Lehigh Valley Industrial Space

Lehigh Valley Industrial SpaceWolf Commercial Real Estate is the Lehigh Valley commercial real estate broker that buyers, sellers, owners and tenants rely on for their Lehigh Valley industrial space needs.

We specialize in all types of available industrial space in the Lehigh Valley and surrounding area, from traditional space for warehousing and manufacturing to more complex Lehigh Valley industrial flex space appropriate for multiple uses under one roof, such as offices, showrooms, warehousing and more.  Wolf Commercial Real Estate is the Lehigh Valley commercial real estate brokerage firm with the people, the power and the connections you need to turn your commercial real estate goals into reality.

The team of real estate professionals at Wolf Commercial Real Estate maintains a total commitment to client-focused relationships, providing unparalleled service and proven expertise.  As a premier Lehigh Valley commercial real estate broker, we supply clients and prospects with ongoing detailed information about Lehigh Valley industrial flex space to help them meet their commercial real estate goals.

Buyers and tenants trust our Lehigh Valley commercial real estate brokerage firm to select the available industrial space in the Lehigh Valley that is ideal for their needs. Our experts then examine the sale or lease terms to assure that they enhance your commercial real estate goals. At Wolf Commercial Real Estate, we’re by your side every step of the way to facilitate a smooth transition to your new Lehigh Valley industrial flex space.

Owners and investors recognize the value of the defined marketing process our Lehigh Valley commercial real estate brokerage firm has developed.  Our marketing plan is customized to each property and sub-market, making it uniquely effective in matching buyers and tenants with available industrial space in the Lehigh Valley and surrounding area.  Demand is high for Lehigh Valley industrial space.  If you are thinking about selling or leasing your Lehigh Valley industrial flex space, act now to take advantage of favorable market conditions.

For more information about Lehigh Valley industrial space for sale or lease, please contact Wolf Commercial Real Estate, the Lehigh Valley commercial real estate broker that clients depend on for all their Lehigh Valley commercial real estate needs.

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Lehigh Valley Distribution Center Sells for $201.5 Million

A recently built 1.03 million-square-foot distribution center in Pennsylvania’s Lehigh Valley has sold for $201.5 million, ranking it as the priciest single-property industrial deal for the market, according to CoStar data.

The industrial facility is located within the master-planned Rockefeller Group Logistics Park at 951 Willowbrook Road in Northampton, a borough about 6 miles north of Allentown and about 8 miles from Bethlehem. Built in 2020, the facility is fully leased to third-party logistics company Geodis, according to CoStar data.

COVID-19 drastically accelerated the growth of e-commerce, and Lehigh Valley has been ideally situated to take advantage, CoStar market analyst Ben Atwood noted in a report about the region.

“The international ports and sprawling suburbs of New York, Boston, Philadelphia, and Baltimore are all within a two hour drive” Atwood wrote. “Within 500 miles is roughly 40% of the nation’s population as are 60% of Canadians. The interstates contained within this market also allow Lehigh to connect directly with inland ports to the south and west, like Columbus and Nashville.”

Atwood noted that because of the primacy of location in shipping, some of the biggest names in logistics occupy millions of square feet here, and the market has a relatively low level of at-risk tenants. That has insulated owners of existing supply through 2020, and vacancies barely budged in spite of millions of square feet of speculative space arriving.

*Article courtesy of CoStar

For more information about Lehigh Valley Industrial space for sale or lease or about any other Lehigh Valley Industrial properties for sale or lease, please contact WCRE at 215-799-6900.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier Lehigh Valley commercial real estate broker that provides a full range of Lehigh Valley commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Lehigh Valley commercial properties for buyers, tenants, investors and sellers.

Please visit our websites for a full listing of Lehigh Valley commercial properties for lease or sale through our Lehigh Valley commercial real estate brokerage firm.

CenterPoint enters Lehigh Valley industrial market with $200M purchase

An Illinois owner of industrial real estate has entered the Lehigh Valley market with a $201.5 million purchase of 951 Willowbrook Road, a 1.03-million-square-foot warehouse-distribution center in Northampton.

CenterPoint Properties has been expanding its core presence in the Northern New Jersey and New York industrial market and the Lehigh Valley has been a target market.

The building was built in 2020 and sold by a joint venture between New York-based Rockefeller Group. The property is fully leased to Geodis, a third-party logistics company, and is located next to a FedEx Ground hub and not far from Lehigh Valley International Airport. Geodis has nine years remaining on its lease.

The property is part of Rockefeller Group Logistics Park, a master-planned industrial park that is in the highly desirable and dynamic Lehigh Valley industrial market. The property is near interstates 78 and 476 and Route 22, providing proximity to the Lehigh Valley region, Philadelphia and New York City.

The Lehigh Valley industrial market had a banner year in 2020, setting records in leasing activity, logging 23.5 million square feet in leases, or 20% more than a previous record set in 2016, according to a Cushman & Wakefield report.

Construction of new buildings also set a record with 21.3 million square feet of new space put on that Pennsylvania market last year. That was 1.25 million square feet more than the prior record set in 2019.

*Article courtesy of Philadelphia Business Journal

For more information about Lehigh Valley Industrial space for sale or lease or about any other Lehigh Valley Industrial properties for sale or lease, please contact WCRE at 215-799-6900.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier Lehigh Valley commercial real estate broker that provides a full range of Lehigh Valley commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Lehigh Valley commercial properties for buyers, tenants, investors and sellers.

Please visit our websites for a full listing of Lehigh Valley commercial properties for lease or sale through our Lehigh Valley commercial real estate brokerage firm.

Nike Is Coming to Bethlehem, Pennsylvania

Nike Lehigh Valley

One of the largest clothing companies on the planet is coming to the Lehigh Valley.

Nike has leased over 1 million square feet at 3633 Commerce Center Blvd. in the Majestic Bethlehem Center, an industrial park that was developed on top of an old Bethlehem Steel plant in Bethlehem, Pennsylvania.

The campus has become one of Lehigh’s most prominent shipping nodes, and the Fortune 100 company will soon be neighbors with QVC, Crayola and McKesson. Like Beaverton, Oregon-based Nike, these tenants were drawn to the Lehigh Valley market by its exceptional interstate access and direct routes into New York and Philadelphia.

The deal is excellent news for Lehigh, because in spite of the market’s strengths, it saw a curious downtick in industrial demand in 2020. Net absorption was below what was seen in the nearby Scranton and Berks County markets, which each saw multiple million-square-foot deals close in the past four quarters.

This cooling was especially surprising given the market’s prominence before the coronavirus pandemic and how the related shutdowns rapidly accelerated online shopping. One would anticipate this market doing extremely well, as over the past decade, Lehigh has easily been the North Atlantic Trade Corridor’s most in-demand market.

Local industrial professionals remain confident that the market will rebound but point to the cheaper rates and availability of premium space outside the valley as factors that could be siphoning away demand. With millions of square feet of speculative development on the way, Lehigh Valley finds itself in a potentially troubling spot for the first time in years.

While the sheer amount of space set to deliver might make some waves in the coming quarters, Nike’s decision to set up shop within Lehigh is a good indication that 2020 was an anomaly, not a trend. This market remains supremely positioned on the supply chain, and the growth of online shopping caused by the coronavirus will likely keep demand elevated for years.

*Article courtesy of CoStar

For more information about Lehigh Valley Industrial space for sale or lease or about any other Lehigh Valley Industrial properties for sale or lease, please contact WCRE at 215-799-6900.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier Lehigh Valley commercial real estate broker that provides a full range of Lehigh Valley commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Lehigh Valley commercial properties for buyers, tenants, investors and sellers.

Please visit our websites for a full listing of Lehigh Valley commercial properties for lease or sale through our Lehigh Valley commercial real estate brokerage firm.

Neighboring Markets Might Be Siphoning Industrial Demand Away From Lehigh Valley

The Lehigh Valley, Pennsylvania, logistics sector has been successful for so long that it almost feels immune to risk. But things are starting to look interesting one quarter into the year.

CoStar data shows industrial demand within Lehigh Valley cooled off somewhat in 2020. The market’s vacancies climbed by roughly 2% during the turbulent year, and in the past 12 months, more than 1 million square feet of industrial space has been put up for sublease.

Last year saw about 2.4 million square feet of net absorption, the difference between move-ins and move-outs. This isn’t a freakishly low figure, but it is under the market’s historic average and one of its weaker showings since 2010. 

That is somewhat concerning because this curious softening of demand is also occurring at a time when some experts are beginning to caution about the risk of oversaturation. There’s nearly 8 million square feet of speculative space on the way in the Valley, and the major projects that delivered in 2020 remain 50% unoccupied at the end of the first quarter.

In all likelihood, this lull is just a blip, and demand will soon bounce back. But what’s interesting here is Lehigh’s cooldown occurred as the national logistics market was exploding. Lehigh should have done very well last year, and what’s even more intriguing is its neighbors are overperforming notably.

Both Scranton and Reading had banner years in 2020, each seeing over 4 million square feet of net absorption, some of the highest levels ever recorded for either markets. And neither market has slowed since the start of 2021. Multiple 1 million-square-foot deals have been inked in these two markets since January, while Lehigh has seen just a few leases over 200,000 square feet finalize in that same time.

Given the relatively slow pace of last year’s leasing, it looks possible that Lehigh’s vacancies could soften notably this year, but it’s still far too early to say this is a trend. CoStar Advisory Services points out that large-scale projects in the Valley have leased up notably quicker than the national average over the past several years, and Lehigh’s position on the supply chain is just too good to dismiss.

But it might mean that tenants are now more willing to sacrifice the perfect location for cheaper rents and more labor. When it comes to the all-important labor pool, Berks County has Lehigh beat outright. Rents in both markets are considerably cheaper, as well, something Scranton developers have been eager to point out.

For those looking to read the rapidly evolving world of central Pennsylvania logistics, Lehigh Valley is now a market worth monitoring closely.

*Article courtesy of CoStar

For more information about Lehigh Valley space for sale or lease in Lehigh Valley or about any other Lehigh Valley properties for sale or lease, please contact WCRE at 215-799-6900.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier Lehigh Valley commercial real estate broker that provides a full range of Lehigh Valley commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Lehigh Valley commercial properties for buyers, tenants, investors and sellers.

Please visit our websites for a full listing of Lehigh Valley commercial properties for lease or sale through our Lehigh Valley commercial real estate brokerage firm.

Lehigh Valley Industrial Market Well Positioned for 2021

Market Posted Year-Over-Year Rent Growth of Nearly 5.5% Last Year

The Lehigh Valley, Pennsylvania, industrial market took everything COVID-19 dished out without missing a beat. And it appears ready for whatever 2021 may throw its way.

Lehigh Valley’s unique location and proximity to every major city along the northeastern shore meant at the start of the shutdown, it had a deep base of strong tenants relatively unexposed to risk. This helped keep the market stable through a few turbulent months in the second quarter when leasing activity dried up across the county.

Because COVID-19 has accelerated the growth of e-commerce, demand quickly resumed. Last year ended with nearly 2.5 million square feet of net absorption — the difference between move-ins and move-outs — which kept vacancies stable even as millions of square feet of industrial space came online in the midst of a global pandemic. The market posted year-over-year rent growth of nearly 5.5%, which is incredible considering the chaos surrounding the initial shutdown.

Demand was heaviest in the Fogelsville corridor, where Interstates 78 and 476 intersect. This is one of the state’s best locations for distributors, and 14 of the year’s 52 leases over 10,000 square feet were signed here. There was also an interesting flurry of activity near Easton and close to the airport, where Geodis and Natural Foods each signed for over 1 million square feet in 2020.

This level of activity likely helped give developers the confidence to resume building, breaking ground on more than 7 million square feet last year. Many of these projects are northeast of Fogelsville and hug I-22. There’s several major projects underway around Easton, which offers the most direct access into New York City but also substantial work being done near the Airport.

Given the market’s location and the growth of e-commerce, it is not too surprising that investment exploded in the Valley. Total industrial sales volume was over $730 million, one of the highest levels in market history and the third consecutive year of sales growth. Big buyers on the year included Prudential, Uline, Prologis, and the BlackStone Group.

*Article courtesy of CoStar

For more information about Lehigh Valley space for sale or lease in Lehigh Valley or about any other Lehigh Valley properties for sale or lease, please contact WCRE at 215-799-6900.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier Lehigh Valley commercial real estate broker that provides a full range of Lehigh Valley commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Lehigh Valley commercial properties for buyers, tenants, investors and sellers.

Please visit our websites for a full listing of Lehigh Valley commercial properties for lease or sale through our Lehigh Valley commercial real estate brokerage firm.

Bridge Development, Link Team on Lehigh Valley Industrial Project

Region Experiences Surge in New Logistics Hubs

Link Logistics Real Estate is teaming up with Bridge Development Partners to create a 480,000-square-foot industrial campus on a 60-acre site in the Lehigh Valley in Pennsylvania, a hot spot for such projects.

Bridge, headquartered in Chicago, assigned the contract for the vacant site at 428 E. Moorestown Road in Wind Gap to Link after securing all of the necessary development approvals. Link Logistics, the Piscataway, New Jersey-based industrial real estate arm of investment giant Blackstone, has retained Bridge to provide development management services and construct a the industrial facility on its behalf.

Construction on the project is slated is begin this month, with completion expected in December. It is Bridge’s first development in Pennsylvania and will be overseen by Northeast Region Partner Jeff Milanaik and his team, according to a statement from the real estate firm.

With space for industrial development scant and state-of-the-art logistics properties scarce in North Jersey, real estate firms have gone south and west to build warehouse and distribution hubs. That’s sparked a flood of development in the Lehigh Valley, a region that borders on and includes part of the Garden State but mainly encompasses Allentown, Bethlehem and Easton in Pennsylvania.

Although Bridge hasn’t had any projects in the Keystone State previously, it has developed in the New Jersey portion of the Lehigh Valley. The developer built Bridge Point 78, a 3.85-million-square-foot industrial campus with six buildings in Phillipsburg, New Jersey, on a former Ingersoll Rand site.

The project’s first phase was recently purchased by PGIM Real Estate for $275 million, according to CoStar data. The complex has a tenant roster that includes Japanese clothing retailer Uniqlo, Mark Anthony Brands, which distributes White Claw alcoholic seltzer, and lawn-care manufacturer ScottsMiracle-Gro.

“The Lehigh Valley continues to distinguish itself as one of the country’s most vital distribution and logistics hubs, which was critical to our success at nearby Bridge Point 78,” Milanaik said in a statement.

The proposed Lehigh North project would feature 36-foot-clear heights, a cross-docked configuration for its 73 exterior docks, four drive-in doors, 100 trailer positions and parking for 187 cars. The facility is equidistant between Route 78 and Allentown near Route 33 through the Northampton Valley.

The new development would be an addition to Link’s Lehigh Valley portfolio, which totals more than 16 million square feet of industrial space, according to Britton Winterer, the company’s executive vice president and head of development.

It is the second industrial project that Bridge and Link have partnered on, with the two companies developing a 95,000-square-foot industrial facility in Lyndhurst, New Jersey, in 2019.

*Article Courtesy of CoStar

For more information about Lehigh Valley space for sale or lease in Lehigh Valley or about any other Lehigh Valley properties for sale or lease, please contact WCRE at 215-799-6900.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier Lehigh Valley commercial real estate broker that provides a full range of Lehigh Valley commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Lehigh Valley commercial properties for buyers, tenants, investors and sellers.

Please visit our websites for a full listing of Lehigh Valley commercial properties for lease or sale through our Lehigh Valley commercial real estate brokerage firm.

‘A Huge Move for Us’: Forward Air Expands to Lehigh Valley, Adding to its Growth as a Logistics Hub

Forward Air Corp. has leased 37,717 square feet in Bethlehem as part of a bigger push into the Lehigh Valley and key Pennsylvania industrial market.

The building at 2675 Commerce Center Blvd. is owned by J.G. Petrucci Co. For the past 11 years, Forward (NASDAQ: FWRD) outsourced its logistics operations to a third party in the Lehigh Valley but decided the timing was right to establish its own employee-based facility in the market, said Thomas Schmitt, CEO.

“This is really a huge move for us,” he said. “We love to go into emerging, high growth areas and this location is perfect to support the Forward network. It will increase our coverage across Pennsylvania and relieve some of the pressure off of Philadelphia.”

The company’s Philadelphia operations are based in 1000 Henderson Blvd. in Folcroft. It also maintains locations in Harrisburg and Pittsburgh.

Forward Air’s expansion in the Lehigh Valley highlights the importance of Pennsylvania as an industrial market and its role in the movement of goods throughout the Northeast, mid-Atlantic and points west.

Forward Air is a $1.4 billion freight and logistics company. In the Lehigh Valley, the company plans to start out with 10 employees and two to three trucks a day and continue to expand from there. “We do expect 10% to 15% of growth every year for many years to come,” Schmitt said.

It’s easier for the company to grow when it controls sites throughout its network, Schmitt said. The company had built its business by being located near airports where airlines were its main customers but has decided to look at areas beyond airports as the company expands its network.

Based in Greeneville, Tenn., Forward Air plays a specialized role in the logistics industry. It provides what is referred to in the industry as LTL, less than truckload or load, and last-mile delivery of products. The company has 200 locations and can reach the entire country in three days or less.

Prior to the pandemic, its customer base had focused on concerts, trade shows and cruise lines where speed of delivery was important. Retailers were also a large part of its business.

“Those are our largest, most profitable customers,” Schmitt said. It’s a highly profitable, high precision business. All of that went away.”

The absence of those customers as a result of the coronavirus forced the company to delve into new lines of business and now include more essential industries such as medical and consumer goods.

*Article courtesy of Philadelphia Business Journal

For more information about Lehigh Valley space for sale or lease in Lehigh Valley or about any other Lehigh Valley properties for sale or lease, please contact WCRE at 215-799-6900.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier  Lehigh Valley commercial real estate broker that provides a full range of  Lehigh Valley commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Lehigh Valley commercial properties for buyers, tenants, investors and sellers.

Please visit our websites for a full listing of Lehigh Valley commercial properties for lease or sale through our Lehigh Valley commercial real estate brokerage firm.

ShipHero Subleases Lehigh Valley Warehouse

ShipHero has subleased a warehouse facility at 6736 Tilghman St. in Allentown, Pennsylvania.

The U.S. multinational e-commerce logistics company is taking the entire 150,0000-square-foot industrial building called Iron Run Distribution Center II.

ShipHero will use the Lehigh Valley warehouse as a fulfillment center. It will be the company’s ninth location in the country.

The 150,000-square-foot building was developed in 1975. Prologis acquired the property in January as part of the Black Creek Group portfolio deal.

*Article courtesy of CoStar

For more information about Lehigh Valley space for sale or lease inLehigh Valley or about any other Lehigh Valley properties for sale or lease, please contact WCRE at 215-799-6900.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier  Lehigh Valley commercial real estate broker that provides a full range of  Lehigh Valley commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Lehigh Valley commercial properties for buyers, tenants, investors and sellers.

Please visit our websites for a full listing of Lehigh Valley commercial properties for lease or sale through our  Lehigh Valley commercial real estate brokerage firm.

Lehigh Valley Not Terribly Affected by Coronavirus Through the Second Quarter

The coronavirus caused some minor disruption to Pennsylvania’s Lehigh Valley logistics market through the second quarter, but fallout from the pandemic was largely limited to investment activity.

Roughly 60 deals closed through 2020’s tumultuous first two quarters, but only a handful finalized from April through June. With one exception, these were small properties trading between local buyers.

Given the uncertainty, its understandable why investment remains mostly muted through the third quarter; However, a June acquisition of the five-star, 475,000-square-foot LogistiCenter 33 could indicate investor confidence slowly coming back. The $62.5 million deal was easily the largest of the quarter and involved Black Creek Industrial. The Denver-based REIT acquired the asset for roughly $130 per square foot, comparing quite favorably to the market average near $85 per square foot.

Nearly everyone involved in the logistics industry remains bullish about its future, and it’s not hard to see why. The pandemic has forced the nation to rapidly adapt to online shopping, and e-commerce levels surged through the second quarter. According to Adobe’s Digital Economy Index, e-commerce growth has accelerated about five years in the past three months. Total online spending for May, at $82.5 billion, is up 77% from that same time in 2019.

Lehigh Valley is uniquely situated to take advantage of this trend. The market is at the intersection of I-79 and I-476, which allows distributors direct access to all the northeast’s major cities as well as other prominent shipping nodes like Nashville and Columbus.

Consequently, more than 10 million square feet was underway at the time of the shutdown, and builders still managed to deliver roughly 1 million square feet through the second quarter. The most notable of these new properties was at 7378 Airport Road, a 450,000-square-foot distribution center near the international airport in Bath.

The airport area has seen a flurry of construction and leasing activity in recent years. Within a five-mile radius, there’s close to 2.3 million square feet of logistics space underway, and it was here that the biggest lease of the second quarter finalized, when Geodis signed for a million square feet in April.

This type of sustained demand has given owners the confidence to continue building in the midst of a world-altering pandemic, and close to 2.3 million square feet broke ground between April and June.

While vacancies understandably softened somewhat through the second quarter, this is largely the result of incoming supply and a handful of moveouts. Because of the primacy of location in shipping, Lehigh attracts some of the biggest names in logistics, and it had a relatively low level of at-risk tenants when the coronavirus arrived. This should insulate owners of existing supply in the coming months, as millions of square feet in spec space arrives.

CoStar data shows less than half of this space was pre-leased at the end of second quarter, and an excess of supply might drag on rents. However, growth over the past several years has been otherwise healthy, and year over year changes remained positive through the second quarter. At the end of June, the average space in Lehigh was leasing for close to $6.20 per square foot, a year-over-year change of nearly 5%.

Lehigh will remain a market worth monitoring through the third quarter. New space arriving during so much uncertainty will test demand like never before and the speed of lease-up will likely impact both rents and investment volume.

*Article courtesy of CoStar News

For more information about Lehigh Valley industrial space for sale or lease in Lehigh Valley or about any other Lehigh Valley properties for sale or lease, please contact WCRE at 215-799-6900.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier Philadelphia commercial real estate broker that provides a full range of Lehigh Valley commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Lehigh Valley  commercial properties for buyers, tenants, investors and sellers.

Please visit our websites for a full listing of Lehigh Valley  commercial properties for lease or sale through our Lehigh Valley commercial real estate brokerage firm.

Pennsylvania’s Lehigh Valley Transportation Infrastructure Source of Strength During Uncertain Times

The Lehigh Valley was a premiere logistics hub before the coronavirus hit, and it looks remarkably well positioned to maintain that stature through the coming quarters.

The map below the location of distribution space occupied by America’s most troubled retailers – those that either had S&P credit rating of BBB – or lower even before the coronavirus took hold, or were cited as particularly high risk borrowers by other ratings firms leading up to the current crisis.

Many of these firms will outlast the coronavirus, but the fact that they occupy more than 170 million square feet of distribution space throughout the U.S. hints at potential trouble spots for the industrial sector. Companies like Kmart were already downsizing their distribution presence pre-pandemic, and a few firms, including Office Depot, have already announced they planned to shutter some distribution spaces permanently in recent weeks.

But despite its large inventory of more than 100 million square feet of logistics space, the Lehigh Valley has notably fewer of these troubled tenants, which make up 0.7% of the local logistics space. That’s well below other nearby distribution hubs in Harrisburg and Scranton, and also less than half the share found in other major U.S. markets such as Kansas City and the Inland Empire.

Whether it’s simply luck that Lehigh Valley has less exposure to these old line retailers, or a reflection of the market’s particular appeal to the most advanced and dominate logistics chain operators such as Amazon.com, Fedex, and Walmart, is unclear. Either way, the market’s unique location should help it continue to garner tenant interest as the economy begins to recover.

Lehigh’s main advantage over its neighbors is that it lies at the intersection of interstates 78, 80 and 476. These routes not only offer direct access to New York City and Philadelphia, they also allow for optionality. Drivers can use I-78 to access markets to the west, while I-80 and I-476 makes it easy to deliver across the mid-Atlantic and Northeast.

Brian Knowles, a principal at Lee Associates near Philadelphia, said that location trumps rents in this industry.

“Rents obviously mean something,” he said. “But if more than 60% of my cost is in transportation expenses, location is more important.”

Knowles has been leasing warehouses for decades, and has witnessed the evolution of eastern Pennsylvania’s logistics market first hand. Shippers flocked to the region, and developers have added close to 85 million square feet across these markets over the last decade.

Knowles credits Lehigh’s growth to its labor pool as well. The costs of being that close to the Port of New York and New Jersey became prohibitively high for those moving goods within the region. Rents in the Newark submarkets, close to the port, lease for about $12 per square foot these days. But the labor is pricier too, and there’s less of it.

Eastern Pennsylvania, a manufacturing hub hurt by decades of outsourcing and automation, offered a deeper, and cheaper, pool of workers in a better location for moving products across the country.

Knowles is also quick to point out that while the Valley might be Pennsylvania’s strongest positioned market right now, he firmly believes other major Pennsylvania markets will weather the storm well, too East Pennsylvania’s location is as strong as before, its labor pool is still deep, and the virus will likely accelerate the growth of e-commerce.

“When I started, the guy in charge of supply chains and logistics worked in some backroom of the warehouse,” said Knowles. “Now, he’s in the executive suites near the CEO.”

*Article courtesy of CoStar News

For more information about Lehigh Valley industrial space for sale or lease in Lehigh Valley or about any other Lehigh Valley properties for sale or lease, please contact WCRE at 215-799-6900.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier Philadelphia commercial real estate broker that provides a full range of Lehigh Valley commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Lehigh Valley  commercial properties for buyers, tenants, investors and sellers.

Please visit our websites for a full listing of Lehigh Valley  commercial properties for lease or sale through our Lehigh Valley commercial real estate brokerage firm.