Pittsburgh Industrial Snapshot – Q1 2017

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The unemployment rate in the seven-county Pittsburgh metro rose 0.6 percentage point year-over-year in Q1 2017, hitting 5.4%. The labor force decreased by 8,600 jobs during the same period while the number of unemployed rose by 3,000 from Q1 2016 to Q1 2017, according to the Pennsylvania Department of Labor Center for Workforce Information and Analysis. Total job growth for 2016 fell just short of 0.5%, landing Pittsburgh in the bottom third of the country’s 381 metropolitan statistical areas (MSAs). The region’s growth statistics are in contrast with national trends, implying that workers unable to secure jobs in Pittsburgh are moving on, limiting the local talent pool and potentially damaging long-term wage growth for existing employers. While the decline in population is less than desirable, it is offset by an influx of international relocations, many of which are fueled by the continued growth in the technology and advanced manufacturing sectors. Uber Technologies, Inc. announced that it would be adding 13,000-square feet (SF) to its testing facilities in Pittsburgh’s Parkway East submarket, more than doubling its current facility and expanding its workforce. In the Monroeville submarket, Bechtel announced plans to expand its 180,000-SF facility by 90,000 SF, enough space to accommodate the addition of more than 200 new employees.

Market Overview

The overall industrial vacancy rate in the Pittsburgh region continued its steady decline in Q1 2017, ending the quarter down 0.5 percentage point over Q1 2016. Rental rates responded to the tightening of the market with a 4.6% increase year-over-year in Q1 2017. The office service/flex sector reported the most substantial change, up 25.6% year-over-year, ending Q1 2017 at $12.36 per square foot. Nearly 600,000 SF of new space was delivered to the market in Q1 2017, and though leasing activity was down 55.1% year-over-year, overall absorption topped 1.1 million SF, an increase of 26.2% over Q1 2016.


With only five industrial properties in the region posting availabilities greater than 200,000 SF and just over 430,000 SF of new speculative product under construction, Pittsburgh will continue to struggle to meet the demands of the growing e-commerce users. The region’s proximity to more than half of the total U.S. population makes it a prime location for supply-chain and distribution channels, but difficult topography and a lack of investment by major industrial developers will challenge the market’s competitiveness throughout 2017.

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Author: Nicole Montecupo

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