The industrial market along the I-81 and I-78 corridors in Pennsylvania experienced strong growth in 2016, with record high leasing activity, positive absorption, and new construction. The overall vacancy rate declined to 4.7% while asking rental rates reached an all-time high of $4.63 per square foot. Construction activity remains robust with 13.2 million square feet currently under construction, driven by speculative development. Despite expected delivery of new inventory in 2017, vacancy is forecast to remain stable due to ongoing strong demand.

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PA I-81 & I-78 Corridor
Industrial Q4 2016
MARKETBEAT
Economic Indicators
Market Indicators (Overall, All Property Types)
Overall Net Absorption/Overall Asking Rent
4-QTR TRAILING AVERAGE
Overall Vacancy
Q4 15 Q4 16
12-Month
Forecast
Pennsylvania Employment 5,862M 5,895M
Pennsylvania Unemployment 4.7% 5.7%
U.S. Unemployment 5.0% 4.8%
Q4 15 Q4 16
12-Month
Forecast
Vacancy 5.2% 4.7%
Net Absorption (sf) 9.8M 16.7M
Under Construction (sf) 12.4M 13.2M
Average Asking Rent* $4.31 $4.64
*Rental rates reflect net asking $psf/year
Economy
The State of Pennsylvania’s unemployment rate increased by 100
basis points (BPS) year-over-year to 5.7% in the fourth quarter of
2016. Despite the rise in unemployment, Pennsylvania's total
nonfarm employment increased by 0.6% over the past year. The
sectors that experienced the largest growth were the professional
and business services (+2.3%), the education and health services
(+1.7%), and the leisure and hospitality sectors (+1.7%).
Market Overview
The I-81 and I-78 industrial market’s overall vacancy rate declined to
4.7% in the fourth quarter of 2016, down 50 BPS year-over-year. In
2016, the market produced the highest annual totals on record for
leasing activity with 19.3 million square feet (MSF) leased, positive
absorption of 16.7 MSF and 17.3 MSF of new construction
delivered. Direct asking rental rates for warehouse and distribution
space climbed to an all-time high to $4.63 per square foot (PSF) in
the fourth quarter, a 1.5% increase from the previous market peak.
Asking rents increased due primarily to the 13.8 MSF of speculative
(spec) product that delivered in 2016, which quote asking rates
north of $4.75 PSF and as high as $5.35 PSF.
Leasing activity was robust in all three submarkets in the I-81 and I-
78 industrial market. In Central PA, there were three leases signed
that exceeded the 1.0-MSF mark including, Starbucks leasing the
1.2-MSF building at 1605 Bartlett Drive in Manchester, Whirlpool
taking 1.1 MSF at 100 Fry Drive in Mechanicsburg, and Mattel
leasing 1.0 MSF at 575 Old Forge Road in Jonestown. In Lehigh
Valley, significant leases included the 1.2-MSF lease to Verizon at
8620 Congdon Hill Drive in Alburtis, Amazon leasing 1.1 MSF at
1610 Van Buren Road in Easton and East Penn Manufacturing
taking 650,000 SF at 8742 Congdon Hill Drive in Alburtis. In
Northeastern PA, Chewy Inc. signed for 808,160 SF at 600 New
Commerce Boulevard, Hudson’s Bay Company took 617,500 SF at
25 Keystone Boulevard in Pottsville, and Amazon leased 399,500
SF at 250 Enterprise Way, also in Pittston.
Outlook
Construction activity is showing no signs of slowing with 13.2 MSF
currently under construction, up 6.9% from year-end 2015. Of the
13.2 MSF under construction, 8.7 MSF is being constructed on spec
which is expected to drive the asking rental rate average further
northward by year-end 2017. Despite the influx of new available
inventory projected to deliver in 2017, the overall vacancy rate is
expected to remain stable, as demand in new spec product has
been robust over the past few years.
PA I-81 & I-78 INDUSTRIAL
$3.20
$3.40
$3.60
$3.80
$4.00
$4.20
$4.40
$4.60
0
2,000
4,000
6,000
8,000
10,000
12,000
2011 2012 2013 2014 2015 2016
Net Absorption, (thousands) Asking Rent, $ PSF
0%
2%
4%
6%
8%
10%
12%
14%
2011 2012 2013 2014 2015 2016
Historical Average = 7.7%

2. MARKETBEAT
About Cushman & Wakefield
Cushman & Wakefield is a leading global real estate services firm that helps clients transform the way people work, shop, and live.
Our 43,000 employees in more than 60 countries help investors and occupiers optimize the value of their real estate by combining
our global perspective and deep local knowledge with an impressive platform of real estate solutions. Cushman & Wakefield is
among the largest commercial real estate services firms with revenue of $5 billion across core services of agency leasing, asset
services, capital markets, facility services (C&W Services), global occupier services, investment & asset management (DTZ
Investors), project & development services, tenant representation, and valuation & advisory. To learn more, visit
www.cushmanwakefield.com or follow @CushWake on Twitter.
Copyright © 2017 Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from multiple
sources considered to be reliable. The information may contain errors or omissions and is presented without any warranty or
representations as to its accuracy.
PA I-81 & I-78 Corridor
Industrial Q4 2016
Cushman & Wakefield
1650 Market Street-33rd Fl
Philadelphia, PA 19103
cushmanwakefield.com
For more information, contact:
Jared Jacobs, Research Manager
Tel: +1 215 963 4077
Jared.Jacobs@cushwake.com
SUBMARKET
TOTAL
BLDGS
INVENTORY
(SF)
YTD
LEASING
ACTIVITY
(SF)
YTD
USER
SALES
ACTIVITY
(SF)
OVERALL
VACANCY
RATE
YTD
OVERALL NET
ABSORPTION
(SF)
UNDER
CNSTR
(SF)
YTD
CONSTR
COMPLETIONS
(SF)
OVERALL
WEIGHTED
AVG.
NET RENT
(MF)
OVERALL
WEIGHTED
AVG.
NET RENT
(OS)
OVERALL
WEIGHTED
AVG.
NET RENT
(W/D)
Lehigh Valley 206 75,878,213 7,318,847 0 3.3% 9,833,089 4,003,658 9,435,958 $3.50 $6.00 $5.17
Northeastern PA 157 56,437,621 3,458,038 0 4.0% 2,480,421 2,971,660 1,803,334 N/A $5.31 $4.19
Central PA 356 124,479,632 8,498,165 854,042 5.9% 4,438,808 6,230,706 6,079,107 N/A N/A $4.55
PA I-81 & I-78 TOTALS 719 256,795,466 19,275,050 854,042 4.7% 16,752,318 13,206,024 17,318,399 $3.50 $5.58 $4.63
*Rental rates reflect asking $psf/year MF = Manufacturing OS = Office Service/Flex W/D = Warehouse/Distribution
Key Lease Transactions 2016
PROPERTY SF TENANT PROPERTY TYPE SUBMARKET
1605 Bartlett Drive 1,209,000 Starbucks Warehouse/Distribution Central PA
8620 Congdon Hill Drive 1,200,000 Verizon Warehouse/Distribution Lehigh Valley
100 Fry Drive 1,116,928 Whirlpool Warehouse/Distribution Central PA
1610 Van Buren Road 1,104,000 Amazon Warehouse/Distribution Lehigh Valley
575 Old Forge Road 1,002,000 Mattel Warehouse/Distribution Central PA
600 New Commerce Boulevard 808,160 Chewy, Inc. Warehouse/Distribution Northeastern PA
Key Sales Transactions 2016
PROPERTY SF SELLER/BUYER PROPERTY TYPE PRICE / $PSF SUBMARKET
1 True Temper Drive 1,226,525 PNC Bank / Clarion Partners Warehouse/Distribution $90,150,000 / $74 Central PA
325 South Salem Church Road 785,400
Endurance Real Estate Group /
AEW Capital Management
Warehouse/Distribution $60,000,000 / $76 Central PA
Key Construction Completions 2016
PROPERTY SF SUBMARKET MAJOR TENANT PROPERTY TYPE COMPLETION DATE
700 & 800 Uline Way 1,670,000 Lehigh Valley Uline Warehouse/Distribution Q3 2016
1605 Bartlett Drive 1,209,000 Central PA Starbucks Warehouse/Distribution Q1 2016
8620 Congdon Hill Drive 1,200,000 Lehigh Valley Verizon Warehouse/Distribution Q3 2016
1610 Van Buren Road 1,104,000 Lehigh Valley Amazon Warehouse/Distribution Q1 2016
Key Projects Under Construction
PROPERTY SF SUBMARKET MAJOR TENANT PROPERTY TYPE COMPLETION DATE
100 Fry Drive 1,116,928 Central PA Whirlpool Warehouse/Distribution Q3 2017
8801 Congdon Drive 1,100,000 Lehigh Valley Speculative Warehouse/Distribution Q2 2017
149 Willowbrook Road 1,031,096 Lehigh Valley FedEx Warehouse/Distribution Q3 2018
575 Old Forge Road 1,002,000 Central PA Mattel Warehouse/Distribution Q2 2017
200 Goodman Drive 938,828 Central PA Speculative Warehouse/Distribution Q1 2017
Hanover Ridge Trade Center – Building III 843,000 Northeastern PA Speculative Warehouse/Distribution Q2 2017