LVEDC Report Finds Lehigh Valley Office, Industrial Markets Remain Strong
By Colin McEvoy on August 16, 2016
The Lehigh Valley’s office and industrial real estate markets continue to demonstrate strength, according to a newly-released report by the Lehigh Valley Economic Development Corporation (LVEDC).
There are currently more than 5 million square feet of industrial space under construction in the Lehigh Valley, and about 10 million square feet of industrial space has been delivered in the region since 2014, much of it built on speculation, according to the report.
“In the world of industrial real estate, it’s safe to say that the Lehigh Valley is one of the top markets in the United States,” said Jarrett Witt, LVEDC Director of Business Development. “There is no lack of public and private capital interest to invest in Lehigh Valley’s industrial sector.”
These are among the findings highlighted in LVEDC’s newly-released Lehigh Valley Commercial Real Estate Report, a quarterly publication detailing the real estate climate of the region, with a particular focus on office and industrial sectors.
“There’s a reason our region was featured this year at NAIOP’s I.CON, the commercial real estate industry’s only national conference for the industrial sector,” said LVEDC President and CEO Don Cunningham. “The Lehigh Valley’s industrial real estate fundamentals are very strong, and the region is ideally situated for national tenants to bring product from the NJ/NY Ports and service the consumers in the Boston-to-Washington corridor.”
The new report, which covers the second quarter of 2016, also shows the Lehigh Valley office market has demonstrated continued strength as a result of the region’s strong economic fundamentals and ongoing population growth.
The Lehigh Valley’s office vacancy rate is at 9.4 percent, significantly lower than the national average of 14.6 percent. The regional industrial market’s aggregate vacancy rate is at 7.2 percent for the second quarter of 2016, an increase over the 6.4 percent rate in Q2 2015.
“Demand for high-quality industrial space in the Lehigh Valley continues to grow and we see the supply of new product struggling to keep pace,” Justin Fanslau, Director of Leasing at Liberty Property Trust, said in the report. “Users of all sizes recognize the strong fundamentals of this market and as a result they want to operate here.”
The report 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 includes “broker perspective” quotes from such regional experts as Jarrett Laubach, Leasing Manager with City Center Lehigh Valley, who weighs in on the regional office market.
“Today’s tenants are challenging the conventional value proposition, placing as much importance on amenities and an environment that helps them recruit and retain top talent as on building finishes, collaborative floorplans, and energy efficiency,” Laubach said. “They seek a compelling set of economics, but they also value a walkable community where casual collisions with other professionals take place.”
The report includes a list of all industrial and commercial real estate transactions recorded in Northampton and Lehigh counties during the second quarter of 2016 that sold in excess of $1 million, as well as major leases in the region. It also highlights the Lehigh Valley’s gross domestic product (GDP), which reached a record-high $35.4 billion in 2014.
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.
The Lehigh Valley Commercial Real Estate Report 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.
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