2019-07-12_DTZ戴德梁行_Industrial_Q1_2019_Pittsburgh,PA_2页_541kb

Pittsburgh Industrial Market Summary Q1 2019

Core Content

This report provides an overview of the Pittsburgh industrial market for Q1 2019, highlighting economic indicators, market performance, and key transactions. The data reflects trends in vacancy rates, net absorption, construction activity, and rental rates across various submarkets and property types.

Main Economic Indicators

• Pittsburgh Employment: Remained stable at approximately 1.2 million employees in Q1 2019.
• Pittsburgh Unemployment: Declined to 4.1%, reaching near historic lows.
• U.S. Unemployment: Continued to decline, reaching 3.8% in Q1 2019.
• Vacancy Rates: Increased year-over-year by 80 basis points (bps) to 6.2%.
• Net Absorption: Declined significantly to -646,000 square feet (sf) in Q1 2019, compared to 912,000 sf in Q1 2018.
• Under Construction: Rose by 420% year-over-year to 749,000 sf.
• Average Asking Rent: Increased slightly to $8.68/sf, up from $8.59/sf in Q1 2018.

Market Overview

• Submarket Performance:
  • Butler County and Parkway West were the top submarkets for new construction, with 70% of the total 750,000 sf of projects located there.
  • South Pittsburgh and Washington County are expected to see significant growth due to the Southern Beltway infrastructure project.
  • Overall Vacancy Rate: 6.2%, with Office Service/Flex submarkets experiencing the highest vacancy (9.4%).
  • Net Absorption: Negative in most submarkets, with Greater Downtown and North Pittsburgh showing the most negative absorption (-113,731 sf and -57,066 sf respectively).

Key Market Trends

• Warehouse/Distribution: The sector has remained tight, attracting major investors like STAG Industrial.
• New Construction: Despite negative net absorption, new construction projects increased by 420% to 749,000 sf.
• Leasing Activity: Rose to 1.0 million sf in Q1 2019, up from 300,000 sf in Q1 2018.
• Rental Rates: The weighted average net rent for warehouse/distribution properties was $5.80/sf, while manufacturing properties averaged $4.55/sf.

Key Lease Transactions

Key Sales Transactions

Outlook

• The Southern Beltway infrastructure project is expected to boost construction and leasing activity in South Pittsburgh and Washington County over the next 24 to 36 months.
• Vacancy rates in these submarkets are projected to fall into the low single digits due to increased leasing activity.
• Warehouse/Distribution remains a key focus for investors, with STAG Industrial actively expanding its portfolio in the region.

About Cushman & Wakefield

• Cushman & Wakefield is a global real estate services firm with approximately 51,000 employees in 400 offices across 70 countries.
• The firm reported $8.2 billion in revenue in 2018, offering a wide range of services including property management, leasing, and capital markets.
• For more information, contact Jack O'Donoghue, SIOR, Principal at +1 412 391 2621 or via email at jodonoghue@gsa-cw.com.

Summary of Key Data

• Total Industrial Buildings: 3,097
• Total Industrial Inventory: 168,978,507 sf
• YTD User Sales Activity: 297,947 sf
• Under Construction: 749,417 sf
• Overall Weighted Average Net Rent: $5.80/sf

This summary highlights the mixed performance of Pittsburgh's industrial market, with rising construction activity and increased investor interest in warehouse/distribution properties, despite challenges in net absorption and vacancy rates.