Petrucci acquires 2 industrial buildings in Upper Macungie

One of the most active industrial developers in the Lehigh Valley has scooped up two buildings in Upper Macungie Township.

J.G. Petrucci Co. Inc., of Asbury, New Jersey, acquired two light industrial properties at 6980 and 7020 Snowdrift Road in the Iron Run Corporate Center from Connecticut-based Penwood Real Estate Investment Management, commercial real estate services firm CBRE announced Monday. CBRE, which negotiated the sale for Penwood, said the transaction closed March 26.

CBRE declined to disclose the sale price, and the deal was not yet recorded in property records as of Monday. Neither Penwood nor J.G. Petrucci immediately provided further comment on the deal.

Penwood owned the two properties for about four years, first acquiring 7020 Snowdrift Road in February 2017 for $2.63 million and then 6980 Snowdrift Road a month later for $4.65 million. Penwood told The Morning Call in April 2017 that it planned significant renovations to the two buildings to expand their market appeal. Both buildings, which were built in the 1970s, had significant vacancies at the time.

“We’re not a buyer, generally, of longterm stabilized assets,” then-Penwood Managing Director Howard Freeman said at the time. “We’re more of an investor in buildings that require some hands-on activity.”

In its release Monday, CBRE said the 99,782-square-foot facility at 6980 Snowdrift Road was renovated in 2018, while the 41,390-square-foot building at 7020 Snowdrift Road was upgraded in 2017.

Both properties are fully occupied by five tenants, CBRE said.

“Penwood’s strategic repositioning of these assets was well executed, and these two buildings are poised to continue benefiting from the formula that makes this market tick,” said Brad Ruppel, an executive vice president with CBRE and a member of CBRE National Partners. “Multidirectional interstate connectivity, New York metro proximity, favorable occupancy costs, and abundant, affordable labor will continue to make 6980 and 7020 Snowdrift attractive to a wide array of users.”

A hot market

From the start of the coronavirus pandemic through the first quarter of 2021, Pennsylvania’s Interstate 78-Interstate 81 corridor “outperformed expectations,” according to first-quarter report from CBRE.

The corridor, a 15-county stretch that covers Wilkes-Barre, the Lehigh

Valley and central Pennsylvania, has seen demand outpace supply as food and beverage, e-commerce and logistics companies search for space.

That dynamic led overall vacancy rates to fall to 6.3%, while average asking lease rates increased to $5.18 per square foot, CBRE noted.

Lehigh County has one of the lowest vacancy rates in the corridor, at just 3.3%, while Northampton County has the highest average asking lease rate of $6.48 per square foot, the report shows.

And more space is on the way: CBRE found that 3.2 million square feet of industrial space is under construction in Lehigh County, while 2.3 million square feet is being built in Northampton County.

The pandemic has only accelerated the warehouse growth the Lehigh Valley has seen over the last several years.

According to the Lehigh Valley Planning Commission’s annual report published Feb. 25, nearly 27 million square feet of new warehouse space has been approved by local governments in Lehigh and Northampton counties over the past six years.

And there is another 10.3 million square feet that remains in the approval pipeline, the LVPC report notes.