Q1 2015 Pittsburgh Office Market Report
The first quarter of 2015 ended with an overall vacancy rate of 8.1% with net absorption totaling a positive 127,251 square feet for the quarter. Sublease space increased during this period ending with 307,784 square feet available. Rental rates finished up $19.84 representing a decrease of 4% adjusted for all classes of available space.
The Class A office market recorded net absorption of a positive 130,773 SF. The Class B office market recorded net absorption of a positive 38,875 SF. The Class C office market recorded net absorption of a negative (42,397) SF. Net absorption for Pittsburgh’s Central Business District was positive 19,408 SF.
Major Lease Transactions: Chevron Corporation executed a lease for 120,000 SF at Cherrington Corporate Center, Building 700 and CA Technologies executed a lease for 22,143 SF at Foster Plaza 9 in the Parkway West Market. Gateway Health Plan executed a lease for 20,298 SF at the Chamber of Commerce Building in the Central Business District.
Click here to see the full Q1 2015 Pittsburgh Office Market Report.
Q1 2015 Pittsburgh Investment Newsletter
OUR CRE WORLD IS FLAT: LEVEL OCCUPANCY RATES, DECLINING ASKING RATES – BUT HEY, WE’LL TAKE IT
The OFFICE MARKET in the Pittsburgh MSA slipped from an overall vacancy rate of 8.0% in 4Q 2014 to the current 8.1% in 1Q 2015. This compared to a higher vacancy rate of 8.3% one year ago. Absorption in the first quarter of 2015 was 127,251 SF, while deliveries totaled 298,256 SF and 1,691,989 SF was under construction in 1Q 2015. The overall asking rate in the first quarter was $19.84 PSF, compared to $20.15 in 4Q 2014 and $19.22 in 1Q 2014. As for the CLASS A market, the asking rate dipped 3.4% to $24.65 PSF in the first quarter, from the 4Q 2014 rate of $25.52 PSF, while the asking rate one year ago was $24.34 PSF. Class A absorption was 130,773 SF for the quarter, while we saw deliveries of 207,000 SF and 1,610,000 under construction. The Oakland submarket continues to lead the way with a 0.1% vacancy rate and an asking rate average of $31.79 PSF. The North submarket remained strong at 3.1% and $24.04 PSF, along with the CBD at 6.3% and $25.90 PSF. The Greater Downtown market was also impressive with vacancy at 4.1% and an average rate of $25.09 PSF. The CLASS B space saw no movement from 4Q 2014 vacancy rate of 8.8%, which is better than the 9.0% we saw one year ago. The 1Q 2015 asking rate was at $18.66 PSF, 11 cents better than the previous quarter, and 36 cents better than 1Q 2014. Class B absorption came in at a tepid 38,875 SF; deliveries at 91,256 SF; and 81,899 SF under construction. Oakland and Monroeville Class B space experienced a 2.4% vacancy rate, with Oakland tallying a $17.62 PSF asking rate and Monroeville a strong $19.86 PSF rate. Greater Downtown remained strong in the B space with an 8.3% vacancy and $21.40 PSF rate. Class C space suffered with a negative 42,397 SF absorption figure, and a 7.2% vacancy rate at a $14.86 PSF average rate.
Click here to see the full Q1 2015 Pittsburgh Investment Newsletter.
Q4 2014 Pittsburgh Investment Newsletter
RETAIL MOVE OVER! OFFICE MARKET SHINES IN 4TH QUARTER; INDUSTRIAL SOFTENS SLIGHTLY
Office Market Sees Big New Construction Numbers
The Office Market in the 4th quarter saw an 8.1% overall vacancy rate, improving from the 3rd quarter’s 8.4% rate, with a positive absorption rate of 868,224 SF. Better yet, the overall asking rate when from $19.97 PSF in Q3 to $20.61 PSF, a 3.2% increase. Two new buildings were delivered totaling 556,643 SF, with another 2,324,245 SF under construction. Two of the high profile projects under construction include the 800,000 SF Tower at PNC Plaza and 250,000 SF at Zenith Ridge III. Notable office leasing transaction include: UPMC Health Plan, represented by Colliers International in Pittsburgh, taking 140,967 SF at Heniz 57 Center, and Wesco International Charitable Foundation’s 82,018 SF at Commerce Court in Station Square. Two new buildings were delivered in the quarter with 186,000 SF at 1 Southpointe Boulevard and 174,000 SF at the Wexford Medical Mall, both of which are 100% occupied. For the quarter, Class A space improved to a 7.6% vacancy and $26.56 PSF in asking rates; Class B space had an improved 8.7% vacancy rate and an $18.57 PSF rate; and Class C space saw the vacancy decrease to 7.5%, with a $14.49 PSF asking rate. The overall CBD vacancy rate improved to 9.2% in vacancy, while the Suburban market continued to improve and ended with a 7.7% vacancy rate.
Click here to see the full Q4 2014 Pittsburgh Investment Newsletter.
Brookings Institution recognizes Pittsburgh in American’s 50 most crucial, highest-value industries
Dennis Yoblansky, CEO of Allegheny Conference on Community Development announced exciting news yesterday regarding Pittsburgh’s success in advanced industries:
“Our region has turned up in the Top 50 of a new list of U.S. metros capitalizing on advanced industries. Washington, D.C.-based think tank, the Brookings Institution and its Metropolitan Policy Program, released “America’s Advanced Industries” – a report that identifies the United States’ 50 most crucial, highest-value industries, defined by their R&D and STEM inputs – two of which are manufacturing and energy, sectors which are squarely in the Pittsburgh region’s wheelhouse of economic drivers.”
For the full report published by Brookings Institution click here.