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May16, 2016

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A SHARP TURNAROUND in industrial real estate activity around the Port of Savan- nah underscores the white-hot demand nationally for logistics properties as well as shipper implementation of long-term plans to use Southeast versus West Coast ports to access the regional market. A burst of activity in the region around Savannah has occurred since mid-2015 when Curtis Foltz, executive director of the Georgia Ports Authority, sounded the alarm that new construction wasn't enough to meet growth seen through the Garden City container terminal. Asia import growth through Savannah is outpacing average growth rates on the East and West coasts, IHS data shows, a clear sign that shippers are looking at the Georgia port not just as an alternative gateway when other ports are congested, but also as a permanent route for inbound goods. The rise in Savannah port volume caught the industrial real estate market unprepared. In the middle of 2015, vacancy rates were well below 3 percent, and in the fourth quarter of 2015 they stood at 3 per- cent, according to Colliers International. They remain low today. At such levels, there would have been few, if any, near-term options for retailers or logistics companies seeking to expand. But since then the market has taken off, at least in terms of new activity. OA Logistics/JLA Home, a subsidiary of home furnishings company E&E Co., will soon open a 1.1 million-square-foot e-commerce fulfillment center at Northport indus- trial park, five miles from the Garden City terminal. TPA Group, a developer, has a 475,000-square-foot warehouse under construction at the Northport park, and furniture company Safavieh is building a 500,000-square-foot distribution center just outside Savannah. By far the biggest new development on the horizon is from short line railroad Omni- TRAX, which plans to develop a 2,700-acre parcel 12 miles from Garden City Terminal, with rail access for CSX Transportation and Norfolk Southern Railway, the two U.S. eastern Class I railroads. Among the largest near-port industrial sites east of the Missis- sippi, the first buildings likely will be ready for occupancy in 18 to 24 months, and expansion could run for 10 to 15 years, Foltz said. Overall, 3.6 million square feet of distribution center space is in the works around the port. MAY 16.2016 TOP 25 NORTH AMERICAN PORTS SPECIAL REPORT 36 THE JOURNAL OF COMMERCE www.joc.com Photo Credit: Georgia Ports Authority/Stephen B. Morton By Peter Tirschwell DEVELOPERS HAVE GEORGIA ON THEIR MINDS Industrial real estate activity jumps around Savannah as Asian imports through the gateway outpace growth at other ports

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