Wednesday, December 27, 2017

Pennsylvania’s I-78/I-81 Warehouse Corridor Booming

by Steve Lubetkin,

At the year’s end, warehouses all around Pennsylvania’s I-78/I-81 Corridor are swelling with extra employees and bustling with activity to satisfy holiday wish lists across the Northeast. The Corridor’s enduringly strong industrial market performance transcends seasonality, however. In a new report  research indicates that in 2017, 11.5 million square feet of warehouse space was absorbed, creating about 5,800 new transportation and warehousing jobs, and a 20-basis-point drop in fourth quarter warehouse vacancy to 6.6 percent, vs. 2016. While deliveries modestly exceeded absorption this year (11.8 million square feet delivered), looking at cumulative supply and demand over the past five years shows total net absorption to-date in the cycle still well outpaces new development.

The Lehigh Valley continued to fulfill occupier needs for modern warehouse space as one of the biggest development hubs in the nation, and produced new transportation and warehousing jobs at the fastest pace since 1993. This warehouse market is filed squarely in the “Nice” column on CRE Santa’s list.

*Source:  Moody’s Analytics, 2017 (Harrisburg-Carlisle, Allentown-Bethlehem & Scranton-Wilkes Barre MSAs, seasonally adjusted employment data including forecast for Q4 2017).

In 2018, warehouse development will remain elevated, and considering forecasts from Moody’s Analytics, Econometric Advisors own projections, the real estate firm expects to see another year of annual positive absorption and transportation & warehousing employment growth, if at a moderating pace.

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