Lehigh Valley Commercial Real Estate Report Released for Q3 2021
By Colin McEvoy on December 7, 2021
The latest issue of the Lehigh Valley Commercial & Industrial Real Estate Report has been released, providing data that reflects the steady and consistent recovery from the COVID-19 crisis that the Lehigh Valley economy has been experiencing over the past year.
Each quarter the Lehigh Valley Economic Development Corporation (LVEDC) publishes a report that provides a detailed overview of industrial and office market activity and notable real estate transactions in the region. The newest edition covers data from the third quarter of 2021.
A digital version of the Lehigh Valley Commercial & Industrial Real Estate Report can be found here. Hard copies will also be available at the LVEDC office and upon request.
The region’s unemployment rate dropped to 5.7% in September 2021, compared to 7.3% in September 2020, according to the U.S. Bureau of Labor Statistics. Employment in the Lehigh Valley is 367,100 as of September 2021, compared to 353,200 a year earlier.
Still, Lehigh Valley employers say that they have challenges attracting and retaining workers, as discussed in the report. LVEDC has led a coalition of employers, educators, and community leaders focused on attracting, retaining, and training talent since 2015.
LVEDC, through its Education and Talent Supply Council, is conducting a new study of the regional talent market to understand the issues employers are facing, and how they may have changed due to the pandemic and other factors since the previous study in 2018.
“In the past, regions recruited companies and the people followed. Today, companies want to know the talent is in a market or that the market is attractive enough to recruit new workers before deciding to stay or move,” LVEDC President & CEO Don Cunningham says in the report. “The emphasis is particularly on the young population, which bodes well for the Lehigh Valley: The latest U.S. Census data shows Lehigh and Northampton counties are among Pennsylvania’s top five counties with the fastest growing population of 18 to 34-year-olds.”
Industrial and economic growth remains strong in the region, according to the report. LVEDC is tracking an active pipeline of 40 companies considering a move to or expansion in the region as of the end of Q3 2021, 28 of which are manufacturing companies.
There is 4.2 million square feet of industrial space currently under construction in the Lehigh Valley, according to the report. The region has a total of 137.7 million square feet of industrial inventory as of Q3 2021, with an overall vacancy rate of 4.5%. A total of 7.7 million square feet of industrial space has been added in the Lehigh Valley in 2021 so far.
Despite all this activity, the Lehigh Valley continues to need smaller-footprint industrial space – buildings of 50,000 to 100,000 square feet – that can house manufacturers. One of the challenges the region faces is finding building space to meet the need of our growing life sciences and advanced manufacturing sectors.
The Lehigh Valley remains a key point for distributing goods into the densely-populated I-95 corridor from Washington, D.C., up through New York City, according to the report.
Industrial space in the Lehigh Valley in the past 12 months has leased at a rate 1.3 times higher than the annual average of the last three years. Market rents in logistics are up an average of 8% nationally, according to CoStar.
The Lehigh Valley currently has 27.7 million square feet in total office space, with an overall vacancy rate of 9.4%, according to the report. There are 1 million square feet of office space currently under construction, driven by Air Products’ new campus in Upper Macungie Township and two office buildings at The Waterfront project in Allentown.
“The next era of the office market will be driven by business and user confidence,” Zachary Jaindl, CEO of Jaindl Enterprises, said in the report.
“Precautionary measures implemented by the COVID-19 forced people out of the office and into a ‘Work From Home’ environment. Businesses are now finding a drop in efficiency, and employees are missing out on the social dynamic of a centralized workplace,” Jaindl said. “With nearly 800,000 square feet of new office under construction, developers can position their new space to companies outside the area to drive up absorption using the region’s optimal cost of living and per square foot pricing, while remaining close to major urban centers to accommodate business needs.”
This report also includes notable commercial real estate sales and leases from the third quarter of 2021. This includes the $20 million purchase of 3700 Glover Road in Forks Township, the new manufacturing operations for A.P. Deauville, one of the nation’s leading marketers and manufacturers of men’s personal care products.
Don Cunningham: Celebrating the Wins in the Lehigh Valley
This column, written by LVEDC President & CEO Don Cunningham, originally appeared in The Morning Call and on the newspaper's website on December 2, 2021. (Click here to re[...]Continue to Next Page