Research &
Forecast Report
PITTSBURGH | RETAIL
Q3 2015
Local Market Update
Mark Anderson Vice President | Pittsburgh
The Pittsburgh retail real estate market continues to be strong. The vacancy rate across all retail property types dropped to
3.5% during the last quarter, although the numbers are skewed upward by large vacancies in a few submarkets. The market for
prime anchored shopping center space is extremely tight and the effective vacancy rate for most quality centers is between
1-2%. Absorption for the period was 208,000 square feet. The total retail market is 138,741,180 square feet, including
32,945,052 of shopping center space. Low vacancy rates and high absorption has pushed lease rates up.
Overall lease rates increased by .2% over the previous quarter to an average of $12.03 per square foot. High quality retail
locations now typically lease in the low to mid $30 range, with some leases coming in as high as $55 per square foot. Small
shop space in fringe market anchored space is usually near $15 per square foot. New construction typically requires a lease rate
no less than $22.50.
Little new development is underway in the market. The most notable developments include The Block Northway, Siena at St.
Clair and the almost completed McCandless Crossing. The Block Northway will include a Nordstrom Rack, Container Store, Ulta
and other upscale brands. The quoted lease rate is in the low to mid $40 dollar range. McCandless Crossing has leased well
and has limited availabilities as it nears completion. Lease rates at the Cinemark anchored development are near $30 per square
foot. Most owners of retail properties in prime areas are in a strong position, and don’t need to provide significant tenant
concessions. National credit tenants looking for prime retail locations have few options and may find themselves competing with
other prospects, or compromising on their location decisions. Non anchored space can be found if a tenant is willing to settle for
a lesser location.
With little development on the horizon to release market pressure, it appears that the market will continue to strengthen for the
foreseeable future. Tenants should expect vacancy rates to remain low as lease rates will continue to increase. Landlords will
continue to have a strong negotiating position and tenants need to be creative and patient in their search for prime locations.
Colliers International | Pittsburgh > Landlord Representation
Harrison Town Square, Pittsburgh, PA
Shoppes at Adams Ridge
Millennium Shops, Bethel Park, PA
> Available space: 400 - 20,000 SF
Cranberry Township, PA
> New 27,000 Square Foot Retail Development
> Great retail/medical space in the heart of
> Available space: 1,400 SF (newer
> Excellent traffic and visibility from Route 88 -
Natrona Heights
> Total facade renovation underway
construction)
21,000 ADT
> Available First Quarter 2015
> Restaurant patios available
1
Elevation - Option 1
3/32" = 1'-0"
66 Alpha Drive West
Harmar Township, Pennsylvania 15238
Renovations
Alpha Ice Complex
ONE DOUGHBOY SQUARE
3400 BUTLER STREET
P I T T S B U R G H, P A 1 5 2 0 1
T E L : 4 1 2. 6 8 3. 3 2 3 0
F A X : 4 1 2. 6 8 3. 3 5 6 3
www.desmone.com
C:\Users\JeffreyWessel\Documents\4032 - Alpha Ice - 2015_Central_jwessel.rvt
Seal:
Date:
Owner / Alpha Ice
Client: Properties, LLC
Drawing Title:
Exterior Facade
Concepts
2
10.27.2015
10.27.2015
Project
4032
Number
Elevation - Option 2
3/32" = 1'-0"
Scale:
3/32" = 1'-0"
Drawing Number:
PS-001
© Desmone Architects 2015
7809 McKnight Road, Pittsburgh, PA
Franciscan Square, Steubenville, OH
66 Alpha Drive, Pittsburgh, PA
> Up to 12,500 SF available
> Up to 20,000 SF retail and 40,000 SF office
> Existing 8,500 SF building in excellent
> Build to suit opportunity
> Flexible lease terms
> 4,000 +/- SF endcap
> Over 30,000 annual visitors to Franciscan
> Near Ross Park and Northway Mall
Gateway Commons
Cranberry Township, PA
> New available space: 1,300 - 14,000 SF
> Newer retail space located at the
corner of Freedom Rd. / Route 228 and
Commonwealth Drive
2
University
conidition
> Adjacent to parcel for land lease/build-to-suit
> At Route 28/PA Turnpike interchange
1910 Cochran Road, Pittsburgh, PA
Thorn Run Crossing, Moon, PA
> 3,184 SF end cap with drive thru
> 1,400 SF available
> Great Mt. Lebanon/Scott Township location
> Divisible to 1,500 SF
> Ample free parking
> Multiple suites available
> Excellent demographics and visibility
Pittsburgh Research & Forecast Report | Q3 2015 | Pittsburgh / Retail | Colliers International
Pittsburgh Region Retail Market Statistics > Q3 2015
Market Comparisons - Total Retail Market Statistics Q3 2015 > Quarterly Comparison and Totals
MARKET
EXISTING INVENTORY
# BLDGS
TOTAL GLA
VACANCY
DIRECT SF
TOTAL SF
VAC. %
YTD NET
ABSORPTION
YTD
DELIVERIES
UNDER
CONST. SF
Armstrong
177
1,614,187
43,400
43,400
2.7%
(5,200)
0
Beaver County
831
8,872,956
480,721
480,721
5.4%
107,796
45,270
11,262
$7.86
Butler County
836
10,078,731
253,030
253,030
2.5%
44,904
3,411
38,345
$13.61
Central Business District
137
2,422,219
134,214
134,214
5.5%
10,135
0
0
$10.40
Greater Downtown
801
5,173,244
188,489
188,489
3.6%
8,802
0
0
$10.48
Monroeville
North Pittsburgh
Northeast Pittsburgh
Oakland
Parkway East Corridor
Parkway West Corridor
South Pittsburgh
Washington County
West Pittsburgh
Westmoreland County
MARKET TOTALS
250
6,081,290
245,283
265,283
4.4%
(28,207)
1,391
14,836,180
267,042
278,710
1.9%
88,684
53,932
0
887
8,556,415
450,262
469,131
5.5%
19,881
0
178
1,129,412
20,700
20,700
1.8%
(1,833)
0
2,119
15,712,880
758,197
758,197
4.8%
26,360
33,106
$9.00
2,000
$13.24
115,796
$17.33
2,718
$12.54
0
$22.46
25,320
$12.01
436
6,734,760
155,813
155,813
2.3%
62,358
28,397
0
$12.33
2,242
23,508,835
543,144
547,094
2.3%
10,907
33,735
54,174
$11.18
985
11,370,585
266,540
267,290
2.4%
81,661
52,139
62,284
$13.13
403
3,222,654
113,870
113,870
3.5%
12,805
5,224
12,000
$11.10
1,782
19,426,832
890,496
890,496
4.6%
33,513
17,196
22,268
$10.36
138,741,180
4,811,201
4,866,438
3.5%
472,566
346,167
$12.03
13,455
272,410
Colliers International | Pittsburgh > Tenant Representation
3
0
QUOTED
RATES
Pittsburgh Research & Forecast Report | Q3 2015 | Pittsburgh / Retail | Colliers International
Retail Healthcare On The Rise
Mark Anderson Vice President | Pittsburgh
The healthcare landscape in the United States has changed
dramatically over the past few decades. Insurance costs
continue to rise while the Affordable Care Act has changed the
way we all think about healthcare. Hospital systems and other
medical organizations have been forced to change the way they
operate, including how they handle their real estate. The rise
of medical malls, urgent care doctors and outpatient surgery
centers has had a significant impact on retail real estate.
Hospital systems and independent doctors have moved away
from consolidating all operations within the hospital complex
and are reaching out to their patients and consumers where
they live, typically in a retail setting. By locating in retail
locations, medical systems are better able to provide convenient
care, while at the same time feeding their overall system.
UPMC, Allegheny Health Network, Excela Health and Heritage
Valley have all made moves toward retail settings. Excela
Health purchased Norwin Hills Shopping Center a few years
ago and AHN completed its first Health + Wellness pavilion in a
retail location in the North Hills. UPMC has opened a number
of urgent care centers and rehab centers in prime locations.
MedExpress, Panther Physical Therapy, Davita Dialysis, Aspen
Dental and Quest Diagnostics all have strong retail presences
in our market. The trend of locating medical offices in retail
spaces is something that landlord’s should expect to continue
for the foreseeable future.
Having medical tenants in a retail setting can have both positive
and negative effects on property owners and managers. On
the positive end, doctors and hospital systems tend to be able
to afford a higher per square foot price point than many other
tenants and medical spaces are extremely expensive to build
out, leading to long term leases. Once they are in their space it
is not economically prudent to relocate. On the negative side,
many medical tenants don’t add much to a retail tenant mix;
patients tend to see their doctor then leave the property, instead
of frequenting other stores. Parking can also be an issue with
some types of medical tenants, as they can have numerous
patients taking up parking spaces for long periods of time.
Retail landlords are wise to attract the right types of medical
uses to their centers, but need to be cautious about the amount
of medical space they lease. Many national retailers do not
want to co-locate in a retail center that has become too medical
in nature. Some retailers will actually include medical uses
in their excluded uses clauses. Given the number and quality
of medical tenants in the market, landlords are wise to push
back on these types of restrictions. Medical tenants can be an
important part of a retail leasing plan, and should be targeted
tenants, under the right circumstances.
Hometown Heroes:
Pittsburgh Based Retailers
Company:
Location:
Year Founded: Number of Employees:
Number of Locations:
Revenue:
About the Company:
American Eagle Outfitters (AEO) is a leading global speciality
retailer offering high-quality on-trend clothing, accessories
and personal care products at affordable prices under its
AEO and Aerie brands. The company operates more than
1,000 stores in the US, Canada, Mexico, China, & Hong Kong,
and ships to over 80 countries worldwide through its
websites. AEO and Aerie merchandise also is
available at over 60 licensed international
franchise stores in 12 countries. For more
information please visit www.ae.com.
FOR MORE INFORMATION
Mark Anderson
Vice President | Pittsburgh
Retail Brokerage
+1 412 321 4200 ext. 222
MarkE.Anderson@colliers.com
RESEARCH CONTACT
Michelle Stewart
Vice President | Pittsburgh
Retail Brokerage
+1 412 321 4200 ext. 227
Michelle.Stewart@colliers.com
Copyright © 2015 Colliers International.
The information contained herein has been obtained from sources deemed reliable. While
every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No
responsibility is assumed for any inaccuracies. Readers are encouraged to consult their
professional advisors prior to acting on any of the material contained in this report.
4
American Eagle Outfitters
Pittsburgh, PA
1977
39,600
929
$160 Billion
Katie Gordon
Marketing & Social Media
Specialist | Pittsburgh
+1 412 321 4200 ext. 212
Katie.Gordon@colliers.com
Colliers International | Pittsburgh
Two Gateway Center
603 Stanwix Street, Suite 125
+1 412 321 4200
colliers.com/pittsburgh
North American Research & Forecast Report | Q4 2014 | Office Market Outlook | Colliers International