Investors are paying tens of millions of dollars for big warehouses in Central Pennsylvania. But there's also a market for stuff that needs to be stored outside.
It's a market that prompted Bethesda, Maryland-based 1788 Holdings to pay $12.8 million for a 21.3 acre tract at 1001 Herr St., a former Harsco manufacturing site.
"I personally love outdoor storage for one reason. It's a zoning code that, generally, jurisdictions are getting rid of," said Larry Goodwin, principal of 1788 Holdings.
That means there is a dwindling supply but a steady demand, he said. "Somebody's got to hang out and take care of the legacy users. That market isn't going away."
Who are the users: While some products need temperature-controlled settings away from wind, rain, sun and snow, other products can be stored cost-effectively in the open air.
The list includes trailers, shipping containers, solar arrays, porta potties and landscaping products, Goodwin said.
Tenants at 1001 Herr St. include Capitol Building Supply, PP&L Electric Utilitiesand a pair of trucking companies, Martin Logistics and Midwest Transport, according to Goodwin and a press release from Marcus & Millichap, the real estate firm that brokered the sale.
PP&L is the largest user, taking up 10 acres and a couple buildings totaling no more than 20,000 square feet, Goodwin said.
Capitol Building is using 3.5 acres but is looking to add up to two acres more, as well as a new shed for storing drywall, Goodwin said. Capitol uses existing buildings totaling about 35,000 square feet.
"They love this location and want to turn it into a regional hub," Goodwin said.
He is marketing the remaining land to tenants with the help of John Van Buskirk, an agent with real estate firm Lee & Associates of Eastern Pennsylvania.
Goodwin noted that he is hoping to work with neighbors to address flooding concerns in the area.
Who's the seller: A real estate partnership tied to John Moran Jr., the developer behind a neighboring property, the World Trade Center Harrisburg at 1000 Cameron St., according to Goodwin and county deed records.
In July, Moran bought the Herr Street property for $505,000 from Capital Region Economic Development Corp.,which had bought the site in 2018 from Harsco.
CREDC, an arm of the Harrisburg Regional Chamber, landed a state grant to study environmental contamination at the site with a goal of putting it back into productive use, said Ryan Unger, president and CEO of the chamber and CREDC.
CREDC also wanted to ensure future owners understood the environmental risks, said Unger, who joined the chamber this summer.
Moran leased the property while CREDC was studying it and had a sales agreement in place for when the environmental review was complete, Unger said.
"An investment of that size is a positive thing for the region and the city," he said of 1788's purchase of the property.
Efforts to reach Moran were not successful.
The background: 1788 Holdings owns 17 properties and 50 acres of outdoor storage space in Alabama, Florida, Georgia, Maryland, North Carolina, Pennsylvania and South Carolina.
In addition to the Herr Street tract, the firm owns a roughly 59,000 square-foot warehouse with outside storage at 1400 Hagy Way in Harrisburg, Goodwin said, Tenants include ice cream maker Hershey Creamery and mail services companyCapitol Presort.
1788 also owns a 430,000 square-foot warehouse with outside storage at 1139 Lehigh Ave. near Allentown, Goodwin added.
The great outdoors: Outdoor storage areas now have their own nomenclature: They are referred to as industrial outdoor storage properties or industrial service facilities.
And like any real estate asset worthy of dueling names, it has dedicated investors.
One of the biggest is a Chicago-based outfit called Industrial Outdoor Ventures.