Q2 2014 Pittsburgh Industrial Market 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 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.
Q3 2013 Pittsburgh Industrial Market Highlights
Pittsburgh Earns Reputation of Conservative Market
The third quarter continued the trend established in the last several quarters. Slow and steady growth with a continuing decline in the vacancy rate – particularly among class A and B inventory. Deal activity witnessed a marginal increase resulting in a drop in overall vacancy from 8% to 7.9%.
Deals of significance include BFG Supply’s lease of 185,00 SF at 460 Nixon Road in the Northeast market and Gordon Food Service’s announcement that they will break ground on a 420,000 SF distribution center at the Findlay Industrial Park in the West. These larger transactions were supplemented by an uptick in 30,000 to 50,000 SF lease commitments – another positive sign.
Industrial Activity Slow, Yet Steady
Vacancy up, while available inventory challenges demand
Sources: Q1 2012 Pittsburgh Industrial Market Report Highlights; CoStar
There is no corresponding amount of good or bad news for the Pittsburgh industrial market, which has remained strong and steady during an uncertain US economy. The biggest challenge our region faces is inventory. This can be favorable during harsh economic times, or frustrating in a healthy economy. In comparison to other nearby markets to the East and West, Pittsburgh’s aging warehouses often lack modern amenities, very few industrial options are new, and there is a shortage of pad ready sites as well as quality bulk space, in terms of 200,000 SF or greater. As Pittsburgh’s available industrial inventory continues to shrink, additional spec development and build-to-suit activity is necessary to satisfy the increasing demand for space, or we risk opportunity loss as projects move to other markets.
Pittsburgh is positioned between recovery and expansion in the industrial market cycle and typically focuses on space segments that range from 10,000 – 30,000 SF, 30,000 – 60,000 SF and 60,000 SF+. While Pittsburgh has weathered the economic storm and our vacancy rate is healthy, the real story is that there is a need for additional well-located Class A inventory. At a time of growing demand, a lack of new supply and little construction, there is a dwindling number of Class A industrial buildings of more than 100,000 square feet available.
Read the complete Colliers International | Pittsburgh Q1 2012 Pittsburgh Industrial Market Report.
“Colliers International | Pittsburgh is extremely bullish on the Pittsburgh industrial market,” said John Bilyak SIOR, CCIM, Principal at Colliers International | Pittsburgh. “The market drivers, which include the energy, technology, education and medical communities, are sustainable and are not going anywhere. Pittsburgh has completely transitioned from the heavy manufacturing of our roots and emerged as a modern value added manufacturing and technology leader.”