Two Northampton County companies have been approved for low-interest loans through the Pennsylvania Industrial Development Authority.
Gov. Tom Wolf announced the approvals this week, along with four other PIDA loans to support business growth.
Continental Cup Co. LLC, through Lehigh Valley Economic Investment Corp., will receive a 10-year $210,000 loan at 3.75% fixed interest rate to buy machinery and equipment, including a lid automation system; dome lid mold; die cutter and punching machine; forklifts; racking system; pumps; and other small equipment, which will be installed at its manufacturing facility at 1920 Spillman Drive, Bethlehem.
Total project cost is $491,562, and Continental Cup has committed to create 44 full-time jobs and retain 27 employees within three years.
Green Leaf Productions Inc., through Lehigh Valley Economic Investment Corp., will get a 10-year $945,000 loan at a 3% reset interest rate to acquire a 10,450-square-foot office building at 161 North Commerce Way, Hanover Township. The project site, which will be used as a full-service multimedia production facility, will provide Green Leaf with more production space and allow it to expand.
Total project cost is $2.1 million, and the company has committed to create 25 full-time jobs within three years.
So far this year, a release said, PIDA has approved more than $41.5 million in low-interest loans, producing almost $91 million in private investment and supporting 998 created and retained full-time jobs.
In the greater Philadelphia region, including central Pennsylvania and the Lehigh Valley, the vacancy rate for industrial space fell to a historic low of 1.96% in the first quarter of 2022.
That’s from a recent report published by Lee & Associates of Eastern Pennsylvania, for a broad area that covers the Philadelphia metro submarket and six other submarkets spreading from Pennsylvania to New Jersey, Delaware and Maryland.
Driving the record low in vacancy was a surge in first-quarter leasing activity that produced 10.7 million-plus square feet of net absorption. That was more than twice the level recorded in the fourth quarter of 2021 and basically offset the 9.2 million square feet of industrial space delivered to the region in the first three months of 2022.
In central Pennsylvania, net absorption was 4.5 million square feet, resulting in a Q1 vacancy rate of 2.1%. That submarket encompasses Dauphin, Lebanon, Cumberland, Franklin, Lancaster, York, Perry and Adams counties.
The report noted that 10.7 million square feet of industrial space is under construction in central Pennsylvania. A major project is the 1.8 million-plus square foot Walmart fulfillment center in Shippensburg.
In the Lehigh Valley submarket, which covers Berks, Lehigh and Northampton counties, 3.1 million square feet of net absorption was generated, leading to a 1.47% vacancy rate.
A “significant driver” of that was completion of the 1.1 million-square-foot building for Mars Petcare in Bethel, Lee & Associates said.
Currently, 8.8 million square feet of industrial space is under construction in the Lehigh Valley.
Overall, more than 46 million square feet is being built throughout Philadelphia and the surrounding submarkets.
“The greater Philadelphia region remains the beneficiary of a dense regional population approaching 6 million people and a strategic Northeast location that provides access to approximately 35% of the United States’ population within a one-day truck drive,” Lee Fittipaldi, principal of Lee & Associates, said in a release.
“The construction and leasing of industrial and warehouse product both nationally and locally reflect the dramatic rise of e-commerce spending, including next-day and same-day delivery, along with strong growth of the manufacturing sector.”
End-users are also attracted to the availability of high-quality, trained labor in the region, he added.
York-based Kinsley Construction said on Monday that subsidiary R&C Heavy Mechanical in Maidencreek Township, Berks County merged under the Kinsley name effective Jan. 1, 2022.
Kinsley acquired R&C in 2006 and the companies have since operated under their own branding, but with a long-standing relationship, working together on plant maintenance work, piping, fabrication and rigging projects.
As of this year, R&C will now operate under the Kinsley name as part of the company’s industrial division. The merger allows the companies to openly share resources within the division, such as manpower and equipment, the company wrote in a statement.
“Together, we hope to expand and strengthen our market share in the heavy industrial sector throughout the Mid-Atlantic region,” said Rick Johnson, Kinsley’s industrial executive vice president.
Thanks to its merger with R&C, Kinsley’s industrial services division will now include concrete and asphalt plant relocations and repairs. Kinsley’s in-house rebar, structural and plate fabrication resources will also increase capacity and service available to R&C’s current clients.
Kinsley Construction has offices in Baltimore and Hagerstown, Maryland; Metro DC; and Eastern Pennsylvania.
J.G. Petrucci Co. Inc. has announced plans to develop a more than 240,000-square-foot industrial facility in Nazareth on a 23.51-acre site it recently acquired.
The site is at 4730 Hanoverville Road. According to Northampton County records the property was purchased from Jacobsburg Realty LLC for $1.
The Bethlehem developer said the loecation of the property between Routes 512 and 22 made the site ideal for light industrial manufacturing or warehouse users seeking easy access to major distribution hubs.
Petrucci Executive Vice President Peter Polt, noted that the property is in an area that is already heavily industrial.
“4730 Hanoverville is a great opportunity to expand our light industrial and manufacturing portfolio,” said Polt. “We are seeing a great demand from smaller industrial users looking for manufacturing or warehouse space. This latest acquisition, coupled with our extensive experience in developing in that location, positions us to deliver the facility and meet demand in a timely manner.”
Petrucci’s most recent development in the Lehigh Valley was Lehigh Valley Flex Center, a 31-acre flex campus, which provides flexible lease options to meet light manufacturing and warehouse space demand.
Building I at the flex campus has been leased to the specialized food manufacturer, Stuffed Puffs, which will be leasing 150,000 additional square feet from Petrucci to expand its manufacturing operations.
“We’re building our portfolio,” said Polt.
He noted that Petrucci currently has more than 4.5 million square feet of industrial space in the Lehigh Valley, mostly small- to mid-sized properties.
A paper cup manufacturer signed a lease for a 40,000-square-foot building in Bethlehem where it will open its first manufacturing facility next month.
Continental Cup Co. will open its site at 1920 Spillman Drive in Lehigh Valley Industrial Park VII off Route 412.
Lehigh Valley Industrial Park, the owner of the property, built the building on spec, said Don Cunningham, president and CEO of Lehigh Valley Economic Development Corp.
“There’s been a shortage in the market for smaller-size industrial manufacturing buildings,” Cunningham said. “We just need more of it.”
Kerry Wrobel, president of LVIP, said LVIP built the building because it saw a lack of properties in the market that offered smaller space.
Continental Cup plans to invest at least $9.5 million into the project and should bring 71 new full-time jobs over the next three years.
Wrobel said the company should start operations in September and it is now setting up equipment. The building is finished and should receive a certificate of occupancy next week, he added.
“The building was perfectly sized for their needs,” Wrobel said.
The company was looking for a site that was also close to Interstate 78, he added.
Continental Cup will manufacture high-end graphic cups primarily for the theater industry, quick-service restaurants and convenience stores, and received some state funds to get started.
The funding includes a $155,000 Pennsylvania First grant from the state Department of Community & Economic Development; $142,000 in job creation tax credits once it creates new jobs; and up to $31,950 in grants for workforce training and development. The state also encouraged the company to apply for a low-interest $400,000 loan from the Pennsylvania Industrial Development Authority to help with equipment costs, according to a news release.
Additionally, the LVIP property offers the Local Economic Revitalization Tax Assistance program, which takes real estate taxes and abates them at a pro-rated amount over 10 years.
The Governor’s Action Team helped coordinate the project along with LVEDC.
Mike Adams of NAI Summit represented both the tenant and the owner in the transaction.
A new report from CBRE Inc. said the growth of online grocery sales could create demand in the U.S. for up to 100 million square feet of cold storage space over the next
With 213.5 million square feet of inventory, Pennsylvania ranks sixth in the U.S. for amount of cold-storage space.
Some of it is in the Lehigh Valley. Cold-storage companies with sites in the region include U.S. Cold Storage in Milford Township, Americold Logistics in Upper Macungie Township and Lineage Logistics, which has a few locations.
However, land is in short supply for more.
“Land is scarce in the Lehigh Valley for building any type of warehouses,” said William Wolf, executive vice president of CBRE, based in Upper Macungie Township. “This fits
that same category. It’s a growing industry and I think it’s going to keep growing.”
That is because consumers are expected to order more and more groceries online.
A recent report from the Food Marketing Institute and Neilsen projects that groceries ordered online will account for 13 percent of total grocery sales by 2022, up from 3 percent in 2018. That would translate into an additional $100 billion per year.
For now, grocers such as Wegmans and Weis are making home deliveries out of grocery stores and supermarkets, Wolf said. But as the home-delivery segment grows, existing brick-and-mortar stores may not be able to support the increased volume.
“They will have to come up with other means to distribute the volume of goods,” Wolf said.
The construction costs for dedicated cold-storage facilities, however, are much higher than they are for traditional warehouses. Among other features, they require a variety of temperature control systems in order to function.
“There are a lot more costs and also the buildings rent for a much higher lease rate than a normal warehouse would,” Wolf said.
A Denver-based real estate firm bought industrial land in South Whitehall Township for $2.5 million with plans to erect three buildings on spec.
The firm, Black Creek Group, bought the vacant land from Partners Profit Group, according to Lehigh County property records. The land, covering more than 16 acres, is at 1430 Eck Road near the intersection with Crackersport Road.
Black Creek Group is planning to fill it with three buildings totaling 907,000 square feet. Once complete, they would bring Black Creek’s Lehigh Valley footprint to about 3.5 million square feet, according to Dave Fazekas, Black Creek Group’s senior managing director for the eastern region.
“Having great success investing in the Lehigh Valley market over the past decade, we are continually looking for unique investment opportunities such as this one,” Fazekas said in a statement.
Black Creek will be hiring a third-party general contractor for the development, which will begin later this summer and should finish in the second quarter of 2020.
Mike Adams, senior vice president of NAI Summit of South Whitehall Township, was the sole broker in the sale.
Jon Gelman, industrial specialist for Gelcor Realty, is handling leasing to tenants.
Are homebuilders, developers and commercial construction contractors seeing an increase in water intrusion in homes and buildings built in Pennsylvania?
“I would say in terms of infiltration into homes, it’s only increased proportionately with the increase of rain,” said Rick Koze, president of Kay Builders in Lower M
acungie Township. “The sheer volume and amount of rain is a problem. What we’ve noticed is we’ve gotten some real wet seasons lately.”
Koze described it as a string of bad luck, with the past two years being much wetter than normal.
“I think the storms are increasing in intensity,” said David Barnhart, vice president of Nappen & Associates, a commercial real estate developer in Montgomeryville. “I think the storms are more frequent, more intense.”
And they are not just a problem for existing buildings.
When a building is under construction, heavy rainfall makes completion more challenging, creating delays and potentially extending home settlements, Koze said.
When workers dig a foundation during construction, they need to properly grade the site so that holes near the foundation don’t fill up with water.
“It’s a big issue when you are putting in roads and heavy rains come and it can flood the detention pond,” Koze said.
That’s something that occurred earlier this year during construction of Jasper Ridge, a new housing community for Kay Builders in Upper Milford Township.
One potential solution is to keep more stormwater systems on the site of a property, which is being driven by regulation from the U.S. Environmental Protection Agency, according to Koze.
“You have to keep almost all your stormwater on site,” Koze said. “We are being required as homebuilders to keep more stormwater on site.”
People often blame flooding on new development but Koze said homebuilders have had to install more underground detention ponds to manage stormwater.
Other measures also have come in handy.
“When the ground gets saturated, a lot of times you get water rising up to the footers. Sometimes we add more sump pumps,” Koze said.
During construction, Koze said, workers for Kay Builders also strive to install a roof right away so plywood framing doesn’t get as wet.
Aside from changes in rainfall amounts and storm intensity, regulations on stormwater management also play a role in determining how much water accumulates on a property.
“Speaking for some of our own developments, some of which date back almost 50 years, we would likely not be able to develop and/or construct to the same extent those projects given today’s regulations,” Barnhart said.
Under today’s regulations, it would be very difficult if not impossible to construct buildings on flood plains and wetlands, Barnhart said. Additionally, buffers and setbacks are required around such water features, as well as around streams.
Barnhart said his company’s 2525 Milford Square Pike project, an industrial flex building under construction in Milford Township, is within a “high-quality watershed” which has even stricter parameters, buffers and setbacks.
Under today’s regulations, a development needs to obtain a National Pollutant Discharge Elimination System permit from the state Department of Environmental Protection, Barnhart said.
For the Milford Square Pike project, Barnhart said it took more than 18 months to obtain this permit.
Barnhart said when his firm acquired the site for the Milford Square Pike project; it realized it could use about 12 out of the 25 acres on the site, given the flood plains, streams and wetlands.
While a portion of the property risks losing value because development may be restricted Barnhart said, the undeveloped portion can serve the community in other ways. Barnhart said his company donated a 3.2-acre lot to the township for use as open space.
Although there are additional undevelopable portions on the remaining lot, they are restricted from development because of an agreement with the neighboring Quakertown Airport along with a conservation easement with the township. The Bucks County soil conservation district and state DEP are also parties to that agreement.
State regulators require all development projects today to incorporate designs that do not increase in the amount of water leaving a site beyond what existed before development, Barnhart said.
Most designs even provide for reduced flow from the site, he said. Projects must adhere to Best Management Practices designs such as rain gardens, bio-infiltrations, and retention basins.
The Milford Square project uses a slow-release bio-infiltration design, which incorporates a device to manage stormwater runoff and prevent flooding and downstream erosion, he added.
Two vacant buildings near Route 309 in Richland Township in Upper Bucks County recently sold for $2.5 million.
The 5.3-acre site is at 590 California Road and includes an 11,500 square-foot office building and 45,000-square-foot-warehouse, said Jane Schiff, associate broker of Howard Hanna The Frederick Group in South Whitehall Township. Schiff represented the seller, Pyramid Realty Group, in the transaction.
Zach Moore, founding partner of Velocity Ventures bought the property. His Philadelphia-based investment firm specializes in the acquisition and management of industrial real estate assets.
The buyer is rehabilitating the property to offer it as a rental, Schiff said.
Michael Borski Jr. of The Flynn Company, based in Philadelphia, said the buyer is working on a complete renovation of the site.
Borski, who represented Moore in the transaction, said the buyer is working on renovations for the two buildings to get them ready for tenants. The project, designed as a speculative development, should be complete by the end of August, he said.
The buyer does not have any tenants in place yet.
The site is next to a new industrial project developed by MRP Industrial.
Last year, MRP Industrial acquired a nearly 23-acre site on West Pumping Station Road off Route 309 in Richland Township and built Park 309, two new industrial buildings.
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