and Elmhurst’s Airside Business Park has 50,000 square feet of new tenancy. Up north, Sippel Enterprises inked 50,000 square feet of new deals and if the Westinghouse sublease in Cranberry finalizes a thing or two in the near term, they will have landed 350,000 square feet of subtenants. The Parkway East is even on the board with M&J Wilkow’s Penn Center East racking up 65,000 square feet of new leasing. Finally, in the city, McKnight Realty’s The Highline has welcomed 100,000 square feet of new customers. These are all legitimately new deals, and they all occurred under Covid’s spell. And most of these projects did not enjoy the leasing activity pre-pandemic that they are now.
Now, like on “Pardon the Interruption”, let’s go to the big finish.
The deals that I’ve mentioned in the preceding two paragraphs have been more of a flight to affordability as opposed to the widely and nationally reported “Flight to Quality”. That is not to say that those projects, or the projects where the aforementioned tenants landed, are not well positioned. Quite the opposite; those owners won deals because they reinvested into their assets with capital improvements and amenities to deliver tremendous value to their customers. But the fact of the matter is that, despite certain pockets of leasing success, some of our region’s newest and most expensive office space is sitting. The shortfall is not in the product. Our development community is doing an excellent job in delivering a quality office environment. The shortfall is in occupier strategy. Demand from the Fortune 1000 and multi-market users will return to our region. Perhaps very soon. Why? The flight to quality data tells us so. Pittsburgh has never been accused of leading the charge in national trends. We are a secondary market and, well, trends are developed in primary markets, and we are in the second tranche of markets that will experience national market conditions. National leasing data consists primarily of that from Gateway and major markets due to their collective scale. Since the onset of Covid, office product that’s been delivered since 2015 has posted 86M square feet of positive net absorption. Compare this to 128M square feet of negative net absorption
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DEVELOPING PITTSBURGH | Fall 2022
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