Leasing demand from natural-gas and other energy companies is helping to bolster the U.S. office market and drive growth in cities such as Pittsburgh, where rents are at their highest in more than a decade.
Greater Pittsburgh, along with Houston and other cities with concentrations of energy-related workers, is outpacing national growth in rents and occupancy, according to a report today from Reis Inc., which showed U.S. office landlords had net gains in leased space for a second year in 2012, following three years of declines. Tenants in energy, along with technology, helped push the national vacancy rate to a three-year low.
More than 50 companies began operations in the Pittsburgh area in 2011, helping to revitalize the economy three decades after the collapse of the steel industry, according to the Pittsburgh Regional Alliance, a group that seeks to attract capital investments to the 10-county region.
The Pittsburgh region -- along with parts of North Dakota, Ohio, New York and West Virginia -- is drawing energy-industry tenants because of new techniques such as horizontal drilling and hydraulic fracturing, or high-pressure water injections, that have made it possible to release the gas contained in shale. So-called fracking has raised objections from environmentalists partly because of possible contamination from the chemically treated water that’s used.