Retail activity in Greater Pittsburgh will likely gain positive momentum through the remainder of 2012, with moderate growth expected in 2013. Grocery stores, local restaurants, fast casual national chain restaurants, medical retail, and upgraded locations for existing national tenants have led the way for recent retail activity in Pittsburgh.
The general atmosphere at the annual ICSC RECon convention in Las Vegas was upbeat and optimistic regarding the retail sector recovery nationally. I believe that the ICSC convention is a strong indicator that retail growth is headed in an upward direction.
The Pittsburgh retail markets are broken into four quadrants: North (Cranberry/Wexford), South (South Hills Village/Mt. Lebanon), East (Monroeville/Murrysville) and West (Robinson). The Cranberry/Wexford market continues to be the most active, with sales being driven by the new 500,000-square-foot McCandless Crossing Development. Tenants there include Lowe’s, LA Fitness, Hilton, Fidelity Bank and Cinemark. The Northern quadrant along the Route 228 corridor continues to develop with new projects, such as the relocation of Dick’s Sporting Goods to a new larger facility and the completion of the Cambria Suites project. Additional activity on the Route 228 corridor includes a new free-standing La-Z-Boy furniture store, GetGo gas and convenience store, and two additional outparcels available for restaurant and hotel use.
Not far behind in development activity are the South (South Hills) and East (Monroeville) quadrants. In the South, construction is under way for new big box retail tenants Dick’s Sporting Goods and Target. In addition to these major retail draws, Bonefish Grill is locating its first Pittsburgh restaurant at South Hills Village. All of this new development is taking place on the Route 19 side of the South Hills Village Mall.
In the East market (Monroeville), the new 16.7-acre UPMC East site is set to open later this summer. The hospital facility will have 156 private rooms, 140 medical-
surgical suites and 16 ICU beds. UPMC anticipates approximately 30,000 visitors to its emergency department. The addition of the regional hospital has increased the interest of retailers and retail developers in the East market. Because the hospital is located in a mature market, I anticipate an increase of redevelopment and re-use construction projects in 2013 and beyond.
In the West quadrant, the Settlers Ridge development is completing its leasing. That project boasts the first ground-up 150,000-square-foot Giant Eagle Market District store that opened in 2010. Other Settlers Ridge tenants include national retailers such as REI, LA Fitness, PF Chang’s, Ross Dress For Less, Barnes & Noble and Michaels. The entire development is 600,000 square feet and there are only a few storefront and outparcel vacancies remaining. This market recently became the home to two national concepts: Hobby Lobby and The Tile Shop chose the West (Robinson) market to open their first Pittsburgh locations.
The Pittsburgh market has historically been a very conservative development market. Because of Pittsburgh’s consistent moderate growth trends, it has not experienced the highs and lows of other markets such as Charlotte and Atlanta. The retail market in Pittsburgh remains stable, and any improvement in the market may be due to the fact that the region’s population losses have been stopped, and it is experiencing a turnaround with consistent gains in overall population growth. Pittsburgh’s growth in the medical, finance, education, and energy sectors will continue to drive retail development in the coming year. Pittsburgh is poised to maintain moderate growth through the balance of 2012 and into 2013. Pittsburgh — the City of Champions — is a proven place to live, work and do business and with four active retail markets. The sky is the limit for future retail growth and development.
— Brad Kelly is director of Retail Services with Colliers International | Pittsburgh.