warehouses Archives

Automating warehouses not a threat to labor force

The use of automation in warehouses that have sprung up across Lehigh Valley won’t impact the workforce, at least for now.

“It used to be that automation would reduce labor,” said Kevvin Miller, director, Americas Consulting Supply Chain, CBRE. “But there are other parameters now, like scalability and flexibility.”

Shawn Furman, Advanced Manufacturing Technology Strategy manager, Manufacturers Resource Center in Allentown, agreed.

“The use of automation is or should be applied to a problem that a company needs to solve,” Furman said. “Most business are going to have a solid plan in place before investing, and that plan will have cost savings associated with it.”

The cost savings can include improving ergonomics, improved accuracy in order fulfillment, or reallocation or reduction of workforce.

“I listed reduction in workforce last because if you can’t find labor, you’re going to hang on to the staff you have and repurpose the workers displaced by automation into another area of your business,” he said. “It doesn’t make sense to layoff trained workers you have in hand, because you are still going to need a team to manage and maintain the automation.”

Miller said the use of automation increases the technical skills needed and most companies train their workers for the tasks. That can result in higher wages.

Only about 25% to 30% of warehouses in Lehigh Valley use robotics, Miller said. Most still use conveyors which requires more labor.

“With the labor shortage, that has become an issue,” he said.

When building a warehouse, Miller said, the companies go where labor is most available.

“Everyone has seen the challenges since COVID and that if forcing some companies to automate,” he said. “Labor is a tough thing.”

The increased need for automation has come from the increased demand for same day, next day and expedited delivery, Miller said.

“Companies are in business to stay in business, which means staying competitive by making wise decisions when faced with the challenges of labor shortages,” Furman said. “Many companies practice continuous improvement to identify waste streams (materials, time, labor) which drives actions to reduce or eliminate the waste identified.”

Automation is just one of many options to help a company tackle waste, but Furman said it’s often difficult to successfully implement without taking steps beforehand to really understand the problem.

“You can’t throw automation at a problem and expect that problem to magically disappear,” he said.

Miller said companies moving to automated systems are those who deliver orders that are less than a pallet. When entire pallets are ordered, a conveyor system will work. But when orders are for partial pallets or even one item, a robotic system is needed.

Even with a robot, Miller said human workers are needed because even though a robot can be programmed to recognize a product by reading a barcode, pallets can shift which would make the product difficult for the robot to identify.

“Robotics are cost effective for moving some items, but more costly for others,” he said. “A person will often have to pick items and hand them to the robots which take them to the packing areas.”

Furman said, too, if there’s a large warehouse requiring workers to walk long distances to manually pick components off shelves, software coupled with autonomous robots could be used to optimize paths of travel for workers.

“Other benefits include ergonomics where the neck and back are strained from driving a fork truck all day,” he said.

People are also needed to maintain the robotics, Miller, whose company creates training materials for robotic systems, said.

“It takes six to 10 months to train people and get systems ramped up,” he said. “They need to learn all the systems involved.”

Miller said automation will eventually reduce the labor force needed. With the demand for on-time deliveries, he sees automation growing to 75%.

“But if you think about how technology has changed over the last 10 years and we are still only at 25%, you can see it will take time,” he said. “So, it isn’t displacing labor now, not from what I’m seeing.”

“I think the future is bright as more automation is utilized,” Furman said. “The workforce will have the opportunity to take a step away from having to spend 8 to 12-hour shifts on the shop floor doing the same task(s) all day every day. Automation will lead to jobs that will be more meaningful and rewarding in the workforce, and that’s a great place to be heading.”

Warehouse plans for former Air Products site move forward

Plans to construct three warehouses on the site of the former Air Products headquarters are moving forward.

Wednesday night the Upper Macungie Township Planning board gave final approval for the plans to redevelop the property at 7201 Hamilton Blvd.

The project consists of the demolition of existing structures and associated underground utilities and the development of three commercial warehouses an associated waterline, sanitary sewer, storm sewer, and stormwater management facilities.

The three warehouses are expected to take up approximately 61of the 235 acres of the former Air Products property.

With the planning commission approval, the plans will next be before the Upper Macungie Township board of Supervisors at their July 6 meeting.

Air Products recently moved its headquarters to a new property approximately a mile away from this location.

Lehigh Valley continues to see high demand for industrial space

Despite high fuel costs and supply chain issues, Newmark Real Estate said the I-81/78 industrial market remains strong.

Demand for warehouse and distribution space shows no signs of slowing, the company said in its second quarter report that looked at Central Pennsylvania, Lehigh Valley and the Greater Philadelphia regions.

Newmark said proximity to a strong labor pool and easy access to consumers remain the top considerations for tenants in their efforts to minimize supply chain and transportation costs.

The Lehigh Valley submarket experienced nearly 1.0 million square feet of positive absorption bringing its year-to-date total to 2.8 million square feet, the report said.

Construction activity is booming, with 7.1 million square feet underway, all of which is expected to deliver over the next 12 months.

The overall vacancy rate for the Lehigh Valley submarket increased by 50 basis points quarter-over-quarter from 7.4% to 7.9% due to approximately 1.0 million square feet of new speculative construction that delivered and is available for lease, according to the report.

This new speculative space is not expected to remain available for long, as product of this type continues to lease quickly. Asking rental rates declined slightly since last quarter by 2.8% to a current average of $5.42/SF.

Notable leases inked this quarter included ABB taking 340,695 square feet at the recently constructed Carson 33 warehouse and distribution facility at 1000 Carson Court in Palmer Township.

Acadian Crossing Consumer Products also leased 214,653 square feet at 323 Logistics Drive located in the Hamburg Commerce Park in Shoemakersville.

The building is set to deliver in the first quarter of 2023.

Overall, demand in the central Pennsylvania region for newly constructed warehouse space remains robust, with over 30.0 million square feet of new construction underway, the report said.

Speculative construction continues to be leased at a rapid pace, typically before the delivery of a building or shortly thereafter, causing land prices to soar, the report said.

Strong momentum noted in the first three months of 2022 carried into the second quarter. The overall vacancy rate declined by 60 basis points quarter-over-quarter from 6.3% to 5.7% in the second quarter.

Overall net absorption was positive at 5.7 million square feet for the second quarter alone, bringing the year-to-date total to 12.0 million square feet.

Average asking rents declined slightly from $5.31 per square foot in the first quarter to $5.26 per square foot in the second quarter. That is up from $5.04 per square foot a year ago.

Currently, 30.5 million square feet is under construction. Overall vacancy declined to 5.7% in the second quarter, down from 6.3% in the previous quarter.

Local investment in warehouse growth fueled by consumer demand

Consumer demand is driving the warehouse boom in Central Pennsylvania and Lehigh Valley with ecommerce companies leasing more than half of the space.

That demand is expected to grow, and local and regional companies are investing in the development, according to CBRE.

Becky Bradley, executive director, Lehigh Valley Planning Commission –

Other space is occupied by food and beverage distribution and manufacturing companies, according to Becky Bradley, executive director of Lehigh Valley Planning Commission. Small to medium-sized businesses make up the rest.

Bill Wolf, vice president of CBRE, which tracks industrial development across the country, including Central Pennsylvania, said Lehigh Valley’s industrial sector and the region are seeing substantial growth from the scaling up of local manufacturing and logistics facilities.

Pennsylvania’s 78 and Interstate 81 corridor in Central Pennsylvania and the Lehigh Valley added the most leased large industrial space in the country in 2020, with 8 industrial leases of 1 million square feet or more added last year, according to a CBRE report.

Additionally, the I-78/I-81 corridor was home to 11 of the 100 largest industrial leases, coming in at almost 13 million square feet — larger than any single MSA (Micropolitan Statistical Areas) or city-sized region in the United States, CBRE said.

The region is close to the ports of New York, New Jersey, Baltimore, and Philadelphia. It also has access to rail service through Norfolk Southern and CSX.

In addition, Lehigh Valley International Airport is ranked one of the top air cargo markets in the country and one of the fastest growing, according to the Airports Council International’s 2021 report.

“The majority of the facilities are general retail and wholesalers – consumer products,” Wolf said. The reason for the growth, he said, is simply consumer demand.

Bradley said most of the warehouses are built on spec.

“They are giant boxes with a lot of flexibility inside,” she said.

However, the majority are leased before construction is complete or around the time of completion.

“We can’t establish traffic (during the planning stages) because we don’t know who is going in until they get there,” she said.

Steven Deck, executive director, Tri-County Regional Planning Commission, which covers Dauphin, Cumberland, and Perry counties, agreed.

“There’s no single or even small group of developers that stand out in our region, more a broad range of commercial/industrial real estate developers,” he said.

In terms of who leases the space, “unless there is a single lease holder like FedEx, UPS, Walmart, Amazon, Proctor & Gamble, etc. we don’t know who leases the space,” Deck said. “Many of these warehouses have unknown users at the land development stage, with such decisions often made well after the planning process is complete.”

“Generally, we see 35%-40% leased before completion,” Wolf said. “Inventory is low, so space is absorbed before completion.”

According to the CBRE report, investing in warehouse and industrial space is more risk diverse. Investors are more local than foreign.

Bradley agreed, saying development is happening by companies that specialize in it. Locally, CBRE, Prologis, Lee & Associates of Eastern Pennsylvania, National Logistics and J.G. Petrucci Company Inc. are among the major players.

Space not leased by ecommerce, food and beverage or manufacturing, are leased by small or even large businesses, Bradley said.

“It could be used for storage, which there is a need for,” she said.

Many of the warehouses, Wolf said, are operated by third party operators.

“It’s always been there, but we are seeing an increase,”

He explained the third-party operators offer accounting, human resources, outsourcing and other services that help companies run more efficiently.

“We are in unprecedented times with construction delays, supply shortages and even delays in approvals,” he said. “There is more demand than supply, so costs are going up.”

Nationally, there has been a 15% increase in rents in major markets, he said. In Central Pennsylvania, rates have climbed 20%, with Lehigh Valley seeing an average of $9-$10 a square foot and Central Pennsylvania seeing $7-$7.50 per square foot.

“The further away from major transportation routes, the lower the rents will be,” Wolf said.

“All the markets are hot” and developers are stretching out to find land suitable for development,” he added.

After Lehigh Valley, developers are stretching into Berks County, Wolf said.

York County, with access to the I-83 corridor, has been strong as well. With access to Baltimore and Harrisburg, companies have pulled labor from those markets and prospered.

Lancaster and Reading, however, have suffered because of Route 222, Wolf said. “The road to nowhere does not give good access.”

While the work being done on Route 222 is ongoing, those markets are still behind in the building boom, he said.

Cold storage is an area of real growth too, he said. “These garner premium rents because they are unique buildings, especially if the leasee needs the whole building.”

Cold storage is in demand not only by food companies, but pharmaceutical and chemical companies as well, he said.

The attraction to the regional market is also due to the labor market, Wolf said.

According to the CBRE report, the regional warehouse labor force was around 190, 500 in 2020. That is expected to grow 13.4% by 2030.

While the labor market is strong, Bradley said different companies require different numbers of employees, depending on the business.

“Look at Walmart, for example,” she said. “They have two warehouses side by side. One is for small items and the other is for large ones.”

Bradley said there could be a 50% difference in the number of employees needed. The warehouse that ships small items can employ 4,000 to 5,000 people while the one that ships large items requires less hands, she said.

“These facilities are becoming more automated all the time in the efforts associated with increasing capacity without huge increases in labor costs,” Deck said.

Bradley agreed. “There is a lot more automation going on.”

Wolf said AI will play a big part in manufacturing, in warehouses and in transportation.

“These companies are more tech savvy with understanding where goods are coming from and how much they need to keep on hand,” he said. “Automation brings on more efficiency through the whole process.”

Even with inflation on the rise, Wolf said the growth of warehouse space is expected to continue because rent is a small portion of the supply chain costs when looking at the cost of transportation, goods, and payroll.

LVPC expresses concern over warehouse proposal for Air Products site

A developer is looking to build three large warehouses at the former headquarters of Air Products in Upper Macungie Township. SOURCE/LVPC –

The Lehigh Valley Planning Commission has expressed serious concern over a proposal to bring three warehouse buildings, totaling more than 2.6 million square feet to the property along Hamilton Boulevard that formerly served as the headquarters of Air Products.

The LVPC staff report described the proposal for the Upper Macungie Township property as inappropriate for the space.

“The subject application as presented generally exhibits inconsistency with FutureLV: The Regional Plan,” the report said. “While the LVPC supports the overall intent to reuse and redevelop the site, the scale of the proposed development is not suitable for the location, which contains a mix of residential, commercial and industrial uses.”

Committee members offered their perspective during a meeting of the Commission’s Comprehensive Planning Committee, with most expressing concern over the impact on local traffic.

“I think this is a disaster waiting to happen,” said Commissioner Percy Dougherty. “The traffic problems are insurmountable in my opinion.”

While he said he does not oppose the building of warehouses on the site, the size and scope of the plans are concerning.

The committee members agreed and recommended forwarding staff comments to the full board, which include recommendations for what the LVPC would like to see happen as the development moves forward.

Noting that the property is nearby several high-crash corridors, the LVPC said they would like to see traffic impact studies revisited, noting that the study submitted did not include a number of major intersections because of current construction projects.

Other recommendations included improving pedestrian access to nearby residential and retail areas by installing sidewalks. The Commission also recommended the improvement of bike lanes and access surrounding the property and making changes that would facilitate public transportation through the Lehigh Northampton Transportation Authority (LANTA)

Another major concern was plans for the removal of a solar array that Air Products had installed on the campus.

“The solar panel farm was one of Air Products’ biggest attributes in terms of when it was installed. I don’t think it would be setting a good example to get rid of it,” Dougherty said.

The committee suggested that language asking the developer to preserve or replace the solar array be added to the official comments.

Becky Bradley, executive director of the LVPC, noted that the commission only serves in an advisory capacity and does not have the authority to approve or disapprove of a project.

“We lend advisory guidance to developers and municipalities as they negotiate out the project. There will be a lot of changes as a result of this process,” she said.

Lehigh Valley warehouse sprawl not easily contained

The rapid growth in the Lehigh Valley is a balancing act for those tasked with approving projects and improving roads and infrastructure.

The balance, however, is dictated, in part, by state laws that restrict municipalities from turning developers away if the area of interest is zoned for the proposed project, even if the infrastructure is not up to the increased demand placed upon it.

This is especially true with the rapid growth of warehouses outside of the industrial parks in the valley.

The Lehigh Valley Planning Commission is now working to join municipalities together to coordinate their municipal plans, a move that could place industrial growth where it can be supported while leaving rural areas free from development.

Gregg Adams, planner for South Whitehall Township, said the township has approved five warehouses, three of which are built, one is under construction, and one hasn’t broken ground yet.

“We have newer ones because (the county) is running out of space along I-78 and developers are looking further away (from main thoroughfares),” he said.

Because the properties are new, Adams said the township is not seeing an increase in traffic yet. “Perhaps in five years we’ll have a better idea.”

South Whitehall Township is just one example of warehouses being built on farms or green spaces. The question among residents is “Why?”.

Becky Bradley, executive director of Lehigh Valley Planning Commission, explained that state law mandates that each municipality have a comprehensive plan that allows for all possible zoning uses. If a developer presents a plan that fits in the zoned use, often times officials’ hands are tied.

Adams agreed. “The Pennsylvania Municipal Planning Code tells us what we can and cannot do. It lays down the law.”

While municipalities can zone the way they want, Adams said, under the law, they must allow for all types of uses.

“Once we adopt an ordinance, if an application comes in and meets the permitted use, we have to allow it,” she said.

But municipalities’ hands are tied when it comes to infrastructure improvement. Bradley said they can require improvements to roads and buffer zones along the property’s frontage, but nothing more.

“You know when you’re driving down a two-lane road and suddenly it goes to four lanes for a short distance before going back to two lanes? That’s why. We’ve all seen that,” she said.

Bradley said the planning commission has been working on this issue for several years. One way to get around the municipal code is to create a group of municipalities that coordinate their comprehensive plans. That way, she said, high intensity development can be put where it makes the most sense and low intensity or open areas can be preserved.

Right now, 31 of the 62 municipalities in the Lehigh Valley – Northampton and Lehigh counties – are in the process of creating four multi municipal plans.

“These things take time,” she said.

The four groups creating multi municipal plans are:

Slate Belt, which includes the boroughs of Bangor, East Bangor, Pen Argyl, Portland, Roseto and Wind Gap and townships of Lower Mount Bethel, Plainfield, Upper Mount Bethel, and Washington.
Nazareth Area, which includes boroughs of Bath, Chapman, Nazareth, Stockerton, and Tatany and townships of Bushkill, Hanover, Lower Nazareth, Moore, and Upper Nazareth.
River Central, which includes the boroughs of Catasauqua, North Catasauqua, and Northampton and townships of East Allen and Hanover.

North Lehigh, which includes Slatington Borough and the townships of Heidelberg, Lynn, Lowhill, Washington and Weisenberg.

In the meantime, the planning commission has created a regional plan that shows where development can be accommodated and where it can’t. That plan, though, is just a guide, as the ultimate decision to approve a plan lies with each individual municipality.

Lamont McClure, Northampton County executive, is taking another approach to quelch the influx of warehouses. He’s working to preserve farmland.

Warehouses “are a bad thing,” he said. “I’ve said consistently that we need a balance of job creation with open spaces, parks and land that is useful. The proper place for warehouses is in industrial parks. They are not appropriate in farm fields.”

Pennsylvania is a right to develop state, so a developer can do whatever he wants with the land he owns. “The planning commission has no power, but it does have a role to educate the public about what can and can’t be done,” McClure said, adding that they have started stepping up in the past five or so years.

“We are the sixth-largest region along the Boston-Washington corridor. Because we are so close to millions of consumers and we have so much farmland, we are a target for development,” he said.

Both Northampton and Lehigh counties are on top of farmland preservation, he said. Municipalities can preserve land, but the cost can be high, so it’s up to the counties.

“Many farmers are willing to take a little less money to make sure their farm is preserved,” he said. “It is our job, our duty to do this.”

The growth in the industrial sector started with Hurricane Sandy in 2012, Bradley said.

“It started with grocery store chains, which quickly realized a need for storage of goods. They started building logistics facilities here because we are not in a coastal zone and our taxes are lower,” she said.

Last year, of 13.2 million square-feet of space that was proposed, 11.7 million was warehouse space. “That’s just in one region,” she said. “But municipalities are getting wise to this, and 1.5 million square feet of manufacturing space and 3.5 million square feet of warehouse space was approved by local governments.”

Bradley said most of the projects approved had to be under the current ordinances because the municipalities weren’t in multi municipal plans. “This still leaves quite a bit (of projects) out there to process.”

George Lewis, vice president of marketing and development research for Lehigh Valley Economic Development Corporation, said the Valley’s location and the supply chain issues make it a focal point for industries looking to build.

“It’s inevitable they are going to come,” he said. “We want to help municipalities weigh these options against other industries to come up with the best plan for them. Ultimately, it is their decision.”

The LVEDC, he said, is promoting the Lehigh Valley to life sciences, food and beverage manufacturers, offices and manufacturing.

“Distribution and logistics happen naturally; we don’t need to promote it,” he said.

David Burke, a founding member of South Whitehall Township Concerned Citizens, formed to fight warehouse development, said he’s been interested in the warehouse issue for four years, ever since a 1-million-square-foot facility was proposed in his neighborhood.

It was built because it was zoned for light industrial, he said. It was built on spec, so it isn’t full yet and truck traffic has not been an issue.

“My concern is the amount of traffic we have now and the infrastructure that can’t support it,” Burke said. “I live near the junction of routes 309 and 22. If we venture toward the Promenade Shoppes (at Saucon Valley) between 3 and 6 p.m. we take our lives in our hands.”

As part of the concerned citizens group, Burke attends most Lehigh Valley Planning Commission meetings as well as those in his township.

“We are becoming a valley of trucks. How can we deal with this with the disconnects in each township,” he asked.

“If there was some way Lehigh Valley could say this is how many warehouses we can have and this is where they go, it would be great. But it’s up to the individual townships.”

Burke pointed to the Greentree Nurseries property, where large trees were grown for sale to retailers. Burke said the property was zoned light industrial and was in the family for generations. When the owner decided to retire, he sold to a developer and now the property is a warehouse complex.

“I attended all the meetings and people were fighting against it. The owner angrily told us we were trying to ruin his retirement. South Whitehall went along with the development because the zoning allowed for it,” he said.

Zoning laws will take time to change, Burke said. “I don’t know how easy it is to change the laws and I don’t want to stagnate, but I don’t want overgrowth where the infrastructure can’t keep up.”

Lehigh Valley ranks among industrial growth leaders

E-commerce was on the rise before the pandemic first swept across the country two years ago.

But the initial outbreak, and resulting stay-at-home orders, began a spike in online shopping that shows little sign of slowing.

That, in turn, has fueled an increased demand for, and construction of, distribution space – particularly in the Lehigh Valley.

In fact, according to a study of the top 11 regions in the country, there has been a 25% increase in growth since the global financial crises of 2007-2009.

The Lehigh Valley region, for the Transwestern study includes all areas shaded in blue. MAP/PROVIDED –

Transwestern Development Company, which does business in the Lehigh Valley and throughout the country, did a study of the 11 fastest-growing areas of the country and the Lehigh Valley, which for their report includes most of Southcentral Pennsylvania and the Lehigh Valley, showed the area was ranked first in four categories the study looked at.

The region led in investment growth, investment growth future, net absorption and rent growth, the company said.

Matt Dolly, author of the Elite 11 report, said the company wanted to track the top 11 growth areas in the country that continue to “lure global investors of industrial real estate.”

“The Lehigh Valley has grown so much, we decided to include the region in our report,” he said.

New Jersey has been so built up that demand has outpaced what it has to offer, so Lehigh Valley has benefited from that, he said.

“You would think the area would [only] support smaller spaces, but in the last year, we’ve seen large warehouses going up,” said Dolly.

In fact, in the last year, Lehigh Valley-Central PA region reported a 4.8% annual growth in occupancy gains, which equates to more than 30 million square feet for a total of 642 million square feet.

“The taxes are lower, there is still more land, and the population is growing,” he said. “According to the 2020 census, Lehigh Valley showed an increase in population where the rest of the state hasn’t.”

That, he said, means a larger workforce pool.

Brian Banaszynski, Northeast regional partner for Transwestern Development Logistics Group, who oversees the company’s business in the region, said e-commerce has grown 16 percent overall in the region since the pandemic began. While e-commerce was growing one to two points a year pre-pandemic, COVID-19 created a jump in that growth by five points.

“Online grocery sales have grown significantly,” he pointed out. “In 2019 there were $2 billion in online sales. When you look at 2021, you see a jump to $9 billion.,” he said. “That is huge.”

Banaszynski noted that the increase demand for product can be seen in the increase in activity at the New Jersey and New York ports.

In 2019, 600,000 cargo containers moved through the ports. In 2021, that number jumped to 800,000.

Those products must go through the logistics facilities to get to the end user.

“That’s why Lehigh Valley is so hot,” he said, pointing out the increased use of cold storage facilities.

And, Dolly said, warehouses are now beautiful properties compared to the dingy sites they used to be, so they are drawing populations in.

“The area has been hot for a while,” said Tom Palisin, executive director of the Manufacturer’s Association, York. “Our highway infrastructure offers access to most of the country, most within a one-to-two-day drive. And space is more affordable. We are not Washinton D.C., Philadelphia or Boston so it’s a smarter investment with similar access to the same markets.”

George Lewis, vice president of marketing, communications and research for Lehigh Valley Economic Development Corporation, said, “The Lehigh Valley continues to see consistent activity and interest in the manufacturing and logistics sectors. We ended 2021 with low industrial vacancy rates and average asking rents that increased by double digits over the previous year.”

“More than 5 million square feet of industrial space was under construction by the end of 2021, and vacancy rates in industrial space averaged 4.1 percent, down from an already low 4.9 percent the year before,” he said.

Banaszynski explained, “the vacancy rate dropped 42 percent even with the growth of new construction.”

In 2018, he said, the vacancy rate with 73 million square feet of space was 5.5-6 percent. In 2021, with 91 million square feet of industrial space, the vacancy rate is 3 percent.

In addition, in mid-2021, rent growth increased 13 percent, he said.

“That was the highest among the Elite 11.”

In the region, Transwestern has 10 million square feet of warehouse space, either completed, under construction, under contract or in the planning stages. Most of the activity is concentrated around Route 100 and Route 222.

“We have a 2-million-square-foot site in the Lehigh Valley right now,” he said. “I can’t disclose where because it is still under contract.”

And while the demand for larger warehouse space remains, it is slowing in the Lehigh Valley as land becomes harder to find. Banaszynski said developers are moving east into Phillipsburg as well as west into Hamburg and other sites.

“The boundaries have grown to accommodate more growth,” he said.

Palisin agreed. “Space is running out, especially along the I-81, I-78 corridors.”

Manufacturers, he said, are doing well with the high demand for products. They are still facing supply chain issues, so many have already filled orders for this year.

Even with the population growth in the region, the size of the workforce is still an issue.

“Every industry is doing well, so employees have choices,” said Palisin. “We didn’t have this before. Hiring usually runs in cycles. But when everyone is hiring at the same time, it thins the [worker] pool.”

Lewis said LVEDC is focused on marketing the region’s economic assets for such target sectors as life sciences, food and beverage processing, professional business services, and advanced manufacturing.

“We’ve seen a high demand for smaller-footprint industrial buildings in the Lehigh Valley, particularly in the 40,000 to 80,000 square-foot range,” he said. “There is a shortage of buildings in that size range in the Lehigh Valley, and LVEDC continues to communicate the need for these buildings to regional developers.”

ASB acquires Lehigh Valley West Industrial Portfolio for $77.6 million

ASB Real Estate Investments (ASB) has acquired Lehigh Valley West Industrial Portfolio, Berks County, for $77.6 million in a joint venture with an affiliate of Endurance Real Estate Group (Endurance).

ASB, based in Washington D.C., made the 929,250-square-foot industrial investment on behalf of its Allegiance Real Estate Fund, an $8.3 billion core vehicle.

Berks Corporate Center, PHOTO/PROVIDED –

Of the portfolio’s 12 buildings, nine buildings totaling 466,420 square feet are in the Berks Corporate Center, a concentration of infill, light industrial facilities providing direct access to a multi-directional interchange at PA Route 61 and US Route 222 in Reading, Endurance said in a press release.

The largest building in the portfolio, 184 Tuckerton Road, with 392,030 square feet, is located across the street from the Berks Corporate Center in the Route 61 Distribution Center.

Two others, 10 Vanguard Drive, a multi-tenanted 57,600 square-foot shallow bay facility, and 650 Lincoln Road, a single tenanted 13,200 square-foot light industrial building are situated within the Lincoln Corporate Center, approximately 12 miles southeast of the Reading buildings via Routes 61 and 422.

“This acquisition continues one of our long-term strategies of buying well-located but difficult to replace light industrial assets,” said Jared Newman, senior vice president of Acquisitions for Endurance. “We remain bullish on Berks County, and specifically the Reading-area submarket, as we have been for more than a decade.”

The portfolio is leased to a variety of tenants ranging from large multinational corporations to regional service-oriented companies. Located just west of the Lehigh Valley, the location provides easy access to highway infrastructure that places six of the top 10 U.S. metropolitan statistical areas and 60% of the Canadian population within a one-day truck drive, the company said.

“This investment provides an excellent opportunity to own a well located, infill industrial portfolio with access to a strong labor base and proximity to one of the premier industrial markets in the country,” said Brodie Ruland, ASB managing director and co-head of Acquisitions. “The Lehigh Valley offers a robust labor pool and is situated within two hours of New York ports and within a one-day drive of 48% of the U.S. population.”

Endurance, of Radnor, PA., also recently completed the sale of three Class A warehouses in the Reading area known as Berks 61, 270,000 square feet and Berks 222, 160,212 square feet, and 167,492 square feet.

The acquisition adds to ASB’s $ 1.5 billion in industrial asset purchases since 2018. Its nationwide industrial portfolio across most major distribution markets now totals more than 13.3 million square feet, Endurance said.

The investment is ASB’s fifth with Endurance Real Estate Group. The National Partners Team of CBRE arranged the sale on behalf of Continental Capital Partners, a private investment firm, based in Virginia Beach.