Weighted average asking rental rates continued their upward march, reaching unprecedented levels, Class A occupancy ended the year at 91.8% - a position not experienced since the early 1980s - and, Pittsburgh experienced another year of considerable property sales, as reported in Newmark Grubb Knight Frank’s newly released Q4 2012 Pittsburgh office research report. Growth in various industry sectors including energy, technology, healthcare, and professional and financial services, demand - particularly for Class A space - and a dwindling supply of inventory have pushed rents to record-breaking levels. Prime market conditions, and, at the other end of the spectrum financially troubled ownership, fed the appetite of hungry investors.
Key statistics for the Pittsburgh office market during the fourth quarter of 2012 are as follows:
• Overall Vacancy Rate - 14.1%
• Class A Vacancy Rate - 8.2%
• Overall Absorption - 48,775 square feet
• Overall Weighted Average Asking Rental rates - $20.38/sf/yr
• Class A Weighted Average Asking Rental Rates - $23.63/sf/yr
“Our company has gathered, tracked and synthesized commercial real estate statistics for over 30 years and this market is as hot as it’s ever been. The late 1970s/early1980s was the last time the market was stronger than today, with the latter part of the 1990s running a close second,” said Gerard McLaughlin, executive managing director of the Pittsburgh office of Newmark Grubb Knight Frank.
There is currently 1.5 million square feet of space under construction prompted by the growth of existing tenants, with all but 13 percent committed. As tenants vacate their current locations to take occupancy of their newly constructed premises, the market may experience some loosening. However, we anticipate that this space may dissipate rapidly due to continued growth and pent-up demand.
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About Newmark Grubb Knight Frank
Newmark Grubb Knight Frank is one of the world’s leading commercial real estate advisory firms. Together with its affiliates and London-based partner Knight Frank, Newmark Grubb Knight Frank employs more than 11,000 professionals, operating from more than 300 offices in established and emerging property markets on five continents.
Newmark Grubb Knight Frank’s integrated services platform includes leasing advisory, global corporate services, investment sales and capital markets, consulting, program and project management, property and facilities management, and valuation services. A major force in the real estate marketplace, Newmark Grubb Knight Frank serves the local and global property requirements of tenants, landlords, investors and developers worldwide. For further information, visit www.newmarkkf.com.
Newmark Grubb Knight Frank is a part of BGC Partners, Inc. (NASDAQ: BGCP), a leading global brokerage company primarily servicing the wholesale financial and real estate markets. For further information, visit www.bgcpartners.com.