HITTING THE RESET BUTTON? Office construction slows in Allentown yet leasing still strong

The dramatic resurgence of commercial development that revitalized downtown Allentown the past few years has reached a pivotal point.

The dramatic resurgence of commercial development that revitalized downtown Allentown the past few years has reached a pivotal point.

While restaurants and retail developments have taken off following the opening of PPL Center two years ago, construction of office space in the city has slowed considerably.

In its place, residential construction, namely upscale apartments, has taken over as the dominant form of development. And that growing desire of people to live in downtown is really what’s going to drive the next round of office development in Allentown, officials said.

Millennials and other young executives are showing an increasing interest in living close to their workplace. Doing so allows them to participate in nightlife after hours, walk to work, network more easily with colleagues and shop in local stores, taking part in an authentic live-work-play environment.

And although construction of offices has slowed in Allentown, there is still demand, developers said. Furthermore, they are looking to establish the live-work-play atmosphere in Allentown.

One needs to look no farther than what’s happening to the urban environment of Philadelphia to see a similar effect also taking shape in Allentown. The scale, size and design of the office buildings going up in Philadelphia can be seen as an influence on the projects planned for downtown Allentown.

When this is coupled with the influx of urban millennials seeking the live-work-play environment, a renewed vigor in office construction projects could occur in Allentown.

But whether Allentown sees as much significant office growth as Philadelphia, even on a smaller scale, remains to be seen.

“Employers’ ability to retain and attract workers is impacted by the environments that they are working in,” said J.B. Reilly, CEO of City Center Investment Corp. His company is the developer behind the bulk of new multimillion dollar projects in Allentown, including Five City Center and Tower 6, two office buildings that are planned.

“Young people want to live in an urban environment,” Reilly said.

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.

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