New LVEDC Report Highlights Growth in Lehigh Valley Industrial, Office Markets
By Colin McEvoy on March 8, 2017
The Lehigh Valley industrial market grew by nearly 7 percent over the course of 2016, reaching a total inventory of 113.6 million square-feet, according to a new report by the Lehigh Valley Economic Development Corporation (LVEDC).
Additionally, the regional office market saw 356,338 square-feet in deliveries in 2016, for a total inventory of 25.6 million square-feet, according to the latest issue of the Lehigh Valley Commercial Real Estate Report, which can be downloaded here.
Released quarterly by LVEDC, the new report indicates the fundamentals of the region’s office and industrial real estate markets remain strong. The Lehigh Valley saw a total of 7 million square-feet in net absorption and 7.3 million square-feet in deliveries in the industrial market in 2016.
“There is no doubt the industrial boom in the Lehigh Valley continues,” LVEDC President and CEO Don Cunningham said in the report, which covers data from the fourth quarter of 2016.
“We are one of the centers of the e-commerce storm on the East Coast and in the nation,” Cunningham said. “This past year has been another strong year for new development and the retention and expansion of existing businesses. Additionally, manufacturing is once again our number one business, making up 15 percent of our $37 billion GDP.”
The Lehigh Valley Commercial Real Estate Report is available digitally on the LVEDC website, and hard copies can be made available upon request at no cost.
According to the report, industrial vacancy rates in the region declined from 6.5 percent in the first quarter of the year to a current rate of 4.9 percent, while asking rates per square-foot rose from $4.85 at the beginning of the year to $5.04 by the fourth quarter.
Kerry Wrobel, President of Lehigh Valley Industrial Park (LVIP), said in the report that the region is benefitting from “a strengthening Lehigh Valley industrial market,” and that LVIP VII has attracted a number of manufacturers as a result.
“There continues to be a serious shortage of Class A industrial space in the range of 10,000 to 50,000 square-feet, which we need to support small business growth in the Lehigh Valley,” Wrobel said. “LVIP is evaluating initiatives to address this need.”
In the Lehigh Valley office market, vacancy rates have remained largely steady throughout the year, currently coming in at 9.1 percent, compared to 9.4 percent in the first quarter of 2016. Likewise, asking rates per square-foot are currently averaging $14.89, compared to $15.11 in the first quarter of the year.
“The Lehigh Valley office market closed 2016 with exceptionally low vacancy rates, particularly in Class A product,” Lauren Gilchrist, Vice President, Director of Research for Philadelphia at JLL, said in the report.
The report notes the most noteworthy addition to the office market in 2016 was Guardian Life Insurance’s new office complex in Hanover Township, Northampton County. Guardian consolidated its previous regional headquarters into one three-story, 281,680 square-foot facility, a testament to the company’s commitment to the Lehigh Valley.
It also highlights Lehigh Valley’s gross domestic product (GDP), which reached a record-high $36.97 billion in 2015 (the most recent year data is available). That marks a 2.2 percent increase over the previous year. Notably, manufacturing is now the region’s top economic sector, generating $5.56 billion – or 15 percent – of the overall GDP.
The report includes such information as major Q4 2016 commercial real estate transactions, net absorption, average asking prices, year-over-year rent growth, and current economic data such as employment by industry, growth rates, historical unemployment data, and workforce growth.
To obtain copies of the Lehigh Valley Commercial Real Estate Report, contact LVEDC Director of Communications Colin McEvoy at [email protected] or 610-266-3817. The report was designed by Michelle Chrin.
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