Pittsburghopingfall 2012
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DEVE LPittsburghOPINGFALL 2012 RESURGENT PITTSBURGH OXFORD MARKS 50 YEARS OF DEVELOPMENT MID-YEAR MARKET SEGMENT UPDATES 2012 NAIOP BUYER’S GUIDE 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. S e r v i c e s ► Site Selection / Due Diligence ► Land Survey ► Landscape Architecture ► Civil Engineering Services ► Geotechnical Engineering ► Construction Phase Services ► Building / Site Operation & Maintenance E x p e r t i s e ► Acquistion ► Development ► Management www.cecinc.com | 800.365.2324 Austin | Boston | Charlotte | Chicago | Cincinnati | Cleveland | Columbus | Detroit | Export | Indianapolis | Nashville | North Central PA | Phoenix | Pittsburgh | St. Louis | Toledo 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 600 Cranberry Woods The Crown Jewel of the Pittsburgh Skyline Signature Class “A” Office Building Prime Location in the heart of In Western Pennsylvania’s Downtown’s Golden Triangle Premier Business Park Up to 174,000 SF Available 95,844 SF Available Bakery Square Penn Center West BKSQ 2.0 coming soon 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 Bailey Center - Southpointe Great visibility from Parkway East 125 & 135 Technology Drive Building 801 | 82,179 SF Available In the Heart of Southpointe with Expansive views Building 701 | 89,069 SF Available Efficient floor plates and Space to Grow Building 501 | 240,000 SF Available 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 | Fall 2012 CONTE NTS 05 Publisher’s Perspective 27 Development Project Walnut at Highland 32 Eye on the Economy Uncertainty plagues the global economy but U.S. commercial real estate conditions continue to improve. 06 Feature / Resurgent Pittsburgh 36 Office Market Update Pittsburgh’s transformation is yesterday’s news. The vitality of the region’s healthcare, Jones Lang LaSalle education and research, natural gas and now, manufacturing sectors are creating jobs, soaking up commercial real estate and driving development. 40 Industrial Market Update CBRE 42 Retail Market Update Colliers International 44 National Market Update Grant Street Associates/Cushman & Wakefield. 18 Developer Profile / Oxford Development Marks 50 Years A partnership between two family real estate businesses has spawned one of the 48 Legal/Legislative region’s largest privately-held companies. The new generation of leadership combines Outlook best practices with family business ethos. Commonwealth Bank v. Kessler makes a big impact on mechanics 50 Benchmarks liens. NAIOP Corporate national chair Bill 54 News from Hunt talks about how Pittsburgh stacks the Counties up after a year of visits to regional chapters around the country. 64 Transactions of Note 2012 Buyer’s Guide 76 At the Closing NAIOP Pittsburgh president 69 Buyer’s Guide 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 3 A Regional Milestone It’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 we’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 ack in sum- Like a test pilot, a developer’s risk www.talltimbergroup.com mer 2006, is that the more often they do their during the job better the odds are there will EDITOR planning be a crash. Jeff Burd of the first 412-366-1857 edition of Of course, Pittsburgh develop- [email protected] BreakingGround,B I debated whether ers have generally not fit the test to publish bi-monthly or monthly. pilot bill. Many of the developers PRODUCTION While I was thinking about the that call Pittsburgh home got into Carson Publishing, Inc. Kevin J. Gordon potential of the six extra advertis- commercial real estate after making ing opportunities, my publishing good doing something else. That partner – Carson Publishing’s owner formula tends to make you more ART DIRECTOR/GRAPHIC DESIGN Carson Publishing, Inc. Kevin Gordon – reeled me back in conservative. Now with lending Jaimee D. Greenawalt by encouraging me to get some- conditions approaching normal and thing out smoothly every other commercial real estate in short sup- month before I tried a monthly ply, the time for the conservative CONTRIBUTING PHOTOGRAPHY Carson Publishing, Inc. schedule. approach may be past. The vision of Jan Pakler the petrochemical industry and our Mark Grasso Six years later I doubt Kevin would regional civic leaders is for another Pittsburgh Regional Alliance give us a passing grade on ‘smooth- economic transformation to follow Rob Long ly’ yet but that didn’t stop me from the maturation of the gas industry, Charles Uhl accepting the opportunity to create complete with millions of square a commercial real estate publication feet of industrial and office space for NAIOP Pittsburgh when they ap- and hundreds of thousands of jobs. ADVERTISING SALES Karen Kukish proached me this past winter. And the petrochemical industry isn’t known for its patience. 724-837-6971 Our relationship with NAIOP has [email protected] been very rewarding and friendly That kind of growth will require MORE INFORMATION: for a number of years so taking this that developers anticipate demand DEVELOPINGPittsburgh is published by next step together, that of putting and build ahead of the actual need together a first-class information for the space. In real estate terms Tall Timber Group for NAIOP Pittsburgh resource for the real estate indus- that’s called speculative building, 412-928-8303 try, didn’t seem like much of a risk. something that is out of vogue www.naioppittsburgh.com these days. Developing a spec Risk is a subject that has been building isn’t a smart play in 2012. No part of this magazine may be reproduced without written permission on my mind a lot in recent years. But if the predictions about the by the Publisher. All rights reserved. These magazines we publish are impact of gas exploration and the the second venture I’ve started ethane crackers are true, the smart This information is carefully gathered and compiled since leaving my employer in 1994. play in 2012 may become the losing in such a manner as to ensure maximum accuracy. I still remember that I didn’t feel play in 2015. We cannot, and do not, guarantee either the that leaving a big corporation was correctness of all information furnished nor the complete absence of errors and omissions. Hence, as risky as my friends and family A rapidly growing economy gets responsibility for same neither can be, nor is, thought back then. Some of it was business a little out of its comfort assumed. probably an overactive self-confi- zone. Of course, adapting to no dence gland (and/or lack of sense) growth in the 1980’s was pretty Keep up with regional construction and real estate but I was also starting a business uncomfortable too. I have faith that events at www.buildingpittsburgh.com that had a capital outlay of a cou- the business community will have ple thousand bucks. Compared to more fun adjusting to the discom- the risks of developing real estate fort of expansion. that is a laughable level of risk. DP Developers are willing to put a ON THE COVER: Mark Grasso considerable amount of their own Director of Corporate money at risk in order to get their Communications vision of how a property should be Jeff Burd Oxford Development Company developed from dream to reality. [email protected] 5 DEVELOPINGPITTSBURGH | Fall 2012 www.developingpittsburgh.com 5 6 DEVELOPINGPITTSBURGH | Fall 2012 Hey Skitch, the news about metro- there isn’t necessarily how did we politan Pittsburgh has an objective measure- get here? turned decidedly posi- ment of what makes tive of late. The region a city more livable or That line from the has been ranked on so more cool or whatever. movie That Thing You many ‘Top Ten’ lists in As enjoyable as it is to Do may well describe the last few years that see Pittsburgh on these the feelings of real es- it is actually getting a lists the more reward- tate professionals in bit old. ing news is the fun- Western PA about the damental state of the market during the past Many of these lists are market.