Natalie Kostelni Reporter Philadelphia Business Journal
Just off the Chrin interchange of Route 33 in Palmer, Carson Cos. is developing a 406,801-square-foot industrial building, adding to its 1.3 million square feet of warehouse space already built in the township.
Carson isn’t stopping with the development of 1051 Carson Court. The California company plans to construct five more buildings totaling 1.2 million square feet in Palmer, which has become a new frontier for industrial development in the Lehigh Valley.
“Route 33 is a relief valve,” said Eric Zahniser, an industrial broker with Lee & Associates of Eastern Pennsylvania. “The Route 33 corridor has really become where the expansion has been pushing. The Route 33 corridor, logistically, is ideal for companies in New Jersey looking to get out of really high lease rates and find opportunities to lease space.”
Other developers have also started to seize on the opportunity Route 33 in Palmer has to offer, including Duke Realty and J.G. Petrucci. Duke Realty is developing 33 Logistics Park, which at build-out will total 2.7 million square feet. In May, the real estate investment trust sold a 1.1-million-square-foot building it built and leased to Amazon there for $154.2 million.
Aside from Amazon, XPO Logistics, FedEx, Porsche and Mondelez International Inc. are among the tenants who have landed in Palmer, and developers such as Carson are betting more will find a place there.
Industrial development along Route 33 is relatively new and the space that has so far been built has occurred over the last five years. It has been spurred by the 2015 opening of a $40 million new Chrin interchange on Route 33 between I-78 and I-80 in Northampton County as a result of industrial submarkets morphing into one another.
Historically, submarkets — whether Bucks County, Northeast Philadelphia, South Jersey or Northern Delaware — were distinct and tenants focused on those narrow geographic areas when searching for space. Now tenants will cast a wider net and look in more expansive geographic areas such as Berks and Northampton counties when evaluating buildings to lease.
Located on the east side of the Lehigh Valley, Palmer is well positioned to capture trucks coming from the Port of New York and New Jersey as they travel west along I-78 and can jump on Route 33. The submarket also draws from Central Pennsylvania and the Philadelphia markets. It’s less than two hours from Harrisburg and just over an hour from the Port of Philadelphia.
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