I-78/I-81 Submarkets | Lehigh Valley, Central PA & Northeast PA I-95 Corridor | Greater Philadelphia
Highlights
- Industrial big-box demand has only accelerated since the
onset of the pandemic. Occupiers have signed 16.9 MSF of
new deals year-to-date, the largest Q3 total in the market’s
history. Year-to-date net absorption, 11 MSF, is also at an
all-time high for the third quarter.
- There is less square footage under construction in 2020 than
in 2019, 12.6 MSF vs. 21.2 MSF. Last year, construction
activity reached a cycle peak due to many 750K+ SF projects
throughout the market. Construction has returned to the
historic norm.
- Though Pennsylvania temporarily halted non-essential
construction in March/April in response to the pandemic, there
was little impact on the supply pipeline beyond some brief
delays. The YOY decrease in construction volume was
expected pre-pandemic, particularly among large-format
projects in Central & Northeast PA. Construction starts
rebounded in Q3 though the supply of large-format, spec
construction remains tight.
- Market-wide, vacancy is expected to decrease in the fourth quarter as there are many large, pending deals and relatively few speculative deliveries in the pipeline.