Real Estate Forum - July/August 2010

Expect “an
attrition
in ware-
housing
and port-
related
groups before this is
all resolved.”

JOSEPH NITTI

Colliers International

Auto Terminal lease to allow for container handling, the agreement will lead to the expansion of the terminal to 170 acres. The expanded Global Container Terminal will become part of the Port Jersey-Port Authority Marine Terminal facility. Global, which is owned by the Ontario Teachers Pension Plan, will handle the day-to-day cargo operation on the much larger footprint.

The lease agreement calls for revenue sharing on containers handled by Global on the combined facility and staged rental payments as the terminal is developed over time. In addition, the Authority will provide Global with up to $150 million to develop and construct new container terminal space. The Authority also agreed to develop a rail facility on the adjacent Greenville property that could handle up to 250,000 containers per year. And it plans to purchase a significant portion of the Military Ocean Terminal at Bayonne for future, long-term port use.

According to Colliers’ Nitti, the agency’s
piers in Jersey City and Bayonne can handle
deepwater ships, which is presumably the rea-
son the Authority is signing a string of long-
term leases here. Quick fixes aside, Nitti
expects “an attrition in warehousing and port-
related groups before this is all resolved.”
Still, some 2010 port-centric leases suggest
that the area will remain viable, including
Exel Logistics, which picked up 130,200
square feet, and Shipco, which will occupy
170,500 square feet, both in Elizabeth, as
well as Graybar’s 136,000-square-foot com-
mitment in Carteret. Also, says JLL’s Kossar,
landlords including AMB, Elberon
Development and ProLogis are poised to
come out of the ground with new product as
build-to-suit requirements return to the New
Jersey port submarket. “As the economy and
market conditions improve, investors like
Veridian and Centerpoint Properties have
also expressed their intentions to invest in

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