Tech industry driving office growth in Oakland and beyond
September 4, 2015 12:00 AM
A view of Oakland from the University of Pittsburgh's Cathedral of Learning, with the landmark's shadow in the foreground and the Pittsburgh skyline in the distance.
By Mark Belko / Pittsburgh Post-Gazette
The region’s burgeoning tech industry is helping to fuel office growth in Pittsburgh, with Oakland leading the way.
A new report by the CBRE real estate company found that Oakland had the 16th highest rent growth of any tech submarket in the United States from the 2013 second quarter to this year’s second quarter.
That, in turn, has helped to pump up the office market as a whole, with Pittsburgh recording the 11th highest rent growth in the country over the same period, according to the report, which analyzed the top 30 tech cities in the U.S. and Canada.
It found that rents in Pittsburgh soared by 12.4 percent over that time.
“The fastest growing office-using sector in the country is tech. We’ve definitely been a big benefactor of that,” said Jeffrey Ackerman, managing director of CBRE’s Pittsburgh office.
Such diversity has helped the city to avoid situations like that in Houston, which is experiencing layoffs because of the downturn in the oil and gas industry, he said.
“We have not seen that because we have a lot of sectors growing like tech,” he said.
While Oakland has been the hub of high tech with its strong education and healthcare sectors, the market is expanding — with the East End, the Strip District, Lawrenceville, Downtown, the North Side and the South Side all seeing an increase in tech users, CBRE said.
Apple, for example, will be moving its offices from the Robert Mehrabian Collaborative Innovation Center at Carnegie Mellon University to a 52,000-square-foot office building that Oxford Development Co. is erecting in the Strip as part of its Three Crossings project. Google left CMU for Bakery Square in Larimer, where it continues to expand.
Mr. Ackerman said “creative partnerships” also are driving growth, specifically mentioning the collaboration between Uber and CMU in creating the Uber Advanced Technologies Center located in the Strip.
“Pittsburgh is increasingly becoming an important city in the tech universe, and that bodes extremely well for our ongoing economic recovery,” he said.
While much of the growth in Pittsburgh has been fueled by existing companies like Google, new entries into the market also are playing a role. Mr. Ackerman said he is working with a couple of firms seeking to locate in Pittsburgh.
Despite the growth, Pittsburgh has yet to crack the top 10 in terms of high tech markets, a list dominated by the likes of the Silicon Valley, San Francisco, Boston, New York, Seattle and Austin.
“I think we will continue as a second 10. I don’t see us breaking into the top 10. Those markets are experiencing such strong growth,” Mr. Ackerman said.
Mark Belko: email@example.com or 412-263-1262.
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