Source:  Colliers International | Pittsburgh

While the global commercial real estate recovery remains uneven and very specific to geographic and asset class, commercial real estate continues to be a prime target for both institutional and private capital alike. Compared to the other primary investment vehicles, commercial real estate offers higher yields and, in many cases, greater stability and overall safety. Additionally, commercial real estate, especially hotels, self-storage, and apartments, has historically proven to be an excellent inflation hedge. As investors continue to fear the inflationary consequences of Quantitative Easing Four (QE4), an influx of capital may surge into the commercial real estate markets in hope of hedging the consequences of the weakening U.S. dollar.

Narrowing down to a regional level, once again the Pittsburgh commercial real estate market strengthened during the fourth quarter of 2012 as all major asset classes experienced positive net absorption coupled with significant vacancy rate compression. Throughout the fourth quarter of 2012, the Pittsburgh Metropolitan Statistical Area unemployment rate dropped from 6.8% to 6.6% and remained well below the national average of 7.8%. Additionally, as of December 2012, Pittsburgh had a year-over-year job growth rate of 1% while also obtaining a new record high of 1,169,000 total jobs. As one might expect, these positive economic trends have spilled over into the real estate markets, causing vacancy decreases and rental increases.

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