America's Fastest-Recovering Cities

Diversified industry and relatively stable housing give residents in these metros a measure of economic security.

Francesca Levy, Forbes.com

Though Omaha, Neb., seems second-rate to some, Warren Buffett may have been on to something when he chose it for the headquarters of his massive holding company, Berkshire Hathaway. According to our research, the city has hit upon a formula to weather the economic downturn better than any other in the country.

While no region has escaped the recession, in Omaha, three Texas metros, a handful of Northeastern manufacturing bases and select southern cities, diversified industry and relatively stable housing fundamentals have provided local residents with comparatively secure standards of living.

Full List: America's Fastest-Recovering Cities
Omaha has had a healthy 1.3% gross metropolitan product (GMP) growth in the past year, and a low foreclosure rate (only one in every 3,246 housing units is in foreclosure), but it sails to the top spot on our list because of its unemployment rate: At 5%, the lowest of the metros we surveyed. Omaha's economy is less dependent on manufacturing than other Midwestern cities, and is boosted by a strong agriculture sector and growing biofuels industry. And while the city has a big stake in the financial industry--a factor that nearly spelled ruin for metros like New York--it doesn't specialize in the types of institutions that took big risks and chased exotic financial structures. Instead, it's home to roughly 30 insurance companies and regional banks like Mutual of Omaha.

Lone Star Luck
In No. 2 city San Antonio, home to four military bases, and Austin, our third-ranked city and the state seat of government, municipal jobs supplement Texas' robust energy sector. In Dallas (No. 6), it's a thriving tech industry that buffers it from energy highs and lows. Although Houston (No. 8) is invested mostly in oil, it has diversified its energy industry beyond oil rigs into refining and chemicals manufacturing.

What's more, the state's housing prices never ascended to the unsustainable levels the rest of the country hit at the peak of the housing bubble. Thus, it didn't crash as hard. These factors have toughened the local economy against a recession that is inextricably tied to real estate.
"Texas didn't have as big of a boom," says James P. Gaines, research economist at the Real Estate Center at Texas A&M University. "So we're not having anywhere near the kind of bust."
Behind the Numbers

To form our list, we ranked the 100 largest Metropolitan Statistical Areas--geographic entities that the U.S. Office of Management and Budget defines and uses in collecting statistics--in five categories: unemployment rate, GMP (a measure of the size of a city's economy), foreclosures, home prices and sales rates.

We ranked September unemployment rates (the most recent available by metro) using data from the Bureau of Labor Statistics; the percentage of a metro's homes in foreclosure with September data provided by RealtyTrac; and the change in GMP between the first and second quarter of 2009 from the Brookings Institution's MetroMonitor. We also included the second-quarter 2009 year-over-year change in Freddie Mac's Conventional Mortgage Home Price Index--a measure of housing price inflation--and the average days on the market for properties currently on sale (to measure sales rates), using data from Zillow.com. We then averaged the scores for each measure to arrive at an overall ranking.

While there is no foolproof method for resisting recession, a common thread in thriving cities is an economy fed by multiple industries. Former Northeastern industrial hubs like Pittsburgh, and Rochester, N.Y., while they may not seem the likeliest models of economic health, have been able to supplement industrial sector decline with a boost from public-sector jobs that have pumped up the economy even as the private sector declined. They land in the fourth and seventh spot on our list, respectively.

But Rolf Pendall, associate professor of city and regional planning at Cornell University, warns that for upstate New York, this promising news may be temporary.

"We've had government spending plugging the gap," he says. "But it's hard to say what's going to happen in the next two years if government spending has to get withdrawn a lot, as it might."

Pittsburgh's GMP grew .8% between the second quarter of 2008 and 2009, consistent with the .8% national average. Home prices there remained relatively stable while those in other cities plummeted because the area's prospects still seemed dim during the housing bubble and speculators looked elsewhere.

"These metros have been so troubled for so long," says Pendall, "that people didn't develop irrational exuberance about the prospects in their housing markets."

Cities where home prices that don't fluctuate wildly are particularly well-positioned to ride out this recession, because they were spared the domino effect of foreclosures, lost jobs and lost productivity. In San Antonio and Austin, quick sales rates (homes in these cities spend 54 and 73 days on the market respectively compared to a 100-day national median) and home prices that fall above the national average--Austin's median home price in September, for example, is a healthy $240,000, 7% higher than the average for the top 100 metros, according to data from Zillow.com--indicate that they escaped the perilous zeal for building, and lending, that swept the rest of the country between 2001 and 2007.

There's a lesson to be learned from these cities, some of which aren't economically thriving, but all of which are well-equipped to emerge from the recession in a similar position to where they started. Rather than chasing rising home prices or apparently plentiful jobs in one-industry towns, families looking for long-term economic stability should seek spots where industry is diverse and housing price shifts are benign.

Top 5 Fastest Recovering Cities
1. Omaha-Council Bluffs, NE-IA Metro Area
2. San Antonio, TX Metro Area
3. Austin-Round Rock, TX Metro Area
4. Pittsburgh, PA Metro Area
5. Harrisburg-Carlisle, PA Metro Area

NAI Pittsburgh Commercial is a Pittsburgh proud locally owned and operated company. To see some of the investment and development opportunities available in the Pittsburgh region CLICK HERE

NAI Pittsburgh Commercial Leases 6,150 SF at the Lone Oak Technology Park Located in Sewickley, PA

Sewickley, PA - (December 14, 2009)

NAI Pittsburgh Commercial is pleased to announce the 6,150 SF lease signing of Two Men and a Truck at the Lone Oak Technology Park located at 2 South Avenue in Sewickley, Pennsylvania.

Edward R. Lawrence, Associate and Victor J. Yates, Associate, of NAI Pittsburgh Commercial, represented Lone Oak Technology Park in the transaction. AJ Pantoni, Advisor and Kim Ford, Managing Principal of CresaPartners represented Two Men and a Truck.
The owners of the park are currently in discussions with an architect about the proposed construction of a new 55,000 SF flex building on the Site in 2010.

NAI Pittsburgh Commercial is a Pittsburgh proud locally owned and operated company. To see some of the investment and development opportunities available in the Pittsburgh region CLICK HERE

Retail Property Being Converted to School

Developer Pays $2.3M for 110,000-SF Building

Genstein Limited Partnership has purchased the 110,000-square-foot retail building at 1500 Yost Blvd in Pittsburgh from Guardian Construction Management. The developer paid $2.3 million, or $21 per square foot.

Conversion of the building for education has already begun. Propel Charter Schools signed a 15-year lease for 42,000 square feet to establish an elementary school. This will be its sixth location. Propel Charter Schools intends to open for the fall semester and plans on opening a high school at the same location the following year.

The building, built in 1970, sits on 11.3 acres and had been home for Nordstrom and Wal-Mart as temporary tenants over the last two years.

Paul Horan of NAI Pittsburgh Commercial represented the buyer and the new tenant. Jeremy Kronman, Christina Bucciero and Courtney Lynn of CB Richard Ellis represented the seller.

NAI Pittsburgh Commercial is a Pittsburgh proud locally owned and operated company. To see some of the investment and development opportunities available in the Pittsburgh region CLICK HERE

ULI: Commercial real estate market will hit bottom in 2010

Pittsburgh Business Times - by Tim Schooley

When a commercial real estate forecast begins with slides of the Roadrunner being chased by Wylie Coyote, it’s not hard to see through to the bottom of the cartoon canyon to understand what the fall represents.

That was Charles DiRocco’s approach to presenting the Urban Land Institute’s report on the Emerging Trends in Real Estate for 2010 in a breakfast hosted by the ULI’s Pittsburgh chapter at the Rivers Club Wednesday morning.

With the residential real estate market bottoming out in 2009, DiRocco said that in 2010 the “commercial real estate is going to hit to bottom as well.

It was a road show DiRocco, Pittsburgh native who is one of the ULI’s principal researchers, has presented in cities throughout the country, serving as the messenger of what’s largely been a bad news market for commercial real estate everywhere.

DiRocco’s gallows approach didn’t sugar coat ongoing trends that suggest a business environment for commercial real estate he expects will be worse than the recession of the early 1990s. The ULI’s larger report expects real estate value declines will average more than 40 percent below previous highs of mid-2007.

With values sinking so much, DiRocco expects real estate development has largely ground to a halt for the new year as well as perhaps a few years to follow.

Richard Moody, a local economist who also participated in the breakfast discussion, emphasized that financing for any new development will remain difficult.

“If you want to see if a banker has a good sense of humor, go and ask him for a construction loan,” Moody said.

The Pittsburgh area has proven to be relatively well-positioned to withstand any fall out in commercial real estate, both men said.

DiRocco said Pittsburgh’s standing has improved over other metros in the past year by not seeing the precipitous drops in value experienced elsewhere. A panel discussion suggested that many late-cycle buyers of 2005 through 2007 could find themselves struggling with foreclosures and workouts given the burden they’ve taken with high sales prices, weakening occupancy and commercial mortgage-backed securities (CMBS) coming due.

Nick Matt, a managing director in the Pittsburgh office of HFF Inc., said it will be difficult for the banks to negotiate a wave of property falling back into their possession.

“Right now, the servicers are inundated,” he said, seeing the process as far more complicated than in the past due to the way commercial mortgage debt has been packaged into CMBS. “We’ve never been through this on the CMBS side.”


NAI Pittsburgh Commercial is a Pittsburgh proud locally owned and operated company. To see some of the investment and development opportunities available in the Pittsburgh region CLICK HERE

Report: Pittsburgh's office rents off slightly year-over-year

Office rental rates in Pittsburgh were down slightly year-over-year, according to a report by CB Richard Ellis Group Inc.

The city saw a 1.1 percent year-over-year decline in average rental rates, the report found. As of Sept. 30, the average rent for Pittsburgh office space was $22.61 per square foot.
Boston's central business district led the Americas on the report, with a 33.9 percent drop in average rental rates.

Average office rents worldwide declined 7.7 percent in the fiscal year ended Sept. 30, according to the report, with rents down in 131 of the 179 major cities CB Richard Ellis tracks. Nearly 50 markets have seen double-digit declines. Tops among cities seeing declines was Kiev (down 64.6 percent) and Singapore (53.4 percent).

Other large drops include a 41 percent decline in Hong Kong, a 39 percent decline in Abu Dhabi and a 35 percent decline in Moscow.

New York retained its rank as the most expensive North American market, with Midtown rents of $68.93 per square foot. New York’s rents rank 24th globally.

London’s West End, where rents declined 17.8 percent during the period studied, is the world’s most expensive market, at an average of $184.85 per square foot.

Tokyo, Hong Kong, Moscow and Paris follow London among the world’s most expensive office rental markets.

The Washington Business Journal and the Boston Business Journal, both affiliated publications, contributed reporting.

NAI Pittsburgh Commercial is a Pittsburgh proud locally owned and operated company. To see some of the investment and development opportunities available in the Pittsburgh region CLICK HERE

Conveyor Belt Manufacturer Fenner Dunlop Americas has Relocated Corporate Headquarters to Pittsburgh

Strategic location is cited as value-add by one of the newest companies to join the region’s energy economy supply chain

(PITTSBURGH – November 30, 2009)

Fenner Dunlop Americas, a wholly owned subsidiary of Fenner, PLC, a UK public company, has moved its corporate headquarters from the suburban Atlanta community of Scottdale, Ga. to Pittsburgh.

Leasing 15,000 square feet of office space in the Omega Corporate Center in Robinson Township (Allegheny County), Fenner Dunlop is now strategically located – a critical consideration during the site selection process, according to company officials.

“We wanted to be close to our North American belting product manufacturing facilities in both Ohio and Canada, as well as to key locations in our newly acquired service businesses – including Conveyor Service Corporation in Blairsville, Pa. (Indiana County), which we acquired last year – and major customer regions,” said Cassandra Pan, president of Fenner Dunlop Americas. “Operating from Pittsburgh puts Fenner Dunlop at the heart of its North American business, allowing for optimal business management. We’re close to where it’s all happening and closer to our customers.”

The headquarters relocation is expected to create approximately 40 jobs including several executives relocating from Atlanta and several new local hires. In addition to the efforts of the local commercial real estate firm NAI Pittsburgh, other development partners including the Pennsylvania Department of Community and Economic Development, Allegheny County Economic Development and the Pittsburgh Regional Alliance worked collaboratively in support of this business investment win.

Founded in 1861 in the UK, the company primarily manufactured leather belting. Today, Fenner Dunlop has operations across Europe, North and South America, Australia, China, India and South Africa and attributes much of its substantial growth to a number of major acquisitions over the last 30 years.

One such acquisition occurred in 2001and resulted in the formation of Fenner Dunlop Conveyor Belting Worldwide, which comprises the company’s core business of manufacturing conveyor belts and related products and services.

Fenner Dunlop provides total conveyor belt solutions to the coal and hard rock mining industry for surface and underground mines worldwide. As such a provider, the company is now integrated into the Pittsburgh region’s energy economy, which comprises innovation leadership and supply chain expertise across traditional and alternative energy sectors. One of these sectors is coal—a fossil fuel found in ample supply in the Pittsburgh region, where public and private R&D abounds to advance clean coal technology. CONSOL Energy Inc., world-headquartered in Washington County, is the largest producer of high-Btu bituminous coal in the United States and a major customer of Fenner Dunlop.

“Fenner Dunlop conveyor belts and the steel structures on which the belts ride are the principal ways that CONSOL moves coal from its mines. We have literally hundreds of miles of Fenner Dunlop belting in our mines, as well as overland belts. These allow CONSOL to meet its customers’ demands for coal - a fuel staple now and for the future,” said CONSOL Energy CEO Brett Harvey, who also chairs the Pittsburgh Regional Alliance Partnership. “CONSOL Energy is pleased that one of its major vendors has made the decision to join the almost 800 energy-related companies that call the Pittsburgh region home,” said Harvey.

“During the recent Pittsburgh [G-20] Summit, President Obama hailed Pittsburgh for its transformation to a model 21st-century economy. That economy includes leadership related to energy—both traditional and alternative. Our innovative edge, coupled with a historic expertise in manufacturing, is amassing a diverse and robust energy supply chain in the region. For that and other reasons, companies like Fenner Dunlop have strategically selected southwestern Pennsylvania – a place gaining recognition as the nation’s new energy capital. From Pittsburgh, these companies are operating to supply the resources, products and components that will ultimately influence the delivery of energy – not only domestically, but globally – in efficient and more sustainable ways,” said Allegheny Conference on Community Development CEO Dennis Yablonsky.

With the mining industry as a primary customer, Fenner Dunlop also recognizes that the Mine Safety and Health Administration’s Pittsburgh Safety and Health Technology Center in Bruceton, PA – just south of Pittsburgh – played a part in the company’s relocation decision. “Nationally and internationally, conveyor belt fire safety in underground mines is a critical concern. Fenner Denlop is at the forefront of belt fire safety and believes it’s strategic to be close to the organization that is uniquely influencing standards compliance around our core business,” said Fenner Dunlop President Cassandra Pan.

While Fenner Dunlop’s conveyor belting operations are largely reliant on the mining industry, the company has also developed a range of belting-related products including moving walkways, parcel handling, plasterboard forming belts, stable matting and agricultural equipment. More information is available at http://www.fennerdunlopamericas.com/.

NAI Pittsburgh Commercial is a Pittsburgh proud locally owned and operated company. To see some of the investment and development opportunities available in the Pittsburgh region CLICK HERE

Sale of the Bowne Building

NAI Pittsburgh Commercial is pleased to announce the sale of the 15,000 square foot office building known as The Bowne Building which is located in downtown Pittsburgh with an address of 120 Boulevard of the Allies, Pittsburgh, PA 15222.

Paul D. Horan, Principal, Gregg Broujos, Principal & Edward Lawrence, Associate of NAI Pittsburgh Commercial represented the sellers in the transaction.

NAI Pittsburgh Commercial is a Pittsburgh proud locally owned and operated company. To see some of the investment and development opportunities available in the Pittsburgh region CLICK HERE

NAI Pittsburgh Commercial Represents Duquesne Light Company in 86,000 SF Rewenal at Chamber of Commerce Building, Pittsburgh, PA

Pittsburgh, PA - (October 23, 2009) - NAI Pittsburgh Commercial is pleased to announce it has represented Duquesne Light Company in an 86,265 SF lease renewal at the Chamber of Commerce Building in downtown Pittsburgh.

Patrick J. Sentner, SIOR of NAI Pittsburgh Commercial represented Duquesne Light Company in this transaction while Jeremy Z. Kronman & Andrew Miller of CB Richard Ellis represented the landlord.

NAI Pittsburgh Commercial is a Pittsburgh proud locally owned and operated company. To see some of the investment and development opportunities available in the Pittsburgh region CLICK HERE

NAI Pittsburgh Commercial Ranked #1 out of 72 Companies for the "Best Places to Work" in Western Pennsylvania

On Thursday, October 22, 2009, the Pittsburgh Business Times invited 72 of the “Best Places to Work in Western Pennsylvania” to an award ceremony held at the Omni William Penn Hotel in Downtown Pittsburgh.

Paired up with Quantum Market Research, The Pittsburgh Business Times conducted an online study of employee satisfaction in order to identify the 72 Best Places to Work. This compilation of data served as a foundation for the overall top 72 rankings, along with individual rankings in three additional categories: small companies (up to 50 employees); medium companies (51 to 150 employees); and large companies (151 and above).

NAI Pittsburgh Commercial not only received the rating of the number one (#1) Best Places to Work in the small company division (the largest of the three categories), but they were also the number one (#1) of the overall Best Places to Work in Western Pennsylvania!

NAI Pittsburgh Commercial is proud to be included amongst the companies that were recognized with this commendable award

NAI Pittsburgh Commercial is a Pittsburgh proud locally owned and operated company. To see some of the investment and development opportunities available in the Pittsburgh region CLICK HERE

3510-90 Smallman Street - 16,500 SF Lease Signing

Pittsburgh, PA - (October 16, 2009) -


NAI Pittsburgh Commercial is pleased to announce the 16,500 square foot lease signing of Fudgie Wudgie Fudge & Chocolate Company at the 3510-3590 Smallman Street property located in Pittsburgh’s Strip District. Fudgie Wudgie has been hand crafting premium fudge and chocolate since 1983.

3510-90 Smallman Street is a 33,000 square foot building recently constructed by locally owned Real Estate Enterprises. There is 16,500 square feet remaining.

John Bilyak, Principal & Director of Industrial Brokerage represented the owner in the transaction while Herky Pollock of CB Richard Ellis represented the tenant.

NAI Pittsburgh Commercial is a Pittsburgh proud locally owned and operated company. To see some of the investment and development opportunities available in the Pittsburgh region CLICK HERE

New Shareholder and Principal of NAI Pittsburgh Commercial

NAI Pittsburgh Commercial is pleased to announce that John C. Bilyak has been named as shareholder and Principal.

Mr. Bilyak has over twenty (20) years of commercial real estate and business experience. His career in real estate has been primarily focused on the disposition and leasing of land and industrial oriented property. Mr. Bilyak also concentrates on the sale of investment grade office and industrial buildings.

Since joining NAI Pittsburgh Commercial in January 2007, as the Director of Industrial Brokerage for the North-Shore based firm, Mr. Bilyak has completed some of the largest industrial transactions in Western Pennsylvania.

Bill Leone, Managing Principal of NAI Pittsburgh Commercial said adding Mr. Bilyak as a new shareholder reflects the firm’s commitment to its clients and to its business philosophy. “John has made an outstanding contribution to his clients, his colleagues, and the firm, while also demonstrating the values embodied in our founding principles,” stated Leone. “Our goal is to retain and add talent while providing our clientele with the highest level of service. Each Principal brings unique attributes to NAI Pittsburgh Commercial.”

NAI Pittsburgh Commercial, locally owned company and established leader of Western Pennsylvania’s Commercial Real Estate Industry, provides results-oriented brokerage, consulting, marketing and research services to businesses and investors throughout the world.

NAI Global is the world's leading managed network of commercial real estate firms. With over 325 offices in 55 countries worldwide, we bring together people and resources to deliver results for our clients wherever needed. Our clients come to us for our deep local knowledge. They build their businesses on the power of our global managed network.

NAI Pittsburgh Commercial is a Pittsburgh proud locally owned and operated company. To see some of the investment and development opportunities available in the Pittsburgh region CLICK HERE

Feds Frets About Commercial Real Estate

With Banks Slow to Take Losses, Fears of a Residential-Bust Repeat; 'More Pain Likely Lies Ahead'

The Washington Post

By Lingling Wei and Maurice Tamman

Bakns in the U.S. "are slow" to take losses on their commercial real-estate loans being battered by slumping property values and rental payments, according to a Federal Reserve presentation to banking regulators last month.

The remarks suggest that banking regulators are girding for a rerun of the housing-related losses now slamming thousands of banks that failed to set aside enough capital during the boom to cushion themselves when the bubble burst. "Banks will be slow to recognize the severity of the loss - just as they were in residential," according to the Fed presentation, which was reviewed by The Wall Street Journal.

A Fed official confirmed the authenticity of the document, prepared by an Atlantic Fed real-estate expert who is part of the central bank's Rapid Response program to spread information about emerging problem areas to federal and state banking examiners throughout the U.S.

While the Sept. 29 presentation by K.C. Conway doesn't represent the central bank's formal opinion, worries about the banking industry's commercial real-estate exposure have been building inside the Fed for months. "More pain likely lies ahead for this sector and for those banks with heavy commercial real estate composure," New York Fed President Bill Dudley said in a speech Monday.

In another sign that many U.S. financial institutions are inadequately protected against potential losses on commercial real-estate loans, banks with heavy exposure to such loans set aside just 38 cents in reserves during the second quarter for every $1 in bad loans, according to an analysis of regulatory filings by The Wall Street Journal. That is a sharp decline from $1.58 in reserves for every $1 in bad loans from the beginning of 2007.

The Journal's analysis includes more than 800 banks that reported haveing more half of their loans tied up in commercial real-estate, ranging from apartments to office buildings to warehouses.

Loan-loss reserves typically rise and fall during any credic cycle, being drawn down as losses mount. Some analysts and investors say the recession combined with inadequate loan-loss provisions when times were good have left banks dangerously vulnerable to the deteriorating commercial real-estate market.

Mr. Conway's presentation painted a bleak picture of the slideing real-estate vales and enormous debt that will need to be refinanced in the next few years. Vacancy rates in the apartment, retail and warehouse sectors already have exceeded those seen during the real-estate collapse of the early 1990's, Mr. Conway noted. His report also predicted that commercial real-estate losses would reach roughly 45% next year. Valuing real estate has always been tricky for banks, and the problem is particularly acute now because sales activity is practically nonexistent.

NAI Pittsburgh Commercial is a Pittsburgh proud locally owned and operated company. To see some of the investment and development opportunities available in the Pittsburgh region CLICK HERE

Office Rents Dive as Vacancies Rise

The Wall Street Journal
by Christina S.N. Lewis

Rent for office space is falling at the fastest pace in more than a decade as vacancies create a glut and landlords slash prices to attract tenants.
Nationwide, effective office rents fell 8.5% in the third quarter compared with the same period a year ago, the steepest year-over-year decline since 1995, according to Reis Inc., a New York real-estate research firm.
The decline came as companies returned a net 19.6 million square feet of space to landlords in the third quarter, slightly more than in the second quarter. For the first three quarters of this year, the net decline in occupied space totaled a record 64.2 million square feet, the highest so-called negative absorption recorded since Reis began tracking the data in 1980. (That doesn't count space that left the market as a result of the 2001 terrorist attacks.)
The vacancy rate, meanwhile, hit 16.5%, a five-year high, according to Reis.
Declining rents and rising vacancies in the office sector signal more woes for the commercial-real-estate market, which already faces a lack of credit and plummeting property values. With landlords more likely to default, financial institutions, which hold trillions of dollars in commercial-real-estate debt also face more pain. "It means more losses for the banks, because they will have to write off more bad debt," said Victor Calanog, director of research for Reis.
For tenants, however, falling rents represent opportunities to save. Landlords are offering concessions, in the form of free rent and build-out costs. "There's a recognition [from some companies] that this is probably a bottom, let me lock in long term," said Mary Ann Tighe, a New York-based leasing broker with CB Richard Ellis, who has negotiated corporate relocations for tenants including advertising firm Ogilvy & Mather and retailer Limited Brands.

As bad as the current environment is for landlords, analysts say it will worsen as unemployment continues to rise. "Even though the technical recession may be over, the labor market typically takes anywhere from 18 to 24 months to bounce back in a consistent way," said Mr. Calanog, who predicts vacancy will rise through 2010 and may not peak until 2011. "If employers are still shedding jobs, they are also going to shed space."
Vacancies are highest in areas with poor housing markets and industrial cities. They are approaching historic highs in Southern California; Las Vegas; Phoenix; southwest Florida; Detroit; Dayton, Ohio; and Hartford, Conn. Other cities, including Dallas and other parts of Texas, and Atlanta, are seeing high vacancy rates largely as a result of overbuilding.
Rent declines were steepest in big cities with large financial sectors, which saw the greatest run-up in rents in 2006 and 2007. They include Seattle, which has been slammed by the failure of Washington Mutual Inc., New York and San Francisco. But the office market deteriorated broadly across virtually all regions: Of the 79 metro areas that Reis tracks, office vacancies rose in 72 of them and effective rents declined in 68 of them.
In Boston, intellectual-property law firm Fish & Richardson PC recently signed a lease for 124,000 square feet of space in a new development under construction on the South Boston waterfront, paying about $48 a foot with about $85 a foot in tenant improvements from the landlord, according to a person familiar with the deal -- compared with the roughly $55 a foot the firm is paying now to landlord Equity Office.
In its attempt to persuade the tenant to stay, Equity Office, which is owned by private-equity firm The Blackstone Group, initially offered the firm $84.50 a foot in December 2007, but dropped the price over time to stay competitive and sent wine and champagne gift baskets to all of the firm's 45 principals, according to Tim French, Fish & Richardson's Boston managing principal.
"We were like the belle of the ball," said Mr. French.

NAI Pittsburgh Commercial is a Pittsburgh proud locally owned and operated company. To see some of the investment and development opportunities available in the Pittsburgh region CLICK HERE

NAI Global President & CEO Jeffrey M. Finn was featured in Real Estate Forum

Discussing opportunities we can find in a frozen credit market and challenges for the year ahead. Chief Economist Dr. Peter Linneman offers his perspective on economic recovery.

Click here to read the article about Jeffrey Finn

NAI Pittsburgh Commercial is a Pittsburgh proud locally owned and operated company. To see some of the Office and development opportunities available in the Pittsburgh region CLICK HERE.

Robust Growth Will Follow Economic Recovery's Slow Start

Says NAI Global Chief Economist Dr. Peter Linneman

The Great Recession has officially ended and recovery will be far more robust than anyone can imagine, according to a new white paper from NAI Global Chief Economist Dr. Peter Linneman. The paper examines the economic recovery and Dr. Linneman provides insight into the leading indicators that the market is stabilizing and investment activity is on the rise.

“Although the news continues to focus on the negative, the economy has bottomed and is on the road to recovery,” said Dr. Linneman. “Historically, the U.S. economy has rebounded in ways that were unimaginable at the time and usually within two years of a recession.”

Is This a Recovery?, NAI Global’s white paper, offers proof that the recession has come to an end and that recovery, however slow, is under way. Dr. Linneman discusses in depth the country’s current economic status, and provides historical evidence from past recessions to support his prediction of a robust recovery by 2012.

You can download the white paper here, or visit http://www.naiglobal.com/, select Publications, then Research Articles & White Papers to see the full archive.

NAI Pittsburgh Commercial is a Pittsburgh proud locally owned and operated company. To see some of the Office and development opportunities available in the Pittsburgh region CLICK HERE.

Signs of Improvement: Pittsburgh Office Vacancy Decreases Q2 2009

Office Vacancies in Pittsburgh Slip

Trib Live: Staff and wire reports Saturday August 22, 2009

The vacancy rate in Pittsburgh's office market declined in the second quarter to 18.2 percent from the 18.7 percent at the end of the first quarter, according to a report issued Friday.

New leases signed for space Downtown included First Niagara Bank for 50,000 square feet at 11 Stanwix St. and Direct Energy's 52,000 square feet at Liberty Center, said a report by GVA Oxford.

Other leases include West Penn Allegheny Health Systems moving its executives to Alcoa Business Service Center on the North Shore; and Expedient Communications relocating its headquarters from Norfolk, Va., to Two Allegheny Center, also on the North Shore.

NAI Pittsburgh Commercial represented the Landlord in the West Penn Allegheny Health Systems lease.

NAI Pittsburgh Commercial is a Pittsburgh proud locally owned and operated company. To see some of the Office and development opportunities available in the Pittsburgh region CLICK HERE.

Largest 2009 Office Sale in Western PA closes

McKnight Pays $89.5M for Cranberry Woods Office Bldgs.

Deal Marks Largest Purchase in Pittsburgh Region in 2009

By Andrew Deichler (CoStar)

August 11, 2009

In the largest office sale in Western Pennsylvania this year, McKnight Realty Partners has acquired four buildings in the Cranberry Woods office park for $89.5 million, or $198 per square foot. In an effort to re-balance its investment portfolio, Multi-Employer Property Trust (MEPT) sold the property at auction. McKnight used a 1031 exchange, which also involved 16 Pittsburgh-area Wendy's restaurants.

Located at 500-800 Cranberry Woods Drive in Cranberry Township, the four-building office campus totals 452,964 square feet. The buildings are 99 percent occupied by such tenants as Verizon Wireless, Westinghouse Electric Co. and McKesson. Nicholas Matt with HFF (Holliday Fenoglio Fowler L.P.) represented the seller. First Commonwealth and First Merit Bank provided financing for the project. Loan values were not disclosed.

Editiorial: While there remains evidence that the economy has not completed a full recovery, Commercial Real Estate in Pittsburgh remains a solid economic performer. This transaction may prove to have broader implications in the continued development, office rates, and occupancy levels in the Pittsburgh and specifically Cranberry area markets. The record price paid for this investment can be viewed as a positive endorsement for the continued need of Class A office space in the North market and Pittsburgh.

NAI Pittsburgh Commercial is a Pittsburgh proud locally owned and operated company. To see some of the Office and development opportunities available in the Pittsburgh region CLICK HERE.

PA Budget Stalemate Threatens to Hurt Job Creation

Future Economic Development Funding in Jeopardy Due to Recession

By Andrew Deichler (CoStar Group)

August 4, 2009

ES3's Facility in York, PA.

Pennsylvania Governor Ed Rendell said Monday that his office is providing incentives for grocery distributor ES3 LLC, to help the company expand its operations in York and create jobs. He also said that aiding such projects in the future might not be so easy.

Funding for projects like the ES3 expansion is drying up across the country as states hammer out budget shortfalls due to the recession.

In Pennsylvania, the Democratic governor and the predominately Democratic House of Representatives have been at a stalemate with the Republican-dominant Senate for the about two months over the state budget.

In short, the Democrats are proposing a personal income tax (PIT) increase to keep job-creation programs going, while the Republicans are in favor of cutting programs to avoid raising taxes.

The governor's office said in a statement that Pennsylvania might be unable to compete for such projects if certain programs are trimmed or completely eliminated in the state budget. "Some lawmakers are debating whether we should turn our backs on the communities and workers these valuable programs serve," said Gov. Rendell. "They want to drastically cut or eliminate the programs that, before the recession hit, helped us to reach record levels of employment."

Click to read the rest of the article

NAI Pittsburgh Commercial is a Pittsburgh proud locally owned and operated company. To see some of the investment and development opportunities available in the Pittsburgh region CLICK HERE

AdVenture Development adds office space to McCandless Crossing plans

From the Pittsburgh Business Times

North Carolina-based real estate developer AdVenture

Development LLC is expanding the scope of its mixed-used

development project in McCandless Township to include an

office component.

North Side-based NAI Pittsburgh Commercial

launched the marketing effort this week to lease a five-

story, 60,000-square-foot office building at the project, the

first of what is expected to be three office buildings at the

mixed-use development.

McCandless Crossing is proposed as a one million-plus square foot development anchored by a

Lowe’s Home Improvement store, to be located along a stretch of McKnight Road on the

northern edge of McCandless Township. McCandless Crossing is also expected to include a

grocery-anchored town center, a movie theater, hotels and town houses.

Paul Horan, a principal at NAI Pittsburgh who is marketing the new office project, expects the

office space will appeal to medical office users given McCandless Crossing’s proximity to the

UPMC Passavant Hospital.

Announcing Premier Mixed Use Development

NAI Pittsburgh Commercial is pleased to announce that it has been awarded the exclusive leasing of the office space component of McCandless Crossing, a + 130 acre mixed use development in McCandless Township in the North Hills of Pittsburgh.

Anchored by a Lowe’s Home Improvement Store, McCandless Crossing is a 1,000,000 + SF project consisting of a Towne Center component and a master planned area including retail, office, hotels, entertainment and residential. It is in close proximity to Pittsburgh’s premier suburban hospital, UPMC Passavant.

The goal of the developer, AdVenture Development, LLC, is to create a project that complements the existing base of properties and knits them together in a cohesive plan that will further energize the North Hills.

The initial phase of the office component will be a five story 60,000 SF Class “A” office building. Two additional similar sized properties will be developed as dictated by the demand for premier office/medical office space conveniently located at the intersection of Duncan Avenue and McKnight Road.

For more information on this project, please contact Paul Horan, Principal at NAI Pittsburgh Commercial at (412) 321-4200 ext. 205 or phoran@naipittsburgh.com

Imminent Deadlines for PA Real Estate Assessment Appeals (Courtesy of Pepper Hamilton LLP)

PA Appeal Deadlines - 2010 Tax Year

Absent any county-wide reassessment or county-wide ratio change, the annual deadlines for assessment appeals in Pennsylvania are as follows:

August 1, 2009: Berks, Bucks, Chester, Dauphin, Delaware, Erie, Lancaster, Lehigh, York

August 31, 2009: Butler, Luzerne, Wyoming

September 1, 2009: Adams, Armstrong, Beaver, Bedford (see below) Blair (see below)
Bradford, Cambria. Cameron, Carbon, Centre, Clarion, Clearfield, Clinton,
Columbia, Crawford, Cumberland, Elk, Fayette (see below), Forest,
Franklin, Fulton, Greene, Huntingdon, Indiana, Jefferson, Juniata,
Lackawanna, Lawrence, Lebanon, Lycoming, McKean, Mercer, Mifflin,
Monroe, Montgomery, Montour, Northampton, Northumberland, Perry,
Pike, Potter, Schuylkill, Snyder, Somerset, Sullivan, Susquehanna, Tioga,
Union, Venango, Warren, Washington, Wayne, Westmoreland

October 1, 2009: Philadelphia County

March 31, 2010: Allegheny County

Read more

Dusty Elias Kirk and Sharon F. DiPaolo are partners in the firm's Real Estate Practice Group . If you have any questions concerning real estate or real estate tax assessment appeals, please contact Dusty Elias Kirk at kirkd@pepperlaw.com; 412.454.5039 or Sharon F. DiPaolo at dipaolos@pepperlaw.com ; 412.454.5005.

Economic Update: New Issue of Linneman Letter Available for Download

We are pleased to share with you this special edition of The Linneman Letter.

In this issue, Dr. Peter Linneman, NAI Global’s Chief Economist and Principal at Linneman Associates, provides his insight into the current economy, inflation pressures, when the recovery will take hold, and uses a comparison of today’s global recession to past downturns to forecast the coming months.

You can download a complimentary copy here. And for an in-depth review of the current state of the economy presented by Dr. Linneman, download the second quarter Global Economic Outlook web conference OnDemand.

NAI Pittsburgh Commercial is a Pittsburgh proud locally owned and operated company. To see some of the investment and development opportunities available in the Pittsburgh region CLICK HERE

Pittsburgh's commercial market leads nation in real estate for business purposes

By Sam Spatter
FOR THE TRIBUNE-REVIEW
Wednesday, July 22, 2009

Pittsburgh's commercial real estate market has maintained its No. 1 position in the nation, according to Moody's Investors Service.

The New York-based ratings company's second-quarter Red-Yellow-Green report issued Tuesday ranked the seven-county region as the top market overall among 60 metropolitan areas nationwide.

Although Oklahoma City was listed as No. 1 in the first quarter 2009 report, Moody's adjusted its method of ranking, which eliminated Oklahoma City and moved Pittsburgh back into the No. 1 spot for that period.Pittsburgh also was rated No. 1 at year-end 2008.

Moody's rated Pittsburgh in three of seven real estate categories the company uses to compare markets. Cities must be rated in three or more categories to get a final ranking. Pittsburgh was judged on multi-family housing, Downtown office vacancies, and full and limited service hotels' occupancy rates. It was not included in retail, industrial or suburban office ratings.

The No. 1 ranking continues the long climb back for the local market, which Moody's ranked among the 10 "most troubled" throughout most of 2005.

Moody's ranking adds to a list of accolades for the region's real estate market.

Kiplinger.com named Pittsburgh one of its six Safe Havens in Real Estate, notingPittsburgh's investment real estate has steadily increased in value with properties in the Downtown, Oakland and Centre/Baum corridor attracting investors willing to pay top dollar for prime real estate.

Moody's uses performances in the seven categories of real estate to arrive at a composite score ranging from 0 to 100.

The name of the report comes from how it describes a market's performance in traffic-light colors, with scores of 0-33 identified as red, 34-66 as yellow, and 67-100 as green.

Moody's evaluation gives the Pittsburgh area a composite score of 52 in the yellow category. The lower score is because of the nation's deflated economy, Moody said.

NAI Pittsburgh Commercial is a Pittsburgh proud locally owned and operated company. To see some of the investment and development opportunities available in the Pittsburgh region CLICK HERE

Economic Outlook: Commercial Real Estate Loans..

Commercial Real Estate Loans Weighing Heavily on Bank Earning Statements

Today's (July 20th) issue of the Wall Street Journal featured an article in the Money & Investing section about the suffering commercial real estate financing industry and its impact on the banking crisis.

As many people are aware, banks have been failing in large numbers over the last 18 months due to short-sighted lending policies and, in some instances, mismanagement and fiduciary scams at senior levels. Now commercial real estate, often a solid monetary investment, is coming under fire as properties and property portfolios are being devalued by increasing vacancies, falling rents and changes in how companies are pursuing their commercial space strategies.

As earnings season heats up in the last couple of weeks of July, investors are closely watching the financial statements from banks and lending institutions to see how they are writing off the commercial loan losses, and for insight into the financial institutions' plans for addressing these earnings issues in the coming months. (You can read Lingling Wei's story here.)

With the commercial real estate market valued at approximately $6.7 trillion USD, is the industry too big to fail? And how will the stock market react to these losses, or perception that losses are coming? The coming quarter should prove most interesting to watch.

Global Economic Outlook - June 2009 now available OnDemand

Is this the “worst ever” yet? Have we hit bottom?

NAI Global’s Chief Economist Dr. Peter Linneman tells us it is “time to rebuild the confidence” in the U.S. economy. We are nearing a bottom, but it will be a while before recovery takes hold. He provides insight into how the economy is improving, which sectors will improve first and the telltale signs recovery is under way. Listen to the June 2009 Global Economic Outlook web conference OnDemand.

Agency Expertise: 80,000SF New Construction

Full service commercial brokerage firm, NAI Pittsburgh Commercial (www.naipittsburgh.com/412.321.4200), has been selected by Kossman Development Company (www.kossman.com/412.921.6100) as the Exclusive Leasing Agent for the new Valley Commerce Center strategically located on Rt. 50 parallel to Interstate 79 in Bridgeville. The first of the two (2) planned single story Class “A” flex buildings is under construction with the earth work slated for completion by the end of June 2009. The foundation and shell will begin immediately with the exterior and base building scheduled for completion by 3^rd Quarter 2009. John Bilyak of NAI Pittsburgh stated, “We are extremely excited about marketing new flex product in the southern I-79 submarket. This project offers amenities, class “A” building specs, and parking that make it unique to a region in need of quality building product.”

The versatility offered by the 44,244 square foot Building One will be conducive to those tenants with office, flex, lab and clean value added manufacturing applications.

John C. Bilyak, Director of Industrial Brokerage and Patrick J. Sentner, SIOR, Principal of NAI Pittsburgh Commercial, are leading the leasing efforts on behalf of Kossman Development Company.

NAI Forms Alliance with Site Analytics

Alliance Offers Expanded Market Analytic Services to Retailers

NAI Global, the world’s premier managed network of commercial real estate firms and one of the largest real estate services providers worldwide, announced today it has formed an alliance with Site Analytics Co., a site selection consulting firm, to offer expanded market analytics services to NAI retail professionals.

Founded in 1995, Site Analytics advises brokers, retailers and landlords on growth-related strategic issues. Their customized reports and models employ sophisticated analytic techniques to provide unique insights that help clients resolve the tough questions they face on a daily basis. Adapting these tools—in consultation with NAI Global’s Market Analytics team—for use by NAI retail professionals, Site Analytics’ range of services helps brokers provide the best possible advice to their clients and improve the site selection process.

“Site Analytics is a market innovator and respected service provider in the U.S.,” said George Anderson, Vice President of NAI Global Market Analytics. “This alliance will expand the reach of the Market Analytics team, and enhance this key service offering for our clients.”

Throughout 2009 Site Analytics will create and implement new products tailored specifically for NAI Global’s managed network, with the first set launching in May prior to ICSC RECON Global Retail Real Estate Convention. Some of these custom products help retail brokers determine how to most effectively identify prospective tenants and market a property. Others help NAI brokers advise their retail clients on the best markets and sites for their expansion or contraction efforts.

“Site Analytics is proud to be an Alliance Partner of NAI Global,” said Adam Epstein, President of Site Analytics Co. “Especially in times like these, it’s important to ensure that clients are making a fully-informed decision. We are pleased that NAI brokers, who are often acknowledged as the leading experts in their home markets, will be enhancing the services they offer their clients with the addition of our customized analyses.”

Site Analytics Co. is based in New York City, and will work with NAI Global’s offices both across the United States and internationally. Headquartered in Princeton, New Jersey, NAI Global manages a network of 325 offices and 5,000 professionals in 55 countries across the globe.

NAI Pittsburgh Commercial is a Pittsburgh proud and locally owned commercial real estate brokerage company and part of the NAI Global managed network. Click to learn how NAI Pittsburgh can help you with the toughest retail challenges.