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Prologis sells JFK portfolio for $57 million

The properties purchased by TA Associates Realty sit in two "pods" to the north of John F. Kennedy International Airport.
TimesLedger Newspapers

As the air cargo industry is poised to capitalize on a rebounding economy, a Boston-based newcomer has purchased a $57 million portfolio of properties adjacent to John F. Kennedy International Airport from the world’s largest warehouse landlord, which is realigning its assets to adapt to a changing market.

TA Associates Realty paid $57.2 million in November for 12 buildings in Springfield Gardens totaling 481,000 square feet from Prologis, the world’s biggest owner of industrial real estate with 565 million square feet worldwide.

The buildings, whose tenants include freight forwarders such as Aramex International and Amerijet, were 93 percent occupied at the time of sale, according to Cushman & Wakefield, the real estate firm that brokered the deal.

“On the market for less than six months, the offering attracted ‘considerable interest,’” Cushman agent Kyle Schmidt said. “We gave more than 20 tours to investors from all over — institutional, local buyers, the full spectrum of potential investors seeking access to this unmatched opportunity, one that they will likely never see again.”

City records show the JFK cargo portfolio is TA’s only holding in New York. Prologis acquired the properties in 2011, when it merged with the AMB Property Corp. to form the world’s largest owner of industrial properties.

And while Prologis still owns about 2 million square feet of real estate around JFK, in the year following its merger the company has been shifting its holdings away from the United States and Europe and buying up square footage in Canada, Mexico, Brazil and Asia.

In the wake of the global financial crisis, vacancy rates for warehouse properties hit their highest points in 2009, and after a two-year period of consolidation, the industry is in the midst of a slow-and-steady recovery — vacancy rates have been declining steadily for the past three years — but analysts predict that will soon change.

Aging inventories of autos, appliances and other durable goods mean there is plenty of pent-up demand among consumers. As the economy rights itself and as consumer demand for products rises, logistics facilities near major ports are expected to see more demand and higher rents before comparable properties inland will.

The logistics industry, however, is in the midst of a shift. Trade with Asia and the increase of cargo expected to come through the Panama Canal when its expansion is completed in late 2014 will drive growth at ports on the West Coast and in Mexico.

JFK, however, will also see competition from inland ports as logistics companies seek to find more efficient routes of distribution.

“Smaller regional distribution centers like Denver, Charlotte, Portland and Kansas City could see a net gain if companies decide that minimizing those last mile costs outweigh the efficiencies and cost savings offered by size,” a Cushman report said.

According to the company’s forecast, industrial-property rents in the greater New York area are expected to rise only 0.1 percent through 2016, while rents in Orange County, Calif., are projected to rise 37 percent.

In September, the New York City Economic Development Corp. commissioned a study to plan for the future of the air cargo industry at JFK, Queens’ second-largest employer.

Reach reporter Rich Bockmann by e-mail at rbockmann@cnglocal.com or by phone at 718-260-4574.

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