by Emily Klingler | 4 min. read
The Industrial Landscape of York and Lancaster Counties
Manufacturing’s long-standing history in South Central PA has cultivated a diverse landscape of industrial properties across York and Lancaster counties. The region’s location, affordability and transportation infrastructure has expanded the scope of locally manufactured products, contributed to the success of new development, and attracted major manufacturing and fulfillment brands.
The rise of e-commerce, advancements in AI technology, and major shifts in geopolitics have reshaped the real estate market across the nation, and smaller markets like York and Lancaster counties are not immune. However, accommodating this growth is not as simple as updating older properties or creating new development projects. The future-focused needs of tenants and investors are centered on adaptability to ensure sustainability for their businesses.
Whether you plan to relocate, expand or consolidate your business within York or Lancaster County, below is a brief summary of the characteristics and trends of the region’s industrial real estate market to help guide you in making data-driven decisions to achieve your real estate goals.
A Competitive Industrial Market
In both York and Lancaster counties, the industrial real estate sector has outperformed office and retail in a turbulent post-Covid market. The region’s transportation infrastructure, proximity to major metro markets, access to a skilled labor force and land affordability has expanded the reach of local manufacturing networks and made the area a desirable location for distribution development. Manufacturing’s economic impact in Pennsylvania exceeds $116 billion and the industry produces more than 10% of jobs across the commonwealth, over 16% in Lancaster County. York County alone sees over 450 million tons of freight moving in and out of the county each year, with manufacturing and distribution expected to continue growing as e-commerce and AI-driven technology advance.
Since 2020, local industrial absorption has remained positive while vacancy rates have hovered at or below 2%. These factors are a result of high, reliable demand fueling competition and are indicators of a healthy, resilient market. With limited industrial space available, rental rates are increasing and development projects are springing up to meet ongoing demand. Well-informed buyers and tenants should perform due diligence in researching current market rates and values for industrial properties. Additionally, seeking guidance from a trusted professional who has established knowledge of the region and access to real-time market analytics is an important step in making successful, data-driven decisions in a competitive market.
Business Parks
The popularity of business parks in York and Lancaster counties has grown rapidly since the early 2000’s. According to ROCK’s in-house data, business park development in York and Lancaster counties account for more than 50% of proposed construction and more than 75% of active, ongoing construction projects. There are approximately 25 operating business parks clustered along the I-83 corridor just north of York City, and Lancaster County is home to major business parks such as Greenfield and Rock Lititz which combine industrial, flex and other uses into multi-functional and collaborative campuses.
Business parks are centralized hubs that offer companies benefits such as access to transportation corridors, proximity to cities, and the opportunity to network within a mixed community of professionals and vendors, all key advantages within the manufacturing and supply chain industry. More affordable than developing vacant land, these parks offer flexible, scalable space options for evolving business needs, and typically include built-to-suit units or customized tenant build-out availabilities. They may also include high-end finishes and amenities for employees including on-site dining, fitness centers and landscaped areas.
Reshoring and Government Incentives for Manufacturing
In the wake of unstable geopolitical climate and trade policies, the impact of supply chain vulnerabilities exposed in recent years has influenced the manufacturing industry. One of the more significant trends is reshoring, an initiative intended to return manufacturing and supply chain operations to domestic locations. Not only has this contributed to placing upward pressure on demand for industrial logistics infrastructure in the region, but it has inspired the commonwealth to embrace the opportunity to enhance one of their trademark industries.
Manufacturing is already one of the primary industries contributing to Pennsylvania’s GDP, with machining and engineering deeply rooted in the region. York County is home to two major hydro power companies, American Hydro and Voith, whose flagship location outside West York City is one of the world’s largest dedicated hydropower turbine manufacturing facilities. To ensure the commonwealth remains an international leader in manufacturing, local officials have established legislation and incentive programs focused on creating employment opportunities and growing PA’s manufacturing sector for workers and suppliers.
These incentives include tax credits and low-interest loans for businesses to create, train and retain local employment and promote development of industrial parks and multi-tenant facilities. Energy plans are being introduced to encourage next-generation energy projects and stimulate the commonwealth’s economy by creating jobs and growing sustainable manufacturing.
Efficiency, Adaptability and Space Optimization
A key feature of warehouses is their built-in adaptability, an advantage that permits these properties to accommodate evolving construction trends, supply chain fluctuations, technology integration and space utilization. As e-commerce consumerism and technology shift industrial tenant and investor priorities toward optimizing efficiency and sustainability, local businesses, including major brands like Utz, are investing in proptech trends and consolidating their operations to reduce costs and improve productivity.
Modern development strategies are focused on innovation and adaptable design concepts that allow the property to evolve with technology. The most common proptech tools in the industrial sector are warehouse management systems (WMS), robotic automation and EV fleets, and net-zero goals of sustainable construction materials and renewable energy sources such as hydroelectric and solar.
Manufacturers and distributors are increasingly investing in AI-driven tools that automate and use algorithms to track and optimize shipping, packaging, storage and replenishment of goods and materials to better manage their supply chain network and reduce costs.
In Need of Industrial Warehouse Space?
Our team at ROCK is equipped with established industry knowledge and insights to help you find the right solution for your industrial real estate needs. Whether you are expanding your business or consolidating operations, contact us today for more information, browse our website for industrial properties to lease or purchase, or visit us at our offices in York and Lancaster.
