Vacancy increases across the market as new leasing activity slows down in existing product.

1. © 2019 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 209,030 s.f. ▲
Under construction 1,314,561 s.f. ▼
Total vacancy 16.8% ▼
Average asking rent (gross) $24.09 p.s.f. ▲
Concessions Rising ▲
Q2 2019
Office Insight
Total vacancy increased across the market, due in part by SAP Ariba’s move
into a newly constructed build-to-suit on the North Shore, resulting in 109,000
square feet of availability in the CBD. Pittsburgh’s new leasing velocity has
been fairly consistent from quarter-to-quarter and absorption has not
fluctuated heavily in either direction. However, with the new wave of
construction across the market commanding the lion’s share of tenant
demand, leasing activity within existing properties across the region has been
challenged, creating downward pressure on asking rates.
Outlook
Using real estate as a means for maintaining and attracting a high performing
workforce has never been more apparent. The recent migration of Philips
Respironics, Wabtec and Bombardier into the urban core are particularly
worth noting, because these companies elected to relocate from long-
standing owned locations to move closer to the city. From last census in 2010
to present, the greater downtown area, an area that encompasses both the
CBD and Fringe submarkets, has seen a population growth among the 18-39
year old age range of 6.0 percent. The rest of the Pittsburgh metropolitan
statistical area (MSA) has seen a population growth among the same age
group of only 1.9 percent. Although the greater downtown has a significantly
less total population compared to the rest of the MSA, the growing
concentration of the younger population is highly desirable for businesses.
Looking forward, leasing activity is predicted to continue to be strong in the
urban submarkets, but the suburbs are not to be counted out. The suburban
submarkets of Southpointe, Northern I-79 / Cranberry and West are expected
to continue to perform steadily among companies where logistical
convenience is high priority. However, it will be the properties with upgraded
amenities that will have the advantage.
-1,000,000
0
1,000,000
2016 2017 2018 YTD 2019
Supply and demand (s.f.) Net absorption
Deliveries
The office market takes a summer vacation as vacancy
increases after a ten-quarter-low
15.8%
16.6%
17.5%
16.6% 16.8%
2015 2016 2017 2018 YTD 2019
Total vacancy
$0.00
$10.00
$20.00
$30.00
2015 2016 2017 2018 YTD 2019
Average asking rents ($/s.f.) Class A
Class B
For more information, contact: Tobiah Bilski | tobiah.bilski@am.jll.com
• SAP Ariba vacates K&L Gates Center, adding a large-block direct vacancy
to the Class A skyline.
• Competition among landlords in the suburbs results in an amenities
arms-race outside of the urban submarkets.
• Since 2016, over 450,000 square feet of positive net absorption has
occurred across properties that have received significant renovations.

2. © 2019 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 4,286,907 -136,170 -66,240 -1.5% 17.5% 19.9% $24.30 0 90,000
East Totals 3,053,814 21,117 34,293 1.1% 25.6% 25.8% $19.48 0 0
North Totals 3,751,808 7,078 14,055 0.4% 10.6% 10.7% $19.60 0 0
South Totals 2,311,420 -48,101 -32,660 -1.4% 13.2% 13.7% $19.76 0 0
Southpointe Totals 2,972,107 -17,852 57,751 1.9% 16.0% 17.0% $21.79 0 0
West Totals 7,055,933 -115,721 -151,844 -2.2% 19.1% 22.0% $21.65 0 220,000
Suburban Totals 23,431,989 -289,649 -144,645 -0.6% 17.3% 18.8% $21.15 0 310,000
CBD Totals 18,969,985 -64,215 -111,300 -0.6% 14.6% 15.7% $27.37 0 50,000
Fringe Totals 8,510,066 29,857 367,047 4.3% 13.4% 17.3% $25.33 277,000 408,408
Oakland / East End Totals 2,198,256 106,662 97,928 4.5% 3.0% 3.0% $26.64 86,500 546,153
Urban Totals 29,678,307 72,304 353,675 1.2% 13.4% 15.2% $26.71 363,500 1,004,561
Pittsburgh Totals 53,110,296 -217,345 209,030 0.4% 15.1% 16.8% $24.09 363,500 1,314,561
Northern I-79 / Cranberry A 3,601,749 -136,913 -66,983 -1.9% 16.8% 19.6% $25.90 0 90,000
East A 1,580,784 24,544 47,619 3.0% 28.6% 28.9% $20.54 0 0
North A 809,347 7,963 1,901 0.2% 10.3% 10.5% $25.02 0 0
Southpointe A 1,909,754 11,859 55,207 2.9% 7.4% 9.0% $23.51 0 0
West A 3,767,504 43,656 8,903 0.2% 16.1% 19.5% $23.12 0 220,000
Suburban A 11,669,138 -48,891 46,647 0.4% 16.2% 18.5% $23.00 0 310,000
CBD A 13,498,998 -74,975 -151,726 -1.1% 13.0% 14.2% $29.96 0 50,000
Fringe A 2,665,470 45,049 384,389 14.4% 3.3% 8.4% $30.01 277,000 408,408
Oakland / East End A 1,055,743 74,862 65,383 6.2% 4.4% 4.4% $28.12 86,500 504,153
Urban A 17,220,211 44,936 298,046 1.7% 11.0% 12.7% $29.93 363,500 962,561
Pittsburgh A 28,889,349 -3,955 344,693 1.2% 13.1% 15.0% $27.00 363,500 1,272,561
Northern I-79 / Cranberry B 685,158 743 743 0.1% 21.5% 21.5% $21.11 0 0
East B 1,473,030 -3,427 -13,326 -0.9% 22.4% 22.4% $18.05 0 0
North B 2,942,461 -885 12,154 0.4% 10.7% 10.7% $18.14 0 0
South B 2,311,420 -48,101 -32,660 -1.4% 13.2% 13.7% $19.76 0 0
Southpointe B 1,062,353 -29,711 2,544 0.2% 31.3% 31.3% $21.07 0 0
West B 3,288,429 -159,377 -160,747 -4.9% 22.4% 24.9% $20.47 0 0
Suburban B 11,762,851 -240,758 -191,292 -1.6% 18.4% 19.2% $19.80 0 0
CBD B 5,470,987 10,760 40,426 0.7% 18.8% 19.5% $22.35 0 0
Fringe B 5,844,596 -15,192 -17,342 -0.3% 18.0% 21.4% $24.30 0 0
Oakland / East End B 1,142,513 31,800 32,545 2.8% 1.7% 1.7% $23.27 0 42,000
Urban B 12,458,096 27,368 55,629 0.4% 16.8% 18.8% $23.39 0 42,000
Pittsburgh B 24,220,947 -213,390 -135,663 -0.6% 17.6% 19.0% $21.55 0 42,000
Q2 2019
Office Statistics
For more information, contact: Tobiah Bilski | tobiah.bilski@am.jll.com