Lehigh Valley warehouse construction starts back up even as earlier projects remain unleased

By Brenda Nguyen CoStar Analytics

Construction has restarted in the Lehigh Valley industrial market, driven by three major speculative warehouse projects that broke ground during the third quarter despite weak leasing and a lingering supply overhang.

Approximately 5.5 million square feet of warehouse space is under construction in late 2026, an amount equivalent to 3.4% of the market’s entire existing inventory. More than 80% of that pipeline is speculative, with most projects proceeding without committed tenants.

The pickup in construction is concentrated in three large projects, rather than a sign of a broad resurgence in development. The trio of bulk distribution facilities began construction in the third quarter, when foundation work began, and together account for more than half of the Lehigh Valley's active construction pipeline.

The projects include Panattoni’s 1.15 million-square-foot Building B at 3900 Commerce Way, the 877,019-square-foot Strykers Tradeport 78 development, and Trammell Crow Co.’s 866,350-square-foot Lehigh Valley Exchange.

The new construction projects are moving forward while the Lehigh Valley continues to work through an excess supply of warehouse space from the previous development cycle, particularly among bulk distribution facilities. Across the 17 warehouses larger than 500,000 square feet completed since 2021, roughly 45% of the space remains available for lease.

Long development timelines mean much of the space now under construction will not hit the market until 2027, giving leasing conditions time to improve. For now, the projects suggest developers are anticipating stronger future demand even as the market continues to digest the previous wave of speculative bulk distribution facilities.

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