Mercer County Sites Are On Developers’ Radars
MERCER, Pa. – In Mercer County, Pennsylvaia, a 200-acre site in East Lackawannock Township once considered by The TJX Companies for its $160-million warehouse proposed in Lordstown is drawing significant interest from other parties.
Talks are in the “infancy stage” but Randy Seitz, executive director of Penn-Northwest Development Corp., says he hopes to have a user locked in within the next six months. One possible project would be in the range of 1 million square feet or larger.
“A lot of the larger distribution centers that I’m talking to can’t believe that TJX turned down that site,” Seitz says. “It’s a fantastic location.”
The interest in new construction sites for retail distribution centers like the one TJX plans to build in Trumbull County doesn’t surprise Seitz. “It makes sense why some of these larger distribution centers are looking for additional space,” he says.
Elsewhere in Mercer County, the area off exit 15 on Interstate 80 is garnering interest and activity for real estate agents, brokers and developers, as are properties with existing building such as the Westinghouse site in Sharon and the former Cooper Industrial building in Grove City.
Seitz says he recently met with parties to discuss the possibility of a new industrial park near Vernon Township, a project that would require procuring state and federal funds for property acquisition and infrastructure.
“That’s the type of long-range planning that we need to look at because of the activity we’re seeing now,” he says.
“Quite a bit” of the interest is coming from investors in China, Seitz reports. Interested parties represent diverse businesses – from data centers and cryptocurrency to manufacturing, he says. And he believes the interest may be spurred in part by tariffs imposed by the Trump administration.
Dave Hall, an agent with ERA Johnson Real Estate Inc. in Hermitage, reports activity is about the same now as it was last year. “There is a lot of inventory still in the market,” he says. “But you see some aggressive pricing, too, compared to Pittsburgh, Erie or even toward Cleveland.”
Much of the commercial interest is in Hermitage and Sharon because that’s where such development is concentrated in the county, but he’s also seeing activity in Farrell, Wheatland and Sharpsville. Hall confirms that companies have reached out to him regarding the area that TJX considered.
“I would call it a very healthy market at this point,” except there is “a lot of office space available right now,” says Jim Sarvas, an agent with the Hermitage office of Northwood Realty Services. He attributes much of the excess inventory to shifts in the medical industry as health systems take over and consolidate individual practices.
Office lease rates in the county average around $10 to $12 per square foot, although they can reach $15 or $20 for higher-end properties where owners are willing to do a lot of remodeling.
Sarvas reports he is putting together several deals to both lease and sell properties. The main activity he sees is taking place in downtown Sharon and the center of Hermitage. “Those are the most active areas,” he says.
During the first six months of 2018, the value of zoning permits issued by Hermitage is twice what it was in the same period last year, according to Gary Gulla, assistant city manager. “That’s a positive trend,” he says, noting one of the larger projects approved was for a Taylor Kia dealership on state Route 18.
Gulla also says he is encouraged by strong interest on the part of residential developers.
Sarvas is awaiting the new ownership at Hermitage’s Shenango Valley Mall. The shopping center, built in the 1960s, was recently taken over by Iowa Square Realty LLC, which took control of the lease with a $50,000 bid at a sheriff’s sale in July. The mall lost anchor stores Macy’s and Sears in 2017 and other retailers have fled as well.
“I have a number of different proposals that I’m waiting to present” to the new operators, including several letters of intent, Sarvas reports.
Meanwhile, downtown Sharon is “approaching vibrancy” and rates have risen as the downtown has become more active. Space now is going for $10 to $12 per square foot. “At one time I was doing $5 rates,” Sarvis says.
He attributes much of the change in downtown Sharon to developer Jim Landino, who has purchased and rehabilitated several buildings. Sarvas handles many of Landino’s properties.
Landino says he is advancing what he describes as a “block-based strategy,” tying buildings together to justify their redevelopment and generate a greater impact. In addition to turning the downtown into a destination, he wants to encourage people to live in Sharon as well as work there.
“Industrially, the area is very strong. What we lack is this cultural community piece,” he says. “We don’t have enough people that live in Sharon paying the wage tax.”
Lucy Wann, an agent with Coldwell Banker Commercial, Cranberry Township, says she sees activity centered near the Grove City Premium Outlets in Springfield Township, just west of Grove City. Part of the interest is from big-box retailers interested in establishing free-standing stores.
“A large segment of their business is downsizing, but they still have a presence,” she says. Chain and local restaurants also are looking for sites in the area.
Pricing for land varies, Wann says. Her agency has sold 1.25-acre parcels for more than $1 million. “It depends on the size of the parcel and if there’s activity present,” she says.
Within the borough itself, “We’re not overwhelmed by any means,” reports Georgie Hodge, broker and owner of Grove City Real Estate.
Even so, potential buyers and renters are coming downtown to check out available properties, including a former Rite Aid building. The kinds of businesses looking at downtown sites are a “melting pot,” Hodge says.
“People like the standalone buildings because of the parking,” she remarks. One developer bought several downtown buildings and brought them up to code “and to a style pleasing to 2018 consumers,” she says.
Still, there are constraints to downtown development, she admits. Many storefronts aren’t conducive to restaurants because there is rentable apartment space above, which is an issue in the event of a fire.
Wann reports she recently sold land for the Living Treasures Safari Resort being developed in Liberty Township. “That will be a drive-though, zip line recreational safari park,” she says.
The park’s development so far hasn’t spurred interest in surrounding property. A soft opening is expected later this year, she reports.
“Once it opens its doors, we will see activity following that,” she says.
Pictured: Randy Seitz, executive director of Penn-Northwest Development Corp.
Copyright 2024 The Business Journal, Youngstown, Ohio.