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$25M project highlights growth in Berks

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Rendering of the Dermody Properties industrial warehouse and distribution center to be built in Berks Park 78 in Bethel Township. (Contributed)
Rendering of the Dermody Properties industrial warehouse and distribution center to be built in Berks Park 78 in Bethel Township. (Contributed)

While Dollar General and PetSmart have two of the largest warehouse and distribution sites at Berks Park 78, a third is on the way.

It’s all part of a continuing warehousing and logistics boom that has tumbled westward from Lehigh County into northern Berks County.

The 323-acre business industrial park, off Interstate 78 in Bethel Township, Berks County, will soon be home to a 750,000-square-foot building owned by Dermody Properties. The company will build a speculative development, a rarity for Berks County, according to Jon Scott, president and CEO of the Greater Reading Economic Partnership.

Last month, Dermody Properties broke ground on the site next to the Dollar General and PetSmart facilities. The new project will be designed for distribution or e-commerce operations.

The property is on Martha Drive in the 323-acre industrial business park off Exit 13 of I-78.

But additional development is in the works in Berks County.

One more pad is left at Berks Park 78 and could accommodate a single facility at 163,000 square feet or two smaller facilities at that site, Scott said. This site is still under control of the Berks County Industrial Development Authority.

Now that both Dollar General and PetSmart have gone through opening ceremonies, the site is now active with business development, with additional room for more companies.

Dollar General, a 906,919-square-foot distribution center, began outbound operations in March, while PetSmart started outbound operations at its 870,000-square-foot-facility in May, said Steve Haver, property manager for Berks Park 78 Owners’ Association, a group that owns the common areas of the industrial park.

The Dermody Properties speculative project is estimated to cost $25 million to $30 million to build, Haver said.

As with any successful industrial real estate project, location, access to roads, infrastructure and a trained workforce are key factors, according to Steve Willems, sales professional/managing principal at NAI Keystone Commercial & Industrial LLC in Reading.

“The I-81/I-78 corridor runs up to the Northeast. We are a nice, very well-located stop along the way,” Willems said. “This is what we would call a big box site more typical of the highway or interstate.”

With the high number of applicants looking for work at Dollar General and PetSmart, there still are many people available to work at the other buildings yet to go up at Berks Park 78, Willems said.

Meanwhile, across the highway, Prologis wants to build an industrial site slightly less than one million square feet. This is one of – if not the largest – industrial property under development in Berks County, Scott said.

The county makes an ideal region for other industrial sites which could be used for warehouse, distribution or manufacturing. Proximity to the major industrial corridor of I-78 and I-81 make Berks an emerging hot spot for these types of developments.

Anything that needs to be created, shipped or stored could find a home in the rural regions of Berks County.

Perry Township makes an ideal spot, according to Scott. It’s here along Route 61 that a development company is working on a property and securing permits to build a light industrial site. The property is under contract, and the developers are ready to move forward, Scott said.

In New Morgan, just outside Reading, thousands of acres offer prime real estate for industrial development. Scott said 206 of these acres are designated Keystone Opportunity Expansion Zones. These zones offer various tax incentives, including tax abatement for a certain number of years, which help to lure developers.

The Berks Industrial Development Authority bought non-aviation land at Reading Regional Airport, a site that could be pivotal for a business looking to do aviation maintenance and repair operations, Scott said.

“Geographically, it really is at the nucleus of Berks County and therefore should have an easy time attracting a workforce from Berks County,” Scott said.

In contrast, the development at Berks Park 78, which is further east of Reading, has more of a multicounty workforce draw, Scott said.

Meanwhile, in Reading, Muhlenberg and West Reading, the Greater Reading Economic Partnership identified brownfield sites which could be repurposed as adaptive reuse, Scott said.

“I think there’s a very strong likelihood that those sites are going to be redeveloped,” he said.

The region has other tracts around the county for future industrial development, Willems said.

“Local business continues to grow,” Willems said. “Our supply of [available] buildings is at an all-time low.”

The region has an effective vacancy rate in industrial property of about 5 percent, he said.

“We see there’s definitely an interest in buyers and tenants alike,” Willems said. “We believe we are going to see more sites being developed in 2014 and 2015. There’s room for more.”

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Brian Pedersen

Brian Pedersen

Reporter Brian Pedersen covers construction, development, warehousing and real estate and keeps you up to date on the changing landscape of our community. He can be reached at brianp@lvb.com or 610-807-9619, ext. 4108. Follow him on Twitter @BrianLehigh and read his blog, “Can You Dig It,” at http://www.lvb.com/section/can-you-dig-it.

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