2010 Global Market Report - NAI Commercial Real Estate

Allentown, PennsylvaniaBerks County, PennsylvaniaContactNAI Summit+1 610 264 0200Metropolitan AreaEconomic Overview2009Population2014 EstimatedPopulationEmploymentPopulationHouseholdAverage IncomeMedianHousehold IncomeTotal PopulationMedian Age810,773827,614366,200$68,490$57,23540The Lehigh Valley, located in eastern Pennsylvania, offersall of the amenities of major urban areas. The Lehigh Valleyis the third largest region in Pennsylvania. It is well situated,just 95 miles to New York City and 53 miles north ofPhiladelphia. The Lehigh Valley is an excellent location forbusiness and industry. The Lehigh Valley has 11 higherlearning institutions and healthcare facilities that have beenrecognized nationally and continue to grow in the region.The area consists of an enterprising and diversified economythat has led to higher-income jobs, a growing and thrivingpopulation and tremendous commercial and industrialgrowth in the region. The Lehigh Valley is home to some ofthe world’s top corporations in a variety of fields, including:Air Products and Chemicals, Inc., B. Braun Medical Inc.,Binney & Smith, Olympus and many others. Excellent transportationaccess also exerts an important influence on theLehigh Valley. The most important highways in the area areRoute 22, Interstate 78, which connects the Lehigh Valleywith Harrisburg to the west and New Jersey to the east, andmajor roadways such as Interstate 81 and 83 to the north.Route 22 provides fast, limited access between Allentown,Bethlehem, and Easton. The Extension of the PennsylvaniaTurnpike can also be accessed off Route 22 and Interstate78, which connects Philadelphia with Wilkes-Barre andScranton areas. The area is also served by the Lehigh ValleyInternational Airport.The Lehigh Valley market remains an attractive market toinvestors, importers, exporters, manufacturers and high-techcompanies. Developers, enticed by abundant land, favorabletaxes, the lure of railway access and infrastructure, continueto secure land positions along Route 22 and Interstate 78corridors. Rental rates in all markets have remainedrelatively stable despite the economy.The industrial market continues to be one of the regionslargest growth areas. Modern shopping malls, big-box andlifestyle centers remain popular. Several developments haverecently been completed, including Promenade in Sauconand Airport Center along Route 22.ContactNAI KeystoneCommercial & Industrial+1 610 779 1400Metropolitan AreaEconomic Overview2009Population2014 EstimatedPopulationEmploymentPopulationHouseholdAverage IncomeMedianHousehold IncomeTotal PopulationMedian Age403,204405,964190,940$68,129$56,58238.5Berks County competes for business in the New Jersey,New York and Maryland markets. Food companies, plastics,specialty metals and battery manufacturing are all wellestablished industries in the area. Medical and financialservices are key drivers in the office sector with technologybasedbusinesses rapidly emerging. Private/Public partnershipsare effectively linking the Penn Corridor from Readingto Wyomissing.The office market has shown mixed results. Class Avacancy and rental rates have experienced a slightdownturn, while Class B vacancy is down 10% and rentalrates remain flat. Vacancy in the Class C sector is upwith unoccupied properties accounting for over 1.1 millionSF. This spells opportunity for both tenants and buyers.Approximately 300,000 SF of office space was absorbed in2009 with a total of 450,000 SF of new space proposedfor 2010.Industrial inventory levels have risen sharply with 6.1 millionSF currently available. Approx. 826,000 SF of new productwas added during the past year. The market had negativeabsorption of 1,072,100 SF of product compared with243,000 SF of positive absorption the prior year. Lease ratesare down slightly with landlord concessions a commonoccurrence. Leasing activity is up as many users are unableto obtain financing. Gross sale of industrial product was up$23 million over the prior year for a total of $179 million.Sale prices were down 12% with a prices ranging from$51/SF for Class A space to $29/SF for Class C.Residential new construction is down 47% with developerssitting on over 2,000 approved, but unimproved lots. Notableretail projects include the 500,000 SF Exeter Commons anda 253,000 SF shopping center in Temple. The $75 millionWyomissing Square development is complete with 248apartments and a 135-room Marriot Courtyard. A 215-roomDoubletree has been proposed with completion scheduledfor 2010.Watch for a Technology Park to be developed at theReading/Berks Airport and the emergence of Bryne Eyre, a3,000 Acre PRD at the I-176 and PA Turnpike interchange.The BOSS 2020 program will enhance traffic flow and boostdevelopment of Sinking Spring Borough and its vicinity.Allentown At A Glance(Rent/SF/YR) Low High Effective Avg. VacancyDOWNTOWN OFFICENew Construction (AAA)Class A (Prime)Class B (Secondary)SUBURBAN OFFICENew Construction (AAA)Class A (Prime)Class B (Secondary)INDUSTRIAL$$N/AN/AN/AN/A17.0010.00$$N/AN/AN/AN/A25.6022.00N/AN/AN/AN/A$ 22.81$ 18.40N/AN/AN/AN/A14.5%16.8%Bulk WarehouseManufacturingHigh Tech/R&DRETAILDowntown$ 2.75N/AN/AN/A$ 7.75N/AN/AN/A$ 4.18N/AN/AN/A14.60%N/AN/AN/ANeighborhood Service CentersCommunity Power CenterRegional Malls$$$8.003.0010.00$$$28.5018.0040.00$ 13.86$ 10.02$ 16.728.9%3.3%4.2%DEVELOPMENT LAND Low/Acre High/AcreOffice in CBDLand in Office ParksLand in Industrial ParksOffice/Industrial Land - Non-parkRetail/Commercial LandResidential$$$$$N/A250,000.00115,000.0080,000.00200,000.0050,000.00$$$$$N/A300,000.00165,000.00125,000.00500,000.00110,000.00Berks County At A Glance(Rent/SF/YR) Low High Effective Avg. VacancyDOWNTOWN OFFICENew Construction (AAA)Class A (Prime)Class B (Secondary)SUBURBAN OFFICENew Construction (AAA)Class A (Prime)Class B (Secondary)INDUSTRIAL$$$$$$15.0012.008.0018.0016.0013.50$$$$$$18.0015.5012.5021.0021.0018.00$ 17.00$ 14.25$ 12.00$ 19.00$ 18.00$ 15.30N/A4.8%23.5%N/A13.9%12.1%Bulk WarehouseManufacturingHigh Tech/R&DRETAIL$$$3.002.904.75$$$4.104.004.75$$$3.503.296.3520.0%18.0%3.0%DowntownNeighborhood Service CentersCommunity Power CenterRegional Malls$$$$12.5016.0013.0013.25$$$$16.0021.5018.0016.75$ 13.25$ 18.25$ 15.25$ 15.0012.0%10.0%11.0%13.0%DEVELOPMENT LAND Low/Acre High/AcreOffice in CBD$ 6.00 $ 8.00Land in Office ParksLand in Industrial ParksOffice/Industrial Land - Non-park$$$130,000.0060,000.0048,000.00$$$250,000.00110,000.00175,000.00Retail/Commercial Land$ 155,000.00 $ 1,225,000.00Residential$ 25,000.00 $ 50,000.002010 Global Market Report ■ www.naiglobal.com 118