Lehigh Valley Gets More Good Economic News in Latest Commercial Real Estate Report
By Colin McEvoy on November 8, 2016
Just over a month after the announcement that the Lehigh Valley’s GDP has reached record levels, there is more good news again for the regional economy, according to the latest issue of the Lehigh Valley Commercial Real Estate Report.
Released quarterly by the Lehigh Valley Economic Development Corporation (LVEDC), the new report indicates the fundamentals of the region’s office and industrial real estate markets remain strong, with vacancy rates in both markets comparing favorably to national averages.
“The Lehigh Valley industrial market is the second-largest in Eastern Pennsylvania, and is easily one of the healthiest markets in the United States,” said Brian Knowles, principal with Lee & Associates of Eastern Pennsylvania. He is one of several experts quoted in the report.
“Given its advantageous geographical position relative to major MSAs in the North Eastern U.S., its strong labor pools, and its logistical proximity to interstates 81 and 78, the Lehigh Valley will continue to attract new tenants, institutional investment and development opportunities through Q4 and well into 2017,” Knowles said.
Released this week, the new issue of the Lehigh Valley Commercial Real Estate Report covers data from the third quarter of 2016. It is available digitally on the LVEDC website, and hard copies can be made available upon request at no cost.
The Lehigh Valley’s office vacancy rate for all combined real estate classes is currently 8.8 percent, according to the report, compared to the national average of 9.9 percent. The regional vacancy rate has dropped by roughly a half-percentage point each year since the third quarter of 2013, when it was 10.4 percent.
Rents have remained relatively stable over that time, coming in at $20.37 percent this quarter, compared to $19.80 exactly one year ago, according to Jarrett Witt, LVEDC Director of Business Development.
The industrial real estate market remains strong in the Lehigh Valley, with an aggregate vacancy rate of 4.9 percent, compared to a national average of 5.6 percent, according to the report.
The regional vacancy rate is a drop compared to 6.5 percent in the second quarter of 2016, but around the same as the 4.5 percent regional vacancy rate from the third quarter of 2013, according to the report.
Larger buildings in particular continue to have low vacancy rates, coming in at 3.7 percent for 500,000 square-feet or above, Witt said. The most significant movement in the industry market was Amazon.com’s 1.1 million square-foot lease of warehouse space in 33 Logistics Park in Palmer Township.
Cindy McDonnell Feinberg, co-founder of Feinberg Real Estate Advisors, said in the report that office consumers are looking for a new experience consisting of shared office facilities, collaborative environments, technology services, vibrant environments and a sense of community.
“The Lehigh Valley is seeing success with collaborative work environments through new facilities in the Trifecta Building and Velocity in Allentown and traditional shared office spaces through Office Quarters in Upper Macungie, Madison Executive Center in Bethlehem, and Regus in Center Valley,” Feinberg said. “The environments match small businesses, start-ups and entrepreneurs in energetic environments.”
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 $37 billion in 2015.
The data featured in the Lehigh Valley Commercial Real Estate Report was gathered by John Lamirand, LVEDC’s research specialist. To obtain copies, contact Director of Communications Colin McEvoy at [email protected] or 610-266-3817.
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