Lee & Associates of Western Pennsylvania Announces Q2 2024 Industrial Market Report Findings

Pittsburgh, PA, August 6, 2024 – Lee & Associates of Western Pennsylvania is proud to release its Q2 2024 Industrial Market Report, presenting comprehensive insights and analyses of the industrial real estate market across the Pittsburgh Region, including Butler, Armstrong, Westmoreland, Fayette, Washington, Beaver, and Allegheny counties.

Key Findings:

1. Overall Market Trends:

• • The vacancy rate in the Pittsburgh Region’s industrial market saw a slight increase of 15 basis points (bps) from the previous quarter, rising to 5.17% in Q2 2024. Despite this increase, vacancy has demonstrated relative stability over the past three years. This quarter marked the first instance of negative net absorption since Q3 2020, driven by a higher level of availability predominantly in Class C buildings across the region.

2. Submarket Highlights:

• • Allegheny County: In Q2 2024, vacancy in Allegheny County rose by 71 bps to 5.79%, continuing an upward trend that began in early 2023, with a total increase of about 150 bps since Q1 2023. Despite the overall negative absorption of (612,501) SF, Class A buildings in Allegheny County showed resilience, recording a positive net absorption of 124,600 SF.
  • Beaver County: The vacancy rate in Beaver County remained relatively low at 3.43%. The county experienced a slight negative absorption of (34,944) SF primarily in Class C buildings.
  • Washington County: Washington County saw a vacancy rate of 4.93%, with a negative net absorption of (181,660) SF, driven by higher availabilities in Class B and C buildings.
  • Westmoreland County: This county recorded positive absorption of 143,190 SF, with a vacancy rate of 4.93%. The positive absorption was primarily in Class B and C buildings.

3. Construction and Development:

• • The Pittsburgh Region saw a significant slowdown in new construction starts and buildings under construction. This decline in construction activity is expected to help the market absorb the existing supply and stabilize vacancy rates in the coming quarters.

4. Demand and Absorption:

• • Class A buildings in the region are expected to benefit from increased demand and lower vacancy rates in the second half of 2024 as new construction projects decline and existing Class A spaces are further absorbed.