the lehigh valley economy - naiop

The Lehigh Valley Economy

DON CUNNINGHAM PRESIDENT & CEO

within 1 day’s drive to reach 1/3 of U.S. Consumers and ½

of Canadian Consumers

Lehigh Valley at a Glance

$35.4 Billion GDPLarger than the entire state of Vermont

and 94 other countries in the world3 Fortune 500 Companies

Site Selection magazine – March 2015The Lehigh Valley was ranked the top-

performing region for economic development in the Northeastern United States

Lehigh Valley at a Glance

Economic base is diversified

$5.24$5.01 $4.95 $4.84

$2.22

$1.61 $1.53 $1.36

$0

$1

$2

$3

$4

$5

$6

FINANCE & REALESTATE

BUSINESSSERVICES

MANUFACTURING EDUCATION &HEALTH CARE

RETAIL TRADE TRANSPORTATION& WAREHOUSING

INFORMATION ARTS &ENTERTAINMENT

Billio

ns

Lehigh Valley GDP by sector

Lehigh Valley at a Glance

9 of 19 projects in 2015 were international I2R Nanowave (Canada)

Lower Macungie, Manufacturing

Malmedie (Germany) Upper Macungie, Manufacturing

Nihon Koden (Japan) South Whitehall, Bio-Tech

SunOpta (Canada) Upper Macungie, Food & Beverage

Inditex (Spain) Forks, Clothing Distribution

MBD – Safran (France) Lower Nazareth, Aerospace

Primark Stores (Ireland) Bethlehem, Clothing Distribution

Ricoh (Japan) Hanover (NC), Electronics

Norac (France) Forks, Food & Beverage

Commercial Real Estate Supply Growth

3,67

2,99

1

4,40

0,16

7

4,46

9,95

5

- 500,000

1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 4,500,000 5,000,000

Inventory Growth (SF)

373,

618

71,6

02

225,

124

143,

575

350,

265

621,

579

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

Inventory Growth (SF)

Source: CoStar, JLL

2014 2014 20142015 2016 – In Progress

2016 – In Progress

2015 20152016 – In Progress

Industrial Office Retail

570K SF –Hamilton Crossing

2015 Year-end Vacancy Rate

6.0%

9.6% 3.8%6.

4% 14.7

%

5.7%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

Industrial Office Retail

Vacancy Rates by Sector

Lehigh Valley National

Source: CoStar, JLL

Major Recent Deliveries & Deals

1185 Feather Way

179,00 SF

10 Emery St

880,000 SF

Primark2485 Commerce Center Blvd

677,000 SF

Major Deliveries & Deals- Office

Three City Center

166,000 SF delivered

Founder’s Building (former LSI HQ)

247,000 SF lease

2016 Pipeline

OFFICEGuardian Life Insurance HQ

280,000 SF

INDUSTRIALULINE Distribution Site

1.6 million SFRETAILHamilton Crossings Lifestyle Center

570,000 SF

INDUSTRIALFedEx Ground Hub –Largest in system

1 million+ SF

Source: ChrinCommerceCentre.com

2016 Pipeline

Chrin Commerce Center 800 acres along Rt. 33 in Northampton

County

Duke Realty 1.1 million SF – delivered Q1 2016

1 million SF

630,000 SF

DCT Industrial 425,000 SF – leased to FedEx and Inditex

Remainder to be manufacturing, office, retail, hotel, and medical

Market Trends

Industrial space being built on spec Nearly 5 million SF under construction

E-Commerce driving growth

Manufacturing GDP and growth remains strong Lehigh Valley’s manufacturing GDP of $4.95 billion ranks

64th out of 351 major U.S. MSAs

The Bethlehem Steel

4 miles of industrial manufacturing on the Lehigh River

Over 1800 Acres

Closed in 1998

Redevelopment

LV Rail Management Intermodal Facility

Bethlehem Intermodal 4.6 miles of track1,200 trailer parking

spaces1 mile from I-78Serviced by Norfolk

Southern and Canadian Pacific railroads

Multi-Modal Logistics & eCommerce Fulfillment Park

www.MajesticBethlehem.com

Multi-Modal Logistics & eCommerce Fulfillment Park

The Majestic Realty Co.

WHO WE ARE Family owned and operated since 1948 Headquartered in Los Angeles Regional offices in Atlanta, Bethlehem PA, Dallas/Fort Worth, Denver,

and Las Vegas

WHAT WE DO Develop commercial real estate with a long-term, Build-and-Hold

business model Own and manage an approximately 80,000,000 SF portfolio Largest privately-owned light industrial developer and owner in the U.S.

HOW WE DO IT Vertically integrated In-house design, engineering and construction capabilities In-house property management

Multi-Modal Logistics & eCommerce Fulfillment Park

Location, Location, Population

Multi-Modal Logistics & eCommerce Fulfillment Park

Bethlehem: ‘Inland Empire NE’

Multi-Modal Logistics & eCommerce Fulfillment Park

TODAY

Bethlehem Steel, circa 1999

Opened Escrow with Bethlehem Steel in 1999

• Close to Interstate 78• Robust utility services

• Industrial Zoning• Extensive Rail

Multi-Modal Logistics & eCommerce Fulfillment Park

TODAY

1999 TODAY

Acquired 441 acresPerformed Extensive Environmental Characterization

Planned 8 MSFFlexible Zoning and Land Use in Place

FTZ and Economic Incentives

• US EPA and PA DEP approvals via Act 2• Only mitigation is to redevelop• Massive demolition and grading program

• On-site rail for direct rail-served buildings• Adjacent intermodal – eliminates drayage costs

and presents heavy-haul opportunity. • New road infrastructure6

Multi-Modal Logistics & eCommerce Fulfillment Park

Interstate, Mainline Rail and Intermodal

1999

Lehigh University

9

Multi-Modal Logistics & eCommerce Fulfillment Park

800ksf 1.2msf2014

10

Multi-Modal Logistics & eCommerce Fulfillment Park

Crayola DC (800,000sf)

11

Multi-Modal Logistics & eCommerce Fulfillment Park

Walmart FC (1,200,000sf)

12

Multi-Modal Logistics & eCommerce Fulfillment Park

Coming Soon….. Bldg #3

All buildings have 360 degree access via common access ring roads

13

Multi-Modal Logistics & eCommerce Fulfillment Park

1,000,000 sf Spec (expandable to 2msf)

14

Multi-Modal Logistics & eCommerce Fulfillment Park

….Or 2 independent buildings

15