Air cargo Warehouse Space Becomes More Dear

This year the Jones Lang LaSalle PAGI report features the first Airport Real Estate Index which measures the nation’s top 12 airports against criteria including cargo volumes, infrastructure plans and real estate conditions.
By Patrick Burnson, Executive Editor
November 22, 2011 - SCMR Editorial

Demand for warehousing space around major U.S airports has ramped up, according Jones Lang LaSalle’s third annual Port, Airport and Global Infrastructure (PAGI) report.

This year the Jones Lang LaSalle PAGI report features the first Airport Real Estate Index which measures the nation’s top 12 airports against criteria including cargo volumes, infrastructure plans and real estate conditions.

“The Index is an indicator of how well the real estate markets around top U.S. airports are performing,” said John Carver, head of the PAGI group at Jones Lang LaSalle.

“Markets such as LAX and New York JFK have held strong with low vacancy rates owing to high demand and a lack of new construction.  Whereas airport submarkets that saw a rise in new development before the recession, such as Dallas-Fort Worth and Miami, suffered higher vacancy rates during the recession and are taking longer to recover.”

The report finds that cargo volumes through the nation’s airports increased by 11 percent in 2010 to 28.2 million metric tons, just short of the 2007 peak of 30.4 million tons. While Memphis airport is listed as the world’s second largest airport for cargo volumes in 2010, behind Hong Kong, it is ranked sixth on the Jones Lang LaSalle’s Airport Index.

At the same time, however, shippers are concerned about an escalation of air cargo rates next year.

“Most major airlines have too much capacity,” said Peter Gatti, executive vice president, National Industrial Transportation League. “That means that they will have to capture new revenue next year to remain profitable.”

Southern California’s shippers may be the first to feel the pinch.

Topping the Index is Los Angeles’ LAX, which has strong cargo volumes, a low 3.8 percent industrial real estate vacancy rate, and several multi-million-dollar investment plans in the works.

New York JFK airport falls in second place.  With high demand for warehouse space in the metropolitan area driving vacancy rates to a low 3.4 percent; JFK is also one of the most space-constrained airports with the highest rents at $12.31 per square foot in its delineated trade area.

While Chicago O’Hare Airport has a relatively high vacancy rate of 14.2 percent, it ranks third on the Index because it serves as a hub for major airlines such as United Airlines and American Airlines, and has a vigorous modernization program in place.  It also has one of the largest annual cargo volumes of 1.376 million tons, third behind Memphis, which has the most at 3.916 million tons and Miami at 1.835 million tons.

Miami also ranks high on the Index with an average vacancy rate of 9.9 percent, reasonable rents at $5.83 per square foot and high cargo volumes.  In fact, Miami International Airport handles 83 percent of all imports and exports to and from Latin America and the Caribbean.

Following Los Angeles (LAX), New York JFK (JFK), Chicago O’Hare (ORD) and Miami International (MIA) is Anchorage (ANC), Memphis (MEM), Newark-Liberty (EWR), Atlanta (ATL), Dallas Forth-Worth (DFW), Louisville (SDF), Indianapolis (IND) and Oakland (OAK).

“For airports to rank higher on our Index they must seek to raise their cargo levels and through traffic as well improve infrastructure to improve the vitality of their real estate markets,” said Carver.



About the Author

image
Patrick Burnson
Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).

Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

The index ISM uses to measure non-manufacturing growth—known as the NMI—was 56.0 in June, which edged out May by 0.3 percent.

Regardless of the date or year, one thing is beyond consistent when it comes to key themes in freight transportation logistics: the state of United States highways and related transportation infrastructure is in an eternal state of chaos and disrepair.

The high-volume warehouse or distribution center that supports B2B, Omni-channel activities, direct-to-consumer shipments, and the Internet of Things all require a flexible and scalable supply chain in order to function at optimal capacity. The problem is that most of today's supply chains are made up of fragmented silos of information that compromise their ability to compete, be responsive to customer demands or seize new business opportunities.

As customers' demands constantly evolve, transportation and logistics (T&L) operations are being put under growing pressure to offer more efficient delivery services, while not compromising on customer service. Using findings from a research survey conducted among transport and logistics managers around the world, this report explores how a combination of mobile technology implementations for mobile workers, and process re-engineering efforts can elevate operations to the next level.

It's a fact - most best-of-breed WMS providers force you to pay every time you require a system change. Uncover five more dirty secrets many warehouse management systems providers don't want you to know. Download the white paper 5 Dirty Secrets of Warehouse Management Systems to discover these hidden truths and gain valuable information on considerations for evaluating WMS vendors.

About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review. Patrick covers international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. Contact Patrick Burnson

Comments

Post a comment
Commenting is not available in this channel entry.