New player enters Lehigh Valley industrial real estate market

April 13–There's a new player in the Lehigh Valley's booming industrial real estate market.

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Over the past couple of months, Penwood Real Estate Investment Management, a Connecticut firm with an office in New Jersey, has closed on two industrial properties in Upper Macungie Township, and with a development partner acquired 44 acres just over the border in Berks County. And that could just be the start.

“We don't view this as a one-off or a two-off acquisition,” said Penwood Managing Director Howard Freeman, who oversees the company's Pine Brook, N.J., office and is responsible for its East Coast acquisitions. “The Lehigh Valley is absolutely a target market of ours.”

While these recent acquisitions technically represent Penwood's entrance into the Lehigh Valley — the company's other projects are in California and New Jersey — its principals are familiar with the Lehigh Valley market. Freeman was previously senior regional director for First Industrial Realty Trust's Eastern region, where he was responsible for the company's acquisition, development and redevelopment in select markets, including the Lehigh Valley.

His most recent round of acquisitions in the Lehigh Valley started in February, when Penwood completed its purchase of a 41,390-square-foot industrial building on 4.09 acres at 7020 Snowdrift Road in the Iron Run Corporate Center for $2.63 million, according to Lehigh County property records.

Then in March, Penwood acquired a roughly 81,000-square-foot industrial building on about 10.6 acres at 6980 Snowdrift Road, also in the Iron Run Corporate Center, for $4.65 million, property records show.

Freeman said Penwood is planning significant renovations to the two buildings to enhance their market appeal. That includes upgraded loading areas, building mechanical systems, office improvements, exterior cosmetics and roof replacements, he added.

While 7020 Snowdrift Road has two small tenants, Freeman said about 30,000 square feet is vacant there and is in need of work to attract another tenant. Meanwhile, the building at 6980 Snowdrift Road is vacant after building and industrial product distributor BlueLinx decided to sell the property as part of its strategy to reduce debt. Now Penwood is planning to expand that building to help appeal to a warehouse user, Freeman said.

“That's the overall Penwood strategy,” Freeman said. “We're not a buyer, generally, of long-term stabilized assets. We're more of an investor in buildings that require some hands-on activity.”

In addition, Penwood and its development partner, JVI LLC of Wind Gap, in mid-March acquired a 44-acre site near Route 737 and Long Lane in Greenwich Township, Berks County, for $1.76 million, property records show. There, Freeman said, Penwood and JVI are seeking approvals to construct near Interstate 78 a 505,000-square-foot warehouse, which is being built on spec and is slated for completion in mid-2018.

While Penwood has had a busy last couple of months in the region, Freeman said the company is seeking additional investments in Pennsylvania and the Lehigh Valley, which he noted has “excellent access” to major highways and is within about 60 miles of Newark Liberty International Airport and Port Newark-Elizabeth Marine Terminal.

“We're intimately familiar with the market and view this as just the beginning of our activities there,” Freeman said.

jon.harris@mcall.com

610-820-6779

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