ROCK Commercial Releases 2021 Q4 Market REPORT

Feb 16, 2022 | Blog Posts

YORK COUNTY INDUSTRIAL | INSTITUTIONAL INVESTORS BOOST SALE VOLUME IN Q4, LEASED SQUARE FEET AT HISTORIC HIGH, VACANCY AT HISTORIC LOW

  • A record 4,101,266 SF was leased in 2021, a 135% increase from 2020 and a 24% increase from 2019.
  • Vacancy plummets to a historic low of 2.86%.
  • Absorption was positive for the year at 2.6 MSF illustrating high demand. This is a record for the county.
  • 300 S Salem Church Rd, York, sold for an estimated $60M as part of merger between VEREIT, Inc. and Realty Income Corporation. The portfolio, valued at $11 billion, contained 3,918 properties nationwide consisting of industrial, retail and office product.
  • REIT acquisitions accounted for over $190M of sales volume in Q4.
  • Industrial expansion projects account for 47% of active construction.
  • 903,599 SF is under construction with over 6 MSF proposed.


YORK COUNTY OFFICE | LEASED SQUARE FEET ENDS AT 3-YEAR HIGH, VACANCY REMAINS BELOW 5%

  • Leased square feet continues to climb and exceeds pre-pandemic levels. Vacancy remains at a five-year low.
  • 50% of office sale transactions were attributed to medical use in Q4 and 39% of transactions for 2021.
  • Average unit size continues to decrease, though 2021 witnessed an uptick in due to several transactions for units greater than 10,000 SF.
  • York County’s positioning as a tertiary market has thus far been insulated from large influxes of vacancy that affect larger metros.
  • York County office continues to remain stable boasting low vacancy and elevated lease rates.


YORK COUNTY RETAIL | LEASED SQUARE FEET EXCEEDS 2020 TOTAL, AVERAGE LEASE RATE UP 11.4% SINCE 2017

  • Absorption slipped further negative in Q4 but supply remains evenly matched with demand.
  • The ROCK Demand Index (RDI) reveals that in the past 12 months, 55% of retail space demand is comprised of businesses seeking an additional location.
  • Small shopping centers (4-5 units) containing a strong tenant mix of national retailers remain popular among investors.
  • Old Navy is to occupy 12,569 SF at Gateway Shopping Center, Hanover in Q1 2022.
  • Vacancy increased 22 basis points to 5.66%.
"The ROCK Demand Index (RDI) reveals that in the past 12 months, 55% of retail space demand is comprised of businesses seeking an additional location."

LANCASTER COUNTY INDUSTRIAL | MARKET REMAINS TIGHT AS VACANCY PLUMMETS BELOW 1.5%, INSTITUTIONAL INVESTORS BOOST SALE VOLUME IN Q4

  • Vacancy dropped for a fifth consecutive quarter and trending below the national vacancy rate of 3.7%.
  • Low vacancy is expected to continue throughout 2022 as demand remains elevated and the construction pipeline remains shallow.
  • 1405 & 1473 ZeagerRoad, Elizabethtown were included in a nationwide portfolio purchase totaling $2.3B.


LANCASTER COUNTY OFFICE | LEASED SQUARE FEET CLOSES GAP ON 2020 TOTALS, FALLS SHORT OF ACHIEVING PRE-PANDEMIC LEVELS

  • Demand for larger office space continues to decrease. Since 2017, average unit size of signed leases has decreased 65.9% from 6,463 SF to 2,199 SF.
  • Absorption ended negative in 2021 with 90,723 more square feet made available than leased. Leased square feet closed the gap on 2020 levels but fell short of exceeding pre-pandemic levels.
  • Medical drove sales volume in 2021 with 49.6% of sale dollars attributed to medical office space.
  • The construction pipeline remains shallow though Penn State Health Medical Center at 2160 State Road in East Hempfield Township remains under construction and on track for completion in Fall 2022.


LANCASTER COUNTY RETAIL | VACANCY HOLDS BELOW 4% AS AVERAGE LEASE RATE CONTINUES TO EXCEED $15/SF

  • The Lancaster County EDC cited little change in consumer sentiment during the month of December 2021 due to concerns from inflation. However, the latest report cites higher consumer sentiment during the month of January 2022 which runs counter to the national measure. 1
  • Absorption fell negative for the year with more square feet made available than was leased.
  • Redevelopment plans to revitalize under performing retail centers are planned for the U.S. Route 30 corridor in East Lampeter Township.

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