The year started off strong, but uncertainty presents itself as the COVID-19 outbreak impacts the economy.

1. © 2020 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.
Fundamentals Forecast
YTD net absorption 285,912 s.f. ▶
Under construction 1,916,708 s.f. ▼
Total vacancy 17.4% ▲
Average asking rent (gross) $24.64 p.s.f. ▶
Concessions Rising ▲
Q1 2020
Office Insight
The new decade started strong with multiple, sizable new construction leases
coming from tech companies reported in the media. One example being 3M |
M*Modal’s 53,000 square feet lease at ICON Development’s 23-acre land
assemblage and $100M redevelopment in North Point Breeze. In 2019, 3M
acquired M*Modal and their conversational AI platform for $1.0 billion. Since
the acquisition, 3M searched the area for a consolidated office solution for
M*Modal’s Squirrel Hill dual offices. The decision to lease space in new
construction only further amplifies the current flight to quality and quick
absorption of new construction trend. Not only has new leasing been strong
in the first quarter, but the total sales volume in the Pittsburgh region is
already off to a good start following the sale of the Westinghouse headquarter
campus in Cranberry Township. The Westinghouse campus was also able to
attract over 70,000 square feet of leasing activity in the first quarter, which
helped the Northern I-79/Cranberry submarket become the highest
performing suburban submarket of the new year.
Outlook
In the near-term, Pittsburgh’s office leasing and sales activity is expected to
slow as many employees adjust to working remote in the attempt to slow the
outbreak of COVID-19. The forced work-from-home shift may have lasting
affect on workplace efficiency strategies, causing further contraction in
footprints across the market. Co-working, which accounts for approximately
525,000 square feet of office space in the region, may also experience a
reduction in membership, causing possible affects to absorption for 2020. As
businesses adapt to working remotely, market activity will be irregular over
the next several quarters, dependent on government regulation and
restrictions. Due to the halt in construction projects in the state, delivery of the
1.9 million square feet of projects under development will be delayed.
-1,000,000
0
1,000,000
2017 2018 2019 YTD 2020
Supply and demand (s.f.) Net absorption
Deliveries
Pittsburgh’s office market starts the year with half of the
total sales volume of 2019
17.5%
16.6%
17.6%
17.4%
2017 2018 2019 YTD 2020
Total vacancy
$0.00
$10.00
$20.00
$30.00
2016 2017 2018 2019 YTD 2020
Average asking rents ($/s.f.) Class A
Class B
For more information, contact: Tobiah Bilski | tobiah.bilski@am.jll.com
• 3M signs 53,000-square-foot lease in the hot East End submarket to serve
as the new home for 3M | M*Modal.
• Westinghouse headquarter campus in Cranberry Township garners both
investor and occupier interest.
• COVID-19 outbreak injects uncertainty into otherwise strong US and
Pittsburgh economies.
Given the health, policy, economic and financial disruption unfolding from the COVID-19
outbreak, resulting real estate market shifts will not be fully reflected in Q1 2020 statistical
indicators. It is too early to provide a quantitative assessment or forecast of the ultimate market
impact of COVID-19. Our analysis focusses on Q1 market activity and how the market is
positioned moving forward. We will be continually monitoring market movements as the
situation evolves. Please feel free to contact us if we can assist.

2. © 2020 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.
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
direct asking
rent ($ p.s.f.)
YTD
Completions
(s.f.)
Under
Development
(s.f.)
Northern I-79 / Cranberry Totals 4,376,907 100,504 100,504 2.3% 15.3% 21.3% $25.76 0 0
East Totals 3,053,814 20,758 20,758 0.7% 24.1% 24.6% $20.02 0 0
North Totals 3,751,808 -38,006 -38,006 -1.0% 11.5% 11.6% $19.75 0 0
South Totals 2,311,420 26,970 26,970 1.2% 12.3% 12.5% $19.52 0 140,000
Southpointe Totals 2,972,107 -3,794 -3,794 -0.1% 17.3% 19.3% $21.51 0 40,000
West Totals 7,227,933 58,162 58,162 0.8% 17.7% 20.1% $21.87 0 220,000
Suburban Totals 23,693,989 164,594 164,594 0.7% 16.5% 18.7% $21.66 0 400,000
CBD Totals 18,969,985 -28,341 -28,341 -0.1% 16.2% 17.0% $27.95 0 0
Fringe Totals 8,715,084 144,753 144,753 1.7% 14.9% 18.2% $25.53 214,671 623,737
Oakland / East End Totals 2,334,209 4,906 4,906 0.2% 3.9% 4.0% $25.23 0 892,971
Urban Totals 30,019,278 121,318 121,318 0.4% 14.9% 16.4% $27.21 214,671 1,516,708
Pittsburgh Totals 53,713,267 285,912 285,912 0.5% 15.6% 17.4% $24.64 214,671 1,916,708
Northern I-79 / Cranberry A 3,691,749 104,517 104,517 2.8% 14.1% 21.0% $26.44 0 0
East A 1,580,784 20,419 20,419 1.3% 27.4% 28.1% $21.36 0 0
North A 809,347 11,297 11,297 1.4% 9.2% 9.4% $25.23 0 0
South A 0 0 0 0.0% 0.0% 0.0% $0.00 0 140,000
Southpointe A 1,909,754 3,612 3,612 0.2% 9.4% 10.7% $23.30 0 40,000
West A 3,939,504 21,265 21,265 0.5% 13.8% 16.5% $24.28 0 220,000
Suburban A 11,931,138 161,110 161,110 1.4% 14.7% 18.0% $24.14 0 400,000
CBD A 13,498,998 -61,753 -61,753 -0.5% 15.4% 16.4% $30.41 0 0
Fringe A 2,880,141 109,837 109,837 3.8% 8.2% 12.6% $31.38 214,671 623,737
Oakland / East End A 1,149,696 2,139 2,139 0.2% 6.4% 6.7% $25.46 0 892,971
Urban A 17,528,835 50,223 50,223 0.3% 13.6% 15.1% $30.45 214,671 1,516,708
Pittsburgh A 29,459,973 211,333 211,333 0.7% 14.0% 16.3% $27.77 214,671 1,916,708
Northern I-79 / Cranberry B 685,158 -4,013 -4,013 -0.6% 21.8% 22.9% $22.20 0 0
East B 1,473,030 339 339 0.0% 20.5% 20.8% $18.08 0 0
North B 2,942,461 -49,303 -49,303 -1.7% 12.2% 12.2% $18.62 0 0
South B 2,311,420 26,970 26,970 1.2% 12.3% 12.5% $19.52 0 0
Southpointe B 1,062,353 -7,406 -7,406 -0.7% 31.5% 34.7% $20.55 0 0
West B 3,288,429 36,897 36,897 1.1% 22.4% 24.3% $20.16 0 0
Suburban B 11,762,851 3,484 3,484 0.0% 18.4% 19.3% $19.67 0 0
CBD B 5,470,987 33,412 33,412 0.6% 18.3% 18.6% $23.05 0 0
Fringe B 5,834,943 34,916 34,916 0.6% 18.1% 21.0% $24.31 0 0
Oakland / East End B 1,184,513 2,767 2,767 0.2% 1.4% 1.4% $24.86 0 0
Urban B 12,490,443 71,095 71,095 0.6% 16.6% 18.1% $23.70 0 0
Pittsburgh B 24,253,294 74,579 74,579 0.3% 17.5% 18.7% $21.69 0 0
Q1 2020
Office Statistics
For more information, contact: Tobiah Bilski | tobiah.bilski@am.jll.com