Redesigned Report Highlights Lehigh Valley’s Hot Industrial Market
The Lehigh Valley’s hot industrial properties continued to drive the region’s commercial real estate market, putting it on pace to match 2021’s record-breaking growth.
That was among the messages in the latest issue of the Lehigh Valley Commercial & Industrial Real Estate Report, which has undergone a complete redesign to a brand new magazine-like format.
The cover of the Q2 issue of the Lehigh Valley Commercial Real Estate Report.
Each quarter the Lehigh Valley Economic Development Corporation (LVEDC) publishes a report that provides a detailed overview of industrial and office market activity and notable commercial real estate transactions in the region. The newest edition covers data from the second quarter of 2022.
A digital version of the Lehigh Valley Commercial & Industrial Real Estate Report can be found here. Hard copies will also be available soon at the LVEDC office and upon request.
The already low vacancy rate for industrial and flex properties dropped to 4.5% while another 1.9 million square feet of space was added, growing the footprint to 144 million, according to the report. Another 6.4 million square feet was under construction.
Industrial leasing remained strong, with deals totaling 2.5 million square feet. Freshpet and Pianca Packaging were among the companies that signed notable industrial leases in the Lehigh Valley, according to the report.
Freshpet announced plans to build an Innovation Kitchen near its existing campus in Hanover Township, Northampton County, creating about 100 new jobs. The 99,000-square-foot facility, expected to open next year, marks the latest in a string of expansions since the health pet food company moved to the Lehigh Valley nine years ago.
“The Lehigh Valley has been a wonderful community and partner to Freshpet,” Billy Cyr, Freshpet’s Chief Executive Officer, said in the report. “We moved to our current Kitchens facility here in 2013, expanded it twice and we are excited to continue that legacy by constructing our new Innovation Kitchen in the Valley.”
Pianca Packaging, a food packaging company, leased more than 29,000 square feet at Riverside Business Center in Whitehall Township. The business makes custom-designed containers for companies such as Starbucks, Applebee’s, Costco, Publix Super Markets, and Wegmans Food Markets.
The Lehigh Valley Commercial & Industrial Real Estate Report also provided an update about the regional office market, which continues to show signs of improvement. Vacancy rates ticked downward from 9.9% in the first quarter to 8.6% in the second as employees continued returning to the office.
Leasing deals totaled nearly 270,500 square feet, the most leasing activity in a single quarter since the pandemic began, according to the report. Among the more notable leases included 49,000 square feet for Merieux Nutrisciences. The deal was a notable expansion for the food science company, which had been leasing space elsewhere in Lehigh County.
The most significant office project under construction is the $40 million Mohrbanc, the first project in the larger Waterfront development that promises to transform an old industrial patch along Allentown’s stretch of the Lehigh River. Construction could be completed as early as this fall.
The report also includes a full-page story about Tek Park, a 514,000-square-foot technology park just outside Allentown on Route 222 that includes such tenants as Broadcom, Aesculap Biologics, Aesculap Implant Systems, and TierPoint.
“Tek Park has a rich legacy and heritage in the Lehigh Valley,” said LVEDC President & CEO Don Cunningham. “It is a unique property that was built to support the semi-conductor industry and has evolved to house other interesting uses.”
The real estate activity accompanies some encouraging signs in the regional labor market, according to the Lehigh Valley Commercial & Industrial Real Estate Report. The Lehigh Valley’s labor force rose to 363,600 in June, exceeding pre-pandemic levels.
The report also states that LVEDC had 38 prospects in the manufacturing sector as of June 2022, totalling 6.6 million square feet. Many of the Lehigh Valley’s new manufacturing and flex tenants in 2022 required less than 100,000 square-feet.
“Manufacturing has a long and rich history in the Lehigh Valley and remains a cornerstone of the evolving economy,” Cunningham said. “The region’s 700 manufacturers and 35,000 workers make everything from guitars that produce the music that enriches our lives to the surgical instruments that save our lives. As companies reconsider their global footprints, we continue to see strong interest from manufacturers in the Lehigh Valley.”
The redesign of the Lehigh Valley Commercial Real Estate Report was done by Michelle Chrin, who designs each the issue released quarter as well as other LVEDC publications, including the organization’s annual report.