Downtown Pittsburgh – A Landlord Market As Occupancy Rates And Rents Soar

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Downtown Pittsburgh skyscrapers are filling up fast.  Occupancy rate in many buildings is in the 90 percent range.  This is a drastic change from a few years ago when many buildings had high vacancy rates.  Owners were making deals with tenants to keep them.

Now landlords are naming their price and tenants are willing to pay the asking rates.  Several large buildings have come off the market after investors decided they could not reinvest anywhere else and get a better return than in downtown Pittsburgh.  Pittsburgh, New York and San Francisco had the largest increases in average office rents in the fourth quarter of 2010.

The Gateway Center Complex (four buildings) was recently taken off the market as well as the 32-story EQT Tower.  The owners decided retaining ownership was in their best interest given Pittsburgh’s bullish market.

Eleven Stanwix Street has gone from a 50 percent to a 94 percent occupancy rate.  The building is now up for sale but the owner is still receiving calls to lease space.  The Oliver Building and the Regional Enterprise Tower are also for sale.  The USX Tower (Pittsburgh’s tallest building at 64-stories) is in the process of being sold and has reached a tentative agreement with the new group of investors.  The purchase price is around $250 million according to the Wall Street Journal.

As occupancy rates climb and office space becomes scare, tenants are willing to pay higher rates to be in a full building (which is characterized as being in the upper 80 to lower 90 percentage leased category).

Could Granite Run Mall Be The Next Entry On DeadMalls.com?

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Granite Run Mall, just outside of Media, Delaware County is slowly dying.  Empty stores and few shoppers is not a good sign of things to come.  Simon Property Group Inc. and Macerich Co. are the owners of Granite Run Mall.

Granite Run Mall may be up for a short sale or a take over by its lender because of a very late $115 million mortgage payment.  Simon appears to have lost interest in dumping more money into the mall.  Malls across America are struggling as consumers have turned to strip malls, outlet malls and big box retail complexes.  If Granite Run fails, it will be the largest mall to be sold or forfeited to a lender since the current recession started. 

Granite Run is a two-level, super-regional mall with 1,033,000 square feet of retail space.  The three anchor stores are JC Penney, Sears and Boscov’s.  Kohl’s is located outside the mall, along the perimeter, to make a fourth large department store at the mall complex.  The mall opened in 1974 and was remodeled in 1984 and 1994.