The overall vacancy rate for Pittsburgh decreased from 7.6% to 7.3% in the first quarter.
Average rental rates for all classes and submarkets reached $19.89, while CBD class A finished the quarter at $30.14.
Construction activity was minimal, as there were two completions of 185,290 SF in the first quarter.
Development and growth in the Greater Downtown submarket have continued. With the success of District 15 and its attraction of Facebook, RDC Design + Build is moving forward with the construction of District 15 Beta Version. This will be a 205,000 square feet, nine-story speculative development at the corner of Smallman and 15th Street.
ConnectiveRX signed a lease for 106,000 square feet in the RIDC WestBusiness Park. They will occupy the entire first building being developed by Burns & Scalo at the new Boardwalk development. ConnectiveRX is relocating from Foster Plaza, where it currently occupies 29,000 square feet. Construction should be completed next year.
Wabtec announced it will take 80,000 SF at 30 Isabella Street on the North Shore. The announcement also revealed the company plans to hire nearly 250 employees.
Co-working continues absorb office space in both the Downtown and Greater Downtown Submarkets. Industrious committed to taking 38,000 SF in Liberty Plaza with an expected occupancy date of Q3 2019. This will be their second location in the Central Business District. Serendipity Labs plans to open 25,000 SF of space in April at 3 Crossings Riverfront West in the Strip District.
The Pittsburgh Penguins announced plans to redevelop the former Mellon Arena site in the Lower Hill District. The project plans to include over 200,000 square feet of office space, as well as residential and retail components. Overall, an estimated 3,000 permanent jobs are expected to be created. Construction is slated to begin this fall.
With demand seeming to rise, net absorption should be more positive for Q2 2019. More business are expected to migrate to the Greater Downtown submarket in an effort to attract and retain talent. Tech companies, law firms and financial services companies should continue to be the most active sectors in the region.