C — February 8 - 21, 2013 — Pennsylvania — Mid Atlantic Real Estate Journal
www.marejournal.com
W estern PA
By Louis V. Oliva, CCIM, SIOR, Newmark Grubb Knight Frank “A jog to the Finish Line”
T
he Pittsburgh Indus- trial Market closed out the fourth quar-
yielded another three months of positive absorption with al- most 300,000 s/f of industrial space absorption. For all of 2012, over 2,050,000 s/f was absorbed which is just under 2% annual growth. When you consider the minimal impact of new construction, this was by all accounts a positive year for the market. As a result, overall market va- cancy is now at 7.4% and Class A vacancy remains at his- torically low (and potentially growth disruptive levels) of 4% with only 1.2M s/f of Class A space available with the larg-
On the economic develop- ment front, two significant announcements were made. The much anticipated year end decision fromRoyal Dutch Shell for an ethane cracker plant at the Horseshead Zinc facility in Beaver County was delayed thru June 2013. While not the decision local officials were hoping, this project re- mains the largest potential job and industrial development project in the Commonwealth of Pennsylvania! The surprising news of the quarter was the announce- ment by the PA Turnpike Commission that the long awaited second phase of the Southern Beltway Project (State Route 576) from Route 22 to Interstate 79 will be proceeding with construction to begin as early as 2014 on the 13 mile extension through Washington County to the Al- legheny/Washington County border near Southpointe. This extension will open up consider land for development as well as create an “Energy Corridor” connecting the of- fice buildings in Southpointe to the industrial parks near the Pittsburgh International Airport and hopefully the new ethane cracker plant off I-376. Assuming the 113th Con- gress acts responsibly and doesn’t force the US into de- fault on the debt ceiling and can make real progress on a deficit reduction plan, 2013 is shaping up to be another solid year for the Pittsburgh Indus- trial market. If absorption of remaining Class A space continues, we expect rents will be on the rise and new construction projects should be placed on the priority list by the spring. Initial inquires in early Janu- ary have increased slightly from the fourth quarter which hopefully signals that corpo- rations sitting on significant cash balances may start mak- ing investment decisions on new expanded facilities in 2013. Louis V. Oliva, CCIM, SIOR is the Executive Managing Director for the Pittsburgh Office of Newmark Grubb Knight Frank and has spe- cialized in Industrial Real Estate for over 26 years. n
est contiguous Class A spaces at 129,000 s/f and 200,000 s/f respectively. While a couple build to suit projects will be starting in the spring for re- cently signed transactions, the faucet remains turned off for speculative construction although a few projects have received entitlement approvals and marketing is underway. There were several transac- tions of significance closed dur- ing the fourth quarter and one will result in a new construc- tion project in 2013. In the West Submarket, Industrial Scientific disclosed they will be
acquiring 36 acres of excess land adjacent to the Bayer Campus in Robinson Town- ship to build a new corporate campus for their expanding manufacturing operations. In the Beaver Submarket, Turnpike Distribution Center leased approximately 121,000 s/f to Genco ATC. This main- tained 100% occupancy in the region’s largest recent spec building of 410,000 s/f completed in 2008. In the Northeast Submarket, Tsu- dis Chocolate acquired the 97,500 s/f facility they had previously leased from the RIDC.
ter of 2012 in similar form as compared to Q3 as the “looming fis- cal cliff” had a definite im- pact on year end deal s ! Despite the
Louis V. Oliva
media warnings of potential economic collapse if Con- gress failed to resolve the expiration of Bush Era Tax Cuts and mandatory spend- ing cuts, the fourth quarter
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