Pittsburgh office space market continues to tighten, report shows
Pittsburgh's overall office market continues to tighten as the region ended 2012 with a 14.1 percent vacancy rate, according to a report issued Thursday.
That was down from the 15.6 percent vacancy rate at the end of 2011, said Newmark Grubb Knight Frank in its 2012 Pittsburgh Office Market. That was the most significant decrease in the past six years, according to the commercial real estate company's figures.
“Pittsburgh is ranked the 10th strongest office market of 57 metro markets, which is down from its third position in 2011,” said Douglas Herold, a director of Integra Realty Resources/Pittsburgh.
The city, which has attracted a number of national and institutional buyers, was identified by the Brookings Institution as one of only three metropolitan areas in the nation to have recovered from the Great Recession, the report noted.
Downtown ended 2012 with a 14.3 percent vacancy rate, down from 15.6 percent at the end of 2011.
If Downtown's fringe areas, such as the North Shore, the South Shore and the Strip District are included, Downtown's vacancy was 19.4 percent in 2012, down from 19.5 percent in 2011.
Still the tightest office market for available space is the Oakland/East End area, which ended 2012 with a 6.8 percent vacancy rate. It was 6.5 percent at the end of 2011. Pittsburgh's suburban market ended the year with a 12.6 percent vacancy rate versus 14.5 percent at the end of 2011.
The strongest suburban market is the North where the vacancy rate was 7.4 percent compared with 7.7 percent in 2011.
Among major office building sales during 2012 were Highwood Properties acquisition of EQT Plaza, Downtown, for $99.2 million; and the University of Pittsburgh Medical Center's two purchases,the Quantum One building in the South Side for $25 million and the office building at 400 Oxford Drive, Monroeville, for $5 million.
The purchase by IRA Realty Capital of Newport Beach, Calif., of the Equitable Resources building on the North Shore was valued at $37 million, according to a report from Grant Street Associates/Cushman & Wakefield.
Among major leases was ServiceLink's in the Pittsburgh International Business Park in Moon; Dynavox's lease at 2100 Wharton St., South Side; Koppers Inc. at 436 Seventh Ave., Downtown; and TrueCommerce's at 400 Northpointe Circle, North Hills.
Sam Spatter is a staff writer for TribTotal Media.