Seaports and Airports: 2011 Real Estate Outlook
In its second annual Ports Airports and Global Infrastructure report, Jones Lang LaSalle reviews the 2010 commercial real estate landscape surrounding the nation's cargo hubs.
2011 Directory
![](https://cdn9.areadevelopment.com/article_images/id76939_Seaports_ArticleLarge.jpg)
But between 2007 and 2009, the nation's top 13 ports experienced an 18.5 percent decline in total throughput volumes as domestic and foreign consumption waned. Since trans-Pacific, U.S.-bound trade from Asia started to recover in the second half of 2009, there has been a positive effect, particularly on West Coast ports, where traffic has increased by 14.8 percent year-over-year.
We devised the inaugural Jones Lang LaSalle Port Index - which rates U.S. port markets on performance and impact on the surrounding real estate economy - to analyze exactly how our domestic ports are faring. Ports are judged on their land value-to-lease rate ratio, local vacancy rates, labor costs, on- or near-dock service by railroads, and planned infrastructure investment. Unsurprisingly, Los Angeles/Long Beach, the largest seaport complex in the United States, tops the Index, followed by New York/New Jersey and Savannah, which have all performed above the national average and have committed to substantial infrastructure investment in recent years.
John Carver discusses recovery in the U.S. industrial real estate sector. Click here for an additional interactive map.
Investing in the Future
U.S. ports have invested more than $34 billion in capital projects to enhance their facilities in the last 50 years, according to the American Association of Port Authorities. By our estimates, the top 13 ports alone will pour nearly a quarter of that amount, roughly $8.5 billion, into container terminal and harbor dredging projects in the next five years. This ratio demonstrates the major efforts to ensure that U.S. ports remain competitive and efficient in the fight for global market share.
Increasing interdependence between global economies, the need for infrastructure improvements, leaner supply chains, and the rapid movement of goods will pressure U.S. ports to secure long-term capital access to financing from the public and private sectors.
Additionally, U.S. ports are anticipating the expansion of the Panama Canal and the long-term rise in cargo and freight traffic. They are attempting to move ahead with aggressive infrastructure investments, concession agreements, and capital improvement plans that will help capture or increase market share and compete with foreign ports. The Los Angeles/Long Beach port has broken ground on a $40 million harbor dredging project, which will deepen the main channel to 76 feet to accommodate deep draft, post-Panamax ships holding more than 14,000 twenty-foot equivalent units (TEUs).
Meanwhile, foreign nations are raising their game through capital investment. Port operators in greater China and the Middle East went on a global buying spree from 2006 to 2007 to gain control of global shipping routes and direct access to raw materials. Stringent U.S. foreign direct investment regulations have prevented the same influx of capital into U.S. ports from foreign investors. As a result, many U.S. ports have leaned on private domestic investment and public-private partnerships to support the multimillion-dollar projects necessary to maintain long-term economic competitiveness.
But China and the Middle East aren't the only regions pouring capital into their ports. The Brazilian government initiated the $526 billion PAC-2 program. Southeast Asia is also increasing infrastructure expenditures, with an expected $32 billion to be spent between 2010 and 2014, according to a KPMG study. While the world's ports are preparing for consumer demand and a cargo growth explosion, world container port handling is expected to grow 6 percent annually starting next year, according to a report by Drewry Shipping Consultants.
Project Announcements
Northland Corporation Expands Greenville, Michigan, Operations
08/29/2024
Swedish Match Expands Daviess County, Kentucky, Operations
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Ardent Mills Expands Commerce City, Colorado, Production Operations
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Paul Mueller Company Expands Springfield, Missouri, Manufacturing Operations
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Nashville Wire Products Expands McEwen, Tennessee, Operations
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Crusoe Energy Systems Plans Tulsa, Oklahoma, Manufacturing Operations
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