Category Archives: Office
This edition of the Investment Newsletter contains 1st quarter 2017 market indicators, market statistics, sales transactions and an investor spotlight interview with Bill Hunt of the Elmhurst Group based in Pittsburgh, Pennsylvania.
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Following a strong performance in the first quarter of 2016, Pittsburgh’s office market ended the second quarter with similar strength, boasting a vacancy rate of just 7.7%. The average rental rate, over all classes, finished at a solid $20.40 per square foot.
Overall, Pittsburgh’s Central Business District (CBD) posted a declining vacancy rate of 8.3%, down over 0.5% from this time last quarter. The average asking rental rate per square foot for all classes in the CBD remained steady from previous quarters reaching $23.66 per square foot. The average asking rental rate for Class “A” buildings in the CBD was just over $26.65 per square foot with Class ”B” reaching an average of $20.60 per square foot. We can expect overall rental rates in the CBD to increase due to the two large renovations underway to include: the 529,000 square foot Liberty Center and the 1,011,000 square foot One Oxford Centre. The buildings are currently quoting $33.00 and $34.00, respectively.
Similarly, Pittsburgh’s suburban office market remained strong. The end of the second quarter showed a 7.4% vacancy rate compared to the first quarter’s vacancy rate of 7.9%. The average rental rate for Class “A” buildings in the suburban office markets reached $23.43 per square foot with Class “B” attaining rates of $19.36 per square foot. Both classes demonstrated an increase from the previous quarter. Suburban submarkets, such as the Parkway West, have retained large amounts of Class “A” inventory providing sizeable users with options in the market.
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Hertz Investment Group and Colliers International | Pittsburgh are proud to announce the recent signing of a new lease agreement with long-standing regional law firm, Keevican Weiss Bauerle & Hirsch LLC to newly renovated space at Three Gateway Center.
“Hertz and Gateway understood ours is a client service business,” said Managing Director Lee Keevican. “Their space plan advances our business plan, providing high value service to clients at competitive prices,” he added. “Our boutique investment bank, Renaissance Partners, LLC, will share the new space, as it continues to serve the capital markets needs of regionally-based companies,” said Keevican.
Keevican Weiss was attracted to Gateway Center based upon its abundant on-site parking (800 spaces) and various amenities to include Eddie Merlot’s Restaurant and the Gateway Café. Keevican Weiss was represented in the transaction by Dick Cassetti of Grant Street Associates.
With the signing of Keevican Weiss, Gateway Center is now approaching a record occupancy level for the overall complex of 90%.
About Gateway Center Complex
Gateway Center is located in the heart of Pittsburgh’s central business district. The 4-building, 1.5 million sq.ft. complex includes plazas with a sparkling fountain and towering trees, lush plants and blooming flowers with breezy walkways. Recent lobby renovations include rich Italian Carrera marble walls, granite floors and shining steel with glass atriums.
Gateway Center offers fabulous views of PNC Park, Heinz Field, and Point State Park. The Center also plays host to the Three Rivers Arts Festival.
Hertz Investment Group acquired this prestigious property in 2004. It is currently owned and managed by Hertz Investment Group. For leasing information, please contact Paul Horan or Edward Lawrence of Colliers International | Pittsburgh at 412-321-4200 or firstname.lastname@example.org and email@example.com.
About Keevican Weiss Bauerle & Hirsch LLC
Keevican Weiss Bauerle & Hirsch LLC is a service-focused law firm that has built its reputation on providing practical business legal advice to its clients. What makes the Firm stand out is its understanding of its clients’ needs as well as the access it offers to the capital markets through its subsidiary, Renaissance Partners, LLC.
The Firm’s practice areas and industry groups cover a broad range of business and legal needs. This breadth of expertise and resources enables the Firm to provide solutions in a traditional way or in an innovative fashion. It also offers an unprecedented range of services through two ancillary services groups: Renaissance Partners, LLC and FiCap Strategic Partners, LLC. These ancillary businesses provide the legal, investment banking, and business consulting services that help companies succeed.
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
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