During the first quarter of 2013 the Pittsburgh commercial real estate market continued to be one of the stronger markets in the United States. Net absorption was relatively flat. This was due primarily to a number of larger growing tenants in the marketplace taking a bit more time than normal to make real estate decisions. Simultaneously there was an uptick in the vacancy rate (8%), but this still represents a very stable marketplace.
What has been a pleasant surprise is the fact that all submarkets within the seven county Pittsburgh market area have vacancy rates under 11%. The highest vacancy rate can be found in the Parkway East corridor at 10.6%. Historically this particular submarket has seen vacancy rates in the 14-16% range.
Learn more about Q1 2013 activity in the Pittsburgh office market.
The economy in Western Pennsylvania has diversified dramatically over the last several decades, but the Energy sector continues to lead economic activity and subsequently drive demand for commercial real estate throughout the region. Western Pennsylvania is poised to become a petrochemical and manufacturing world leader. The chemical industry is already seeing a boom nationally due to shale gas drilling as the industry shifts from oil to natural gas as a raw material. “Our firm has been very active in the local and national energy sector, said Patrick Sentner SIOR, Founding Principal at Colliers International | Pittsburgh, “and our enthusiasm in this business sector is reinforced by the activity we are seeing at
the local level.”
The Energy industry has played a significant role in the economy’s gradual recovery, according to the new Colliers office market report, which shows that energy markets contributed a disproportionate percentage of total national office absorption in the last year. The dynamics of the energy industry are expected to have a growing impact on all types of commercial real estate in the coming decade.
“The Pittsburgh region is also feeling the positive effects of the Energy sector including oil and gas (Marcellus shale activity), nuclear, wind, and solar all playing a part in the continued positive absorption of office product thorough out our region,” said Paul Horan, Founding Principal at Colliers International | Pittsburgh.