Pittsburgh Industrial Snapshot – Q1 2018
In 2017, Southwestern Pennsylvania experienced the highest year-over-year increase in job growth since 2012, posting a 1.1% increase over 2016 with 12,600 new jobs added to the economy, according to the Bureau of Labor Statistics. The mining, logging and construction sector took top billing at 7.7% growth year-over-year while education and health services came in a distant second at 2.5%. The manufacturing sector, which posted just a 0.1% decline in growth, shows signs of stabilization for the first time in many years.
With more than 5.2 million square feet (msf) of industrial leasing activity recorded over the past 24 months, it was no surprise that net absorption in Q1 2018 was nearly double that of the same period 2017. Few speculative projects remain vacant within the Pittsburgh region, and though construction starts year-to-date lag those of the same period 2017, several new developments were announced. Among them, the Elmhurst Group has proposed a $25.5-million, 121,800-square-foot flex/office building for the final brownfield parcel at Pittsburgh Technology Park in the Oakland submarket. The flex/office model has proven successful for a number of developers in the region. The Regional Industrial Development Corporation has been remediating and developing old steel mill sites into hybrid office and R&D spaces for a variety of tech companies, most recently at its Lawrenceville Technology Center in the Greater Downtown submarket. The Tech Forge, which is a mix of office and high-bay space, just landed new-to-the-market Aurora Innovation, an autonomous vehicle technology company as its latest tenant. Aurora will occupy 40,000 sf at the property and joins Caterpillar, who recently expanded into the property’s mezzanine level, now occupying 74,000 sf. Additionally, Al. Neyer, LLC plans to construct two single-story warehouses at Clinton Commerce Park. Expected to be between 50,000 and 75,000 sf upon completion, these buildings will join two 400,000-sf fully-leased distribution centers already on the 10-acre site.
Vacancy within the industrial market will remain stagnant in 2018 as new speculative product is quickly absorbed and outdated product is demolished to make way for new development. Mixed-use projects combining industrial, office and multi-family will dominate new construction within the Greater Downtown area as developers scramble to meet the evolving needs of the growing tech industry.View Attachment