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BERKS BONANZA 6M square feet of new logistics and warehouse buildings are underway or planned

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A developer from Baltimore is building this 300,000-square-foot logistics center at Hamburg Logistics Park, at Route 61 south of Zion Church Road, Perry Township.
A developer from Baltimore is building this 300,000-square-foot logistics center at Hamburg Logistics Park, at Route 61 south of Zion Church Road, Perry Township.

Huge machines have turned acres of old hills, dales and putting greens into table-flat building sites, and crews have put up steel and concrete this summer at the biggest of seven major land-development projects in Berks County.

The projects are designed to help fill demand for shipping and logistic services in the Interstate 78 corridor, as well as to allow local companies to expand without leaving the area.

Together, the seven plans show 755 acres of development, with 5.9 million square feet – 136 acres – under roof, and slots for 1,678 tractor-trailers.

In total, developers paid upward of $70 million for the land.

They sense urgency in the market – much of the land was purchased this year and construction has been heavy this summer.

The biggest parks hope to have buildings ready this year.

“Just like the Lehigh Valley, this area is within a day’s travel of all the major ports of New York, Philadelphia and Baltimore,” said Joseph H. Body, engineer and zoning officer for Perry Township, home to three major developments now being built.

LABOR POOL AND I-78

The marketers, and their online brochures, stress that their sites are attractive because many workers are available just down the road in Reading.

“That really is a key point,” said Alan Lewis, a partner with The Keith Corp., a commercial real-estate firm based in Charlotte, N.C., developing Hamburg Commerce Park on Route 61 in Perry Township. He said the labor market is generally tight in the Lehigh Valley.

The other selling point is the location. Big companies from all over the United States and the world are considering sites in the Interstate 78 corridor to take advantage of quick access to ports and customers throughout the Eastern seaboard.

Rural Perry Township is hosting a cluster of three warehouse projects totaling 440 acres, centered on Route 61 and Zion Church Road, three miles south of Interstate 78.

HAMBURG COMMERCE PARK

The big news at the 210-acre Hamburg Commerce Park, at the northeast corner of Route 61 and Zion Church Road, is that the developer has decided to offer a 1.5-million square-foot building, which would be one of the biggest speculative structures in the Greater Lehigh Valley, according to Lewis.

“We are trolling for tenants in that range,” he said.

The company bought the former Esther Ludwig estate and surrounding parcels in April for about $33 million and began work immediately on a speculative 600,000-square-foot warehouse. Overall, 2 million square feet of building space are available. Plans show parking for 626 tractor-trailers and 1,000 other vehicles.

Many companies are considering the site, Lewis said.

HAMBURG LOGISTICS PARK

Across Zion Church Road, on the southeast corner of Route 61, MRP Industrial, based in Baltimore, also is putting up a massive building on speculation.

Plans for Hamburg Logistics Park on 165 acres on the former Perry Golf Course, also in Perry Township, show a distribution center with three buildings with a combined 1.9 million square feet.

D. Reid Townsend, a founding principal of MRP, said the 1.24 million-square-foot building under construction there is the largest ever built in Pennsylvania before a tenant has committed.

STEADY INTEREST

In fact, most of the building in the region is speculative, Townsend said, showing the demand for projects where business can quickly start operations. He said he expects that building to be finished in early 2019, while a 340,000-square-foot building will be finished this fall.

The park is getting steady interest with “multiple active proposals,” Townsend said. Plans show parking for more than 700 tractor-trailers and 1,200 other vehicles.

Body said construction around the intersection has caused problems with mud on the road and dust, but builders respond appropriately.

Despite lots of truck traffic, “there hasn’t been a storm of complaints,” Body said.

LOGISTICS CENTER AT VALLEY WEST

Across Route 61 and to the south, at Zweizig Road, construction started in July on a 504,000-square-foot warehouse on 65 acres, said Paul Pontius, vice president of investments at Core5 Industrial Partners, based in Atlanta.

He said he expects Logistics Center at Valley West to be finished in April.

It’s also speculative construction, Pontius said, which is now “the name of the game” because new tenants don’t want to wait before starting operation.

BEST USE FOR TOWNSHIP

Perry Township changed the zoning at the sites from residential to light-industrial-commercial, which permits warehouses, Body said. Most of the township is preserved agricultural. These sorts of projects make better sense for the township than building high-density housing, which puts a great demand on schools and municipal services, Body said.

The Hamburg Commerce and Hamburg Logistics properties, formerly containing residential real estate and a golf course, respectively, had been for sale for years, Body noted.

“No one would buy it [the land] and make something pretty,” he said. “This is what you get.”

Developers picked this spot because it’s three miles from Interstate 78, Body said. The state’s coincidental improvements to Route 61 on the stretch are an advantage, he said.

BERKS61

Brasler Properties of Philadelphia is developing another park, Berks61, on 19 acres on Route 61 in Muhlenberg Township, nine miles south of the cluster in Perry Township.

Two businesses are interested in the spot, said Chris Brasler, CEO of Berks61 LLC.

Plans show one building of 270,000 square feet, across from Witman Road.

Work started in July, Brasler said. The interested tenants are regional companies, of which he declined to name. They would use the buildings for “mixed logistics” and light manufacturing, he said. He expects construction to be finished in the middle of next year.

SNAGS AT THE STATE LEVEL

Brasler said the three-year permitting process was discouragingly lengthy.

It was easy to work with Muhlenberg Township, but the state’s “bureaucratic process is not a logical growth-oriented process,” Brasler said.

The Berks 61 park has railroad access and is approved for the state Local Economic Revitalization Tax Assistance program, known as LERTA.

BERKS222

Brasler Properties also is developing Berks222, two 180,000-square-foot buildings on 52 acres at Route 222 and East Huller Lane. Ontelaunee Township granted conditional final approval in March.

Brasler said he expects two to four tenants will use the site for logistics, light manufacturing or assembly, and may be interested in setting up cold-storage.

He expects construction will be finished in the second or third quarter of 2019.

GREATER BERKS DEVELOPMENT FUND

Beside private developers, the Greater Berks Development Fund, a nonprofit development agency, is working on an 89-acre industrial park in Bern Township off Route 222. The development fund bought three adjacent properties in April for $4.8 million.

They flank the expressway just south of Leisczs Bridge Road and have access from Van Reed Road. Several other companies use Van Reed at the Route 183 exit to access Route 222.

The development fund plans to submit plans to Bern Township to subdivide the parcels into multiple lots, according to Debra Millman, director of business development at the Greater Reading Chamber Alliance, a business and development organization.

LOCAL RETENTION

Millman said she hopes the parcels provide opportunities for local companies that are growing to remain or locate in Greater Reading.

Many companies around Reading have grown but are landlocked or operate in buildings that no longer serve their operations, she said.

Some businesses, mostly local, are interested, Millman said.

The development fund hopes to sell the land as is but may add improvements if funding is available, she said. The development fund has posted signs and plans to start to otherwise soon market the site.

BERKS 183

Plans to develop 155 acres, known as Berks 183, on Aviation Road near the Reading Regional Airport in Bern Township hit a hurdle when infrastructure bids came in much higher than expected, said Thomas C. McKeon, executive director of the Berks County Industrial Development Authority.

The authority, which bought the land in 2011 for about $3.2 million, is scaling back plans to save costs and expects to rebid this fall and start construction in the spring, McKeon said.

J.G. Petrucci Inc., a developer based in Asbury, N.J., has agreed to buy one parcel for a 100,000-square-foot building, McKeon said. He anticipates small businesses such as manufacturers, service companies, labs or offices would fit.

He also said leaders at local companies have said they are growing and need new sites in Greater Reading to preserve their workforce. n

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