Rays of Sunshine

This was the week for speaking about the 2014 outlook for construction. I had the occasion to hear 2 different perspectives on the economy and the regional market, both of which were surprisingly upbeat.

PNC’s Kurt Rankin presented a look at the macroeconomy that was especially bullish on job creation and had an overriding message that the US economy had finally shaken off the shackles of the Great Recession and was poised to expand. That would be good for Pittsburgh too, of course. As an economist, Kurt was pretty conservative but surprised me when asked what he thought were the “things he didn’t know that he didn’t know” – in other words what things might be lurking in the weeds. Rather than pointing to potential disasters his response was that the surprise was the upside potential.

Thursday morning I attended Integra Realty’s annual Viewpoint conference, a must-see for anyone interested in the commercial real estate market. Here again the message was decidedly upbeat, especially for the long haul. IRR’s managing partner, Paul Griffith, looked out to the future and forecasted job growth for the region in the 20,000 range. He joked that he had a hard time bringing himself to be so optimistic but that the economic drivers were there.

I happen to agree with these actual experts. The construction market in 2014 will still be tough but I think the assignment for most executives may be shifting towards analyzing the opportunities to bid with an eye to avoiding the risk of taking on bad work instead of worrying about not having enough work.

One of the sub-markets already seeing a mini-boom is Wexford. The job driver is healthcare. With Highmark’s medical mall under construction, three new office buildings – two of which are expressly medical in purpose – are being planned within half mile of the mall. UPMC will build a $4-5 million spine center at 12670 Perry Hwy., roughly a block away from a 39,500 sq. ft. office being developed by John Baun. Currently out-for-bid is a 40,000 sq. ft. office for Connected Health, which will be located in between the other two at 12620 Perry Hwy. Bridges, Jendoco, Landau, Martini, Massaro and A. W. McCay are bidding that project.

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