Mericle Adding 6 Industrial Buildings in Pennsylvania
- May 01, 2019
Mericle Commercial Real Estate, a privately-owned commercial real estate development and brokerage company in northeastern Pennsylvania, has started construction on six speculative industrial and flex buildings in CenterPoint Commerce & Trade Park in Jenkins Township and Pittston Township, Pa.
The buildings will range in size from 42,000 square feet to 310,000 square feet, totaling 802,000 square feet. They will complement four large industrial buildings recently constructed by Mericle at the site that can accommodate tenants needing from 200,000 square feet to 1 million square feet. Upon completion in late 2019, CenterPoint will feature 43 buildings totaling 10.7 million square feet. There are currently 51 tenants employing about 5,500 workers and that number is expected to increase to about 7,500 upon full occupancy.
Mericle President Robert Mericle said all the new buildings can be divided into smaller spaces. Several will be flex buildings suitable for manufacturing, distribution, office and medical firms.
“For the past several years, there has been strong interest from distribution and manufacturing firms needing bulk industrial space in excess of 200,000 square feet,” Mericle said in a prepared statement. “However, lately we have seen a noticeable increase in requests for smaller spaces ranging from 6,000 square feet to 60,000 square feet. Most of our small spaces at CenterPoint are occupied so our 2019 projects will help us meet the needs of a wider variety of businesses.”
Mericle said the strong economy coupled with the requests for smaller spaces led him to the decision to construct the new spec buildings.
“There are many companies that lease space in outdated buildings. They are hampered by low ceilings, narrow column spacing, tight truck courts and lighting and heating systems that are not energy efficient. Some are even located in buildings in residential neighborhoods that are located a considerable distance from the nearest highway,” Mericle said. “Our new CenterPoint buildings will give them the opportunity to move to a much better, energy-efficient space, immediately adjacent to two interstates, at a lower overall operating cost.”
CenterPoint is less than one mile from Interstates 81 and 476 and 10 miles from Scranton, Pa., and Wilkes-Barre, Pa.
Changing Industrial Markets
A recent CBRE report found e-commerce and logistics firms were taking more space in the industrial sector in 2018. These companies signed 61 of the 100 largest lease agreements, taking 61.5 million square feet of space. Manufacturers accounted for 13 of the top 100 lease transactions, representing 13.3 million square feet with retailers coming in third, recording four of the largest transactions with 3.6 million in leases signed.
Southern California’s Inland Empire, the leading industrial market in the U.S., had the most deals with 20 accounting for nearly 19 million square feet. The PA I-78-81 Corridor in Eastern Pennsylvania ranked second with 11 deals encompassing 11.8 million square feet in 2018.
A Colliers International third quarter 2018 research report noted the Eastern PA industrial market grew 4 percent in the first three quarters of last year with each of its three submarkets having positive absorption. There was an increase in the overall vacancy rate from 6.34 percent to 7.31 percent but that was due to new supply in the Lehigh Valley I-78 corridor. Rents remained stable throughout the region.
Scranton and Pittston are located in the Northeast PA N I-81/80 submarket, the smallest of Eastern Pennsylvania’s three submarkets. Colliers pointed to a 1 million-square-foot speculative development by Mericle in Pittston as the only spec project in the submarket during Q3 2018. The report noted that as of Q3, there was 3.5 million square feet of existing or under construction availabilities in that submarket, with 2.4 million square feet of it coming from new spec developments.