Lehigh Valley’s Commercial Real Estate Market Fundamentals Remain Strong
By Colin McEvoy on May 3, 2016
The Lehigh Valley’s commercial real estate market fundamentals continue to remain strong across the office and industrial sectors, according to a new report released by the Lehigh Valley Economic Development Corporation.
LVEDC has released the latest issue of its Lehigh Valley Commercial Real Estate Report, a quarterly publication detailing the real estate climate of the Lehigh Valley, with a particular focus on office and industrial sectors.
“The economic conditions in the Lehigh Valley remain strong,” said Don Cunningham, LVEDC President and CEO. “The e-commerce sector continues to explode while manufacturing remains on the rise, with the region’s 677 manufacturers generating more economic output in the Lehigh Valley than what is happening in most other major metropolitan areas. One of the new challenges in the region is generating the right employees to meet the growing demand.”
The new issue, which has undergone a redesign, covers data from the fourth quarter of 2015 and the first quarter of 2016.
It is available digitally on the LVEDC website, and hard copies can also be made available upon request at no cost. To obtain copies, contact Director of Communications Colin McEvoy at [email protected] or 610-266-3817.
The Lehigh Valley’s office vacancy rates are significantly lower than the national average, reaching 10.10 percent in the first quarter of 2016, according to the report. That compares favorably to the national rate of 13.2 percent, and is virtually unchanged from the region’s 10.8 percent rate in Q1 2015.
“Between Q4 2015 and Q1 2016, the Lehigh Valley office market demonstrated continued strength, fueled by ongoing population growth and strong economic fundamentals,” Lauren Gilchrist, JLL‘s Vice President, Director of Research for Philadelphia, said in the report.
“With limited large blocks of space available despite ongoing construction planning in the Allentown NIZ, we expect landlord favorable conditions throughout the rest of 2016 for well-located, quality assets,” Gilchrist said.
The Lehigh Valley’s industrial real estate market also remains strong, with an aggregate vacancy rate of 7.5 percent for the first quarter of 2016, according to the report. That is an increase over the 5.1% regional vacancy rate in Q1 2015.
“The industrial real estate fundamentals in the Lehigh Valley are strong,” Sean Bleiler, Senior Vice President at CBRE, said in the report. “In 2016 we are seeing user demand is quickly outpacing the supply of modern product. Both national tenants and developers alike continue to see the need grow their presence within the Lehigh Valley market.”
The report also includes such information as 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. It also reports on the Lehigh Valley’s gross domestic product, which reached a record-high $35.4 billion in 2014.
Additionally, the report includes a list of all industrial and commercial real estate transactions recorded in Northampton and Lehigh counties during the first quarter of 2016 that sold in excess of $800,000. The largest was the $43.35 million sale of 9658 West Hills Court in Weisenberg Township, which the California-based Watson Land Company purchased from Hillwood Investment Properties to establish its first East Coast industrial facility.
The Lehigh Valley Commercial Real Estate Report is consistent with one of LVEDC’s core principles: to serve as the leading source of economic data and market intelligence on the Lehigh Valley’s economic assets and resources to serve our economic strategies, marketing efforts, and the needs of our stakeholders.
The data featured in the Lehigh Valley Commercial Real Estate Report was gathered by John Lamirand, LVEDC’s research specialist.
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