Pittsburgh One of the Top 15 Regions for Business Locations
Their list was developed from the perspective of a business executive looking for a site for a major facility, who wants to find readily available properties at an affordable price. In contrast, most lists of "top areas for real estate" are designed for real estate investors, who want to find places where they will get the maximum return on an investment in land and buildings. Those places have high and rapidly increasing real estate prices, so the investor gets top dollar for rents/sales, and they have low vacancy rates, which insure that a new property will be leased/sold in short order.
As the magazine points out, these criteria are the exact opposite of what a business looking to expand would want. The business wants to find a selection of ready-to-go sites and buildings (which means there have to be vacant properties) at affordable prices.
So while the Pittsburgh Region's high ranking may be (somewhat) bad news for real estate developers, it is good news for regional economic development efforts. When a business decides there is a business case for expansion (e.g., because of a growing market for its products), it wants to proceed with that expansion as quickly as possible. And it wants to do it as affordably as possible. Pittsburgh's ranking means that it offers a better combination of price and availability than most metro areas in the country.
A decade ago, the Pittsburgh Region had a high vacancy rate on industrial properties, but it wasn't good news, because most of those properties were of low quality. In fact, in 2000, a study by site selection consultant Deloitte and Touche Fantus found that there were only 4 sites and 3 buildings in the entire 10-county region which could accommodate a business seeking a large, high quality location.
But that has changed, thanks to two things: (1) an aggressive effort by all 10 counties in the region over the past decade to develop better quality industrial sites and buildings for the Region, and (2) a coordinated effort by all the counties and regional agencies, working through the Southwestern Pennsylvania Growth Alliance, to obtain the state funding needed to finance those sites at an affordable cost for businesses. Now, the Pittsburgh Region has a wide selection of vacant, high quality properties at affordable prices -- and that's good news for businesses seeking to expand, as well as for residents of the region who would like to work for those businesses.
A key part of this was the development of new industrial sites near Pittsburgh International Airport. Many businesses would like to locate near the airport, but until recently, there were not ready-to-build industrial sites with the necessary infrastructure to accommodate business expansion. Thanks to a unique partnership of Allegheny, Beaver, and Washington Counties and the Allegheny County Airport Authority called the Tri-County Airport Partnership, that changed. And as Grubb & Ellis's Third Quarter 2006 Industrial Market Trends report notes, "with the completion of site work at the Clinton Commerce Park, the opening of the Findlay Connector, and the recent completion of the first 100,000 square foot speculative building in the Imperial Business Park, the West Submarket is positioned for a very active 2007."
The key now is for the Pittsburgh Region to aggressively market the industrial sites and buildings it has, and to keep developing more sites and buildings so that businesses seeking to expand can continue to find good quality, affordable choices in the region.