Commercial Real Estate Outlook 2006
Economic development experts and real estate professionals in northeast Pennsylvania say 2006 will be a “banner year” in growth in commercial and industrial real estate.
Shoppers can look forward to new retail centers; vacationers will see new recreational facilities; and local workers can expect an influx of employers.
John Cognetti, industrial/commercial broker for Hinerfeld Realty in Scranton, says northeast Pennsylvania is “maturing” as a legitimate location for business expansion and relocation. Cognetti, who coordinates real estate deals between investors and developers, says every sector of the market will show growth.
Businesses take advantage of a relatively low cost of real estate, approximately $65,000 per acre in the region compared to other areas where the cost is around $95,000, Cognetti said. Plus, with access to major highways and a locale just 500 miles from 80 percent of U.S. purchasing power, distributors and manufacturers see the value of locally placed distribution centers and operations.
Some high-profile projects Cognetti points to include the increase in occupancy at the Glenmaura Corporate Center in Moosic, the Super Wal-Mart store planned for Scranton and the 16-acre retail site near the Wachovia Arena which is drawing a lot of interest from large merchants across the country. The Shops at Montage retail complex and the additions to Pocono Downs will also have a positive impact. All of this development will cause significant changes in northeast Pennsylvania’s overall property value and future economic stability, he says.
Rhea Simms from Lewith and Freeman Real Estate says sales of new and existing homes will match or surpass 2005.
In spite of rising interest rates, more people are qualifying for mortgage loans than ever before, providing the fuel for strong home sales, she says.
The more popular residential market are townhouses and condominium, she says. Several developments in the back mountain area, such as Newberry Estates and Dakota Woods, offer residents a relaxed lifestyle. Real estate markets in the area’s cities are showing more life as well, Simms notes. In Scranton, the Olive Street townhouses are bringing in a lot of interest, and in Wilkes-Barre queries about existing homes and rental units have increased significantly, she says.
John Augustine senior director of economic and entrepreneurial development for the Greater Wilkes-Barre Chamber of Business and Industry points to the work being done in the City of Wilkes-Barre as a significant economic boost. The South Main Street redevelopment project, a new theater and housing, and the start of the riverfront and Sterling Hotel projects in 2006 will constitute huge improvements for the city.
The future of downtown Wilkes-Barre, and other cities in northeast Pennsylvania, hinges on providing attractive and affordable housing to increase pedestrian traffic and recreate a vibrant, healthy street level environment, Augustine says. The South Main project will reinforce the traditional retail core and an attractive “streetscape.”
In the suburbs, large land development increases. For example in Pittston, Luzerne County, the Center Point industrial park, an 861 acre site in the process of development attracted over $83 million in investment from companies locating operations there. He also points to the 90 percent occupancy at he Crestwood Industrial Park resulting from five deals in 2005 resulting in 1000 jobs. Three more deals for that location are on the blocks for 2006, he adds.
Local distribution and food manufacturing industries are growing, bucking the national trend, Augustine says. Along with proximity to markets along the East Coast, and access to interstate highways system, industries are finding flexibility in local developers and attractive real estate.
Locally, there is a lot of land ready for developing, as well as existing buildings and developers who will build to specifications. These attributes make northeast Pennsylvania commercial real estate attractive because companies can literally move in and start operations without a lot of set up.
Chuck Leonard, executive director for Pocono Mountain Industries in Stroudsburg looks forward to a “watershed year in 2006,” judging by the influx of retailers such as Lowe’s into the Bartonsville area and many new strip malls in Monroe County.
Other highlights include the refurbishing of the Mt. Airy Lodge and Pocono Manor, increased hospitality industry as a direct result of new attractions like the Great Wolf Lodge and legalized casino-style gambling.
The Poconos are still the highest rated vacation destination in the state of Pennsylvania, Leonard said.
Andy Skrip, vice president of the Greater Scranton Chamber says the “trickle down” of strong national and state economies is being felt locally as well. Along with incentive programs like the state’s Keystone Opportunity Zones, local industrial real estate growth has been tremendous.
In Scranton, the Mount Pleasant Corporate Center, located across from the Scranton Area High School will be a major improvement, Skrip said. The Valley View Business Park in Jessup and improvements at the Covington Industrial Park all point to increased investment in the area.
– Courtesy of the Northeastern Pennsylvania Business Journal