Pittsburgh industrial market vacancy rates are declining and asking rents are increasing. New speculative construction reveals a healthy investor appetite in a growing market.

1. © 2017 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.
Q3 2017
Industrial Insight
The first half of the year began with slow activity in the industrial market with
91.7 percent occupancy. However, in the third quarter there were signs of life.
Al. Neyer proposed a new 220,000-square-foot distribution center in Jackson
Township, right next to the new FedEx distribution center along I-79 at the
Evans City exit. With current speculative construction for the year over 400,000
square feet, the proposed distribution center would add 54.6 percent more
Class A inventory in a desirable submarket within a market that has low
availability in this asset class. News of the proposed distribution center broke
not long after Castlebrook Development began site development on their
416,000-square-foot distribution center in Beaver County along the
Pennsylvania Turnpike.
Outlook
All signs point positive for the Pittsburgh industrial market. Although activity
has been modest at the start of the year, the planned distribution center
construction proves that investment is gearing up for long-term demand.
Manufacturing output was reported to have increased last year over 2015 by
approximately $4.0 billion. Self-Storage developers are investing and that is a
good indication that Pittsburgh is growing overall. In the third quarter, there
were several storage deals reported. Guardian Storage is opening two
facilities in the region this quarter and is anticipating three more by the end of
2018. In addition, Nuvo Development LLC will be developing a 105,000-square-
foot storage facility on a former industrial sight in SouthSide. There are
roughly 500 locations of storage facilities, big and small, in the Pittsburgh
region. Investment, while taking a slight breather after the activity of 2016, is
continuing to display confidence in tenant demand, evidenced by the low
vacancy within the Class A sector.
Fundamentals Forecast
YTD net absorption 1,842,470 s.f. ▲
QTD net absorption 332,094 s.f. ▲
Under construction 652,864 s.f. ▲
Total vacancy 8.3% ▼
Average asking rent (NNN) $5.13 p.s.f. ▲
Tenant improvements Stable ▶
-500,000
1,500,000
3,500,000
2013 2014 2015 2016 YTD
2017
Supply and demand (s.f.) Net absorption
Deliveries
This summer had a little bit of everything;
manufacturing, distribution, and storage.
12.4% 12.4% 11.8%
9.6%
8.3%
2013 2014 2015 2016 YTD 2017
Total vacancy
For more information, contact: Tobiah Bilski | tobiah.bilski@am.jll.com
• Multiple additions of storage facilities is a good indication that
Pittsburgh’s population is increasing near the urban core.
• A new proposed distribution center on First and Main in Jackson
Township is just what the supply doctor ordered.
• Manufacturing output showing signs of growth in Pennsylvania at a time
when additive manufacturing, robotics, and plastics are on everyone’s
minds.
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
2013 2014 2015 2016 2017
Average asking rents ($/s.f.)
W&D Manufacturing

2. © 2017 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.
Q3 2017
Industrial Statistics
For more information, contact: Tobiah Bilski | tobiah.bilski@am.jll.com
Inventory
(s.f.)
Quarterly
absorption
(s.f.)
YTD absorption
(s.f.)
YTD
absorption
(% of stock)
Total
availability
(s.f.)
Total
availability
(%)
Average
asking rent
($ p.s.f.)
YTD
completions
(s.f.)
Under
construction
(s.f.)
83,130,433 35,533 1,182,337 1.4% 7,991,976 9.6% $5.31 403,000 652,864
Manufacturing 55,902,994 296,561 660,133 1.2% 3,487,445 6.2% $4.73 0 0
Total 139,033,427 332,094 1,842,470 1.3% 11,479,421 8.3% $5.13 403,000 652,864
Flex / R&D 21,715,215 -169,327 180,281 0.8% 2,590,810 11.9% $10.00 0 73,920
Beaver County
4,510,599 -14,458 -117,204 -2.6% 691,866 15.3% $5.58 0 416,000
Manufacturing 4,748,578 -4,300 70,900 1.5% 86,300 1.8% $5.99 0 0
Total 9,259,177 -18,758 -46,304 -0.5% 778,166 8.4% $5.63 0 416,000
Flex / R&D 579,085 0 -14,360 -2.5% 105,220 18.2% $10.00 0 0
Butler County
3,896,250 12,717 -99,383 -2.6% 684,320 17.6% $3.55 0 0
Manufacturing 3,586,191 -12,700 33,984 0.9% 445,005 12.4% $2.14 0 0
Total 7,482,441 17 -65,399 -0.9% 1,129,325 15.1% $2.99 0 0
Flex / R&D 386,900 0 0 0.0% 11,000 2.8% $10.00 0 0
Downtown
17,872,155 -5,457 119,301 0.7% 1,296,305 7.3% $5.18 0 0
Manufacturing 4,497,484 -7,800 59,177 1.3% 55,700 1.2% $7.18 0 0
Total 22,369,639 -13,257 178,478 0.8% 1,352,005 6.0% $5.26 0 0
Flex / R&D 3,048,204 2,650 32,357 1.1% 275,007 9.0% $8.69 0 0
East
6,519,686 87,377 88,818 1.4% 502,817 7.7% $8.31 0 0
Manufacturing 4,588,748 0 -105,800 -2.3% 442,190 9.6% $3.25 0 0
Total 11,108,434 87,377 -16,982 -0.2% 945,007 8.5% $5.94 0 0
Flex / R&D 3,112,912 -57,870 138,552 4.5% 497,202 16.0% $10.49 0 0
Northeast
5,870,737 63,810 101,795 1.7% 192,284 3.3% $5.50 0 0
Manufacturing 6,408,774 -111,800 -81,254 -1.3% 205,090 3.2% $5.75 0 0
Total 12,279,511 -47,990 20,541 0.2% 397,374 3.2% $5.63 0 0
Flex / R&D 3,261,718 0 31,424 1.0% 265,090 8.1% $10.75 0 0
Northwest
10,318,348 3,758 196,521 1.9% 619,083 6.0% $6.05 0 0
Manufacturing 3,478,558 -31,000 -62,000 -1.8% 102,040 2.9% $9.95 0 0
Total 13,796,906 -27,242 134,521 1.0% 721,123 5.2% $6.63 0 0
Flex / R&D 2,239,369 -15,809 32,763 1.5% 200,047 8.9% $14.10 0 0
South
5,740,769 -25,560 -36,372 -0.6% 522,540 9.1% $3.78 0 0
Manufacturing 8,033,856 -51,831 -79,831 -1.0% 257,613 3.2% $6.75 0 0
Total 13,774,625 -77,391 -116,203 -0.8% 780,153 5.7% $4.80 0 0
Flex / R&D 1,701,137 34,890 34,284 2.0% 103,604 6.1% $12.37 0 0
Washington County
5,563,429 -7,656 333,521 6.0% 1,336,186 24.0% $5.01 0 0
Manufacturing 4,715,323 22,892 -48,950 -1.0% 465,050 9.9% $6.31 0 0
Total 10,278,752 15,236 284,571 2.8% 1,801,236 17.5% $5.35 0 0
Flex / R&D 1,395,473 -12,556 23,642 1.7% 283,256 20.3% $9.00 0 0
West
10,601,891 5,553 312,185 2.9% 947,656 8.9% $5.74 365,500 156,864
Manufacturing 2,847,633 -6,900 26,416 0.9% 146,000 5.1% $6.49 0 0
Total 13,449,524 -1,347 338,601 2.5% 1,093,656 8.1% $5.84 365,500 156,864
Flex / R&D 3,538,823 -145,032 -137,060 -3.9% 620,814 17.5% $10.57 0 73,920
Westmoreland County
12,236,569 -84,551 283,155 2.3% 1,198,919 9.8% $5.27 37,500 80,000
Manufacturing 12,997,849 500,000 847,491 6.5% 1,282,457 9.9% $4.17 0 0
Total 25,234,418 415,449 1,130,646 4.5% 2,481,376 9.8% $4.71 37,500 80,000
Flex / R&D 2,451,594 24,400 38,679 1.6% 229,570 9.4% $5.38 0 0
Warehouse & Distribution
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