Curtis Spencer of IMS Worldwide

An unexpected countervailing force may halt the anticipated drop in demand for US warehouse and distribution space, making the current economic downturn less damaging to the industrial real estate market than anticipated, says a leading logistics expert. According to Curtis D. Spencer, president of Houston-based Foreign Trade Zone and supply chain consultancy IMS Worldwide Inc., a mounting necessity for major companies to assure “just-in-time” delivery of goods stemming from stepped-up port security will counteract the impact of declining consumer spending on industrial space demand. Spencer broached the subject in relation to the Southern California market at a recent broker networking event presented by the Los Angeles-based AIR Commercial Real Estate Assn. But in an exclusive interview with GlobeSt.com, the consultant maintains the observation applies throughout the nation.

GlobeSt.com: Can you give a brief summary of what you see occurring?

Spencer: We’ve had downward pressure on industrial demand based of the lack of consumer purchasing power. Yes, that’s happening, but there’s also an increase in wholesale inventory due to just-in-time concerns and the need to have more inventory on hand than was needed a year ago. So that’s a plus for industrial real estate. I think the two forces will counterbalance one another.