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CBRE Econometric Advisors (CBRE EA) analyzed the intricacies of trade flows, focusing particularly on their effects on warehouse space requirements—a subject pertinent to industrial real estate investors and occupiers. In doing so, we challenge a popular belief that domestic production via onshoring unequivocally benefits all sectors of the economy. We identified a cyclical pattern of warehouse space needs in relation to trade, a narrative far more nuanced and time-dependent than commonly believed. We highlight the often-unexpected impacts on warehouse space requirements brought about by the ebb and flow of the import and export of goods.

Additionally, using Los Angeles as a case study, we shed light on regional aspects of these global events. This analysis uncovers some of the unique characteristics and potential roadblocks that can affect trade patterns and warehouse demand in a particular area, highlighting the significance of local considerations within the larger context.

Our analysis uncovers a more evolving understanding of how domestic production or onshoring influences the industrial real estate market. It challenges sector stakeholders to abandon broad-stroke assumptions and further examine the impacts of shifting trade dynamics on warehouse demand.