The Pennsylvania I-78/I-81 Logistics Corridor, stretching from
Northeastern Pennsylvania, through the Lehigh Valley, and into Central
Pennsylvania, has emerged as one of the nation’s most sought-after areas
to warehouse and distribute goods. In H2 2017, its institutional-grade warehouse/distribution inventory measures over 200 million sq. ft, spread between three major submarkets.
- The Central Pennsylvania (Central PA) submarket has been the
historical core of the PA I-78/I-81 logistics corridor, specializing as a
super-regional node for bulk warehousing. Half of the Corridor's institutional-grade inventory lies in Central PA.
- The Lehigh Valley has experienced the fastest growth among the
Corridor submarkets, due in large part to its proximity to New York City via toll-free highways and the scarcity of land in New Jersey. This submarket commands the highest asking and acheived rents; recent deals for new warehouse spaces have been struck between $5.75 - $5.95 per sq. ft.
- Northeastern PA has emerged as an attractive alternative to the Lehigh Valley and Central PA, offering lower costs, plentiful land, and qualified labor. Its ascendancy is seen in the submarket's fundamentals: direct vacancy in Northeastern PA was cut nearly in half from 14.1% in Q1 2017, to 7.4% in Q4 2017.
Throughout the I-78/I-81 Corridor, 19 institutional-grade warehouse/distribution facilities were under construction in Q4 2017, totalling 13.2 million sq. ft.