Friday, August 25, 2023

Harleysville industrial warehouse sells to Boston firm for $14.8M

 By Paul Schwedelson – Reporter, Philadelphia Business Journal

Stag Industrial, a Boston-based investment trust, bought a 152,625-square-foot industrial building in Harleysville for $14.8 million, according to property records.

The property at 1510 Gehman Road is just east of I-476 and south of Detwiler Road. It was previously owned by Platinum Owner PA LLC, which bought the building for $15 million in December 2020. Less than three years later, the value dropped by $173,000.

Stag (NYSE: STAG) owns about two dozen assets in the Philadelphia market totaling 5.5 million square feet of warehouse distribution and manufacturing space. As of March, the company owned 561 properties totaling 111.6 million square feet and that are collectively worth around $6 billion.

Deacon Industrial Supply Co., which distributes pipes, valves and related equipment, is a tenant at 1510 Gehman Road.

The building, which was built in 1990, has changed ownership several times since 2012. That’s when Cam 1510 Gehman Road LLC bought the property for $5.6 million. Four years later, it sold to LHV Portfolio Investors LLC for $9.5 million. Then in 2020, Platinum Owner PA LLC bought the property for $15 million. With each sale, the building’s value increased by millions of dollars over just a few years until the most recent transaction.

At the start of the Covid-19 pandemic, the demand for space at industrial properties rose rapidly and rents spiked as vacancy reached record lows. That was around when the previous owner bought the industrial building. Online shopping grew rapidly and companies searched for ways to combat supply chain challenges.

This year, the market has started to cool off as a normalization process has played out with demand slowing down and vacancy rates ticking back up to pre-pandemic levels.

Stag Industrial did not respond to requests for comment.

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