Office Market: 2017

DEVE LPittsburghOPINGFall 2015 Office Market: 2017

Workforce: The Key To Development

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Capital Markets Eye Higher Rates

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05CON President's MessageTENTS Developer Profile 21 Chaska Property Advisors

Developing Trend 06 35 Workforce development is a key to Feature real estate development. The Office Market: 2017 Will rising employment and Eye On the Economy emerging technologies trump 39 looming vacancies? Office Market Update 44 Avison Young

Industrial Market Update 49 Cushman & Wakefield/Grant Street Asociates

Retail Market Update 53 Newmark Grubb Knight Frank

57 Capital Markets Update 63 Legal / Legislative Outlook Regulatory updates: Waters of the U.S.

Benchmarks 67 East Liberty’s rebirth is a P3 success story. 27 Development Profile Tower 260 Voices 73 SIOR brokers reflect on the role of the broker.

2015 Buyer’s Guide 76 News from the Counties 88 Buyer’s Guide The 2015 NAIOP Buyer’s Guide puts contacts for designers, engineers, People / Events contractors and lenders in one easy-to-use resource. 86

www.developingpittsburgh.com 3

President’s Message

PUBLISHER ittsburgh has been receiving a great These are but a few issues that need to be Tall Timber Group deal of attention this year from major tackled. I want to encourage every member www.talltimbergroup.com publications like The New York Times, of NAIOP Pittsburgh to get involved with Washington Post, The Atlantic and advocacy and I want to encourage our EDITOR more. The country has taken notice chapter to push the advocacy envelope. As Jeff Burd of the cultural and commercial renaissance an example, NAIOP Pittsburgh currently has 412-366-1857 P [email protected] that has been blossoming in the region over a task force chaired by Lynn DeLorenzo and the past decade. Tony Rosenberger that is looking at the permit PRODUCTION process that involves approvals by DEP, the Carson Publishing, Inc. Most recently, the city has caught the Corps of Engineers and PWSA. Kevin J. Gordon attention of Millennials, and is being named [email protected] one of the hippest places for young people We expect to influence the discussion in the country! In addition to the trendi- about permitting in the same way NAIOP ART DIRECTOR/GRAPHIC DESIGN ness of Pittsburgh, the success of the city's has influenced the Mechanics Lien law and Carson Publishing, Inc. Jaimee D. Greenawalt commercial development has impacted the other issues. I hope every NAIOP Pittsburgh region's business growth, residential boom, member will join with the chapter’s advocacy CONTRIBUTING PHOTOGRAPHY and economic prosperity. leadership to remain an influential voice for Carson Publishing, Inc. commercial real estate development. DLA+ Architecture & Interior Design The growth of the market makes Pittsburgh Horizon Properties Group a fine place for recent graduates to young Of course, NAIOP continues its tradition of Burns & Scalo Real Estate Services families and empty-nesters to live and work. offering fine educational and networking Millcraft Investments It's the reason for our city's recent national programs. We are the association for anyone Chaska Property Advisors attention! The quick developments occurring involved in commercial development in CONTRIBUTING EDITORS throughout Pittsburgh are directly affecting western Pennsylvania. Join us. Together we Anna Burd the success of its residents. can impact the region for decades to come. Karen Kukish The evolution of Pittsburgh from its Steel I invite you to enjoy the 7th edition of ADVERTISING SALES City past to a hub for green innovation and Developing Pittsburgh. Karen Kukish development is an exciting time for all of us. 412-837-6971 At NAIOP, we are dedicated to the revitaliza- [email protected] tion and progression of Pittsburgh. It's with Sincerely, MORE INFORMATION: a strong sense of community and like-mind- DevelopingPittsburghTM is published by edness for collaboration that will keep our Tall Timber Group for NAIOP Pittsburgh city in the limelight as leader in commercial 412-928-8303 development and innovative projects. www.naioppittsburgh.com Another example of NAIOP’s collaborative No part of this magazine may be spirit is the way we have worked together to reproduced without written permission influence some of the civic issues that affect by the Publisher. All rights reserved. our business and the region. NAIOP Pitts- This information is carefully gathered and com- burgh’s strong advocacy of the completion of piled in such a manner as to ensure maximum the Parkway West/I-79 interchange was called accuracy. We cannot, and do not, guarantee out by PennDOT as being very influential in either the correctness of all information furnished their decision to move ahead with the project nor the complete absence of errors and omis- almost a decade ago. So while we’re feeling sions. Hence, responsibility for same neither can good about what is going well in Pittsburgh be, nor is, assumed. in 2015, it is important to remember that Keep up with regional construction there are still some significant challenges and real estate events at to our growth and prosperity. To thrive as a www.buildingpittsburgh.com region we’ll need to modernize infrastructure, maintain the public/private partnerships that Brian Walker NAIOP Pittsburgh President have fostered great developments, develop a comprehensive transit system, improve the business tax environment and develop permitting and entitlement processes that are consistent and reasonable.

www.developingpittsburgh.com 5 feature

6 DEVELOPINGPITTSBURGH | Fall 2015 feature

Office Market: 2017

JLL’s release of its Digital Skyline market When the oil crises of the 1970s rocked analysis tool in July created something of the consumer, triggering several reces- a ripple in the business press. Factoring sions, Houston and Dallas boomed; yet, in new construction with planned con- when the U.S. economy took off in the solidations, JLL observed that the Class A mid-late 1980s, those Texas cities were vacancy rate could be above ten percent mired in a deep recession. The industrial again by 2018. Articles written after dislocation that put rust-belt towns in the report was released focused on the the dumps in the early 1980s boosted coming vacancy, even though JLL’s analysis Southern cities like Charlotte, Atlanta didn’t offer such a forecast. But the infor- and Orlando through several business mation distilled conversations that were cycles without feeling a downturn. During already circulating around the real estate the Clinton-era boom of the mid-1990s, community where questions were being Southern California reeled from the raised about the future of Pittsburgh’s impact of military base closures. And more office market. Would the region find the recently, the emergence of energy and business to fill the space? information technology as economic drivers allowed Pittsburgh to come through One of the more interesting trends the Great Recession mostly unscathed. The that began in the late 1970s, when the $64,000 question now is: Can this new manufacturing base of the U.S. economy economy of Pittsburgh’s push the regional shifted away from Northern and Midwest- economy to continued growth through the ern cities, was a decoupling of regional next business cycle? economies from the national picture.

www.developingpittsburgh.com 7 feature

Given the current dynamics of office have increased slightly during the Another trend emerging in Pitts- supply and demand, and what we second quarter and year-over-year burgh is a realignment of the know about some of the significant because of the amount of new con- submarkets. During the past decade, user decisions that are impacting struction delivered into the market. as energy companies dominated the the market over the next couple of While all forecast a continued slight user growth, office demand along years, the answer to that question increase in vacancy for the next few I-79 outstripped the rest of the will determine the success or dif- quarters, each predicts rents will market. Demand pushed develop- ficulty of new office development. continue to climb, anticipating that ment in Cranberry Township and the new inventory will help satisfy the surrounding suburbs. The poster Where’s the Space? pent-up demand. child for the energy industry, of course, was Southpointe. The second Users have found the office market As would be expected, the tight phase of that park produced millions to be tight in the Pittsburgh market space market has been a boon of square feet of new office space for several years. The lack of space to property owners. In its Digital that has basically been absorbed. – especially the most desirable space Skyline analysis of the office market – has been the most defining charac- conditions, JLL spoke of the recent A slowdown in Westinghouse teristic of the office environment. conditions as being favorable Electric’s business following the towards landlords, noting that own- earthquake that damaged the Data from the three real estate ers “controlled negotiating leverage, Fukushima reactor in March 2011 service firms that publish quarterly increasing rents and tightening con- led to the company consolidating reports on the office market vary cessions.” NGKF’s Pam Lowery, vice and subleasing one of its campus due to methodology but each shows president of research and marketing, buildings. The ripple effect through the office market in mid-2015 with points out that a deeper dive into the supply chain dimmed demand little available space. CBRE and JLL the data reveals that vacancy rates for office space in Cranberry and report that the overall office market vary widely between classes and leasing in that market has been has roughly 73 million square feet, the demand for Class A space has more challenging for conventional of which slightly more than ten helped push the overall rental rate. office product. In Southpointe, the percent is vacant. Newmark Grubb slowdown in the natural gas explo- Knight Frank (NGKF) excludes solely “It’s a matter of class,” Lowery says. ration has slowed growth, as has owner-occupied buildings from its “Class A vacancy is 11.9 percent but consolidation, but the bigger reason data and shows that 16 percent of Class B is 22.8 percent. [Users] all that users aren’t flocking to South- 52.9 million square feet are vacant. want brand new buildings and they pointe is that the project is nearly All three report that vacancy rates are willing to pay for it.” fully developed. Horizon Properties has the holdings to develop several hundred thousand square feet more at Southpointe – and Horizon’s Mike Swisher expects the company will sign 200,000 square feet in new leases over the next two years – the delay by the developer of the Cool Springs property across I-79 means that there won’t be a significant amount of new development in northern Washington county soon.

Development has shifted to an east-west axis as the I-79 corridor cools off, at least temporarily. In the east, the action has not been suburban but rather in the City of Pittsburgh’s Oakland and East Liberty neighborhoods. Vacancy rates in this part of the metro have been the lowest of any submarket for years, with Oakland dipping below three percent. That submarket will see its first new spec building, Elmhurst’s 105,000 square-foot Schenley Place, delivered by early 2016.

8 DEVELOPINGPITTSBURGH | Fall 2015 feature

The most active submarket in the Parkway West/Airport Corridor, where Burns & Scalo is building a spec medical office building, the Greentree Primary Care Center 2.

Further east, the biggest new office its new headquarters building. The project is Bakery Square 2.0. The success in leasing up building one so 213,000 square-foot office building Development has quickly has moved Oxford to up its there is virtually pre-leased, an- shifted to an east- plan for office space in the mixed- chored by Google’s latest expansion use development to 375,000 square of 66,000 square feet. Developers west axis as the I-79 feet. Walnut Capital expects interest in the second building to translate into corridor cools off, “I think overall the Strip is a location an anchor tenant that will kick off at least temporarily. where office tenants want to be,” the companion second office late says Shawn Fox, vice president of this year or in early 2016. In the east, the business development for Oxford. “We’ve had great reaction to our Oakland’s universities have fed action has not other buildings at Three Crossings. the growth in East Liberty and the And the buzz on the whole develop- proximity to both Oakland and been suburban but ment has been strong.” Downtown has created what may rather in the City of be the next hot market east, which Tim Goetz, principal at Cushman & is the Strip District. The Buncher Pittsburgh’s Oakland Wakefield/Grant Street Associates, Company owns a large and attrac- is getting the kind of feedback from tive site east of the Convention and East Liberty clients that Fox was talking about. Center along the river that is finally beginning to develop. Office build- neighborhoods. “The Strip District is on a lot of ings are planned for the parcels folks’ radar now. It’s really catching between the 16th Street Bridge fire,” he asserts. “More and more and the Convention Center. But the Construction is well underway on tenants are talking about wanting current hot bed of activity is to the the 52,000 square foot first office to be in cool space and in a cool east of the Strip’s shopping district, building, which will be headquarters place.” where Oxford Development is build- to Rycon Construction and has ing Three Crossings. attracted Apple as its other tenant. The highest volume of new space Burns & White also signed a lease for development is occurring in the

www.developingpittsburgh.com 9 feature

Airport Corridor. Activity in the west like the ones going on in downtown market out of the downturn, demand suburban market is high in spite Beaver, where a 20,000 square foot for space was coming from emerging of the fact that the vacancy rate office is under construction, or in the industries, changing demographics remains the second worst in the met- Sewickley business district, where and changing expectations about ropolitan market, hovering steady at almost 40,000 square feet of spec work space. 20 percent for almost a decade. New office is being built. Truly strong office deals have been done, both markets will see demand move into Perhaps the biggest driver of devel- spec and build-to-suit, by a deep communities that are out of the rush opment in the west is human nature bench of developers. At the moment, hour traffic patterns but can still and the desire for what is shiny and new product is being built by Burns offer enough lifestyle amenities to new. The Airport Corridor is Pitts- & Scalo, Castlebrook, Chapman Prop- satisfy employers. burgh’s largest submarket outside of erties, Continental/Chaska, Elmhurst Downtown but much of the office and Al Neyer, as well as a number of Lifestyle amenities are one of the inventory was older or outdated individual property owners. drivers of the demand for new office in design. This factored heavily in space in lieu of existing buildings; the decision-making for Pittsburgh One test of the office market will however, there are a number of International Business Park (PIBP), be how deep it is over the next other factors pushing development. according to JLL’s Jason Stewart, few years. It’s one thing to have who says his advice to clients Dick boom-like interest at Southpointe What’s Driving Development? Donley and Barry Ford was that users or in the Airport Corridor during an would happily leave existing Airport- energy industry boom but it’s quite The new construction boom along area buildings to rent the efficient, another to have office demand in the Airport Corridor is in some ways flexible buildings that Continental/ smaller submarkets. The strength of a microcosm of what has been going Chaska was proposing. Stewart the Pittsburgh market may better be on throughout the region. As devel- wasn’t alone in that opinion. exemplified by more developments opers led the regional construction

10 DEVELOPINGPITTSBURGH | Fall 2015 feature

“The axiom I always use is new industry. The PIBP will start its fifth The plunge in oil prices that began buildings win; old buildings lose,” building in the fall, a 67,000 square last July was tied directly to shale agrees Jim Scalo, CEO of Burns & foot office for Service Link. Demand exploration in the U.S. Oil taken Scalo Real Estate Services. “We’re for the flex product at PIBP has been from the Bakken formation swelled moving our interests to the Parkway strong enough that only one of the inventories and pushed the Saudi East because it’s the biggest sub- five buildings, the Building 300 that Arabian producers to up production market and there are a lot of tired is under construction, was actually a in an effort to drive the American buildings out there.” spec building when started. drillers into submission. That precipitous decline in oil prices, coupled Burns & Scalo are wrapping up the Whether in the west or at South- with an already-low natural gas leasing of its Concorde flex office pointe, it was the influence of the price, put the brakes on new explo- in the RIDC Park West and start- natural gas industry that has been ration in the Marcellus and forced ing construction of The Bentley, a the ultimate driver of development oil companies to whack expenses. 44,000 square-foot spec office at the since 2009. For all the talk of “eds As expected, this downsizing of the top of Green Tree hill. Scalo says his and meds” as the backbone of industry had an impact in Western company is interested in developing the new economy, it was the rapid PA’s real estate market. On the other a 100,000 square foot office at its growth of the gas industry that kept side of the coin, however, the lack of parcel in Foster Plaza and perhaps Pittsburgh recession-proof after the infrastructure in the natural gas play two others in the RIDC Park West. financial crisis. And as the industry was at least as big a problem for the has evolved here, the fortunes of oil industry as the low price was. And Other projects in the Airport Cor- and gas exploration and the business that has actually lifted real estate ridor are also taking advantage of cycle of the Marcellus and Utica demand. the desire for new product, as well Shale formations continue to drive as the emergence of that Corridor development. Midstream developers are investing as another center for the oil and gas billions during this downturn for the

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Southpointe II, with the Town Center and Zenith Ridge projects, exploded with new construction after the natural gas industry began exploration. Photo courtesy Horizon Properties.

oil and gas industry to allow produc- driller opened his eyes to the scale stream and downstream – that is still ers to process the abundant natural of the investment that is ongoing. in its early stages. What everyone in gas in the Marcellus and get it to the industry has promised from the market. It’s the midstream companies “Realize that these [midstream] beginning of the Marcellus play has that are now expanding like the companies are each investing more been the bigger payoff when the gas drillers once did, Mike Swisher says. than one billion dollars this year. is turned into its industrial chemical “Companies bullish on Southpointe Rice’s CFO put it into perspective for assets, after cracker plants have see it as an opportunity to gobble up us when he said that’s $20 million been built. If that is indeed the case, some space if other users are cutting every week,” Scalo remarks. “I think the gas industry will drive office back on space,” he notes. “If one the fact that Marathon is getting development – along with lots of midstream company starts to pull into the game is huge. Why are they manufacturing – for decades. back, another one steps up and says doing that? They are teaming up they will take the space.” now for the future. They think the However soon the gas industry future of gas is great.” matures, Pittsburgh developers Scalo also sees how midstream com- will have to learn to adjust to the panies are stepping up. Rice Energy Of course, whatever has transpired boom-and-bust cycles of that busi- leased all of Burns & Scalo’s 150,000 with the natural gas play thus far has ness. Folks in Texas, Oklahoma and square-foot third building at Zenith been confined to the exploration, Louisiana have understood this fact Ridge in Southpointe II. He says the processing and distribution – the up- of life since the 1930s. The cyclical

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nature of the energy industry will be campus as im- a new additive to the Pittsburgh real portant to the estate cycle. well being of their workers. “It will be interesting to see how This includes the gas industry affects the market,” play and muses Bill Hunt of The Elmhurst exercise space, Group. “I think many people thought especially out- the Marcellus Shale growth would doors. It also just go on forever and that was includes a lot never going to be the case.” of features that accommodate Changes in design expectations have the flexible also been a driver of office usage in work hours this decade. Whether you ascribe the – sometimes changes to the work habits of the long after emerging Millennial demographic or businesses to the cost-cutting imperatives of close – of their corporate bean counters, the model employees. for new office design is a more That means en- efficient and open plan. These leaner hanced security designs put downward pressure on and access con- the space needed per employee, trols, healthier which drives down the cost of real environments estate and offsets the impact of job and buildings creation to a degree. But the new that reflect the designs also reflect the fact that more sustain- corporations – especially those in able mores of the high tech sector – are using real the modern estate to create a culture that builds worker. Com- their talent pool. panies that get it right get the Companies like Google have gar- best people nered headlines for how their offices and that adds are built to appeal to the hard-work- to the bottom ing, hard-playing employees it seeks, line. complete with cafeterias, indoor and outdoor play areas, gaming rooms “The brightest and lots of space for collaboration. people I deal In Bakery Square, Google keeps hens with use real so that health-conscious employees estate as a Graphics and data courtesy have access to fresh, organic eggs. capitalist tool. Their highest priority Newmark Grubb Knight Frank These strategies are meant to bring is the attraction and retention of the best and brightest to Google’s talent,” says Scalo. having these companies at Carnegie door but such amenities also have a Mellon might mean. We now have a more subtle benefit to the employer. Some of the most extraordinary tal- better idea. ent being attracted to Pittsburgh is “The old buzz words were live/work/ going to Carnegie Mellon University Google’s ten-fold increase in size play. The smartest employers I know and the University of Pittsburgh and and its impact on Bakery Square today don’t care where their people to the companies that are spinning and East Liberty is a taste of the live or play; they care where they off from the technology transfer business scale that tech can achieve. work,” Scalo says. “The new buzz occurring there. When tech giants Aside from the potential that the word is walk-ability. Employers don’t Apple, Microsoft, Intel and Google Marcellus and Utica plays have for want to put employees in cars for were all leasing space at the Collab- driving manufacturing, the com- lunch because they can’t get them orative Innovation Center at CMU, mercialization of the research being back in one hour.” much was made of the fact that it done on software, Internet, robotics, was the only building in the world biotechnology and healthcare big Scalo believes that companies are that held all four. Little, if any, fuss data will have the most lasting long- also looking at lifestyle amenities on was made about the potential that term impact on Pittsburgh’s economy

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and its real estate market. The city By control- is poised to become a magnet for ling the tech companies as an alternative development on for the high-cost centers like Silicon university land, Valley, San Francisco or Washington CMU could DC, much in the way that Austin or either eliminate Boston did thirty years ago. The at- private develop- traction of Uber and General Electric ers altogether to Pittsburgh for the companies to or make the research and apply next generation process less technologies is a bellwether of the profitable. A opportunities to come. more tightly- controlled plan Subra Suresh of CMU and Pitt’s would also Patrick Gallagher are the heirs to the make it difficult culture of collaboration that Jared for a private Street. Unmentioned in JLL’s report is Cohon and Mark Nordenberg initiat- developer to act on its own vision for the potential or likelihood that PNC ed and by all accounts the successors an opportunity. For the near term, Financial Services will be vacating are even more aggressive in their the development currently seeking its space at 600 Grant Street when visions of the future. Those aggres- developers and the project Dr. Suresh leases expire, having relocated to sive visions are already impacting the articulated would seem to be aiming the new Tower at PNC Plaza. The face of development in the city. to attract the same users that were major tenant at 525 William Penn, being wooed to the ALMONO site BNY Mellon, is expected to vacate its To execute a plan for its western that RIDC is working to develop. 600,000 square feet in that building campus portal, CMU engaged JLL Elmhurst’s Bill Hunt sees the upside by 2018, although the bank has not to seek development proposals for for private development as much formally announced specific plans 425,000 square feet of office and larger than any downside. and timetables. At present, 525 a hotel along Forbes Avenue at William Penn is 97.6 percent leased Junction Hollow near the Carnegie “I look at it as a step function. If and occupied. Museum. The request for proposals the universities will continue to drew almost two dozen responses be growth generators – and they It’s easy to see why the addition of and the selection process in still are – then it’s the right thing to do,” more than 1.2 million square feet – underway. Concurrently, Dr. Suresh Hunt says. “If they throw up a large in addition to the 330,000+ square announced his vision for the new project that can hurt [private devel- feet of the Union Trust Building com- north campus expansion, which will opers] in the short run but in the ing “back” into the market – would be anchored by the 300,000 square- long run it’s absolutely positive for make the news. This limited number foot Tepper School of Business. Dr. the region. Oakland is still undersup- of vacancies alone would add about Suresh articulated what he called plied for office.” 1.5 million square feet to the CBD an “innovation corridor” in the inventory. That’s 700 basis points to new Tepper Quadrangle. That vision What’s the Future? the vacancy rate in two years’ time. included several large office/research But the net negative absorption is buildings that would be similar to Emerging technologies, the natural a “glass half full” or “glass half those adjacent to MIT’s campus in gas play and Pittsburgh’s general empty” story depending on your Boston. “hot-ness” all show the potential to perspective. create significant economic growth. The vision is one that is both Will that growth be sufficient to con- For starters, none of the spaces are ambitious and attainable. Gifts for tinue the righteous cycle of develop- vacant at the moment and landlords Carnegie Mellon have poured in at ment that has occurred over the past have two more years of collecting record pace during the past two few years? rent and preparing to backfill the years and the university, as well space. One possible scenario is for as Pitt, has become much more A closer look at the Skyline report those property owners to become experienced at optimizing the value shows that the rising vacancies aggressive and pull the market down of the licensing of the technologies were essentially confined to two with lower rents. Reports of the early developed in their research facilities. buildings, 600 Grant Street and 525 deals done by the Davis Company As exciting as the prospects are for William Penn Place. The impending at the Union Trust Building are at this vision, the execution of the plan relocation of U.S. Steel to its new rents that are lower than the market could cause headaches for local building being developed by Clayco commands at the moment. If that’s developers. in the lower Hill District will free up correct and such deals continue, 470,000 square feet at 600 Grant there will be downward pressure

www.developingpittsburgh.com 17 feature

on all rents, a situation that would from pursuing it. The lack of options If there is a big user out there, it make it that much more difficult for was certainly enough to keep most shouldn’t be very long before it’s new development like Oxford’s 350 users renewing their leases unless known. Even though the spaces in Fifth Avenue. But there are other it was impossible to operate within 600 Grant Street and 525 William possible scenarios. their existing space. The upside of Penn Place aren’t available until more vacant space is that there are 2017, a big user would be making One possibility, of course, is that more opportunities for tenants. plans now. Avison Young’s Duke landlords won’t succumb to the pres- What isn’t known is how many Kingsley worked with PPG Industries sure to cut rates or boost conces- tenants need those opportunities for on the renewal of their 350,000 sions. Assuming the cost of capital more space. square foot lease at One PPG Place remains within the range it has been about three years ahead of expira- since the financial crisis, owners One other item of interest involves tion. He points out that like a big with healthy balance sheets can wait a user tangentially from the natural ship, big users can’t make last out vacancies with lower risk. gas industry, IMG Midstream, which minute decisions. develops and builds small-scale Another outcome could be that the power plants fired by gas. IMG “If you take 250,000 square feet business conditions of the Down- is reportedly looking for space in or more, your choices are less and town users – and wannabe users Downtown or the CBD fringes, your timetable is compressed,” – are healthy enough to expand into the first company associated with Kingsley explains. “If you want new space that hasn’t been available the gas industry to do so. The gas construction you need at least two heretofore. Brokers don’t seem to industry has boycotted Downtown in years. Even if you choose an existing be impressed that there are a lot of response to the City of Pittsburgh’s building there are a lot of logistical users – particularly big users – in the ban on drilling. If IMG leases issues and considerations. If you’re a market; however, the fact that the Downtown and the decision has big user, you can’t just decide you’re market was known to be tight could the impact of crossing a picket line, going to move in six months.” have kept users needing more space others may follow.

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18 DEVELOPINGPITTSBURGH | Fall 2015 feature

In the suburban market, there are “I’ve said for a couple of years that service companies. Pittsburgh’s civic no imminent major evacuations. The it’s the strongest market since the leaders are spearheading an effort Parkway West market has nearly a 1970s and 1980s, when we had a towards workforce development, dozen vacant spaces over 50,000 lot of building and then a lot more diversity and population attraction. square feet scattered throughout the building,” Goetz jokes. “It’s taken Those efforts are likely to work market in all classes of buildings but a lot of years to recover but we’ve on some level and could be wildly clearly the inventory isn’t infringing been on a good run here lately. I successful, driving demand for space on new development. This corridor, think everyone is hopeful that the unseen in generations. along with Southpointe, will get a momentum of the past few years will boost in 2019 when the Southern continue.” Glass half-empty or glass half-full, Beltway connects the airport to I-79 the environment for office develop- via a new highway. And, suburban All signs point towards the economic ment is still ripe. The way conditions markets north, west and south ride continuing in Pittsburgh. You have evolved in Pittsburgh over the should benefit handsomely when the could even make an argument that past half-decade have facilitated construction of downstream facilities the region’s economy is poised for successful speculative development like the crackers planned for Monaca another leg up. The tremendous and the conditions haven’t deterio- and Belmont County, OH begins. breakthroughs in IT, biomedical and rated. energy are driving jobs, and jobs Those major developments are still equal space. If the jobs forecast “With the low cost of capital – our on the horizon however. Between holds up for the next three years cost of borrowing is two percent – now and 2017 there are certainly then there will need to be eight or we can build a quality spec and wait question marks about whether the nine million square feet for 60,000 the extra months to get the ten- Pittsburgh market can maintain its new jobs. Pittsburgh is on the verge ants,” says Jim Scalo. “We’re going momentum. of a new frontier in manufacturing to continue to put spec product out that would also lead to enormous there in the right locations if interest office demand for supply chain and rates stay low.” DP

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Chaska’s partnership with Continental has brought four new buildings into the market within two years, with a fifth building to start in October.

a third partner in their original developing long-term relationships. business, called Abstract Properties, It’s a model that works well in which was developing Cranberry America’s largest small town. Pitts- Business Park (CBP). When the part- burgh companies don’t do a lot of ner asked for the Abstract Properties deals every year so they tend to get name, the developers needed a new to know the deals and the people one. Donley was raised in Ashland, involved very well. Donley may not haska Prop- OH and spent childhood summers have been raised in Pittsburgh but erty Advisors at Lake Erie in Huron, OH at a home he has adapted well. is the de- his father built. The lake house was veloper that located on Chaska Beach, so Don- He credits his father, who owned never meant ley’s family suggested using Chaska a feed and grain business in Ohio, to be. Richard as the name of the entity that would with teaching him about the kind Donley, Chaska’sC president, spent continue developing. of work ethic and attitude it takes nearly 30 years in commercial real to be an entrepreneur. Donley got estate finance before circumstances Chaska is a small shop, with five his degree and business education thrust the opportunity to develop employees including Donley. That’s at Miami of Florida. His intention upon him. Even the company’s name intentional and reflects how Dick was to stay in Miami to start his was somewhat inadvertent. Donley is most comfortable manag- career when he got a great job offer ing his business. That sort of model in Pittsburgh, which was his wife’s Donley and partner William Recker requires the support of good consul- hometown. were in the process of buying out tants and contractors, which means

www.developingpittsburgh.com 21 experience. After the repeal of the real estate-friendly Economic Recov- ery Tax Act, Donley was moved into workouts and got a first-hand look at the trouble coming to commercial real estate. By 1990, he had his fill of watching the people on the other side of the table restructure deals that cost Westinghouse a lot of money. That experience was eye- opening for him, however.

Westinghouse’s portfolio endured Donley had an one of the more precipitous declines in asset value in American com- idea he wanted mercial real estate history. Donley ultimately realized that the problem to begin doing was less about the assets than the development. He management. Westinghouse’s assets weren’t fundamentally different from took the opportunity GE Capital’s or any of its competitors to start his own but they were not well-managed. Donley noted that no one on the shop working as vice boards of either Westinghouse president of finance Credit or Westinghouse Electric had for J. W. Galbreath any real estate experience. Co. and was involved The pressures to generate cash to make earnings targets motivated Dick Donley with Galbreath when Westinghouse to sell assets, usu- the local office ally at a discount to sweeten the “I started working for PNC in the deal. By the time the credit crunch mortgage department when it was transitioned to CB- and recession hit in the late 1980s, actually Pittsburgh National Mort- Westinghouse’s portfolio contained gage as part of Pittsburgh National Richard Ellis. CBRE a disproportionate share of difficult Bank,” Donley recalls. “That was had developed a properties. Several years removed in 1972. PNB was a great place to from the crisis, he saw that the work. None of us really knew what building for GMAC as companies that had purchased West- the heck a mortgage banker was the first building in a inghouse’s bad assets had all made but we were trying to figure it out. money, with some of the portfolios I went through the credit program, new business park on doubling in value within a decade. which was a great foundation for land owned by Penn whatever you wanted to do. Jim By 1990, Donley felt he had a Rohr and I started out in credit Power, off Unionville background that would suit him well together. He had been there about as his own boss. six months when I joined.” Road in Cranberry Township. “I went from a business education Over the next decade or so, Donley to a bank, to a credit company that was fortunate to work for sev- is doing fairly creative lending, to she was dating a guy that she was eral financial firms with a different a mortgage broker where you learn committed to but said I should meet perspective of the commercial real the long-term effects of deals and her best friend. That turned out to estate process. He had two dif- then back to a credit company doing be my wife Beth.” ferent stints with Westinghouse equity deals, workouts and restruc- Credit, with time at mortgage broker turing,” he says. “That’s a pretty During his time with Carey Kramer, Carey Kramer Crouse & Associates in good foundation for a commercial Donley gained experience doing between. real estate business.” equity partnership deals, including a number of deals with Westing- Donley had crossed paths earlier When he left Westinghouse for the house Credit. He found himself in his life with Bob Carey’s family. second time, Donley started Delta with an opportunity to return to While at Miami he met a young Property Holdings with Mike Zamag- Westinghouse in a more responsible woman that he thought he might ias, doing workouts and restructur- capacity and began a second chapter ask for a date. The woman was Bob ing the debt for Zamagias Properties. there. Donley was put in charge of Carey’s sister. “She told me that They took over 13 shopping centers an equity group as a result of his

22 DEVELOPINGPITTSBURGH | Fall 2015 in 13 states that were all distressed and worked out nearly seven million square feet of troubled retail, including restructuring the debt for Robinson Town Center for Zamagias Forest City. Donley and Zamagias had a healthy respect for one another and kept their business deals simple. He says the two would write down the particulars of a deal on two sides of a piece of paper, tear it in half and each would put the “agreement” in their wallet.

“Mike had the construction and leasing, all the property knowledge. I had the lender contacts,” Donley explained. “When you put all that together it was a good team. Mike is still a close friend and one of the most talented individu- als I’ve done business with. He has just an incredible mind.”

Donley had an idea he wanted to begin doing development. He took the opportunity to start his own shop working as vice president of finance for J. W. Galbreath Co. and was involved with Galbreath when the local office transitioned to CB-Richard Ellis. CBRE had developed a building for GMAC as the first building in a new business park on land owned by Penn Power, off Union- ville Road in Cranberry Township. Mike Cahn was one of the partners in the Penn Power project and the two began to work together during the financing of the second building, which was built for Coventry Healthcare.

Cahn and Donley were familiar with each other from when Donley had helped the Foster family refinance four of the buildings at Foster Plaza, where Cahn was property manager. They began to talk about buying the rest of the land for the park – some 76 acres – as an investment, intending only to contribute the land to deals that would 24 rated AV® Preeminent™ be developed by other partners. Over 21 named as Best Lawyers® the following year, the partners bought ® the remaining undeveloped land in the 13 are Super Lawyers park and went about the process of and re-branding. 6 listed as Super Lawyers Rising Stars®

“Penn Power was trying to sell a product – land – and we were selling a park, so we changed the product. We changed the entrance. We changed everything,” Donley explains.

Fate intervened when their development partner from Indiana had financial problems and was no longer going

www.developingpittsburgh.com 23 to be involved with the project. the number two or three thing on Unsure of how the development their list of employee desires was to would ultimately go forward, the “We have generally walk right out of their office into a partners nonetheless marketed a been blessed with picnic area.” flex building for months without any success in pre-leasing. Donley says great partners and The flexible buildings allow Chaska at some point he and his partners great lenders. When to build a small picnic area adja- decided that they would need to cent to an office or customize the build the building in order to attract you look at being a interiors in an almost limitless way. tenants and so Cranberry Business developer it’s kind Donley’s goal is to make the real Park Building 200 became theirs to estate disappear for the tenant so develop. of like you’re a band that there are no concerns about grass-cutting or light bulbs or HVAC “Jim Noland and PenTrust was our leader or conductor. problems. He gives the tenant the partner in that deal. I’ve known Jim You don’t have to responsibility for the janitorial and since I moved here in 1972 and he utility bills so that they can control bought into the concept. They put in play every instrument how clean and comfortable their two-thirds of the equity and we put but you have to space is. Chaska then works hard at in one-third,” Donley recalls. “We managing the rest of the property so wanted it to be very rich in equity understand what the tenant doesn’t have to and that – we were at about 35 percent on each one does,” he takes a team of partners. the deal - because frankly we didn’t know whether the building would says. The approach “We have generally been blessed be 50 percent warehouse or 100 fits well with with great partners and great percent. We were building a very lenders. When you look at being a expensive shell with generous park- Donley’s intention of developer it’s kind of like you’re a ing that you don’t build with flex. To staying small. band leader or conductor. You don’t this day people are confused about have to play every instrument but what we build. It’s only been in the you have to understand what each last five years that people started one does,” he says. The approach figuring us out so we had a long That product confused the contrac- fits well with Donley’s intention runway without much competition.” tors and designers initially as well. of staying small. “I have strategic Most companies CBP met with partners. It’s project-oriented so if In the Cranberry marketplace, suggested the buildings be tilt-up or you don’t have any projects, like Cranberry Woods was the highest- metal buildings, but Donley and his I’ve had a dry spell in Cranberry, you class office product but by covenant partners decided on brick and ma- don’t have a lot of people.” the buildings in Cranberry Woods sonry exteriors. That decision helped couldn’t have loading docks. CPB attract office users that needed the Among those partners are general was designed to be totally flex- warehouse but were predominantly contractor Continental Building ible on the interior and included office usage. The higher office usage Systems and its parent, Continental dock doors. As the highest-class boosted rents and made the high Realty. Jason Stewart from JLL is his flex product in Cranberry, CBP was parking ratios – five per thousand broker. WTW Architects has designed very attractive for office users that square feet or higher – work. all the buildings in CPB and the needed to have access to a loading first few at Pittsburgh International dock. Although it offers a flex prod- “We didn’t know at the time that Business Park. NEXT Architecture uct, CBP remains nearly 85 percent we were building primarily offices handles the tenant improvement office use to this day. but what we did know was that to design and is designing the most get the rents we wanted to get, we recent buildings at PIBP. Donley “For example, HRG Engineering needed a higher density of office; likes bidding with the same team needs some storage and deliveries. we needed to offer more parking,” of subcontractors, many of which Patterson Dental is training, region- he says. “What we do is make it maintain the buildings at the parks. al offices and they ship and receive look like an office park. When And throughout the past 15 years dental chairs,” Donley explains. you drive through here you have Bill Recker has been Donley’s equal “For these companies, it’s really heavy landscaping. You have what partner in equity and guarantees important that they have a ware- I think are very attractive buildings and was one of the co-founders of house component but our initial that aren’t going to age in a few Cranberry Business Park. tenants all came out of warehouses years. We spend a lot of time on because that was the only way they the environment, on walkways, on Chaska relies heavily on those could have access to the doors. I benches on picnic tables. The people partnerships and the philosophy had seen something close to this who come to a place like Cranberry that Donley has about the partner/ product in Kentucky and in Atlanta aren’t coming here for density. They vendors is steeped in his belief that and I loved it.” come here to get away from density. his business rests on relationships. One of our tenants at the airport, A man who has thousands of names

24 DEVELOPINGPITTSBURGH | Fall 2015 in his contact management system – many of whom go back to his PNC and Westinghouse days – Donley believes that he gets better service by not treating vendors as commodi- ties and by paying them in the manner they want to get paid.

“How can I ask a guy for a favor if I’m 90 days behind with him?” he asks. “I get a five percent discount on my snow plowing because I pay within ten days. Well I’m going to pay in ten days anyway. I keep his cash flow going. He can pay his people. It all trickles down and it ultimately becomes about families and kids and being able to survive.”

Chaska has two main projects underway. The older of the two, Cranberry Business Park, has been the successful model for Chaska’s flex office product for 15 years or more. Donley has the potential for a few more buildings in Cranberry but the perceived slowdown in demand in that market has kept Chaska on the sideline the past couple years. He has Continental Building Systems pricing a new spec building that could start at Cranberry Business Park in the fall.

What has kept Chaska busy the past few years has been the rapid pace of development at the Pittsburgh International Business Park, a project off Cherrington Parkway Extension that Chaska is working with Continental Development as a partner to develop. Pledged to starting a building every 18 months, the Continental/Chaska team has its fourth building under construction in less than two years. In early August, Continental/Chaska signed a lease that will kick off construction of its fifth building, the 67,000 square-foot Building 400, in October for November 2016 occupancy.

Dick Donley’s career took him all over the world and involved him in some extremely complex deals. It also seems to have driven him to keep the latter part of his career simpler.

“You can’t keep every tenant. It’s not possible to keep everyone happy. Tenants get bought and sold,” he notes. “But what I really like is being small enough to still be in touch with the daily issues the tenants have.

“When you first start out, you know everything about a few deals. As you start to move up you know a little bit about a lot of deals, which I didn’t like very well. Today I’m so happy to know everything about a few deals.” DP

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MEMBER FDIC Development Profile

Rendering courtesy Millcraft Investments. Tower 260

There hasn’t been a spec office tower in Downtown“ for 30 years or more and there’s a reason for that,” jokes Brian Walker, chief financial officer and executive vice president of finance for Millcraft Investments. Walker’s comment summed up a lengthy explanation of the complex capital stack necessary to make the Tower 260 project a reality.

Millcraft is nearing the end of a very ambitious $500 million program of development that began more than a decade ago when it shifted the focus of its development to Pittsburgh’s Downtown. Starting with the rede- Square. By late August, most of of Il Pizzaiolo,” says Piatt. “Roost velopment of the former Lazarus the office space was leased or is fine dining, with some banquet store at Fifth and Wood Street into committed, with only the top two space and breakfast. And Revel Piatt Place, Millcraft has been at floors remaining available. Only 800 focuses on fine fast lunch, an all day the forefront of changing both the square feet of the ground floor retail menu that will go into the evening perception and the reality of Down- remains un-leased. and then after 10:00, the space town Pittsburgh from a business begins to transform into an ultra- district where the sidewalks rolled Tower 260 is meant to weave itself lounge focusing on the night life up after rush hour to a vibrant live/ into the fabric of the resurgent Mar- Downtown.” work/play neighborhood. Tower 260 ket Square, while acting as a bridge is a $107 million, 18-story mixed-use to Point Park’s Academic Village. The project’s origins are rooted building that reflects just how much The parking garage is intended to be in Millcraft’s master plan for its the Downtown market has evolved in dedicated to Market Square patrons. Downtown development, which such a short time. The restaurants – Pirata, Revel and was overwhelmingly weighted Roost – are aimed at serving diners towards residential. Lucas Piatt, When Turner Construction completes looking for something more formal now Millcraft’s president and COO, the project at the end of 2015, that the existing casual Market was assuming a greater leadership Tower 260 will open with three Square restaurants. role in Millcraft’s business and he higher-end restaurants, a 330-car had a vision for urban living in garage, a 198-room Hilton Garden “Pirata is a Caribbean concept that Pittsburgh that he knew existed in Inn and 128,000 square feet of is being opened by Ron Molinaro other major cities. office space that overlooks Market

www.developingpittsburgh.com 27 “We thought the suburbs had Mayor Murphy’s Fifth/Forbes corridor “We realized that quality office pushed too far away from the urban strategy, converting the former G. space was scarce in Downtown. core and we thought young people C. Murphy store and five adjoin- There was no place for anyone to in particular wanted to be in the ing buildings into apartments with expand. It was time for someone city, more like the European model,” 60,000 square feet of storefront to develop a multi-tenant high explains Piatt. “We knew that unlike retail. The final piece of the program rise,” recalls Piatt. “We wanted other plans for redeveloping Down- was to be a 200-unit apartment to focus on the efficiencies. Focus town that retail wasn’t going to be known as Forbes Village, later called on natural light and modern-day the catalyst for that. It was going to The Gardens at Market Square. technology. We also looked at how be residential. That’s why we started people were using office space so and took the big bet and the risk to A lot happened between the plan- [Tower 260] will present an op- build Piatt Place.” ning and execution of the full plan. portunity for someone who wants Millcraft took on an unexpected op- to downsize or be more efficient Millcraft purchased the Lazarus portunity when the Commonwealth in their space. Right now we’re property during the waning months of Pennsylvania decided to sell the negotiating with folks for basically of Tom Murphy’s term and was State Office Building, investing the entire building.” successful in responding to the $43 million to convert the offices Fifth and Forbes request for pro- into the 218-unit Rivervue Apart- The strategy as the development was posals that went out early in Bob ments. The global economy nearly being planned was to use the design O’Connor’s tenure in 2005. melted down in the fall and winter to make the building as competi- of 2008-2009, sending tremors tive as possible in the marketplace. Because of the size of the Lazarus through the capital markets. And Millcraft’s goal was to emphasize the store, it was more practical to con- Pittsburgh’s economy surged ahead amenities of the hotel and the office vert the main portion of the building as the rest of the country struggled, but to keep them separate. Office to office space with retail on the leaving the Downtown market tenants can access the hotel but ground floor, but the roof became with very little vacant space. That there isn’t shared lobby space. Office home to 60 luxury condominiums. In became the key to the future of the floors are 18,500 square feet with 2007, Millcraft took on the project Gardens project. windows that are effectively floor- that had been the bullseye for to-ceiling. Piatt explains that the

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28 DEVELOPINGPITTSBURGH | Fall 2015 office’s rectangular shape is comple- The anchor tenant in the building financing. According to Walker, the mented by a core that is somewhat pulled out just before closing. Lease- project consistently had a $20 mil- unique in design. Millcraft chose to up was difficult at first. Because lion gap in the financing. The project position the restrooms in the Tower the building was an infill between budget went from $76 million to its behind the elevator bank so that Forbes and Fourth Avenue, Millcraft final number as the project scope three sides of the core are open. had to work through concerns from grew and costs escalated. Rigorous owners and tenants on Fourth about efforts to control the design and “It may be the only building in town the building’s design. They held hold the line on the budget didn’t where you can get off the elevator design reviews and ultimately had change some of the fundamental and see the skyline straight in front to settle with a couple of neighbors issues. Tower 260 was being wedged of you,” he says. “In this case we who didn’t want a taller building into one of the oldest sections of designed a core where you have next to theirs. Downtown, on a very tight site. The three entrances to the office space. difficult footprint magnified the cost The straight ahead option gives you “We tried to do everything we could of the parking garage, which would the ability to have a glass panel in to have density there to pay hom- be very expensive, even without the your lobby and look out at Market age to the buildings around us. We cost of building below grade. Like Square’s skyline. worked with the neighbors, some other ambitious urban commercial happily and some not so happy,” projects, Tower 260 would have to “Rates are around $30 per square Piatt chuckles. “But if you look utilize as many financing tricks as foot but when you couple that with at the Benedum Trees Building, possible. the efficiency, which makes for a there are two windows that get low common area factor, we’re very blocked per floor. One is the end “We qualified for three New Market competitive. So someone that’s in a of their corridor and the other one Tax Credits, an RACP grant, a gam- 1980s high-rise can come here and is a corner conference room. It has ing grant, and a TIF for the public probably save money and that’s what minimal impact I think. Of course infrastructure and parking garage,” we’re seeing.” that depends on who you talk to.” describes Walker. “We raised private equity from 25 different sources. During the planning of the project, These challenges to developing Tow- Credit came from the ERECT Fund there were a few bumps in the road. er 260 all paled in comparison to the and the URA.” Other lenders in-

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cluded M & T Bank, Fifth Third Bank ness model. The Piatt’s were familiar and First Commonwealth. “The biggest chal- with the complexity of developing in lenge was pulling ev- an older region with the problems of “The biggest challenge was pulling mature industrial infrastructure. For everyone together. You talk about eryone together. You them, seeing the projects through public-private partnerships, this talk about public- was the only option. P3 involved the Parking Authority, Pittsburgh Public Schools, the Com- private partnerships, “I think that’s why earlier develop- monwealth Financing Authority, the this P3 involved the ments failed. There were out-of- state, Pittsburgh Urban Initiatives, town developers and this was a Allegheny County and the URA,” Parking Authority, transaction for them. When the continues Walker. “At the end of the projects hit a bump in the road day it all worked out but the coordi- Pittsburgh Public they decided to focus on another nation of all those agencies was the Schools, the Com- market.” Piatt says. “We were local hard work.” and when we hit those bumps in monwealth Financing the road – and we had them – we Piatt believes his company’s per- Authority, the state, decided to persist and get creative sistence was one of the reasons to make things work. And frankly, Millcraft was chosen to develop Pittsburgh Urban most of these projects didn’t work the Fifth/Forbes corridor in the first Initiatives, Allegheny on paper until we got creative and place. Millcraft was a local developer took advantage of the programs that that has a “hold and operate” busi- County and the URA,” were out there.”

www.developingpittsburgh.com 31 Separate lobbies secure office users from the hotel’s guests. Rendering courtesy Millcraft Investments.

Both Walker and Piatt say that ing with McKnight Realty Partners Avenue, Forbes in our mind is really coordinating all the various sources to redevelop the former Saks Fifth going to be a fantastic street in the of grants, debt and equity was Avenue store site, so Millcraft will next three or four years.” nearly as challenging as finding the continue to have a hand in Down- capital sources. There were 12 dif- town’s resurgence. Lucas Piatt says “For us real estate development ferent entities involved in financing it’s exciting to get to the point in isn’t just building a building. It’s not the project, with a number involved the construction where the building just bricks and mortar or steel and in the tax credit sales alone. The begins to match the image he has concrete; it’s community. And you’ve complexity of the deal was apparent had in his head. got to work with the community. at closing. This project is more than just a “We think this project will further building; it’s an economic catalyst. “I remember at the closing we bolster what’s happened in Market It’s going to produce $4 million a had tens of thousands signatures. Square over the past five years and year in economic activity. It’s provid- We went through 30 pens getting continue that great resurgence that ing hundreds of jobs. It’s a much- everything signed,” Piatt jokes. we’re seeing. This, combined with needed asset for the city,” Piatt the new PNC tower, is really going continues. “We’re not in this just to As glass panels are being installed to change the face of Wood and turn a profit. It’s not a transaction on Tower 260’s exterior, the end of Forbes,” Piatt says. “And then when for us. It’s a community-building Millcraft’s Fifth/Forbes development you add on top of that the Playhouse effort.” is in sight. The developer is partner- Theater coming down to Forbes DP

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to the front burner for a few indus- she says. “If we don’t find replace- Workforce tries already. ments for the Baby Boomers who are retiring we’re going to be short of Development is According to talent consultant workers.” iCims, the two industries in the a Development direst shape at present are pharma- The problem is one that is plaguing ceuticals, which have roughly one almost every city in America, even if Issue Too applicant for every two jobs open, Pittsburgh is seeing it first. Perhaps and construction, which has 94 the urgency of the situation will he problem applicants for every 100 jobs. be elevated sooner, if the latest is one that Business Conditions Survey of the is beginning Just as the needs of industries differ National Association for Business to be in the from one to another, there are Economics (NABE) is any indication. business head- differences in the inventory of skilled NABE’s current survey showed that lines more workers from region to region. Hu- 35 percent of corporate economists frequently yet many people can’t mans aren’t generally nomadic in the reported shortages of skilled work- T 21st Century but economic booms ers, up from 25 percent in April. comprehend its potential harm. There aren’t enough workers to and busts have acted as catalysts That’s a significant jump in a survey fill the employment needs of many for workers to move to find work. that tends to move in increments industries. That means that as the economy has of two or three points. That skilled expanded over the past two years, workforce shortage may be one It seems like only yesterday that some cities find themselves with a reason why fewer of the same com- unemployment was the nation’s workforce that is mismatched to the panies responded that their capital biggest economic problem, so it’s opportunities that exist. Pittsburgh is spending would increase during the not surprising that the average one of those cities. remainder of 2015, even though the American may not feel the talent majority forecasted “solid growth” shortage first-hand, but for some Aside from the immediate problems for their business. industries the depth of the reces- that insufficient labor can cause – sion is one reason why the problem above-market labor costs, higher Companies that can’t find skilled presented so quickly. In architecture, prices and slower product or service workers can’t take on more business for example, the decline in employ- delivery – there is a longer-term and can’t grow without risking a ment was so severe that many simply impact on the vibrancy of a city that failure to perform. If companies in left the profession. Now, as demand doesn’t have the capacity to meet Pittsburgh can’t grow, the need for for construction is racing ahead, the workforce demands of its most space will decline over time. The re- architects are in short supply. successful companies. Businesses gion could find it is home to healthy, that are growing will be forced to profitable businesses that grow their But the downturn in 2009 is but expand elsewhere. New business will footprint somewhere else. There is a one reason that businesses find be harder to attract. For Pittsburgh, direct link between workforce devel- themselves short of skilled workers. it could mean a cycle of business opment and real estate development The biggest culprit is simple demo- attraction and job growth can be over the long haul. graphics. There are a lot of Baby eroded in a decade or less. And Boomers and the median age of Laura Fisher, senior vice president, Another facet of the workforce that demographic cohort is now 65. workforce and special projects for development is matching the skills of While the Millennial generation is the Allegheny Conference on Com- the workforce to the demands of the actually larger in number than even munity and Economic Development, employers. Even as Pittsburgh enjoys the Boomers, there has been a shift is concerned that the sense of total employment that reaches new in the kinds of work that Americans urgency surrounding the problem all-time highs almost every month do and the skills that are needed to isn’t great enough. in 2015, there is a mismatch of do that work. Social attitudes about people to opportunities. The Imagine education and vocation have left “We’re going off a demographic cliff Pittsburgh employment opportunities Americans with too many college here shortly. The rest of the country website listed almost 28,000 open degrees and not enough technical will feel it eventually but we have jobs as August began, with roughly skills. It’s a problem that is moving the oldest workforce in Pittsburgh,” two of three having an information

www.developingpittsburgh.com 35 technology component. With 64,000 that improved understanding will unemployed people in metropolitan come from studying what employers Pittsburgh, having people with skills “While great op- are lacking. to match the positions open would reduce the number of unemployed portunities exist for “The ultimate goal with this new by another 44 percent. students, there is program is to help high school kids make better choices,” says Fisher. “The fact that there are 25,000 sometimes a discon- “We’re not going to tell students open jobs on Imagine Pittsburgh and nect between these what to study but we want them to an unemployment rate above five go into whatever field they choose percent shows that there is a discon- job training systems with their eyes wide open about the nect,” observes Fisher. and the skills Penn- job prospects.”

During 2014, the Allegheny Confer- sylvania employers There is evidence that the Com- ence conducted 51 group sessions to are seeking,” she monwealth is beginning to take get input for its 2015-2017 agenda. note. The PA Department of Over 1,000 people attended and says. “To close that Education (PDE) employs a program voiced their biggest concerns and gap, Governor Wolf’s called Career and Technical Educa- opinions on the region’s biggest tion – what was formerly known as needs. These regional leaders clearly 2015-2016 budget vo-tech - with over 80 career and articulated that the problem of at- technology centers (CTCs) and more tracting and retaining talent was the increases funding than 120 school districts offering top issue to address. More striking for programs that PDE-approved career and technical was the fact that the workforce education throughout the state. issue hadn’t been on the agenda help Pennsylvanians These programs allow students to just three years earlier. The Confer- learn the targeted earn industry certifications while ence has put together a workforce enrolled in school. task force, led by PNC’s CEO Bill skills necessary to Demchek, which is charged with compete, including According to PDE Press Secretary wrestling the problem to the ground. Nicole Reigelman, the Wolf adminis- Industry Partnerships tration understands the gap between Those hungry for a quick fix will and Workforce and workforce skills and opportunities be disappointed, however. Fisher that Fisher describes. explains that the task force will take Economic Develop- as much as the first year getting to ment Network of PA “While great opportunities exist understand the problem, especially for students, there is sometimes in light of the fact that Pittsburgh (WEDnetPA); job-link a disconnect between these job has the people to meet the physical training systems and the skills need for workers but not the skill literacy programs to Pennsylvania employers are seek- sets to match up to the opportuni- build employment ing,” she says. “To close that gap, ties. Governor Wolf’s 2015-2016 budget skills; and vocational increases funding for programs “The focus of our efforts is around rehabilitation pro- that help Pennsylvanians learn the understanding what changing targeted skills necessary to compete, demographics are doing to our grams that help per- including Industry Partnerships and workforce,” she explains. “We will sons with disabilities Workforce and Economic Develop- also be looking to understand in a ment Network of PA (WEDnetPA); forward-looking way at where the prepare for, obtain job-link literacy programs to build demand for workforce will be.” and maintain employ- employment skills; and vocational rehabilitation programs that help One obvious part of the solution ment.” persons with disabilities prepare for, is to use the educational system obtain and maintain employment.” to attack the problem. The task force of the Allegheny Conference parents understandably have. School Governor Wolf has also proposed expects to help high schools and districts are also currently incented that $28 million in Career and Tech- post-secondary schools develop to maximize the number of gradu- nical Education Grants be awarded programs that teach technical skills ates who go on to college. These are in communities around Pennsylvania to students not bound for a career challenges that will take changes to support the establishment and that requires a college education. in opinion and policy. What can be enhancement of CTE programs, Part of the challenge in developing improved sooner is the understand- updates to training equipment and such programs is surmounting the ing of the career prospects that will college, and career counseling pro- bias towards college education that arise from a technical education and grams for middle and high schools.

36 DEVELOPINGPITTSBURGH | Fall 2015 This funding was all new and is, unfortunately, a victim of the budget battle currently going on in Harrisburg.

As politicians jockey for position, the need for workforce grows. In Western PA, there is a very real example of the connection between a robust workforce and regional business development. Royal Dutch Shell has been studying the feasibility of building a world-class petrochemical facility, including an ethane cracker, in Monaca, PA. Much of the feasibility study has revolved around chemical and natural gas industry fundamentals; however, one of the top issues that Shell has repeatedly raised in its evaluation has been the size and characteristics of the construction workforce in the region.

“There is no question about it,” replies Jason Fincke, executive director of the Builders Guild, when asked about Shell’s interest in the available construction workforce. “We have worked closely with the Pittsburgh Regional Alliance to give as much information as we can about the 41,000 craft workers in the Pittsburgh market. I’ve met personally with Shell on a couple of occasions and they want detailed information, right down to the number of workers in each trade by zip code. I can tell you that workforce is very important to them.”

It’s Pittsburgh’s good fortune that the answers Shell has been seeking thus far have been positive. As we imagine the development possibilities that will arise as a result of Shell’s locating a polyethylene production facility, think www.millcraftinv.com of the lost opportunity that would have been if there weren’t enough workers to meet Shell’s demands. When we hear people talk of Lazarus rising from the dead, we can’t help but feel a little pride... even if It is the latter scenario that civic leaders are planning to avoid. Over the past few years Piatt Place wasn’t the main topic of that conversation. programs like ShaleNet and Service-to Veterans But, bringing new life to empty spaces in downtown have been developed to enhance the career opportunities for targeted audiences. The Pittsburgh is our passion. We believe living and playing Allegheny Conference hopes to have similar where you work is good for the city, and good for programs in place within a couple of years that will target the audiences in highest demand. the planet. That’s why Millcraft has been leading While that study is going on, there are some redevelopment efforts in the area from projects like specific programs already in the works. Because of an information technology analysis, there Piatt Place to Tower Two-Sixty, the first new multi-use is certainty that IT will be one of those high building constructed downtown in almost 30 years. demand fields.

“We do know that IT and IT-enabled skills will cut across all industries. The goal is to develop MILLCRAFT training programs that fit, whether those are two-year or four-year programs,” says Linda INVESTMENTS Topoleski, vice president of workforce programs and operations for the Allegheny Conference. Call 724.229.8800 “Workers won’t need a four-year degree or ten for Business Leasing Opportunities, years of experience. We’re looking to create pathways to careers.” Or 412.471.4900 for Residential Sales DP

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t mid-year rose 2.9 percent in the second values are improving at a higher 2015, the quarter following an increase of pace, beginning to recover the underlying 1.8 percent from January through ground lost after the mortgage cri- economic March, reflecting pent-up response sis. Home inventories are low – with support for the to lower gas prices since mid- little more than a five-month supply commercial late 2014. Consumer confidence available – and new construction property sectorA is as strong as it showed strength in how people has only topped the million-unit has been since the peak of the last viewed the current situation with mark within the past year. There are economic cycle in 2007-2008. Un- less confidence about the future. fewer obstacles to healthy consumer like that peak, there is little of the The Conference Board said June 30 spending, a driver of 70 percent of frothiness of the housing bubble that its consumer confidence index the economy. boom and room for even more upside in this business cycle. Look- ing forward into 2016, what clouds loom for commercial real estate are in the potential for tighter fiscal policy to disrupt the good times.

The principle source of optimism and strong real estate performance has been the labor market. Employ- ment grew by some 3.1 million jobs in 2014, reaching a new historical high for the number employed in the U.S. Coupled with construction volumes that are still some 30 percent below the pre-recession peak, the demand for office and industrial space outstripped supply by a considerable amount. That created good news for occupancy and rental rates.

The July 2 jobs report showed that 1.3 million jobs had been created during the first six months of 2015, dropping unemployment to 5.3 percent. The decline in unemployment was attributed to a further decline in the workforce rather than the rise in employment. While the trend rose to 101.4 in June, up from a The economy in Western Pennsyl- of lower workforce participation is May reading of 94.6, but declined vania picked up steam in May and troubling – the 62.6 percent labor again in July to 90.9. The survey of June as more people entered the participation rate was the lowest current conditions found consumers labor market and employers added since October 1977 – the decline registering an index of 107.4. 15,700 and 6,700 jobs respectively. thus far in 2015 has been primarily The year-over-year increase through from people who were fully em- Consumers are in a better posi- six months has been 23,500 non- ployed leaving the workforce, rather tion to contribute to the economy farm jobs. The seasonally adjusted than unemployed workers giving up. than at any time since the housing unemployment rate is generated bubble in the mid-2000s. Today, from a separate survey of house- The job gains occur as consumers however, the consumer balance holds, which showed the labor grow more confident about the sheet is much improved. Debt-to- force grew by 6,400 people to 1.22 outlook for the economy and their income ratios are lower than have million people. own finances. Consumer spending existed for 30 years or more. Home

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40 DEVELOPINGPITTSBURGH | Fall 2015 “There are a lot of positive things be affected by “seasonal interac- May 18 Economic Letter concluded going on that are more solid than tions between the components that the BEA is not adjusting out we’re used to seeing in the past 15 themselves that get skewed once calendar impacts. After doing its years,” notes Jack Shelley, senior aggregated,” offers Kurt Rankin, own round of adjustments, the vice president for real estate lend- vice president and economist for FRBSF estimates that GDP grew at ing and services for Dollar Bank. the PNC Financial Services Group. a much faster rate from January “When things heat up, developers Rankin is quick to point out that through March. tend to fall in love with every this is his best guess of the reason, opportunity and that’s how things but notes that seasonal adjustments Regardless of whether or not there get overbuilt. Right now that’s are arbitrary and seem to need is as dramatic a rebound in the not happening, even though we’re some revisions to make the adjusted second and third quarters of 2015 seeing more development than in comparisons valid. as in 2014, there are few domes- many years. We’re starting to catch tic head winds to slow the U.S. up with ourselves with pent-up economy. June and July brought demand.” reminders that some of the world’s largest economies aren’t on as firm The improvements to the consumer Regardless of whether a footing as the American economy, side of the economy offset soft- but thus far the ripples from the ness in business investment and or not there is as Greek debt default and the slow- government spending to drive a 2.3 dramatic a rebound down in China have barely been felt percent increase in gross domestic in the U.S. product (GDP) during the second in the second and quarter. Growth was muted by a third quarters of 2015 As had been predicted, the small slight decline in equipment expen- size of the Greek economy and the ditures and a 68.2 percent decline as in 2014, there are certainty of the ultimate outcome of in mining and drilling by oil and gas few domestic head negotiations to restructure its debt companies. The measure of private rendered that “crisis” insignificant domestic demand – which strips out winds to slow the to the U.S. Few options existed for trade, inventories and government U.S. economy. June Greece except to agree to austerity spending – rose 2.5 percent. The measures and social changes that rise in GDP was somewhat below and July brought the European Union – and mainly economists’ expectations, but that Germany – made as provisions for was in part due to revisions that reminders that some extending a lifeline. While there the Bureau of Economic Analysis of the world’s largest was media discussion of Greece’s (BEA) made to the first quarter GDP problems imploding the EU, there – which now shows a 0.6 percent economies aren’t was little likelihood of that happen- increase – and its methodology. on as firm a footing ing. U.S. investors and businesses behaved as though there was little A trend that the BEA is investigat- as the American chance of a Greek default triggering ing – and is expected to provide economy, but thus far a global financial event, and indeed, explanation and guidance about when a deal was struck the reaction later this year – is the disparity in the ripples from the to the agreement was muted. growth between the first quarter Greek debt default and subsequent quarters. Real GDP Of more potential danger is a reces- growth typically declines ten per- and the slowdown sion in China. Concerns over a real cent in the first quarter of the year, in China have barely estate bubble persist and the level without seasonal adjustments, and of consumption and investment by the second quarter then rebounds been felt in the U.S. Chinese companies has declined by roughly 20 percent. Since 2000, compared to the decade-long trend; however, the seasonally-adjusted however, Chinese GDP growth growth rates have been much lower remained at seven percent in the during the first quarters and have This may seem like a lot of eco- second quarter, slightly higher than fallen precipitously after 2010. nomic nit-picking but when you the 6.9 percent that was forecasted. Because most analysts forecasted consider the key role that consumer Chinese stock exchanges have got- a solid first quarter 2015 based on and business confidence played ten headlines for the recent volatil- other economic data, the decline in prolonging the recovery after ity but the Shanghai Index has risen seemed to really spark questions 2011 and the role that GDP growth more than 20 percent since January this year. is playing in the Federal Reserve 1 and Hong Kong’s Hang Seng Index Bank’s decision-making on inter- is up roughly six percent. Investors The methodology for seasonal est rates, getting the rate of real in Chinese stocks seem to have an adjustments relies on adjustments growth right isn’t a trivial matter. increasing level of anxiety over the to the individual categories within In fact the Federal Reserve Bank of role the Chinese government will GDP that are then aggregated to San Francisco (FRBSF) studied this play in supporting the markets. reach a total. This top line GDP may “residual seasonality” and in its China has purchased blue-chip

www.developingpittsburgh.com 41 It is the favored position of U.S. real estate that might give some observers pause, as the market conditions begin to more closely resemble those in 2007. Certainly there are similarities to that period from the perspective of capital chasing assets but there are a number of metrics that indicate a difference in markets.

For one, there is virtually no asset class that has been overbuilt in the way the housing market was in 2007. There is an argument to make for a bubble in apartment construction but the number of new apartments in the pipeline is not near some of the historical highs of previous cycles and both occupancy levels and rents continue to climb for apartments. For the remaining commercial real estate products, regulatory constraints have kept pressure on appraisals Seasonally-adjusted GDP growth rates for the first quarter have declined steadily over the past four and loan-to-value ratios that have decades. Source: Federal Reserve Bank of San Francisco. restrained property valuations. It’s difficult to make a case that any commercial asset class is artificially stocks through a portfolio called inflated, except to the degree that the China Securities Financial the low interest rates are factored Corp. and has dialed back inflows For one, there is in. Interest rates would seem to be into the market, either to test virtually no asset the main risk factor looming for the whether stocks can be supported real estate market. without intervention or because class that has been its own liquidity is constrained. overbuilt in the way In her most recent remarks to Few observers believe it is the Congress, Federal Reserve Bank latter and government response to the housing market Chair Janet Yellen signaled that significant weekly or daily selloffs the Fed was finally ready to raise seems to reinforce that opinion. was in 2007. There rates. Neither the stock markets nor is an argument to the Treasury debt market mustered These two highlights of the global much of a response to Yellen’s economy reflect the environment make for a bubble remarks, creating the impression in which American companies in apartment that the first increase or two is must do business. Weaker de- already priced into the markets. mand and weak economies in construction but At this point, there seems to be Europe – coupled with the fear the number of new confidence that the Fed will manage that the Eurozone may yet dis- any tightening skillfully and that the solve – continue to create pres- apartments in the increases that occur over the next sure to maintain loose monetary pipeline is not near 12 to 18 months will be small. policy. Likewise, a softer Chinese economy will be an incentive for some of the historical For an industry that depends upon the central bank there to stimulate highs of previous job growth, consumer confidence, growth. Either of these scenarios, economic stability and appetite let alone the relative strength of cycles and both for yield as its recipe for success, U.S. businesses, makes investing commercial real estate is in a very in U.S. assets more inviting. For occupancy levels and strong environment for the next at least the balance of 2015, U.S rents continue to 18 to 30 months. The primary risk commercial real estate assets will appears to be higher interest rates, be among the favorite of those climb for apartments. a risk that seems remote and limited foreign investments. in its impact. DP

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www.developingpittsburgh.com 43 Office Market Update

40 basis points (bps) from the CBD Office Developments Pittsburgh second quarter of 2014. The Pitts- burgh job market was enhanced by Pittsburgh’s Central Business Economy the addition of over 19,000 jobs, a District currently has two projects 1.7 percent year-over- year increase planned for delivery in the second city formally led by the natural resources, half 2015, the Tower at PNC Plaza, known as mining and construction sectors a 40 story – 800,000 square feet America’s posting a cumulative 6.1 percent office building and Tower Two- steel capital, increase. Average wages in the Sixty, an 18 story – mixed use de- the Pittsburgh market rose 3 percent over the velopment. Positioned at the corner region is now previous year to $52,884. of Fifth Avenue and Wood Street, an economyA fueled by innovation. the Tower at PNC Plaza will have a Over the past decade the Pitts- Pittsburgh Office Market lasting impact locally affecting the burgh economy performed well and city skyline. It will also stand as the for the most part remained stable The Pittsburgh office market, con- world’s greenest building expecting through the great recession due to sisting of nearly 71 million square to exceed the requirements of LEED the region’s unwavering education, feet across five counties, ended Platinum. Located less than a block healthcare, and financial services the second quarter of 2015 with a away, bordering Market Square industries. In recent years, how- vacancy rate of 8.2 percent, up 20 is Tower Two-Sixty, which offers ever, the technology sector and the bps from 8.0 percent in the second approximately 128,000 square energy industry have demonstrated quarter of 2014. Year over year feet of LEED certified office space. booming characteristics and the Tower Two-Sixty recently secured an office tenant for 50,000 square feet, leaving 78,000 square feet of office space remaining for lease.

US Steel will be contributing to the increase in Pittsburgh’s CBD development activity. At the conclusion of 2014 US Steel announced its commitment to construct a new 268,000 square feet LEED certified headquarters building. Standing 5 stories tall, the office building is to be constructed on the former Civic Arena site, and feature large 50,000 square feet floor plates, which will rank among the largest in the CBD. Construction is scheduled to start the fourth quarter 2015.

The Boston based Davis Companies acquired the Union Trust building in 2014 and is currently in the process of repositioning the asset potential to become major con- office leasing activity was vibrant as a technology hub. Located at tributors in the region’s long term at the mid-year mark of 2015 with 501 Grant Street, the Union Trust economy. the Downtown area absorption out- building which is currently being performing the suburban markets renovated, will offer 250,000 leas- As the Pittsburgh economy contin- by slightly over 72,000 square feet. able square feet. Once completed, ues its resurgence, key employment Overall absorption statistics were the building will welcome tech indicators remain positive. At the strong, demonstrating a significant tenants Jawbone and Truefit into conclusion of the second quarter increase compared to the same a combined 30,000 square feet of 2015, Pittsburgh’s unemployment period 2014. modern quality office space. rate declined to 5.2 percent, down

44 DEVELOPINGPITTSBURGH | Fall 2015 The Central Business District also has several build-to-suit opportunities scheduled, upon the commitment of an anchor tenant, as Burns & Scalo, Oxford Development, and the Civic Arena Redevelopment project are marketing proposed office buildings. Pittsburgh’s CBD currently has over 1.3 million square feet of proposed office space.

Suburban Office Market

Pittsburgh’s suburban markets are proving to be an area of high growth and activity. The Industries’ 348,000 square foot success of the Southern suburbs renewal at PPG Place in Pittsburgh’s comes as no surprise, since the As a result of Central Business District, Rice Southpointe area has become Energy’s new Headquarters lease known as the region’s oil and gas the high quality for 150,000 square feet at Zenith epicenter. In spite of the recent office space Ridge III, a class A office building slide in oil price, construction concurrently under construction in tinues and rental rates are on the being delivered Southpointe Business Park and rise. Trying to compete with other to attract tenants Chevron’s 120,000 square foot suburban markets, East Liberty is lease at 700 Cherrington Parkway maintaining the interest of devel- such as Google, in Moon Township. Meanwhile, as opment companies, and due to the CMU and a number Apple looks to expand its pres- market’s recent advances, existing ence in the city, it will be leasing buildings are being repositioned of emerging approximately 26,000 square feet and new developments are being at Three Crossings, a mixed use announced nearly every quarter. As technology complex in the Strip District, upon a result of the high quality office companies, the completion. space being delivered to attract tenants such as Google, CMU and level of demand Investment Activity a number of emerging technology and rental rates companies, the level of demand The office market experienced and rental rates in the area have in the area have noteworthy transaction volume reached new highs. reached new with investment sales totaling approximately $130 million in the Notable Lease Transactions highs. first half of 2015. New York investors displayed an interest in the Notable lease transactions in the Pittsburgh office market through first half of 2015 included PPG

www.developingpittsburgh.com 45 An Influx of Space

Pittsburgh’s Central Business District has become known as one of the tightest class A markets in the country rivaling metros such as New York City and San Francisco; however, by 2018 the amount of available space could increase dramatically because of consolidations and new construction. Notable space coming available includes 425,000 square feet at 600 Grant Street as a result of US Steel’s planned transition into a new headquarters building in October 2017; 650,000 square feet at 525 William Penn Place as a part of BNY Mellon’s ongoing consolidation efforts, and the substantial amount of leased space PNC will be vacating at numerous locations as it centralizes at The Tower. Additionally, the available office space under construction and renovation will introduce another 300,000 square feet for a total availability of over two million square feet in the Central Business District alone.

At the end of the second quarter 2015 the Pittsburgh suburban and fringe markets had 772,244 square feet under construction with 51 percent of the space preleased. Although certainly not as concentrated as the CBD, large blocks of space will also be available in these markets due to the consolidations of GlaxoSmithKline Consumer Healthcare and Big Heart Pet Brands. GSK will be vacating 130,000 square feet at 1000 GSK Drive – Millennium Center One in the Parkway West corridor and Big Heart Pet Brands is to vacate nearly 100,000 square feet at 375 North Shore Drive.

The Result

Due to the economic strides Pitts- burgh continues to take during the region’s resurgence, average asking the second quarter as Faros Proper- & Scalo, Grand View Partners, and rental rates for Class A office ties – new owner of Allegheny Kossman Development also con- space have escalated. The overall Center, King Penguin Fund – new tributed to the region’s investment asking rental rate for Class A space owner of the Lawyers Building, activity. Faros Properties recorded increased to $26.10 per square and Anglo Hudson Realty – new the largest single investment thus foot in the second quarter of 2015, owner of 811 Camp Horne Road, far in 2015 at Allegheny Center for up from $25.47 per square foot in all completed acquisitions in the $48.69 million. the second quarter of 2014. This market. Local investments by Burns represents the fourth consecutive

46 DEVELOPINGPITTSBURGH | Fall 2015 year of steady increase, which has been a direct result of the region’s Looking for Commercial Space in Beaver County? low vacancy rates and a rebound- Call Avison Young Commercial Real Estate ing economy. Moving forward, however, the influx of office space 11 miles on the horizon should have an 602 Morris St. impact on price, placing downward Darlington, PA pressure on rental rates. These fac- Industrial Space tors will have an influence on the 40 acre site For Sale region’s office market conditions 5 miles in the near term shifting leverage th from the Landlord to the Tenant 850 4 Ave. and will provide an opportunity for New Brighton, PA large users to establish and or up- Office Space grade their presence in Pittsburgh’s + 13,800 sf For Sale growing office market. 5 miles 800 5th Ave. New Brighton, PA George Kingsley Flex Space Principal – Managing Director + 38,000 sf For Sale [email protected] Proposed 412.944.2131 Cracker 3.5 miles Avison Young 350 Kentucky Ave. Four PPG Place, Suite 300 Rochester, PA Pittsburgh, PA 15222 Industrial Space DP + 24,500 sf For Sale

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PITTSBURGH, PA I CHARLESTON, WV I STATE COLLEGE, PA I CANTON, OH I SEWELL, NJ Industrial Market Update

MANUFACTURING POISED FOR GROWTH IN 2015

fter decades of losses in its manufacturing sector, Pitts- burgh has set a course to revive its industrialA base in 2015. The focus has shifted from the steel industry to high-tech and light manufacturing, including growth in both local start- ups and international super powers. Named one of 12 new "manufacturing communities" that are part of the U.S. Department of Commerce's Investing in Manufacturing Commu- nity Partnership (IMCP), Pittsburgh is poised to lead the country in specialty metals manufacturing. IMCP was created to help accelerate the resurgence of manufacturing in the U.S. and encourages communities to strengthen their competitive edge in order to attract global manu- facturers and supply chains. For six of the past eight years, manufacturing has been the region's most active sector with regard to business investment deals. In fact, Pittsburgh has been ranked among the top 10 American cities for direct foreign investment by fDi Magazine and is home to more than 390 foreign-owned firms.

Capital investments in the Pittsburgh region totaled $2.3 billion in 2014, according to the Pittsburgh Regional Alli- Advanced manufacturing led the re- tion on a new $32 million advanced ance. Of the 274 regional business gion's five key industry sectors with manufacturing facility in Findlay investment deals recorded by the 68 business attractions, expansions Township, where it expects to create economic development organization, or retentions, representing $450.2 50 jobs in mechanical, electrical and seven out of ten were for expansion million in capital investment. software engineering fields when it or retention of existing companies. General Electric has begun construc- opens in Q3 2015. Leedsworld, Inc.

www.developingpittsburgh.com 49 Swanson School of Engineering and incubator space for up to six innovation projects. The university plans to take occupancy of its new space at the Energy Innovation Center in Pittsburgh's Hill District neighborhood in Q3 2015.

DEVELOPERS TARGET BUILD- TO-SUIT REQUIREMENTS

Sippel Development announced plans to construct a 305,000-square has executed a lease for the first foot distribution facility in Jackson phase of a new 240,000-square- Township, Butler County submarket, foot warehouse to be constructed General Industries on behalf of FedEx, who is look- on 28.11 acres at Westmoreland ing to establish a new distribution Business and Research Park, West- released its concept facility in the market. Oxford De- moreland County. Plans are in place for Concorde Pointe, velopment broke ground on its 250 to double the size of the facility, Industry Drive project, a new $13 which would bring the company's a new $100 million million, 88,000-square foot flex and occupancy at the park to more than office complex near the Airport that 800,000 square feet. light industrial will be anchored by Under Armour. park that will be The company has been scouting the Gerome Manufacturing, a Fayette area near Dick's Sporting Goods County-based manufacturer of constructed on a 110- headquarters for several years and custom sheet metal products plans to open a new product show- celebrated the opening of its new acre stretch of open room upon completion. $9 million, 150,000-square foot land in Rostraver, facility. State-of-the-art equipment General Industries released its and an enhanced work environment Westmoreland County. concept for Concorde Pointe, a are expected to contribute to the new $100 million light industrial company's success in attracting new The company plans park that will be constructed on a global and local customers. to target energy 110-acre stretch of open land in Rostraver, Westmoreland County. HIGH-TECH AND R&D LEAD companies with 25,000 The company plans to target energy OCCUPIER ACTIVITY square foot to 250,000 companies with 25,000 square foot to 250,000 square foot warehouse The Brookings Institution ranked square foot warehouse and light industrial requirements for Pittsburgh 45th out of the 100 its 30 building project. In addition, top metros for employment within and light industrial the developer intends to add retail advanced industries such as R&D requirements for its 30 and restaurants to provide additional and science, technology, engineering amenities for tenants. and math (STEM). With more than building project. 103,000 professionals currently FOOD SERVICES DRIVE working in these fields in the region, NEW CONSTRUCTION leasing and user sales within the high-tech and advanced manufactur- With 25 current employees, the The food service/logistics sector ing sectors have gradually increased currently is driving new build- for the past five years. User sales company hopes to expand to 100 in the new location. to-suit construction within the activity in the Pittsburgh industrial industrial market. Among the market topped 1.2 million square latest projects are: Gordon Foods' feet (msf) in the first half of 2015. Uber technologies, Inc. has partnered with Carnegie Mellon 420,000-square foot distribution Aerotech Designs, a manufacturer center in Findlay Business Park, and online purveyor of bicycle cloth- University (CMU) to build a robotics research lab that will focus on airport corridor; and, Paragon ing, purchased two industrial facili- Foods new $12 million facility ties formerly owned and occupied constructing self-driven cars. The Uber Advanced Technologies Center in Warrendale. In addition, Aldi by the Pittsburgh Post-Gazette on is in the permit process for an Pittsburgh's North Side, Greater will be developed near CMU's national robotics engineering center 110,000-square foot expansion of Downtown submarket. The company its 500,000-square foot distribution will consolidate its operations into in Lawrenceville. The center also will occupy space within two neighbor- warehouse at Victory Business Park approximately 60,000 square feet in in Butler County. the two buildings, which the compa- ing buildings. The University of ny chose because of their proximity Pittsburgh has signed 15-year leases to the city's riverfront bicycle trails. for three energy-related labs for its

50 DEVELOPINGPITTSBURGH | Fall 2015 Jack O'Donoghue, SIOR Principal Cushman & Wakefield | Grant Street Associates, Inc. [email protected] Grant Street Associates, Inc. 310 Grant Street, Suite 1550 Pittsburgh, PA 15219 412-391-2600 www.gsa-cw.com DP

OUTLOOK opment. As a result, leasing activity is expected to continue to decline Home to eight of 2014's Fortune as vacancy and rental rates increase. 500 companies, Pittsburgh has Public-private partnerships formed emerged as a diversified global busi- to respond to this growing need ness center. The region has all of the can help Southwestern Pennsylvania right assets economically to meet remain competitive but timing is of the growing needs of industrial users the essence. Jack O’Donoghue emerging in the U.S. save one: large warehouse/distribution facilities or adequate pad-ready sites for devel-

www.developingpittsburgh.com 51 GRANT STREET 8-6-15 - Half pg horizontal - Pittsburgher FINAL.indd 1 8/6/2015 2:21:17 PM Gerard McLaughlin Executive Managing Director [email protected] Louis Oliva Executive Managing Director [email protected] 210 Sixth Avenue, Suite 600, Pittsburgh, PA 15222 T 412.281.0100

North America  Latin America  Europe  Asia-Pacific  Africa  Middle East www.ngkf.com Retail Market Update

he Pittsburgh In CBD development/redevelopment Other urban markets continued to retail sector news, Core Realty purchased the flourish, with asking rents in some ended the first Macy’s building with plans to con- existing established neighborhoods half of 2015 vert the 1.2 million-square-foot icon outperforming historically strong with another into a mix of apartments, hotel and upscale locales. At the same time, decrease in retail. Macy’s will vacate the building a move back to the city has led to vacancy, whichT at 4.3 percent was a in September, ending the location’s struggling and challenged segments 10–basis-point decline from year-end 125-year operation as a retail store. of the marketplace experiencing 2014. A lack of overbuilding, low Once home to three major depart- gentrification. East Side, anchored unemployment and pent-up demand ment stores, the CBD has struggled by Home Depot, Whole Foods, Tar- contributed to the ever-tightening to attract and maintain major retail- get, Trader Joe’s, hip restaurants, marketplace.

Demand in the Central Busi- ness District (CBD) continued to support an increase in occupancy rates and asking rents throughout the first half of the year, partly due to the growing downtown population. For the first time in several years, the CBD has a grocery store, Market Street Grocery, which opened its doors in April. However, there is no shortage of food options for those wanting to dine out. The Pittsburgh Downtown Partnership reported that there are 300 restaurants in the Golden Triangle, with over 10 new restaurants coming later this year and into 2016. In the Market Square segment of the CBD, Pirata, a Carib- bean restaurant, is scheduled to open in February 2016. The restaurant will occupy space in Tower Two-Sixty, an office building that is expected to complete at the end of this year. In Two PPG Place, Poros, a Greek restaurant, is scheduled to open at the end of summer. Historically not a dinning destination, the Mel- ers. In 2012, Saks departed the Pitts- and the Bakery Square complex, is lon Square area will also be home burgh CBD. The site, located close an example of an area that has made to several restaurants in the future, to Macy’s, will be converted into a dramatic turnaround and is still as former single-use buildings are parking, condos and retail space. As evolving. converted to include hospitality and of the close of the first half of the residential space. year, construction on the Saks site Activity in well-located suburban had not yet begun. markets kept pace with the urban

www.developingpittsburgh.com 53 McCandless Crossing and Whole Foods in the South Hills core trade area, and The Fresh Market recently signed a lease for its second Pitts- burgh location in Fox Chapel.

Other new and existing tenants expanding in Pittsburgh are Uncle Maddio’s Pizza Joint, Blaze Pizza, Piada Italian Street Food, Pure Barre, Mattress Firm, Smashburger, Ross Dress for Less, Speedway, Starbucks, Dunkin Donuts, Primanti Bros Res- taurant, Chipotle, Moe’s, Massage Envy, Jimmy John’s, Applebee’s, Auto Zone, Planet Fitness, Panda Express, Five Below, HomeGoods, Dick’s, Field & Stream, Penn Station Subs, Good- will, Corner Bakery Café, Chick-fil- A, Buffalo Wild Wings, Noodles & Company, and more!

core. In the North/Cranberry sub- The outlook for retail in the Pitts- market, the development of the Trader Joe’s in burgh marketplace will keep land- 57-acre Village of Cranberry Woods lords smiling, as the limited amount of Route 228 will be divided into McCandless Crossing of existing space and new product two segments by two develop- under construction will continue to ers. Plans laid out by Creative Real and Whole Foods in drive up rents. Estate include a restaurant and a the South Hills core second hotel in the first phase, David Glickman, Director and Madison Acquisitions, the new trade area, and The Newmark Grubb Knight Frank owner of the remaining 47.0 acres, Fresh Market recently 210 Sixth Avenue, Suite 600 will develop the second phase. The Pittsburgh PA 15222 site will be anchored by a proposed signed a lease for its (412) 434-1065 110-room hotel, 290 apartments, 10 [email protected] townhomes, and 37,000 square feet second Pittsburgh www.ngkf.com of retail space, a 10,295 square foot DP restaurant, 5,000 square feet of location in Fox office space and 10,000 square feet Chapel. that could be used for either offices or retail.

A little closer to the city, in the are under consideration, including a North/McKnight Road submarket, the potential downsizing in mall square McCandless Crossing development footage. However, modifications are announced lease commitments from not projected to begin until 2016 at Old Navy, Hello Bistro and Gigi’s the earliest. Cupcakes USA. Nearby, at The Block Northway (formerly Northway Mall), In tenant news, the grocery wars Nordstrom Inc. will open a 40,000 have subsided- somewhat. Discount square foot Nordstrom Rack in the retailer Aldi, which recently pur- fall of 2016.The off-price retail store chased Bottom Dollar Food from will be one of the lead tenants in the Delhaize Group, announced the redevelopment of the 470,000 that several former Bottom Dollar square-foot mall. David Glickman stores will reopen under the Aldi flag, and Aldi rival, Lidl, is com- Heading south to the South/Route mitting to a number of locations 51 submarket, the long-struggling throughout greater Pittsburgh and 1.3 million square foot Century III will have multiple stores open over mall is also headed for a makeover. the next 12 months. Trader Joe’s and Currently owned by Moonbeam Cap- Whole Foods are both opening third ital Investments, various scenarios stores in Pittsburgh: Trader Joe’s in

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Equal Housing Lender. Member FDIC.or Copyrightall the © 2012, Dollar Bank, Federal Savings Bank. BUS037_12 daily noise and headlines that suggest that equity BUS037_12.indd 1 2/14/12 11:08 AM and financial markets areF less stable now than in the past few years, the capital markets are running in a way that is consistent with the environment that has existed since credit normalized in 2013.

There are a few themes that describe the status of the markets: liquidity and access to capital is extremely good; real estate fundamentals are strong and still improving; traditional investment options remain limited because of a historically low interest rate environment; lenders and investors are assuming a hike in interest rates before the year ends; and on a regional level, economic conditions continue to make Pitts- CMBS issuances have normalized at pre-boom levels, near $100 billion annually. burgh a stronger market for real estate investment and development than most. Although the gap between the “I see lots of capital out there, lots U.S. and Pittsburgh economies has of people who want to earn more Jack Shelley, senior vice president of tightened, unemployment in Pitts- than one-half percent for their real estate lending and services for burgh remains below the level of the capital,” says Shelley. “I see pent-up Dollar Bank, sees some chinks in the national economy. Without seasonal demand from investors to put that armor as the economy rolls through adjustment, there have been roughly capital into real estate.” a seventh year of recovery but not 24,000 new jobs created year-over- necessarily for Pittsburgh’s real year in metropolitan Pittsburgh and Those same fundamentals are estate market. the forecast of 20,000 new jobs this pushing lending all over the country. year seems realistic. That’s a lot of The Mortgage Bankers Association “I really think there are a lot of demand for new workspace – much forecasts that commercial and cautionary elements in the economy of it new office space – and more multifamily mortgage originations that should make us [bankers] stay household formations than new will increase eight percent in 2015 on our toes but we’re truly blessed construction is creating homes. As from their prior year level but even to be in Pittsburgh right now,” Shelley says, there are a number of that increased level of activity won’t Shelley says. good reasons why landlords continue exhaust the supply of available fi- to be great borrowers in Pittsburgh nancing to meet demand. What may and are attracting investors. present a problem for borrowers is

www.developingpittsburgh.com 57 the accelerated rate at which many lenders have reached their allocations for commercial real estate.

Leading the charge in the multifamily category are the government- sponsored entities (GSE), Fannie Mae and Freddie Mac. The GSE’s are limited by the Federal Housing Finance Agency to $30 billion each annually for apartment loans and each was on pace in the spring to reach that allocation by fall. As the GSE’s slowed the pace of deals, rates for apartment loans increased by 40 to 50 basis points. This allowed other lenders more access to the apartment market. Recent legislation gives Fannie and Freddie the opportunity to make apartment loans that won’t count against their allocations, and the renewed interest in apartment deals by the GSE’s has pushed portfolio lenders back to non-residential commercial loans.

Portfolio lenders – like banks, life insurance companies and private equity lenders – make up the largest share of the capital pool. Portfolio lenders typically diversify where their capital is deployed, allocating a share to commercial real estate. Virtually all lenders increased their allocations for commercial real estate in 2015, but loan demand has pushed many to within sight of the annual allocations by mid-year. Lenders can add to their allocations when conditions dictate it but when that happens lenders will tend to be more selective about the deals they do. That will mean borrowers with credit issues may or with less desirable project types won’t find as many lenders interested in their deals later this year.

“We’re looking at a period now where across the market we’ve seen a pretty healthy real estate development cycle,” says Stephen Cobain, executive vice president of corporate banking for First Commonwealth Bank. “We’re starting to ask questions about whether the market can absorb another hotel or office or whatever. You have to ask the right questions about why the project is being built. If you find yourself reaching to answer the questions it’s time to take a step back.”

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Cobain points out that First Com- monwealth hasn’t changed their Real Estate I Construction I Manufacturing underwriting approach by becoming more conservative but also sees no P. 412-227-2500 • F. 412-227-2050 reason to get more aggressive in the www.BlumlingGusky.com current conditions.

One segment of the market that would benefit from more conservative conditions among portfolio lenders is commercial mortgage-backed securities (CMBS). Bundling commercial loans into securities that can be rated and sold as bonds, CMBS issuers sell to investors looking for higher yields that go up as the quality of the loan goes down. The real estate led financial crisis gutted the CMBS market for nearly five years when investors lost faith in the Project success. quality of the loans underlying the It’s what our clients do. bonds. That faith has slowly returned at a lower level and since CMBS It’s what we do. lending relies only upon the demand for commercial real estate loans from bond investors, CMBS issuances are limited by the market’s appetite rather than an arbitrary limit.

Roughly 20 percent of all commercial real estate loans are CMBS, so the return of CMBS volume has been a boon to real estate development. After being stuck below $85 billion for the past seven years, CMBS Colliers International | Pittsburgh volume was forecasted to top $100 billion in 2015 and issuances specializes in adding value to our through June were on target at $52 clients to accelerate their success. billion. Deal flow slowed in July but volume likely ended about $60 billion. Even though August is expected to be another slow month, it’s clear that there is potential for CMBS to soak up additional commercial real estate loan volume if other lenders slow down.

“We’re in the summer doldrums. Deals slow down and spreads have widened out a bit,” explains Nick Matt, managing director for HFF’s Pittsburgh office. Matt isn’t concerned about the dog days of summer hurting volumes. “If you look up and down Wall Street, all Commercial Real Estate Sales and Leasing Services those big banks have a CMBS shop and they are not going to stop doing > Real Estate Management > Valuation and Advisory deals in March and April because > Corporate Solutions > Investment of pricing in summer. Bonds in the > Sustainability > Auctions pools are not going off at the price that was anticipated so that eats at 412 321 4200 | www.colliers.com | @PghCRE their profits.” Learn how we are living our values of service, expertise, community and fun at www.colliersinternationalpittsburgh.com

www.developingpittsburgh.com 59 that she foresaw only a gradual incline to whatever tightening would occur.

Part of the Federal Reserve’s desire to get rates moving higher is to have the opportunity to ease rates in the event of an economic slowdown in 2017 or later. Higher rates, especially in an environment without inflation, aren’t good news for commercial real estate owners and developers. Most deals since the recovery began have been done with extraordinarily low capitalization rates. An increase of 100 or 200 basis points in interest and the exit from these deals gets messy. Higher rates will also stress cash flow, at least until rents catch up. But if the Fed makes good on its promise of a long slow rise in interest rates, the impact on commercial real estate should be negligible. Higher rates Yields on Treasury Bills remain at levels that are historically low. might have sanguine side effects since higher rates will improve business conditions for banks, mak- Summer doldrums aside, investors are obligated to maximize the return ing capital more available without should remain interested in CMBS as to the CMBS bondholders, the likely materially impacting its cost. long as the yields remain relatively option would be for the properties close to those of corporate bonds. in question to be taken and sold At this time, forecasts for interest One unknown hanging over the at current market value. Such an rates are generally in line with those CMBS market is the roughly $350 eventuality would add inventory that of PNC Financial Group’s prediction billion in maturing loans from could suppress the value of other that Fed funds will remain at or 2005-2007 that are maturing in properties. below one percent through 2015 2015 through 2017. Loans made and 10-Year Treasury bills will not from 2005 until the crisis froze up Should the worst case scenario occur exceed 2.5 percent until 2017. If the markets can be assumed to be in the maturity of the 2006-2007 such a forecast holds true, the shift the most competitive, with higher loans, the result would not be a in policy from easing to tightening loan-to-value ratios and property flooded commercial real estate will not harm the ability for busi- values that were probably inflated market (it’s worth noting that a nesses to use credit for expansion at the time. The proper assumption similar gloomy forecast for the or stress real estate financing. Such is that these maturing loans will be five-year maturity window in 2001 an environment has potential to the most-leveraged of the previous and 2012 was never realized). The act as another launching point for boom cycle. number of properties affected is economic activity to expand. small compared to the overall inven- Borrowers will have seen the values tory and overbuilding isn’t a threat. The fly in the ointment could be of the properties appreciate again in Unlike what occurred ten years ago, an unexpected return of inflation. recent years but likely not enough new construction remains no more The cost of energy has fallen to a to allow a new loan to pay off the than two-thirds the volume of the point that makes rapid inflation original mortgage. Today’s market previous boom, with the exception in materials and finished products conditions find 80 percent LTV as of the apartment sector. unlikely any time soon, except for the ceiling so borrowers will have to those that are heavily dependent come up with a way to bridge that The most realistic threat to the upon skilled labor. The current gap. In the intervening years since capital markets remains an unex- inventory of skilled workers is tight the crash, the fortunes of commer- pected rise in interest rates. Federal enough that wages are beginning cial property owners have reversed Reserve Bank Chair Janet Yellen to see upward pressure, although and most will have the balance sheet has taken great pains to assure the the trend has not shifted upward or liquidity to meet the gap should markets that any increase in rates beyond a two percent year-over-year they wish to. The potential problem would come in response to perceived increase. Economic growth beyond will come from those properties – economic strength and would not the three percent level could create the volume of which is unknown trigger a series of steeper hikes. In more scarcity of skilled labor and – that are in the hands of special fact, Yellen’s recent testimony was accelerate wage hikes, which could servicers. Because special servicers fairly explicit in assuring Congress push inflation high enough to cause

60 DEVELOPINGPITTSBURGH | Fall 2015 the Fed to accelerate interest rate ENVIRONMENTAL MANAGEMENT & SITE DEVELOPMENT ENGINEERING increases.

There was some small evidence of a rebound in inflation in the Bureau of Economic Analysis’ July 30 estimate of second quarter economic growth. The personal consumption expenditures price index increased by 2.2 percent, the fastest since the first quarter of 2012, after falling at a 1.9 percent rate at the start of ENGINEERING STRONGER COMMUNITIES the year. Excluding food and energy, prices increased at a 1.8 percent AT THE GROUND LEVEL pace. KU Resources offers a wide range of Jim Noland, president of PenTrust Real Estate Advisory Services, is environmental management and among those who aren’t overly site development engineering services. concerned about rising interest rates Let us do the groundwork to help in the near term. He believes the at- minimize your risk and maximize your profits. traction of the investment will keep capital flowing into commercial real KURESOURCES.COM estate and points out that higher rates would have some advantages.

“Commercial real estate is still viewed a very desirable asset class,” he notes. “Interest rates are as low as they are going to go. Rates have no place to go but up. That brings inflation into the picture but inflation is a friend to commercial real estate.” Assuming the arc of the Fed’s rate Connecting ideas, hikes remains shallow, there is little reason to expect the cost of capital capital and clients. to impede development between now and the end of 2016. Disrup- tions to the markets from global exogenous events could slow the Grandbridge Real Estate Capital provides the vital link between complex market economy or squeeze rates further conditions and capital solutions. As a national full-service leader in commercial and through a flight to safety; but even multifamily finance, we combine our wide range of capital sources with a knowledgeable that threat seems exaggerated. and experienced team to deliver results, deal after deal. Recent volatility in Greece and China made lenders ask for more yield, our scope of services includes: adding a premium of 10 to 15 basis points for CMBS issuances and mov- - Freddie Mac Program Plus® Seller/Servicer | Seniors Housing ing the 10-Year Treasury bill between - Fannie Mae DUS® 2.22 and 2.49 percent. But in the - FHA-insured Loans | MAP and LEAN context of thirty years of interest - Nearly 50 Insurance Companies rates, the cost of borrowing in 2015 - CMBS | Institutional Investors | Pension Funds remains exceptionally low. - Proprietary Lending Platform | Structured Finance - $29 Billion+ Loan Servicing Portfolio “There’s still a lot of liquidity out there and a lot of lenders looking to lend,” observes Nick Matt. “All in ContaC t Us rates are still around four percent. If you can’t make money at four Two Gateway Center | 603 Stanwix Street | Suite 1899 percent, you’re in the wrong busi- Pittsburgh, PA 15222 | Phone 412.391.3366 | Fax 412.471.1773 ness.” grandbridge.com DP Loans are subject to credit approval. Equal Housing Lender.

www.developingpittsburgh.com 61 NAIOP Pittsburgh Officers Brian Walker, President Millcraft Investments Inc. David Weisberg, Vice President BNY Mellon Gerald Bunda, Secretary Imperial Land Corporation Christine Vann, Treasurer BDO Daniel Puntil, Past President Grandbridge Real Estate Capital LLC Domenic Dozzi, Corporate Board Jendoco Real Estate Louis Oliva, Advisory Board Liaison Newmark Grubb Knight Frank

Board of Directors At Large Wm. Randell Forister W. Scott Caplan Clayco Jason Stewart Jones Lang LaSalle Maureen Ford Alcoa Don Smith Jr. Regional Industrial Development Corporation Linda Fisher TriState Capital Tyler Noland PenTrust Real Estate Advisory Services Inc. Lou Stempkowski Learn more about NAIOP, the Commercial Real Estate Development PNC Real Estate Banking NAIOP in the western Association, is the leading organization for developers, Jamie White LLI Engineering Pennsylvania tri-state region owners and related professionals in office, industrial at naioppittsburgh.com and mixed-use real estate. NAIOP provides Michael Sharp, DL Representative Continental Office Environments or 412-928-8303. unparalleled industry networking and education, and Patricia Farrell, Legal Counsel advocates for effective legislation on behalf of our Meyer Unkovic & Scott LLP members. NAIOP advances responsible, sustainable development that creates jobs and benefits the Advisory Board communities in which our members work and live. Steve Thomas Chapman Properties Peter Sukernek Hanna Langholz Wilson Ellis Paul Griffith Integra Realty Resources Inc. David Massaro Massaro Properties For more information on how you can develop Thomas Murphy connections with commercial real estate through NAIOP, Jendoco Real Estate visit us online at www.naiop.org or call 800-456-4144. Barry Ford Continental Real Estate Companies Richard Donley Cranberry Business Park Associates LP Legal/Legislative Outlook

other waters. The EPA and Corps tions or disturbance (including Recent Regula- jointly released the proposed rule in routine maintenance) may be subject April 2014, and by April 2015 had to CWA Section 404 permitting tory Changes and received close to one million com- requirements. Even constructed ments from the public. drainageways, swales and similar Their Impacts on surface flow conveyances would be The proposed rule expands the types considered jurisdictional unless it the Development of waters that will be considered can be demonstrated that they are jurisdictional and therefore subject not connected to a WOTUS and that Community they do not meet the definition of wetlands. By Daniel A. Maltese and Gregory P. Quatchak Thankfully, some The rule appears to lay this burden- of-proof on the applicant. Ditches s we find really useful are exempt from regulation if ourselves clos- exemptions for they: 1) are excavated in uplands, ing out another drain only uplands, and have less construction stormwater controls than perennial flow; and 2) do not season in the contribute to flow, either directly or Pittsburgh and ditches were indirectly, to a WOTUS. Since most region, a number of new or updated added—a clear ditches are constructed to collect A and transport runoff to a discharge regulations and guidelines must be taken into consideration when indicator that the point at a stream or wetland, only determining scope, schedules and ditches that are wholly disconnected costs for future projects. As with vigorous public from a watershed and remain dry any regulation designed to mitigate comment period was most of the year are likely to qualify potential environmental or ecologi- for exemptions. cal impacts, there are going to be effective. subsequent impacts to business if Stormwater Systems and they want to stay on the compliant Green Infrastructure side of the table. But those impacts to business—specifically to growth, Stormwater treatment systems and development and their related to CWA permitting requirements. other constructed water treatment construction needs—can themselves The proposed revisions extend systems traditionally were not be mitigated with some careful federal jurisdiction to most waters claimed by the Corps because these planning, preparation and guidance within the watershed by establish- systems are designed and maintained from environmental and ecological ing new formulas for documenting to satisfy Section 402 of the CWA experts. The following highlights “connectivity” and “proximity” of (regarding point and non-point some significant updates that may those upstream resources. It will discharges and NPDES permitting). affect future development plans. certainly make declaring an “isolated” wetland more difficult in our Recently, however, some Corps WATERS OF THE UNITED STATES region, as we will always be close to Districts have begun claiming an ordinary high water mark. stormwater channels and basins on On June 29, 2015, the U.S. Envi- the basis that they are either not ronmental Protection Agency (EPA) Thankfully, some really useful regularly maintained or they convey and U.S. Army Corps of Engineers exemptions for stormwater controls flow to/from a wetland or stream. (Corps) revised the definition of and ditches were added—a clear This is a slippery slope; if the mere “Waters of the U.S.” (WOTUS) indicator that the vigorous public connection to a stream or wetland is within the federal Clean Water Act comment period was effective. sufficient to claim jurisdiction, then (CWA). The revisions will affect the most stormwater facilities could be circumstances in which permits are The Ditch Issue subject to CWA Section 404 permit- needed to disturb and discharge fill ting requirements. material into streams, wetlands or Once a ditch or other area is under federal CWA jurisdiction, modifica-

www.developingpittsburgh.com 63 Additionally, green infrastructure has Pennsylvania Function Based Aquatic result in quicker permit review times been widely promoted by the EPA Resource Compensation Protocol from the PADEP and the Corps. Since and others as an effective solution aims to streamline the mitigation the success of the mitigation sites for stormwater control, water quality process by making one standard would be the responsibility of the and other issues. Despite appeals approach for everyone permitting bankers, developers would not have by many stakeholders, the EPA and projects with wetland and stream to deal with any of the long-term Corps have declined so far to pro- impacts in Pennsylvania. The PADEP success monitoring, which is typi- vide an explicit exemption for green has been working on the guidance cally five years. In addition, it would infrastructure—which may have a for more than 10 years. allow for more precise budgeting chilling effect on its use. and prediction of mitigation costs on Any impact to aquatic resources the front end of projects. What site engineers and real estate (wetlands, streams, open water) managers can do to reduce exposure must be mitigated by creating In the meantime, PADEP is develop- compensatory habitat, generally ing an In-Lieu Fee program in which • Regularly maintain stormwater nearby. Historically, site develop- the proponent pays a fee to an management facilities, includ- ers proposing to impact aquatic entity, such as a state program, that ing ditches, ponds and any resources had to offer mitigation then undertakes development of the other constructed drainage- with a similar acreage (in the case of compensatory habitat. The program, ways, by removing sediment wetlands and open waters) or linear “Pennsylvania Integrated Ecological build-up and colonizing veg- footage (in the case of streams). Services Enhancement and Support” etation. Also, control fugitive These draft “function based” pro- (PIESCES), will act as a “backstop” runoff or seepage. tocols move away from the acreage until mitigation banks are up and and linear foot model and focus on running in the state. • Retain design plans, permits the functional replacement of those and maintenance records, etc. resources. This is not unlike what Until such time when mitigation for water conveyance systems, other states have been doing for banks are servicing an area or especially green infrastructure. some time. the In-Lieu Fee program is up and This documentation may be running, the conventional method proof to refute jurisdictional Opening up Pennsylvania to of Permittee-Responsible mitigation claims in the future and prove Mitigation Bankers banking will still be accepted. that features were excavated in, and drain only, uplands. The draft protocols are intended NORTHERN LONG-EARED BAT LISTING to ensure compensation require- • Where possible, design drainage ments under PADEP Chapter 105, Posing perhaps the greatest threat control systems that promote as well as meet the requirements of to project scheduling was the April infiltration of stormwater into the 2008 Federal Mitigation Rule. 2, 2015, listing of the northern the ground. Also, avoid controls Interestingly, the 2008 Mitigation long-eared (NLE) bat as “threat- that channelize surface water Rule identifies mitigation banking as ened” by the U.S. Fish & Wildlife flow or detain flows for long the preferred method for offsetting Service (USFWS). Despite cogent periods of time. impacts to wetlands and streams. arguments from industry profes- Mitigation banks, in which a third- sionals and supporting consultants Remember, even though you have a party company buys and develops about the potentially crippling permit, the EPA and Corps may re- the habitat and then sells mitigation impacts of the listing on business, evaluate in the future and determine credits back to the project own- it was the decline of NLE numbers that conditions have changed and ers, take responsibility for having due to the ever-growing presence your infrastructure is now subject to their banks approved by regulators. of White Nose Syndrome that regulation. Therefore, when finalized, the draft pushed regulators to take proac- functional protocols will provide the tive steps and list the species as The effective date for the WOTUS re- mechanism by which the mitigation federally endangered. The resultant visions is August 28, 2015. The EPA bankers can establish the amount impacts to new land development has established a website dedicated of “credits” for sale. From a devel- construction will be felt across to public outreach: http://www2. oper’s standpoint, the functional the rather large geographic region epa.gov/cleanwaterrule. protocols will allow you to quantify in which these bats are found, the amount of “debits” needed to including here in southwestern WETLANDS AND STREAMS offset your impacts to wetlands or Pennsylvania. For developers to bal- MITIGATION streams. ance compliance with construction season, they must first understand In near-direct relation to the WOTUS How these guidelines will whether the rule applies to their rule is the Pennsylvania Depart- affect your project project and, if so, what their opment of Environmental Protection’s tions are. (PADEP) new technical guidance on Given the fact that the applicant wetlands and streams mitigation in would not need to provide a detailed Pennsylvania, which is anticipated to mitigation plan within an applica- be finalized by the end of 2015. The tion, the proposed guidelines could

64 DEVELOPINGPITTSBURGH | Fall 2015 How this listing will affect in Pennsylvania) may be imposed by Daniel A. Maltese is vice president your project the USFWS. and the corporate Ecological Services practice lead with Civil & Environ- The listing included a 4(d) rule, Updates to the PNDI database mental Consultants, Inc. (www. which relates primarily to tree cecinc.com) based in Pittsburgh, PA. clearing, provides some exemptions, The Pennsylvania Department of Contact: 412.429.2324; dmaltese@ such as for timbering operations and Conservation and Natural Resources cecinc.com. projects resulting in “minimal” (less (DCNR) will be updating the PNDI than one acre) clearing. However, database later this year. The updates Gregory P. Quatchak is founding typical development activities are to the GIS-based system will improve principal and the corporate Real not covered. The Corps issued a developers’ access to known loca- Estate Industry Consulting Group special public notice stating that all tions of species of special concern lead with Civil & Environmental Pennsylvania Natural Diversity Inven- in Pennsylvania and will help in the Consultants, Inc. (www.cecinc.com) tory (PNDI) receipts dated prior to project planning process. based in Pittsburgh, PA. Contact: May 4, 2015, for “authorized work” 412.429.2324; gquatchak@cecinc. that has not been completed are no It is important to understand wheth- com. longer valid. Therefore, it would be er NLE bats will affect a project DP prudent to rerun any PNDIs dated and to know how to plan a project prior to May 4, 2015. should there be a need to clear trees in winter.

If an issue with NLE (or Indiana bats) KNOW AS MUCH AS POSSIBLE comes up during your PNDI database search, then there may be a need As real estate managers and de- to have direct correspondence with velopers, it is important to know, USFWS. Depending on the type of understand and plan for these project and amount of impacted regulatory changes to the land acreage, winter tree clearing restric- development landscape. tions (October 1 through March 31

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retail center called Eastside that the residents with subcontractors work- The New East neighborhood began to draw cus- ing on the projects. tomers from all over the city again. Liberty Owes There was also a larger community While the Whole Foods may have benefit in developing a Target store. Much to been a tipping point, what followed Mosites attracted Target during the was not overnight success. In fact, it recession and when the store was Private-Public wasn’t until almost eight years later, built it used a new urban design and as business was recovering from was one of only two Target stores Partnership the Great Recession that Target and built that year. Target gave the Bakery Square got underway. In the community a store that would sell he rebirth of succeeding five years, East Liberty everyday items at affordable prices, the East Liberty has become a hot spot but it took giving the neighborhood a destina- neighborhood adventurous developers and unprec- tion rather than creating just retail has become a edented public support to create that appealed to others outside East regional and that success. Liberty. That project also required national suc- public partnership in the demolition cess story. So many measures were T Eastside was an ambitious project of the public housing projects and taken over the course of a genera- that included bringing a big box street improvements to restore Penn tion that it’s understandable that the retailer and additional retail into Avenue as a thoroughfare to the east. common narrative about East Liberty the neighborhood in later phases. is that success was a result of a long As ambitious as the plan was, the In the meantime, Walnut Capital persistent effort to turn around a development required a significant thought it had the right concept for district that was once Pittsburgh’s amount of public financial support in re-purposing the former Nabisco second downtown. The reality is a order to make the economics work, plant into offices, retail and hotel bit different. especially since there was a higher use. Like with the redevelopment of than normal risk that demand would the Penn-Highland area, the adaptive Success did take 30 or 40 years to not follow the development. re-use of the Nabisco plant – known achieve and involved many millions as Bakery Square – was going to of dollars in public funds but those The first phases of Eastside received take public subsidy to make the funds did not return the kinds public support in the form of tax project happen. of results that were anticipated increment financing (TIF) and until the past decade. East Liberty’s Redevelopment Assistance Capital “It was really when Bob O’Connor revitalization is a great story of Program (RACP) grants. There were was mayor that we first started,” private-public partnership (P3). It’s also grants and beneficial financing recalls Todd Reidbord, president of also proof that success in redevelop- from the Department of Housing and Walnut Capital. “We said there’s this ment comes from making good P3 Urban Development and the Depart- big factory here on six acres and if investments, not just from making ment of Community and Economic you want to reuse it you’re going big investments. Development. Urban Redevelopment to have to invest in infrastructure Authority (URA) helped with prop- around here because the site can’t East Liberty and its business district erty acquisition and infrastructure. hold the amount of people that are became isolated from its customers The nearly $10 million was a mix going to work here. In the old days and neighboring communities by of grants and subsidies that came when people worked for Nabisco the construction of public housing from city, county, state and federal they didn’t drive here; they took a high-rises and a transportation plan sources. This recipe that the Mosites streetcar or lived nearby.” that purposely routed traffic around Company used became the model for the commercial district. Throughout the developments that followed. Reidbord’s comments underscore the 1980s and 1990s a number of what is the best fit for P3 projects, developers tried projects that failed Mosites worked to leverage the the construction of modern and ef- or never came to fruition. There was partnership with government by ficient infrastructure. Adapting urban the first sign of commercial success marrying the economic benefits of structures or property for new usage when Home Depot was attracted the development to the community. means replacing aging sewers, build- to Highland Avenue in 1999 but it They made first-source hiring agree- ing new roads and traffic controls, wasn’t until 2002, when the Mosites ments with Whole Foods to line up and it especially means creating Company drew Whole Foods to residents to get jobs. East Liberty parking solutions to achieve the Centre Avenue and built the new Development Inc. worked to place highest and best use of the property.

www.developingpittsburgh.com 67 More than $200 million has been invested in Bakery Square and Bakery 2.0, leading to more than 2,000 jobs at the site.

“We couldn’t build parking privately. If you don’t build parking then this As councilman, Bill Parking was a key to another impor- will have to be a much less intense tant project that worked to open up use and that’s not what the city is all Peduto supported Highland Avenue as a main thor- about,” says Reidbord. “You want to the project and oughfare again. Walnut Capital and maximize the potential of the prop- Massaro Properties collaborated to erty. The city and the URA bought suggested creating restore the iconic Highland Building into it right away and agreed that a special planning and the neighboring Wallace Build- we had to have the parking. We put ing into 117 market rate apartments. a deal together to do a TIF and they district for Bakery The $29 million project took advan- supported our RACP application.” Square. It’s worth tage of historic tax credits to bolster the conventional financing but a Reidbord points out that the assis- noting that the peak key piece of the puzzle was a $4.5 tance came from leaders across sev- of the P3 planning million RACP grant. eral administrations. He says that the support never waned after O’Connor and approvals “The missing piece was always the died and Luke Ravenstahl became parking. Nobody could figure out mayor. Both the Rendell and Cor- occurred during the how to make that work,” explains bett administrations supported the financial crisis and David Massaro, president of Mas- projects. As councilman, Bill Peduto saro Properties. “The URA helped us supported the project and suggested the recession that secure an RACP grant at the end of creating a special planning district coincided with it. the Rendell administration to help for Bakery Square. It’s worth noting us build the parking garage. It’s not that the peak of the P3 planning only for the apartments but also and approvals occurred during the for the East Liberty neighborhood, financial crisis and the recession that “They all bought the same story that which was underserved for parking.” coincided with it. Walnut Capital’s you have to invest in infrastructure financial backing and business plan to make it work. It was parking; it The resulting Walnut on Highland was persuasive; and of course, there was site prep and the road improve- apartments were absorbed as quickly were fewer other projects moving ments here, the traffic lights and left as the units could be completed, forward to support. turn lanes,” says Reidbord. bringing new residents to a block

68 DEVELOPINGPITTSBURGH | Fall 2015 that was central to the East Liberty core and that had seen half-dozen developers trip up before executing the restoration over more than two decades. We didn’t just get a law firm, we got a firm commitment. Both the Bakery Square and Eastside projects are in the midst of larger investments than had occurred in earlier phases. Mosites is well underway with the third phase of Eastside, which is a $65 million mix of apartments and retail combined with a new transit center. The project garnered a $15 million TIGER IV grant from the federal government and a $2.5 million RACP grant. Walnut Capital is well into its Bakery 2.0 development, with construction started on the second 176-unit Bakery Living apartments and a 218,000 square foot office building that will include more space for Google.

What also has helped with the P3 partnership is the relationship between Mosites Company and Walnut Capital. While technically competitors, the two developers have presented their case for public support and financing in a non-competitive manner. Each has positioned their projects as complementary to the overall redevelopment of the community, in part because of a belief that the potential market is even larger than their developments can hold.

“I think that’s another thing we’ve all done really well. We’ve been able to work together. We don’t go to Harrisburg and say give us money instead of them,” notes Reidbord. “We go together – often literally going together – and say we need you look at all these projects to understand how much the growth of this region is focused right here.”

Measuring Success John Atwood and Tony Chammas , Real Estate Developers / MB&M Clients since 1992 The measure of a P3’s success isn’t the return on investment that the developer and his or her equity partners achieve. Making money on a development should be a metric for the public good – this attracts other developers too – but the return for the taxpayer Legal services customized to your real comes when the project becomes the rising tide that lifts all boats in the neighborhood. estate and development needs.

“I make the point that when there’s private-public partnership that’s a public investment. People need to think of the taxpayer just like any other investor in the project,” says Susheela Nemani-Stanger, manager, economic development for the URA.

In East Liberty, you could make that argument for a number of subsidized projects. The Home Depot proved A FIRM COMMITMENT TO YOU the concept that retail could work. Whole Foods and the first phase of East Side proved that a higher-end retailer could attract shoppers from outside East Liberty • SOUTHSIDE WORKS • while employing a more diverse segment of the popu- 424 SOUTH 27TH ST, #210 PITTSBURGH, PA 15203 lation. Target proved that locating a typically suburban shopping outlet could work to serve the residents within the urban fabric of East Liberty. Walnut on 412.242.4400 • MBM-LAW.NET Highland proved that residents would pay higher rents and safely walk the streets of a transitional neighborhood. And of course, Bakery Square proved that

www.developingpittsburgh.com 69 East Liberty could be a relief valve for the overcrowded Oakland office market and much more.

Planners theorize that when anchors succeed, there will be follow on infill development that will absorb the remaining blighted neighborhood. That theory has played out in textbook fashion in East Liberty.

AVAILABLE IMMEDIATELY! Target’s location is occasionally • 10,000 – 53,000 SF at Pittsburgh a source of anger and protest International Business Park in the community. The store sits • 10,000 – 20,000 SF at Cranberry on the site of the public hous- Business Park ing high-rises that once cut off East Liberty’s main drag from the surrounding neighborhoods. Opponents decried the loss of the affordable housing units that the demolition meant but Skip Schwab, deputy director of East Liberty Development Inc., points out that 39 percent of the housing units in the neighborhood are subsidized affordable units, a share that is higher than when the high-rises were still standing. PLEASE CONTACT 412-208-1400 Moreover, the quality of the new Jason Stewart, Jones Lang LaSalle [email protected] living spaces, like Pennley Place, Liberty North and Liberty South, are a vast improvement over the aging and crime-ridden high rises.

Some of the other measures of the developments are equally positive. Some 2,000 people work in Bakery Square. That’s five times the 400 that Nabisco employed at the factory that Bakery Square replaced. According to Reidbord, 70 percent of the residents in RELATIONSHIPS | REPUTATION | RESULTS Bakery Living and the Walnut on Highland apartments lived in another state prior to locating in East Liberty.

The Port Authority reports that ridership at the East Liberty stops on the transit systems is up more than 16 percent over 2014, a figure that should increase after Mosites’ transit center and apartments are completed.

“We did a study that showed that our percentage of public investment in the project is less than five percent,” Reidbord LANDAU BUILDING COMPANY explains. “For five percent I think 9855 RINAMAN ROAD, WEXFORD, PA, 15090 724-935-8800 www.landau-bldg.com

70 DEVELOPINGPITTSBURGH | Fall 2015 Apartment Complexes—Senior Living Facilities—Condominiums—Hotels the public got a huge return on their investment. That’s 95 percent private money and five percent public investment. I think anyone would take that deal. When you make smart investments, it turns out well.”

It may ultimately be that the most important economic return of the East Liberty rebirth will come from Google’s locating in Bakery Square. It’s hard to ignore the economic benefit that comes from having the tech giant grow so exponentially in such a short time. Certainly, Walnut Capital’s apartments would have been filled more slowly and the robust retail surrounding Bakery Square’s offices would likely have been weaker; however the real benefit may be in what Google’s choice represents to others.

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www.developingpittsburgh.com 71 The $65 million mixed-use transit-oriented third phase is the largest of Mosites Company’s Eastside developments.

East Liberty’s story is about the infill than most politicians would have Walnut Capital had received enough and the persistence that changed the imagined when the investment deci- support, Reidbord says just the way people from around the region sions were made. Considering the opposite was true. “To everyone’s viewed going to East Liberty for potential from energy and emerging credit locally, everyone has said you shopping and entertaining. The dy- high technology transfer, you would have to continue to invest to make namic economic turnaround has also be foolish to sell short the return things successful.” had social ramifications. Pedestrian that further public investment in East connections between East Liberty Liberty, or other East End neighbor- To David Massaro, the key to mak- and Shadyside have re-opened. Penn hoods, will bring. ing the public-private partnership Avenue again links Downtown to the work as an alignment of interests. Parkway East without interruption. As developers and civic leaders look “To make P3 work you have to have Once isolated, East Liberty is again to identify what might be the next your goals aligned with the public connected to economic opportunities East Liberty, the public partners side of the partnership,” he says. that can help lift the fortunes of its involved so far seem to be adhering “We had common goals going into residents. to the concept that creating further it. The city was really motivated to growth requires further investment, make it work. The URA really helped In the final analysis, the public instead of closing the file on the with whatever we needed to get participation in a P3 development project. through.” mitigates the risks associated with urban developments. Older cities “The assistant secretary of the U.S. Todd Reidbord exudes confidence have infrastructure that is in need Economic Development Administra- when he talks about the future of updating or replacement for what tion (EDA), Jay Williams – who is the for East Liberty. “I’m real excited the 21st Century user requires. former mayor of Youngstown, OH – about the next five years. What kind Virtually all older cities – and most toured the city and told us that they of tech company or international new ones – need to have structured wanted to reinvest in this project company will land here next?” parking included to make the density too. They made an initial investment DP of a project development work. What and we want to invest again, so has happened in East Liberty is that we’re looking at EDA funds poten- these public investment strategies tially for the transit center.” Asked have paid back to a higher degree if he had sensed any sentiment that

72 DEVELOPINGPITTSBURGH | Fall 2015 Voices

"How have changes in technology, the real estate market and the regional economy impacted the role of the broker?"

Bob Cornell, SIOR shale has been very positive for rates President and absorption and environmental Pennsylvania Commercial Real problems have made transactions Estate, Inc. take much longer but a gradual cleanup of sites is a good tradeoff for a better world.

Other significant changes in real estate brokerage in general over the past four decades include a predominance of national brokerage organizations today vs. nationally connected local boutique firms that dominated the business when I started, broker teams vs. lone rangers and mobile brokerage vs. traditional office environments.

I would expect technology to have an increasing impact on how people initially evaluate commercial real you returned a phone call within 24 estate but when a company gets hours and you were a superstar if serious there is no substitute for an you did so within a few hours. Now experienced broker. a good broker is responsive to their clients almost instantaneously. This Patrick Sentner, SIOR does not mean that a broker has to Technology has made it easier to do Founding Principal have the correct answer immediately an initial property search because Colliers International but it does mean that they should let the inventory is centralized in a their client know that they under- fee-based database accessible to all Since becoming a commercial real stand the question and will then get brokerage companies. Back in the estate broker in the mid 1990’s there back shortly with a formal answer. I day, we used contacts, shoe leather, is one word that describes my career try to be responsive from 5:00 AM to index cards and file drawers - not “Blessed”. I was blessed to be hired 10:00 PM on a daily basis – that was sexy but more creative. The superior by Oxford Development Company, not the case in the 1990’s. broker of today will still do personal blessed to work with some great prospecting because no matter how brokers who taught me the business, During my career I have seen Pitts- good a database is, all the answers blessed to later partner with some burgh go from a tertiary market to are not there. wonderful people in starting Colliers a strong secondary market. I have International | Pittsburgh and finally seen rental rates increase relatively Technology does make things easier blessed to have a wonderful family significantly in certain submarkets and more efficient, especially in support me in my endeavors. (after over a decade with no change the industrial market where the at all) and I have seen landlords/ properties have a wide geographic However I have seen many changes developers invest significant money footprint. Western PA industrial real in our industry both locally and in buildings and areas that came estate brokerage has changed more nationally and fully expect change as a total shock to me. I have also because of what is in the ground to become the “New Norm”. From seen tenant requirements change than any other factor. Marcellus and a technology standpoint the biggest significantly. No longer is that large Utica shale exploration and environ- change centers on connectivity. corner office important to tenants. mental contamination from previous During the early stages of my career Instead natural light, higher ceilings, uses are prevalent. The impact of you were considered responsive if access to amenities and access to

www.developingpittsburgh.com 73 parking (including bike parking) and of the commercial RE broker to a public transportation are all far more large degree. Brokers have replaced important than that 20’X20’ office traditional RE departments for larger with a private restroom! corporations and listing brokers can reach a global set of users and Like many industries the commercial investors within seconds. Over the brokerage industry is going to have past 10-15 years, the differentiation to continue to evolve. Social media has been the firms who can manipu- must be used to communicate with late the technology to their best clients and prospects. Brokers are advantage, separating themselves going to need to be more open to from their competitors. Brokers “teaming” concepts and to simply seem to work faster and be able to being more collaborative not only cover more opportunities, but the with their “team” but also with their race to stay on top of the cutting clients. However the one thing that edge of technology is a brutal one. will not change in the future – good brokers are going to have to work The ever-changing pace of technol- at least 60 hours each week – they ogy will change the role of the real simply will need to work a bit differ- estate broker dramatically over time. ently. With faster and more accurate data, standardized formats will become Jack O'Donoghue, SIOR the norm, which can pose some with clients, store and use infor- Principal problems for emerging brokers. The mation and process transactions. Cushman & Wakefield | Grant more available the disseminated info Typewriters, fax machines, land-line Street Associates, Inc. becomes, the less likely the need phones and large computer rooms for such a middleman. The old style with raised floors have all been re- When I started in the business 30 broker with his thumb on the pulse placed, essentially by mobile phones some years ago, the phone, yellow of his local marketplace will be and notepads. For brokers, these pages, and hard file cabinets were replaced with an account manager changes have been mostly positive the lifeline of the commercial real with his fingers on a keyboard. The as they allow for the more efficient estate broker. The business was art of negotiating is already being use of one of our most important more personal and required you challenged by general comparative resources, our time. to actually sell the Tenant on the analysis. I truly think that the big- available space or property you were gest hurdle for the future real estate For industrial brokers, another representing. Tenant representation broker will be the standardization significant change has involved was nonexistent and carbon paper of sales agreements and leases. environmental legislation and and whiteout on your fingers caused The need for brokers/attorneys to our ability to sell environmentally quite a mess. produce mega lease agreements impacted properties. When I began will be replaced by more gener- in real estate, it was very difficult to The incredible speed of technology ally accepted legal language thus finance and sell any impacted real has allowed brokers to operate with establishing a national form as an estate. With the Act II legislation it a much broader range, which I think efficient guideline, creating greater became possible to market and sell has enhanced the role and value transparency in the role of the real former manufacturing sites in PA and estate broker. That being said, qual- allow those properties to once again ity real estate brokers offer strategic contribute to the local economy. and specialized service to clients, Without Act II, much of the recent pulling all of the data together to development activity that has been craft the best transaction on their so positive for Pittsburgh may not behalf. Technology – no matter how have occurred. advanced – can never replace the art of a good client “schmooze over a These changes have been significant business lunch or dinner. but real estate brokerage remains a relationship business, one that Robert P. Blackmore is built on trust. While there are SIOR I First Vice President unlimited sources of information CBRE, Inc., Industrial Services available, the role of the broker to advise his/her clients and help them Over the past 25 years, there have to interpret and act on the available been many changes that have information remains critical. I do not affected the local real estate market see that changing in the foreseeable and my business as an industrial real future. estate practitioner. Technological advances have led to significant changes in the way we communicate

74 DEVELOPINGPITTSBURGH | Fall 2015 TRANSFORMING REAL ESTATE INTO REAL ADVANTAGE

For every client, advantage is delivering the broadest, deepest reach and resources any real estate company offers. Transforming property into prosperity, square feet into strong portfolios, scale into global strength. All in service

Amy Brocato, CCIM, SIOR Candidate of exceptional outcomes that build Associate, Industrial Brokerage real business advantage. Let us put our Hanna Langholz Wilson Ellis actionable perspectives, global reach Because of when I started in the business I and powerful connections to work have always had access to new technology and used it to be more productive. I see the for your business. role of technology in the real estate brokerage world changing the role of the broker of the future.

When I look at old files in our office I see aerial photos and deed documents, the kinds of things you needed to market a property. It was important to have an intermediary broker taking the time to put together marketing materials and researching the details that were not readily available (i.e. deeds, zoning maps, etc.). But now the client has access to all of this information and can obtain it just as easy as I can, if they have the time.

With the lack of product in the Pittsburgh market, it has taught me to think differently about every requirement that crosses my desk, the need to be more creative. I feel like I am more an advisor than a real estate agent “brokering” a deal. For me to get a deal done, I need to be looking for creative solutions that are still making efficiencies in my client’s overall real estate portfolio. To do that, I feel it is important to understand global and local economic and real estate trends and if/how they can help my client’s overall business strategies. Having the ability to draft a letter of intent or a proposal is only going to get a broker so far over the next few years. We are already seeing deal activity compress and more off market deals Build on occurring. Brokers are going to have to act cbre.com/pittsburgh Advantage more like consultants for our clients in the future. DP

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76 DEVELOPINGPITTSBURGH | Fall 2015 News from the Counties

Economic activity during the Armstrong County first half of 2015 in Armstrong Armstrong County Department of County was notable due to a Economic Development mixture of private and public Northpointe Technology sector construction and infra- Center Center II 187 Northpointe Boulevard structure investments. One of Freeport, PA 16229 the largest new-construction 724-548-1500 (T) projects currently underway 724-545-6055 (F) in Southwestern Pennsylvania Michael Coonley, Executive Director is quickly proceeding toward [email protected] completion. Located in central www.armstrongidc.org Armstrong County, the 270,500 square foot, $55 million Arm-

www.developingpittsburgh.com 77 Armstrong County (continued)

strong Junior/Senior High School projects move forward during the Finally, Trio Motion Technology, will open for the beginning of the first half of 2015. CWM Environ- Inc. has agreed to extend their 2015-16 school year. mental, Inc. broke ground on their tenancy for five years at North- 9,600 square foot building and pointe Technology Center II. They The ACIDC awarded a contract in the 11,410 square foot build- were the first tenant to lease April 2015 to develop additional ing under construction for the space at the multi-tenant office pad-ready sites in Northpointe. Kittanning State Police barracks and flex facility owned by the Neiswonger Construction of is almost complete. CWM Envi- ACIDC. Trio Motion Technology Clarion County received the con- ronmental and the State Police manufactures a specialized source tract to build two pads (3 and 10 are expected to move into their of high performance automation acres respectively) at the entrance new buildings during the second technology for various applica- to Northpointe. This new retail/ half of 2015. In June, Holloway tions including grinding, welding, commercial phase is the latest Seating, LLC purchased lot 27 labeling, and packaging. improvement to the KOZ-desig- from the ACIDC's sister agency, nated mixed-use industrial park. the Armstrong County Industrial For information about the ser- The project will be completed in Development Authority, to con- vices offered by the ACIDC, or to September of this year. struct a 7,000 square foot manu- search available land and build- facturing facility. Holloway Seat- ings in Armstrong County, visit The KOZ-designated West Hills ing produces stadium bleacher http://www.armstrongidc.org. Industrial Park at the intersection systems for customers throughout of State Route 28 and U.S. Route the United States. Construction is 422 saw several new-construction expected to begin shortly.

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78 DEVELOPINGPITTSBURGH | Fall 2015 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 [email protected] www.beavercountyced.org Beaver County has experienced a significant amount of development activity over the first half of 2015. Columbia Gas of Pennsylvania, Inc. announced it will locate a new training center and operations center in Center and Potter Townships. The project will involve two new buildings and almost $20 million in investment. The operations center will house 80 employees and the training center will be able to accommodate a like amount of employees and trainees from a multi-state area. Construction is expected to be completed in the spring of 2016. The Beaver County Corporation for Economic Develop- ment (CED) is supporting construction of the operations center with $1.5 million in financing.

Shell Chemical Appalachia, LLC has Looking to Expand? Consider Indiana County been issued an air quality permit and certain other permits required for its proposed petrochemical complex HighPointe 119 in Potter Township. The issuance of at Indian Business the permits is a critical milestone in Springs Park the site evaluation process. While a final investment decision has yet to be made, the site of the former Horsehead Corporation zinc smelter Windy Corporate continues to undergo significant development activity. Ridge Campus Business & Business CED is under agreement with a Technology Park developer for its Bridgewater Crossing Park property. Bridgewater Crossing is a 12 acre site proposed for mixed-use  Pad Ready Sites development located at the conflu- ence of the Beaver and Ohio Rivers in  Class A Office Suites available Bridgewater Borough. CED completed  Access to 422, 119, and 22 over $4 million in site improvements including access roads, water, sew-  KOZ tax incentives

ers, a riverfront park, a trail system that connects the Beaver and Ohio Indiana County riverfronts, and a transient boat dock to support on-site commercial uses. Center for Economic Operations A final decision on the project is expected this summer. LEARN MORE ABOUT INDIANA COUNTY www.indianacountyceo.com · 724-465-2662

www.developingpittsburgh.com 79 more than 20 wells and has more will move 100 employees from their Butler County than 25,000 acres under lease in the current location in Cherry Township Community Development county. Cranberry Township based into leased and renovated office space Corporation of Butler County Aesynt, Inc. recently announced plans at 500 Grand Avenue, East Butler. The 112 Hollywood Drive #102 to move manufacturing from Italy to move will occur this winter. Butler, PA 16001 Western PA. They currently employ 724-283-1961 (T) 300 at the headquarters in Cranberry. CDC recently reduced the price on 29 724-283 3599 (F) RACP grants were approved for the acres of shovel-ready land available Ken Raybuck, Executive Director following Butler County Projects: $3 at the Pullman Center Business Park [email protected] million for the Arden Development in the City of Butler. Lots are priced www.butlercountycdc.com Corporation in Lancaster Township, as low as low as $50,000 per acre. (mixed use residential); $1 million for There are also 60 acres available at Infrastructure investment to support the Cranberry Springs Development Victory Road Business Park in Clinton natural gas production continues Phase II in Cranberry Township, (medi- Township, a Keystone Opportunity with the recent announcement that cal, commercial office and retail); Zone. Please contact the CDC at 800- Midstream MLP Energy Transfer plans and $2.5 million for Jeremiah Village 283-0021 for information on land, to invest $1.5 billion in a new pipeline at Glade Run Lutheran Services in commercial buildings and office space network in Southwestern PA, sup- Zelienople, (site prep for Jeremiah Vil- available for sale or lease in Butler porting companies like EdgeMarc in lage, including a community center). County. Butler County. EdgeMarc has drilled Office of Personnel Management

Township Business Park as ground- approximately 30 acres of industrial Fayette County breaking on Phase 1 occurred on June sites and approximately 10 acres of Fay-Penn Economic Development 2nd. The 311 acre Dunbar Township commercial sites still available, with Council Business Park, located on Rt. 119 the KOZ designation through 2020. 1040 Eberly Way, Suite 200 and Pechin Road, will be developed Lemont Furnace, PA 15456 in three phases. Phase 1 contains The ICMI Road Business Center is 724-437-7913 (T) approximately 100 acres in 11 lots, getting a major facelift. JLE Industries 724-437-7315 (F) ranging in size from 3.8 to 10 acres. will acquire and refurbish an existing Bob Shark, Executive Director Completion of Phase 1 is expected in 50,000 square foot facility to serve [email protected] November at a cost of approximately as its new corporate headquarters. Dana Kendrick, Econ. Dev. $3.1 million. The first lot is already The company plans to invest more Dept. Mgr. under contract. than $9 million on the project, and [email protected] has also committed to the creation www.faypenn.org Construction is also underway at the of 80 new, full-time jobs and retain- University Business Park on Rt. 119 ing 48 existing positions over the Fay-Penn Economic Development in North Union Township. Numerous next three years. Through Fay-Penn’s Council (“Fay-Penn”) has served the upgrades are in progress, including a support and coordination with the business community of Fayette County new storm water pond and road en- PA Governor’s Action Team (GAT), JLE for over two decades. Fay-Penn’s mis- hancements. The University Business Industries received a funding proposal sion to foster economic prosperity in Park is designated as a Keystone Op- from the Department of Community the county is accomplished through a portunity Zone (KOZ) through 2020, and Economic Development including comprehensive set of business servic- offering potential tax abatements a Pennsylvania First Program grant es, including site selection, financing, to occupants. A new Speedway gas for $150,000 and $160,000 in Job workforce development, real estate station and convenience store is under Creation Tax Credits. and business park development, tax construction at the park entrance. credit incentives, and consulting. Since its inception, Fay-Penn has Parcels are becoming scarce in the become the pre-eminent, “One Stop 2015 brought a flurry of activity in Fayette Business Park, Georges Town- Shop” economic development orga- real estate development and site ship. Two more parcels went under nization in the county, serving busi- selection programs. Construction is contract this spring with closings nesses through its in-house programs finally underway at the new Dunbar anticipated in the fall. There are and/or its partner organizations.

724-852-4132 (F) Industrial Developments, Inc. as the Greene County Don Chappel, Executive Director non-profit economic development or- Greene County Industrial [email protected] ganization sold two parcels in Paisley Developments, Inc. www.gcidc.org Industrial Park and another parcel in 300 EverGreene Drive EverGreene Technology Park. Waynesburg, PA 15370 The first six months of 2015 proved to 724-852-2965 (T) be very productive for Greene County

80 DEVELOPINGPITTSBURGH | Fall 2015 Greene County (continued) Wilkinsburg is ready for investment.

Paisley Park is located in Cumberland Twp. in the eastern part of Greene County while EverGreene Technology Park is located in Franklin Twp. just east of the I-79 Waynesburg exit.

DJ Realty Holdings, LLC purchased a 5 acre parcel in Paisley Park to construct a medical facility while Bravo Charlie LLC purchased a likewise 5 acre parcel for their Royal Flush operation, a gas field water hauling company. Both properties closed during the first quarter of the year.

In EverGreene Technology Park, Greene County Memorial Hospital Foundation closed on a 13.5 acre parcel in June and the site location will be the future home for their Wellness Center and Wilkinsburg experienced a 38% increase in real estate sales last accompanying indoor soccer facility year. The Wilkinsburg CDC leverages this positive growth by in addition to office space. All three properties should begin construction promoting available properties, connecting developers to during the 3rd and 4th quarters of this resources, and supporting investors beyond the sale. year.

Cameron International, a Houston, Learn more at wilkinsburgcdc.org. Texas based natural gas company, announced during the second quarter Feb. 2015.indd 1 2/4/2015 1:18:01 PM of the year they will begin construction on their new building in EverGreene Technology Park having purchased a 10 acre parcel in 2014.

In March, EQT relocated its Midstream operation from one side of SR 21 in Franklin Twp. to the other side as they moved into the former Kyowa building TRANSPORTATION SOLUTIONS adjacent to the north bound ramp of FOR TODAY AND TOMORROW I-79 in Waynesburg. At the same time EQT Production moved part of their operations into the former home of EQT Midstream.

The County of Greene continued with its development plans at the county airport to make available land parcels along SR 21. Marcellus and Utica drilling for natural PITTSBURGH · STATE COLLEGE · COLUMBUS gas and oil continued throughout Greene County in the first half of the year as well as pipe line construction TRAFFIC ENGINEERING AND PLANNING projects. TRAFFIC SIGNAL AND SIGNAL SYSTEM DESIGN HIGHWAY AND ROADWAY DESIGN PARKING CONSULTING MULTI-MODAL PLANNING AND DESIGN

WWW.TRANSASSOCIATES.COM 1-866-490-0630

www.developingpittsburgh.com 81 Disobedient Spirits is the region’s first man project that their brewery and Indiana County artisan distillery that offers a variety taproom will be operational by Fall. Indiana County Center for Economic of original in-house vodkas, whiskeys, Like Disobedient Spirits, they hope to Operations and brandies. Located in downtown generate tourism in the area. 801 Water Street Homer City, the owners Robert Begg Indiana, PA 15701 and Robert Sechrist, provide tours of Construction activities continue at two 724-465-2662 (T) their one-of-a-kind distillery. They plan KOZ-designated business parks, the 724-465-3150 (F) to make 5,000 gallons of vodka in Windy Ridge Business & Technology Byron G. Stauffer, Jr., Executive Director their first year. They are hopeful that Park in White Township and the 119 [email protected] one day it will become a major tourist Business Park in Center Township with www.indianacountyceo.com attraction in the area. roadway and underground utilities to serve nearly 225 pad-ready acres. Upon signing a five year lease, Rx Pro Indiana County Commissioners ap- Work is to be completed by the Fall of Pennsylvania relocated to a 6,338 proved a $117,500 loan from the 2015. square foot suite at HighPointe at Indian county’s Revolving Loan Fund to assist Springs. Rx Pro Pennsylvania provides with the development of the Lev- To learn more about economic de- compounding and specialty pharmacy ity Brewing Company. The company velopment opportunities in Indiana services in their state-of-the-art labora- plans on creating five full time jobs County, visit www.indianacountyceo. tory and clean room. Rx Pro currently in the next three years. Owners Erich com. has seven employees but plans to add Walls, Luke McKelvy and Jared Her- up to 20 new jobs in the near future.

Business Park bringing 15 new jobs 4. Environmental status Lawrence County to the community. Portersville Valve 5. Topography and grading Lawrence County Economic relocated its operation from Butler requirements Development Corporation County to Lawrence County adding 6. Flooding, drainage and load- 100 East Reynolds Street 75 jobs. LCEDC’s ability to assist bearing capacity of the soil Plaza South, Suite 100 these companies hinged initially on 7. Zoning, tax rate New Castle, PA 16101 site availability. 8. Utilities – water, natural gas, T: 724-658-1488 electricity and sanitary sewer F: 724-658-0313 Real estate – land or buildings – is Is electric high-capacity? Who Linda Nitch, Executive Director the only tangible product the LCEDC are the utility providers? [email protected] has to sell to prospects. Years of 9. Transportation – interstate www.lawrencecounty.com experience with prospects has taught access, rail availability, com- us that the intangible benefits of mercial airports Every company, whether industrial, our county such as workforce and In addition to this tool, the LCEDC commercial or retail, needs real es- low costs become relevant AFTER is publishing a guide to 32 prime tate in one form or another. Whether the prospect has decided one or sites and facilities, and LCEDC again a local company is expanding or more sites in the County are worth hosted a Familiarization Tour (Fam an outside company is seeking a consideration. Availability of sites is Tour) in May. new location, The Lawrence County the FIRST FACTOR in a site selection Economic Development Corporation search. Together, these tools (the database, (LCEDC) cannot help them unless printed guide, and Familiarization a site or facility is available in the Because of this LCEDC maintains Tours) demonstrate to prospects County that meets their needs. a database of county sites and that, yes, we indeed have sites and facilities and links this data to the facilities. Now let’s talk business, Long-time residents and first time Pa Site Search and the Pittsburgh and let’s talk jobs! visitors can agree that Lawrence Prospector web sites. The database For more information concerning the County offers an array of sites and is much more than a list of loca- tour, please contact Linda Nitch at is easily accessible. Surrounded tions with photos. Prospects require 724-658-1488. by four Interstates, the County is detailed and specific site information within an 8-hour drive of New York including: City, Chicago, Washington DC and Toronto, Canada 1. Site location (municipality and school district) Recently two companies chose to 2. Size of the site (parcel usable build their industrial facilities in acres; structure square foot- Lawrence County. Magnetic Lift- age) ing Technologies relocated from 3. Cost of the site and cost to Struthers, Ohio to the Neshannock develop the site

82 DEVELOPINGPITTSBURGH | Fall 2015 Bacon Bourbon and A Beer announced A&M Wine & Beer Supplies and The Washington County they will open a restaurant/bar at the Park Washington Winery relocated to a larger Washington County Chamber Place development in the fall. facility at 202 S. Main Street in Washing- of Commerce Minteer’s Too – a coffee shop/deli/ice ton. 375 Southpointe Boulevard #240 cream parlor will occupy 750 square feet Canonsburg, PA 15317 in the former Maggi’s News Stand in National athletic retailer Hibbett Sports 724-225-3010 (T) Claysville. They will feature deli sand- has opened its newest store in Wash- 724-228-7337 (F) wiches, deli items for purchase, coffee, ington Crown Center, North Franklin Jeff Kotula, President doughnuts, ice cream and other culinary Township. [email protected] attractions. Purveyors will include Man- Five Below, which specializes in items www.washcochamber.com cini, 19 Coffee Co., Hershey’s Ice Cream costing $5 or below, will be locating in and Donut Connection. the Old Mill complex off Route 19 in A new company, Custom Nuclear Fabrica- South Strabane Township. tion, is leasing 200,000 square feet of Owners of Nemacolin Woodlands resort space in the Pennsylvania Transformer in Fayette County are building Nemacolin A Francesca's boutique opened in late Technology plant on Curry Avenue. The Pet Resort, a 6,593-square-foot building April and two new stores will open at company will manufacture stainless steel on Washington Road in Peters Township Tanger Outlets - A new 2,500 square foot containment tanks for spent nuclear fuel. that will offer vet services, grooming, Hot Topic store is scheduled to open in boarding and other pet-related amenities early July and a 5,000 square foot Rack Financial Services: to South Hills residents. The facility, which Room Shoes is slated to open in mid- After 79 years, Charleroi Federal has a is expected to open later this month, may Summer. new identity with a new name - cfsbank. become the first of a chain of pet spas. Housing: Northwest Savings Bank opened its sixth Announcement was made for several new Washington County Branch in a newly In Peters Township, Eat’n Park is working housing developments in Peters Township: constructed building on Murtland Avenue on a 6,514 square foot restaurant and • Forty new lots will be developed in South Strabane Township. development on Washington Road that at the Whispering Pines housing will include office space. The existing development in Venetia. Healthcare: Eat’n Park may be converted to a Dunkin’ • Twenty-eight new lots will be Washington Health Systems has expanded Donuts. In addition, Taco Bell is looking to developed at Ryan Homes’ Orchard its reach into Greene County when it construct a 2,527 square foot restaurant Park development, also in Venetia. purchased Southwest Regional Medical on Washington Road on the vacant lot • Eddy Homes, based in Bridgeville, is Center in Waynesburg. next to Walgreens. looking to develop 78 patio homes Hospitality & Retail: at its Crossings Six development in Dunkin’ Donuts opened on Cavasina Drive Washington County Hospitality, a subsid- McMurray. in Canonsburg. iary of Glenmark Holding, is building an • Martik Properties, a Finleyville extended stay hotel off the Jessop ramp Don Patron, a Mexican Restaurant was an- builder, is planning on developing from I-70. The appropriately branded Sub- nounced for the Park Place development. 33 townhomes at its Venetia Pointe urban Extended Stay will be a four-story, Fanatic Impressions, a sporting goods development. 120-room facility in Canton Township, store opened in the City of Washington. A 206 unit apartment complex is targeted near Dean’s Water Service. Construction to open at the Park Place development in began last September and a late October Chick-fil-A opened at the Mill in South the Fall. opening is planned. Strabane Township. Primanti Bros. Restaurant and Bar will In March, the Meadows Casino an- The Hyatt Place Hotel, which is linked to open soon on Racetrack Road at The nounced it spent an additional $4 million the Meadows Racetrack & Casino by a pe- Street development. on improvements to the back stretch destrian bridge, opened its 155 rooms at area of the harness racing operation in the end of April. The hotel features a styl- Burgerz and Dogz will soon open at the North Strabane Township. That raises the ish Parlay Lounge as well as a comfortable Park Place development. total cost of upgrades to more than $10 patio lounge with fire pit; complimentary million. Upgrades include replacement Wi-Fi access throughout; a 42-inch HDTV Penn Station Subs opened in the Old Mill of older barns and installation of new in the guest rooms; about 1,800 square in South Strabane Township. stalls, gates, matting, ventilation systems, feet of meeting space; 24-hour gym; and Five Guys opened in the Old Mill in South windows and paving around the barns. an indoor pool. Strabane Township. Work also has been done to alleviate stormwater and wastewater run-off, and The $12 million, 50,000 square foot The Speedway convenience store/gas installation of a state-of-the-art security Hampton Inn & Suites is nearly complete station opened in the Meadows Landing system is under way. in the California Technology Park. The Development in South Strabane Township. 84-room property is located just off Pennsylvania Turnpike Route 43 and near Country Side Deli opened on Henderson Interstate 70, Route 40 and California Avenue in Washington. The provide deli University. products, hot foods, grocery items and catering.

www.developingpittsburgh.com 83 Project7_Layout 1 2/12/15 3:11 PM Page 1 Westmoreland County Westmoreland County Industrial Development Corporation 40 North Pennsylvania Avenue # 520 Greensburg, PA 15601 T: 724-830-3061 F: 724-830-3611 Jason W. Rigone, Executive Director [email protected] www.co.westmoreland.pa.us 182,311 The first half of 2015 was a robust one for Westmoreland County with many shovels workers hitting the dirt as the spring yielded much development. However, with the final lien strong hurdle concerning The Monsour Medical Center cleared, the demolition of the former hospital will soon begin and the property redeveloped.

The razing of the 4.6 acre lot located off of US Rt. 30 in the City of Jeannette is a Low long time coming. The hospital closed its doors in 2006 and has since been a haven for arsonists and vandals. With the help of Taxes the newly created Westmoreland County Land Bank, the legal red tape preventing developers to do work on the property was cut through and now remediation, demolition, and redevelopment may begin. The Westmoreland County Industrial Develop- ment Corp. (WCIDC) will act as the project Pad Ready manager and bid out most of the work. Sites In development news, Leed’s, a commercial printing and promotional company, is expanding in Westmoreland’s largest industrial park: The Business & Research Park located just outside New Kensington. The expansion includes a new 500,000 square foot building on 28 acres to go Multiple along with buildings located on six other lots throughout the park. The building will STEM house warehousing operations and office space for their decorations department. Education

At Industrial Park II, located in Allegheny Initiatives Township, RV Coleman recently purchased the former Alon Processing site to relocate their trucking operation previously located in neighboring Armstrong County. For 724.830.3061 updates on these projects and several more underway, please check westmoreland- westmorelandcountyidc.org countyidc.org for more information. DP WCIDC Board of Directors: Charles W. Anderson R. Tyler Courtney Ted Kopas

www.developingpittsburgh.com 85 People & Events

Noland, NAIOP Support Habitat in South Africa

From July 10 through July 22, NAIOP board member Tyler Noland, director of underwriting at PenTrust, was one of 40 Americans who accompanied roughly 200 volunteers to Cape Town, South Africa for the Nelson Mandela Build with Habitat for Human- ity. The volunteers built 20 houses in five days. NAIOP Pittsburgh, which has a proud history of supporting Habitat with its Night at the Fights program, donated two laptops to Habitat for use in South Africa.

Tyler Noland (center) stands among volunteers and clients of Habitat for Humanity during his trip to South Africa.

Citizen Bank’s Tammy Dohn and Jim McDunn with Pennoni’s John Skorupan and Clayco’s Scott Ca- (From left) At the CREW golf outing were Chad Karen Kukish from the Tall Timber Group at the plan at the NAIOP golf outing at Laurel Valley. Huber from the Huber Group, Phil Krut with OSS NAIOP/CREW Clay Shoot. Security, Continental’s Carl Belli with Laura Law- rence and Brooke Huber from CBRE.

86 DEVELOPINGPITTSBURGH | Fall 2015 Bruce Corna from Kacin Companies (left), Steve Tassaro and (From left) Dollar Bank’s Sandra Wise, UPMC’s Margaret Bell and Matt Curtis (right) from Continental Building Systems at the NAIOP Heather Knuth from Integrity Design at the fifth anniversary golf outing. celebration of CoreNet Pittsburgh, hosted by Dollar Bank.

Cynthia Nielsen from Continental Office (left), Bank of America’s JLL’s Jason Stewart (left) and J. C. Pelusi (right) flank Clayco's Tom Robin Alexander and Debra Brown from MBM Contracting (right) at Sieckhaus at the NAIOP golf outing. CoreNet’s anniversary.

(From left) Candace Cuppett and Jeff Zacherl from Johnson Controls NAIOP Pittsburgh board members Lou Oliva, Lynn DeLorenzo and with Allen & Shariff’s Paul Messineo Jr. (right). Randy Forister.

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Gerard Associates Architects 410 Fort Pitt Commons 445 Fort Pitt Boulevard Perfido Weiskopf Wagstaff + Goettel Pittsburgh PA 15219 408 Boulevard of the Allies T: 412-566-1531 Pittsburgh, PA 15219 www.gerardassociatesarchitects.com T: 412.391.2884 Dawn Danyo DiMedio, AIA, LEED AP BD+C F: 412.391.1657 Allegheny Mineral Corporation [email protected] www.pwwgarch.com One Glade Park Design 3 Architecture PC Alan Weiskopf, Managing Principal A Woman Owned Business providing architecture, East Kittanning, PA 16201 300 Oxford Dr. Ste. 120 planning, interior and environmentally responsible [email protected] Monroeville, PA 15146 T: 724-548-8101 design services to a full range of commercial clients PWWG offers architecture, planning, and urban design T: 412-373-2220 www.alleghenymineral.com www.d3a.com since 1959. The firm commits itself to understanding for projects in multi-family housing; education and Dennis C. Snyder, President William Snyder projects completely, developing working relationships technical training; and the rehab, preservation, and Mike Odasso, Vice President of Sales [email protected] with clients and delivering projects that are techni- adaptive reuse of historic structures. Our award- [email protected] cally and aesthetically complete. Every project is given winning design work also includes hotels, parking Allegheny Mineral Corp. provides crushed stone, Design 3 Architecture has been offering architecture, principal attention. We believe this commitment to structures, theaters, and commercial operations. For planning, and interior design services to the Pitts- service yields superior design. 38 years, from our studios in downtown Pittsburgh, industrial rock dust and agricultural lime to Pennsyl- burgh region since 1982. We view inherent project we have assisted owners with detail-oriented vania, Ohio, and West Virginia. In 2014, the company constraints as potential opportunities for innovative service, from early explorations, to coordinating was listed as one of the 40th largest aggregate design solutions. With a philosophy grounded in team multi-disciplinary teams of engineers, to construction producers in the nation. Our limestone product has collaboration, providing both personal attention and management and LEED commissioning. PWWG is also provided a solid foundation for schools, churches, project leadership, Design 3 Architecture does more expert in code and zoning compliance, feasibility and hospitals and family homes in and around our com- than solve problems. We provide solutions that are space programming, historic tax credit applications, munity. Allegheny Mineral has been recognized for its unique, exciting and affordable. community outreach, and 3D visualizations. efforts in areas of safety, sustainability, community relations and industry contributions in the form of awards from state and federal agencies.

HHSDR Architects/Engineers 40 Shenango Avenue DLA+ Architecture & Interior Sharon, PA 16146-1502 Design 130 7th Street, 201 Century Bldg. Pittsburgh PA 15222-3413 Folster Plaza, Suite 200 T: 800-447-3799 750 Holiday Drive Renaissance 3 Architects, P.C. Overhead Door Company of T: 412-281-2280 Pittsburgh, PA 15220 48 South 14th Street Greater Pittsburgh www.hhsdr.com www.DLAplus.com Pittsburgh, PA 15203 400 Poplar Street Andreas Dometakis Kari Miller T: 412-431-2480 Pittsburgh, PA 15223 [email protected] [email protected] www.r3a.com T: 412-781-4000 x 217 Frank Gargiulo Deepak Wadhwani DLA+ is a full service architecture and interior design F: 412-781-2446 [email protected] [email protected] firm dedicated to providing Strategic ArchitectureSM www.overheaddoorpittsburgh.com solutions through a collaborative and integrated HHSDR has been Building Relationships with our At R3A we believe that successful design shapes Ron Morris, President approach to delivering projects for our clients in clients since 1953. We are regional leaders in design environments that actively engage the senses and [email protected] Corporate/Commercial, Higher Education, Sports, and construction contract administration, with a facilitates positive human interactions and behaviors, portfolio of projects sized from a few hundred to From the time we invented the garage door in 1921 Government, Healthcare, and Retail/Hospitality. We while employing technologies that help improve the Overhead Door has always produced and installed the are committed to delivering not only a technically 400,000 square feet. We deliver design solutions performance of our daily lives. R3A is a 23-person firm through traditional design-bid-build techniques as highest quality products. Our superior product crafts- successful project, but also one that includes sound with two principals, supported by an experienced manship and dedicated excellence in customer care principles of sustainable design intended to serve the well as design-build. Ranked annually by the Pitts- and creative team of architects, interior designers and burgh Builders Exchange as the most active firm in the has made us the leader in door systems for diverse client and the community well into the future. Fueled project managers. R3A provides a full range of archi- markets and customers around the globe. We offer the by a creative and talented team, our once two person tri-state region, we earn our clients’ trust by providing tectural, interior design, planning services. We pride high-quality and responsive service. most complete line of quality residential, commercial firm has grown to 30 people in a matter of six years ourselves in being uniquely qualified to respond to the and industrial upward-acting door systems. Our Red earning us a spot as one of the “100 Fastest Growing increasingly diverse and complex facilities needs of Ribbon trademark is your guarantee of receiving Companies in Pittsburgh” two years in a row and the our clients and their organizations. unequaled personalized service and expertise – from INC 5000 Fastest Growing Companies in the United assistance with product selection through the timely States three years in a row. completion of product installation.

DRS Architects, Inc. IKM Incorporated One Gateway Center, Seventeenth Floor One PPG Place Pittsburgh, PA 15222 VEBH Architects Pittsburgh, PA 15222 470 Washington Road T: 412-281-1337 T: 412-391-4850 Pittsburgh, PA 15228 F: 412-281-4639 F: 412-391-4815 T: 412-561-7117 www.ikminc.com www.drsarchitects.com www.vebh.com Joel R. Bernard, AIA, NCARB, LEED AP Kathryn A. Jolley, MBA, ASID, LEED AP Contact: Daniel Skrabski Principal [email protected] [email protected] [email protected] Designing for the future, DRS Architects continues to VEBH Architects has been serving the communities of provide innovative and creative architectural solutions IKM Incorporated has been providing architecture, planning and interior design services to corporate and Southwestern Pennsylvania and beyond for more than as we have for more than 50 years. We listen carefully 65 years. We are passionate about creating quality en- institutional clients for 100-years. IKM’s mission is to to our clients’ needs and develop customized respons- vironments for our clients. Our designs for workplaces provide innovative and informed architecture that es to each design challenge. We provide architecture, enhance client identity, offer increased productivity, interior design and master planning services through positively impacts the world through leadership in and deliver long-term value to a business, as well the varied markets of higher education, laboratories, understanding, exploration and decision making. IKM as the customers and the community it serves. We health and wellness, government, hospitality, and is a member of the American Institute of Architects are committed to creating great places that inspire, corporate offices. Our talented design teams work to and the US Green Building Council. motivate, and ultimately enrich our region and the develop exemplary projects which enrich daily life, communities in and around the places we call home. improve communities, advance a sustainable future and promote design excellence. www.developingpittsburgh.com 89 1962, HRG has grown to six office locations throughout Pennsylvania, West Virginia, and Ohio. We have over Building Code Consultant 200 dedicated professional engineers, geologists, environmental scientists, surveyors, landscape architects, and related support personnel that provide a DONOGHUE full-service approach to every project. Service offerings PROJECT CONSULTING, LLC include land development, water resources, water & wastewater, transportation, survey, GIS, environmen- Donoghue tal, and financial consulting. R.A. Smith National, Inc. Project Consulting, LLC 333 Allegheny Avenue, Suite 202 2 East Crafton Avenue [email protected] Oakmont, PA 15139-2072 Pittsburgh, PA 15205-2804 T: 412- 605-7045 T: 412-828-7604 341 Science Park Drive With experience in code compliance and enforcement, F: 412-828-7608 Suite 205 as well as design, planning, project management, www.rasmithnational.com State College, PA 16803 construction, and building ownership; we can be your The Gateway Engineers John Frydrych, M.S., P.E. T: 412-921-3303 C: 412-491-6132 Building Code Subject Matter Expert. We speak that 400 Holiday Drive #300 [email protected] www.dewooster.com language. We offer: Pittsburgh, PA 15220 R.A. Smith National is a multi-disciplinary consulting Chuck Wooster, President • Building Code & Accessibility Consulting Services T: 412-921-4030 engineering firm that is a leader in civil engineering, [email protected] • Compliance Strategies F: 412-921-9960 structural engineering and land surveying. R.A. Smith • Owner Advocacy / Representation www.GatewayEngineers.com National works with clients to deliver excellence, vision Since 1971, our firm has been a highly regarded and • Project Planning Ryan L. Hayes, Director of and responsive service. Developers and governmental respected leader in the traffic engineering industry. • Project Management Business Development agencies take advantage of the diverse expertise We are most proud of our uncompromising integrity. • Client Relationship Advice [email protected] and team collaboration that is incorporated in every Our goal is to guide our clients through the rigorous • Forensics & Due Diligence. Gateway Engineers and its predecessors have played an project. The firm provides comprehensive services process of real estate development and assist them by Contact Tom Donoghue to discuss how we can help that include civil engineering, structural engineering, correctly identifying on-site and off-site traffic impacts, with your project. active role in the development of the Ohio Valley since 1882. Our incessant pursuit of project management ecological services, land development engineering, develop cost effective and efficient mitigation strate- excellence has created strengths in municipal engi- site planning, surveying, water resources engineering gies, and seek and receive municipal and State DOT neering, consulting work, and all facets of private de- and 3D laser scanning. Offices are located in Oakmont approvals and/or permits. Our skills include: Traffic velopment including the burgeoning energy industries. (Pittsburgh), PA; Brookfield (Milwaukee), Madison Engineering Studies, Highway Occupancy Permits, Traf- Civil Engineer The tradition of providing value-added engineering and Appleton, WI; Naperville (Chicago), IL and Orange fic Signal System Design, Roadway Design, Intersection solutions carries on as the company continues to grow. County, CA. Design, and Parking Studies. Wooster also provides site Gateway Engineers staff of registered professional en- design services. gineers, 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, Construction Consultant please visit the new GatewayEngineers.com.

GAI Consultants, Inc. DONOGHUE 385 E. Waterfront Drive Red Swing Group Homestead, PA 15120 4154 Old William Penn Hwy PROJECT CONSULTING, LLC

T: 412-476-2000 Suite 300 www.gaiconsultants.com Murrysville, PA 15668 Donoghue Patrick M. Gallagher, T: 724.325.1215 Project Consulting, LLC Assistant Vice President / Senior Director F: 866.295.5226 [email protected] [email protected] www.RedSwingGroup.com T: 412- 605-7045 Transforming ideas into reality for over 50 years, Pennoni Associates Inc. Matthew Smith Having been the Project Manager on both the Client, GAI’s teams of real estate and economic counselors, 9 Foster Plaza, Suite 700 [email protected] and Consultant side; as Owner, Architect, Subject Mat- urban planners, engineers, environmental specialists, 750 Holiday Drive Red Swing Consulting Services views its clients as ter Expert, and Code Official; we understand how to surveyors, and landscape architects provide innovative, Pittsburgh, PA 15220 partners focusing first and foremost on building and succeed in the design and construction industry. practical, and cost-effective solutions for all stages of T: 412-521-3000 x2778 maintaining strong relationships. Mutual trust from We speak all of those languages. We offer: land development. Our award-winning land develop- www.pennoni.com these relationships is the foundation of solid business • Project Management, ment portfolio includes large multi-use complexes, John Skorupan partnerships. Red Swing offers complete land develop- • Project Planning retail centers, healthcare and educational campuses, [email protected] ment consulting services to take a project from concept • Owner Advocacy / Representation residential communities, urban streetscapes, parks and Pennoni is proud to be celebrating our 50th anniver- through construction. Red Swing possesses experience • Code & Accessibility Consulting, trails, marinas, and resorts. Distinguished in our com- sary as a multi-disciplined consulting engineering in land development, infrastructure, utility, environ- • Client Relationship Advice mitment to urban-infill, Greenfield, and brownfield and design firm. An ESOP company, Pennoni employs mental and communication projects. Red Swing ef- • Construction Observation development, we help clients achieve their project over 1,000 professional and technical personnel with fectively maximizes the return on investment through • Lender's Work-In-Place Verification goals. GAI brings projects from ideas to reality. Learn 30 offices throughout the Mid-Atlantic States, Ohio, a collaborative design approach, utilizing a low impact • Forensics & Due Diligence more at www.gaiconsultants.com. North Carolina and Florida. Pennoni is a full-service design philosophy that reduces project capital costs Contact Tom Donoghue to discuss how we can help provider of Land Development, Landscape Architecture, and produces the competitive edge that we and our with your project. Structural Engineering, Surveying, Environmental, partners demand. Transportation, Geotechnical, MEP Design and Energy & Sustainability. Locally, Pennoni has offices in Pitts- burgh, State College and Uniontown that service the developer, industrial, transportation, education and Herbert, Rowland & Grubic, Inc. the Marcellus Shale industry in Western Pennsylvania, Herbert, Rowland & Grubic, Inc. Ohio and West Virginia. We promise to put all of our 200 West Kensinger Drive, Suite 400 passion, our knowledge and our skill into doing what- Cranberry Township, PA 16066 ever it takes, every day, every time, for every project. 724.779.4777 Daniel D. Santoro, AICP [email protected] www.hrg-inc.com HRG is an employee-owned, full-service consulting engineering firm that provides quality, cost-effective design solutions. Our professional team provides a wide range of services from site design, permitting, and environmental assessments to transportation and survey. We do it all in-house, expediting the land development process and eliminating delays. We get you down to business – Fast. Since its inception in

90 DEVELOPINGPITTSBURGH | Fall 2015 Contractor Developer

EMCOR/Scalise Industries 108 Commerce Blvd. Suite A Lawrence, PA 15055 McKamish, Inc. T: 724-746-5400 55th & AVRR A. Martini & Company F: 724-746-5410 320 Grant Street Pittsburgh, PA 15201 Joseph Scalise AdVenture Development, LLC Verona, PA 15137 T: 412-781-6262 [email protected] 111 E. Oak Street T: 412-828-5500 F: 412-781-2007 www.scaliseindustries.com Selma, NC 27576 www.amartinigc.com www.mckamish.com EMCOR Services Scalise Industries is a single source T: 919-965-5661 Emily Landerman Dave Casciani www.adventuredev.com [email protected] provider of Mechanical, Electrical and Fire Protection [email protected] Construction Services to commercial and institutional Kevin M. Dougherty Established in 1951, A. Martini & Co. is not just a When it comes to specialty mechanical contracting, clients. From service and maintenance solutions to [email protected] general contracting and construction management McKamish sets the bar. The Commercial Construction complex construction projects, the Scalise Industries Kevin Dougherty formed AdVenture Development, LLC firm – it is a family business that embodies the dedica- Group at McKamish serves customers big and small in team will utilize our extensive resources to enable in 2005. AdVenture Development focuses on com- tion, work ethic and talent of three generations of virtually all market segments, meeting their Mechani- integrated workflow solutions. We deliver superior mercial real estate development projects and is actively the Martini family. A. Martini & Co.’s size, history and cal Contracting, Plumbing and HVAC needs. We excel at service through our 65+ years of facilities expertise involved in the acquisition, development, leasing and work philosophy are specifically geared to offering Pre-Construction and Design Assist/Build services. The and trade knowledge, and continuously implement management and has also retained real estate consult- experience, commitment and a partnering approach. McKamish Service Group thrives to optimize customer new technologies to construct quality products and ing assignments in Pennsylvania, Virginia, West Virginia A. Martini & Co. provides construction management investment in new and existing building systems. A enhance value for customers. A part of EMCOR Group, and North Carolina. Currently being developed in and general construction services for multimillion dedicated team of professional technicians, operating a our expertise is backed by the resources of a Fortune Pittsburgh, PA is McCandless Crossing, a 1.2 million sf dollar and smaller projects for industry, retail, medical, fleet of vehicles, provide McKamish Service customers 500 organization. mixed-use development. In the Raleigh, North Carolina entertainment, corporate, residential, education and with around-the-clock support. Please visit our website non-profit clients. area a similar development , EASTFIELD, is planned. – www.mckamish.com – to learn more about us! Kevin and his team are dedicated to exceeding their clients’ expectations. Please visit our website at: www.adventuredev.com to learn more.

Restoring the Past Building the Future

Jendoco Construction Corporation PJ Dick Inc. 2000 Lincoln Road 225 North Shore Drive Burchick Construction Company Inc. Pittsburgh, PA 15235 Pittsburgh PA 15212 500 Lowries Run Road T: 412-361-4500 T: 412-807-2000 Chapman Properties Pittsburgh, PA 15237 F: 412-361-4790 www.pjdick.com 100 Leetsdale Industrial Drive T: 412-369-9700 www.jendoco.com Bernard J. Kobosky Leetsdale, PA 15056 www.burchick.com Domenic Dozzi [email protected] T: 724-266-4499 Joseph E. Burchick [email protected] PJ Dick – Trumbull – Lindy Paving is a Pittsburgh, PA www.chapmanprop.com [email protected] Located in Pittsburgh for over 50 years, Jendoco has based contracting entity providing building construc- Steve Thomas Burchick Construction is a full-service general contrac- built a reputation for being a premier quality general tion, highway, site, and civil construction and asphalt [email protected] tor founded on the commitment to excellence that Joe contractor and construction manager with expertise paving services. Since 1979, the companies have served Chapman Properties is a leading provider of quality Burchick brings to each project the company under- in many facets of building construction. From renova- a number of different owner groups including com- business facilities in Southwestern Pennsylvania. An takes. Burchick’s management approach is designed tions, to restorations, to new construction, our team mercial, institutional, government and private equity award winning commercial property development and to ensure optimum results for our clients, setting the of seasoned professionals has the experience and developers. Consistently ranked among the nation’s management company based in Pittsburgh, Chapman performance standard for construction services. Our commitment to meet the challenges of your projects. top firms, the family owned group of companies is designs, builds, and operates state-of-the-art business executives and managers have broad-based experience We have experience with new construction, renova- widely considered the region’s largest construction firm parks with a concentration on regional distribution delivering construction to the highest standards, re- tion, historical restoration and preservation, research offering a variety of delivery systems utilizing superior and industrial projects. They are best known for their gardless of the client’s preference for delivery method. facilities, hospitals and medical facilities, schools and expertise, equipment and innovation. redevelopment of the 2+ million square foot Leetsdale Burchick’s project team and professional engineers universities, religious facilities, water treatment facili- Industrial Park, and are currently developing Chapman on staff are equally comfortable with a completed ties, multi-tenant residential, commercial, industrial, Westport, a 2.6 million square foot master-planned design or with providing pre-construction assistance institutional, retail and sustainable construction. mixed use business park located 3 miles from Pitts- at the earliest stages of design. Burchick has managed burgh International Airport on the Westport Road In- commercial, industrial and institutional projects from terchange of PA Turnpike 576, and Chapman Southport, $100,000 to $73 million with equal attention. Burchick a 153-acre mixed use office park located on Racetrack Construction, setting the performance standard. Rycon Construction Inc. 2525 Liberty Avenue Road in Washington County next to the Meadows Race- Pittsburgh, PA 15222 track and Casino and Tanger Outlet Mall. T: 412-392-2525 LANDAU BUILDING COMPANY F: 412-392-2526 9855 Rinaman Road www.ryconinc.com Wexford, Pennsylvania 15090 Todd Dominick CLAYCO, INC. T: 724-935-8800 [email protected] 133 Sunridge Drive www.landau-bldg.com Rycon Construction, Inc. is a premier construction CLAYCO, INC. Pittsburgh, PA 15234 Jeffrey Landau, President management & general contracting firm which has 133 Sunridge Drive T: 412 913 7505 [email protected] completed more than $2 billion of work and currently Pittsburgh, PA 15234 Scott Caplan, Business Development Man- Established over 100 years ago, Landau Building averages in excess of $230 million annually. Expertise T: 412 913 7505 ager - East Region Company (LBC) has become one of the premier is in new construction, renovations and design-build Scott Caplan, Business Development Man- [email protected] family-owned and operated general contracting firms projects for owners of commercial, industrial, insti- ager - East Region www.claycorp.com in Western Pennsylvania. In 2006, Landau Building tutional, multi-unit residential and governmental [email protected] Clayco is a full-service, turnkey real estate develop- Company expanded its construction services to include buildings. Rycon’s stellar reputation for quality service www.claycorp.com ment, design, engineering, design-build and construc- the northern West Virginia region when it created the is built on a solid history of successful projects and an Clayco is a full-service, turnkey real estate develop- tion firm. Clayco specializes in “the art and science of subsidiary Marks-Landau Construction. Now in its 5th unwavering business philosophy that puts customer ment, design, engineering, design-build and construc- building,” by providing fast-track, turnkey solutions generation, LBC continues to build strong RELATION- satisfaction first. The results are return customers and tion firm. Clayco specializes in “the art and science of globally for commercial, institutional and industrial SHIPS with its clients by focusing on their need to build impressive company growth. building,” by providing fast-track, turnkey solutions building types and heavy civil infrastructure projects a safe, high-quality project on time and within budget. globally for commercial, institutional and industrial and is a leader in safety, technology, diversity and Our commitment to integrity, honesty, and excellent building types and heavy civil infrastructure projects sustainable design. Clayco looks “beyond these walls” client service has built the solid REPUTATION we exhibit and is a leader in safety, technology, diversity and focusing on helping our clients fulfill their mission. every day and on every project. We deliver exceptional sustainable design. Clayco looks “beyond these walls” RESULTS that exceed our client’s expectations for qual- focusing on helping our clients fulfill their mission. ity and service and make Landau Building Company their builder of choice. We welcome the opportunity to be your builder of choice.

www.developingpittsburgh.com 91 Armstrong County Industrial Development Council Herbert, Rowland & Grubic, Inc. Continental Building Systems Northpointe Technology Center II Herbert, Rowland & Grubic, Inc. 187 Northpointe Boulevard Washington County Chamber 395 E. Waterfront Drive Suite 300 200 West Kensinger Drive, Suite 400 Freeport, PA 16229 of Commerce Homestead, PA 15120 Cranberry Township, PA 16066 T: 724-548-1500 375 Southpointe Boulevard #240 T: 412-476-3006 724.779.4777 www.armstrongidc.org Canonsburg, PA 15317 www. continental-buildingsystems.com Daniel D. Santoro, AICP Michael P. Coonley, AICP T: 724-225-3010 Carl L. Belli, LEED AP [email protected] Executive Director F: 724-228-7337 [email protected] www.hrg-inc.com [email protected] www.washcochamber.com Continental Building Systems (CBS) draws on a com- HRG is an employee-owned, full-service consulting The Armstrong County Industrial Development Council Mary Stollar prehensive scope of services, customized for every Senior Vice President Economic engineering firm that provides quality, cost-effective client, to build solutions for their companies. We offer (ACIDC), established in 1968 is a private 501(c)(3) design solutions. Our professional team provides a industrial development corporation. Identified as the Development a single source with total development, design and [email protected] wide range of services from site design, permitting, lead economic development group within the County, and environmental assessments to transportation construction services available to our clients. With a The Washington County Chamber of Commerce is the 26-year history and an annual construction volume of the ACIDC, along with its sister organization the and survey. We do it all in-house, expediting the land Armstrong County Industrial Development Authority, largest business organization in Washington County development process and eliminating delays. We get over $200 million, we have a diverse base of experience and the second largest chamber of commerce in South- in commercial construction, including multi-story of- provides single-point-of-contact service for emerg- you down to business – Fast. Since its inception in ing or expanding business and industry. Owners and western Pennsylvania. The Chamber focuses on eco- 1962, HRG has grown to six office locations throughout fice buildings and tenant improvements, retail, restau- nomic and business development initiatives to expand rants, warehouses, industrial / manufacturing, medical, operators of four industrial parks, single use and multi- Pennsylvania, West Virginia, and Ohio. We have over tenant facilities, the ACIDC works closely with existing the economy of Washington County and was one of the 200 dedicated professional engineers, geologists, recreational, education, multifamily, student housing, first organizations to publically support the economic assisted living and site development. or prospective businesses to identify the right location. environmental scientists, surveyors, landscape archi- They also provide financing assistance to companies benefits and job creation potential of the natural gas tects, and related support personnel that provide a through government loan/grant programs and private industry. Learn more at www.washcochamber.com. full-service approach to every project. Service offerings sector financial institutions. include land development, water resources, water & Document Handling wastewater, transportation, survey, GIS, environmental, and financial consulting. Westmoreland County Industrial Development Corporation Fifth Floor, Suite 520 Community Development 40 North Pennsylvania Avenue Corporation of Butler County Greensburg, PA 15601 KU Resources, Inc. 111 Woody Drive T: 724-830-3061 22 South Linden Street Tri-State Reprographics, Inc. Butler, PA 16001 F: 724-830-3611 Duquesne, PA 15110 2934 Smallman Street T: 724-283-1961 www.westmorelandcountyidc.org T: 412-469-9331 Pittsburgh, PA 15201 F: 724-283-3599 Jason W. Rigone F: 412-469-9336 T: 412-281-3538 www.butlercountycdc.com Executive Director www.kuresources.com F: 412-281-3344 Ken Raybuck, Executive Director [email protected] Mark Urbassik www.tsrepro.com [email protected] [email protected] Founded in 1983 by the Westmoreland County Board DJ McClary, Director of Operations The Community Development Corporation of Butler of Commissioners, the Westmoreland County Industrial KU Resources, Inc. provides a full range of environmen- [email protected] County (CDC) is the lead economic development orga- Development Corporation (WCIDC) implements a com- tal management and site development engineering For 70 years, Tri-State has provided printing and docu- nization in Butler County. The CDC is your first contact prehensive economic development strategy to promote services to industrial, commercial, and community- ment management to Architects, Engineers and Con- for economic development in Butler County. The CDC growth in terms of job creation, economic output and a based clients. The firm specializes in brownfield rede- tractors. Today we utilize the latest in Online Planroom works closely with you to identify the right location stable tax base for Westmoreland County. Through the velopment, environmental site assessment, economic Services, Scanning / Printing in both Black &White and for your business. Available land includes 60 acres at development of a county-wide industrial park system, revitalization assistance, regulatory permitting and Color. Level 3 Graphics, a division of Tri-State specializ- the Victory Road Business Park, with a KOZ designa- a responsive Business Calling Program and involvement compliance, remediation design and implementation, ing in large format color, services the Sign, Advertising, tion, and 30 acres at the Pullman Center Business Park in public/private partnerships, WCIDC strives to foster and environmental risk management strategies. The and Display Markets. Our unique approach combined Expansion. Initial lots at the Pullman site are priced as business growth, resulting in job opportunities for the firm’s engineering and environmental consulting capa- with our product research and years of knowledge low as $50,000 per acre. All utilities are at both sites. citizens of Westmoreland County. bilities also include the areas of civil and geotechnical enables us to continually present new possibilities to The CDC also has financing available for real estate, engineering, site development engineering, water our clients. equipment, working capital and lines of credit. resources engineering, mining and quarry services, water quality monitoring, and air quality compliance Engineer and permitting. Economic Development

Fay-Penn Economic Development Council LLI ENGINEERING 1040 Eberly Way 1501 Preble Ave, Suite 300 Pittsburgh, PA 15233 Suite 200 Civil & Environmental Lemont Furnace, PA 15456 T: (412) 904-4310 Ambridge Regional Consultants, Inc. www.LLIEngineering.com 2301 Duss Avenue #1 T: 724-437-7913 www.faypenn.org 333 Baldwin Road James D. White, PE, LEED AP Ambridge, PA 15003 Pittsburgh, PA 15216 [email protected] T: 724-266-4661 Dana Kendrick [email protected] T: 800-365-2324 LLI Engineering provides mechanical, electrical, www.AmbridgeRegional.com www.cecinc.com For more than 20 years, Fay-Penn has been the lead architectural, commissioning, and structural engineer- Debi Leopardi, Managing Director Gregory P. Quatchak, P.E. agency for economic development in Fayette County. ing services. Since 1910, LLI Engineering has been [email protected] [email protected] As evidenced by its experience and successes, Fay-Penn consistently recognized for providing top-quality Value Ambridge Properties at the Ambridge Regional Civil & Environmental Consultants, Inc. (CEC) is a com- engineering design services. We specialize in commer- Distribution & Manufacturing Center is located in has a high quality staff in place with a number of years of experience in planning, managing and marketing pany of professionals who provide integrated design cial, critical facilities, education, healthcare, industrial, Beaver County and is convenient to all major local and consulting services at all points in a property’s life infrastructure upgrades, green building design, energy roadways, and only 11 miles from the proposed ethane buildings; construction, rehabilitation, and maintenance of buildings; business park development; tenant cycle. CEC’s industry experts offer a full complement conservation modifications, project engineering, and cracker plant. Entirely zoned for industry, its 85 acres of evaluation, technical and regulatory insight. Our engineering estimates. Located in Pittsburgh, Pennsyl- house 22 buildings that contain over one million lease development and management; state and federal grant writing, management, and administration; work- value lies in the practical knowledge senior leaders vania, LLI Engineering has completed projects in over square feet of leasable business, warehouse, office, wet contribute along with our broad skill-sets and desire to 20 different states. lab, distribution, and manufacturing space. Its tenants force development; low-interest business financing solutions; and real estate managing and marketing. advance our clients’ strategic objectives. We’re build- also enjoy direct access to Norfolk Southern Rail Co. ing trust and our reputation on a local level through service as well as on-site maintenance and logistics personal business relationships while continually as- services. For more information, call 724-266-4661, or sessing our environmental and economic sustainability visit www.ambridge regional.com. in the communities where we practice. 92 DEVELOPINGPITTSBURGH | Fall 2015 Green Building/ Energy Consultant First Niagara Bank, N.A. Commercial Real Estate 11 Stanwix Street, 16th Floor Pennoni Associates Inc. Pittsburgh, PA 15222 9 Foster Plaza, Suite 700 2 East Crafton Avenue T: 412-807-2900 750 Holiday Drive Pittsburgh, PA 15205-2804 www.fnfg.com Pittsburgh, PA 15220 341 Science Park Drive Greg Boyd, VP T: 412-521-3000 x2778 Suite 205 [email protected] www.pennoni.com State College, PA 16803 Randy Cornelius, VP John Skorupan Chapman Properties T: 412-921-3303 [email protected] [email protected] 100 Leetsdale Industrial Drive C: 412-491-6132 Kris Volpatti, FVP Leetsdale, PA 15056 www.dewooster.com Pennoni is proud to be celebrating our 50th anniver- [email protected] T: 724-266-4499 Chuck Wooster, President sary as a multi-disciplined consulting engineering With First Niagara you’ll find a perfect balance, a com- www.chapmanprop.com [email protected] and design firm. An ESOP company, Pennoni employs munity oriented bank offering personal attention, de- Steve Thomas over 1,000 professional and technical personnel with livering customized solutions, and keeping current with Since 1971, our firm has been a highly regarded and 30 offices throughout the Mid-Atlantic States, Ohio, [email protected] respected leader in the traffic engineering industry. products and services required for any project. We aim North Carolina and Florida. Pennoni is a full-service to improve the quality of life of our neighbors in terms Chapman Properties is a leading provider of quality We are most proud of our uncompromising integrity. provider of Land Development, Landscape Architecture, business facilities in Southwestern Pennsylvania. An Our goal is to guide our clients through the rigorous of where they live, work and play. Today, over 70,000 Structural Engineering, Surveying, Environmental, neighbors live in apartments, over 60,000 people work award winning commercial property development and process of real estate development and assist them by Transportation, Geotechnical, MEP Design and Energy management company based in Pittsburgh, Chapman correctly identifying on-site and off-site traffic impacts, in facilities, over $3,500,000,000 in commerce flows & Sustainability. Locally, Pennoni has offices in Pitts- through retail and hospitality projects all financed by designs, builds, and operates state-of-the-art business develop cost effective and efficient mitigation strate- burgh, State College and Uniontown that service the parks with a concentration on regional distribution gies, and seek and receive municipal and State DOT First Niagara. Work with one of our teammates – ben- developer, industrial, transportation, education and efit from the consistent quality they deliver. and industrial projects. They are best known for their approvals and/or permits. Our skills include: Traffic the Marcellus Shale industry in Western Pennsylvania, redevelopment of the 2+ million square foot Leetsdale Engineering Studies, Highway Occupancy Permits, Traf- Ohio and West Virginia. We promise to put all of our Industrial Park, and are currently developing Chapman fic Signal System Design, Roadway Design, Intersection passion, our knowledge and our skill into doing what- Westport, a 2.6 million square foot master-planned Design, and Parking Studies. Wooster also provides site ever it takes, every day, every time, for every project. mixed use business park located 3 miles from Pitts- design services. burgh International Airport on the Westport Road In- terchange of PA Turnpike 576, and Chapman Southport, a 153-acre mixed use office park located on Racetrack Finance Road in Washington County next to the Meadows Race- Environmental PNC Real Estate track and Casino and Tanger Outlet Mall. 249 Fifth Avenue Pittsburgh, PA 15222 www.pnc.com/realestate Joe Pascarella, VP Industry/Trade Association T: 412-762-2672 [email protected] KU Resources, Inc. Dollar Bank Autumn Harris, AVP Three Gateway Center 22 South Linden Street T: 412-762-4702 401 Liberty Avenue Duquesne, PA 15110 [email protected] Pittsburgh, PA 15222 T: 412-469-9331 PNC Real Estate is a leading provider of banking, F: 412-469-9336 T: 412-261-7515 financing and servicing solutions for commercial real www.kuresources.com www.dollarbank.com estate clients. Our capabilities include acquisition, con- Mark Urbassik David Weber struction and permanent financing for developers and [email protected] [email protected] investors; agency financing for multifamily properties; KU Resources, Inc. provides a full range of environmen- As your business changes, you'll need the flexibility to American Subcontractors respond to market opportunities by purchasing equip- and debt and equity capital for the affordable housing tal management and site development engineering industry. And, through Midland Loan Services, we Association of WPA services to industrial, commercial, and community- ment, expanding your facilities or increasing working 565 Callery Road capital. Your credit needs will change as your business provide third-party loan servicing, asset management based clients. The firm specializes in brownfield rede- and technology solutions. Cranberry Twp., PA 16066 velopment, environmental site assessment, economic grows, so your overall credit plan should address T: 724-538-8227 revitalization assistance, regulatory permitting and short-term demands as well as long-term growth. F: 724-538-8227 compliance, remediation design and implementation, Dollar Bank’s Business Banking Experts will work to www.asawpa.org and environmental risk management strategies. The understand your business and assist you in achieving Angie Wentz, Executive Director firm’s engineering and environmental consulting capa- your goals with the right financing for your needs. For Geotechnical Engineer [email protected] bilities also include the areas of civil and geotechnical more information, contact David Weber, Vice President Business Lending. ASA Western PA, the American Subcontractors As- engineering, site development engineering, water sociation of Western PA, is a non-profit organization resources engineering, mining and quarry services, dedicated to the representation and advocacy for the water quality monitoring, and air quality compliance subcontractor, specialty trade contractor, supplier and and permitting. ACA Engineering, Inc. service provider business community; promoting an 410 North Balph Avenue equitable business environment through providing Pittsburgh, PA 15202 professional education, networking opportunities, T: 412-761-1990 government advocacy and influence throughout the www.acaengineering.com construction industry. ASA was founded in 1966, our Thomas R. Beatty, P.G. chapter was established in 1989. ASA of Western PA [email protected] has been around for 26 years. Learn more about what ACA Engineering, Inc. is an independently owned ASA Western PA can do for your company by visiting and operated geotechnical and environmental engi- our website or contacting the office. neering, 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.

www.developingpittsburgh.com 93 Insurance Land Surveyor

Pennoni Associates Inc. Builders Guild of Western PA, Inc. 9 Foster Plaza, Suite 700 650 Ridge Road, Suite 301 Simpson & McCrady LLC 750 Holiday Drive Pittsburgh, PA 15220 Pittsburgh, PA, 15205 310-330 Grant Street | Suite 1320 GAI Consultants, Inc. T: 412-521-3000 x2778 T: 412-921-9000 Pittsburgh, PA 15219 385 E. Waterfront Drive www.pennoni.com www.buildersguild.org T: 412.261.2222 Homestead, PA 15120 John Skorupan Building trade unions and contractors working to- [email protected] T: 412-476-2000 gether to provide the best value in construction. Our www.gaiconsultants.com [email protected] Simpson | McCrady is a boutique risk management firm Pennoni is proud to be celebrating our 50th anniver- 40,000 member workforce is professionally trained in with a tailored approach to client management ser- Patrick M. Gallagher, the finest apprenticeship centers in the country. We Assistant Vice President / Senior Director sary as a multi-disciplined consulting engineering vices. Our firm prides itself on providing our client base and design firm. An ESOP company, Pennoni employs understand the demands of the industry, are commit- with access to specialists in all areas of the insurance [email protected] ted to customer satisfaction and are drug free. Today’s Transforming ideas into reality for over 50 years, over 1,000 professional and technical personnel with industry including Commercial Insurance, Private Client 30 offices throughout the Mid-Atlantic States, Ohio, building trade unions are setting a new standard of Services, Employee Benefits and captive risk alterna- GAI’s teams of real estate and economic counselors, excellence. Get to know us. urban planners, engineers, environmental specialists, North Carolina and Florida. Pennoni is a full-service tives. We strive to go above and beyond taking care of provider of Land Development, Landscape Architecture, your insurance needs by providing risk management surveyors, and landscape architects provide innovative, practical, and cost-effective solutions for all stages of Structural Engineering, Surveying, Environmental, tools and solutions through our trusted vendors. As one Transportation, Geotechnical, MEP Design and Energy of the largest personal and commercial insurance advi- land development. Our award-winning land development portfolio includes large multi-use complexes, & Sustainability. Locally, Pennoni has offices in Pitts- sors in Pennsylvania, we have the expertise to handle burgh, State College and Uniontown that service the any account size anywhere in the world. retail centers, healthcare and educational campuses, residential communities, urban streetscapes, parks and developer, industrial, transportation, education and trails, marinas, and resorts. Distinguished in our com- the Marcellus Shale industry in Western Pennsylvania, mitment to urban-infill, Greenfield, and brownfield Ohio and West Virginia. We promise to put all of our passion, our knowledge and our skill into doing what- IRONWORKER EMPLOYERS Interior Designer development, we help clients achieve their project goals. GAI brings projects from ideas to reality. Learn ever it takes, every day, every time, for every project. ASSOCIATION more at www.gaiconsultants.com. Of Western Pennsylvania Foster Plaza 9 750 Holiday Drive, Suite 615 Legal Services Pittsburgh, PA 15220 Landscape Architect T: 412-922-6855 www.iwea.org William C. Ligetti, Jr. [email protected] The IWEA is a Trade Association of Union Contractors Design 3 Architecture PC who work in all aspects of the Ironworking Trade within 300 Oxford Dr. Ste. 120 the Construction Industry. We are a resource for all Monroeville, PA 15146 Babst Calland owners, developers and contractors who are looking T: 412-373-2220 Two Gateway Center for a qualified contractor with a well-trained work- www.d3a.com GAI Consultants, Inc. 603 Stanwix Street force. Visit our website or call our office for additional William Snyder 385 E. Waterfront Drive 6th Floor information. [email protected] Homestead, PA 15120 Pittsburgh, PA 15222 T: (412) 394-5400 Design 3 Architecture has been offering architecture, T: 412-476-2000 www.babstcalland.com planning, and interior design services to the Pittsburgh www.gaiconsultants.com Justin D. Ackerman, Esquire region since 1982. We view inherent project constraints Patrick M. Gallagher, [email protected] as potential opportunities for innovative design solu- Assistant Vice President / Senior Director Marcia L. Grimes, Esquire tions. With a philosophy grounded in team collabora- [email protected] Master Builders’ Association of [email protected] tion, providing both personal attention and project Transforming ideas into reality for over 50 years, Peter H. Schnore, Esquire Western Pennsylvania, Inc. leadership, Design 3 Architecture does more than solve GAI’s teams of real estate and economic counselors, [email protected] 631 Iron City Drive problems. We provide solutions that are unique, excit- urban planners, engineers, environmental specialists, Pittsburgh, PA 15205 ing and affordable. surveyors, and landscape architects provide innovative, Babst Calland’s real estate lawyers have well-rounded T: 412-922-3912 practical, and cost-effective solutions for all stages of skills and experience in real estate development, fi- www.mbawpa.org land development. Our award-winning land develop- nance, construction, energy, environmental risk assess- [email protected] ment portfolio includes large multi-use complexes, ment, zoning and land use, tax assessment appeals, Leading the Industry, Building the Region! retail centers, healthcare and educational campuses, eminent domain, and other corporate and litigation The Master Builders’ Association represents the pre- residential communities, urban streetscapes, parks and services. We provide creative, pragmatic advice to ferred commercial contractor in our region. Collectively, trails, marinas, and resorts. Distinguished in our com- developers, landlords, tenants, investors, brokers and the membership accounts for over 80% of the commer- mitment to urban-infill, Greenfield, and brownfield managers of commercial real estate to help them reach cial construction in our area and the MBA contractors development, we help clients achieve their project their goals, through attentive service that keeps the client’s bottom line in mind. From acquisition to dispo- have built over 90% of the square-footage of LEED Colby Design, Ltd goals. GAI brings projects from ideas to reality. Learn certified buildings in the Pittsburgh region. With skilled more at www.gaiconsultants.com. sition, our approach to the practice of law gives our real labor, superior safety services and the latest technol- 870 Hahntown-Wendel Road estate clients an edge. ogy, the MBA contractor is the best value North Huntingdon PA 15642 T: 724-864-0814 www.colbydesignltd.com Fran Colby, FASID, NCIDQ, LEED AP ID+C [email protected] Branding Your Interior Environment. Colby Design provides full-service interior design for a wide variety of commercial clients. From full space renovation or starting from the ground up, Colby Design creates a branded interior environment that presents a company’s unique identity. Not merely interior design, Colby Design creates functional and captivating spaces for commercial enterprises through in-depth knowledge of interiors and construction. Expertly blending practicality, sensibility, and passion then infusing that energy within the principles and philosophies of architecture, Colby Design creates your interior brand.

94 DEVELOPINGPITTSBURGH | Fall 2015

DONOGHUE brokerage company primarily servicing the wholesale financial and real estate markets. For further informa- PROJECT CONSULTING, LLC tion, visit www.bgcpartners.com. Maiello Brungo & Maiello 3301 McCrady Road Donoghue CBRE Pittsburgh, PA 15235 Project Consulting, LLC U. S. Steel Tower, Suite 4800 T: 412.242.4400 [email protected] 600 Grant Street F: 412.242.4377 T: 412-605-7045 Pittsburgh, PA 15219 mbm-law.net 412-471-9500 Having been the Owner, Project Manager, Designer, TARQUINCoRE, LLC Lawrence J. Maiello, Esq. www.cbre.com/pittsburgh Planner, Code Official, Subject Matter Expert, Client, 2403 Sidney Street, Suite 200 [email protected] Jeffrey Ackerman and Consultant; we understand what it takes to make Pittsburgh, PA 15203 The MAIELLO, BRUNGO & MAIELLO Real Estate Team [email protected] a project succeed in the design and construction indus- T: 412-381-7433 provides legal services throughout the real estate try. We speak all of those languages. We offer: Owner The Pittsburgh Office of CBRE is the local leader in pro- F: 412-381-6793 development cycle. Our attorneys have assisted with Advocacy / Representation, Project Management, viding comprehensive commercial real estate services www.Tarquincore.com the development of office parks, retail centers, multi- Project Planning, Code & Accessibility Consulting, to property owners, investors and tenants. Recognized Ronald J. Tarquinio, Principal family housing, and mixed use developments. We Client Relationship Advice, Construction Observation, as the largest commercial real estate service provider [email protected] understand the perspectives of a developer and their Lender's Work-In-Place Verification, Forensics & Due in the western Pennsylvania area, CBRE Pittsburgh has Whether you’re an investor, developer, landlord or tenant, various roles as a buyer, contractor, landlord and bor- Diligence Contact Tom Donoghue to discuss how we set the standard for excellence in the marketplace for you need a partner who can provide you with compre- rowers. MAIELLO, BRUNGO & MAIELLO has counseled can help with your project. over 50 years. We offer extensive corporate real estate hensive real estate knowledge…and help you put that clients on property acquisitions and sales, construction, solutions, knowledge and experience in Asset Services, knowledge to work for your benefit. Someone who can financing, zoning, taxation, title insurance, leasing, tax Brokerage Services, Corporate Services Investment analyze all of the relevant aspects of a potential transac- incremental financing (TIF), and other issues associated Sales, Facilities Management, Management Services tion, develop creative strategies based on an insightful with land use and development. Professional Services and Retail Services. The CBRE Pittsburgh office is com- understanding of the market, then help you effectively mitted to providing clients with quality support services implement your plans.TARQUINCoRE meets these needs and market intelligence that encompass accounting, with a unique, client-focused approach across a complete research, marketing and administration, as well as ac- range of commercial real estate services. From landlord cess to cutting-edge technology. representation to property management to tenant representation to brokerage services – whatever your real Meyer Unkovic & Scott estate needs might be – TARQUINCoRE can help you maxi- 1300 Oliver Building mize options, seize opportunities, avoid potential pitfalls Pittsburgh, PA 15222 and expedite transaction times. T: 412-456-2800 www.muslaw.com W. Grant Scott 2 East Crafton Avenue T: 412-456-2893 Pittsburgh, PA 15205-2804 Grant Street Associates, Inc. Structural Engineer [email protected] 341 Science Park Drive The Grant Building Patricia E. Farrell Suite 205 310 Grant Street Suite 1550 T: 412-456-2831 State College, PA 16803 Pittsburgh, PA 15219 [email protected] T: 412-921-3303 T: 412-391-2600 The Real Estate & Lending Group recognizes the impor- C: 412-491-6132 www.gsa-cw.com tance of understanding our clients’ business objectives www.dewooster.com At Cushman & Wakefield | Grant Street Associates, Inc., and providing timely, creative, and cost-effective Chuck Wooster, President we aim to be your commercial real estate provider of solutions. We work with financial institutions, manu- [email protected] choice - the standard for industry knowledge, service facturers, shopping center and mixed-use property Since 1971, our firm has been a highly regarded and and execution in the Pittsburgh region. As a full-service owners, brokers, developers, buyers, sellers, landlords, respected leader in the traffic engineering industry. commercial real estate firm and member of the Cush- Pennoni Associates Inc. and tenants. Our team handles a broad range of mat- man & Wakefield Alliance, Grant Street Associates has We are most proud of our uncompromising integrity. 9 Foster Plaza, Suite 700 ters such as contract negotiation, site acquisition and been providing unsurpassed client-oriented tenant, Our goal is to guide our clients through the rigorous 750 Holiday Drive development, evaluation of potential environmental landlord, buyer and seller representation services since process of real estate development and assist them by Pittsburgh, PA 15220 issues, site planning, commercial loan closings, and 1993. We have built one of the most dedicated, recog- correctly identifying on-site and off-site traffic impacts, T: 412-521-3000 x2778 zoning variances. Our team also handles land use, title nized and respected commercial real estate firms in the develop cost effective and efficient mitigation strate- www.pennoni.com insurance, residential transactions, oil and gas leasing gies, and seek and receive municipal and State DOT Greater Pittsburgh region. issues, and tax assessment appeals. John Skorupan approvals and/or permits. Our skills include: Traffic [email protected] Engineering Studies, Highway Occupancy Permits, Traf- fic Signal System Design, Roadway Design, Intersection Pennoni is proud to be celebrating our 50th anniver- Design, and Parking Studies. Wooster also provides site sary as a multi-disciplined consulting engineering Owner Representative design services. and design firm. An ESOP company, Pennoni employs Newmark Grubb Knight Frank over 1,000 professional and technical personnel with 210 Sixth Avenue #600 30 offices throughout the Mid-Atlantic States, Ohio, Pittsburgh, PA 15222 North Carolina and Florida. Pennoni is a full-service Real Estate Broker T: 412-281-0100 provider of Land Development, Landscape Architecture, www.ngkf.com Structural Engineering, Surveying, Environmental, Gerard McLaughlin Transportation, Geotechnical, MEP Design and Energy Campayno Consulting Services, LLC [email protected] & Sustainability. Locally, Pennoni has offices in Pitts- P.O. Box 554 Louis Oliva burgh, State College and Uniontown that service the Oakmont, PA 15139 [email protected] developer, industrial, transportation, education and T: (412) 794-8129 Avison Young Newmark Grubb Knight Frank is one of the world's the Marcellus Shale industry in Western Pennsylvania, F: (412) 794-8130 4 PPG Place, Suite 300 leading commercial real estate advisory firms. Together Ohio and West Virginia. We promise to put all of our www.campaynoconsulting.com Pittsburgh, PA 15222 with London-based partner Knight Frank and inde- passion, our knowledge and our skill into doing what- Jesse C. Campayno T: 412.944.2137 pendently-owned offices, NGKF's 12,000 professionals ever it takes, every day, every time, for every project. T: 412-302-0035 F: 412.944.2124 operate from more than 320 offices in established and [email protected] www.avisonyoung.com emerging property markets on five continents. Campayno Consulting provides construction consulting George Kingsley With roots dating back to 1929, NGKF's strong foun- services for owners and developers who need assistance Principal and Managing Director dation makes it one of the most trusted names in managing the complex contractual relationships [email protected] commercial real estate. NGKF’s full-service platform between their contractor and architect. Jesse Campayno Avison Young is the world’s fastest-growing commercial comprises BGC’s real estate services segment, offering has more than 37 years of experience in field and real estate services firm. Headquartered in Toronto, commercial real estate tenants, landlords, investors executive positions, giving him insight into the best Canada, Avison Young is a collaborative, global firm and developers a wide range of services including practices of project management. Campayno focuses on owned and operated by its principals. Founded in 1978, leasing; capital markets services, including invest- five core services: Owner representation and construc- the company comprises 1,900 real estate professionals ment sales, debt placement, appraisal, and valuation tion management; estimating and conceptual budget- in 67 offices. Avison Young’s Pittsburgh office opened in services; commercial mortgage brokerage services; as ing; project executive services; dispute resolution and 2012 providing value-added, client-centric investment well as corporate advisory services, consulting, project business consulting. Our clients rely on our expertise to sales, leasing, advisory, management, financing and and development management, and property and add value to their projects by providing clear direction, mortgage placement services to owners and occupiers corporate facilities management services. For further maintaining open lines of communication and placing of office, retail, industrial and multi-family properties. information, visit www.ngkf.com. NGKF is a part of the project owner’s goals as the top priority. BGC Partners, Inc. (NASDAQ: BGCP), a leading global www.developingpittsburgh.com 95

1.2 Million square foot mixed-use development nestled in the North Hills of Pittsburgh

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www.adventuredev.com www.mccandlesscrossing.com The Partnership Behind the Project.

412-683-3810 412-261-8810