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Real Estate Journal — Fall Preview — September 28 - October 11, 2018 — 7C
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P ittsburgh B roker
ittsburgh topped Ven- tureBeat.com’s list of “Four U.S. Tech Hubs By Randall G. McCombs, SIOR, Cushman & Wakefield | Grant Street Associates, Inc. Pittsburgh office market forecast P
Developers continue to focus on the Greater Downtown submarket for a variety of speculative office and mixed- use projects. After several years playing second fiddle to Pittsburgh’s North Shore, which serves as the center for sports and entertainment in the region, the South Side once again has caught the eye of developers and investors alike. Nearly a dozen new projects were announced for the South Side in 2018. Among them, McKnight Realty Partners’ $110-million renovation of the former Riverwalk Corporate
Center, a historic former cargo warehouse is situated along the Monongahela River. Upon completion, the 868,000 s/f complex will include creative office space, numerous outdoor amenities and a 1,000-space parking garage. RDC, Inc., a regional de- veloper, began construction of District 15, a $22-million, 105,000 s/f office project in Pittsburgh’s Strip District. This is an area within the Greater Downtown submarket that has recorded occupancy of 95% or better for several quarters and a current average
asking rental rate of $26.07 per square foot (psf). The riv- erfront project is expected to deliver in Q3 2019, and along with another 304,000 s/f in the pipeline, should help to ad- dress the growing demand for larger blocks of space by tech companies. Though vacancy within Pittsburgh’s market remains fluid, only a handful of di- rect, contiguous availabili- ties greater than 60,000 s/f currently exists within the CBD and fewer than 20 spaces of this size are avail- able in Pittsburgh’s entire
inventory. Class A landlords will continue to push asking rates and demand longer terms in order to recoup capital improvement expen- ditures and larger tenant improvement allowances for the foreseeable future. Many tenants may consider exer- cising early renewal options in order to lock in current rates and conditions. Randall G. McCombs, SIOR is executive vice president | Corporate Oc- cupier Services at Cush- man & Wakefield | Grant Street Associates, Inc.
to Watch in 2018” and for good reason. Pittsburgh’s technology sector grew 1 2% o v e r the past two years, rank- ing the re-
Randall McCombs
gion fourth largest among North America’s small tech markets with over 42,000 employees. This growth has increased demand for co- working spaces and pushed the renovation of more than 4.0 million s/f (msf) of office space by landlords looking to lure new tech tenants. The number of new con- struction projects breaking ground year-to-date (YTD) 2018 is up 103.8% over the same period 2017, posting just over 1,113,000 s/f (sf) of new inventory. Among the most substantial projects announced is the final phase of Bakery Square, a 234,000 s/f office building to be built for Philips’ Sleep and Respi- ratory Care regional head- quarters. The company plans to move approximately 1,250 employees to the new loca- tion from its current facility in Murrysville, Westmore- land County. Occupancy is expected in Q3 2020. Though Philips’ move may be the largest relocation an- nouncement in recentmonths, the company is following a trend among significant oc- cupiers in the Pittsburgh region. The competitive land- scape has become even more challenging for employers seeking to attract and retain top talent matriculating from local universities, and the Greater Downtown area has been the bulls-eye for many site selection specialists. Or- acle announced in early Q3 2018 that it would relocate its regional office from the Parkway West to Nova Place on Pittsburgh’s North Shore joining United Healthcare who relocated to the complex from the Parkway East in 2016. Additionally, Bombar- dier Transportation is mov- ing forward with a relocation of its Rail Control Solutions Group from the South Pitts- burgh submarket to 90,000 s/f in Pittsburgh’s Strip District neighborhood.
FOR SALE 1501 LEBANON CHURCH RD. West Mifflin, Pittsburgh MSA, Pennsylvania 15236
176,485 SF FACILITY - FOR SALE HIGH-TECH MANUFACTURING / OFFICE 1501Lebanonchurchroad.com
For more information, please contact one of the following individuals: Randall G. McCombs, SIOR Executive Vice President +1 412 697 1678 rmccombs@gsa-cw.com Lic # RS142486A Samuel T. McGill Vice President +1 412 391 2635 smcgill@gsa-cw.com Lic. # RS320732
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