Office Snapshot – Q4 2015
Pittsburgh placed 11th in construction job growth in a national survey ranking metros with a population greater than 500,000. Jobs in the region grew 9.9% over the past five years according to the U. S. Bureau of Labor, jumping from 47,500 new jobs in 2010 to more than 52,000 in 2015. Despite uncertainties in the steel and energy markets, regional unemployment remained in line with the national average, while job growth year-over-year from December 2014 to December 2015 increased the employment base by 14,000 new jobs.
Tech firm growth drives leasing in 2015
Perhaps the biggest news of 2015 was the announcement that Facebook leased 20,000 square feet (sf) in the new Schenley Place, a 110,000-sf speculative building that opened in Q3 2015. The space will be occupied by Oculus, a virtual reality company Facebook purchased for $2 billion in 2014. The company sought to be in close proximity to its recruitment pool at Carnegie Mellon University. In addition, Akustica, a local company owned by the German conglomerate Robert Bosch, LLC, is moving to 52,000 sf at 3 Crossings, Building Two from its offices of more than 20,000 sf at the SouthSide Works. Launched as a start-up out of Carnegie Mellon University in 2001, Akustica will join the new offices of Apple and the law firm Burns White at 3 Crossings, which will eventually total more than 375,000 sf of office and flex space as well as 300 apartment units.
The final three months of 2015 marked the biggest quarter in at least 20 years for investment deals as 30 Pittsburgh tech companies received capital of $47.5 million from venture capitalists, angel networks, companies and economic development entities, pushing the year’s total to 85.
Expect the global urbanization trend to push forward in 2016, furthering the demand for creative downtown office space with high-density capacity and easy accessibility. Suburban parks will follow suit, updating furniture and finishes to provide a more urban feel, offering more mixed-use amenities and access to public transportation. The Pittsburgh office market should experience a short-term lift due to improving tenant fundamentals and lower operating costs; but long-term sustainability will depend on a rebound in oil prices and the stabilization of the energy market.View Attachment