Publisher's Opinion-

June 2018 Edition
Changing Face of Industrial

Change is always inevitable. Few industries can compare to the whirlwind of real estate. The latest example, of course, is the retail market with the recent closing of major chains like Charming Charlie, Toys R Us, and Carson Pirie Scott & Co. Then you have JC Pennys, Sams Club, and also Sears shutting stores. Where will it end?
Everyone knows all about the retail dilemma but let’s talk about the gorilla in the room–Industrial. Yes–Industrial!
Although industrial has been one of the strongest real estate performers, it too could be on the verge of major change. This change may be good or bad depending on where one’s investment dollars are invested.
The current administration is pushing for tariffs on many imports from all countries. Canada and China are already planning on reciprocating with tariffs of their own. I am sure there will be plenty of backroom deals, but if all the tariffs are enacted, how you fit into the equation determines how bad or good this will be.
Bad in that our costs on many products will go up. Bad for investors with money invested in international manufacturing as well as for local manufacturers who ship internationally. Transportation companies that specialize in international traffic will take a hit.
Good in that more products you buy will be locally manufactured. Unemployment will decrease and salaries will increase as companies fight for employees. Our overall economic health will improve. Transportation companies that handle local traffic will certainly benefit.
These are simple observations but where does industrial fit in? I am glad you asked. The majority of industrial buildings being constructed are large distribution centers. These terminals are designed to receive a high-volume of international shipping containers, perform crossdock operations, and redistribute freight as needed.
Under the new trade laws, as more local manufacturing strengthens, international business will shrink. More manufacturing plants will be expanded or built. That leaves the giant distribution terminals in a position to reinvent themselves. If they haven’t already, now would be a good time for them to plan for the future.
We are now working on our July Commercial issue. We will focus on Rehab/Renovation, Continuing Education, and Professional Services. We will see you then.

by Roger Krieg
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