You have probably heard that the Panama Canal is being expanded. What you may not know is what that means to New Jersey.
The Panama Canal now handles Panamax ships, meaning ships equal to the maximum capacity of the existing Panama Canal. After the expansion, the Canal will be able to handle Post Panamax ships [Post Panamax as a term is an utter disappointment. What not Pana-Really-Max or Pana-Mungous or Pana-Ziti? Such a lost opportunity for wordplay. Alas.] These are some mighty big ships: 1,200 feet log, 160 feet wide, capable of handling 1,200 TEUs (20 Foot Equivalents, about 1/2 of a typical 40 foot container), more than double the capacity of Panamax ships. Expanding the Canal means the biggest cargo ships can sail from Asia to the Atlantic Ocean.
The Atlantic Ocean. That’s near us, right?
Right you are! And in anticipation, the Port Authority of New Yahk and New Joisey plans to deep-dredge the approaches to Port Newark and Port Elizabeth, and, in a clever bit of engineering, raise the Bayonne Bridge. Our way of saying, this way big boys…..
Other changes started a few years ago. With limited land available, the Port Authority began demolishing warehouse buildings to provide more open storage for containers. The result was a boon to nearby warehouse owners. The industrial vacancy rate within a 10 mile radius of the Port increased a mere 1% after 2008, during the worst of the recession, and started declining in mid-2012, long before most other real estate sectors. The very cleverest of these warehouse barons (and you know who you are) are now selling into this hot market.
But the story goes further. I mean, when was the last time you had a 40 foot steel container delivered to your house? The goodies in those containers have to be unloaded, sorted, stored and distributed. Conveniently, there are several zillion square feet of shiny, high-ceiling warehouses just south along the New Jersey Turnpike. This where all the stuff you order on Amazon (now about to occupy its 1 million square foot distribution/drone-port facility in Robbinsville) comes from? As it turns out, this part of New Jersey, just north and west of Princeton, has the advantage of being within a few miles of a major port and a half-day drive from the 50+ million people living in the Boston-Washington DC googleopolis. The Exit 8A Industrial submarket, as it is known, is en fuego. Vacancy peaked at 16% at the end of 2009. It’s about 7% now.
And the really big ships haven’t even gotten here yet.
– Bob Gagliano
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