Local Industrial Markets Prove Resilient During Pandemic
Wayne, PA (July 15, 2020) — Newmark Knight Frank (NKF) released its second quarter 2020 industrial market reports for Greater Philadelphia and the I-81/78 Corridor. Healthy market activity recorded in the past three months clearly demonstrated the strength of both industrial product as an asset class, and the local industrial markets.
During the quarter, the region grappled with sharp economic losses and shelter-in-place mandates. However, during this period, activity in the I-81/78 Corridor industrial market was robust with 1.3 million square feet of net absorption noted. Multiple deals in the 500,000- to 1.0-million-square-foot range transacted, average asking rents increased 1.5 percent from the previous quarter, and eight new warehouse projects commenced construction despite a temporary ban on all active construction sites, which was lifted mid-quarter on May 1st. The Lehigh Valley submarket led the region in occupancy gains, accumulating 1.2 million square feet in net absorption primarily driven by Amazon’s occupancy of the 1.0-million-square-foot warehouse at 3539 Mountain Road. According to NKF Senior Managing Director Tim Brogan, ecommerce firms like Amazon will continue building out their first- and last-mile supply chain network, with increased intensity catalyzed by COVID-19. “The ‘shop-at-home’ effect is driving even greater demand for online fulfilment facilities and we’re seeing ecommerce requirements in the market increase,” he said.