New Lehigh Valley Commercial Real Estate Report Shows Continued Economic Activity
By Colin McEvoy on May 25, 2021
The latest issue of the Lehigh Valley Commercial & Industrial Real Estate Report shows that economic activity has continued throughout the early months of 2021, as the region moves tentatively closer to a post-pandemic world.
The Lehigh Valley Economic Development Corporation (LVEDC) had an active pipeline of 52 companies considering a move to or expansion in the Lehigh Valley as of the end of the first quarter of 2021, according to the report.
Twenty-nine, or more than half, of these companies were manufacturing prospects, while 17 were in the distribution sector. The majority of these prospects were seeking 200,000 square feet or less, reflecting a continued demand for small- and medium-footprint industrial buildings in the Lehigh Valley.
“The market is extremely busy,” said Mike Adams, Senior Vice President at NAI Summit, one of several regional experts quoted in the report.
“Although we have a good amount of big box distribution development and existing product available, there is a lack of leasable industrial space from 5,000 to 40,000 square feet,” Adams said. “There are many smaller companies searching for this space and cannot find a home. That also goes for industrial buildings for sale in all size ranges.”
Released quarterly, the Lehigh Valley Commercial & Industrial Real Estate Report provides a detailed overview of industrial and office market activity in the region, as well as significant commercial real estate transactions. The new issue covers data from the first quarter of 2021.
A digital version of the report can be downloaded here. Hard copies will not be printed this quarter.
According to the report, there is nearly 9 million square feet of industrial space under construction in the Lehigh Valley. The regional industrial market totaled 132.3 million square feet of inventory as of the end of Q1 2021, with a 5.9% vacancy rate and 2.4 million square feet delivered during the year so far.
Industrial space availability has increased overall, but smaller-footprint space in the 20,000 to 80,000 square-foot range has declined over the last year.
The Lehigh Valley had 14 million square feet of available industrial space overall as of Q2 2020, compared to 11.2 million one year earlier. But the amount of space in smaller-footprint buildings dropped from 1.1 million square feet to 936,000 square feet in that same timespan.
Meanwhile, the region’s office market space totals 27.5 million square feet as of the end of Q1 2021, with slightly more than 760,000 square feet under construction. Excluding owner-occupied and medical office space, the amount of rentable space drops to 16.9 million square-feet.
“As the Lehigh Valley office market continues to emerge from the pandemic, new lease deals and renewals are getting done,” said Philip M. Schenkel, Executive Vice President & Associate Director at Jones Lang LaSalle, who was quoted in the report.
“Companies with larger footprints are taking longer to determine their short term and long term occupancy requirements, however we do expect deal activity in all size ranges to continue increasing into the summer as greater portions of the population are vaccinated,” Schenkel said.
This report also includes notable commercial real estate sales and leases from the first quarter of 2021, including four transactions with sales prices that exceeded $1 million.
The largest transaction was a $4.7 million purchase of 4815 Crackersport Road in South Whitehall Township by Covenant Transport Inc. U.S. Xpress, one of the country’s leading truckload carriers, announced in April that it had signed a lease for a 14-acre terminal at that location, according to The Morning Call.
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