Blog Archives

Q4 2014 Pittsburgh Industrial Market Report

Q4 2014 Static Finish to the Year

Ind Report ImageThe 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.

Q3 2014 Pittsburgh Industrial Market Report

Ind Report Image

Q3 2014 Trending Upward

As expected the third quarter was an active quarter for lease executions. Net absorption for the quarter was 950,000 SF putting year to date absorption at just under 1,500,000 square feet. This already exceeds 2013’s total absorption of 1,150,000 square feet. With the current activity in the market there is no reason to think the trend will not continue into the fourth quarter. All indications are that 2014 will have a year end positive absorption that hasn’t been witnessed since 2008.

The only down side to this activity is we are still not seeing the market react with corresponding speculative development. Users (whether they be tenants or buyers) seeking quality space over 100,000 square feet now have only three options in the entire Southwest Pennsylvania market. We do see some light on the horizon with several hundred thousand square feet of speculative building in the pipeline, but this is just not enough to satiate the market’s appetite.

Click here to see the full Q3 2014 Industrial Market Report.

Q2 2014 Pittsburgh Industrial Market Report

Q2 2014 Ind Report

Q2 2014 Pittsburgh Still Positive

Although deal volume in the second quarter was not as robust as the first, activity remained brisk. The expectation is that the third quarter will bring more transactions from the tenants and buyers currently scouring the market. Scouring is the appropriate term given the only potential impediment to increased activity is the lack of quality options for users to move on.

The stats point to a marginal decrease in absorption of 233,000 square feet yet for the calendar year, we are still 600,000 square feet positive. The expectation is that the third quarter will be back on the right side of the ledger, particularly with the early quarter announcement by Amazon that they are leasing the 200,000 square feet of remaining space in 2250 Roswell Drive. This leaves only two quality availabilities in excess of 100,000 square feet remaining in the Greater Pittsburgh market.

Click here to see the full Q2 2014 Industrial Market Report.

Q1 2014 Industrial Market Report

Q1 2014 Ind Report

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.

Click here to see the full Q1 2014 Industrial Market Report.