Outlook Good for Northeast Industrial

NEWARK-The face of industrial real estate is changing, thanks to a variety of economic pressures, and the northeast is already benefiting. “Everything’s changed,” said Curtis Spencer, president of IMS Worldwide, Inc. in his keynote address at this year’s RealShare Industrial East conference. “The ports were at 10% growth, but now the port of LA/Long Beach has dropped off, while the New Jersey/New York ports have continued to grow.”

Spencer gave a number of reasons for this phenomenon. For one thing, Mexico is on the rise as a manufacturing center, and more goods are coming through the Suez Canal and heading to ports in the northeast. The high price of gas is also making companies look more closely at the locations of their distribution centers. Rail, which is plentiful in the northeast, is becoming more popular as a distribution method, and companies are spreading out distribution centers and locating them near major population centers in order to cut down on the number of miles trucks need to travel in order to reach customers.

One of the northeast’s greatest assets is its dense population. The Eastern United States has 66% of the country’s population, and according to Spencer, the East Coast ports will soon begin to seriously compete with the West Coast ports for inland market share. The current state of the economy, however, is making some companies slightly reluctant to expand their industrial base in anticipation of a port boom. “This is a have-to year,” said Tom Tucci, senior managing director of CB Richard Ellis, in his opening remarks for the town hall meeting on the state of industrial real estate. “People are not pulling the trigger on deals unless they have to.”