Bed Bath & Beyond Inc. plans to occupy a 1-million-square-foot distribution center in Pennsylvania as part of a $250 million effort to modernize its supply chain.
The facility in Frackville in the Lehigh Valley will be one of two distribution facilities the Union, New Jersey, company plans to open. The other will be located in Southern California.
The deal contributed to continued robust industrial leasing activity in the Lehigh Valley market. The I-78/I-81 Corridor experienced more than 7 million square feet of absorption during the second quarter and that was the “highest ever recorded in a single quarter.” That submarket has 385.4 million square feet and a vacancy rate of 5.8%. Asking rents for new construction in that area come in at $7 a square foot.
Bed Bath & Beyond (NASDAQ: BBBY) selected Ryder System Inc., a third-party logistics company, to develop and operate the two regional distribution centers. The building in Pennsylvania can be expanded beyond 1 million square feet. It will serve Bed Bath & Beyond’s Northeast stores as well as online orders. It will open this fall and is expected to create 300 jobs.
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