Pittsburgh’s office market wild card
There can be little doubt that the ongoing coronavirus pandemic has roiled office space markets around the world. Pittsburgh is no exception. In fact, it likely is being affected more acutely.
And despite lots of rah-rah-sis-boom-bahing about the pandemic leading to, in its own perverse way, an occupancy renaissance, the best anyone really can say about the future is that they simply don’t know. For wild cards abound.
Well before the pandemic hit, Pittsburgh’s top-notch office space was struggling as vacancies hit rates not seen in a decade. Work-at-home trends stand to exacerbate the trend.
But some analysts see a silver lining. To wit, once the pandemic fades, companies will be eager to have their staffs back together again. That, however, could require more space to keep social-distancing standards in place, bolstering their bottom lines.
But the times they have ‘a changed.
That might be a pipe dream considering that more than a few businesses may have found more operational and economic efficiencies in the work-at-home regimen.
And as The Wall Street Journal reports, companies worldwide now with excess space are subletting it. “The trend could force property owners to lower rents,” it finds.
Whether that leads to more space being rented remains to be seen. And that could be the least of landlords’ challenges in Pittsburgh and elsewhere.
Another Wall Street Journal commentary questions the very need for “The Office” as it came to be known.
“Is it worth having central hubs and office towers or would it be better just to rent space for a week every quarter to gather distributed teams?” it posits.
Consider that question in Pittsburgh’s case in which not only is there a glut in premium office space but also the continuing planning for and/or building out of new office space that’s being subsidized by taxpayers.
As we’ve noted before, that’s a horrid public policy in “good times” and a recipe for disaster in pandemic times.
Vicious cycles that force the free market to compete against those perverted by government intervention underwritten by taxpayer dollars invariably are.
Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (email@example.com).