Demand for logistics space continued along an accelerated pace in the I-81/78 Corridor during the first quarter of 2013 as 2.2 million square feet of occupancy gains pushed the overall vacancy rate 40 basis points lower to settle at 9.0%. Activity among wholesalers and retailers, such as Samsung’s new, 290,000-square-foot lease at 3700-3900 Industrial Road in Harrisburg, Penn., highlight the wholesale and retail sectors’ role in this market as demand drivers.
From a construction perspective, recently inked deals at newly constructed speculative facilities in the Lehigh Valley will most likely kick off another round of development in this submarket, which enjoyed occupancy gains on the order of 4.9 million square feet over the past nine quarters. This, in concert with rising rents, places this market clearly in the expansion phase.
Key statistics for the I-81/I-78 Corridor industrial market during the first quarter of 2013 are as follows:
• Vacancy Rate: 9.0%
• Absorption: 2,176,821 SF
• Average Asking Rent: $3.71/SF NNN
• Warehouse/Distribution Asking Rent: $3.57/SF NNN
• R&D/flex Asking Rent: $7.00/SF NNN
Looking forward, March’s measure of consumer confidence took a dip. Sequestration fears along with less-than stellar employment measures most likely account for this sudden shift. While consumers slowly adapt to the new norm of “constant crisis” in Washington, D.C. and the recent slowing in employment gains, which will most likely prove to be the cyclic norm for the spring over the past three years, expect consumer confidence to return, resulting in more logistics requirements for the I-81/I-78 Corridor.
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