Not too long ago, the Parkway West office market had more vacancies than the Bates Motel. Now it's getting tough to find any room.
The latest evidence of the turnaround came Wednesday when Moon-based developer DiCicco Development Inc. announced that it will build a five-story, 130,000-square-foot office building off the Montour Run interchange of the Parkway West.
DiCicco is starting the building, named Westpointe Corporate Center Four, on speculation -- in other words, without a tenant in hand -- but is confident that the risk is worth it.
"It's just that the market is extremely tight. When you do a search for space in the Parkway West, there's one building with 70,000 square feet, there's one with 60,000 and there's nothing else," said Jeremy Kronman, the CBRE executive vice president who is marketing the space.
"I think [the market] will reward the developer who puts up the first building."
Overall, the office vacancy rate in the corridor dropped from 18 percent at the end of 2011 to 14.3 percent at the end of last year. Mr. Kronman said vacancy rates now are hovering in the 5 percent range, particularly for top-quality Class A space.
The developer already has started site work and ordered steel for the building, which will be erected in Moon next to a Hilton Homewood Suites that DiCicco is building in conjunction with Concord Hospitality.
DiCicco has a long history in the corridor. It built on speculation Westpointe Corporate Center One, which was leased to Nova Chemicals, and Parkwest Corporate Center, which was leased to Lanxess Corp. for its U.S. headquarters.
Other DiCicco tenants include Chevron and RTI International Metals.
Mr. Kronman said the demand in the Parkway West corridor is being driven by energy, financial services and general business companies. The corridor is the region's largest, representing about half of all suburban office space in the market.
DiCicco isn???t the only one building there.
Elmhurst Group and the Erect Fund are partnering to build a single-story, 45,000- to 50,000-square-foot building in Moon at the former Greater Pittsburgh International Airport terminal, now known as Airside Business Park.
In addition, Continental Real Estate Cos. and Chaska Property Advisors of Cranberry plan to break ground in May on their third office building in less than a year in Moon adjacent to Cherrington business park. The first two buildings, now under construction, will be leased to ServiceLink, a mortgage services company.
Mark Belko: email@example.com or 412-263-1262.