C&W report shows new age of trade changing US cities.

The development of larger warehouses and distribution centers close to main transportation routes to manage the dramatic rise in imported goods will continue to reshape American communities, according to a new White Paper released by global real estate services firm Cushman & Wakefield.

"We wanted to get a handle on the pivotal role that changing global trade patterns are having on commercial real estate," said Maria Sicola, senior managing director of Research at Cushman & Wakefield. "As more warehousing and distribution centers are being built near ports and major inland hubs, some communities and even our rail system are experiencing significant growth."

Strong consumer demand continues to be fueled by the influx of goods manufactured in low-cost countries and imported through a handful of major ports, said Sicola. "These goods are flooding into the U.S. through a few major ports and then distributed into markets throughout North America."

Sicola said supply chain management, which includes shipping, warehousing and distribution, has become the "number one priority" for many businesses today. "The implication for real estate owners, developers and urban development is enormous," she added.

With predictions that imports will continue to rise by an annual rate of some 10%, Cushman & Wakefield reports that the three following trends will have the greatest impact on commercial real estate decisions and US communities:

* Use of Larger Ships: Only a limited number of ports have channels deep enough and equipment large enough to handle the largest Post-Panamax vessels. Los Angeles/ Long Beach are considered the best positioned to handle these ships and their massive loads. Other ports that can handle larger ships include Oakland, Seattle and Tacoma, Wash., while Savannah, Ga. Charleston, S.C. and New York/New Jersey are racing to complete capital improvement programs that will boost their ability to compete.

The real estate impact of larger ships is caused by the off-loading of cargo to nearby inland locations. For example in Ontario, Calif., about 50 miles inland from the ports, large amounts of land are being used for distribution center development. New locations north of Los Angeles and ex-military bases are also being considered. As well, large multi-functional facilities that combine cross-docks for short-tem inventory and storage space for longer-term inventory are becoming more common in Washington's Kent Valley submarket.

* Rail Making a Comeback: The increased use of rail has led to strong growth in the warehouse markets surrounding some of the nation's largest interior hubs, such as Chicago, Memphis, Atlanta and Dallas. Chicago, Memphis and Dallas-Fort Worth all stand to gain the most from rail's resurgence.

These regions have the ability to serve large markets and are located at the intersection of multiple rail lines and interstates. These areas also have major players such as local government, railroads and developers, who are willing to make investments that will keep the rails and the real estate surrounding them growing.

* Distribution Centers get Super-Sized: The increased use of large, million-square-foot distribution centers is a direct result of the massive flow of low-cost products that are being imported into the United States.

These massive distribution centers are being located on the outskirts of the nation's most populated areas. While many of these facilities are built-to-suit for large tenants, there has been a considerable escalation in speculative construction over the past 12 months.

Cushman & Wakefield expects Southern California and Chicago to benefit the most from these new economic developments.

Additionally, Houston, New York and New Jersey will also gain.