Midstate attracts warehouse property investors
Firms based outside Pennsylvania have taken steps in the past year toward building footprints in the midstate's warehousing and distribution holdings sector.
Georgia-based Industrial Developments International Inc. said it obtained a zoning change this spring that's needed to construct three buildings totaling about 2.4 million square feet of warehousing on more than 160 acres in Penn Township, Cumberland County.
The next step in the process is for the firm, also known as IDI, to undertake site engineering and go through the site approval process with the township, said Frank Petkunas, senior vice president and regional managing director. When the firm will break ground will be determined by how the final approvals process goes.
"We will be moving through at a prudent pace, and we'll see where it goes," Petkunas said.
The township's planning commission recommended against the zoning change.
The property is near Key Logistics Park.
IDI homed in on the location because of its proximity to the Northeast's high percentage of the country's population and disposable income, he said. The firm seeks to put projects like this on major arterial roadways to reach major metropolitan areas, Petkunas said.
Also in Cumberland County, New Jersey-based Woodmont Industrial Partners acquired several months ago an about 180,000-square-foot, food-grade warehouse facility in Silver Spring Township and renovated it, said Eric Witmondt, managing principal.
Woodmont Industrial Partners is a division of New Jersey-based Woodmont Properties, and Witmondt also is Woodmont Properties' CEO.
The acquisition is part of the larger picture as Woodmont focuses on a corridor stretching from the Harrisburg area through the Lehigh Valley and into New Jersey. In past months, it also acquired properties in the Clinton, N.J., and Kutztown areas totaling more than 1.1 million square feet of space, according to the firm. It has a partnership formed for such acquisitions with AEW Capital Management LP, the firm said.
At the end of June, Woodmont also expects to close on about 1.5 million square feet of space in a six-building property called Capital Business Center near Harrisburg International Airport and the Pennsylvania Turnpike in Dauphin County, Witmondt said.
This site has two buildings that date from around the start of the 1960s that Woodmont plans to tear down and replace with Class A space, he said.
The two older buildings gave the property a lower profile, Witmondt said, but the new construction should elevate the asset. It is attractive because it is close to the turnpike and the airport.
Witmondt said the facility and the one in Cumberland County both fit the mold of what Woodmont is looking for: strategically positioned sites that can be acquired and brought up to be higher-value assets with some work.
"That is something we are trying to do throughout this region," he said.
The proximity of the firm's target area to major metropolitan areas and the roads connecting them is nothing new and has always made it appealing, Witmondt said. The area also boasts great intermodal facilities.
The potential going forward also includes companies that either are growing organically in the area and will need to expand or firms that want to come into the market, Witmondt said.
Many properties are ripe for upgrades, and there is also opportunity for new construction, he said.