Pittsburgh Forecast: Trendy with a Chance of Staying Power

It’s no secret that Pittsburgh has received national attention in the past couple years due to its incredible transformation from a renowned and drab steel industry town to an up-and-coming hot spot. And though it’s ranked as a New York Times weekend destination, the Steel City has also developed a reputation for its technology industry, educational opportunities, affordability, and massive allure to the average Millennial. At let’s not forget its recent rise to its position as No.1 food city in America, as rated by Zagat.

In addition to its appeal to the average consumer, those who are attuned to the region’s commerce might be aware that Pittsburgh is making progress in other areas. The end of 2015, for instance, saw a major success in the private-sector business world: the elimination of the capital stock and franchise taxes. According to Dennis Yablonksy, CEO of the Allegheny Conference on Community Development, this elimination is “one of the reasons the Tax Foundation ranks the 2016 business tax climate in Pennsylvania higher than neighboring states including Maryland, New Jersey, New York and Ohio.”

So what does any of this mean for economic development in Pittsburgh in the coming years? Is trendy Pittsburgh here to stay, or will it pass over soon?

Pittsburgh Economic Development 2016

The word on the street is that Pittsburgh may very well be the next Austin – and not in the sense that the ‘burgh is “weird” or known for its music scene, but more along the lines of serving as the next major tech hub. In fact, the Steel City actually ranked in the nation’s top 10 for venture capital investment in 2015. Austin, Texas slid in at No.12.

Pittsburgh’s per capita real GDP has also risen dramatically in the past couple years – reaching a 5% growth between 2012 to 2014, which trumped the Austin metro area’s growth, and more than doubled the national growth rate.

Pittsburgh Commercial Real Estate 2016

What do these numbers mean for those involved in the commercial real estate sector? Potential growth, of course. One of the city’s most renowned neighborhoods, the Strip District, is starting to be known as “the Silicone Strip” due to the influx of tech companies planting roots there. Uber’s driverless-car research facility, for instance, is established there – as is Apple. Google’s presence a few miles away in Bakery Square adds to this draw, and increases real estate options in several of Pittsburgh’s prime neighborhoods.

For those involved in commercial real estate, now is the time to strike. The city’s business rental space, purchase prices, salaries, and energy costs all continue to be cost-effective, and despite the fact that energy companies have vacated the region, there continue to be additional companies moving in to replace them.

“As soon as a company moves out, we’re backfilling that space quickly as we did five years ago,” said R.T. Walker, VP of CBRE’s Energy Facilities Group. “There is about 1.1 million square feet of new industrial space in the pipeline but still plenty of demand to fill it.”

So while it seems that the recent charm and old-world character of the Steel City might not continue to shine in the spotlight, the truth is that Pittsburgh’s growth is not going anywhere – at least not anytime soon.