Commercial Real Estate Outlook Takes Center Ice at PPL Center
By Colin McEvoy on April 14, 2016
There was excitement in the air at the PPL Center on April 14, but it wasn’t from a Phantoms hockey game or a Journey and Santana concert. It was from the Greater Lehigh Valley Chamber of Commerce‘s 2016 Commercial Real Estate Outlook.
More than 600 people came out for the event on the floor of the Allentown hockey arena, where several industry experts and speakers discussed the latest details about the state of commercial real estate in the Lehigh Valley.
“It was a good 2015 for the Lehigh Valley, and we don’t expect it to decline in 2016,” said Don Cunningham, President and CEO of the Lehigh Valley Economic Development Corporation (LVEDC), which co-sponsored the event.
“I want to thank the Chamber for their great work, and for the partnerships that we have,” Cunningham said, “because I really believe the regional approach we’ve taken to economic growth and serving our business community is why we’re succeeding at a much greater rate of so many other communities our size in Pennsylvania and the East Coast.”
Cunningham delivered a marketplace update and described several trends in the Lehigh Valley market. Nearly 5 million square-feet of industrial space are currently being built in on speculation, meaning with no tenant lined up, which is a sign of a strong regional market.
He also noted the manufacturing industry remains strong in the Lehigh Valley. The region’s GDP reached a record-high $35.4 billion in 2014, and the manufacturing sector made up $4.95 billion of that GDP, ranking 64th out of 351 major metropolitan areas in the United States.
“People often misinterpret manufacturing by measuring it just based on jobs,” Cunningham said. “Obviously, there aren’t as many jobs because of automation and technology, but we have 677 manufacturers making goods here in the Lehigh Valley and putting out more economic output than is prevalent in most regions for manufacturing.”
Read the full presentation Cunningham delivered below:
The event also included presentations by three “Deal Makers” in the Lehigh Valley: Jeffrey Palmquist, Senior Vice President, northeast Region at Duke Realty; Jim Petrucci, President of J.G. Petrucci Co., Inc.; and Justin Fanslau, Director of Leasing at Liberty Property Trust Lehigh Valley.
Petrucci identified several major projects his company completed in 2015, including a 70,000 square-foot expansion at Flexicon’s manufacturing facility in Bethlehem Township, a 99,071 square-foot expansion at the SunOpta facility in Upper Macungie Township, a 180,000 square-foot research and manufacturing facility for Curtiss Wright, and a 120,817 square-foot dormitory expansion at Northampton Community College.
“I think that overall the Lehigh Valley is going to continue to grow,” Petrucci said. “As a matter of fact, I would say one of the challenges, not just for the planners but for the entire business community, is controlling growth.”
Palmquist said Duke Realty owns 141 million square feet in 22 markets, with a portfolio that is 73 percent industrial, 19 percent medical office, and 8 percent office. Looking ahead to the future, Duke Realty plans to maximize e-commerce, noting that the Lehigh Valley region’s central location makes it best positioned to supply product to the East Coast.
Cunningham also took note of the “explosion” of the Lehigh Valley e-commerce market, which employs about 25,000 regionally, as many as Bethlehem Steel employed during the height of its operation post-World War II. The industry is growing at a rate of 15 to 20 percent annually, he said, compared to 2 to 3 percent annually for traditional brick-and-mortar retail.
“We see no end to the e-commerce growth,” Cunningham said. “That’s why FedEx wants to be here. And with that FedEx megahub coming up, we constantly get reached out to by other companies that want to be close to FedEx, because the game is to get the product to you as quickly as possible.”
The Chamber also distributed several awards, including the Development Achievement Award for Wilmer R. Schultz, Inc., the Community Partner Award for Habitat for Humanity Lehigh Valley, and the Regional Commitment Award for St. Luke’s University Health Network.
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