The Southeast region of the U.S. has been one of the biggest benefactors of this expansionary economic period. The region boasts some of the fastest growing metro areas in the country – both in terms of population and job growth. Due to its low cost of living and favorable business climate, many companies and manufacturers have located operations in the Southeast. As such, port-centric markets in the Southeast have experienced strong demand to service to the growing region – and the industrial real estate markets are thriving as a result.
“This is a great time to be a port in the Southeast.” Said JLL Economist and Chief Strategist Walter Kemmsies. Specific, the ports of Jacksonville, Savannah, and Charleston, which have collectively seen TEU levels increase 54.4 percent between 2009 and 2016 – all three ports are on pace to have another record year in volume. The Port of Charleston has experienced the biggest increase, and (like the other ports) is undergoing renovations to increase capacity, which is driving further investment into the real estate markets. “The ports and cargo owners are reinforcing the benefits from each other’s investments”, added Kemmsies – a rising tide lifts all boats.
“There are several factorings contributing to the dynamic growth at all three South Atlanta ports” said JLL Executive Vice President Steve Grable. In addition to the strong economic gains experienced in the region, macro factors are playing a big part. For example, Grable points out that “the expansion of the Panama Canal allows larger ships to land at these ports, thereby reducing transportation costs. Any clearly shippers now recognize the importance of redundant east and west coast facilities in order to mitigate labor and weather disruptions.”
The port markets of Jacksonville, Savannah, and Charleston are prime hubs for businesses that need to import goods to the Southeast. These markets are secondary and tertiary industrial markets, and have experienced incredible growth through the current development cycle as business invest in these areas, which is increasing demand for warehouse space in these markets. Given the accessibility to the fast growing region, the industrial markets in the area are increasingly becoming tight. “These markets are seeing unprecedented interest in warehouse space and tenants are finding few options left available” notes JLL Senior Vice President Luke Pope. With more regional growth expected, these markets will continue to be on the minds of investors and occupiers alike.