The Pittsburgh Commercial Real Estate Market

Pittsburgh’s Thriving CRE Market

Pittsburgh is a flourishing hub for commercial real estate (CRE), offering promising investment returns for both investors and tenants. The city’s diverse economy, rich culture, and robust infrastructure support a dynamic real estate market.

Economic and Cultural Landscape

Located at the confluence of the Allegheny and Monongahela Rivers, Pittsburgh, historically known as the Steel City, has evolved into a center for healthcare, education, technology, robotics, and financial services. Key employers include Fortune 500 companies and educational institutions like the University of Pittsburgh, Carnegie Mellon University, and Duquesne University.

Pittsburgh also boasts a vibrant cultural scene with unique food traditions and recreational spaces such as Frick Park and Highland Park, providing ample opportunities for outdoor activities.

Regional Breakdown

• Population: Nearly 2.5 million in the metro area, making it the 26th largest in the U.S.
• Counties: Greater Pittsburgh includes Allegheny, Armstrong, Beaver, Butler, Fayette, and Westmoreland counties.
• Demographics: Median age is 42.8; per capita income is $40,538; median household income is $66,609.
• Education: Over 38% hold a bachelor’s or advanced degree, higher than the state and national averages.

Job Market

Pittsburgh’s job market is diverse, supported by a highly educated workforce. The city’s GDP is $168 billion, with key sectors including AI, climate tech, cybersecurity, energy, life sciences, manufacturing, and robotics. Major employers are the University of Pittsburgh Medical Center, Highmark Health, and PNC Bank. The city is also a top metro area for STEM jobs, thanks to collaborations between Carnegie Mellon University and the University of Pittsburgh.

Industrial Market

Pittsburgh has transformed from a heavy manufacturing base to a hub for high-tech manufacturing and distribution. The industrial market is characterized by low vacancy rates, positive absorption, and rising asking rents.

• Inventory: 148,689,301 SF
• Vacancy Rate: 5.0%
• Absorption: 211,124 SF (Q2 2023)
• Under Construction: 3.8 million SF
• Key Submarkets: Westmoreland County, West, City of Pittsburgh, Northeast

Office Market

The Pittsburgh office market is adjusting with increased sublease options and a slight reduction in vacancy rates. Rental rates are improving despite negative absorption and new construction is down slightly.

• Inventory: 133,968,100 SF
• Vacancy Rate: 14.6%
• Absorption: -1,039,226 SF (Q2 2023)
• Under Construction: 696,600 SF
• Key Submarkets: Central Business District, Greater Downtown, Parkway West

Retail Market

Pittsburgh’s retail market remains strong, supported by thriving office-using sectors. Despite some challenges, retail spending is at record levels, encouraging tenant expansions and limited speculative supply, which keeps rents rising.

• Inventory: 152,033,256 SF
• Vacancy Rate: 5.0%
• Absorption: 125,855 SF (current quarter)
• Under Construction: 233,237 SF
• Key Submarkets: South Pittsburgh, Westmoreland, North Pittsburgh

Multifamily Market

Pittsburgh’s multifamily market is stable, with positive rent growth and a steady occupancy rate. Large-scale medical projects by entities like the University of Pittsburgh Medical Center are expected to further bolster the city’s economic foundation.

• Total Housing Units: 714,244
• Multi-Unit: 225,905
• Vacancy Rate: 4.3%
• Average Asking Rent: $1,261
• Rent Growth: 0.2% (last three months)
• New Construction: 2,095 units

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