The real estate market surrounding the major U.S. seaports is leading the nation's industrial recovery and is outperforming the broader industrial property market, according to a report issued today by real estate and logistics services giant Jones Lang LaSalle Inc. (JLL).
According to the report, the third annual study issued by the Chicago-based company, overall vacancy rates at seaports have dropped to 8.5 percent from 9.9 percent. By contrast, vacancy rates for the general industrial market stand at about 9.7 percent, the report said.
John Carver, who heads JLL's ports, airports, and global infrastructure group, said the port industrial property segment is benefiting from stronger warehouse demand propelled by growing international trade activity. U.S. imports and exports totaled $316 billion in May, just under the all-time record set in July 2008, the report said.
At the same time, vacancy rates have shrunk as millions of square feet of space have been taken out of the market in the past year, the report said.
The Port of Los Angeles was ranked as the nation's top port in a JLL index that rates the top 12 port markets on their cargo performance, investment plans, twenty-foot equivalent container unit volumes, and other characteristics such as their land value-to-lease ratios, labor costs, and availability of on-dock or near-dock service by Class I railroads. Los Angeles received a 95.1 rating, followed by the Port of Long Beach with a 92.8 rating.
The Port of Baltimore showed the largest percentage gain year over year, with an 8.7-point jump to 82.5, the report said.
Vacancy rates varied, with Los Angeles and Long Beach showing the lowest rates at 6.2 percent, while the Port of Savannah, dealing with the lingering effects of an overbuilt market, had the highest rate at 23.6 percent, the report said.
Carver said seaport real estate will continue to outperform the broader industrial real estate market as trade volumes continue to expand and the Panama Canal expansion project opens the door for larger ships to call on U.S. ports and increases the demand for portside warehouse space.