Pittsburgh becoming technology hotspot

Pittsburgh is one of the nation's up-and-coming tech hubs.

From a city based on the production of steel to an emerging leader in the technology field, Pittsburgh is a hotspot for commercial real estate.

The co-founder of East Liberty, Rabih Helou​, told the Pittsburgh Post-Gazette that many technology startups are selecting Pittsburgh as a destination to establish their business.

"On the West Coast, the last 10 years the cost of real estate – whether it's commercial or otherwise – has exploded, while Pittsburgh stayed the same," Helou said. "Now the equation changes, especially when you consider what happened in real estate the past 10 years during the Great Recession has crippled hiring at major corporations. Tech talent thinks, 'Do I want to go to work for a major corporation or do I go to start my own thing?'"

According to a recent report from the Los Angeles-based real estate services and investment firm CBRE Group, the Pittsburgh area ranks 23rd in the country as a tech talent market. It also scored highly in the knowledge pipeline category, notching 10th, and came in first in the office market bracket.

Pittsburgh's office market rates have exceeded national averages throughout 2013, according to a study by Seattle-based Colliers International.

"The reason Pittsburgh has a high ranking for the five-year office market rental outlook is because the supply of high-quality spaces is very tight and demand exceeds the pace of new spaces coming onto the market," Jeffrey Ackerman, managing director at CBRE's Pittsburgh office, told the Pittsburgh Post-Gazette.

Ackerman noted the efforts to build up-and-coming neighborhoods into popular tech areas in tandem with the abundance of talent coming from the area's universities – Duquesne, Pitt and Carnegie Melon – should attract developers in the next few years.

The Steel City's overall market rates
The study from Colliers International states that average office rental rates in Pittsburgh were $4 cheaper than the national average in the second quarter of 2013. The rates were $18.63 per square foot, which is up 15 percent from the first quarter. The national average is $23.23 per square foot.

The vacancy rates are also better in Pittsburgh than the national average. Vacancy rates dropped to 8 percent in the second quarter of 2013 compared to 17 percent across the nation.

Construction in the city is also up, with 358,000 square feet of space delivered in the second quarter.

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