If there was one clear takeaway from Philadelphia’s industrial market performance last year, it was that investor demand was red hot for nearly all types of distribution properties.
Deutshce Bank’s DWS Group acquired two of Dermody Properties’ newly delivered South Jersey distribution centers, 2320 Center Square Road, and 2650 Oldmans Creek Road, for between $90 and $95 per square foot, despite the fact that both properties were unleased upon delivery.
A range of smaller firms, including Endurance Real Estate Group and Burton Real Estate, also successfully sold older properties they had acquired, renovated and leased-up within the past 36 months, often realizing large capital gains in the process.
But as the record-breaking levels of industrial leasing that prevailed during 2016 and 2017 are fading further into the rearview mirror, a noticeable divergence is emerging.
Speculative development is adding millions of square feet of unleased, modern distribution centers to Philadelphia’s inventory. Amazon’s leasing in the region has slowed and options are quickly growing for tenants looking for newly delivered space with clear heights of 30 feet or more.
At the same time, vacancies have never been tighter among older properties with lower ceilings, as more traditional industrial tenants compete for a limited inventory of affordable space.
Our latest Philadelphia industrial market video update dives into these trends in more detail, to help investors understand opportunities and risks emerging in 2020.
*Article courtesy of the CoStar News, Adrian Ponsen
For more information about Philly industrial space or other Philadelphia commercial properties, please contact the team at Wolf Commercial Real Estate, a leading Philadelphia commercial real estate broker that specializes in Philly industrial space at 215-799-6900.
Wolf Commercial Real Estate is a Philadelphia commercial real estate brokerage firm that provides a full range of Philadelphia commercial real estate listings and services, marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Philadelphia commercial properties for buyers, tenants, investors and sellers.