By Bill O’Boyle, Wilkes-Barre Times Leader
PLAINS TWP. — John Augustine, President/CEO at Penn’s Northeast, said the most significant trend in regional economic development is a tremendous amount of “deal flow” — meaning a large increase in new leads.
Augustine explained that “deal flow” is a term used by finance professionals such as venture capitalists, angel investors, private equity investors and investment bankers to refer to the rate at which they receive business proposals/investment offers.
Augustine was speaking at Friday’s inaugural real estate summit at The Woodlands Inn and Resort, attended by nearly 200 business people, commercial Realtors, developers, builders, and site selectors who shared their outlook on current and future real estate trends in Northeastern Pennsylvania, state and the country.
The forum focused on commercial, industrial and office markets — including the growing medical sector as well as downtown development, housing, retail, and office.
“A lot of companies are leaving the New York-New Jersey metro area due to costs,” Augustine said. “And we have seen an increase in international inquiries as well.”
Augustine said the region’s nearest competitor is the Lehigh Valley, which he said is filling up, leaving Northeastern Pennsylvania as the next logical location.
Augustine offered numerous regional facts and figures at the forum:
• The five county region is home to nearly 900,000 residents.
• The region’s population has grown by 2 percent since 2000; however, Pennsylvania population growth rate is 4 percent and national growth is 15 percent.
• There are about equal numbers of millennials (age 20 to 34) and seniors (age 65-plus) in the region — 18 percent of the total population.
• The region’s average unemployment rate is 5.6 percent — typically higher than Pennsylvania and the nation, but a large decrease since the recession of 2009-2011.
• There are about 386,000 jobs in the five county region — two-thirds of these are in Lackawanna and Luzerne Counties, with the remaining third located in Monroe, Schuylkill, and Wayne.
• The largest industry in the region is health care, employing more than 65,000 workers; followed by retail (more than 48,000 workers) and manufacturing (more than 42,000).
• Our region has 19 colleges and universities with more than 40,000 students.
• Warehousing and storage industry specifically has been growing at a rate of almost 5 percent per year. Within the region that industry added almost 6,600 new jobs in the last decade.
• Since 2000, more than 41 million square feet of industrial space has been leased.
• In 2017, 5.4 million square feet of industrial leases were signed.
Larry Newman, executive director of Wilkes-Barre’s Diamond City Partnership, came away with three broad takeaways from the summit.
Driven by E-commerce and distribution, the region’s industrial/commercial real estate market has become incredibly robust, he said, and it’s attracting tenants and developers from around the country and the world.
“However, the biggest drag on the regional market continues to be the availability of skilled employees,” Newman said.
Newman said the office-space market is not dying, but it is changing significantly.
“Shared, open-plan office space is a trend to be reckoned with, and, as we’ve seen in Downtown Wilkes-Barre, office environments set within an urbanized, mixed-use, live-work neighborhood are increasingly in demand,” he said.
Newman also said increasingly, quality of place and quality of life issues, such as downtown revitalization, healthy neighborhoods, education, and the arts, are playing a larger and larger role in business site selection decision-making, because they have a direct impact upon the availability of a skilled workforce.
“Consequently, we ignore those issues — or maintain obsolete views about them — at our peril,” Newman said.
Newman gave a detailed presentation at the summit, noting that downtown Wilkes-Barre has 11,300 daytime employees — 1 of every 10 jobs in Luzerne County.
He said half of downtown’s 11,000 jobs are in office-using businesses like finance, insurance, and professional services.
Newman said downtown is a regional center for arts, dining, and entertainment, adding there are 40 different places to eat, featuring cuisines from around the world. And Newman said, downtown is a college neighborhood with King’s College and Wilkes University book-ending the central business district.
The downtown has become a place to live with 152 new market-rate lofts and apartments that have been developed in eight rehabilitated buildings during the past six years.