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18C — June 23 - July 13, 2017 — Mid-Year Review — M id A tlantic
Real Estate Journal
By Staci Saeger, NAI Summit Supply and Demand: The Lehigh Valley’s Regional Dilemma G reater L ehigh V alley B roker
T he Greater Lehigh Valley has attracted an influx of new busi-
corporations, both regional and international. Rail service, water ports, three interna- tional airports, and a central location within a one day’s drive of one-third of all U.S. consumers and half of all Ca- nadian consumers. For over a decade, the Lehigh Valley has enticed huge corporations in- cluding some of Fortune 500’s largest companies, to establish their headquarters, distribu- tion centers, and manufactur- ing facilities throughout the region. Some of the largest include Amazon, FedEx, Air Products, Crayola, Olympus,
Martin Guitar, B.Braun, PPL, Mack Trucks, Coca-Cola, and Samuel Adams. What else could any business possibly need? Well, maybe one thing. The demand for commercial real estate greatly exceeds the supply, and this trend has un- fortunately remained consis- tent for some time. Inventory in all sectors in the commercial and industrial market has been at a low. Vacancy rates have decreased and maintained around the same percentage for almost three quarters this year. Rental rates have con- tinued to increase, regardless
of quality. Industrial and flex space is by far the most diffi- cult to find, with the office sec- tor sharing similar struggles. The market has evolved over recent years from endless pos- sibilities to slim pickings for the most preferred locations. This activity has resulted in a positive expansion into new territory; thus lending itself to a stronger, larger region. More and more, we are see- ing companies from all over the nation and the world searching for a location in the Lehigh Val- ley. Unfortunately, due to such high demand, the availability
for space has decreased. With the industrial and flex market taking the biggest hit overall, it is the mid-size spaces that have become nearly impossible to find. Also to be noted, the overall trend in retail brick and mortar is declining. Big box retailers have already be- gun closing their doors, mainly due to the increase in e-com- merce shopping. However, due to this growth in e-commerce, this trend has benefited the region’s industrial growth. For medical users, the ap- proach has transformed into more of a retail state of mind. Increased convenience and ac- cessibility to health provider properties has been instituted to aid in their efforts to cross sell their services to all audi- ences. A common pattern we see is when vacancy is low, rates are high. This has been shown especially in the industrial and office sectors, making it harder on companies to find their ideal location. When a location does become available, owners are less flexible in negotiations knowing that there is a short- age of options. This is seen even more so with land sales creating a larger focus on land preservation in the region. Where municipal governments are not as quick to sign off on approvals and are putting stricter regulations on develop- ment. Due to this, there have seen some increased expansion immediately bordering the Lehigh Valley in the Poconos, Scranton, Berks County, Le- highton, Quakertown and more. Current development still continues to progress in the Lehigh Valley including medical facilities to Class A office space to large industrial buildings. Relative to the commercial and industrial real estate mar- ket across the United States, overall the Lehigh Valley remains strong and prosper- ous. Even with the current dilemma, the Greater Lehigh Valley continues to thrive. New development projects are being born every day to help accommodate the mar- ket need, despite the growing pains the specific areas may bring. The Greater Lehigh Valley has much to look for- ward to. Staci Saeger is director of marketing and a licensed real estate agent at NAI Summit. n
nesses to the area in recent years, and for a multitude of reasons. The strong i n f ras t ruc - ture, the di- verse, quickly growing econ-
omy, along with the transpor- tation system and easy access to major metropolitan areas has increasingly piqued the interest for companies and Staci Saeger
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IMMEDIATE OCCUPANCY
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235,000 SF • 14+ AC • 20’-24’ Ceiling hts Private rail served facility • Ample parking 600 Brighton Street, Bethlehem, PA
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17,000-34,000 SF Available for Sublease Flexbile Terms • 32’ Ceiling ht • 4 Dock doors 4779 Hanoverville Rd, Bethlehem, PA
27,615 SF Warehouse/flex space • 3 Dock doors 20’ Ceiling heights • Ample parking 2800 Baglyos Cir, LVIP VI, Bethlehem, PA
585 AC along NJ/PA border • Zoned Industrial Easy access to 80, Routes 22, 33, + 78 Phillipsburg Belvidere Rd, Belvidere, NJ
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LAND AVAILABLE FOR SALE
COMM. BLDG FOR SALE
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2 parcels totaling 41+ acres • Multiple uses Neighboring parcel also for sale • Easy access Brookside & Lower Macungie Rds, Emmaus, PA
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