Originally Posted by markson33
I think that both sides of the argument are correct. Forest City probably is not interested in investing more in Pittsburgh because they can achieve greater returns elsewhere. To that extent a new, more agressive, developer might be more willing to ante up where Forest City will not.
That being said, I think daviderik is correct in that, if the market was truly to that point we would see more development. How many new highrise residential projects are being built in Pittsburgh. None. Simply put the market isn't there yet. The Cork Factory is effectively getting $24 per square foot for their space. Highrise development needs to get closer to $30. For most projects the numbers don't work yet.
I'm not convinced that the higher rental rates couldn't be achieved, but then its not my money to risk. I would love to see an aggressive, risk taking developer buy out Forest City and do what Forest City is unwilling to do. I'm not holding my breath though.
I'm not necessarily referring to highrise residential, markson33. Station Square, while I believe that highrise residential would be justified there, would be just fine with midrise or even the standard 4-5 story residential projects that are so common nowadays in many cities. As far as residential costs are concerned, what are those costs, exactly? $30/sf? Are you referring to yearly rental cost? That would be about $30k/year for a 1000sf unit, or about $2500/month. That seems atrocious for anywhere not in NYC, Boston, SF, or parts of Los Angeles...
First of all, I do believe Forest City is more concerned with a few of their megaprojects in several cities. Secondly, I also believe they're still miffed over the whole casino thing. But most importantly, I think a sale of Station Square to a more aggressive development company would be an excellent thing indeed. While of course I'm not saying that Pittsburgh's necessarily ready for a ton of high-end residential highrises, I do believe there's a huge unmet demand for modern apartments and condos in the $200-250k/sf range for purchase and/or the $1.50-$1.75/sf per month rental rate. So $200-250k for buying a 1000sf condo or perhape $1500-1750/month for a rental apartment. Especially with the incredible river/downtown views from Station Square, I definitely feel those are very reasonable prices. I simply cannot fathom a developer not being able to make a good return on investment at those types of prices.
Honestly, I simply feel that many developers (and banks, most importantly the banks!) still have opinions of Pittsburgh shaped from 1960, not 2012...