Pittsburgh Industrial Snapshot – Q1 2016
According to the Pittsburgh Regional Alliance, manufacturing was the strongest sector for investment activity within the region for the seventh time in nine years, racking up 63 of the total 275 deals tracked in 2015. With a capital investment of $2.9 billion, Pittsburgh remains a stable economy with the robust regional supply chain necessary for businesses to grow and succeed.
One of the more significant investments year-to-date is GE’s Center for Additive Technology Advancements. The $39-million, 125,000-square-foot (sf) research center was opened by the company during Q1 2016. Focused on 3D printing and more efficient processes for manufacturing, the new center is situated in the Parkway West submarket and currently employs more than 20 high-tech workers with a goal of more than doubling that number within one year. GE was attracted to Pittsburgh because it expects the region to become one of four or five national hubs for high-tech manufacturing.
Year-over-year leasing activity increased by 42.8%, ending the quarter at nearly 384,000 sf. The Greater Downtown submarket led the region with 73,500 sf leased. Among the largest transactions were UATC, an electrical contractor, who leased 33,000 sf on Smallman Street; and Scott Electric, who leased 26,000 sf in Lawrenceville. Monroeville and Beaver County rounded out the top three most active submarkets for the quarter.
Lack of quality product and rising demand continued to push rental rates in the region, with the overall asking rate finishing at $7.21 per square foot (psf) triple net, an increase of nearly 34% year-over-year. As the manufacturing sector shifts to a more high-tech focus, rental rates are following. Asking rent in this sector jumped 16% year-over-year from $3.94 psf in Q1 2015 to $4.56 psf one year later.
The Pittsburgh industrial market will continue to navigate the volatile energy market throughout 2016, repositioning itself as the center for technology and advanced manufacturing. Expect overall rental rates to remain stable throughout the next six to nine months as landlords and developers work to reposition their properties to meet the needs of this growing sector.View Attachment