While demand slowed in Q4 2023, there are numerous signs that demand has increased through Q2 2024. Demand has slowed due to many factors that would include the continuation of high interest rates, a slow down in the trend of consumer spending, and consumers choosing to spend more of their disposable income on experiences such as vacations instead of purchasing “hard goods”.
Construction costs continue to remain high, while a positive for sellers of existing buildings, this is driving many potential tenants and developers to seek other alternatives. Construction activity slowed at a much faster pace in Pittsburgh compared to national trends. Space underway is at a historic low of 170,000 SF, representing 0.1% of inventory, compared to the National Index of 1.8%. Construction activity will remain muted over the near term, as no new projects broke ground over the past six months.*
The majority of top leases signed year to date range from 20,000 SF to 60,000 SF. One of the largest deals signed in recent months comes from PCC Lubricants, which leased 87,000 SF at 150 Bonnie Drive in Butler. In June, Curtiss-Wright Corporation leased 85,400 SF at 616 Hite Road in Harwick in the Northeast Pittsburgh submarket. Aramark leased 40,000 SF at 193 Thornhill Road in the North Pittsburgh submarket.*
