Retail Snapshot Q2 2014
WalletHub.com ranked Pittsburgh the 26th best city to work for a small business out of 100 ranked U.S. metros. The site included criteria such as the number of inhabitants, industry varieties, earnings and hours worked.
Pittsburgh’s retail sector certainly serves as a testimonial for this ranking as several local restaurateurs have begun expanding their concepts into various submarkets throughout the region. Among them is BRGR, a better-burger restaurant in Pittsburgh’s Eastside neighborhood, which has added two suburban locations in Cranberry Township and at the Galleria of Mount Lebanon, as well as, at PNC Park, home of the Pittsburgh Pirates. The restaurant also features a food truck during the business week and at festivals and special events. BRGR competitor, Burgatory has added three new locations to its original at The Waterworks in the Northeast Pittsburgh submarket, as well as, a Burger and Shake Stand at Consol Energy Center, home to the Pittsburgh Penguins.
RETAIL MARKET OVERVIEW
Pittsburgh’s retail market saw little change in year-over-year vacancy, dropping slightly from 4.0% to 3.9% in Q2 2014. Year-to-date (YTD) absorption is positive 380,108 square feet (sf) with approximately 620,239 sf delivered and 166,282 sf currently under construction.
New delivers YTD are down 11% from Q2 2013, though occupancy of new developments is greater than 85% across the region. Among the latest deliveries are 1500 Economy Way, a 154,567-sf facility that is fully occupied by Wal-Mart on a long-term lease; and 1900 Main Street at Southpointe Town Center, a 57,795-sf mixed-use development that is 84% leased to tenants including: All-Star Sports Bar & Grill, Crazy Mocha Coffee Company, Zoup! and Tuscana.
The grocery sector is responsible for much of the region’s leasing and construction activity over the past 18 months. Pittsburgh’s dominant full-service grocer, Giant Eagle, has been experimenting with new store concepts in an effort to remain competitive with the discount and convenience brands that recently have expanded in the market, including Bottom Dollar, Aldi and Speedway. Giant Eagle’s counter has been an expanded GetGo concept offering large fueling stations with grab-and-go food and convenience products, and its latest effort, Market District Express, a quick shopping and dining concept that caters more to the suburban foodies. This concept offers fast-casual dining and drinks with a Starbucks and limited-service market offering fresh produce and a deli alongside prepared foods perfect for quick dinners at home in a much smaller footprint than its full-service sister store.
Pittsburgh’s economy continues to outperform its benchmark competitors, posting an unemployment rate of just 5.3% at the conclusion of Q2 2014. Low unemployment and affordable cost of living averages will continue to positively impact consumer spending within the region. Construction deliveries will fall short of 2013; however, a variety of new projects is under development and should begin to take shape in 2015.View Attachment