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Market Report

Pittsburgh Industrial Market Report

Second Half 2018

Developers Enticed by Airport Industrial Area; Value-Add Opportunities Near the Core Gain Popularity

 

Bevy of commercial shipping options continue to strengthen Pittsburgh industrial sector. Serving as a logistics link between the Midwest and East Coast, Pittsburgh remains one of the nation’s industrial anchors. A significant amount of inbound and outbound river cargo is supported by the metro’s three-river system, which offers access to the roughly 8,000 miles of navigable rivers in 24 states. Additionally, Pittsburgh has a notable railroad presence. These factors have helped propel rents in past years as the market boasts some of the highest rental rates in the Rust Belt; they will sit in the mid-$5 range by year end. The metro’s strong industrial reputation should help keep vacancy movement to a minimum this year, rising slightly as the supply-and-demand balance is still stabilizing following elevated completions in 2015 and 2016. This year, construction remains relatively subdued, hovering near the 600,000-square-foot mark for the second year in a row. Reduced deliveries can be somewhat attributed to builders waiting for the supply-and-demand balance to correct itself as well as the area’s hilly terrain, which makes it difficult to develop industrial property.

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