MOUNTAIN TOP, PA-PepsiCo has finalized a 10-year lease for a 503,000-sf build-to-suit distribution center in Crestwood Industrial Park and will move in this fall. Chicago-based Higgins Development Partners developed the project for owner, JPMorgan.

Gene Preston, Higgins’ senior vice president, tells that after beating out competitors for development rights to a 70-acre tract in the park, which is controlled by the Greater Wilkes-Barre Chamber of Business and Industry, that it enlisted New York City-based JP Morgan to buy the land parcel at 545 Oak Hill Rd., fund construction and own the building. He says the land price cost $4.8 million. Preston declines to disclose the construction cost or aggregate value of the PepsiCo lease.

On condition of anonymity, a developer of such facilities throughout Eastern Pennsylvania tells the typical construction cost is about $55 per sf, which would take the BTS tag close to $28 million. He adds that “depending on the fit-out for a particular build-to-suit, the cost could be higher.” Also under condition of anonymity, a broker familiar with the Wilkes-Barre industrial market says the average asking rate for warehouse/distribution space in the area is $4.25 per sf.

Under the agreement with JPMorgan, the Purchase, NY-based PepsiCo has the option to develop an additional 200,000 sf on the parcel. Preston says there are no immediate plans to do so.

Crestwood Industrial Park is a 3.5-million-sf industrial campus. Among its occupants are Fairchild Semiconductor International, Phillips Lighting Co., Sealy and Gruma-Mission Foods.

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