Category Archives: Retail
With the inauguration of President Trump fresh in our minds, it would be appropriate to discuss the impact of a new presidency on the retail real estate world. Will new tariffs impact retailers like Best Buy and Walmart, or could new manufacturing emerge that might lower costs? Instead of discussing these weighty issues, and because Colliers International | Pittsburgh has its priorities straight, we would prefer to talk about beer. Specifically the burgeoning microbrewery explosion we have seen in our region.
Combined with a hot restaurant scene, Pittsburgh’s food options have never been better.
The excitement in Pittsburgh’s food scene is headlined by the strong growth in regional micro-breweries. Just this past month Mindful Brewing opened their new location on Route 88 in Castle Shannon. At the same time Southern Tier Brewing Company opened on the North Shore and Helltown Brewing announced it is expanding to Bloomfield. By some count, no fewer than seventeen breweries are planned or expected to open in the region in 2017. While many might wonder if this could be too much of a good thing, Kyle Mientkiewicz of Grist House Craft Brewery, one of Pittsburgh’s first and most popular craft breweries disagrees. “In the grand scheme of things I don’t think the market is
saturated yet,” he said, “but if you do enter the market you better have a good product”. Grist House’s success has shown other entrepreneurs that people will seek out good
Local craft breweries are only a part of Pittsburgh’s strong restaurant scene. National and regional restaurant chains are expanding rapidly within the market and competing for real estate options. Restaurants active in the market include Firebirds, Bomba, Hello Bistro, Plaza Azteca, Choolah, Mission BBQ, Emiliano’s, and many others. By some counts there may be dozens of restaurant concepts competing for the same prime locations. The result is a lack of opportunities for smaller local restaurants and increasing rental rates. Restaurants that used to lease space for $15 or $18 per square foot are now forced to deal with market rents that range between $25 and $40 per square foot. Rising occupancy and labor costs create a conundrum for many restauranteurs. Joe Billhimer, a franchisee of multiple restaurant concepts said, “The implications of higher rents, coupled with increasing difficulty in finding quality workers and their ability to get to your location absent mass transportation services, has added another factor into deciding the right location for a restaurant to be prosperous. It has become very important to look at your location and the availability of workers.“
Some pundits believe that, nationally, there is an oversupply of restaurant uses and that there will be a market correction. In a recent poll by the National Restaurant Association, only 17% of restaurateurs believed that the market for restaurants will improve over the next year, while 29% see conditions worsening. Of course, we know that polls don’t always correlate with reality, so have a beer, leave the politics aside and enjoy the plethora a food options that Pittsburgh provides.
To read the full Q1 2017 Pittsburgh Retail Newsletter, click here.
This edition of the Investment Newsletter contains 1st quarter 2017 market indicators, market statistics, sales transactions and an investor spotlight interview with Bill Hunt of the Elmhurst Group based in Pittsburgh, Pennsylvania.
Click here to view the entire report.
The Pittsburgh retail real estate market continues to be strong. The vacancy rate across all retail property types dropped to 3.5% during the last quarter, although the numbers are skewed upward by large vacancies in a few submarkets. The market for prime anchored shopping center space is extremely tight and the effective vacancy rate for most quality centers is between 1-2%. Absorption for the period was 208,000 square feet. The total retail market is 138,741,180 square feet, including 32,945,052 of shopping center space. Low vacancy rates and high absorption has pushed lease rates up.
Overall lease rates increased by .2% over the previous quarter to an average of $12.03 per square foot. High quality retail locations now typically lease in the low to mid $30 range, with some leases coming in as high as $55 per square foot. Small shop space in fringe market anchored space is usually near $15 per square foot. New construction typically requires a lease rate no less than $22.50.
Click here to view the full report.
Commercial Real Estate professionals from several Colliers International offices convened in Pittsburgh last week for two days of networking, meetings, and presentations. The Pittsburgh Regional Alliance, Civil & Environmental Consultants, and Oxford Development sponsored this inaugural Colliers Regional Meeting at PNC Park.
Brokers and service line leaders from Colliers International travelled from California, Connecticut, Illinois, Maryland, New Jersey, Ohio, Virginia, Washington D.C., and across Pennsylvania on Wednesday for dinner and networking on the rooftop deck at the Blue Line Grille, directly across the street from Consol Energy Center.
“The Colliers Regional Conference brought together market leaders, brokers and service line experts to strengthen internal relationships and expand our ability to service clients, whether they are building owners, large corporations, law firms, banks or health care institutions across the state and throughout the region,” explained Joseph Fetterman, Executive Vice President of Strategic Initiatives for Colliers International offices in Eastern Pennsylvania and Delaware.
Thursday began with breakfast in the Lexus Club and a Pittsburgh-themed trivia contest and presentation by the Pittsburgh Regional Alliance. Industrial, Office, Retail, and Investment break-out sessions followed, which included collaboration meetings; presentations on energy, healthcare, ADA compliance, corporate solutions, and capital markets; and a panel discussion from some of the area’s largest office users.
Fetterman added, “The highlight was a panel of Pittsburgh based clients who spoke to challenges they face and initiatives they have underway for their respective real estate portfolios.”
“The Colliers International Regional Meeting was a huge success from many perspectives, especially corporate service business development and broker-to-broker networking,” commented Gregg Broujos, Managing Director & Founding Principal of Colliers International | Pittsburgh. “We were also able to show off our great city and the presentation by the Pittsburgh Regional Alliance was an incredibly valuable resource in showing our out-of-town brokerage professionals why they should bring their corporate clients to Pittsburgh.”
The long day ended with a view of the downtown skyline from the bleacher seats at PNC Park as the Pirates took on the Nationals and an amazing display of Zambelli Fireworks.
“The Pittsburgh Pirates were so gracious with their venues and everyone one of their staff members showed the utmost professionalism with every detail of the event,” Broujos added. “And the icing on the cake was the Pirates smacking the Nationals around on Thursday night!”