PITTSBURGH | Development Rundown II

[Jonboy1983]

Originally Posted by glowrock

Agreed, Everygrey. It would be great if they relocated to space in the redevelopment, but as long as they stay in the Pittsburgh region, I'd be okay with that.

Hope they don't pull the airport card, though!

Aaron (Glowrock)

Don't even JOKE about such an atrocity! Traffic actually increased from 2010 to 2011, so that "lack of traffic" isn't going to fly IMO. Not to mention, with all the economic growth taking place and about to take place, it's certainly NOT going to fly in the up-comming years!

Coming back to that post about the Lower Hill consortium. How about they consult US Steel, US Steel discusses their needs (I hope it's due to the fact they're running out of room), and then they'd be a direct stakeholder in the development of the Lower Hill. More than likely, they'll likely put something there we can all agree on and like...

Again, it's wishful thinking...

[themaguffin]

I don't think that it's necessary for them to be part of the arena development, unless of course it makes sense. However, people shouldn't expect the development to look "authentic"

It's going to be new and look it. Regardless of density, it will look like Columbus' arena district. Hopefully it will be denser and make the most use of the space, but new is new. It will be shiny and you can bet a chain store or 2 will be involved.

Again, what's most realistic to hope for is the best use of space in terms of layout and density, I think the content is further down the list.

[markson33]

I would imagine that the arena site will be somewhat like Columbus, just a little less dense. The buildings will be 4-5 stories with residential coming first. I wouldn't mind seeing an Atlantic Station type development.

If US Steel leaves downtown, and PNC moves into their tower, there will be a 750,000 sf vacancy in USS Tower. Nobody is going to build a lot of speculative office with that on the horizon.

[Private Dick]

It would be awesome if a new US Steel headquarters is part of the arena site development -- how about a stainless steel twin of the current tower?

Having US Steel there could really make sure that the redevelopment is a true extension of downtown, and not an abrupt change from dense downtown height and urbanity to an Anywhere, USA city lifestyle centre.

Unfortunately, I don't like this news -- it has all the signs of a suburban move. A former classmate of mine who is a manager with US Steel indicated to me about a year ago that there was talk of a move to a "more appropriate" location. He wasn't sure what that meant, he was just hoping he wouldn't have to move (within the Pittsburgh area or elsewhere). Who knows what that means... hopefully nothing bad.

I agree with Evergrey that the redevelopment of the lower hill cant be filled with yet another southside works-y entertainment center and that a real, cohesive neighborhood should be built there. And I guess that brings a question to my mind... How do you build a "real neighborhood" in location like this in a city like Pittsburgh, which likely cannot support a cluster of residential highrises nor demand an extension of the type of commercial office space that is found on the other side of Crosstown Blvd?

What are the steps required and the type of development that should be done here? How do you redevelop an urban site without it being that rather generic "urban destination center" that we see everywhere? Basically, what infill would be appropriate and unique for this site in Pittsburgh?

[themaguffin]

f US Steel leaves downtown, and PNC moves into their tower, there will be a 750,000 sf vacancy in USS Tower

Won't PNC's move out of the tower open up room for US Steel? Or is the issue that PNC won't be making that move for a couple years?

It would be quite interesting if US Steel's move meant some new construction, but you're right on market conditions, there would have to be something beyond their lease to warrant anything of substantial size.

It would be awesome if a new US Steel headquarters is part of the arena site development -- how about a stainless steel twin of the current tower?

I'm a fan of that tower as much as anyone, but it was a statement of its time. It's time for a new statement. If something big were announced, I would have mixed feelings about US Steel being associated with it, because all of the media attention would note that and it would negate any notion of Pittsburgh being beyond steel.

[Private Dick]

Originally Posted by themaguffin

I'm a fan of that tower as much as anyone, but it was a statement of its time. It's time for a new statement. If something big were announced, I would have mixed feelings about US Steel being associated with it, because all of the media attention would note that and it would negate any notion of Pittsburgh being beyond steel.

Yeah, a major tower is definitely not going to happen anyway. I was just dreaming -- you have to admit a shiny, stainless version of the imposing black home of Darth Vader would be an incredible sight.

[chiaroscuro]

This is 3 months old, but the first I'd heard of it.

http://www.bizjournals.com/pittsburg...t-incline.html

"By this time next year, Pittsburgh city planners will know the feasibility of reviving an incline that once ran between the Strip District and the Hill District."

[markson33]

Won't PNC's move out of the tower open up room for US Steel? Or is the issue that PNC won't be making that move for a couple years?

I don't think that the issue is that US Steel doesn't have enough room. I have no doubt the landlord would be willing to make room for them if they needed more, which they probably don't. Frankly, from US Steels point of view it would make a lot of sense to move out.

If both US Steel and PNC move out of the tower in a 2/3 year time-frame it creates a huge hole in the market that would need to be filled. Add to that Buncher's development in the strip, The Wholey Building, Continental's North Shore development and all of a sudden the vacancy rate in downtown goes up significantly.

It would be great if US Steel would stay downtown, and the arena site makes a lot of sense. I just don't know if they have any desire to stay downtown.

[Wiz Khalifa]

Originally Posted by Private Dick

What are the steps required and the type of development that should be done here? How do you redevelop an urban site without it being that rather generic "urban destination center" that we see everywhere? Basically, what infill would be appropriate and unique for this site in Pittsburgh?

That would be the million dollar question.

This isn't NYC or even Chicago, so where will the funds (or demand) come from to build anything that would do this large central redevelopment area the 'justice' it deserves?

Something tells me that if the timetables set up for construction are too urgent to meet actual demand, then all we are going to end up with is more of the lifestyle center faux urban crap variety in this very central location.

Therefore, the city pretty much needs a large entity like US Steel to come in as a co-developer of this plot to set the standards high for construction from the very beginning.

[themaguffin]

What they need is smart planning. It's a balance of unique land available and what the market demands, and with that, appropriate scale as it sits between downtown and the Hill.

Frankly, I would highly doubt that the eastern "back" portion (the large parking lot behind the arena) would be tall much at all and I'm ok with that. As long as the design is good and street level appearance is well done on all portions, with appropriate street level retail etc... it alone would be a nice addition to the area.

The key, to me, is the "front" (or western portion... where the arena currently sits).

One 300-400 ft office tower would be a nice victory so to speak - a 3 PNC size tower or so. One tower of office space. Two or more would be nice, but as big as the land area is, it's not big enough for the footprint or more than a couple buildings of size on that western lot.

Imagine a triangle featuring an office tower, an apartment tower and a hotel, with a nice green space in between. All 3 comparable in size - That would really nice, could look really look sharp, "step" down to the hill in height and is completely realistic.



If the eastern lot became mostly residential that's fine.

[Jonboy1983]

2 things:

IMO, US Steel would be foolish to want to vacate Downtown. Other companies are rushing/have rushed into downtown to take advantage of class A office space, so why on earth would they want to give up their share of it? I really hope they do something to stay Downtown. It just doesn't seem right to consider US Steel as part of suburbia...

I like that read on the possiblilty of an incline between the Strip and the Hill. It would be nice to see not only an "unusual" mode of public transportation, but to see perhaps a better link between these two neighborhoods.

[markson33]

IMO, US Steel would be foolish to want to vacate Downtown. Other companies are rushing/have rushed into downtown to take advantage of class A office space, so why on earth would they want to give up their share of it? I really hope they do something to stay Downtown. It just doesn't seem right to consider US Steel as part of suburbia...

I will agree that it doesn't seem right, but I completely disagree that they would be foolish to leave. Quite the contrary. There is almost no reason for US Steel to be downtown - other than sentimentality. Perhaps the best reason for them to move to the suburbs is that they can save a ton of money on efficiency (both in the square footage and the operating expenses). They can also control their own destiny and consolidate their operations.

No companies are rushing to take advantage of class A office space downtown. I certainly realize that the vacancy rate is low, but that is mainly due to UPMC's lease at US Steel Tower. Tenants generally don't move from the burbs to downtown.

[glowrock]

Originally Posted by markson33

I will agree that it doesn't seem right, but I completely disagree that they would be foolish to leave. Quite the contrary. There is almost no reason for US Steel to be downtown - other than sentimentality. Perhaps the best reason for them to move to the suburbs is that they can save a ton of money on efficiency (both in the square footage and the operating expenses). They can also control their own destiny and consolidate their operations.

No companies are rushing to take advantage of class A office space downtown. I certainly realize that the vacancy rate is low, but that is mainly due to UPMC's lease at US Steel Tower. Tenants generally don't move from the burbs to downtown.

How much available Class A space is available downtown, markson33? As best as I can tell from perusing several real estate market reports, not a whole hell of a lot. Class B and C space is rapidly being removed for residential use, so even that kind of space is becoming less and less available, especially in relatively large contiguous amounts.

The companies that prefer to be downtown will continue to be there, namely banks & financial institutions, insurance companies, legal offices, etc... etc... And realistically, downtown is a very, very centrally-located place, so it's easy to attract workers from all around the metro area. When a company locates in say Southpointe down south (where I happen to work) or up in Cranberry/Wexford/Warrendale, it's extremely difficult to attract employees from across the region. Commuting from say Monroeville to Southpointe would be a nightmare, same for any of the eastern region. And to the Cranberry area, you're pretty much eliminating much of the eastern Pittsburgh region along with a good portion of the South Hills from a reasonable commute.

I agree that a long-term lease in the new development would be a likely ideal situation for USX or any other company located downtown that's looking for new or expanded office space. In addition, with the continued influx of oil & gas companies entering and growing in the area, there are definitely some who would like to have a central office location, not just be in Cranberry/Wexford/Warrendale or Southpointe.

Aaron (Glowrock)

[markson33]

How much available Class A space is available downtown, markson33? As best as I can tell from perusing several real estate market reports, not a whole hell of a lot. Class B and C space is rapidly being removed for residential use, so even that kind of space is becoming less and less available, especially in relatively large contiguous amounts.

There's about 150,000 SF available at PPG, which is probably the biggest block. 120,000 SF available at 4 Gateway. One Oxford can probably put together about 80,000 SF if they wanted to. There is probably 60,000 SF that could be consolidated at Federated Investors Tower as well. Fifth Avenue Place, US Steel, One Mellon, 525 William Penn, and 625 Liberty are all full.

There is still a fair amount of class "B" space available, including almost all of the Union Trust Building (450,000 SF or so). Chatham Center also has a significant amount of space available. The Gulf Tower, The Chamber of Commerce Building and The Clark Building all have larger vacancies. Then you have the unknown use buildings - Reed Smith, Saks, Lord & Taylor etc. that are all vacant.

I'm hoping that US Steel is simply using the threat of leaving as a negotiating tool. It would be really sad if they left the city proper.

When we have companies that come in from out of town they almost always want to be in Cranberry, Southpointe or the Parkway West. The site selectors always seem to think it is easiest to get new employees to move to those areas. So far, the oil & gas companies have had very little interest in downtown - kind of for the same reason that US Steel might not have interest; its not where their business is.

[glowrock]

Originally Posted by markson33

There's about 150,000 SF available at PPG, which is probably the biggest block. 120,000 SF available at 4 Gateway. One Oxford can probably put together about 80,000 SF if they wanted to. There is probably 60,000 SF that could be consolidated at Federated Investors Tower as well. Fifth Avenue Place, US Steel, One Mellon, 525 William Penn, and 625 Liberty are all full.

There is still a fair amount of class "B" space available, including almost all of the Union Trust Building (450,000 SF or so). Chatham Center also has a significant amount of space available. The Gulf Tower, The Chamber of Commerce Building and The Clark Building all have larger vacancies. Then you have the unknown use buildings - Reed Smith, Saks, Lord & Taylor etc. that are all vacant.

I'm hoping that US Steel is simply using the threat of leaving as a negotiating tool. It would be really sad if they left the city proper.

When we have companies that come in from out of town they almost always want to be in Cranberry, Southpointe or the Parkway West. The site selectors always seem to think it is easiest to get new employees to move to those areas. So far, the oil & gas companies have had very little interest in downtown - kind of for the same reason that US Steel might not have interest; its not where their business is.

Well, so you mentioned a few larger blocks of Class A space, but none of them are what I'd consider to be huge, markson33. That's actually not a whole hell of a lot for a fairly large downtown business district. As for Class B, I've heard the Gulf Tower was going to undergo some serious renovations to bring leasing percentages up.

Either way, we're still not looking at huge amounts of space, save for the Union Trust building. Though I wonder, why is so much of it vacant when so many other towers are essentially full or 90%+? Sounds like an ownership problem, most likely.

As for oil & gas, EQT has had their offices downtown for a long time. I have a feeling that, especially given that Southpointe is now essentially fully leased out, downtown will again come into play for the industry.

Aaron (Glowrock)

[Evergrey]

Originally Posted by glowrock

Either way, we're still not looking at huge amounts of space, save for the Union Trust building. Though I wonder, why is so much of it vacant when so many other towers are essentially full or 90%+? Sounds like an ownership problem, most likely.


Aaron (Glowrock)

Bingo.

Downtown Pittsburgh has a remarkable scarcity of Class A office space... as does Oakland. There has been continued absorption and rate growth quarter after quarter... with residential conversions devouring chunks of lower-tier office space. I believe that if we had a "normal" financing environment like we did before the 2008 crash... we'd be seeing much more speculative office construction.

[themaguffin]

I agree - don't discount the value of being central in the region.

As for Saks and the former L&T building are not office space currently.

[Evergrey]

Hey Glowrock... do you know anything about the Southpointe Town Center? I was just reading the Grubb & Ellis Pittsburgh Retail Market Report for 4Q '11, and it mentioned it is to begin construction in April.

http://www.grubb-ellis.com/Forecast2...ET_2011_4Q.pdf

In the Southpointe sector of the Washington submarket, Horizon Properties will begin construction of Southpointe Town Center in April of
2012. In addition to a 100,000-square-foot office building, the 34-acre development will include 60,000 square feet of retail space.

A short pdf
http://www.cullprop.com/Documents/So...n%20Center.pdf

http://www.costar.com/costarconnect/...sCostar=Costar

[Evergrey]

I think we may have talked about this before... but wow... what an awful form of development... a drive-thru CVS on the critical former Giant Eagle site at Centre & Craig in North Oakland. I was thinking... isn't there already a CVS almost immediately adjacent to that site? Ah... they're closing that location when they open this new one! What a waste.

Baum/Centre is a critical automobile corridor for the East End... but it seems to be turning into one big drive-thru anymore.

http://www.pittsburghlive.com/x/pitt.../s_788442.html

CVS Pharmacy planned for site in Oakland

By Sam Spatter, FOR THE PITTSBURGH TRIBUNE-REVIEW
Tuesday, March 27, 2012

The site of a former Giant Eagle supermarket at North Craig Street and Centre Avenue in Oakland will be redeveloped as a CVS drugstore.

Douglas J. Kyle, president of South Side-based Armstrong Development, is planning the $5 million project. Kyle acquired a 25-year lease with eight five-year options from Kappa Properties to put a 13,000-square-foot store on the land.

The pharmacy will be built on the supermarket's former parking lot, and the store will be torn down to make way for a 46-space parking lot, he said.

"We expect to begin construction by late fall, providing all city approvals have been obtained, with an opening by late spring of 2013," he said. Vehicles will enter and exit the site off Centre. A drive-through window will be at the rear of the building.

When the new pharmacy opens, Kyle said, an existing CVS about four blocks away on Centre Avenue will close. Kyle, one of two developers for CVS in this region, recently opened a CVS Pharmacy in Carnegie and has another one under construction on Route 30 in Unity.

So much for the vision of the 8-year-old "Baum-Centre Development Strategy for a High Quality Urban District". All of these drawings, maps and plans apparently mean nothing.

http://www.city.pittsburgh.pa.us/bau...alDraft2.2.pdf

Recommendations: North Oakland District

􀂄 Plan for new, higher density development surrounding the
Centre/Craig Street intersection.

􀂄 Develop specific strategies for key sites, including the
northwest corner at Craig/Centre, the Centre Avenue Giant
Eagle site, the northwest corner of Millvale/Centre, and properties
north of Gold Way/Baum intersection.

jscottarchitects.com


foursquare.com


yelp.com

[glowrock]

Evergrey, the Southpointe Town Center has more or less begun construction, at least site work, in the last week or so. This will also be where Mylan's new HQ will be, something in the range of 250k sf...

Aaron (Glowrock)