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Bay Area Research Rant: Flying the (Business) Friendly Skies

SFO_Airport_Terminal-resized-600

By Robert Sammons, Regional Director – Northwest U.S. Research

In the past I’ve done a lot of traveling SFO Airport but really purely for pleasure. As you may have seen in my first “Rant” I mentioned that I’m a bit of a frequent flyer nut. You have likely read about us – hopping on a plane and going half-way around the world just to earn more miles especially if some random cheap fare pops up. It’s likely not the greenest thing one can do but the plane is going anyway and I feel I balance it out by not owning a car and taking mass transit whenever possible.

My travel has picked up for work lately too which I’m enjoying thus far. There have been and will been quarterly trips around the region and meetings in other places to attend. I have managed some slight status with United over the years and it helps minimally to ease getting on and off the plane. Still it isn’t exactly glamorous nor am I all that sure it really ever was. (Well maybe the new “Residence Class” on Etihad but that’s not an option for me!). A two-day (work) turnaround to DC followed immediately by a three-day (family) turnaround to Atlanta is a lot of butt-in-seat miles during the week. But I can actually “think” during this time without loads of interruptions.

Okay so what exactly is this “Rant” about this week now that you know my travel schedule? Well I’ve been thinking about airports and connectivity and how important it all is for business and growing a city or region. Additionally, how important is it to have a rail connection to the airport for a greener environment and unburdening the traffic congestion within its vicinity? And with many of you traveling over the next couple of weeks thanks to the holidays, I thought the topic would be timely and potentially helpful.

In C&W’s Northwest Region, we are lucky to have great airports and average to great methods of getting to and from those facilities. Would much of the region’s growth have possibly occurred without such premier transit hubs? Possibly but these airports have certainly allowed the area to stay competitive and continue to expand.

Let me give you a brief run-down plus some intriguing stats of our airports across this region:

San Jose – with Silicon Valley booming, the very convenient Mineta San Jose International Airport (SJC) is picking up flights. Several international destinations have been added recently or will be shortly. These include Tokyo, Beijing, London and Frankfurt (all via non-U.S. carriers) connecting it nonstop to both tech and financial markets. A big boost would be direct rail access – something the entire area could use more of certainly. But there is always the Valley Transportation Authority’s free shuttle bus to both Metro Light Rail and Caltrain.

San Francisco – it might come as a surprise that SFO is not the largest airport in terms of passengers or movements in the region (that title goes to our friends in Denver). But as far as international traffic it is head and shoulders above the rest in the Northwest. The fact that it is has a direct rail connection (BART) to downtown San Francisco (in fact much of the Bay Area) is a huge plus. There is no denying SFO has been a huge pull in generating international business for the entire Bay Area.

Oakland – OAK has taken off as a hub for low cost carriers such as Southwest, Spirit and even international carrier Norwegian Airlines. And just over a year ago, it received its own dedicate rail link via a special BART link. This facility should and could be a big feather in Oakland and the East Bay’s cap but it seems to be underplayed.

Sacramento – speaking from a personal point of view, I have to say that SMF is a really beautiful facility. There is certainly a lot of room for growth here and a big plus would be the addition of rail connections into Sacramento. But coverage is not bad with nonstop to major hubs around the country as well as Hawaii and Mexico. SMF could most definitely be beneficial in drawing additional business to the area.

Portland – PDX is often ranked as one of the best airports in the country. The design is indeed fantastic and it has no doubt helped in pulling more and more companies into the area. It doesn’t hurt to have nonstop connections to both Asia and Europe. And the light rail connections into Portland and beyond are both green and convenient.

Denver – I was just through DEN last week and it is an amazing bustling facility. As mentioned earlier, it draws the most traffic of any airport in the region. In fact it is the fifth busiest in the country. DEN was completed in 1995 and sits on 34,000 acres (the second largest in the world by area). It definitely feels a bit removed being 23 miles east of Downtown but, that said, it will receive a direct rail connection to Union Station in April of 2016. And if there’s any doubt that part of the development of DEN was about drawing business, well it says it right on the airport website – “Denver International Airport will drive more economic growth for Denver and Colorado.”

Seattle – SEA-TAC is a hub for two major airlines and has seen its traffic count climb sharply in recent years thanks to some aggressive competition between the two carriers – Delta and Alaska. All this airline traffic certainly continues to help pull businesses and jobs to the area. And though it took some doing, the airport did get a light rail connection in late 2009 and it takes you right in to downtown Seattle. All-in-all a great facility for a booming market which also happens to be the historic home of aerospace giant Boeing (though it did move its headquarters to Chicago back in 2001).

Salt Lake City – a very convenient five miles northwest of downtown, SLC has increased its traffic lately thanks to Delta which uses the facility as a hub for both domestic and international flights. This is another airport in the region that has connected its airport to downtown and the region via light rail. Salt Lake City has been on a tear lately – picking up jobs relocating from higher-priced markets along the west coast.

Market Passenger Traffic (2014) Change over 2013 Rail Connection
Denver 53,472,514 +1.7% Yes*
San Francisco 47,114,631 +4.8% Yes
Seattle 37,498,267 +7.7% Yes
Salt Lake City 21,141,610 +4.7% Yes
Portland 15,916,512 +5.9% Yes
Oakland 10,336,788 +6.1% Yes
San Jose 9,385,212 +6.9% No
Sacramento 8,972,756 +3.3% No
Source: Airports Council International *April 2016
Market 2014 Cargo by Landed Weight (lbs.) Change over 2013
Oakland 2,954,355,995 +8.47%
Seattle 1,574,603,394 +13.58%
Denver 1,314,752,910 +4.37%
San Francisco 1,245,416,930 +4.57%
Portland 1,126,448,683 -0.93%
Salt Lake City 962,293,488 +2.98%
Sacramento (Mather) 361,191,250 +2.15%
Sacramento (International) 287,806,700 -1.18%
San Jose 244,687,656 -0.19%
Source: FAA

So there you have a (not-so-quick) review of the major airports of the Northwest U.S. The area is lucky to have some amazing facilities that have absolutely been driving forces in their markets for economic growth.

This post is guest commentary from the latest weekly edition of our Bay Area Research Rant, which you can subscribe to for free by e-mailing robert.sammons@cushwake.com.

Robert_SammonsRobert Sammons is a Research Director for Cushman & Wakefield. Based in San Francisco, Robert’s principal roles include working closely with the C&W research teams across the Northwest – including Northern California, Portland and Denver. Robert is author of numerous documents that delve into a wide variety of real estate and economic trends. He has been a quoted source for all manner of real estate and related economic information in many widely known media outlets across the country. Robert has 29 years of real estate experience as both an appraiser and researcher. He earned a BBA in Real Estate from The University of Georgia and an MS in Real Estate from Georgia State University. Robert is a member of the Urban Land Institute.

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