Newmark Real Estate releases 2nd quarter 2022 Greater Philadelphia and I81/78 Industrial Market Reports
Newmark Real Estate (Newmark) is pleased to release its second quarter 2022 Greater Philadelphia and I81/78 Industrial Market Reports.
Greater Philadelphia Industrial Market
Activity in the Greater Philadelphia industrial market, inclusive of Southeastern Pennsylvania, Southern New Jersey and Delaware, remains robust. Demand for warehouse and distribution space, particularly newly constructed speculative product, is showing no signs of slowing. There is currently 22.6 million square feet under construction, 84.0% of which is being developed on speculation. Rising fuel prices has created supply chain and other challenges for industrial tenants. In order to minimize transportation costs, tenants have been diligent to select sites which are proximate to their customer base, and they are willing to pay premium rents for ideal space in targeted locations. Strong tenant demand is driving rental rates for warehouse and distribution space and the cost of land to record highs. In some industrial submarkets rental costs are nearing peak levels, as annual rent escalations have climbed to 4.0% – 5.0%.
I81/78 Industrial Market
Activity in the I-81/78 industrial market remains strong. Despite rising fuel costs and the challenges it has presented to supply chains for retailers, e-commerce, and logistics companies, demand for warehouse and distribution space is showing no signs of slowing. Proximity to a strong labor pool and easy access to consumers remain paramount considerations for tenants in their efforts to minimize supply chain and transportation costs. Demand for newly constructed warehouse space remains robust, with over 30.0 million square feet of new construction underway in the I-81/78 industrial market. Speculative construction continues to be leased at a rapid pace, typically before the delivery of a building or shortly thereafter. Land prices soar, as tenants seek the best available sites which are proximate to the consumers they serve.
