ROCK Commercial Real Estate publishes quarterly market reviews designed to survey and gauge the state of commercial real estate conditions in Central Pennsylvania. The publications offer thoughtful, forward-looking insight into trends in the local office, industrial, and retail markets.
YORK COUNTY INDUSTRIAL | 1.19% VACANCY INCREASE IN Q3 ATTRIBUTED TO SPECULATIVE CONSTRUCTION
- Speculative construction at The Cubes at EmigRoad and newly completed 693 N Hills Road in York accounts for over 650,000 vacant square feet in Q3.
- 3.57 MSF remains under construction with an additional 5.89 MSF of warehouse proposed to be built. Vacancy will continue to see an increase over the next year should these projects be completed prior to securing tenants.
- Demand for warehousing is expected to remain high as online order fulfillment gains momentum from the ongoing pandemic.
- 54% of leased square feet was located inthe region of Greater York West with an average unit size of 12,481 SF
YORK COUNTY OFFICE | OFFICE SALES STRONG HEADING INTO Q4, UP 27.6% FROM SAME TIME LAST YEAR
- $4.7M remains under contract at the close of Q3 providing the potential for strong sales performance in Q4.
- Although lease activity continues its downward trend, lease activity year-to-date is at 64% of 2019 levels and within 54,000 SF of the three yearrolling average of 162,177 SF.
- Average lease rates year-to-date are at a five year high at $12.82/SF with the highest lease rate recorded at $16.67 / SF. This is on-par with the national trend seeing lease rates rise along with vacancy.
- Despite the five-year high in vacancy, York County remains well below the national average of 14.4%.
- 57% of pending sales dollar volume is attributed to medical office space.
- UPMC Pinnacle outpatient center on Brunswick Drive in Hanover has been completed, delivering 43,200 SF of outpatient medical office to York County
YORK COUNTY RETAIL | ABSORPTION REBOUNDS INTO POSITIVE TERRITORY, VACANCY STALLS AT 7.95%
- Self-certification for food service operators began on September 21stallowing them to operate at 50% indoor capacity. Operators must abide by strict guidelines set forth by the state and undergo inspections to maintain eligibility.
- The Hutton Company, Inc. has purchased the former Ryan’s Steakhouse at 341 Eisenhower Drive in Hanover for re-development. The site is currently under construction.
- Year-to-date absorption was positive for the second consecutive quarter in 2020 with more space being leased than placed on the market.
- For restaurants applying to self-certify as a COVID-19 compliant business, they may operate at 50% capacity beginning on September 21st. Heading into a cold and flu season we will see if this easing of restriction is here to stay. However, providing the opportunity to seat additional patrons indoors will hopefully help to ease financial strain heading into the winter months.
- Bankruptcy proceedings for national retailers, particularly apparel, has led to re-structuring of leases including temporary rent concessions. In many instancesretailers are using bankruptcies as an opportunity to re-invent themselves.
- 63% of all retail leases were larger than 2,000 SF
LANCASTER COUNTY INDUSTRIAL | LEASE RATES EXCEED NATIONAL AVERAGE AT $6.65 PER SQUARE FOOT
- Average lease rates continue to increase and exceed the national average of $6.63 / SF.
- 62.5% of leases were for units 10,000 SF or less.
- 521,000 SF of Class A warehouse is currently under construction and due for delivery in Q1 2021.
- Vacancy remains below the national average of 5.3%
LANCASTER COUNTY OFFICE | VACANCY & LEASE RATES INCREASE, ON PAR WITH NATIONAL TREND
- Vacancy rose again in Q3 keeping to the national trend but remains well below national average of 14.4%. The swing in vacancy remains tight over the past five years varying no more than 0.65%.
- Lease rates continue to rise and have risen 9.71% since 2016.
- Average lease rates year-to-date are at a five year high at $14.01 / SF. This is on par with the national trend seeing lease rates rise along with vacancy.
- With more inventory placed on the market than was leased, net absorption flipped negative year-to-date totaling -29,064 SF.
- 190,574 SF will need to be leased in Q4 to match total leased square feet in 2019
LANCASTER COUNTY RETAIL | VACANCY INCREASE STALLS AT 6.22% IN Q3
- Lancaster vacancy of 6.22% sits below the national average of 7.1%.
- For restaurants applying to self-certify as a COVID-19 compliant business, they may operate at 50% capacity beginning on September 21st. Heading into a cold and flu season we will see if this easing of restriction is here to stay. However, providing the opportunity to seat additional patrons indoors will hopefully help to ease financial strain heading into the winter months.
- Striking a balance between online presence and physical locations continues to remain a priority for retailers. Retailers able to achieve this balance will be presented with opportunities to grow even amidst uncertain circumstances.
ROCK Commercial Real Estate
ROCK is an industry leader in commercial real estate that focuses on Brokerage Advisory, Property Management, Lease Administration, and Consulting. Our mission is to deliver unparalleled commercial real estate services through a team of professionals that builds strong relationships, provides comprehensive knowledge, and focuses on solutions that are right for you. ROCK Commercial was ranked BEST COMMERCIAL REAL ESTATE COMPANY and BEST PROPERTY MANAGEMENT COMPANY IN 2020 by CPBJ READERS.