IRR-Pittsburgh Mid-Year Viewpoint 2015 Local Market Report - Office
The Pittsburgh office market remains strong with an overall occupancy rate of approximately 92%. Over the past year, overall market occupancy levels have remained relatively stable while class A rental rates continue to climb steadily. Class B rental rates have generally remained stable as certain submarkets, such as the Parkway West and the CBD, continue to experience significant Class B vacancy issues.
New speculative office development has generally been sporadic, focusing primarily in the strongest markets such as Southpointe, the East End, the Strip District, and the Parkway West. In the CBD, new office construction has been limited to owner-occupant and government subsidized mixed use development.
In the coming months, the class A markets are projected to remain strong with positive space absorption and moderate levels of rental rate growth, while the class B market in most locations will likely continue to remain flat in terms of space absorption and rental rate growth. Capitalization rates, which have remained relatively flat over the past year, are expected to continue to remain flat, but could increase if interest rates start to rise, as expected later this year.
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IRR Mid-Year Viewpoint 2015 comprises a National Overview report and 300+ two-page Local Market Reports for all key property types as well as additional resources, including metrics methodology, graphs, and tables; these free reports may be downloaded from IRR’s site here.