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Costco renews lease for southern New Jersey distribution space

By Sam Bixler CoStar Research

Costco Wholesale, the Washington-based membership warehouse retailer that ranks among the largest retail operators in the world, renewed its lease for 100,134 square feet of industrial space at LogistiCenter at Logan in Logan Township, New Jersey.

Dermody Properties owns the 365,760-square-foot distribution building at 2100 Center Square Road in Gloucester County. The building, which was built in 2008 and renovated in 2022, is located within LogistiCenter Logan, a 1,100-acre, master-planned business park containing over 5.5 million square feet of warehouse, distribution and manufacturing space and is located at Exit 10 of I-295 and Exit 2 of the New Jersey Turnpike.

Dermody, a privately owned logistics real estate firm based in Reno, Nevada, acquired the Logan Township site in 2005 and crafted the master-planned campus, which has since attracted users including Kimberly Clark Corp., Freightliner and Amazon, the latter of which signed a 1 million-square-foot lease at the park.

Costco Wholesale operates more than 870 warehouse stores worldwide. Costco has maintained a growing distribution footprint in New Jersey, where it also leases warehouse space in Newark.

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GXO Logistics renews warehouse lease in central Pennsylvania

By Margaret Sutherland Costar

GXO Logistics, a global logistics firm that manages outsourced supply chains and provides warehousing and e-commerce fulfillment for major brands, renewed the lease for the 413,867-square-foot warehouse it occupies at 4406 Freight St., also known as Industrial Park Road in Camp Hill, Pennsylvania.

The 39-year-old industrial building is owned by HagerPacific Properties, a Newport Beach, California-based investor that specializes in acquiring and repositioning commercial real estate across the country.

Built in 1987, the facility sits within a well-established industrial corridor near Interstate 83 and the Pennsylvania Turnpike.

The Camp Hill facility is one of several distribution centers GXO operates across central Pennsylvania, with additional locations in Middletown, Mechanicsburg and Carlisle.

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Smaller lease deals drive Central Pennsylvania’s core industrial market

 By Brenda Nguyen CoStar Analytics

Industrial space availability trends across South Central Pennsylvania— spanning Harrisburg, Lancaster, York, Reading, Lebanon and Gettysburg—reveal a growing disconnect between development patterns and tenant demand.

Developers continue to build big facilities geared for single users, but tenants are leasing small-bay facilities, creating uneven market conditions across building size segments.

Small-bay industrial properties, those measuring under 50,000 square feet, remain the most in-demand segment, with availability holding near 3.5% in 2026. Industrial buildings measuring between 50,000 and 100,000 square feet also show tight conditions, with availability at 4.5%. Limited new construction in these two size categories, combined with steady demand from local and regional users, continues to support lower vacancy rates.

Over the past three years, approximately 530 industrial leases were signed in this six-county region, with 88%, or about 470 leases, signed for spaces smaller than 100,000 square feet. This sustained demand has kept vacancy compressed in smaller formats, even as overall supply has expanded.

Availability rises sharply with building size. Mid-sized industrial properties, those between 100,000 and 249,999 square feet, have availability above 10%, while availability in buildings between 250,000 and 499,999 square feet has reached approximately 12.3%.

Buildings larger than 500,000 square feet now have the most availability, at roughly 13.7% in mid-2026, surpassing the 250,000 to 499,999 square foot segment in recent quarters.

Although large leases often dominate headlines, they account for a small share of actual demand. Over the same three-year period, only 13 leases, about 2.5% of total transactions, exceeded 500,000 square feet. These large-block leases tend to occur irregularly, creating sharp swings in vacancy when they are signed or when a building in this size quotient is delivered vacant.

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York emerges as South-Central Pennsylvania’s fastest-growing industrial hub

By Brenda Nguyen CoStar Analytics

Industrial development across South Central Pennsylvania has concentrated in three primary markets—York, Harrisburg, and Reading—driven largely by three factors: highway connectivity, proximity to major Northeast population centers, and access to Foreign Trade Zone 147, which spans all six markets in the region.

York leads by a meaningful margin, adding 12.5 million square feet of industrial space since 2020, with another 3.1 million square feet under construction. This sustained development pipeline reinforces York’s role as the region’s fastest-growing industrial hub, which has grown by 13% over the past five years, well ahead of the national average growth rate of 10.3%.

York also recorded the strongest population gain in Pennsylvania last year, supporting a deeper labor pool for companies expanding in the market. Combined with its position as a key logistics gateway to Philadelphia, Baltimore and Washington, D.C., York continues to attract large-scale distribution users.

Harrisburg and Reading follow closely behind, underscoring expansion patterns along major freight corridors. Harrisburg has added roughly 11.0 million square feet of industrial space since 2020, with 1.2 million square feet underway. About 9.9 million square feet was added in Reading in the same timeframe, making it the region’s largest active pipeline at 3.6 million square feet.

All three markets benefit from their exposure to FTZ 147, which allows companies to reduce or defer import duties and operate with greater flexibility across manufacturing, storage, and distribution.

Lancaster, Lebanon, and Gettysburg have seen comparatively limited industrial development since 2020, largely due to structural constraints rather than a lack of demand.

Lancaster and Lebanon each added just over 5 million square feet since 2020, but have minimal development underway. In Lancaster, agricultural land preservation limits the availability of large-scale sites. Meanwhile, Lebanon is constrained by limited water and wastewater infrastructure, aging sites that require costly redevelopment, and strong community resistance to large-scale projects that threaten agricultural land.

Gettysburg remains the smallest market, with about 1 million square feet of industrial space added and no active development projects. Together, these dynamics underscore how infrastructure, land availability, and labor access shape where industrial growth occurs.

These markets are also farther from key freight corridors, limiting their appeal to large distribution users. While they fall within the FTZ 147 service area and share its customs benefits, those advantages carry less weight without the infrastructure to support large-scale logistics operations.

As a result, tenant demand continues to concentrate in the infrastructure-rich hubs of York, Harrisburg, and Reading, while Lancaster, Lebanon, and Gettysburg support more localized, incremental growth.

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