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Jul. 30, 2014

Major Amazon Lease Deal Tightens Pittsburgh’s Industrial Market

By Adriana Pop, Associate Editor

Seattle-based Internet giant Amazon.com is planning to expand its network of sortation centers with the opening of a new facility in Pittsburgh’s West End.

According to the Pittsburgh Business Times, the e-commerce company has signed a long-term lease agreement to occupy more than 200,000 square feet of space in the former Roomful Express warehouse at 2250 Roswell Drive near Crafton.

“The Amazon building at 2250 Roswell Drive in Pittsburgh is part of a new Amazon network of sortation centers,” Nina Lindsey, a company spokeswoman, told the newspaper. “At sort centers, customer orders are sorted by final destination and consolidated onto trucks for faster delivery.”

Amazon will join established tenant ModCloth in the 550,000-plus-square-foot building, bringing it to full occupancy. Rugby Realty Co. Inc. of New Rochelle, N.Y. is the owner of the property, which it purchased in 2011 for nearly $7.4 million.

Both Amazon and Rugby Realty are now planning to invest millions to accommodate operations at the new sort center, which is expected to employ about 100 people.

Upon completion, the facility will serve the immediate area and nearby regions, enabling the delivery of items within 24 hours of purchase.

With the signing of the Crafton lease, Amazon has taken a significant portion of industrial space off the region’s limited market.

“We’re at a crossroads in so far as we don’t have an inventory of Class A industrial space,” Rick O’Brien, senior vice president for industrial and logistics in the Pittsburgh office of Jones Lang LaSalle, told the Pittsburgh Business Times. “The question is does the local development community believe that they’re missing an opportunity, and if so, will they begin to develop larger industrial speculative buildings?”

According to the 2014 mid-year report released by Integra Realty Resources, the vacancy rate for class A industrial space in the Pittsburgh region was about 4.5 percent, while flex industrial vacancy stood at about 8.5 percent.

Photo credits: Point2 Homes via Google Maps

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