INSIGHTREALTY GROUP, Inc.

 

Port: Land is selling quickly

Mitsui's coming, and there's a rush to grab some space

 

By TIMOTHY J. GIBBONS, The Times-Union

 

They show up at the Jacksonville Port Authority offices about once a week. Big, national developers. Small, local developers. Investment companies. Landowners.

In short: the type of people who will supply the warehousing and distribution space Jacksonville needs to deal with the flood of imported goods coming into the city in just over a year.

"We are seeing a tremendous interest from developers," said David Stubbs, director of properties and environmental compliance for the authority. "You just can't wait too terribly long. There's not an unlimited supply of industrial land. If you're serious about being here, there's some sense of urgency."

Across the East Coast, port cities are striving to capitalize on increased interest by steamship companies who are looking for alternatives to the clogged megaports of California.

Places like Norfolk, Va., Savannah, Ga., and Charleston, S.C., have millions of square feet of warehouse space under development, adding to the capacity around those ports that are already major players in handling containerized cargo, particularly from Asia.

As Jacksonville gears up for the late-2008 arrival of Japanese steamship company Mitsui O.S.K. Lines - establishing the first major connection between the First Coast and the manufacturers of the imported goods voraciously consumed by the U.S. - its industrial real estate community is in the early stages of preparing to house and distribute those products.

"People are sniffing around the area," said James Citrano, managing director of CB Richard Ellis in Jacksonville. "We're seeing the preparation now."

Behind the scenes, the city is readying for a real estate explosion as retailers and developers begin to assemble the estimated 5 million to 8 million square feet of warehouse space that will be required.

"We're right in the middle of an industrial revolution," said Hobart Joost, senior vice president with Colliers Dickinson. In the past two months, he said, the company closed on three land deals worth a total of $35 million, including one tract with 220 acres of usable land, and has three more projects set to close in the next quarter.

"We continue to have industrial developers come to our office," Joost said. "We think we're 8 million square feet short right now, if the terminal opened today."

The warehousing explosion should extend beyond Jacksonville: Although retailers like to be close to the port - allowing them to receive shipments more quickly - cheaper, more available land in the suburban counties around Duval County makes outlying sites viable in their own right.

"Baker has rail, [highway] access, land," said Stubbs, with the Port Authority. "That's pretty attractive to people."

There are, of course, some obstacles that have to be overcome before buildings rise from the ground, including things (in Duval County) like the City Council's recently passed stormwater fee, which affects owners of large stretches of paved property.

On the more basic economic side, the increased demand has been steadily driving up the price of land around the region.

The different type of cargo will also require the city's developers to look at larger projects - 800,000 square feet and larger, rather than the 80,000 square feet and smaller that have been the area norm.

"We're talking about bulk warehousing," said Louis Galant, director of research at Colliers Dickinson. "That's basically what we'll need to really accommodate the trade coming in to Jacksonville."

That's the type of warehouse being built at Cecil Commerce Center by Bridgestone Firestone North American Tire, a company whose decision to come here has helped spark more interest in the region, city and port officials say.

"I think people are saying 'Bridgestone did it and Michaels did it,' " said Roy Schleicher, senior director of marketing and trade development for the Port Authority, referring to Michaels Stores' decision to relocate its Southeast seasonal distribution center here. "Let's take a look at it."

And that interest leads to activity on the real estate side.

"Local and out-of-town land developers and investment companies are knocking at our door every day," Schleicher said. "Not a week goes by without someone coming by here."

 

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