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News release

Miami, FL

Port Index Reveals Miami Port Real Estate Continues to Excel

Jones Lang LaSalle’s Port Index reveals stellar year for port property


Miami, August 22, 2011 — Jones Lang LaSalle’s third annual Port, Airport and Global Infrastructure (PAGI) report published today, reveals that even amid economic volatility, real estate in the markets surrounding the nation’s seaports is leading the U.S. industrial real estate recovery. The Port of Miami is no exception with total net absorption, or space taken, more than doubling from 404,454 square feet in the first half of 2010 compared to 814,889 square feet in the first half of 2011 and total cargo volumes entering the port are up by 9.24 percent from the same time last year.

“Even with a myriad of global economic challenges, seaport industrial real estate has continued to retain its premium value over inland industrial locations,” said John Carver, head of Jones Lang LaSalle’s Ports Airports and Global Infrastructure team. “Rising leasing volumes and demand for warehouse space at gateway logistics hubs such the Port of Miami is driving this continued ‘coast inward’ recovery. In the last year, millions of square feet of space have been taken in and around our busiest ports, bringing vacancy rates down.”

Revealed: The Port Index 2011
Last year’s PAGI report unveiled Jones Lang LaSalle’s first annual propriety Port Index which rates the top 12 U.S. port markets on their cargo performance, investment plans and TEU (twenty-foot equivalent unit) volumes, and on their real estate fundamentals*.  The Port of Miami has risen in the rankings to 80.5 points, up from last year’s 79.8 score.
 
 
 
While cargo volumes were up and leased space on the rise, the vacancy rate was at 10 percent just above the port average of  8.5 percent but this was by no means the highest.  The Port of Miami ranked fifth out of 12 in the rankings for vacancy rates.  Rents around the Port of Miami are the highest on the East Coast at $6.17 per square foot but behind leaders on the West Coast – Oakland at $6.36 and LA at $6.28 per square foot.

This year, the port with the highest score on the Index is the Port of Los Angeles at 95.1, maintaining its reign from last year but improving its annual score by 3.7 points.  Also at the top of the list again was Long Beach with a close 92.8 rating.  LA continues to top the charts owing to its high container volumes, market share of trans-pacific cargo traffic, its stable real estate market and the $1billion earmarked to capital improvements in the next five years. Other ports that registered score improvements were Houston, Baltimore, Virginia and Charleston.

The Panama Effect
“U.S. ports are mindful of the impending completion of Panama Canal expansion project and they have long been preparing to compete for the large ‘post-panamax’ ships,” stated Carver.  “But it will be the ports with an efficient and holistic approach to moving goods as quickly and as cost effectively as possible that will triumph.”

Currently, only the Port of Norfolk has the 50’ draft depth necessary to accommodate the larger ‘post-panamax’ container ships; while the ports of New York/New Jersey and Miami have projects approved and/or underway to increase their depth by 2014.

Florida becoming a logistics hub
“Florida is fast-becoming a logistics hub,” said Steve Medwin, Managing Director at Jones Lang LaSalle. “With the state’s large consumer base, geographic position in close proximity to Panama, the rest of Latin America and the Caribbean, Florida has become a major import-export destination and is poised to become a national center for freight distribution.”
The development of Florida Inland Port, formerly known as Treasure Coast Intermodal Campus, is a new logistics and distribution model for the state. The Florida Inland Port is a proposed 4,000+ acre, rail-oriented, integrated logistics center in southwest St. Lucie County set to break ground next year.  The project, which is being developed inland to serve the logistics needs of Florida’s ports, will allow shippers to offload their cargo at one of Florida's major seaports then utilize the new inland-based distribution centers, warehouses and assembly plants to complete the import-export cycle. 

Outlook
“We expect several new developments serving the Port of Miami to break ground during the fourth quarter of this year and first quarter of next year,” said Medwin. Developers are responding to the increased leasing activity which has left fewer than 10 quality spaces over 100,000 square feet available in the market for “big-box” tenants to lease.  As today’s vacancy rate inches towards the historical average of 7-8 percent, fewer options are available for new companies entering the market and existing companies looking to expand into modern, quality distribution space.”

* Ports in the Index are scored on their TEU volumes, cargo growth rates and other factors such as land value-to-lease rate ratio, local vacancy rates, labor costs, availability of on- or near-dock service by Class I railroads as well as planned infrastructure investment.

About the PAGI report
The Port, Airport and Global Infrastructure report provides a detailed analysis of the current and future impact of macroeconomic trends, local development initiatives, cargo volumes, trade flows and shipping patterns on industrial real estate surrounding the nation’s top seaports and airports.  This is one of the only reports of its kind – drawing together trends in trade, supply chains and industrial real estate.

About Jones Lang LaSalle
Jones Lang LaSalle (NYSE:JLL) is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2010 global revenue of more than $2.9 billion, Jones Lang LaSalle serves clients in 70 countries from more than 1,000 locations worldwide, including 200 corporate offices.  The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 1.8 billion square feet worldwide. LaSalle Investment Management, the company’s investment management business, is one of the world’s largest and most diverse in real estate with $45.3 billion of assets under management. For further information, please visit our website, www.joneslanglasalle.com.