The Pittsburgh market continued to outpace the national average in the second quarter of 2013 as the overall office vacancy decreased 0.1% to 8.0% compared to 17.0% nationally. Despite an average rental rate increase of $0.15 to $18.63 in the market, Pittsburgh remains a value to businesses in comparison to the nationwide average rental rate of $23.23 per square foot. Construction also continued to surge, with three buildings consisting of 358,000 square feet of office space delivered during the quarter and 1,376,855 square feet still under construction. Net absorption numbers were promising as well, with a positive 353,651 square feet in suburban markets and a positive 27,253 square feet in the Central Business
Learn more about Q2 2013 activity in the Pittsburgh office market.
More than 1,500,000 square feet of Class “B” and “C” office space has been taken off the market for conversion into residential and hospitality uses in the past couple of years. During this time, the former state office building, the Clark Building, the former Alcoa Headquarters, the former Verizon Building and 526 Penn Avenue have all been sold and either converted into residential use, or are awaiting redevelopment.
“This residential trend has added vibrancy to Pittsburgh’s Central Business District, positively impacting both the office and retail sectors of our market.” said Paul Horan, Founding Principal at Colliers International | Pittsburgh.
Hertz Investment Group & Colliers International | Pittsburgh hosted an Open House to promote leasing opportunities at the Gateway Center Complex on Wednesday, May 22, 2013, on the seventeenth floor of One Gateway Center. Approximately 40 brokers from the Western Pennsylvania commercial real estate brokerage community attended the event.
“Colliers International | Pittsburgh enjoys hosting events that provide a forum for our peers in the industry to network and learn about the opportunity at hand. Hertz Investment Group, owner of Gateway Center, has authorized a broker incentive program which was unveiled at the event. The purpose of the incentives is to promote continued momentum within the complex through new leasing activity.” said Paul Horan Founding Principal at Colliers International | Pittsburgh.
“The Gateway Center event was an unmitigated success as brokers from each major real estate firm in Pittsburgh were in attendance,” commented Edward Lawrence MBA, Vice President of Office Brokerage at Colliers International | Pittsburgh.
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During the fourth quarter of 2012, Pittsburgh’s overall office vacancy rate decreased to 7.9%, continuing an ongoing positive trend. Behind the stability of Pittsburgh’s banking sector, the strength of local health insurance companies and the under-the-radar growth of many high-tech companies, Pittsburgh continues to be one of the strongest office markets in the United States.
The strength of the overall Pittsburgh office market is not limited to just a few submarkets. While most of the focus has been on the Central Business District, Cranberry and Southpointe, the other submarkets continue to perform well. The Parkway West is as tight as it has been since the “dot-com” days due to growth in both energy and mortgage service companies. In addition, the Parkway East/Monroeville area, while the weakest of the various submarkets, with a 10.5% overall vacancy rate, is actually strong compared to historical levels.
“The Pittsburgh office market is as strong as we have seen it since the dot-com days of the late 1990’s,” said Patrick Sentner SIOR, a founding principal at Colliers International | Pittsburgh. “Only this time the overall fundamentals appear to be much more sound.”
Sources: Allegheny Conference on Community Development; Imagine Pittsburgh; National Geographic Traveler, Sperling’s BestPlaces; Brookings Institute; The Economist; Bloomberg Businessweek; The Fiscal Times; Pittsburgh Post-Gazette, Pittsburgh Business Times; Pittsburgh Post-Gazette
Pittsburgh has a new and amazing year ahead of itself. Our reinvented economy is among the factors offering plenty to celebrate, as 2013 marks the 30 year anniversary of Pittsburgh’s economy hitting bottom, with the steel industry collapse crippling the region. Today, Pittsburgh is progressing, and continues to be credited as a city renewed, boasting a diverse economy, growing youth population and stable real estate market. Whether recognized by a “Best of the World” place to visit by National Geographic Traveler, paid tribute in Sperling’s BestPlaces as the best city to relocate to in the United States, or honored as one of just three metros in the nation that have fully recovered from the Great Recession by Brookings’ Global Metro Monitor, Pittsburgh has earned top honors as a great place to live, work and play. Even the Today Show is on board, recently announcing that the travel website/magazine Jetsetter listed Pittsburgh among the top travel spots around the world for 2013, and The Fiscal Times has recently honored Pittsburgh as one of the 15 best cities to grow old in.