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Q4 2014 Pittsburgh Industrial Market Report
Q4 2014 Static Finish to the Year
The fourth quarter of 2014 finished without the anticipated flourish that it was trending toward. Vacancy actually crept up three basis points from 7.2% to 7.5% while absorption for the quarter experienced a negative 591,656 square feet. This is the largest negative quarter since 2009 and all others, with the exception of the second quarter of 2014, were positive. Even with the market giving back close to 600,000 square feet in the fourth quarter and 300,000 square feet in the second quarter, the year end absorption number was still a rosy 675,000 square feet.
At least a portion of the negative absorption in the fourth quarter of 2014 can be attributed to American Eagle officially bringing their 440,000 square foot distribution facility in Thorn Hill Industrial Park to market. It would be remiss not to credit a portion of the slow down to the sudden and unexpected drop in oil prices with prices under $60.00 per barrel, and for a brief time under $50.00, suddenly uncertainty spread into the previously teflon-coated energy sector. While this is anticipated to be a minor blip on the radar, it is fully expected to bleed into the first quarter of 2015, negatively impacting deal volume although not necessarily slowing advancement of projects by larger players in the sector.
Deals of significance in the fourth quarter include the sale of 367 Morganza Road, a Colliers International | Pittsburgh listing, in Washington County to National Rubber. The 65,700 square foot building traded at $52.00 per square foot. Edward Marc Brands leased 50,000 square feet in the Lawrenceville section of Pittsburgh and R&N Steel Manufacturing leased 70,000 square feet at 3401 Grand Avenue on Neville Island. Evidence of the trend noted on the back page of this report, 6500 Hamilton Avenue a 60,000 square foot multistory building in the red hot east side sold for $14.00 per square foot. The new owner plans to convert the former warehouse building to a higher and better use.
Evidence of the trend noted on the back page of this report, 6500 Hamilton Avenue a
60,000 square foot multistory building in the red hot east side sold for $14.00 per square
foot. The new owner plans to convert the former warehouse building to a higher and
better use.
Click here to see the full Q4 2014 Pittsburgh Industrial Market Report.
Q1 2013 Pittsburgh Industrial Market Report
Slow Start to 1st Quarter 2013
It’s a marathon, not a sprint – We hope!
The Pittsburgh Industrial Market got off to a slow start coming out of the gate in 2013. The 1st Quarter saw very few transactions of significance as buyers and tenants consider the impact of a soft economy, and lingering concerns surrounding the federal budget.
The Greater Pittsburgh vacancy rate changed little from 4th Quarter 2012 with a slight drop to 7.9% from 8.1% the previous quarter. Available Class A product continues to remain scarce, and at the risk of beating the proverbial dead horse, no relief is in sight in the form of new speculative product. That said, the market is anticipated to give back two large blocks of space of existing product. Flabeg recently announced that they are ceasing operations at their four year old solar glass manufacturing plant in Findlay Township. This 228,000 SF facility would represent the largest block of Class A product in the market when it is made available. In the north, United Stationers will be vacating their 124,000 SF Cranberry building.
Looking forward, we believe the 2nd Quarter will prove more robust than the 1st Quarter. Unless there is additional unanticipated negative news on the economic front, the pent up demand from companies already kicking tires in the market is sure to result in more transactions.
Read the full Q1 2013 Pittsburgh Industrial Market Report
“Colliers International | Pittsburgh is pleased to present the 1st Quarter 2013 Industrial Market Report,” said John Bilyak SIOR, CCIM, Principal at Colliers International | Pittsburgh. “We look forward to your feedback and trust that this information will prove insightful as you evaluate your current real estate and requirements going forward. As always, please contact us at 412 321 4200 if we can be of service.”
Pittsburgh Enjoys Positive Industrial Absorption – Although Lack of New Class A Industrial Warehouse Product Still Remains
Source: Q4 2012 Colliers international | Pittsburgh Industrial Market Report
Pittsburgh continued its pattern of ignoring national uncertainty during the final three months of 2012, and enjoyed another quarter of positive absorption.
Unfortunately, the pattern also continued with the sluggish delivery of new Class A industrial warehouse product. Net absorption for the calendar year 2012 was roughly 388,000 SF while overall vacancy fell to 8.2% and vacancy for Class A product came in at a stunning 3.6%.
Pittsburgh is not a market that traditionally experiences a high volume of build to suit activity. Historically most absorption occurs through activity on existing product – either speculative or second/third generation. With the lack of available inventory, it will be interesting to monitor build to suit projects over 2013. Most forecasters do not anticipate a drop off in demand which makes for simple math – excess demand and limited supply equals build to suit. While developers always prefer to build with a tenant in hand, in speculative development one often wins the deal due to timing. Increased build to suit activity will lead to increased competition, perhaps including national players. The risk our market runs for not delivering existing options to meet the demand is that we lose projects to other markets.
“The Colliers Pittsburgh Industrial team remains bullish on the demand for industrial space throughout our region, although our optimism is tempered somewhat by the lack of supply,” said John Bilyak SIOR, CCIM, Principal at Colliers International | Pittsburgh. “We look forward to another active albeit challenging year, in that we will have to be especially creative in identifying solutions for our clients.”
Demand for Industrial Product Continues to Grow Steadily
Source: Colliers International | Pittsburgh Q3 2012 Pittsburgh Industrial Market Report
Pittsburgh’s lack of available industrial inventory in the region has caused demand to continue to grow. With short supply in sight, companies who are expanding or relocating to the region are looking to developers for build-to-suit and speculative construction plans. The Parkway West has positioned itself as the next corridor for industrial growth and development, while Butler and Washington County are building momentum in midstream facility construction for the natural gas industry. MarkWest received preliminary approval from Chartiers Twp. in Washington Co. to build a rail spur and yard off Route 519, based on a M arch 2012 report from Breaking Ground Magazine. The developer also has several additional compressor/processing stations in various stages of development in Houston and western Washington Co. Additionally, the Port of Pittsburgh, a 200 mile expanse of commercially navigable waterway, has enabled numerous industries to locate along the rivers in order to take direct advantage of inexpensive barge transportation. This is expected to positively impact the rising demand for quality, first class warehouse and distribution facilities along with an uptick in the construction of manufacturing facilities and the resultant spinoff in related industries.
Click here for the full report.
“The industrial team at Colliers International | Pittsburgh continues to be bullish on the Western Pennsylvania economy and is looking forward to continuing to work towards realizing our regions potential in 2013,” said John Bilyak SIOR, CCIM, Principal at Colliers International | Pittsburgh. “Given our market conditions, the only thing that can stand in the way of our growth is a lack of space to accommodate internal expansion and external interest.”
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