By: Paula Wolf
November 15, 2021 10:21 am
Thanks to the boom in e-commerce, the Lehigh Valley industrial market is even busier than it was prior to the pandemic.
That’s the verdict of Kevin McGowan, president of McGowan Corporate Real Estate Advisors, who just released an update on industrial sales activity in the region.
The report, using data from CoStar, revealed that sales volume in the Lehigh Valley the previous 12 months is nearly $538 million, “some of the highest levels this market has ever seen.”
McGowan noted that 97 industrial assets have traded over the past year, typically closing at close to $116 per square foot.
The price per square foot has been increasing steadily since 2015, as Lehigh Valley’s industrial inventory has risen in value. https://8387046a265fe6c3a3d8a05f94147d5c.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html
One of the priciest deals in the region’s history was the sale of the Rockefeller Group’s 1 million-square-foot 951 Willowbrook Road facility in Northampton to CenterPoint Properties, based in Oak Brook, Illinois. The cost was nearly $200 million, which comes out close to $200 per square foot, the report said.
“The Class A purchase marks CenterPoint’s entry into the Lehigh Valley market as it expands westward from its core foothold in the northern New Jersey/New York market,” according to a release from the company.
McGowan’s update also mentioned the sale of a 180,000-square-foot building at 3700 Glover Road in Easton, for $20.4 million, or nearly $110 per square foot.
One problem plaguing the market is the shortage of building materials, he said in an interview, making construction of new inventory difficult.
The report added that logistics accounts for $418 million of the $538 million in sales the prior 12 months.
Two hot areas of investment in the region are Boulder and Liberty business centers, next to each other in Breinigsville. Situated between Trexlertown and Fogelsville, these industrial parks “offer tenants immediate access to I-78, I-476 and Highway 22,” the report explained.
McGowan defined logistics as the “science around how to move things,” or routing products properly at the lowest cost.
The Lehigh Valley is a robust industrial market because it’s positioned to take cargo from the ports of New York, New Jersey and Philadelphia and transport the goods on three major interstates (78, 80 and 476), he said. Those highways are within a 12-hour drive of a significant percentage of the U.S. population, McGowan said.
And demand keeps rising, he said, because e-commerce is how more and more Americans shop these days. “You tap away on your smartphone and expect something to show up at your house.”