NORTHEASTERN PA — An affiliate of Endurance Real Estate Group, LLC (“Endurance”) announced the acquisition of a three building bulk warehouse/distribution portfolio totaling 544,640 s/f in Northeastern Pennsylvania. The portfolio includes 7 and 15 Alberigi Dr. in Jessup Borough, consisting of 166,500 s/f and 129,500 s/f, respectively, and a 248,640 s/f building at 32 S. Preston Dr. in Wilkes-Barre. The portfolio is situated in the Northeast PA submarket of the I-81/I-78 Distribution Corridor, offering users immediate proximity to I-81 and close proximity to I-476 (PA Turnpike), I-80, I-84 and I-380. The portfolio is currently 50% occupied.
The buildings were constructed in the late 2000’s and feature class A warehouse/distribution specifications including 30’ clear ceiling heights, ESFR sprinkler systems, and ample (and expandable) loading capacity with full dock packages. 7 Alberigi Dr. is fully leased to two tenants including BAE Systems in the majority of the square footage. 15 Alberigi Dr. is fully available and easily demisable, having been designed with multiple storefront entrances to efficiently accommodate tenant suites ranging from 32,500 s/f up to a full-building presence. 32 S. Preston Dr. offers a 124,080 s/f contiguous block of available space which is demisable down to approximately 40,000 s/f units, with the other 50% of the building occupied by Rehrig Penn Logistics. Planned immediate improvements to 15 Alberigi Dr. and the existing vacancy at 32 S. Preston Dr. include an upgrade of the warehouse lighting to T5 fixtures and the construction of flexibly designed shell office space and restrooms providing an easily expandable and customizable template for new tenants.
“This deal represented a rare opportunity to acquire class A quality assets below replacement cost in a tightening submarket in one of the strongest warehouse/distribution corridors in the country” said Benjamin Cohen, president of Endurance. “Two of the buildings suffered from persistent vacancy largely due to the timeframe in which they were delivered in the 2006-2008 time frame, though with leasing market conditions tightening and the inherent appeal of these assets combined with a fresh approach to property leasing and management (with suites in move-in condition) we feel confident that we can step in and stabilize the portfolio quickly,” added Cohen.
The Endurance team has considerable ownership experience in the 1-81/I-78 Distribution Corridor overall and the Northeast PA submarket specifically, with just under 2 MSF combined of existing warehouse/distribution product and entitled FAR in the Northeast PA region in its portfolio inclusive of the subject portfolio. In nearby Pittston, PA, Endurance’s re-development project at the Interstate Distribution Center in Pittston, PA is underway with both demolition of the former 1 MSF building and sitework in progress to deliver a mass-graded site in late spring 2015 capable of accommodating 1.2 million s/f out of the fully entitled 1,506,000 s/f footprint.