Pittsburgh State of the Market: Key Takeaways from the Bisnow Panel
Gary Gabor, Division Manager for ARCO Pittsburgh, recently joined fellow industry experts as a speaker at Bisnow’s Pittsburgh State of the Market event. His panel discussed current supply and demand drivers in Pittsburgh and the outlook of the city’s future pipeline. Gary provided insights from an industrial construction perspective, including pricing, material lead times, and the impact of decreasing interest rates. Below are some key takeaways from the event.
Pictured: Gary Gabor (far right), Division Manager for ARCO Pittsburgh, participates in Bisnow’s Pittsburgh State of the Market panel.
Investing in Pittsburgh’s Growth
Investing in Pittsburgh’s infrastructure is vital for attracting industrial users, particularly manufacturing companies, to the area. By fostering a city that appeals to workers and offers a desirable living environment, Pittsburgh can enhance its appeal to both existing and prospective businesses looking to establish or expand operations. Although the construction market has faced slow starts due to a backlog created by the COVID-19 pandemic and challenges in financing, the prospect of lower construction costs and decreasing interest rates is poised to revitalize activity.
Pictured: 147,000 SF Cold Storage & Office TI for a Confidential Client in Coraopolis, Pennsylvania
Construction Pricing & Material Lead Times
Construction prices are stabilizing both nationally and in Pittsburgh due to subcontractor backlog not being as robust as in recent years, leading to increased competition in pricing. In the Northeast, construction costs have decreased approximately 20-30% from pricing peaks in 2020. This shift is prompting developers and end-users to reassess and reprice their projects. Notably, prices for key materials like steel and roofing, which spiked during COVID, are now seeing the largest declines.
While many supply chain challenges have stabilized, lead times for some materials, such as electrical switchgear, remain lengthy. However, there are creative solutions that can be implemented to mitigate schedule impacts. For example, partnering with manufacturers to purchase materials direct and working with utility companies in a project’s early stages can help avoid major delays.
Future Pipeline & Demand Drivers
Looking ahead, the industrial market retains a positive outlook. As interest rates decline and uncertainties diminish, activity is expected to rise. Despite existing challenges, the Pittsburgh market is poised for recovery and ongoing growth, driven by tenant demands and a focus on specialized industries like manufacturing.
In Pittsburgh, manufacturing continues to be a key industry. While many companies have been hesitant to build new or renovate existing facilities due to rising interest rates and a higher subleasing market, there will likely be an increase in activity in 2025 and 2026 as financing becomes more feasible.
Pictured: 100,000 SF Speculative Warehouse for Crossgates, Inc. and Elmhurst Group in Washington, Pennsylvania
About ARCO | Pittsburgh
ARCO Pittsburgh is a premier, full-service design-build general contractor with more than 30 years of experience providing clients with complete project delivery throughout the United States. As the nation’s largest builder of warehouse and distribution space, we pride ourselves in offering the best, most cost-effective, single-source, turnkey solutions and adding value to every project.
With 48 offices in major markets coast to coast, ARCO offers the strength and presence of a national general contractor with the focus, attention, and regional expertise of a local builder. ARCO’s proven design-build approach combines quality of design and construction, management of expense, and adherence to schedule into a single point of responsibility. ARCO offers preliminary design at no cost to our customers to remove the risk of substantial upfront costs.
