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A series of evolving market conditions, movement of goods for e-commerce, and the mounting influence of the millennials are all shaping commercial real estate trends within NEPA.

An acceleration of “westward movement” has been recognized by John Cognetti, president of Hinerfeld Commercial Real Estate. According to Cognetti, this involves established firms in the metro areas of New York and New Jersey moving out due to astronomical real estate values, soaring operational costs and steep taxes.

These select companies are therefore buying “b-stock” locations with good price points in or near NEPA for relocation. Rail sidings are prized, plus decent ceiling heights, a clean environment, easy truck access, loading docks, natural gas service and ample parking.

“A lack of commercial property listings within NEPA for this relocation is now a reality, and we have been resorting to active recruitment of listings to meet demand,” said Cognetti. “As this relocation trend accelerates, we’re seeing options placed on various industrial properties.”

Prospective players in the medical marijuana market are jostling to get a piece of the action and evaluating how they can retro-fit older NEPA locations for their use. This activity is often suitable for older facilities, provided boundary lines, environmental conditions and data about prior use is all suitable.

“On virtually every sale of a commercial location the banks require an environmental assessment to be completed, so that is nothing new,” said Cognetti. “However, if boundary lines need to be surveyed, that can be expensive.”

Another economic development trend noted by Cognetti involves the expanding ways market data is collected, analyzed and loaded into computer systems as part of industrial forecasting. The efficiency gains made with these data systems virtually guarantee commercial companies will need to employ fewer people as productivity rises and production waste is reduced.

“So much disruption of labor through technology is occurring that radical changes are necessary in the number and types of employees that are needed,” said Cognetti. “This also influences the type of industrial sites that are needed.”


E-commerce power

Changing market conditions in the retail industry are directly influencing the NEPA commercial market, according to Jim Cummings, vice president of marketing with Mericle Commercial Real Estate Services. He has noted that, according to, 18 nationally known retailers recently announced plans to close, a total of 2,727 stores.

“These included big names such as JC Penney, Payless ShoeSource, Radio Shack, Macy’s, The Limited, Staples and Gander Mountain,” said Cummings.

Retail analysts agree the United States has been “overstored” for several years. However, the most powerful force causing the retail contraction is an explosion of e-commerce that now allows consumers to comparison shop, find the lowest price and place an order that is shipped to their doorstep in as little as 24 hours. 

According to Cummings, national retailers are therefore occupying millions of square feet of distribution space near interstates and major metro areas, and his firm often entertains square footage demands of 300,000 to perhaps one million to create fulfillment centers where e-commerce orders can be processed and products quickly shipped to consumers. These companies typically search the I-81 Corridor and I-78 Corridor from Harrisburg to the Lehigh Valley to northeastern Pennsylvania to find sites that meet their requirements for logistics, labor, taxes, operating costs and quick delivery.

“Northeastern Pennsylvania is benefitting from this activity with firms such as Boden USA,,, American Eagle Outfitters and others who have opened e-commerce fulfillment centers here,” said Cummings. “As e-commerce continues to grow across the country, we expect all of the communities along the I-81 Corridor to be in contention for new fulfillment centers.


Millennial power

The nation’s millennials, now entering the workforce in great numbers, are also a force commercial real estate players must contend with. Denise Luikart, associate principal and interior designer with Highland Associates, explained that specific demands for interior design still depend on individual client tastes and predictable demographics, but metro appetites are seeping into NEPA.

With millennial workers one of these trends is called bench-style desking, particularly when office space is expensive. Bench desks allow companies to accommodate more workers for each square foot, witch also make sense because the millennials as a group are usually not concerned with privacy or adhering to an assigned space.

An open office environment can therefore be installed for these youths. Limited availability of some private office spaces is still needed, such as the executive offices, but open bench desking and a quiet huddle room often is becoming the norm.

“The workers can then use the huddle room for quiet and privacy or to make phone calls,” says Luikart.

Stiff competition for skilled employees is also playing a role in office demands. In particular, larger companies are striving to land talent, and recognition of the need for a specific type of office environment has become part of the labor equation.

Even in health care, where facility dollars can be tight and regulation is active, managers have recognized the need to create a specific environment as care systems function within a free-market hospitality environment and must compete for customers. Inevitably patient satisfaction controls the flow of dollars through care, and the demands of the patients must be met to build repeat business.

“It’s also interesting how urban locations are making a comeback,” said Luikart. “The millennials want to live and work in the city, and this is breathing new life into a lot of urban real estate.”