Pittsburgh Industrial Snapshot – Q3 2017

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Reshoring and foreign direct investment by companies that have returned U.S. production or sourcing from offshore operations brought 77,000 new jobs to the country last year and more than 338,000 jobs since 2010, according to the Reshoring Initiative 2016 Report. This job growth has trickled into Pennsylvania: the PA Manufacturers’ Association reported manufacturing output in the state increased to $86 billion in 2016 up from $82 billion the year prior. The association cited the shale boom and burgeoning tech industry, in Western PA in particular, for providing feedstocks for a range of manufacturing. The U.S. Bureau of Labor Statistics attributes about 500,000 jobs in the state to the manufacturing sector, though supply chain and distribution channels puts the indirect impact in the millions of jobs.

Market Overview

Pittsburgh’s industrial market continued to tighten in Q3 2017 with overall vacancy dropping 1.2 basis point from the same period 2016. A 3.2% year-over-year increase in leasing activity coupled with a nearly 200,000-square-foot (sf) lag in year-to-date new construction activity in the region further challenged new users entering the market. Rental rates remained stable across all sectors but are expected to rise with the release of new speculative product in the market.

Cincinnati, Ohio-based Al. Neyer is set to break ground on a new 220,000-sf speculative distribution center in Jackson Township, Butler County submarket. Expected to deliver in Q1 2018 the $14-million project is situated just off Interstate 79 North near the new FedEx distribution center. The project comes on the heels of Neyer’s latest addition to its Clinton Commerce Park, a 266,000-sf distribution building located in the Parkway West corridor. The company sold its first facility at the project, a 297,200-sf warehouse fully-leased to Berlin Packaging, in Q2 2017 for $23.6 million.


Substantial rent increases are expected within the high tech/R&D sector over the next 12 months with the commencement of construction at Hazelwood Green, formerly called Almono, the 178-acre former Jones & Laughlin steel mill site. Carnegie Mellon University (CMU) has signed a 10-year lease for 94,000 sf at Mill 19, a building to be constructed inside the steel superstructure of the abandoned mill. CMU’s Advanced Robotics Manufacturing and Manufacturing Futures Initiative will be the anchor tenant at the Regional Industrial Development Corporation’s brownfield project.

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Author: Nicole Montecupo

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