Investment Overview

Marcus & Millichap has been chosen to exclusively market this FedEx Ship Center for ownership. The property is composed of a single story 25,574 square foot light industrial building situated on 3.21-acres in New Stanton, Pennsylvania. 1,740 (6.8%) square feet is allocated for vehicle maintenance, 3,800 (14.9%) square feet for office, and 20,000 square feet of warehouse space. The building was built to suit for FedEx Corporation’s Ship Center in 1990 which will continue to be the sole occupant until September 30, 2026. They have two 5-year options with 5% increases at the beginning of each option term. The lease is corporately guaranteed by FedEx Corporation having a Baa2 investment grade rating. FedEx Ground and FedEx Freight are also located nearby, which demonstrates their strong commitment to this area. Many other notable firms operate out of New Stanton such as UPS, which operates two facilities as well as USPS, DeLallo Foods, Respironics, and many more. Westmoreland County is a very large submarket, containing roughly 37.2 million SF of industrial space. The vacancy rate, 5.6%, has edged downward modestly in the past four quarters. Net absorption over the past year clocked in at about 580,000 SF, more than twice the five-year average. Rents grew by 4.5% over the past year, which is right in line with the impressive decade-long annual average in Westmoreland County. Logistics space in Westmoreland County run for about $6.80/SF, which is moderately below the metro average of $7.70 but is considerably above the current rent of $5.38 for the subject property. The 720,000 SF currently underway in Westmoreland County accounts for 1.9% of inventory. This represents a continuation of new developments in the submarket, which has already seen 430,000 SF delivered over the past three years. This does not include site prep for a new 1-million square foot Amazon warehouse / distribution center along the Pennsylvania Turnpike (I-76). Industrial properties have traded with regularity in recent years, and last year, the number of sales significantly exceeded the three-year average.