Pennsylvanias

Winter 2016

FIGURE 1: THE PA I-78/I-81 INDUSTRIAL CORRIDOR

CBRE RESEARCH

P EN N S YLVA N I A S I - 7 8 / I - 8 1 LO G I S T I CS CORRI D OR

The Pennsylvania I-78/I-81 Logistics Corridor, stretching from

Northeastern Pennsylvania, through the Lehigh Valley, and into Central
Pennsylvania, has emerged as one of the nations most sought-after areas
to warehouse and distribute goods.

his report has been created to meet the increasing need

CLASS :

from tenants, owners, investors, developers, and other

Class A: the most prestigious warehouse distribution

interested parties for accurate data to evaluate market trends.

The inventory of warehouse distribution properties in this
report are institutional-grade, meaning their space is
functional to most modern users. The majority of the 178.7
million sq. ft. of properties in this report have been built
within the past 25 years.
However, a significant portion of the value in this report lies in

buildings competing for premier industrial users. These

buildings typically have been built more recently, offering
modern systems, higher quality interior and exterior
finishes, high density sprinkler systems, and higher
clearance heights.
Class B: warehouse distribution buildings competing for a
wide ranges of users. Interior and exterior finishes are fair
to good, while the systems are functional and adequate.

its granularity. We have identified each property so that we

can analyze the market by the following attributes:

SUBMARKET:
Central Pennsylvania (Central PA)

FIGURE 2: NEW CAPABILITIES TO ANALYZE DATA FOR

INSITITUTIONAL-GRADE WAREHOUSE DISTRIBUTION
PROPERTIES

Lehigh Valley
Northeastern Pennsylvania (Northeastern PA)

SIZE :
100,000-300,000 sq. ft.

Submarket

Size

300,000-500,000 sq. ft.

Over 500,000 sq. ft.

Class

Source: CBRE Research, Q2 2016.

CBRE RESEARCH

FIGURE 3: THE RISE OF THE MASSIVE, MODERN DISTRIBUTION WAREHOUSE

Class A Properties Greater than 500,000 sq. ft.
(MSF)

No segment of the PA I-78/I-81 Corridor has grown as quickly as the

80

inventory of Class A warehouse properties sized over 500,000 sq. ft.

Figure 3 illustrates the increase in the Class A inventory of buildings

70

greater than 500,000 sq. ft. since 2006 (134% change 2006-Q2

60

2016). The Central PA submarket has seen its inventory of Class A

50

properties greater than 500,000 sq. ft. grow faster than the other two

40

major submarkets (Lehigh Valley and Northeastern PA) since 2006

30

(159%).

20

2015

2014

2013

2012

Lehigh Valley

Central PA

Q2 2016

Northeastern PA

2011

2010

2009

2008

2007

2006

10

Source: CBRE Research, Q2 2016.

FIGURE 4: LARGER WAREHOUSES ARE INCREASINGLY CHARACTERISTIC OF THIS MARKET

Inventory Composition of I-78/I-81
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

Due to the growth of larger warehouses, Figure 4 shows how

the composition of the regions inventory has changed in the last
ten years.

26%

33%

19%

19%

56%

48%
2006

100,000-300,000 SF

Q2 2016

300,000-500,000 SF

Over 500,000 SF

Source: CBRE Research, Q2 2016.

FIGURE 5: DEMAND AND VACANCY

Net Absorption (Left Side)

4

CBRE RESEARCH

YTD
Q2 2016

2015

2014

2013

2012

2011

4
2
2010

0
-2
2009

20
18
16
14
12
10
8
6

2008

16
14
12
10
8
6
4
2

2007

(%) Despite a considerable amount of supply over the last several years,

2006

(MSF)

Direct Vacancy Rate (Right Side)

Source: CBRE Research, Q2 2016.

strong demand has kept pace. As a result, direct vacancy along the
I-78/I-81 corridor hovers near an historic low. The Lehigh Valley, with
its relative scarcity of land, persistently exhibits the lowest vacancy
rates along the corridor.

P EN N S YLVA N I A S I - 7 8 / I - 8 1 LO G I S T I CS CORRI D OR

Bigger and better: the construction of

warehouses sized over 500,000 sq. ft. has
been the largest source of inventory growth
along the PA I-78/I-81 corridor over the
past ten years.
CBRE RESEARCH

FIGURE 6: RECORD ASKING RENTS AVERAGE DIRECT ASKING LEASE RATE

$4.50

As a result, the average asking rent reached a new all-time high

$4.30

(Figure 6). The highest average asking rents, at $4.98 per sq. ft. in
Q2 2016, are found in the Lehigh Valley.

$4.10
$3.90
$3.70
$3.50

Source: CBRE Research, Q2 2016.

Q2 2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

$3.30

FIGURE 7: PA 78/81 CORRIDOR NET ABSORPTION BY CLASS

Remarkably, as shown in Figure 6, Class A warehouses have

(MSF)

not recorded any annual negative net absorption during the

18

last 10 years. The only negative absorption was limited to Class

B warehouses. Furthermore, this negative absorption was only
experienced, in aggregate, by properties under 500,000 sq. ft.

12

26%

33%

19%

48%

19%
56%

Source: CBRE Research, Q2 2016.

FIGURE 8: NOTABLE, NEW TENANTS TO THE PA I-78/I-81 CORRIDOR

The growth and increasing importance of this market is demonstrated by some of the global brand names who have located here.

CBRE RESEARCH

2015

2014

2013

2012

2011

2009

2010

Class B

YTD
Q2 2016

Class A

2008

2007

2006

-4

P EN N S YLVA N I A S I - 7 8 / I - 8 1 LO G I S T I CS CORRI D OR

PA I-78/I-81 Industrial Corridor Statistics

(Institutional-grade Warehouse Distribution Properties)
ALL PROPERTIES
2006
NUMBER OF
367
BUILDINGS
INVENTORY (SF) 117,986,484
DIRECT
9.30%
VACANCY RATE
AVG. DIRECT
ASKING RENT
$4.22
(SF/YR., NNN)
YTD NET
ABSORPTION (SF) 7,339,806
CLASS A PROPERTIES
2006
NUMBER OF
130
BUILDINGS
INVENTORY (SF) 52,045,080
DIRECT
13.63%
VACANCY RATE
AVG. DIRECT
ASKING RENT
$4.12
(SF/YR., NNN)
YTD NET
ABSORPTION (SF) 5,262,249

2007

2008

2009

2010

2011

2012

2013

2014

2015

Q2 2016

387

403

414

415

416

423

428

443

461

476

128,533,575

137,019,553

142,700,278

143,705,908

144,843,908

149,776,750

153,915,036

161,145,325

169,995,154

178,742,607

10.50%

14.62%

18.33%

15.49%

12.77%

14.30%

13.18%

6.94%

6.68%

7.73%

$4.15

$4.18

$3.91

$3.75

$3.68

$3.79

$3.74

$3.90

$4.18

$4.27

4,231,615

-702,684

-821,090

4,794,026

5,853,291

2,309,061

5,406,073

14,959,382

9,035,280

3,986,112

2007

2008

2009

2010

2011

2012

2013

2014

2015

Q2 2016

149

165

176

177

178

183

188

202

218

232

62,375,670

70,840,758

76,562,245

76,815,245

77,953,245

82,423,245

86,526,607

93,713,062

101,790,626

110,278,079

14.97%

21.52%

22.23%

16.87%

12.92%

14.48%

12.82%

5.02%

7.13%

9.03%

$4.23

$4.31

$4.04

$3.97

$3.98

$4.08

$3.92

$4.06

$4.29

$4.51

4,307,267

76,775

3,751,610

4,906,130

4,329,127

2,876,258

5,192,445

11,980,836

5,811,512

3,876,935

2008

2009

2010

2011

2012

2013

2014

2015

Q2 2016

243

246

246

245

248

248

255

262

265

41,233,478

41,778,098

41,734,304

41,634,304

42,309,069

42,328,508

43,509,590

44,877,374

45,630,874

11.01%

16.00%

16.19%

15.95%

16.21%

12.77%

8.08%

9.21%

8.44%

$4.02

$3.78

$3.63

$3.59

$3.80

$3.85

$4.08

$4.12

$4.13

-923,810

-1,776,363

-74,302

228,584

761,627

1,681,288

2,596,200

1,113,027

509,271

2008

2009

2010

2011

2012

2013

2014

2015

Q2 2016

68

72

73

73

73

75

77

82

87

25,755,125

27,381,812

27,913,444

27,913,444

27,929,521

28,801,493

29,419,293

31,353,565

33,487,568

22.11%

34.12%

30.14%

23.35%

23.20%

21.60%

12.95%

11.42%

11.07%

$4.10

$3.85

$3.68

$3.78

$3.93

$3.80

$3.91

$3.96

$4.08

135,331

-2,076,264

1,422,171

1,894,195

55,069

1,129,955

3,029,047

2,162,583

780,692

2007

2008

2009

2010

2011

2012

2013

2014

2015

Q2 2016

85

92

96

96

98

102

105

111

117

124

64,294,102

70,030,950

73,540,368

74,058,160

75,296,160

79,538,160

82,785,035

88,216,442

93,764,215

99,624,165

7.54%

13.99%

13.77%

9.56%

7.09%

10.17%

10.46%

4.37%

3.89%

6.28%

$4.12

$4.30

$4.07

$3.94

$3.61

$3.60

$3.53

$3.79

$4.34

$4.47

5,043,516

85,795

3,031,537

3,446,157

3,730,512

1,492,365

2,594,830

9,334,135

5,759,670

2,696,149

100,000 - 300,000 SQ. FT. PROPERTIES

2006
2007
NUMBER OF
232
240
BUILDINGS
INVENTORY (SF) 39,391,083 40,820,298
DIRECT
8.85%
10.58%
VACANCY RATE
AVG. DIRECT
ASKING RENT
$3.94
$4.19
(SF/YR., NNN)
YTD NET
345,592
ABSORPTION (SF) 1,338,380
300,000 - 500,000 SQ. FT. PROPERTIES
2006
2007
NUMBER OF
59
62
BUILDINGS
INVENTORY (SF) 22,391,675 23,419,175
DIRECT
12.45%
18.49%
VACANCY RATE
AVG. DIRECT
ASKING RENT
$3.89
$4.15
(SF/YR., NNN)
YTD NET
ABSORPTION (SF) 1,508,959 -1,157,493
OVER 500,000 SQ. FT. PROPERTIES
2006
NUMBER OF
76
BUILDINGS
INVENTORY (SF) 56,203,726
DIRECT
8.36%
VACANCY RATE
AVG. DIRECT
ASKING RENT
$4.58
(SF/YR., NNN)
YTD NET
ABSORPTION (SF) 4,492,467

Source: CBRE Research, Q2 2016.

CBRE RESEARCH

CENTRAL PA
OVERVIEW

FIGURE 9: CENTRAL PENNSYLVANIA SUBMARKET MAP

Existing Institutional-grade
Warehouse Distribution Locations

CBRE RESEARCH

P EN N S YLVA N I A S I - 7 8 / I - 8 1 LO G I S T I CS CORRI D OR

FIGURE 10: INVENTORY COMPOSITION OF PA I-78/I-81 CORRIDOR

19%

52%

NORTHEASTERN
PA

The Central Pennsylvania (Central PA) submarket has been the

historical core of the PA I-78/I-81 logistics corridor, specializing as a

CENTRAL PA

super-regional node for bulk warehousing. The 90.5 million sq. ft. of
institutional-grade warehouse space in Central PA encompasses 52%
of the 78/81 corridors inventory.
Though the majority of the warehouse distribution inventory remains
in Central PA, the Lehigh Valley and Northeastern PA have grown
more rapidly over the past 10 years. Nonetheless, the one, important
segment in Central PA that has grown faster than the Lehigh Valley

31

and Northeastern PA is the Class A inventory greater than 500,000

sq. ft.

LEHIGH VALLEY
Source: CBRE Research, Q2 2016.

FIGURE 11: AS GOES CENTRAL PA, SO GOES THE I-78/I81 CORRIDOR DIRECT VACANCY RATES
Due to Central PAs larger share of the PA I-78/I-81 corridor, most

(%)

of the corridors market indicators are heavily influenced by and

25

strongly correlate with Central PA. The Direct Vacancy Rate, as seen
in Figure 11, for example, is indicative of the strong relationship

20

between Central PAs trends and the 78/81 corridor.

15

Among the counties in the Central PA submarket, Lancaster County

10

historically maintains the lowest vacancy rates.

2015

2014

2013

2012

2010

2011

PA I-78/I-81 Corridor

Q2 2016

Central PA

2009

2008

2007

2006

Source: CBRE Research, Q2 2016.

FIGURE 12: NET ABSORPTION BY SUBMARKET CENTRAL PA IS USUALLY THE BULK OF DEMAND
(MSF)
16
14
12
10
8
6
4
2
0
-2
-4

In most years, demand is strongest in Central PA (in terms of absolute

total sq. ft. absorbed). In the last recession, Class B warehouses

2015

2014

2013

2012

2011

Lehigh Valley

Northeastern PA

YTD Q2 2016

Central PA
Source: CBRE Research, Q2 2016.

2010

2009

2008

2007

2006

experienced the bulk of the negative absorption.

CBRE RESEARCH

The Central PA submarket comprises the

bulk of the PA I-78/I-81 corridors inventory,
currently 90.5 million sq. ft. of institutionalgrade warehouse space.
10

CBRE RESEARCH

P EN N S YLVA N I A S I - 7 8 / I - 8 1 LO G I S T I CS CORRI D OR

Central PA Statistics
(Institutional-grade Warehouse Distribution Properties)
ALL PROPERTIES
2006
NUMBER OF
194
BUILDINGS
INVENTORY (SF) 62,198,735
DIRECT
7.66%
VACANCY RATE
AVG. DIRECT
ASKING RENT
$4.29
(SF/YR., NNN)
YTD NET
ABSORPTION (SF) 2,719,231
CLASS A PROPERTIES
2006
NUMBER OF
63
BUILDINGS
INVENTORY (SF) 24,024,472
DIRECT
11.89%
VACANCY RATE
AVG. DIRECT
ASKING RENT
$4.07
(SF/YR., NNN)
YTD NET
ABSORPTION (SF) 1,721,676

2007

2008

2009

2010

2011

2012

2013

2014

2015

Q2 2016

201

206

213

213

215

219

222

222

228

236

65,910,931

68,315,206

72,656,944

73,022,743

74,125,743

77,333,035

80,378,121

80,305,663

85,104,571

90,569,721

9.68%

15.60%

21.29%

16.80%

15.46%

18.15%

17.71%

7.36%

5.71%

8.95%

$4.02

$4.02

$3.90

$3.73

$3.68

$3.76

$3.72

$3.84

$4.31

$4.52

-20,322

-2,196,625

-556,093

2,931,623

2,769,724

684,142

2,773,711

8,075,994

6,249,071

1,957,049

2007

2008

2009

2010

2011

2012

2013

2014

2015

Q2 2016

70

75

82

82

84

87

90

90

96

104

27,736,668 30,140,943 34,523,263 34,523,263 35,626,263 38,668,263 41,678,425 41,678,425 46,517,225 51,982,375
16.84%

22.77%

27.37%

18.77%

16.19%

18.55%

19.41%

4.16%

5.54%

11.56%

$4.11

$4.19

$4.11

$4.04

$4.05

$4.06

$3.91

$3.89

$4.32

$4.58

-201,323

-49,675

1,854,083

2,968,140

2,022,516

1,635,931

2,093,524

5,965,049

4,387,811

1,957,049

2008

2009

2010

2011

2012

2013

2014

2015

Q2 2016

125

126

126

126

127

127

127

128

128

100,000 - 300,000 SQ. FT. PROPERTIES

2006
2007
NUMBER OF
123
124
BUILDINGS
INVENTORY (SF) 20,675,801 20,907,051
DIRECT
6.46%
8.96%
VACANCY RATE
AVG. DIRECT
ASKING RENT
$3.88
$4.01
(SF/YR., NNN)
YTD NET
408,352
-333,409
ABSORPTION (SF)
300,000 - 500,000 SQ. FT. PROPERTIES
2006
2007
NUMBER OF
33
35
BUILDINGS
INVENTORY (SF) 12,376,006 13,018,506
DIRECT
13.04%
15.02%
VACANCY RATE
AVG. DIRECT
ASKING RENT
$3.68
$3.83
(SF/YR., NNN)
YTD NET
601,338
-341,279
ABSORPTION (SF)
OVER 500,000 SQ. FT. PROPERTIES
2006
NUMBER OF
38
BUILDINGS
INVENTORY (SF) 29,146,928
DIRECT
6.22%
VACANCY RATE
AVG. DIRECT
ASKING RENT
$4.77
(SF/YR., NNN)
YTD NET
ABSORPTION (SF) 1,709,541

Source: CBRE Research, Q2 2016.

21,003,051 21,151,051 21,319,257 21,319,257 21,484,549 21,503,988 21,431,530 21,690,483 21,690,483

12.90%

17.00%

15.89%

15.56%

22.39%

16.99%

7.82%

7.79%

7.33%

$4.02

$3.78

$3.67

$3.69

$3.90

$3.92

$4.00

$4.26

$4.32

-1,070,842

-670,555

334,876

179,282

-1,268,721

1,175,968

1,652,908

647,283

2008

2009

2010

2011

2012

2013

2014

2015

Q2 2016

37

39

39

39

39

40

40

41

44

13,819,481 14,503,801 14,570,433 14,570,433 14,570,433 14,949,205 14,949,205 15,300,160 16,550,860

21.40%

35.86%

28.79%

23.41%

23.12%

24.39%

11.29%

6.33%

12.41%

$3.95

$3.89

$3.77

$3.75

$3.74

$3.70

$3.78

$4.02

$4.57

-200,386

-1,559,728

1,071,851

784,930

42,366

100,710

1,959,034

1,069,741

2007

2008

2009

2010

2011

2012

2013

2014

2015

Q2 2016

42

44

48

48

50

53

55

55

59

64

31,985,374

33,492,674

37,002,092

37,133,053

38,236,053

41,278,053

43,924,928

43,924,928

48,113,928

52,328,378

7.98%

14.90%

18.04%

12.62%

12.37%

14.20%

15.79%

5.80%

4.58%

8.53%

$4.16

$4.07

$4.00

$3.74

$3.57

$3.61

$3.47

$3.79

$4.41

$4.57

654,366

-925,397

1,674,190

1,524,896

1,805,512

1,910,497

1,497,033

4,464,052

4,532,047

1,957,049

CBRE RESEARCH

11

LEHIGH VALLEY
OVERVIEW

FIGURE 13: LEHIGH VALLEY PENNSYLVANIA SUBMARKET MAP

Existing Institutional-grade
Warehouse Distribution
Locations

12

CBRE RESEARCH

P EN N S YLVA N I A S I - 7 8 / I - 8 1 LO G I S T I CS CORRI D OR

FIGURE 14: CHANGE IN TOTAL INSTITUTIONAL-GRADE INVENTORY (2006 Q2 2016)

(%)
70

The Lehigh Valley has experienced the fastest growth among the

60

78/81 submarkets. Since 2006, its inventory of institutional grade

50

warehouse distribution properties grew 66% to 55 million sq. ft.

40

It owes its growth to its proximity to New York City via toll-free

30

highways, the increasing scarcity of land in New Jersey, and the

20

trends towards expedited delivery of goods to consumers from

warehouses.

10
0

Lehigh Valley

Northeastern PA

Central PA

Source: CBRE Research, Q2 2016.

FIGURE 15: AVERAGE DIRECT ASKING LEASE RATES (Q2 2016)

The advantageous location of the Lehigh Valley and its significant

$5.50

growth has contributed to the highest, average rents along the 78/81

$5.00

corridor. Q2 2016 average asking rents were $4.98 per sq. ft., while
Class A rents reached $5.29 per sq. ft. Rents in the Lehigh Valley

$4.50

have persistently been the highest along the PA I-78/I-81 corridor

$4.00

since 2006.

$3.50
$3.00
$2.50
$2.00

Lehigh Valley

Northeastern PA

Central PA
Source: CBRE Research, Q2 2016.

FIGURE 16: DIRECT VACANCY RATES

(%)

The direct vacancy rate of the Lehigh Valley remains near historic

20
18
16
14
12
10
8
6
4
2
0

lows, despite the significant growth of the inventory.

The tightest market for space along the PA I-78/I-81 corridor is in
Lehigh County, a market comprising 31.4 million sq. ft., but only a

Lehigh Valley
Source: CBRE Research, Q2 2016.

Q2 2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

vacancy rate of 2.0%.

PA I-78/I-81 Corridor
CBRE RESEARCH

13

Lehigh Valley Statistics

(Institutional-grade Warehouse Distribution Properties)
ALL PROPERTIES
2006
NUMBER OF
97
BUILDINGS
INVENTORY (SF) 33,061,832
DIRECT
6.74%
VACANCY RATE
AVG. DIRECT
ASKING RENT
$4.32
(SF/YR., NNN)
YTD NET
ABSORPTION (SF) 4,356,988
CLASS A PROPERTIES
2006
NUMBER OF
41
BUILDINGS
INVENTORY (SF) 17,980,285
DIRECT
8.13%
VACANCY RATE
AVG. DIRECT
ASKING RENT
$4.37
(SF/YR., NNN)
YTD NET
ABSORPTION (SF) 3,624,507

2007

2008

2009

2010

2011

2012

2013

2014

2015

Q2 2016

103

109

109

109

108

111

113

125

135

140

35,777,332 39,108,597 39,108,417 39,283,248 39,318,248 41,043,798 42,336,998 48,970,705 52,282,645 54,905,448
10.58%

12.97%

12.61%

8.82%

5.84%

6.41%

3.61%

2.08%

5.02%

3.69%

$4.33

$4.61

$4.06

$4.04

$3.70

$4.19

$4.11

$4.74

$4.63

$4.98

-517,871

1,479,626

-28,792

2,262,334

1,302,647

1,657,658

2,495,917

6,166,416

1,664,865

1,842,388

2007

2008

2009

2010

2011

2012

2013

2014

2015

Q2 2016

46

52

52

52

51

53

55

66

76

81

20,508,285 23,788,660 23,788,660 23,576,660 23,611,660 25,039,660 26,332,860 32,850,275 36,162,215 38,785,018
11.25%

19.42%

15.50%

8.35%

4.46%

6.19%

2.60%

1.57%

6.30%

4.25%

$4.64

$4.67

$4.16

$4.47

$4.23

$5.09

$4.26

$5.00

$4.78

$5.29

6,656

504,945

718,961

2,189,196

1,052,040

1,198,090

2,405,239

5,708,663

1,446,329

1,881,540

2008

2009

2010

2011

2012

2013

2014

2015

Q2 2016

61

61

61

60

62

62

66

71

73

100,000 - 300,000 SQ. FT. PROPERTIES

2006
2007
NUMBER OF
58
61
BUILDINGS
INVENTORY (SF) 10,279,782 10,810,282
DIRECT
9.04%
13.37%
VACANCY RATE
AVG. DIRECT
ASKING RENT
$4.28
$4.45
(SF/YR., NNN)
YTD NET
689,641
-209,991
ABSORPTION (SF)
300,000 - 500,000 SQ. FT. PROPERTIES

7.94%

12.01%

11.77%

13.01%

7.73%

5.47%

4.28%

4.66%

4.21%

$4.24

$3.96

$3.68

$3.61

$3.75

$4.14

$4.73

$4.80

$5.01

19,131

-611,914

-58,361

-118,353

1,290,784

350,870

690,885

829,621

312,288

2008

2009

2010

2011

2012

2013

2014

2015

Q2 2016

17

17

17

17

17

18

20

24

25

6,413,209

6,413,209

6,413,209

6,413,209

6,429,286

6,922,486

7,540,286

9,141,286

9,625,089

11.37%

20.38%

15.36%

6.33%

11.69%

5.80%

5.49%

12.91%

2.75%

$4.27

$3.82

$3.87

$3.88

$4.47

$4.26

$4.91

$4.85

$5.21

1,062,503

-577,875

356,743

579,000

-329,703

843,400

605,448

835,244

791,000

2007

2008

2009

2010

2011

2012

2013

2014

2015

Q2 2016

28

31

31

31

31

32

33

39

40

42

19,678,816

21,884,926

21,884,926

22,271,757

22,406,757

23,606,757

24,406,757

29,838,164

30,588,164

32,233,664

8.33%

15.93%

10.63%

5.53%

2.34%

4.36%

2.16%

0.36%

2.81%

3.76%

$4.06

$4.74

$4.19

$4.42

$3.95

$3.95

$4.47

$4.25

-114,880

397,992

1,160,997

1,963,952

1,301,647

4,870,083

739,100

2006
2007
NUMBER OF
13
14
BUILDINGS
INVENTORY (SF) 4,903,234
5,288,234
DIRECT
2.52%
13.26%
VACANCY RATE
AVG. DIRECT
ASKING RENT
$3.60
$4.41
(SF/YR., NNN)
YTD NET
851,021
-193,000
ABSORPTION (SF)
OVER 500,000 SQ. FT. PROPERTIES
2006
NUMBER OF
26
BUILDINGS
INVENTORY (SF) 17,878,816
DIRECT
6.58%
VACANCY RATE
AVG. DIRECT
ASKING RENT
$4.37
(SF/YR., NNN)
YTD NET
ABSORPTION (SF) 2,816,326
14

10,810,462 10,810,282 10,598,282 10,498,282 11,007,755 11,007,755 11,592,255 12,553,195 13,046,695

CBRE RESEARCH

842,000

696,577

Source: CBRE Research, Q2 2016.

P EN N S YLVA N I A S I - 7 8 / I - 8 1 LO G I S T I CS CORRI D OR

NORTHEASTERN
PA OVERVIEW

FIGURE 17: NORTHEASTERN PENNSYLVANIA SUBMARKET MAP

Existing Institutional-grade
Warehouse Distribution Locations

CBRE RESEARCH

15

FIGURE 18: INVENTORY COMPOSITION BY SIZE AND SUBMARKET

(%)

Northeastern PA has emerged as an attractive alternative to the

70

Lehigh Valley and Central PA, offering lower costs, plentiful land, and

60

qualified labor.

50

Nonetheless, it takes a back seat to the Lehigh Valley and Central

40

PA in terms of users seeking the most accessible, prime sites. A

30

significant portion of its demand remains regionally-based.

20
Our data for Northeastern PA reflects a greater share of smaller

10
0

warehouses than the other 78/81 submarkets.

100,000-300,000 SF

300,000-500,000 SF

Northeastern PA

Central PA

Over 500,000 SF
Lehigh Valley

Source: CBRE Research, Q2 2016.

The Northeastern PA warehouse

distribution market offers lower costs,
more plentiful land, and abundant
labor for tenants.

16

CBRE RESEARCH

P EN N S YLVA N I A S I - 7 8 / I - 8 1 LO G I S T I CS CORRI D OR

Northeastern PA Statistics
(Institutional-grade Warehouse Distribution Properties)
ALL PROPERTIES
2006
NUMBER OF
76
BUILDINGS
INVENTORY (SF) 22,725,917
DIRECT
17.50%
VACANCY RATE
AVG. DIRECT
ASKING RENT
$3.96
(SF/YR., NNN)
YTD NET
263,587
ABSORPTION (SF)
CLASS A PROPERTIES
2006
NUMBER OF
26
BUILDINGS
INVENTORY (SF) 10,040,323
DIRECT
27.63%
VACANCY RATE
AVG. DIRECT
ASKING RENT
$4.00
(SF/YR., NNN)
YTD NET
-83,934
ABSORPTION (SF)

2007

2008

2009

2010

2011

2012

2013

2014

2015

Q2 2016

83

88

92

93

93

93

93

96

98

100

26,845,312 29,595,750 30,934,917 31,399,917 31,399,917 31,399,917 31,199,917 31,868,957 32,607,938 33,267,438
12.39%

14.53%

18.59%

20.77%

15.09%

15.14%

14.51%

13.35%

11.88%

11.07%

$4.28

$4.06

$3.74

$3.53

$3.65

$3.71

$3.71

$3.61

$3.72

$3.73

4,769,808

14,315

-236,205

-399,931

1,780,920

-32,739

136,445

716,972

1,121,344

186,675

2007

2008

2009

2010

2011

2012

2013

2014

2015

Q2 2016

33

38

42

43

43

43

43

46

46

47

14,130,717 16,911,155 18,250,322 18,715,322 18,715,322 18,715,322 18,515,322 19,184,362 19,111,186 19,510,686
16.72%

22.24%

21.29%

24.08%

17.38%

17.15%

12.51%

12.80%

12.58%

11.79%

$4.28

$4.07

$3.75

$3.41

$3.67

$3.66

$3.92

$3.78

$3.90

$3.90

4,501,934

-378,495

1,178,566

-251,206

1,254,571

42,237

693,682

307,124

-22,628

38,346

2008

2009

2010

2011

2012

2013

2014

2015

Q2 2016

57

59

59

59

59

59

62

63

64

9,419,965

9,816,765

9,816,765

9,816,765

9,816,765

10.32%

18.25%

21.63%

19.92%

12.18%

11.73%

12.83%

17.46%

15.72%

$3.83

$3.55

$3.44

$3.25

$2.81

$2.75

$2.78

$3.77

$3.79

127,901

-493,894

-350,817

167,655

739,564

154,450

252,407

-363,877

196,983

2008

2009

2010

2011

2012

2013

2014

2015

Q2 2016

14

16

17

17

17

17

17

17

18

5,522,435

6,464,802

6,929,802

6,929,802

6,929,802

6,929,802

6,929,802

6,912,119

7,311,619

36.39%

43.86%

46.63%

38.98%

34.04%

31.36%

24.66%

20.74%

18.98%

$4.26

$3.78

$3.42

$3.81

$4.00

$3.96

$3.60

$3.50

$3.50

-726,786

61,339

-6,423

530,265

342,406

185,845

464,565

257,598

-10,308

100,000 - 300,000 SQ. FT. PROPERTIES

2006
2007
NUMBER OF
51
55
BUILDINGS
INVENTORY (SF) 8,435,500 9,102,965
DIRECT
14.48%
10.98%
VACANCY RATE
AVG. DIRECT
ASKING RENT
$3.73
$3.88
(SF/YR., NNN)
YTD NET
240,387
888,992
ABSORPTION (SF)
300,000 - 500,000 SQ. FT. PROPERTIES
2006
2007
NUMBER OF
13
13
BUILDINGS
INVENTORY (SF) 5,112,435
5,112,435
DIRECT
20.53%
32.72%
VACANCY RATE
AVG. DIRECT
ASKING RENT
$4.18
$4.45
(SF/YR., NNN)
YTD NET
56,600
-623,214
ABSORPTION (SF)
OVER 500,000 SQ. FT. PROPERTIES
NUMBER OF
BUILDINGS
INVENTORY (SF)
DIRECT
VACANCY RATE
AVG. DIRECT
ASKING RENT
(SF/YR., NNN)
YTD NET
ABSORPTION (SF)

9,816,765 10,485,805 10,633,696 10,893,696

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Q2 2016

12

15

17

17

17

17

17

17

17

18

18

9,177,982

12,629,912

14,653,350

14,653,350

14,653,350

14,653,350

14,653,350

14,453,350

14,453,350

15,062,123

15,062,123

18.58%

5.17%

9.00%

7.66%

7.96%

0.56%

8.17%

8.31%

8.31%

3.87%

3.87%

$4.00

$4.00

$3.88

$3.92

$3.98

$4.70

$3.60

$3.60

$3.77

$3.95

$3.95

-33,400

4,504,030

613,200

196,350

-42,691

1,083,000

-1,114,709

-203,850

1,227,623

CBRE RESEARCH

17

Source: CBRE Research, Q2 2016.

CONSTRUCTION
OVERVIEW

18

CBRE RESEARCH

P EN N S YLVA N I A S I - 7 8 / I - 8 1 LO G I S T I CS CORRI D OR

Projects Under Construction

(Summer 2016)
ADDRESS

CITY

COUNTY

SUBMARKET

SIZE

TOTAL
AVAILABLE

ASKING
RENT

OWNER

STATUS

1999 RITNER HWY

CARLISLE

CUMBERLAND

CENTRAL PA

938,828

938,828

$4.75

GOODMAN BIRTCHER

UNDER
CONSTRUCTION

5 LOGISTICS DR

CARLISLE

CUMBERLAND

CENTRAL PA

204,800

204,800

$4.75

MRP REALTY JV
INDUSTRIAL PROPERTY
TRUST, INC.

UNDER
CONSTRUCTION

45 LOGISTICS DR

CARLISLE

CUMBERLAND

CENTRAL PA

582,000

582,000

$4.85

RYAN COMMERCIAL JV
HILLWOOD INVESTMENT
PROPERTIES

UNDER
CONSTRUCTION

1495 DENNISON ST

CARLISLE

CUMBERLAND

CENTRAL PA

620,000

620,000

$4.75

HILLWOOD
INVESTMENT
PROPERTIES

UNDER
CONSTRUCTION

50 MSC DR

JONESTOWN

LEBANON

CENTRAL PA

398,250

398,250

$4.75

RIDGELINE PROPERTY
GROUP

UNDER
CONSTRUCTION

1445 EDEN RD

YORK

YORK

CENTRAL PA

754,881

754,881

YORK COUNTY
ECONOMIC ALLIANCE

UNDER
CONSTRUCTION

220 W STATE ST

LYON TWP

BERKS

LEHIGH VALLEY

133,232

EAST PENN
MANUFACTURING
COMPANY

UNDER
CONSTRUCTION

CONGDON HILL DR

ALBURTIS

LEHIGH

LEHIGH VALLEY

1,100,000

LIBERTY PROPERTY
TRUST

UNDER
CONSTRUCTION

8620 CONGDON HILL DR

ALBURTIS

LEHIGH

LEHIGH VALLEY

1,200,000

$4.95

LIBERTY PROPERTY
TRUST

UNDER
CONSTRUCTION

10

8742 CONGDON HILL DR

ALBURTIS

LEHIGH

LEHIGH VALLEY

650,000

$4.75

LIBERTY PROPERTY
TRUST

UNDER
CONSTRUCTION

11

MILL CREEK RD

ALLENTOWN

LEHIGH

LEHIGH VALLEY

1,070,000

LIBERTY PROPERTY
TRUST

UNDER
CONSTRUCTION

12

MILL CREEK RD

ALLENTOWN

LEHIGH

LEHIGH VALLEY

600,000

ULINE

UNDER
CONSTRUCTION

13

3100 ALBURTIS RD

MACUNGIE

LEHIGH

LEHIGH VALLEY

210,000

INDUSTRIAL INCOME
TRUST

UNDER
CONSTRUCTION

14

149 WILLOW BROOK RD

ALLENTOWN

LEHIGH

LEHIGH VALLEY

1,200,000

FEDEX

UNDER
CONSTRUCTION

15

4683 HANOVERVILLE RD

BETHLEHEM

NORTHAMPTON

LEHIGH VALLEY

947,500

947,500

$4.75

TRAMMELL CROW CO.

JV CLARION PARTNERS

UNDER
CONSTRUCTION

16

4779 HANOVERVILLE RD

BETHLEHEM

NORTHAMPTON

LEHIGH VALLEY

297,600

297,600

$4.95

TRAMMELL CROW CO.

JV CLARION PARTNERS

UNDER
CONSTRUCTION

17

HECKTOWN RD

EASTON

NORTHAMPTON

LEHIGH VALLEY

790,720

790,720

PLANNED

18

1611 VAN BUREN RD

EASTON

NORTHAMPTON

LEHIGH VALLEY

629,800

629,800

PLANNED

19

4200 E BRADEN BLVD

EASTON

NORTHAMPTON

LEHIGH VALLEY

475,800

475,800

20

250-300 RESEARCH DR

JENKINS TWP

LUZERNE

NORTHEASTERN PA

279,000

20,000

21

FREEPORT RD

PITTSTON TWP

LUZERNE

NORTHEASTERN PA

312,356

1,100,000

210,000

$4.75

DERMODY PROPERTIES

UNDER
CONSTRUCTION

MERICLE

UNDER
CONSTRUCTION

SCANNELL PROPERTIES

UNDER
CONSTRUCTION

Source: CBRE Research, Q2 2016.

CBRE RESEARCH

19

To learn more about CBRE Research, or to access additional

research reports, please visit the Global Research Gateway at:
www.cbre.com/researchgateway.
IAN ANDERSON
Director, Research & Analysis
+1 215 561 8997
[email protected]
JOSEPH GIBSON
Research Manager
+1 610 727 5922
[email protected]
LISA DENIGHT
Senior Research Analyst
+1 215 561 8932
[email protected]
CBRE, INC.
Two Liberty Place
50 S. 16th Street, Suite 3000
Philadelphia, PA 19102
+1 215 561 8900
www.cbre.com/philadelphia
Licensed Real Estate Broker

Disclaimer: Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not
doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm
independently its accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all
rights to the material are reserved and cannot be reproduced without prior written permission of CBRE.