Developers build in East Liberty while Pittsburgh employment stagnates (Economy: 2014, apartments)

[CFP]

This is not going to end well.

Ultra-low interest rates courtesy of the Federal Reserve and their Quantitative Easing program are making it possible for developers to embark on several new projects in East Liberty such as Bakery Square 2.0, Eastside 3, the Indigo Hotel, the Ace Hotel, East Liberty Place South, etc. In theory those projects are under construction to meet rising demand. In reality they're more like the Chinese ghost cities, make-work projects that once completed will remain vacant for years.

According to the Trib, "preliminary jobs numbers released this week by the U.S. Bureau of Labor Statistics show virtually flat job growth for the Pittsburgh region in 2013, adding just 400 jobs for the year".

Job market stalls in Pittsburgh area | TribLIVE

“We actually had the lowest job growth of the 15 regions,” said Doug Heuck, program director for Pittsburgh TODAY. “In fact, we were the only one who actually lost jobs in that January year over year period.”

http://wesa.fm/post/pittsburgh-regio...KJSqV0.twitter

Economy - Percent Change in Jobs by Sector

"Falling unemployment was not good news, however, because 2,400 fewer people reported that they had jobs."

Read more: http://www.post-gazette.com/business...#ixzz2wKl9Cao4

Unemployment drops in Pittsburgh area, but so does number of available jobs - Pittsburgh Post-Gazette

There is no rising demand for all the new development in East Liberty (or for the city in general) because there is no job growth. The BLS report is proof of that. What does exist is a tremendous supply of cheap money for developers thanks to the Fed and QE.

If you think the ground floor vacancies at East Liberty Place North are a joke
http://goo.gl/maps/edy7u
not to mention all the vacancies on Broad Street between Highland and Sheridan
http://goo.gl/maps/auDHk
wait a few years.

[AaronPGH]

The Ace Hotel doesn't make mistakes when they open a property.

[LIRefugee]

There can easily be a rise of jobs in East Liberty while jobs elsewhere in the city fall, assuming the stats you posted are true. The original Bakery Square is all filled out and Walnut would not have embarked on 2.0 if there wasn't demand for it. There is also a big difference between office jobs and retail space, and East Liberty Place South is far from the most actively-developing portions of East Liberty. Also, East Liberty Place south will include a number of apartments, and the north building, from what I understand, is full. The building does not exist purely for retail.

Chinese ghost cities? There isn't a word for that extreme form of hyperbole.

[_Buster]

First, they are preliminary jobs numbers which always change, they are based on surveys, they could improve or get worse. as another poster here would say, just "writing on a web page". The developments however, are real. Second, a city is not a steady state entity. Areas are sometimes underserved or overserved by certain businesses, but they always fluctuate over time. It is apparent that the city has been underserved by hotels in particular, so the catch up is probably a good thing, and will create jobs itself. These are private sector companies putting up their own money - they are not stupid and they are not going to throw it away.

The Chinese ghost cities comment is especially priceless. So now we've had Pgh compared to both Nazi Germany and Communist China, within about one hour on this forum, by the downers. just why would anyone think you people are absurd?

[Hopes]

It's not going to be like Chinese ghost cities. They're like that because they're in the middle of nowhere. Development in the middle of a metro area won't have the same fate.

They need to lower their rental prices on the storefronts in East Liberty. The requested rates are crazy high for an area that is essentially dead right now. When I complained on here, someone said that lowering the rates would bring in undesirable tenants like paycheck advance loan companies and stuff. That's not true. They can keep those businesses out by simply not renting to them. I recently rented workshop space in a shared building filled with many creative businesses. Every single one of these businesses would jump at a chance to have an independent space in a great location if the rent was reasonable to allow an opportunity to grow their businesses. These East Liberty properties would be perfect, but they are being priced as if it's already the hot area.

[_Buster]

Originally Posted by Hopes

It's not going to be like Chinese ghost cities. They're like that because they're in the middle of nowhere. Development in the middle of a metro area won't have the same fate.

They need to lower their rental prices on the storefronts in East Liberty. The requested rates are crazy high for an area that is essentially dead right now. When I complained on here, someone said that lowering the rates would bring in undesirable tenants like paycheck advance loan companies and stuff. That's not true. They can keep those businesses out by simply not renting to them. I recently rented workshop space in a shared building filled with many creative businesses. Every single one of these businesses would jump at a chance to have an independent space in a great location if the rent was reasonable to allow an opportunity to grow their businesses. These East Liberty properties would be perfect, but they are being priced as if it's already the hot area.

I assume they are mostly 5 year leases. If the owners think it's becoming a very hot area, they don't want to get locked in for 5 years at a lower rent and miss out on the extra money. My guess is they are waiting for the other local developments to get closer to completion when it will more likely be seen as the place to be. OTOH, if they thought it was going to be a ghost city, they would be renting (or selling) for whatever they could get.

[FreightTrainRunning]

I don't know about retail but there's a massive shortage of office space in the city. Bakery Square 2 will have no problem leasing out.

[Hopes]

Originally Posted by _Buster

I assume they are mostly 5 year leases. If the owners think it's becoming a very hot area, they don't want to get locked in for 5 years at a lower rent and miss out on the extra money.

Commercial leases can be written many ways. Escalating rent can be written right into 5 year leases.

Originally Posted by _Buster

OTOH, if they thought it was going to be a ghost city, they would be renting (or selling) for whatever they could get.

Of course they don't expect it to be a ghost city. They have high hopes the big payoff is in the near future. Those retail properties have been sitting for a very long time already.

[Buckeye Burgher]

I remember when East Liberty was a sh****le and the rest of us still stagnated.

I like this way better.

[LIRefugee]

Originally Posted by Buckeye Burgher

I remember when East Liberty was a sh****le and the rest of us still stagnated.

I like this way better.

East Liberty is a wonderful problem to have these days.