Developing Pittsburgh Fall 2012 by Jaimee Greenawalt

Pittsburgh RESURGENT

PITTSBURGH

OXFORD MARKS 50

YEARS OF DEVELOPMENT MID-YEAR MARKET SEGMENT UPDATES 2012 NAIOP

BUYER’S GUIDE

FALL 2012

DEV E LOPING

Civil & Environmental Consultants, Inc. Whether already defined or yet to be, the highest and best use of real estate is achieved by identifying each site and/or facility’s unique conditions and constraints using accurate, unbiased and informed analysis. CEC draws from more than 20 years of service to the commercial, retail, industrial, institutional and residential real estate industry. We deliver environmentally-conscious integrated design and experienced consulting services to owners, facility managers, developers, architects and contractors at all points in a property’s life cycle.

Services ► Site Selection / Due Diligence ► Land Survey ► Landscape Architecture ► Civil Engineering Services ► Geotechnical Engineering ► Construction Phase Services ► Building / Site Operation & Maintenance

Expertise ► Acquistion ► Development ► Management

Year after year, CBRE is involved in more of the largest office leases and office investments sales in Western Pennsylvania than any other firm. The largest tenants in the market, the most prestigious landlords, and private real estate investors continue to look to CBRE as a trusted advisor for their most critical requirements. PPG Place

The Crown Jewel of the Pittsburgh Skyline Prime Location in the heart of Downtown’s Golden Triangle Up to 174,000 SF Available

Bakery Square

BKSQ 2.0 coming soon

600 Cranberry Woods

Signature Class “A” Office Building In Western Pennsylvania’s Premier Business Park 95,844 SF Available

Penn Center West

The Parkway West’s Premier Class A Office Address Accessible to everywhere 20,000 SF Available

Platinum LEED, University Sector Office Space Up to 400,000 SF Available

Churchill Corporate Campus Great visibility from Parkway East

Building 801 | 82,179 SF Available Building 701 | 89,069 SF Available Building 501 | 240,000 SF Available

Bailey Center - Southpointe 125 & 135 Technology Drive

In the Heart of Southpointe with Expansive views Efficient floor plates and Space to Grow 2,500 SF – 20,000 SF Available

#1 IN REAL ESTATE SERVICES WORLDWIDE cbre.com 600 Grant Street | Pittsburgh, PA 15219 | T 412.471.9500 | www.cbre.com/pittsburgh

CONT E NTS

| Fall 2012

Publisher’s Perspective

Development Project Walnut at Highland

Eye on the Economy Uncertainty plagues the global economy but U.S. commercial real estate conditions continue to improve.

Feature / Resurgent Pittsburgh

Pittsburgh’s transformation is yesterday’s news. The vitality of the region’s healthcare, education and research, natural gas and now, manufacturing sectors are creating jobs, soaking up commercial real estate and driving development.

Office Market Update Jones Lang LaSalle

I ndustrial Market Update CBRE

Retail Market Update Colliers International

44 18

Grant Street Associates/Cushman & Wakefield.

Developer Profile / Oxford Development Marks 50 Years

A partnership between two family real estate businesses has spawned one of the region’s largest privately-held companies. The new generation of leadership combines best practices with family business ethos.

Benchmarks

NAIOP Corporate national chair Bill Hunt talks about how Pittsburgh stacks up after a year of visits to regional chapters around the country.

2012 Buyer’s Guide 69

National Market Update

Buyer’s Guide

L egal/Legislative Outlook Commonwealth Bank v. Kessler makes a big impact on mechanics liens.

ews from N the Counties

Transactions of Note

At the Closing NAIOP Pittsburgh president Lynn DeLorenzo.

The 2012 NAIOP Buyer’s Guide puts contacts for designers, engineers, contractors and lenders in one easy-to-use resource. www.developingpittsburgh.com

A Regional Milestone Itâ&#x20AC;&#x2122;s been 50 years since we first put a shovel in the ground and changed commercial real estate development. We pioneered the regional mall, built iconic skyscrapers and are at the forefront of sustainable construction. We have taken our skills and enterprise across the country and made our mark, but have never forgotten our roots here in western Pennsylvania. Nor will we ever cease to be actively involved in our community, supporting its causes, providing for its needs and loudly and proudly calling it home. Oxford Development Company celebrates 50 years in business mindful of how weâ&#x20AC;&#x2122;ve achieved that milestone: Our People, Our Clients and Our Community.

Development & Project Management Property Management Leasing & Brokerage Services Investment Advisory Services www.oxforddevelopment.com

Publisher’s Perspective PUBLISHER

Tall Timber Group www.talltimbergroup.com EDITOR

Jeff Burd

412-366-1857 jburd@talltimbergroup.com PRODUCTION

Carson Publishing, Inc. Kevin J. Gordon ART DIRECTOR/GRAPHIC DESIGN

Carson Publishing, Inc. Jaimee D. Greenawalt

CONTRIBUTING PHOTOGRAPHY

Carson Publishing, Inc. Jan Pakler Mark Grasso Pittsburgh Regional Alliance Rob Long Charles Uhl ADVERTISING SALES

Karen Kukish

724-837-6971 kkukish@talltimbergroup.com MORE INFORMATION:

DEVELOPINGPittsburgh is published by Tall Timber Group for NAIOP Pittsburgh 412-928-8303 www.naioppittsburgh.com No part of this magazine may be reproduced without written permission by the Publisher. All rights reserved. This information is carefully gathered and compiled in such a manner as to ensure maximum accuracy. We cannot, and do not, guarantee either the correctness of all information furnished nor the complete absence of errors and omissions. Hence, responsibility for same neither can be, nor is, assumed. Keep up with regional construction and real estate events at www.buildingpittsburgh.com

ON THE COVER: Mark Grasso Director of Corporate Communications Oxford Development Company mgrasso@oxforddevelopment.com

5 DEVELOPINGPITTSBURGH

| Fall 2012

ack in summer 2006, during the planning of the first edition of BreakingGround, I debated whether to publish bi-monthly or monthly. While I was thinking about the potential of the six extra advertising opportunities, my publishing partner – Carson Publishing’s owner Kevin Gordon – reeled me back in by encouraging me to get something out smoothly every other month before I tried a monthly schedule. Six years later I doubt Kevin would give us a passing grade on ‘smoothly’ yet but that didn’t stop me from accepting the opportunity to create a commercial real estate publication for NAIOP Pittsburgh when they approached me this past winter. Our relationship with NAIOP has been very rewarding and friendly for a number of years so taking this next step together, that of putting together a first-class information resource for the real estate industry, didn’t seem like much of a risk. Risk is a subject that has been on my mind a lot in recent years. These magazines we publish are the second venture I’ve started since leaving my employer in 1994. I still remember that I didn’t feel that leaving a big corporation was as risky as my friends and family thought back then. Some of it was probably an overactive self-confidence gland (and/or lack of sense) but I was also starting a business that had a capital outlay of a couple thousand bucks. Compared to the risks of developing real estate that is a laughable level of risk. Developers are willing to put a considerable amount of their own money at risk in order to get their vision of how a property should be developed from dream to reality.

Like a test pilot, a developer’s risk is that the more often they do their job better the odds are there will be a crash. Of course, Pittsburgh developers have generally not fit the test pilot bill. Many of the developers that call Pittsburgh home got into commercial real estate after making good doing something else. That formula tends to make you more conservative. Now with lending conditions approaching normal and commercial real estate in short supply, the time for the conservative approach may be past. The vision of the petrochemical industry and our regional civic leaders is for another economic transformation to follow the maturation of the gas industry, complete with millions of square feet of industrial and office space and hundreds of thousands of jobs. And the petrochemical industry isn’t known for its patience. That kind of growth will require that developers anticipate demand and build ahead of the actual need for the space. In real estate terms that’s called speculative building, something that is out of vogue these days. Developing a spec building isn’t a smart play in 2012. But if the predictions about the impact of gas exploration and the ethane crackers are true, the smart play in 2012 may become the losing play in 2015. A rapidly growing economy gets business a little out of its comfort zone. Of course, adapting to no growth in the 1980’s was pretty uncomfortable too. I have faith that the business community will have more fun adjusting to the discomfort of expansion. DP

Jeff Burd

www.developingpittsburgh.com

6 DEVELOPINGPITTSBURGH

| Fall 2012

Hey Skit ch, how did we get here ?

the n e w s a b o u t m e t r o -

t h e r e i s n ’t n e c e s s a r i l y

polit a n P i t t s b u r g h h a s

a n o b j e c t i v e m e a s u r e-

turn e d d e c i d e d l y p o s i -

ment

tive o f l a t e . T h e r e g i o n

a city more livable or

the

has b e e n r a n k e d o n s o

m o r e c o o l o r w h a t e v e r.

movie That Thing You

many ‘ To p Te n ’ l i s t s i n

As enjoyable as it is to

Do may well describe

the l a s t f e w y e a r s t h a t

see Pittsburgh on these

t he feelings of real es-

it is a c t u a l l y g e t t i n g a

lists the more reward-

t ate

bit o l d .

ing news is the fun-

T hat

line

from

professionals

what

makes

damental state of the

Western PA about the market during the past

Man y o f t h e s e l i s t s a r e

market.

f ew years. After more

rath e r s u b j e c t i v e , e v e n

e r s , i t i s a n u n d e rs t a t e -

t han two d ecades of a

whil e b e i n g f l a t t e r i n g .

m e n t t o s a y t h a t i t ’s

s teady barrage of neg-

Whil e

L i v-

a good time to be in

ativity – often origi -

able ’ k i n d s o f l i s t s a l l

c o m m e r c i a l r e a l es t a t e .

nating from the local

have s o m e k i n d o f m e t -

press and politicians –

rics

the

‘Most

For

d e v e l o p-

m e t h o d o l o g y,

Re s u r gent

Pittsburgh

www.developingpittsburgh.com

The road from struggling to thriving took a lot of turns. When the economy of Western PA was turned on its ear from 1980 to 1984, the civic leaders of the region did not necessarily chart a path towards a long patient recovery. It is certain that Richard Caliguiri, Sophie Masloff or Tom Murphy would have gladly landed a ‘big fish’ to replace the steel industry. The leaders who put the strategies in place hoped for quick results but were prepared to see incremental gains in the economy that would be sustainable through good markets and bad. Pittsburgh’s turnaround story has been told many times by summer 2012. The focus of those stories is usually on the successes but the quiet decisions that laid the foundation were just as important. The answer to the question of how we got here is that this is where we planned to be all along.

Mon Valley, Beaver Valley or South Side, for example – the first actions needed were more economic triage than revitalization. In the areas hardest hit by the downturn the first concerns were about human services rather than redevelopment but even at that stage there were economic efforts tried throughout the region. Over time many of the smaller subregional agencies gave way to larger, more concerted efforts. Each county learned to garner resources and how to market the advantages of the county. And at the regional level there were several agencies working with private sector leadership to promote the business climate and lifestyle advantages of Pittsburgh. The fragmented and regional efforts weren’t without successes.

GETTING HERE THE HARD WAY “You don’t build a market out of home runs; you build it out of singles and doubles,” says Dick Donley, president of Chaska Property Advisors. “The good market we have was kind of an evolution.”

Photo by Charles Uhl

The evolution Donley speaks of was not the kind Darwin explained in Origin of the Species. Conditions in Pittsburgh’s commercial real estate market did not slowly deteriorate in 1981; they collapsed as more than 300,000 jobs ultimately went away. Starting from that low point, however, the improvement was a function of time and a sort of real estate natural selection. The building stock in 1985 was designed for an economy that wasn’t here anymore. Like at a vineyard, the existing stock needed pruning before new growth began to occur. For those areas that were ‘pruned’ from the economic vines – the 8 DEVELOPINGPITTSBURGH

| Fall 2012

Pittsburgh was actually first named ‘Most Livable City’ by Rand McNally in 1985. Software and computer research done at Carnegie Mellon University spun off a number of successful businesses, a phenomenon that accelerated during the dot com boom. University of Pittsburgh’s medical research and hospital system attracted increasing grants and the behemoth that became UPMC started to develop. The telecom boom of the late 1990’s created a new mini-industry for a few years. At the end of the day, no successes were as effective as the passing of time to transform the old economy.

“I started with PNC in 1972 and in the early years of my career there were some tough times. The coal mines were shutting down and Consol was closing in West Virginia,” remembers Donley. “I asked an economist how you trained a coal miner to be a computer programmer. Of course the answer was that you don’t. The answer was attrition but you didn’t want to hear that at the time.” Attrition is not a viable solution if you are charged with attracting business or running for office, however, and everyone in those situations was trying to do something proactive. Not many of those projects were the kind of overnight successes that their sponsors hoped would result. Some of the big government initiatives or investments simply needed time to fully mature. Southpointe is a great example of the singles and doubles approach but until the late 1990’s the success of the park was less assured. Several of the higher profile projects initiated by the City of Pittsburgh were also slow to develop – like South Side Works – or missed the mark altogether – as the Lazarus and Lord & Taylor investments did. What did emerge during this period was the blueprint that would prove to be ultimately successful, that of public private partnership.

TURNING POINTS Public private partnerships had long been part of the Pittsburgh landscape. Several of Pittsburgh’s most pressing problems over the years had been solved by marrying government and business leadership. David Lawrence, Richard King Mellon, John Kane, Robert Doherty and Jack Heinz were among the leaders who tackled air pollution, public transit and the downtown revitalization known

NAIOP Pittsburgh Officers Lynn DeLorenzo, President PWC Property Solutions

Daniel Puntil, Vice President Grandbridge Real Estate Capital

Lou Oliva, Secretary Newmark Grubb Knight Frank

Christine Vann, Treasurer Alpern Rosenthal

COMING EVENTS

Richard Donley, Past President Cranberry Business Park Associates

Domenic Dozzi, National Board

Marcellus Shale: The Latest

Jendoco Real Estate

September 20, 2012 7:30 AM Omni William Penn

Gregory Quatchak, National Committee

“North American Port & Intermodal Trade and Transportation System Trends” October 3, 2012 11:30 AM Rivers Club The expansion of the Panama Canal and its impact on East Coast ports will create emerging new distribution corridors and increase inland port opportunities. See how Western Pennsylvania will benefit.

Civil & Environmental Consultants

DeWitt Peart, National Committee Pittsburgh Regional Alliance

William Hunt, National Chairman The Elmhurst Group

Board of Directors at Large Michael Belsky Columbia Gas of Pennsylvania

Jerry Bunda

NAIOP Pittsburgh Night at the Fights November 1, 2012 5:15 PM Omni William Penn

NAIOP Pittsburgh’s Developers’ Showcase November 13, 2012 Allegheny Center Learn what professional site selectors and real estate investors have to say about the Pittsburgh region. Visit exhibits of regional developers and economic development agencies. Network with your peers.

Imperial Land Corporation

W. Scott Caplan Burns & Scalo Real Estate Services Inc.

Grant Mason Oxford Development Corporation

Brian Walker Millcraft Industries

Wm. Randell Forister Allegheny County Airport Authority

Michael Swisher

NAIOP Pittsburgh Holiday Party

Horizon Properties Group

December 6, 2012 5:00 PM Duquesne Club

David Weisberg

NAIOP Pittsburgh Awards Banquet

Jerry Bunda, Imperial Land Corporation Transportation Maureen Ford, ALCOA Marketing/Communication David Weisberg, Huntington National Bank Programming Carl Belli, Continental Building Systems Membership Geoff Nara, Civil & Environmental Consultants Economic Development Ryan Klousnitzer, CONSOL Developing Leaders Board Representative

March 14, 2013 David L. Lawrence Convention Center

Visit naioppittsburgh.com or call 412-928-8303 for additional information.

Huntington National Bank

Committee Chairs

TWO GREAT BRANDS. ONE REAL ESTATE POWERHOUSE. + are coming together to create a game-changing platform in commercial real estate – Newmark Grubb Knight Frank. With offices throughout North America, a shared entrepreneurial spirit, and a commitment to superior client service, Newmark Grubb Knight Frank is the industry’s newest full-service powerhouse. As part of BGC Partners, a leader in global capital markets, we are dramatically increasing our footprint, expanding our business lines, and capitalizing on technology – establishing a premier position in commercial real estate.

6 PPG Place, Suite 600, Pittsburgh, PA 15222 T 412.281.0100 Newmark Grubb Knight Frank Tenant & Landlord Representation w Global Corporate Services w Investment Sales & Capital Markets w Property Management w Facilities Management w Appraisal w Project Management w Office w Industrial w Retail w Multi-family w Hospitality

now as Renaissance I. That blueprint created the Allegheny Conference on Community Development. A significant turning point took place in 2003 when the Conference became the umbrella for the merger of the Pittsburgh Regional Alliance, the Pennsylvania Economy League of Southwestern Pennsylvania and the Greater Pittsburgh Chamber of Commerce.

At roughly the same time as the Redd Up movement was getting underway a single lease inked at the South Side Works had a similarly unexpected impact. When the Cheesecake Factory opened in August 2004, the addition to the restaurant landscape didn’t exactly create a new food culture but the popular food chain’s selection of the Soffer project as its second PA location gave credibility to the Pitts-

That project – which was concurrent with the Findlay Connector – also impacted one of Pittsburgh’s weak spots: the airport. “Once the missing ramps and the Findlay Connector became reality it made the airport corridor more viable,” notes Louis Oliva, executive managing director for Newmark Grubb Knight Frank. “That’s significant for this market because if you look at any major

“The completion of the I-79 ramps o pened up tremendous development opportunities for Butler Co unty, even more than I-279...” Beyond the advantages of the combined resources of the organizations, the merger focused the business attraction efforts of the merged Conference on a broader 10-county region and placed more emphasis on enabling existing businesses to retain talent and expand. The new Conference also focused the energies of the private sector leadership. The merged entity also provided a ‘go to’ resource for any company with an interest in locating in the region. Within a few years, several other events proved to be turning points that were the residue of a long-term plan and combined public private support. Some were quantifiable and others went to impacting the regional psyche, but all contributed to the confidence that characterizes Pittsburgh today. One of those factors that influenced our psyche was the manner in which Bob O’Connor led the city as mayor. O’Connor’s style may have been less sophisticated than some of his predecessors but his enthusiasm was infectious. Programs like ‘Redd Up Pittsburgh’ drew criticism for the parochial feel but the goal was pure Marketing 101. The mayor’s political instincts served the development community well in his all too brief tenure.

Photo by Mark Grasso

burgh retail market (not to mention co-tenancy clout). Since then retailers with limited outlets, like Tiffany’s or Nordstrom’s have put Pittsburgh on their maps. At the opposite end of the spectrum was an infrastructure improvement that had been advocated by local government and business leaders (especially NAIOP Pittsburgh) for its potential to unlock development. The completion of the I-79/Parkway West ramps was an expensive and lengthy project but the results have exceeded expectations. “The completion of the I-79 ramps opened up tremendous development opportunities for Butler County, even more than I-279,” says Dewitt Peart, “It’s a case book study of what well thought out infrastructure planning can do. It also showed that we can’t do [economic development] without private sector leadership.”

airport corridor in the U.S. there are industrial developments surrounding the airport.” One of the commercial real estate turning points that may have turned in part on the airport access from the north was the decision by Westinghouse in 2007 to select Cranberry Woods for its new headquarters. The decision resulted in roughly 1.2 million square feet of space in Cranberry. The project was the largest build-to-suit in Pennsylvania’s history and was the largest office lease of the year in 2010. Dick Donley believes that the Westinghouse deal was more important than simply a great real estate development. “There was a big improvement in our mentality when the region kept Westinghouse,” he says. “I had feared for quite a while that they were moving. That would have made a big hole in the region.”

www.developingpittsburgh.com

how far the reach of the region had gone.

Westinghouse’s decision came as an effort aimed exclusively at changing the mentality of the region got underway. When James Rohr assumed the role of chairman of the Allegheny Conference, the organization took dead aim at the negative impression of Pittsburgh that persisted among many Pittsburghers and launched the Imagine Pittsburgh campaign. Intended to support the celebration of Pittsburgh 250 in 2008, Imagine Pittsburgh showed how the regional economy had been changed and just

“Jim Rohr, with his enthusiasm and salesmanship made a huge difference,” says De Peart. “His investment from a regional perspective – and the region is only as strong as its core - was very important. The campaign showed what Pittsburgh could be.” Peart thinks that the Imagine Pittsburgh was effective because it set the stage for what would unfold during the Pittsburgh 250 celebration in 2008 and the G-20 Summit in 2009. He looks at those opportunities as the turning points that shifted the focus of the region’s new-found confidence outward. “We went from constantly making excuses to aggressively promot-

ing the region,” he explains. “The combination of Pittsburgh 250 and the G-20 gave us the forum to talk to the international media about the transformation.” Perhaps the most unexpected turning point for metropolitan Pittsburgh was the recession that followed the global financial crisis. The fear and loss of business that the collapse of the financial markets spawned were certainly experienced in Pittsburgh but as the recession played out it became clear that the symptoms of the downturn, unemployment and declining property values, were less severe in this region. Employment remained almost two points higher than the rest of the country throughout the recession. Housing prices – which were at the epicenter of the collapse – remained steady in Pittsburgh and prices began to appreciate again within a year of the crisis. On a more practical level, the recession was important to Pittsburgh because the city was fortunate to be home to some of the winners – or at least the survivors – of the tumul-

Quality, Excellence, Integrity Since 1951 (412) 828-5500 www.amartinigc.com 12 DEVELOPINGPITTSBURGH

| Fall 2012

tuous market conditions. One of those, PNC Financial Services was one of the few giant banks that avoided the residential mortgage market during the bubble. Since the crisis, PNC has clearly emerged as one of the banking winners and its continued growth is behind the largest real estate project at the moment, the $380 million Tower at PNC Plaza. A final turning point that changed the nature of the office market in downtown was the decision by UPMC to move its administration from Oakland to the USS Tower.

WHERE WE ARE NOW One of the turning points not listed above is the Marcellus Shale play. The arrival of the gas industry came after almost all of the events that changed attitudes about Pittsburgh took place, but of course the impact of just the early stages of the exploration of the Marcellus and Utica Shale formations has been profound. Gas has had a transforming effect on dozens of small towns throughout southwestern PA and has been a further booster rocket to areas like Cranberry and northern Washington County that were already robust. For commercial real estate, the gas industry has absorbed huge chunks of available office and industrial space. The industry has made a successful office park, Southpointe, even more successful. Gas has also created a commercial real estate market in Greene County where one virtually didn’t exist. And as summer 2012 winds down, the industry is turning the region’s softest sub-market, the Airport Corridor, into Pittsburgh’s next hot market.

It is difficult to predict how the natural gas business will ultimately change Western PA. In only eighteen months the industry has shifted its focus to southwestern PA and Ohio to optimize exploration efforts in a time of severely depressed gas prices. The real potential economic impact won’t come from the exploration, however but rather from the separation and refining of ethane into ethylene. www.developingpittsburgh.com

GREENTREE DOWN TOWN SOUTHPOINTE AIRPORT GREENTREE DOWN TOWN SOUTHPOINTE AIRPORT D TOWN GREETREE AIRPOR SOUTHPOINTE GREENTRE DOWN TOWN SOUTHPOIN AIRPORT GREENTREE DO TOWN SOUTHPOINTE AIR DOWN TOWN GREETREE AIRPORT SOUTHPOINTE GREENTREE DOWN TOWN SOUTHPOINTE AIRPORT D TOWN GREETREE AIRPOR SOUTHPOINTE GREENTRE DOWN TOWN SOUTHPOIN BuILd yOuR BRANd AIRPORT DOWN TOWN G

PRIME LOCATIONS DOWNTOWN

AIRPORT

GREENTREE

SOUTHPOINTE

fROM ThE gROuNd uP

AIRPORT SOUTHPOI BurnsScalo.com

412.250.3000

From there grows the potential for manufacturing of plastics, chemical, fertilizer, pharmaceuticals and all forms of downstream products. That’s why the selection of Monaca as the preferred site for Shell’s ethane cracker could prove to be such a boon to a region already feeling prosperous. At the time of Shell’s announcement in March the regional economic leaders were quick to point out that the selection was far from assured (at the same time expressing confidence that the choice would ultimately be made). They also made it clear that Shell was not the only producer looking for a cracker site. Indeed, another plant has been announced outside Charleston, WV. Even more exciting are growing whispers of another cracker plant being planned in Western PA, one that will get to the market even sooner than Shell’s plant. Whether or not any of the gas industries’ predictions about the future for development come true, those projects and opportunities are still in the realm of potential. What is real at this point is a market with very little vacant space and lots of demand building. There are the first signs of projects being developed to provide some relief to the market but some headwinds exist.

office in the Cranberry Crossroads development and is ready to start the first of two 48,400 square foot flex buildings at the Commons at Thorn Hill. Chaska is preparing for construction of another building at Cranberry Business Park as well as the first building at its new Pittsburgh International Business Park in Moon Township. At Southpointe, Horizon Properties is in the process of selecting a contractor for its next 150,000 square foot office building and Burns & Scalo Real Estate’s Jim Scalo is close to securing a deal that will trigger construction of a 125,000 square foot new office building.

porate users are the key to the next phase of new development. In the meantime, the current conditions are proving to be very attractive to investors, especially those from outside of Pittsburgh. During the past year or so two of the higher profile office transactions in the central business district involved out-oftown buyers. 11 Stanwix Street was purchased for $66.6 million by GLL Real Estate Partners from Munich, Germany and Highwoods Properties

Scalo has also announced plans for a 300,000 square foot building downtown. There has been interest in the building since its announcement in the winter. Leasing interest in Millcraft’s Gardens at Market Square has also been brisk. While nothing formal has been announced, reports of an agreement with Deloitte have surfaced and the project’s contractor, Turner

Whether or not any of the gas industr ies’ predictions about the future for development come tr ue, those projects and opportunities are still in the realm of potential.

The market fundamentals are very strong. Building owners and developers are enjoying a seller’s market for rents. Demand for space in the region’s most desirable sub-markets – Oakland, Cranberry, Southpointe and downtown – is running ahead of supply by a significant amount. Many of the region's developers used the time of slower activity during the recession to entitle projects that have been in the pipeline. The spring and summer of 2012 have been marked by another round of uncertainty about the global economy but this year the end of summer is bringing construction on some of those projects. In Cranberry, Elmhurst has begun the work on its 90,000 square foot

Construction has priced the project more than once. Interest in Oxford’s 350 Fifth Avenue project has also been higher than expected. The flurry of lease conversations on these office projects – as well as a half-dozen industrial developments of 100,000 square feet or more – is the source of optimism for the regional real estate industry. The recovery from the recession has been marred by the unusually tight market conditions, which have put a damper on transactions. Optimism about new development is being driven by a higher level of interest in space by the region’s corporations. Those cor-

paid $214.1 million for PPG Place. While those are sales that grabbed the headlines, the evidence is that out-of-town interest is high for more pedestrian properties too. In fact, roughly 35 percent of the transactions over one million dollars in Allegheny County this year involved buyers from outside the region. “We’re definitely having a lot more interest from out-of-town investors. We’re probably getting an inquiry per week,” says HFF director Kyle Prawkzik. “With the amount of available space, the low vacancy rates and the number of firms quoting www.developingpittsburgh.com

– lenders aren’t quite in the position to offer the capacity to finance all the needed development.

Project Success. It’s what our clients do. It’s what we do.

steady increases in rents over the next five years, Pittsburgh is getting a lot of attention all over.” Prawdzik points out that the root of the interest is the economic diversification of the real estate products in Pittsburgh. He says that buyers like hearing about the lower unemployment and the various kinds of users taking up big chunks of leasehold in the region.

“I think they like the fact that our economy is based upon healthcare and new energy,” he says. If you canvas the myriad of research publications done by brokers and real estate investment firms about Pittsburgh’s market it’s easy to understand the attraction. On average, the research projects rents increasing by between four and six percent annually over the next five years. Those kinds of income projections will make investors pretty happy, especially in a climate with interest rates at historic lows. As demand has spiked for certain classes of commercial buildings, and with relatively little supply being added to inventory, the conditions appear to be inflating prices. “We’re in somewhat of a bubble right now,” asserts Paul Griffith, managing director for Integra Realty Resources. “There was a shopping center trade done [earlier this summer] on Route 8 in Gibsonia that was a seven cap rate. That product should never be a seven cap. I think we’ll see values skewed by the low interest rates.”

Real Estate I Construction I Manufacturing P. 412-227-2500 • F. 412-227-2050 www.BlumlingGusky.com

16 DEVELOPINGPITTSBURGH

| Fall 2012

The idea that there could be a commercial real estate bubble anywhere so soon after the peak of 2007 would seem preposterous, especially when many markets are still experiencing weak conditions. But bubbles can be inflated by a number of factors and no factor is as effective as more money chasing less product. Even if all the reported users looking for space pulled the trigger on new projects this year – something that is not going to happen – lenders aren’t quite in the position to offer the capacity to finance all the needed development. That means investors will be chasing the same properties and cap rates will remain hard to figure.

The skewed cap rate components are one more factor that could cool off financing over the next year or so. As good as Pittsburgh’s market conditions are, there remain a few headwinds to progress.

WHAT COULD STOP US? The most immediate concern about the regional real estate markets is the weakness of the global economy. One of the ingredients in the secret sauce of the Pittsburgh turnaround is the globalization of its businesses. While going global helped businesses expand their prospects and customers, it also opened them up to another level of the business cycle. The weakness in Europe and China has meant reduced sales for many companies with headquarters or large regional presence in Pittsburgh. That in turn, has reduced some of the demand for space. A deeper downturn overseas could hurt more. Another aspect of the current global weakness is that there are still problems with financial institutions. In Europe, the sovereign debt burdens have caused default already. The ongoing discussions are about how much of a haircut Eurozone creditors are willing to accept. Like with subprime mortgage defaults in 2008, the level of exposure of U.S. lenders is unknown at this point. Should it be high, banks will pull back on lending again. On the verge of jumping back into construction mode, Pittsburgh developers would be forced to slow down plans if credit were to be squeezed again. For developers who have demand, land and the wherewithal to finance new construction there is still the threat of rising costs. In the central business district, the shortage of land and supply has created a cost structure for new construction that makes new development difficult for multi-tenant projects. Rents in downtown have moved briskly higher over the past five years but still remain significantly below the $32 to $35 per square foot needed to justify new construction. Even in Oakland, where rents are in that ballpark, there are other development costs that make urban development difficult without subsidies to handle extraordinary site costs or parking. The

state has reorganized the Redevelopment Assistance Capital Program (RCAP), as well as some of the other programs under the Department of Community and Economic Development. Fewer funds will be available in 2012. “I’m a big proponent of RCAP. We have to have it if we’re going to do urban development,” says Jim Scalo. “There’s a round of RCAP grants out there right now but it’s only for projects that had prior authorization.” The fiscal handcuffs that are limiting government now represent a threat beyond the inability to fund P3 projects. One of the key roles that government plays is the upkeep of public infrastructure and at all levels of government that function is being deferred. Improved business conditions in the region will add revenues to the state and local coffers but crumbling infrastructure impedes growth as much as a shaky economy can. Investment in key infrastructure projects was an important ingredient in Pittsburgh’s recipe for success and reinvestment is needed to maintain the growth. In the suburbs, demand for land to develop real estate is up against demand to develop natural resources. In places where natural gas exploration isn’t happening, the word is out about the strength of the economy and land owners are feeling like this is their time to cash in. That’s good for landowners but rising land prices can ruin a development pro forma before a project can get off the ground. Highmark’s purchase price for 24 acres in Cranberry Woods was roughly double what Landmark Properties paid in 2011 for land on Dutilh Road, just across Route 228 from Cranberry Woods. The higher price would add at least $10 per square foot to the office buildings Landmark has proposed.

years went on the image of Pittsburgh became more elevated around the planet. Just as importantly, the image became more elevated here in our backyard. Commercial real estate is on some levels a confidence game. Without faith in the future prospects there is little motivation for anyone to build or expand. What the regional economic development leaders have learned is that a strategy that builds incrementally upon past successes creates sustainable progress. Much like word of mouth for a small business, the reputation of Pittsburgh has begun to be a principle market driver. Perhaps the best indicator of the validity of that approach is the imitation of other cities. Former Allegheny Conference CEO Mike Langley was hired last year by the Minneapolis-St. Paul Regional Economic Development Partnership with the hope that he could create in the Twin Cities a unified economic development approach similar to the one that the Allegheny Conference had during his tenure. And in January of this year, York County, PA merged its County Chamber of Commerce and the York County Economic Development Corporation to become a one-stop organization for business. The county studied a number of EDC business models from around the country and chose to follow that of the Allegheny Conference. As much as anything else, the story of Pittsburgh’s resurgence is the story of a resurgent attitude. Confidence in the region has been a powerful weapon in the arsenal of the counties in southwestern PA as they work to make sites ready for new business. The strategy of hitting singles and doubles has led to some home runs during the past five years. Even after 250 years, the story of Pittsburgh’s evolving economy is still in the early innings. DP

RESURGENT ATTITUDES What has truly been transformed over the past five years has been the attitude of those who are in the commercial real estate business. The recession created hardships for Pittsburgh businesses but as those www.developingpittsburgh.com

Developer Profile

Oxford Development Turns 50

o one likes to be considered typical, especially after 50 years in business. Perhaps it is more accurate to portray Oxford Development as a prototypical real estate developer for Pittsburgh. If nothing else, the companyâ&#x20AC;&#x2122;s origins certainly have a prototypical Pittsburgh feel. Photo by Rob Long

18 DEVELOPINGPITTSBURGH

| Fall 2012

The co m p a n y w e k n o w a s O x f o rd Develo p m e n t w a s f o u n d e d i n 1 9 6 2 as an e x t e n s i o n o f tw o f a m i l y re a l estate b u s i n e s s e s . T h e p a t r i a rc h s o f the co m p a n i e s w e re E u g e n e L e b o w itz and H a r r y S o ff e r. L e b o w i t z w a s from E l l w o o d C i t y bu t h a d re a s o n to cros s p a t h s re g u la r l y w i t h S o ff e r. During a l u n c h m e e t i n g i n O a k l a n d , the tw o r a n i n t o t h e p re s i d e n t o f Wester n PA N a t i o n al B a n k ( p re d e cessor t o E q u i b a n k ) , w h o t o l d t h e m of a pro p e r t y o n w h i c h t h e b a n k was fo re c l o s i n g o n C r a i g S t re e t . The ba n k e r w o n d e re d i f e i t h e r would b e i n t e re s t e d. A s i t t u r n e d out, bo t h m e n w e re . Rather t h a n c o m p e te f o r t h e p ro p erty, So ff e r a n d L e b o w i t z d e c i d e d to tur n t h e p ro j e c t o v e r t o t h e n e x t genera t i o n o f t h e i r b u s i n e s s e s t o see ho w w e l l t h e y c o u l d m a r k e t t h e buildin g . D o n a l d S o ff e r a n d M a r k E. Mas o n , w h o w a s L e b o w i t z ’s s o n in-law, w e n t t o w o r k l e a s i n g t h e proper t y a n d h a d t h e b u i l d i n g f i l l e d up wit h i n a f e w w e e k s . C a p i t a l i z i n g on the s u c c e s s o f t h e p a r t n e r s h i p the tw o f a m i l i e s f o u n d e d D o n Mark R e a l t y, w i t h L e b o w i t z , M a s o n , Harry a n d D o n S o ff e r a s p r i n c i p a l s . A year l a t e r L e b o w i t z ’s s o n , E d w a rd Lewis b e c a m e t h e f if t h p r i n c i p a l

a f t e r g r aduating from law school a t t h e U niversity of Pennsylvania a n d p r a cticing for a short time in P h i l a d e l phia.

Oxford partners Ed Lewis, Eugene Lebowitz and Mark Mason (left-to-right without hats) at the groundbreaking for the Monroeville Mall in winter 1966.

D o n - M a rk was not in business long b e f o re t he partners decided to purs u e a n opportunity that was prob a b l y a b it over their heads. It was a p ro j e c t that would set the course f o r t h e company’s early years. “ We w e re told that both Hor ne’s a n d G i mbel’s were looking for a de v e l o p e r to build a shopping center o n p ro p erty they both owned in the S o u t h H ills,” remembers Mark Ma s o n . “ We were probably more ag g re s s i v e than we should have been b u t w e thought we could handle t h e p ro j ect so we went ahead.”

Eddie Lewis

D o n - M a rk purchased the 85 acres t h a t w e re just south of the inters e c t i o n of Route 19 and Fort Couch R o a d i n Bethel Park and Upper St. C l a i r i n late 1962. W ith two dep a r t m e n t stores as anchors they b e g a n t he planning for what would Mark E. Mason

www.developingpittsburgh.com

Adventure Development, AGH-West Penn Hospital, Alcoa, Alcosan, Allegany School District of Maryland, Allegheny County, Allegheny County Airport Authority, Allegheny Ludlum, Allegheny Valley School District, Apple, Baker Young, Baldwin School District, Bayer, Bentworth School District, Bethany College, BNY Mellon, Burns and Scalo, California University of Pennsylvania, CanonMcMillan School District, Carnegie Mellon University, Center Area School District, Children's Museum of Pittsburgh, City of Pittsburgh, Conemaugh Health System, Connellsville School District, CONSOL, Diocese of Pittsburgh, Disney, Duquesne University, Edinboro University, Elteq Management, Elwood Mill Products, Fairmont Hotel, Federal Bureau of Prisons, Fourth River Development, Fox Chapel School District, Fuhrer Beverage, Gateway Financial, Genco, General Services Administration, George Mason University, Google, Grove City College, Hempfield School District, Hertz, Highmark, Horizon Properties, Howard Hanna, Indiana University of Pennsylvania, Jameson Health System, Kinkos, Kiski Area School District, Koppers, Larrimor’s, Manchester Bidwell Corporation, Maryland Department of Corrections, Maryland DGS, Michael Joseph Development, Montour School District, Mt. Aloysius College, Mt. Lebanon School District, Mylan, Ohio State University, Oxford Development, PA Department of Corrections, Pennsylvania State Employee Credit Union, Penn State University, Pennsylvania DGS, Pine Richland School District, Pittsburgh Parking Authority, Pittsburgh Penguins, Pittsburgh PostGazette, Pittsburgh Theological Seminary, PNC, Point Park University, Range Resources, REI, Robert Morris University, Rubinoff Development Company, Soffer, Somerset County, Sony, South Fayette School District, Sports and Exhibition Authority of Allegheny County, Springhill Suites, The Children's Home of Pittsburgh, Time Warner, Union Switch and Signal, University of Maryland, University of Pittsburgh, UPMC, Upper St. Clair School District, Urban Active, US Airways, US Army Corp of Engineers, US Postal Service, US Steel, VA Pittsburgh Healthcare System, Walgreens, Walnut Capital, Washington County, Washington Wild Things, The Watson Institute, West Mifflin Area School District, Wheeling Hospital, YMCA of Western PA

part·ner·ship n. (pärtnr-ship)

A relationship between individuals or groups that is characterized by mutual cooperation and responsibility, as for the achievement of a specified goal. For more than 30 years, we've enjoyed enduring partnerships with leaders in commercial and institutional markets spanning healthcare, education, science, energy, technology and business. That's why PJ Dick is the region's leader in construction services. And it's why 75% of our clients keep coming back for more.

www.pjdick.com

The experience to take the best, and make it better.

A Drug Free Equal Opportunity Employer

becom e S o u t h H i l l s V i l l a g e . W i t h no exp e r i e n c e d e v e lo p i n g m a j o r shoppi n g c e n t e r s , M a s o n s a y s t h e y researc h e d t h e l a t e s t p ro j e c t s , even tr a v e l i n g t o C a l i f o r n i a t o s e e the co n s t r u c t i o n o f t h e To p a n g a Mall ou t s i d e L o s A n g e l e s . To p a n g a Mall w a s t h e f i r s t e n c l o s e d m a l l i n Califor n i a a n d o n e o f t h e f i r s t i n the na t i o n t o e m p l o y a m u l t i - l e v e l design . D o n - M a r k hi re d t h e p ro j ect’s a rc h i t e c t , We l t o n B e c k e t , w h o had de s i g n e d t h e C a p i t o l R e c o rd s buildin g a n d w a s i n t h e m i d s t o f master p l a n n i n g C e n t u r y C i t y i n L o s Angele s . It was d u r i n g t h e c o n s t r u c t i o n o f South H i l l s V i l l a g e t h a t E d L e w i s joined t h e f i r m . T h e m a l l o p e n e d i n July 19 6 5 . A t t h e t i m e i t o p e n e d , South H i l l s v i l l a g e w a s t h e l a r g e s t enclose d s h o p p i n g c e n t e r b e t w e e n New Yo r k C i t y a n d C h i c a g o . The su c c e s s o f S o u t h H i l l s V i l l a g e whette d t h e i r a p p e t i t e f o r d evelopm e n t . T h e mid-19 6 0 ’s w e re the yea r s w h e n Americ a n c o n s u merism w a s b e g i nning to g ro w. A t the sam e t i m e , the mo v e t o t h e suburb s t h a t h a d begun a f t e r Wo r l d War II w a s c h a n g ing ho w p e o p l e shoppe d . T h e Pittsbu r g h s u b u r b s were d e v e l o p i n g far eno u g h a w a y from th e c i t y t h a t the cen t r a l i z e d s h o p p i n g i n d o w ntown o r E a s t L i b e r t y w e re b e c o m ing inc o n v e n i e n t . M a s o n s a y s t h a t they b e g a n l o o k i n g a t t h e e a s t e r n suburb s f o r t h e i r n e x t o p p o r t u n i t y as soon a s t h e S o u t h H i l l s V i l l a g e was co m p l e t e d .

To a c c u mulate the properties in M o n ro e ville, Don-Mark registered a n e w c ompany with the state of P e n n s y l v ania, calling it Oxford D e v e l o p ment Company. Before 1 9 6 6 e n ded, Oxford broke ground o n M o n roeville Mall, opening the t w o - l e v el, 1.3 million square foot m a l l i n May 1969. During the p l a n n i n g of the mall, Oxford had a c q u i re d a much larger amount of p ro p e r t y than was needed for that p ro j e c t alone and over the next d e c a d e developed the Monroeville K - M a r t , W ickes and smaller retail s t o re s n ear the mall. Oxford also b u i l t a Marriott, the Expo Mart, t h e R a c quet Club Apartments and P i t t s b u r gh Racquet Club, and the 9 0 , 0 0 0 square foot Westinghouse o ff i c e b uilding on the properties s u r ro u n ding Monroeville Mall. T h e n e x t big expansion for the c o m p a n y would take Oxford to F l o r i d a . As the Monroeville Mall w a s b e i ng constructed, Don Sof-

The next big expansion for the company would take Oxford to Florida. As the Monroeville Mall was being constr ucted, Don Soffer lear ned of an opportunity to purchase a 785-acre parcel of ground in norther n Dade County.

“Monro e v i l l e w a s n ’t b e i n g s e r v e d by the c o m m e rc i a l m a r k e t a t t h e time. T h e d e m o g r a p h i c s s h o w e d that th e b u y i n g p o w e r o f t h e e a s ter n sub u r b s w a s n ’t b e i n g s e r v e d , ” he exp l a i n s . “ We b e l i e v e d p e o p l e i n the su b u r b s w a n t e d t o u t i l i z e t h e suburb s i n s t e a d o f u s i n g t o w n f o r their s h o p p i n g , s o w e b e g a n a c c umulatin g l a n d i n M o n ro e v i l l e a f t e r South H i l l s V i l l a g e . ”

f e r l e a r ned of an opportunity to p u rc h a s e a 785-acre parcel of g ro u n d in norther n Dade County. T h e p ro perty was mostly marsh and s u b m e r ged land along the interc o a s t a l waterway, but Soffer and L e w i s b elieved that South Florida’s g ro w t h would support an ambitious d e v e l o p ment over the long haul. D o n S o ffer relocated to Miami to b e t h e p oint person for the comp a n y i n Florida. The development w a s a p l anned community known a s Tu r n berry Isle and it eventually g re w t o include thousands of con d o s , t h e Aventura Mall and the city o f Av e n t ura. D o n S o ffer’s move to Miami was p e r m a n ent and in the 1980’s the

Oxford board chair Anne Lewis

Soffer family exited from Oxford’s ownership. The Soffer’s Tur nberry Associates kept the Tur nberry Isle/ Aventura and Monroeville Mall while Oxford maintained ownership of the Bell Tower proper ties in Ft. Myers and their mall in Parkersburg, WV. “Don Soffer was particularly dynamic and was very helpful in Florida,” says Mason. “Ed Lewis was also very dynamic and he was the driving force in Pittsburgh.” Ed Lewis’s vision and dri ve led Oxford Development in a different direction at the end of t he 1970’s. Mark Mason explains that Lewis was looking to do something significant downtown at a time when the leadership of the company was exploring opportunities other than malls. “When you get into development, everything is not the same – you can’t take a cookie cutter approach to each shopping center – but you have to look for other opportunities to try,” he says. “It takes the same amount of smarts to do development of any kind and we were looking for different venues to develop. Ed had the f oresight to see that a downtown office could be successful and his vis ion tur ned out to be correct. It was really an achievement.”

www.developingpittsburgh.com

we put a re-engineering plan in place to add service sector revenue growth to the business while the balance sheet sorted itself out, which took quite a while.”

Under Matter, the company would le verage its experience and strategic assets to expand into feegenerating businesses that would offset the risk of balance sheet development. What M a s o n i s re f e r r i n g t o i s the de v e l o p m e n t o f O n e O x f o rd Centre , a 1 . 4 m i l l i o n s q u a re f o o t office a n d re t a i l c e n t e r t h a t w a s built o n s p e c u l a t i o n . T h e p ro j e c t , which h a s 8 5 0 , 0 0 0 s q u a re f e e t of offi c e s p a c e , g o t u n d e r w a y i n 1980 a n d h e l p e d k i c k s t a r t w h a t is now k n o w n a s R en a i s s a n c e I I . As con s t r u c t i o n o f O n e O x f o rd progre s s e d , t h e re g i o n f e l l i n t o one of t h e m o re s e v e re re c e s s i o n s in its h i s t o r y. T h a t p e r i o d m a r k e d the en d o f t h e s t e e l i n d u s t r y a s the ec o n o m i c d r i v e r o f We s t e r n PA’s ec o n o m y. O n e O x f o rd o p e n e d as the c o u n t r y w a s b e g i n n i n g t o awake n t o w h a t P re s i d e n t R e a g a n called t h e ‘ n e w d a y i n A m e r i c a . ’ Leasing t h e b u i l d i n g w a s n o t e a s y but th e p ro j e c t w a s s u c c e s s f u l . By the l a t e 1 9 8 0 ’s t h e t w o re m a i n ing pri n c i p a l s a t O x f o rd D e v e l o pment b e g a n t o t h ro t t l e b a c k a n d looked o u t s i d e t h e f a m i l y f o r a n e w presid e n t f o r t h e f i r m . “I kne w a t s o m e p oi n t I w a s g oing to w a n t t o s t o p c o m i n g i n every m o r n i n g a t 8 : 0 0 A M , ” M a s o n recalls . “ We w a n t e d t o b r i n g i n a stron g b u s i n e s s m a n w h o m i g h t take th e c o m p a n y i n a d i ff e re n t directi o n . We h i re d D a v i d M a t t e r, who h a d b e e n t h e c h i e f o f s t a ff f o r Mayor C a l i g u i r i . ” Lewis w a s m i n d f u l t h a t t h e c a p i t a l marke t s w e re s h i f t i n g d r a m a t i c a l l y and se n s e d t h a t d e v e l o p e r s w o u l d not be a b l e t o d o b u s i n e s s t h e same w a y i n t h e f u t u re . T h e c o m pany h a d b ro u g h t on S t e v e n G u y i n 1987 a s c h i e f f i n a n c i a l o ff i c e r a n d his exp e r t i s e i n a n a l y z i n g a s s e t s 22 DEVELOPINGPITTSBURGH

| Fall 2012

Retired CEO David Matter

a n d r i s k were part of change in d i re c t i o n that would get structure u n d e r D avid Matter. Guy says the c h a n g e s made sense, especially s i n c e t h e market was taking away s o m e o f the strengths of Oxford’s c u l t u re heretofore. “ Yo u h a ve to look at how Eddie L e w i s w as, what made him great,” h e e x p l a ins. “Eddie was a risk taker a n d t h e capital was his so he could d o s o w ith a clear conscience. In 1 9 8 7 w e were very, very aggressive w i t h h o w we developed. The poster c h i l d f o r that was One Oxford, w h i c h E d started without a single lease.” Matter took the reins of a company that had been developing risky commercial real estate projects for more than 25 years. Commercial real estate was being plagued by tough credit conditions following the Savings & Loan crisis and a national recession was looming. What could be done with guts and a good story in the 1960’s and 1970’s was no longer possible and Oxford Development had become a mature property owner with assets to risk. Under Matter, the company would leverage its experience and strategic assets to expand into fee-generating businesses that would offset the risk of balance sheet development. “ D a v i d ’s leadership began at a d i ff i c u l t period of time for real e s t a t e a nd Oxford certainly wasn’t i m m u n e to that,” notes Guy. “I w a s C F O and David was COO and

Oxford was reorganized into four operating divisions that reflected the diversification into related real estate services: development; property management; brokerage and business services. In 1990, the company formed Central Property Services, a cleaning business, and Bakewell Parking, which provided parking facility management services. Central Property Services became a success story of its own, growing to 900 employees and building revenues of $32 million prior to its sale in 2009. The company also focused its efforts on expanding its experience in managing its own properties into a third-party service for others. W ithin a decade, Oxford was able to grow that service to become the largest property manager in the region. During this period, Oxford began a successful run acting as the development agent for institutional owners in the region. In this role Oxford works for some of the largest organizations in the re gion, serving as develop er/program manager for projects like UPMC Sports Medicine Complex at South Side Works, the new Childrens Hospital, CONSOL Energ y Center, 3 PNC Plaza, the O’Reilly Theater and Theater Square for the Cultural Dis trict. Oxford has worked extensive ly for UPMC, even overseeing the construction of their new offices in USS Tower. That line of business continues to be an integral part of Oxford’s mix up through today, as the company is involved with the Center for Innovativ e Science in Shadyside and the program to rebuild and expand the West Penn Allegheny Health System. Another client whose business grew during Matter’s tenure was the General Services Administration, which selected Oxford Development to do development/lease back deals for a number of federal gover nment offices.

“There are great things that PNC and the Piatt’s are doing all along that cor ridor. There are a lot of synergies in that area,” says Guy. “ We began to think we were shooting too low in our plans for the building, that perhaps there was a chance to do something ver y special there.” David M a t t e r s u c c e s s f u l l y s t e e re d Oxford i n t o m o re d iv e r s e b u s i n e s s es whi l e c o n t i n u i n g t o d e v e l o p n e w comme rc i a l re a l e s t a t e p ro j e c t s . His rol e e x p a n d e d t o C E O w h e n E d Lewis p a s s e d a w a y i n l a t e N o v e mber 20 0 6 . L e w i s ’s wi d o w A n n e assume d h i s ro l e a s b o a rd c h a i r, steerin g t h e f i r m w i t h M a r k M a s o n as vice - c h a i r. O x f o rd c o n t i n u e d t h e practic e o f h i r i n g s tro n g l e a d e r s h i p from o u t s i d e t h e f a m i l y w h e n M a t ter ret i re d i n 2 0 1 0 , e l e v a t i n g S t e v e Guy to C E O .

The new construction option for the proposed 350 Fifth Avenue fits into the fabric of the new Fifth/Forbes corridor. Rendering by DL Astorino.

Oxford CEO Steve Guy

I n t h e t wo years Guy has been l e a d i n g Oxford Development he has w o r k e d to continue refining the di re c t i o n he helped take the company w i t h M a tter. He says the markets w i l l d i c t ate their mix of businesses b u t t h a t his stewardship of the firm w i l l re f l ect his personality. “I am a v e r y c a reful balance sheet and risk a n a l y s t . We won’t take undo risks w i t h o u r capital but rather we’ll re l y o n fee income and services.”

Oxford recently completed an ex haustive five-year strategic planning process, the report of which is being reviewed by the firm’s ownership to set its course. The plan’s objectives are to maintain its growth of fee income and to ex pand the services Oxford provides its clients. If all goes according to plan the company will announce several new services in the fall. They plan to expand the role of their investment advisory service, Oxford Real Estate Advisors and grow their ownership and manage ment investment fund from which Oxford does its own balance sheet development. And in their 50th year, Oxford is planning a development that has created a buzz again. On May 24th, they announced 350 Fifth Avenue, a project that will result in a new high-rise or re-purposed version of their office at 411 Smithfield Street. Oxford Development began thinking about the project in 2010 as it was mulling over options for www.developingpittsburgh.com

For winning results, turn to a team with proven performance.

MB&M Law Teams: Real Estate Construction Business Banking & Finance

Labor & Employment School & Municipal Litigation Estate Planning

Call 412-242-4400

Pittsburgh

south side Works

Wexford

mbm-law.net

Connecting ideas, capital and clients. Grandbridge Real Estate Capital provides the vital link between complex market conditions and capital solutions. As a national full-service leader in commercial and multifamily finance, we combine our wide range of capital sources with a knowledgeable and experienced team to deliver results, deal after deal. our scope of services includes: -

Freddie Mac Program Plus® Seller/Servicer | Seniors Housing Fannie Mae DUS® FHA-insured Loans | MAP and LEAN Nearly 50 Insurance Companies CMBS | Institutional Investors | Pension Funds Proprietary Lending Platform | Structured Finance $26 Billion+ Loan Servicing Portfolio

ContaCt Us 3000 U.S. Tower, 600 Grant Street | Pittsburgh, PA 15219 Phone 412.391.3366 | Fax 412.391.7984 gbrecap.com/connect Loans are subject to credit approval.

Equal Housing Lender.

24 DEVELOPINGPITTSBURGH

| Fall 2012

dealing with the aging Smithfield property. Tenants had been leaving to go to newer buildings while still paying rent at 411 Smithfield. Oxford’s management concluded it could either allow the building to decline completely or invest in it. By n ot renew ing leases the building will be empty by the end of 2012, which will allow them to gut and renovate it complete ly; however, the plan for the project also allows for the demolition of 411 Smithfield to clear the way for a new office tower. “There are great things that PNC and the Piatt’s are doing all along that corridor. There are a lot of synergies in that area,” says Guy. “We began to think we were shooting too low in our plans for the building, that perhaps there was a chance to do something very special there.” Guy characterizes interest in the project as “ keen,” a conservative response to the question of leasing activity. “Going from ‘keen’ to ‘signed’ can be a very long road,” he says. After 50 years, Oxford Development remains a force in the commercial real estate market, both here and through out the U.S. Through many transi tions in market conditions and family generations, the leadership has been able to steer a course that has kept Oxford clear of the pitfalls that have claimed many of its peers over the years. There is another generation of Lewis’s and Mason’s at the firm, but the family and ownership is confident in allowing their corporate leadership to manage the company. Steve Guy finds it interesti ng that he’s still asked how different things are now that he’s CEO. “People seem to think it must be different because David is retired after 20 years but we haven’t changed anything from the plan he and Ed Lewis and I put in place in 1992,” he says. “David is a good friend and mentor and I miss him dearly but we’re going to con tinue to do the things that have made us successful to this point.” DP

CouNTLeSS SoLuTIoNS, oNe rooF Sometimes bringing your commercial real estate plans to life takes more than just a loan. It takes financing and banking solutions that work hand in hand. At PNC, we do it all. From construction to bridge to permanent financing. From treasury management to interest rate risk management. Locally and nationally. To learn more, visit pnc.com/realestate

reAL eSTATe bANkINg

AgeNCY FINANCe

TAx CredIT CAPITAL

mIdLANd LoAN ServICeS

CIB PDF 0712-045-106012

Development Project

alnut on Highland. I f y o u a re in the re a l e s t a t e b u s iness a n d w e re u n d e r w h e l m e d w h e n the Ur b a n R e d e v e l o p m e n t A u t h o rity issu e d a re q u e s t f o r p ro p o s a l i n late 20 0 9 f o r re d e v e l o p m e n t o f t h e Highla n d B u i l d i n g i n E a s t L i b e r t y, you wo u l d b e u n d e r s t o o d . T h e p ro posal – w h i c h w a s a c t u a l l y l o o k i n g for dev e l o p e r s t o re - p u r p o s e t h e Highla n d a n d Wa l l a c e B u i l d i n g s o n South H i g h l a n d , p l u s t h e f o r m e r PNC Ba n k – re p re s e n t e d t h e s i x t h attemp t t o re j u v e n a t e t h e s i g n a ture st r u c t u re i n E a s t L i b e r t y ’s o n c e promin e n t b u s i n e s s d i s t r i c t . The Hi g h l a n d B u i l d i n g w a s b u i l t i n 1909 a s o n e o f t h e w a v e o f h i g h rise off i c e b u i l d i n g s t h a t w e re p o p ping u p a s a re s u l t o f t h e a d v a n c e s in stru c t u r a l m a t e r i a l s . D e s i g n e d b y Daniel B u r n h a m a n d d e v e l o p e d b y A. C. F r i c k , t h e H i g h l a n d B u i l d i n g is a 13 - s t o r y o ff i c e . T h e b u i l d i n g was on e o f f i v e B u r n h a m d e s i g n s constr u c t e d w i t h i n a d o z e n y e a r s in Pitts b u r g h , i n c l u d i n g t h e U n i o n Trust B u i l d i n g , t h e P e n n s y l v a n i a Union S t a t i o n , t h e F r i c k B u i l d i n g and th e O l i v e r B u i l d i n g , w h i c h opened t h e s a m e y e a r a s t h e H i g hland Bu i l d i n g . W h i l e l e s s o r n a t e than th e B e a u x A r t s s t y l e o f t h e downto w n B u r n h a m p ro j e c t s , t h e Highla n d w a s a p ro u d s y m b o l o f the im p o r t a n c e o f E a s t L i b e r t y ’s comme rc i a l d i s t r i c t . Like th e re s t o f E a s t L i b e r t y, t h e Highla n d B u i l d i n g d e c l i n e d a f t e r the fat e f u l re - ro u t i n g o f P e n n Avenue a n d u r b a n re n e w a l o f t h e 1960’s . T h e b u i l d i n g w a s p u t o n the Na t i o n a l H i s t o r i c R e g i s t r y i n 1991 b u t h a d b e e n a b a n d o n e d b y its own e r s a f e w y e a r s e a r l i e r a n d taken b y t h e c i t y f o r u n p a i d t a x e s . By 200 9 , t h e H i g h l a n d B u i l d i n g had be e n v a c a n t f o r o v e r 2 0 y e a r s .

D u r i n g t hose two decades, dev e l o p e r s from within and outside P i t t s b u r gh had advanced plans for re n o v a t i ng the Highland Building. M o s t o f these concepts attempted t o c re a t e housing or a hotel. In 2 0 0 5 , Terminus Real Estate from K n o x v i l l e, TN purchased the propert y t o c o nvert it into 184 condos but c o u l d n ’t make the deal work. The l a s t o f t he proposals was a 2007 p l a n t o bring the Highland Buildi n g b a c k to office use by Zambrano C o r p o r a tion. Along with a planned n e w h o t el at the cor ner of Centre Av e n u e and South Highland, the re n o v a t i on of the Highland died w i t h Z a mbrano’s bankruptcy. T h e Te r minus project provided an i m p o r t a nt advance, however, even t h o u g h the development did not go f o r w a rd . Under the name of High l a n d H o tel LP, Terminus acquired t h e Wa l l ace Building and the lot b e t w e e n the two buildings. While t h e i r p l a n aimed at demolition and

construction of a hotel next to the Highland Building, the accumulation of the additional parcels cre ated an opportunity to address the problem that had thwarted all the proposed projects to date: limited parking. “The URA bought the [Highland] building in the 1990’s and invited developers to decide wh at would be built. Frankly, we weren’t very picky about what would go there,” says Robert Rubinstein, director of economic development for the URA. “There was not much interest in any of the opportunities. We would enter into an option agreement but the developer could never make the project work. The key obstacle was always the lack of parking for whatever re-use was being proposed.” As the two previous developers struggled to deliver some sort of project at the 121 South Highland

The Walnut on Highland flanks the new parking garage. Rendering by Indovina & Associates.

www.developingpittsburgh.com

site in the latter half of the last decade, however, some fundamen tal changes were occurring in the fabric of East Liberty that would pave the way for the Walnut on Highland project. In 2002, Whole Foods h ad located on Centre Avenue as the first piece of the East Side retail center that Mosites Co. was developing. That retailer – which arrived just after the Home Depot store opened on North Highland – kick started a revitalization that was in synch with the accelerating New Urbanism movement. Along with a battery of redevelopment projects from easter n Shadyside to Garfield, several key employers located in the East End that would attract younger professionals. Coupled with Oakland’s employment center, East Liberty’s new employment base created a shortage of supply that set up real demand for what the neighborhood was lacking: market rate housing. URA’s request for proposals in late 2009 drew two responses. One was for another hotel and the second, submitted by Highland-Wallace Joint Venture (a joint venture of Walnut Capital Partners and Mas -

“I think Walnut knew that apartments in the area were pretty well leased up,” he says. “The building lays out well for apartments. We didn’t really do analysis for any markets other than apartments – Walnut drove that – other than a little retail in the Wallace building.”

Photo by Charles Uhl

28 DEVELOPINGPITTSBURGH

| Fall 2012

saro Pro p e r t i e s ) c a l l e d f o r c o n v e r t i n g t h e H i g h l and and Wa l l a c e i n t o a pa r t m e n t s w i t h a 1 8 2 - c a r p arking garage . T h e l a t t e r p ro p o s a l a l s o i n c l u d e d ro u g hly 15,000 s q u a re f e e t o f g ro u n d f l o o r re t a i l b u t i t was the 12 9 u n i t s o f m ar k e t r a t e a p a r t m e n t s a n d t he parking s o l u t i o n t h a t w o n t h e d a y. Walnut C a p i t a l i s o n e o f t h e l a r g e s t a p a r t m e n t owners in t h e c i t y, w i t h t h e h e a v i e s t c o n c e n t r a t i o n of its unit s l o c a t e d b e t w e e n O a k l a n d a n d S h a d y s i de. The co m p a n y w a s a l s o a t t h e t i m e w r a p p i n g u p the largest c o m m e rc i a l d e v e l o p m e n t i n t h e E a s t E n d, the Bakery S q u a re p ro j e c t . T h a t e x p e r i e n c e g u i d e d the propos a l f o r H i g h l a n d / Wa l l a c e f ro m t w o d i ff e rent directi o n s . “We are v e r y f a m i l i a r w i t h t h e re s i d e n t i a l m a r k et in the a re a . O u r p ro p e r t i e s a re g e n e r a l l y i n t h e core un i v e r s i t y m a r k e t s a n d a re b a s i c a l l y 1 0 0 p ercent o c c u p i e d , ” e x p l a i n s To d d R e i d b o rd , p re s i d ent and pr i n c i p a l a t Wa l n u t C a p i t a l . “ T h e re a re n o w a tremen d o u s n u m b e r o f p e o p l e w o r k i n g n e a r b y and about 6 0 p e rc e n t o f t h e m l i v e i n t h e a re a . ” Massaro P ro p e r t i e s b ro u g h t t o t h e p a r t n e r s h i p their experie n c e w i t h s o m e o f t h e a l t e r n a t i v e f i n a n cing me a s u re s t h a t w o u l d b e n e e d e d , a s w e l l a s the constr u c t i o n . D a v i d M a s s a ro , p re s i d e n t o f M a s saro Proper t i e s , s a y s t h a t t h e e n d u s e o f t h e p ro j e c t was fa i r l y s e l f - a p p a re n t . “ I t h i n k Wa l n u t k n e w that apartm e n t s i n t h e a re a w e re p re t t y w e l l l e a s e d up,” he say s . “ T h e b u i l d i n g l a y s o u t w e l l f o r a p a r t ments. We did n ’t re a l l y d o a n a l y s i s f o r a n y m a r k e t s o t her than a p a r t m e n t s – Wa l n u t d ro v e t h a t – o t h e r t han a little re t a i l i n t h e Wa l l a c e b u i l d i n g . ”

DEVELOPMENT

BROKERAGE

For the U R A t h e re w a s a l o t o f a t t r a c t i o n t o t h e apartm e n t p ro p o s a l . R u b i n s t e i n s a y s t h a t t h e y saw the pro p o s a l m e e t i n g a re c o g n i z e d d e m a n d f o r the market , a s w e l l a s f i t t i n g i n t o a s t r a t e g i c n e e d for the red e v e l o p m e n t o f E a s t L i b e r t y. “Havin g Wa l n u t C a p i t a l a s a p a r t n e r c o u l d n ’t have been a b e t t e r f i t b e c a u s e t h e y h a v e t h o u s a n d s of units a n d m a n y o f t h e i r t e n a n t s a re f ro m o u t o f town t h a t c a m e t o w o r k a t t h e h o s p i t a l s , u n i v e rsities an d t e c h c o m p a n i e s l i k e G o o g l e , ” h e s a y s . Rubinstei n e x p l a i n s t h a t t h o s e k i n d s o f re s i d e n t s were a key m i s s i n g a s s e t t o t h e n e w E a s t L i b e r t y. “ T he ‘Main S t re e t ’ o f E a st L i b e r t y h a s s h i f t e d f ro m Penn Avenue t o C e n t re w h e re m o s t o f t h e n e w i n v e st ment h a s b e e n m a d e , b u t y o u c a n w a l k o n e b l ock from C e n t re o n H i g h l a n d a n d i t i s s t i l l b l i g h t e d. The lynchp i n i n t h e h i s t o r i c E a s t L i b e r t y c o re i s g e t ting people t o l i v e t h e re . ”

PROPERTY MANAGEMENT

Pittsbu r g h ’s m a y o r a g re e s . “ T h e H i g h l a n d a n d Wal lace bu i l d i n g s s t a n d a t a c r i t i c a l s p o t i n t h e h e art of East L i b e r t y, a n e i g h b o r h o o d t h a t h a s u n d e r gone a trem e n d o u s t r a n s f o r m a t i o n o v e r j u s t t h e l a s t few years,” s a y s M a y o r L u k e R a v e n s t a h l . “ T h e h i s t oric rehabi l i t a t i o n o f t h e s e p ro p e r t i e s w i l l c o m p l e t e the comeback of this intersection, and now all four

www.developingpittsburgh.com

cor ner s w i l l b e a c t i v e w i t h n e w shops a n d re s t a u r a n t s . A t t r a c t i n g new p e o p l e t o l i v e a n d w o r k i n t h e area is a n i m p o r t a n t l i n k t o t h e contin u e d re b i r t h of E a s t L i b e r t y. ” Rubins t e i n m a k e s t h e p o i n t t h a t the ne i g h b o r h o o d h a d b e c o m e s a f e but th a t h a v i n g f u l l - t i m e re s i d e n t s will ad d t o t h e p e rc e p t i o n o f s a f e t y and ex t e n d s t h e re t a i l h o u r s i n t h e core. H e p o i n t s o u t t h a t 7 5 p e rc e n t of Tar g e t ’s e m p l o y ee s a re w i t h i n walkin g d i s t a n c e t o t h e s t o re b u t none l i v e i n t h e b l oc k s i m m e d i a t e l y adjace n t . Of cou r s e , h a v i n g a n e s t a b l i s h e d deman d a n d e x p e r i e n c e d d e v e lopers d o e s n ’t g u a r a n t e e s m o o t h sailing . R e g a rd l e s s o f t h e s u i t a b l e match f o r re s i d e n t i a l u n i t s t h e re was st i l l t h e t a s k o f b u i l d i n g t h e parkin g a n d t h a t h u rd l e l o o k e d insurm o u n t a b l e . “We l o o k e d f i r s t a t u n d e r g ro u n d parkin g b u t t h a t w a s t o o c o s t l y a n d ended u p w i t h a d e s i g n t h a t p u t an abo v e g ro u n d p a r k i n g g a r a g e betwe e n t h e t w o b u i l d i n g s , ” e x-

p l a i n s Massaro. Solving the design p ro b l e m didn’t alleviate the feasi b i l i t y i s sue, however, which meant m a k i n g full use of all financing opt i o n s a v ailable. “No matter how it w a s c o n figured, the project doesn’t a p p r a i s e at the value you need to g e t t h e right deal. The rents aren’t t h e re t o support the financing. We re a l l y n eeded the private/public p a r t n e r ship to make this work.” T h e d e v elopers planned to make u s e o f t he historic tax credits a v a i l a b l e for the restoration of the H i g h l a n d Building but their sale w a s n o t going to cover the gap in f i n a n c i ng. As with previous de v e l o p m ent attempts, this project w a s c o ming up short because of t h e c o s t of providing parking but t h e re w as an option that HighlandWa l l a c e JV pursued that would m a k e t h e project work. The state’s R e d e v e l opment Assistance Capital P ro g r a m (RCAP) was designed to f i l l g a p s in financing for projects t h a t w e re essential to employment c re a t i o n or other economic ben e f i t o r t hat had historic or cultural s i g n i f i c ance. The developers ap-

plied for RCAP grants totaling $4.6 million and received approval from Gov. Rendell in late 2010. Like other grant applicants, the story didn’t quite end there for Massaro and Walnut Capital. The Highland-Wallace grant was approved in the last two weeks of Rendell’s term as gover nor as part of $84 million in grants that Republicans felt included favors to Rendell’s friends. Incoming Gov. Corbett decided to thoroughly review all the applications that were approved to assure their qualifications were valid. The Highland-Wallace grant was not one of those being cast as a political favor but the grant was nonetheless held up. As summer 2011 wound down the partners began to get concer ned about whether or not the release of the funds would happen in time to meet the deadline for their HUD funding package; however, circumstances conspired to make that deadline a non-issue. The RACP grant was finally released in late 2011, giving the Highland-Wallace project the solution that others had missed.

First Niagara Commercial Real Estate Finance Group Serving the banking needs of Western Pennsylvania’s commercial property owners and developers.

Call (412) 807-2745 to speak with a First Niagara representative. First Niagara Commercial Real Estate Finance Group is part of First Niagara Bank, N.A.

30 DEVELOPINGPITTSBURGH

| Fall 2012

First Niagara Bank, N.A. MEMBER FDIC

When a s k e d w h a t t h e b i g g e s t challen g e o f t h e d e v e l o p m e n t was Re i d b o rd q u i c k l y re s p o n d e d , “Defin i t e l y f i g u r i n g o u t t h e p a r k i n g and ho w t o p a y f o r i t . P a r k i n g w a s critica l b e c a u s e n o o n e i s g o i n g t o rent in a n u r b a n h i g h - r i s e w i t h o u t it. We w e re a b l e t o f i g u re o u t h o w to mak e t h e p a r k i n g w o r k i n a w a y that o t h e r s h a d n ’t ”

W i t h t h e public participation and t h e p ro perty type du jour, the H i g h l a n d-Wallace team was able t o s e c u re conventional financing w o r k i n g with WesBanco, Dollar B a n k a n d Tri-State Capital. “Our t i m i n g f or conventional couldn’t h a v e b e en better. Apartments are t h e h o t t est property type for com m e rc i a l loans.”

David M a s s a ro s a y s t h a t t h e f i n a n c ing for t h e p ro j e c t w a s a c h a l l e n g e in gen e r a l . “ T h e c a p i t a l s t a c k f o r this pro j e c t i s f a i r l y c o m p l i c a t e d , ” he not e s . “ I t w a s n ’t a c o n v e n tional f i n a n c i a l d e a l . T h e re w a s o u r equity, t h e h i s t o r i c t a x c re d i t s a n d the RA C P g r a n t . F o r t h e l o a n w e started d o w n t h e p a t h o f t h e H U D 221(d) ( 4 ) p ro g r a m . ”

T h e d e s i gn for the project was d o n e b y TKA Architects. The park i n g g a r a ge was designed by Indov i n a & Associates. According to R e i d b o rd, the plans are very much i n k e e p i ng with the lifestyle needs o f t h e t arget renters.

W ith t h e f i n a n c i a l m a r k e t s s t i l l healing f ro m t h e c r a s h o f 2 0 0 8 , the HU D l o a n p ro g r a m , w h i c h w a s for ne w c o n s t r u c t i o n a n d s u b s t a ntial reh a b i l i t a t i o n o f m u l t i - f a m i l y projec t s , b e c a m e p o p u l a r a m o n g develo p e r s . T h e 2 2 1 ( d ) ( 4 ) p ro g r a m offere d d e s i r a b l e r at e s a n d l o a n to-valu e r a t i o s t h a t w e re a b o v e 8 0 percen t , a r a t i o t h a t f a r e x c e e d e d what w a s a v a i l a b l e f ro m p r i v a t e lender s . O n t h e o t h e r h a n d , t h e recessi o n h a d c re a t e d a m u c h larger p o o l o f re n t e r s a n d m u l t i family p ro j e c t s b e c a m e t h e r a g e almost o v e r n i g h t . T h a t m e a n t t h a t the HU D p ro g r a m w a s a l m o s t t h e only g a m e i n t o w n . C o m b i n e d w i t h HUD’s d e l i b e r a t e d u e d i l i g e n c e p ro cess, t h e v o l u m e m a d e t h e re v i e w more d i ff i c u l t . “It wa s a p e r f e c t H U D d e v e l o pment, a n u r b a n a p ar t m e n t , b u t w e were t u r n e d d o w n t h re e t i m e s b e fore ge t t i n g a p p ro v e d , ” s a y s M a s saro. “ We w o r k e d w i t h B e l l w e t h e r twice t h ro u g h t h e p ro c e s s a n d t h e n appea l e d t o g e t a p p ro v e d b u t o n l y with c o n d i t i o n s . B y t h a t t i m e w e realize d t h a t t h e t i m e w e n e e d e d to get t h ro u g h t h e c o n d i t i o n s c o u l d mean w e c o u l d n ’t g e t t h e p ro j e c t done b y o u r t a r g e t o p e n i n g i n M a y 2013.” “It tur n e d o u t t h a t h a v i n g t i m e o n our sid e w a s a p l u s b e c a u s e i t g a v e the ba n k s a c h a n c e t o g e t f r i e n dlier ab o u t l e n d i n g , ” h e c o n t i n u e d . Both lo a n c o n d i t i o ns a n d r a t e s h a d norma l i z e d b y t h e e n d o f 2 0 1 1 .

“ I t h i n k they will be very attractive t o p e o p le who are new to the area. I t ’s w h a t’s expected by someone l o o k i n g for an urban lifestyle,” he e x p l a i n s . “There will be one- and t w o - b e droom units. The smaller a p a r t m e nts will be 500 to 600 s q u a re f eet and the two-bedrooms w i l l b e i n the 800 to 900 square f o o t r a n ge. The units are clean, m o d e r n designs, with open layouts, g r a n i t e kitchens and stainless steel a p p l i a n ces. The building will have a n e x e rcise center and a roof-top d e c k f o r the residents’ use.” C o n s t r u ction got underway on the re n o v a t i on in March 2012, with the c o n s t r u ction of the garage slated t o s t a r t by Labor Day. Massaro Corp o r a t i o n is handling the construct i o n w i t h a completion target of M a y 1 5 , 2013. “ I t h i n k the Walnut guys would like t o h a v e the building by April if they c o u l d , ” says Massaro. “They are h a n d l i n g the marketing and leasi n g a n d there are 50 or so names o n t h e waiting list for apartments a l re a d y. ” A restaurant has signed a l e t t e r of intent for most of the re t a i l s p ace that was available as well. D e v e l o p ing the project also has a b i t o f ‘ back to the future’ in it for t h e p a r t ners. Massaro Corp. reno v a t e d t h e Motor Garden Square in t h e m i d -1980’s, creating a retail c e n t e r t hat was intended to revital i z e E a s t Liberty in the manner that t h e E a s t Side and Bakery Square p ro j e c t s have today. As it tur ned o u t , s h o ppers weren’t ready to

patronize the neighborhood and the company tur ned the building back to the lender. Toda y, more than a few observers have noted that Joe Massaro – who was raised in East Liberty – was ahead of his time, but David Massaro has a more practical view. “You could say we were ahead of our time but you could also say we weren’t very smart,” he jokes. “The Highland project is kind of a homecoming for my family. Because of the history there, East Liberty is special to us. In its day, the build ing was a medical office. My dad grew up on Larimer Avenue and went to the doctors there. Todd’s family is from the area t oo and his father’s dentist was in the build ing.” “My father is from the East Liberty/ Highland Park neighborhood and was in the Highland Building many times,” Reidbord says. “He is my resident historian for the project.” Reidbord is quick to point out that their development of the project stands on the shoulders of many partners. “We’ll take a little credit for figuring out what would wor k but the URA and East Liberty Development (ELDI) have long been champions of doing more housing – more market rate housing – in that neighborhood,” he says. “There was a lot of investment made in infrastructure and planning that went ahead of us.” Massaro agrees. “We’re not the pioneers here. I give a tip of the hat to Steve Mosites. He took a risk ten years ago with Whole Foods and planted his flag in t he ground in the neighborhood,” he says. “I also have to say what a good partner the ELDI was. M aelene Myers [ELDI’s executive director] was instrumental, as was Rob Stephany when he was at the URA. ELDI did a great job of long-term planning and development to get us to this point.” DP

www.developingpittsburgh.com

Eye on the Economy

o matter h o w ro b u s t the health of the Pittsburgh economy in the do g d a y s o f s u m m e r 2 0 1 2 , t h e near te r m o u t l o o k fo r c o m m e rc i a l real es t a t e i s s t i l l w e i g h e d d o w n by the s l u g g i s h n e s s o f t h e n a t i o n a l and gl o b a l e c o n o m ie s . M u c h l i k e a swimm e r d r a g g i n g a b a l l a n d c h a i n , the reg i o n a l e c o n o m y i s s h o w i n g signs o f f a t i g u e . At the ro o t o f t h e p ro b l e m s f a c ing the e c o n o m y i s t h e u n c e r t a i n t y about t h e h e a l t h o f b u s i n e s s e s , consum e r s a n d g o v e r n m e n t s i n t h e coming y e a r o r t w o . G i v e n w h a t the Am e r i c a n b u s i n e s s o w n e r h a s endure d d u r i n g t h e p a s t t h re e o r four ye a r s i t i s n o t u n e x p e c t e d t h a t he or s h e s h o u l d re v e r t t o m o re

c o n s e r v ative instincts as question m a r k s h ave arisen this past spring. P a r a m o unt among these concer ns a re t h e much slower pace of job g ro w t h and subsequent stalling of t h e h i g h unemployment rate, the c o n t i n u ed saga of the unraveling E u ro z o n e and, of course, the fall e l e c t i o n s. I n t h e f ourth year of recovery the e c o n o m y is really a multi-faceted c re a t u re , with varying levels of h e a l t h o r decline across various re g i o n s and sectors of the market. S u c h a shifting landscape is comm o n a s a recovery takes hold. What i s n o t a s common is the disparity of c o n d i t i o ns this far from the trough o f t h e recession. O n e f a c et of the economy that is s h o w i n g consistent and improv i n g h e a l th is commercial property.

Certain regions are still experienc ing softness of demand or overbuilt inventories but as a whole the fundamentals of the supply and demand are firming; mo reover, the commercial market is behaving in a way that is predictable. As the markets free fell in early 2009, an interesting report by the MIT Cen ter for Real Estate put the plunging commercial real estate values into an historical perspective and accurately predicted the nearly 50 percent decline that occurred. MIT’s data also showed that the precipi tous crash – while wrenching and seemingly unprecedente d – was actually quite normal for the 12 to 15 year cycle. MIT profe ssor, Dr. David Geltner even noted optimistically that the decline also signaled the beginning of the re-inflation of the CRE bubble. According to the July CoStar Commercial Repeat Sale Indices (CCRSI) Geltner’s forecast appea rs to be coming true. CoStar looks at repeat sales each month and compares the pricing to more than 100,000 repeat sales since 1996. This re search has created several key indexes to measure the trend and magnitude of price movement in commercial categories for both investment grade and general commercial properties. The most recent month surveyed was May 2012, during which 853 repeat sales were analyzed. The results show pricing that is gaining in all segments.

Absorption rates for CRE have recovered from the trough of the recession but have leveled off below the 2007 peaks.

32 DEVELOPINGPITTSBURGH

| Fall 2012

The indexes measure pric ing by weighting more heavily for larger transactions (Value-Weighted), smaller and medium sized transactions (EqualWeighted), as well as segmenting sales into investment grade and

genera l q u a l i t y. I n M a y e a c h o f the fo u r i n d e x e s s h o w e d g a i n s year-o v e r- y e a r, a n i n d i c a t i o n t h a t the re c o v e r y i n p ro p e r t y p r i c i n g i s reachi n g a c ro s s a l l s i z e a n d q u a l i t y dimen s i o n s o f t h e c o m m e rc i a l re a l estate s e c t o r. The Va l u e - We i g h t e d I n d e x c l i m b e d to its h i g h e s t l e v e l s i n c e F e b r uary 20 0 9 i n M a y, s h o w i n g a 3 6 . 1 percen t i n c re a s e s i n c e J a n u a r y 2010. C o S t a r p o i n t s o u t t h a t t h e improv e d Va l u e - We i g h t e d I n d e x re flects s t ro n g i n v e s t o r d e m a n d f o r proper t i e s t h a t h a v e b e e n a t t h e lead in re c o v e r i n g v a l u e , l i k e p r imary m e t ro a re a s a n d i n s t i t u t i o n a l grade m u l t i - f a m i l y p ro p e r t i e s . T h e Equal- We i g h t e d I n d e x c l i m b e d 6 . 6 percen t o v e r M a y 2 0 1 1 , t h e l a r g e s t month l y g a i n s i n c e b e f o re t h e re cessio n b e g a n i n 2 0 0 7 . C o S t a r s e e s this as a n i n d i c a t i o n t h a t d e m a n d for sm a l l e r a n d l o w e r- q u a l i t y a s s e t s has ca u g h t u p w i t h t h e i n s t i t u t i o n a l grade p ro p e r t y d e m a n d . That p a t t e r n o f b ro a d - b a s e d i mprovem e n t h e l d t r u e w h e n a n a lyzed b y a s s e t q u a l it y, re g a rd l e s s of tran s a c t i o n s i z e . N e t a b s o r p t i o n of inve s t m e n t g r a d e o ff i c e a n d distrib u t i o n s p a c e w a s re l a t i v e l y strong d u r i n g t h e s e c o n d q u a r t e r of 201 2 . A b s o r p t i o n o f o ff i c e s a n d wareh o u s e s o f g e n e r a l c o m m e rc i a l qualit y w a s p o s i t i v e , o ff s e t t i n g d eclines i n re t a i l n e t a b s o r p t i o n . T h e trend i n a b s o r p t i o n o f l o w e r q u a l i t y proper t i e s h a s n o n e t h e l e s s b e e n positiv e o v e r a l l t h ro u g h o u t 2 0 1 2 , pushin g p r i c e s u p wa rd . Perhap s t h e m o s t p o s i t i v e i n d i c ator for c o n t i n u e d p r i c i n g g ro w t h for co m m e rc i a l p ro p e r t y i s t h e contin u e d d e c l i n e i n d i s t re s s s a l e s . By CoS t a r ’s m e a s u re o f d i s t re s s e d pricing , f e w e r d i s t re s s s a l e s o c curred i n M a y t h a n a n y m o n t h s i n c e mid-2 0 0 9 . Comm e rc i a l re a l e s t a t e v a l u e s a re a lagg i n g i n d i c a t o r o f t h e h e a l t h o f the ec o n o m y. T h e cu r re n t t re n d i s ,

Perhaps the most positive indicator for continued pricing growth for commercial property is the continued decline in distr ess sales… fewer distr ess sales occur red in May than any month since mid-2009. i n f a c t f ollowing the steep correc t i o n i n pricing and inventory that o c c u r re d following the recession a n d f i n ancial crisis. Like the housi n g b u b ble, the peak in CRE value w a s h e i ghtened by artificial factors r a t h e r t han in response to excess d e m a n d or short inventory. The low l e v e l s o f new construction from 2 0 0 9 - 2 011 have as much to do w i t h t h e current increase as does a n y g ro wing demand. For demand t o d r i v e the next stage in expans i o n , a n improved general economy w i l l n e e d to exist. A t m i d - year, the jury is very much o u t o n the direction of what is a s t a l l e d economy. N o s i n g le factor could determine t h e d i re ction of the next phase of t h e b u s iness cycle as much as a c h a n g e in the unemployment rate. A f t e r d eclining by nearly two perc e n t a g e points and several million j o b s , u n employment is hovering at 8 . 2 p e rcent in July and total em p l o y m e nt has stalled at 140 million j o b s , s o me six million below peak e m p l o y ment. The Bureau of Labor S t a t i s t i c s (BLS) reported in July t h a t h i r ing in the second quarter h a d c re ated an average of 75,000 j o b s e a ch month compared to the m o n t h l y average of 226,000 in the f i r s t q u arter of the year. BLS also s h o w e d that in June, seasonally a d j u s t e d nonfarm payroll employ -

ment increased in 29 states and the District of Columbia and decreased in 21 states. Compared with June 2011, employment increased in all but six states, but anecdotal indications are that the momentum for adding jobs has decreas ed. The surprising expansion of 163,000 jobs in July offers hope that a new hiring trend is underway but that jury is still out. The July 16 quarterly survey of 67 corporate economists of the National Association for Business Economics (NABE) indicated that plans to hire were cooling as well. Their survey showed that only 23 percent of the businesses surveyed planned to expand hiring in the third quarter. “The survey results suggest worsening economic conditions through increased flatness in sales and profit margins, less upward pressure on employment, weaken ing optimism concer ning real [gross domestic product] growth, and rising concer ns about the impact of the European crisis, potential U.S. gover nment spending cuts in January, and the expiration of Bush-era tax cuts in December, although there are fewer inflationary pres sures,” said survey chair Nayantara Hensel. Another survey showing sluggish or mixed results was the Federal Reserve’s quarterly Beige Book of economic activity, a summary of informal responses about business conditions in its 12 districts. Reports from eight of the 12 Federal Reserve districts “indicated that overall economic activity continued to expand at a modest to moderate pace in June and early July,” the Fed reported in the July 18 Beige Book. The New York, Ph iladelphia and Cleveland districts noted that activity continued to expand, but at a slower pace since the last report, while Richmond cited m ixed activity.

www.developingpittsburgh.com

formation has been positive in terms of home prices and sales. June’s housing start data, which showed the new construction rate at 760,000 units, offers a broader hope for the economy. That rate is still well below the household formation rate. Residential construction creates a large number of jobs and an increase in the number of units to one million wou ld drop the unemployment rate below seven percent. And that would have positive ripple effects throughout the econ omy.

Sales of distressed properties fell to the lowest share of the market since April 2009 but remain several times higher than historical norms.

One si g n i f i c a n t c a u s e o f t h e s t a gnation i s t h e s l o w d o w n o v e r s e a s . While t h e E u ro p e a n U n i o n i s g e t ting m o s t o f t h e h e a d l i n e s , i t i s t h e coolin g o ff o f t h e h i g h e r- o c t a n e emerg i n g e c o n o m i e s i n B r a z i l , R u ssia, In d i a a n d C h i n a t h a t i s g i v i n g U.S. c o r p o r a t i o n s h e a d a c h e s . T h e s e four c o u n t r i e s – t h e s o - c a l l e d B R I C nation s – h a v e p ro v i d e d m a r k e t s for glo b a l m a n u f a c t u re r s a n d t h e i r growth f u e l e d t h e la t t e r y e a r s o f the las t b o o m c y c l e. For an y o n e s t i l l c l i n g i n g t o t h e i d e a that m o d e r n e c o n o m i e s c a n o p e rate de - c o u p l e d f ro m t h e re s t o f t h e world, t h e c u r re n t s t a t u s s h o u l d shatte r t h a t i l l u s i o n . T h e s i t u a t i o n has a re a l ‘ c i rc l e o f l i f e ’ f e e l , b u t withou t t h e h a p p y L i o n K i n g - D i s n e y ending , a t l e a s t f o r n o w. Europe w a s a n i m p o r t a n t m a r k e t for Ch i n e s e a n d I n d i a n g o o d s . T h e steepe n i n g re c e s s i on i n E u ro p e has ch i l l e d c o n s u m p t i o n . C h i n a ’s growth i s s l o w i n g r a p i d l y. I n d i a a n d Brazil h a v e a l s o l o s t m o m e n t u m , with g ro w t h w e a k e n i n g . R u s s i a i s

34 DEVELOPINGPITTSBURGH

| Fall 2012

d e p e n d ent on high energy prices a n d E u ropean consumption. The w e a k e n ing of BRIC economies is a f u n c t i on of lower demand from d e v e l o p ed countries, resulting in re d u c e d exports and weaker com m o d i t y prices. The withdrawal o f E u ro pean banks, which have h i s t o r i c ally been major lenders to e m e r g i n g markets, has decreased t h e f l o w of money to countries n e e d i n g foreign investment. F o r A m erican businesses, the s l o w d o wn in emerging markets has re d u c e d revenues and profits. Even s t e l l a r c ompanies like Apple have s e e n t h e cooling – in China particul a r l y – i mpact ear nings and sales s i n c e s p ring. F ro m a mong the mostly gloomy n e w s t h ere are a couple of trends t o w a t c h that would point to more i m m e d i ate improvement. The big g e s t a n d most direct of these is a re c o v ery in the housing market t h a t l e a ds to a significant increase i n n e w construction. Both regional a n d n a t ional housing market in-

The more derivative trend that could result from another year of suppressed growth is an acceleration of the normalizing of lending conditions. Banks and lenders have been able to build reserves during the past few years but cannot boost ear nings growth without usi ng that cash to make loans. Increasing ear nings pressure has increased competition among lenders and with demand for loans slowing, that competitive pressure is likely to lead to more favorable underwriting conditions than have existed since the financial crisis. What most of this macroeconomic outlook means is that consumers and business owners have too many conflicting signals and too few clear indicators of what is coming next. That uncertainty does little to inspire or feed confidence and confidence is a key ingredient in the recipe for comme rcial real estate. It appears more likely that the picture will not become clearer until the outcome of the November elections are known and a reading on the consumer’s Holiday spend ing is seen. DP

Office Market Update

outhwestern Pennsylvania witnessed yet another season o f s t ro n g o ff i c e l e a s i n g a c t i vity dur i n g t h e f i r s t h a l f o f 2 0 1 2 and th e b a l a n c e o f t h e y e a r i s s e t to cha n g e t h e l a n d s c a p e o f p ro d uct off e r i n g s . I n P i t t s b u r g h ’s c o re , all eye s w i l l b e o n p ro j e c t s s u c h a s The To w e r a t P N C P l a z a , M i l l c r a f t Indust r i e s ’ T h e G a rd e n s i n M a r k e t Square , M c K n i g h t R e a l t y P a r t n e r s ’ progre s s i n c o n v e r t in g T h e O l i v e r Buildin g t o m i x e d u s e , t h e f a t e o f The Un i o n Tr u s t B u i l d i n g , C o n t i n e n tal Rea l E s t a t e ’s n e x t e n d e a v o r o n the No r t h S h o re a n d t h e P e n g u i n s ’ positio n i n g o f t h e f o r m e r M e l l o n Arena s i t e f o r d e v e lo p m e n t . W i t h Class A v a c a n c y s t i l l s i t t i n g i n s i ngle dig i t s , h o w t h e s e d e v e l o p m e n t s unfold w i l l u n d o u b t e d l y i m p a c t tenant d e c i s i o n s w e l l i n t o 2 0 1 3 . The su b u r b s a re a l s o p o s i t i o n e d for an e x c i t i n g c o n c l u s i o n t o t h e year. P e re n n i a l h e a l t h c a re s u p e rpower s U P M C a n d H i g h m a r k a re ,

36 DEVELOPINGPITTSBURGH

| Fall 2012

a t a b re akneck pace, affecting the o ff i c e l a ndscape by absorbing acre a g e o t h erwise slated for build-tos u i t a n d speculative office develo p m e n t . In Pine, 35 acres of what w o u l d h ave been an expansion of C o p p e r l eaf Court is now captive t o H i g h mark’s use. And the most a c c e s s i b le confluence of Interstate h i g h w a y s in the re g i o n – the i n t e r s e c tion of I - 7 9 a n d I-76 on R o u t e s 228 and 1 9 i n C r anberry – i s t h e venue for t h e l a t e st race in t h e h e a l th syst e m s ’ e x pansion. W i t h H i ghmark’s p u rc h a s e of 25 a c re s i n Cran b e r r y Woods and U P M C ’s pend i n g a c q uisition o f m o re than 3 0 a c re s at the n e i g h b o ring S u m m i t of Cranb e r r y Woods,

almost half-a-million square feet of planned office is on the cut ting room floor. Is that a bad thing? Prob ably not. W ith a slight pullback from nuclear and Marcellus users of late, coupled with the ongoing construction of Cranberry Crossroads, an available pad site at Summit of Cranberry Woods and t he ever-ex panding Cranberry Business Park, office users in the North head into the balance of the year and 2013 with as many – or more – options for space than they have seen in some time. In the longer term, the Northeast cor ner of I-79 and Route 228 will pro vide Cranberry Town ship with a new pool of office sites as its infrastructure progresses. Over the past several years, stretching as far back into the early 2000’s, suburban conversation has been dominated by Cranberry and its I-79 counterpart, South-

In Southpointe, pending projects could spell the end of available acreage for development on the west side of I-79 and spur Wa shington County ’s leadership to initiate infrastr ucture improvements across the interstate at Cool Valley. pointe . I t ’s t a k e n a w h i l e , b u t t h e Parkwa y We s t h a s re c e n t l y s t o o d up for i t s e l f w i t h a s t r i n g o f n o t eworthy t r a n s a c t i o n s t h a t w i l l s h i f t leverag e s o m e w h a t f ro m t h e t e n ant to t h e l a n d l o rd . D e a l s s u c h a s Chevro n a t C h e r r i n g t o n C o r p o r a t e Center, F e d E x ’s s i g ni f i c a n t e x p a n sion at O m e g a C o r p o r a t e C e n t e r and th e W i l l i a m s O i l & G a s l e a s e a t Park Pl a c e c o m b i n e d t o s e n d d e v e lopers b a c k t o t h e d r a w i n g b o a rd for new c o n s t r u c t i o n o p p o r t u n i t i e s in the a i r p o r t c o r r i d o r. T h e j o i n t venture b e t w e e n C o n t i n e n t a l R e a l Estate a n d C h a s k a P ro p e r t y A d v i s o r s will de l i v e r t h e f i r s t s u c h s p a c e o n a spec u l a t i v e b a s i s a t t h e re c e n t l y announ c e d P i t t s b u r g h I n t e r n ational B u s i n e s s P a r k o n C h e r r i n g t o n Parkwa y i n M o o n To w n s h i p . O t h e r project s t h a t h o p e to c a p i t a l i z e o n this ne w m o m e n t u m i n c l u d e R u g b y Realty’s re c e n t a c q u i s i t i o n o f p a d sites a t o p P e n n C e nt e r We s t a n d DiCicc o D e v e l o p m e n t ’s p ro j e c t a t Scott S t a t i o n . In Sout h p o i n t e , p e n d i n g p ro j ects co u l d s p e l l t h e e n d o f a v a i lable ac re a g e f o r d e v e l o p m e n t o n

Innovative Solutions. Outstanding Support. KU Resources, Inc. provides a full range of environmental management and site development engineering services to a wide array of clients. By engaging the skill set of the firm’s personnel, clients ensure a quality partner from project inception to completion. The firm specializes in: -

Brownfield Redevelopment Environmental Site Assessments Environmental Risk Management Site Remediation Economic Revitalization Assistance Regulatory Compliance

Civil/Geotechnical Engineering Site Development Support Water Resources Engineering Water Quality Litigation Support Air Quality

KU Resources, Inc.

22 S. Linden Street | Duquesne, PA 15110 | 412-469-9331 www.kuresources.com www.developingpittsburgh.com

Building Energy Management. Realized. Trane systems, services and solutions reduce energy use in existing commercial properties up to 50% while increasing net asset value and maximizing tenant comfort. Combined with PA’s Act 129 Rebate program Trane partners with you to develop intelligent, flexible and efficient solutions. By updating HVAC systems equipment and controls, along with full service and commissioning, Trane can help you succeed, now and for the life of your building. Contact Tim White, Trane’s Pittsburgh office at 412.747.3000 or email twhite2@trane.com Trane belongs to Ingersoll Rand’s family of brands, including Club Car®, Ingersoll Rand®, Schlage® and Thermo King®. Ingersoll Rand is a world leader in creating and sustaining, safe, comfortable and efficient environments.

the We s t s i d e o f I - 79 and sp u r Wa s h i n g t o n County ’s l e a d e r s h i p t o initiate i n f r a s t r u c t u re improv e m e n t s a c ro s s t h e interst a t e a t C o o l Va l l e y. Bur ns & S c a l o i s h i n t i n g at plan s f o r a n e w o ff i c e develo p m e n t , C ro s s g a t e s has an n o u n c e d 9 0 , 0 0 0 square f e e t o f n e w i n ventor y a t 2 0 0 Wo o d c l i ff Drive a n d H o r i z o n ’s To w n Center d e v e l o p m e n t will off e r “ o ff i c e o v e r retail” p ro d u c t . T h e s e develo p m e n t s , c o u p l e d with 2 0 1 3 ’s d e l i v e r y o f Mylan’s 2 8 0 , 0 0 0 s q u a re foot h e a d q u a r t e r s a n d the po t e n t i a l f o r a s i gnifican t e x p a n s i o n b y Ansys w i t h i n t h e p a r k , could c a p o ff o n e o f t h e most s u c c e s s f u l p u b l i c / private p a r t n e r s h i p s i n our reg i o n ’s h i s t o r y. So thin g s a re b u s y in t h e ‘ b u r b s , but let ’s c l o s e b y h e a d i n g b a c k t o the cit y, w h o s e o ff i c e i n v e n t o r y i s greate r t h a n a l l o f t h e s u b u r b a n marke t s c o m b i n e d . H o w a re o u r new n e i g h b o r s ? You k n o w, t h e investo r g ro u p s t h a t h a d n ’t p re v i ously o w n e d a n y t h i n g i n t h e re g i o n only to c r a s h o u r p a r t y a n d s n a p u p some o f t h e C B D ’s m o s t i c o n i c a d dresse s . L e a s i n g a c ti v i t y t h u s f a r i n their s h o r t P i t t s b u r g h h i s t o r y w o u l d sugges t t h a t t h e y a re d o i n g j u s t fine. A f t e r C l a s s A v a c a n c y r a t e s i n the CB D p l u m m e t e d f ro m a l m o s t 18% t o 7 % o v e r t h e p a s t s e v e r a l years, 2 0 1 2 o ff e re d u p a n e w w a v e of dea l s i n c l u d i n g G a t e w a y H e a l t h Plan a t G a t e w a y C e n t e r ; To w e r s Watson , H i g h m a r k a n d S a u l E w ing at P P G P l a c e ; a n d t h e F e d e r a l Reserv e o f C l e v e l a n d a t O n e O x f o rd Center. M o re s o t h a n i t s s u b u r b a n counte r p a r t s , n e w c o n s t r u c t i o n within t h e u r b a n c ore c a n b e c h a l lengin g g i v e n s i t e c o n s t r a i n t s , a greate r e m p h a s i s o n v e r t i c a l i t y a n d parkin g c o m p o n e n t s . A s a re s u l t , we’ve s e e n p ro p e r t i e s t r a d e f o r repurp o s i n g w h i c h , w h e n c o u p l e d with a f o re m e n t i o n ed s a l e s a c t i v i t y in stab i l i z e d o ff i c e t o w e r s , p ro v i d e additio n a l e n d o r s e m e n t t o t h e n ation’s ( a n d t h e w o r ld ’s ) i n v e s t o r s that o u r re g i o n o ff e r s a d i v e r s e

r a n g e o f safe and opportunistic real e s t a t e p lays. PMC Property Group’s a c q u i s i t i on of the Verizon Buildi n g a n d the Regional Enterprise To w e r ; Millcraft Industries’ delive r y o f h igh-rise apartments at the f o r m e r State Office Building; the E l m h u r s t Group’s purchase of the F I S E R V building; and, most recently, P N C B a nk’s acquisition of the Lord & Ta y l o r building are examples t h a t i n v estors will look upon when c o n s i d e r ing other challenged assets s u c h a s the Reed Smith and Union Tr u s t b u ildings. R e g i o n wide, that’s a lot of activity. T h e k e y to sustaining this activity l i e s i n t he ability to finance good p ro j e c t s and the continued good h e a l t h o f our users: Utica, Marcel l u s , n u c lear; healthcare, education a n d t h e i r tentacles into research a n d d e v elopment; continued g ro w t h in the financials; bellweth e r s i n m anufacturing, consumer g o o d s a nd retail; and, finally, p ro f e s s i onal service and law firms t h a t a re part of the fabric of our s k y l i n e . If the local operations of t h e s e i n dustries can continue to a v o i d t h e economic pitfalls exper i e n c e d by the rest of the country a n d i f o ur municipalities continue t o c o o p erate with the development c o m m u nity, Southwester n Pennsylv a n i a ’s office market will keep its

place as one of the country’s top performers. Jason Stewart is executive vice president, director of agency leasing at Jones Lang LaSalle. DP

Jason Stewart

www.developingpittsburgh.com

Industrial Market Update

h e P i t t sburgh i n d u st r i a l re a l estate m a r k e t ’s fundam e n t a l s re m a in e d s o u n d throug h t h e s e c o n d q u a r t e r o f 2012. T h e ro u g h l y 1 3 6 m i l lion sq u a re f o o t l o c a l i n d u s trial m a r k e t e n d e d t h e s e c o n d quarte r w i t h a v a c a n c y r a t e o f 8.08% , e s s e n t i a l l y u n c h a n g e d from t h e p re v i o u s q u a r t e r. User a c t i v i t y p u l l e d b a c k t owards t h e e n d o f t h e q u a r t e r. Macro- e c o n o m i c h e a d w i n d s , indecis i o n t i e d t o re g u l a t o r y uncert a i n t i e s , a n d t h e t y p i c a l summe r s l o w d o w n a l l c o ntribute d t o t h i s . H o w e v e r, t h i s had lit t l e e ff e c t o n t h e o v e r a l l market c o n d i t i o n s a n d s e v e r a l signific a n t t r a n s a c t io n s o ccurred . A q u i o n E n e r g y l e a s e d and oc c u p i e d 3 1 5 , 0 0 0 s q u a re feet at t h e R I D C We s t m o re l a n d (forme r S o n y p l a n t ) , A a ro n ’s l e a s e d 154,81 6 s q u a re f e e t a t 4 6 0 N i x o n Road a n d M i n e S a f e t y A p p l i a n c e s

l e a s e d 1 19,821 square feet at the Tu r n p i k e Distribution Center in B e a v e r County.

New construction activity remains limited. Very little construction is planned for the balance of 2012 and speculative construction re mains nominal. Some build-to-suit transactions currently in the market should result in an increase in space under constru ction later in 2012 as well as deliveries in 2013. Larger users seeking existing space are going to continue to find a dearth of quality options. Marcellus and Utica related activ ity remains a mixed bag. Drill ing activities have shifted to the “Wet” areas of the Marcellus and liquids rich Utica Shale. Drilling in the “Dry” areas of the Marcellus has slowed considerably but midstream (processing, storing, and transportation) activities remain strong. Despite low natural gas prices, activity related to the oil and gas supply chain continues to have a positive impact on the local industrial market. Through the balance of 2012 and into 2013, the forecast is gener-

40 DEVELOPINGPITTSBURGH

| Fall 2012

Despite low natural gas prices, activity related to the oil and gas supply chain continues to have a positive impact on the local industrial market.

Property Valuation

ally p o s i t i v e f o r t h e P i t t s b u r g h i n d u s t r i a l m a r ket. Pent- u p u s e r d e m a n d re m a i n s a n d a n i n c re a s e in econo m i c a n d re g u l a t o r y c e r t a i n t y s h o u l d re sult in i n c re a s e d i n v e s t m e n t s b y b o t h l a n d l o rds and t e n a n t s . W h i l e u s e r a c t i v i t y i s b y n o m e a ns robus t , t h e m a r k e t â&#x20AC;&#x2122;s f u n d a m e n t a l s re m a i n s o l id. Until s p e c u l a t i v e c o n s t r u c t i o n o f a n y s i g n i f icance o c c u r s , o c c u p a n c y l e v e l s w i l l c o n t i n u e to increa s e , w i t h t h e m a r k e t â&#x20AC;&#x2122;s o v e r a l l v a c a n c y r a te proje c t e d d i p b e l o w 7 % b y t h e e n d o f 2 0 1 2 . This will l i k e l y p u t s o m e u p w a rd p re s s u re o n p r i c i ng as we he a d i n t o 2 0 1 3 .

Property Valuation

Richa r d G a s p e r i n i i s v i c e p r e s i d e n t a t C B R E . R obert Bl a c k m o r e i s f i r s t v i c e p r e s i d e n t a t C B R E . DP

Litigation Support

Integra Realty Resources - Pittsburgh

Robert Blackmore

Richard Gasperini

Over 135 years of experience providing commercial real estate appraisals, market and feasibility studies, impact studies, litigation support and consulting throughout Western Pennsylvania and West Virginia. In addition, with 65 offices across the United States, we provide a national platform to solve your valuation challenges. Paul D. Griffith, MAI, CRE, FRICS Managing Director T: 724.742.3324 F: 724.742.3390 pgriffith@irr.com www.irr.com/pittsburgh www.developingpittsburgh.com

Retail Market Update

e t a i l a c t i vi t y i n G re a t e r Pittsburgh will likely gain positive momentum throug h t h e re m a i n d e r o f 2 0 1 2 , with m o d e r a t e g ro w t h e x p e c t e d i n 2013. G ro c e r y s t o re s , l o c a l re s t a u rants, f a s t c a s u a l n a t i o n a l c h a i n restaur a n t s , m e d i c a l re t a i l , a n d upgrad e d l o c a t i o n s f o r e x i s t i n g n ational t e n a n t s h a v e l e d t h e w a y f o r recent re t a i l a c t i v i t y i n P i t t s b u r g h . The ge n e r a l a t m o s p h e re a t t h e a n nual IC S C R E C o n c o n v e n t i o n i n L a s Vegas w a s u p b e a t a n d o p t i m i s t i c regard i n g t h e re t a i l s e c t o r re c o v e r y nation a l l y. I b e l i e v e t h a t t h e I C S C conven t i o n i s a s t ron g i n d i c a t o r that re t a i l g ro w t h i s h e a d e d i n a n upward d i re c t i o n . The Pit t s b u r g h re t a i l m a r k e t s a re broken i n t o f o u r q ua d r a n t s : N o r t h (Cranb e r r y / We x f o rd ) , S o u t h ( S o u t h Hills V i l l a g e / M t . L e b a n o n ) , E a s t (Monro e v i l l e / M u r r y s v i l l e ) a n d We s t (Robin s o n ) . T h e C r a n b e r r y / We x f o rd market c o n t i n u e s t o b e t h e m o s t active, w i t h s a l e s b e i n g d r i v e n b y the ne w 5 0 0 , 0 0 0 - s q u a re - f o o t M c Candle s s C ro s s i n g D e v e l o p m e n t . Tenant s t h e re i n c l u d e L o w e ’s , L A Fitness , H i l t o n , F i d e l i t y B a n k a n d Cinem a r k . T h e N o r t h e r n q u a drant al o n g t h e R o u t e 2 2 8 c o r r i d o r

c o n t i n u es to develop with new p ro j e c t s , such as the relocation of D i c k ’s S porting Goods to a new l a r g e r f acility and the completion o f t h e Cambria Suites project. Ad d i t i o n a l activity on the Route 228 c o r r i d o r includes a new free-stand i n g L a - Z -Boy fur niture store, GetGo g a s a n d convenience store, and two a d d i t i o nal outparcels available for re s t a u r a nt and hotel use. N o t f a r behind in development a c t i v i t y are the South (South Hills) a n d E a s t (Monroeville) quadrants. I n t h e S outh, construction is under w a y f o r new big box retail tenants D i c k ’s S porting Goods and Target. I n a d d i t ion to these major retail d r a w s , Bonefish Grill is locating i t s f i r s t Pittsburgh restaurant at S o u t h H ills V illage. All of this new d e v e l o p ment is taking place on the R o u t e 1 9 side of the South Hills V i l l a g e Mall. I n t h e E ast market (Monroeville), t h e n e w 16.7-acre UPMC East site o p e n e d earlier this summer. The h o s p i t a l facility will have 156 priv a t e ro oms, 140 medical-surgical s u i t e s a nd 16 ICU beds. UPMC a n t i c i p a tes approximately 30,000 v i s i t o r s to its emergency departm e n t . T he addition of the regional h o s p i t a l has increased the interest o f re t a i l ers and retail developers in t h e E a s t market. Because the hos-

pital is located in a mature market, I anticipate an increase of rede velopment and re-use construction projects in 2013 and beyond. In the West quadrant, the Settlers Ridge development is completing its leasing. That project boasts the first ground-up 150,000-squarefoot Giant Eagle Market District store that opened in 2010. Other Settlers Ridge tenants include national retailers such as REI, LA Fitness, PF Chang’s, Ross Dress For Less, Bar nes & Noble and Michaels. The entire development is 600,000 square feet and there are only a few storefront and outparcel vacan cies remaining. This market recent ly became the home to two new national concepts: Hobby Lobby and The T ile Shop chose the West (Robinson) market to open their first Pittsburgh locations. The Pittsburgh market has historically been a very conservative development market. Be cause of Pittsburgh’s consistent moderate growth trends, it has not expe rienced the highs and lows of other markets such as Charlotte and Atlanta. The retail market in Pittsburgh remains stable, and any improvement in the market may be due to the fact that the region’s population losses have been stopped, and it is experienc-

Information source: CoStar

42 DEVELOPINGPITTSBURGH

| Fall 2012

Information source: CoStar

ing a t u r n a ro u n d w i t h c o n s i s t e n t gains i n o v e r a l l p o p u l a t i o n g ro w t h . Pittsbu r g h ’s g ro w t h i n t h e m e d i cal, fin a n c e , e d u c a t i o n , a n d e nergy se c t o r s w i l l c o n t i n u e t o d r i v e retail d e v e l o p m e n t i n t h e c o m i n g year. P i t t s b u r g h i s p o i s e d t o m a i n tain m o d e r a t e g ro w t h t h ro u g h t h e balanc e o f 2 0 1 2 a n d i n t o 2 0 1 3 . Pittsbu r g h — t h e C it y o f C h a m-

p i o n s — is a proven place to live, w o r k a n d do business with four a c t i v e retail markets. The sky is the l i m i t f o r future retail growth and d e v e l o p ment. — B r a d Kelly is director of Retail S e r v i c e s with Colliers International | P i t t s b u rgh. DP Brad Kelly www.developingpittsburgh.com

National Market Update

conomic O v e r v i e w. T h e U S e c o n o m y ’s g ro w t h d u r i n g the first half of 2012 was driven b y c o n s u m p t i o n , i n v e s t m e n t and ex p o r t . R e a l U S G ro s s D o m e s t i c Produc t ( G D P ) ro s e a t a 1 . 5 % a n nualize d r a t e i n t h e s e c o n d q u a r t e r. This ai d e d e m p l o y m e n t g ro w t h f o r a net g a i n o f 1 . 7 m i l l i o n n e w j o b s throug h J u n e , a 1 . 3% i n c re a s e year-o v e r- y e a r, a n d h e l d u n e m p l o y ment s t e a d y a t 8 . 2 % . T h e I S M ’s gauge o f n e w o rd e r s , a m e a s u re o f future a c t i v i t y, p l u ng e d f ro m 6 0 . 1 to 47.8 , t h e f i r s t t i m e s i n c e t h e recess i o n e n d e d t h a t t h i s i n d e x h a s fallen b e l o w 5 0 . R e a d i n g s b e l o w 5 0 genera l l y s i g n i f y e c o n o m i c c o n t r a ction. D e s p i t e a s t ro n g s t a r t t o t h e year, m o m e n t u m a p p e a re d t o b e slowin g a t t h e c l o s e o f t h e s e c o n d quarte r a n d p ro b a b l y w i l l s t a y b e low tre n d f o r t h e re s t o f 2 0 1 2 .

OFFICE VACANCY AND RENTAL RATES Overal l v a c a n c y w i t h i n C u s h m a n & Wak e f i e l d ’s 4 1 c o re m a r k e t s throug h o u t t h e U . S . has fal l e n t h ro u g h out th e p a s t 1 2 month s , e n d i n g the sec o n d q u a r t e r at 16.4 % . O f t h e core m a r k e t s , o n l y five re p o r t e d a r i s e of 1.0 p e rc e n t age po i n t ( p p ) o r greate r – N o r t h e r n V irgini a ( u p 3 . 0 p p to 18.0 % o v e rall); We s t c h e s t e r Count y ( u p 2 . 0 p p to 18.4 % o v e r a l l ) ; New H a v e n ( u p 1.3 pp t o 1 5 . 1 % overall ) a n d Wa s h ington , D . C . ( u p 1.0 pp t o 1 2 . 5 % overall ) .

44 DEVELOPINGPITTSBURGH

| Fall 2012

A s v a c a ncy rates trend lower, a g r a d u a l increase in asking rents h a s b e e n occurring. The overa l l r a t e for U.S. central business d i s t r i c t s (CBDs) has increased for f i v e c o n secutive quarters, posting a 4 . 3 % increase year-over-year in t h e s e c ond quarter 2012 at $38.02 p e r s q u are foot (psf). The same has b e e n n o ted in U.S. suburban mark e t s w h ere overall rents reached $ 2 4 . 0 3 psf in the second quarter, a 1 . 3 % increase year-over-year, ris i n g f o r the fifth consecutive q u a r t e r after a low of $23.66 p s f i n t he first quarter 2011.

OFFICE LEASING ACTIVITY Ye a r- t o - date office leasing a c t i v i t y took a 9.0% dive y e a r- o v e r-year in the second q u a r t e r, posting just over 9 1 . 5 m i llion square feet ( m s f ) . N ew class A transact i o n s h a ve been significantly l o w e r t han in 2011 – due in p a r t t o dwindling blocks of a v a i l a b l e space – but demand f o r c l a s s B and class C space i s o n t h e rise. Among the

largest deals closed in the second quarter were: Green Mountain Cof fee Roaster for a 424,000-sf new build-to-suit development in Boston that will deliver in three phases through 2016; QBE Insurance for 183,000 sf in Phoenix; AirBnB for 170,000 sf in San Francisco; Capital One for 158,582 sf in Chicago; and Nationstar Mortgage for 153,457 sf in the Dallas/Fort Worth area.

Year-to - d a t e l e a s i n g a c t i v i t y i n U.S. CB D s i s d o w n f ro m l a s t yearâ&#x20AC;&#x2122;s re l a t i v e l y s t ron g v o l u m e o f 41.8 m s f b u t i s s t i l l w e l l a b o v e recessi o n - e r a l e v e l s a t 2 9 . 7 m s f . Though c l a s s A l e a s i n g d e c l i n e d to 16.6 m s f f ro m 2 9 . 1 m s f o n e year ag o , c l a s s B a nd C l e a s i n g was up t o a l m o s t 1 3 . 2 m s f f ro m 12.7 m s f re c o rd e d a t m i d - y e a r 2011. I n c o n t r a s t , s u b u r b a n l e a sing act i v i t y s a w a 5 . 1 % i n c re a s e over th e p re v i o u s y e a r, t o t a l i n g 61.7 m s f . V iacom C o r p . â&#x20AC;&#x2122;s 1 . 6 m s f re n e w a l and ex p a n s i o n a t 1 5 1 5 B ro a d way in M i d t o w n M a n h a t t a n w a s record e d a s o n e o f t h e l a r g e s t

www.developingpittsburgh.com

O f t h e 73 industrial markets t r a c k e d by Cushman & Wakefield, 5 5 re c o rded year-over-year declines i n v a c a ncy. The Greater Los Ange l e s a re a remained the tightest in t h e c o u ntry with an overall vacancy r a t e o f j ust 4.6%. Central New J e r s e y a nd Phoenix were the most i m p ro v e d markets year-over-year,

OFFICE OUTLOOK

INDUSTRIAL VACANCY AND ABSORPTION Despit e t h e g r i m e c o n o m i c s i t uation f a c i n g t h e i n d u s t r i a l s e ctor, th e m a r k e t c o n t i n u e d t o p o s t health y d e m a n d a n d d e c l i n i n g vacanc i e s a c ro s s t h e c o u n t r y. T h e overal l v a c a n c y r a t e f e l l t o 9 . 3 % at mid - y e a r 2 0 1 2 , d o w n 3 0 b a s i s points ( b p s ) f ro m t h e e n d o f t h e first q u a r t e r a n d d o w n 1 1 0 b p s from 1 0 . 4 % a t m i d - y e a r 2 0 1 1 . T h e curren t v a c a n c y r a t e i s t h e l o w e s t the ma r k e t h a s e x p e r i e n c e d s i n c e fourth q u a r t e r 2 0 0 8 w h e n t h e o v e rall rate w a s 8 . 6 % . N e t a b s o r p t i o n

46 DEVELOPINGPITTSBURGH

| Fall 2012

9.8

12.9

15.7

18.2

18.9

msf

Despit e a s l o wdown i n e c o n o mic mom e n t u m , office f u n d a menta l s s h o u l d LEASING ACTIVITY – TOP U.S. INDUSTRIAL MARKETS remain p o s i t i v e 25 throug h t h e b a l ance o f 2 0 1 2 , 20 with v a c a n c y rates f a l l i n g f u rther an d re n t a l 15 rates c o n t i n uing a s t e a d y 10 increas e . A b o o s t in buil d - t o - s u i t 5 constru c t i o n i s expect e d o v e r 0 the ne x t 1 2 t o 2 4 Greater LA Chicago Inland Empire Dallas/Fort Worth month s a s l a r g e blocks o f q u a lYTD 2011 YTD 2012 ity spa c e b e c o m e scarce i n s e l e c t cities a c ro s s t h e countr y. S p e c u lative c o n s t r u ction w i l l re m a i n l i m i t e d a s o n g o i n g p o s t i n g more than a 200-bp decline capita l c o n s t r a i n t s a n d re n t a l r a t e e a c h ; t h e PA I-81/I-78 Distribution apprec i a t i o n w i l l p ro v e d e t r i m e n t a l C o r r i d o r recorded an improvement to new d e v e l o p m e n t . f ro m 1 1 .1% to 9.1%, and the Dal l a s / F o r t Worth vacancy dropped 1 7 0 b p s to 11.2%.

INDUSTRIAL LEASING ACTIVITY AND DEVELOPMENT I n d u s t r i al demand remained stron g e s t i n seaport cities, major distrib u t i o n c enter hubs and auto-cent r i c m a r kets. Leasing activity during t h e f i r s t half of the year totaled 1 9 9 . 2 msf. The Greater Los Angeles m a r k e t continued to top the nation i n l e a s i ng activity with 18.9 msf, w h i l e C hicago’s inland hub domi n a n c e remained unchallenged with

mid-year leasing reaching nearly 19.0 msf for a 30.5% year-overyear increase. Lease transactions in excess of 200,000 sf have fueled the industrial market’s recovery. Among the largest year-to-date are Home Depot, Inc.’s commitment to lease a 1.6-msf warehouse that will be built adjacent to its 657,600sf rapid deployment facility in the Chicago area, and Crayola’s execu tion of an 800,000-sf lease for a build-to-suit facility in the Lehigh Valley, Philadelphia market. The U.S. industrial market has seen little in the way of new development throughout the recession ary and postrecessionary period. In fact, only 29.6 msf of space was added to the market nationally Houston in 2011, of which 4.4 msf were specula tive. Already thi s year, 17.5 msf of new supply was added to that inventory with 7.9 msf of it offered on a speculati ve basis. An additional 49.2 msf is currently under construction with 17.0 msf of speculative space scheduled to deliver by year-end. 9.1

f o r t h e first half of the year also w a s p o s itive 65.1 million square f e e t ( m s f), up from 52.5 msf in m i d - y e a r 2011.

8.5

CBD tr a n s a c t i o n s o f t h e y e a r. T h e compa n y w i l l o c c u py a n a d d i t i o n a l 191,00 0 s f i n i t s p r i m e d o w n t o w n locatio n . I n a d d i t i o n , M o r g a n Stanley w i l l e x p a n d b y 3 3 7 , 0 0 0 s f at One N e w Yo r k P l a z a , D o w n t o w n New Yo r k . I n P h i l a d e l p h i a , t h e P h i l adelph i a P a r k i n g A u t h o r i t y l e a s e d 124,66 2 s f , a n d i n S a n F r a n c i s c o , Autode s k l e a s e d 1 0 8 , 1 9 6 s f .

INDUSTRIAL OUTLOOK The pace of economic growth is still healthy enough for continued recovery in market fundamentals; however, the deepening uncertainty of the European market coupled with a stagnant U.S. economy will undoubtedly impact the industrial market for the balance of 2012. Source: Cushman & Wakefield, Inc. DP

350 Fifth Avenue A new Oxford Development Project in the Heart of Downtown Pittsburgh

350 Fifth Ave. Tower Highlights • • • • •

•

• •

33 story, 772,000 SF building with a total project cost of $238 million Construction jobs – 450 Permanent jobs - 2,500 41 spaces of underground parking At a minimum, LEED Silver construction and elements of alternative energy, such as Photovoltaic (PV) Generation and Geothermal Access will be explored The ground floor enclosure steps back at the Smithfield and Fifth corner, forming a public exterior space under the cover of the building’s upper floors. Another setback allows for an extra wide sidewalk, a mini park, and urban dining establishments 350 Fifth will be visible from major transportation routes and the city’s top tourist destinations like Mount Washington and Station Square. Opportunities exist for incorporating a company’s identity by introducing large scale graphics in the color, lighting and composition of the building exterior A Sky Deck features event space and signature terrace that will become a symbolic addition to the Pittsburgh skyline and the corporate identity of an anchor tenant Opportunity exists for naming rights by an anchor tenant

350 Fifth Ave. Renovation Highlights • 200,000 SF building with a total project cost of $40 million • Project features 180,000 SF of Class A Office Space and 20,000 SF of ground floor retail and restaurant space • Construction jobs - 125 Permanent jobs - 800 • LEED EB Certified project (Leadership in Energy and Environmental Design for Existing Buildings) • Office space features a modern, urban design with abundant natural light, center core, and open floor plans • Roof area consists of public space for tenants featuring a roof top deck and garden area • Opportunity exists for naming rights by an anchor tenant

Michael R. Daniels Executive Vice President Oxford Realty Services, Inc. 412.261.0200 ext 480

Joseph F. Tosi Assistant Vice President Oxford Realty Services, Inc. 412.261.0200 ext 471

mdaniels@oxforddevelopment.com

jtosi@oxfordrealtyservices.com

Development & Project Management | Property Management | Leasing & Brokerage Services | Investment Advisory Services | www.oxforddevelopment.com

Legal/Legislative Outlook Recent Superior Court Decision Places Lien Priority Granted to Open-End Mortgages at Risk

he Superior Court of Pennsylvania recently issued a two to one decision that will have an enormous impact on the Pennsylvania lending industry as it relates to open-end construction mortgages. The focus of the appeal was the applicability of the 2006 Amendments (the “Amendments”), effective January 1, 2007, to Pennsylvania’s Mechanic’s Lien Law, 49 P.S. 1101 et seq. The Amendments amended Pennsylvania’s Mechanic’s Lien Law and made significant changes to the law gover ning priority of liens and lien waivers. One such change made contractor and subcontractor lien waivers against public policy for non-residential projects. Additionally, the Amendments purportedly granted openended mortgages priority over mechanic’s liens, which represented a significant change from the prior law under certain circumstances. Particularly, under the preAmendment law, a subcontractor could back date its lien to the date when work was “visibly commenced” on the property. If that date pre-dated the open-end mortgage, the subcontractor would be granted priority. W ith regard to the issue of priority, the purpose of the Amendments was to make mechanic’s liens subordinate to “bank liens” so as not to freeze lending. 1 The decision

48 DEVELOPINGPITTSBURGH

| Fall 2012

of the Superior Court of Pennsylvania in Commerce Bank/Harrisburg, N.A. v. Kessler, 2012 Pa. Super. 100, defies the purpose of 2006 Amendments relating to priority and, in many circumstances, places that priority in jeopardy under normal and customary lending practices in Pennsylvania. Specifically, in Kessler, the Superior Court addressed the priority of liens between the holder of an open-end mortgage and the project contractor (“Contractor”). The construction contract was entered into prior to the effective date of the Amendments and the open-end mortgage post-dated the Amendments. Under the pre-Amendment mechanic’s lien law, absent a lien waiver, the contractor would have had priority over the holder of the open-end mortgage because work had visibly commenced prior to the recording of the open-end mortgage. However, due to the Amendments, the priority of the liens was at issue. In the lower court, the Contractor successfully argued that its lien had priority due to its contract pre-dating the effective date of the Amendments. Particularly, the Contractor argued that to apply the Amendments to its contract would be to apply a statute retroactively in violation of Pennsylvania law. The Lender disagreed with this position and argued that applying the Amendments was not affecting the Contractor’s contractual rights, but were changing the Contractor’s statutory rights, which could be freely changed by the legislature. The Superior Court agreed with the Lender and held that because the Contractor “obtained” its lien under the Mechanic’s Lien Law as amended; it was bound by the provisions thereof. After seemingly making a major decision in favor of the Lender, the Superior Court reversed course and affirmed the lower court based on other grounds. The Contractor

argued that even though the Amendments applied, the open-end mortgage at issue did not comply with the statutory requirements in order to gain priority. The Section at issue grants priority to “an openend mortgage as defined in 42 Pa.C.S. 8143(f) (relating to openend mortgages), the proceeds of which are used to pay all or part of the costs of completing erection, construction, alteration or repair of the mortgaged premises secured by the open-end mortgage.” The parties stipulated that portions of the proceeds of the open-end mortgage were used to pay for tax claims, closing costs, satisfaction of an existing mortgage and to satisfy other judgments and liens. Though both parties agreed that certain money spent did not go towards “completing erection, construction, alteration or repair,” the Lender argued that because Section 8143(f) also contained the definition of the word “indebtedness,” that paying for expenses included within that definition should be permissible. This position was supported by the argument that the definition of “open-end mortgage” including the word indebtedness and, therefore, the definition of indebtedness should be considered. The Superior Court disagreed and held that because indebtedness was not specifically referenced by the legislature, it could not be considered. As such, the Superior Court held that because not every dollar of the openend mortgage went to “completing erection, construction, alteration or repair of the mortgaged premises secured by the open-end mortgage,” the Contractor had priority over the open-end mortgage. While there are still open and remaining issues relating to the Amendments and the applicability of Section 1508(c), this holding makes clear that paying certain costs at the time of closing that would otherwise be properly included in an open-

end mortgage, such as those costs described in Kessler, removes the open-ended mortgage from the protected class. Moreover, in an unrelated matter, an argument has been made that Kessler also prevents the payments of soft costs related to construction. Though this issue is not addressed directly by Kessler and strong arguments favor inclusion of these costs, based on the holding in that matter, it is unclear whether the Court will deem these costs permissible. Unless the decision in Kessler is reversed through a rehearing en banc or by the PA Supreme Court, this is the law in Pennsylvania. Accordingly, it is important for all Pennsylvania lenders to immediately examine their outstanding open-end mortgages and determine whether they are at risk. Going forward, Lenders entering into a project will have two choices. First, they can ensure that the open-end mortgage pays for nothing other than the costs allowed by the Mechanic’s Lien Law as Amended. This may be difficult because, inherently, an open-end mortgage allows for many other costs to be covered. Second, and though costly, a Lender may be forced to essentially shut down a project, pay off all of the contractors, remove all equipment from the project site, close the new loan, and then start a new second project after the mortgage has been recorded. Although difficult, due to the strict requirements imposed by the recent Superior Court opinion, this may be the safest alter native. This decision also has significant ramifications for the title insurance industry. After Kessler, it is now a risk to insure any construction loan that pays for costs other than those that are pure hard construction costs. It is clear that after Kessler, open-end mortgages that cover acquisition costs cannot be insured without exception for mechanic lien claims. The recent Superior Court opinion also puts into ques-

tion whether loans that pay for soft construction costs would be granted priority over mechanic lien claims. Until this issue is resolved, insuring these types of loans without exceptions for mechanic liens comes with a substantial risk. Though cast as an opinion on statutory interpretation, this recent opinion seemingly flies in the face of Pennsylvania lending practices and leads to more questions than it does answers. Due to the amount of dollars that are often involved in these types of transactions, this opinion should be immediately contemplated and analyzed by this Commonwealth’s lending institutions.

1 See purpose as stated in correspondence from Lou Bacchi, Director of Governmental Affairs for the Pennsylvania Builders Association to Representative George Kenney, a bill sponsor, dated June 26, 2006. By Brant Miller, Dave Ziegler and Chris Lovato, attor neys in the real estate and construction practice at Dickie McCamey Chilcote. Editor’s note: The Pennsylvania legislature is considering major changes to the Mechanics Lien Law of 2007. NAIOP Pittsburgh was one of a number of industr y associations advocating changes to provide owner’s notice of subcontractors and suppliers working on a project, as well as several other revisions. House Bill 16202 passed March 27 by a margin of 190-6. The bill will now be considered by the Senate. DP

www.developingpittsburgh.com

Benchmarks

i n c e J a n u a r y, E l m h u r s t G ro u p p re s i d e n t B i l l Hunt has been serving as the chair of NAIOP Corpo r a t e , l e a d i n g t h e n a t i o n a l board f o r 2 0 1 2 . A s n a t i o n a l c h a i r, Hunt h a s t a k e n a d v a n t a g e o f t h e opport u n i t y t o v i s i t m o re t h a n a dozen l o c a l N A I O P c h a p t e r s – a n d will vis i t t h a t m a n y m o re b y y e a r ’s end – a s w e l l a s p a r t i c i p a t i n g i n severa l n a t i o n a l c o n f e re n c e s . T h e experie n c e g a v e h i m t h e c h a n c e to see w h a t w a s b e i n g d o n e r i g h t in othe r c i t i e s a n d t h e p l a t f o r m t o talk ab o u t w h a t w a s b e i n g d o n e right i n P i t t s b u r g h . A s m i g h t b e expect e d , H u n t s a y s t h e e x p e r i e n c e has tau g h t h i m m u c h a b o u t t h e people w h o d e v e l o p re a l e s t a t e a n d has giv e n h i m a b ro a d e r p e r s p e c tive ab o u t t h e w o r k h e d o e s f o r NAIOP P i t t s b u r g h a n d f o r h i s l i v i n g .

e m p h a s i zing as National Chair is to r a i s e N AIOP’s profile with gover nm e n t a ffairs. We are looking for l o c a l c h apters to communicate w i t h t h eir elected officials and to p a s s i n f ormation along to national i f t h e i r members have a key cont a c t w i t h their House and Senate s t a ff . M y goal is to get half of the 1 4 , 0 0 0 - plus members to be able to a r t i c u l a t e at least three of the top l e g i s l a t i ve threats to our industry.

50 DEVELOPINGPITTSBURGH

| Fall 2012

Hunt: Thus far I have be en to Buffalo, Cleveland, Pensacola, Dallas, Milwaukee, Portland, W inston Salem, Raleigh, New York, Denver, Calgary and Washington, DC. There are another dozen or so that I’ll visit before the end of my term.

Hunt: There is a general frustration with the uncertainty that is coming from Washington and it is hindering our tenants’ decisions to sign leases. The questions about tax rates, health care costs, environ mental regulations, energy policy and many other items are keeping businesses from pulling the trigger.

DP: Fir s t , w h y a re y o u d o i n g a l l these v i s i t s t o o t h e r N A I O P c h a pters?

The vis i t s a re a n o p p o r t u n i t y f o r me to m a k e s u re t h a t t h e w o r k o f the NA I O P C o r p o r a t e o r g a n i z ation is c o m m u n i c a t e d t o t h e l o c a l chapte r s . N A I O P re c e n t l y c o m p l e t e d a strat e g i c p l a n a n d t h e re i s a major e m p h a s i s o n s u p p o r t i n g t h e individ u a l c h a p t e r s – t h e i r a d v ocacy, s u p p o r t i n g l o c a l e d u c a t i o n progra m s a n d c h a p t e r l e a d e r s h i p . An init i a t i v e t h a t I a m p e r s o n a l l y

DP: What chapters have you visited?

DP: What are some of the common issues you are hearing around the country?

DEVEL O P I N G P i t t s b u r g h a s k e d B i l l Hunt t o t a l k a b o u t h i s y e a r a s n ational c h a i r t h u s f a r a n d a b o u t t h e insight s g a i n e d f ro m h i s t r a v e l s .

Hunt: I t ’s a c t u a l l y a n e x p e c t a t i o n of the n a t i o n a l c h a i r. T h e re i s a budge t o f a b o u t $ 3 0 , 0 0 0 f o r t r a v e l that N A I O P w a n t s t h e c h a i r t o u s e . I didn’t n e e d m u c h e n c o u r a g e m e n t becaus e I l o v e t o t a l k a b o u t re a l estate a n d i t w a s a g re a t o p p o r t u nity to b e t t e r u n d e r s t a n d t h e l a t e s t ideas a b o u t u r b a n p l a n n i n g .

would make it less favorable for businesses to rent than own.

Bill Hunt

I hear a lot about bifurcation of the market. Developers complain that there is debt and equity out there chasing deals but only ‘bald elephants’ – deals that are big with no hair on them. If there is a deal that is even a little off on the qual ity scale, interest and prices drop off dramatically.

D P : W h at are the top threats? H u n t : Tax legislation, especially l e g i s l a t i on aimed at converting t h e t re a tment of carried interest t a x f ro m capital gains to ordinary i n c o m e rates, is something that N A I O P will continue to focus on. A n o t h e r focus is tax extenders. N A I O P backs the extension of the 1 5 - y e a r depreciation for leasehold i m p ro v e ments and the brownfield re m e d i a tion expensing, both of w h i c h e xpired at the end of 2011. T h e t h i rd issue is the proposed FA S B l e ase accounting change that w o u l d require companies to capital i z e l e a s e payments rather than have re n t a s an expense. That change

There are a number of other problems that relate back to the recession and financial crisis that seem to be plaguing mo st markets, including Pittsburgh. Class A prop erties are leasing up at the expense of B and C properties. As prerecession leases are coming due the fear is that rents will continue to roll down. Lenders don’t exist for certain kinds of loan transactions. Generally speaking there is fear that the banks haven’t put their problems completely behind them and that the volume of underwater properties with loans expiring in 2012 and 2013 will trigger lenders to sell off bad assets, which

will res e t c a l c u l a t i o n s o f re s e r v e require m e n t s a n d t i g h t e n c re d i t again. C o n s t r u c t i o n c o s t s h a v e n o t fallen a s f a r a s re n t s h a v e . Te n a n t s are op t i n g f o r s h o r te r t e r m l e a s e s , preferr i n g f l e x i b i l i t y t o c e r t a i n t y about re n t s . A l l o f t h e s e a n d o t h ers are t o u g h e r m a rk e t c o n d i t i o n s that ha v e c o m e a s a re s u l t o f t h e financ i n g p ro b l e m s . The rec e s s i o n a l s o c a u s e d d e f e r r a l of mai n t e n a n c e c o s t s . I t h i n k t h e re is deni a l a b o u t t h e e ff e c t s o f d e f e rring re g u l a r m a i n t e n a n c e d u r i n g the pa s t t h re e y e a r s . P ro f o r m a s have to b u i l d m a i n t e n a n c e b a c k t o histori c a l l e v e l s a n d a l s o m a k e u p for pas t d e f e r r a l s i n t h e n e x t f e w years. DP: So f a r w h a t h a s b e e n t h e b i ggest su r p r i s e f ro m t h e m e e t i n g s ? Hunt: I ’ m n o t s u re i f I ’ v e b e e n s u rprised b u t t h e re h a s b e e n a v a r i e t y

o f e x p e ctations from visit to visit. I a l w a y s prepare remarks but some p l a c e s j ust want me to stand up a n d s m i le while others want me to d o a n e ntire speech. The difference i n t h e s i ze of the chapters has been i n t e re s t i ng. In Pensacola for exam p l e , t h e y have a pretty small chap t e r s o w hen I came to speak it was a b i g d e al, like they were giving me t h e k e y to the city kind of thing. T h e re h ave been places where I’ve b e e n t h e speaker in front of more t h a n a h undred people and cities w h e re i t ’s been just a discussion a m o n g t he nine or ten chapter b o a rd m embers. O n e s u r prise was at the New York C i t y c h a pter. You know they kind o f a c t l i ke they invented real estate i n N e w York so when their guy was t a l k i n g about the market there he w a s s a y i ng how low the vacancy r a t e s w e re and how New York’s v a c a n c y rates were the lowest in

“In Portland I met with the chapter ’s board so it was a smaller group. Af ter my presentation, the first question I was asked was what I could suggest that would help them make Portland as hot as Pittsburgh is.” the country except for Pittsburgh. It was nice to be there for that meeting. DP: What other meetings stand out? Hunt: In Denver they held a contest for students from two gradu ate university real estate programs

www.developingpittsburgh.com

for wh i c h I w a s a s k e d t o p a r t i c i p a t e as a ju d g e . T h e y g a v e t e a m s a 1 6 acre s i t e t h a t i s b y t h e o l d a i r p o r t and as k e d t h e m t o c re a t e p ro p o s a l s for red e v e l o p m e n t . We g a v e t h e m feedba c k o n t h e i r i d e a s a n d t h e n in the e v e n i n g t h e t e a m s m a d e t h e propo s a l s a g a i n f o r a b a n q u e t o f 800 p e o p l e . T h e w i n n e r s re c e i v e $5,00 0 , s o t h e re w a s re a l i n c e n t i v e to win t h e a n n u a l a w a rd . Milwa u k e e w a s i n t e re s t i n g b e c a u s e they a re s t r u g g l i n g w i t h s o m e o f the kin d s o f p ro b l e m s w e h a v e been f a m i l i a r w i t h i n P i t t s b u r g h . They a re t r y i n g t o re v i t a l i z e t h e i r downt o w n a n d h a v e n ’t h a d a n y new b u i l d i n g s i n ro u g h l y 3 0 y e a r s . Milwa u k e e s e e m s t o h a v e a c h i p on its s h o u l d e r f o r n o t b e i n g l i k e nearby C h i c a g o . The Da l l a s c h a p t e r i s a l o t o f f u n becau s e e v e r y o n e t h e re j u s t l o v e s to talk a b o u t re a l e s t a t e . I t ’s a b i g deal th e re . D e v e l o pe r s i n D a l l a s talk ab o u t re a l e s t a t e l i k e i t ’s s e x . Even t h e i r s p o u s e s s e e m t o k n o w about a l l t h e d e a l s t h a t a re b e i n g done a n d w h a t ’s r i g h t a n d w ro n g with t h e b u i l d i n g s . In Por t l a n d I m e t w i t h t h e c h a p t e r ’s board s o i t w a s a s m a l l e r g ro u p . After m y p re s e n t a t io n , t h e f i r s t questi o n I w a s a s k e d w a s w h a t I could s u g g e s t t h a t w o u l d h e l p them m a k e P o r t l a n d a s h o t a s P i t t sburgh i s . DP: Ta l k a b o u t t h a t p e rc e p t i o n . Did yo u g e t t h e s e n s e t h a t o t h e r chapte r s v i e w P i t t s b u r g h a s a h o t marke t ? Hunt: Yes. As part of my presentation to each city I take time to talk about what’s going on in Pittsburgh and what the positive things are. I also make sure to point out that while everyone is on Pittsburgh’s bandwagon right now, it wasn’t always that way. I remind them that I moved to Pittsburgh in the mid-1980’s but I have seen more positives in the last three years than in the previous two decades. It’s important for them to know that we lost 110,000 steel jobs and 350,000 jobs overall and that we are now reaping the benefits of intentional policies that developed over time.

52 DEVELOPINGPITTSBURGH

| Fall 2012

I a m a s ked why things are work i n g i n P ittsburgh and one of the k e y i t e ms I feel that Pittsburgh l e a r n e d was to differentiate itself f ro m o t her cities. I stress that when I t a l k a bout the city. Places like D a l l a s o r Charlotte that had a lot o f p o p u lation growth have advan t a g e s b ut you don’t know so much a b o u t t hem; you can’t characterize t h e m . P ittsburgh is characterized b y i t s u niversities and technology. C M U i s characterized by software o r ro b o tics. Pitt is characterized by m e d i c i n e. Even if you aren’t from t h e a re a you’ll probably be aware o f t h e s e niches at these universit i e s . T h ose differentiators are what a t t r a c t people and businesses. I t h i n k Pittsburgh also benefits f ro m i t s corporate commitment to d o w n t o wn. Companies like PNC b u i l d n ew buildings downtown but t h e c o mmitment is also in the form o f s u p p ort for the arts, initiatives l i k e t h e ‘pop up’ retail grants, and t h e s u p port through the founda t i o n s . I t ’s not just philanthropic. C o r p o r a tions have created an e n v i ro n ment that helps with re c r u i t m e nt and retention of employ e e s . T h ere has been a resurgence o f m a n y of our older industrial c o m p a n ies, like Calgon or West i n g h o u s e, that have re-engineered w h a t t h ey do and how they do it. A n d w e have also benefitted from t h e e m e rgence of the shale gas exp l o r a t i o n and the long-term potent i a l o f t hat industry. P i t t s b u r gh has also embraced being a m i d - s i zed market. There are a lot o f g o o d things about not being a b i g m a r ket. We have one of the b e s t a t mospheres for raising a fam i l y. F o r many people quality of life i s a b o u t the things that Pittsburgh h a s : g o od schools, family values, s h o r t w ork commutes and afford a b l e h o using. I can think of two g o o d e xamples of how that has w o r k e d in Pittsburgh’s favor. O n e i s Google. They are obvi o u s l y h ere because of CMU but the p e o p l e that work in Pittsburgh are h e re b e cause they don’t want to be i n N e w York or San Francisco. The o t h e r e xample is one I’m persona l l y f a miliar with, which is Rand. P i t t s b u r gh is their mid-size market

operation. They work all over the world so they could hav e offices anywhere but they couldn’t recruit the kinds of people they wanted to come to Santa Monic a or Wash ington DC. Those are great places but not everyone wants to have the lifestyle that comes with those cities. To Rand it made sense to locate to a place that had the kind of lifestyle that Pittsburgh has. DP: What experiences have you had that changed or reinforced your perceptions? Hunt: Being the national chair also allowed me to participate in the Real Estate Round Table in Wash ington DC, where all 17 major trade associations – like NAIOP, BOMA, NAHB, American Hotel & Lodging Association, Mortgage Bankers – meet with Senators, Congressmen and administration of ficials to deal with issues important to real estate. One of my previous frustrations with trade associations is that they can be inefficient with advocacy. They at times are all trying to solve the same problems independently, but the Round Table divided up the associations and the gover nment officials and each team got one issue to work. That allowed us to focus our energy on one issue but the group then got to tackle all the issues. It is a very good model. The opportunity to have an impact on our communities is s omething that I believe we need to exercise. As developers, we are in a position to affect change that is necessary to move our communities forward. The I-79/Parkway West interchange project is a great example of what can happen with advocacy. NAIOP got behind that project ten years ago. I remember being at a meeting with PennDOT in Bridge ville when the head of the office expressed surprise that NAIOP was so involved in the project. He said no individual company or local gover nment agency had “championed the project.” That project opened up the airport to Cranberry. I think it’s possible Westinghouse may not have stayed in the region without that. DP

News from the Counties

Armstrong County Armstrong County Department of Economic Development Armsdale Administration Building 124 Armsdale Road, Suite 205 Kittanning, PA 16201 724-548-1500 (T) 724-545-6055 (F) Michael Coonley, Executive Director mpcoonley@co.armstrong.pa.us www.armstrongidc.org The Armstrong County Department of Economic Development is the lead economic development agency within the County. The Department 54 DEVELOPINGPITTSBURGH

| Fall 2012

provides staff to the Armstrong County Industrial Development Authority (ACIDA), a public development agency and the Armstrong County Industrial Development Council (ACIDC), a private non-profit (501c3) economic development corporation. The ACIDC provides a single-pointof-contact service for information pertaining to all economic development and business related resources in Armstrong County. Operating four industrial parks, a multi-tenant office building and other properties, the ACIDC is tasked with presenting new or expanding businesses a wide range of options to guide their relocation, expansion, or initial location decisions. The ACIDC works directly with companies to identify sites and assist with financing, permitting and workforce development needs. Most recently, the ACIDC sold a 30,000 sq. ft. facility in Northpointe, Armstrong County’s premier office and light manufacturing park. FLIR Government Systems Pittsburgh purchased the building in July 2012 to consolidate its Pittsburgh operations.

FLIR, headquartered in Portland, Oregon, is a world leading manufacturer of infrared detectors and systems. FLIR will immediately begin their retrofit of the facility and move its 65 employees to the Northpointe facility in early 2013. Sloan Brothers Company is a fourth generation family-owned business that has been in operation since 1922 designing and building lubricators and lubrication systems for compressors and other critical equipment. Since purchasing their facility in 2009, their employment and sales figures have doubled. Construction has just begun on their Northpointe facility expansion with completion expected by the end of the year.

Beaver County Beaver County Corporation for Economic Development 250 Insurance Street, Suite 300 Beaver, PA 15009 724-728-8610 (T) 724-728-3666 (F) James Palmer, President jpalmer@beavercountyced.org www.beavercountyced.org As Royal Dutch Shell’s preferred location for what would be one of southwestern Pennsylvania’s largest industrial projects in a generation, Beaver County draws increasing interest from industrial users and developers. Shell’s ethane cracker plant feasibility planning process is underway, and if the investment decision is made to build the plant, it would be another several years before the plant is operational. However, just the announcement of Potter Township as Shell’s priority site has created the impetus for a comprehensive, proactive planning effort among private, public, educational, and regional partners to help prepare for and leverage this rare opportunity. For its part, the Beaver County Corporation for Economic Development (CED) has accelerated its efforts to develop diverse sites to attract the jobs that are anticipated to result from this

The ACIDC has also initiated two major site improvement projects in Northpointe. Utilizing $3 million in funds borrowed through Pennsylvania’s Business In Our Sites program, approximately 40 acres will be developed into pad-ready sites for office and light manufacturing users. An additional 20 acres of property located at the entrance to Northpointe at Exit 18 of SR 28 is being prepared for retail development. Metal Solutions Inc. recently purchased Lot 11 in the Parks Bend Farm Industrial Park, located near Leechburg, for their new facility. Construction on the 10,000 square foot facility will begin shortly; a Spring 2013 completion is expected.

multi-billion dollar investment. By August, CED will complete a $3 million investment in the Aliquippa Industrial Park providing public infrastructure for a rail served, 72-acre industrial site featuring 3,000 feet of Ohio River frontage. Sub-dividable to 15 acre parcels, this property is certified as a Special Industrial Area under Pennsylvania Land Recycling Program. In May, the site was one of the first to receive Pennsylvania Department of Environmental Protection designation as a Keystone Special Development Zone, providing $2,100 state tax credit for each new job created. The site also qualifies as a Federal New Market Tax Credit eligible area and is certified as a Foreign Trade Zone. Currently CED is fitting out over 66,000 square feet of industrial space for two new tenants in the Monaca Commerce Center. The 110,000 square foot multi-tenant facility has undergone a complete exterior and site modernization. Approximately 16,000 square feet, with potentially up to 20,000 square feet of additional space, is currently available for lease. This fall CED plans to expand its WestGate Business Park, adding two new building pads totaling about 25 acres. WestGate is a premier highway

In addition to sales within the ACIDC’s properties, staff also works with private sector developers and property owners. In July 2012, staff assisted BelleFlex Technologies LLC, a wholly owned subsidiary of Blair Strip Steel Company in acquiring 90,000 sq. ft. of industrial space in Ford City from Farmers & Merchants Bank of Western PA. BelleFlex supplies disc springs to the energy market. Belleflex, which launched in 2010 with one employee, now has 24 and a client base in seven countries. The adjacent property, consisting of a level 43 acre Brownfield site, has received ACT 2 clearance and is now available for manufacturing uses.

oriented business park designed to accommodate various sized parcels for office, light industrial, distribution, and warehousing activities. WestGate is located on Pennsylvania State Route 18 adjacent to Exit 13 of the Pennsylvania Turnpike (I-76), is four miles from the Turnpike’s interchange with I-376, and has toll free access to I-79. The site has as a Special Industrial Area designation under the Land Recycling Program and features flat, wooded, shovel-ready sites ranging from 4 to 33 acres. New development within WestGate is granted a ten year local property tax exemption and certain state business tax exemptions as a Keystone Opportunity Zone. The property is designated as a Foreign Trade Zone. Planned for 2013 is the third expansion of the Hopewell Business Park, located just five miles from the Pittsburgh International Airport via I-376. The next phase will provide two new development ready pads each about 6 to 8 acres. The Hopewell Business Park is home to fourteen companies with over 1,300 employees. One high visibility, 6.3 acre site is currently available. Hopewell is also designated as a Foreign Trade Zone.

www.developingpittsburgh.com

Butler County Community Development Corporation of Butler County 112 Woody Drive Butler, PA 16001 724-283-1961 (T) 724-283 3599 (F) Ken Raybuck, Executive Director kraybuck@butlercountycdc.com www.butlercountycdc.com The Community Development Corporation of Butler County (CDC) is your first stop for economic development in Butler County. The CDC is the only organization in the county that focuses on proactively creating an environment for private industry to develop and retain jobs in Butler County. The CDC board is comprised of 32 Butler County business owners and residents who are committed to working with the firms who do business in our county and their employees who live, work and enjoy the amenities that Butler County offers. As professionals in the local community, the CDC staff has the resources and expertise to promptly provide other business owners with the answers they need. The CDC recently sold a 5,000 square foot office building at 112 Woody Drive to the Butler County Housing and Redevelopment Author-

Fayette County Fay-Penn Economic Development Council 1040 Eberly Way, Suite 200 Lemont Furnace, PA 15456 724-437-7913 (T) 724-437-7315 (F) Michael A. Jordan, Jr., Executive Director michaelj@faypenn.org www.faypenn.org Incorporated in 1991, Fay-Penn Economic Development Council is designated as the lead economic development agency for Fayette County, PA. Fay-Penn is a private, non-profit organization created to maintain and increase jobs in Fayette County. Providing development sites to support business development initiatives 56 DEVELOPINGPITTSBURGH

| Fall 2012

ity. Development sites currently available include: 40 acres for sale at the Victory Road Business Park; a 30,000 square foot flex building for sale or lease at 140 Hollywood Drive and 15,000 square feet of office space for lease at 112 Hollywood Drive. The CDC also has a 14,700 square foot flex building available at 295 Delwood Road. The Jackson’s Pointe Commerce Park located at the intersection of Routes 19 and 528 is nearing completion and the first speculative building of approximately 69,000 square feet has been constructed. Infrastructure and utility work on this building are being completed while it is marketed to prospective clients. The second phase of the business park was recently approved by Jackson Township officials and tree removal and site grading will begin in the near future. This phase is a mixed-use site that will include both commercial and office space. Creative Real Estate Development Company recently signed an agreement to sell 30.5 acres in Cranberry Twp. to UPMC to be used for the development of a state-of-the-art sports medicine facility and a training center for the Pittsburgh Penguins. In addition, the firm recently responded to requests for approximately 220,000 square feet that is needed by an energy sector firm.

is critical to the overall economic and community development of Fayette County. Fay-Penn is currently planning a new 311-acre business park at the corner of US Route 119 North and Pechin Road in Dunbar Township, Fayette County at an estimated $5.7 million cost. Fay-Penn recently acquired a vacant 207-acre site, and is currently in negotiations to acquire an additional 104 acres of adjoining property. It is estimated that once fully developed, the project could result in the creation of approximately 250 saleable acres for business development. The Dunbar Township site offers many advantages to businesses

Downtown Butler economic development includes the Centre City project which will bring a hotel to the city. This project is touted as the key to the redevelopment of downtown Butler as there will be 100 construction jobs associated with the project as well as approximately 30 permanent positions once the hotel is completed. The Centre City project is also expected to create 60 spin-off jobs once the hotel is open for business. It is anticipated that several smaller development projects will follow upon the hotel’s completion. The Marcellus Shale industry continues to play an important role in the growth of Butler County. In addition, firms such as Westinghouse and Mine Safety Appliances are also adding jobs in the southern half of Butler County. Despite a somewhat sluggish recovery in other parts of the nation, economic development in Butler County is forging ahead; whether you are looking to buy vacant land, lease flex or office space or purchase a building Butler County has affordable opportunities waiting for your business.

including: its location along US Route 119 and proximity to the Connellsville airport, rail accessibility, its proximity to Penn State Fayette campus, and its central location near other gas and gas related industries. All of these factors are major selling points to potential tenants. A recent feasibility/marketing study conducted by Strategy Solutions concluded that the acquisition and development of the Dunbar Township site is likely to be a viable location for growth with new opportunity for the region as it is developed. The projected new business development due to the expansion of Marcellus Shale and other energy and advanced manufacturing and support businesses is overwhelmingly favoring positive

Another way the Gateway Engineers are helping develop Pittsburgh

Experience The Right Approach...

The Gateway Engineers manages numerous projects for a wide variety of clients. We understand that every project and every client is unique. Our project management system, decades of experience, qualified personnel, and turnkey engineering services allow us to successfully execute projects regardless of size or complexity.

• • • •

Aggressive schedules Countless stakeholders Numerous site constraints High profile projects

We’re ready to start!

A FULL-SERVICE CIVIL ENGINEERING FIRM

www.gatewayengineers.com

Fayette County (continued) economic growth in Southwester n Pennsylvania. W ith the recent influx of gas-related business location and expansion projects in the region, Fayette County is experiencing a shortfall in available land and buildings to offer. In the past few years, Fay-Penn has been successful in providing business site and location assistance to twelve gas and gas-related companies alone and the inqui-

Greene County Greene County Industrial Developments, Inc. 300 EverGreene Drive Waynesburg, PA 15370 724-852-2965 (T) 724-852-4132 (F) Don Chappel, Executive Director donchappel@gcidc.org www.gcidc.org Greene County Industrial Developments, Inc., dba Greene Alliance for Development, celebrated its 55th year of service to Greene County this past February in business park development and business financing. The organization owns and manages the 248-acre EverGreene Technology Park in Waynesburg, and the 72-acre Paisley Industrial Park in Carmichaels. GCID has been successful in attracting national and international companies to Greene County. In recent years, we have played a role in bringing CONSOL Energy, RJ Lee Group, Westmoreland County Community College, Stahls Hotronix and others into our business parks. Greene Alliance for Development was recently formed to provide a new entity to streamline the real estate development process and build synergies among the many public and private economic development agencies and firms looking to Greene County for a new or expanded presence here. The EverGreene Technology Park is a 21st Century collaborative business community for the energy industry and other technology-focused, forward-thinking companies. It 58 DEVELOPINGPITTSBURGH

| Fall 2012

ries continue to come. As a result, more than 100 acres of land have been sold, and Fay-Penn was able to immediately accommodate the location of five companies leasing a total of 37,000 sq. ft. in single and multi-tenant building space. The gas industry activity not only offers significant job opportunities and new private investment; it also creates a great need to develop new location sites and buildings for immediate occupancy. In an effort to address that shortfall, Fay-Penn has

developed a 10-year industrial development strategy, which includes the acquisition and development of additional business parks and construction of several new speculative buildings (either single or multioccupant).

sits directly on top of some of the country’s most active natural gas exploration and production plays, the Marcellus Shale.

proximity to the high-demand markets on the East Coast of the U.S. Greene Alliance for Development has sold 20 acres in Paisley Park to Ryan Industrial Supply, KCI Properties LLC and Stallion Oilfield Services.

The discovery of the Marcellus Shale natural gas is widely viewed as a bridge between the age of oil and the next energy paradigm. Largescale commercial development in this region started ramping up in 2005 and continues to build momentum, having already impacted Pennsylvania’s economy to the tune of several billion dollars. EverGreene is the ideal location to research, develop, test and market energy along with industry-leading experts and internationally-recognized companies. In the past 20 months, Greene Alliance for Development has sold 22 acres of land in EverGreene to Community Bank, Chesapeake Energy and RG Johnson Company, Inc. There are 20 acres of pad ready acreage available for immediate development and current work includes a 15-acre site which will be pad ready by October 1st. The Paisley Business Park offers a strategic location, building-ready parcels and inexpensive land costs. The 72-acre office park & industrial complex is located at the Intersection of State Routes 21 & 88 in Carmichaels and is ideally suited for light manufacturing, R&D/HQ or branch office use and has 20 acres of land available for development. Paisley has a strong transportation infrastructure in place and is in close

The proposed new business park development project will provide much needed location opportunities to accommodate the influx of energy and advanced manufacturing companies.

In March, the Greene County Commissioners selected Burns & Scalo Real Estate Services to create a master development plan for a 6.2 acre parcel at the Greene County Airport in Franklin Township. Expected in spring 2013, the plan should include offices, retail and possibly a new hotel. Tax-exempt land is part of the Keystone Opportunity Zone (KOZ) program, which provides state and local tax abatement to businesses and residents locating in a designated zone. Through credits, waivers and broad-based abatements, total taxes on economic activity in these zones are reduced to nearly zero. Available KOZ’s include EverGreene Technology Park in Franklin Township, Paisley Business Park in Cumberland Township and MeadowRidge Business Park in Perry Township. The MeadowRidge Business Park recently became home to Shaft Drillers International, a worldwide drilling company that employs 1400 workers, as well as a longwall mining company and a regional wholesale grocery distributor. For information please contact Don Chappel.

Indiana County Indiana County Center for Economic Operations 801 Water Street Indiana, PA 15701 724-465-2662 (T) 724-465-3150 (F) Byron G. Stauffer, Jr., Executive Director byronjr@ceo.co.indiana.pa.us www.indianacountyceo.com Whether you’re just getting started or you’re ready to extend your reach, the Indiana County Center for Economic Operations (www.indianacountyceo.com) has a wide variety of buildings and locations to meet your specific business needs. Multitenant buildings, KOEZ/KOIZ locations, pad-ready sites—throughout Indiana County you’ll find substantial choice in available property. When it comes to choosing a site for your business, there are options in Indiana County to help you grow. Manufacturing plant, laboratory, or office, we’ll assist you with the selection process so you can focus on what you do best—running your business.

Colliers International | Pittsburgh Experts in Acquisition, Disposition and Leasing

Improved Platform | World Class Service | Better Results Commercial Real Estate Sales and Leasing Services > Valuation and Advisory > Real Estate Management > Investment > Corporate Solutions > Auctions > Sustainability 412 321 4200 | www.colliers.com | @PghCRE Learn how we are living our values of service, expertise, community and fun at www.colliersinternationalpittsburgh.com

The Indiana County Corporate Campus is a well situated business park located in Burrell Township near Blairsville at the intersection of U.S. Routes 22 and 119. Two new shovel ready business parks are under development, namely the 119 Business Park along Route 119 South near Coral/Graceton and the Windy Ridge Business & Technology Park located at the intersection of U.S. Route 422 and PA Route 286, just west of Indiana Borough. Indiana County has a number of multi-tenant office facilities for consideration: the Corporate Campus Multi-Tenant Building and the Interchange Center are a part of the Indiana County Corporate Campus, and HighPointe at Indian Springs offers two modern multi-tenant buildings with state-of-the-art amenities, located in White Township. In addition, the R&P Building and the Atrium are close to downtown Indiana amenities. There are a number of industrial buildings available within the county: The 3-Ring Building; Dixonville Commons, and the Allegheny Logistics Building.

PWC

PROPERTY SOLUTIONS, LLC PWC operates a full service commercial real estate management platform capable of assisting our clients with many services to enhance properties, offering a seamless working relationship facilitating all services on a single contract basis. Five Parkway Center Suite 215 Pittsburgh, PA 15220 412.937.1925

KNOWLEDGE INTEGRITY EFFICIENCY

SATISFACTION

www.pwcpropertysolutions.com Nicole DeLuca • Chuck Diloreto • Christine Andreyo • Lynn DeLorenzo

www.developingpittsburgh.com

Indiana County (continued) For sale and for lease retail/professional sites are available in Indiana, Homer City, Clymer, and Blairsville Boroughs, in addition to welldesigned and attractive mall and strip mall locations throughout the County. Indiana County’s transportation structure is ever-improving and access to markets has become simpler than ever. A streamlined highway system connects Indiana County in each direction. The runway expansion project at the Indiana County Jimmy Stewart Airport is coming to fruition and building a broadband fiber optic network is underway throughout the county.

Lawrence County Lawrence County Economic Development Corporation 100 East Reynolds Street Plaza South, Suite 100 New Castle, PA 16101 724-658-1488 (T) 724-658-0313 (F) Linda Nitch, Executive Director nitch@lawrencecounty.com www.lawrencecounty.com In Lawrence County, the exploration and development of the shale natural gas is providing new investment for our county. New leases continue to be negotiated with landowners by HilCorp and Royal Dutch Shell. Test wells are being drilled to determine the supply of wet and dry gas in the county. The companies are looking for the ‘sweet’ spot of the gas and once that spot is found, more drilling is expected. It appears that we are on the brink of shale gas reigniting the business climate in our county. Along with the improved business climate comes the creation of new jobs both by the drillers and others in our community. With this continued interest in natural gas have come prospects looking for industrial buildings with land available for lay down areas for pipe. Also of great interest have been our second class rail lines many of which are owned by New Castle Industrial 60 DEVELOPINGPITTSBURGH

| Fall 2012

So far this year Environmental Service Laboratories, Inc., Environmental Land Surveying and Solutions, Inc. and Specialty Tires, Inc. have announced capital expansion projects. The retail and service sector has also been active and growing. Indiana County boasts a major university with Indiana University of Pennsylvania, a successful community hospital in Indiana Regional Medical Center, a junior college, and seven superior school districts, as well as a technology training center. The growing natural gas shale industry has burgeoned in Indiana County, focused manufacturing remains strong, and healthcare and higher education industry sectors continue

Railroad and the opportunity to warehouse drilling supplies in box cars. Lawrence County has prepared for industrial opportunities by developing Millennium Technology Park located at the intersection of I-376 and Kings Chapel Road. Nearly 80 acres of level land are ‘shovel-ready’ with water, sewer, power and natural gas available. The Lawrence County Economic Development Corporation is constructing a 50,000 square foot multi-tenant building on the site. Two 25,000 square foot sections are being planned with 5,000 square feet of office space available. The building will be available for occupancy in the Spring of 2013. The County also has Neshannock Business Park developed by the Regional Industrial Development Corporation (RIDC). This park’s tenants include: Axion Power, Velocity Magnetics, and Dallas Hartman. There are approximately 55 acres available for development with all utilities located in the park. In order to meet the needs of businesses seeking to be located in the eastern side of the county is the Shenango Commerce Park. Located off of Frew Mill Road and just 15 minutes from I-79 the park has over 40 acres available for development. For businesses seeking a location on the western side of the county is the

to develop. Agriculture and tourism continue to keep Indiana County’s economy positive and prosperous. Established in 1994, the Indiana County Center for Economic Operations (CEO) is a county-wide publicprivate partnership serving Indiana County, Pennsylvania, and dedicated to the overall growth and prosperity of the county’s business community. Through this cooperative initiative, the CEO provides access to information, resources, and the delivery of integrated programs and services to assist businesses in their efforts to grow and expand.

500 acre New Castle Development site located in North Beaver and Mahoning Townships. The site has First Energy’s electric transmission lines located adjacent to it as well as Tennessee Gas high pressure gas line. In the southern sector of the County is the Gateway Commerce Center. This is a former limestone mine with over 2,000,000 square feet of light warehousing and manufacturing space. This facility offers a security system and a variety of storage and warehousing opportunities. There are numerous commercial opportunities within the county including the 20,000 square foot call center located in downtown New Castle; 40,000 square feet of newly remodeled Class A space at Nesbitt Place located in Neshannock Township and Adam’s Manufacturing office building on Factory Avenue in Ellwood City. Information on of these locations and many more throughout the County can be found at the LCEDC’s web site – www.lawrencecounty.com or by calling Linda Nitch, LCEDC’s Executive Director.

Washington County

with 4.3 percent or 1650 new jobs created.

Washington County Economic Development Partnership 20 East Beau Street Washington, PA 15301 724-225-3010 (T) 724-228-7337 (F) Jeff Kotula, President jeff@washcochamber.com www.washingtoncountyworks.com

Total home sales increased in Washington County by 15 percent in May 2012 compared to May 2011 with an increase of 16 percent in the average selling price for existing homes and an increase of nearly 13 percent for new homes.

Washington County, Pennsylvania which consistently realizes unemployment rates lower than national, state and regional averages due to the expansion of the natural gas industry and substantial public investments in economic development initiatives - continues to increase its leadership position among Southwestern Pennsylvania counties in terms of economic growth and job creation. Washington County, Pennsylvania by the numbers According to the 2010 U.S. Census, Washington County’s population increased by 2.4 percent - one of only two counties in the Greater Pittsburgh Region to gain population. In a recent report, the U.S. Bureau of Economic Analysis announced Washington County ranked second in Pennsylvania and 94th in the nation in percentage of wage growth between 2009 and 2010. According to the United States Department of Labor’s Bureau of Labor Statistics, in March of 2011, Washington County ranked third in the nation in percentage of job growth

Westmoreland County Westmoreland County Industrial Development Corporation 40 North Pennsylvania Avenue, Suite 520 Greensburg, PA 15601 724-830-3061 (T) 724-830-3611 (F) Jason W. Rigone, Executive Director wcidc@wpa.net www.co.westmoreland.pa.us The first half of 2012 has proved exciting for Westmoreland County. Beginning this year with the major announcement of Aquion Energy Inc. selecting RIDC Westmoreland for its

There is no question that the development of the energy industry has become a significant economic generator in Washington County, so much so that the county has been designated as the “Energy Capital of the East”. As evidence to support its claim, of the 45 county economic development projects announced at a press conference earlier this year, 24 were energy and energy-related company attraction and expansion projects with 21 of those projects being a direct result of the Marcellus Shale gas play. Washington County is viewed as the epicenter of the Marcellus Shale geologic formation stretching from Southwestern Pennsylvania and into West Virginia and New York which has the potential to become the second largest natural gas field in the world. The county was home to the first Marcellus well and the first horizontal well in Pennsylvania. According to the Pennsylvania Department of Environmental Protection, 215 permits have been issued in 2012the most in Southwestern Pennsylvania and to date, 970 wells have been drilled in the county.

first full-scale manufacturing facility to four other pronounced company expansions within the county’s industrial park system that will be encompassing more than 390,000 square feet of building space, are all signs of optimism. Aquion Energy, a developer and manufacturer of revolutionary sodium ion batteries and energy storage systems will be leasing approximately 250,000 square-feet of space within RIDC Westmoreland – Multi-Tenant Facility (former Sony site) located near New Stanton. The company started in 2007 with the

In addition to the impressive economic development successes in the energy sector, Washington County encourages economic growth by keeping taxes low, investing in infrastructure and business parks, and by partnering with its business community to create jobs and increase economic development activities through public/private efforts. Washington County continues to invest in infrastructure, business parks and community development projects through the Washington County Local Share Account Program (LSA). The LSA program is Washington County’s share of gross terminal revenues from The Meadows Racetrack and Casino that has been directed by the commissioners to economic development projects in the county. Since its inception five years ago, the program has invested $46.3 million in 158 new economic, community and industrial development projects in Washington County. More impressive is the $233 million those funds were able to leverage in federal, state and local monies. Investments made in business parks such as Alta Vista Business Park, Southpointe II Business Park and StarPointe Business Park as well as programs in job training, the expansion of the Washington County Airport, infrastructure and other job creation projects are preparing the county for future development and capitalizing on its existing assets. For additional information on Washington County, please contact Jeff Kotula, President, Washington County Chamber of Commerce.

use of R&D funding from Car negie Mellon University. Now a scientific advancement with 70 employees, the company may grow to about 200 workers by next year at the facility. Further, the added incentive to Aquion was the Westmoreland County Community College (WCCC) Workforce Training Facility, which will also open in the fall of 2013. By leasing 70,000 square feet at the site, WCCC will offer advanced technology workforce training, a bonus to all companies in the county and specifically those locating in the RIDC multi-tenant facility in New Stanton. www.developingpittsburgh.com

Westmoreland County (continued) In addition to Aquion Energy, other attention-grabbing announcements included a 26,000 square foot expansion for Steel City Vacuum Company. Already an existing tenant at the Westmoreland Technology Park I also near New Stanton, Steel City Vacuum is expanding for the second time in just over a year and is a national wholesale/distributor of vacuum parts and supplies. Clearspan Construction Products selected the Westmoreland County Airpark near Latrobe for its 100,000 square foot warehouse facility. By specializing in producing high quality fabricated steel products for use in heavy industrial and infrastructure projects, in essence the company will be growing this operation and expanding on additional property at the site. All the more, Hatch-MDS, a company in the design, engineering, prototyping and sourcing of graphics, fixtures and displays for the retail industry is currently moving into approximately 5,000 square feet at the Jeannette Industrial Park. And Jeannette’s home-based company, Excel Glass and Granite, will be expanding for a second time by constructing yet another 12,000 square feet to warehouse raw material.

These, along with the recently publicized $20 million expansion plans at Ar nold Palmer Regional Airport and its booming passenger service offered by Spirit Airlines, are all key factors that today’s difficult times are not standing in the way of positive growth in the county. “Westmoreland County is also having its share of impact from natural gas exploration,” said Jason Rigone, Executive Director of the county’s Industrial Development Corporation. “This growth has best been seen in the easter n part of the region, which has the county currently pursuing Phase II development at the Westmoreland County Airpark adjacent to the Ar nold Palmer Airport.” When asked what is available in the county right now, Rigone quickly responded, “Our priority economic development project is RIDC Westmoreland.” The WCIDC formed a joint partnership with the Regional Industrial Development Corporation (RIDC) in May to manage and operate the New Stanton site. The massive 2.8-million square foot building situated on 349 acres was vacated by Sony in 2010 and is a focal point for state and local officials. RIDC, a private, non-profit organization whose expertise is regional economic development stepped forward to take the lead and partner with Westmoreland County to redevelop the

DE V E LOPING

site as a multi-tenant facility. “Because of its prime location and magnitude in size, this site is not only a priority in Westmoreland County but regionally as well,” adds Don Smith, President of RIDC. The facility offers 200,000 – 1,000,000 square feet of industrial space which could potentially be designated as a Keystone Opportunity Zone (KOZ) providing business tax relief to qualifying businesses. Other strategic marketing efforts in the county include 122,000 square feet at Jeannette Industrial Park in the City of Jeannette; and 6 – 31 Acre Pad Sites at Technology Park I, II and Distribution Park in North New Stanton. The county also offers other industrial park sites and various sizes of existing privately-owned buildings for lease or sale including “Downtown Destinations” and KOZ sites. “Our attitude in Westmoreland is upbeat,” said County Commissioner Chuck Anderson. Commissioner Anderson also serves as chairman of the county Industrial Development Corporation. “And of course, our message to business is welcome!” DP

Pittsburgh Spring Edition!

If you haven’t already reserved your space, be sure to stay in front of the ‘who’s who’ of commercial real estate by advertising in the Spring 2013 edition of D E V E L O P I N G Pittsburgh. • Stay up-to-date with the market information, trends and hot topics that affect your business. • The Spring 2013 edition will also celebrate the 2013 NAIOP Pittsburgh Annual Awards.

62 DEVELOPINGPITTSBURGH

| Fall 2012

The Power to Prosper is right under our feet. Nature put Washington County, Pennsylvania at the center of the Marcellus Shale. Itâ&#x20AC;&#x2122;s up to you to make the most of it. There is more energy to tap. There is more room to grow. There is more time to prosper. Join other Washington County companies and help shape the nationâ&#x20AC;&#x2122;s economy, energy security and clean energy future.

Put your company on top of it all.

www.washcochamber.com

Transactions of Note

his list includes Allegheny County property transfer data originally collected from public records by RealSTATs, Inc. (www.RealSTATs.net) and identified by them as a transfer of non-residential property. Initially published in the Pittsburgh Post Gazette Sunday edition’s Real Estate Sections, only non-residential transfers with a consideration or stamp value greater than $1,000,000 were selected by Tall T imber Group for research at the Allegheny County

Property Address Municipality 501-521 Penn Avenue Pittsburgh, Ward 2 234 Coraopolis Road Kennedy Twp. 1000 Commerce Drive Findlay Twp 301 South Hills Village Upper St. Clair Twp. 2000 Commerce Drive Findlay Twp 912 Fort Duquesne Blvd Pittsburgh, Ward 2 425 Sixth Ave & Montour Way Pittsburgh, Ward 2 100 Vista Circle Dr O'Hara Twp. 4721 Fifth Avenue Pittsburgh, Ward 7 2527 Nicholson Road Franklin Park 7209 McKnight Rd Ross Twp. 12121 Perry Highway Pine Twp. 4113 William Penn Hwy Monroeville 4400 Centre Ave Pittsburgh, Ward 4 6051 Copperleaf Ct Pine Twp. 400 Fifth Avenue Pittsburgh, Ward 2

64 DEVELOPINGPITTSBURGH 1005 E Entry Dr

Property Use Office - Elevator 3+ stories Nursing Home/Priv Hosp Office - Elevator 3+ stories Shopping Ctr Office - Elevator 3+ st Office - Elevator 3+ stories Office - Elevator 3+ stories Condo MultiUnits Charitable Instit- Nursing Home Auto sales/service Church Discount Store Apt 40+ Office - Elevator 3+ stories Office - Elevator 3+ stories

Assessor’s Online Database. Property use is determined by the assessor and data shown here (Sale Date, County Total Assessed Value, Prior Sale Price/Date, Taxes, etc.) were collected from those online records. The value of sheriff ’s deeds and the stamp value of nominal transactions were included. Sheriff sales are noted in the tables with an “sd” following the price. Only transactions for the first six months of 2012 were included. There’s a total of $228.8 million for the 60 transactions with the City of Pittsburgh claiming nearly 43%

Sale Price Sale Date $48,000,000 3/1/12 $11,657,411 1/11/12 $10,750,000 2/6/12 $8,000,000 4/25/12 $7,475,000 2/6/12 $7,350,000 2/15/12 $7,050,000 3/22/12 $7,000,000 sd 2/24/12 $5,600,000 6/28/12 $5,440,000 3/12/12 $5,200,000 3/7/12 $4,950,000 2/13/12 $10 / $4,950,000 3/6/12 $4,545,000 5/4/12 $4,200,000 2/23/12 $3,850,000 6/7/12

| Fall 2012

Mini Warehouse

$10 / $3,498,300

Prior Price Prior Date

$4,200,000 7/22/08

$8,000,000 9/16/10

$7,500,000 12/22/95 $1,706 5/23/11

of all Allegheny County transfer dollars. Offices accounted for 45 percent of the transfers followed by institutional transfers with 10 percent of the activity. Retail uses saw $17.8 million in restaurants, $18.3 million in stores plus $11.1 million in shopping centers. Ward 2 in Pittsburgh saw the most action with $71.2 million followed by Findlay Township at $18.2 million. Pine Township had $14.1 million with Monroeville at $12.9 million followed by Ross Township at $12 million. Most notable was that 35 percent of the new owners are from outside of Pennsylvania entirely.

Total Assd Value Taxes $35,835,900 $199,828 $3,945,600 $220,010 $2,880,000 $16,059 $7,293,000

Buyer Lot Size HTA Penn Ave LLC 1.7585 A Ohio Pennsylvania Property 8.0 A US Real Estate LP 4.4140 A Target Corp 5.8520 A

$3,115,000 US Real Estate LP $17,370 $9,914,400 Ft Duquesne Blvd LP $55,285 $6,775,000 PMC 425 Sixth Ave Assoc $37,779 Chapel Pointe Condo

5.1990 A

36,414 SF

Carnegie Mellon Univ 25,000 sf

$2,209,827 11/21/01 $1,350,000 9/23/91 $3,921,051 1/14/03 $450,000 12/19/88 $600,000 11/30/00 $2,500,000 2/10/05 $9,250,000 6/30/99 $2,990,000

$5,594,300 Concordia Lutheran Ministries $31,195 $2,119,300 LRC McKnight Investors $11,818 $10,078,000 Optimus 28 Mgt

6.004 A 5.089 A 24.8957 A

$3,921,051 $21,865 $1,800,000 $10,037 $2,603,000 $14,515 $2,500,000 $13,941

Penn Rite LLC 2.835 A Bellefield Housing Partn LP 25,110 SF Westminster Ltd 3.5178 A PNC Bank

$2,990,000 Extra Space Prop Ten

1.3223 A

Pine Twp. 4113 William Penn Hwy Monroeville 4400 Centre Ave Pittsburgh, Ward 4 Property AddressCt 6051 Copperleaf Municipality Pine Twp. 501-521 Avenue 400 FifthPenn Avenue Pittsburgh, Ward 2 234 Coraopolis Road Kennedy Twp. 1000 1005 Commerce E Entry Dr Drive Findlay TwpWard 20 Pittsburgh, 301 HillsRoad Village 4015South Freeport Upper St.Twp. Clair Twp. Harrison 2000 Commerce Drive Findlay Twp 912 Duquesne Blvd 630 Fort William Marks Drive Pittsburgh, Munhall Ward 2 425 Sixth AveRd & Montour Way 25 McMurray

Discount Store Apt 40+ Property Use Office - Elevator 3+ stories Office - Elevator 3+ stories Nursing Home/Priv Hosp Office - Elevator Mini Warehouse 3+ stories Shopping Shop Ctr - Ctr Community Office - Elevator 3+ st Office - Elevator Commercial 3+ stories Office - Elevator Restaurant

Pittsburgh, WardTwp. 2 Upper St. Clair 100 Vista Circle Dr O'Hara Twp. 4721 Avenue 4500 Fifth Brooktree Rd Pittsburgh, Pine Twp. Ward 7 2527 Nicholson Road Franklin Park 7209 9395 McKnight Rd Ross Twp. McCandless 12121 Perry Highway Pine Twp. 4113 Penn Blvd Hwy 1400 William Market Place Monroeville Moon Twp. 4400 Ave 4530 Centre Perry Hwy Pittsburgh, Ross Twp. Ward 4 6051 4121 Copperleaf MonroevilleCt Blvd Pine Twp. Monroeville 400 Avenue 606 Fifth Liberty Ave & Oliver Ave Pittsburgh, Ward 2

3+ stories Condo MultiUnits

4721 McKnight Road Ross Twp. 1005 Dr St Reed EStEntry & Miller Pittsburgh, Pittsburgh, Ward Ward 20 3 4015 Road 19025Freeport Perry Hwy Rt 19 Harrison Twp. Marshall Twp. 5555 Century 3 Blvd West Mifflin 630 Marks 7500William Brooktree Rd Drive Munhall Pine Twp. 25 McMurray Rd Upper St. Clair Twp.

Retail/Office Over

900 Park Manor Blvd Ext Robinson Twp. 4500 Saw Brooktree Rd Blvd 3516 Mill Run Pine Twp. Brentwood

Restaurant

10247 Perry Hwy McCandless 9395 McKnight Rd McCandless

Auto sales/service

3000 Liberty Ave Pittsburgh, Ward 6 1400 Market PlaceRoad Blvd 73B Noblestown Moon Twp. Collier Twp 4530 Perry Hwy S Highland Ave

Office/Warehouse

Charitable Office - WalkUp 3+ Stories Instit- Nursing Home Auto sales/service Restaurant Church Discount Store Restaurant Apt 40+ Church Office - Elevator Discount Store 3+ stories Office - Elevator 3+ stories

Mini Warehouse Vacant Comml Land Shop Ctr - Community Motel/Tourist Cabin Discount Store Commercial Office - Elevator 3+ stories Restaurant

Office - WalkUp Institutional 3+ Stories Medical/Clinic

Restaurant

Restaurant Office/Warehouse Church Retail/Office Over

2/13/12 $10 / $4,950,000 3/6/12

9/23/91 $3,921,051 1/14/03

$4,545,000 5/4/12 Sale Price $4,200,000 Sale Date 2/23/12 $48,000,000 $3,850,000 3/1/12 6/7/12 $11,657,411 1/11/12 $10 $10,750,000 / $3,498,300 2/6/12 3/22/12 $8,000,000 $3,100,000

$450,000 12/19/88 Prior Price $600,000 Prior Date 11/30/00 $2,500,000 2/10/05 $4,200,000 $9,250,000 7/22/08 6/30/99

4/25/12 3/16/12 $7,475,000 2/6/12 $7,350,000 $3,050,000 2/15/12 3/16/12 $7,050,000 $2,930,369

9/16/10 8/3/06 $3,454,164 4/12/95 $7,500,000 12/22/95 $1,706 $2,400,000

3/22/12 $7,000,000 sd 2/24/12 $5,600,000 $2,815,000 6/28/12 1/11/12 $5,440,000 3/12/12 $10 / $5,200,000 $2,808,000 3/7/12 $4,950,000 2/13/12 $10 / $2,789,554 $4,950,000 3/6/12 3/22/12 $4,545,000 $2,700,000 5/4/12 6/1/12 $4,200,000 $2,635,000 2/23/12 5/3/12 $3,850,000 $2,610,000 6/7/12 4/16/12

5/23/11 7/2/07

$2,500,001 1/11/12 $10 / $2,474,746 $3,498,300 3/22/12 5/16/12 $3,100,000 $2,422,500 3/16/12 5/14/12 $2,272,982 1/12/12 $3,050,000 $2,225,000 3/16/12 4/16/12 $2,930,369 3/22/12 $2,212,799 3/19/12 $10 / $2,815,000 $2,138,365 1/11/12 6/14/12 $2,100,000 6/8/12 $10 / $2,808,000 $2,100,000 6/13/12 $2,789,554 $2,000,000 3/22/12 2/13/12 $2,700,000 $1,875,000

$2,990,000 8/4/00 $8,000,000 $475,549

$875,000 4/11/95 $223,024 12/16/04 $375,000 10/10/02 $2,209,827 $3,000,000 11/21/01 7/2/07 $1,350,000 $475,000 9/23/91 6/18/96 $3,921,051 $410,000 1/14/03 9/10/88 $450,000 12/19/88 $600,000 $1,250,000 11/30/00 4/29/10 $2,500,000 $1,000,000 2/10/05 5/1/92 $9,250,000 6/30/99 $2,990,000 $360,000 8/4/00 4/1/83 $475,549 $650,000 8/3/06 10/9/86 $3,454,164 4/12/95 $2,141,800 1/4/02 $2,400,000 $175,000 7/2/07 9/15/94 $875,000 $1,977,700 4/11/95 1/6/06 $223,024 12/16/04 $375,000 $337,500 10/10/02 5/27/03 $3,000,000 $150,000 7/2/07 9/31/1976 $475,000 6/18/96 $410,000 9/10/88 $85,248

24.8957 A $3,921,051 Penn Rite LLC $21,865 $1,800,000 $10,037 Total Assd Value $2,603,000 Taxes $14,515 $35,835,900 $2,500,000 $199,828 $13,941 $3,945,600 $220,010 $2,880,000 $2,990,000 $16,059 $16,673 $7,293,000 $4,400,000

Buyer Westminster Ltd

25,110 SF Lot Size 3.5178 A

HTA PNC Penn Bank Ave LLC

1.7585 1.3223 A

Ohio Pennsylvania Property

8.0 A US Real Estate LPTen Extra Space Prop 4.4140 5.2255 A

Target Corp Highland Mall Assoc LP

$24,535 $3,115,000 US Real Estate LP $17,370 $9,914,400 Ft Blvd LP 612Duquesne Munhall Partn $55,285 $6,775,000 425 Portfolio Sixth Ave Assoc $1,754,500 PMC Cole OU $37,779 $9,784 Chapel Pointe Condo $2,000,000 $11,152 $5,594,300 $31,195 $2,119,300 $2,296,600 $11,818 $12,806 $10,078,000

2.835 A

Bellefield Housing Partn LP

5.8520 A 22.9717 5.1990 A

36,414 2.56SF A

Carnegie Mellon Univ Hammel Funding LLC 25,000 1.304 sf A

Concordia Lutheran Ministries

6.004 A LRC Investors New McKnight Private Rest Prop 5.089 A 6.3370

Optimus 28 Mgt

24.8957 A $3,921,051 $953,300 $21,865 $5,316 $1,800,000 $4,181,700 $10,037 $2,603,000 $2,351,000 $14,515 $13,110 $2,500,000 $2,000,000 $13,941 $11,152

Penn RiteRetail LLC Prop Trust National

Westminster Ltd Osiris Properties

3.5178 4.5660 A 1.3223SF A 8,420 3.9890 A 5.2255 4.7593 A A 22.9717 A 4.27 A

Mountain View Ventures 612 Munhall Partn Real Estate Tri Rivers Brooktree Cole OU Portfolio

3.4230 A 1.117 a 2.56 A

$1,977,700 Steel City Corral Prop $11,028 $2,000,000 Hammel Funding LLCTrust $655,820 National Retail Prop $11,152 $13,657 $1,155,000 RKW Real Estate $6,441 $2,296,600 New Private Rest Prop $12,806 $46,400 $259 $953,300 $1,700,000 $5,316 $9,480 $4,181,700 $6,934,800

25,110 10.8543SF A

PNC Bank Tiversa Real Estate Holdings

$1,698,000 McKinght Northland LLC $9,469 $2,990,000 Space Prop Ten $165,800 Extra Reed Roberts Hsng LP $16,673 $10,003 $4,400,000 Highland Mall Assoc $2,960,000 Mars Hospitality LLC LP $24,535 $16,506 $1,750,000 $9,958 $2,000,000 $11,152 $1,754,500 $9,784

2.835 A 1.6025

Bellefield Housing Summer Wind Mgt Partn LP

2.9304 A 1.304SF A 33,202 5.97 A 6.3370 A

Americo Real Estate Co National Retail Prop Trust Flynn Properties

13,920 SF

www.developingpittsburgh.com 1.6025 65AA 5.2430

Summer MgtLP HighlandWind Wallace

Brentwood 10247 Perry Hwy McCandless

Medical/Clinic Auto sales/service

6/14/12 $2,100,000 6/8/12

Property Address

Property Use

Sale Price

Municipality 3000 Liberty 501-521 PennAve Avenue Pittsburgh, Ward 62

73B Coraopolis NoblestownRoad Road 234 Collier Twp Kennedy Twp. S Highland Ave Drive 1000 Commerce

Pittsburgh, Findlay TwpWard 8 249 South N CraigHills St Village 301 Pittsburgh, WardTwp. 4 Upper St. Clair Liberty Ave 2000 Commerce Drive

Pittsburgh, Findlay TwpWard 6 121 Fort Walmart Dr 912 Duquesne Blvd North Versailles Pittsburgh, WardTwp. 2 4903Sixth William Hwy Way 425 AvePenn & Montour MonroevilleWard 2 Pittsburgh, 4800Vista McKnight 100 CircleRd. Dr Ross Twp. O'Hara Twp. 800 Brickworks Drive 4721 Fifth Avenue Leetsdale Pittsburgh, Ward 7 3951 Nicholson William Penn Hwy 2527 Road Monroeville Franklin Park 415 Home Dr Rd 7209 McKnight North Twp. Fayette Twp. Ross 105-108 Cedarwood 12121 Perry HighwayCircle WestTwp. Deer Twp. Pine

Office/Warehouse Office - Elevator 3+ stories Office/Warehouse Nursing Home/Priv Hosp Retail/Office Over Office - Elevator 3+ stories Office - 1-2Ctr Story Shopping Industrial Office - Elevator 3+ st Drive-in Restaurant Office - Elevator 3+ stories Lt Mfg - Elevator Office 3+ stories ServiceMultiUnits Station Condo Indus - Warehouse MultiTenant Charitable Restaurant InstitNursing Home Drive-in Restaurant Auto sales/service Nursing Home Church

4113 William Penn Hwy Monroeville 9070 Centre St. Simon 4400 AveWay McCandlessWard 4 Pittsburgh, Robinson St 6051 Copperleaf Ct Pittsburgh, Pine Twp. Ward 4 6190Fifth Steubenville 400 Avenue Pike Robinson Pittsburgh,Twp. Ward 2 200 Main Street Coraopolis 209 Ninth Street 1005 E Entry Dr Pittsburgh, Ward 20 2 1288 Freeport OakridgeRoad Rd 4015 South Fayette Harrison Twp. Twp. Smallman & 23rd St Pittsburgh, Ward 2 1707William Pennsylvania Ave 630 Marks Drive Pittsburgh, Ward 21 Munhall Bank St 25 McMurray Rd Pittsburgh, WardTwp. 22 Upper St. Clair

Discount Store

225 E Seventh Avenue West Homestead 4500 Chartiers BrooktreeAvenue Rd 1100 Pine Twp.Rocks McKees

Retail Structure

9395 McGinley McKnight Rd 2380 McCandless Monroeville 3781 William Penn Hwy Monroeville 1400 Market Place Blvd Moon Twp. 4530 Perry Hwy 66 DEVELOPINGPITTSBURGH | Ross Twp.

Restaurant Instit - Charitable Home/Hosp

Vacant Apt 40+Comml Land Institutional Office - Elevator 3+ stories Restaurant Office - Elevator 3+ stories Indus - Warehouse OfficeWarehouse - Elevator 3+ st Mini Rt of Way Shop Ctr - Community Office/Warehouse Utility Commercial Institutional Restaurant

Sale Date $2,100,000 $48,000,000 6/13/12 3/1/12 $2,000,000 $11,657,411 2/13/12 1/11/12 $1,875,000 $10,750,000 3/16/12 2/6/12 $1,800,000 $8,000,000 2/15/12 4/25/12 $1,725,000 $7,475,000

2/1/12 2/6/12 $1,708,212 $7,350,000 5/1/12 2/15/12 $1,700,000 $7,050,000

1/24/12 3/22/12 $1,662,500 $7,000,000 sd 2/24/12 $1,622,361 $5,600,000 4/20/12 6/28/12 $1,593,477 $5,440,000 6/11/12 3/12/12 $1,537,404 $5,200,000 5/2/12 3/7/12 $1,336,000 $4,950,000 6/6/12 2/13/12 $10 / $4,950,000 3/6/12 $1,250,000 $4,545,000 6/8/12 5/4/12 $1,250,000 $4,200,000 2/23/12 $1,220,315 $3,850,000 1/19/02 6/7/12 $1,200,000 3/27/12 $1,197,500 $10 / $3,498,300 4/13/12 3/22/12 $1,170,000 $3,100,000 3/21/12 3/16/12 $1,165,000 3/202012 $1,100,000 $3,050,000 3/12/12 3/16/12 $1,100,000 $2,930,369 3/22/12

Office - WalkUp Supermarket 3+ Stories

Restaurant Restaurant Church

Fall 2012

$1,060,000 6/29/12 $2,815,000 $1,055,000 1/11/12 1/23/12

$10 / $1,040,000 $2,808,000 3/22/12 $1,034,000 2/28/12 $2,789,554 3/22/12 $2,700,000 6/1/12

$337,500 5/27/03 $150,000 Prior Price

9/31/1976 Prior Date

$4,200,000 7/22/08 $85,248 3/29/96 $242,250 $8,000,000 11/20/87 9/16/10

$460,000 $7,500,000 11/2/98 12/22/95 $650,000 $1,706 3/6/92 5/23/11

$1,615,000 2/23/05 $370,000 $2,209,827 1/14/98 11/21/01 $1,951 $1,350,000 12/1/10 9/23/91 $1,476,751 $3,921,051 3/5/08 1/14/03 $450,000 12/19/88 $600,000 11/30/00 $1,257,529 $2,500,000 12/30/11 2/10/05 $9,250,000 6/30/99 $900,000 $2,990,000 3/30/99 8/4/00 $475,549 8/3/06 $3,454,164 4/12/95

$2,400,000 7/2/07 $875,000 4/11/95 $223,024 $750,000 12/16/04 8/9/00 $375,000 $487,500 10/10/02 4/28/00 $3,000,000 $500,000 7/2/07 2/26/87 $475,000 6/18/96 $410,000 9/10/88

$13,657 $1,155,000 RKW Real Estate $6,441

33,202 SF 5.97 A

Total Assd Value Buyer Taxes $46,400 $35,835,900 Americo HTA PennReal AveEstate LLC Co $259 $199,828 $1,700,000 $3,945,600 $9,480 $220,010 $6,934,800 $2,880,000

FlynnPennsylvania Properties Property Ohio Highland Wallace US Real Estate LPLP

Lot Size 13,920 1.7585SF A 5.2430 8.0 A

$0 11,367 $16,059 4.4140SF A $458,100 Target Pittsburgh $7,293,000 CorpCommunity Holding Corp $2,554 14,200 5.8520SF A $2,500,810 Collier $3,115,000 US RealDevelopment Estate LP $20 7.8272 A $17,370 5.1990 $694,000 Ft TOMS King RE Penn $9,914,400 Duquesne Blvd LP $55,285 $802,500 PMC Laura425 Land Co Ave LP Assoc $6,775,000 Sixth $4,475 $37,779 RJN Retail LLCCondo Chapel Pointe

$5,431,620 $30,288 $2,485,000 $5,594,300 $13,857 $31,195 $672,000 $2,119,300 $3,747 $11,818 $1,635,800 $10,078,000 $9,122

LIP 3 LP Mellon Univ Carnegie Cole GC Monroeville LLC Concordia Lutheran Ministries TOMSMcKnight King RE Investors Penn LRC Human Services Optimus 28 Mgt Housing Co

$3,921,051 Penn Rite LLC $21,865 $50,000 Bellefield Fifth ThirdHousing Bank Partn LP $1,800,000 $279 $10,037 Carlow University $2,603,000 Westminster Ltd $14,515 $589,400 $2,500,000 $3,287 $13,941 $968,700 $5,402 $900,000 $2,990,000 $5,019 $16,673

StoreBank Master Funding LLC PNC West Hills Holding LLC

1.238 A 10.528SF A 36,414

26.593 sf A 25,000 3.3704 6.004 A 1.2790 5.089 A 2.978 A 24.8957 2.835 A 4.031SF A 25,110 3.5178 A 1.0046 A 1.3223 5.0630 A

Ninth Space 209 LLC Extra Prop Ten

Berkley Holdings LLCLP $4,400,000 Highland Mall Assoc $24,535 $612,300 2225 Smallman Assoc LP $3,414 $809,800 612 1707Munhall Pennsylvania Partn Ave LLC LightOU LifePortfolio Ministries $1,754,500 Cole $9,784 $410,000 Program for Offenders Inc $2,331 $2,000,000 Funding LLC $503,600 Hammel Bottom Dollar Food NE $11,152 $2,808

$2,296,600 Private $6,803,300 New HR Acq PA Rest Prop $12,806 $37,937 $700,000 Glickman Real Estate Dev $3,903 $953,300 National Retail Prop Trust $5,316 $4,181,700 Summer Wind Mgt

5.2255 A 2.6020 A 22.9717 1.289 A 1.75 A 2.56 A 1.5496 A 1.304 A 1.1605

6.3370 9.14 A 1.86 A 1.6025 A 10.8543 A

Learn more about NAIOP in the western Pennsylvania tri-state region at naioppittsburgh.com or 412-928-8303.

NAIOP, the Commercial Real Estate Development Association, is the leading organization for developers, owners and related professionals in office, industrial and mixed-use real estate. NAIOP provides unparalleled industry networking and education, and advocates for effective legislation on behalf of our members. NAIOP advances responsible, sustainable development that creates jobs and benefits the communities in which our members work and live.

For more information on how you can develop connections with commercial real estate through NAIOP, visit us online at www.naiop.org or call 800-456-4144.

Now in Pittsburgh

Local knowledge is the foundation of our professional practice. For more information about Avison Young and our services contact:

Duke Kingsley I Principal & Managing Director Direct: 412.944.2131 duke.kingsley@avisonyoung.com

James Kelly I Senior Vice President, Principal Direct: 412.944.2133 james.kelly@avisonyoung.com

Brad Totten I Senior Vice President, Principal Direct: 412.944.2132 brad.totten@avisonyoung.com

Michael Downey I Vice President Direct: 412.944.2135 michael.downey@avisonyoung.com

Brandon Snyder I Vice President Direct: 412.944.2134 brandon.snyder@avisonyoung.com

625 Liberty Avenue, Suite 3150, EQT Plaza, Pittsburgh, PA 15222

P 412.944.2130

www.avisonyoung.com

cranberry crossroads route 228 & I-79 cranberry township, pa 16066 • Three story, 90,000 SF, Class A Office Building

• 360 Surface Spaces are available with a ratio of 4.0/1,000 SF

• Located on Route 228 in Cranberry Township

• Highly visible signage opportunity facing Rt. 228

• 30,000 SF floor plates

• Conveniently located near I-79, The Pennsylvania Turnpike, and Rt. 19

• Delivery in 4Q of 2012

90,000 sF available 4Q2012

68 DEVELOPINGPITTSBURGH

| Fall 2012

For information, contact Pat Greene 412.471.3017 pj.greene@cbre.com

DEVELOPING

Pittsburgh

2012 Buyer’s Guide! LOOKING FOR AN ARCHITECT, ENGINEER, CONTRACTOR OR LENDER? THE 2012 NAIOP BUYER’S GUIDE LISTS DOZENS OF FIRMS FROM AROUND THE REGION THAT CAN FIT THE BILL. Architect............................................69 Building Products..............................70 Civil Engineer....................................70 Construction Consultant...................71 Consultant.........................................71 Contractor.........................................71 Developer..........................................72 Economic Development....................72 Engineer............................................72 Environmental...................................73 Finance..............................................73 Geotechnical Engineer......................73 Green Building/Energy Consultant...74 Industry/Trade Association................74 Interior Designer...............................74 Land Surveyor...................................74 Landscape Architect..........................75 Liquor License/Restaurant Broker.....75 Maintenance/Service Contractor......75 Professional Services.........................75 Real Estate Broker.............................75

Architect Astorino

227 Fort Pitt Boulevard Pittsburgh, PA 15222 T: 412-765-1700 www.astorino.com John D. Francona, RA, LEED AP jfrancona@astorino.com

At Astorino, we believe that great design meets the deepest needs of the people who live, learn, heal, work and play in the environments we create. It’s that simple. For over 40 years, Astorino has been at the forefront of where people and design intersect. A full-service company, Astorino combines architectural, engineering, construction and interior design solutions with unprecedented human-centered research to provide one seamless delivery process. We leverage our creative foundation, interdisciplinary expertise and strong collaborative approach to impact the greater good...to design for the future...and to re-imagine landscapes.

Design 3 Architecture PC 300 Oxford Dr. Ste. 120 Monroeville, PA 15146 T: 412-373-2220 www.d3a.com William Snyder was@d3a.com

Design 3 Architecture has been offering architecture, planning, and interior design services to the Pittsburgh region since 1982. We view inherent project constraints as potential opportunities for innovative design solutions. With a philosophy grounded in team collaboration, providing both personal attention and project leadership, Design 3 Architecture does more than solve problems. We provide solutions that are unique, exciting and affordable.

Desmone & Associates Architects One Doughboy Square 3400 Butler Street Pittsburgh, PA 15201 T: 412-683-3230 F: 412-683-3563 www.desmone.com Chip Desmone, AIA, LEED AP cdesmone@desmone.com

Desmone & Associates Architects is a full-service architecture, planning and interior design firm located in the historic Lawrenceville district of Pittsburgh. Since 1958 we have serviced the industrial, commercial, private and non-profit sectors with friendly and efficient service. Design is our passion! We care deeply about each detail of every project, and we listen intently to the needs and desires of our clients. Our unique knowledge and skills, coupled with our strong client commitment, enables our team to transform the vision of our clients into a reality.

DLA+ Architecture & Interior Design Foster Plaza 9, Suite 200 750 Holiday Drive Pittsburgh, PA 15220 www.dlastorino.com

Achieving a client’s unique vision takes a unique approach. Thanks to our Strategic ArchitectureSM approach – clients are finding that it can be easy to integrate organizational and brand strategy into the planning and design of facilities. Find out more at our website or call 412.921.4300.

DRS Architects, Inc.

One Gateway Center, Seventeenth Floor Pittsburgh, PA 15222 T: 412-391-4850 F: 412-391-4815 www.drsarchitects.com Kathryn Jolley kathryn_jolley@drsarchitects.com

Designing for the future, DRS Architects continues to provide innovative and creative architectural solutions as we have for more than 50 years. We listen carefully to our clients’ needs and develop customized responses to each design challenge. We provide architecture, interior design and master planning services through the varied markets of higher education, laboratories, health and wellness, government, hospitality, and corporate offices. Our talented design teams work to develop exemplary projects which enrich daily life, improve communities, advance a sustainable future and promote design excellence.

Front Studio Architects 357 N. Craig Street Pittsburgh PA 15213 T: 412-682-2121 www.frontstudio.com Art Lubetz Art@frontstudio.com

Front Studio’s architecture is experientially powerful and environmentally responsive. Our emphasis on collaboration and experimentation defines flexible spaces with the capacity to evolve and adapt. Front Studio’s steadfast reputation for excellence is due to an intensive review process that includes code compliance, budget control measures and sound construction practices. Our work uses provocative yet economical materials to produce fresh and unique solutions.

HHSDR Architects / Engineers 40 Shenango Avenue Sharon, PA 16146-1502 130 7th Street, 201 Century Bldg. Pittsburgh, PA 15222-3413 (800) 447-3799 T: 724-981-8820 F: 724-981-4515 Frank Gargiulo fgargiulo@hhsdr.com vcawthorne@hhsdr.com

HHSDR has been building relationships with our clients since 1953. Specializing in the adaptive reuse of facilities for education and training, commerce, and government, we have designed for sustainability since the 1980s. HHSDR has completed LEED-certified projects in Allegheny and Mercer counties. For several years, we have been ranked by the Pittsburgh Builders Exchange as the most active firm in the tri-state region. We’ve earned that ranking by providing high-quality and responsive service to our clients. Our project portfolio includes projects sized from a few hundred to 400,000 square feet.

1601 Arrott Building 401 Wood Street Pittsburgh, PA 15222-1838 T: 412-566-1531 www.gerardassociatesarchitects.com Dawn M. Danyo, AIA LEED AP BD+C dmdanyo@gerardassociatesarchitects.com

A Woman Owned Business providing architecture, planning, interior and environmentally responsible design services to a full range of commercial clients since 1959. The firm commits itself to understanding projects completely, developing working relationships with clients and delivering projects that are technically and aesthetically complete. Every project is given principal attention. We believe this commitment to service yields superior design.

800 Vinial Street #B314 Pittsburgh PA 15212 T: 412.321.8313 www.poharchitects.com Loren Wright, AIA loren.wright@poharchitects.com

Pieper O’Brien Herr Architects was established in 1971 and provides architecture, interior design, and graphic design services for both public and private sector clients throughout the United States. The firm is headquartered in Atlanta with a regional office in Pittsburgh. Our design portfolio includes a diverse range of markets including office, industrial, mission critical, educational, justice and retail.

Renaissance 3 Architects, P.C. 48 South 14th Street Pittsburgh, PA 15203 T: 412-431-2480 www.r3a.com Deepak Wadhwani dw@r3a.com

IKM Incorporated

One PPG Place Pittsburgh, PA 15222 T: 412-281-1337 F: 412-281-4639 www.ikminc.com Joel R. Bernard, AIA, NCARB, LEED AP Principal jbernard@ikminc.com

IKM Incorporated has been providing architecture, planning and interior design services to corporate and institutional clients for 100-years. IKM’s mission is to provide innovative and informed architecture that positively impacts the world through leadership in understanding, exploration and decision making. IKM is a member of the American Institute of Architects and the US Green Building Council.

Lami Grubb Architects, LP Gerard Associates Architects, L.L.C.

Pieper O’Brien Herr Architects

100 E. Swissvale Avenue Pittsburgh, PA 15218 T: 412.243.3430 F: 412.371.1586 www.lamigrubb.com Chelsea Cox Suzan Lami, AIA Lga@lamigrubb.com

At R3A we believe that successful design shapes environments that actively engage the senses and facilitate positive human interactions and behaviors, while employing technologies that help improve the performance of our daily lives. R3A is a 17-person firm with three principals supported by an experienced and creative team of architects, interior designers and project managers. R3A provides a full range of architectural, interior design, planning services. We pride ourselves in being uniquely qualified to respond to the increasingly diverse and complex facilities needs of our clients and their organizations.

RSH Architects

363 Vanadium Road #200 Pittsburgh PA 15243 T: 412.429.1555 x 19 F: 412.279.7285 www.rsharc.com Joel C. Cluskey, AIA, CCS jcluskey@rsharc.com

RSH Architects celebrates its fourth decade of professional practice with renewed ownership, enthusiasm, and a commitment to quality architecture that endures - aesthetically, functionally and environmentally. RSH Architects serves diverse clientele within a variety of markets which include colleges and universities, financial institutions, housing, municipal governments, and high technology manufacturing.

Placing the client at the center of every project, our designs come from a thorough understanding of the client’s goals and a genuine passion for exceeding those goals. Our 38 professionals, with years of experience and deep creative talent, bring value to community, corporate, institutional, medical, residential, and retail/restaurant projects. Utilizing LEED accredited staff, we create enduring environments that are sensible to build. Lami Grubb Architects completes over 500 projects each year across the United States and in Canada, and is a www.developingpittsburgh.com 69 certified woman-owned business.

Lampus Company RSSC Architecture

5500 Brooktree Road, Suite 300 Wexford, PA 15090 T: 724-933-9100 www.rsscarch.com Ralph J. Sterzinger, AIA rjs@rsscarch.com

The firm of Ross Schonder Sterzinger Cupcheck P.C. has been practicing architecture for over 45 years. The scope of our practice varies widely from public facilities to private developments. RSSC Architecture’s design philosophy is the utilization of practical and sustainable materials, applied in a creative manner that recognizes the unique individuality of each client and project. RSSC Architecture’s end goal is to create a facility that satisfies the current and future needs of the client through the appropriate application of creative design and building elements.

Parkway Yard 2321 Todd Road Aliquippa, PA 15001 www.lampus.com John Bliss 412-362-3800 JBliss@Lampus.com Cindy Burianek 724-375-6637 CBurianek@Doren.biz

Visit the Lampus Company brick and concrete products showroom at the Parkway Yard to view the latest colors, shapes, sizes, and textures of multiple brick lines. Also plan to schedule product review meetings with your clients at the Parkway Yard showroom. View samples to assist with the decision making process. The Parkway Yard also features the convenience of immediate inventory of concrete products for the building and construction industries. Delivery services are available. Contact the Parkway Yard for complete details – 724-375-6637.

Civil Engineer VEBH Architects, P.C. 470 Washington Rd Pittsburgh PA 15228 T: 412-561-7117 Dan Skrabski info@vebh.com

VEBH Architects has been serving the communities of Southwestern Pennsylvania and beyond for more than 65 years. We are passionate about creating quality environments for our clients. Our designs for workplaces enhance client identity, offer increased productivity, and deliver long-term value to a business, as well as the customers and the community it serves. We are committed to creating great places that inspire, motivate, and ultimately enrich our region and the communities in and around the places we call home.

Building Products

Michael Baker Jr., Inc.

Airside Business Park 100 Airside Drive Moon Township, PA 15108 T: 724-495-4135 www.mbakercorp.com Steve Savich, Land Development Lead SSavich@mbakercorp.com

Baker’s professionals provide full service consulting on residential, commercial, retail developments, industrial/ office parks, educational/ governmental facilities and utility infrastructure projects. From brownfield redevelopments and greenfield sites to projects in densely populated urban areas and redevelopment/expansions to existing sites, Baker delivers all your land development needs. Preliminary Site Investigations & Evaluations, Feasibility Studies, Site Planning & Conceptual Plan Preparation, Utility Infrastructure Design Landscape Architecture, Stormwater Management, Erosion Control (NPDES Permitting), Federal, State, & Local Permitting, Bidding & Construction Phase Services, Site Engineering, Services for Design-Build Development.

ARDEX Americas 400 Ardex Park Drive Aliquippa, PA 15001 T: 724.203.5066 C: 724.544.0925 www.ardexamericas.com Danielle Hunsicker Danielle.Hunsicker@ardexamericas.com

A global leader in the development and manufacturing of high-performance specialty building products including all aspects of flooring and tile & stone installations for commercial and residential applications. ARDEX Americas has led the industry for 30+ years in product performance and innovation. ARDEX introduced self-leveling cements into the U.S. and ARDEX K 15® is still the most specified self-leveling underlayment in North America. ARDEX also offers a comprehensive Polished Concrete System and a fullline of Concrete Repair and Restoration products for exterior concrete surfaces. ARDEX prides itself on unmatched customer service, technical support, training and a commitment to the profitability of its customers’ businesses as the Ultimate Partner.

70 DevelopingPittsburgh | Fall 2012

Bowman Consulting

680 Andersen Drive Foster Plaza 10, Suite 430 Pittsburgh, PA 15220 T: 412-328-2222 www.bowmanconsulting.com Michael Pointer, CLA mpointer@bowmancg.com

Bowman Consulting delivers real estate, energy, infrastructure and environmental development solutions to public and private markets throughout the country. Bowman offers the depth of resources commonly found at large design firms, while operating with the flexibility of a boutique firm. Our team of specialists provides successful strategies and full-service capabilities to exceed the expectations of the client, community and stakeholders.

GAI Consultants, Inc.

385 E. Waterfront Drive Homestead, PA 15120 T: 412-476-2000 www.gaiconsultants.com Patrick M. Gallagher p.gallagher@gaiconsultants.com

Transforming ideas into reality for over 50 years, GAI’s teams of real estate and economic counselors, urban planners, engineers, environmental specialists, surveyors, and landscape architects provide innovative, practical, and cost-effective solutions for all stages of land development. Our award-winning land development portfolio includes large multi-use complexes, retail centers, healthcare and educational campuses, residential communities, urban streetscapes, parks and trails, marinas, and resorts. Distinguished in our commitment to urban-infill, Greenfield, and brownfield development, we help clients achieve their project goals. GAI brings projects from ideas to reality. Learn more at www.gaiconsultants.com.

Pennoni Associates Inc. 700 Seco Road Monroeville PA 15146 T: (412) 229-2778 www.pennoni.com John Skorupan jskorupan@pennoni.com

Pennoni Associates is a multi-disciplined consulting engineering and design firm employing 900 professional, technical, and administrative personnel with 28 offices throughout the eastern United States. Pennoni, an ESOP company, offers services in Site Design, Landscape Architecture, Environmental, Health and Safety, Indoor Air Quality, Surveying, Transportation, Land Development, Construction Inspection and Testing, MEP, Geotechnical, Underwater Inspection, and Structural Engineering. Locally, Pennoni has offices located in State College, Monroeville and Uniontown that service the developer, building owner, industrial, transportation, education, government, and Marcellus Shale industries in western Pennsylvania, West Virginia, and Ohio.

The Gateway Engineers

400 Holiday Drive, Suite 300 Pittsburgh PA 15220 T: 412-921-4030 F: 412-9219960 www.gatewayengineers.com Ryan L. Hayes, Director of Business Development rhayes@gatewayengineers.com

The Gateway Engineers, Inc. and its predecessors have played an active role in the development of the Ohio Valley since 1882. Our incessant pursuit of project management excellence has created strengths in municipal engineering, consulting work, and all facets of private development including the burgeoning energy industries. The tradition of providing value-added engineering solutions carries on as the company continues to grow. Gateway’s staff of registered professional engineers, surveyors, construction inspectors, and landscape architects, along with qualified technicians, is ready to provide the expertise and personalized service which every project deserves. For more information, please visit www.gatewayengineers.com

R.A. Smith National

300 Corbet Street, Suite 200B Tarentum, PA 15084 T: 724-224-2330 F: 724-224-5254 www.rasmith.com John Frydrych, M.S., P.E. John.Frydrych@rasmithnational.com

R.A. Smith National is a multi-disciplinary consulting engineering firm that is a leader in civil engineering and sustainability. R.A. Smith National works with clients to deliver excellence, vision and responsive service. Developers and governmental agencies take advantage of the diverse expertise and team collaboration that is incorporated in every project. The firm provides comprehensive civil engineering services that include civil engineering, ecological services, land development engineering, site planning, surveying, visualization, water resource engineering and 3D laser scanning. Offices are located in Pittsburgh, PA; Milwaukee, WI; and Orange County, CA.

Mackin Engineering Company RIDC Park West 117 Industry Drive Pittsburgh, PA 15275 T: 412-788-0472 www.mackinengineering.com Robert W. Genter, RLA, ALSA Director- Land Development Services rwg@mackinengineering.com

Serving our clients since 1960, Mackin Engineering Company continues to be a leader in the civil engineering field. We offer a wide range of professional consulting services for both public and private sector clients from across the Commonwealth. Mackin places an emphasis on our staffs’ ongoing professional development to best serve our clients. Our multi-disciplinary staff includes dedicated professionals in the fields of traffic, civil, highway and structural engineering; landscape architecture; municipal planning; land surveying; and construction inspection/management; graphic design; and IT services.

Red Swing Group

4154 Old William Penn Hwy Suite 300 Murrysville, PA 15668 T: 724.325.1215 F: 866.295.5226 www.RedSwingGroup.com Matthew Smith Matthew.Smith@RedSwingGroup.com

Red Swing Consulting Services views its clients as partners focusing first and foremost on building and maintaining strong relationships. Mutual trust from these relationships is the foundation of solid business partnerships. Red Swing offers complete land development consulting services to take a project from concept through construction. Red Swing possesses experience in land development, infrastructure, utility, environmental and communication projects. Red Swing effectively maximizes the return on investment through a collaborative design approach, utilizing a low impact design philosophy that reduces project capital costs and produces the competitive edge that we and our partners demand.

Construction Consultant KU Resources, Inc.

Baer & Associates, LLC

700 River Avenue, Suite 543 Pittsburgh, PA 15212 T: 412-224-4892 www.baer-associates.com Josh Telenko jtelenko@baer-associates.com

Baer & Associates is a full service construction consulting firm specializing in preconstruction services including: Cost Estimating, Value Engineering, Cost Consulting, Cost Segregation, Litigation Support, and Constructability Reviews. In business since 1976 and with a combined staff experience of over 100 years in the construction industry, we have tailored our services to provide independent estimates and reports to reflect the current bidding climate and market conditions with unprecedented accuracy and integrity. We strive to provide real-world costs regardless of project size and/or phase of design to guide owners and designers to a common intended budget to eliminate bid-day uncertainties.

22 South Linden Street Duquesne, PA 15110 T: 412-469-9331 F: 412-469-9336 www.kuresources.com Mark Urbassik murbassik@kuresources.com

KU Resources, Inc. provides a full range of environmental management and site development engineering services to industrial, commercial, and communitybased clients. The firm specializes in brownfield redevelopment, environmental site assessment, economic revitalization assistance, regulatory permitting and compliance, remediation design and implementation, and environmental risk management strategies. The firm’s engineering and environmental consulting capabilities also include the areas of civil and geotechnical engineering, site development engineering, water resources engineering, mining and quarry services, water quality monitoring, and air quality compliance and permitting. We also provide forensic engineering and litigation support services.

Contractor A. Martini & Company

Campayno Consulting Services, LLC P.O. Box 554 Oakmont, PA 15139 T: (412) 794-8129 F: (412) 794-8130 www.campaynoconsulting.com Jesse C. Campayno T: 412-302-0035 ccserv@comcast.net

Campayno Consulting provides construction consulting services for owners and developers who need assistance managing the complex contractual relationships between their contractor and architect. Jesse Campayno has more than 37 years of experience in field and executive positions, giving him insight into the best practices of project management. Campayno focuses on five core services: Owner representation and construction management; estimating and conceptual budgeting; project executive services; dispute resolution and business consulting. Our clients rely on our expertise to add value to their projects by providing clear direction, maintaining open lines of communication and placing the project owner’s goals as the top priority.

Consultant

320 Grant Street Verona PA 15137 T: 412-828-5500 www.amartinigc.com Emily Landerman Emily.Landerman@amartinigc.com

Established in 1951, A. Martini & Co. is not just a general contracting and construction management firm – it is a family business that embodies the dedication, work ethic and talent of three generations of the Martini family. A. Martini & Co.’s size, history and work philosophy are specifically geared to offering experience, commitment and a partnering approach. A. Martini & Co. provides construction management and general construction services for multimillion dollar and smaller projects for industry, retail, medical, entertainment, corporate, residential, education and non-profit clients.

Continental Building Systems

395 E. Waterfront Drive Suite 300 Homestead, PA 15120 T: 412-476-3006 www. continental-buildingsystems.com Carl L. Belli, LEED AP cbelli@continental-buildingsystems.com

Continental Building Systems (CBS) draws on a comprehensive scope of services, customized for every client, to build solutions for their companies. We offer a single source with total development, design and construction services available to our clients. With a 26-year history and an annual construction volume of over $200 million, we have a diverse base of experience in commercial construction, including multi-story office buildings and tenant improvements, retail, restaurants, warehouses, industrial / manufacturing, medical, recreational, education, multifamily, student housing, assisted living and site development.

McKamish, Inc.

55th & AVRR Pittsburgh PA 15201 T: 412-781-6262 F: 412-781-2007 www.mckamish.com Dave Casciani davec@mckamish.com

When it comes to specialty mechanical contracting, McKamish sets the bar. The Commercial Construction Group at McKamish serves customers big and small in virtually all market segments, meeting their Mechanical Contracting, Plumbing and HVAC needs. We excel at Pre-Construction and Design Assist/Build services. The McKamish Service Group thrives to optimize customer investment in new and existing building systems. A dedicated team of professional technicians, operating a fleet of vehicles, provide McKamish Service customers with around-the-clock support. Please visit our website – www.mckamish.com – to learn more about us!

Restoring the Past Building the Future

Jendoco Construction Corporation 2000 Lincoln Road Pittsburgh PA 15235 T: 412-361-4500 F: 412-361-4790 www.jendoco.com Domenic Dozzi ddozzi@jendoco.com

PJ Dick Inc.

Located in Pittsburgh for over 50 years, Jendoco has built a reputation for being a premier quality general contractor and construction manager with expertise in many facets of building construction. From renovations, to restorations, to new construction, our team of seasoned professionals has the experience and commitment to meet the challenges of your projects. We have experience with new construction, renovation, historical restoration and preservation, research facilities, hospitals and medical facilities, schools and universities, religious facilities, water treatment facilities, multi-tenant residential, commercial, industrial, institutional, retail and sustainable construction.

PJ Dick – Trumbull – Lindy Paving is a Pittsburgh, PA based contracting entity providing building construction, highway, site, and civil construction and asphalt paving services. Since 1979, the companies have served a number of different owner groups including commercial, institutional, government and private equity developers. Consistently ranked among the nation’s top firms, the family owned group of companies is widely considered the region’s largest construction firm offering a variety of delivery systems utilizing superior expertise, equipment and innovation.

225 North Shore Drive Pittsburgh PA 15212 T: 412-807-2000 www.pjdick.com Bernard J. Kobosky Bernie.kobosky@pjdick.com

Rycon Construction Inc. LANDAU BUILDING COMPANY Burchick Construction Company Inc. 500 Lowries Run Road Pittsburgh PA 15237 T: 412-369-9700 www.burchick.com Joseph E. Burchick joeburchick@burchick.com

Burchick Construction is a full-service general contractor founded on the commitment to excellence that Joe Burchick brings to each project the company undertakes. Burchick’s management approach is designed to ensure optimum results for our clients, setting the performance standard for construction services. Our executives and managers have broad-based experience delivering construction to the highest standards, regardless of the client’s preference for delivery method. Burchick’s project team and professional engineers on staff are equally comfortable with a completed design or with providing pre-construction assistance at the earliest stages of design. Burchick has managed commercial, industrial and institutional projects from $100,000 to $73 million with equal attention. Burchick Construction, setting the performance standard.

9855 Rinaman Road Wexford, Pennsylvania 15090 T: 724-935-8800 www.landau-bldg.com Thomas Landau tlandau@landau-bldg.com

Since our inception nearly 120 years ago, Landau Building Company has evolved into a premier commercial construction firm. For over five generations we have insisted on exceeding our clients’ expectations for quality and service – and that insistence built the reputation we reinforce every day. Focusing on client satisfaction is our philosophy and our business strategy. Demonstrating our integrity, value, and quality on every project is our plan to ensure continued success. Our clients know that Landau will represent their best interests and deliver the best product money can buy.

2525 Liberty Avenue Pittsburgh PA 15222 T: 412-392-2525 F: 412-392-2526 www.ryconinc.com Todd Dominick todd@ryconinc.com

Rycon Construction, Inc. is a premier preconstruction, general contracting and construction management firm with expertise in new construction, renovations and design-build projects for owners of commercial, industrial, institutional and governmental buildings. Rycon’s stellar reputation for quality service is built on a solid history of successful projects completed on time and on budget and an unwavering business philosophy that puts customer satisfaction first. The results are return customers and impressive company growth. Rycon has executed more than $1.5 billion of work and currently averages in excess of $100 million annually.

www.developingpittsburgh.com

Developer

Economic Development

TEDCO Construction Corp. TEDCO Place Carnegie, PA 15106 T: 412·276·8080 www.tedco.com Bryan H. Clark bclark@tedco.com

TEDCO Construction brings over three decades of collective construction experience to our clients. We continue to grow by successfully delivering a balance of new and renovation work in commercial, education, healthcare and industrial facilities. Team building, management services and project control is the foundation of our outstanding list of clients.

Washington County Chamber of Commerce Oxford Development Company One Oxford Centre Pittsburgh PA 15219 T: 412-261-1500 www.oxforddevelopment.com Shawn Fox SFox@oxforddevelopment.com

A partner in real estate development and service.Oxford Development is a premiere full-service commercial real estate firm. Building upon the solid foundation of a 50-year history, Oxford is the largest, privatelyowned real estate development and services firm in Pennsylvania. The company’s owned and managed portfolio consists of retail, office, institutional, healthcare, residential, industrial and sports and entertainment assets throughout the United States and includes some of the country’s signature real estate properties. Oxford has been involved in over 4.5 million square feet of LEED® certified projects. Above all, Oxford’s greatest asset is its team of accredited professionals.

Ambridge Regional

2301 Duss Avenue Suite 1 Ambridge PA 15003 T: 724-266-4661 www.ambridgeregional.com Gene Pash, President Gpash@ambridgeregional.com

Value Ambridge Properties at the Ambridge Regional Distribution & Manufacturing Center is located in Beaver County and is convenient to all major local roadways, and only 11 miles from the proposed ethane cracker plant. Entirely zoned for industry, its 85 acres house 22 buildings that contain over one million square feet of leasable business, warehouse, office, wet lab, distribution, and manufacturing space. Its tenants also enjoy direct access to Norfolk Southern Rail Co. service as well as on-site maintenance and logistics services. For more information, call 724-266-4661, or visit www.ambridgeregional.com.

20 East Beau Street Washington, PA 15301 T: 724-225-3010 F: 724-228-7337 Mary Stollar Director of Business Investment www.WashingtonCountyWorks.com

The Washington County Chamber of Commerce is the largest business organization in Washington County and the second largest chamber of commerce in Southwestern Pennsylvania. The Chamber focuses on economic and business development initiatives to expand the economy of Washington County and was one of the first organizations to publically support the economic benefits and job creation potential of the natural gas industry. Learn more at www.washcochamber.com.

Engineer

T Construction & Consulting Services

2593 Wexford-Bayne Road, Suite 207 Sewickley, PA 15143 T: 412.238.1500 www.tccserv.com Traci Yates traci@tccserv.com

T Construction & Consulting Services was established in 2011 by Traci Yates to provide construction and consulting services. With over 25 years of experience in the construction industry, we are dedicated to our clients providing Total Project Solutions for projects in the commercial industrial, municipal, higher education, healthcare, housing, entertainment, government and retail markets. We are a 100% woman owned and operated company with Woman Business Enterprise (WBE) certifications. Construction project delivery methods include Construction Management at Risk, Construction Management as Advisor, Design-Build or General Contractor. Consulting services include Cost Estimating, Owner’s Representative and Project Management.

Horizon Properties Group, Inc. 375 Southpointe Blvd. Suite 410 Canonsburg, PA 15317 T: 724-743-7722 ext 2502 Michael Swisher mswisher@horizonprop.net

Horizon Properties Group, Inc. is a full service real estate development company with extensive experience in the development of new communities, office buildings, corporate headquarters facilities, retail, hospitality and residential projects. The company is headed by Rod L. Piatt and Michael Swisher who were the key individuals responsible for the successful development of Southpointe including the master planning. Horizon Properties Group is comprised of an in-house staff of architects, planners, engineers, landscape architects, interior designers and financial professionals that enable Horizon to excel in all facets of real estate development.

Armstrong County Industrial Development Council

124 Armsdale Road, Suite 205 Kittanning, PA 16201 T: 724-548-1500 F: 724-545-6055 www.armstrongidc.org Michael P. Coonley, AICP, Executive Director economicdevelopment@co.armstrong.pa.us

The Armstrong County Industrial Development Council (ACIDC), established in 1968 is a private 501(c) 3 industrial development corporation. Identified as the lead economic development group within the County, the ACIDC, along with its sister organization the Armstrong County Industrial Development Authority, provides single-point-of-contact service for emerging or expanding business and industry. Owners and operators of four industrial parks, single use and multi-tenant facilities, the ACIDC works closely with existing or prospective businesses to identify the right location. They also provide financing assistance to companies through government loan/grant programs and private sector financial institutions.

Atlantic Engineering Services 650 Smithfield Street, Suite 1200 Pittsburgh, PA 15222 T: 412-338-0051 www.aespj.com John Schneider, P.E. j.schneider@aespj.com

Atlantic Engineering Services provides structural engineering services. Our clients benefit from proactive engineers searching out optimal solutions. The interaction of these engineers with other disciplines, along with regional expertise, provides enhanced design economies. Our practice areas include new construction, renovation, historic structures, seismic retrofit, concrete restoration and expert witness services for all types of building owners including commercial, residential, institutional, K-12, university and higher education.

Trammell Crow Company Volpatt Construction 100 Castleview Road Pittsburgh PA 15234 T: 412-942-0200 F: 412-942-0280 www.volpatt.com Ray Volpatt Jr. RayJr@volpatt.com

Volpatt Construction, a General Contractor/Construction Manager who specializes in new construction, renovation, and restoration has successfully positioned itself as one of the most respected building contractors in the Western Pennsylvania Tri-State area. From one small laboratory renovation at the University of Pittsburgh to more than 500 commercial, institutional and industrial projects, Volpatt Construction has developed a focus on high quality, hands-on service, competitive pricing, and timely project completion which has helped them build a long list of repeat clients. For more information please contact Ray Volpatt, Jr. We are Building.

72 DevelopingPittsburgh | Fall 2012

600 Grant Street Suite 4800 Pittsburgh, PA 15219 T: 412-471-2296 www.trammellcrow.com James F. Murray-Coleman j.murraycoleman@trammellcrow.com

As one of the nation’s leading real estate development and investment firms with locations in 16 major cities, Trammell Crow Company has operated for 60+ years as master developer, partner and consultant dedicated to the fundamental principle of building value for our clients. TCC executes development and acquisition strategies tailored to meet the needs of its owner/occupant clients. For investors, we offer strategic joint ventures, opportunity funds and other targeted investment opportunities. By applying our “RISE” values: Respect, Integrity, Service and Excellence, we strive to provide users and investors in, office, industrial, healthcare and multi-family properties with world-class service and advice.

Regional Industrial Development Corporation of Southwestern Pennsylvania 210 Sixth Avenue Suite 3620 Pittsburgh, PA 15222 T: 412-315-6447 www.ridc.org Tim White twhite@ridc.org

RIDC is recognized as one of Pennsylvania’s largest and most successful private, not-for-profit economic development corporations. Established in 1955, the RIDC was formed to foster new employment opportunities and to diversify the regional economy of Southwestern Pennsylvania. Through a wide range of real estate development activities, RIDC provides development, finance, and lease of new and redeveloped buildings and stands ready to assist the growth of businesses throughout the Pittsburgh region. Today, RIDC owns over 2,800 acres of land in various suburban and urban industrial parks and manages over 60 buildings.

Civil & Environmental Consultants, Inc. 333 Baldwin Road Pittsburgh, PA 15216 T: 800-365-2324 www.cecinc.com Gregory P. Quatchak, P.E. gquatchak@cecinc.com

Civil & Environmental Consultants, Inc. (CEC) is a company of professionals who provide integrated design and consulting services at all points in a property’s life cycle. CEC’s industry experts offer a full complement of evaluation, technical and regulatory insight. Our value lies in the practical knowledge senior leaders contribute along with our broad skill-sets and desire to advance our clients’ strategic objectives. We’re building trust and our reputation on a local level through personal business relationships while continually assessing our environmental and economic sustainability in the communities where we practice.

Environmental Dollar Bank

Firsching, Marstiller, Rusbarsky & Wolf Engineering, Inc. 1500 Ardmore Boulevard, Suite 200 Pittsburgh, PA 15221 T: 412-271-5090 F: 412-271-5193 www.fmrwengineering.com Joseph Loizzo, P.E. loizzo@fmrwengineering.com

Firsching, Marstiller, Rusbarsky & Wolf Engineering, Inc. provides Mechanical, Electrical, Plumbing and Fire Protection consulting engineering services for commercial buildings. We design M.E.P. systems for hospitals, surgery centers, office buildings, universities, laboratories, churches, theaters, and airports. We also perform engineering studies and site evaluations for existing buildings. We work with building owners for evaluating and designing equipment replacement projects such as water heaters, boilers, air handling units, chillers, generators, and electrical service upgrades. We use both Revit and AutoCAD to develop our construction documents.

Herbert, Rowland & Grubic, Inc. 200 West Kensinger Drive, Suite 400 Cranberry Township, PA 16066 T: 724-779-4777 www.hrg-inc.com James A. Feath, R.L.A. jfeath@hrg-inc.com

We are a full-service consulting engineering firm celebrating 50 years of service. Our company is a nationally ranked Top 500 engineering design firm in the United States by Engineering News-Record (ENR) magazine. HRG has seven office locations throughout Pennsylvania and West Virginia and has a staff of 250 professional engineers, geologists, environmental scientists, surveyors, landscape architects, and related support personnel that provides a full-service approach to every project. Our accomplished team provides services related to land development, water resources, water/wastewater & energy, transportation, survey, GIS, environmental, mechanical/electrical/plumbing, and financial consulting.

Bowman Consulting

680 Andersen Drive Foster Plaza 10, Suite 430 Pittsburgh, PA 15220 T: 412-328-2222 www.bowmanconsulting.com Michael Pointer, CLA mpointer@bowmancg.com

Three Gateway Center 401 Liberty Avenue Pittsburgh PA 15222 T: 412-261-7515 www.dollarbank.com David Weber dweber578@dollarbank.com

As your business changes, you’ll need the flexibility to respond to market opportunities by purchasing equipment, expanding your facilities or increasing working capital. Your credit needs will change as your business grows, so your overall credit plan should address short-term demands as well as long-term growth. Dollar Bank’s Business Banking Experts will work to understand your business and assist you in achieving your goals with the right financing for your needs. For more information, contact David Weber, Vice President Business Lending.

22 South Linden Street Duquesne, PA 15110 T: 412-469-9331 F: 412-469-9336 www.kuresources.com Mark Urbassik murbassik@kuresources.com

249 Fifth Avenue Pittsburgh PA 15222 www.pnc.com/realestate Andy Blair, VP T: 412-768-3638 andy.blair@pnc.com Joseph Pascarella, AVP T: 412-762-2672 joseph.pascarella@pnc.com

PNC Real Estate is a leading provider of banking, financing and servicing solutions for commercial real estate clients. Our capabilities include acquisition, construction and permanent financing for developers and investors; agency financing for multifamily properties; and debt and equity capital for the affordable housing industry. And, through Midland Loan Services, we provide third-party loan servicing, asset management and technology solutions.

Geotechnical Engineer Grandbridge Real Estate Capital LLC

Pennoni Associates Inc. 700 Seco Road Monroeville PA 15146 T: 412-229-2778 www.pennoni.com John Skorupan jskorupan@pennoni.com

3000 U.S. Steel Tower 600 Grant Street Pittsburgh, PA 15219 T: 412-391-3366 www.gbrecap.com Daniel P. Puntil dpuntil@gbrecap.com

Grandbridge, a subsidiary of BB&T, arranges permanent commercial and multifamily real estate loans, services loan portfolios, and provides asset and portfolio management and real estate brokerage services. With a current servicing portfolio of more than $26 billion, Grandbridge represents approximately 100 capital providers that include insurance companies, CMBS investors, pension fund advisors, commercial banks and capital markets investors, as well as its proprietary lending platform, BB&T Real Estate Funding. The company is a Fannie Mae DUS® lender, a Freddie Mac Program Plus® Seller/Servicer, and an approved FHA MAP and LEAN lender.

ACA Engineering, Inc.

40 Western Avenue Pittsburgh, PA 15202 T: 412-761-1990 www.acaengineering.com Thomas R. Beatty tbeatty@acaengineering.com

ACA Engineering, Inc. is an independently owned and operated geotechnical and environmental engineering, materials testing and inspection firm with offices in Pittsburgh, Mechanicsburg, and Laporte PA, and Youngstown, OH. Our engineers, geologist, draftspersons, inspectors, and technicians provide quality designs, engineering studies, surveys, and project management. Our senior staff has a combined experience of over 100 years in engineering, construction inspection, and laboratory testing. ACA maintains an in-house laboratory that has been inspected and accredited by AASHTO Materials Reference Laboratory, Cement and Concrete Reference Laboratory, and the U.S. Corps of Engineers.

Finance Integra Realty Resources - Pittsburgh

KU Resources, Inc.

PNC Real Estate

Multi-Family Lender

Bellwether Enterprise

K&L Gates Center 210 Sixth Avenue, Suite 840 Pittsburgh, PA 15222 T: 412-566-1313 www.bellwetherenterprise.com Barbara M. Sullivan, S.V.P. bsullivan@bellwetherenterprise.com Christopher Talerico, A.V.P ctalerico@bellwetherenterprise.com

Bellwether Enterprise has brought together our local market expertise, national lending relationships and financing structure experience to offer our clients the most extensive multifamily, commercial real estate solutions. With a portfolio of over $5 billion, we provide a variety of loan products for investment real estate placed through a range of institutional investors including life insurance companies, pension funds, commercial banks, CMBS lenders and government agencies such as FHA, Fannie Mae, Freddie Mac. Call when you need an expert in multifamily and commercial financing.

T: 724-742-3324 F: 724-742-3390 www.irr.com/pittsburgh Paul D. Griffith, MAI, CRE, FRICS Managing Director pgriffith@irr.com

Garvin Boward Beitko Engineering, Inc.

180 Bilmar Drive Suite IV Pittsburgh, PA 15205 T: 412-922-4440 Joseph F. Boward, P.E., F.NSPE jboward@garvinbowardeng.com www.garvinbowardeng.com

A firm built on reputation, Garvin Boward Beitko Engineering, Inc., provides geotechnical, forensic, materials science, construction-phase evaluations/testing, natural resource and environmental services to a wide range of clients. We perform subsurface investigations (including test borings and/or test pits), retaining structure designs, as well as a wide range of geotechnical engineering studies and evaluations to meet clients’ needs. From foundations, retaining walls and earthwork to wetland delineations, habitat assessments and wildlife hazard assessments, our staff will provide expert recommendations to meet project demands. www.developingpittsburgh.com

Green Building/ Energy Consultant CLASS-G.ORG

CLASS-G

Foster Plaza 9 750 Holiday Drive Pittsburgh, PA 15220 T: 412-922-1800 www.class-g.org Mike Embrescia Mike@class-g.org

Measure and communicate your sustainable management practices for one location or thousands quickly and inexpensively. Your staff measures the locations’ operations against 100 easy-to-understand best practices and can do so in as little as one hour. The result is a sustainability rating. Use Class-G as a comprehensive planning tool for continuous improvement, measuring one location against all your others, or to provide leadership by transparency to all your stakeholders through our unique communications tools. Class-G costs just $700 per location, and less for 10 or more.

Interior Designer

Bowman Consulting

Green Building Alliance

333 East Carson Street, Suite 331 Pittsburgh, PA 15219 T: 412-773-6004 www.go-gba.org info@gbapgh.org

Green Building Alliance (GBA) is a community benefits organization that inspires the creation of healthy, high performing places for everyone by providing leadership that connects knowledge, transformative ideas, and collaborative action. A chapter of the U.S. Green Building Council, GBA has served as a regional catalyst for nearly two decades. We offer over 125 different education, training, and networking events annually, and have created initiatives to track building performance, lower carbon emissions, and promote green schools. Visit www.go-gba.org to learn more about our exciting programs or to become a member!

Design 3 Architecture PC 300 Oxford Dr. Ste. 120 Monroeville, PA 15146 T: 412-373-2220 www.d3a.com William Snyder was@d3a.com

m/design Trane

400 Business Center Drive Pittsburgh, PA 15205 T: 412-747-3000 www.Trane.com Tim White, Sales Manager Complex Solutions twhite2@Trane.com

Trane, a wholly owned subsidiary of Ingersoll Rand (NYSE: IR), is a world leader in creating and sustaining safe, comfortable and efficient environments in commercial, residential and industrial markets. Trane offers a broad range of energy-efficient heating, ventilation and air conditioning solutions services, systems and solutions, including aftermarket service and parts; advanced building controls; and building solutions that allow energy-efficient systems to pay for themselves through energy savings. Over nearly 100 years, Trane’s built their reputation for reliability, high quality, product innovation, and a powerful distribution network. Visit www.trane.com.

Industry/Trade Association

IRONWORKER EMPLOYERS ASSOCIATION Of Western Pennsylvania Foster Plaza 9 750 Holiday Drive, Suite 615 Pittsburgh, PA 15220 T: 412-922-6855 www.iwea.org William C. Ligetti, Jr. wligetti@iwea.org

The IWEA is a Trade Association of Union Contractors who work in all aspects of the Ironworking Trade within the Construction Industry. We are a resource for all owners, developers and contractors who are looking for a qualified contractor with a well-trained workforce. Visit our website or call our office for additional information.

650 Ridge Road, Suite 301 Pittsburgh, PA, 15205 T: 412-921-9000 www.buildersguild.org

Building trade unions and contractors working together to provide the best value in construction. Our 40,000 member workforce is professionally trained in the finest apprenticeship centers in the country. We understand the demands of the industry, are committed to customer satisfaction and are drug free. Today’s building trade unions are setting a new standard of excellence. Get to know us.

74 DevelopingPittsburgh | Fall 2012

Pittsburgh PA T: 412-922-7219 www.mdesignpgh.com Mary Ann Mozelewski, ASID, LEED AP mamdesign@verizon.net

Providing Interior Design, Space Planning, Project Management and CAD Drafting and Detailing Services. These services are completed in a cost effective manner using award winning design solutions, technical expertise and utilizing numerous years of industry experience. m/design specializes in Commercial Interiors and has recently completed the Interiors for Master Builders’ Association’s Headquarters, The Western Pennsylvania Carpenter’s Training Center and the executive offices for SAE International.

680 Andersen Drive Foster Plaza 10, Suite 430 Pittsburgh, PA 15220 T: 412-328-2222 www.bowmanconsulting.com Michael Pointer, CLA mpointer@bowmancg.com

GAI Consultants, Inc.

385 E. Waterfront Drive Homestead, PA 15120 T: 412-476-2000 T www.gaiconsultants.com Patrick M. Gallagher p.gallagher@gaiconsultants.com

Master Builders’ Association of Western Pennsylvania, Inc. 631 Iron City Drive Pittsburgh PA 15205 T: 412-922-3912 www.mbawpa.org Jon O’Brien jobrien@mbawpa.org

Builders Guild of Western PA, Inc.

Land Surveyor

The Master Builders’ Association is a trade association whose membership includes over 150 of the top general contractors, construction managers, specialty contractors, and service and supplier companies supporting our region’s commercial construction industry. Collectively, the membership accounts for over 80 percent of the commercial construction in Western PA. The MBA brings a strong, influential and single voice to the industry, which is our greatest source of pride and legacy since 1886. We are one of 96 chapters affiliated with AGC of America representing over 32,000 members nationwide.

Pieper O’Brien Herr Architects 800 Vinial Street #B314 Pittsburgh PA 15212 T: 412.321.8313 www.poharchitects.com Loren Wright, AIA loren.wright@poharchitects.com

Pennoni Associates Inc. 700 Seco Road Monroeville PA 15146 T: (412) 229-2778 www.pennoni.com John Skorupan jskorupan@pennoni.com

Professional Services

R.A. Smith National

300 Corbet Street, Suite 200B Tarentum, PA 15084 T: 724-224-2330 F: 724-224-5254 www.rasmith.com John Frydrych, M.S., P.E. John.Frydrych@rasmithnational.com

Landscape Architect

Grant Street Associates, Inc. Pennoni Associates Inc. 700 Seco Road Monroeville PA 15146 T: (412) 229-2778 www.pennoni.com John Skorupan jskorupan@pennoni.com

Liquor License/ Restaurant Broker GAI Consultants, Inc.

385 E. Waterfront Drive Homestead, PA 15120 T: 412-476-2000 www.gaiconsultants.com Patrick M. Gallagher p.gallagher@gaiconsultants.com

Specialty Group

3205 McKnight East Drive Pittsburgh, PA 15237 T: 412-369-1555 www.specialtygroup.com Terri Sokoloff info@specialtygroup.com

Since 1986 Specialty Group has been Pennsylvania’s one-stop source for all bar, restaurant and liquor license related business services. Having processed thousands of transfers statewide, Specialty Group has become known as the largest liquor license broker in Western Pennsylvania, providing licenses for restaurants, beer distributors and six-pack shops to individual operators, brokers, developers etc. Specialty Group is a boutique, full-service company which also consists of a lending department as well as a bar and restaurant brokerage division. Call us today to schedule your confidential, no cost consultation!

Maintenance/ Service Contractor

Schneider Downs

1133 Penn Avenue Pittsburgh, PA 15222 T: 412-261-3644 www.schneiderdowns.com Gennaro DiBello gdibello@schneiderdowns.com

Since 1956, Schneider Downs has provided an array of financial and consulting services to the real estate industry, including accounting, tax, business advisory, wealth management, corporate finance and technology consulting services. We have a team of professionals dedicated to serving our real estate clients, providing strategic services to meet the specific needs of this unique industry. By integrating our years of experience serving real estate clients, our professionals help our clients improve cash flows, save on taxes and increase profitability.

Real Estate Broker CBRE

U. S. Steel Tower, Suite 4800 600 Grant Street Pittsburgh, PA 15219 T: 412-471-9500 www.cbre.com/pittsburgh Jack Norris jack.norris@cbre.com

The Pittsburgh, Erie and State College Offices of CBRE is the local leader in providing comprehensive commercial real estate services to property owners, investors and tenants. Recognized as the largest commercial real estate service provider in the western, Northwestern and Central Pennsylvania areas, CBRE Pittsburgh has set the standard for excellence in the marketplace for over 50 years. We offer extensive corporate real estate solutions, knowledge and experience in Asset Services, Brokerage Services, Corporate Services Investment Sales, Facilities Management, Management Services and Retail Services. The CBRE Pittsburgh, Erie and State College offices are committed to providing clients with quality support services and market intelligence that encompass accounting, research, marketing and administration, as well as access to cutting-edge technology.

The Grant Building 310 Grant Street Suite 1550 Pittsburgh, PA 15219 T: 412-391-2600 www.gsa-cw.com

At Grant Street Associates, Inc., we aim to be your commercial real estate provider of choice - the standard for industry knowledge, service and execution in the Pittsburgh region. As a full-service commercial real estate firm and member of the Cushman & Wakefield Alliance, Grant Street Associates has been providing unsurpassed client-oriented tenant, landlord, buyer and seller representation services since 1993. We have built one of the most dedicated, recognized and respected commercial real estate firms in the Greater Pittsburgh region.

Newmark Grubb Knight Frank Six PPG Place, Suite 600 Pittsburgh, PA 15222 T: 412-281-0100 www.newmarkkf.com Gerard McLaughlin gerry.mclaughlin@grubb-ellis.com Louis Oliva louis.oliva@grubb-ellis.com

A part of BGC Partners, Inc. (NASDAQ:BGCP), Newmark Grubb Knight Frank is one of the largest commercial real estate service firms in the U.S. It brings together the strategic consultative approach to creating value for clients and leading position in the New York market that are hallmarks of Newmark Knight Frank; the complementary strengths of Grubb & Ellis in leasing and management, investment sales, valuation and capital markets services; and BGC’s financial strength, proprietary technology, expertise in global capital markets and deep relationships with many of the world’s leading financial institutions. Newmark Grubb Knight Frank, together with its affiliates and Londonbased partner Knight Frank employ more than 11,000 professionals, operating from more than 300 offices in established and emerging property markets on five continents. This major force in real estate is meeting the local and global needs of tenants, owners, investors and developers worldwide.

Trane

400 Business Center Drive Pittsburgh, PA 15205 T: 412-747-3000 www.Trane.com Tim White, Sales Manager Complex Solutions twhite2@Trane.com

Colliers International | Pittsburgh Two Gateway Center 603 Stanwix Street, Suite 125 Pittsburgh, PA 15222 | United States T: 412-321-4200 F: 412-321-4400 www.colliers.com/markets/pittsburgh

Colliers International | Pittsburgh offers flexible, customized commercial real estate solutions to meet and exceed client goals, including brokerage, consulting, corporate and investment services, facility and asset management, valuation services, marketing and market research to individuals, businesses, investors, property owners, tenants and developers. Our expert professionals are dedicated to the highest level of client service, professionalism and integrity. Colliers International is the third-largest commercial real estate services company in the world, with over 12,300 professionals operating out of more than 520 offices in 62 countries.

www.developingpittsburgh.com

At the Closing

By Lynn DeLorenzo he past few years have b e e n a n e x c i ti n g a n d re w a rd i n g t i m e f o r t h e m e mbers o f N A I O P P i t t s b u r g h . M a n y of our m e m b e r s h a v e c o n t r i b u t e d much e ff o r t t h a t re s u l t e d i n t h e re surgen c e o f t h e re g i o n a l re a l e s t a t e market . To c e l e b r a t e t h o s e e ff o r t s and pro v i d e a re g u l a r v o i c e f o r our ind u s t r y, N A I O P h a s l a u n c h e d a maga z i n e t h a t w e t h i n k w i l l s e t a stand a rd f o r i n f o r m a t i o n i n t h e comme rc i a l re a l e s t a t e b u s i n e s s . DEVEL O P I N G P i t t s b u r g h i s n o t s o much a b o u t t h e p a s t , t h e s t e e l indust r y a n d o t h e r h a rd t i m e s t h i s region h a s b e e n s u b j e c t e d t o b u t more a b o u t h o w t h e p a s t re f l e c t s and in f l u e n c e s o u r f u t u re . A l though a c l i c h é , i t i s t r u l y h a rd to buil d f o r t h e f u t u re w i t h o u t a n unders t a n d i n g o f t h e p a s t . A t a time w h e n m a n y p ub l i c a t i o n s a re going d i g i t a l , w e t h o u g h t i t i m p o rtant to p ro d u c e a h a rd c o p y f o r m a t of DEV E L O P I N G P i t t s b u r g h. To k e e p curren t w i t h t h e d i g i t a l a g e , w e a re also pl a n n i n g t o p u b l i s h t h e m a g azine on - l i n e a n d a re p ro v i d i n g an elec t ro n i c n e w s l e t t e r u p d a t e quarte r l y i n o rd e r t o b e p o l i t i c a l l y correc t ! While t h e l a s t f e w y e a r s h a v e presen t e d g re a t c h a l l e n g e s t o t h e comme rc i a l re a l e s t a t e i n d u s t r y, Pittsbu r g h h a s f a re d b e t t e r t h a n many o t h e r a re a s o f t h e c o u n t r y. It may c o m e a s a s u r p r i s e t o m a n y that Pi t t s b u r g h w a s n e v e r “ o v e rbuilt”. We a l l k n o w t h a t c o m m e rcial re a l e s t a t e i s c yc l i c a l , a n d t h a t we ten d t o o v e r b u i l d f ro m c y c l e to cycl e , b u t t h i s w a s n o t t h e c a s e here. T h e c i t y i t s e l f i s c o m p r i s e d o f many o l d e r a rc h i t e ct u r a l s t r u c t u re s that ha v e e n d u re d t h ro u g h t h e decade s w i t h a n o c c a s i o n a l n e w buildin g a d d e d t o t h e s k y l i n e e v e r y

76 DEVELOPINGPITTSBURGH

| Fall 2012

f e w y e a rs. The Pittsburgh of today i s n o w a vibrant downtown underg o i n g y et another transformation. P N C h a s begun construction on a n e w $ 400 million headquarters b u i l d i n g to be comprised of 33 stor i e s a n d 800,000 square feet. The To w e r a t PNC Plaza will become t h e w o r ld’s most environmentally f r i e n d l y sky rise. And a couple of n e w m u ltitenant buildings are in t h e d i s c ussions stages. M a n y p eople are also not aware o f t h e n umber of Fortune 500 c o m p a n ies that are located in the g re a t e r Pittsburgh market or of the m a n y g l obal, regional headquarters a n d o p e ration centers also based h e re . I n the last five years, Ameri c a n E a g l e, Dick’s Sporting Goods a n d C o nsol Energy have built new h e a d q u arters employing thousands o f p e o p le and helping to retain our y o u n g e r talent. O l d e r b uildings have been retrofit t e d i n t o hundreds of new apart m e n t s a nd condos to meet the dem a n d s of a growing population and re s u r g e nce of urban living. And i n t e r f a c i ng the offices and apart m e n t s a re universities and students f u r t h e r enhancing the downtown c e n t r a l business district. I t i s h a rd to talk about Pittsburgh w i t h o u t talking about its sports t e a m s . Through the hard work a n d d e d ication of many corporate a n d c i v i c leaders, PNC Park, Heinz F i e l d a n d the Consol Energy hockey a re n a h ave all been woven into the f a b r i c o f the city making all fac i l i t i e s accessible to the workforce a n d t r a nsit options. S e v e r a l key factors have lead to the re g i o n ’s positive transition. First, p o p u l a t ion growth and the ability t o re t a i n young talent have fueled c o m p a n y expansions. Second is e c o n o m i c diversity. Over the past c o u p l e of decades, business leade r s f o c u sed on several key indust r y s e c t ors that have continued to

provide momentum and drive the economy: Advanced manufacturing; financial & business services; healthcare & life sciences and in formation & communications technology. Last, energy is at the fore front with natural gas abundant in the region and surrounding market areas. The Marcellus Shale is the largest unconventional natural gas reserve in the world and Pittsburgh is the largest major metro atop this vast reserve. This year, Site Selection magazine ranked Pittsburgh as the No. 1 Metro Area in the North east US; London-based Economist Intelligence Unit listed Pittsburgh as the “most livable city” in the US; and National Geographic Traveler named Pittsburgh among the 20 “Best of the World” places to visit in 2012. For these reasons and all of the above, we thought it important to tell you the story of Pittsburgh today in our first NAIOP Pittsburgh publication – DEVELOPINGPittsburgh. We think you’ll enjoy it and hope you w ill find it useful to your business. Lynn DeLorenzo is the N AIOP Pittsburgh Chapter 2012 pre sident. She is also Senior Vice President/Devel opment for PWC Property Solutions LLC.

GRANT STREET 7-27-12- FP Full Color.indd 1

8/1/2012 10:54:22 AM

“

LET’S TALK @ 412.261.8130

WE’RE MAKING LOANS... AND A DIFFERENCE. ” You need a bank you can count on for financing. But if the conversation stops at interest rates and payment plans, are you getting your money’s worth? We’re a mutual bank, independent like you. We know having experienced professionals on your side makes a difference. That’s why you’ll have your own Dollar Bank business banker. A lender, yes. And more – someone who’ll get to know your business and bring you ideas to build your future. READY FOR A BANK THAT INVESTS IN YOU? LET’S TALK @412.261.8130.

CORPORATE BANKING · BUSINESS BANKING · TREASURY MANAGEMENT · COMMERCIAL REAL ESTATE · PRIVATE BANKING