Three years ago, the Jacksonville Port Authority (Jaxport)signed Mitsui to a 30-year lease for 158 acres at Dames Point, onwhich the Japanese shipping firm planned to develop a cargoterminal that would establish the city as its East Coast operationscenter. Mitsui subsidiary TraPac Inc. won't complete the newfacility for another six months, but the shipper decided to launchits East Coast-South China Express service ahead of time because ofhigh demand.

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The Mitsui deal attracted the attention of other shippers, andin 2006 Denmark's Nordana Line, which provides service toMediterranean and West African ports, announced plans to shift someof its services from Savannah to Blount Island. The same year,Atlantic Container Line of Iselin, NJ began exporting cars andtrucks from Blount Island to West Africa. Early this year, CrowleyMaritime signed a 10-year lease with Jaxport for seven acres and a10-year sublease for 3.8 acres. This spring, Jaxport signed adetailed agreement with Korea's Hanjin Shipping Co. for developmentof a 170-acre container terminal to open in 2011.

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The deal also attracted retailers and developers. Shortly afterthe Mitsui announcement, Michael's Stores Inc., which uses Mitsuito import much of its holiday merchandise, initiated plans to moveits seasonal distribution center from Savannah to Jacksonville,leasing a 285,000-sf building from Boston-based First WinthropCorp. Since then not only has development has continued unabated,but major new players have discovered the market. Among the firstwere Majestic Realty Co. of City of Industry, CA, which purchased47 acres for development of 833,000 sf of distribution space, andDallas-based Jackson-Shaw Co., which acquired 995,000 sf ofbuildings on 77 acres along with 86 undeveloped acres.

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The most recent entrants are Denver-based ProLogis and Atlanta'sOakmont Industrial Group. The former paid $7.8 million late lastyear for 97 acres in Westlake Industrial Park for the 1.5million-sf ProLogis Park Westlake; and in April it paid $4.1million for 53 acres in another location for development of the onemillion-sf ProLogis Park 295. Oakmont recently acquired 75 acresonly 2.5 miles from the TraPac site for development of NorthPortLogistics Center and has begun construction of an 849,042-sf bulkdistribution building.

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Despite the growth, the city still has not broken into the uppertiers of port activity. While total cargo grew from 7.3 milliontons and 692,422 20-foot equivalent units (TEUs) in '03 to 8.3million tons and 710,073 TEUs last year, it still ranks behind some30 other North American ports in terms of tonnage and 25 ports incontainer totals. It ranks second, however, in vehicle imports,with 614,647 cars and trucks handled last year. Perhaps moreimportantly, Jacksonville has greater capacity and more room togrow than many of its rivals. According to Jaxport, the market has17,000 acres of available buildings and expansion capacity.

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In general, brokers describe the leasing market as strong.Though the vacancy rate rose a full point in Q1 to 6.1%, accordingto Colliers International, the level remains among the lowest inthe country and more than two points below the national average.The completion of the TraPac facility and subsequent expansion to afull schedule of Mitsui arrivals is expected to push absorption bythe end of the year. Even with delivery of more than 10 million sfof new bulk distribution product for '08, brokers project little invacancy from the current level.

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