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U.S. Seaport Outlook 2012

Key findings

  • New score methodology: Our improved PAGI score methodology has revealed a shake-up at the top. The top three are still the same ports, but the Port of New York/New Jersey now leads Los Angeles and Long Beach.
  • Three tiers of ports: The new scores have also revealed an underlying distribution of ports in three distinct tiers. The top two tiers have three ports each whereas the last contains an additional seven ports.
  • Exports creating opportunities: Now at an all-time high for the United States, exports have become an increasingly important driver of activity at domestic ports and their surrounding real estate markets.
Seaport 2012 Keyfindings (image)

East coast prepares for Panama

  • East coast prepares for Panama: East coast ports continue to make progress in preparing for the opening of the new set of locks at the Panama Canal, now set to be completed in 2015.
  • Investment pours into ports: Despite the uncertain macro environment, ports have continued to invest heavily in infrastructure improvements. At least $13 billion of public investment is flowing into ports over the next decade. These improvements will expand capacity and increase efficiency.
  • New transshipment hub for Panama: The new port being constructed at Colon on the Atlantic side of the Panama Canal is poised to quickly jump into the ranks of the world’s most crucial transshipment hubs.

Limited options for large space users

  • Limited options for large space users: Large blocks of space are disappearing from port markets. A mere nine spaces can house a tenant of greater than 500,000 square feet within 15 miles of any major seaport. Only 20 blocks are available for tenants needing at least 250,000 square feet within five miles of a major port.

Momentum in seaport markets

  • Leverage changes hands in seaport markets: Overall, the seaport markets continue to lead the broader industrial real estate market, but some individual ports have now slipped. Notably, momentum has slowed near the Los Angeles and Long Beach ports while Jacksonville, Miami, Seattle and Tacoma have swung significantly into landlord favorable territory.
  • East coast has vacancy to burn: East coast ports such as Savannah, Charleston, Jacksonville and Baltimore have higher vacancy in their surrounding port markets, but they are also the fastest growing over the last 18 months. We expect development to remain cautious as these markets continue to tighten over the coming quarters.

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