Jones Lang LaSalle
Global Industrial Markets Growing Fast
By Sean Ryan
Sean Ryan is associate editor of Real Estate New Jersey.
(To read more on the industrial market, click here.)
SECAUCUS, NJ-As big as New Jersey's port area is, it's only the 16th largest in the world. The vast changes to the industrial markets in Asia and Europe are serving the big growth in the global market, said Walter Rakowich, president and COO of ProLogis, to an audience of approximately 300 at the RealShare Industrial East conference. Rakowich was the keynote speaker for the event, which is produced by Real Estate Media, publisher of Real Estate Forum and GlobeSt.com.
As globalization shifts manufacturing and helps to build an international middle class--China will have a 200-million person middle class in the next 10 years--industrial demands are changing just as rapidly. Rakowich points to Shenzhen, the fourth largest port in the world and a city of seven million people, which essentially didn't exist 20 years ago.
Around 80% of port traffic from Asia goes to the West Coast, mostly the port of Long Beach. It takes twice as long for ships to reach eastern ports, and larger ships can't fit through the Panama Canal. In Europe, the nationalized shipping models that the continent has the infrastructure built for might not be the most efficient means of transportation, thanks to unrestricted transport across the continent, he noted. The Rotterdam and Hamburg ports are the two largest; Marseilles might be on the list, but labor problems keep the port from all that its Mediterranean location promises.
A town hall panel spoke of some of the less recognized markets in North America. Jim Dieter, executive managing director for CB Richard Ellis and moderator of the panel, brought up Hagerstown, MD and Orange County, NY, as expansion areas for the northeastern market. Greg Thurman, president of Panattoni Development Co., mentioned Toronto, the second largest distribution market in North America, as being comparable to New Jersey in terms of problematic developing. "There's land, but a lot of it is wet, protected and you'll never get it zoned."
Similarly, John Thomas, managing director for ING Clarion Partners, attested that Calgary, Austin, and the region north of Mexico City were all "harder than New Jersey" for developers. Local developer Gus Milano, executive vice president, finance and leasing, for Hartz Mountain Industries, enjoys the tough development areas, because it leads to more opportunities. "We like land constrained situations. The barriers to entry are what create value."
Stanley Danzing, executive director for Cushman & Wakefield, is seeing some of the distributors who had left northern New Jersey coming back. After balking at land prices and development problems, they've reaccessed their situations and "the extra costs seem to be justified." Danzig does suggest that other ports--such as Houston and Savannah--are due for increases because the major ports are running out of room. "There's a limit to how much you can stretch the envelope in L.A. and Newark."
Copyright © 2006 ALM Properties, Inc. All rights reserved. Reproduction in whole or in part without permission is prohibited.
Global Industrial Markets Growing Fast
By Sean Ryan
Sean Ryan is associate editor of Real Estate New Jersey.
(To read more on the industrial market, click here.)
SECAUCUS, NJ-As big as New Jersey's port area is, it's only the 16th largest in the world. The vast changes to the industrial markets in Asia and Europe are serving the big growth in the global market, said Walter Rakowich, president and COO of ProLogis, to an audience of approximately 300 at the RealShare Industrial East conference. Rakowich was the keynote speaker for the event, which is produced by Real Estate Media, publisher of Real Estate Forum and GlobeSt.com.
As globalization shifts manufacturing and helps to build an international middle class--China will have a 200-million person middle class in the next 10 years--industrial demands are changing just as rapidly. Rakowich points to Shenzhen, the fourth largest port in the world and a city of seven million people, which essentially didn't exist 20 years ago.
Around 80% of port traffic from Asia goes to the West Coast, mostly the port of Long Beach. It takes twice as long for ships to reach eastern ports, and larger ships can't fit through the Panama Canal. In Europe, the nationalized shipping models that the continent has the infrastructure built for might not be the most efficient means of transportation, thanks to unrestricted transport across the continent, he noted. The Rotterdam and Hamburg ports are the two largest; Marseilles might be on the list, but labor problems keep the port from all that its Mediterranean location promises.
A town hall panel spoke of some of the less recognized markets in North America. Jim Dieter, executive managing director for CB Richard Ellis and moderator of the panel, brought up Hagerstown, MD and Orange County, NY, as expansion areas for the northeastern market. Greg Thurman, president of Panattoni Development Co., mentioned Toronto, the second largest distribution market in North America, as being comparable to New Jersey in terms of problematic developing. "There's land, but a lot of it is wet, protected and you'll never get it zoned."
Similarly, John Thomas, managing director for ING Clarion Partners, attested that Calgary, Austin, and the region north of Mexico City were all "harder than New Jersey" for developers. Local developer Gus Milano, executive vice president, finance and leasing, for Hartz Mountain Industries, enjoys the tough development areas, because it leads to more opportunities. "We like land constrained situations. The barriers to entry are what create value."
Stanley Danzing, executive director for Cushman & Wakefield, is seeing some of the distributors who had left northern New Jersey coming back. After balking at land prices and development problems, they've reaccessed their situations and "the extra costs seem to be justified." Danzig does suggest that other ports--such as Houston and Savannah--are due for increases because the major ports are running out of room. "There's a limit to how much you can stretch the envelope in L.A. and Newark."
Copyright © 2006 ALM Properties, Inc. All rights reserved. Reproduction in whole or in part without permission is prohibited.
posted by Jones Lang LaSalle NJ News Blog at 9:49 AM
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