The Pittsburgh industrial market continues on a positive trend in Q3 2016, as the region prepares for the Shell cracker plant.

1. Average total asking rentvs total net absorption
Source: JLL Research
Year-to-date salesvolume by submarket
Source: JLL Research
Preleased new construction
Source: JLL Research
Industrial market is healthy and there is something brewing
At the end of the third quarter 2016, total net absorption surpassed the 1.3million
square feet postedat the end of 2015. Duringthat same time frame, direct
average rents have increasedby $0.28 per square foot. Availability has
decreased as well, currently at 9.8 percent, two percentagepoints down fromat
the end of 2015when availability was at 11.8 percent. More notably, absorption
numbers for the third quarter this yearalonewerejust shy of half of the total
year-to-date number. Themarket is expectedto grow as Shell builds their
cracker plant, which is strategically placedto engross 70.0percent of North
America’s entire polyethylene demandwithin a700mile radius.
Shell adds more propertiesto their existing portfolio
In 2016, industrial capital investments have beenmostly divvied upbetweenthe
West and North submarkets, totaling $90.1million. With theexpectedarrival of
the Shell cracker plant, industrial properties anddevelopment sites arebeing
continually swallowed up nearthe plant by investors looking to cashin with the
anticipated futuredemand. Shell has beenmaking acquisitions as well, to be
sure they have the roomthey need, not only fortheir offices andwarehouses, but
for employee housing as well. In the thirdquarter, Shell purchasedthree land
sites on Frankfort Road inBeaverCounty, as well as 110 acres onStoney Ridge
in Center Townshipclose to theBeaver Valley Mall.
Robotics growing in the ‘burgh
A city once rich in blue collar factories and thesteel industry is repositioningitself
as a center of innovation androbotics. Uber’s facility in the Strip District is home
to self-driving cars and Uber will beadding to its presence in Pittsburgh withan
Advanced Technologies Center testing facility at the Almono site inHazelwood.
Uber is not the only company tappinginto Pittsburgh’s engineering talent pool for
robotics research, Caterpillarhas beenworkingwith CarnegieMellon University
on robotics research since2007. Recently, Caterpillar signed a leasefor upto
20,000 square feet of space inRIDC’s new building beingdeveloped onthe
former Heppenstall Steel Co. site in Lawrencevilleto housetheir robotics
department for automatingoff-highway haul trucks.
Industrial Insight
Pittsburgh | Q32016
13,510,006
Total availability (s.f.)
2,790,789
YTD total net absorption (s.f.)
$4.81
Average asking rent (p.s.f.)
612,500
Total under construction(s.f.)
9.8%
Total availability
2.0%
YTD net absorption(as a % of stock)
$6.25
New build asking rents (p.s.f.)
979,000
YTD construction completions (s.f.)
©2016 Jones Lang LaSalle IP, Inc. All rights reserved.For more information, contact: Tobiah Bilski | tobiah.bilski@am.jll.com
770,000
191,000
260,000
North West
East Downtown
South
$3.7M
$10.1M
$11.9M
$38.6M
$51.5M
0.0
1.0
2.0
Q4 2015 Q1 2016 Q2 2016 Q3 2016
Under Construction Preleased
$4.60
$4.80
$5.00
-2.0
0.0
2.0
4.0
2013 2014 2015 YTD 2016
Total Net Absorption Average Asking Rent
Total(m.s.f.)Total(m.s.f.)
($p.s.f.)
Pittsburgh industrial market gearing up for growth

2. Industrial Statistics
Pittsburgh | Q32016
©2016 Jones Lang LaSalle IP, Inc. All rights reserved.For more information, contact: Tobiah Bilski | tobiah.bilski@am.jll.com
Inventory
(s.f.)
Quarterly
total net
absorption
(s.f.)
YTD
total net
absorption
(s.f.)
YTD
total net
absorption
(% of stock)
Total
availability
(s.f.)
Total
availability
(%)
Average
total asking
rent
($ p.s.f.)
Quarterly
completions
(s.f.)
YTD
completions
(s.f.)
Under
construction
(s.f.)
Pittsburgh Totals
Warehouse & Distribution 82,961,466 839,160 1,626,925 2.0% 9,505,629 11.5% $5.27 568,000 923,000 612,500
Manufacturing 54,930,448 417,828 1,163,864 2.1% 4,004,377 7.3% $3.72 56,000 56,000 0
Totals 137,891,914 1,256,988 2,790,789 2.0% 13,510,006 9.8% $4.81 624,000 979,000 612,500
Flex 20,633,880 -98,701 383,027 1.9% 2,733,279 13.2% $9.99 0 54,000 68,000
Beaver County
Warehouse & Distribution 4,526,997 219,563 283,532 6.3% 700,816 15.5% $5.39 0 0 0
Manufacturing 4,517,893 0 38,000 0.8% 157,200 3.5% $2.65 0 0 0
Totals 9,044,890 219,563 321,532 3.6% 858,016 9.5% $4.89 0 0 0
Flex 579,085 -5,025 9,739 1.7% 107,596 18.6% $10.00 0 0 0
Butler County
Warehouse & Distribution 3,615,353 -10,492 -30,225 -0.8% 283,537 7.8% $7.68 0 305,000 135,000
Manufacturing 3,588,175 43,000 71,500 2.0% 419,289 11.7% $1.20 56,000 56,000 0
Totals 7,203,528 32,508 41,275 0.6% 702,826 9.8% $3.81 56,000 361,000 135,000
Flex 386,900 0 0 0.0% 11,000 2.8% $10.00 0 0 0
Downtown
Warehouse & Distribution 18,444,302 -35,468 11,048 0.1% 1,396,636 7.6% $5.25 0 0 0
Manufacturing 4,823,443 26,573 263,096 5.5% 120,577 2.5% $7.15 0 0 0
Totals 23,267,745 -8,895 274,144 1.2% 1,517,213 6.5% $5.40 0 0 0
Flex 3,047,812 -46,848 55,182 1.8% 381,129 12.5% $8.10 0 0 0
East
Warehouse & Distribution 6,565,485 -7,272 14,679 0.2% 641,705 9.8% $5.14 0 0 0
Manufacturing 4,594,489 35,199 9,981 0.2% 370,926 8.1% $4.00 0 0 0
Totals 11,159,974 27,927 24,660 0.2% 1,012,631 9.1% $4.72 0 0 0
Flex 2,858,912 15,375 195,831 6.8% 639,572 22.4% $10.50 0 0 0
Northeast
Warehouse & Distribution 6,291,992 30,740 99,792 1.6% 320,511 5.1% $5.15 0 0 0
Manufacturing 6,408,774 -29,790 157,310 2.5% 123,536 1.9% $5.75 0 0 0
Totals 12,700,766 950 257,102 2.0% 444,047 3.5% $5.32 0 0 0
Flex 3,006,818 -7,650 50,449 1.7% 283,938 9.4% $10.75 0 0 0
Northwest
Warehouse & Distribution 10,204,144 78,700 339,301 3.3% 1,105,103 10.8% $5.96 0 0 0
Manufacturing 3,479,451 0 58,300 1.7% 40,040 1.2% $4.00 0 0 0
Totals 13,683,595 78,700 397,601 2.9% 1,145,143 8.4% $5.89 0 0 0
Flex 2,109,466 9,049 19,018 0.9% 174,200 8.3% $12.27 0 0 0
South
Warehouse & Distribution 5,381,206 -48,760 -96,359 -1.8% 541,600 10.1% $3.35 0 0 0
Manufacturing 8,033,856 -86,114 -81,114 -1.0% 177,782 2.2% $6.75 0 0 0
Totals 13,415,062 -134,874 -177,473 -1.3% 719,382 5.4% $4.19 0 0 0
Flex 1,634,737 -14,600 28,510 1.7% 108,564 6.6% $11.66 0 0 0
Washington County
Warehouse & Distribution 5,449,811 3,827 285,230 5.2% 1,927,313 35.4% $4.75 0 0 0
Manufacturing 4,716,380 0 147,025 3.1% 230,350 4.9% $4.95 0 0 0
Totals 10,166,191 3,827 432,255 4.3% 2,157,663 21.2% $4.77 0 0 0
Flex 1,404,532 -56,750 -105,861 -7.5% 303,709 21.6% $9.00 0 0 0
West
Warehouse & Distribution 10,468,325 581,522 525,090 5.0% 1,204,671 11.5% $6.34 568,000 568,000 180,000
Manufacturing 2,760,269 0 4,172 0.2% 159,916 5.8% $5.00 0 0 0
Totals 13,228,594 581,522 529,262 4.0% 1,364,587 10.3% $6.18 568,000 568,000 180,000
Flex 3,192,163 9,244 55,731 1.7% 465,322 14.6% $12.59 0 54,000 68,000
Westmoreland County
Warehouse & Distribution 12,061,179 24,940 191,427 1.6% 1,467,947 12.2% $4.40 0 50,000 297,500
Manufacturing 12,959,110 428,960 495,594 3.8% 2,286,651 17.6% $3.68 0 0 0
Totals 25,020,289 453,900 687,021 2.7% 3,754,598 15.0% $4.81 0 50,000 297,500
Flex 2,413,455 -1,496 74,428 3.1% 258,249 10.7% $4.77 0 0 0