6C — December 8 - 21, 2017 — Central Pennsylvania — M id A tlantic
Real Estate Journal
www.marejournal.com
C entral P ennsylvania
By Jason Grace, Landmark Commercial Realty Central PA: A Top 5 Core Industrial Market
T
he Central Pennsylva- nia industrial market has become a top 5
Providing access to nearly 70% of the total consumer markets in North America within a 1 day’s drive, the region has ex- perienced significant demand with the emergence of the e- commerce and fulfillment sec- tor requiring maximum next day ship and return services. The market benefits frommul- tiple intermodal facilities (CSX &NS) as well as major mission critical facilities for parcel car- riers USPS, UPS and FedEx. Market fundamentals have been historically strong with nearly 13 million s/f of new speculative class A regional
and super regional distribu- tion facilities under construc- tion. Even with the pipeline of supply coming, online vacancy rates hover around 4.5%which is well below the historical market standard of 7%. With a backlog of nearly 10 million s/f of new tenant requirements in the market, we expect in- stitutional capital to continue fueling additional vertical construction. The central Pennsylvania and Lehigh Valley submar- kets, or Inland Empire East as some of the national devel- opers have begun calling it,
will continue to see increased demand for warehouse and logistics facilities in central and eastern Pennsylvania as the Philadelphia port starts to see the benefits of the long planned upgrades to accommo- date the recent Panama Canal expansion. Near term we will see in- creased demand and dwindling supply of high quality fully entitled big box development sites which will give way to higher land prices and ris- ing rental rates for existing spaces. Historical rental rates ranged from $4.15/PSF/NNN
to $4.35/PSF/NNN for Class A space but have recently seen deals getting done north of $4.85/PSF/NNN. Economic incentives available to tenants including LERTA programs as well as KOZ & KOEZ qualified sites in northeast Pennsylva- nia have helped absorption of some of the larger speculative projects in the state in the last 24 months. **Recent significant market transactions include Kohler (1MM SF), Georgia Pacific (1.4MM SF), UPS (600,000 SF), Apple (1MM SF), Whirl- pool (1.1MM SF), Chewy. com (850,000 SF), ACE Hard- ware (1.1MM SF), Nordstrom (800,000 SF), SuperValu (750,000 SF) and Mattel (1MM SF) Jason Grace, CCIM, SIOR is the senior vice president of Corporate Brokerage Services at Landmark Com- mercial Realty, Inc. | TCN Worldwide, a Central Penn- sylvania based full-service commercial real estate bro- kerage firm with a global network platform . n Meridian arranges $52 . 5 mi l l ion in CMBS & Mezzanine Financing for property in Eagleville Eagleville, PA — Merid- ian Capital Group arranged $52.5 million in CMBS and mezzanine financing for the Riverview Landing at Valley Forge, luxury multifamily prop- erty in Eagleville, on behalf of Liss Property Group. The 10- year financing package features a blended rate of 5.68% and full- term interest-only payments. Meridian achieved a loan-to- value of 82.5% by combining the senior CMBS loan with the mezzanine layer of debt. This transaction was negotiated by Meridian managing director, Russ Drebin , and senior vice president, Steven Halpert , who are both based in the com- pany’s Iselin office. “The proceeds of this financ- ing packaged were used to retire a bridge loan that was used to renovate approximately 30% of the units. The success of this capital improvement initiative allowed Meridian to secure favorable permanent financing with mezzanine debt that includes funds allocated for the renovation of the remaining units,” said Halpert. n
core indus- trial market. It is well posi- tioned along the national- ly-recognized I -81 t rans - p o r t a t i o n corridor with i mme d i a t e
Jason Grace
connections to I-78, I-76, I-83 and I-80, as well as immediate access to major deep water ports at New York/New Jersey, Philadelphia and Baltimore.
Warmest wishes for the Holiday Season and throughout the New Year
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