Pittsburgh, located in Southwestern Pennsylvania at the confluence of the Allegheny, Monongahela and Ohio Rivers, consistently ranks among the top places to live, work and visit in the United States. Its economy has avoided the wave of severe economic turmoil due to the diversity of its leading industries. Once a world hub for iron and steel, Pittsburgh has shifted its economy to technology, healthcare, nuclear engineering, finance, education and energy. Pittsburgh’s outlook could not be any clearer. Stable real estate markets and a low unemployment have propelled the region into one of the fastest-growing economies in the United States.
The top employers come from the healthcare and education sectors. University of Pittsburgh Medical Center (UPMC), the second-largest employer in the state of Pennsylvania, employs more than 55,000 people locally. In addition to the University of Pittsburgh, Duquesne University and Carnegie Mellon University, Pittsburgh houses 26 post-secondary institutions. The success of these sectors has sparked increased development and investment within Pittsburgh’s city limits.
Throughout its rich history, Pittsburgh has been a center for innovation between the formation of the first robotics institute, the creation of the polio vaccine, and the launch of the first commercial radio station. Today, the city is recognized as an international leader in the green-building movement, with the world’s first green convention center among its numerous LEED-rated structures.
Local residents and businesses are enjoying a renaissance period. With tremendous corporate and community support, expansion in all sectors, and a vibrant culture, Pittsburgh is poised for continued growth and excellence.
New development is occurring in downtown and suburban markets. The Southwestern Pennsylvania region is becoming a hub for natural-gas and oil extraction in the Marcellus Shale formation, creating more demand for office space. PNC has commenced construction on a 33-storey tower at PNC Plaza, which will be completed in 2015. The Pittsburgh Penguins of the National Hockey League are also developing a 28-acre site for a mixed-use project adjacent to the new Consol Energy Center.
The retail market continues to gain momentum in the city as well as in the suburbs. The activity in the downtown area will have a positive impact and improve occupancy levels and increase rents for many years.
The Cranberry corridor in the city’s north and the development potential near the Pittsburgh International Airport are examples of the continued interest and growth in the suburban markets.
Pittsburgh’s industrial real estate sector continues to tighten as the availability of class A product becomes increasingly limited. The sector as a whole has always been stable, maintaining a vacancy rate below 10% for more than a decade. Pittsburgh is an attractive location for warehouse and distribution companies. More than half of the U.S. population can be reached within 500 miles. The need for growth is evident beyond the statistics as rising local businesses and companies new to the market find difficulty identifying available existing product to meet their requirements. Pittsburgh ranks as the second-busiest inland port in North America. The city’s rivers were once crowded with barges carrying iron ore and coal, but now they transport aggregate and frac sand to support the fiercely growing natural-gas industry. The Marcellus and related shale formations have driven Texas, Louisiana and Oklahoma-based businesses to the region. The economic impact of hydraulic fracturing is substantial, and the energy company influx is not expected to peak for decades.
Over the past decade, Pittsburgh has seen ownership of its skyline change from primarily locally-based companies to large national firms with multi-market holdings. Pittsburgh’s reputation for economic stability and innovation has captured the attention of international investors. Downtown and suburban office developments have received much attention due to increased trading activity in recent years while the multi-family sector has quietly become one of the top investment markets in the country. The apartment vacancy rate in Pittsburgh is among the lowest in the U.S. Pittsburgh will remain an active investment market due to its favorable statistics and visible economic growth.