Pittsburgh Retail Market

The retail real estate market in Pittsburgh is flourishing. There are many developments in the pipeline in both the city and in the numerous suburbs surrounding it. National retailers are seeking entry into the city’s retail scene and vacancy rates have remained very low. Currently, the total vacancy is less than 6 percent, according to data released by Pittsburgh-based Howard Hanna Commercial.

“[There are] malls, strip centers, community centers and lifestyle centers all in development throughout Pittsburgh,” says Doug German, retail development manager at Howard Hanna Commercial. Developers are focused on land acquisition and site selection with special attention paid to the terrain and infrastructure problems found in the city.

There are several significant retail developments that are positively impacting the market. Located in Frazier Township just outside Pittsburgh, The Mills Corporation’s Galleria at Pittsburgh Mills and Village at Pittsburgh Mills will bring 1.1 million square feet of enclosed mall space and a collection of big box retailers to the area. The Galleria is expected to open this year. Settler’s Landing is a new lifestyle center underway west of Pittsburgh in Robinson that will create a “mega-destination” for area shoppers, German says. And perhaps the biggest development within the city is Nordstrom’s plans to enter the market. According to German, the department store retailer is expected to open two locations within the city that are expected to become large draws.

The bulk of new development is in the suburbs due to the wealth of available land in western Pennsylvania. “New suburban communities harbor more open-minded infrastructure expectations, which equate to lower acquisition and occupancy costs,” German says. “City center acquisitions appear to be costly, but with the recent eminent domain decision by the [Supreme Court], urban locations may turn around.”

Many new retailers have entered the market in recent years. “Pittsburgh has been ‘on sale’ for quite some time, for tenants and landlords,” German notes. “Most retailers have recognized the demand for retail over the last 10 years and have started to migrate here. The region is ready for trendy names such as The Cheesecake Factory [which recently opened in the Soffer Organization’s 2 million-square-foot SouthSide Works project] and Whole Foods, which are new to Pittsburgh.”

The Pittsburgh area should continue to attract retailers, German says, because acquisition costs are lower than in similar cities. Even with significantly high occupancy rates across the board, the city is still poised for continued growth. German believes that Route 19, which runs north/south through Pittsburgh, is primed for increased development on both ends outside the city because of recent population growth and available land. Also, Route 30 in Westmoreland County just east of the city should see increased interest from developers because of the large population and wealth of land.

©2005 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.

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