NAIOP NJ SEMINAR: PORT CARGO VOLUME UP 6.1 PERCENT, BUT CHALLENGES REMAIN
Infrastructure and Economic Recovery are Key Issues, but Projected Growth will Provide Commercial Real Estate Opportunities
ELIZABETH, N.J. – December 7, 2011 – (RealEstateRama) — The first nine months of 2011 have seen a 6.1 percent increase in cargo coming into the Port of New York and New Jersey; raising the Bayonne Bridge and replacing the Goethals Bridge are top priorities as the port continues to be a major economic engine; and commercial real estate opportunities still exist relating to the port.
Those were some of the conclusions provided by speakers at the Transportation & Logistics Update, a seminar presented by NAIOP New Jersey, the commercial real estate development association. “According to a recent study, the port generates $11.6 billion in personal income and almost $37.1 billion in business income annually,” said Michael G. McGuinness, CEO of the chapter. “Despite the recession, jobs related to port activity grew by almost 3.5 percent from 2008 to 2010.”
The 6.1 percent increase in cargo year-to-date “is a good economic marker,” said Bill Baroni, deputy executive director of the Port Authority of New York and New Jersey. Noting that the Port Authority was founded in 1920 at the urging of New York Gov. Al Smith, who termed port development ‘critical,’ “those words are still heeded today,” Baroni said. “We are still faced with new challenges.”
Among those challenges: raising the Bayonne Bridge to accommodate the new, larger Post-Panamax vessels utilizing the expanded Panama Canal, a project Baroni termed “ahead of schedule”; replacing the aging Goethals Bridge; continued improvements to the PATH light rail system and Port Authority-operated bus terminals; and replacing the aging Pulaski Skyway to improve access to the port and the rest of the region.
“We are doing all of this because this is what our governors want,” Baroni said. “Governors Christie and Cuomo have told us they will continue to work with us to improve the region.”
Economic viability of the region is “a key goal,” said James Simpson, commissioner of the New Jersey DOT. While noting the industrial space that remains empty along the New Jersey Turnpike, “we are feeling better about New Jersey. People are not leaving, he said, noting corporate moves to New Jersey by such companies as Panasonic and Bayer, “but we need more good-paying jobs,” he conceded.
His wide-ranging remarks covered everything from the havoc wreaked on transportation by 2011’s weather events, his agency’s efforts to ensure pedestrian and biking safety, DOT’s “Clean New Jersey” program, and why the newly proposed No. 7 subway tunnel under the Hudson River makes more sense than the cancelled ARC tunnel project. And, in any case, “if you need anything, call us,” he said. “The Christie administration really cares.”
While the uptick in cargo entering the port might be a “good marker,” Anne Strauss-Wieder of consulting firm A. Strauss-Wieder, Inc. termed the current economy a “white water rapids, and we are trying to navigate the river. The economy has begun to recover, but it is a jobless recovery.” Noting the impact of everything from port strikes on the West Coast, to fuel cost spikes, natural disasters, inventory costs, and even food recalls, “we are seeing continued economic unrest.”
Among the solutions: “More import/export activity at our East and West Coasts, and a greater push to use all of the freight system elements,” she said.
Brian Clark, managing director for APM Terminals, lauded the Port Authority for enhancing port access and egress with its development of express rail facilities. But what the region’s ports have to do now is, “be prepared for future growth.”
With his company operating four terminals inside of the Bayonne Bridge, “we are very happy to see that project moving forward. We are currently developing facilities and increasing capacity to handle the larger Post-Panamax vessels. He termed the port, “a very competitive marketplace. We have four competitors, and we are all expanding capacity.”
In terms of commercial real estate opportunities, Bo Farkas, vice president of Prologis, said, “companies like to see more trailer parking per door.” It has become a matter of “maxing out” sites and increasing leasing opportunities. Noting, however, that while this region is a great port location from the standpoint of everything from connectivity to the labor force, “it is difficult to find larger tracts of land at a good price. It is important to compile small tracts of land around the port to achieve higher trailer parking ratios and build new, efficient warehouses.”
Among the current trends: “We are seeing a lot of build-to-suit activity by some of the larger companies seeking greater efficiency, and they have their own real estate departments to do that,” Farkas noted. Another trend is redevelopment of old industrial warehouses.
What can the State of New Jersey do now to help? Continue physical infrastructure improvements, and provide tax incentives for local cargo, ventured Clark. For Farkas, the key is the “speed of approvals for getting projects done.”
The seminar was also the second NAIOP New Jersey seminar licensed to accredit Continuing Education Units (CEUs), now required by the State of New Jersey for licensed real estate brokers and salespersons as a condition for biennial license renewal. Professional planners and accountants were eligible to earn two CEUs for attending the program.
###
Media Contact:
Evelyn Weiss Francisco/ 201-796-7788 / evelyn (at) caryl (dot) com
