SOMERSET, NJ-The diverse characteristics of the New Jersey industrial market make it likely to reap significant economic benefit from the Panama Canal expansion, as Cassidy Turley details in a recent “Insights” report.
“The Port of New York and New Jersey is the largest port on the East Coast and services highly concentrated and affluent consumer markets along the Eastern Seaboard, making it quite attractive to nearly any type of business,” noted Raymond Trevisan, managing principal of New Jersey for Cassidy Turley.
Even as cargo volume in other port markets is shrinking or stagnant, the Port of New York and New Jersey has been recording increased import and export traffic in the last few years. This year, says Cassidy Turley, the industrial real estate corridor along the New Jersey Turnpike has had strong and consistent leasing velocity, driven by big-box tenants requiring optimum access to port shipping and top-grade facilities, in addition to value pricing.
“Other encouraging signs include vacancies at a level that has not been reported since the fourth quarter of 2006,” said Trevisan. He also cited increased sales activity and a renewed interest in speculative development: “The Panama Canal expansion creates a chain reaction, whereby growing demand for imports and exports is likely to fuel demand for modern, energy-efficient warehouse and distribution space, specifically along the Turnpike Corridor.”
The Port Authority of New York and New Jersey's expedited work on the $1 billion Bayonne Bridge-raising project is further boosting demand, he said. The plan involves raising the bridge's current 151-foot air draft by 64 feet to accommodate the clearance needed for the larger ships that will pass through the widened canal, set to open in 2015.
“The timely completion of this project is crucial in order to remain competitive,” said Michelle Clifford, a senior research analyst in New Jersey. “The Port Authority anticipates that the Panama Canal expansion will produce dramatically lower per-slot shipping-costs savings for larger vessels” she said. “These savings are likely to flow through the supply chain, resulting in lower consumer prices and stimulating demand for space in the surrounding industrial markets.”
According to Cassidy Turley's report, the projected economic impacts and benefits of investments from now through 2017 in the Port of New York and New Jersey include 41,300 total jobs throughout the region, or about 6,900 jobs annually; more than $2 billion in personal income; $4.4 billion in business income; and almost $850 million in federal, state, and local tax revenues.
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