|Improving trade volumes have led to cautious optimism around gateway markets
The Jones Lang LaSalle Port, Airport and Global Infrastructure Outlook provides a distinctive analysis of seaport- and airport-centric industrial space in gateway U.S. real estate markets. Observing the infl uence of global economic drivers, including trade and cargo flows, socioeconomic and political factors, as well as port capacity and infrastructure investment, it provides both a macro overview of current trends impacting the domestic sector in addition to detailed information on major seaports and airports. This report explores warehouse property fundamentals in a 15-mile radius from seaports, given a minimum building size of 50,000 square feet. Airport markets are comprised of a three mile radius and a minimum size of 20,000 square feet.
- A rising tide will not lift all ships. Many ports around the United States are pursuing massive infrastructure and modernization plans to position themselves in competition for market share as global containerized trade begins to pick back up.
- After a relatively smooth take off in air freight volumes around the world after the recession, the sector hopes it will not experience any pockets of turbulence on the way to sustainable levels of growth.
- The last recovery in industrial real estate began in gateway seaport and airport markets. It is expected that this cycle will follow similar patterns, although traction this time will take longer in established globaleconomies than in emerging markets.
Introduction of the Jones Lang LaSalle Port Index
The JLL Port Index has been developed to provide the reader a benchmark of U.S.port markets from the perspective of the real estate stakeholder. A defined set of measurable indicators have been used in addition to key performance metrics of the ports themselves. Along with TEU volumes and port growth rates, the JLL U.S. Port Index takes into consideration factors such as land value-to-lease rate ratio and local vacancy rates. Other items in the rating process include planned infrastructure investment,labor costs and the availability of on-dock or near-dock service by Class I railroads. Each port is given 30 points as base start, and then the seven aforementioned criteria are ranked on a scale from 1-10, for a total possible score of 100 points. The various criteria are assigned different weights based upon their total value add to port efficiency and profitability. The JLL Port Index can be viewed as a market indicator of overall desirability of any given port to industrial development and investment interests, as well as for decision makers in the site selection process itself.