J.G. Petrucci Co. Inc. has expanded its industrial portfolio with the acquisition of two properties on Snowdrift Road in Upper Macungie Township.
CBRE had been marketing the properties and negotiated the sale on behalf of the former owner, Penwood Real Estate Management.
Penwood, of West Hartford, Conn., is a real estate investment advisory firm that was formed in 2003 and is dedicated to managing value-added real estate investments in the institutional market.
Petrucci, which has offices in Bethlehem, currently owns and operates over 4.5 million square feet of commercial, industrial, retail and residential properties.
The two Iron Run Lehigh properties at 6980 and 7020 Snowdrift Rd. total 135,082 square feet and are fully occupied with five major tenants.
Penwood renovated both properties while they were under its ownership.
6980 Snowdrift Rd., which is a 99,782-square-foot facility sitting on 10.59 acres, was renovated in 2018.
The other property, 7020 Snowdrift Road is a 41,390-square-foot property sitting on 4.09 acres. It was renovated in 2017.
“Iron Run has endured as one of the Lehigh Valley’s most consistent, well-located light industrial concentrations,” said CBRE’s Brad Ruppel. “These two buildings and their diverse tenant roster are emblematic of the adaptive functionality of this park. Investors continue to recognize the draw of locating at the heart of the region’s dynamic logistics infrastructure and labor concentrations.”
Commercial real estate experts were expecting 2020’s industrial development boom to continue, but Mike Hess, senior vice president of CBRE in the Harrisburg office said industrial development along the I-78/I-81 corridor was even stronger than expected during the first quarter of the year.
The corridor, which runs through Central Pennsylvania, Northeastern Pennsylvania and the Lehigh Valley is literally busting at the seams and is growing rapidly with new construction projects to meet the demand.
According to the most recent CBRE market report vacancy rates are down to a low 6.3% and the absorption rate was high.
“There has been more than 3 million square feet of net absorption so far this year,” Hess said.
With 13 million square feet of space absorbed in all of 2020, “the Lehigh Valley, Northeast and Central Pa. are very well on to track to meet or exceed that.”
In response to an uptick in demand during 2020, developers grew the construction pipeline to 18 million square feet. Specifically, Central PA and the Lehigh Valley recorded over 3.2 million sq. ft. in new construction activity.
He expects that to be snapped up quickly by light industrial and logistics tenants, noting that even as construction increases, absorption rates have been keeping up with the rate of construction over the past several years. In 2015, for example, he said there was 8.4 million square feet of industrial construction with 7.9 million square feet leased out.
“It’s almost, to the square foot, balanced what gets built to what gets absorbed,” Hess said.
And while all that growth sounds great for the economy, it does have its drawbacks.
“We are going to be in the position where we are undersupplied,” he said.
The majority of sites that are good for development are already underdevelopment, and most likely already have tenants lined up, he said.
That has increased speculative development significantly.
Basically, to meet the pace of demand, developers can’t wait for a tenant to come to them. They need to have inventory ready so tenants can move in on the faster timetable that the market demands.
“You have to get out there and take a risk on the market, and those who have done it have been rewarded,” he said.
Even as the sector moves into the second quarter of the year, new projects are entering the pipeline.
“This whole region has turned out to be a spec market. If you build it they will come,” Hess said.
But for those companies looking to locate manufacturing or logistics facilities along the I-78/I-81 corridor – prices are skyrocketing. Just over last year, rents across the board have risen 20% to 25% going from an average of about $4.50 per square foot to about $5.50 and he expects rents to continue to trend upward.But, he said, it isn’t just a money grab, construction costs are also rising dramatically.
With the scarcity of land, commercial real estate space is selling for almost $40 per square foot right now, compared to only $20 per square foot in 2020.
Materials are also more expensive and harder to come by. In the competitive steel beam market prices are about $16 per square foot, $2 more than last year and there is a 40- to 50-week lead time on orders. Developers need to order what they need in advance so they have the materials in place in time for the start of construction. “Because of all these factors, new projects are going to have to have higher rentals,” he said.
With the high demand for such space developers and tenants are willing to pay the higher prices. “Industrial has become the new retail,” Hess said, and companies in apparel, consumer goods and food are looking to have production and distribution in the region.
Investors are also willing to pay the price.
The report said even though overall capital markets activity cooled slightly in the first quarter of 2021, it still generated more than $100 million in investment activity, and 2020 ended the year achieving nearly $1 billion in total capital markets activity.
Prologis Valley West in Alburtis is one of the new logistics centers currently in the pipeline along the I-78/I-80 corridor. PHOTO COURTESY CBRE
Since the start of the COVID-19 pandemic, growth in the e-commerce, logistics and transportation industries, which were already booming in the Lehigh Valley, has gone full tilt.
According to the Lehigh Valley Economic Development Corp., the Lehigh Valley’s gross domestic product for transportation and warehousing was $2.5 billion in 2019, and while newer numbers are not available, job growth statistics indicate that number should be dramatically higher today.
The number of jobs in the logistics industry grew from 22,005 in 2015 to 34,477 in 2020, according to the Lehigh Valley Economic Development Corp.
Reading-based Penske Logistics, which employs more than 10,000 truck drivers across the country, said the demand for drivers in the region is strong.
“We are seeing tremendous demand for truck drivers in the Lehigh Valley; it’s one of the most challenging driver markets in the country,” said Jeff Jackson, senior vice president of operations for dedicated contract carriage at Penske Logistics. “The local transportation companies that we hire to service our customers, to pick up and deliver freight regionally, have been kept busy by the work we have given them. These small companies in the greater Reading-central Pennsylvania-Lehigh Valley markets appear to be doing well in this environment.”
That demand for workers in the sector has led to higher wages, according to Don Cunningham, president and CEO of the LVEDC. Because of the demand, workers in the sector had an average weekly salary of $844 in Lehigh and Northampton counties by the third quarter of 2020. That’s led to nearly full-employment in the sector, he said. Even low-skilled labor at these logistics facilities are seeing starting wages that are generally higher than $15 an hour.
“These are wages we’ve not seen in our history for non-skilled workers,” Cunningham said. “Most regions in the country would kill to have full-employment for their non-skilled labor population.”
The need for logistics space, which includes pack-and-ship companies like Amazon, retail aggregators, like Zullily, third-party logistics providers and direct-to-consumer ecommerce companies, has kept the construction industry hopping.
The Lehigh Valley had nearly 9 million square feet of industrial and flex space under construction at the end of 2020, Cunningham said. By that measure, Lehigh Valley’s construction activity was among the busiest in the nation, ranking only behind Nashville and Austin. Much of that was in the logistics sector, he said.
Growth in the sector is so strong, the only thing hampering its expansion at this point is the availability of land, he said.
The pace continues
And, the construction isn’t slowing down. Much of it is in providing infrastructure needed to accommodate the increased traffic coming in and out of the region.
Lehigh Valley International Airport just announced plans to build space to meet the increased air cargo coming into the Hanover Township, Lehigh County airport. Since 2016 LVIA has seen a 165% increase in cargo traffic — going from processing 47 million pounds to more than 126 million in 2019 and 210 million during the COVID-19 bump last year.
The Lehigh Northampton Airport Authority recently hired Aviation Facilities Company Management LLC of Dulles, Virginia, to plan and develop portions of the airport’s property to help plan cargo, logistics and other airport facilities to help meet the demand.
“Developing air cargo infrastructure remains a strategic goal for the Airport Authority,” said Thomas R. Stoudt, executive director, LNAA. “Partnering with the AFCO team on this important initiative will allow Lehigh Valley International to better serve our current air cargo demand, while providing expansion opportunities for new and existing businesses. This partnership will increase the ability of cargo carriers to serve the growing demand in our region.”
The increase in traffic, including truck traffic, has also led to the widening of a number of roadways in the Lehigh Valley, including Route 22 and Route 412. Right now the region is feeling the growing pains of the transition to a logistics-heavy region, with increased truck traffic and the sprawl of big-box buildings into suburban and rural areas. But, he said, with the infrastructure improvements that are coming, traffic issues should ease in the future.
“You need to adapt and you need to adjust, and that’s exactly what the Lehigh Valley is doing,” Cunningham said.
While issues like open space and farmland preservation are an important concern in the community and developers should be mindful of the impact of the construction boom, Cunningham said the growth is coming from the demand right in the community.
“Ask yourself how many products have you been ordering online and having them delivered to your door,” He said. “”Every package that has been delivered to my door versus me going to the store – that’s a truck that brings it.”
But for those concerned by the fast development of logistics and ecommerce facilities and the number of trucks on the road, Cunningham said he believes the boom is slowing.
“I think we’ve peaked as far as the large scale build out of logistics,” he said. “But, it’s still a great place to move your product and it’s also a great place to make your product.”
Bangor Area Middle School Students produced a video at B Brawn in Bethlehem, calling the manufacturer one of the heroes of the pandemic. SOURCE/WHATSSOCOOL.ORG
Voting begins today for the eighth year of the “What’s So Cool About Manufacturing” Lehigh Valley contest.
Organized by the Manufacturers Resource Center, the contest pairs area manufacturers with middle-school students who teach them about the work they do. Later, the students create a video about what’s so cool about the manufacturer.
The contest, which started in the Lehigh Valley, but has now spread across the state with individual local contests, is designed to encourage young people to explore careers in manufacturing, where there is a high demand for skilled labor.
Members of the public can vote through April 9 for what they think is the best of the student videos. Those students will be honored with this year’s “Viewers Choice Award.”
A panel of judges will award honors in six other categories including Outstanding Career Pathway and Outstanding Creativity.
While the MRC usually hosts a large event to celebrate the wrap up of the competition, this year’s awards program will be taped in advance because of the COVID-19 pandemic.
It will then be aired on WFMZ TV and streamed on WFMZ.com on April 26 at 7 p.m.
Sights for Hope will be putting its new name on the organization’s vehicles that transport clients who have visual impairments. PHOTO/SUBMITTED
Lehigh Valley-based Center for Vision Loss is looking to drop the negative and concentrate on the positive of what the organization does with a name change it is announcing today.
Starting April 6, the nonprofit agency will be known as Sights for Hope. The organization empowers people living with visual impairment and promotes health eyesight throughout the Lehigh Valley and Monroe County.
“We have been working on this transition for quite some time now, and we are very pleased with the end result,” said Dennis Zehner, executive director of Sights for Hope. “Many organizations like ours across the country are committing to similar name changes in the interest of championing and empowering people instead of focusing on a challenge they face.”
Sights for Hope considered more than 200 names in the last 18 months before choosing Sights for Hope. The name will go on the organization’s vehicles that transport clients who have visual impairments to medical appointments, grocery stores, and to in-person agency services.
To help get the word out about the new, more positive name, Sights for Hope is launching a Sips 4 Sight promotion at participating restaurants and businesses that will sell Yeti ramblers with the new Sights for Hope logo.
Billboards and other public-facing advertising will be placed throughout the service area, touting Sights for Hope.
The Lehigh Valley IronPigs minor league baseball team is also supporting a campaign to publicize the nonprofit’s work.
From left to right: Stephanie R. Raymond, Gregory N. Dudkin
PPL Corp. of Allentown named Gregory Dudkin executive vice president and COO.
Dudkin brings 40 years of experience in energy and telecommunications operations to his new role. He has been serving as president of PPL Electric Utilities, the company’s electric utility subsidiary, since 2012. He joined PPL Electric Utilities in 2009 as senior vice president of operations.
Prior to joining PPL, he served as Comcast’s senior vice president of technical operations and fulfillment and as a regional senior vice president for the telecommunications company.
Stephanie Raymond, vice president of distribution operations, will succeed Dudkin as president of PPL Electric Utilities.
She joined PPL Electric Utilities in 2011 as director of project and contract management.
Before PPL Electric Utilities, she served as chief operating officer of CablenetServices Inc. and in numerous senior leadership positions for Comcast Cable Communications, General Fiber Communications, International Fibercom Inc. and All Star Telecom.
“As we strategically reposition PPL to focus squarely on high-performing energy companies in the U.S., the promotions of Greg and Stephanie will help us build on our strong performance record and create additional value for all stakeholders,” said Vincent Sorgi, PPL’s president and CEO.
In his new role, Dudkin will report to Sorgi and oversee PPL’s regulated utility operations in the U.S., with the heads of PPL’s Pennsylvania and Kentucky utility operations reporting to him.
In her new role, Raymond will oversee electricity delivery and customer service to 1.4 million homes and businesses in eastern and central Pennsylvania, as well as PPL Electric Utilities’ continued investments in infrastructure and technology to improve service to customers.
Joe Colalillo, chairman and CEO of ShopRite, speaks at the ShopRite of Bethlehem. PHOTO/SUBMITTED
Many young athletes dream of growing up and having their picture on a Wheaties box, but for staff at ShopRite stores, getting on a Cheerios box is the big honor.
Photos of 100 ShopRite associates will appear on limited-edition Cheerios boxes as part of an annual tradition recognizing associates for fighting hunger in the communities where ShopRite stores operate.
This year two Lehigh Valley staffers, Bethlehem ShopRite associates Kira Freeman and Terri Gudzinas of Easton, will be featured on the box.
The store associates are featured on the box, which was unveiled at in-store ceremonies, in recognition of their fundraising efforts to support regional food banks.
To earn a spot on the cereal box, ShopRite associates participate in the annual ShopRite Partners In Caring Cheerios Contest competition sponsored by ShopRite and General Mills.
The staffers helped to collect donations at check-out and in-store. The campaign also encouraged customers to round their grocery purchases up to the nearest dollar to help in the effort.
ShopRite and General Mills recognize the 45 top fundraising ShopRite stores. These winning stores then select two ShopRite associates to be featured on the Cheerios box. The customized cereal boxes are sold exclusively at ShopRite.
“This past year we saw food banks working overtime as more families found themselves facing food insecurity during the pandemic,” said Rob Zuehlke, ShopRite’s manager of Corporate Social Responsibility. “We’re proud to be able to support these regional food banks in the Feeding America network and extend a sincere thank you to our hardworking associates and generous customers who sustain this annual contest and make a difference in our communities.”
In addition to the unveiling, each ShopRite location presented a $500 donation to a local food bank, made possible by the prize money received from the contest.
The company-wide fundraising efforts this year raised $1 million for regional food banks.
The next generation is taking over at NovaTech in Quakertown.
Conrad Oakey will assume the role of CEO from his father, Volker Oakey, who will stay on as chair of the board of directors.
Volker Oakley has owned and led NovaTech since 1979. The company provides automation solutions for electric utilities and process manufacturers around the world. Over the years it has acquired companies such as GSE Systems in 2003 and Bitronics in 2008.
Recently, NovaTech made changes to integrate its power and process divisions to increase its ability to sell across its traditional market segments and streamline operations.
“With these changes, the time to introduce a new CEO felt right,” said Volker Oakey. “We have a strong and energetic group of leaders. Conrad has been preparing for this for most of his life. I could not be more proud to make this handoff. I am confident and excited about the future of the company.”
He noted that Conrad Oakey has been involved in the company since he was a young boy and has worked for NovaTech in a variety of positions for the past 23 years.
He was instrumental in developing the company’s digital presence, helped establish succession planning and increased the company’s media presence.
Since 2018 he has served as NovaTech’s vice president of strategy and communications.
He received a dual B.A. in Chemistry and Studio Art from Williams College in 1998. In 2013, he received an MBA from Duke University, Fuqua School of Business.
St. Luke’s University Health network Laboratory Services has been named the 2021 Lab of the Year by Medical Laboratory Observer.
MLO is a national peer-reviewed management source for lab professionals.
According to MLO Network Laboratory Services at St. Luke’s was judged on customer service, productivity, teamwork, education and training, strategic outlook and lab inspections and excelled in the criteria.
Laboratory Service has 469 employees performing more than five million tests per year through ten rapid response labs, which serve inpatient units and emergency departments. There is one core and one specialty lab and patient specimens are collected at 50 patient service centers around the Lehigh Valley as well as a mobile phlebotomy program. It also has 14 pathologists analyzing more than 50,000 specimens a year.
MLO cited such reasons as productivity and work to improve customer service as reasons for the honor.
2021’s MLO Lab of the Year also named one runner up: U.S. Air Force School of Aerospace Medicine’s Epidemiology Laboratory, which is located at Wright Patterson Air Force Base, Ohio.
St. Luke’s Laboratory Services and Epi Lab will be featured in the April edition of MLO.
Since 2016 Lehigh Valley International Airport has seen a 165% increase in cargo traffic — going from processing 47 million pounds of cargo to more than 126 pounds in 2019 and 210 million during the COVID-19 bump last year.
With the steady pace of air cargo growth expected to continue at the airport, the Lehigh Northampton Airport Authority is looking to develop a range of facility and infrastructure, including cargo, logistics and other airport facilities to help meet the demand.
The LNNA selected Aviation Facilities Company Management LLC of Dulles, Virginia, to plan and develop portions of the airport’s property for such use.
“Developing air cargo infrastructure remains a strategic goal for the Airport Authority,” said Thomas R. Stoudt, executive director, LNAA. “Partnering with the AFCO team on this important initiative will allow Lehigh Valley International to better serve our current air cargo demand, while providing expansion opportunities for new and existing businesses. This partnership will increase the ability of cargo carriers to serve the growing demand in our region.”
Over the last several years, the authority has evaluated a number of alternatives and reviewed proposals focused on air cargo growth options for undeveloped land on the airfield, he said.
The Airport Authority agreed that AFCO presented a strong vision that compliments the ABE Masterplan.
He said AFCO provides an experienced team and an established communication network for coordinating projects of this scope with the various regulatory agencies associated with on-airport development.
Peoples Security Bank & Trust Co. has hired Carmen Flosdorf as vice president commercial lending officer. She will be based at the West Tilghman Street branch office in Allentown.
In her new role, Flosdorf will be responsible for organizing and generating new commercial business activity in the form of lending, advisory and treasury services for privately-held, family-owned companies in the greater Lehigh Valley region.
“We’re very excited to have Carmen join the Peoples Security Bank & Trust team in the Lehigh Valley. With her impressive experience and track record in building long-term, meaningful relationships, we hold every confidence that she will be a valuable asset to the Bank in the years to come,” said Jeffrey Drobins, senior vice president and Lehigh Valley Market president.
Flosdorf comes to people security after 20 years with BB&T/Truist Bank, where she served as a Middle Market Banker.
During her tenure at BB&T/Truist Bank, she oversaw the strategic identification and delivery of integrated lending solutions across functional areas for mid-sized companies from various business sectors.
Flosdorf was recently named as one of LVB’s 2021 Women of Influence recipients.
Bio Med Science’s existing manufacturing line at its facility on Morris Court in Allentown. PHOTO/SUBMITTED
Bio Med Sciences Inc. is more than tripling its size as it moves its headquarters and manufacturing from its current space on Morris Court to a more than 40,000-square-foot space at 999 Postal Road in Hanover Township, Lehigh County.
The company manufactures products for burn treatment, plastic surgery and aesthetic skin care under name brands including Silon, Oleeva and SeaAllure.
Mark Dillon, president of the company, said the Bio Med has had great opportunities for growth in recent years that have been hampered by a lack of space and production equipment.
“We’ve been bulging at the seams,” Dillon said. “We’ve been hampered on working on new technologies because we can’t interrupt our production.”
As Bio Med moves into the new facility it will be adding newer, faster and more efficient production line, which will be used for ramping up production of the company’s major existing product lines. The existing equipment can then be dedicated to some of their smaller product lines and for research and development work.
“With the extra space and production lines we should have five to six fold the capacity we have now,” Dillon said. “That’s going to open up new opportunities for us.”
One area in particular of growth will be in providing products to the U.S. Military, which has been difficult to fulfil with the company’s existing space.
Dillon said Bio Med will also be looking to expand into new products and research new second-generation burn treatment and wrinkle reduction technology with the new production capability.
While adding the new production equipment won’t directly lead to new jobs as it is more efficient and automated than the current equipment, Dillon said the growth he expects with new product lines and markets should lead to hiring.
“We’re going to be staffing up in a couple of departments,” he said.
Renovations on the new space has begun and Dillon hopes to have office staff moved in by mid-May with production work up and running by early September.
NAI Summit represented Bio Med in the long-term lease of the new space.
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