Industrial market conditions in Hampton Roads further illustrate that now is the time for Westport capital investment and development. Increasing demand and a lack of any speculative construction during the recession recovery have pushed the vacancy rate down to 7.8 percent for all industrial buildings. This is a significant decline from peak levels of 2009 when the overall vacancy for this market was 17 percent. For true Class A buildings, the vacancy rate has fallen to 5 percent, sparking competition between users needing product with deep truck courts for trailer storage, clear height in the range of 30’ to 36’, and super flat concrete slabs capable of supporting high cube racks and mezzanine structures.
Both industrial leasing in the general market and the success of Westport are directly tied to the dominance and continued growth of the VPA terminal complex. Shippers and carriers alike are attracted to the port for both imports and exports because of its existing deep water and also excellent Class I rail connectivity to the Midwest. The port already is prepared for the larger vessels that will move through the expanded Panama Canal. In fact, Post Panamax vessels are already calling into the Virginia port via the Suez Canal. The Virginia port complex is 50’ in draft and is the only East Coast port not required to dredge the shipping channel or raise the height of bridges. Combined, both CSX and Norfolk Southern have invested over $1 billion dollars in improving rail corridors to the Midwest for double stacked containers.
The Port of Virginia is the 9th most active container port in the United States with more than 2 million TEUs (twenty foot equivalent units) annually. It is, in fact, the fastest growing port system in the United States. Illustrating this growth is the recent certification from the Green Coffee Roasters Association designating VPA as a coffee exchange location. This certification is expected to double the local warehouse space for coffee bean distribution from 700,000 square feet to 1,500,000 square feet.
In conclusion, Westport represents a rare and unique speed-to-market opportunity. Four closely related factors are of interest to capital investors and developers. First, the park is entitled and ready for construction. It can immediately provide both build-to-suit and speculative leasing solutions to shippers looking for industrial space in this market. Second, the expansion of the Panama Canal will be completed by early 2016 and with this improvement larger vessels three times the current size will be coming directly to East Coast ports. Norfolk is prepared for these vessels while other East Coast ports are still engaged in dredging and the raising of bridges. Third, the low vacancy rate in Norfolk demonstrates that now is the time to proceed with Westport development. And fourth, in addition to immediate industrial development, there is future upside at Westport with retail development. Current zoning allows for 150,000 square feet of retail space along US-58 frontage.
Both industrial leasing in the general market and the success of Westport are directly tied to the dominance and continued growth of the VPA terminal complex. Shippers and carriers alike are attracted to the port for both imports and exports because of its existing deep water and also excellent Class I rail connectivity to the Midwest. The port already is prepared for the larger vessels that will move through the expanded Panama Canal. In fact, Post Panamax vessels are already calling into the Virginia port via the Suez Canal. The Virginia port complex is 50’ in draft and is the only East Coast port not required to dredge the shipping channel or raise the height of bridges. Combined, both CSX and Norfolk Southern have invested over $1 billion dollars in improving rail corridors to the Midwest for double stacked containers.
The Port of Virginia is the 9th most active container port in the United States with more than 2 million TEUs (twenty foot equivalent units) annually. It is, in fact, the fastest growing port system in the United States. Illustrating this growth is the recent certification from the Green Coffee Roasters Association designating VPA as a coffee exchange location. This certification is expected to double the local warehouse space for coffee bean distribution from 700,000 square feet to 1,500,000 square feet.
In conclusion, Westport represents a rare and unique speed-to-market opportunity. Four closely related factors are of interest to capital investors and developers. First, the park is entitled and ready for construction. It can immediately provide both build-to-suit and speculative leasing solutions to shippers looking for industrial space in this market. Second, the expansion of the Panama Canal will be completed by early 2016 and with this improvement larger vessels three times the current size will be coming directly to East Coast ports. Norfolk is prepared for these vessels while other East Coast ports are still engaged in dredging and the raising of bridges. Third, the low vacancy rate in Norfolk demonstrates that now is the time to proceed with Westport development. And fourth, in addition to immediate industrial development, there is future upside at Westport with retail development. Current zoning allows for 150,000 square feet of retail space along US-58 frontage.