X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

PHILADELPHIA-Best known for its 35 million sf of manufacturing and distribution space, the Lehigh Valley is now aggressively marketing office space, according to a report by Michael Bartolacci, vice president of Chatham, NJ-based The Garibaldi Group, who heads his firm’s newly opened office in Bethlehem, PA. “Industrial users are continuing to expand in the area, albeit at a slower pace,” he says.

The Lehigh Valley office market consists of more than 7 million sf, according to Bartolacci, and the vacancy rate is approximately 15%. “Asking rates for class-A space are between $17 and $18 per sf,” he says, adding, “there are several new class-A units and sublease availabilities, encouraging landlords to become more aggressive in their leasing practices.

“A trend in the region is the construction of office buildings in Downtownmarketplaces,” Bartolacci says. He cites Liberty Center in Downtown Bethlehem, leased by Fireman’s Fund Insurance, and the new 80,000-sf Broad & New Building, also in Bethlehem. In addition, he notes that Pennsylvania Power & Light is currently building a 209,000-sf facility in Downtown Allentown, which will include 30,000 sf of retail.

Meanwhile, nearly 2 million sf of new industrial space came on the market in 2001. That, plus the overall economic climate, has also led to bargaining.

“While the average asking (industrial space) rental rates dropped from (a range of) $4.35 per sf to $4.50 per sf in the beginning of 2001, deals are now closing at below market rents (or) less than $4 per sf,” he says.

Bartolacci expects the industrial market to stabilize “in the near future,” and rental rates to return to their previous range, with office rates following suit. “However, most developers will continue to avoid speculative office development without a lead tenant in place,” he concludes, “thereby limiting their exposure and the potential for over-development.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.