- Robotic company leasing activity increased in the third quarter, with over 90,000 square feet signed. Total net absorption decreased due to several large class A blocks becoming available. - UPMC, the largest employer in Pennsylvania, plans to expand their office presence in Pittsburgh after being selected as a provider for the state's new healthcare program. - To attract top talent, companies will need to invest in modern office space that supports human capital development, as older inventory may not meet current needs.

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 -287,186 s.f. ▼
Under construction 474,274 s.f. ▲
Total vacancy 17.5% ▲
Average asking rent (gross) $23.46 p.s.f. ▲
Concessions Stable ▶
Q3 2017
Office Insight
A major driver of leasing activity in the third quarter came from the robotics
and technology industries. Carnegie Mellon University was announced to be
taking around two-thirds of the 95,000-square-foot Mill 19 building, within the
Almono brownfield development site, for their Advanced Robotics for
Manufacturing Institute. In the Fringe, Argo AI signed a lease for 65,000 square
feet at Oxford Realty’s 3Crossings, while Wombat Securities is set to backfill
Argo AI’s 23,850 square feet in the Crane Building. Total net absorption
decreased this quarter due to several large class A blocks becoming available
in the Fringe and CBD in spite of the increased tech sector activity. Even with
these new options, total class A vacancy within the Fringe and CBD
submarkets is still below 15.0 percent.
Outlook
The University of Pittsburgh Medical Center (UPMC), the number one
employer in the state of Pennsylvania by number of employees, was chosen
this year as one of three providers for the state’s new Community
HealthChoices managed care program. UPMC is now looking to expand their
office presence in Pittsburgh. In 2017, The University of Pittsburgh received
over $476.9 million in funding from the National Institutes of Health (NIH) with
annual R&D expenditures at approximately $861.2 million. As healthcare and
technology become synonymous, having two top ranked universities in both
categories like the University of Pittsburgh and Carnegie Mellon University
positions Pittsburgh favorably for growth in the life sciences industry. Tenant
demand from diverse industries will help drive future investment in Pittsburgh
forward, however, it will be the top end office product and creative office
alternatives that will continue to draw the most attention. Older inventory will
need to adjust to accommodate the needs of companies looking to contend
in Pittsburgh’s competitive labor market.
-500,000
0
500,000
1,000,000
2013 2014 2015 2016 YTD
2017
Supply and demand (s.f.) Net absorption
Deliveries
The Pittsburgh Robotics Revolution charges forward,
but keep an eye on healthcare and how it all connects
15.9% 15.9% 15.8%
16.6%
17.5%
2013 2014 2015 2016 2017
Total vacancy
$0.00
$10.00
$20.00
$30.00
2013 2014 2015 2016 2017
Average asking rents ($/s.f.) Class A
Class B
For more information, contact: Tobiah Bilski | tobiah.bilski@am.jll.com
• Robotic company leasing activity picks up steam in the third quarter,
with over 90,000 square feet signed.
• UPMC looks to expand in the CBD not long after being chosen as one of
three providers for Pennsylvania’s new managed care program.
• To thrive in Pittsburgh’s competitive talent market, companies will need
to make strategic real estate decisions that invest in human capital.

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.
Q3 2017
Office Statistics
For more information, contact: Tobiah Bilski | tobiah.bilski@am.jll.com
Class
Inventory
(s.f.)
Total net
absorption
(s.f.)
YTD total net
absorption
(s.f.)
YTD total net
absorption
(%)
Direct
vacancy (%)
Total
vacancy (%)
Average
direct asking
rent ($ p.s.f.)
YTD
completions
(s.f.)
Under
construction
(s.f.)
CBD Totals 18,928,135 -268,932 -362,728 -1.9% 14.0% 15.9% $26.55 0 50,000
Fringe Totals 7,708,658 -144,962 -233,439 -3.0% 14.6% 17.6% $23.42 105,000 187,500
Oakland/East End Totals 2,057,856 65,841 115,278 5.6% 5.5% 5.6% $32.70 64,500 0
Urban Totals 28,694,649 -348,053 -480,889 -1.7% 13.6% 15.6% $25.84 169,500 237,500
North Totals 3,624,734 3,614 -94,712 -2.6% 11.7% 12.3% $21.44 45,000 103,000
Northern I-79/Cranberry Totals 3,442,781 50,950 173,028 5.0% 9.9% 11.5% $24.03 0 133,774
East Totals 3,045,135 41,054 91,934 3.0% 31.1% 33.0% $20.38 0 0
South Totals 2,347,259 -20,815 -51,191 -2.2% 13.3% 15.7% $20.86 80,000 0
Southpointe Totals 2,972,107 5,515 -22,431 -0.8% 19.6% 27.0% $22.51 0 0
West Totals 7,002,426 -41,522 97,075 1.4% 19.0% 20.5% $21.10 0 0
Suburban Totals 22,434,442 38,796 193,703 0.9% 17.6% 19.8% $21.37 125,000 236,774
Pittsburgh Totals 51,129,091 -309,257 -287,186 -0.6% 15.3% 17.5% $23.46 294,500 474,274
CBD A 13,102,880 -260,674 -158,092 -1.2% 11.3% 13.2% $29.61 0 50,000
Fringe A 2,087,970 -153,346 -82,658 -4.0% 3.7% 14.1% $24.89 105,000 0
Oakland/East End A 969,243 7,785 55,012 5.7% 8.0% 8.4% $34.71 64,500 0
Urban A 16,160,093 -406,235 -185,738 -1.1% 10.1% 13.0% $29.68 169,500 50,000
North A 786,347 18,394 -25,104 -3.2% 9.5% 11.6% $24.45 45,000 103,000
Northern I-79/Cranberry A 2,766,249 5,711 57,059 2.1% 9.7% 11.6% $24.50 0 44,700
East A 1,580,784 820 70,538 4.5% 28.4% 29.7% $22.15 0 0
South A 0 0 0 0.0% 0.0% 0.0% $0.00 0 0
Southpointe A 1,909,754 -8,216 -34,214 -1.8% 10.6% 20.9% $23.34 0 0
West A 3,767,504 -41,054 15,969 0.4% 16.7% 19.2% $22.69 0 0
Suburban A 10,810,638 -24,345 84,248 0.8% 15.0% 18.5% $23.21 45,000 147,700
Pittsburgh A 26,970,731 -430,580 -101,490 -0.4% 12.1% 15.2% $26.35 214,500 197,700
CBD B 5,825,255 -8,258 -204,636 -3.5% 20.2% 22.1% $22.25 0 0
Fringe B 5,620,688 8,384 -150,781 -2.7% 18.7% 18.9% $23.32 0 187,500
Oakland/East End B 1,088,613 58,056 60,266 5.5% 3.2% 3.2% $23.61 0 0
Urban B 12,534,556 58,182 -295,151 -2.4% 18.0% 19.0% $22.77 0 187,500
North B 2,838,387 -14,780 -69,608 -2.5% 12.3% 12.4% $19.02 0 0
Northern I-79/Cranberry B 676,532 45,239 115,969 17.1% 11.1% 11.1% $22.28 0 89,074
East B 1,464,351 40,234 21,396 1.5% 33.9% 36.6% $18.79 0 0
South B 2,347,259 -20,815 -51,191 -2.2% 13.3% 15.7% $20.86 80,000 0
Southpointe B 1,062,353 13,731 11,783 1.1% 35.8% 37.8% $22.06 0 0
West B 3,234,922 -468 81,106 2.5% 21.7% 21.9% $19.58 0 0
Suburban B 11,623,804 63,141 109,455 0.9% 19.9% 21.0% $20.08 80,000 89,074
Pittsburgh B 24,158,360 121,323 -185,696 -0.8% 18.9% 20.0% $21.30 80,000 276,574