Commercial Real Estate, Capital, Insurance, Leasing & Management

Shipping It In

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Southeast has some of the most successful, competitive ports in the United States.

Southeast has some of the most successful, competitive ports in the United States.

The Southeast is rife with a number of successful and active ports along the East Coast and Gulf Coast. It’s unclear yet what impact the ports will have once the Panama Canal expansion is complete in 2015, but experts believe the work the ports are doing now to expand their capabilities and footprint will bode well for the future of their respective economies.

A group of real estate experts have written about the major ports in the Southeast, including the Port of Savannah, the Port of Jacksonville (JAXPORT), the Port of Baltimore and PortMiami. The following articles highlight the ports’ activity, economic significance and challenges.

“If approved, the dredging project would be a significant driver for the industrial and office market in Jacksonville.” – Monte Merritt, Franklin Street Real Estate Services, Senior Director

Port of Jacksonville
For a half a decade there has been much debate in Jacksonville regarding deepening an 11-mile stretch of the St. Johns River that leads to Jacksonville Port Authority’s (JAXPORT’s) Talleyrand Marine Terminal. This constant debate has created a state of uncertainty over Jacksonville’s status as a main player among its east shore competitors, which include Savannah and Charleston. Currently at 40 feet, JAXPORT is working with House Representatives studies. The Jacksonville port study is slated to be completed in April.

In addition to the depth issues, container ships also face issues with Mile Point, a stretch of the St. Johns River where dangerous cross-currents cause unsafe conditions for large vessels.

Supporters of dredging argue that increasing the depth to 47 feet would allow larger vessels to enter, making the port more competitive with other in the region, and thus positively impacting the area’s commercial real estate market. At its current depth, container ships can only be partially loaded and can only enter or exit the port during high tide, causing scheduling limitations and increased cargo costs.

The shallow depth of the port may also cause the city to lose the opportunity to become a global port. Hanjin Shipping Co. Ltd., Korea’s largest and one of the world’s top 10 container carriers, pulled out of its decision to build a $300 million container shipping terminal at the Port of Jacksonville earlier this year because the current port could not support its shipping needs. JAXPORT officials had previously reported that the Hanjin terminal would bring Jacksonville more than 5,600 jobs and nearly $1 billion in annual impact.

If approved, the dredging project would be a significant driver for the industrial and office market in Jacksonville. The port could attract additional shipping lines to the area, thus creating a need for more warehouse and distribution centers. Businesses that rely on large cargo shipments could also be enticed to open centers in Jacksonville.

Critics of the dredging project cite environmental concerns and the true economic value to northeast Florida. However, JAXPORT officials stand behind the prediction of a significant, positive impact for the local economy and are currently working to demonstrate how the project will produce a reasonable return on the investment for the city and the region.

Despite the dredging debate, the port has made some positive enhancements. Recently, JAXPORT underwent an 18-month, $12.4 million reconstruction of the port’s heavy-life cargo berth, which now ranks as one of the nation’s highest-weight-bearing-capacity docks. According to port officials, Jacksonville’s location on the southeast coast allows it to offer the best intermodal connections in the South Atlantic. The newly rebuilt Berth 31 will allow the port to take on additional heavy-lift opportunities and expand its position in the project cargo arena.

Monte Merritt is a senior director for Franklin Street, a commercial real estate firm with offices throughout the Southeast. Based out of the firm’s Jacksonville office, Merritt specializes in landlord and tenant representation in office and industrial sectors. Download PDF

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