May 29—John Augustine, President and CEO at Penn's Northeast, says Northeastern Pennsylvania is experiencing record growth — there are more developers, brokers and companies looking at the region than ever before.

And Augustine said there are a few reasons for this, but a key factor is, as the saying goes, "location, location, location."

Augustine said the region is in a period of unprecedented growth with more than 70 million square feet of new construction being planned on and around the Interstate 81/Interstate 80 corridor.

"Our land is still affordable and accessible," Augustine said. "Our talent pool remains strong. Our education system is second to none and our utilities are some of the most reliable in the country. And our quality of life is amazing.

"The pandemic forced more online shopping than ever before and new generations of consumers are purchasing more than ever before, Much of those goods come from overseas."

Augustine says the key to all this lies within the first mile of the logistic chain — it's called "drayage" — which is the transport of freight from an ocean port to a destination.

"The amount of time and cost it takes to get the products from port to a distribution center is crucial," Augustine said. "We are fortunate to be close to the third largest port in the U.S. — the port of New York and New Jersey.

According to Augustine, the last mile is the next and most important part in delivery as more and more consumers want products ASAP.

"In one day's drive, you can reach one-third of the U.S. and half of Canada, giving NEPA a unique advantage," Augustine said.

So as more and more locations like Philadelphia and the Lehigh Valley run out of space and become unaffordable, Augustine says more and more companies are looking to the northeast.

"That is where Penn's Northeast plays a crucial role in regards to marketing our collective assets," Augustine said. "Our community leaders realized 20 years ago that no single community has everything it needs and so we needed a way to show brokers and site-selectors and companies all of the positive attributes that Northeastern Pennsylvania has to offer."

Augustine said Penn's Northeast began to work on behalf of its partners by attending trade shows, doing national advertising, maintaining events with brokers and developers across the country.

"We work with the state of Pennsylvania and its international office to showcase our region to the world," Augustine said. "And the efforts are paying off. Not only are we attracting distribution centers, but manufacturing, plastics and agri-business are our fastest growing sectors and we see that growth continuing."

Augustine said when you pull all of these assets and more together, NEPA is able to make as strong a case as any other region in the country.

The future is bright

Augustine says in the next few years there will be much more available space in newly constructed buildings along the I-81/I-80 corridor:

—30 million square feet in the greater Hazleton area.

—10 million square feet in Wilkes-Barre/Hanover Township/Pittston area.

—20 million in Lackawanna County.

—10 million Schuylkill County.

—2 million in Carbon County.

—2 million in Monroe County.

Augustine notes that the growth along I-81 is due to the lack of space and high cost in the Lehigh Valley area, and NEPA's proximity to major markets and proximity to ports is crucial.

"People who order products today want them tomorrow," Augustine said.

He said more industrial buildings were built and occupied during the pandemic than in the past 10 years.

Augustine also said there has been a recent renewed interest in manufacturing.

"Many leads we are getting are from overseas companies looking to make products in the U.S.," Augustine said.

Mericle sees increased interest

Jim Cummings, vice president of marketing at Mericle Commercial Real Estate Services, said the national brokerage community has branded eastern and central Pennsylvania as the I-78/I-81 Corridor. This includes an area that starts just north of Scranton and extends south to the Pennsylvania/Maryland border. The Allentown/Bethlehem/Easton and Greater Harrisburg areas are included in this geography.

"Robust industrial growth in the Corridor over the past 10 years has made it one of the largest areas for development in the nation," Cummings said. "In its report entitled — United States Industrial Outlook — Q1 2022 — the national commercial brokerage firm JLL lists eastern and central PA as having a total industrial inventory of approximately 787 million square feet, the second most for any market in the country. Only Chicago, with 1.3 billion square feet, has more."

Cummings said Greater Hazleton's proximity to Interstates 81 and 80, affordable operating costs, productive workforce and the pro-business attitude of its local governments, are very appealing to major corporations.

"In competing metro areas, real estate costs are skyrocketing and land is becoming scarce," Cummings said. "With the new business parks that have been proposed, Greater Hazleton finds itself in a unique position to transform its economy and reverse long-term negative economic indicators such as high unemployment rates and below average family household incomes."

Since 2007, Cummings said Mericle's CenterPoint Commerce & Trade Park in Jenkins Township and Pittston Township has been one of the fastest growing business parks in the Commonwealth. Today, the park has 70 tenants and 7,500 employees. Mericle constructed the large majority of the buildings in the park on speculation, with no tenants in-hand.

"We credit the state and local governments with creating a pro-business environment that made it worth taking on such significant financial risk," Cummings said. "CenterPoint's immediate highway access and proximity to the major metro areas in the northeast U.S., strong utility service, and affordable business costs, are some of the factors that have helped us attract companies to the park."

Since January of 2020, Cummings said Mericle has seen an increase in inquiries for industrial space.

"We have been able to accommodate quite a few of the businesses in our buildings located throughout Lackawanna and Luzerne counties," he said.

He said the nation's fastest growing industrial areas are those that are within a few hours of tens of millions of people.

"The I-78/I-81 Corridor is able to check that box," Cummings said. "Whenever national firms like JLL issue reports that list this part of Pennsylvania among the leaders for industrial development, private industry takes notice. Companies don't like to blaze trails. They tend to locate where their friends and competitors have already done due diligence and opened successful operations. Lately, the I-78/I-81 Corridor has been that place."

GAT Report

In February, Augustine said the annual report issued by the Governor's Action Team (GAT) for Fiscal Year 2020-21 showed Northeastern Pennsylvania as the Commonwealth's leader in job creation as a whole, as well as in the manufacturing industry and regional and national headquarters sectors.

"Northeastern Pennsylvania is leading the state and country in manufacturing and e-commerce distribution," Augustine said at the time. "We expect that trend to continue in 2022 and beyond. Companies realize our strategic location, excellent workforce and low operating costs are the keys to their success."

Augustine has been advocating a regional approach to economic development for years and the effort is showing huge dividends.

"This is a testament to our regional approach to economic development," Augustine said. "This could not have happened with one community competing against another. This is cooperation at its finest, showcasing the best that Northeastern Pennsylvania has to offer."

Augustine said the report provides additional detail on GAT's results this year, including major job creation projects like Ball Corporation in Jenkins Township and CANPACK Group in Olyphant, Lackawanna County, establishing aluminum canning operations in Northeastern Pennsylvania; and many other examples of businesses choosing Pennsylvania as the best location for sustainable long-term growth.

"This report showed that we created more new jobs than any other region in the state," Augustine said. "And the majority of those jobs were in manufacturing and other sectors."

'The GAT report reaffirms what we know — that our region is one of the most sought-after locations in the U.S.," Augustine said. "It also shows that it's not just about e-commerce distribution, but also manufacturing and national and regional headquarters."

Augustine said major companies in the U.S. and globally no longer see municipal boundaries when they look at NEPA.

"They see opportunities," Augustine said. "And our collective whole is our greatest good."

Earlier this year, Sen. John Yudichak, I-Swoyersville, said $1.19 billion in private investment leveraged the creation of 2,362 jobs and the retention of 2,622 existing jobs, while spurring an economic ripple effect that sustained 11,048 jobs in the region.

"It has been a long time since northeastern Pennsylvania led the state in job creation, and it is important for the economic and community leaders of our region to take pride in this great accomplishment, welcome new companies who are investing in our region, and double our efforts to sustain the historic economic growth we are experiencing in the region," Yudichak said.

"The entire I-81/I-80 corridor is bustling with new economic development and poised to create thousands of new job opportunities in northeast Pennsylvania over the next decade. Northpoint, Blue Cup Ventures, Mericle, Blue Creek, and Hazleton Creek Properties are just a few of the private developers lining up to invest in the transformation of the I-81/I-80 corridor into the number one place to do business in Pennsylvania."

DCED comments

The Pennsylvania Department of Community and Economic Development (DCED) said the proximity and speed to markets are huge advantages for the region, thanks to five different interstates meeting in Northeastern PA.

Additionally, DCED says the commercial industrial market has been proven to the capital markets, demonstrating that new buildings can be absorbed at rates where investors can make a consistent return over the life of the lease.

DCED cited other benefits NEPA has, including:

—Within 11 hours from NEPA — that's the allotted time truck drivers have to drive a day per The Federal Motor Carrier Safety Administration (FMCSA), of the US Department of Transportation (DOT) — a truck driver can reach approximately one-third of the U.S. population and half of the Canadian population.

—The region has a slightly higher unemployment rate than neighboring regions, increasing the size of the labor pool and labor participation rate for companies.

Augustine said, "Northeastern Pennsylvania offers a wealth of walkable neighborhoods, beautiful historic buildings, cultural institutions, parks, and sporting opportunities that enrich the lives of our region's residents.

"Working together, we believe the best is yet to come."

Reach Bill O'Boyle at 570-991-6118 or on Twitter @TLBillOBoyle.