Tuesday, May 22, 2012

When an exodus isn't

So these rumors have been bubbling for some time, but Jon Delano/KDKA talks about the next big office building that may be built downtown. New Skyscraper Could Be Built In Downtown Pittsburgh

But note this quote:

“We’ve really been fighting this exodus, if you will, from downtown Pittsburgh and from the region, and now that’s reversing,” Allegheny County Executive Rich Fitzgerald told KDKA Money Editor Jon Delano.

What 'exodus'?   I've been throught his before, the number of jobs located in the city of Pittsburgh has been one of the most remarkably consistent metrics.  Roughly 300K jobs were located in the city of Pittsburgh proper in 1960 and it has been about the same exact number over the last 20 years.  Given that large parts of the city are likely declining, that stabilility is being driven by the strength of jobs located Downtown and Oakland.  There may be fluctuations year by year, but clearly NO EXODUS.  That is the story, not that there is some rebound from a trough that didn't happen even through the 'great recession'.

If you really parse it, consider that Downtown recently had one large new skyscraper built in the form of PNC 3... has another large PNC tower already announced. For there to be continued supply additions despite all the new recent additions is a sign that there was no exodus in any recent past either. It all is an argument that sounds like what I reacted to when I once asked "Is Downtown Dead?".  The answer was no a decade ago and is clearly still no today.

But this new potential building is interesting.  If indeed it is for a new Chevron tenant, a potential mentioned here already, it really would be a big boomerang moment for the company that claims Gulf as one of its progenitors. Chatter is also that Chevron has been pressuring for the city to go back on its legislated 'ban' on new drilling within city limits.  If there is a big new project involving Chevron you have to wonder how that debate will progress.

and if yet another big tower gets announced... with presumably some tenants lined up since this type of thing will not be built on spec...  then I hope the bemoaning of a potential US Steel departure from Downtown will not be overhyped.  Personally I can't believe the building's landord lets US Steel get away unless they are confident they can line up new tenants once they are gone. 

Now the real question.  Remember it's not only this new potential tower, but the PNC tower just beginning, that will be added to Downtown office space.  Presumably all that new office space that will have respectable occupancy rates and Dilbert-density employee counts.  So with most bus routes being eliminated and with parking supply Downtown essentially capped, does anyone want to spot the over/under for what daily parking rates will be Downtown in say 2015? 


Blogger Dean Jackson said...

Almost all of the open office space real estate is Downtown, almost all of it is long-term lease only, and at prices that compare to Washington, DC office space.

Which is to say, it's easier and cheaper to rent space in other cities. While our housing is cheaper than most cities, trying to get space here - especially for startups or companies unable to sign 10+ year leases - is one thing slowing down new jobs in the area.

That, and I don't quite understand why the hell *all* of the office space we build is Downtown. It seems like a higher-cost than putting your employees elsewhere in the city; the new developments in the East End come to mind here.

Wednesday, May 23, 2012 10:04:00 PM  
Anonymous MH said...

That, and I don't quite understand why the hell *all* of the office space we build is Downtown.

I assume it's because that's where the infrastructure is. The East End doesn't have nearly as much of it, either in freeway access or transit.

Thursday, May 24, 2012 10:18:00 AM  
Anonymous Alex B. said...

It's really simple. Politicians say they are "fighting for something" that has already happened or will never happen, then they get to take credit because they were "fighting".

The vast majority of voters are not concerned with the messy details and politicians take advantage of that ignorance.

Thursday, May 24, 2012 11:48:00 PM  
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