Logistics Firms Brace for Tariffs but Bet Big on Cross-Border Trade

Logistics companies, heavily invested in US-Mexico infrastructure, are bracing for potential trade disruptions from looming tariff threats.

Jordan B. & Han-Gwon Lung
January 07, 2025

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Good morning. With billions sunk into U.S.-Mexico infrastructure, logistics companies face looming tariff threats from President-elect Donald Trump. Yet they’re doubling down on North America’s trade future.

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nearshoring

Logistics Firms Prepare for Potential Tariffs, Still Bullish

Logistics companies, heavily invested in US-Mexico infrastructure, are bracing for potential trade disruptions from looming tariff threats. But they don’t mind too much.

Why it matters: These investments, from new truck terminals to expanded warehouses, underscore the growing importance of cross-border manufacturing and freight, even as President-elect Donald Trump threatens a 25% tariff on imports from Mexico and Canada.

By the numbers: U.S. imports from Mexico reached $475 billion in 2023, up 5% from the previous year, reflecting the deepening integration of the two economies.

CPKC’s $31 billion merger created the first freight network linking Mexico, the U.S., and Canada, enabling smoother trade flows.
Prologis and Kuehne + Nagel are scaling up warehouse capacity along the border to handle surging freight demand driven by nearshoring trends.

Similar sentiments: The Mexican government is doubling down on infrastructure, committing $2.7 billion to expand the Port of Manzanillo’s capacity by 2030 to bolster its position in the regional supply chain.

➥ THE TAKEAWAY

What’s next? While tariff threats create uncertainty, nearshoring’s cost advantages and logistical efficiencies keep North America a vital hub for global trade. Logistics firms are betting that the long-term benefits will outlast short-term political risks.

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✍️ Editor’s Picks

Interest rate outlook: US interest rates are expected to remain high in 2025, with a target federal funds rate of 3.9%, impacting CRE financing and valuations amid persistent inflation concerns.
Get a quote: With the recent rate cut, it’s time for developers to get off the sidelines ahead of the competition, making the next 12-18 months critical for obtaining financing. C-PACE offers a fixed-rate, 30-year amortization period, and applies to new and renovation projects. (sponsored)
Cutting edge: Proptech startup Jones secures $15M in Series B funding to enhance its AI-driven insurance verification platform, aiming to reduce client workloads amid rising insurance costs.
Selling fast: Centra Capital Partners invites accredited investors to join the thriving North Branch Fox Run SFH development, offering a projected 21.8% IRR and capitalizing on strong local demand. (sponsored)
Bond refi: Tishman Speyer and Henry Crown are set to refinance Hudson Yards' Spiral Tower with a $2.7 billion bond deal, potentially marking the year's first major single-asset CMBS transaction.
Inflation focus: Fed officials Kugler and Daly stress that while inflation has cooled, the job isn't finished, emphasizing the need to avoid harming the labor market as they aim for more rate progress.

🏘️ MULTIFAMILY

Green ambitions: MA aims to enhance energy efficiency in rental properties, with a new Mass Save plan that includes weatherization, electrification, and incentives to address asbestos and old wiring.
Expanding down under: Greystar has acquired a $1B portfolio of 7 Australian student housing properties, adding 5.7K beds across 5 cities to its global portfolio.
Cold, hard cash: CP Capital has sold Hathon, a 190-unit apartment community in Medway, MA, to an undisclosed all-cash buyer, highlighting strong demand in Boston multifamily.
Incentive dilemma: NYC developers are building more multifamily projects with 99 or fewer units to take advantage of tax breaks, potentially hindering long-term solutions to the city's housing crisis.

🏭 Industrial

Doubling down: Amazon’s (AMZN) $2B industrial spending in 2024, focused on logistics and data centers, is part of its strategy to strengthen infrastructure amid booming demand for cloud computing.
Blame Canada: Canada Pension Plan Investment Board is selling its 45% stake in the $6B Goodman North American Partnership and its 49% interest in 4 Chinese real estate projects, generating $2.4B.
Snapped up: Terreno Realty (TRNO) purchased 3 warehouses in Doral for $196M, one of the top industrial deals of 2024, with the property 76% leased to six tenants.
Beyond Virginia: Atlas Development is set to build Project Sail, a 13-building, 4.9 MSF data center campus south of Atlanta, with a projected $17B cost and completion by 2036.

🏬 RETAIL

Local renaissance: Neighborhood shopping centers are gaining investor attention as rising occupancy and limited supply spark a retail revival, particularly for grocery-anchored properties.
The bigger they are: TGI Fridays sold 9 of its remaining US stores for $34.5M to Mera Global as part of its Chapter 11 bankruptcy restructuring to pay down a $24M debt.
Loan secured: A $104M loan from Hudson Bay Capital will help pay off construction debt for the first phase of Centro City’s 350 KSF retail development, part of a larger mixed-use project in Miami.
Sunny shopping: NJ-based Garden Commercial purchased the upscale, grocery-anchored Plaza Del Mar in Palm Beach for an undisclosed price, expanding its Florida portfolio.

🏢 OFFICE

Major deal: Citadel secured a 504 KSF lease on 20 floors at Brookfield’s redeveloped 660 Fifth Ave, a key step in the building’s transformation into a sustainable, state-of-the-art office space.
Bargain hunt: Real Capital Solutions plans to deploy $3.5B to acquire distressed office buildings in major US cities, targeting 40% to 70% discounts, with a focus on Dallas, Austin, and Houston.
Moving home base: CBRE just signed a 64 KSF lease at Lever House in Midtown Manhattan, making its new global HQ part of a unique hybrid office strategy.
Setting new records: According to JLL, a record 28 Manhattan office leases surpassed $200 PSF in 2024, while over 200 triple-digit deals set a new high.

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