Warehouse developer active in Eastern Pennsylvania
Congestion along the Interstate 95 corridor, lower taxes and a reduced cost of living — these are among the factors leading to a boom in warehouse constructing in Eastern Pennsylvania, according to an executive whose firm has completed five projects in the state and has several others underway.
Eugene Preston, senior vice president of Higgins Development Partners based in Morristown, N.J., said that from Pennsylvania locations in the Lehigh Valley and Poconos — even as far west as Harrisburg — companies are finding they are able to continue to serve the New York-New Jersey metropolitan area.
Higgins, founded in 1980, is a private company based in Chicago that develops both office and industrial property in select locations around the country.
“We are focused on markets with dynamic growth, and that means today markets related to imports or markets like in Pennsylvania that are handling material that are coming through ports,” he said.
Preston joined Higgins about two-and-a-half years ago after a 16-year career at the Rockefeller Group, a company well known in the distribution business for projects such as the large foreign trade zone in Mt. Olive, N.J. He also does work for Higgins in Florida.
Warehouse construction is booming in both New Jersey and Pennsylvania, and Higgins is in the process of getting development approval for a 350,000-square-foot building near exit 8a on the New Jersey Turnpike.
But Preston believes the opportunity has been bigger in Pennsylvania where Higgins has been focusing on developing facilities along highways such as I-81 and I-84. From these locations, companies can reach customers throughout the Northeast, from New England down into the mid-Atlantic states, avoiding tolls and congestion, he said.
The company has built five distribution buildings in Pennsylvania with space totaling 2.5 million square feet. The company also has land to build another 3 million square feet of warehouse space in the Keystone State, including sites in Poconos and Lehigh Valley.
In recent months, Higgins has:
* Completed a 385,000-square-foot building at the Arcadia West Industrial Park in the Lehigh Valley, in Weisenberg Township. The company has also built a 500,000-square-foot facility at the same industrial park, which is used by third-party logistics provider Exel for its customer, Walgreens.
* Signed a letter of intent to lease part of a 400,000-square-foot building it built in the Humboldt Industrial Park in Hazleton. Construction of that building was completed in April.
* Completed construction of a 602,500-square-foot warehouse/distribution center in Carlisle, Pa., near Harrisburg. The company is close to leasing it to another 3PL, Preston said.
* The company is also building a 500,000-square-foot distribution center in Mountain Top, Pa. that will be used to distribute Gatorade for Pepsico.
Preston said one of the trends he has observed in the Pennsylvania warehouse market is the increasing size of buildings. He said that many companies are concentrating distribution in fewer, but larger facilities.
“There have been several million-square-foot facilities in the past five years,” he said. These include facilities being built by Johnson & Johnson and Wal-Mart.
Buildings also have higher ceilings, upwards of 32 to 36 feet. Another big trend, he said, is a desire by companies for more truck trailer parking. Companies commonly use trailers for on-site storage, particularly in the peak season, he says.
About 30 percent of what Higgins constructs is build-to-suit, the remainder speculative. Currently the upper limit of spec buildings is about 600,000 square feet, Preston said.