Welcome to the June Edition of the Hanna Commercial Newsletter! Summer is here, we are excited to bring you the latest insights and updates from the ever-evolving landscape of Pittsburgh’s commercial real estate.
2024 MARKET REPORT MULTIFAMILY PITTSBURGH
PREPARED BY:
Ben Atwood Senior Advisor batwood@hannacre.com Cynthia Kamin Vice President ckamin@hannacre.com
2024
2024
hannacre.com
hannacre.com
Multifamily Market Report
Multifamily Market Report
UNITS UNDER CONSTRUCTION 2,379
2024 ANNUAL INVESTMENT $316M
YOY INVESTMENT GROWTH 406.5%
VACANCY RATE 6.10%
AVG UNIT RENT $1,362
AVG. RENT/SF $1.60
2024 MULTIFAMILY MARKET REPORT: OVERVIEW
Pittsburgh’s multifamily market remains on fantastic footing heading at the start of 2025. Over the past twelve months, the market saw vacancies contract and rent growth eclipse both nearby markets and the national benchmark. Investors are noticing the region’s strength and trading activity picked up noticeably from 2023. DEMAND Multifamily demand remains extraordinarily healthy and has vacancies hovering around 6% at the start of 2025, a noteworthy figure for multiple reasons. At a national level, occupancies are softening because of over construction in boomtown markets like Austin and Nashville. That Pittsburgh remains well under the national average demonstrates that local developers continue timing their new arrivals in an intelligent manner. But even better news for the region is that developers were not inactive at all during the past year. Close to 1,600 units arrived in 2024. While not a record setting year, it was an above average expansion for the region. Additionally, this followed on the heavy deliveries of 2023, which saw 1,700 units come online.
That the market was able to absorb these units effortlessly indicates that Pittsburgh is likely ready and capable of handling new supply. With over 2,300 units under way within the market, it is likely that vacancies soften over the course of 2025. However, given the strength of demand, the new arrivals will be unlikely to make new waves. All of Pittsburgh’s submarkets are posting healthy levels of occupancy. Even the region that stands out (Downtown) is fuller than the data recognizes. Much of the new supply to arrive over 2024 was in this submarket, and these new projects are all close to full occupancy. Additionally, multiple major projects are experiencing major renovations, spiking the vacancy.
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2024
2024
hannacre.com
hannacre.com
Multifamily Market Report
Multifamily Market Report
RENTAL RATES The robust demand has translated into strong YOY rent growth. Gains for 2024 were over 3%, eclipsing peer cities of Cleveland and Cincinnati, as well as the national average. It is extremely rare for Pittsburgh to outshine the national benchmark. The cool down in rents being felt nationally is the direct result of overbuilding in the major markets like Nashville and Austin. That Pittsburgh has not oversaturated itself means that owners should anticipate steady gains to continue at a healthy clip through 2025.
BOLD PREDICITIONS FOR 2025 • Investment Levels Surpass 2024 Levels • CBD vacancies compress by 3% • YOY Rent Growth Will Surpass National Average in 2025
DAILY RENT TRACKER
INVESTMENT SALES After a slow 2023, investors began opening the pocketbooks in 2024. Over $315 million was spent in last year, nearly five times the levels of investment in 2023. Total investment figures can be somewhat deceiving in a market like Pittsburgh, which typically sees major money being spent every other year. Last year’s total investment figures were driven by two main acquisitions: the 442-unit District and the 319-unit Ascent. Both sales showcase the strengths of Pittsburgh’s multifamily market. The aptly named District is a 2021 arrival in the cities trendiest part of town: The Strip District. This project sold to a national investor based out of New York for over $275,000/unit with a price tag of over $129 million. The Ascent is located in Wexford, a growing suburban node in the North Hills. The property features modern amenities and design, was built in 2015, and was purchased by a national investor for $79 million at nearly #250,000/unit. Both deals showcase how the region is fully capable of attracting major outside investors, but also noteworthy is the number of transactions because it showcases a rebound in local purchasing. CoStar shows that over 130 multifamily properties sold in 2024, a 25% increase in what was seen the prior year.
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2024
MARKET REPORT MULTIFAMILY PITTSBURGH
PREPARED BY:
Ben Atwood Senior Advisor batwood@hannacre.com
Cynthia Kamin Vice President ckamin@hannacre.com
HANNA COMMERCIAL REAL ESTATE 11 STANWIX STREET, SUITE 1024 PITTSBURGH, PA 15222 412-261-2200 HANNACRE.COM
All information furnished regarding property for sale, rental or financing is from sources deemed reliable. No represen- tation is made as to the accuracy thereof, and it is submitted subject to errors, omissions, change of price, rental, or other conditions, prior sale lease, financing or withdrawal without notice. Hanna Langholz Wilson Ellis will make no represen- tation,and assume no obligation, regarding the presence or absence of toxic or hazardous waste or substances or other undesirable material on or about the property.
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