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A rebound of import activity at the Port of Savannah, which saw a large decrease in traffic at the start of the coronavirus pandemic, is attracting new developers to coastal Georgia, where they plan to build large-scale industrial projects.
Despite a noticeable drop in imports and exports at Georgia Ports Authority terminals in March, overall traffic held steady during 2020, buoyed by its busiest December ever. During December, the Port of Savannah moved 447,525 twenty-foot equivalent container units, known as TEUs, an increase of 24% compared to December 2019, according to the Ports Authority.
For the year, Georgia Ports Authority terminals moved more than 4.68 million TEUs, an increase of 1.8% from 2019.
The increase in traffic at U.S. ports led to new demand for warehouse and distribution space around them, said Walter Kemmsies, an expert in port logistics and development. As a result of consumer good shortages during the pandemic, supply chain companies generally have increased inventories 5%, “so you don’t get caught up in what happened to the bicycle guys,” Kemmsies said in an interview. “Five percent equals millions of new square feet of industrial space around the county.”
During stay-home orders designed to slow the spread of the coronavirus, bike shops across the United States ran out of stock and had to wait for weeks for new supplies to come in from overseas.
The bounce-back in activity, caused in part by increased online shopping by consumers during the pandemic, has prompted developers of import, distribution and fulfillment centers to commit to the Savannah region for the first time.
“Georgia has the third-largest and fastest-growing port in the U.S.,” Nick Sansone, principal of Sansone Group, said in an interview. “It’s got the capacity to double its current volume.”
Last month, Sansone Group, a St. Louis-area commercial property firm that develops retail, industrial, office and residential properties, partnered with a private equity real estate fund advised by Crow Holdings Capital to acquire nearly 102 acres in Port Wentworth, Georgia, less than 6 miles from the Port of Savannah.
Crow Holdings and Sansone Group paid Greenland Developers $14.6 million for the property, according to CoStar data. Sansone plans to develop up to 1.3 million square feet of Class A industrial space at the site at Interstate 95 and Georgia Route 21.
Nick Sansone said the firm plans to start construction on the project’s first building, a 437,500-square-foot industrial facility, in March and expects to complete it in December. It would then start the larger second phase in October, with plans to complete it by the end of July 2022, Sansone said.
“We just love the location of Savannah” because markets from South Florida, the Midwest and other regions can be served from the Southern city at lower costs than from areas near ports in Los Angeles and New Jersey, he said.
VanTrust Real Estate of Kansas City, Missouri, also entered the Savannah market this year. Earlier this month, VanTrust broke ground on Interstate West, a 515-acre industrial development in Bryan County, about 22.6 miles from Port of Savannah.
VanTrust’s first phase at Interstate West includes a 1.2 million-square-foot speculative, Class A warehouse that the developer plans to deliver in the fourth quarter. All told, the park can accommodate 4.9 million square feet of industrial space.
“With the continued growth of the Port of Savannah, we expect to see more of this type of development both here in Bryan County and throughout the region,” Development Authority of Bryan County Chairman Sean Register said in a statement.
The Port of Savannah is likely to benefit from clogged berths at ports in Southern California, Kemmsies said. “Ships are waiting up to a week for a berth there,” he said. A surge in imports that started before the 2020 holiday shopping season have led to the bottleneck in the West.
Kemmsies, who worked at JLL for years as an economist specializing in U.S. imports, exports and port development, said Savannah is well positioned for further growth. He recently relocated to the city from New Jersey.
“If you’re an industrial real estate investor, the macroeconomic trends are in their favor,” he said about areas with thriving ports such as Savannah.
For the Record
Chris Tomasulo of JLL is leading leasing efforts for Sansone Group in Port Wentworth. Danny Chase and David Sink of Colliers International Savannah are marketing Interstate West for lease on behalf of VanTrust.
