Portman, a development firm known for its office and hospitality properties across the globe, is expanding its relatively new industrial group in the U.S. Northeast as regional markets such as Philadelphia attract new warehouse and distribution projects.
The Atlanta-based development firm said it hired Mike Nelligan, a 30-year industry veteran who's worked at EQT Exeter, JLL, Trammell Crow and Duke Realty, as vice president of development for the Northeast region. Since launching its logistics-centered industrial division in 2021, Portman has more than 3.5 million square feet of Class A industrial space in its pipeline. That space includes Carney Commerce Center, a 587,500-square-foot distribution hub in Carneys Point, New Jersey, set to be completed within a month.
Portman said it sees opportunity to develop logistics properties across a region where it sees some of the industrial supply aging and unable to meet the demands of occupiers seeking new space. Creating the new leadership position filled by Nelligan embodies the firm's commitment to expanding in the sector, Portman Managing Director John Gaskin said.
“The Northeast is the most densely populated region in the country, but its existing industrial inventory is dated and lacks the infrastructure to serve the area effectively,” Gaskin said in a statement.
Portman is expanding its industrial group in the region because markets such as Philadelphia has seen demand return "to long-term norms" after a downshift during the COVID-19 pandemic, according to a report from CoStar Market Analytics. "Buoyed by resilient consumer spending, recent leasing demand translated to 6.3 million [square feet] in annual net absorption — on par with the 10-year average of 6.9 million square feet," CoStar said in the report.
However, as often happens, developers begin building on a speculative basis when they see healthy demand. That's the case in the Philadelphia market, which gained 19.3 million square feet of new space in the past year, "the highest surge in Philadelphia's recent history," according to CoStar. As a result, the industrial vacancy rate has climbed by 1.9% year-over-year to 6.9%, CoStar data shows.
Growing Pipeline
Portman's industrial pipeline in the Northeast also includes Silver City Business Park, a 1.1-million-square-foot industrial business park in Taunton, Massachusetts, and I-76 Trade Center, a plannedindustrial campus of 1.9 million square feet about 35 miles northwest of Philadelphia. The first phase of I-76 Trade Center, a 636,120-square-foot building, is expected to be completed in August.
In his role at Portman, Nelligan will be responsible for all aspects of development, including land acquisition, entitlement, financing, construction, leasing and sales in New England, eastern Pennsylvania, New Jersey and the mid-Atlantic region, the company said.
Nelligan, who has completed more than 300 development, acquisition and leasing transactions during his career, joined Portman from River Feale Investments, where he served as a managing director. At Exeter and JLL, he served in leadership positions.
Nelligan said in a statement that he is "eager to leverage my industry experience" and "an industrial stronghold in the Northeast" at Portman.
Portman's industrial portfolio stretches from Boston to Austin, Texas, and contains 8.8 million square feet of space that has been completed or is underway or in the design phase.
Portman, founded in 1957 by the late architect-developer John Portman, is known for office developments such as Embarcadero Center in San Francisco, Renaissance Center in Detroit and Peachtree Center and Truist Plaza in Atlanta. The firm also gained a reputation for hotel and mixed-use projects including Shanghai Centre in China — which contains apartment towers, the Portman Ritz-Carlton Hotel, a seven-story office component and a 1,000-seat theater — and New York Marriott Marquis at Times Square.