SMARTCAP's Rail Advantage

Filling the Gap in Rail-Served Industrial Real Estate

SMARTCAP targets the underserved small and mid-sized rail user, delivering tailored designs that major developers overlook

SMARTCAP’s rail strategy is to become the leading provider of rail-served industrial real estate for small and mid-sized users, a niche largely ignored by large developers. The firm targets opportunistic acquisitions and developments in secondary and strategic U.S. markets — particularly the West Coast, Mountain West, and Texas — where rail capacity lags demand. By focusing on transload opportunities for containers, trailers, and dimensional freight, and by partnering with major Class I carriers, short-line operators, and economic development groups, SMARTCAP aims to capture growth fueled by nearshoring, cross-border trade, and rising intermodal volumes, positioning itself as a specialist partner in an underserved but rapidly expanding segment of the industrial real estate market. Learn more below about the markets we're targeting and why.

vast north american network offers opportunity amid rail resurgence

Class I railroads, including major players like Union Pacific (UP), Burlington Northern Santa Fe (BNSF), and Canadian Pacific and Kansas City Southern (CPKC), together form the backbone of North American rail that supports smaller Class II and Class III lines. UP anchors the U.S. with expansive east–west and north–south corridors that move massive import volumes inland. BNSF complements this with a broad network of intermodal routes and hubs connecting key U.S. regions and linking into Mexico. CPKC uniquely integrates Canada, the U.S., and Mexico, offering a seamless cross-border alternative that is increasingly vital amid nearshoring and global supply chain shifts.

Class	Scale & Network	Role in Supply Chain	Examples	SMARTCAP Opportunity
Class I	~92,000 miles; ~69% of U.S. freight ton-miles	National long-haul and intermodal backbone	BNSF, Union Pacific, CSX, Norfolk Southern, CPKC	Partner with carriers to acquire/develop sites along key corridors; act as an external development arm for rail carriers and shippers
Class II (Regional)	400–1,500 miles of track	Provide connector service between Class I networks and regional shippers	Iowa Interstate, Montana Rail Link, Indiana Rail Road	Collaborate with regionals to identify secondary markets underserved by industrial developers; capture value in overlooked corridors
Class III (Short Line)	600+ operators; <350 miles each; ~$40.4M max revenue; 45,000 miles (~29% of network)	First-mile/last-mile service for local industries	Patriot Rail, Watco, OmniTRAX, Genesee & Wyoming	Focus on small–mid bay developments and opportunistic acquisitions; serve local users who lack developer support and often self-develop

Class

Scale & Network

Role in Supply Chain

Examples

SMARTCAP Opportunity

Class I

~92,000 miles; ~69% of U.S. freight ton-miles

National long-haul and intermodal backbone

BNSF, Union Pacific, CSX, Norfolk Southern, CPKC

Partner with carriers to acquire/develop sites along key corridors; act as an external development arm for rail carriers and shippers

Class II (Regional)

400–1,500 miles of track

Provide connector service between Class I networks and regional shippers

Iowa Interstate, Montana Rail Link, Indiana Rail Road

Collaborate with regionals to identify secondary markets underserved by industrial developers; capture value in overlooked corridors

Class III (Short Line)

600+ operators; <350 miles each; ~$40.4M max revenue; 45,000 miles (~29% of network)

First-mile/last-mile service for local industries

Patriot Rail, Watco, OmniTRAX, Genesee & Wyoming

Focus on small–mid bay developments and opportunistic acquisitions; serve local users who lack developer support and often self-develop

Union Pacific (UP)

Union Pacific’s route system spans across 23 U.S. states, covers over 32,100 miles of track and network stretches from West Coast hubs like Los Angeles, Portland, and Seattle through mountain passes, into the Midwest, and down into the South, including Texas and the Gulf Coast

The Sunset Route is the main intermodal route for goods imported from SE Asia via the ports of LA / Long Beach moving from the coast to Texas and the Midwest via Kansas City all the way up to Chicago

The Union Pacific Transcontinental Route is one of the most historic and important rail lines in the United States. It connects Chicago to the San Francisco Bay Area (Oakland), passing through key Midwestern and Western hubs.

The Overland Route is primarily an intermodal and automotive corridor, supplemented by bulk agricultural and industrial freight. Its role as a high-capacity, double-track mainline makes it one of UP's busiest and most strategic freight corridors.

UP is the only line connecting the Nogales, AZ, border crossing with Mexico to the US rail network.

burlington northern santa fe (bnsf)

BNSF operates approximately 33,400 miles of track across 28 U.S. states, and into parts of Canada.

Major Corridors: The system map underscores key corridors such as:

Southern Transcon (BNSF offers a route alternative to UP’s Sunset Route from the West Coast ocean gateways to main metro areas in Texas (Dallas Fort Worth and Houston) & to Chicago via Kansas City
Northern Transcon (Pacific Northwest–Midwest)
Northern Transcon (Pacific Northwest–Midwest)
Routes to the Powder River Basin, Gulf Coast, and northern grain and coal corridors

Intermodal and Freight Hubs: Intermodal yards and facilities are located in areas like Chicago, Seattle, Oakland, Los Angeles, and Houston

Like UP, but not stretching across the US-Mexico border, BNSF offers connectivity to Ferromex (main rail carrier in Mexico) in El Paso, TX and Brownsville, TX

Canadian pacific & Kansas city southern (CPKC)

CPKC provides connectivity between key Mexican ocean gateways: Lazaro Cardenas on the Pacific Coast and Altamira on the Gulf Coast and the US border, Texas and the Midwest

Especially Lazaro Cadenas is starting to be seen as an intermodal alternative access to Texas and the Midwest for goods originating in SE Asia

That became apparent at the time of congestion and union volatility (IWLA strike risk) in LA / Long Beach

Nearshoring has led to an unprecedented boom of the industrial real estate market in Mexico

Mexico Industrial markets bordering Texas (from Juarez to Reynosa) have been capturing approx. 75-80% of industrial absorption attributed to nearshoring and are expected to continue doing so in the near future

Union Pacific’s route system spans across 23 U.S. states, covers over 32,100 miles of track and network stretches from West Coast hubs like Los Angeles, Portland, and Seattle through mountain passes, into the Midwest, and down into the South, including Texas and the Gulf Coast
The Sunset Route is the main intermodal route for goods imported from SE Asia via the ports of LA / Long Beach moving from the coast to Texas and the Midwest via Kansas City all the way up to Chicago
The Union Pacific Transcontinental Route is one of the most historic and important rail lines in the United States. It connects Chicago to the San Francisco Bay Area (Oakland), passing through key Midwestern and Western hubs.
The Overland Route is primarily an intermodal and automotive corridor, supplemented by bulk agricultural and industrial freight. Its role as a high-capacity, double-track mainline makes it one of UP's busiest and most strategic freight corridors.
UP is the only line connecting the Nogales, AZ, border crossing with Mexico to the US rail network.

bnsf-keyrouts

BNSF operates approximately 33,400 miles of track across 28 U.S. states, and into parts of Canada.
Major Corridors: The system map underscores key corridors such as:
- Southern Transcon (BNSF offers a route alternative to UP’s Sunset Route from the West Coast ocean gateways to main metro areas in Texas (Dallas Fort Worth and Houston) & to Chicago via Kansas City
- Northern Transcon (Pacific Northwest–Midwest)
- Northern Transcon (Pacific Northwest–Midwest)
- Routes to the Powder River Basin, Gulf Coast, and northern grain and coal corridors
Intermodal and Freight Hubs: Intermodal yards and facilities are located in areas like Chicago, Seattle, Oakland, Los Angeles, and Houston
Like UP, but not stretching across the US-Mexico border, BNSF offers connectivity to Ferromex (main rail carrier in Mexico) in El Paso, TX and Brownsville, TX

cpkc-withroutes

CPKC links Mexico’s key ocean gateways—Lázaro Cárdenas on the Pacific Coast and Altamira on the Gulf Coast—to the U.S. border, Texas, and the Midwest.
Lázaro Cárdenas is increasingly emerging as an intermodal gateway to Texas and the Midwest for goods originating from Southeast Asia.
Lazaro Cadenas' strategic location became apparent at the time of congestion and union volatility
(IWLA strike risk) in LA / Long Beach
Nearshoring has led to an unprecedented boom of the industrial real estate market in Mexico
Industrial markets in Mexico—spanning from Juarez to Reynosa—and along the Texas border have captured roughly 75–80% of nearshoring-driven industrial absorption, a trend expected to continue in the near term.

How We Deliver on Our Rail Strategy

Through data-driven site selection, opportunistic acquisitions, and strategic partnerships, SMARTCAP creates long-term value while giving underserved rail users the facilities they need to thrive.

Strategic Pillars

Acquisition of existing rail-served properties (value-add projects)
Development of new rail-served properties (speculative, BTS, fee development)

Competitive Positioning

Large developers (e.g., Panattoni, Prologis) focus on massive master-planned projects, leaving smaller users underserved.
SMARTCAP aims to differentiate by being a niche provider, offering rail-served sites tailored for mid-sized tenants who would otherwise have to self-develop

SMARTCAP’s Focus

Opportunistic Acquisitions: Target under-supplied rail-served assets in secondary and major markets where rail capacity lags standard industrial development. Work with brokers, owners, and large corporates to source off-market opportunities
Niche Development: Fill the gap for small and mid-sized rail users (often overlooked by large-scale developers). Focus on the West Coast, Mountain West, and Texas. Partner with rail providers, economic development agencies, and strategic data firms to match sites with users
Freight Priorities: Actively pursue transload opportunities for (1) warehouse goods (containers/trailers tied to e-commerce and imports) and (2) dimensional freight (lumber, steel, bulky construction goods). Avoid hazardous liquids and most bulk commodities, with selective exceptions (e.g., resin)

Market Context

Growth Trends: U.S. rail freight is valued at $71.8B (2025), projected to grow between 2.5–9.2% CAGR depending on scenario, fueled by e-commerce, port activity, and nearshoring
Nearshoring Tailwinds: Manufacturing shifts to Mexico are boosting cross-border freight, particularly automotive, electronics, and industrial goods. Intermodal volumes between the U.S. and Mexico are projected to grow 6–8% annually through 2030
Infrastructure Expansion: Border cities like Laredo and El Paso are seeing significant investment in terminals, bridges, and inland ports, creating stronger cross-border corridors

Execution & Partnerships

Partnerships: Build ties with Class I carriers (UP, BNSF, CPKC), short-line operators (Patriot Rail, Watco), specialized rail engineers, and select brokerage partners
Modus Operandi: Use proprietary tools to map and categorize rail-served sites, acquire existing assets or rail-adjacent land, and upgrade them for modern use. Aim to be seen as an external development arm for railroads
Exit Strategies: Blend value-add acquisitions (3–5 year holds), merchant build-to-suit programs, and potential portfolio consolidation with institutional equity partners

Bottom Line

SMARTCAP’s rail strategy is about owning the underserved niche in rail-served industrial real estate — acquiring and redeveloping assets in secondary and strategic markets, catering to small- and mid-size rail users, and capitalizing on nearshoring-driven cross-border growth. By aligning closely with railroads, brokers, and end-users, SMARTCAP positions itself as a specialist provider and partner of choice in a market segment with limited competition but strong demand drivers.

Rail's Market Size & Growth Momentum

Intermodal Boom

Cross-Border Edge

Global trade shifts creating tailwinds

Filling the Gap in Rail-Served Industrial Real Estate

SMARTCAP targets the underserved small and mid-sized rail user, delivering tailored designs that major developers overlook

Seattle, WA

Portland, OR

Salt Lake City, UT

Phoenix, AZ

Tucson, AZ

Laredo → San Antonio, TX

vast north american network offers opportunity amid rail resurgence

Union Pacific (UP)

burlington northern santa fe (bnsf)

Canadian pacific & Kansas city southern (CPKC)

Building Our Approach on Class I Rail Connectivity

What good looks like:
Transloading developments and Existing assets

Development site

existing asset