JLL's Pittsburgh Office Outlook identifies the top trends driving the local real estate market. The report also includes an analysis of market statistics, leasing activity, notable sales transactions and economic conditions.

1. Office Outlook
Pittsburgh | Q4 2015

2. Skyline vacancy forecast
Source: JLL Research
Signed office tenants at 3 Crossings
Southpointe negotiating leverage
Source: JLL Research
U.S. Steel’s HQ reversal reduces the Skyline’s long-term vacancy forecast
In November of 2014 U.S. Steel announced plans for a new 268,000-square-foot
headquarters in the Lower Hill District. Clayco would act as the developer on the
project, completing construction within 22 months and then leasing it to U.S.
Steel for 18 years. However, in a stunning reversal, U.S. Steel announced in
November of 2015 that they were abandoning their new headquarter plans and
instead had signed a short-term extension at U.S. Steel Tower while they
reevaluate their long-term options. This announcement has a dramatic effect on
the long-term outlook for the Pittsburgh Skyline as U.S. Steel was set to vacate
425,000 square feet at the Class A U.S. Steel Tower at 600 Grant Street.
3 Crossings development in the Strip District tops headlines in 2015
The mixed-use project with an estimated price tag of $160 million will include
four office buildings totaling 363,000 square feet, along with 300 apartment units,
retail, and a parking garage. The first office building totaling 53,000 square feet
delivered in the fourth quarter and is leased to Rycon Construction and Apple.
Construction is currently underway on the second office building, which will total
77,000 square feet. That building is scheduled to deliver in July of 2016 and has
been leased to Bosch. And in the spring, construction will begin on the third
office building totaling 110,000 square feet. That building is scheduled to deliver
in March of 2017 and has been leased to Burns White.
With downturn in energy, office demand in Southpointe subsides
Pittsburgh has long been an energy hub. First it was coal, then it was nuclear,
and most recently natural gas. Each of these sectors however, is in the midst of
a downturn, and as a result, office demand from energy tenants has subsided.
This is particularly true in the Southpointe submarket where energy companies
associated with the natural gas industry have concentrated. Vacancy in this
submarket neared 5 percent a few years ago and is now north of 10 percent.
This has caused a shift in leverage from a purely landlord favorable position to a
more neutral position.
U.S. Steel’s HQ reversal alters Skyline forecast
2,257
Office insight
Pittsburgh | Q4 2015
49,748,464
Total inventory (s.f.)
-130,287
Q4 2015 net absorption (s.f.)
$22.67
Direct average asking rent
835,000
Total under construction (s.f.)
15.3%
Total vacancy
202,591
YTD net absorption (s.f.)
5.0%
12-month rent growth
74.4%
Total preleased
3%
7%
11%
15%
2010 2011 2012 2013 2014 2015 2016 2017 2018
Tenant favorable market
Neutral market
Landlord favorable market
‘12 ‘13 ‘14 ‘15 ‘16
Tenant Building Leased s.f.
Burns White Riverfront East 80,000
Bosch 2555 Smallman 52,000
Rycon Construction 2501 Smallman 25,000
Apple 2501 Smallman 18,000
JLL | Pittsburgh | Office Outlook | Q4 2015

3. JLL | Pittsburgh | Office Outlook | Q4 2015
Current conditions – submarket Historical leasing activity (s.f.)
Source: JLL Research Source: JLL Research
Total net absorption (s.f.)
Source: JLL Research
Total vacancy rate (%)
Source: JLL Research
Direct average asking rent ($ p.s.f.)
Source: JLL Research
695,350
1,248,476
639,801
1,169,811
1,061,737
925,765
772,970
-151,142
457,951
202,591
-500,000
0
500,000
1,000,000
1,500,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
$20.68 $20.57
$20.84
$20.46
$20.72 $20.65
$20.81
$20.97
$21.59
$22.67
$20.00
$21.00
$22.00
$23.00
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
18.4%
15.7% 15.9%
16.5%
16.1%
14.1%
14.5%
14.8% 14.9%
15.3%
13.0%
15.0%
17.0%
19.0%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Landlordleverage
Tenantleverage
Peaking
market
Falling
market
Bottoming
market
Rising
market
4,000,000
4,500,000
4,000,000
5,000,000
3,500,000
0
1,500,000
3,000,000
4,500,000
6,000,000
2011 2012 2013 2014 2015
Suburbs
CBD
Pittsburgh

4. Office leasing report
Pittsburgh | Q4 2015
JLL | Pittsburgh | Office Outlook | Q4 2015
This report analyzes all closed office leases > 5,000 s.f.
667,000
14
3,320,000
99
615,000
52,000
59.6
Growing Shrinking Stable
0
470,000
129,000
49,000
19,000
0
Top 10 lease transactions during the quarter
Size Footprint
470,000 Stable
52,000 Growing
20,000 Growing
20,000 Growing
19,000 Growing
15,000 Stable
14,000 Growing
13,000 Growing
12,000 Stable
10,000 Growing
Leasing activity by size
Total Class A s.f. leased
Expansion in market
Average term (mos)
Total Class B s.f. leased
Leasing activity by industry Leasing activity by submarket
Expansion in building
Renewal
Extension (< 36-month term)
Relocation within market
New to market
Direct
600 Cranberry Woods Drive Cranberry / Northern I-79
At a glance
Total s.f. leased QTD
Total transactions QTD
Total s.f. leased YTD
Tenant footprint
9 0 5
Total transactions YTD
Leasing activity by transaction type
Type
600 Grant Street CBD DirectU.S. Steel
Tenant Address Submarket
Direct
4420 Bayard Street Oakland / East End Direct
3011 Smallman Street Fringe
2555 Smallman Street FringeBosch
GAI Consultants
Undisclosed technology company
MG Development
Direct
University of Pittsburgh 4420 Bayard Street Oakland / East End Direct
Direct
Frost Brown Todd 1 PPG Place CBD Direct
Duolingo 5900 Penn Avenue Oakland / East End Direct
Union Real Estate Company 301 Grant Street CBD Sublease
Printing Industries of America 301 Brush Creek Road North
1
-
1
-
12
0
250,000
500,000
100,000+ 75,000-99,999 50,000-74,999 30,000-49,999 5,000-29,999
Total s.f. leased Number of leases
0
600,000
1,200,000
Q1 2015 Q2 2015 Q3 2015 Q4 2015
Historical leasing activity
74%
11%
8%
3%
CBD Fringe
Oakland / East End Cranberry / Northern I-79
North South
West
70%
11%
5%
4%
Manufacturing Engineering
Technology Healthcare
Nonprofit Education
Real estate Law firm
Energy and utilities Consulting

5. Office statistics
Pittsburgh | Q4 2015
Class Inventory (s.f.)
Total net
absorption
(s.f.)
YTD total net
absorption
(s.f.)
YTD total net
absorption (%
of stock)
Direct
vacancy (%)
Total vacancy
(%)
Average
asking rent ($
p.s.f.)
YTD
completions
(s.f.)
Under
construction
(s.f.)
CBD Totals 18,906,378 -114,895 -22,970 -0.1% 10.7% 13.2% $24.82 0 128,000
Fringe Totals 7,381,862 -69,199 -29,975 -0.4% 10.9% 12.4% $23.28 52,000 136,000
Oakland/East End Totals 1,784,112 23,648 16,532 0.9% 10.2% 10.2% $26.29 110,000 209,000
Urban Totals 28,072,352 -160,446 -36,413 -0.1% 10.7% 12.8% $24.50 162,000 473,000
North Totals 3,417,734 -8,195 137,446 4.0% 8.1% 8.8% $18.15 0 122,000
Northern I-79/Cranberry Totals 3,389,782 -24,058 20,273 0.6% 11.7% 16.0% $25.25 58,000 0
East Totals 3,045,135 32,050 24,487 0.8% 31.1% 32.5% $20.16 0 0
South Totals 2,267,259 23,262 69,069 3.0% 11.1% 11.6% $17.47 0 0
Southpointe Totals 2,643,776 -22,521 -59,098 -2.2% 12.9% 14.8% $23.49 207,000 150,000
West Totals 6,912,426 29,621 46,827 0.7% 21.4% 21.8% $21.42 205,000 90,000
Suburban Totals 21,676,112 30,159 239,004 1.1% 17.0% 18.4% $21.19 470,000 362,000
Pittsburgh Totals 49,748,464 -130,287 202,591 0.4% 13.5% 15.3% $22.67 632,000 835,000
CBD A 13,508,456 -82,079 -165,906 -1.2% 7.7% 9.8% $28.05 0 128,000
Fringe A 1,761,174 -75,724 -51,808 -2.9% 4.5% 10.5% $26.15 52,000 136,000
Oakland/East End A 759,999 33,216 23,293 3.1% 18.9% 18.9% $27.86 110,000 209,000
Urban A 16,029,629 -124,587 -194,421 -1.2% 7.9% 10.3% $27.91 162,000 473,000
North A 706,347 3,882 47,270 6.7% 5.2% 6.8% $23.29 0 122,000
Northern I-79/Cranberry A 2,713,250 -25,745 36,980 1.4% 13.1% 16.5% $25.62 58,000 0
East A 1,580,784 30,853 25,676 1.6% 30.0% 30.4% $22.15 0 0
Southpointe A 1,581,423 4,152 -18,459 -1.2% 7.5% 7.5% $25.12 207,000 150,000
West A 3,767,504 91,795 51,621 1.4% 17.7% 18.2% $23.24 205,000 90,000
Suburban A 10,349,308 104,937 143,088 1.4% 16.0% 17.2% $23.58 470,000 362,000
Pittsburgh A 26,378,937 -19,650 -51,333 -0.2% 11.0% 13.0% $25.45 632,000 835,000
CBD B 5,397,922 -32,816 142,936 2.6% 18.2% 22.0% $21.42 0 0
Fringe B 5,620,688 6,525 21,833 0.4% 13.0% 13.0% $22.97 0 0
Oakland/East End B 1,024,113 -9,568 -6,761 -0.7% 3.7% 3.7% $20.28 0 0
Urban B 12,042,723 -35,859 158,008 1.3% 14.5% 16.2% $22.04 0 0
North B 2,711,387 -12,077 90,176 3.3% 8.8% 9.3% $17.35 0 0
Northern I-79/Cranberry B 676,532 1,687 -16,707 -2.5% 6.1% 13.9% $22.06 0 0
East B 1,464,351 1,197 -1,189 -0.1% 32.3% 34.7% $18.17 0 0
South B 2,267,259 23,262 69,069 3.0% 11.1% 11.6% $17.47 0 0
Southpointe B 1,062,353 -26,673 -40,639 -3.8% 20.9% 25.6% $22.61 0 0
West B 3,144,922 -62,174 -4,794 -0.2% 25.8% 26.2% $19.92 0 0
Suburban B 11,326,804 -74,778 95,916 0.8% 18.0% 19.5% $19.25 0 0
Pittsburgh B 23,369,527 -110,637 253,924 1.1% 16.2% 17.8% $20.54 0 0
JLL | Pittsburgh | Office Outlook | Q4 2015

6. Office submarket map
Notable sales transactions | Q4 2015
JLL | Pittsburgh | Office Outlook | Q4 2015
5900 Penn Avenue, Pittsburgh
Sale Price: $2.5 million; $46 p.s.f.
Square feet: 54,000
Buyer: Alphabet City Development
10475 Perry Highway, Wexford
Sale Price: $3.8 million; $103 p.s.f.
Square feet: 37,000
Buyer: Union Real Estate
285 East Waterfront, Homestead
Sale Price: $6.6 million; $50 p.s.f.
Square feet: 131,000
Buyer: Madison Realty Group
131 Broadview Road, New Stanton
Sale Price: $8.7 million; $230 p.s.f.
Square feet: 38,000
Buyer: Boyd Watterson
501 Ronda Court, Irwin
Sale Price: $17.7 million; $253 p.s.f.
Square feet: 70,000
Buyer: VEREIT
These properties
are located
in outlying
Westmoreland
County

7. Employment vs. unemployment rate: Pittsburgh
Industry employment stratification: Pittsburgh
Educational &
Health Services
251,700 21%
Trade, Transportation
& Utilities
224,700 19%
Professional &
Business Services
177,200 15%
Government
119,900 10%
Leisure & Hospitality
119,000 10%
Manufacturing
88,400 7%
Financial Activities
70,000 6%
Mining, Logging &
Construction
69,700 6%
Other Services
50,800 4%
Information
18,500 2%
Job growth/loss by sector (12-month change): Pittsburgh
Office employment trends (12-month change, 000s): Pittsburgh
Job growth (12-month change): United States vs. Pittsburgh
Office employment update
Pittsburgh | Q4 2015
5.0%U.S. unemployment
1.2%U.S. 12-month job growth
4.5%Pittsburgh unemployment
1.0%Pittsburgh 12-month job growth
5.0%Pennsylvania unemployment
0.7%Pennsylvania 12-month job growth
-5.0%
-2.0%
1.0%
4.0%
2010 2011 2012 2013 2014 2015
Pittsburgh United States
2%
4%
6%
8%
10%
1,000,000
1,050,000
1,100,000
1,150,000
1,200,000
2005 2007 2009 2011 2013 2015
Nonfarm employment Unemployment
-1,400
-1,400
-300
300
300
500
500
2,300
5,000
6,200
-3,000 -1,000 1,000 3,000 5,000 7,000
Other Services
Manufacturing
Government
Financial Activities
Information
Mining, Logging & Construction
Professional & Business Services
Trade, Transportation & Utilities
Educational & Health Services
Leisure & Hospitality
-12.0
-6.0
0.0
6.0
12.0
2010 2011 2012 2013 2014 2015
Professional & Business Services
Information
Government
Financial Activities
JLL | Pittsburgh | Office Outlook | Q4 2015

8. For more information, please contact:
Andrew Batson
Manager, Research
+ 1 216 937 4374
Andrew.Batson@am.jll.com
Geoff Greco
Associate
+ 1 412 208 2053
Geoff.Greco@am.jll.com
Jason Stewart
Executive Vice President
+ 1 412 208 1402
Jason.Stewart@am.jll.com
Nick Jacobs
Senior Vice President
+ 1 412 208 1408
Nick.Jacobs@am.jll.com
About JLL
JLL (NYSE: JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased
value by owning, occupying and investing in real estate. A Fortune 500 company with annual fee revenue of $4.7 billion and gross revenue of $5.4
billion, JLL has more than 230 corporate offices, operates in 80 countries and has a global workforce of approximately 58,000. On behalf of its
clients, the firm provides management and real estate outsourcing services for a property portfolio of 3.4 billion square feet, or 316 million square
meters, and completed $118 billion in sales, acquisitions and finance transactions in 2014. Its investment management business, LaSalle Investment
Management, has $56.0 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle
Incorporated. For further information, visit www.jll.com.
This publication is the sole property of Jones Lang LaSalle IP, Inc. and must not be copied, reproduced or transmitted in any form or by any means,
either in whole or in part, without prior written consent of Jones Lang LaSalle IP, Inc.
COPYRIGHT © JONES LANG LASALLE IP, INC. 2016
Bill Leone
Senior Vice President
+ 1 412 208 8243
Bill.Leone@am.jll.com
Jordan Phillippi
Associate
+ 1 412 208 8302
Jordan.Phillippi@am.jll.com
Alexa Jennings
Associate
+ 1 412 208 1409
Alexa.Jennings@am.jll.com
Tobiah Bilski
Research Analyst
+ 1 412 208 1426
Tobiah.Bilski@am.jll.com
Nick Francic
Senior Vice President
+ 1 412 219 2196
Nick.Francic@am.jll.com
Dan Adamski
Managing Director, Brokerage
+ 1 412 212 8090
Dan.Adamski@am.jll.com
JC Pelusi
Market Director
+1 412 208 2040
JC.Pelusi@am.jll.com
Jeff Adams
Vice President
+ 1 412 208 1404
Jeff.Adams@am.jll.com
Rob Baker
Senior Analyst
+ 1 412 208 1415
Rob.Baker@am.jll.com
Jackie Bezek
Associate
+ 1 412 208 1413
Jackie.Bezek@am.jll.com
Joe Goodman
Senior Associate
+ 1 412 208 1410
Joe.Goodman@am.jll.com