- Increased leasing activity across most submarkets has dropped the total vacancy rate to 16.7 percent. - The technology sector exhibits the most demand with over 600,000 square feet of tenant requirements active in the market. - Development is focused on urban submarkets, totaling 841,026 square feet under construction, as companies seek higher-quality space downtown and in urban areas.

1. © 2017 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 479,044 s.f. ▲
Under construction 841,026 s.f. ▼
Total vacancy 16.7% ▼
Average asking rent (gross) $24.09 p.s.f. ▲
Concessions Stable ▶
Q2 2018
Office Insight
Larger companies in Pittsburgh have been reorganizing their footprints.
Recent moves such as BNY Mellon out of 525 William Penn Place, the Bank of
America sublease at Nova Place, the AHN sublease at 30 Isabella and the
Westinghouse HQ sublease in Cranberry had their impact on vacancy during
2017. The signs of a leasing rebound began during the first quarter of 2018
and now, total net absorption has reached positive territory once again.
Expansions by ANSYS in Southpointe and JP Morgan Chase in the CBD have
helped decrease vacancy rates, as well as multiple relocations and new leases
across the market. Office demand is not showing signs of slowing, especially
from the growing technology industry. From 2001 through 2010, the average
annual number of technology companies new to the market was 16. However,
over the last 7 years, the annual average nearly doubled to 30. Further
exemplifying the demand from technology, Philips Respironics committed to
200,000 square feet at Bakery Square at the end of the second quarter,
moving their operations from the East closer to the universities.
Outlook
Unemployment in Pittsburgh has dropped to 3.6 percent, which is below the
national average of 3.8 percent and the lowest it has been since 1999.
Although population growth for the metro has been stagnant, Pittsburgh’s
downtown population has seen a growth of over 30.0 percent since 2010, with
the fourth highest concentration of Millennials in the country at 29.7 percent.
Currently, the only office projects under development are in the urban
submarkets, totaling 841,026 square feet. The outlook going forward will be
the continuous flight towards higher quality product in the urban submarkets
from the technology companies in the market. However, suburban office
product that can replicate the natural placemaking that urban areas offer will
have the best chance to capture new tenants.
-1,000,000
0
1,000,000
2014 2015 2016 2017 YTD
2018
Supply and demand (s.f.) Net absorption
Deliveries
Pittsburgh rebounds as corporate rightsizings slow
down and vacancy is absorbed.
15.9% 15.8%
16.6%
17.5%
16.7%
2014 2015 2016 2017 2018
Total vacancy
$0.00
$10.00
$20.00
$30.00
2014 2015 2016 2017 2018
Average asking rents ($/s.f.) Class A
Class B
For more information, contact: Tobiah Bilski | tobiah.bilski@am.jll.com
• Increased leasing activity across most submarkets, dropping total
vacancy rate to 16.7 percent.
• Technology sector exhibits the most demand with over 600,000 square
feet of tenant requirements active in the market.
• The urban submarkets are active with a flurry of development projects.

2. © 2017 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 1,497 -19,003 -0.4% 17.3% 18.1% $24.31 0 0
East Totals 3,046,536 22,922 -2,754 -0.1% 25.9% 27.9% $20.24 0 0
North Totals 3,751,808 67,495 144,560 3.9% 11.0% 11.3% $19.89 103,000 0
South Totals 2,347,259 25,301 36,991 1.6% 13.5% 15.6% $18.84 0 0
Southpointe Totals 2,972,107 119,229 89,330 3.0% 14.8% 19.0% $23.03 0 0
West Totals 7,046,426 83,476 102,995 1.5% 17.4% 19.6% $21.59 0 0
Suburban Totals 23,451,043 319,920 352,119 1.5% 16.7% 18.6% $21.40 103,000 0
CBD Totals 19,122,659 22,754 95,808 0.5% 15.1% 15.8% $26.86 152,674 50,000
Fringe Totals 7,893,297 72,648 44,704 0.6% 11.0% 16.3% $24.25 0 582,073
Oakland / East End Totals 2,057,356 -6,581 -13,587 -0.7% 4.7% 5.2% $29.95 0 208,953
Urban Totals 29,073,312 88,821 126,925 0.4% 13.2% 15.2% $26.38 152,674 841,026
Pittsburgh Totals 52,524,355 408,741 479,044 0.9% 14.8% 16.7% $24.09 255,674 841,026
Northern I-79 / Cranberry A 3,601,749 6,352 -5,653 -0.2% 16.6% 17.6% $25.29 0 0
East A 1,580,784 14,769 -5,195 -0.3% 29.8% 31.1% $21.78 0 0
North A 809,347 46,623 87,712 10.8% 11.8% 12.0% $25.36 103,000 0
Southpointe A 1,909,754 104,479 77,352 4.1% 7.7% 13.3% $23.72 0 0
West A 3,767,504 91,651 109,443 2.9% 15.2% 18.6% $23.54 0 0
Suburban A 11,669,138 263,874 263,659 2.3% 16.1% 18.6% $23.39 103,000 0
CBD A 13,498,998 7,444 74,121 0.5% 12.0% 12.9% $29.80 0 50,000
Fringe A 2,257,970 5,530 -13,866 -0.6% 3.4% 14.8% $26.52 0 414,073
Oakland / East End A 969,243 -1,851 -1,987 -0.2% 3.1% 4.1% $35.97 0 166,953
Urban A 16,726,211 11,123 58,268 0.3% 10.4% 12.7% $29.89 0 631,026
Pittsburgh A 28,395,349 274,997 321,927 1.1% 12.7% 15.1% $27.06 103,000 631,026
Northern I-79 / Cranberry B 685,158 -4,855 -13,350 -1.9% 20.8% 20.8% $22.33 0 0
East B 1,465,752 8,153 2,441 0.2% 21.8% 24.4% $17.89 0 0
North B 2,942,461 20,872 56,848 1.9% 10.8% 11.1% $19.01 0 0
South B 2,347,259 25,301 36,991 1.6% 13.5% 15.6% $18.84 0 0
Southpointe B 1,062,353 14,750 11,978 1.1% 27.7% 29.2% $22.64 0 0
West B 3,278,922 -8,175 -6,448 -0.2% 19.9% 20.7% $19.88 0 0
Suburban B 11,781,905 56,046 88,460 0.8% 17.4% 18.5% $19.86 0 0
CBD B 5,623,661 15,310 21,687 0.4% 22.4% 22.6% $22.41 152,674 0
Fringe B 5,635,327 67,118 58,570 1.0% 14.0% 17.0% $24.08 0 168,000
Oakland / East End B 1,088,113 -4,730 -11,600 -1.1% 6.2% 6.2% $24.58 0 42,000
Urban B 12,347,101 77,698 68,657 0.6% 17.1% 18.6% $23.14 152,674 210,000
Pittsburgh B 24,129,006 133,744 157,117 0.7% 17.2% 18.6% $21.57 152,674 210,000
Q2 2018
Office Statistics
For more information, contact: Tobiah Bilski | tobiah.bilski@am.jll.com