Carlisle retail building sells for $5M, 7-Eleven signs long-term lease

A newly built-to-suit retail listing at 1003 S. Hanover St., Carlisle, sold for $5.05 million, CBRE announced.

North Bergen, New Jersey-based BSG Management Co., a prominent developer in the mid-Atlantic states, sold the property under a long-term NNN lease to a 7-Eleven convenience store.

The CBRE team of Karly Iacono and Patti AmecAngelo led the marketing campaign, represented the seller and sourced the buyer. AmecAngelo was also the exclusive leasing agent.

“Despite the dislocation in the capital markets, buyer demand for quality net lease assets remains strong,” Iacono said in a release. “We were pleased to provide a competitive exit for our client while securing the buyer a solid long-term hold consistent with their investment strategy.”

Offering direct highway access to Interstate 81, the property is an out-parcel to a Home Depot, as well as close to many other major national retailers including a Walmart Supercenter, T.J. Maxx, Tractor Supply Co., Chick-Fil-A, Panera Bread, Cracker Barrel, Chili’s Grill and Bar and CVS.

Paula Wolf is a freelance writer

Luxury bathroom fixture distributor relocates to York

A wholesale distributor of luxury bathroom products has moved from Secaucus, New Jersey to a 70,000-square-foot industrial space at 145 Morgan Lane in York. 

CBRE said it completed the lease for Lexora Home, which distributes such products as faucets, cabinets, vanities, mirrors, bathtubs and other accessories. 

The move is the company’s fourth expansion in the past five years. 

“We are thrilled to be relocating our operations to 145 Morgan Lane, a larger facility that will help us to best serve our customers,” said Andrey Bogan, CEO at Lexora Home. “We are extremely bullish on the future of our company as we continue to grow and expand.” 

The facility is located just one mile from the North and South interchange of I-83. The property features eight docks (with an ability to expand to 10), two drive-in doors, 30-foot clear height and ESFR sprinkler system. 

The CBRE team of Nicholas Klacik, Kevin Dudley, Chad Hillyer, Kate Granahan, John La Prise, and Sean Bleiler represented Lexora Home in the lease negotiations. 

Jason Turnbull of Rock Commercial Real Estate acted on behalf of ownership. 


Industrial rents hit record levels even as market cools on I-78/I-81 corridor

Following a slowdown in the fourth quarter of 2022, the I-78/I-81 corridor saw an uptick in leasing activity for the first quarter of 2023. 

Commercial Real Estate firm CBRE put out its quarterly report on activity along the quarter, which said that leasing activity along the corridor topped 6 million square feet while overall net absorption tallied more than 7 million square feet of occupancy growth, the fourth highest quarter on record.   

Still Bill Wolf, vice chairman of CBRE, said the region’s commercial real estate market appears to be normalizing. 

“Overall demand is still strong, but it’s come down to more pre-pandemic levels,” he said. 

Rather than rushing to beef up their supply chain, Wolf said many companies are looking to see where sales are heading before making investments in warehousing, logistics or manufacturing, which is lowering the demand for space. 

The Lehigh Valley trailed Central Pennsylvania and Northeastern Pennsylvania with a lower net absorption of commercial real estate space. 

In fact, Northeast Pa. claimed most of the positive absorption during the first quarter of 2023, tallying 4.3 million square feet.  

Meanwhile, Central Pa. and the Lehigh Valley posted significantly less absorption than in recent quarters as supply remained severely limited, especially within the 1 million sq. ft or greater range, where only two options were available in existing buildings.  

Three leases greater than 1 million square feet were signed during the first quarter of 2023, accounting for half of all leasing activity. 

While the numbers may be down, Wolf said, “It’s a good thing,” and such a normalization is simply part of the cycle and helps keep the market under control. 

That doesn’t mean rent prices aren’t continuing to skyrocket. 

While still a relative bargain compared to other surrounding major metropolitan areas, rents continue to climb in the region. 

The average rent for all classes across the corridor is close to $8 per square foot, the highest ever. 

For the most in-demand properties close to major transportation arteries, Class A industrial space is leasing for closer to $10 to $15 per square foot, Wolf said. 

While demand for space is down, construction of new facilities is also down along the corridor, which will keep the market competitive. 

Construction starts have stalled as a combination of rising construction and debt costs eroded returns on rent assumptions.  

Also, there has been a pushback from municipalities against warehouse development, further stalling efforts to add stock to the supply-restricted industrial market throughout the corridor.  

For a third consecutive quarter, Wolf said, starts totaled below 2 million square feet, which is far less than the average 5.4 million square feet that broke ground since the start of the pandemic.  

He noted that a year ago, active construction projects totaled more than 40 million square feet, but has since dropped to 16.8 million square feet. 

As a result, Wolf said, CBRE is predicting that the I78/I-81 corridor will remain supply constrained during the remaining portion of 2023, which will further drive up rent prices. 


Harrisburg home to 2 of the priciest industrial sales of 2022

Who says big deals don’t get done in Harrisburg?

In 2022, two of the nation’s 50 priciest industrial property transactions were in the vicinity of the state’s capital. That data comes courtesy of the newest report from CommercialSearch.

Harrisburg’s $193 million portfolio sale of the Capital Logistics Center ranked 16th among the nation’s most expensive industrial deals from last year. The 1,288,690-square-foot property, consisting of three buildings, was sold May 18 by Link Logistics to CBRE Investment Management for roughly $150 per square foot.

Also ranking among 2022’s priciest U.S. industrial transactions was the $167 million sale of the 3000 State Drive building. The 970,000-square-foot property – ranked 24th on the list – was sold March 28 for $172 per square foot by DHL Supply Chain to CPUS LEBANON LP.

Pennsylvania accounts for the second-largest group of deals by state, with seven of the top 50 sales. California accounts for the largest group, with 16.

Paula Wolf is a freelance writer

Commercial real estate starting 2022 with more records along I-78/I-81 corridor

Coming off a record-breaking year in 2021, the I-78/I-81 corridor is continuing to experience record low vacancy, record high absorption and record high rents in the commercial real estate market, as well as a construction industry that’s struggling to keep up with demand. 

According to the latest report from CBRE, the vacancy rate in the region was a low 3.8%, while net absorption was 4.9 million square feet.  

Average rent has reached $5.94 per square for industrial space and there is currently 33.5 million in new construction in the pipeline. 

The average rent along the corridor is up 3% over last quarter and is expected to continue to climb. 

In the coveted Lehigh Valley, average asking rents rose to $7.07 per sq. ft. In Central Pennesylvania and Northeast Pennsylvania, average asking rents landed at $5.32 and $5.30 per square foot, respectively. In the particularly tight Class A warehouse subset, overall average asking rents increased to $6.48 per square foot, indicative of the strong competition for modern logistics facilities. 

Vincent Ranalli, executive vice president with CBRE said not only is the vacancy rate at a record low, but 40% of all of the new construction in the pipeline is already pre-leased. 

He said that has developers very bullish and many are moving forward on new projects much faster than they would have in the past. 

He pointed to one project in East Allentown Township, just north of the Lehigh Valley International Airport. 

The development calls for five buildings and the first two buildings, which are under construction, have already been leased.  

Because of the expected continued demand, the developer is looking to break ground on the next Three buildings this spring. 

“Looking back at the first quarter of 2021, we actually have more demand than we had at that time. We have more tenants looking for space and by every metric we’re busier this year than a year ago,” Ranalli said. “Last year was an historic year in the Lehigh Valley so we seem to be on course for another banner year. 

But it’s actually Central Pennsylvania that is currently leading the pack in new construction, a fact that Ranalli attributes mostly to the availability of space compared to the Lehigh Valley. 

“Lehigh Valley is just a little bit harder to develop in because there’s less sites,” he said. “What you have in Central Pennsylvania is that there’s less barriers to entry.” 

He said there are currently 12.6 million square feet of industrial space under construction currently in Central Pennsylvania as compared to 11 million square feet in the Lehigh Valley. 

“Landlords are still very confident and are willing to go forward on speculative projects,” he said. 

He noted there is also strong diversity in the tenants of these buildings, with third-party logistics, ecommerce, food & beverage and consumer goods leading the tenant pool along the corridor. 

And while construction is up, Ranalli said it still isn’t quite keeping up with demand and CBRE expects the tight market to continue through at least the rest of the year. 


Light industrial rents skyrocket 30% in Northeast, but Central Pa. may benefit

Rent prices for logistics facilities in the Northeast U.S. Corridor are skyrocketing, but that may be good news for developers and property managers in the Lehigh Valley and Central Pennsylvania.

A report by CBRE shows that rents for light industrial properties rose nearly 30% during the first half of 2021 compared to the first half of 2019, before the COVID-19 pandemic drove the demand for such properties.

According to Vince Ranalli, executive vice president for CBRE, rents in the Lehigh Valley and Central Pennsylvania are averaging around $7 per square foot for Class A industrial space. But, that’s still much lower than other regions along the corridor, making sites in the Lehigh Valley and Central Pennsylvania more attractive.

The Pennsylvania I-78/I-81 corridor, which encompasses the Lehigh Valley, Central Pennsylvania and Northeastern Pennsylvania has had an average Class A industrial rent increase of 11.8%, which while significant, is still drastically lower than Central New Jersey, which has seen rents increase by 49.32%, the Philadelphia area market, which has risen by $47.31 and Northern New Jersey, which has seen a 31.01% increase in rents prices.

“The Lehigh Valley is still a bargain compared to other areas,” Ranalli said. “We see tenants all of the time that are priced out of the other markets and want to be in the Lehigh Valley.”

Meanwhile the demand for such properties is continuing at a staggering rate.

Vacancies within the Northeast Corridor dropped more than 70 basis points during the first six months of 2021, settling at a record low of 3.3%

“That’s historic,” Ranalli said. “We’ve never seen that before.”

But demand is only part of the reason that rents are rising so drastically.

Costs for developers building the properties are also on the rise. The cost of materials has skyrocketed. Steel, for example, is costing more than three times what it did last year.

Labor costs have also gone up dramatically, all of which go towards the cost of building these industrial facilities and contribute to higher rents.

But the demand for Class A, modern industrial space isn’t slowing down and developers are leasing out properties faster than they can build them.

“We’re seeing a lot of pre-leasing, which is something we’ve never seen before,” Ranalli said. “These buildings are being leased while the walls are still going up.”

The biggest challenge in the Lehigh Valley and Central Pennsylvania right now is a lack of property to develop.

“All of the easy sites are gone. I’ve said it before, developers are having to get creative to find new sites to develop,” he said.

And it’s a trend he said he doesn’t see slowing down anytime soon, so those looking to lease light industrial properties should consider the higher prices as the new standard of what to expect.

CBRE names Beares to lead regional market

CBRE has named Rija Beares to lead its Greater Philadelphia Region, which includes both the Lehigh Valley and Central Pennsylvania in addition to downtown and suburban Philadelphia, Delaware and Southern New Jersey.

In her new role as advisory services market leader, Beares will be responsible for driving the company’s growth strategy in the region and leading the company’s advisory services business including leasing, sales, valuations, debt and structured finance and property management.

“After a thorough review process, Rija emerged as the clear choice to take the Philadelphia business into the future,” said Michael Caffey, regional president for CBRE’s North Region. “Not only is she highly regarded as a leasing professional by her peers and clients, she is also well respected for her leadership qualities, work ethic and her ability to manage complex situations with aplomb.”

Beares joined CBRE in 2002, advising institutional and entrepreneurial owners in structuring lease transactions and developing lease-up strategies.

In 2010 she began focusing exclusively on representing corporate occupiers of real estate. She also served as the leader of CBRE’s technology and Media practice for the Greater Philadelphia region.

She will be based out of Radnor.

California developer buys Schuylkill logistic center for $25.7M

A Schuylkill County logistics center has just been sold for $25.7 million.

CBRE reports that it arranged the sale of the nearly 2.4 million-square-foot Rausch Creek Logistics Center in Valley View to California-based Panattoni Development Co.

CBRE represented the seller, Tremont FT LLC, which is an affiliate of Viridian Partners.

“Located in the heart of Pennsylvania’s I-78/I-81 Industrial Corridor, Rausch Creek Logistics Center will offer tenants superb access to major industrial markets in the Northeast,” said Michael Hess, an agent with CBRE involved in the sale. “Panattoni Development specializes in build-to-suit and speculative industrial development. With limited inventory in Central Pennsylvania and the Lehigh Valley, and with a 75% LERTA tax abatement available, this state-of-the-art industrial park will attract an array of prominent industrial users.”

The logistics center sits immediately off of Exit 107 of I-81, and just 18 miles from I-78.

It will consist of Building 1, which will be 1,346,755 square feet.

Speculative construction is expected to begin soon with delivery in the third quarter of 2022.

Building 2, which is 1,040,540 square feet, will be pad ready to begin speculative construction in early 2022.