Industrial Snapshot – Q3 2015
Ranked 11th overall in recession recovery by WalletHub in its comparison of 150 of the largest U. S. cities across 17 economic criteria, Pittsburgh continues to hold its own despite uncertainties in the steel and energy markets. Regional unemployment remains in line with the national average, while job growth year-over-year from September 2014 to September 2015 increased the employment base by nearly 15,000 new jobs and average weekly wages experienced the largest increase of all benchmarked regions, jumping 5.7% during the same period.
Leasing activity for Q3 2015 was down 65.2% from the same period 2014, ending the quarter at just 376,155 square feet (sf). Overall net absorption was down dramatically year-over-year, posting just 41,000 sf, a drop of 95.2%, with warehouse/ distribution totaling negative 198,252 sf in Q3 2015. A major factor in these declines is a lack of large blocks of quality product, which has spurred local and national developers to break ground on a number of new projects in the region, particularly in the Parkway West near the airport. Chapman Properties revealed plans for a 50,400-sf distribution facility in Chapman Westport; Ashley Capital announced its 316,000-sf warehouse/distribution project at Findlay Industrial Park; and Al Neyer, Inc. released drawings for a 252,000-sf distribution facility at Clinton Commerce Park. These speculative projects will complement the build-to-suits underway for General Electric, Gordon Food Services and Under Armour within the same submarket.
Pittsburgh has been ranked among the top ten American cities for direct foreign investment by fDi Magazine and is home to more than 390 foreign-owned firms. Year-to-date sales figures reinforce this ranking, posting a nearly 7.0% increase in industrial investment sales, year-over-year for 2015 and totaling over 1.1 million square feet.
The region’s centralized location has put it back on the map for major distribution companies looking to improve supply-chain efficiency and shorten delivery periods. Expect significant leasing activity within the warehouse/distribution sector over the next 12 to 24 months with rental rates edging past the $5.00/NNN per square foot mark in most submarkets.View Attachment