Potential seen Downtown
There are at least 10 sites in the Downtown area where a new office building could be built, according to a real estate executive at CB Richard Ellis.
"Not necessarily a tall skyscraper, but one for an office, or a mixed use building containing residential units, perhaps a hotel and retail," said Andy Wisniewski, executive vice president at the firm, during its annual event that discussed conditions in the area market Thursday at the Westin Convention Center Hotel, Downtown.
Potential sites Wisniewski mentioned were on Wood Street, the Cultural District along Penn Avenue, Grant Street, at the Civic Arena, the Salvation Army, Fort Pitt Boulevard and the North Shore along with Station Square and the Strip.
Although overall Downtown office vacancy rate is a low 11.7 percent -- 8.8 percent in Class A buildings -- the need for a new office building could be questionable because a number of buildings have vacancy rates in excess of 20 percent.
These include the Henry W. Oliver Building, the Union Trust Building, Koppers and the former Lord & Taylor building, he said.
Pittsburgh is considered one of the stronger office markets in the nation, said Jeremy Kronman, executive vice president at CBRE Pittsburgh.
While rent concessions provided by office landlords have diminished, some landlords have taken the opportunity to do other things to improve their buildings, such as upgrading the building's common areas and meeting rooms, he said.
Some landlords are planning ahead, attempting to create larger spaces for tenants who may need it in the future.
An important part of a lease is allowing large tenants to place signs with their name on the building, at their expense, Kronman said.
Apartments have been one of the highlights of the city's favorable standing with national developers and investors.
"I get calls from developers and investors in areas outside the region interested in either building or buying apartments here," said Cynthia Kamin, CBRE senior vice president.
Occupancy has been in the 96 percent range, though she expects it may drop to 95.2 percent this year. Those numbers are welcome news to apartment owners, who don't provide the concessions in rent or other items as they had in the past, she said.
Rentals average between $886 and $894 per month, and Kamin believes it will increase to $899 per month this year.
Pittsburgh survived the national recession in better shape than most metropolitan areas, said Arthur F. Jones Jr., a senior economist at CBRE Econometric Advisors.
"The region's transition from an industrial economy to one of health care and office occupancy enabled the region to have a good year in 2010 with the promise of continued growth in 2011," he said.