Q4 2015 Pittsburgh Office Market Report
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.
Pittsburgh possesses beauty, brains and a new economy
Sources: Pittsburgh Business Times, Chicago Tribune, Huffington Post, Pittsburgh Post Gazette
Chicago Tribune travel writer Josh Noel described Pittsburgh as “one of our nation’s most underrated cities, with a beauty as breathtaking as it is obvious” in his January 4th article titled “New meets old in Pittsburgh.” While this is true to anyone who has seen the city skyline, Pittsburgh has much more to offer than just beauty.
With the steel-city persona and days of heavy industry over, the city experiences a “new Pittsburgh economy” more focused on growth rather than manufacturing. In 2012, the Pittsburgh metropolitan market recorded 2.91 knowledge jobs per manufacturing job, compared with a 2.38 ratio for the country overall. Perhaps this transition is due to the growth of area universities, including Carnegie Mellon University who is ranked 23rd in the U.S. News and World Report’s most recent ranking of national universities. In fact, Movoto deemed Pittsburgh “America’s Smartest City” in their 2013 ranking of the 100 most populous U.S. cities.
Between 2007 and 2012, the gross domestic product for the Pittsburgh area increased 4.6 percent, and in 2012, average employment was above 750,000. Not only are these individuals employed, they are happy in their workplace. In January 2013, the site Career Bliss ranked Pittsburgh in the top five cities with the happiest workers, based on more than 36,000 reviews.