Mid Atlantic Real Estate Journal — Brokerage Directory — July 27 - August 16, 2012 — B


B rokerage D irectory

By Lou Oliva, Newmark Grubb Knight Frank The Pittsburgh Industrial Market - Picking up momentum


he Pittsburgh Indus- trial Market continued to perform well during

Road in Harmar Township; Global Links acquired the 58,000 s/f former HVL Ware- house in Green Tree; Mattress Firm leased 40,000 s/f in Law- renceville and Schaedler Yesco Distribution leased 40,000 s/f in O’Hara Township. The biggest news of the frst half of 2012was the longawaited announcement by Royal Dutch Shell that they had entered into an option agreement to acquire the 300 acre Horsehead Zinc facility in Beaver Cty. along the Ohio River. In addition to the impact of a billion dollar plus construction project, the long term impact of a 80,000 barrel/

day ethane “cracker” plant will drive signifcant growth from downstream and midstream in- dustrial users. Given all of the investments in infrastructure and land development sites made within the Airport/West Submarket of Allegheny Cty., neighboring counties such as Beaver Cty., Lawrence Cty., Washington Cty. and Butler Cty. should all beneft from its proximity to the cracker plant. While the Royal Dutch Shell project is still a year or two away, the market is positioning itself to take advantages of the opportunities inherent in such a major project.

With respect to the second half of the year, based on cur- rent deals in the pipeline and level of activity, we expect the usually slower third quarter to outpace the third quarter of 2011; but with the election coming in November and the problems surrounding Europe and the slowing growth in Chi- na, it is diffcult to predict the year-end results. Regardless of your politics, the upcoming pre- seidential election and eventual outcome should eliminate the uncertainty on issues relating to taxes and healthcare. Hope- fully, these resolutions will prompt decisions by business

leaders that will encourage business activity and real es- tate transactions in 2013. Financial institutions are still reluctant to fnance speculative inventory, despite the strength of the market fundamentals in several submarkets which are nearing minimal vacancy. Only the strongest of our local de- velopers, such as The Buncher Company and The Elmhurst Group have been able to wade through the fnancial markets to start new projects in 2012. Again, we believe there is pent- up demand from privately held businesses considering new continued on page 8B

the Second Quarter of 2012 as an addi t i onal 9 5 0 , 0 0 0 s / f w a s a b s o r b e d bringing the year-to-date s i x -mon t h

Lou Oliva

absorption in at just under 1,400,000 s/f. When you con- sider that the industrial market absorbed 1,200,000 s/f over the entire twelve months of 2011, Pittsburgh is on pace for one of its strongest years since the mid 2000’s! The overall market-wide va- cancy is approaching 8 percent and Class A space is in the 4-5 percent vacancy range. The Northwest submarket is at an all time high with an occupancy rate approaching 96 percent. While some new construction is nearing completion, for us- ers in excess of 100,000 s/f, the options are very limited with build-to-suit being the most probable outcome for those f- nancially viable users needing space in 2013/2014. For large users in excess of 200,000 s/f, build-to-suit may be the only option depending on location fexibility. While the market-wide avail- ability is in excess of 9,000,000 s/f, less than 1,500,000 s/f is considered class A with the largest available space at 200,000 s/f. For users able to function in a 22’ clear facility, two larger options remain in the 350,000 s/f to 600,000 s/f range. A signifcant amount of the remaining vacancy still deals with some level of func- tional obsolescence. There have been a signifcant number of large transactions in 2012. In descending order, here are some of the major in- dustrial transactions: Aquion leased 250,000 s/f at the RIDC Westmorland (former Sony plant) soon after the RIDC/ WCIDA took control of the as- set from the Commonwealth of PA; Castle Co-Packers ac- quired the 220,000 s/f former Chestnut Ridge Bottling facil- ity in Latrobe; Mine Safety Appliances leased 120,000 s/f at the Turnpike Distribution Center in Beaver Cty.; Vision Products/Sampco (70,000 s/f), Hostess Brands (62,000 s/f) and Hose Power (41,000 s/f) all leased space at 460 Nixon

2011 Leasing Totals: 99.8% Occupied 3,647,365 SF Leased Heller Industrial Parks

Leasing for less in Central Jersey. n Huge Foreign Trade Zone n Energy Efficient Warehouse Lighting n 60% Lighting Bill Reduction n 20% Solar Energy Electric Rebates n Subsidized Daycare

(732) 287-4880

205 Mill Road, Edison NJ 08837


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