Q1 2014 Off to a Good Start
The first quarter of 2014 bodes well for the remainder of the year. The market is not only active, but deals are closing. This is welcome news given the fact that while the market has seen activity over the last four quarters, the actual transactions were often slow to materialize. The deal volume continues to put a strain on inventory with class A vacancy further shrinking to historic low levels. Users of significance will soon have no option but to resort to build to suit developments or settle for less than ideal existing options.
The Pittsburgh market witnessed both major newspapers taking additional space. The Post Gazette with a major repositioning of their operations, leased the former Flabeg building in Clinton Commerce Park with plans to move 227,000 SF of their printing operation from downtown into the Parkway West Corridor. The Tribune Review continues to streamline operations and expanded an existing facility in Youngwood to a 50,000 SF footprint.
The fourth quarter of 2013 finished in much the same way it began and maintained throughout the year; solid if unspectacular growth. The vacancy rate fell from 7.9 percent in the third quarter to 7.7 percent in the fourth quarter and dropped three basis points in total over the course of the year. The lack of quality Class A warehouse continues to be a factor with vacancy levels dropping to an astounding 2.97 percent.
The region’s confidence continues to spiral upward with fourth quarter projections from numerous economists that the manufacturing sector will continue to rebound. Optimism is the word heading into 2014. Pittsburgh should be especially bullish given the multitude of story lines that should positively impact the industrial market. These include CSX announcing that they will construct a $50,000,000 multi modal facility in McKees Rocks; the continued expansion of the Southwest Pennsylvania energy sector, and the much needed passage of the state transportation bill. Any of these alone are significant, but taken in total, insure that the region will continue to advance forward.