As of 2023, the ports of Newark and Los Angeles remain crucial entry points for US global trade. Both ports handle billions of dollars’ worth of cargo coming into the country every year and remain pivotal gateways for cargo entry, but the size, operations, and impact on the industrial real estate market have significant differences.
The port of Newark, New Jersey remains the largest container port on the East coast. The port supports over 400,000 jobs and has generated almost $8.5 billion in local, state, and federal tax revenue over the past decade. With import and export routes ranging from Asia, Europe, and Latin America, it has facilitated over 85 million tons of cargo worth more than $211 billion.
Due to the continued growth in e-commerce, Newark has seen consistent growth in port activity. As more people continue to shop online, the demand for imports, warehousing, and distribution centers has skyrocketed, leading to the immense demand for industrial real estate in the Northeast. The demand for industrial real estate will remain strong in the Northeast as rents continue to rise and vacancy rates remain low.
The port of Los Angeles, located in Southern California, remains the largest port in the United States. It serves as a major gateway for trade with Asia and is a critical hub for transportation and logistics for US imports. The port of LA handles over 25% of the nation’s container traffic. Spanning a massive 7,500 acres of land and 43 miles of waterfront, the port of LA has passenger and cargo terminals that accommodate containers, automobiles, cruise lines, dry and liquid bulk, breakbulk, and warehouse staging space.
In 2023, the port of LA has seen consistent growth across all facets of its industrial real estate market, driven by the continuous demand for imports and e-commerce. The demand for industrial real estate in the Southern California market remains strong with minimal vacancy rates at historic lows paired with continuous rental growth year over year. The demand for industrial real estate in Southern California is expected to remain strong with increasing demand from the logistics and e-commerce sectors.
While both major ports have seen a tremendous increase in demand for industrial real estate, they both have different strengths that attract varying industries. The port of Newark primarily attracts distribution centers, warehouses ad logistics facilities due to its immediate location near major consumer markets. The port of LA attracts a wide range of industries due to its location at major access points in the United States and its geographic proximity to Asia. Aerospace, manufacturing, technology companies, and automobiles are a few of the major industry sectors that utilize the port of LA’s access to major transportation and logistics infrastructure.
The ports of Newark and Los Angeles will remain pivotal gateways for global trade in the United States. These key ports will continue to support the demand for industrial real estate in those immediate markets and surrounding areas. The demand for e-commerce and access to major trade routes and infrastructure will ensure continuous low vacancy rates despite the rising rents. Both regions of the United States are attractive destinations for investors, developers, and owner-operators.