May
28

Intermodal Industrial Facilities Capture Investor Attention

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port craneE-commerce growth and port traffic troubles have dominated the news in the industrial sector this year, but a story that has been relegated to the background has been the increasing popularity of intermodal industrial properties. Investors are now collecting premium rents for intermodal properties located near large container-stacking facilities.

The nation’s logistics sector is now facing a perfect storm of individual consumers and businesses increasing orders and the need for deliveries in the absence of enough transportation growth. Large Panamax ocean vessels are now clogging East and West Coast ports with almost four times the delivery levels as a decade before. Dock worker strikes at Los Angeles-Long Beach and trucker shortages have further exacerbated the port back-ups.

As a result, intermodal properties have been expanding steadily to meet new demand. Thirty intermodal parks opened since 2000, with 19 of those opening in the past seven years. Markets with intermodal facilities, including Chicago, Dallas/Fort Worth, Atlanta, Indianapolis and Kansas City, have the highest rent growth, according to a recent report from commercial real estate services firm Cushman & Wakefield. Traffic at intermodal facilities increased by more than 5 percent from 2013 to 2014, according to the Cushman report. According to a Colliers report, intermodal traffic in January 2015 was at about 251,000 containers per week, the highest January average in history.

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