Shopping centers and ready-made office space top the list of what's hot

According to the National Association of Realtors, a leading indicator shows commercial sectors will continue to improve throughout 2006.

The Commercial Leading Indicator for Brokerage Activity has risen 2.7 percent from the first quarter of 2005. The first quarter index marked four straight quarters of growth, with improvement seen in 10 of the last 11 quarters.

Activity in northeastern Pennsylvania mirrors national activity with continued demand for commercial and industrial investment opportunities. One area where investment demand remains high is in shopping centers.

Lackawanna County:

"In general, shopping centers are commanding a lot of inquiries throughout the region," says John T. Cognetti, president of Hinerfeld Commercial Real Estate, Scranton. "Almost every shopping center in northeastern Pennsylvania has sold in the last five years, from the small ones to the big ones."

One property generating tremendous response in Scranton is The Shops at Linden Place located on an 8.5-acre site at 550 North Seventh Avenue. The property offers about 56,018 square feet of building area consisting of a Redner's Warehouse Market and an Arby's Restaurant. The paved parking area supports 375 parking spaces.

"There's a possibility to add 14,000 additional square feet to the site," says Cognetti. "The reason it's so hot is because there are so many people looking for investment-grade real estate, and they are looking all over the country, not just in major metropolitan areas. This type of property has attracted an awful lot of attention."

The $6.6 million asking price places the property in the hands of a niche area of investors. The property fronts on the east side of North Seventh Avenue and is easily accessible to traffic on North Seventh Avenue, West Linden Street and the North Scranton Expressway.

Carbon County:

Industrial sites also are attracting investors. In Carbon County, a property that shows potential for brisk activity is a brownfield site known as the Packerton Yards. The 59-acre site was formerly used as a transfer station for freight cars and for the storage and repair of steel and spare passenger rail car and parts. The property ties between the Lehigh River and Reading and Blue Mountain railroad lines in parts of the Borough of Lehighton and Mahoning Township. Located off Route 209, the site is minutes from the Pennsylvania Turnpike.

"We do know there is a lot of interest by industrial developers who have clients to move into buildings," says Fred Osifat, director of the Carbon County Office of Planning and Development."We have interest by several developers that when the park is ready, if you will, that they are willing to come in and put a shell building up to attract industry."

Results of a Phase III environmental assessment show landscaping with topsoil and other engineering measures can remedy the petroleum and petroleum byproduct contamination on the property, paving the way for the next step. The county hired an engineer to prepare preliminary plans for the infrastructure needed to create an industrial business park and anticipates a formal groundbreaking next year.

On the county's southern end, the South Carbon Business Park off Little Gap Road near Palmerton has seen brisk activity over the past two years. The site consists of over 61 acres of subdivided land zoned for general industrial use. The park's utilities include electric, onsite septic and onsite well.

"We had two companies last year that moved into Carbon County, Structural Metal Fabricator and Architectural Polymers," says Toni Artuso, Carbon County Economic Development Corporation. Across the street, Paules Metal Works expanded its 29,000-square-foot operations with construction of a 7,000-square-foot building.

Luzerne County:

Luzerne County also shows brisk activity at the CenterPoint Commerce and Trade Park-East, a 12.61acre industrial park in Jenkins Township between Scranton and Wilkes-Barre. "We are going to be able to develop acres in the first phase," says Jim Hilshire, vice president of marketing for Mericle Commercial Real Estate Services, WilkesBarre. "The industrial park fits very tight in this market right now. We are getting a lot of activity right now. We have three projects under way, and we don't have a road infrastructure yet." Developers expect the project to fill quickly due to its easy access to Interstate 81, and the Pennsylvania Turnpike and its close proximity to the airport and Interstates 80, 84 and 380.
The first phase of the project includes construction of a 128,992-square-foot building with office frontage and truck loading at the rear.

The site can be subdivided for various uses and holds a federal trade zone (FTZ) status that offers added benefits for cdmpanies meeting international trade requirements. Tenants will also be exempt from real estate property taxes for improvements over a 10-year period through the Local Economic Revitalization Tax Assistance (LERTA) program.

Monroe County:

The hot spot on the far eastern portion of the state is the Penn Regional Business Center, a planned $78 million office/commercial project on Route 209 in Middle Smithfield Township, Monroe County. The site's proximity to Interstate 80 and the New Jersey border makes it an attractive location for industries from the east, including what some call Wall Street West.

"When we deal with clients from New Jersey, everybody wants to be just across the bridge," says Chuck Leonard, executive director of the Pocono Mountains Economic Development Corporation, Tobyhanna.

"The Penn Regional Business Center is a concrete effort to address the business continuity the region has been pursuing. It has proximity to the marketplace, close to New Jersey, close to New York. It's the kind of project we think will generate the kind of jobs that will help us keep some of our commuters in the county."

Leonard doesn't expect those jobs until 2008 but believes the project will create opportunities for additional growth. "We think the Penn Regional Business Center provides us with the kind of property necessary to attract jobs to this side of the river," says Leonard. "We hope that it is something that will generate the kind of jobs that will keep people in Monroe. It's part of an overall comprehensive approach to economic development. We have realized we have a broad cross section of skills and abilities in our community, and we are trying to create jobs that will encourage as many people to work in Monroe County as we possibly can."

Developers expect the 14.6-acre site to house 278,500 square feet of space in two four-story buildings generating office capacity for up to 1,500 employees. The project includes improvements to the highway, sewer and water infrastructures. Anticipated amenities include a luncheon area, fitness and day care centers, conference facilities and a state-of-the-art cardaccess security system.