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U.S. Airport Outlook 2013

Engines of demand thirsting for fuel

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In this report we cover the top cargo airports in the U.S. and their surrounding real estate markets as well as unveil our newly improved scoring methodology.

The study reveals one group of airports dominated by FedEx and UPS serving 'big box' distribution and fulfillment operations and a second that includes international gateways served by a multitude of carriers and surrounded by 3PLs, freight forwarders and other specialized users of industrial real estate. Total cargo volume growth may be anemic, but we see opportunities to cater to the right end-users tied into growing trade lanes and the expanding e-commerce segment that relies on parcel shippers to meet ever-growing customer service demands.

Score and methodology

The PAGI score was created to provide a quick snapshot of U.S. airports from the vantage point of the real estate stakeholder — those who invest in, develop or occupy industrial properties in airport-centric locations.

We based the index on 13 measurable performance metrics divided into two major categories: air cargo operations and real estate market factors. The resulting index score is then a combination of the performance metrics and provides a subjective measure of an airport's value to Jones Lang LaSalle clients and their customers.

The real estate metrics taken into consideration include the total amount of industrial real estate stock within three miles of airport boundaries, the total stock within the broader industrial market served by each airport, the vacancy rate of properties within the three mile buffer, the amount of available square footage within the three mile buffer, and the rent premium (or discount) for properties within the three mile buffer compared to the broader market. For this segment of the score, Chicago O'Hare (ORD) scored the highest, followed closely by Newark Liberty (EWR) and Miami International (MIA).

The air cargo operations metrics are designed to capture the health and growth of the airports as well as their functionality and connectivity. Our measures score the total volume of cargo traffic (measured in metric tons), short- and long-term growth in volume, flight operations capacity, runway length, the number of operational cargo airlines and the population reachable within one day's drive from the airport. Memphis International (MEM) has the highest air cargo operations score in our study followed by MIA and Los Angeles (LAX).

To produce our final airport index score, the two components are weighted and then combined. It is important to note that all individual components of index are scored by percentile; hence, the scores are relative to the best and worst performing airports in the group. This year's highest ranked airport is MIA with a score of 125, followed by ORD at 123 and MEM with a 115.

Airport Scores Index

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PAGI Airport Scores Index (image)