The Francis Scott Key Bridge Collapse: Port Traffic and the Affects on Local Real Estate

On March 26th, at approximately 1:30 a.m., a 984-foot container vessel collided with one of the supports of the Baltimore Key Bridge, causing a catastrophic collapse. Tragically, six workers lost their lives in the collapse, and two additional workers were injured.

The impact of the tragedy will undoubtedly be felt in and around Port Newark and other New Jersey ports in the short, medium, and long term. Property owners and logistics operators are advised to prepare themselves for the challenges and opportunities that will arise.

Blau & Berg is expecting a rapid increase in demand and pricing for industrial properties in the area as logistics operators are forced to redirect shipments to nearby facilities.

More specifically, The Baltimore bridge collapse will undoubtedly disrupt the flow of auto imports, as Baltimore’s port is a significant entry point for imported vehicles along the Eastern Seaboard. With the closure of the bridge, auto imports destined for Baltimore will need to be rerouted to alternative ports, leading to logistical challenges and potentially increased costs. One of the primary ports that could see an uptick in auto imports because of the bridge collapse is Port Newark in New Jersey.

Port Newark is one of the largest ports on the East Coast and is well-equipped to handle containerized cargo, including automobiles. Port Newark is very likely to serve as a viable alternative for auto imports that were originally destined for Baltimore. Additionally, other ports along the Eastern Seaboard, such as the Port of New York and New Jersey, the Port of Savannah in Georgia, and the Port of Charleston in South Carolina, may also see increased volumes of auto imports as shipping companies seek alternative routes to bypass the affected area.

Rerouting auto imports will create challenges locally in New Jersey. Increased congestion and competition for terminal space will lead to potential delays in processing – not only for new vehicle shipments, for also for containerized cargo. Additionally, drayage costs may rise as logistics companies battle additional congestion and adjust their routes/ schedules to accommodate the shift in cargo flow.

Property owners in the vicinity of Port Newark and other major ports in New Jersey are sure to see increased interest in available industrial space. The surge in demand is likely to drive up rental prices, making it a favorable market for property owners. Similarly, potential tenants in need of industrial space, such as logistics companies and distributors, may find themselves facing a competitive market with limited availability. In such a scenario, it becomes crucial for businesses to act swiftly and secure suitable properties that meet their operational needs.

Furthermore, individuals considering short-term subleases should utilize unused portions of yards or other underutilized spaces to provide additional capacity in and around the NJ port infrastructure. By leveraging available resources, businesses can adapt to the evolving market conditions and optimize their operations to meet the growing demand for industrial real estate.

We are only beginning to feel the impacts of this tragedy in New Jersey, which are unlikely to resolve in the short term.

We encourage you to consider helping the families of the victims via the Key Bridge Emergency Response Fund. Please visit Key Bridge Response Fund — Baltimore Civic Fund.