Real Estate
Select top US airports and property market indicators* Airport
Immediate Memphis Anchorage Louisville Miami Current
Market Size Vacancy 26.1
13.8% 17.1 30.5 37.7 Los Angeles 19.0 JFK
Chicago O’Hare
Newark -Liberty DFW
Atlanta 5.7 53.5 Indianapolis 18.3 43.0 15.5 27.6 2.6% 10.0% 9.8% 4.9% 5.8% 14.8% 12.0% 7.3% 20.2% 15.3% 2010 Net Average
Absorption Asking Rents 0.2
$2.11 0.0 -0.3 0.1 -0.1 0.0 0.1 0.6 0.8 -0.4 -0.4 $11.57 $3.07 $8.45 $13.66 $11.14 $5.28 $2.98 $5.08 $4.17 $3.02 Comments
The main FedEx Express global “SuperHub”; also servces as hub for Delta Airlines
Major hubs for FedEx Express and UPS; also Alaska Airlines second largest hub, after Seattle.
Worldwide air hub for UPS; also home to two airlines, maintenance complexes
Regional hub for American Airlines; largest gateway between US and Latin America; handled most international cargo in the US in 2009
Major hub for United Airlines; focus city for American Airlines, Southwest, and Virgin; also international gateway for Delta Air lines; 2 million sqft of cargo facilities
Base of operations for Jetblue Airways; international gateway hub for American Airlines and Delta Air lines; nearly 100 cargo operators Main hub for United Airlines; redevelopment of airfield will entail replacement of primary cargo hub
Hub for FedEx Express and focus city for AirTran Airways; long-range master plan calls for fourth runway
FedEx’s third largest cargo hub with 2 million sqft in operations; regional hub for Continental Airlines
Primary and largest hub for American Airlines and primary hub for American Eagle; Asia and Europe cargo account for 75% of cargo traffic
Primary hub for AirTran Airways and Delta Airlines; Delta hub is the world’s largest airline hub
* Preliminary figures, subject to change
Indianapolis International Airport Indianapolis’ real estate market experienced healthy net absorption in 2010 and entered 2011 with a historically low vacancy rate of 5%. Online retail operations, both existing and new, find significant value in the neighbouring FedEx hub and continue to expand in the area with over 1.5 million square feet of recent new space requirements.
Los Angeles International Airport At LA, asking rents for industrial estate is the highest of all the markets tracked, registering at $13.66 per square foot, leasing activity continues its momentum. Demand from carrier and logistics firms remains strong and land lease transactions have increased due to excess trailer space requirements as a result of strong trade flows through the local ports. Limited blocks of space for quality Class A product have spurred landlords to start some speculative development again. Vacancy rates continue to decline; while overall asking rates are high compared to
GLOBAL AIRPORT CITIES
other airports they have levelled out and are starting to rise in the Class A sector.
Miami International Airport The industrial real estate market surrounding the airport has witnessed almost a 100 basis points drop in vacancy rates from the previous quarter and is currently at 9.8%. The availability of large blocks of Class A product (100,000sqft plus) is falling faster than other submarkets in the region. As the Latin America economies remain strong and trade volumes rise, tenants see this as a good time to lock in low rental rates of good quality spaces in the airport submarket. With the development of a large rail yard next to the airport and access to good quality railroads there is a set to be a rise in demand for logistics and distribution centre space over 2011. Overall cargo traffic through the Miami Airport was up by around 6% in January 2011 compared to the same time last year.
Memphis International Airport America’s Aerotropolis, which is supported by runway, road, rail, and river, possesses its main driving force in the airport located FedEx SuperHub.
Memphis Airport is the heart of the Aerotropolis and this area includes the Southeast, Desoto County (located in MS), and Southwest submarkets. All three submarkets have recently experienced positive leasing momentum. Also, positive net absorption for all three of the airport submarkets over the last few quarters continues to push vacancy rates down and the supply of large blocks of space is fast decreasing as construction has been scarce in recent years.
About the author John Carver is a real estate expert for ports, airports and infrastructure at Jones Lang Lasalle.
Issue 1, Volume 5 33
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