At a glance
- Cushman & Wakefield's Hunter Kessell, Gerry Blinebury and Collin Potter are overseeing leasing; Ware Malcomb is the architect.
- The first of the two, Hanover's first Southern California industrial start, was a 200,000-square-foot ground-up in Simi Valley backed by Crow Holdings, and both were builds in markets where Hanover had no footprint — a pattern of paying for land and entitlement instead of cash flow someone else has already stabilized.
- Industrial capital, as this publication has argued, is paying for scarcity and operating platforms, and Hanover's version is narrower and more legible: pick a constrained distribution market, deliver near the Port of New York and New Jersey, and use the finished building to establish the footprint the next three sites get sourced from.
Hanover Company has delivered Savage Road, a 358,234-square-foot industrial building at 770 Savage Road in Northampton, Pennsylvania, its first project in the Lehigh Valley and the second new market the firm has entered by ground-up construction in 27 days. Cushman & Wakefield's Hunter Kessell, Gerry Blinebury and Collin Potter are overseeing leasing; Ware Malcomb is the architect.
The first of the two, Hanover's first Southern California industrial start, was a 200,000-square-foot ground-up in Simi Valley backed by Crow Holdings, and both were builds in markets where Hanover had no footprint — a pattern of paying for land and entitlement instead of cash flow someone else has already stabilized.
It is also the trade Hines took in August, when the $92 billion manager said it would pivot from buying to building on the view that a construction freeze has created a scarcity advantage acquisitions cannot match. Industrial capital, as this publication has argued, is paying for scarcity and operating platforms, and Hanover's version is narrower and more legible: pick a constrained distribution market, deliver near the Port of New York and New Jersey, and use the finished building to establish the footprint the next three sites get sourced from.
The building is the large-format type a bulk distributor wants — 36-foot clear height, rear-load configuration, 51 dock doors — and the kind a developer can replicate wherever land is zoned and power is available. No tenant appears in the announcement, and an outside leasing team carrying the assignment is consistent with the space arriving uncommitted.
The counterargument lives at the small end of the market, where scarcity is most protected because building costs have moved fastest; Cushman & Wakefield's cost guide shows small industrial projects inflating fastest, at $144 a square foot. A 358,000-square-foot rear-load sits at the opposite end of that spectrum, where the barrier to a rival is the site's position on the port corridor rather than the building itself; Hanover is underwriting geography, and geography is the one input a competitor with a better basis can copy.
The first lease signed at Savage Road will say more than the delivery did. David Hudson, president of Hanover Industrial, says the company keeps looking for markets with strong long-term growth potential, and Dan Gordon, a regional development partner, calls the completion a milestone in establishing a Lehigh Valley presence. The rent on that first signature prices both claims at once.
Reported by the Sectors desk from Connect CRE. Published . Corrections