Market Overview
Although still negative year-to-date (YTD) due to ongoing consolidations of pre-pandemic footprints, absorption continues to gradually improve, with the market recording net occupancy gains in four of the past six quarters. Net absorption was slightly positive in Q3 2026 at 11,094 square feet (sf), bringing cumulative absorption since the beginning of 2025 into positive territory. Class A space has driven much of this improvement, recording nearly 290,000 sf of positive net absorption since 2025, including 68,000 sf in Q3.
New leasing activity YTD approached 1.9 million square feet (msf), keeping pace with the first three quarters of 2024, which ultimately recorded the highest annual leasing total since the pandemic. Class A product accounted for 71.8% of all new leasing across the Pittsburgh MSA, with the flight-to-quality trend even more pronounced in the Central Business District (CBD), where Class A captured 94.4% of activity YTD. Renewals further demonstrated occupiers’ preference for quality space, with Class A accounting for over 68.0% and 91.0% of renewed space across the MSA and in the CBD, respectively. Such a proportion of Class A renewals suggests many occupiers are choosing to retain high-quality space rather than reenter a market with limited top-tier options and elevated buildout costs. Competition for this space supported rental growth despite persistently high headline vacancy, with the average Class A asking rate increasing 2.1% year-over-year (YOY).
The overall vacancy rate measured 17.1% at the close of Q3 2026, 20 basis points (bps) below the all-time high reached in Q1 2025. With no noteworthy projects under construction for eight consecutive months, the lack of new supply and recovering demand have helped offset ongoing consolidations of pre-pandemic office requirements. As a result, the headline vacancy rate has remained within a narrow 40-bp range over the past two years. Conditions vary considerably by quality, however, as the supply of top-tier space that meets occupier requirements remains limited, thereby supporting further rental growth at the upper end of the market.
