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ROCK Commercial Releases 2020 Q2 York/Lancaster Market REVIEWS

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August 21, 2020
YORK COUNTY INDUSTRIAL | LEASE RATES CONTINUE TO CLIMB, DEMAND HIGH AMIDST PANDEMIC
  • Average rent of Class A & Class B industrial space continues its steady increase, achieving a 5 year high of $5.26/SF.
  • Demand for industrial space is expected to remain high despite the onset of COVID-19. Fulfillment of online ordering remains a key driver for industrial warehouse demand.
  • 50% of all industrial leases were located in Greater York West with unit sizes averaging 26,908 SF.
  • 3.65 MSF remains under construction with an additional 4.8 MSF of warehouse proposed to be built.
YORK COUNTY OFFICE | AVERAGE LEASE RATES CONTINUE INCREASE
  • York County office sector continues to demonstrate resiliency to shakeups and market downturns even amidst the COVID-19 pandemic.
  • $4.1M remains under contract at the close of Q2, potentially providing a strong start to Q3.
  • York Exponential has begun construction on their Fortress of York Initiative at the former Western National Bank building in York City. The Fortress of York will work in tandem with the Innovation District to provide an 8,000 SF facility to house a STEM, robotics and computer programming center.
YORK COUNTY RETAIL | LARGE FOOTPRINT VACANCIES FUEL 0.91% INCREASE IN VACANCY IN Q2
  • Adopting creative solutions to connect with customers remains key to success amidst health concerns. Demonstrating and promoting a health conscious environment to customers will become an integral part of a company’s brand.
  • Real estate featuring existing drive-thrus and established online ordering helped QSR’s fair easier than other restaurant types.
  • Printing and media companies have discovered new opportunities filling demand for branded social distancing floor markers, posters and hand sanitizing stations.
  • 89% of new retail leases this quarter took place in suburban markets (outside a city or borough)
  • 78% of all retail leases were less than 2,000 SF.
LANCASTER COUNTY INDUSTRIAL | VACANCY RATE INCREASE SLOWS TO +0.15% IN Q2, LEASE RATES AT $5.77/SF
  • Average lease rate of Class A & Class B achieves a five year high of $5.52/SF. Overall, lease rates remain stable without any drastic swings over the past five years.
  • 82% of leases were for units 10,000 SF or less.
  • 947,300 SF remains proposed to be built.
  • Vacancy, although rising, remains well below the national average of 5.2%.
LANCASTER COUNTY OFFICE | MINIMAL VACANCY INCREASE OF 0.51%, LEASED SQUARE FEET ON PAR WITH Q1
  • Vacancy remains low overall despite 0.51% uptick in Q2 and well below national average of 13.7%.
  • 64% of leases were for spaces 2,000 SF or less.
  • 91% of reported leases were for Class A and Class B space.
  • With more inventory leased than introduced to the market, net absorption flipped positive year-to-date at 22,289 SF.
LANCASTER COUNTY RETAIL| LOW VACANCY IN PREMIUM CENTERS DESPITE OVERALL VACANCY INCREASE
  • Vacancy rate for Lancaster County across all types of retail is on par with the national trend. Vacancy in Lancaster County is currently 6.18%, while the national average sits at 6.8%.
  • Class B & Class C retail accounts for 85.1% of all vacant retail space.
  • Flexibility, adaptability and creativity is essential to retailer success in a COVID-19 world. Architecturally, modular designs for retailers and restaurants will allow a space to easily adapt between red, yellow, and green phase restrictions.
  • Lease rates are down this quarter, possibly fueled by limited inventory in premium rate shopping centers such as Shoppes at Belmont, Overlook Town Center, and Lime Spring Square, among others. Leases at these centers had been boosting the county average with signed leases upwards of $15/SF.

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