Pittsburgh Retail Market Report
Ultra-Low Vacancy Attracts Investors; Buyers Expand Search Parameters to Obtain Greater Yields
Moderated development helps normalize rent gains. Pittsburgh’s household income growth should remain above the national rate in 2019, improving spending power and enticing more retailers to western Pennsylvania. Because of this, market vacancy is expected to drop, keeping the rate one of the lowest in the nation. Contributing to the tightening conditions is sparse construction as roughly 230,000 square feet will come to market, the lowest volume in more than a decade. Approximately two-thirds of this year’s completion total are single-tenant structures including numerous convenience stores and quick-service and fast-casual dining options. However, there are several small strip centers to be finalized across the metro in 2019; most of them are located in outer-lying submarkets like Fayette County and Westmoreland County. Limited supply growth should give rents a chance to stabilize after several consecutive years without an identifiable trend. Areas near downtown Pittsburgh headline the market’s solid rental gains this year, particularly the Carson Street corridor and the Strip District, where revitalization efforts have boosted consumer interest.