Two weeks ago I got a call from a client who needed 15,000 SF of industrial space immediately for a period of three months. They have 30 large unexpected shipping containers coming to them on a slow boat from China. A small snafu in their communications with the China vendors resulted in this unexpected inventory. After a scramble they got the space and the crisis was averted. This brought to mind a headline I saw early last year about the new direct shipping route between Tampa and China.

The level of shipping activity, specifically container shipping activity at the Port of Tampa has seen a steady increase over recent years. Overall tonnage has remained relatively steady as shipments of phosphate and sulfur have diminished and been replaced by container traffic. If trends continue the Phosphate trade will level out at some small number and the contained traffic will increase at about 10% to 15% per year. http://www.tampaport.com/press.asp?rls_id=227 for Port of Tampa Strategic and Master plans.

In 2007 the port moved about 39,000 contained across its docks and their strategic plan calls for an increase of about 15% per year for the foreseeable future.

This is the primary driver of Industrial and Warehouse pricing in the Tampa Bay area. All of the warehousing around the port and along Adamo Drive is occupied. Much of it with shipping related inventory. Warehouse space around Tampa International Airport is priced as high as $115 per square foot. As people look for reasonable Industrial and Warehouse pricing they come to Pinellas County and find only a little relief.

Strict Land use rules in Pinellas County combined with much of the Industrial land being converted to residential, office and retail use in the recent housing boom has left Pinellas with low inventories and high prices.

As long as the port activity remains strong, Industrial and Warehouse demand will remain. I have a hard time believing prices will go up much further, but I do believe lease rates will increase over the next years as the port activity increases.

At some point over the next year or two warehouses will become a viable investment vehicle. The people who are buying them now will look very smart when that time comes.