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ROCK Commercial Real Estate Releases 2019 Q4 Market Reviews

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January 27, 2020

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.

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        ​YORK COUNTY INDUSTRIAL | RECORD LOW VACANCY, RISING RENTS

  • 578,000 SF of inventory remains under construction at the start of 2020 with an additional 7.8 MSF of warehouse proposed to be built.

  • 92% of proposed development is located within Greater York West, a region of York County comprising 17% of all industrial SF in York County.

  • 10,000 –20,000 SF has been the unit size of choice among York County industrial users in 2019, comprising 80% of all lease transactions.

  • E-commerce fulfillment and high-end manufacturing continue to drive Class A warehouse construction for the foreseeable future.


    YORK COUNTY OFFICE | LIMITED INVENTORY CREATES TIGHT MARKET

  • Low vacancy and limited inventory has created a tight market for tenants seeking office space

  • The most popular unit size among office tenants in Q4 was 1,000-4,000 SF, which accounted for 45% of all office leases.

  • Medical office continues to drive office sales in the York Market with 50% of sales volume attributed to medical users.

  • Dollar volume of year-end sales has been on a declining trend from a peak of $85.4M in 2015 to the current $46.9M in 2019. With number of transactions per year also declining over this same time period, this could be indicative of landlords’ desire to hold on to their stable, reliable investments

  • The first phase of York City’s Innovation District is planned to break ground in June 2020 and be completed by late 2021. Phase 1 will deliver 60,000 SF of flex office space geared to attracting a line up of high tech tenants including York Exponential, a York based robotics manufacturer.

     

    YORK COUNTY RETAIL | VACANCY RISES, RENTS DOWN 47 CENTS

  • While data debunks predictions of a dire retail apocalypse, boom and bust cycles will become more prevalent rather than long periods of sustained growth.

  • Consumers will continue to patron physical stores to interact with products and service providers first hand. However, we will witness the layout and size requirements of retailers change to maximize efficiency.

  • Brick and mortar retailers must reinvent themselves to compete with online retailers who are delivering a seamless customer experience and retaining customer loyalty.

     

    LANCASTER COUNTY INDUSTRIAL | SUPPLY KEEPING PACE WITH DEMAND

  • Despite the uptick in vacancy this quarter to 3.65%, average vacancy for 2019 remains below 3% and on a downward trend

  • 57% of leased industrial space occurred within Greater Lancaster West, a region of Lancaster County rich with clusters of warehouse and manufacturing along Routes 30 and 28

  • 490,000 SF remains under construction at the end of Q4, with an additional 255,000 SF proposed in 2020 or beyond.

  • Following national trends, industrial performance in terms of declining vacancy and increasing rents, places Lancaster County in a position of strength heading into 2020.

     

    LANCASTER COUNTY OFFICE | LOW VACANCY, RENTS ON THE RISE

  • Infill development in prominent, accessible and convenient locations in Lancaster City will continue to increase average lease rates

  • Units 3,500 SF or less were the unit size of choice this quarter and accounted for 82% of leases.

  • Net absorption continued to decrease this quarter to a mere 12,896 SF. With low vacancy holding steady, a positive economic outlook and reduced availability, the office market will begin to tighten in 2020.

     

    LANCASTER COUNTY RETAIL | LIFESTYLE CENTERS FUEL RENT INCREASE

  • Lancaster County continues to deliver on its stellar reputation as a cool, innovative, vibrant area to grow a business. Mixed-use projects will continue to be developed feeding into the small city vibe of the region.

  • Brick and mortar retailers must reinvent themselves to compete with online retailers who are delivering a seamless customer experience and retaining customer loyalty.

  • Consumers will continue to patron physical stores to interact with products and service providers first-hand. However, we continue to witness the layout and size requirements of retailers change to maximize efficiency.

  • The median unit size in 2019 was 2,000 SF. This is expected to remain unchanged or diminish in 2020 as retailers seek to minimize cost from excess real estate.

    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.

     



    Contact
    Becky Murphy, Marketing Director
    ROCK Commercial Real Estate, LLC
    717.854.5357 ext: 103 | bmurphy@rockrealestate.net