The Savannah Industrial Market May Slowly Be Coming To Terms With Tariff Uncertainty

For the first time in several generations, industrial warehouse users in the U.S. have been forced to navigate the uncertainty of widespread, often-changing tariffs. Many paused on leasing new space to navigate this new landscape of global trade and are only now beginning to adapt to this uncertainty.

Local experts at Bisnow’s Savannah State of Commercial Real Estate event on Sept. 17 said they have seen signs of this market adaptation. President Donald Trump’s global trade wars have rattled Savannah’s industrial market, and companies often held off making leasing decisions during the second quarter. 

However, panelists said they now see green shoots of demand for industrial space. 

The uncertainty of the administration’s tariff policies particularly impacted importers, who typically order their products months in advance, said Walter Kemmsies, managing partner with infrastructure and real estate consulting firm The Kemmsies Group. With such uncertainty, industrial tenants pulled back on leasing new space.

“It was just cheaper to keep [product] in storage and pray the tariffs go away. So that was the first half of the year,” Kemmsies said.

The scars of the trade war on Savannah’s industrial market began to appear in earnest in Q2. Local leasing activity fell from 4.3M SF in Q1 to 1.3M SF in Q2, the lowest level in five years, according to a CBRE report. And while absorption was positive by 4.3M SF, much of that figure comes from build-to-suit completions. Retailer Burlington moved into its 2M SF facility at Interstate West industrial park just west of Savannah in Ellabell, but little new happened in Q2, according to the report.

“This slowdown reflects broader macroeconomic caution, with many occupiers extending RFP timelines or pausing decisions altogether,” the CBRE researchers wrote.

The pullback wasn't endemic to Savannah. Tenants paused real estate decisions in many major industrial markets, including Atlanta and Dallas, Seefried Industrial Properties Senior Vice President Doug Smith said during the event at the Hyatt Regency Savannah.

“Corporate America is paralyzed right now to go into these big spaces,” Smith said. “For most corporate real estate directors … [they] just simply call timeout.”

Panelists said the market is now pivoting to capture rising demand as tenants grow more certain about the administration’s tariff policies. 

Since 2020, Savannah has experienced a boom of new industrial development, growing from 80.7M SF to more than 157M SF by Q2. 

That rampant growth has had its price, though, with vacancy rising from just over 1% in 2022 to 11.5% in the second quarter, according to CBRE. The increase in vacancy and pullback in leasing demand have driven down rents as space languishes empty in the market, panelists said. 

As a result, developers have scaled back on new construction. The city had nearly 10M SF under construction at the end of 2024. By Q2, that number dropped to 3.3M SF, according to CBRE. 

“Developers are taking a more cautious approach, trying to wait for the market to normalize a little bit and get back to healthy levels,” McCraney Property Co. Director of Acquisitions Joe Curley said.

Smith said the Trump administration may be inclined to solidify its tariff policies as the country approaches midterm elections, and this could prompt big warehouse users off the sidelines. 

Activity is already perking up in Savannah, according to CBRE. The market is seeing renewed demand for spaces over 250K SF, a trend that “signals a potential return to more balanced activity in the second half of the year,” CBRE said. 

Activity at Savannah’s port has picked up as well. More than 534,000 containers were handled in August, a 9% increase year-over-year and the third-busiest month on record, the Georgia Ports Authority reported. 

While the tumult in tariff policies in the first half of the year is likely creating pent-up leasing demand, Kemmsies cautioned that abrupt shifts in tariff policies could still quickly dampen demand. 

“The minute you think you’ve got a plan going, a new tariff shows up, like a 50% tariff in India, which has really disrupted Amazon, Tesla, Walmart,” Kemmsies said.

Companies “had bet on America pulling from China into India, and then we will tell India, ‘Take a hike,’” he said.

Developers may need to get comfortable making plans with a higher degree of uncertainty, Smith said.

“I do think that there's probably some pent-up demand that users that have been on the sidelines are recognizing,” he said. “I don't think we're ever going to get 100% clarity on tariffs.”