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Pennsylvania Governor Tom Wolf just announced Amazon's plans to establish a 1 million sq. ft. distribution center in the Pittsburgh market. The center will be located in Findlay Township near the Pittsburgh International Airport. Amazon is reportedly making a $30 million dollar investment in the center, which is expected to create 800 new jobs. According to an Amazon press release, employees will be paid a minimum of $15 per hour (plus benefits) to pick, pack and ship larger-sized items to customers. This center will be within a day’s drive from most Northeast and Midwest states. With this announcement, Amazon now has 15 different operation centers located throughout the state.
Large industrial leases are being signed at an unprecedented rate within the Pittsburgh market. This type of deal velocity and large average transaction size is common on the eastern side of the state, in Central PA and the Lehigh Valley, but until recently hasn’t been as common in Pittsburgh and the western portion of Pennsylvania. In the first half of 2019 the Pittsburgh industrial market experienced more than 1.6 million sq. ft. of net absorption, already surpassing the 2018 total. It should be noted the net absorption figure does not include the Amazon (1 million sq. ft.) or Nord Lock (125,000 sq. ft.) build-to-suit projects. Shell and Niagara Water both leased built-to-suit facilities totaling approximately 450,000 sq. ft. each while Urban Outfitters leased a new 892,000 sq. ft. facility in Indiana, PA. In Ohio, just over the Pennsylvania border and within an hour drive of Pittsburgh, TJX Companies Inc. leased a brand new 1.2 million sq. ft. distribution center in Lordstown. Development activity across multiple asset types remains strong in the region as more projects break ground causing the construction labor market to tighten.
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