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. 

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. 

Sale of farmland could prompt industrial development in Forks Township

The sale of 32 acres of farmland in Forks Township could prompt the development of a new warehouse or other type of industrial use on the land. (PHOTO/SUBMITTED) –

The recent sale of about 30 acres of farmland in Forks Township could prompt the development of a new warehouse or other type of industrial use on the land.

Lisa Meszler Lyon, an agent with ALT Realty of Bethlehem, said she represented the seller, Ike Holdings LLC in the sale of 197 Padula Road in Forks Township to Northampton Farms LLC, an entity of Jaindl Land Co. of Orefield.

Meszler Lyon said the transaction took a year and a half to close and the land is vacant farmland.

The property covers 32 acres, zoned general industrial.

Though he declined to disclose the sale price, David Jaindl, owner of Jaindl Land Co. said he does not have a feasible user for the site.

“It’s premature to talk about the potential buyer for the site,” Jaindl said. “Ultimately, it’s going to be developed as an industrial property.”

Township planning commission records from a January 2019 meeting show a representative from Maser Consulting submitted a sketch plan for the property that presented a 389,400 square foot warehouse.

The project was also recently discussed at a planning commission meeting in December but no action was taken.

Two logistics giants plan to merge in $12.6B deal

This image shows a completed industrial building owned by Liberty Property Trust in Hamburg Commerce Park, which began construction off Route 61 in Berks County. (Submitted) –

A real estate company with a 26-million-square-foot industrial portfolio in Pennsylvania, many of them properties throughout Lehigh Valley and Central Pennsylvania, could merge with a San Francisco-based multinational real estate investment trust.

Prologis Inc. and Liberty Property Trust said both companies have agreed to a merger where Prologis plans to acquire Liberty in an all-stock transaction valued at about $12.6 billion.

The transaction should close in the first quarter of 2020, if it meets approval of Liberty shareholders and other customary closing conditions.

“Liberty’s logistics assets are highly complementary to our U.S. portfolio and this acquisition increases our holdings and growth potential in several key markets,” said Prologis chairman and CEO Hamid Moghadam, in a news release. “The strategic fit between the portfolios allows us to capture immediate cost and long-term revenue synergies.”

The transaction would increase Prologis’ presence in target markets such as the Lehigh Valley, Central Pennsylvania, Chicago, New Jersey and Southern California.

Many of Liberty’s properties in both the Lehigh Valley and Central Pennsylvania markets are in close proximity to each other, and are often newer properties. Liberty also has a corporate office in Bethlehem.

In a conference call about the transaction, Moghadam said the average property is about seven years younger than those in Prologis’ portfolio.

“Ninety percent of the whole portfolio is within three miles of a Prologis asset,” Moghadam said.

In the Lehigh Valley, the Liberty portfolio would bring 26 million square feet and an additional 4 million square feet in new construction.

“While Central Pennsylvania has experienced oversupply, the Lehigh Valley is much more constrained,” he added.

With a 3.8 percent vacancy rate in the Lehigh Valley, the officials said there is not much more space to build in that area going forward.

Once complete, the transaction would create a 900-million-square-foot portfolio that could generate about $60 million in annual savings, including $10 million from revenue synergies and $50 million from incremental development value creation.

Furthermore, the transaction could create immediate cost synergies of about $120 million from corporate general and administrative cost savings, operating advantage, lower interest expense and lease adjustments.

The officials described the transaction as a merger that would allow Prologis to acquire mostly industrial properties, including:

  • A 107-million-square-foot logistics operating portfolio with an 87 percent overlap with key markets;
  • 1 million square feet of logistics development in progress;
  • 1,684 acres for future logistics development with buildout potential of about 20 million square feet;
  • A nearly 5 million square foot office operating and development portfolio.




Report shows speculative development down in industrial market

A report examining the market in industrial growth for the third quarter showed a considerable drop in speculative development compared to last year.

The Pennsylvania Interstate 78/81 corridor saw occupancy gains of 2.2 million square feet but also a significant drop in spec development. (Submitted) –

In its research on the activity level of Pennsylvania’s Interstate 78/81 corridor, which includes parts of the Lehigh Valley, Berks County and Central Pennsylvania, CBRE said total spec construction starts for 2018 were at 15,109,356 square feet and 2019 year-to-date, CBRE is tracking 5,341,689 square feet of starts in the corridor. That represents a decline of about 10,000,000 square feet.

“The Lehigh Valley is still a great location and a lot of people are developing there,” said Vincent Ranalli, senior vice president at CBRE Inc. in Radnor. “As you get further west, I think that’s where they hit the pause button. We got off to a slow start but it picked up at the end. Now we have four or five deals out there, large scale tenants looking for space.”

Some of these potential tenants are with CBRE and some are with other firms, but Ranalli said he expects them to sign leases by the end of the year. These tenants are looking for space that’s 800,000 square feet or larger, he added.

“That will have an impact on which developers pull the trigger on the next spec building,” Ranalli said.

While a decline in spec development would signify there’s less demand for space and less confidence in the market, Ranalli said he sees evidence of strong demand based on interest from those tenants looking for large space, plus the continued strength of other types of tenants.

Those include food and beverage companies, automotive tire companies, e-commerce and companies that provide space for merchandise returns.

“More buildings are being set up to handle the volume of returns,” Ranalli said.

Generally, the growth of online shopping means companies want to be closer to the customers they serve, he added.

“We expect 2019 to finish strong just based on current activity.”

Companies typically sign leases toward the end of the year, he said.

The third quarter saw some significant transactions from large companies such as Keurig Dr. Pepper, which landed at Park 100 Logistics in Upper Macungie Township, Max Finkelstein Tire at exit 10 of I-78 in Myerstown and J.M. Smucker Co. at exit 37 of I-81 in Newville.

For the third quarter, the corridor saw occupancy gains of 2.2 million square feet, on par with the 2.1 million square feet of deliveries.

Construction starts totaled more than 3 million square feet as developers broke ground on new projects, mainly in Northeast Pennsylvania and the Lehigh Valley.

Now, the corridor has more than 17.3 million square feet of new development, which the report said was a record high for the corridor.

In addition, the corridor saw $132 million in total capital investment during the third quarter. Furthermore, institutional and private investors made up 56 percent of the buying pool, while real estate investment trusts and private investors made up the rest.

Average asking rents increased slightly from $4.56 per square foot in the second quarter to $4.58 per square foot in the third quarter and rents noticeably increasing in Northeast Pennsylvania.

The report said Northeast Pennsylvania might gain more attention from developers as land becomes scarcer in and around the Lehigh Valley submarket.

Furthermore, the report said speculative construction should slow down as the cycle continues to mature.