- Robotics and automation continue to drive office activity in Pittsburgh, especially in the Fringe submarket near Carnegie Mellon University. - Demand from technology companies is fueling growth in the Fringe and urban submarkets, while vacancy rates are higher in suburban areas. - Overall vacancy in Pittsburgh is at 16.3% as of Q1 2017, a slight decrease, while average asking rents have increased. Investment continues to flow into the city.

1. © 2017 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.
Q1 2017
Pittsburgh
Office Insight
A more specialized form of technology is emerging quickly in Pittsburgh:
robotics. Carnegie Mellon University (CMU), located in the Oakland / East End
submarket, has been home to the Robotics Institute since 1979. However, the
latest flurry of activity from Uber, Amazon, and the recently funded Argo
(Ford), continue to make the point that being close to the robotics research
coming from CMU is key. Being one of the top 10 universities in the world for
technology, and ranking number one in the nation for computer science
graduate studies, CMU has helped build technology company office demand
in the region. The technology job sector in Pittsburgh is now the fastest
growing industry at 4.3 percent year-over-year from 2015, outpacing the
United States at just 3.4 percent. The growth in technology jobs has attracted
a younger demographic as well. The ten year period from 2005 to 2015 in
Pittsburgh showed an increase in the population of 25 to 34 year olds at 20.2
percent, reversing the previously lamented “brain drain.”
Law firms and financial institutions occupy the majority of space in the CBD,
but the Fringe has quickly transformed into the technology submarket, with
over 240,000 square feet of office space taken by technology firms in 2016.
Outlook
Leasing activity is primarily focused on Class A space and the need for quality
space is driving redevelopment. In the urban submarkets, as office buildings
trade, aggressive underwriting will continue to increase rental rates. The
increasing rental rates were slightly outpaced by overall vacancy rates at the
end of 2016, whereas overall vacancy hit a six year high at 16.6 percent.
Despite the higher vacancy rate, outside investment continues to enter
Pittsburgh in 2017 with the first quarter sale of 11 Stanwix for $81.0 million.
Fundamentals Forecast
YTD net absorption 156,629 s.f. ▲
Under construction 399,574 s.f. ▲
Total vacancy 16.3% ▼
Average asking rent (gross) $23.12 p.s.f. ▲
Concessions Stable ▶
0
500,000
1,000,000
2013 2014 2015 2016 YTD
2017
Supply and demand (s.f.) Net absorption
Deliveries
Investment continues to flow into Pittsburgh while
office demand from tech companies grows
15.9% 15.9% 15.8%
16.6%
16.3%
2013 2014 2015 2016 2017
Total vacancy
$0.00
$10.00
$20.00
$30.00
2013 2014 2015 2016 2017
Average asking rents ($/s.f.) Class A
Class B
For more information, contact: Tobiah Bilski | tobiah.bilski@am.jll.com
• Automation and robotics continue to drive office activity forward,
especially in the Fringe submarket.
• With limited large block quality space in the CBD submarket, the Fringe is
experiencing a surge of activity and attention.
• Urban submarkets continue to take the lion’s share of tenant activity,
and the suburban submarkets, like the East, at 34.2 percent vacancy, are
taking a hit.

2. © 2017 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.
Q1 2017
Pittsburgh
Office Statistics
For more information, contact: Tobiah Bilski | tobiah.bilski@am.jll.com
Class Inventory (s.f.)
Total net
absorption
(s.f.)
YTD total net
absorption
(s.f.)
YTD total net
absorption (%)
Direct vacancy
(%)
Total vacancy
(%)
Average direct
asking rent ($
p.s.f.)
YTD
completions
(s.f.)
Under
construction
(s.f.)
CBD Totals 18,928,135 -116,857 -116,857 -0.6% 12.9% 14.6% $26.03 0 0
Fringe Totals 7,526,595 151,822 151,822 2.0% 10.7% 11.5% $23.26 105,000 37,500
Oakland/East End Totals 1,993,356 61,037 61,037 3.1% 5.1% 5.3% $33.16 0 0
Urban Totals 28,448,086 96,002 96,002 0.3% 11.8% 13.1% $25.52 105,000 37,500
North Totals 3,417,734 -58,539 -58,539 -1.7% 10.7% 11.3% $21.35 0 193,000
Northern I-79/Cranberry Totals 3,442,781 39,042 39,042 1.1% 10.6% 15.4% $23.97 0 89,074
East Totals 3,045,135 55,960 55,960 1.8% 32.4% 34.2% $20.22 0 0
South Totals 2,267,259 -45,344 -45,344 -2.0% 10.7% 12.4% $20.41 0 80,000
Southpointe Totals 2,822,107 34,480 34,480 1.2% 22.5% 26.4% $22.75 0 0
West Totals 6,912,426 35,028 35,028 0.5% 20.0% 21.3% $21.05 0 0
Suburban Totals 21,907,442 60,627 60,627 0.3% 18.1% 20.3% $21.30 0 362,074
Pittsburgh Totals 50,355,528 156,629 156,629 0.3% 14.5% 16.3% $23.12 105,000 399,574
CBD A 13,102,880 -33,301 -33,301 -0.3% 9.9% 12.2% $29.22 0 0
Fringe A 1,905,907 -17,682 -17,682 -0.9% 4.0% 6.5% $24.07 105,000 0
Oakland/East End A 969,243 47,227 47,227 4.9% 8.8% 9.2% $34.97 0 0
Urban A 15,978,030 -3,756 -3,756 0.0% 9.1% 11.3% $29.25 105,000 0
North A 706,347 -32,557 -32,557 -4.6% 11.6% 14.0% $24.61 0 193,000
Northern I-79/Cranberry A 2,766,249 -11,888 -11,888 -0.4% 10.0% 14.1% $24.66 0 0
East A 1,580,784 68,911 68,911 4.4% 28.5% 29.8% $22.42 0 0
South A 0 0 0 0.0% 0.0% 0.0% $0.00 0 80,000
Southpointe A 1,759,754 19,045 19,045 1.1% 15.0% 19.7% $23.64 0 0
West A 3,767,504 -6,443 -6,443 -0.2% 17.4% 19.8% $22.78 0 0
Suburban A 10,580,638 37,068 37,068 0.4% 16.3% 19.4% $23.40 0 273,000
Pittsburgh A 26,558,668 33,312 33,312 0.1% 12.0% 14.5% $25.98 105,000 273,000
CBD B 5,825,255 -83,556 -83,556 -1.4% 19.5% 20.1% $22.05 0 0
Fringe B 5,620,688 169,504 169,504 3.0% 13.0% 13.2% $23.17 0 37,500
Oakland/East End B 1,024,113 13,810 13,810 1.3% 1.6% 1.6% $23.86 0 0
Urban B 12,470,056 99,758 99,758 0.8% 15.1% 15.4% $22.53 0 37,500
North B 2,711,387 -25,982 -25,982 -1.0% 10.5% 10.6% $18.21 0 0
Northern I-79/Cranberry B 676,532 50,930 50,930 7.5% 12.9% 20.7% $21.73 0 89,074
East B 1,464,351 -12,951 -12,951 -0.9% 36.6% 38.9% $18.36 0 0
South B 2,267,259 -45,344 -45,344 -2.0% 10.7% 12.4% $20.41 0 0
Southpointe B 1,062,353 15,435 15,435 1.5% 35.1% 37.5% $22.12 0 0
West B 3,144,922 41,471 41,471 1.3% 23.0% 23.1% $19.43 0 0
Suburban B 11,326,804 23,559 23,559 0.2% 19.8% 21.2% $19.72 0 89,074
Pittsburgh B 23,796,860 123,317 123,317 0.5% 17.4% 18.2% $20.91 0 126,574