JLL Pittsburgh Office Insight & Statistics - Q3 2018
- 1. © 2017 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof. Fundamentals Forecast YTD net absorption 598,259 s.f. ▲ Under construction 947,153 s.f. ▲ Total vacancy 16.3% ▼ Average asking rent (gross) $24.11 p.s.f. ▲ Concessions Rising ▲ Q3 2018 Office Insight The delivery of Riverfront West at 3 Crossings in the third quarter of 2018 added 130,500 square feet of Class A office space to the inventory. The newest addition in the Strip District was delivered with only 26,000 square feet of availability. District Fifteen is the next project scheduled for delivery only a stone’s throw away from where Bombardier, currently located in West Mifflin, signed for 90,000 square feet at One Waterfront Place. There has been significant technology company interest in District Fifteen, but it was Facebook that signed a lease for the entire building. Meanwhile, activity swirls in East Liberty as site work for a new speculative development called East Liberty Centre begins yards away from a potential redevelopment of an existing grocery store, along with new retail, residential and structured parking. Outlook With ever-increasing activity in the Fringe and Oakland / East End submarkets, along with stable leasing performance in the CBD following myriad corporate rightsizings, leasing in the suburbs has continued to be limited. The urban submarkets have collectively garnered approximately 61.0 percent of the year-to-date leasing by total square-footage. In mid-September, the City of Pittsburgh closed on the newly renovated 420 Boulevard of the Allies, removing over 160,000 square feet from the Class A inventory in the CBD submarket. Looking ahead, there are three feasible scenarios for Pittsburgh by year-end. Vacancy will trend below 16.0 percent and will be at its lowest level in the past five years. Urban submarket absorption will double with the delivery of a fully-leased District Fifteen and the subsequent leasing of new technology and coworking companies, as well as additional tenant urban migration. The average asking rate of the urban Class A office space will peak over $30.00 per square foot. -1,000,000 0 1,000,000 2014 2015 2016 2017 YTD 2018 Supply and demand (s.f.) Net absorption Deliveries Pittsburgh’s urban submarkets have a blockbuster summer 15.9% 15.8% 16.6% 17.5% 16.3% 2014 2015 2016 2017 2018 Total vacancy $0.00 $10.00 $20.00 $30.00 2014 2015 2016 2017 2018 Average asking rents ($/s.f.) Class A Class B For more information, contact: Tobiah Bilski | [email protected] • Tenant migration trend continues, as Bombardier signs for 90,000 square feet in the Strip District. • 420 Boulevard of the Allies is bought by the City of Pittsburgh and 168,200 square feet of newly renovated space is taken out of inventory. • Facebook signs entire 105,000-square-foot District Fifteen in the Strip District.
- 2. © 2017 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof. Class Inventory (s.f.) Total net absorption (s.f.) YTD total net absorption (s.f.) YTD total net absorption (% of stock) Direct vacancy (%) Total vacancy (%) Average direct asking rent ($ p.s.f.) YTD Completions (s.f.) Under Development (s.f.) Northern I-79 / Cranberry Totals 4,286,907 7,905 10,927 0.3% 9.1% 17.2% $24.53 0 0 East Totals 3,046,536 9,419 6,665 0.2% 26.4% 27.6% $20.22 0 0 North Totals 3,751,808 -16,742 127,818 3.4% 11.5% 11.8% $20.60 103,000 0 South Totals 2,347,259 18,671 65,251 2.8% 12.7% 14.4% $19.29 0 0 Southpointe Totals 2,972,107 -29,993 59,337 2.0% 15.0% 20.0% $22.88 0 0 West Totals 7,046,426 -70,853 32,142 0.5% 18.6% 20.6% $21.52 0 0 Suburban Totals 23,451,043 -81,593 302,140 1.3% 15.7% 18.8% $21.43 103,000 0 CBD Totals 18,969,985 24,815 127,029 0.7% 14.0% 14.7% $27.15 0 50,000 Fringe Totals 8,023,797 120,781 165,485 2.1% 10.4% 16.2% $25.28 130,500 614,700 Oakland / East End Totals 2,057,356 17,192 3,605 0.2% 3.9% 4.4% $25.04 0 282,453 Urban Totals 29,051,138 162,788 296,119 1.0% 12.3% 14.4% $26.62 130,500 947,153 Pittsburgh Totals 52,502,181 81,195 598,259 1.1% 13.8% 16.3% $24.11 233,500 947,153 Northern I-79 / Cranberry A 3,601,749 24,353 18,700 0.5% 7.3% 16.9% $25.47 0 0 East A 1,580,784 8,408 3,213 0.2% 30.1% 30.6% $21.78 0 0 North A 809,347 -8,598 79,114 9.8% 12.9% 13.0% $25.05 103,000 0 Southpointe A 1,909,754 14,746 92,098 4.8% 6.1% 12.6% $23.39 0 0 West A 3,767,504 -35,663 73,780 2.0% 16.5% 19.5% $23.46 0 0 Suburban A 11,669,138 3,246 266,905 2.3% 13.5% 18.6% $23.39 103,000 0 CBD A 13,498,998 22,286 96,407 0.7% 12.0% 12.7% $30.11 0 50,000 Fringe A 2,388,470 93,421 79,555 3.3% 4.1% 15.5% $29.32 130,500 577,200 Oakland / East End A 969,243 -508 -2,495 -0.3% 3.1% 4.1% $27.81 0 240,453 Urban A 16,856,711 115,199 173,467 1.0% 10.4% 12.6% $29.97 130,500 867,653 Pittsburgh A 28,525,849 118,445 440,372 1.5% 11.7% 15.1% $27.18 233,500 867,653 Northern I-79 / Cranberry B 685,158 -16,448 -7,773 -1.1% 18.9% 18.9% $22.66 0 0 East B 1,465,752 1,011 3,452 0.2% 22.4% 24.3% $17.93 0 0 North B 2,942,461 -8,144 48,704 1.7% 11.1% 11.4% $19.04 0 0 South B 2,347,259 18,671 65,251 2.8% 12.7% 14.4% $19.29 0 0 Southpointe B 1,062,353 -44,739 -32,761 -3.1% 30.9% 33.4% $22.66 0 0 West B 3,278,922 -35,190 -41,638 -1.3% 21.1% 21.8% $19.81 0 0 Suburban B 11,781,905 -84,839 35,235 0.3% 17.9% 18.9% $19.95 0 0 CBD B 5,470,987 2,529 30,622 0.6% 19.1% 19.6% $21.51 0 0 Fringe B 5,635,327 27,360 85,930 1.5% 13.0% 16.5% $23.71 0 37,500 Oakland / East End B 1,088,113 17,700 6,100 0.6% 4.5% 4.5% $23.50 0 42,000 Urban B 12,194,427 47,589 122,652 1.0% 15.0% 16.8% $22.50 0 79,500 Pittsburgh B 23,976,332 -37,250 157,887 0.7% 16.4% 17.8% $21.11 0 79,500 Q3 2018 Office Statistics For more information, contact: Tobiah Bilski | [email protected]