As residential prices continue to rise in New York and New Jersey, neighboring northeast Pennsylvania is beginning to look more and more attractive to metropolitan residents. Today, residents are moving to the area to take advantage of affordable home prices, a lower cost of living and all that the great outdoors has to offer. On the heels of this residential migration is an influx of retail development.
The majority of the retail development in this growing market is the repositioning of existing retail and infill development where there are gaps between the markets. The Shoppes at Montage, northeastern Pennsylvania’s first lifestyle center, opened this past spring and brought with it several new retailers to the area. Developed by Jeffrey R. Anderson Real Estate, the 316,000-square-foot center includes approximately 70 retailers including newcomers such as J. Jill, Christmas Tree Shops, Jos. A Bank and several specialty restaurants. The new center was also a big draw for staple regional mall tenants such as Victoria’s Secret and Gap. Located in the Glenmaura area right off of Interstate 81 between Scranton and Wilkes-Barre on Davis Street/Montage Mountain Road, the new lifestyle center will conveniently serve the entire northeast Pennsylvania market.
The area of Glenmaura is anticipated to be the next booming commercial real estate market in northeast Pennsylvania. In addition to the Shoppes at Montage, there is a large 18-screen cinema, a major corporate office park with Class A office buildings, a growing residential component, as well as a plethora of recreational activities ranging from the Montage Ski Resort, the Montage Performing Arts Center, an outdoor concert amphitheatre to a country club with a golf course. Another factor that will affect the growth in the area is the local AAA baseball franchise, which recently became an affiliate of the New York Yankees. In addition to being a tourist attraction, the owner of the franchise, Mandalay Sports, intends to develop the area surrounding the stadium with retail and other commercial development.
The Poconos is another growing area and a big draw for the northeastern Pennsylvania market. Heading east toward the Poconos, the Route 611 corridor is filling up with big-box development to the point that it has begun to put a strain on traffic. This new wave of retail development is being built to meet the demands of the growing population in the Poconos region. No longer primarily a second home community, a mix of residents, ranging from retiring baby boomers to young couples looking to start families and businesses, are moving to this idyllic area. Another factor affecting the growth of the Poconos is the new Mount Airy Casino that is slated to open this fall. The new gaming development promises to attract more tourists as well as residents with the promise of new jobs — again catalysts for more retail development.
Currently, retail vacancy rates are sitting at approximately 10 percent with rental rates ranging from $15 per square foot to $30 per square foot for mall rentals. However, keep your eye on this market because things are only going to get better.
– John T. Cognetti, SIOR, CCIM, is the president of Hinerfeld Commercial Real Estate.
– First published in Northeast Real Estate Business
