Duke Expands Portfolio in Keystone State
- Aug 19, 2015
Duke Realty Corp. has acquired a Pennsylvania industrial portfolio, West Hills Building B, a newly constructed 232,655-square-foot warehouse-distribution center in the Lehigh Valley developed by Hillwood Investment Properties of Dallas.
The price was not released. The building in the West Hills Business Center, a 230-acre industrial park in Kutztown, Penn., was completed in May and has already been fully leased to NFI Distribution. West Hills Building B is adjacent to West Hills Building A, a 980,000-square-foot, fully leased bulk warehouse that Duke also owns.
“The acquisition of this top-quality building is in alignment with Duke Realty’s focus on top-quality industrial assets in Pennsylvania and other strong distribution markets,” Jeff Palmquist, senior vice president, Northeast Region, said in a prepared statement. “This purchase also is reflective of our desire to grow our presence in the Lehigh Valley because of its superior interstate access, strong labor base and access to densely populated areas, including New York, New Jersey, Philadelphia and Baltimore.”
West Hills Business Center is located at I-78 and PA-863. The property is about 75 miles from Philadelphia and 100 miles from New York City.
The acquisition of West Hills Building B brings Duke Realty’s Pennsylvania portfolio to 4.7 million square feet. Also in the Lehigh Valley, the REIT is developing a speculative 1.1 million-square-foot bulk industrial building at the 33 Logistics Park at Chrin Commerce Centre. The property, just off Route 33, is expected to be completed by late 2015 or early 2016.
The regional industrial market continued to strengthen during the first two quarters of 2015, according to Colliers International’s Q2 2015|Industrial Research & Forecast Report Eastern Pennsylvania, Southern New Jersey, Delaware. The Lehigh Valley had the lowest vacancy rate in the region, 3.8 percent, and the highest asking rent – $4.93 per square foot, the Colliers report stated. The report also noted that over 60 percent of the 8.7 million square feet under construction in the region was speculative.
Duke, an Indianapolis-based REIT that specializes in owning, managing and developing industrial and office properties, recently opened a regional office in Conshohocken, Penn. Palmquist, a veteran Duke executive, is responsible for the company’s growing portfolio of industrial portfolios in the Northeast, which includes properties in the Lehigh Valley, Central Pennsylvania and along the I-81 corridor; Northern and Southern New Jersey; Baltimore; Delaware and Northern Virginia. He will be overseeing leasing and management of existing properties and identifying new development and acquisition opportunities as well as build-to-suit developments.
“Our portfolio has grown exponentially in this region of the country in the past three years, and we anticipate that this area will be an ongoing growth market for us in the future,” Palmquist added in a prepared statement about the new regional office. “We have acquired quality properties throughout the region and have demonstrated our construction capabilities with the development of two buildings in New Jersey, a 1.1 million-square-foot distribution facility in Delaware and our in-progress 1.1 million-square-foot distribution facility at 33 Logistics Park Building One at Chrin Commerce Centre located on the east side of the Lehigh Valley.”
Duke, which has been disposing of numerous suburban office holdings as it focuses more on industrial and medical office properties, is also developing a 589,362-square-foot, build-to-suit bulk industrial building in Hutchins, Texas, for Shippers Warehouse, Inc.