The midstate's value ... other than proximityMajor metros are nearby, but what else does the region offer a real estate investor?
So what are the best reasons to buy, build or lease commercial real estate in Central Pennsylvania?
Other than the market being so close to all the big East Coast cities. And the network of interstates crisscrossing the region to reach these cities. And the ports serving these cities that are close to midstate companies.
Versions of these answers are always top-of-mind when local real estate experts talk about the midstate's best commercial real estate selling points. They're the main reason.
But below is the rest of the list. They are nine other attributes local communities have to offer in the commercial real estate market beyond proximity.
They range from the big picture to quirky subtleties you might never have thought of before.
1. Hedges to overbuilding.
The midstate commercial real estate market dodged the bubble that burst more severely in other areas of the country several years ago, local real estate stakeholders say. But why?
One reason is that it is harder to overbuild and outstrip demand here in good times, said Blaze Cambruzzi, chief operating officer for York-based Rock Commercial Real Estate. Some people might see a lack of public water and sewer in some areas or hoops to jump through at the municipal level only as downsides, he said. But it's harder to build a damaging bubble when there are some "natural barriers" that keep growth in check in the midstate in general, Cambruzzi said. It creates stability for an investment.
If an owner had to sell a property to raise cash, the midstate is a better place to divest than other secondary markets, Cambruzzi said. For example, there are a good number of real estate investment trusts in the local market compared with similar areas, he said. REITs have been active players on the national real estate scene in the past few years.
3. Disguised demographics.
The numbers of potential customers in each midstate community, such as Harrisburg, Lancaster or York, might not look huge at first glance. But put them together, and you get a large, concentrated population disguised somewhat by separate city names, said Brad Rohrbaugh, partner and retail sales and leasing specialist with York-based Bennett Williams Realty Inc.
Many people are willing to drive around the midstate as if it were one big community, meaning a retail development can draw more potential customers than just the immediate locality, he said.
4. Land availability.
There is quite a bit of land available in the midstate for further development, and some of those aforementioned hurdles are seeing improvement, said Matthew Crocker, assistant vice president of Crossgates Inc. The developer's midstate office is in Swatara Township, Dauphin County.
The state Department of Environmental Protection for one is an increasingly good partner for being proactive about explaining the rules and helping developers implement methods to comply with regulations, he said.
5. Potential remains.
The roads serving the midstate might not be in the best condition, for example, but it means there is room for improvement to make the area's selling points even better, Crocker said. After all, once an area maximizes its potential, where does it go from there?
"The positive is that we sit on so much potential," he said.
6. Supply chain.
The diversity of industries around the area makes it hard to think of a raw material or other supply that someone else within an hour's drive isn't already making or bringing in, said Cambruzzi of Rock Commercial. It means there are existing supply chains to tap into for pretty much anything a firm that wants to buy or lease in the midstate would need, he said.
7. Amish and Mennonite heritage.
Might sound odd at first, but hear it out. People associate the midstate, especially Lancaster County, with the Amish and Mennonite communities, said Jeff Herr, sales and leasing executive with Bennett Williams. It creates a national brand of having an ingrained work ethic that results in quality products — something that's quite important when a manufacturer is looking to buy property and set up shop in a new locale. It complements the fact that the local area has a strong workforce.
There's also a wholesome feeling to the prospects of living in such a community. Herr said he never lost a deal because a company didn't think employees would want to raise families in the midstate.
8. Natural disasters.
Compared with the now-evident hurricane vulnerability of New York City, earthquakes in California and tornadoes in the Midwest, the midstate is relatively free of natural disasters, said John Thiry, commercial real estate adviser with East Hempfield Township, Lancaster County-based NAI Commercial Partners Inc. Thiry recently heard from a company that wants to lease space in Lancaster County to back up its operations in the New York City area after Hurricane Sandy.
9. Numbers just add up.
There are a host of reasons companies buy or lease in an area: price, the right available workers, the wages those employees would expect, etc. Thiry also recently worked with a company from Manhattan that is moving part of its headquarters to Lancaster County. It wasn't just a regional search to pick the new location. It was a nationwide query to find the best place for them based on costs, available employees and the right skill sets, Thiry said.