NONRESIDENTIAL 1,622, Nonresidential Construction Montgomery County, Pennsylvania. Montgomery County Data:
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1 Montgomery County Data: NONRESIDENTIAL 2017 Nonresidential Construction Montgomery County, Pennsylvania 1,622,332 Square feet of nonresidential development completed in In 2017, nonresidential construction outperformed four of the previous six years with a total of approximately 1.6 million square feet with commercial being the dominant sector. Unlie previous years, there was a more even distribution of square footage built among the other categories., Office, and Transportation all saw growth in square footage of over 200,000 sf. eoblue - Moore Par KOP Commercial development, which includes retail, consumer services, and hotels was the top category for construction. While the county has a full supply of retail developments and is liely saturated, the maret is evolving and adding new formats each year. Three large mid-county developments in Dublin, Providence, and Whitpain together accounted for over half of all commercial construction this year. The Lifetime Fitness in the Fort Washington Office Par is an example of a significant center of employment diversifying its offerings and creating a more mixed-use environment. Other major commercial developments included a hotel, self-storage facility, and redevelopments of existing shopping centers. Nonresidential Square Footage by Land Use from 2011 to Commercial 436, , , , ,540 1,132, ,117 Industrial 22,698 69, ,567 31,282 29, , , , , ,289 41, , , ,707 Elderly 0 200,201 63, , ,031 33,543 Municipal 127,084 14,712 1,025 5, ,916 21, ,325 Office 66, , , , , , ,247 Recreation 5,796 13,442 12,829 21,518 16,148 88,708 1,904 Transportation 0 24, ,000 Utilities 9,373 3, ,890 16,507 5,624 2,164 Total 1,105,508 2,171,299 1,400, ,948 1,172,209 2,335,884 1,622,332 The data was derived from county tax records available from the Board of Assessment Appeals and includes not only new buildings but additions to existing structures. Instead of using the exact date of the completion of construction, this database assigns a year built value to each property on the date which it was originally assessed. This is typically after the completion of construction and can sometimes be several months to a year later. Therefore, construction completed in 2017 may not appear in the 2017 recordset, although it would be accounted for in next year s report. Past years are also updated to account for development not entered into the system at the time of this report. 1
2 2017 Nonresidential Land Development by Land Use 29 Pennsburg Hanover Douglass 100 East reenville Pottsgrove West Pottsgrove X Red Hill 663 New Hanover Pottstown Pottsgrove Marlborough Frederic reen Lane 73 Legend Frederic Limeric 9 Commercial Industrial Municipal Salford 422 Salford Schwensville Royersford Periomen Telford Souderton Trappe Providence Office X Recreation Transportation Utility 10 Salford Sippac Collegeville Hatfield Twp. Worcester Providence East Norriton West Norriton Montgomery Hatfield Horsham Franconia Bor. Lansdale Towamencin North Dublin Wales wynedd 276 wynedd 29 7 Merion Norristown 8 Bridgeport Whitpain Plymouth 76 Ambler 73 Conshohocen West Conshohocen 476 Whitemarsh Merion Hatboro Springfield Top Ten projects noted by numeral (see table below) Moreland Narberth 611 Philadelphia Moreland Jenintown Bryn Athyn Abington 2 Rocledge Cheltenham 67% The percentage office construction increased in Montgomery County in 2017 The next highest categories were institutional and office, the majority of which came from three sources, the new eoblue headquarters in Merion, the new Penn State Abington dormitory ( Lionsgate ), and a Main Line Health System office building in Bryn Mawr. Industrial development which reached a high the previous year in terms of square footage constructed, saw a significant decrease in the amount completed in However, proposals for industrial construction this past year were also the highest they have been in recent memory which could lead to significant growth in the years ahead. Also of note is the rise in municipal construction as municipalities from Springfield to Douglass upgraded or rebuilt government facilities. Top Ten Largest Nonresidential Projects in 2017 Ran Project Name Municipality Land Use Total Square Feet 1 Septa arage - Lansdale Train Station Lansdale Transportation 226,000 2 Lionsgate - Penn State Abington Dormitory Abington 139,087 3 Lifetime Fitness Dublin Commercial 114, First Ave. Condo 2 - eoblue Merion Office 113, Bryn Mawr Ave. - Main Line Health Doctor's Office Merion Office 108,293 6 Hallowell School Horsham 94,059 7 Marriot - Residence Inn Providence Commercial 80,495 8 Center Square Commons SC Whitpain Commercial 74,688 9 Bucman's Si Shops Warehouse Limeric Industrial 55, All-Time Self Storage Providence Commercial 50,200 2
3 Maret Trends Older retail centers are evolving - adding new business such as gyms, movies theaters, and healthcare facilities. With the reat Recession firmly in the past, the nonresidential real estate maret has surged in recent years to mae up for a lac of development in the earlier part of this decade. While the amount constructed this year was less than the year prior, it still represents a general trend upwards for nonresidential sectors. Commercial remains a strong sector and continues to grow by hundreds of thousands of square feet each year. However, what has been built is increasingly part of mixed-use developments in contrast to single-use shopping centers. Examples of this trend are the continued build-out of the KOP Town Center and strong absorption of its space by the maret, as well as the incorporation of commercial outlets in apartment complexes and business pars across the county. Center Square Commons - Whitpain Township In addition to format changes, the location of retail has also shifted to more central jurisdictions with multi-modal connections. Regional scale malls and main streets have seen their trade grow as strip and large scale, single-use shopping centers have stagnated. However, that does not mean all existing shopping centers are failing. Many have courted different uses for empty spaces such as gyms, movie theatres, and urgent care facilities. Years ago these centers would have been struggling, now there seems to be an expanded array of opportunities for them to diversify. It is important to note that most of this diversification comes from not relying on consumer goods sales but rather consumer services. Employment in Montgomery County $495,000 $490,000 $485,000 $480,000 $475,000 Annual $470,000 $465,000 $460,000 $455, Year The amount of office space constructed increased by 67% since 2016 despite significant changes in the sector regarding new formats such as co-woring and the decreasing amount of space necessary per worer. Recent growth in co-woring facilities continues to siphon some small, upstart companies away from the traditional office lease model, but much of the growth in this particular office segment is geared towards urban areas instead of suburban office pars. The amount of space necessary for each employee has been getting smaller but the way in which employees wor is also changing. Some may wor more regularly from home, others may not have a permanent wor space at their office and instead practice benching, but overall the need for office space is still there. Continued 3
4 employment growth within the county, as reported by the Bureau of Labor Statistics (BLS), and declining office vacancy rates have placed pressure on this sector to produce new spaces. Between 2016 and 2017, employment grew by over 8,500 worers and vacancy declined another half percent. Employment has finally gone beyond the high point reached the year the reat recession hit in 2008 and will continue to put pressure on the maret to produce more space. In addition, some developers and property owners are focusing on the maretability of existing assets through rehabilitation to provide on-site amenities and modern layouts. A number of business pars such as the Fort Washington Office Center and Pennsylvania Business Campus in Horsham have incorporated residential and other nonresidential land uses to create mixed-use, walable centers. The maret has recognized that Montgomery County has an expanding wealth of these urban areas which help employers attract and retain worers. As a result, the major centers still draw new tenants every day. King of Prussia, Plymouth Meeting, Fort Washington, and Merion continue to see growing rates of office occupancy; especially as job growth accelerates in the suburbs compared to the city for the first time since the beginning of the recession. Consistency of 2017 Nonresidential Location with the County Comprehensive Plan The Planning Commission tracs where new construction is located in relation to the county s Development Potential map, which is part of our adopted county comprehensive plan. The map classifies all land within the county according to one of three broad categories, rowth Areas, Rural Resource Areas, and Open Space Preservation Areas. Each has its own list of recommended land use policies. One of the goals of the plan is to guide new development, at sufficient densities, into the rowth Areas, which include both developed land and undeveloped land, usually adjacent to existing development and able to be served by public infrastructure, including sewers, water, and road improvements. The plan also recommends that development should be minimized in areas identified as Rural Resource Areas, which should retain a rural character. When development does occur in these areas it should be at lower densities, utilize land preservation guidelines and be aimed at preserving open space and natural resources. Almost all of the nonresidential development in 2017 was constructed in rowth Areas, and most of that development occurred as infill or expansions within already developed areas, as shown in the table below. The few developments which did tae place within the existing open space area were either utility or institutional facilities. Square Footage by rowth and Rural Resource Categories Category Sum of Square Footage Percentage rowth Areas - Developed Land 1,190,464 73% rowth Areas - Developable Land 417,317 26% Rural Resources Areas - Developed Land 0 0% Rural Resources Areas - Developable Land 0 0% Existing Preserved Open Space 5, % Conservation Opportunity Areas 8, % 4
5 Municipality Commercial Industrial Square Feet by Land Use and Municipality LAND USE TYPES Elderly Municipal Office Recreation Transportation Utility Total Abington , ,075 Ambler Bridgeport Bryn Athyn Cheltenham Collegeville Conshohocen Douglass , ,000 East reenville East Norriton Franconia 21, ,600 reen Lane Hatboro Hatfield Borough Hatfield Township 12, ,497 Horsham 7, , , ,722 Jenintown 4, ,684 Lansdale 0 26, , ,600 Limeric 5,760 55, , ,707 Frederic wynedd 22, ,543 36, ,367 Merion 3, , ,293 Moreland Pottsgrove Providence 6, ,792 Salford 12, ,080 Marlborough Montgomery Narberth New Hanover 8, ,470 Norristown , ,588 North Wales Pennsburg Periomen 0 21, ,150 Plymouth 40, ,069 Pottstown , ,904 Red Hill Rocledge Royersford , ,884 Salford Schwensville Sippac , ,724 Souderton Springfield ,289 13, ,020 Telford Towamencin Trappe Dublin 114, ,038 Frederic wynedd Hanover Merion 72, , ,938 Moreland 52, ,725 Pottsgrove Providence 133, , ,937 Salford West Conshohocen West Norriton West Pottsgrove Whitemarsh Whitpain 74, , ,468 Worcester Total 593, ,325 33, , , ,247 1, ,000 2,164 1,622,332 5
6 lossary Commercial This includes all forms of retail development lie bans, restaurants, clothing stores, hardware stores, and drug stores. It also includes personal services, hotels, mini-storage facilities, health spas, and fitness centers. Industrial This includes all forms of light and heavy manufacturing. It also includes warehouses and flex space. This includes churches, hospitals, schools, and universities. Some fee for service recreational uses lie the YMCA are considered an institutional land use. Elderly This includes silled nursing facilities with inpatient care, assisted living facilities, and senior centers. In a continuing care facility, independent living suites would not be considered nonresidential development, but any silled nursing facility, doctor s office, community center, dining hall, or assisted living suite would. Municipal This includes any land development carried out by a municipal government. The construction of police stations, fire houses, municipal libraries, communication facilities, and warehouses on municipal property are considered a municipal land use. Office This includes all sizes of offices. It also includes research and development facilities. Recreation This includes facilities associated with outdoor recreational uses such as golf courses, camps, swim clubs, mini-golf courses, soccer clubs, etc. It also includes community centers within residential developments. Square Feet This is the total amount of net leasable floor space in a building, not necessarily the gross building area, which may include common areas or facilities. Transportation This includes train stations, airports, and other facilities associated with the movement of goods or people. Utilities This includes any land development involving the construction of public or private utilities. Utility construction incidental to nonresidential or residential construction is not included in this figure unless a separate building or other type of facility is constructed. Cell phone towers are also included in this land use. 6
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