United States Steel Corp. (NYSE:X) has sold its Keystone Industrial Port Complex near Philadelphia to industrial and multifamily housing developer NorthPoint Development, which eventually plans to build a 10 million-square-foot industrial site, it was announced Friday.
The sale, which fetched $160 million, according to people familiar with the matter, ends US Steel’s 67 years of ownership of the site, which is located in Fairless Hills, Pennsylvania, about 26 miles from Philadelphia and roughly eight miles from Interstate 95. The Pittsburgh-based company began producing steel at the location in 1954. At its peak, it employed nearly 10,000 workers at the site.
As domestic steel production sagged in the face of low-cost competition from imports, US Steel decided to convert the facility to an “inland port” with an industrial park fed by 75 miles of rail service. Today, about 1.5 million square feet is currently occupied by a diverse tenant mix from the energy, gases, industrial metals and real estate industries. The site sits on 180 acres.
NorthPoint Development plans to break ground this spring on the project’s first phase, which calls for the development of about 3 million square feet, according to Colliers International, a professional services and investment management firm that advised US Steel on the transaction.
The project is being classified as a “bulk logistics” complex. However, there is expected to be a certain level of e-commerce activity at the site, as well as traditional manufacturing operations, Colliers said. The property will be rebranded as the Keystone Trade Center.
There was no information available on the expected completion date of the first phase, or when additional phases would begin.
The U.S. industrial property market continues to boom, propelled by explosive growth in e-commerce fulfillment demand which has accelerated during the COVID-19 pandemic with more Americans ordering online instead of returning to stores. Vacancy rates nationwide are at historic lows, with availability in regions with high population density measured in the low single digits. The I-95 corridor, which in the Northeast encompasses five major markets from Boston to Washington, D.C., is no exception.
Such an expansive industrial property doesn’t hit the market every day, according to Collier’s executives. The complex represents an “incredibly unique redevelopment opportunity within a Tier 1 industrial market,” said Thomas Golarz, vice president of Colliers’ Philadelphia Industrial Logistics and Transportation team.