Blog Archives
Pittsburgh continues revitalization with several redevelopment initiatives
Former Fifth Avenue High School
Sources: Fifth Avenue Lofts, Pittsburgh Post Gazette, Fourth River Development, New York Times, Architectural Record
It is a very exciting time to live, work and play in the Pittsburgh region. With redevelopment projects slated for future construction, and sustainable improvements and investments in infrastructure, Pittsburgh is gaining notable recognition as a city with think forward strategies for economic revitalization.
Developers in Pittsburgh, and across the country are building momentum in construction, by converting empty hotels, schools and multifamily properties into improved office and residential spaces. As demand increases for tenants in technology and energy related sectors, developers nationwide are eager to fulfill their space requirements, and commercial real estate experts are improving the overall appeal of these properties by adding tenants that offer recreational, residential and even entertainment amenities.
“Our firm has been involved in many projects where a former school or church has been successfully retrofitted into an alternative use,” said Gregg Broujos, Managing Director & Founding Principal at Colliers International | Pittsburgh. “Most popular has been turning former schools into apartments, like the former Fifth Avenue High School project and a former elementary school in Emsworth, both of which we were involved with as listing brokers.”
Demand for Industrial Product Continues to Grow Steadily
Source: Colliers International | Pittsburgh Q3 2012 Pittsburgh Industrial Market Report
Pittsburgh’s lack of available industrial inventory in the region has caused demand to continue to grow. With short supply in sight, companies who are expanding or relocating to the region are looking to developers for build-to-suit and speculative construction plans. The Parkway West has positioned itself as the next corridor for industrial growth and development, while Butler and Washington County are building momentum in midstream facility construction for the natural gas industry. MarkWest received preliminary approval from Chartiers Twp. in Washington Co. to build a rail spur and yard off Route 519, based on a M arch 2012 report from Breaking Ground Magazine. The developer also has several additional compressor/processing stations in various stages of development in Houston and western Washington Co. Additionally, the Port of Pittsburgh, a 200 mile expanse of commercially navigable waterway, has enabled numerous industries to locate along the rivers in order to take direct advantage of inexpensive barge transportation. This is expected to positively impact the rising demand for quality, first class warehouse and distribution facilities along with an uptick in the construction of manufacturing facilities and the resultant spinoff in related industries.
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“The industrial team at Colliers International | Pittsburgh continues to be bullish on the Western Pennsylvania economy and is looking forward to continuing to work towards realizing our regions potential in 2013,” said John Bilyak SIOR, CCIM, Principal at Colliers International | Pittsburgh. “Given our market conditions, the only thing that can stand in the way of our growth is a lack of space to accommodate internal expansion and external interest.”
Demand for Office Space is Excellent in Downtown Pittsburgh
Sources: Colliers International | Pittsburgh Q3 2012 Pittsburgh Office Market Report
Pittsburgh office market performance continues to be strong, with an increased amount of activity and tenant movement. The office vacancy rate is steadily declining on a quarter over quarter basis, as Class A buildings continue to fill with new leases, expansions and renewals. Plans of new construction are on the horizon, employment rates are improving, and there is solid momentum in absorption. Pittsburgh is performing well ahead of the US average, and is expected to continue in a positive direction into the next quarter. Under-utilized Class B and C properties are being converted into residential use, and demand for a mixed-use “live-work-play” community continues to be the focus for adding vibrancy to downtown Pittsburgh and lifting occupancy rates. The total number of city residents has increased from 1,000 seven years ago, to over 7,000 today. High performance banking, healthcare, energy and education sectors are driving positive growth, along with favorable trends in housing recovery and residential opportunities downtown.
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“The Pittsburgh commercial office market continues to be strong. While some local companies are still waiting to see what the upcoming “Fiscal Cliff” will mean to their businesses, others are moving forwarded with planned relocations and expansions,” said Patrick Sentner SIOR, Founding Principal at Colliers International | Pittsburgh.
“We remain encouraged in the strengthening of Pittsburgh’s commercial real estate market, and are poised to assist our clients through leveraging our breadth of knowledge and world leading Colliers platform and personnel,” added Paul Horan, Founding Principal at Colliers International | Pittsburgh.
Central Business District Booming with News of Office Space Development
Sources: Q2 2012 Pittsburgh Office Market Highlights; CoStar
Excitement is growing for the possibility of new downtown Pittsburgh high rise buildings, offering a blend of new office and retail space. Development plans announced in Q2 2012 are all located near Market Square, fresh off a $5 million makeover. The Pittsburgh Business Times and CBS Pittsburgh reported the six-story building at 441 Smithfield Street will either be replaced with a new 33-story, 772,000 SF Class A office skyscraper stretching along Smithfield Street between Fifth and Forbes Avenues, or it will receive full Class A renovation, offering 180,000 SF of office space along with 20,000 SF of ground-level retail. Additional development plans include: a $400 million, 33-story Tower at PNC Plaza under construction on Wood Street; The Gardens at Market Square, a 17-story high-rise featuring 95,000 SF of office space, a 175-room Hilton Garden Inn, 23,000 SF of retail and a 325-space parking garage; and the conversion of the old State Office Building into residential living. Site Selection Magazine reports Pittsburgh’s Central Business District has welcomed $5 billion in new capital investment in the last six years.
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“Pittsburgh has been very fortunate to be the home of growing financial organizations and hospital groups,” said Patrick Sentner SIOR, Founding Principal at Colliers International | Pittsburgh. “In addition, our location at the epicenter of Marcellus and Utica Shale plays, combined with the many technology spinoff companies coming out of our various colleges and universities, have continued to strengthen our office market.”
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