Partnership applauds Downtown growth
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Downtown Pittsburgh is going through a growth spurt.
The number of people living Downtown has exploded over the past decade, office buildings and hotels are filling up, and billions of dollars in development have taken place or are in the pipeline.
That's the assessment from the Pittsburgh Downtown Partnership, which issued its first State of Downtown Pittsburgh report Thursday during a reception at Point Park University's Village Park.
The report, prepared by the partnership and some of its partners, is designed to serve as a resource for investors, developers, community leaders and others by highlighting development efforts under way in the city's core and on its fringes.
At the reception, Frederick Thiemen, president of The Buhl Foundation, which helped to fund the endeavor, urged those in attendance not only to use the 32-page report as a tool to spur investment but to figure out where there needs to be improvement.
"Now is not the time to sort of sit back and think about how far we've come. Now is the time to start thinking about where we can go from here," he said.
In some ways, the report is simply a compilation of much of the development and growth that has taken place Downtown for much of the past decade, from construction projects to new restaurants to declines in the office vacancy rate.
The report estimated that between the start of 2006 and the end of 2011, more than $4.8 billion in private and public projects had been completed or were in the pipeline in greater Downtown -- the Golden Triangle, the north and south shores, the lower Hill District, Uptown and the Strip District to 26th Street. The amount had jumped to nearly $5 billion by the end of the first quarter this year.
As further evidence of growth, the report states that the number of building permits issued for construction Downtown had increased from 96 in 2009 to 169 last year.
In addition to serving as a resource to investors and developers, the report also can be used as a benchmark for the future, allowing stakeholders to measure progress in a tangible way, said Jeremy Waldrup, the partnership's president and CEO. The partnership plans to update the report annually.
"Our hope is that we can year over year begin to really tell a complete story of the evolution of Downtown," he said. "This is going to be objective. There's no spin on this. This is going to be the real facts."
One of the big areas of growth Downtown has been in the residential market, where there has been a surge in the number of condominium and apartment units constructed over the last half dozen years.
The report found that the number of people living Downtown has increased by nearly 1,000, or by more than 33 percent, since 2000. Add in the other areas of greater Downtown and the number of residents has jumped by 21.3 percent, from 6,425 in 2000 to 7,796 in 2010, according to the report.
Since the 2009 second quarter, 219 apartment units have been completed and another 346 are under construction. The occupancy rate for apartments has averaged 94 percent and hasn't fallen below 90 percent since the second quarter of 2009. Furthermore, the average rental rate per square foot has jumped from $1.40 in 2008 to $1.70 by the end of 2011.
Last year, 76 condos sold in greater Downtown, and the average sales price per square foot was $208, up $4 from 2010.
As apartments and condos fill up, the office market is tightening up.
The report found that the vacancy rate for top-of-the-line Class A space had dropped from 14.2 percent in the first quarter of 2009 to 7.4 percent by the end of 2011. Lease rates also increased from $23.70 in early 2010 to $24.01 by the end of 2011.
And the numerous accolades Pittsburgh has received in recent years has helped to boost tourism. Last year, Greater Downtown hotel occupancy averaged 65.1 percent, up from 64 percent in 2010. For the Pittsburgh market as a whole it measured 68.2 percent, the highest level in its competitive set and much better than the national average of 60 percent.
As for dining, the partnership counted more than 300 restaurants in greater Downtown, including 10 new ones in the resurgent Market Square in 2011 alone.
On the down side, the report noted that tony retailer Saks Fifth Avenue had closed its Downtown store and that Macy's department store had reduced its retail space. It pointed out that a task force formed by Mayor Luke Ravenstahl, a Democrat, is developing a three-year plan to revitalize the retail sector.
A copy of the report is available for download at www.DowntownPittsburgh.com/SODP.
First Published April 27, 2012 12:45 am