Macro Factors May Creates Headwinds:
Colliers’ Pittsburgh leasing team remains cautiously optimistic
about the continued strength of the overall industrial market
in our region. However, several macro factors weighed heavily
on the market during the 3rd quarter and could persist through
remainder of 2022. For example, the National Association of
Manufacturers released its Outlook Survey for the third quarter
of 2022, which shows increased concerns in the following areas
(biggest business challenge by % of those manufacturing leaders
- 78.3% - supply chain disruptions
- 76.1% - raw material costs
- 65.9% - rising logistics costs
These factors lead to a more cautious market overall and
increased difficulty to finalize transactions. With this said, there
were still many positive stories during the 3rd quarter and the
Pittsburgh industrial market remains quite strong.
Al Neyer Announces 2 Million SF of New Development:
Demonstrating continued confidence in the region’s industrial
market, Cincinnati-based developer, Al Neyer, announced its
plans for approximately 2 million SF of new projects in the
Pittsburgh region. The firm gained approval from the Allegheny
County Airport Authority to develop four buildings, totaling
630,000 SF on a 46-acre site, labeled Northfield Industrial Park.
Additionally, Neyer acquired a 15-acre site at the Westmoreland
Technology Park II from the Westmoreland County Industrial
Development Corp. The development will include a 150,000
SF industrial building. Neyer’s announcement of its 2 million
SF commitment is a reflection of the current and anticipated
continued demand for quality, Class A warehouse and flex
Pittsburgh is on Winner’s List of “Build Back Better” Funding:
Some of the key drivers of the region’s industrial/flex market,
(Robotics/AI) received a major boost this quarter, as the U.S.
Economic Development Administration awarded $62.7 million
in federal funding as part of the Build Back Better Regional
Challenge. Pittsburgh was one of 21 locations out of 529
applicants around the country to secure funding from the
program. The funding will certainly bolster growth in the fields
of robotics and AI in the region which will lead to increased
tenant activity for specialized manufacturing and flex space.
Here is the allocation:
- Southwestern Pennsylvania Commission ($24.8 million) – to
help bolster the workforce for the robotics industry through
specialized training and education.
- Advanced Robotics for Manufacturing Institute -ARM –
($14.2 million) to fuel its plans for operating a robotics
manufacturing hub at its Mill 19 location in Hazelwood Green.
This will provide additional resources to smaller robotics
companies to help facilitate growth within the region.
- Innovation Works – ($12 million) – to be used toward the
construction of an applied robotics startup factory within a
10-minute drive of the CBD. The pillars of the factory will be
“formation, launch and growth” which should have a positive
impact on the robotics/AI industries for years to come.
- InnovatePGH ($4.8 million) – to create an initiative entitled
“Expanded Pathways to Entrepreneurship”.
- Catalyst Connection ($4.8 million) – to further enhance
the SME Robotics Adoption project, intended to encourage
technology adoption for small to medium sized companies.
The “Build Back Better” funding will help to bolster the
robotics / AI industries in Pittsburgh, therefore strengthen the
overall industrial / flex market.
Other News Bits and Bites in the Industrial Market:
- Imperial Land Company has reportedly sold two sites at the
Findlay Industrial Park.. One site was acquired by Cochran
Automotive Group for $1.25 million on which it is anticipated
to construction an 80,000 SF building. The other site was sold
to J.S. Paris Excavating of Youngstown, OH on which a 55,000
SF warehouse building will be constructed.
- The Buncher Co. has listed two buildings, totaling 60,000 SF
at the Clinton Commerce Center, to include 2201 Sweeney
Drive (232,325 SF) and 2291 Sweeney Drive (400,000 SF).
- Chapman Properties sold two buildings at Chapman-
Westport, totaling 148,000 SF to Dallas-based Sealy &
Company for a reported price of $24 million ($162 per SF).
- New York Based Golden East Investors has acquired the
985,000 SF, 20 acre site at 1080 River Avenue on the North
Side. Golden East plans a mixed-use development to include
300,000 SF of industrial and distribution space marketed by
Colliers. Additionally, the site will include tech flex and life
sciences space along with a 500-space garage, some retail and
200,000 SF of multi-family.