Strong interest in speculative industrial properties keeps growing as construction advances on two speculative developments under construction in the $110 million West Hills Business Center off Interstate 78 in Weisenberg Township, Lehigh County.
Though no tenants are confirmed, interest has grown from out-of-state companies looking to set up shop in the industrial park. The site is home to a logistics and distribution center for National Freight Industries and four other buildings, two of which are yet to be built.
Hillwood Investment Properties of Dallas, Texas, is the developer/contractor for the industrial park.
Both buildings should be complete by early March, said Gary Frederick, senior vice president of development for Hillwood.
So far, Hillwood has seen good activity and is talking to several tenants, Frederick said.
“We’ve just got a lot of activity from companies not in the area looking to set up a distribution center to service the Northeast,” said Vincent Ranalli, first vice president of CBRE Inc. Brokerage Services in Wayne, Delaware County. “We feel very confident based on the construction schedule. The goal was to have the buildings under roof before the winter.”
While no tenants have signed leases for either of the two buildings under construction, interest remains strong because of the site’s visibility from I-78, its proximity to the highway’s exit and entrance ramps and that it’s close to the labor base of both Berks and Lehigh counties, Ranalli said.
Interest is from distribution-oriented prospects and also manufacturers and e-commerce businesses.
The Valley is a great location for companies looking to ship products from New England to Virginia, he said.
The opening of the NFI site in January drew a lot of attention to the site as the first building in the park and gave Hillwood Properties the encouragement to move forward with construction of the other buildings. NFI serves Ocean Spray from this site.
“The Lehigh Valley is so incredibly tight right now; there’s just not a lot of brand new industrial development,” Ranalli said.
The Valley is at a 3 percent vacancy rate for industrial properties, a historic low, he added.
A lot of industrial properties get absorbed before construction is even finished, Frederick said.
“There is very little vacancy of Class-A industrial properties,” he said. “There is an imbalance right now in demand and supply. It’s tough to find sites that can be entitled. It’s very challenging.”
Any industrial site in the Valley that only has access to Route 22 is confined. However those sites that can access Route 33 and I-78 are going to have a big advantage, Frederick said.
More new industrial development is coming next year, with the proposed FedEx distribution hub in Allen Township, and several projects on the way, including the Industrial Development International warehouse in Lower Nazareth, developments owned by Griffin Land off Route 512 in Hanover Township, Northampton County, several properties in Lower Macungie and the industrial sites near the new Route 33 Chrin interchange in Palmer Township.
“Those are some relatively significant blocks of space,” Frederick said.
The West Hills Business Center has space for two more buildings, which will be constructed following another set of Pennsylvania Department of Transportation improvements, Frederick said.
These last two buildings could be built simultaneously and delivered by early 2016.