Category Archives: Economy
The Steel City has claimed yet another accolade to add to its growing list. USA Today recently voted Pittsburgh as the best large metro area for jobs.
The rankings were based on “the number of hiring opportunities relative to population, the area’s affordability and job satisfaction,” according to Glassdoor.com, a website which allows former and current employees to anonymously review companies and their management.
This is far from Pittsburgh’s first recognition as one of the best cities in the country. In 2018 alone, Pittsburgh was selected as the second most livable city in the United States, number one city for the most affordable rent, number 34 out of the top 100 places to live in the world, and number one city for young people to live based on job opportunities, affordability and livability.
To read the full USA Today article, click here.
Office Market May be Nearing Peak
At the conclusion of 2015, Pittsburgh’s office market is beginning to show
signs of peaking. Overall office vacancy rates for the 4th quarter increased
slightly over 3rd quarter results from 8.1% vacant to 8.3% vacant at year
end. Rental rates for office space in all submarkets and classes decreased
slightly in the 4th quarter to $20.51/sf, from $20.55/sf in the 3rd quarter, or
a 0.02% decrease.
Pittsburgh’s CBD had a few notable transactions in 2015. PNC moved
into its new Platinum LEED Certified 800,000 SF office tower located at
300 Fifth Avenue in the 4th quarter. PPG Industries, Inc. maintained its
headquarter presence at One PPG Place, renewing approximately 300,000
SF there. In November 2015, US Steel Corporation announced it would not
be moving forward with a planned “300,000 SF Build-to-Suit” at the site of
the former Civic Arena, instead, electing to extend its lease commitment at
600 Grant Street for one more year through the summer of 2018. Millcraft’s
Tower Two-Sixty, a mixed use development including office, retail and a
hotel adjacent to the vibrant Market Square, signed three office leases and is
closing in on 80% occupancy prior to the planned Spring 2016 completion
Click here to see the full report.
The Pittsburgh retail real estate market continues to be strong. The vacancy rate across all retail property types dropped to 3.5% during the last quarter, although the numbers are skewed upward by large vacancies in a few submarkets. The market for prime anchored shopping center space is extremely tight and the effective vacancy rate for most quality centers is between 1-2%. Absorption for the period was 208,000 square feet. The total retail market is 138,741,180 square feet, including 32,945,052 of shopping center space. Low vacancy rates and high absorption has pushed lease rates up.
Overall lease rates increased by .2% over the previous quarter to an average of $12.03 per square foot. High quality retail locations now typically lease in the low to mid $30 range, with some leases coming in as high as $55 per square foot. Small shop space in fringe market anchored space is usually near $15 per square foot. New construction typically requires a lease rate no less than $22.50.
Click here to view the full report.
Q4 2014 Static Finish to the Year
The fourth quarter of 2014 finished without the anticipated flourish that it was trending toward. Vacancy actually crept up three basis points from 7.2% to 7.5% while absorption for the quarter experienced a negative 591,656 square feet. This is the largest negative quarter since 2009 and all others, with the exception of the second quarter of 2014, were positive. Even with the market giving back close to 600,000 square feet in the fourth quarter and 300,000 square feet in the second quarter, the year end absorption number was still a rosy 675,000 square feet.
At least a portion of the negative absorption in the fourth quarter of 2014 can be attributed to American Eagle officially bringing their 440,000 square foot distribution facility in Thorn Hill Industrial Park to market. It would be remiss not to credit a portion of the slow down to the sudden and unexpected drop in oil prices with prices under $60.00 per barrel, and for a brief time under $50.00, suddenly uncertainty spread into the previously teflon-coated energy sector. While this is anticipated to be a minor blip on the radar, it is fully expected to bleed into the first quarter of 2015, negatively impacting deal volume although not necessarily slowing advancement of projects by larger players in the sector.
Deals of significance in the fourth quarter include the sale of 367 Morganza Road, a Colliers International | Pittsburgh listing, in Washington County to National Rubber. The 65,700 square foot building traded at $52.00 per square foot. Edward Marc Brands leased 50,000 square feet in the Lawrenceville section of Pittsburgh and R&N Steel Manufacturing leased 70,000 square feet at 3401 Grand Avenue on Neville Island. Evidence of the trend noted on the back page of this report, 6500 Hamilton Avenue a 60,000 square foot multistory building in the red hot east side sold for $14.00 per square foot. The new owner plans to convert the former warehouse building to a higher and better use.
Evidence of the trend noted on the back page of this report, 6500 Hamilton Avenue a
60,000 square foot multistory building in the red hot east side sold for $14.00 per square
foot. The new owner plans to convert the former warehouse building to a higher and
Click here to see the full Q4 2014 Pittsburgh Industrial Market Report.