COVID-19 delays most projects in the second quarter, but activity begins to return in June.

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.
Q2 2020
Pittsburgh
Office Insight
Across the country, available sublease space is increasing. COVID-19 and the
move towards working remote has had a profound impact on the U.S. office
market. In Pittsburgh, the impact is noticeable, but not as severe. Less than
1.0 percent of the office inventory was made available through subleases in
the second quarter.
Although leasing activity declined in April and May, June showed a return
towards normal levels. As construction restrictions were lifted, several
speculative office projects in Pittsburgh resumed. The Vision on Fifteenth and
Liberty East both began site preparation, while Walnut Capital began
demolition of the existing buildings on the Innovation District site in Oakland.
Outlook
Absorption for the second quarter was negative by more than 500,000 square
feet due to several large blocks of sublease space becoming available, as well
as leasing activity taking a pause. But as construction picks back up and the
region moves towards the next normal, leasing activity is expected to
rebound.
Local investors are still bullish on the Pittsburgh market as Burns and Scalo,
LG Realty, and Walnut Capital continue development on the three largest
speculative office projects in the region. Demand is still evident for the new
construction projects as tenants emphasize a need for higher levels of safety
due to COVID-19. Touchless technologies and upgraded mechanicals are top-
of-mind, and landlords are adjusting accordingly. As the summer continues,
re-entry strategies will be implemented and the economy will regain some
footing. While this year may lag previous years due to uncontrollable
variables, Pittsburgh’s foundation remains strong and a recovery is not far
away.
Fundamentals Forecast
YTD net absorption -308,955 s.f. ▲
Under construction 1,941,708 s.f. ▶
Total vacancy 18.3% ▼
Sublease vacancy 1,354,142 s.f. ▲
Direct asking rent $25.46 p.s.f. ▶
Sublease asking rent $20.81 p.s.f. ▶
Concessions Increasing ▲
-1,000,000
0
1,000,000
2016 2017 2018 2019 YTD
2020
Supply and demand (s.f.) Net absorption
Deliveries
Sublease availability increases as the early impacts of
COVID-19 become apparent
12%
14%
16%
18%
20%
2006 2008 2010 2012 2014 2016 2018 2020
Total vacancy
For more information, contact: Justin Simakas | justin.simakas@am.jll.com
• Leasing slowed in the first two months of the second quarter, but activity
showed signs of return in June. Renewals saw a noticeable uptick.
• Construction resumed in May as regulations eased across the state.
Several speculative office buildings are currently under construction.
• UPMC and EQT among several large sublease availabilities added.
Additional sublease space is likely to be added in the coming quarters.
$10
$15
$20
$25
$30
2006 2008 2010 2012 2014 2016 2018 2020
Average asking rent ($ p.s.f.) Direct
Sublease
The health, policy, economic and financialdisruption stemming from the COVID-19 pandemic continues to
create a fluid and evolving environment for the office market. Although data from Q2 is providing greater
clarity about conditions and the short-term real estate outlook, there remains significant uncertainty
surrounding market dynamics and long-term trajectories and, as a result, we will continue to monitor
fundamentalsclosely as the situation unfolds. 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 5,577 106,081 2.4% 15.0% 21.0% $25.75 0 0
East Totals 3,053,814 -56,532 -35,774 -1.2% 26.1% 26.4% $20.13 0 0
North Totals 3,751,808 -71,273 -109,279 -2.9% 12.9% 13.5% $19.33 0 0
South Totals 2,311,420 -41,091 -14,121 -0.6% 14.1% 14.2% $20.15 0 140,000
Southpointe Totals 2,972,107 -8,184 -11,978 -0.4% 16.7% 19.5% $21.57 0 40,000
West Totals 7,229,171 -131,194 -73,032 -1.0% 17.4% 20.9% $22.00 0 220,000
Suburban Totals 23,695,227 -302,697 -138,103 -0.6% 17.0% 19.7% $21.67 0 400,000
CBD Totals 18,969,985 -244,900 -273,241 -1.4% 16.1% 18.3% $27.87 0 0
Fringe Totals 8,715,084 -32,640 106,542 1.2% 14.9% 18.4% $29.01 214,671 648,737
Oakland / East End Totals 2,334,209 -9,059 -4,153 -0.2% 4.4% 4.4% $35.72 0 892,971
Urban Totals 30,019,278 -286,599 -170,852 -0.6% 14.9% 17.3% $28.54 214,671 1,541,708
Pittsburgh Totals 53,714,505 -589,296 -308,955 -0.6% 15.8% 18.3% $25.46 214,671 1,941,708
Northern I-79 / Cranberry A 3,691,749 -10,935 93,582 2.5% 14.0% 21.2% $26.46 0 0
East A 1,580,784 -52,639 -32,220 -2.0% 31.1% 31.5% $21.46 0 0
North A 809,347 -15,618 -4,321 -0.5% 11.1% 11.3% $23.84 0 0
South A 0 0 0 0.0% 0.0% 0.0% $0.00 0 140,000
Southpointe A 1,909,754 -61,505 -57,893 -3.0% 10.1% 13.9% $22.97 0 40,000
West A 3,943,914 -88,831 -67,566 -1.7% 13.7% 18.6% $24.24 0 220,000
Suburban A 11,935,548 -229,528 -68,418 -0.6% 15.3% 19.9% $23.93 0 400,000
CBD A 13,498,998 -253,980 -315,733 -2.3% 15.4% 18.3% $30.42 0 0
Fringe A 2,880,141 -872 103,394 3.6% 8.0% 12.0% $36.96 214,671 648,737
Oakland / East End A 1,149,696 4,133 6,272 0.5% 6.4% 6.4% $38.35 0 892,971
Urban A 17,528,835 -250,719 -206,067 -1.2% 13.6% 16.5% $32.27 214,671 1,541,708
Pittsburgh A 29,464,383 -480,247 -274,485 -0.9% 14.3% 17.8% $28.97 214,671 1,941,708
Northern I-79 / Cranberry B 685,158 16,512 12,499 1.8% 20.4% 20.4% $22.38 0 0
East B 1,473,030 -3,893 -3,554 -0.2% 20.7% 21.1% $17.84 0 0
North B 2,942,461 -55,655 -104,958 -3.6% 13.4% 14.0% $17.92 0 0
South B 2,311,420 -41,091 -14,121 -0.6% 14.1% 14.2% $20.15 0 0
Southpointe B 1,062,353 53,321 45,915 4.3% 28.7% 29.7% $20.71 0 0
West B 3,285,257 -42,363 -5,466 -0.2% 21.9% 23.7% $20.47 0 0
Suburban B 11,759,679 -73,169 -69,685 -0.6% 18.6% 19.4% $19.75 0 0
CBD B 5,470,987 9,080 42,492 0.8% 18.0% 18.4% $22.85 0 0
Fringe B 5,834,943 -31,768 3,148 0.1% 18.3% 21.6% $24.47 0 0
Oakland / East End B 1,184,513 -13,192 -10,425 -0.9% 2.5% 2.5% $22.71 0 0
Urban B 12,490,443 -35,880 35,215 0.3% 16.7% 18.4% $23.66 0 0
Pittsburgh B 24,250,122 -109,049 -34,470 -0.1% 17.6% 18.9% $21.69 0 0
Q2 2020
Office Statistics
Pittsburgh
For more information, contact: Justin Simakas | justin.simakas@am.jll.com