LVB.com – Commercial Real Estate Enjoying Slow, Steady Growth

Local experts say commercial development in the Lehigh Valley is back on track for steady growth.

“There’s no question that everyone saw that it slowed down, (but) we’re definitely in the middle of a modest uptick,” said James Balliet, president of The James Balliet Commercial Group.

“The reality is that real estate is cyclical. It will come back; it’s just a mater of time unless something crazy happens. You just never know, that’s what the scary part is. Overall…we are positioned very well and I honestly do think we’ve seen the worst.”

Even when things slowed down, they never got too bad, he said.

“The Lehigh Valley is pretty active, even through the worst of times it held up nationally because of proximity to major cities of Philadelphia and New York,” Balliet said.

Balliet’s company specializes in shopping center sales and leasing; it currently handles 160 properties. His client list includes Cabela’s Ventures, JG Petrucci Co. and Developers Diversified Realty.

On the retail property front, discount stores and fast food franchises were making moves during the economic slowdown.

“Those types of retailers, when the economy was at its lowest point, really thrived,” Balliet explained.

Balliet said he’s seen an increase in service-type retail centers, such as emergency medical centers and the like.

Balliet has two projects in the works: a 7,000-square-foot strip shopping center planned for just south of the Route 33 interchange on Route 248 in Nazareth and a two-acre job that abuts the Airport Center Shopping Center.

In a previous interview with Lehigh Valley Business, Peter Reinke, the vice president of regional development for the Lehigh Valley Economic Development Corp. (LVEDC), noted a trend towards downtown redevelopment. Projects such as Allentown’s Neighborhood Improvement Zone (NIZ) and the Pomeroy Building in Easton are examples of this, he said.

“I’d love to see more development not just in the cities but in the boroughs, like Hellertown, Bangor and Macungie.

They have land types that are key and we are working to develop them,” Reinke said.

Another area that’s prime for redevelopment is in South Bethlehem near the Sands Casino, he added.

In terms of commercial industrial and office space, Hawley Realty President Amy Hawley said, things “getting better, land is starting to sell which means new construction and that’s a nice sign to see.”

Hawley Realty deals mainly in office and commercial industrial spaces and has seen business double since 2008-’09. Hawley said 40 percent of her business is office space; the remaining 60 percent of the company’s business is industrial space.

“The overall growth is steady. We’re getting a lot more prospect inquiries, so that’s encouraging,” said Hawley.

In terms of warehouse or industrial uses, land that is especially valuable is located near industrial and business parks where infrastructure such as sewer and water are already in place.

Companies from inside the region and not just those from beyond are looking for land in the Lehigh Valley, which is another good sign of the strength of the Valley’s economy.

“We’re finding a lot of activity in the 10,000-50,000-square-foot range,” Hawley said. In general, those looking for warehouses want buildings with loading dock doors, highway access and higher ceilings. More customers want 24-foot ceilings as opposed to the 18-foot ceilings that were previously popular.

“We’re one of the few regions in the country where new industrial construction going on,” said Hawley.

“We’ve got a good highway system, a good business environment, we’re business-friendly, our real estate taxes lower than major metro markets that surround our region and our interest rates are lower.”

In a recent interview with Lehigh Valley Business, NAI Summit Business Manager John Crampsie expressed similar sentiments.

He noted that many clients are surprised to discover that it’s harder to find warehouse space in the Lehigh Valley because they’re “used to reading about a glut in the market.”

Hawley is also seeing more companies looking into whether they’re using their space efficiently, too.