Q3 23 – Abundant reasons for optimism

Despite the ongoing softening the industrial market is experiencing at both the national and local levels, there are few reasons for pessimism regarding the long-term health of the sector. Numerous sources of data show leasing velocity slowing and  vacancies climbing across the country, but in many ways this cooling represents a return to normalcy after years of pandemic related upheaval. Indeed, there are abundant reasons for optimism. For instance, CoStar data shows that despite the uptick in availability, national vacancy rates remain comfortably beneath the 20-year historic averages. Amazon is picking back up its leasing activity and many other industries are also making moves with over 20 large electric, battery, and semiconductor plants set to open in the next three years. Pittsburgh’s own data mirrors these national trends. CoStar has local vacancies hovering around 5%, with total net absorption of about 1.5 million SF. This represents a slight cooling of leasing activity but also indicates that demand is strong enough to support newer supply.