D2 Capital Advisors Arranges $6.15 Million Warehouse Construction Financing
Exclusive: $60M manufacturing complex slated for Bucks County
By Natalie Kostelni – Reporter, Philadelphia Business Journal
Pennridge Development Enterprises Inc. is constructing a 100,000-square-foot building on speculation as part of a bigger, $60 million plan to create an 80-acre industrial campus adjacent to the Pennridge Airport in Bucks County.
The building is being marketed to manufacturing companies that have been squeezed out by the increased conversion of these types of properties into distribution centers.
The property, which is zoned for industrial use, is owned by the same family that owns the Pennridge Airport in Perkasie. A plan was established about three years ago and work began last year on the first building. The owners would like to construct six buildings with nearly 700,000 square feet of space. “It’s a really good market for this type of space,” said Rob Brink, president of Pennridge Development.
The idea of constructing the first building on speculation was calculated. Brink wanted to show proof he could execute on developing a building and, therefore, create some credibility that might lead to other projects, he said. “We’re going to see how it goes,” he said.
Called the Pennridge Airport Business Park, the property at 1100 N. Ridge Road is about three miles from Route 309 and is a pioneer in the Bucks County submarket, said Michael Golarz, a broker with Colliers International who has been retained to find tenants for the space. The location wasn’t viewed for last-mile distribution but rather high tech manufacturers, life science companies and other businesses that need R&D or flex space.
There are some other companies and manufacturers located in that general area that is not far from Montgomery County including: Almac Group, a pharmaceutical company; Blommer Chocolate Co.; RR Donnelly, a commercial printer; and Secant Medical Inc., a make of biomedical textiles and other medical devices.
In addition, the business park may appeal to companies that like its proximity near the airport, which is capable of handling mid-size jets, Brink said. “In theory you have a manufacturer or biotech company present in some other state or country and they need to fly an executive or material in and out,” he said. “It’s the convenience of having an airport nearby and the beauty of this one is it’s a private airport. You can go in and out fairly quickly.”
The first building was financed with a $6.15 million construction loan arranged by D2 Capital Advisors and provided by Tristate Capital Bank. Rents are currently posted at $6.50 a square foot. Another site is being readied for a second, 100,000-square-foot building, which will likely be a build-to-suit, Brink said.
The industrial market in the Philadelphia area is strong. During the first quarter vacancy stood at 5.3 percent which is just above an all-time record low of 4.7 percent the first quarter of 2018, according to Newmark Knight Frank data. New construction is keeping pace with demand and space is leasing quickly and at record prices, the NKF report said. Average asking rents ticked up to $5.40 a square foot and expect to rise throughout the year.