Wednesday, May 5, 2021

Lehigh Valley Distribution Center Sells for $201.5 Million

By Clarice King CoStar Research

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.

Oak Brook, Illinois-based CenterPoint Properties acquired the industrial facility from a joint venture between Rockefeller Group and PCCP LLC, according to JLL, which brokered the deal.

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.

"The property presented an exceptional opportunity to acquire a large scale, new generation building in the core of the Lehigh Valley market. The park’s location, adjacent to a massive multinational delivery services company’s hub, makes e-commerce operations a logical use within the surrounding area for years to come."

COVID-19 drastically accelerated the growth of e-commerce, and Lehigh Valley has been ideally situated to take advantage.

"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."

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. 

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