Justin Smith, SIOR

It's fascinating to see how US business profit margins are projected to remain elevated through 2025, driven by substantial investments in recent years. This article perfectly highlights the intricate dynamics of supply chains and the delicate balance businesses must maintain to sustain growth and profitability. #SupplyChainInsights #BusinessMargins #EconomicTrends #InvestmentRisks #Profitability #SupplyChain #BusinessGrowth #Investment #ProfitMargins #logistics #wednesdaywins #cre #sior #industrialbrokerage https://lnkd.in/gAnDdMjm

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A recent CBRE report highlights the growing dominance of third-party logistics (3PL) providers in bulk industrial leasing. In 2024, 3PLs accounted for 34.1% of leases over 100,000 sq. ft., up from 30.6% last year. Key drivers include supply chain diversification, cost management, and enhanced resilience. With 498 leases year-to-date, 3PLs are set to remain the top occupiers of industrial space, ensuring flexibility and efficiency for businesses. View the attached report to read more in depth about this topic.

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In response to anticipated tariffs on Chinese imports, U.S. 🇺🇸 companies are proactively increasing their inventory levels, a strategy highlighted in a recent The Wall Street Journal article. This shift towards maintaining higher ‘strategic stock’ is poised to significantly impact industrial and warehouse leasing across North America. By pulling demand forward, businesses may seek additional storage solutions to accommodate their expanded inventories. This trend couls drive increased demand for industrial and warehouse spaces, presenting substantial opportunities for real estate developers and investors in the logistics sector. As companies prioritize supply chain resilience, the emphasis on strategic stockpiling underscores the critical role of robust warehousing infrastructure in supporting business continuity. This development not only bolsters the industrial real estate market but also highlights the evolving strategies businesses are adopting to navigate global trade uncertainties. Now the question remains for Canada 🇨🇦… Will we a similar trend with “near-shoring” inventories? https://lnkd.in/gfM2YSab

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As freight markets stabilize, the logistics sector is seeing a surge in mergers and acquisitions. With more reasonable valuations and steady earnings, companies are exploring new opportunities for growth. Lower interest rates are also fueling this activity, particularly among private equity firms. Read more via The Wall Street Journal: https://bit.ly/3CBmFOY. 

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Tenants in manufacturing, logistics, and warehousing are leveraging automation and AI to boost efficiency and meet growing demands with fewer resources. As Yardi highlights, these technologies require facilities designed for power, connectivity, and adaptability. Interesting read from GlobeSt.com: https://bit.ly/3ZZtfXF.

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The pandemic highlighted the risks of prioritizing lean inventories above all else. However, recent events have prompted companies to adopt a longer-term approach to managing risk. #RiskManagement #SupplyChain #BusinessStrategy #cscmp #cscmpgreatlakes #westmichigan #cfos #westmichiganbusiness #realestatedevelopment #economicoutlook #outlook2024 #business #westmichigan #grandrapids #holland

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It is no secret that over the last 18-24 months, Chinese 3PL's have absorbed a majority of the #InlandEmpire West industrial product. The below article sheds some light as to the why and what could be changing in the near term. Interesting read:

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Insightful Report on US Logistics from CBRE Research: 📦 Container Volume Exceeding Pre-Pandemic Levels 👷‍♂️ Labor Contracts for 45K Workers Expire in September 🌉 Francis Scott Key Bridge finally re-opens Final point: "Nearshoring" of manufacturing has arrived. Lázaro Cárdenas, Mexico had the highest YOY container volume increase (34.7%) in Q1.

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"Last-Mile Logistics Facilities" Remember when we used to call them “the corner of Main & Main?" We are so much more sophisticated these days! 😁 What hasn’t changed is their importance. These urban distribution centers are critical for modern supply chains: ✅ Faster Delivery: Inventory close to the customer means same-day delivery. ✅ Lower Costs: Urban proximity = fewer miles and smaller fuel bills. ✅ Strong Rent Growth: Limited land means limited supply, and we all know how that equation ends. They may have a new name, but these buildings are still the cornerstones of efficiency and profitability. Whether you call them “Last Mile” or “Main & Main,” they’re an essential part of logistics. #CapitalMarkets, #InvestmentSales, #RealEstateInvestment, #CRE, #CommercialRealEstate, Adir Levitas, Ohad Porat

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Sharing this WSJ article as caught my attention https://lnkd.in/ebRWJRdp. Interesting to see that to date in 2024, 20% of US net new warehouse leasing take-up is by Chinese 3PLs and e-commerce operators (e.g. Alibaba Group, JD.COM, Temu, WesternPost Group etc). Likely changes to the de minimis postal rules (currently no duties payable on overseas parcels of goods with a value below $800) is a possible factor, as is improving fulfilment times, which are far slower than local competitors (Amazon, Walmart, Target). Is this a sign of things to come for the UK market? There are some initial indications that it might. Earlier this year, we noted JD.COM's interest in Currys plc and the attraction of its UK physical footprint (21 distribution warehouses and 300+ retail warehouses nationwide) to supplement its online model. https://lnkd.in/ejwEe6Ep Chinese discounter SHEIN recently launched a 400k sq ft big box requirement in the Midlands’ Golden Triangle. This coincides with their exploration of a UK listing; although there are hurdles to clear on that, particularly around employment rights, including a probable meeting with the House of Commons’ business select committee. Whilst the US and UK markets are materially different from a supply and demand perspective, supply chain trends and network evolution are much more closely related, with developments often flowing through to the European market. Additionally, a combination of increased US tariffs on Chinese goods potentially on the horizon with the Republican win and weakening Chinese economy could see Europe and the UK come into increasing focus for Chinese operators. It will be interesting to see how this unfolds. #logistics #realestate #onshoring

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CEO’s of manufacturing and distribution companies are increasing pushing their teams to adjust their supply chains to be more efficient, flexible and redundant. You can understand how difficult it is to make long term capital intensive business investments that require 10 years to payback in an environment that changes abruptly often. As a result we’re seeing executives rely heavily on supply chain consultants to help model building, automation, network and transportation scenarios than ever before. We’ve worked with several consultants with preliminary market intel and we’ve won and executed several large assignments as a result. This year we’re investing our professional development time, money and effort deepening those relationships, forging new ones and investing in education. Which events have the highest level supply chain practitioners? What educational sources have the best faculty and curriculum? Jason Miller might have an opinion here. Who are your favorite supply chain consultants that you think I should meet? Who do you think would make for engaging and insightful podcast guests in this arena? Grant La Bounty Chris Vassilian

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A brief synopsis of the State of Logistics report...more V U C A! (Volatility, Uncertainty, Complexity & Ambiguity)

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As Lineage makes headlines with the year's biggest IPO, it's clear that the demand for efficient cold storage and logistics solutions is at an all-time high. For cold storage 3PLs competing with giants like Lineage, and food companies grappling with capacity constraints, there are unique opportunities to stand out and grow. Our Cold & Food Facilities team specializes in providing tailored real estate solutions that help cold 3PLs and food companies optimize their supply chains. Whether it's finding the right existing facilities to expand capacity, developing new cold storage capacity, or creating the right strategic partnerships to facilitate innovative solutions, our team is here to support your growth. With the rise in e-commerce and the evolving food consumption habits, having a robust cold storage strategy is not just beneficial—it's essential. Let's connect and explore how we can help your business stay ahead of the curve, ensuring you have the connectivity, facilities, efficiency and capacity needed to meet market demands and deliver excellence. Together, we can create a competitive edge in this rapidly expanding and evolving industry. #ColdStorage #3PL #SupplyChain #FoodIndustry #CommercialRealEstate #Logistics #Innovation https://lnkd.in/gmixyW5i

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Are you curious how the US election outcome may impact global manufacturing and supply chains? Our Prologis Research team has released new research along with their perspective. In short, "tariffs, disruptions and evolving economics are changing global sourcing patterns on the margin, but U.S. logistics real estate remains anchored by domestic consumption." Check out the full report at the link below. #supplychain #globaltrade #logisticsrealestate https://lnkd.in/gdXGEEw5

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