Wednesday, August 24, 2016

Lehigh Valley warehouse frenzy continues



LOWER NAZARETH TOWNSHIP — First 33 Commerce Center, a new two-building industrial complex in Lower Nazareth Township, has filled up quickly.


Central Garden & Pet Co., a maker of products for the lawn and garden and pet supplies markets, has signed a lease for a 243,360-square-foot facility at 3895 Eastgate Blvd., Gov. Tom Wolf announced Thursday. The company will use the facility as a distribution center for its garden products, an operation that was previously located in Taunton, Mass.

Central Garden & Pet expects to create 40 full-time jobs there over the next three years.

Right next to Central Garden & Pet's new building is a 341,400-square-foot warehouse that logistics giant UPS is leasing and will use for seasonal capacity, UPS spokeswoman Susan Rosenberg said this week. The facility will be used as a transit hub for UPS Ground packages that are moving to other points, she said, and the company is outfitting it with conveyor systems for hub processing.

Since UPS won't ramp up for seasonal hiring until sometime in October, Rosenberg said it was premature to provide any seasonal hiring estimates. She declined to disclose lease details.

"This hub is a part of property leases around the country for similar operations that give us flexibility and help us manage the spike of holiday volume," she said.

UPS and Central Garden & Pet signed two of the largest industrial leases in the Lehigh Valley during the second quarter, according to a quarterly commercial real estate report released earlier in the week by the Lehigh Valley Economic Development Corp.

The report added further evidence to the strength of the Lehigh Valley industrial real estate market. For example, the combined vacancy rate for industrial space in the area was 7.2 percent. In addition, there is more than 5 million square feet of industrial space under construction in the area.

Just since 2014, about 10 million square feet of industrial space — much of it built on speculation — has been delivered in the region, the report states.

"In the world of industrial real estate, it's safe to say that the Lehigh Valley is one of the top markets in the United States," said Jarrett Witt, LVEDC director of business development. "There is no lack of public and private capital interest to invest in Lehigh Valley's industrial sector."

The report, of course, doesn't come as any surprise to Lehigh Valley residents, who see more and more trucks on already congested highways. Freight volume in the Lehigh Valley is expected to grow by 96 percent to 80.2 million tons by 2040, according to the Lehigh Valley Planning Commission.

And more companies continue to open warehouses or fulfillment centers here, attracted by the area's quick access to highways and population hubs like Philadelphia and New York City. Just since April, women's online stylist company Stitch Fix has opened a 483,990-square-foot distribution center in Lower Nazareth and Amazon has said it plans to open a 1.1-million-square-foot fulfillment center in Palmer Township.

And more leases were signed in the second quarter, according to a report on the I-81 and I-78 corridor from commercial real estate services firm Cushman & Wakefield.

The report shows logistics company California Cartage Co. signed a lease for a 538,650-square-foot warehouse at 3051 Commerce Center Blvd. in Bethlehem and FedEx inked a lease for a 400,000-square-foot warehouse at 2929 Schoeneck Road in Lower Macungie Township.

For Central Garden & Pet, the company decided to relocate the distribution center to Lower Nazareth because of the location's proximity to its customers, said Will Reeves, Central Garden & Pet regional vice president. The company also thinks the area will provide a "solid pool for hiring," Reeves said.

Central Garden & Pet plans to invest at least $835,000 on the project, which will include facility leasing, employee training and the purchase of machinery, equipment and computer hardware and software.

The company received a funding proposal from the state Department of Community and Economic Development that includes $80,000 in Job Creation Tax Credits, a $80,000 Pennsylvania First Program grant, and $18,000 in WEDnetPA funding for employee training.

Based in Walnut Creek, Calif., Central Garden & Pet has about 3,700 employees, mostly in North America.

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