Newly delivered properties remain vacant due to weaker tenant demand
Vacancy in the Pennsylvania I-81/78 Corridor increased for the sixth consecutive quarter. During Q1 2024, the overall vacancy rate rose 50 basis points (bps) from year-end 2023 to 6.2%. All three market clusters recorded quarterly upticks in vacancy: Lehigh Valley increased 60 bps to 7.2%, Central PA rose 50 bps to 5.1% and Northeast PA increased 40 bps to 7.2%.
More than 23.0 million square feet (msf) of new warehouse and distribution space delivered within the I-81/78 Corridor over the past four quarters. However, tenant demand from retailers and e-commerce companies weakened in the post-pandemic economy, hindering the timely removal of this space from the market.