Although the COVID-19 pandemic and associated lockdowns had port officials all over the United States sweating in early 2020, by July of that year it was evident that consumers would keep the ports open and operating as they spent more on imported goods and services than ever before. While other sectors in the commercial space suffered (think hotels, restaurants, and brick-and-mortar retail), the industrial sector boomed. In fact, according to a new outlook from Cushman & Wakefield, industrial real estate proved to be the most resilient commercial sector in 2020. Even with the addition of about 300 million new square feet of space coming available in the United States and Canada, historic vacancies remained low.
According to industry logistics experts at Prologis, 2021 will likely see “intensifying competition for available [industrial] parcels, which is expected to drive up the land costs in many U.S. markets. Analysts added, “At the same time, increasing regulatory barriers and community resistance is limiting development, adding costs, and extending timelines. These trends should amplify the supply-demand imbalance, especially in infill areas.” The report also predicted these factors would lead to future rent growth.
In Savannah, Georgia, strong import volumes into the Port of Savannah and other associated terminals in the area resulted in a 1.3 percent increase in traffic in 2020 despite the “COVID surprise.” Inland ports, specialized facilities that receive containers directly from seaports and that can dramatically reduce the timeframe for shipping to end customers, are also thriving in the Savannah area and throughout the state of Georgia, thanks to deep-water ports in Savannah and nearby Brunswick, Georgia. The Port of Savannah is the largest single-terminal container facility of its kind in North America and actually consists of two modern, deep-water terminals. Brunswick boasts an additional three deep-water terminals.
Because port operations are considered essential, the presence of a port in a metro area is a strong indicator that the local economy will likely prove resilient in the event of more public-health related lockdowns and other economic volatility. “Projected import traffic shows no signs of abatement through the first quarter of 2021,” observed Cushman & Wakefield analysts. “With the explosive growth occurring in e-commerce, the demand for industrial space in warehouse, distribution, and fulfillment centers has continued to grow. The port industry remains essential to the supply chain process and will continue to evolve to meet the increased demand for goods.”
For cities like Savannah, this is excellent news when it comes to economic growth and security in 2021 and beyond.