Single-story light industrial building, located at 1139 Lehigh Avenue, is 87% leased
Bethesda, MD (March 21, 2018) – 1788/Riverside Business Center, LLC, an affiliate of 1788 Holdings, L.L.C., a Bethesda, Maryland-based real estate investment company, has acquired Riverside Business Center, a 423,900 square foot single-story light industrial building in Whitehall, Pennsylvania for $11.65 million. Located at 1139 Lehigh Avenue, the building was approximately 87% leased at the time of the acquisition with eleven tenants.
“Riverside Business Center presented us with the unique opportunity to acquire a high-quality Class “B” light industrial property that is substantially leased with in-place rents significantly below market. Supplementing our attraction to this asset was our ability to purchase the property at just over $27 PSF, a price which is less than 30% of the property’s replacement cost. This price reflects tremendous value for an asset located in an industrial and warehouse corridor that is widely considered to be among the most vibrant in the country,” stated Larry J. Goodwin, Principal, 1788 Holdings. “Our team intends to create long-term value with a strategy that includes a capital investment program to further improve both the functionality and the aesthetics of the property, overhauling the branding and marketing of the property and aggressively improving the property’s profile within the community. We believe the property contains every necessary element, including an irreplaceable location, to achieve tremendous value creation for our investors. The existing tenant base is extremely strong and committed to remaining within the building.”
Riverside Business Center overview
Constructed in 1910, the project has been improved and renovated on numerous occasions. The most recent renovation commenced in 2006 and involved the investment of more than $9 million to convert the property from a single-user manufacturing facility into a multi-tenanted warehouse and light manufacturing facility. The conversion included the installation of 31 dock doors and 23 drive-in doors; the installment of modernized HVAC, lighting and plumbing systems; the addition of new bathrooms in all tenant suites; a complete exterior brick and concrete makeover; the paving of the parking lot and the rehabilitation significant portions of the roof.
Positioned on approximately 34 acres of land, the structure features average ceiling heights of 20’; the availability of ample automobile and truck parking and a dry sprinkler fire protection system. The building contains approximately 25,000 square feet of office space that is currently not leasable until certain building upgrades are performed. Abutting the Lehigh River, Riverside Business Center is located adjacent to the Lehigh Valley Thruway (US Route 22) with immediate access to Interstate 78 and the Pennsylvania Turnpike. Lehigh Valley International Airport is less than three miles from the site; while Philadelphia is approximately 60 miles south and New York City approximately 90 miles west from the project.
Lehigh Valley, Pennsylvania market environment
Riverside Business Center is contained within the Lehigh Valley submarket which is considered the 68th largest metropolitan area in the United States by population, the home to nearly 700,000 people, and a Gross National Product (GNP) exceeding $39 billion. The area has achieved a compound annual growth of 4.67%, according to the Lehigh Valley Economic Development Corporation (LVEDC) and more than 116 million square feet of industrial space and 26 million square feet of commercial office space is contained within the region. Nearly 7,000 new jobs serving the warehouse and industrial category have been added to Lehigh Valley area within the past five years, according to LVEDC, as well as 24,000 jobs in total during this time period. Both the bulk industrial market and the light industrial market were just over 4% vacant at the end of third quarter 2017, which is below the national average.
"The Lehigh Valley is one of the fastest-growing industrial markets in the country, growing faster than the inland empires in Texas and California,” stated Don Cunningham, President and CEO of the Lehigh Valley Economic Development Corporation. “With our access to markets, well-developed transportation infrastructure, and central location within one day's drive to one-third of all consumers in the United States, the Lehigh Valley is the most desirable market in the Northeast.”
Industrial/warehouse space category
Nationally, the industrial/warehouse category has emerged as the most prolific real estate category based on a confluence of factors led by the tremendous growth of the e-commerce industry and the need for companies to be within close proximity to major population centers. A recent report issued by Cushman & Wakefield indicated that the demand for industrial space stood at “century highs” with more than 246 million square feet of industrial space absorbed last year. The national vacancy rate ending 2017 was approximately 5%.
“The Lehigh Valley corridor remains an attractive place for manufacturing companies, as well as business involved in the warehouse and logistics categories, based on the availability of highly-skilled employees, affordable rents and a lower cost of living, while having access to the major cities in the Northeast,” explained Larry Goodwin of 1788 Holdings.
Lee & Associates of Eastern Pennsylvania has been selected to handle leasing activities on an exclusive basis for this property, with Brian Knowles, a Principal with firm, managing the requirement.
Summit Management and Realty Company has been selected to act as the management agent on an exclusive basis for this property.
1788 Holdings, LLC is a Bethesda-based real estate investment company with a focus in the Washington, D.C. and suburban Maryland region. The company’s capabilities include the acquisition, development and strategic oversight of highly-differentiated residential, office, retail and industrial properties. For additional information, visit www.1788holdings.com