The PHL region experienced a vacancy decrease to 5.71% at the end of the Q3, which was a new record low for the market. Due largely to some notable built-to-suit deliveries, the market recorded over 4.2 million square feet in positive absorption during the quarter. Total absorption YTD has eclipsed 13.7 million square feet, which is an average quarterly pace of almost 4.6 million square feet. At this pace, the Philadelphia Industrial market could eclipse over 18 million square feet in positive absorption, breaking the record set just last year.<\/p>\n
The Garden State also continued to grow in Q3. The Southern New Jersey Industrial submarket has accounted for nearly a third of the total Philadelphia market\u2019s positive absorption YTD. The New build to suit (BTS) and speculative (SPEC) construction preleasing in both Burlington and Gloucester counties accounted for nearly 73% of the total positive absorption in Southern New Jersey YTD. This included the 1.85 million square feet of BTS projects delivered in Q3 for Amazon and Greenyard Logistics in Gloucester County, as well as the Camuto Group in Burlington County. Seven buildings have been delivered this year that were either BTS or SPEC preleased. This trend should continue through year\u2019s end. As we head into Q4, there are currently four SPEC buildings under construction in Southern New Jersey, two of which have already been preleased.<\/p>\n
The I-81 Corridor tallied 25% of the PHL region\u2019s total absorption in Q3, and approximately 20% of the total positive absorption YTD. Vacancy decreased slightly in Q3, to end at 4.95%, marking the third straight quarter in which vacancy was less than 5.0%. Like Southern New Jersey, a significant portion of the positive absorption YTD (approximately 40%) is directly attributed to BTS deliveries. Focused predominantly in Luzerne County, BTS activity continues to help drive the positive absorption we\u2019ve seen for the last several quarters. While SPEC preleasing is not considered rare, it has been less consistent driver YTD. Of the five projects under construction, four are SPEC projects in Luzerne County, two of which are preleased. When delivered, they will account for over 1 million square feet of positive absorption. <\/p>\n
In both Central PA and the Lehigh Valley, vacancy rates increased during the quarter, accounting for 60,000 SF in negative absorption across the two submarkets. Nonetheless, these markets have accounted for 6.7 million square feet in positive absorption over the past four quarters. A closer look reveals that, while there is overwhelming positive absorption (7.9 million SF) occurring in Class A properties Class B and C properties in Central PA and the Lehigh Valley saw nearly 1.2 million square feet in negative absorption. Looking forward to the end of 2017, we expect both the Central PA and Lehigh Valley submarkets will experience positive absorption in Q4, predominantly on the back of expected BTS deliveries such as Whirlpool in Central PA and FedEx in the Lehigh Valley. <\/p>\n","protected":false},"excerpt":{"rendered":"
The PHL region experienced a vacancy decrease to 5.71% at the end of the Q3, which was a new record low for the market. Due largely to some notable built-to-suit deliveries, the market recorded over 4.2 million square feet in positive absorption during the quarter. Total absorption YTD has eclipsed 13.7 million square feet, which is an average quarterly pace of almost 4.6 million square feet. At this pace, the Philadelphia Industrial market could eclipse…<\/p>\n","protected":false},"author":24,"featured_media":910,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1212],"tags":[],"class_list":["post-908","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-research"],"yoast_head":"\n