Real Estate Journal — Industrial / Distribution Centers — May 30 - June 12, 2014 — 9C
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M id A tlantic
I ndustrial R eal E state & D istribution C enters
By Louis Oliva, SIOR, CCIM, Newmark Grubb Knight Frank Pittsburgh industrial market update
S
pring at Last! After one of the lon- gest winters in recent
s/f of absorption in this facility which was vacated by Sony a few years ago. Given all of the existing development sites throughout Westmoreland County, we should expect to see additional construction projects in this well located submarket at the I-70/I-76 intersection. The ongoing review by Royal Dutch Shell to consider con- struction of a $4 billion ethane cracker plant in Potter Town- ship, Beaver County was for- mally extended through June 2014 and while the regional economic development com- munity and political leaders
remain optimistic about a posi- tive outcome, the consensus of the business and real estate
support both existing busi- nesses and future businesses is Phase II of the Southern
ton County through Westport in Allegheny County and hope- fully to the Ethane Cracker Plant in Beaver County. Given the recent investment by Gordon Foods to build a 430,000 s/f distribution facil- ity at Westport and addi- tional activity throughout the airport/I-376 corridor, there is every reason to believe that significant industrial devel- opment activity will occur throughout the Western PA region. Louis Oliva, SIOR, CCIM is executive managing di- rector at Newmark Grubb Knight Frank. n
history, the late spring a r r i v a l t o Pi t tsburgh has brought with it a flur- ry of activity and an ever tightening i ndus t r i a l
“There is every reason to believe that significant industrial development activity will occur throughout the Western PA region.”
development community re- mains at 50% probability for the project which all agree can be a game changer for the Pittsburgh region and indus- trial real estate marketplace. One recent announcement that involves a significant infrastructure spend that will
Beltway Project from Route 22 to Interstate 79. As a re- sult of the recent passage of Act 89 by the PA Legislature, this $550m, 13 mile, toll road project is targeted for comple- tion in 2019 and will create a true energy corridor extending from Southpointe in Washing-
Louis Oliva
real estate market. While the statistics at the end of the first quarter 2014 remained basi- cally unchanged from the 2013 year-end figures with overall occupancy of 92% and class A vacancy at a paltry 4% consist- ing of only 1.4m s/f with the largest available class A space of 130,000 s/f, there is a sense that the region is ready to see growth in 2014 and beyond! This limited availability of class A space should bode well for new construction with increased build to suit activ- ity as evidenced by numerous projects in the market. While our local developers have re- mained conservative (along with their lenders) on specu- lative construction, we are only a few transactions away from nearing total occupancy of class A space. While this is healthy for industrial land- lords, it is not very accommo- dating for growing companies or users looking to enter the Pittsburgh market; especially those in manufacturing, ware- house/distribution and energy services. There were several major announcements during the first quarter that made an im- pact on the market. The first piece of good news involved the Pittsburgh Post Gazette which signed a long term lease for the recently vacated Flabeg Solar Panel Facility in the Clinton Commerce Center. The PGwill occupy all 227,000 s/f and relocate their printing operations from downtown Pittsburgh to the airport cor- ridor. In Westmoreland County, the RIDC and Westmoreland County IDC announced that Cenveo (acquirer of National Envelope) is going to lease 300,000 s/f in the former 2.1m s/f Sony Plant known as the RIDC Westmoreland. This relocation by Cenveo, coupled with last year’s relocation by Aquion and the expansion of two existing tenants has resulted in almost 1,000,000
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Gerard McLaughlin Executive Managing Director gmclaughlin@ngkf.com Louis Oliva Executive Managing Director loliva@ngkf.com 210 Sixth Avenue, Suite 600, Pittsburgh, PA 15222 T 412.281.0100
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