How and why Pittsburgh tech firms are fueling the office market
There’s more than one reason why tech companies are clamoring to find space in the City of Bridges
What is one of the key drivers in the Pittsburgh office market?
The answer is easy: the city’s thriving tech industry.
In fact, 21% of Pittsburgh’s office leases in the first half of 2022 can be attributed to tech companies, and 29% of the total number of square feet transacted over the past five years has been from tech companies.
While many companies are executing their return-to-office strategies, tech moguls like Google and Duolingo have been ahead of the game, securing coveted Trophy and Class A spaces to compete for top talent in this ever-growing industry.
Here’s why these companies have chosen Pittsburgh and how they’re navigating the market to meet their growth goals.
Why tech companies are choosing Pittsburgh
There’s more than one reason why tech companies are clamoring to find space in the City of Bridges, including:
Affordability: Both the cost of living and the cost of office spaces in Pittsburgh is less than in coastal cities like San Francisco, San Jose, New York City and Boston. According to JLL’s latest research, the direct asking rent for office spaces in Pittsburgh is $26.61 per square foot—$55.07 less per square foot of office space in New York City.
A thriving tech community: Pittsburgh is home to a variety of tech-related companies and industries, many of which focus on autonomous technology and robotics. Companies in those sectors have attracted $5.5 billion since 2019, leading others to flock to or expand in this tech mecca. For example, national robot manufacturer Agility Robotics recently expanded its presence in Pittsburgh by signing a lease for 13,500 square feet at the Chocolate Factory in Robotics Row.
Top talent: Tech companies are also considering Pittsburgh for its robust talent pool. With Carnegie Mellon University and the University of Pittsburgh nestled in the heart of downtown, top talent is right around the corner for companies aiming to expand their footprints. Plus, these universities are known for their technology programs, with Carnegie Mellon, in particular, cited as having two of the top information technology program and robotics programs in the U.S.
What Pittsburgh tech companies are doing with their spaces
In this tenant-favorable market, tech companies are capitalizing on ways to attract and retain top talent—from convenient locations and access to unique and attractive amenities. Many tenants signing long-term leases are reaping the benefits, such as more than $90 per square foot of tenant improvement allowances and more than 12 months of free rent. In turn, they’re using those savings to invest in their office spaces.
Companies are also taking advantage of lower rental rates to upgrade to Trophy or Class A spaces. In fact, since 2018, new leasing in Pittsburgh has gravitated 70% more toward buildings built or renovated within 10 years of the lease being signed, with much of the tech-focused activity taking place in emerging neighborhoods like Robotics Row, Lawrenceville and Oakland/East End.
Take autonomous vehicle manufacturer Aurora Innovation, for example.
The firm announced plans to move its headquarters to LEED-certified 1600 Smallman in September 2020—after the onset of the COVID-19 pandemic—and opened the doors of the new location in April 2022. The new, 100,000-square-foot space features floor-to-ceiling windows for abundant natural light, a welcoming reception area, employee lounges and a cafeteria—all of which its employees can use and enjoy. The new headquarters is also located in the popular Strip District, home to Robotics Row and a variety of desirable retail, shopping and dining options that are all within walking distance.
Other examples of tech companies that have upgraded or relocated their offices to Pittsburgh include Sheetz, which is expected to open its 20,000-square-foot tech office at Bakery Square IV in August of 2022, and Inovalon, which signed a 40,000-square-foot lease at 275 Technology Drive. Both spaces feature amenity-rich conveniences in vibrant, up-and-coming areas.
Learn more about the Pittsburgh office activity
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