Author Archives: Colliers International | Pittsburgh
Sources: World Wildlife Fund
Colliers International | Pittsburgh has created a new marketing strategy that will reduce paper waste and help save our environment one tree at a time. The company now uses electronic tablets instead of printing paper copies of tour books, company overview books, Offering Memorandums, presentations and other marketing materials. These materials that contain anywhere from ten to 100 pieces of paper, depending on the project, can now be sent electronically after a tour is completed.
According to Gregg Broujos, Managing Director of Colliers International | Pittsburgh, the new Tablet Tour is convenient for all parties, and saves a large amount of paper. “When prospective tenants and buyers tour a property, they will be given a Colliers International | Pittsburgh tablet that contains all of the pertinent information on the subject property. After the tour, they give the tablet back to the Colliers broker, and the Colliers broker will send the same information to the prospective buyer or tenant electronically. In this way, the prospect can pick and choose what pages they want to print, if any.”
Q3 2014 Trending Upward
As expected the third quarter was an active quarter for lease executions. Net absorption for the quarter was 950,000 SF putting year to date absorption at just under 1,500,000 square feet. This already exceeds 2013’s total absorption of 1,150,000 square feet. With the current activity in the market there is no reason to think the trend will not continue into the fourth quarter. All indications are that 2014 will have a year end positive absorption that hasn’t been witnessed since 2008.
The only down side to this activity is we are still not seeing the market react with corresponding speculative development. Users (whether they be tenants or buyers) seeking quality space over 100,000 square feet now have only three options in the entire Southwest Pennsylvania market. We do see some light on the horizon with several hundred thousand square feet of speculative building in the pipeline, but this is just not enough to satiate the market’s appetite.
The Pittsburgh office market continued its steady growth during the third quarter with increased absorption and an unchanged vacancy rate of 8.4%. The average asking lease rate was up over last quarter to $19.97 per square foot, an increase of 0.7%. Class “A” space continues to be in strong demand, especially in the CBD where the vacancy rate is 6.84% and large blocks of space are scarce. Suburban class “A” space has a higher vacancy rate of 9.1%, with large vacancies in the Cranberry, Monroeville and Parkway West submarkets.
Lease rates have general held steady or increased over the quarter. Overall, asking lease rates for the CBD are $21.84 with suburban asking lease rates coming in at $19.20. The average lease rate for the entire market is $19.97, which represents a healthy increase over the average rate of $18.79 quoted at this time last year.
Absorption for the quarter was 404,283 square feet, the largest amount since fourth quarter 2012. The largest transactions during the quarter were Express Scripts’ lease for 70,000 square feet and EQT’s lease of 30,000 square feet at Zenith Ridge Two. It is anticipated that absorption should continue to be positive for the near term although new deliveries may hold the occupancy rate in check. A number of new projects are on the drawing board, but not many will be built on a speculative basis, and those that are built speculatively will be relatively small. With the exception of the Gardens at Market Square (159,000 SF), the most speculative construction is under 100,000 square feet.