Savannah was already the fifth-largest seaport according to volume in 2014. But the growth has continued.
ATLANTA—Investors are looking for strategic bets. Could areas around ports be a prime spot for industrial developers?
Many industry watchers are saying yes. GlobeSt.com caught up with Frank Giantomasi, member of Chiesa Shahinian & Giantomasi PC's Real Estate, Development and Land Use Group, to get his take the port-industrial real estate connection in part one of this exclusive interview.
GlobeSt.com: Do you see a surge in attention on ports, and what factors are driving that surge?
Giantomasi: What is driving the surge are the new boats coming through the Panama Canal and the raising of the bridge that allows boats with larger amounts of cargo to arrive in Port Newark. The fact is that the New Jersey side of the port still maintains 95% of its commercial business. Cargo is now getting there at greater volume, because many of the boats are more than twice as large as those that were coming in previously. They're carrying more density than ever before.
GlobeSt.com: What is going on with investors eyeing ports? Are you seeing big deals in the works or closed?
Giantomasi: We are seeing a great demand for the acquisition of land through ground lease or purchase. There is more construction of new warehouse facilities than we have seen in the last 10 to 15 years, with demand for refrigerated warehousing leading the way.
As far as magnitude, we're seeing warehouses that are 300,000 square feet or 400,000 square feet. It's not just someone looking to build 50,000 square foot or 60,000 square foot buildings. The result of that is also seeing a spike in industrial land value and the price of renting warehouses.
GlobeSt.com: What developer activity, specifically, are you seeing around ports? How are developers, in other words, responding to the opportunity?
Giantomasi: The port itself has been pushing its historic tenants out, and will continue to push them out. That is causing the historic tenants—which you previously didn't see, hear or feel because they were deep within the port—to look to acquire land for historic port activities, port support activities and the construction of warehouse facilities.
(How does Savannah's port impact Atlanta's metro? Get one take).
GlobeSt.com: Are industrial facilities around ports seeing a rise in occupancy?
Giantomasi: Yes. If you can find an industrial facility that's vacant, I would be shocked. That's how much occupancy has increased over the last 10 years.
Anecdotally, a lot of people really didn't believe the bridge would be raised and the larger boats would get here. The construction process was sluggish and had lots of delays, so there were some doubts as to whether it would get done. Now that it's all happening people are believing, and they know it's time to put their money up.
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