The Pittsburgh retail market continued its strong performance during the fourth quarter. While remaining very tight and stable, the vacancy rate had a slight increase from 3.4% to 3.5%. Average rental rates made a 1.3% increase over last quarter to $14.19, however class “A” retail rents range from $25-$55 per square foot. Very limited options are available for new construction, however nine buildings totaling 60,041 square feet were completed while another 328,511 square feet is still under construction.
The Pittsburgh mall market consists of 16 properties having an average rental rate of $20.00, which is up by $0.07 over last quarter. This tight sector of the market has a 2.7% vacancy rate. Ross Park Mall, South Hills Village and The Mall At Robinson are proposing transformative redevelopments of their former Sears boxes.
Over the past year, major tenants, such as Sears, Kmart and Toys R Us have moved out of large blocks of space. These vacancies, among others have caused the overall vacancy rate to increase by 0.1% over the last year. Many of these larger vacant boxes in good locations will be backfilled quickly by other users. Some notable transactions in the fourth quarter include Urban Air’s lease of the former HH Gregg space in Robinson. Fresh Thyme opened their Bridgeville location and are building out a Cranberry store. Wahlburgers restaurant signing a lease for its second Pittsburgh area location at The Mall at Robinson and Sly Fox Brewing’s planned opening at The Highline on the Southside.
Vacancy rates for 2019 should stay very low as there are relatively few new developments in the works. Rental rates are also expected to remain steady going into the coming year. Tenants searching for prime locations will continue to deal with a very competitive market.