Industrial developers and investors are in touch with the pulse of the industrial marketplace and are taking aggressive steps to meet the potential increase in demand for modern, Class A space.

1. © 2020 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 2020
Pittsburgh
Industrial Insight
Construction resumes in the region, however impacts
from COVID-19 are felt with negative absorption
The health, policy, economic and financialdisruption stemming from the COVID-19 pandemic continues to
create a fluid and evolving environment for the industrial market. Although data from Q2 is providing greater
clarity about conditions and the short-term real estate outlook, there remains significant uncertainty
surrounding market dynamics and long-term trajectories and, as a result, we will continue to monitor
fundamentalsclosely as the situation unfolds. Please feel free to contact us if we can assist.
Construction at the Shell petrochemical facility faced headwinds as safety
regulations around COVID-19 limited the amount of workers. Other
construction projects across the region were also placed on pause as state
regulations restricted construction. However, in June, construction resumed
and activity began to show signs of a return. In a quarter with less than
400,000 square feet of total leasing, June captured the majority of leasing as
the market began to return towards normalcy, while 16.2 percent of leasing
occurred in May and only 8.4 percent took place in April.
Sales activity in the second quarter also lagged behind previous quarters with
$10.8 million in total sales volume across two closed transactions. Although
the total sales volume is well below previous years, the total square footage
sold is only slightly behind last year’s total by approximately 300,000 square
feet and has already surpassed the total in 2018.
Outlook
Several transactions were initiated pre-COVID-19, including Komatsu’s 250,000
square feet at Alta Vista Business Par and Haemonetics’s 202,817 square feet
at Clinton Commerce Park, Building III. Both projects will be under
construction in the third quarter. Sewickley based Chapman Properties
continues to expand development opportunities at Westport, Cincinnati
based Al. Neyer is entitling two additional speculative buildings at the Clinton
Commerce Center, Indianapolis based Scannell Properties is aggressively
marketing two large industrial park sites in the West submarket and the
Pittsburgh International Airport will announce the developer for their
Innovation Campus this summer. Industrial tenants-in-the-market, as a
measure of activity, are up 27.0 percent over 2019. While initially the pandemic
hit the pause button in the second quarter, it has accelerated the need for
high quality industrial space to service medical, grocery and e-commerce
sectors on a national basis and the trend is evidenced in many markets,
including Pittsburgh.
• A slight uptick in vacancy could end a five-year decline trend, however
national trends in e-commerce demand suggest a rebound.
• Sales activity decreased in the second quarter with only two sales
closing in April and June.
• Although COVID-19 put leasing activity and construction on pause for a
quarter, there are plenty of tenants in the market searching for space.
For more information, contact: Justin Simakas | justin.simakas@am.jll.com
Fundamentals Forecast
YTD net absorption -288,195 s.f. ▲
Under construction 1,786,000 s.f. ▲
Total vacancy 6.8% ▼
Sublease vacancy 75,170 s.f. ▶
-2,000,000
0
2,000,000
4,000,000
2016 2017 2018 2019 YTD
2020
Supply and demand (s.f.) Net absorption
Deliveries
4%
6%
8%
10%
12%
14%
2006 2008 2010 2012 2014 2016 2018 2020
Total vacancy
$2
$4
$6
$8
2006 2008 2010 2012 2014 2016 2018 2020
Average asking rent ($ p.s.f.)
Direct
Sublease
Average asking rent (NNN) $5.49 p.s.f. ▲
Concessions Stable ▶

2. © 2020 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 89,292,798 -206,060 -57,442 -0.1% 6.7% 9.0% $5.89 0 726,704 1,786,000
Manufacturing 53,883,017 -211,892 -230,753 -0.4% 7.0% 8.2% $4.81 0 0 0
Totals 143,175,815 -417,952 -288,195 -0.2% 6.8% 8.7% $5.49 0 726,704 1,786,000
Beaver County
Warehouse & Distribution 5,627,234 0 -16,800 -0.3% 13.2% 21.1% $4.92 0 130,000 521,000
Manufacturing 4,358,833 0 -14,125 -0.3% 10.8% 9.6% $3.77 0 0 0
Totals 9,986,067 0 -30,925 -0.3% 12.2% 16.3% $4.75 0 130,000 521,000
Butler County
Warehouse & Distribution 4,136,199 -14,000 1,940 0.0% 17.4% 20.9% $4.53 0 0 0
Manufacturing 3,561,575 0 0 0.0% 7.4% 8.0% $2.77 0 0 0
Totals 7,697,774 -14,000 1,940 0.0% 12.8% 14.9% $4.07 0 0 0
Downtown
Warehouse & Distribution 18,388,235 -4,182 -4,934 0.0% 4.2% 6.7% $11.08 0 0 0
Manufacturing 4,643,481 0 -1,200 0.0% 1.3% 4.1% $9.00 0 0 0
Totals 23,031,716 -4,182 -6,134 0.0% 3.6% 6.2% $11.04 0 0 0
East
Warehouse & Distribution 5,969,910 -42,182 -38,512 -0.6% 4.5% 6.7% $5.87 0 0 0
Manufacturing 3,637,199 0 0 0.0% 5.7% 6.0% $3.44 0 0 0
Totals 9,607,109 -42,182 -38,512 -0.4% 4.9% 6.4% $4.52 0 0 0
Northeast
Warehouse & Distribution 6,086,164 12,500 12,500 0.2% 2.0% 3.3% $4.69 0 0 0
Manufacturing 6,880,307 0 -21,250 -0.3% 5.6% 5.9% $3.63 0 0 0
Totals 12,966,471 12,500 -8,750 -0.1% 4.0% 4.7% $3.97 0 0 0
Northwest
Warehouse & Distribution 10,525,275 -212,239 -302,136 -2.9% 6.1% 9.0% $6.09 0 0 0
Manufacturing 3,063,621 0 0 0.0% 0.3% 0.3% $0.00 0 0 0
Totals 13,588,896 -212,239 -302,136 -2.2% 4.8% 7.0% $6.09 0 0 0
South
Warehouse & Distribution 5,521,847 949 -5,451 -0.1% 7.5% 9.7% $5.74 0 0 0
Manufacturing 7,892,472 0 0 0.0% 5.1% 5.1% $5.62 0 0 0
Totals 13,414,319 949 -5,451 0.0% 6.1% 7.0% $5.68 0 0 0
Washington County
Warehouse & Distribution 6,423,088 8,800 45,133 0.7% 10.2% 15.0% $5.53 0 0 165,000
Manufacturing 4,736,380 0 -50 0.0% 2.4% 2.4% $5.08 0 0 0
Totals 11,159,468 8,800 45,083 0.4% 6.9% 9.7% $5.51 0 0 165,000
West
Warehouse & Distribution 12,115,232 45,772 156,526 1.3% 6.5% 6.0% $6.14 0 596,704 1,100,000
Manufacturing 2,706,639 0 1,284 0.0% 2.4% 4.4% $5.15 0 0 0
Totals 14,821,871 45,772 157,810 1.1% 5.8% 5.8% $6.11 0 596,704 1,100,000
Westmoreland County
Warehouse & Distribution 14,499,614 -1,478 94,292 0.7% 5.7% 6.7% $4.99 0 0 0
Manufacturing 12,402,510 -211,892 -195,412 -1.6% 14.4% 18.0% $5.42 0 0 0
Totals 26,902,124 -213,370 -101,120 -0.4% 9.7% 11.9% $5.31 0 0 0
Q2 2020
Industrial Statistics
Pittsburgh
For more information, contact: Justin Simakas | justin.simakas@am.jll.com