York company completes headquarters expansion

Weldon Solutions has completed the expansion of its York County headquarters in West Manchester Township. 

A CNC cylindrical grinder and robotic automation systems manufacturer, Weldon Solutions announced the expansion of its production shop and warehouse in January 2022. The expansion measures 18,000 square feet in the production shop and warehouse and 3,000 square feet in its office. 

“We are excited to have completed this major expansion, which increases our capacity and ability to provide more grinders and automation solutions to keep up with growing demand from our customers,” said Travis Gentzler, president of Weldon Solutions. 

“With this additional space, we will be able to fill more orders for our high-quality grinder and robotic automation systems.” 

Increased demand for CNC grinders and customized industrial automation solutions were the reasons for the expansion. 

The facility now totals 61,000 square feet, and the expansion will help clear the way for new product development and team growth. 

The contractor for the expansion project was H&H General Excavating.

Commercial real estate market still busy in York County

The York County commercial real estate market showed signs of strong activity in the third quarter, although the once-frenetic pace has cooled.

“We’re seeing some slowing,” said Kevin Hodge, brokerage adviser with Rock Commercial Real Estate, which prepared the Q3 report covering the industrial, office and retail sectors.

But by no means is the market sluggish. People are just “a little more cautious,” he said.

Vacancy has fallen below 2% in the York County industrial segment, though the rate of decline dropped for the second consecutive quarter following the rapid absorption of 2021. Nationally, a slowdown in e-commerce growth led vacancy rates to rise 20 basis points, which could signal a coming trend.

The York County pipeline, however, is pretty full, with 3.4 million square feet under construction and an additional 4.3 million square feet planned. Logistics 83, a 670,390-square-foot warehouse at 825 Locust Point Road, York, is scheduled for completion by the end of this year.

The report noted that 38.5% of remaining construction should be finished in the second quarter of 2023. According to Rock’s Demand Index, 87.5% of industrial users are seeking space less than 100,000 square feet. There remains a shortfall of at least 300,000 square feet of available space to meet that demand, even though inventory increased in Q3.

Hodge noted that lease rates “are absolutely still climbing,” a sign that demand is still there. They continue to increase with new construction, asking upwards of $8.50 per square foot.

Industrial lease transactions in the third quarter included Hanover Terminal Inc. renting 37,500 square feet at 1649 Broadway, Hanover, and Southland Insulators of PA LLC renewing its lease for 17,800 square feet at 3635-3725 Board Road, York.

One of the major sales transactions was CKT Holdings LLC’s purchase of 61,250 square feet at 101 Sinking Springs Lane, Emigsville, for $2.7 million from Hercon Pharmaceuticals LLC.

In the office market, leasing is stronger than sales, with the medical subsector quite active.

Absorption remains positive for the year, meaning more square feet has been leased than vacated.

Construction is been minimal but recent completions include 18,000 square feet of medical office space at Westgate, an office complex next to UPMC Memorial Hospital, and 10,000 square feet of professional office space at 3190 E. Prospect Road. Phase II of Westgate,

providing an additional 95,000 square feet of professional/medical office space, should be available next year.

Transactions last quarter included WebFX, a digital marketing provider from Harrisburg that leased 3,370 square feet at 316-320 N. George St., York.

On the sale side, EK Commerce Center LLC purchased 16,682 square feet at 221 W. Philadelphia St., Suite 2EB, York, from Westwood Properties LLC for $1.8 million.

Turning to the retail sector, vacancy fell 28 basis points to 4.06%, and sales volume is at a five-year high, exceeding $160 million through the third quarter.

This market continues to perform well, despite the economic uncertainty from Federal Reserve interest rate hikes, inflation, supply chain disruption, labor shortages and rising energy costs.

“A steady stream of leasing volume, positive absorption, decreasing vacancy and increasing lease rates are providing a positive outlook heading into the year end,” the report said.

Retail leasing activity has already surpassed last year’s total by 12,296 square feet, and York County lease rates have risen 59 cents over the past 12 months. Year to date, the average lease rate is $17.39 per square foot.

A big transaction last quarter was when Interiors Home leased 38,192 square feet at Manchester Crossroads, York.

“There’s still money in the market sloshing around,” Hodge said. A lot of the sales are “investment-type stuff.”

Over the past three years in York County, sales volume has increased 131.85% while the average sale price has increased 63.76%.

Among the third-quarter highlights was the $11.5 million sale of 109,615 square feet at 693 Lombard Road, Red Lion, to America’s Realty LLC by Northville Green Associates LLC.

Paula Wolf is a freelance writer

Industrial vacancy rates keep falling in central Pa., beyond

Activity in the Interstate 81/78 and greater Philadelphia industrial markets continued at a healthy pace in the third quarter, despite a drop-off in demand from the year before.

The two reports from Newmark Real Estate show lease rates are still rising as vacancy rates fall.

In the I-81/78 corridor, which includes the central Pennsylvania, northeastern Pennsylvania and Lehigh Valley submarkets, 29.6 million square feet is under construction, as land prices climb to peak levels. “With demand slowing, it will be interesting to monitor how much of the available speculative space coming online will be pre-leased before completion,” the report noted.

Positive absorption totaled just under 7 million square feet, bringing the year-to-date number to 19.1 million square feet.

Third-quarter vacancy fell to 5.3%, down from 8.6% a year ago. On average, asking rental rates for all industrial property types rose to $5.31 per square foot, an increase of 3.9% year over year.

Central Pennsylvania leads the way

Vacancy in the central Pennsylvania region was just 3.7%, lowest of the three I-81/78 submarkets. It also led in positive absorption, with 8.6 million square feet year to date, 3.1 million of that in the third quarter.

Among the major tenants taking occupancy were UPS moving into its newly built 775,000-square-foot East Zone Regional Hub at 2110 N. Union St., Middletown; Life Technologies Corp. relocating to Greencastle Logistics Center at 1611 Ebberts Spring Court, Greencastle; and Sun Run occupying 423,000 square feet in Susquehanna Logistics Center at 10874 Second Amendment Drive, Glen Rock.

Newmark reported that asking rents for warehouse and distribution space in central Pennsylvania are up 8.9% year over year, averaging $5.14 per square foot.

The real estate company also noted that 13 million square feet of the 29.6 million square feet under construction in the I-81/78 corridor is in central Pennsylvania.

Boohoo signed the largest lease of the quarter, for nearly 1.1 million square feet at 2771 N. Market St. in the First Logistics Center @ 283, Elizabethtown. In addition, Amazon leased 551,030 square feet at 121 Commerce Ave. in the Matrix I-81 Logistics Center, Greencastle, and Bowman Logistics renewed its lease for 447,000 square feet at 2294 Molly Pitcher Highway, Chambersburg.

Lots of activity in Lancaster County

In the second Newmark third-quarter report, for greater Philadelphia, Lancaster County is included in the southeastern Pennsylvania coverage area and saw some major tenants lease space.

Tyreflow Environmental Inc. moved into a 250,320-square-foot building at 1905 Horseshoe Road, Lancaster, and Ahold Delhaize occupied the newly constructed 250,000-square-foot cold storage building at 3800 Hempland Road, Mountville.

And once it’s completed later this year, the 325,500-square-foot building under construction at 2222 N. Reading Road, Denver, will be home to PureCycle LLC.

This quarter’s largest investment sale in southeastern Pennsylvania was in also in Lancaster County, with Dalfen Industrial buying the 251,250-square-foot warehouse at 791 Stony Battery Road, Landisville, for $29 million from Catalyst Commercial Development LLC. That comes out to $115 per square foot.

The overall vacancy rate in the southeastern Pennsylvania submarket fell to 3.9% from 4.7% a year earlier, with Lancaster County coming in at 1.5%, the lowest of the six counties in the coverage area.

Paula Wolf is a freelance writer

Hanover commercial real estate “in its own world”

The industrial real estate market in the greater Hanover area was very tight in the first half of 2022, with a vacancy rate of less than 1%.

Meanwhile, the lease rates for retail space keep rising.

Those are some of the highlights from a midyear report on this geographic submarket, compiled by Rock Commercial Real Estate.

Drew Steffens, Rock’s director of data services, said, “Hanover is its own world” when it comes to commercial real estate, which the report divides into industrial, office and retail sectors.

The vacancy for industrial space is even lower than in York County as a whole, he said.

For purposes of the report, the greater Hanover area includes the boroughs of Hanover, McSherrystown, New Oxford and Abbottstown and the townships of Union, Conewago, Oxford, Berwick, Penn, West Manheim, Heidelberg and Manheim.

They all have businesses and consumers “that identify with the Hanover market,” the report stated.

Steffens said the greater Hanover area is ideal because it’s close to the Maryland line and has access “to a considerable amount of employees.”

Total industrial inventory was 20.07 million square feet; the low vacancy rate was across Class A, B and C space.

Logistics operators are searching for more room “to store materials and alleviate supply chain interruptions,” according to the report.

Though demand is elevated, there’s not much newly built space available because construction costs are so expensive, Steffens said. “A lot of the growth we’re seeing is existing facilities wanting to expand.”

So lease activity has been minimal – due to a lack of supply, not a shortage of demand.

Two major projects in the area are the addition of 175,493 square foot of refrigeration space at Hanover Foods, 1175 Wilson Ave., and AquaPhoenix’s approximately 80,000-square-foot warehouse expansion at 860 Gitts Run Road.

Yazoo Mills Inc. also has completed construction of 60,000 square feet of warehouse space at 800 Gitts Run Road, the report said.

One of the bigger industrial sales in the first half of the year was 262 Church St., Conewago Township, an 81,793-square-foot property purchased for $3.3 million by Church Street Equities LLC. The seller was Eash & Gilbreath Family LP.

On the leasing side, 10,734 square feet at 9 Barnhart Drive, Penn Township, was rented to Hanover Terminal Inc.

The report noted that the market is tight in the much smaller office sector as well, where total inventory is 1.73 million square feet.

Vacancy is just over 3%. Steffens said many office space renters are staying where they are, “content with what they have.”

One of the major transactions in this segment was a 6,823-square-foot suite in the Eichelberger Professional building that sold for more than $1.11 million to BSSF Properties LLC. The seller was RLH Hanover Real Estate LLC.

The office lease transactions in the first half of 2022 included State Farm Insurance’s renting 1,600 square feet in Hanover Crossing.

In the greater Hanover area retail market, a higher ratio of Class A leases accounts for spike in average lease rates in 2020 and 2022.

Overall retail square footage is 7.1 million square feet, and absorption indicates demand is keeping pace with supply, the report said.

Helping absorption was the sale of the 34,854-square-foot Wolf’s Furniture showroom/warehouse along the Golden Mile (371 Eisenhower Drive) for $2.85 million to furniture and mattress retailer Raymour & Flanigan.

Not much big box retail space is still available, Steffens said, with the exception of a former Bon-Ton department store.

Among restaurants, the report noted that Jersey Mike’s leased 6,700 square feet of Class A space in Gateway Hanover. And Steffens mentioned Primanti Bros. Restaurant & Bar’s new location on Eisenhower Drive.

“Hanover historically has very high retail spending,” he said. “They like to go out to eat.”

Paula Wolf is a freelance writer

New training program available for hospitality jobs

The York County Industrial Development Authority, staffed by the York County Economic Alliance, is launching the John A. Lambert Hospitality Training Program.

The initiative, in partnership with Crispus Attucks, York College of Pennsylvania and GF Hotels & Resorts, honors John A. Lambert, one of the Yorktowne Hotel’s most recognized and tenured employees.

Offered at no cost, the training program will prepare individuals for a career in the hospitality industry. Participants who attend and complete the classes and earn a passing grade on the corresponding exam will receive a certificate from the nationally recognized American Hotel and Lodging Educational Institute, a release said.

The evening and weekend classes – to be held Sept. 12 through Sept. 28 – will be taught by industry professionals and held in the Crispus Attucks computer lab at 605 S. Duke St., York. Classes in Spanish are available upon request.

Training topics include Guest Service Gold: Golden Opportunities; Front Desk Representative; Guest Room Attendant; Restaurant Server; Maintenance Employee; and Kitchen Cook.

The John A. Lehman Hospitality Training Program is financially supported by the Women’s Giving Circle and the Rotary Club of York.

Anyone interested in working for the Yorktowne Hotel as it prepares to reopen is also encouraged to attend the York Hiring Fair from noon to 4 p.m. Sept. 15 at PeoplesBank Park and Yorktowne Hiring Days from 9 a.m. to 4 p.m. Sept. 19-21 at the York County Economic Alliance, 144 Roosevelt Ave., York.

Paula Wolf is a freelance writer

AHF Products sells five of its plants and leases them back

AHF Products, which last month purchased three Armstrong Flooring plants, sold and leased back five other properties in its industrial portfolio.

The Lancaster-based hard-surface flooring manufacturer, driven in part by industry consolidation as well as investor demand for net leased industrial properties, plans to use the money to grow the company, according to real estate firm Newmark, which represented AHF.

The sale-leaseback includes five manufacturing and distribution facilities covering 1 million square feet in Tennessee, Arkansas, Missouri and Kentucky.

Fully occupied by AHF, the properties are subject to a long-term absolute net lease with annual rental escalations. They are within strategic proximity of AHF’s suppliers, lowering manufacturing costs and allowing the company to price its products competitively, a release said.

“Despite uncertainty in the marketplace and growing concerns of a recession, this portfolio garnered extensive interest from numerous institutional sale leaseback investors,” said Newmark Managing Director Briggs Goldberg. “Navigating through the turbulence of the past 90 days – including a 100-basis-point increase in treasuries—we maintained a competitive environment, which allowed us to hold the buyer to originally agreed upon terms.”

The three manufacturing facilities AHF acquired from Armstrong Flooring Inc., after Armstrong filed for Chapter 11 bankruptcy, are in Lancaster; Beech Creek, Pennsylvania; and Kankakee, Illinois.

Paula Wolf is a freelance writer

Steven & Lee Cos. expand, establishing title agency

The Stevens & Lee Cos. has launched Reliance Search and Settlement LLC, a full-service title agency serving commercial, industrial and residential buyers and sellers, as well as owners looking to refinance.

Clients will include businesses of various sizes; individuals; government agencies and others.

Reliance will be headquartered in Stevens & Lee’s Market Square office in downtown Harrisburg. It’s led by Sean Delaney, who joined the law firm as a shareholder in its Real Estate Department in May 2022, and includes title agents Veronica Eskra and Jennifer Carl.

As part of this expansion, additional space has been leased so Stevens & Lee now occupies the entire 16th floor of the Market Square Plaza building.

The establishment of the title agency follows on the heels of Stevens & Lee’s further expansion in the region. In addition to Delaney, the Market Street office added construction and real estate litigator Veronica Morrison, appellate litigator Karl S. Myers and corporate finance attorney Kara Eshenaur last month as well.

Paula Wolf is a freelance writer.

Commercial real estate market remains robust in York County

In the first quarter of 2022, vacancy continued to fall across the industrial, office and retail segments of the York County commercial real estate market, with the industrial sector setting a record low.

The 2.08% industrial vacancy rate is down 85 basis points from the previous quarter and is the lowest “since we’ve been tracking it,” said Kevin Hodge, brokerage adviser with Rock Commercial Real Estate.

“We’re basically full,” he said. “It’s just amazing how much is going on right now.”

Most industrial construction in York County is on a larger scale, Hodge said.

Rock’s report noted that real estate developer CRG sold its 311,920-square-foot warehouse at 950 Woodland View Drive, Manchester Township, for $45.5 million. The facility is 40% occupied and accounted for 64% of sales volume in the county last quarter.

The highest demand is among users seeking space less than 10,000 square feet. There’s a deficit of approximately 125,000 square feet for this size category and “possible opportunity for landlords willing to carve up larger units,” the report said.

In this tight market, the York County submarkets with the lowest first-quarter vacancy were South Western (Hanover area at 0.64%), Northern (Dillsburg/Lewisberry at 0.81%) and South Eastern (Brogue at 0.73%).

According to the report, which compiles data from a number of sources, Hodge said, 4.2 million square feet of industrial space is under construction, with an additional 3.7 million square feet proposed. Most projects built on speculation are immediately absorbed upon completion, driving down vacancy rates further.

Three-quarters of the new construction is on the Interstate 83 corridor, from Lewisberry in the north to Shrewsbury in the south.

Expansion projects last quarter included Hanover Foods Corp. at 1175 Wilson Ave., Penn Township (175,493 square feet of freezer storage); Yazoo Mills Inc. at 800 Gitts Run Road, Penn Township (approximately 60,000 square feet of warehouse space); and Ollie’s Bargain Outlet at 3300 Espresso Way, East Manchester Township (approximately 200,000 square feet of warehouse space).

Switching to the York County office sector, there’s definitely strong demand among smaller users, Hodge said. The market for bigger spaces is softer, as larger companies tend to have employees working remotely.

It can be hard to find Class A and B office product in smaller increments these days, he said. “The higher quality stuff is thinner,” so Class C space in places like York city is getting repurposed.

Class A units in the county are leasing upwards of $20 per square foot. Among the highest lease rates were York Executive Center (2555 Kingston Road) and 220-224 St. Charles Way, which are Class A facilities near busy retail corridors.

In the first three months of this year, 240,000 square feet of office space sold, the highest performing quarter since the start of the pandemic. Vacancy is at a five-year low, dropping 53 basis points to 4.08%.

“Although unemployment remains on the decline, effects from inflation, labor shortages, interest rate increases, supply chain disruptions and threats from global conflict continue to work against economic recovery,” the report said. “Despite these challenges, demand is predominantly focused on smaller unit sizes less than 5,000 square feet.”

Ninety percent of leases in the first quarter were in this size range. An example is 2951 Whiteford Road, Springettsbury Township, a 4,758-square-foot unit leased by McLean Mortgage Corp.

There is 586,000 square feet available throughout York County, with units 5,000 square feet or less making up 41% of the vacant square footage.

“Tenants are also taking advantage of the current environment to not only move to new space but also negotiate to maintain their current lease rates,” the report explained.

Class A projects under construction include 18,000 square feet of professional/medical office suites at Westgate Plaza, next to UPMC Memorial Hospital, and 10,000 square feet of professional office space at 3190 E. Prospect Road, Windsor Township.

In the York County retail sector, first-quarter vacancy declined 56 basis points to 5.1%.

“We’re still seeing decent activity,” Hodge said. Finding employees to fill jobs remains a problem, but new business starts continue to be strong.

Sale volume is at its highest level since the fourth quarter of 2020. Earlier this year, Raymour & Flanigan acquired the former Wolf’s Furniture at 380 N. Northern Way, Springettsbury Township, for $5.25 million, the report noted. This is one of three showrooms the Syracuse-based furniture and mattress retailer is opening in the midstate.

In addition, Haines Road LLC purchased the 55,817-square-foot Haines Acres Shopping Center, Springettsbury Township, for $6.5 million. The new owner intends to renovate the façade of the complex, anchored by Ollie’s Bargain Outlet, beginning later this summer.

Total leased square feet was also higher than average in the first quarter, the report said.

Two transactions accounted for 59% of that: 32,200 square feet leased to Fun City Trampoline Park at 1200 Greensprings Road, Conewago Township, and 30,447 square feet leased to WellSpan Health at Queensgate Shopping Center, York Township.

Paula Wolf is a freelance writer

Schaedler Yesco buys building to enhance its western Pa. market

Schaedler Yesco Distribution’s new Westmoreland County facility. PHOTO/ PROVIDED

Harrisburg-based Schaedler Yesco Distribution Inc. announced the purchase of a 90,000-square-foot building in Westmoreland County to further serve its western Pennsylvania customers.

Established in 1924, the company is a fourth-generation, family- and employee-owned “provider of complete connected solutions for the electrical industry,” according to a release.

It has 22 locations in Pennsylvania and one in New York, and offers services and products for lighting, datacomm, automation and industrial needs.

Schaedler Yesco President Farrah Mittel informed employees of the acquisition May 10.

“Next month we will close on the purchase of a new facility in Lower Burrell, Pa., just 15 miles northeast of our current Pittsburgh location,” she said. “We have long known that our western market holds plenty of opportunities. Over the last few years, we have been diligently looking in that area for a facility conducive to growing our inventory and services so we can win a larger piece of those opportunities.”

In Burrell Plaza along Leechburg Road, the long-vacant building was the former home of a JCPenney.

Greg Schaedler, the company’s CEO, added: “We’re excited to put life back into this building. Not only will it be a great facility to serve our customers, but we’re eager to be part of the local community.”

The design and construction phase will begin quickly after closing, Schaedler said, with an opening expected in the summer of 2023.

Harsco announces Q1 revenue of $453 million  

Harsco Corp., which plans to relocate its Camp Hill headquarters to Philadelphia early next year, reported first-quarter revenue Tuesday from continuing operations of $453 million. 

That represented a 1% increase from the prior quarter. Operating income from continuing operations was $8 million, and adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) totaled $49 million. 

Founded in 1853, Harsco provides environmental solutions for industrial and specialty waste systems and technology for the rail sector. The company employs 12,000 in more than 30 countries. 

“Despite Harsco facing a challenging operating environment marked by increased inflationary pressures, we met our first quarter guidance,” Chairman and CEO Nick Grasberger said in a release. “… As the global economy continues to grow and sustainability goals remain a focus, Harsco is poised to benefit as a leading provider of recycling and material re-use solutions within industrial markets.” 

Underlying demand within most key markets – including the steel industry – is firm, he said. “The global steel market is in the process of rebalancing as a result of the Russia-Ukraine conflict, and we anticipate limited impacts over time given the diversity of our portfolio. 

“Meanwhile, continued high inflation as well as supply-chain and labor-market tightness remain concerns, particularly in the U.S. Internal actions are underway to mitigate these impacts and we remain confident that each of our businesses is positioned to deliver operating results growth in 2022.” 

Harsco has updated its 2022 guidance to reflect the challenges related to inflation – particularly in transportation and container costs – and ongoing labor-market tightness. It now expects to report $81 million to $96 million in operating income for the year. 

Lancaster industrial property sells for $23.9 million 

A newly-built industrial building at 701 Stony Battery Road, Lancaster. PHOTO/PROVIDED

A newly-built industrial building at 701 Stony Battery Road, Lancaster has been purchased for $23.9 million, according to documents filed with the Lancaster County Recorder of Deeds. 

The 251,250-square-foot industrial building was purchased from Catalyst Commercial Development, which oversaw the entitlement process and constructed the asset. Lee & Associates of Eastern Pennsylvania (LAEP) orchestrated the sale and did not disclose the buyer of the property. 

The facility features 36-foot clear ceiling heights, 49 loading docks and ample parking capacity, according to LAEP. 

“The building’s exceptional location combined with best-in-class design and the limited amount of Class A product in the Route 283 Corridor attracted the buyer to the opportunity,” said Robert Yoshimura, a principal at LAEP. “Additionally, the site’s infill location was desirable due to the rapid growth of the Lancaster submarket, forecasted population growth, and a robust logistics infrastructure network.” 

East Hempfield Township approved the facility along with 791 Stony Battery Road in March 2021. 701 finished construction in mid March and LAEP closed the sale on April 25. 

The new owner of the facility has already leased the space out, according to Connor Sanbower, an associate at LAEP. 

“It was a smooth transition,” said Sanbower. “With market conditions as they are, it was a rewarding investment for this firm to go for.”