14A — May 24 - June 13, 2019 — NAI Global — Industrial / Distribution Centers — M id A tlantic
Real Estate Journal
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NAI C o -O p
ar removed from its glory days as the heart of coal mining in the United By Steve Cole, SIOR, NAI Mertz of PA Northeastern Pennsylvania has quietly emerged as a major distribution hub F
the manufacturers may have gone in search of cheaper labor abroad, the area stretching from Scranton to Wilkes-Barre to Hazleton still possesses some valuable constants – its prox- imity to NYC and Philadelphia and access to major interstate highways. As e-commerce and demand for distribution space continue to drive the industrial market, those assets are prov- ing valuable. Surrounded by higher profile distribution markets in New Jersey, Philadelphia, and the Lehigh Valley, Northeast- ern Pennsylvania has quietly
emerged a sought after location for distribution and logistics operations. With perennially favored industrial destina- tions, such as Northern New Jersey, experiencing a scarcity of space and rising lease rates, many firms began to look elsewhere out of necessity. Northeastern Pennsylvania, with room to build and reason- able construction costs, was an obvious alternative. As the Chairman of NAI Mertz of PA and hailing from Pittston, Barry Mertz has seen the evolution of themarket from primarily driven by relocation
or expansion within the region to now becoming a sought after destination for global giants. “In our early years, our success in finding tenants and buyers relied heavily on our direct mail and email campaigns and canvassing within the region. Now in addition to our regional efforts, we’re taking a more national approach targeting the largest firms in the distribution and logistics sector, and we’re finding a receptive audience.” The rebirth of industrial in NEPA has centered around the cross roads of interstates, primarily Humboldt Industrial
Park in Hazleton, located just off I-81 with easy access to I-80, and Mericle’s Center- Point Commerce and Trade Park, in Pittston. The two boasts an impressive roster of tenants – Hershey, American Eagle Outfitters, AutoZone, and Michael’s in Humboldt and Home Depot, Lowe’s, Men’sWearhouse, and Neiman Marcus. And proving its bona fides as a force in the distri- bution space, NEPA features three Amazon distribution centers – a 399,500 s/f build- ing in CenterPoint, a 615,600 s/f building in Humboldt and a newly constructed 1.2 mil- lion s/f facility at Covington Industrial Park in Gouldsboro. Once the large players in the distribution sector took notice, NEPA caught the eye of indus- trial investors and developers as well. Investment sales in the area have been steadily rising and saw a jump of 42% from 2017 to 2018. Perhaps the clearest in- dication of momentum for NEPA’s industrial sector is the heightened rate of specula- tive construction. Mericle has announced plans to construct six buildings (ranging in size from 42,000 to 310,000 s/f) on speculation in CenterPoint in Jenkins Twp. in 2019. Addi- tionally, Mericle has pad sites at CenterPoint and its other parks throughout the region that can accommodate us- ers requiring anywhere from 5,000 to 1,000,000+ s/f. The market has expanded beyond the pillars of Scranton, Wilkes-Barre and Hazleton as well. In Monroe County, sev- eral massive facilities, includ- ing Amazon’s, are rising along I-380 on the route toward NYC. Arcadia North Business Park and its surrounding area are host to 1,000,000+ s/f facili- ties for Wal-Mart and Johnson & Johnson. Arcadia, like the majority of business parks in the region, offers generous incentives to prospective ten- ants. Whether it’s KOZ/KOEZ incentives for Humboldt and Arcadia, or the LERTA pro- gram at CenterPoint, compa- nies who bring jobs to the area have many options in finding a location that makes financial sense for them. At the recent NEPA Real Estate Summit organized on by Penn’s Northeast, the growth of the industrial market in North- eastern Pennsylvania was a continued on page 24A
States and having seen manufactur- i ng ope r a - tions gradu- ally decline in the latter part of the last century, Northeastern
Steve Cole
Pennsylvania became some- what of an afterthought in the discussion of prominent industrial markets. But while the coal has been mined and
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