Trading Places... "There are no trucks from China." That's Hamid Moghadam, Chairman & CEO of AMB Property Corporation (NYSE: AMB), a global owner and operator of industrial real estate, commenting on the dynamics of international trade.

How important is trade? In 1960 the U.S. exported $19 billion worth of goods -- in 2003 $714 billion. In 1960 the U.S. imported $15 billion worth of goods -- in 2003 $1,263 billion. Trade is a fast-growing area of our economy.

According to Moghadam, this is particularly important for industrial real estate because inventories per unit of output have fallen for the last 50 years, thus dampening demand. Warehousing for trade, however, is a growth business. Moghadam: "Remember, if it comes from overseas, it comes in a ship or a plane."

So domestically AMB focuses on submarkets in twelve "hub and gateway markets" near airports and seaports: Atlanta, Austin, Baltimore / Washington D.C., Boston, Chicago, Dallas / Fort Worth, Los Angeles, Miami, Minneapolis, Northern New Jersey / New York City, the San Francisco Bay Area, and Seattle.

Conversely, AMB's customers drive demand for warehouses at the other end of the supply chain, too. So AMB is now building warehouses in Europe and Asia -- Amsterdam, Frankfurt, Hong Kong, London, Madrid, Paris, Singapore and Tokyo -- as well as Mexico. The picture to the right shows a recently completed two-story 233,773 square foot warehouse immediately adjacent to the Changi International Airport in Singapore.

Within three years, AMB's goal is to derive 15% of its revenue from global operations. Wow, that's a different world than the real estate world that I entered over thirty years ago, when my first boss began and ended my sales training with the single instruction, "Call anywhere in the U.S."

Spread the word... Many thanks to Harbinder Khera of MindMatrix, which provides software for marketing real estate, for sponsoring this week's Dispatch. If you want to spread the word about your product or service, sponsor the Dispatch. Send e-mail or call 415-485-6700.

--Peter Pike