CHICAGO-With the national industrial vacancy rate at 9.7%, the empty space in commercial properties in US seaports is at 8.5%, a figure expected by Jones Lang LaSalle in its annual Port, Airport and Global Infrastructure report. The locally based firm predicted last year that the top 12 US port markets will lead the industrial market recovery, and the facts bear out that claim, JLL said in this year’s report.
The Port of Los Angeles and Long Beach lead the country based on cargo performance, investment plans and 20-foot equivalent volumes (TEU), as well as real estate fundamentals, according to the JLL report. Plans for the Panama Canal expansion opening in 2015 also have boosted activity on the East Coast, including Charleston, New York/New Jersey and Miami.
John Carver, head of the JLL ports team, tells GlobeSt.com that there’s been double-digit increases in cargo traffic volume across all the major US ports this year. “This activity has led to improved conditions in real estate markets that cluster around the port terminals,” he says. “Rising leasing volumes and demand for warehouse space at these gateway logistics hubs is driving this continued “coast inward” recovery. In the past year, millions of square feet of space have been taken in and around our busiest ports, bringing vacancy rates down.”
Even the recent economic uncertainty from the past two weeks shouldn’t have an impact on the commercial activity around the ports, Carver says. “This year’s total port growth level may be a little bit lower, but by 2012 the activity should be back to the peak levels of 2007,” he says.
This growth is also spilling over into the markets with intermodal activity, going from sites within 10 miles of the ports, such as Savannah, GA to country interior intermodal cities such as Chicago and Kansas City, MO, Carver says. These include the 4,000-acre Treasure Coast Intermodal Campus site in St. Lucie County, FL, an “inland” port that will integrate US container seaports with a dedicated distribution center. JLL is an advisor on this project.
“You can use the analogy of the barbell – you have the port on one end, and the intermodal on the other end, all connected by rail. Once it hits those intermodals, there’s warehousing and logistics getting clustered together, then taking the products out to the population centers,” Carver says.
According to a recent second quarter report by Annapolis, MD-based Morprop Advisors, intermodal freight continues to be a bright spot of growth for transportation firms and real estate. For example, CSX just announced it will build a new 34-acre intermodal hub in Louisville, KY, said Morprop founder Ted Morandin in a recent statement. “We expect to see logistical warehouse development pick up around rail yards before new logistics warehouse development at the ports begins to come back,” he said.
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