Warehouse

Warehouse Prices Surge in York, PA: A Five-Year Analysis (2020–2025)

Posted by author-avatar
0

Introduction

Over the past five years, York County, Pennsylvania has experienced a significant surge in warehouse prices. Industrial real estate in this region – including both the rental rates for logistics space and the sale values of warehouse properties – has been on a steady upward trajectory since 2020. The COVID-19 pandemic and the e-commerce boom that followed helped ignite unprecedented demand for storage and distribution facilities, driving vacancies to record lows and pushing rents and property values higher. For example, one local market report noted that average industrial lease rates jumped 21% from 2021 to 2022 amid tight supplyrockrealestate.net. This article examines the historical pricing data from 2020 through 2025, the key drivers behind these price increases, insights for investors, and the future outlook for York’s warehouse market.

Historical Trends in Warehouse Pricing (2020–2025)

Pandemic Era Boom (2020–2021): In 2020, the industrial real estate market in York was already healthy but soon kicked into high gear. As companies retooled supply chains and consumers shifted to online shopping during the pandemic, demand for warehouse space accelerated. By 2021, York County’s industrial sector had a record-breaking 4.1 million square feet of space leased, a 135% increase from 2020 and 24% higher than pre-pandemic 2019cpbj.com. This frenetic leasing activity drove the industrial vacancy rate down to an historic low of only 2.86% by the end of 2021cpbj.com. In other words, virtually all available warehouse space was quickly snapped up, giving landlords leverage to raise rents. Industrial absorption (net space occupied) hit a yearly record of 2.6 million square feet in 2021cpbj.com – clear evidence of heightened demand for distribution and fulfillment space in York.

Continued Growth and Rising Rents (2022–2023): The momentum carried into 2022. Even as pandemic disruptions began to ease, the appetite for warehouse space remained strong. Developers delivered new warehouses to the market, yet tenants were quick to occupy much of this new supply. York’s vacancy rate stayed extremely low (hovering around 2–3% through 2022), and average asking lease rates continued to climb – rising about 21% year-over-year by the third quarter of 2022rockrealestate.net. By early 2023, roughly 800,000 square feet of new industrial space had been completed in the county during Q1 alone, causing a slight uptick in vacancy from its nadir (vacancy rose by 46 basis points from late 2022 levels, to roughly 2.8%)rockrealestate.netrockrealestate.net. However, this was not a sign of weakening demand but rather a temporary supply adjustment – indeed, many of the large newly built facilities were pre-leased or quickly absorbed by tenants. For instance, in one major project, a 1.8 million square-foot distribution center (Trade Center 83 North) was completed in 2023 and was fully pre-leased to United Natural Foods, Inc. (UNFI) before it even openedrockrealestate.net. The fact that such a massive warehouse was spoken for in advance underscores how tight the market remained. On the sales side, investment activity reached a peak in 2021 (a year that saw several institutional investors buying into York’s industrial market, including a single $60 million warehouse transaction as part of a REIT portfoliorockrealestate.net). After that 2021 peak, industrial sale volumes and pricing normalized to pre-pandemic levels by 2023 as interest rates rose and the market cooled slightly from its hottest frenzyrockrealestate.netcpbj.com. Even so, overall property values stayed well above 2019 levels – for example, in mid-2023 a newly built logistics center in York sold for $54.5 million to an investment firmcpbj.com, reflecting continued confidence in the market. Lease activity also remained robust through 2023, with square footage leased up 51% compared to the prior year by mid-2023cpbj.comcpbj.com. In short, from 2020 to 2025 warehouse rents in York County have risen substantially (on the order of 20–30%+ in aggregate), and sale prices have similarly climbed as the industrial real estate sector expanded.

Current Conditions (2024–2025): As of late 2024 and early 2025, the York warehouse market shows little sign of a downturn. Vacancies remain extremely low – generally in the 2–3% range – indicating a continued healthy balance of supply and demandrockrealestate.net. Absorption has stayed positive, meaning more space is being occupied than vacatedrockrealestate.net. Lease rates and property values are at or near all-time highs after the steady climbs of recent years. Notably, leasing activity in early 2025 has been described as “formidable” and on par with historic norms, bucking the softer trends seen in some other regionsrockrealestate.net. In other words, companies are still actively in the market for York County warehouse space in 2025, and competition for quality facilities remains fierce. With only a modest amount of new industrial space slated for delivery in the near term (after a wave of big projects in 2022–23), the market is still tight. Local commercial brokers report that limited new supply coupled with sustained demand is continuing to drive both sale prices and lease rates higher going into 2025cpbj.com. In summary, the past five years have seen an unmistakable upward trend in warehouse pricing in York, PA – a trend underpinned by strong fundamentals that persisted through 2024.

Key Drivers Behind the Price Increases

Several key factors have fueled the rise in warehouse rents and values in York County from 2020 to 2025:

  • E-commerce Boom and Soaring Demand: The rise of e-commerce since 2020 dramatically boosted demand for distribution centers and fulfillment warehouses nationwide, and York has been a direct beneficiaryrockrealestate.net. Retailers and logistics providers needed additional warehouse capacity to store and ship online orders, especially during the pandemic and its aftermath. Much of the record space absorption in York has come from e-commerce, retail distribution, and third-party logistics firms ramping up operationscpbj.com. This surge in tenant demand allowed warehouse landlords to increase rents steadily. High demand fueled intense competition among occupiers, contributing to bidding up prices on both leases and acquisitionsrockrealestate.net. Even in 2023, brokers noted that new availabilities (tens of thousands of square feet) could get leased within days due to the “screaming hot” market conditionscpbj.com. Simply put, more companies chasing limited space has been a recipe for higher prices.
  • Strategic Location and Logistics Infrastructure: York County’s geographic position and transportation infrastructure make it an ideal logistics hub, which has bolstered both demand and pricing. The county sits at the crossroads of major Mid-Atlantic transportation routes – notably the I-83 corridor running north–south through York (connecting to Baltimore/Washington D.C. to the south and Harrisburg and I-81 to the north) and close proximity to the east–west Pennsylvania Turnpike (I-76). This proximity to major metropolitan markets and interstate highways means that companies can reach a huge consumer base within a few hours’ driverockrealestate.net. Silas Chamberlain of the York County Economic Alliance points out that York’s strategic location and excellent transportation networks are a big reason warehouses here continue to see high interestlinkedin.com. Indeed, over 450 million tons of freight move in and out of York County each yearrockrealestate.net, underscoring the area’s importance in the supply chain. Well-developed infrastructure – from highway access and trucking routes to rail intermodal facilities in the broader region – has made York a preferred location for distribution centers. This logistical advantage drives up the value of warehouse space locally, as tenants are willing to pay a premium for locations that optimize their shipping times and costs.
  • Tight Supply and Low Vacancy: A crucial driver of price growth has been the extremely low vacancy rates in York’s industrial market throughout this period. For most of 2021–2024, the county’s warehouse vacancy hovered between roughly 2% and 4%, which is essentially full occupancy in practical termsrockrealestate.netrockrealestate.net. Such tight conditions put landlords firmly in control – tenants have limited options, so they compete for space, often paying higher rents to secure a facility. Even older Class B and C industrial buildings (which are less modern or ideally located) have been largely filled; by mid-2023 the vacancy rate for Class B/C space was reportedly below 2%cpbj.com. This means even the “low-cost” warehouses are almost entirely occupied, pushing some businesses to consider any space they can find. The reliable, high demand and scarcity of available space have been “indicators of a healthy, resilient market,” according to local analystsrockrealestate.net. Additionally, new construction has struggled to keep pace with demand. Although developers added millions of square feet of warehouse inventory in the past few years, much of it was pre-leased or absorbed immediately (as seen with the UNFI facility and others). In 2022, for example, about 36% of all new industrial inventory in York was immediately absorbed upon completionrockrealestate.net. With supply only incrementally catching up, vacancies stayed low – a classic supply-demand imbalance that pushed prices upward.
  • Industrial Growth and Economic Development: York’s long-standing base of manufacturing and industrial businesses also plays a role in warehouse demand. The county has a diverse industrial landscape – from heavy manufacturers (e.g. hydro turbine producers) to food processing to light assembly – which requires significant warehouse and production space. In recent years, trends like reshoring of manufacturing (bringing production back to the U.S.) and companies holding higher inventory levels for resilience have added to local warehouse needsrockrealestate.netrockrealestate.net. State and local officials have introduced incentives to grow Pennsylvania’s manufacturing and logistics sectors, which has spurred projects (for instance, initiatives supporting industrial park development and workforce training)rockrealestate.netrockrealestate.net. York County has attracted several major industrial investments and expansions in the last few years, including new high-tech manufacturing and distribution facilities, all of which require large warehouses. These developments contribute to both higher demand and higher-quality facilities entering the market, which in turn lift the overall price levels for industrial real estate. Another facet is the growth of modern industrial business parks. Developers have concentrated new projects in planned industrial parks offering ready infrastructure and highway access. Business park developments in York (and neighboring Lancaster) now account for over 50% of proposed industrial construction and about 75% of ongoing construction projectsrockrealestate.net – a testament to the demand for clustered, logistics-friendly sites. These parks often feature Class A warehouses with high ceilings, ample loading docks, and other premium features, commanding top-of-market rents and prices. The flight to quality for many logistics tenants has meant newer facilities can charge significantly more per square foot than older stock, raising the average market price. Overall, the combination of a booming logistics sector, strategic location, constrained supply, and proactive economic development has created the perfect environment for warehouse prices in York to climb steadily in the 2020–2025 period.

https://www.rockrealestate.net/the-industrial-landscape-of-york-and-lancaster-counties/ Business park development has become a dominant mode of industrial expansion in York County. More than 50% of proposed new construction and 75% of active projects are in planned business parks, reflecting developers’ focus on well-located, infrastructure-equipped sitesrockrealestate.net. These modern logistics parks help meet tenant demand but also set higher price benchmarks in the market.

Investment Insights and Opportunities

The rapid increase in warehouse rents and values in York has drawn significant investor attention, turning the region into something of a hot spot for industrial real estate investment. Several insights and opportunities stand out for businesses and investors considering this market:

  • Strong Investor Demand and Capital Inflows: In the wake of rising rents and low vacancies, institutional investors have poured capital into York County’s industrial sector, seeking to acquire high-quality warehouse assets. In late 2021, for instance, over $190 million of York industrial property was purchased by Real Estate Investment Trusts (REITs) and other institutional buyers in just one quarterrockrealestate.netcpbj.com. Large portfolio deals included transactions like a single York warehouse trading for approximately $60 million as part of a national acquisitionrockrealestate.net. This influx of outside capital drove up pricing, compressing capitalization rates (cap rates) to historically low levels for the market. Even as interest rates rose in 2022–2023 (putting some upward pressure on cap rates nationally), industrial cap rates in strong secondary markets like York remained relatively low, reflecting the secure income streams and tenant demand backing these properties. For investors, this means warehouse assets in York have been offering stable, bond-like income (long-term leases to solid logistics and manufacturing tenants) with the potential for rent growth – an attractive combination. However, it also means competition to buy is high. Opportunities still exist to acquire industrial properties in the York area, but buyers should be prepared for a competitive bidding environment, especially for modern Class A facilities with credit-worthy tenants.
  • Value Appreciation and Sale Opportunities: Owners of warehouses in York have seen significant appreciation in asset values over the past five years. Properties purchased in the mid-2010s have likely increased in value substantially by 2025 due to the market’s cap rate compression and rent growth. This opens opportunities for sale or recapitalization at favorable pricing. Some local owners have taken advantage of high prices through sale-leaseback deals or outright dispositions to institutional buyers looking to enter the market. From an investment standpoint, those who acquired or developed assets pre-2020 have realized strong gains. Going forward, value-add investors might look at older Class B/C industrial properties in York that, while fully leased now, could see even higher rents after strategic upgrades. Since even older warehouses are enjoying near-full occupancycpbj.com, an investor can step in, improve the building’s features (docks, sprinkler systems, clear heights, etc.), and potentially mark leases to higher market rates. The tight market for small to mid-sized industrial spaces (which many local businesses occupy) means there is demand for whatever space is available – a positive for investors considering secondary assets, not just brand-new mega-warehouses.
  • Development and Redevelopment Prospects: For developers, York’s trend of rising warehouse prices signals that new construction can be a lucrative endeavor – if executed wisely. Land costs and construction costs have gone up, but so have achievable rents, which helps preserve development profit margins. Over the last few years, numerous developers have pursued speculative warehouse projects in York County, often in the form of large business parks as mentioned earlier. Many of these projects have been rewarded by quick lease-up or even pre-leases (as in the UNFI case) due to pent-up tenant demandrockrealestate.net. Opportunities exist to develop modern logistics facilities in strategic locations near highways, as the market still has unmet demand in certain size segments (especially larger 500,000+ sq. ft. distribution centers). However, new development requires navigating zoning and community concerns (more on that in the outlook section). Another avenue is redevelopment: older industrial sites or brownfields in the York area could be repositioned into functional warehouse space. Given high land prices and limited greenfield sites, investors might target outdated manufacturing properties or vacant big-box retail buildings and convert them into warehouses. Businesses looking for space might also consider build-to-suit arrangements, partnering with developers to create facilities tailored to their needs, since existing inventory is scarce. Overall, the investment climate in York’s industrial market remains optimistic – landlords enjoy strong cash flows, and new entrants see potential for growth – but it requires careful strategy due to the competitive and evolving landscape.
  • Landlords’ Market and Tenant Strategies: From a business occupier perspective, the rise in warehouse prices means higher costs to lease or buy industrial space. Tenants looking in York have faced landlord-favorable conditions in recent years. Companies needing distribution space have had to act fast and be willing to pay asking rates (or above) to secure leases, given multiple parties often interested in the same property. Some firms have responded by signing longer lease terms to lock in current rates before they climb further. Others have expanded their search radius to nearby counties or slightly less in-demand submarkets to find more affordable options, though York’s advantages often justify the price. For businesses and investors alike, one key insight is that the fundamentals in York – high demand, low supply – are unlikely to reverse quickly, so entering this market sooner rather than later could position one to benefit from continued growth. Investors should stay attuned to local market reports and data (for example, tracking quarterly vacancy and absorption trendsrockrealestate.netcpbj.com) in order to time their decisions, but the general trajectory has been upward.

Future Outlook for York’s Warehouse Market

The future outlook for warehouse prices in York, PA remains broadly positive, though not without some challenges. Current trends and forecasts suggest that the factors driving growth will largely persist into the near future:

  • Continued High Demand vs. Limited New Supply: Looking ahead, York’s strategic location and logistics strengths are expected to keep demand high for industrial space. Local economic development officials emphasize that unlike some parts of the country where warehouse expansion is cooling off, York County is “not seeing it” slow down locallylinkedin.com. Many companies still view South-Central Pennsylvania as a critical hub for distribution to East Coast markets, and York offers slightly more affordable and available land than bigger metro areas. At the same time, the construction pipeline is relatively modest in the next couple of years. After a burst of deliveries through 2022–23, fewer projects are scheduled to open in 2024–2025 – one mid-2023 report noted that only about 500,000 sq. ft. of new industrial space was due for completion in the latter half of 2023, a much smaller addition than previous quarterscpbj.com. Unless a new wave of developments is initiated, this limited supply pipeline suggests that vacancy will remain very low and competition for space will stay fierce, exerting upward pressure on rents and sale prices in the near termcpbj.com. In essence, the imbalance that has defined the past few years (more demand than supply) is set to continue, barring an economic downturn.
  • Economic and Industry Trends: Broader economic forecasts for the region indicate stability with potential for growth. York County’s job market has been steady, and manufacturing/logistics are projected to remain pillars of the local economy. As manufacturers implement reshoring and inventory expansion strategies, they will require additional production and warehouse space domestically – likely benefiting markets like York that have ready infrastructure. Local officials have been proactive in attracting new industrial projects (for example, recent announcements in sectors like solar panel manufacturing and distribution centers) which will bring new facilities and jobsyorkcountyed.com. These developments point to sustained demand for industrial real estate. On the flip side, one factor to watch is interest rates and capital market conditions: if rates remain elevated, some investors may be more cautious, which could slightly temper how aggressively prices rise on the investment sales side. There are also signs that nationally, warehouse construction has finally started to outpace absorption in a few markets, leading to a slight uptick in the U.S. average vacancy. However, York’s local market has so far defied national softening, maintaining low vacancies and strong rent growth even as other regions see a pauselinkedin.comlinkedin.com. Assuming the U.S. economy avoids any deep recession, the industrial real estate outlook for secondary markets like York is for continued growth, albeit at a somewhat more measured pace than the frenzied pandemic-era spike. Rent increases may moderate to single-digit percentages annually (rather than the double-digit jumps seen in 2021–22), but they are still likely to be positive. Likewise, warehouse property values in York should hold firm or increase, given the high cost of new construction and the persistent desirability of well-located logistics assets.
  • Local Development and Policy Considerations: A notable aspect of the future will be how York County manages the balance between warehouse development and community impact. The rapid proliferation of warehouses has raised some concerns among residents regarding traffic, land use, and environmental effects. In early 2024, for example, a large proposed industrial park in the northern York County (Dillsburg area) faced intense community opposition – ultimately, developers withdrew their rezoning request for the project after sustained public protestwhp580.iheart.com. This “victory” for local residents in stopping a robust warehouse project highlights the growing tension between economic growth and quality-of-life considerationslinkedin.com. Moving forward, we can expect more scrutiny on warehouse proposals. Municipalities may impose stricter zoning, require traffic improvements, or limit where mega-warehouses can be built. Any slowdown in new development approvals could further constrain future supply, ironically helping keep existing warehouse prices high by preventing oversupply. Developers will need to engage with communities and design projects responsibly – for instance, by implementing buffers, road upgrades, and sustainable practices – to win approval for new sites. There is also a push for redevelopment of already-industrialized sites (instead of consuming greenfield land) to ease community concerns. Overall, local policy decisions will play a role in shaping the pace of new warehouse additions, which in turn affects market dynamics.
  • Infrastructure Upgrades: On the horizon, infrastructure upgrades in the region could enhance York’s appeal and capacity for logistics operations. Pennsylvania has been investing in highway improvements (such as ongoing work to widen sections of I-83 and upgrade interchanges around York and Harrisburg) which will improve traffic flow for trucks. There are also discussions about enhancing freight rail connections and expanding the region’s intermodal freight facilities. If realized, such improvements would further strengthen the case for companies to site distribution centers in York – potentially boosting demand even more. Businesses and investors keeping an eye on York should monitor these infrastructure projects, as they can open up new corridors and development opportunities (for example, a new highway interchange could make additional land viable for warehousing). Improved infrastructure tends to correlate with higher land and warehouse values, so any significant enhancements could contribute to the next leg up in pricing. That said, these benefits likely unfold over a longer term, beyond 2025.

In summary, the outlook for York’s warehouse market is one of guarded optimism. The current fundamentals are strong – low vacancy, high demand, rising rents – and most indicators point to a continuation of these trends in the near future. Warehouse prices (both for leases and sales) are expected to stay elevated or even increase further, given the competitive market conditionscpbj.com. York’s advantages in location and its established industrial base position it well to keep attracting logistics and manufacturing activity. However, stakeholders must navigate the challenges of growth: ensuring infrastructure keeps up, addressing community concerns, and watching broader economic signals. Barring any major economic shock, York, PA’s warehouses should remain a hot commodity, and the region will likely continue to be a favorable arena for industrial real estate investment and development in the years ahead. The past five years have demonstrated a clear upward trajectory, and all signs suggest that trajectory isn’t over yet. With careful planning and sustainable growth strategies, York County’s warehouse market can continue to prosper – benefiting businesses, investors, and the local economy alike.

Sources

Newer
🏢 York, PA Office Market Trends (2020–2025)
Back to list

Leave a Reply

Your email address will not be published. Required fields are marked *