Steel is showing signs of a comeback after a decade low in 2016.

1. © 2019 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.
Q2 2019
Industrial Insight
Announced at the end of June 2019, Nord-Lock committed to a 125,000
square-foot build-to-suit at Clinton Commerce Park, continuing the
development in the West submarket. As warehouse and distribution space in
the suburbs continue to attract users, one project in the Downtown
submarket has been in the spotlight. After Northwood Investors bought the
Sears Outlet property through a portfolio acquisition, speculation of a
redevelopment circulated. However, the building is now being marketed for
sale. If the property was redevelopment by new ownership, 321,000 square
feet of distribution space will be removed from the Downtown industrial
inventory. Industrial sales volume in the region has nearly reached $50.0
million for the first half of 2019, with all of the transactions occurring outside
of the Downtown submarket.
Outlook
A familiar industry in Pittsburgh is making a comeback - steel. With the rise in
demand of metallurgical coal in relation to the rise in steel, investments in
coal have returned and the local industry is optimistic. However, the current
administration has announced in the second quarter that the 25 percent
tariffs imposed on Canada and Mexico would be lifted and could reapply
downward pressure on domestic steel. Not only will a revamped NAFTA
agreement affect U.S. steel companies, but the current trade relationship
between the United States and China puts global steel markets in a
vulnerable position. If China’s domestic steel prices fall, more exports from
China would increase supply in the global market, lowering prices and
impacting the Pittsburgh region’s investment in steel. U.S. Steel Corporation
outlined plans in the second quarter for more than $1.0 billion in upgrades in
its steelmaking operations. This investment is an important piece to the
region’s economy and could impact industrial market dynamics, but only if
the market remains strong.
Fundamentals Forecast
YTD net absorption 431,667 s.f. ▲
QTD net absorption -335,998 s.f. ▲
Under construction 1,029,887 s.f. ▶
Total vacancy 6.7% ▼
Average asking rent (NNN) $5.45 p.s.f. ▶
Tenant improvements Stable ▶
-500,000
1,500,000
3,500,000
2015 2016 2017 2018 YTD
2019
Supply and demand (s.f.) Net absorption
Deliveries
NYSE Arca Steel Index continues upward trend since
decade low at the beginning of 2016
11.8%
9.6%
8.4% 7.7%
6.7%
2015 2016 2017 2018 YTD 2019
Total vacancy
For more information, contact: Tobiah Bilski | tobiah.bilski@am.jll.com
• Peaks in the Producer Price Index for Metals and Metal Products have
been consistently landing higher since the decline in 2015, echoing the
NYSE Arca Steel Index’s signs of positive growth.
• Al. Neyer commences construction of Building III at Clinton Commerce
Center after Nord-Lock signs 125,000 square-foot lease.
• Sales volume of industrial product on pace to surpass last year’s total.
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
2015 2016 2017 2018 YTD 2019
Average asking rents ($/s.f.)
W&D Manufacturing

2. © 2019 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.
Inventory (s.f.)
Quarterly total
net absorption
(s.f.)
YTD total net
absorption (s.f.)
YTD total net
absorption (%
of stock)
Total vacancy
(%)
Total
availability
(%)
Average
total asking
rent ($
p.s.f.)
Quarterly
Completions
(s.f.)
YTD
Completions
(s.f.)
Under
construction (s.f.)
Pittsburgh total
Warehouse & Distribution 88,254,613 -364,093 513,708 0.6% 6.2% 6.7% $5.52 0 831,899 1,029,887
Manufacturing 53,869,017 28,095 -112,041 -0.2% 6.8% 6.8% $5.33 0 0 0
Totals 142,203,630 -335,998 431,667 0.3% 6.4% 6.7% $5.45 0 831,899 1,029,887
Beaver County
Warehouse & Distribution 5,494,762 -128,003 -273,347 -5.0% 12.5% 18.3% $4.69 0 0 416,000
Manufacturing 4,358,833 23,044 50,044 1.1% 11.1% 11.1% $4.36 0 0 0
Totals 9,853,595 -104,959 -223,303 -2.3% 11.9% 15.3% $4.59 0 0 416,000
Butler County
Warehouse & Distribution 3,916,199 -167,517 -125,217 -3.2% 15.9% 15.1% $4.88 0 0 220,000
Manufacturing 3,561,575 0 509 0.0% 7.4% 7.4% $2.64 0 0 0
Totals 7,477,774 -167,517 -124,708 -1.7% 11.8% 11.5% $4.22 0 0 220,000
Downtown
Warehouse & Distribution 18,356,235 -165,053 -155,732 -0.8% 3.8% 4.1% $7.98 0 0 0
Manufacturing 4,643,481 -31,003 -31,003 -0.7% 1.7% 1.7% $8.24 0 0 0
Totals 22,999,716 -196,056 -186,735 -0.8% 3.4% 3.6% $8.01 0 0 0
East
Warehouse & Distribution 5,969,910 -36,670 27,658 0.5% 5.3% 5.3% $9.33 0 0 0
Manufacturing 3,637,199 -12,000 11,500 0.3% 5.7% 5.7% $4.32 0 0 0
Totals 9,607,109 -48,670 39,158 0.4% 5.5% 5.5% $7.12 0 0 0
Northeast
Warehouse & Distribution 6,086,164 51,495 57,495 0.9% 2.6% 2.8% $6.29 0 0 0
Manufacturing 6,880,307 -34,300 -234,300 -3.4% 5.4% 5.4% $5.67 0 0 0
Totals 12,966,471 17,195 -176,805 -1.4% 4.1% 4.2% $5.86 0 0 0
Northwest
Warehouse & Distribution 10,525,275 33,204 -230,317 -2.2% 5.0% 5.2% $5.85 0 0 0
Manufacturing 3,063,621 48,283 48,283 1.6% 2.9% 2.9% $9.50 0 0 0
Totals 13,588,896 81,487 -182,034 -1.3% 4.5% 4.7% $6.36 0 0 0
South
Warehouse & Distribution 5,465,734 13,000 8,745 0.2% 2.6% 2.6% $5.76 0 0 0
Manufacturing 7,892,472 -45,929 -45,929 -0.6% 4.5% 4.5% $6.02 0 0 0
Totals 13,358,206 -32,929 -37,184 -0.3% 3.7% 3.7% $5.96 0 0 0
Washington County
Warehouse & Distribution 6,113,579 -38,433 76,716 1.3% 12.1% 12.1% $5.36 0 535,249 0
Manufacturing 4,736,380 80,000 72,550 1.5% 1.8% 1.8% $5.91 0 0 0
Totals 10,849,959 41,567 149,266 1.4% 7.6% 7.6% $5.42 0 535,249 0
West
Warehouse & Distribution 11,907,141 200,178 1,050,155 8.8% 4.0% 4.0% $4.99 0 259,150 393,887
Manufacturing 2,706,639 18,000 -7,295 -0.3% 3.8% 3.8% $5.35 0 0 0
Totals 14,613,780 218,178 1,042,860 7.1% 4.0% 3.9% $5.05 0 259,150 393,887
Westmoreland County
Warehouse & Distribution 14,419,614 -126,294 77,552 0.5% 7.5% 7.5% $4.35 0 37,500 0
Manufacturing 12,388,510 -18,000 23,600 0.2% 13.0% 13.0% $5.55 0 0 0
Totals 26,888,124 -144,294 131,152 0.5% 10.2% 10.2% $5.11 0 37,500 0
Q2 2019
Industrial Statistics
For more information, contact: Tobiah Bilski | tobiah.bilski@am.jll.com