(Read more on the industrial market.)
PHILADELPHIA-The overall industrial market throughout the MSA remained active during the first quarter of the year, according to data from several area brokerage firms. CB Richard Ellis puts the vacancy rate at 6.1%, down from nearly 6.3% in the final quarter of 2006.
CBRE statistics encompass 17 counties in Pennsylvania, New Jersey and Delaware. Cushman & Wakefield data covers a narrower geography and puts the overall area's industrial vacancy at 9%. Its report notes, "This is the lowest overall vacancy rate for the industrial market in five years," and says it is 120 basis points below the total vacancy for the same quarter a year ago.
Both companies agree that Central Pennsylvania and the Lehigh Valley remain the most active submarkets. Joe McDermott, CBRE SVP, tells GlobeSt.com, "The broad Central Pennsylvania area looks so good because there have been some retail consolidations, and we've seen huge deals. This is a large-box retail-driven market, and retailers are looking for big spaces where they can be more efficient. The market is pretty tight."
The average direct asking triple-net rental rates for warehouse space along the I-81/I-78 distribution corridor in Central Pennsylvania "topped $4 per sf for the first time in the history of the market," according to Cushman & Wakefield. It reports that high quality space priced closer to $4.25 per sf during first quarter.
The first-quarter CBRE report says the vacancy rate in Central Pennsylvania has fallen to just above 4.8%, compared with just shy of 5.2% in the final quarter of 2006. The vacancy rate in the Lehigh Valley submarket dropped to 7.7% from nearly 9.5% in fourth quarter 2006.
"There's a good amount of space under construction in the Lehigh Valley," McDermott says, predicting the vacancy rate will either stay as it is or increase slightly as new product comes on line. "Demand in this market has begun to shift towards industrial users seeking 50,000 sf to 60,000 sf," he says.
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