Quote:
Originally Posted by markson33
I will agree that it doesn't seem right, but I completely disagree that they would be foolish to leave. Quite the contrary. There is almost no reason for US Steel to be downtown - other than sentimentality. Perhaps the best reason for them to move to the suburbs is that they can save a ton of money on efficiency (both in the square footage and the operating expenses). They can also control their own destiny and consolidate their operations.
No companies are rushing to take advantage of class A office space downtown. I certainly realize that the vacancy rate is low, but that is mainly due to UPMC's lease at US Steel Tower. Tenants generally don't move from the burbs to downtown.
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How much available Class A space is available downtown, markson33? As best as I can tell from perusing several real estate market reports, not a whole hell of a lot. Class B and C space is rapidly being removed for residential use, so even that kind of space is becoming less and less available, especially in relatively large contiguous amounts.
The companies that prefer to be downtown will continue to be there, namely banks & financial institutions, insurance companies, legal offices, etc... etc... And realistically, downtown is a very, very centrally-located place, so it's easy to attract workers from all around the metro area. When a company locates in say Southpointe down south (where I happen to work) or up in Cranberry/Wexford/Warrendale, it's extremely difficult to attract employees from across the region. Commuting from say Monroeville to Southpointe would be a nightmare, same for any of the eastern region. And to the Cranberry area, you're pretty much eliminating much of the eastern Pittsburgh region along with a good portion of the South Hills from a reasonable commute.
I agree that a long-term lease in the new development would be a likely ideal situation for USX or any other company located downtown that's looking for new or expanded office space.
In addition, with the continued influx of oil & gas companies entering and growing in the area, there are definitely some who would like to have a central office location, not just be in Cranberry/Wexford/Warrendale or Southpointe.
Aaron (Glowrock)