Real Estate Journal — Central Pennsylvania — June 10 - 23, 2016 — 7C
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M id A tlantic
C entral PA Lee & Associates
Central Pennsylvania market continues to draw the attention of investors & developers C entral Pennsylvania is an integral part of the Philadelphia Region, which explains the strong positive absorption the mar- ket has experienced over the last 12 months.
or larger. Unsurprisingly, that “Core Group” subset, consisting of approximately 125,000,000 s/f of existing space, represents well over 25% of the parent market’s core stock, as well as a dis- proportionately large share of ongoing development and construction activity. It should be no surprise that the market continues to draw the attention of inves- tors and developers. At the close of the first quarter, Cen- tral Pennsylvania vacancy stood below structural levels at 5.96% and over the last 12
months the market recorded 4.8 million s/f of positive ab- sorption. Assuming that pace continues, current construc- tion activity (5.5 million s/f of speculative starts) represents a little over a one year sup- ply of space. All indications with regard to demand are positive – leasing activity focused on warehouse and distribution space remains above normal, with a major- ity of that demand primarily driven by the 3PL, Consumer Goods and Food and Beverage industries. A large portion of demand is new to the market,
lectively represent approxi- mately 25 million s/f of poten- tial supply. Approximately half of that total is currently planned along Interstate 81, which stretches from the market’s eastern edge in Lebanon County south to the Maryland border, reinforc- ing Central Pennsylvania’s importance as a vital link connecting the Northeastern United States to the Mid- Atlantic region. Michael Hanes leads research for Lee & Associ- ates of Eastern Pennsylva- nia, LLC. n
one o f the largest and most active i n d u s t r i a l markets in t h e c o u n - t ry . Span - ning roughly 5,200 square mi l e s and
Because of its unique geo- graphical position and trans- portation infrastructure, the Central Pennsylvania market will continue to be a desired location for industrial invest- ment and development. Look- ing ahead, Lee & Associates is actively following a signifi- cant number of future devel- opment projects in Central Pennsylvania. These projects range from concept plans to pad ready sites, and col-
Michael Hanes
eight counties, this critical submarket includes a rare combination of rail, road and parcel infrastructure that is uniquely capable of project- ing one-day service through- out the Northeast and Mid- Atlantic United States, and practical same-day service into coastal markets from New York to Virginia. The largest of the Phila- delphia submarkets, Central Pennsylvania is widely held, with both private and pub- lic equity well represented. Multi-market players such as Industrial Property Trust, Liberty Property Trust, Clar- ion, Hillwood, Exeter Prop- erty Group, USAA, Dermody, Cabot, High Street and oth- ers have made numerous investments in Central PA. International players such as Prologis, and Global Lo- gistic Properties hold market leading positions, and new entrants like Australia-based developer Goodman Birtcher, who recently broke ground on a new class A+ campus of two million s/f at Exit 44 on I-81 in Carlisle, PA, continue to find the area to be an attractive investment. While Central Pennsylva- nia is considered a submarket of the overall Philadelphia industrial market, it could easily stand on its own. Boast- ing over 250,000,000 s/f of standing industrial stock, it accounts for approximately one quarter of the total stock within its parent PHLmarket and, along with the Lehigh Valley, routinely accounts for the vast majority of the leasing activity. The bulk of the activity is driven by need for larger warehouse and dis- tribution space, with tracked requirements averaging well over 250,000 s/f. In an effort to keep our finger on the pulse of the market, Lee & Associ- ates of Eastern Pennsylvania focuses our research efforts on warehouse and distribu- tion buildings 100,000 s/f
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