SVNIC’s 2016 Market Outlook Reports assess the current state of the national commercial real estate market, and identify micro-trends within specific geographic regions and industries for 2016. Today we are delving into the 2016 Top Industrial Markets to Watch. Not the largest or the most actively contested markets, the 2016 Industrial Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that is driving the economy and commercial real estate performance in markets across the country.
Top Industrial Market to Watch: Pittsburgh, PA
The Pittsburgh economy has more or less stabilized after the recession and massive losses to its manufacturing and steel production base. Today the unemployment rate sits at 5.5% as of January ‘16 but job creation is effectively flat at a literal 0.0% rate of growth. The industrial real estate market of Pittsburgh is highly influenced by oil and gas production as well as the steel industry, both of which have potential to see long-term losses. Key industrial sectors are losing jobs, including Manufacturing and Trade, Transportation, and Utilities which are declining at annualized rates of –3.4% and –0.4%, respectively. Thankfully, Pittsburgh is transforming itself into a more research and high-tech focused economy which should grow overall jobs and ultimately benefit the industrial sector. Further, this trend should cause more vacant industrial buildings to be repurposed and redeveloped, helping industrial landlords overall.
Advisor Insights: SVN | Three Rivers Commercial Advisors
SVN’s Pittsburgh-based Advisors at SVN | Three Rivers Commercial Advisors have some industrial market highlights to share. Here’s what to look out for in the Pittsburgh industrial market in 2016:
- Vacancy rate is 6.2% and expected to stay the same or slight decrease
- Rental Rate average is $5.74 / SF which is trending upwards and expected to stay the same or increase
- Positive absorption expected for both flex and warehouse space
Over the next few weeks, the SVN Blog will be featuring posts that will focus on each of the top markets to watch for industrial, multifamily, office, and retail properties. SVN Advisors from selected top markets have provided their industry expertise regarding what to look out for in their specific market in the coming months. Don’t miss out on these important insights – subscribe to the SVN Blog on the right side of the blog homepage.
To read more on other top industrial markets, download the full version of the 2016 Industrial Market Outlook report here.
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