Over the past two years, a critical section of Pittsburgh’s expanding tech industry led the country in rent increase, and the region as a whole might be ready for much greater expansion in the future.
That is according to CBRE, which issued its annual Tech-30 report this week, which measures the industry’s influence on office demand and rents.
The East End/Oakland region has the largest office rent increase of any tech submarket in the United States, at 34.6 percent between the second quarter of 2019 and the second quarter of 2021, according to the analysis. It outpaced tech centers like Seattle’s Lake Union, which is home to Amazon, as well as those in Toronto, Phoenix, Philadelphia, Dallas, Denver, and Nashville.
In addition, over the same time period, the East End/Oakland submarket scored in the top five for net absorption, indicating that the space that is becoming available is being occupied.
CBRE managing director Jeffrey Ackerman said, “That suggests that demand is really robust.”
Given that the Oakland and East End area as a whole is punctuated by strong demand and very restricted supply a combination that drives up rents the fact that the local submarket led the country is not unexpected.
The expansion of high-tech firms, notably in software and robotics, is fueling demand, which in turn need additional space.
Mr. Ackerman remarked, “It is a positive indication because it shows a couple of things.” “One is that firms want to be close to talent, and we know that the institutions Carnegie Mellon and the University of Pittsburgh are really driving the talent.”
Based on tech employment growth and momentum, office market performance, and demand recovery, the CBRE research named Pittsburgh as one of the top ten markets set for resiliency and continuing expansion.
Charlotte, Montreal, New York, Phoenix, Raleigh-Durham, Seattle, Silicon Valley, and Toronto are among the others.