The Pittsburgh market has felt the effects of COVID in other property types, but industrial continues to move forward due to e-commerce and distribution demand.

1. Pittsburgh
Pittsburgh’s industrial sector seems to be weathering the effects of COVID-
19 well. Construction resumed in the third quarter, vacancy rates have
dropped half a percent from the second quarter and average direct asking
rates saw a slight increase. More than half of the 1.6 million square feet of
construction that is currently underway has been preleased due to large
build-to-suit projects from occupiers such as Amazon. In September,
Project Penguin announced a 400,000-square-foot project where they will
join the growing number of companies at Clinton Commerce Park. This
continues the trend of speculative construction sites turning into build-to-
suit projects due to the dearth of existing Class A industrial buildings.
Although the Shell petrochemical facility faced difficulties in the previous
quarter due to COVID-19, the facility recently announced that construction
is nearly 70.0 percent complete. When the plant goes live, it will be
producing billions of tons of plastic each year, much of which will be sold
domestically. This will further generate a need for shipping in the
surrounding area and several speculative projects, such as the 400,000-
square-foot Turnpike Distribution Center II in Beaver, have already
been proposed.
Outlook
Although Pittsburgh has a deep foundation of manufacturers, the vast
majority of recently delivered projects and current construction continues
to be focused on distribution centers. The COVID-19 pandemic has
accelerated the need for high quality space to serve medical, grocery and e-
commerce sectors across the nation and this trend is also true for
Pittsburgh market. The West submarket will continue to prove to be a
popular destination moving forward as the construction of the Southern
Beltway nears completion. New projects will likely surface in the upcoming
quarters as companies look to take advantage of last mile delivery sites
near the new beltway.
Pittsburgh’s industrial market shows resiliency
amid COVID-19 pandemic
• Construction resumes and leasing rebounds as e-commerce demand
creates a surge in activity primarily focused around logistics centers.
• Pittsburgh’s industrial asking rents continue an upward trend as the
market experiences 264,897 square feet of positive absorption for
the quarter.
• Amazon’s 1.3 million-square-foot distribution center at Chapman
Westport is expected to deliver in October.
Fundamentals Forecast
YTD net absorption 227,037 s.f. ▶
Under construction 1,618,000 s.f. ▼
Total vacancy 6.3% ▲
Sublease vacancy 81,918 s.f. ▲
Direct asking rent $5.55 p.s.f. ▶
Sublease asking rent $6.81 p.s.f. ▼
Concessions Stable ▲
0
1,000,000
2,000,000
3,000,000
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
For more information, contact:
Justin Simakas| justin.simakas@am.jll.com
Industrial Insight | Q3 2020
The health, policy, economic and financial disruption stemming from the COVID-19 pandemic
continue to create a fluid and evolving environment for all real estate sectors. Uncertainty
remains around market performance and implications will differ by market and sector.

2. Pittsburgh | Q3 2020
Industrial Statistics
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 89,884,953 142,558 71,895 0.1% 6.3% 7.3% $6.33 165,000 891,704 1,618,000
Manufacturing 53,883,017 122,339 155,142 0.3% 6.4% 6.4% $4.53 0 0 70,873
Overall Total 143,767,970 264,897 227,037 0.2% 6.3% 7.0% $5.56 165,000 891,704 1,688,873
Beaver County
Warehouse & Distribution 5,627,234 -1,225 -18,025 -0.3% 7.7% 10.3% $5.09 0 130,000 105,000
Manufacturing 4,358,833 14,125 20,856 0.5% 10.0% 8.8% $4.14 0 0 0
Overall Total 9,986,067 12,900 2,831 0.0% 8.7% 9.7% $4.60 0 130,000 105,000
Butler County
Warehouse & Distribution 4,136,199 177,750 218,690 5.3% 12.2% 12.5% $5.21 0 0 0
Manufacturing 3,561,575 0 0 0.0% 7.4% 8.5% $2.73 0 0 0
Overall Total 7,697,774 177,750 218,690 2.8% 9.9% 10.6% $4.18 0 0 0
Downtown
Warehouse & Distribution 18,388,235 -96,124 -156,290 -0.9% 5.0% 7.3% $11.08 0 0 0
Manufacturing 4,643,481 138,500 7,000 0.2% 1.1% 1.7% $6.01 0 0 0
Overall Total 23,031,716 42,376 -149,290 -0.6% 4.2% 6.2% $10.82 0 0 0
East
Warehouse & Distribution 5,981,690 -1,683 -54,076 -0.9% 4.9% 6.1% $7.07 0 0 0
Manufacturing 3,637,199 18,936 7,936 0.2% 5.4% 5.4% $3.32 0 0 0
Overall Total 9,618,889 17,253 -46,140 -0.5% 5.1% 5.9% $4.10 0 0 0
Northeast
Warehouse & Distribution 6,086,164 30,000 -9,500 -0.2% 3.0% 2.8% $5.84 0 0 0
Manufacturing 6,880,307 200,000 178,750 2.6% 2.7% 3.0% $4.58 0 0 0
Overall Total 12,966,471 230,000 169,250 1.3% 2.9% 2.9% $5.11 0 0 0
Northwest
Warehouse & Distribution 10,626,198 23,722 -428,322 -4.0% 7.2% 8.7% $6.67 0 0 0
Manufacturing 3,063,621 0 0 0.0% 0.3% 0.3% $0.00 0 0 0
Overall Total 13,689,819 23,722 -428,322 -3.1% 5.7% 6.8% $6.67 0 0 0
South
Warehouse & Distribution 5,525,042 1,512 -7,139 -0.1% 7.6% 9.1% $5.92 0 0 0
Manufacturing 7,892,472 88,600 88,600 1.1% 4.0% 4.0% $5.89 0 0 0
Overall Total 13,417,514 90,112 81,461 0.6% 5.5% 6.1% $5.91 0 0 0
Washington County
Warehouse & Distribution 6,588,577 41,011 73,144 1.1% 12.2% 12.7% $5.50 165,000 165,000 250,000
Manufacturing 4,736,380 0 -50 0.0% 2.4% 2.4% $4.52 0 0 0
Overall Total 11,324,957 41,011 73,094 0.6% 8.1% 8.5% $5.41 165,000 165,000 250,000
West
Warehouse & Distribution 12,426,000 -33,455 325,571 2.6% 5.0% 4.6% $6.48 0 596,704 1,100,000
Manufacturing 2,706,639 -53,837 -52,553 -1.9% 4.4% 4.3% $5.15 0 0 70,873
Overall Total 15,132,639 -87,292 273,018 1.8% 4.9% 4.5% $6.36 0 596,704 1,170,873
Westmoreland County
Warehouse & Distribution 14,499,614 1,050 127,842 0.9% 4.8% 5.3% $4.77 0 0 163,000
Manufacturing 12,402,510 -283,985 -95,397 -0.8% 14.0% 14.0% $4.76 0 0 0
Overall Total 26,902,124 -282,935 32,445 0.1% 9.1% 9.3% $4.76 0 0 163,000
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