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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