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The Port of Charleston was ranked last among the top 13 U.S. ports in industrial development and investment desirability, according to the Jones Lang LaSalle Port Index, which was released Tuesday as part of the company’s Port, Airport and Global Infrastructure report.
By Daniel Brock
dbrock@scbiznews.com
Published June 25, 2010
A study released this week ranked the Port of Charleston last among the top 13 U.S. ports in industrial development and investment desirability.
Real estate advisers Jones Lang LaSalle released its first U.S. port index on Tuesday as part of the company’s Port, Airport and Global Infrastructure report. Port markets were rated on ports’ performance and their impact on the surrounding real estate economy.
Seven categories made up the index:
The facilities were each given a base 30 points, and each category was scored from 1 to 10, making 100 the perfect score.
Charleston finished with a 73, bottom among major American seaports and just behind Baltimore at 73.8. California’s Los Angeles/Long Beach port complex led the way with a 91.4, ahead of the Port of New York and New Jersey, at 89.5, and the Port of Savannah, at 86.3.
Vacancy and decreased volume hurt Charleston’s rating, according to Jones Lang LaSalle.
Over the course of a year, vacancy escalated by 1.6% to 9.0% nationally, as tenants shed excess space, consolidated operations or ceased business altogether, the report said.
Despite ports gearing up for investment, repercussions from the global economic meltdown have brought demand for the warehouse and distribution space around ports to critically low levels, according to the report.
Vacancy in the Charleston market is 12.7%.
For the second straight year, net absorption decreased by 2 million square feet for a total of negative 3.9 million square feet in 2010 nationwide. And despite some inventory replenishment, demand has yet to return to most major port markets, the report said.
Jones Lang LaSalle officials said that massive volume losses at Charleston helped drive down the average asking rent price in the port market to its current level of $3.84 per square foot. Only the Port of Jacksonville in Florida fetches less, at $3.53 per square foot, according to the report.
Meanwhile, as the global shipping market crashed, TEU volume at Charleston dropped 27.8% to 1.18 million in 2009, by far the biggest hit for any of the ports surveyed.
“Asking rents declined by an average 7.1%, with the largest losses in the markets surrounding the ports of Los Angeles, Long Beach and Charleston,” said Craig Meyer, managing director and head of Jones Lang LaSalle’s Americas Industrial Services team. “It’s no surprise that these three ports, along with Virginia and Tacoma (Wash.), posted the highest year-over-year losses from 2008 in total container volumes, demonstrating the integral relationship between port through-traffic and industrial vacancy rates.”
The Port of Charleston, however, has made volume gains throughout the first half of 2010, posting higher numbers in the first four months of the year before leveling off in May. Recently announced shipping contacts, a rail-served warehouse program and a huge spike in the port’s refrigerated cargo volume have also brightened officials’ outlook.
“New cargo initiatives are boosting Charleston port volume, and this port is fortunate to have some quality spaces to meet increasing demand,” SPA spokesman Byron Miller said.
The report noted several other positive developments for the port, including TBC Corp.’s coming 1.1 million-square-foot distribution center in Jedburg; Boeing partner New Breed Logistics’ recent lease of a 101,500-square-foot warehouse in North Charleston; and the container terminal being built at the former Navy Base in North Charleston, a facility that will raise the port’s capacity by 1.4 million TEUs.
The new terminal is part of the port’s preparation for the Panama Canal’s expansion in 2014. And it’s part of a trend that will see the top 13 U.S. seaports spend a projected $8.5 billion on infrastructure over the next five years, according to the report.
“There are great long-term opportunities on the horizon for port real estate leasing and investment,” said Meyer.
Reach Daniel Brock at 843-849-3144.
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