Pittsburgh Downtown Partnership reports apartment market rebound

Downtown living is proving resilient with a sustained multifamily building boom and a new stage of condo development in the works.

By Tim Schooley for Pittsburgh Business Times

May 2, 2018

Pittsburgh –  

Downtown living is proving resilient with a sustained multifamily building boom and a new stage of condo development in the works.

That was one finding among many by the Pittsburgh Downtown Partnership in the organization’s State of Downtown report for 2018, released Tuesday at a reception in the Union Trust Building. The annual research report has grown to include a greater downtown beyond the Golden Triangle that incorporates new development happening in the Strip District, North Shore, Uptown and the Lower Hill District as well as on the South Side.

While downtown Pittsburgh’s apartment vacancy had dipped below 90 percent for the first time in recent years in the first quarter of 2017, PDP CEO and President Jeremy Waldrup said that occupancy levels rebounded by 5 percent during the year, putting occupancy levels back up to 94 percent.

“There was some concern last year after the first quarter,” said Waldrup of the periodic lull in the vacancy rate. “In the spring, it picked back up.”

At a time when there’s a growing expectation the Pittsburgh market won’t be able to absorb all the new apartments being added, Waldrup said the market rebound “speaks to the strength of downtown” and the stretch of the new apartments being developed in the urban core.

The PDP also sees a total of nearly 400 condos under development in the greater downtown area with a host of smaller projects joined by major developments such as the 180 condos planned by the Davis Cos. in conjunction with the Pittsburgh Parking Authority and the Pittsburgh Cultural Trust at 9th and Penn Avenue and the Lumiere project by a joint venture of Millcraft Investments and McKnight Realty Partners on Smithfield Street.

“It’s something we’ve talked about for the last few years as a real missed opportunity, and the market has responded,” said Waldrup of Pittsburgh’s potential for new condos, which has lagged new apartment development.

Those nearly 400 condos remain only a fraction of new apartments in the works, with the PDP putting the number of new rental units under construction at 1,467.

Some sectors of downtown development are stronger than others.

Office vacancy has gradually increased in the central business district. And retail remains slow to come, as the PDP totaled up eight new stores to open up downtown last year, a number equal to the number of new restaurants that opened in the first quarter of 2018, and only a fraction of the 40 restaurants that opened downtown last year.

Still, investment remains strong and broad-based, reports the PDP, in its seventh annual report.

Building permits downtown increased by 91 percent throughout the greater downtown, reports the PDP, which totals 28 projects under construction expected to add 400 new hotel rooms along with apartments, office and new cultural facilities, such as a new expansion of the Carnegie Science Center and the new Pittsburgh Playhouse at Point Park University expected to open downtown in the next few months.

The PDP put the value of current construction activity at $1 billion and added that $4.6 billion in total investments has been made downtown in the last past decade.

 

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