N
ew tariffs are causing a ripple effect in the Lehigh Valley commercial real estate market, leading to increased construction and supply chain costs. This, in turn, is prompting tenants to delay leasing decisions and reassess expansion plans.

    Despite these headwinds, reshoring initiatives are driving new manufacturing investments and boosting demand for industrial space in inland and secondary U.S. markets. The Lehigh Valley's prime location and lower prices compared to nearby port markets make its industrial rents highly competitive.

    According to McGowan Corporate Real Estate Advisors, the average rent for industrial properties in the Lehigh Valley market is $8.90 per square foot, with 4- and 5-Star facilities reaching up to $12 per square foot. This is significantly lower than neighboring markets such as Northern Jersey ($15.70), New York ($19.80), and Philadelphia ($11.40).

    The latest wave of tariffs is adding pressure on occupiers, slowing leasing decisions, and contributing to a 70% year-over-year collapse in investment sales volumes to $210 million. As a result, landlords may rely more heavily on concessions to maintain occupancy in the short term.

    However, with new supply increasingly constrained by regulation, the Lehigh Valley is well-positioned to tighten inventory again, setting the stage for renewed rent gains in the future.