YORK COUNTY INDUSTRIAL | TIGHT MARKET PERSISTS AS VACANCY APPROACHES 2%, 4.2 MSF UNDER CONSTRUCTION TO HELP MEET DEMAND
- Vacancy falls a further 85 basis points to a historic low of 2.08%.
- Real estate developer, CRG, sold their 311,920 SF warehouse at 950 Woodland View Dr., York for $45.5M. The facility is at 40% occupancy and accounts for 64% of sales volume in York County.
- Demand remains highest for users seeking space less than 10,000 SF. There is a deficit of approximately 125,000 SF for this size category and possible opportunity for landlords willing to carve up larger units.
- Headwinds from inflation, rising interest rates, and increases to material handling and transportation costs may suppress the growth seen over the past two years.
YORK COUNTY OFFICE | YEAR STARTS WITH UPTICK IN DEMAND FROM SMALLER OFFICE USERS, POTENTIAL SLOWDOWN AMIDST ECONOMIC UNCERTAINTY
- A plethora of economic factors are coalescing, making predictions for the office sector difficult. Although unemployment remains on the decline, effects from inflation, labor shortages, rising interest rates, supply chain disruptions, and threats from global conflict continue to work against progress made in the economic recovery.
- Q1 2022 is the highest performing quarter since the start of the pandemic in terms of square feet sold. 240,000 SF sold this quarter.
- Although rate of decrease is slowing, vacancy remains at a five-year low falling 53 basis points in Q1.
- Absorption starts the year negative after trending positive for 2021.
- Lease rates received a boost from Class A units leasing upwards of $20/SF.
YORK COUNTY RETAIL | POSITIVE START TO 2022, STRONG DEMAND AS ABSORPTION TURNS POSITIVE AND VACANCY FALLS 56 BASIS POINTS
- Positive start to the year despite potential growth barriers.
- Positive absorption in Q1 as more square feet was leased than made available.
- Vacancy fell 56 basis points to 5.1%.
- Sale volume is at its highest level since Q4 2020.
- Raymour & Flanigan, a New York based furniture company, purchased the former Wolf’s Furniture location at 380 N. Northern Way, York for $5.25M.
"Q1 2022 is the highest performing quarter since the start of the pandemic in terms of square feet sold. 240,000 SF of office space sold this quarter."
LANCASTER COUNTY INDUSTRIAL | MARKET REMAINS TIGHT AS VACANCY PLUMMETS BELOW 1.5%, INSTITUTIONAL INVESTORS BOOST SALE VOLUME IN Q4
- Vacancy dropped for a fifth consecutive quarter and trending below the national vacancy rate of 3.7%.
- Low vacancy is expected to continue throughout 2022 as demand remains elevated and the construction pipeline remains shallow.
- 1405 & 1473 Zeager Road, Elizabethtown were included in a nationwide portfolio purchase totaling $2.3B.
LANCASTER COUNTY OFFICE | VACANCY SHRINKS 32 BASIS POINTS, LEASING ACTIVITY CONTINUES AMIDST ECONOMIC UNCERTAINTY
- A plethora of economic factors are coalescing, making predictions for the office sector difficult. While the Lancaster EDC reports positive findings regarding declining unemployment1, effects from inflation, labor shortages, rising interest rates, supply chain disruptions, and threats from global conflict continue to work against progress made in the economic recovery.
- Demand for larger office space continues to decrease. Since 2017, average unit size of signed office leases has decreased 67.84%from 6,463 SF to 2,078 SF.
- 86% of leases in Q1 were attributed to units less than 5,000 SF. 37% of vacant units are 5,000 SF or less.
- The construction pipeline remains shallow with Penn State Health Medical Center at 2160 State Road in East Hempfield Township accounting for 95% of new construction. The facility is due for completion in Fall 2022.
LANCASTER COUNTY RETAIL | VACANCY HOLDING BELOW 4% AS LEASE RATES INCREASE, AUTO USES ACCOUNT FOR 54% OF SALES VOLUME
- Tenants are becoming more selective on pricing, moving quickly on well priced, well positioned space.
- Online exclusive retailers are requesting brick-and-mortar space to showcase and sell their brands.
- The Lancaster County EDC Intelligence Report cited “worry over current conditions but shared an improved outlook over where the local economy is headed.”
- Redevelopment plans to revitalize underperforming retail centers are planned for the U.S. Route 30 corridor in East Lampeter Township.
