Demand for Warehouses Is Soaring… Here’s How to Play It

Chris’ note: As globalization breaks down, manufacturing jobs are “reshoring” and coming back to America. It’s a theme we call America Reborn. Because it will kick off an economic renaissance that few see coming. And today you’ll hear from Brad Thomas on a way to play it. If you don’t already know him, Brad is a real estate developer turned income investing expert. And below he shows how reshoring is causing the price of warehouse space to soar. You don’t have to own a warehouse to profit from this. There’s one industrial real estate stock that’s on sale right now. And it allows you to become a warehouse landlord – and profit from the boom in demand – without owning any property directly. There’s money to be made in warehouses. A lot of money… Fresh out of college, my first real estate client was a successful businessman named Marty Elrad. He owned warehouses on the East Coast. And he happened to have a 50,000-square-foot warehouse sitting empty in my hometown of Greenville-Spartanburg, South Carolina. My job was to find tenants and get the building leased out. It took me nearly a year. But when I was done, that warehouse was minting money. Then Marty asked me to help him sell it. Two months later, I landed him a contract to sell the warehouse for $1.5 million. He pocketed the money. I walked away with $250,000 in commissions and a valuable experience. I’ve kept an eye on the industrial real estate market ever since. And there hasn’t been a better time to buy into this sector in my more than three decades as a real estate developer and investor. You see, demand for warehouses is soaring. And it isn’t going to stop anytime soon. Today, I’ll show you why powerful trends in manufacturing and e-commerce are responsible for the surge in demand. Plus, I’ll give you the name of one industrial real estate company that’s on sale right now. Manufacturing Is Coming Home There used to be 900 acres of peach orchards along Highway 85 about halfway between Greenville and Spartanburg. These days, a BMW manufacturing plant sits on that land, churning out SUVs and crossovers. It’s become a big part of our local economy. The plant employs more than 11,000 people. And it brings in thousands of smaller businesses that supply and support the factory. And BMW is expanding. It’s adding a battery assembly plant in the nearby town of Woodruff to support production of electric vehicles. Similar stories are playing out across America as companies bring manufacturing jobs back home. It’s a part of a trend called reshoring. If you’ve been reading along in these pages for a while, you’ll know that the pandemic highlighted how fragile international supply chains could be. Reshoring is the process of bringing those supply chains back to within America’s borders. The aim is often to reduce reliance on other countries, improve quality, and strengthen local economies. And Washington is backing this trend with massive subsidies. The CHIPS and Science Act passed into law in August 2022. It gives $280 billion to boost research and manufacturing of semiconductors – aka chips – in the U.S. Meantime, the Inflation Reduction Act offers tax credits worth $7,500 for folks who buy a new U.S.-manufactured electric vehicle. And EV demand has been soaring with sales projected to jump 35% this year. More manufacturing means more warehouses needed to store raw materials and finished products. And that’s not the only source of demand for warehouse space… E-Commerce Is Pushing Demand Even Higher E-commerce has also been a growing trend for many years. And the pandemic gave it a big boost. Right now, e-commerce represents about 20% of all retail sales in the U.S. By 2027, that’s expected to increase to 23%. Warehouses for brick-and-motor retail stores are packed to the roof with goods on pallets. Products are taken out every time a store needs to be restocked. But e-commerce is different… Workers and robots in the warehouse pick out products and pack them for shipping to customers as orders come in. That requires up to three times more warehouse space than the typical brick-and-mortar retailer needs. And e-commerce goods don’t just sit in one warehouse. They go from distribution buildings to sorting facilities to last-mile warehouses before they make it onto a delivery truck. Those extra stops mean even more warehouse space is needed to support an e-commerce economy. And surging demand for warehouse space has led […]

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