pittsburgh viewpoint presentation 2017 - email...
TRANSCRIPT
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INDUSTRIAL
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INDUSTRIAL
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Pittsburgh Industrial Market Timeline
EXPANSION
HYPERSUPPLYRECOVERY
RECESSION
2012, 2013
2015, 2016, 2017
2014
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Industrial – Class ALocal Markets by Vacancy
Los Angeles, CA– 2.0%Naples, FL – 2.2%Boise, ID – 2.5%
Pittsburgh, PA – 3.5%
Raleigh, NC – 13.3%Phoenix, AZ – 13.8%Washington, DC – 15.7%
TOP TH
REE
BOTTOM THRE
E
Local MarketClass A
3.5% (9th out of 62)
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SOURCE: Real Estate Research Corporation Real Estate Report, 3Q, 2011-2017
Industrial Cap Rate Trends East Region
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General Industrial MarketDistribution / Warehouse Market
• U.S. Industrial Market vacancy currently stands at an all‐time‐low of 5.8%.
• National industrial rental rates have increased 4.9% per year for the past five years.
• Net absorption for industrial space has increased for 24 consecutive quarters.
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General Industrial MarketDistribution / Warehouse Market
• JLL’s Q3 Industrial Investment Outlook cites the Pittsburgh industrial market as a “rising market”.
• The Southwestern Pennsylvania Commission projects a 40 % increase in regional freight trafficking by 2040.
• E‐commerce and traditional regional transport are currently the primary drivers for distribution/ warehouse space.
• Amazon in Findlay Township? Where Amazon goes, others follow.
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General Industrial MarketDistribution / Warehouse Market
• The planned Shell Cracker Plant could have a substantial impact on the market.
• There is a lack of large, modern distribution/ warehouse space (and pad sites) in the market.
• Several large tenants (over 300k SF) were lost to the market, due to the lack of suitable existing space or pad sites.
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RETAIL
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RETAIL
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Pittsburgh Retail Market Timeline
EXPANSION
HYPERSUPPLYRECOVERY
RECESSION
2012, 2013, 2014
2015, 2016,2017
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RetailLocal Markets by Vacancy
Denver, CO – 2.5%Dallas, TX – 3.0%Washington, DC – 3.6%
Pittsburgh, PA 4.75%
Syracuse, NY – 13.75%Tulsa, OK – 14.5%Birmingham, AL – 18.2%
TOP TH
REE
BOTTOM THRE
E
Local Market
4.75% (11th out of 62)
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Class A Community Center Cap Rate Trends
NationalPittsburgh
20166.9%7.25%
20176.77%7.25%
National Average Pittsburgh Average
SOURCE: Integra Realty Resources – Pittsburgh, 2017
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Major Ongoing Projects
South Strabane
Proposed Market – South FayetteUpper St. Clair
McCandless
Ross Township
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Integra Realty Resources, Inc. irr.com 39
HOSPITALITY
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HOSPITALITY
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Comparative Regional Hospitality Trends
• In 2015 and 2016, occupancy rates in the Pittsburgh regional hospitality market declined; most metro areas saw increased occupancy.
• ADR is substantially higher than peer cities.• Gas drilling and extraction activity caused a surge in the regional supply
between 2012‐2016.• Sharp decline in gas related activity and increase in hotel room supply
resulted in a decline occupancy over the last two years.
Source: Hotel Review, Smith Travel Research, Integra Realty Resources Pittsburgh
Segment 2016 2015 2014 2016 2015 2014 Pittsburgh, PA 59.0% 65.0% 67.4% $118.71 $119.18 $116.21 Charlotte, NC‐SC 72.2% 70.7% 70.2% $105.53 $100.96 $93.31 Cincinnati, OH‐KY‐IN 64.5% 63.3% 62.2% $101.34 $98.63 $93.11 Columbus, OH 66.0% 64.9% 64.7% $101.34 $99.25 $94.48 Indianapolis, IN 66.1% 65.4% 65.2% $106.80 $100.80 $94.37 Kansas City, MO‐KS 64.8% 65.2% 64.3% $99.54 $95.21 $90.52 Raleigh‐Durham‐Chapel Hill, NC 61.3% 63.0% 62.1% $109.24 $102.37 $99.00
Occupancy Average Daily Rate
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Western PennsylvaniaRig Count vs. Hotel Occupancy
Source: Hotel Review, Smith Travel Research, Integra Realty Resources Pittsburgh, Baker Hughes
Hotel Occupancy Rig Count2011 68.20% 242012 67.60% 212013 66.10% 222014 67.40% 232015 65.00% 272016 59.00% 8
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• Hotel Monaco and Homewood Suites opened in 2015.• Hilton Garden and Embassy Suites opened in 2016.• Room nights sold (RNS) has continued to increase with a new high of
1.105 million RNS sold in 2016.• However, the occupancy rate slid measurably for the first time since the
recession, falling in 2016 to 65.7%.• RevPar, which had been growing since the recession, fell by 10%
between 2015‐2016.
Source: Hotel Review, Smith Travel Research, Integra Realty Resources Pittsburgh
Hospitality Market ‐ Pittsburgh CBDYear RNA RNS Occupancy ADR RevPar2011 1,481,215 953,053 64.3% $141.04 $93.29
2012 1,489,811 992,734 66.6% $145.10 $99.44
2013 1,491,390 987,261 66.2% $147.59 $100.55
2014 1,491,390 1,020,921 68.5% $150.21 $105.36
2015 1,500,540 1,037,710 69.2% $155.04 $110.58
2016 1,681,572 1,105,210 65.7% $153.00 $100.50
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Future Supply – Urban Pittsburgh
2017 ‐ 3 New Hotels (467 rooms)2016‐2017 – 10.1% increase in RNA
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Future Supply – Urban Pittsburgh
2018 – CBD, Strip, North Side (722 rooms)2017‐2018 – 14.2% Increase in RNA
THE ANDREW
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Hospitality Capitalization Rate Trends ►IRR research reveals
that cap rate compression has leveled off during 2016.
►71% of markets expect to see hospitality cap rates remain steady through 2017, while only 15% of markets are forecasting a further decrease.