Home» Posts tagged "Construction"

Top Commercial Real Estate Projects to Impact Central PA

Posted on February 26, 2018 by Mike Kushner in Blog, Commercial Real Estate, Construction, Local Market No Comments

There is a lot of different commercial construction activity taking place in Central Pennsylvania. Looking at the top commercial real estate projects to be delivered in 2018, there are two retail projects and 4 Class A industrial projects that will enter the market, bringing with them new businesses, jobs and consumers. Let’s take a closer look at these top projects to better understand the likely impact they will have on Central Pennsylvania’s economy both now and into the future.

RETAIL

Lancaster County has two retail real estate projects under construction that are projected to have a significant impact on jobs and the economy. The anchor stores for each of the two projects are supermarket brands we have come to know and love – and ones that will surely attract consumers far and wide.

The smaller of the two projects is the Crossings at Conestoga Creek, located on U.S. Route 30 in Lancaster. The 90,000 square feet of retail space being developed will be anchored by Wegmans which will become the county’s second largest supermarket, trailing only Shady Maple Farm Market in East Earl, which is 150,000 square feet. With annual sales of $7.4 billion, Wegmans is the nation’s 32nd largest supermarket chain.

The Crossings, which sits on a 90-acre site between Toys R Us and the Lancaster Post Office, is being developed by High Real Estate Group. This new retail space will create a substantial number of jobs and attract shoppers from surrounding counties. The Wegmans store anticipates the creation of 500 to 550 new jobs, and they have already begun hiring for their grand opening in 2018.

Project at 206 Rohrerstown Road.

Lancaster’s Manheim Township has exciting news of its own as it prepares to welcome the grand opening of a Whole Foods market in 2018. The proposed $130 million Belmont housing and retail project includes the market, other retail stores and homes on farmland just south of Route 30.

Rendering of Belmont retail and housing project.

Anchoring the retail portion of the 110,508 square-foot project will be the 40,000-square-foot Whole Foods market. Additional tenants will be Two Farms, Inc. Panera Bread, Metro Diner, Fuddruckers, Citadel Federal Credit Union and Mod Pizza. The retail portion of Belmont will create nearly 1,000 jobs, while Belmont overall will generate millions of dollars in tax revenue for Lancaster.

INDUSTRIAL

Four new industrial real estate projects are also under construction in Central Pennsylvania. Though much larger in size, these spaces will have a slightly different impact on our local jobs and economy than Lancaster’s retails spaces.

The largest is the Class A industrial space located at 100 Goodman Drive in Carlisle. This is part of the Goodman Logistics Center Building 1. It was announced in August 2017 that the tenant for this 1,007,868 square-foot space will be syncreon, a global third-party logistics company headquartered in Michigan. From this prime industrial location, syncreon will have access to more than 40 percent of the population of the United States.

Project at 100 Goodman Drive.

Another Carlisle Class A industrial space soon to enter the market is the warehouse at 100 Carolina Way. This 805,600 square-foot space, currently not pre-leased, is located next to Keen Transport, U-Pack and ABF Freight. The third industrial construction project is the 738,720 square-foot space located at 112 Bordnersville Road in Jonestown (First Logistics Center – Building A). Situated in the heart of the I-78 and I-81 industrial distribution corridor, the industrial park is designed to accommodate two Class A distribution centers. The second space will be delivered in Q3 2018.

Project at 100 Carolina Way.

Project at 112 Bordnersville Road.

The final Class A industrial space which is under construction in Central PA is the Ace Hardware expansion located at 139 Fredericksburg Road, Fredericksburg. With 225,875 square-feet of space, this expansion will turn the building’s existing space into a combined 1.1 million square-feet of distribution space located at Lebanon Valley Distribution Center.

Rendering of the ACE Hardware expansion.

As Central Pennsylvania’s warehousing and distribution industry grows through the delivery of these new buildings, to what extent do you feel this will impact our local jobs and economy?

Also, which of Lancaster’s two new retail spaces do you feel will gain more traffic – short term but also long term?

Join in the conversation by leaving a comment below!

[Online Resources] Real Estate, ace hardware, business, carlisle, central pennsylvania, Class A, Commercial Real Estate, Construction, CRE, distribution, Economy, expansion, growth, harrisburg, industrial, jobs, lancaster, lebanon, new space, pennsylvania, retail, shipping, space, supermarket, trucking, warehouse, wegmans, whole foods

Mega Warehouse Space Exploding in Central PA

Posted on December 4, 2017 by Mike Kushner in Blog, Local Market, Trends No Comments

Central Pennsylvania has gained 8 warehouses, each over 1 million square-feet, since 2010.

With today’s booming e-commerce market continuing to expand, the need for sufficient storage space to meet online consumer demands is at an all-time high. To keep pace with online consumer needs, retailers look towards extra-large storage warehouses exceeding 1 million square feet, also known as “Mega Warehouses.” These warehouses are a way to keep an edge over the competition. Between 2010 and 2017, 21 of these mega warehouses were constructed in the Philadelphia Submarket which includes Central PA.

As people continue to prefer ordering goods online with a click of a button or a tap via smartphone applications, over the traditional brick and mortar storefronts, the need for these mega warehouses continues to grow. Mega warehouses around the U.S. are strategically placed outside large metro areas allowing them to benefit from the abundance of space. By maintaining access to road, sea and rail transportation channels, mega warehouses do not sacrifice their ability to directly deliver goods to consumers in a timely manner.

Top 5 Largest Warehouses in Central PA Since 2010

# 1: At the top of the list is the warehouse occupied by Georgia Pacific. Located at 234 Walnut Bottom Road, Shippensburg, the property is 1,495,700 square-feet. CBRE Global Investors purchased this property from Prologis in 2015 for $83,000,000.

# 2: Unilever PLC, the company behind brands Dove, Lipton, Ben and Jerrys and many more, occupies 1,370,052 square-feet at 954 Centerville Road, Building 3, Newville. In 2013, this building was awarded LEED certification by the U.S. Green Building Council.

# 3: Developed by Hillwood and sold to GLP in 2016, this property is located at 1605 Bartlett Drive, Manchester. Starbucks occupies the entire 1,209,000 square-foot building.

# 4: The Urban Outfitters Distribution Center located at 766 Brackbill Rd, Gap, is 1,200,000 square-feet. Completed in 2015, this property is owned by Urban Outfitters.

# 5: The Nordstrom Fulfillment Center is located at 30 Distribution Dr., Elizabethtown. This 1,142,000 square-foot facility was constructed in 2015 and is located in a designated foreign trade zone (FTZ).

Take a look at all 8 warehouse properties in Central PA that are over 1 million square-feet.

Right Here In Central PA, We Are The Hub Of All The Action!

Central Pennsylvania remains a premiere market for industrial space and it’s easy to see why. To businesses that rely upon the ease and affordability of shipping their products to make a living, Central Pennsylvania possesses four main components that drive the decision – a great roadway system, an abundant work force, relatively inexpensive and available raw land, and the ability to reach 70 to 80 percent of the U.S. population in 24 hours. Additionally, our government regulations on warehousing and distribution are comparatively easy and straightforward compared to other states or regions.

Currently, there is one mega warehouse under construction in Central PA. The Goodman Logistics Center located in Carlisle. The property is fully leased and will be occupied by Syncreon, a third-party logistics company, in early 2018. In addition, there are five proposed buildings in excess of 1 million square-feet.

Central Pennsylvania is well poised to harness the economic boost from the e-commerce boom. We have a unique opportunity to serve this industry that we can’t afford to miss!

Learn more from past market reports:

Central Pennsylvania Industrial Real Estate Report for Q2 2017

Influx of New Construction Impacts Central PA’s Industrial Real Estate Market

Central Pennsylvania Industrial Real Estate Report for Q1 2017

brick and mortar, central pennsylvania, Commercial Real Estate, Construction, distribution, ecommerce, Economy, industry, large, market, mega warehouse, Mike Kushner, news, Omni Realty, pennsylvania, report, shipping, space, square feet, top 5, transportation, trend, warehouse

Amidst Massive Retail Closings, Central PA Commercial Real Estate Continues to Grow

Posted on June 26, 2017 by Mike Kushner in Blog, Local Market, Trends No Comments

We’ve watched it on the news, read about it in the papers and have seen it in person. Several large retailers in Central Pennsylvania have made the decision to close their doors, such as Sears, Kmart, and hh gregg, as well as a growing list of other retailers struggling to stay in the black.

The landscape of retail real estate is changing, and with that the market is reacting. While some retailers are looking to move out of brick-and-mortar locations, other mega brands like Amazon are looking to move in. What does this mean for the future of retail real estate, specifically here in Harrisburg, York and Lancaster? Let’s take a look at changes that have taken place and trends that have emerged over the last 12 months.

Harrisburg

The Harrisburg retail market has gained 162,000 square-feet of new space in the last 12 months. However, in this same amount of time, the market was only able to absorb 110,000 square-feet, causing the total net absorption for the quarter to drop to a negative 153,000 square-feet. The 4.2% vacancy rate is an increase from the recent low we saw in Q1 2017, when it dipped down to 3.7%. Though the market has 0.0% rent growth, there has been $82M in sales that is almost double the historical average of $52M. Harrisburg has just 1 under-construction retail property that will be delivered in 2017 and will add 12,000 square-feet of unleased space to the market. Though we have recently seen quite a few closings of retail locations, there remains more than 20 proposed projects for new retail space including general retail, community centers and strip malls.

York

The York retail market has gained 27,000 square-feet of new retail space over the last year, with a 12-month net absorption of 152,000 square-feet. The total net absorption for the current quarter is negative 10,000 square-feet. York’s vacancy rate is a bit higher than Harrisburg’s at 5.7%, but over the past 12 months, it has decreased by 0.6%. The market experienced a very small rent growth of 0.1% and did $19M in sales in 12 months’ time. York County has 4 under-construction retail properties that will be delivered in 2017-2018 and will add 264,217 square-feet of mostly unleased space to the market.

Lancaster

In Lancaster County, 34,000 square-feet of new retail space was delivered to the market in the last 12 months. The 12-month net absorption is 169,000 square-feet and the total net absorption for the current quarter is negative 13,000 square-feet. Lancaster’s vacancy rate is much lower than York and Harrisburg, coming in at 2.4%. In the last 12 months the vacancy rate has decreased by 0.6%, reaching its lowest point back in Q4 2016 when it was 2.3%. Like Harrisburg, Lancaster did not experience a rent growth in the last 12 months, but did do $39M in sales. Lancaster County has 5 under-construction retail properties that will be delivered in 2017-2018 and will add 159,500 square-feet of space to the market, more than half of which is preleased.

Trends & Overview

In the current market, each city has its strengths and weaknesses. Harrisburg has the highest 12-month sales of the three, but the lowest net absorption for the current quarter. Lancaster has the lowest vacancy rate of the three, but has relatively unimpressive new construction projects, sales and rental growth. York has the most new retail space scheduled to be delivered in the next few years, but has the lowest 12-month sales of the three.

All things considered, each market appears to be stable and poised for additional growth. Vacancy rates have remained mostly the same or experienced a decrease, the markets are demonstrating their ability to absorb most of the new space that is being delivered, and there continues to be under-construction projects and plan for new space. These indicators provide us with confidence that real estate investors, developers and retailers continue to see value in doing business in Central Pennsylvania.

Between Harrisburg, York and Lancaster, the area offers some unique benefits including more space and at a lower cost compared to big cities. We are also a main corridor for commuters and travelers going to New York, Philadelphia, Baltimore and Washington, D.C. Simply put, Central Pennsylvania has the right combination of resources and advantages to remain a vibrant location for retail growth.

Do you agree? What Central PA market is having the best year so far? Share your thoughts by commenting below!

central pa, Commercial Real Estate, Construction, costar, Economy, expert, growth, Mike Kushner, new, Omni Realty, pennsylvania, rental rate, report, retail, space, statistics, trends, vacancy

Central Pennsylvania Industrial Real Estate Report for Q1 2017

Posted on April 20, 2017 by Mike Kushner in Blog, Commercial Real Estate, Local Market, Trends No Comments

Region gains more than two million square feet of new industrial space in first quarter

2017 is on track to becoming one of the best years yet for industrial real estate in Central Pennsylvania – and we’ve only just wrapped up the first quarter! The market absorbed more than 2 million square feet of new space, while increasing net absorption and holding on to the highest rental rate per square foot that we’ve had in over four years. The vacancy rate also holds steady at 5.5%, even with an increase in vacant space.

The market almost can’t get its hands on space fast enough. Five of the six buildings delivered this quarter made it to CoStar’s Top 10 list. Additionally, nine new buildings are under construction and will deliver yet another 4,410,916 square feet of new space.

To see the full impact of the growth taking place in Central Pennsylvania’s industrial real estate market, take a look at the highlights from Q1 2017.

SELECT YEAR-TO-DATE DELIVERIES

Within the first quarter of 2017, Central Pennsylvania received six new industrial properties, totaling a combined 2,244,371 square feet of space. Five of these made it to CoStar’s list of Select Year-to-Date Deliveries. The first and largest is the Eden Road Logistics Center in York with 754,881 square feet of space. Next, Carlisle Distribution Center – Building 5 delivered 582,000 square feet of space. The Crossroads Logistics Center in Jonestown delivered 398,250 square feet of space. The property at 51 Commerce Drive – Building 1 in Reading delivered 339,200 square feet of space. And the property at 1451 Stoneridge Drive in Middletown contributed an additional 10,200 square feet of space.

SELECT TOP UNDER CONSTRUCTION PROPERTIES

If six new properties delivering in the Q1 wasn’t enough to prove the rapid growth of industrial real estate in Central Pennsylvania, there are yet nine more properties under construction, four of which made it to CoStar’s list of Select Top Under Construction Properties. A 1.1 million square-foot property located at 100 Fry Drive, Mechanicsburg is expected to deliver in Q3. A 1,002,000 square-foot property located at 575 Old Forge Road, Jonestown is also expected to deliver in Q3. The Goodman Logistic Center Carlisle – Building 2 will deliver 938,828 square feet of space in Q2. Finally, Orchard Business Park II – Building A will deliver 780,000 square feet of space in Q4.

SELECT TOP SALES

Among the year’s select top sales, are three worth noting that took place in Central Pennsylvania. The Ames True Temper building in Carlisle (1,226,525 square feet) sold for $90,150,000 to Clarion Partners. Target Distribution Center in York (785,400 square feet) sold for $60,000,000 to AEW Capital Management. And the building at 100 Louis Parkway in Carlisle (400,596 square feet) sold for $28,850,000 to Industrial Property Trust.

ABSORPTION

2017 is setting records all around for industrial real estate in Central Pennsylvania. Q1 boasts the largest number of buildings in existing inventory (3,635) and the largest total RBA (262,658,186 square feet) we have ever seen. In less than four years, the local market gained 45 new buildings, with nine more under construction. Even with all of this new inventory entering the market, net absorption continues to increase, proving the demand for more space. Net absorption this quarter rose from 992,800 square feet to 2,107,328 square feet. This is the highest net absorption we’ve seen since Q2 2015 and the third highest since it plummeted into the negatives in Q2 2013.

VACANCY & RENTAL RATES

Total vacant space increased from 14,255,260 square feet to 14,392,303 square feet this quarter. Even with this increase, the vacancy rate holds steady at 5.5%, where it’s been since Q2 2016. The quoted rental rate also remains steady at $4.36. This is the highest price per square foot we’ve seen prior to Q2 2013, again proving a healthy demand for industrial real estate in Central Pennsylvania!

What trend from the first quarter did you find most interesting or impactful to Central Pennsylvania industrial space? Share your insights by leaving a comment below.

Learn more from past market reports:

Central Pennsylvania CRE Market Reports Q4 2016

Predictions for Trends and Changes in Commercial Real Estate in 2017

Influx of New Construction Impacts Central PA’s Industrial Real Estate Market

[Online Resources] Real Estate, central pennsylvania, Commercial Real Estate, Construction, costar, CRE, demand, expert, facts, first quarter, industrial, market report, Mike Kushner, more space, new space, Omni Realty Group, pennsylvania, space, statistics, supply, trends, vacancy

Central PA’s Office Market Sets Recent Records for Vacancy, RBA and Rental Rates!

Posted on October 19, 2016 by Mike Kushner in Blog, Local Market, Trends No Comments

At first glance, it didn’t appear like Q3 2016 held any exciting news for Central Pennsylvania’s office real estate market. No top sales, no major projects delivered and only a couple projects under construction. But as we dug a little deeper into the numbers, we found that this quarter claimed recent record highs for RBA and quoted rental rates, as well as a record low for vacancy rate.

Together, these trends tell us that good things are happening within the local office real estate market, with numbers that continue to indicate growing demand. Let’s take a closer look at the highlights from Q3 2016 which we can use to analyze the current market and predict future trends.

Select Year-to-Date Deliveries:

CoStar’s list of Select Year-to-Date Deliveries includes two properties in Central Pennsylvania. Though none of these were delivered in Q3, it’s worth recapping that activity that has taken place so far in 2016. The Sterling Place Corporate Center in Mechanicsburg was delivered in Q2 with 129,000 square-feet of fully leased space. At 440 Walker Road, Chambersburg, 9,199 square-feet of space was delivered in Q1. Only 63% was preleased.

Top Under-Construction Properties:

Although no new properties were delivered in Q3, we expect to see at least one new office building delivered to the Central PA market in Q4. This property, located on Hogestown Road in Mechanicsburg, will add 129,000 square-feet of office space. It is 100% preleased.

Absorption and Demand:

Net absorption dropped this quarter by 70,917 square-feet. There has been a lot of fluctuation in net absorption from quarter to quarter and this continues in line with the trend. Total RBA did not budge from last quarter which was 54,902,624 square-feet. This maintains the recent record high that we reached in Q2, the highest RBA in Central PA since prior to Q4 2012.

Vacancy & Rental Rate:

Vacancy decreased again this quarter to a recent record low of 6.0%. This is the lowest vacancy rate we have experienced since prior to Q4 2012. As might be expected with a decrease in vacancy, we also experienced an increase in the quoted rental rate. Now at $17.30 per square-foot, this is $0.04 higher than last quarter and only $0.03 less than the recent record high of $17.33 we saw in Q1 2016.

Our Summary/Analysis:

All in all, Q3 brought positive news for Central Pennsylvania’s office real estate market. An increase in demand for space is driving down vacancy and driving up the price per square foot. New properties are at least 50%, if not 100%, preleased before they even hit the market. With another 100% preleased property expected to be delivered next quarter, we predict that 2016 will have a strong finish, indicating a healthy and growing office market.

Based upon the data for Q3 2016, what do you find to be most interesting or important? Share your insight by commenting below!

[Online Resources] Real Estate, analysis, business, buy, camp hill, central pa, Commercial Real Estate, Construction, cumberland, dauphin, demand, Economy, harrisburg, hershey, lancaster, lease, local, market, mechanicsburg, Mike Kushner, net absorption, new, office, Omni Realty, pennsylvania, property, rent, report, sales, space, trends, york

Central Pennsylvania’s Retail Real Estate Market Experiences Record-Setting Quarter

Posted on September 15, 2016 by Mike Kushner in Blog, Local Market, Trends No Comments

This quarter has posted some of the highest and lowest numbers we have seen since 2012. In Central Pennsylvania’s local retail real estate market, vacancy rate is low, rental rate is high and both net absorption and total RBA have increased. But overall, what does this tell us about the state of our economy and what we can expect in future quarters?

Let’s take a closer look at some of the record-setting numbers we experienced in Central Pennsylvania’s retail real estate market in 2016’s second quarter and what they mean to the health of the economy.

Select Year-to-Date Deliveries:

Coming in at number three on the list of select year-to-date deliveries is the retail property located at I-81 and Walker Road in Chambersburg. Phase I and II, delivered in Q1 2016, total 109,237 square-feet of space that is 92% leased (44,000 square-feet with 4,400 square-feet vacant). Some of the major tenants include Kohl’s, Target, Giant, Red Robin, Staples, PetSmart, Michael’s, Olive Garden, VisionWorks, ATT&T and many more. Palisades Development, LLC are currently processing LOIs for the remaining space. Phase III is planned and construction will proceed when leasing warrants.

At number 15 on CoStar’s list, is another Palisades Development, LCC retail property located at 968 Norland Avenue in Chambersburg. This 10,800 square-foot building is 100% occupied and was also delivered in Q1 2016.

Select Top Retail Leases:

On the list of Select Top Retail Leases, Harrisburg area east claimed the top spot. Listed at number one is the Harrisburg East Shopping Center with 69,954 square-feet of space. Although not listed by CoStar’s as a “Select Top Retail Lease” for this quarter, plans are in place for the Giant currently in Colonial Commons, to make a move 0.2 miles down Jonestown Road to the Harrisburg East Shopping Center into the retail space formerly occupied by Gander Mountain. This will provide more space for Giant and is already attracting additional retail businesses nearby including a CVS Pharmacy and potentially a fast-casual restaurant, reports KIMCO, owner of the shopping center.

Select Top Sales:

Only one of the nine Select Top Sales from April 2015-June 2016 is from the Central Pennsylvania submarket. The Shoppes at Susquehanna Marketplace sold for $44,000,000 to Clarion Partners. With an RBA of 110,365 square-feet, this came at a cost of $398.68 per square foot.

Additionally, the West Porte Center, listed by CoStar as a Select Top Retail Lease, is more accurately represented as a sale. PennDOT purchased 67,126 square-feet of land for a new Amtrak station in Middletown that is expected to be finished in 2018. This is estimated to be a $32 million project which will include features like a covered pedestrian bridge to provide direct access to Penn State Harrisburg’s campus.

Absorption and Demand:

Net absorption increased this quarter from 64,467 square-feet (in Q1) to 110,449 square-feet, currently. Total RBA also increased, though just slightly, from 88,822,714 square-feet (in Q1) to 88,854,312 square-feet, currently. Six buildings were delivered with a total RBA of 31,598 square-feet. Additionally, five buildings are under construction.

Vacancy:

This quarter, the vacancy rate decreased by 0.1% to 4.7%. This once again matches the vacancy rate of Q4 2015, which is the lowest rate the Central PA submarket has experienced since prior to Q3 2012.

Rental Rate:

The quoted rental rate increased this quarter by $0.11 to $12.00. This is the highest price per square-foot the local retail real estate market has experienced since prior to Q3 2012.

Our Summary/Analysis:

Q2 2016 provided to be an exciting and record-setting quarter for Central Pennsylvania’s retail real estate market. We experienced a recent record low for vacancy rate at 4.7% and a recent record high for quoted rental rate at $12.00 per square-foot. These two trends go hand in hand, so it’s no surprise they would correlate together.

Another positive indicator for the health of the retail real estate market is the increase in net absorption and total RBA. Though neither were record-setting per se, net absorption nearly doubled in a single quarter which is impressive in its own right. It’s safe to say that the market is growing in demand, increasing in price and is able to absorb the new buildings that have been delivered.

What trend do you think will have the greatest impact on the Central Pennsylvania retail market? Share your insight by commenting below!

[Online Resources] Real Estate, 2016, advice, analysis, blog, building, business, buy, commercial, Construction, costar, data, Economy, expert, facts, growth, lease, market report, Mike Kushner, new, news, numbers, Omni Realty, opinion, prediction, project, q2, retail, sale, second quarter, sell, space, statistics, store, trends

New Industrial Space Popping Up All Over Central PA While Vacancy and Rental Rates Increase

Posted on August 14, 2016 by Mike Kushner in Blog, Local Market, Trends No Comments

The Central Pennsylvania industrial real estate market is an active place to be right now! In second quarter 2016, three new properties were delivered with three more under construction. Most interestingly, none of this new space is preleased. Both vacancy and rental rates continue to rise to some of the highest numbers we have seen in recent quarters.

What do these trends tell us about the health of the industrial market and the local economy? Let’s take a closer look at the highlights from second quarter 2016.

Select Year-to-Date Deliveries:

The Lebanon Valley Distribution Center, located at 139 Fredericksburg Road, Fredericksburg was delivered this quarter with an RBA of 874,126 square-feet that is not preleased. Another Central Pennsylvania building delivered in second quarter 2016 is the property at 192 Kost Road, Carlisle. It has an RBA of 422,200 square-feet and is not preleased. Third, LogistiCenter 78-81 delivered another 405,000 square-feet of unleased space this quarter. Combined, this is 1,701,326 square feet of new, unleased industrial space delivered in second quarter 2016.

Top Under-Construction Properties:

In addition to the buildings delivered to the market this quarter, there are three more under-construction properties in Central Pennsylvania that will be delivered in the coming year. The Eden Road Logistics Center will be delivered in fourth quarter 2016. It has an RBA of 754,881 square-feet and is 0% preleased. Trade Center 44 is also expected to deliver in fourth quarter 2016. This property has an RBA of 620,000 square-feet and is 0% preleased. Finally, Crossroads Logistic Center is expected to deliver in first quarter 2017 with an RBA of 398,250 square-feet. It is also 0% preleased.

Select Top Sales:

Three of the nine Select Top Sales between April 2015 and June 2016 took place in Central Pennsylvania. Coming in at number one on the list is Park 81 in Shippensburg. This 1,495,720 square-foot facility sold for $83,000,000 to CBRE Global Investors, LTD. Number five on the list is 100 Louis Parkway in Carlisle. This 400,596 square-foot facility sold for $28,850,000 to Industrial Property Trust. The final Central Pennsylvania property on the list, ranking number seven, is located at 1225 S. Market Street, Mechanicsburg. With 596,703 square-feet, this property sold for $21,350,000 to Allen Distribution.

Absorption and Demand:

Net absorption once again dropped this quarter to 69,303 square-feet. If this trend does not soon reverse, we are inching our way closer to a negative net absorption that we have not seen since second quarter 2013. Net absorption has been declining each quarter since reaching a peak of 2,382,561 square-feet in second quarter 2015. Though this quarter was not the drastic decrease we have seen in most recent quarters, it is still contributing to the downward trend.

Vacancy:

Vacancy has increased this quarter, rising to 6.0%. This is the highest vacancy rate we have seen since second quarter 2014. After reaching a low of 4.5% in second quarter 2015, vacancy has continued to rise steadily.

Rental Rate:

The quoted rental rate is also on the rise. Second quarter 2016 ended with a rate of $4.30 per square foot. This is the highest rate we have seen since prior to third quarter 2012. It was only midway through 2015 when we saw this rate exceed $4.00 and it has been steadily rising ever since.

Our Summary/Analysis:

With so much new, unleased space entering the Central Pennsylvania industrial real estate market right now, it’s obvious why net absorption continues to decrease. By first quarter 2017, another three new, unleased buildings will be completed which leads us to predict that a negative net absorption in in our not too distant future. Following this trend, vacancy rates will continue to rise as well.

Where it gets interesting is even with all of this new, unleased space and vacancy rates on the rise, second quarter 2016 experienced the highest quoted rental rate we have seen in recent years. What this tell us is that the demand for industrial space in Central Pennsylvania continues to outpace supply.

In a recent Central Penn Business Journal article, many experts weigh in on the thriving industrial market. The consensus? We will continue to see growth, especially with retailers’ increased emphasis on faster home deliveries. To accomplish one-day deliveries, for example, this calls for more facilities in closer proximity. The demand may not necessarily be for larger warehouses, but for more warehouses placed in prime locations. And Central Pennsylvania is a prime location for warehousing and distribution, indeed!

What additional impact do you think all of this new industrial space will have on the Central Pennsylvania market? Share your insight by commenting below!

[Online Resources] Real Estate, analysis, building, camp hill, carlisle, central pa, Construction, costar, data, dauphin, Economy, harrisburg, hershey, highlights, industrial, lancaster, lease, lemoyne, local, market, market report, mechanicsburg, Mike Kushner, new cumberland, numbers, Omni Realty, pennsylvania, properties, property, rate, rental cost, sales, space, statistics, trends, vacancy, york

Hundreds of Thousands of Square-Feet of New Office Space Coming to Central PA in 2016

Posted on August 1, 2016 by Mike Kushner in Blog, Local Market, Trends No Comments

Two new construction projects, located at the intersection of Carlisle Pike and Hogestown Road in Mechanicsburg, will deliver 258,000 square-feet of office space to Central Pennsylvania this year. Silver Spring Township is calling this construction “Class A Office Space Project” and are confident that, by attracting new businesses to the area, this space will benefit the entire community and its existing businesses.

Here’s a look at how the market has responded to this new space, as well as our analysis of the long-term trends that are yet to come.

Select Year-to-Date Deliveries/Top Under-Construction Properties:

In Q2 2016, Central Pennsylvania had just one building delivered, but it was substantial. Ranked number one on the Greater Philadelphia list of Year-to-Date Deliveries is the office space located at 974 Hogestown Road, Building 200, Mechanicsburg. It is Class A office space that is 100% occupied. Another 129,000 square-feet building, also located on Hogestown Road is under construction and projected to be completed in Q3 2016.

Absorption and Demand:

In Q2 2016, the net absorption has almost doubled since Q1 2016 and is nearly six times larger than it was in Q4 2015. In Q4 2015 it was 50,949 square-feet, increasing to 162,531 square-feet and further increasing this quarter to 301,337 square-feet. This is the largest net absorption we have seen in over a year, compounded by the fact that Central Pennsylvania’s last four years of net absorption has been varied and volatile. One new building delivered this quarter contributed 129,000 square-feet of pre-leased space to the market. There are 2 more buildings currently under construction and they are expected to deliver 136,590 square-feet of space to the market later this year.

Vacancy:

The vacant square footage decreased from 3,705,257 square-feet (Q1) to 3,532,920 (Q2). The vacancy rate also decreased to 6.5% (down 0.3% from last quarter). This is the lowest vacancy rate we have seen since prior to Q3 2012 and is only the second time it’s dipped into the 6.0% range, with last quarter being the first time. Though the vacancy rates have bounced slightly between increasing and decreasing each quarter since 2012, the overall trend has been a decrease.

Rental Rate:

This quarter, the quoted rental rate decreased from $17.32 (Q1) to $17.25. This is the first decrease that we have seen since Q3 2013. However, the fact that the price per square foot still remains above $17.00 makes it a higher price point than the market has experienced between the years of 2012-2015.

Employment:

Pennsylvania’s unemployment rate rose to 5.6% in June. The local labor force declined by 4,000 from May’s record high level of 6.54 million. The Pennsylvania Department of Labor reported that nine of the 11 sectors actually posted job increases in June; however, the two sectors that posted a loss, mining and logging and trade, transportation and utilities, were enough to cause the unemployment rate to rise. They each posted job losses of 600.

Our Summary/Analysis:

Silver Spring Township’s “Class A Office Space Project” is drawing new business into Central Pennsylvania. With 129,000 square-feet of 100% occupied space delivered to the market this quarter and another building of the same size to be delivered next quarter, there is a proven demand for this space. Furthermore, this spur of activity has the potential to draw even more businesses into the area who want to be part of the growing business community. This would come at an opportune time as the local market is experiencing a rise in unemployment.

What trend this quarter do you think will have the greatest impact on the Office Real Estate market moving forward? Share your insight by commenting below!

[Online Resources] Real Estate, absorption, analysis, buildings, business, camp hill, central pennsylvania, commercial, Construction, costar, data, east shore, Economy, employment, expert, harrisburg, hershey, impact, jobs, lancaster, market report, mechanicsburg, Mike Kushner, office, Omni Realty, pa, pennsylvania, rental rate, report, space, statistics, unemployment, vacancy rate, west shore, york

Central PA Retail Market Reacts to 7 New Buildings Delivered in First Quarter 2016

Posted on June 27, 2016 by Mike Kushner in Blog, Local Market, Trends No Comments

2016 has already proven to be an interesting year for Central Pennsylvania’s retail real estate market. A total of seven new buildings were delivered this quarter alone with a combined RBA of nearly 150,000 square-feet of space – only some of which is occupied. As a result, this new space has impacted vacancy and rental rates as well as net absorption. Here is a more detailed look at some of the highlights from Q1 2016 for Central Pennsylvania retail.

Select Year-to-Date Deliveries:

Seven new buildings were delivered to the Central Pennsylvania retail market in Q1 2016. Six of these properties made it to CoStar’s list of the Philadelphia Market’s Top 15 Select Year-to-Date Deliveries. They are as follows:

Number 2 on CoStar’s list is the building at I-81 and Walker Road with an RBA of 109,237 square-feet that is 12% occupied.
Number 7 on CoStar’s list is the building at 968 Norland Avenue with an RBA of 10,500 square-feet that is 71% occupied.
Number 10 on CoStar’s list is the building at Cedar Crest Crossing with an RBA of 7,310 square-feet that is 100% occupied.
Number 11 on CoStar’s list is the building at 2101 Strickler Road with an RBA of 7,043 square-feet that is 0% occupied.
Number 13 on CoStar’s list is the building at Donegal Square with an RBA of 6,108 square-feet that is 0% occupied.
Number 15 on CoStar’s list is the Chik-Fil-A located at Chambersburg Square with an RBA of 5,000 square-feet that is 100% occupied.

Absorption and Demand:

After hitting a low of negative 152,049 square-feet in first quarter 2015, net absorption has been on a steady climb. However, this trend came to an end this quarter with a significant decrease in net absorption, dropping from 281,270 square-feet (Q4 2015) to 105,984 square-feet (Q1 2016). The seven new buildings, with a combined RBA of 149,898 square-feet, most certainly had an impact on the market’s ability to absorb the new space. It’s also worth noting that Central Pennsylvania comes in second, only behind suburban Philadelphia, in year-to-date net absorption and deliveries.

Vacancy:

This quarter the vacancy rate barely budged, increasing from 4.8% to 4.9%. What’s worth noting is that this is one of the very few times we have seen the rate increase during a nearly four-year-long trend of decreasing rates. After hitting a high of 6.0% in the latter part of 2012, rates hit their lowest number last quarter at 4.8%. Could this quarter’s increase be the start of an ongoing trend of increasing rates? The seven new buildings delivered to the market this quarter would indicate yes, which brings us to our next area of focus.

Rental Rates:

Lastly, the quoted rental rates have increased by $0.05, from $11.83 last quarter to $11.88 this quarter, returning them nearly to where they were in Q3 2015. Over the past four years, Central Pennsylvania’s rental rates for retail space have increased and decreased without much consistency. It will be interesting to watch these numbers throughout the rest of the year.

Our Summary/Analysis:

With nearly 150,000 square-feet of new retail space dumped into the market this quarter, Central Pennsylvania has responded to these changes well – all things considered. The vacancy rate moved just ever so slightly and rental rates actually increased, proving the market has a demand for this new space. Further proof is that Central Pennsylvania ranks second to suburban Philadelphia in year-to-date net absorption and deliveries. We should keep a keen eye on how the new construction will continue to impact our local businesses and economy as there is sure to be additional movement and emerging trends!

What trend this quarter do you find most noteworthy? Share your thoughts by commenting below!

[Online Resources] Real Estate, advice, analysis, buildings, camp hill, central pa, city, Construction, costar, cumberland, data, dauphin, expert, facts, harrisburg, hershey, lancaster, lemoyne, local, market, mechanicsburg, Mike Kushner, new cumberland, Omni Realty, opinion, pennsylvania, projects, region, report, retail, trends, york

Central PA Proves Its Increasing Demand for Retail Real Estate Q4 2015

Posted on February 10, 2016 by Mike Kushner in Blog, Local Market No Comments

Retail real estate investors and consumers alike should be excited about the market trends we experienced in fourth quarter 2015!

There are several strong indicators that the local market is healthy, growing and catching the eye of some major retailers like Field and Stream. The highlights from the most recent quarter include the lowest vacancy rate since prior to 2012 even with a continual increase in inventory as four new buildings were delivered this quarter. Additionally, a positive and increasing net absorption demonstrates the market’s ability to handle the new space while still growing in demand.

What else can we learn from how the retail real estate market in Central PA performed at the close of 2015? Let’s take a look at more important trends worth noting…

Select Year-to-Date Deliveries:

Specifically this quarter, we saw two new retail spaces delivered to the Central PA submarket that made it to the top 15 list for the Philadelphia market. Coming in at number 11 is the retail building at 4250 Chambers Hill Road in Harrisburg. This 59,400 square-foot space is 100% occupied by Restaurant Depot. Coming in at number 12, the Central PA market gained a new Field and Stream near the Capitol City Mall in Camp Hill that delivered 50,000 square-feet of new space to the market and is also 100% occupied.

Select Top Sales:

Among the nine select top sales highlighted in the fourth quarter for the Philadelphia market, just one occurred in the Central PA submarket. The 171,069 square-feet Lowe’s building located at 250 S. Conestoga Drive in Shippensburg was sold by Excel Trust, Inc. to the ARC Companies for $24,250,000.

Vacancy:

In fourth quarter 2015, the vacancy square-footage and vacancy rate dropped ever so slightly from the previous quarter, but overall these are the lowest numbers we have seen since prior to 2012! The vacant square footage is 4,295,660 and the vacancy rate is 4.9%. This is the first time we are seeing the vacancy rate drop into the 4’s since at least four years ago.

Rental Rates:

2015 finished the year with retail rental rates at $11.71. While this did not set any all-time low or high records for recent quarters, it is a slight decrease from the $11.76 we ended with in the third quarter. With the highest peak in recent history occurring in the second quarter of 2015 at $11.88, it will be interesting to see if this decreasing trend continues into 2016 and beyond.

Absorption and Demand:

Net absorption increased this quarter to 227,275 square-feet. A total of four new buildings were delivered to the market (two we just discussed) which contributed an RBA of 124,295 square-feet. The total RBA of existing inventory rose to 87,242,952 square-feet which is the highest we have seen since prior to 2012. Historically, total RBA has been on a steady climb for nearly four years and counting.

Our Summary/Analysis:

Fourth quarter 2015 delivered good news and positive signs of growth for the Central PA retail real estate market. We experienced the lowest vacancy rate in recent history, dropping into the 4’s with a rate of 4.9%.

What’s most impressive is that this decreasing vacancy rate occurred during a quarter in which inventory also increased, four new buildings were delivered to the market and nine new buildings are still under construction. The positive (and increasing) net absorption tells us that the local retail market is well-poised to handle this new inventory and that businesses are growing and expanding into Central PA.

Based upon the activity in the Central PA submarket for retail real estate in fourth quarter 2015, what do you think will have the greatest impact on our local economy? Share your thoughts by commenting below!

[Online Resources] Real Estate, 2015, analysis, blog, commercial, Construction, costar, data, deliveries, expert, field and stream, fourth quarter, leases, local, lowe's, market, Mike Kushner, news, Omni Realty, opinion, prediction, q4, report, retail, sales, statistics, summary, trends