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SCRANTON, PA-Sears Holdings Corp. has signed a lease for a one-million-sf, build-to-suit distribution center in Covington Industrial Park. The owner/developer is Chicago-based First Industrial Realty Trust.
First Industrial has begun site work, and expects to complete the building by Sept. 15, according to Richard Astheimer, SVP of development in that company's Pennsylvania regional office in Exton. He tells GlobeSt.com the estimated all-in cost for the facility is between $50 million and $55 million.
The lease term is for 10 years, he says, and, citing a confidentiality agreement with the tenant, declines to disclose the rental rate. According to a year-end 2006 report from the Philadelphia office of Cushman & Wakefield, the average asking rent rate for warehouse/distribution space along the 1 81/78 corridor is $3.99 per sf.
This will be the fourth and largest building to date in the 800-acre Covington park, which Astheimer says can accommodate 4.5 million sf. First Industrial launched the park, which is located along the I-81 corridor, in July 2002 with a 390,000-sf build-to-suit distribution center for Maytag Appliance Sales Co. Caterpillar Logistics is also located in the park along with Versacold, a Canada-based refrigerated logistics supplier, which opened a 340,600-sf cold storage facility in 2006.
The Sears site is in a portion of the park that is a designated Keystone Opportunity Expansion Zone, which provides certain tax abatements through 2013. The state's Department of Community and Economic Development and the Greater Scranton Chamber of Commerce are providing Sears with $90,000 in customized job training funds. The project is expected to create 200 new jobs within three years.
The facility will support Sears' stores in Pennsylvania, New York and New Jersey. It "will serve as a vital link in ensuring that merchandise arrives at our stores and to our customers in an efficient and effective fashion," says Aylwin Lewis, Sears Holdings' president and CEO, in a statement.
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