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How The EU Is Forcing Twitter To Censor (And Musk Can’t Stop It)

How The EU Is Forcing Twitter To Censor (And Musk Can’t Stop It)

Authored by Robert Kogon via The Brownstone Institute,

Twitter is obviously…

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How The EU Is Forcing Twitter To Censor (And Musk Can't Stop It)

Authored by Robert Kogon via The Brownstone Institute,

Twitter is obviously at the center of what is commonly known as “Big Tech censorship.” It has been busily using the censorship tools at its disposal – from removing or quarantining tweets to surreptitiously “deboosting” them (shadow-banning) to outright account suspension – for at least two years now. And those who have managed to remain on the platform will have noticed a sharp upturn in its censorship activities starting last summer. 

For most of this time, the main focus of Twitter censorship has, of course, been supposed “Covid-19 disinformation.” By now, almost all the most influential advocates of early treatment or critics of Covid-19 vaccines on Twitter have had their accounts suspended, and most have not made it back. 

The list of the permanently suspended includes such prominent voices as Robert Malone, Steve Kirsch, Daniel Horowitz, Nick Hudson, Anthony Hinton, Jessica Rose, Naomi Wolf, and, most recently, Peter McCullough. 

And myriad smaller accounts have met the same fate for committing such thought crimes as suggesting that the myocarditis risk of both mRNA vaccines (Moderna and BioNTech/Pfizer) outstrips any benefit or pointing to mRNA instability and its unknown consequences for safety and efficacy.   

But why in the world would Twitter censor such content? The expression “Big Tech censorship” implies that Twitter et al. are censoring of their own accord, which invariably elicits the retort that, well, they are private companies, so they can do what they want. But why would they want to? 

The notion that it is because the denizens of Silicon Valley are “leftists” or “liberals” is clearly not very helpful. They may well be. But whether mRNA vaccines are safe and effective, as advertised, is a factual matter, not an ideological one. And, in any case, the purpose of private for-profit corporations is, needless to say, to make a profit. The motto of the shareholder is not “Workers of the World Unite!” but “Pecunia non olet:” money doesn’t stink. Shareholders expect management to create value, not destroy it.

But what Twitter is doing by censoring is precisely subverting its own business model, thus undermining profitability and putting downward pressure on share price. Free speech is obviously the lifeblood of every social media. Censored speech – like the tweets of a Robert Malone or a Peter McCullough or, for that matter, a Donald Trump – translates into lost traffic for the platform. And traffic is, of course, the key to monetizing unrestricted online content. 

We could call this the “Twitter conundrum.” On the one hand, there is no way that Twitter could possibly “want” to censor Covid dissident voices, or indeed any voices, and thus restrict its own traffic. But, on the other hand, if it fails to do so, it risks incurring massive fines of up to 6% of turnover, which would likely represent a deathblow to a company that already has not turned a profit since 2019. Twitter, in effect, has a financial gun to its head: censor or else.

Wait, what? There has been much talk recently of the Biden administration exerting informal pressure on Twitter and other social media to censor unwelcome content and voices, and lawsuits have even been launched against the government for infringing the alleged victims’ 1st Amendment rights. But all that such pressure appears thus far to have consisted of are some chummy nudges in emails. 

There has surely not been any threat of fines. How could there be without a law authorizing the executive branch to impose them? And such a law would be blatantly unconstitutional, since precisely what the 1st Amendment states concerning freedom of speech is that “Congress shall make no law…abridging” it.

But there’s the rub. Congress, needless to say, has not made any such law. But what if a foreign power made such a law and it de facto abridged the freedom of speech also of Americans? 

Unbeknownst to most Americans, this has in fact occurred and their 1st Amendment rights are being vitiated, namely, by the European Union. There is a financial gun pointed at Twitter. But it is not the Biden administration, but rather the European Commission, under the leadership of Commission president Ursula von der Leyen, that has its finger on the trigger.

The law in question is the EU’s Digital Services Act (DSA), which was passed by the European Parliament last July 5 amidst almost total indifference – in Europe as much as in the United States – despite its momentous and disastrous implications for freedom of speech worldwide.

The DSA gives the European Commission the power to impose fines of up to 6% of global turnover on “very large online platforms or very large online search engines” that it finds to be non-compliant with its censorship requirements. “Very large” is defined as any platform or search engine that has over 45 million users in the EU. Note that while the size criterion is limited to users in the EU, the sanction is based precisely on the company’s global turnover.

The DSA has been designed to function in combination with the EU’s so-called Code of Practice on Disinformation: an ostensibly voluntary code for “combatting disinformation” – aka censoring – that was originally launched in 2018 and of which Twitter, Facebook/Meta and Google/YouTube are all signatories.

But with the passage of the DSA, the Code of Practice is evidently not so “voluntary” anymore. There is no need for complex legal analyses to show that the sanction provisions in the DSA are intended as the enforcement mechanism for the Code of Practice. The European Commission has said so itself – and in a tweet no less!

In fact, the Code has never really been all that voluntary. The Commission had already made its desire to “tame” the US tech giants known previously, and it had already flexed its muscles, imposing massive fines on Google and Facebook for other alleged offenses. 

Moreover, it has been brandishing the threat of the DSA fines since December 2020, when it first put forward the DSA legislation. (In the European Union, the Commission, the EU’s executive branch, has sole authority to initiate legislation. Quaint American notions like the separation of powers are not a thing in the EU.) The eventual passage of the legislation by the parliament has always been treated as a mere formality. Indeed, the above-cited tweet was posted on June 16 of this year, three weeks before the parliament voted on the law!

Curiously, the publication of the draft legislation coincided with the authorization and subsequent rollout of the first Covid-19 vaccines in the EU: the legislation was unveiled on December 15 and the first Covid-19 vaccine, that of BioNTech and Pfizer, was authorized by the Commission just six days later. Vaccine skeptics or critics would quickly become the principal target of EU-driven online censorship thereafter.

Six months earlier, in June 2020, the Commission had already placed the focus of the Code firmly on alleged “Covid-19 disinformation” by launching a so-called Fighting COVID-19 Disinformation Monitoring Programme, in which all Code signatories were expected to participate. Some attempts had already been made at monitoring compliance with the Code, and signatories were expected to submit annual reports. But, as part of the Covid-19 monitoring program, signatories were now required – “voluntarily,” of course – to submit monthly reports to the Commission specifically dedicated to their Covid-19-related censorship efforts. The rhythm of submission was subsequently scaled back to bimonthly.

Twitter’s reports, for example, contain detailed statistics on Covid-related content removal and account suspensions. The below chart, showing the evolution of these numbers from February 2021 (shortly after vaccine rollout) through April 2022, is taken from Twitter’s latest available report from June of this year.

Note that the data concerns content removed and accounts suspended globally: i.e. Twitter’s efforts to satisfy the Commission’s censorship expectations do not only affect the accounts of users based in the EU, but of users all around the world. 

The fact that many, if not most, of the accounts that have been suspended in this connection were written in English raises particularly troubling issues. In the aftermath of Brexit, after all, only around 1.5% of the EU’s population are native English speakers! Even supposing that policing speech was a good thing, what business does the EU have policing speech, or requiring social media platforms to police speech, in English, any more, say, than in Urdu or Arabic?   

The Twitter report and those of other Code signatories can be downloaded here. If the numbers were to be continued, they would undoubtedly show a sharp upturn in censorship activities starting in late June/early July. Twitter users interested in the subject could not help but have noticed the massive purge of Covid dissident accounts that occurred over the summer. 

And this upturn was in fact entirely to be expected, since on June 16 – the day the European Commission posted its warning to online platforms reproduced above and three weeks before the passage of the DSA – the Commission announced the adoption of a new, “strengthened” Code of Practice on Disinformation.

The timing was surely not coincidental. Rather, the adoption of the “strengthened” Code of Practice and the passage of the DSA served as a kind of one-two punch, putting “very large online platforms and search engines” – Twitter, Meta/Facebook and Google/YouTube, in particular – on notice about what would be in store for them if they failed to fulfill the EU’s censorship requirements.

Not only does the new Code contain no less than 44 “commitments” that signatories are expected to meet, but it also contains a deadline for meeting them: namely, six months after signature of the Code (cf. paragraph 1(o)). For original signatories of the new Code like Twitter, Meta and Google, this would bring us, namely to December. Hence, the sudden rush of Twitter et al. to prove their censorship bona fides.

The “strengthened” Code was supposedly written by the signatories themselves, but under extensive “guidance” from the European Commission that was first made available in May 2021. Chillingly, the Commission “guidance” refers to the kind of censorship data presented above as “key performance indicators” (pp. 21f). (Different euphemisms are used in the Code itself.)

As part of the new Code, moreover, signatories will participate in a “permanent task-force” chaired by the European Commission and that will also include “representatives of the European External Action Service,” i.e. the EU’s foreign service (Commitment 37).

Think about this for a moment. For the last several months, American commentators have been up in arms about occasional, informal contacts between social media companies and the Biden administration, whereas those same companies have been systematically reporting back to the European Commission on their censorship efforts for the last two years now and they will henceforth be part of a permanent task force on “combatting disinformation” – aka censoring — chaired by the European Commission.

While the former may or may not constitute collusion, the latter is obviously something much more than mere collusion. It is a matter of explicit EU policy and law that directly subordinates online platforms to the Commission’s censorship agenda and requires them to implement it on pain of ruinous fines. 

Note that the DSA gives the Commission “exclusive” – in effect, dictatorial – powers to determine compliance and to apply sanction. For the online platforms, the Commission is judge, jury and executioner. 

Again, there is no need to enter into the tortuous details of the legislative text to show this. All official EU pronouncements on the DSA highlight the fact. See here, for instance, from the parliament’s Internal Market Committee, which notes that the Commission will also be able to “inspect a platform’s premises and get access to its databases and algorithms.”

Does anyone really imagine that the Biden administration has anything remotely like this sort of capacity to direct the actions of online platforms? Make no mistake about it. Twitter censorship is government censorship. But the government in question is not the US government, but rather the European Union, and the EU is, in effect, imposing its censorship on the entire world.

Those hoping that Elon Musk’s buying Twitter, if it does indeed come to pass, will put an end to Twitter censorship are going to be in for a rude awakening. Elon Musk will be facing the same conundrum as Twitter’s present management and will be just as much hostage to the EU’s censorship requirements.

Lest there be any doubt about this, consider the below video, which, despite the forced smiles, has indeed something of the feel of a hostage video. In early May – just a couple of weeks after Twitter accepted Musk’s original purchase offer and, yet again, before the European parliament had even had the opportunity to vote on the DSA – the EU’s Internal Market Commissioner Thierry Breton traveled to Austin, Texas, to explain the “new regulation” to Musk. 

Breton then memorialized Musk’s cringeworthy submission to the EU’s demands in the video posted on his Twitter feed.

Tyler Durden Sun, 10/09/2022 - 10:30

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Riley Gaines Explains How Women’s Sports Are Rigged To Promote The Trans Agenda

Riley Gaines Explains How Women’s Sports Are Rigged To Promote The Trans Agenda

Is there a light forming when it comes to the long, dark and…

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Riley Gaines Explains How Women's Sports Are Rigged To Promote The Trans Agenda

Is there a light forming when it comes to the long, dark and bewildering tunnel of social justice cultism?  Global events have been so frenetic that many people might not remember, but only a couple years ago Big Tech companies and numerous governments were openly aligned in favor of mass censorship.  Not just to prevent the public from investigating the facts surrounding the pandemic farce, but to silence anyone questioning the validity of woke concepts like trans ideology. 

From 2020-2022 was the closest the west has come in a long time to a complete erasure of freedom of speech.  Even today there are still countries and Europe and places like Canada or Australia that are charging forward with draconian speech laws.  The phrase "radical speech" is starting to circulate within pro-censorship circles in reference to any platform where people are allowed to talk critically.  What is radical speech?  Basically, it's any discussion that runs contrary to the beliefs of the political left.

Open hatred of moderate or conservative ideals is perfectly acceptable, but don't ever shine a negative light on woke activism, or you might be a terrorist.

Riley Gaines has experienced this double standard first hand.  She was even assaulted and taken hostage at an event in 2023 at San Francisco State University when leftists protester tried to trap her in a room and demanded she "pay them to let her go."  Campus police allegedly witnessed the incident but charges were never filed and surveillance footage from the college was never released.  

It's probably the last thing a champion female swimmer ever expects, but her head-on collision with the trans movement and the institutional conspiracy to push it on the public forced her to become a counter-culture voice of reason rather than just an athlete.

For years the independent media argued that no matter how much we expose the insanity of men posing as women to compete and dominate women's sports, nothing will really change until the real female athletes speak up and fight back.  Riley Gaines and those like her represent that necessary rebellion and a desperately needed return to common sense and reason.

In a recent interview on the Joe Rogan Podcast, Gaines related some interesting information on the inner workings of the NCAA and the subversive schemes surrounding trans athletes.  Not only were women participants essentially strong-armed by colleges and officials into quietly going along with the program, there was also a concerted propaganda effort.  Competition ceremonies were rigged as vehicles for promoting trans athletes over everyone else. 

The bottom line?  The competitions didn't matter.  The real women and their achievements didn't matter.  The only thing that mattered to officials were the photo ops; dudes pretending to be chicks posing with awards for the gushing corporate media.  The agenda took precedence.

Lia Thomas, formerly known as William Thomas, was more than an activist invading female sports, he was also apparently a science project fostered and protected by the athletic establishment.  It's important to understand that the political left does not care about female athletes.  They do not care about women's sports.  They don't care about the integrity of the environments they co-opt.  Their only goal is to identify viable platforms with social impact and take control of them.  Women's sports are seen as a vehicle for public indoctrination, nothing more.

The reasons why they covet women's sports are varied, but a primary motive is the desire to assert the fallacy that men and women are "the same" psychologically as well as physically.  They want the deconstruction of biological sex and identity as nothing more than "social constructs" subject to personal preference.  If they can destroy what it means to be a man or a woman, they can destroy the very foundations of relationships, families and even procreation.  

For now it seems as though the trans agenda is hitting a wall with much of the public aware of it and less afraid to criticize it.  Social media companies might be able to silence some people, but they can't silence everyone.  However, there is still a significant threat as the movement continues to target children through the public education system and women's sports are not out of the woods yet.   

The ultimate solution is for women athletes around the world to organize and widely refuse to participate in any competitions in which biological men are allowed.  The only way to save women's sports is for women to be willing to end them, at least until institutions that put doctrine ahead of logic are made irrelevant.          

Tyler Durden Wed, 03/13/2024 - 17:20

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Congress’ failure so far to deliver on promise of tens of billions in new research spending threatens America’s long-term economic competitiveness

A deal that avoided a shutdown also slashed spending for the National Science Foundation, putting it billions below a congressional target intended to…

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Science is again on the chopping block on Capitol Hill. AP Photo/Sait Serkan Gurbuz

Federal spending on fundamental scientific research is pivotal to America’s long-term economic competitiveness and growth. But less than two years after agreeing the U.S. needed to invest tens of billions of dollars more in basic research than it had been, Congress is already seriously scaling back its plans.

A package of funding bills recently passed by Congress and signed by President Joe Biden on March 9, 2024, cuts the current fiscal year budget for the National Science Foundation, America’s premier basic science research agency, by over 8% relative to last year. That puts the NSF’s current allocation US$6.6 billion below targets Congress set in 2022.

And the president’s budget blueprint for the next fiscal year, released on March 11, doesn’t look much better. Even assuming his request for the NSF is fully funded, it would still, based on my calculations, leave the agency a total of $15 billion behind the plan Congress laid out to help the U.S. keep up with countries such as China that are rapidly increasing their science budgets.

I am a sociologist who studies how research universities contribute to the public good. I’m also the executive director of the Institute for Research on Innovation and Science, a national university consortium whose members share data that helps us understand, explain and work to amplify those benefits.

Our data shows how underfunding basic research, especially in high-priority areas, poses a real threat to the United States’ role as a leader in critical technology areas, forestalls innovation and makes it harder to recruit the skilled workers that high-tech companies need to succeed.

A promised investment

Less than two years ago, in August 2022, university researchers like me had reason to celebrate.

Congress had just passed the bipartisan CHIPS and Science Act. The science part of the law promised one of the biggest federal investments in the National Science Foundation in its 74-year history.

The CHIPS act authorized US$81 billion for the agency, promised to double its budget by 2027 and directed it to “address societal, national, and geostrategic challenges for the benefit of all Americans” by investing in research.

But there was one very big snag. The money still has to be appropriated by Congress every year. Lawmakers haven’t been good at doing that recently. As lawmakers struggle to keep the lights on, fundamental research is quickly becoming a casualty of political dysfunction.

Research’s critical impact

That’s bad because fundamental research matters in more ways than you might expect.

For instance, the basic discoveries that made the COVID-19 vaccine possible stretch back to the early 1960s. Such research investments contribute to the health, wealth and well-being of society, support jobs and regional economies and are vital to the U.S. economy and national security.

Lagging research investment will hurt U.S. leadership in critical technologies such as artificial intelligence, advanced communications, clean energy and biotechnology. Less support means less new research work gets done, fewer new researchers are trained and important new discoveries are made elsewhere.

But disrupting federal research funding also directly affects people’s jobs, lives and the economy.

Businesses nationwide thrive by selling the goods and services – everything from pipettes and biological specimens to notebooks and plane tickets – that are necessary for research. Those vendors include high-tech startups, manufacturers, contractors and even Main Street businesses like your local hardware store. They employ your neighbors and friends and contribute to the economic health of your hometown and the nation.

Nearly a third of the $10 billion in federal research funds that 26 of the universities in our consortium used in 2022 directly supported U.S. employers, including:

  • A Detroit welding shop that sells gases many labs use in experiments funded by the National Institutes of Health, National Science Foundation, Department of Defense and Department of Energy.

  • A Dallas-based construction company that is building an advanced vaccine and drug development facility paid for by the Department of Health and Human Services.

  • More than a dozen Utah businesses, including surveyors, engineers and construction and trucking companies, working on a Department of Energy project to develop breakthroughs in geothermal energy.

When Congress shortchanges basic research, it also damages businesses like these and people you might not usually associate with academic science and engineering. Construction and manufacturing companies earn more than $2 billion each year from federally funded research done by our consortium’s members.

A lag or cut in federal research funding would harm U.S. competitiveness in critical advanced technologies such as artificial intelligence and robotics. Hispanolistic/E+ via Getty Images

Jobs and innovation

Disrupting or decreasing research funding also slows the flow of STEM – science, technology, engineering and math – talent from universities to American businesses. Highly trained people are essential to corporate innovation and to U.S. leadership in key fields, such as AI, where companies depend on hiring to secure research expertise.

In 2022, federal research grants paid wages for about 122,500 people at universities that shared data with my institute. More than half of them were students or trainees. Our data shows that they go on to many types of jobs but are particularly important for leading tech companies such as Google, Amazon, Apple, Facebook and Intel.

That same data lets me estimate that over 300,000 people who worked at U.S. universities in 2022 were paid by federal research funds. Threats to federal research investments put academic jobs at risk. They also hurt private sector innovation because even the most successful companies need to hire people with expert research skills. Most people learn those skills by working on university research projects, and most of those projects are federally funded.

High stakes

If Congress doesn’t move to fund fundamental science research to meet CHIPS and Science Act targets – and make up for the $11.6 billion it’s already behind schedule – the long-term consequences for American competitiveness could be serious.

Over time, companies would see fewer skilled job candidates, and academic and corporate researchers would produce fewer discoveries. Fewer high-tech startups would mean slower economic growth. America would become less competitive in the age of AI. This would turn one of the fears that led lawmakers to pass the CHIPS and Science Act into a reality.

Ultimately, it’s up to lawmakers to decide whether to fulfill their promise to invest more in the research that supports jobs across the economy and in American innovation, competitiveness and economic growth. So far, that promise is looking pretty fragile.

This is an updated version of an article originally published on Jan. 16, 2024.

Jason Owen-Smith receives research support from the National Science Foundation, the National Institutes of Health, the Alfred P. Sloan Foundation and Wellcome Leap.

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What’s Driving Industrial Development in the Southwest U.S.

The post-COVID-19 pandemic pipeline, supply imbalances, investment and construction challenges: these are just a few of the topics address by a powerhouse…

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The post-COVID-19 pandemic pipeline, supply imbalances, investment and construction challenges: these are just a few of the topics address by a powerhouse panel of executives in industrial real estate this week at NAIOP’s I.CON West in Long Beach, California. Led by Dawn McCombs, principal and Denver lead industrial specialist for Avison Young, the panel tackled some of the biggest issues facing the sector in the Western U.S. 

Starting with the pandemic in 2020 and continuing through 2022, McCombs said, the industrial sector experienced a huge surge in demand, resulting in historic vacancies, rent growth and record deliveries. Operating fundamentals began to normalize in 2023 and construction starts declined, certainly impacting vacancy and absorption moving forward.  

“Development starts dropped by 65% year-over-year across the U.S. last year. In Q4, we were down 25% from pre-COVID norms,” began Megan Creecy-Herman, president, U.S. West Region, Prologis, noting that all of that is setting us up to see an improvement of fundamentals in the market. “U.S. vacancy ended 2023 at about 5%, which is very healthy.” 

Vacancies are expected to grow in Q1 and Q2, peaking mid-year at around 7%. Creecy-Herman expects to see an increase in absorption as customers begin to have confidence in the economy, and everyone gets some certainty on what the Fed does with interest rates. 

“It’s an interesting dynamic to see such a great increase in rents, which have almost doubled in some markets,” said Reon Roski, CEO, Majestic Realty Co. “It’s healthy to see a slowing down… before [rents] go back up.” 

Pre-pandemic, a lot of markets were used to 4-5% vacancy, said Brooke Birtcher Gustafson, fifth-generation president of Birtcher Development. “Everyone was a little tepid about where things are headed with a mediocre outlook for 2024, but much of this is normalizing in the Southwest markets.”  

McCombs asked the panel where their companies found themselves in the construction pipeline when the Fed raised rates in 2022.   

In Salt Lake City, said Angela Eldredge, chief operations officer at Price Real Estate, there is a typical 12-18-month lead time on construction materials. “As rates started to rise in 2022, lots of permits had already been pulled and construction starts were beginning, so those project deliveries were in fall 2023. [The slowdown] was good for our market because it kept rates high, vacancies lower and helped normalize the market to a healthy pace.” 

A supply imbalance can stress any market, and Gustafson joked that the current imbalance reminded her of a favorite quote from the movie Super Troopers: “Desperation is a stinky cologne.” “We’re all still a little crazed where this imbalance has put us, but for the patient investor and owner, there will be a rebalancing and opportunity for the good quality real estate to pass the sniff test,” she said.  

At Bircher, Gustafson said that mid-pandemic, there were predictions that one billion square feet of new product would be required to meet tenant demand, e-commerce growth and safety stock. That transition opened a great opportunity for investors to run at the goal. “In California, the entitlement process is lengthy, around 24-36 months to get from the start of an acquisition to the completion of a building,” she said. Fast forward to 2023-2024, a lot of what is being delivered in 2024 is the result of that chase.  

“Being an optimistic developer, there is good news. The supply imbalance helped normalize what was an unsustainable surge in rents and land values,” she said. “It allowed corporate heads of real estate to proactively evaluate growth opportunities, opened the door for contrarian investors to land bank as values drop, and provided tenants with options as there is more product. Investment goals and strategies have shifted, and that’s created opportunity for buyers.” 

“Developers only know how to run and develop as much as we can,” said Roski. “There are certain times in cycles that we are forced to slow down, which is a good thing. In the last few years, Majestic has delivered 12-14 million square feet, and this year we are developing 6-8 million square feet. It’s all part of the cycle.”  

Creecy-Herman noted that compared to the other asset classes and opportunities out there, including office and multifamily, industrial remains much more attractive for investment. “That was absolutely one of the things that underpinned the amount of investment we saw in a relatively short time period,” she said.  

Market rent growth across Los Angeles, Inland Empire and Orange County moved up more than 100% in a 24-month period. That created opportunities for landlords to flexible as they’re filling up their buildings. “Normalizing can be uncomfortable especially after that kind of historic high, but at the same time it’s setting us up for strong years ahead,” she said. 

Issues that owners and landlords are facing with not as much movement in the market is driving a change in strategy, noted Gustafson. “Comps are all over the place,” she said. “You have to dive deep into every single deal that is done to understand it and how investment strategies are changing.” 

Tenants experienced a variety of challenges in the pandemic years, from supply chain to labor shortages on the negative side, to increased demand for products on the positive, McCombs noted.  

“Prologis has about 6,700 customers around the world, from small to large, and the universal lesson [from the pandemic] is taking a more conservative posture on inventories,” Creecy-Herman said. “Customers are beefing up inventories, and that conservatism in the supply chain is a lesson learned that’s going to stick with us for a long time.” She noted that the company has plenty of clients who want to take more space but are waiting on more certainty from the broader economy.  

“E-commerce grew by 8% last year, and we think that’s going to accelerate to 10% this year. This is still less than 25% of all retail sales, so the acceleration we’re going to see in e-commerce… is going to drive the business forward for a long time,” she said. 

Roski noted that customers continually re-evaluate their warehouse locations, expanding during the pandemic and now consolidating but staying within one delivery day of vast consumer bases.  

“This is a generational change,” said Creecy-Herman. “Millions of young consumers have one-day delivery as a baseline for their shopping experience. Think of what this means for our business long term to help our customers meet these expectations.” 

McCombs asked the panelists what kind of leasing activity they are experiencing as a return to normalcy is expected in 2024. 

“During the pandemic, shifts in the ports and supply chain created a build up along the Mexican border,” said Roski, noting border towns’ importance to increased manufacturing in Mexico. A shift of populations out of California and into Arizona, Nevada, Texas and Florida have resulted in an expansion of warehouses in those markets. 

Eldridge said that Salt Lake City’s “sweet spot” is 100-200 million square feet, noting that the market is best described as a mid-box distribution hub that is close to California and Midwest markets. “Our location opens up the entire U.S. to our market, and it’s continuing to grow,” she said.   

The recent supply chain and West Coast port clogs prompted significant investment in nearshoring and port improvements. “Ports are always changing,” said Roski, listing a looming strike at East Coast ports, challenges with pirates in the Suez Canal, and water issues in the Panama Canal. “Companies used to fix on one port and that’s where they’d bring in their imports, but now see they need to be [bring product] in a couple of places.” 

“Laredo, [Texas,] is one of the largest ports in the U.S., and there’s no water. It’s trucks coming across the border. Companies have learned to be nimble and not focused on one area,” she said. 

“All of the markets in the southwest are becoming more interconnected and interdependent than they were previously,” Creecy-Herman said. “In Southern California, there are 10 markets within 500 miles with over 25 million consumers who spend, on average, 10% more than typical U.S. consumers.” Combined with the port complex, those fundamentals aren’t changing. Creecy-Herman noted that it’s less of a California exodus than it is a complementary strategy where customers are taking space in other markets as they grow. In the last 10 years, she noted there has been significant maturation of markets such as Las Vegas and Phoenix. As they’ve become more diversified, customers want to have a presence there. 

In the last decade, Gustafson said, the consumer base has shifted. Tenants continue to change strategies to adapt, such as hub-and-spoke approaches.  From an investment perspective, she said that strategies change weekly in response to market dynamics that are unprecedented.  

McCombs said that construction challenges and utility constraints have been compounded by increased demand for water and power. 

“Those are big issues from the beginning when we’re deciding on whether to buy the dirt, and another decision during construction,” Roski said. “In some markets, we order transformers more than a year before they are needed. Otherwise, the time comes [to use them] and we can’t get them. It’s a new dynamic of how leases are structured because it’s something that’s out of our control.” She noted that it’s becoming a bigger issue with electrification of cars, trucks and real estate, and the U.S. power grid is not prepared to handle it.  

Salt Lake City’s land constraints play a role in site selection, said Eldridge. “Land values of areas near water are skyrocketing.” 

The panelists agreed that a favorable outlook is ahead for 2024, and today’s rebalancing will drive a healthy industry in the future as demand and rates return to normalized levels, creating opportunities for investors, developers and tenants.  

This post is brought to you by JLL, the social media and conference blog sponsor of NAIOP’s I.CON West 2024. Learn more about JLL at www.us.jll.com or www.jll.ca.

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