Supply Surge Pressures Allentown Storage Rates

This week the Radius+ team took a closer look at the Allentown-Bethlehem-Easton, PA-NJ CBSA.

This market has seen notable supply growth in the past few years.

• In 2022 there was 6.5% new supply added
• In 2023 there was 5.2% new supply added
• In 2024 there was 7% new supply added
• In 2025 so far there has been 1.7% new supply added

The interest developers have had in this market can be accredited to a few factors.

First and foremost the Allentown-Bethlehem-Easton, PA-NJ CBSA has seen strong population growth compared to the rest of the state of Pennsylvania. Its prime location between New York and Philadelphia has made it an attractive place for people to live offering a convenient location close by to employment hubs while having a lower cost of living compared to its urban center neighbors. The Lehigh Valley Planning Commission expects this area to add another 100,000 residents by 2050.

Allentown-Bethlehem-Easton, PA-NJ CBSA also boasts being a shipping and logistics center for the surrounding area. With over 8 million square feet of industrial space coming online in just 2021. This industry has attracted a transient work force that has fueled Self Storage demand in the area, with larger units being appealing to local businesses requiring flexible storage options.

Despite these strong demand drivers- the area has struggled in recent years to keep up with the supply added. While in early 2022 during the peak of COVID-19 market rates almost got as high as $3 a square ft the area has had web rates suppressed as the newly added facilities stabilize.

Sources:

• https://lvpc.org/datalv

• https://www.lehighvalleynews.com/northampton-county/warehouses-in-the-lehigh-valley-is-the-boom-over-and-what-happens-next