The expansion of industrial real estate in the Philadelphia area has been unshakeable since the pandemic, but residents are beginning to revolt.
Since 2020, roughly 55 million square feet of industrial space has either been built or is under construction in the region, the Philadelphia Inquirer reported. By 2025, there will be 189 warehouses spanning at least 20,000 square feet, an increase from 24 in 2020.
Many of the region’s warehouses are close to the I-95, I-295, and the New Jersey Turnpike that run parallel to the Delaware River. They average 300,000 square feet, though the strongest demand for new warehouses are for properties smaller than 200,000 square feet.
Part of the rise in industrial development in the region — beyond the growing e-commerce needs of companies such as Amazon and Walmart — can be attributed to an outgrowth of the development that has taken place in neighboring New Jersey. Critically, however, a small stretch of the New Jersey Turnpike was widened from six to 12 lanes a decade ago, opening up the transportation potential of trucks.
Since then, major projects have constantly cropped up. Hilco Redevelopment Partners has a project unfolding at the Bellwether District, set to span 14 buildings and three-quarters of a 1,300-acre site in South Philadelphia. At old Philadelphia’s Coke Plant, BP Bridesburg LLC is negotiating with Philadelphia Coke Co. Inc. to purchase and convert the 63-acre site into warehousing. In Northeast Philadelphia, Crow Holdings is planning a 150,000-square foot industrial building it recently acquired for $8 million.
Warehouse construction may be peaking, however.
“The fundamentals are definitely still strong, but it looks like supply is definitely going to outpace demand for a while,” Colliers’ Adam Gorodesky told the Inquirer.
There’s also been pushback from residents as municipalities have struggled to cope with the influx of truck traffic and infrastructure, as well as environmental concerns such as stormwater runoff, and loss of farmland and green space.
Residents have had some victories. Plans for five million square feet of warehouse space were rejected last May in Oldmans Township. This month, Walmart announced it would be closing a fulfillment center in the same municipality.