The only way to affect tomorrow is to understand where we are today.
The only way to affect tomorrow is to understand where we are today.
Toward that end, the Lehigh Valley Economic Development Corp. has released its first in what will be a quarterly Lehigh Valley real estate report that summarizes the Lehigh Valley real estate and economic development market, particularly in comparison to state and national trends.
Among the findings from the first eight-page report is that the Lehigh Valley commercial office market is showing signs of improvement and compares favorably to the national office market. The Lehigh Valley’s overall office market vacancy rate is 11.8 percent, compared to 15.8 percent nationally.
The report was released this month at a LVEDC Brokers and Developers Council event, at which a panel of area experts discussed the state of the Lehigh Valley office market.
“Though there is still a significant amount of office space that is unoccupied, the competition from tenants for top quality office space is strong as the recovery gains momentum,” said Jody King, a commercial real estate broker and vice president with CBRE. “Because of this, we are beginning to see developers move closer to starting construction on new offices.”
There are 1,325 office buildings in Lehigh and Northampton counties for a combined total of more than 24 million square feet of office space.
The majority of those buildings, 708, are deemed Class C offices. There are 567 Class B office buildings and 50 Class A buildings in the Lehigh Valley.
The total average rental rate of that space is $19.82 per square foot. Square foot rates vary greatly depending on the class of the office space and where it is located.
Much of the Class C space in the region is old, with an average building age of 81 years old. The Class B space averages 60 years old. The average age of the Lehigh Valley’s Class A office space is 18 years old.
The urban revitalization zone in Allentown, formally called the Neighborhood Improvement Zone, has led to construction of the region’s newest office space, and, because of the state-financing incentives, has brought Class A space to the market that is leasing below market rate.
