There is an emerging trend in the Far East of using idled container ships to store empty shipping containers.  Some liner companies have run the numbers and found that it is cheaper for them to pay a handling fee to have empties moved onto idle ships than it is to pay daily per-TEU storage fees at the ports.  The cost-benefit analysis to this approach only works if you plan to be storing the containers for an extended period.  This doesn’t indicate a very optimistic outlook on the liner company’s part.  

However, it could be a significant cost savings.  An 8,000 TEU ship would hold, you guessed it, 8,000 containers.  Those containers, if stacked 5 high (and not allowing for isles) would occupy almost 6 acres of prime port real estate.  The storage costs can add up quickly.  Plus, if you’ve got the ships there, why not use them for something?

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The Society of Industrial and Office Realtors (SIOR), in conjunction with the National Association of Realtors (NAR) released their 4Q08 Commercial Real Estate Index.  The national index, which is derived from surveys of SIOR members nationwide, came in at 48.7.  A score of 100 on the index represents a balanced real estate market.  Less than 100 indicates deteriorating conditions, more than 100 represents expansion of the market.  The 4Q08 value represented the eight straight quarter where the index has fallen and the largest quarter over quarter drop since the market begin falling in the Spring of 2007.

Overall, I’m not sure there are any big surprises in the report.  However, it does serve as a more scientific confirmation to what many of us are seeing and feeling.  Some of the findings include:

• It’s a tenant’s market out there – significant concessions are available
• It’s a good time to be a purchaser – if you can get debt funding
• Little to no new construction on the horizon
• Leasing activity is down, vacancy rates are up
• The Office market (41.5 points) is fairing worse than the industrial market (43.6 points), barely
• The South is doing better than other regions (54.2 points)
• The Northeast is doing worse than other regions (50.4 points)
• The West is doing much worse than other regions (39.3 points)

That sounds pretty much in line with what I am seeing.  Anyone seeing anything different in their market?