TRANSIT A BOLD VISION Fall 2018 Carnegie Mellon University Tepper School of Business B U I L D I N G E X C E L L E N C E www.mckamish.com CONTENTS | Fall 2018 05 President’s Message 07 Advocacy Update 31 Eye On the Economy 35 Office Market Update SVN | Three Rivers Commercial Advisors 39 Industrial Market 07 Executive Director’s Message Update Grant Street Associates/ Cushman & Wakefield 43 Capital Market Update 47 Legal / Legislative Outlook 49 Benchmarks Pittsburgh’s Multi-family Market is Showing 08 Feature Resilience A Bold Transit Vision 55 Voices 58 News from the Counties 67 People / Events 72 BUYER’S 2018 GUIDE 25 Development Project Ashby at South Hills Village www.developingpittsburgh.com 3 Quality. Excellence. Integrity. For 67 years, A. Martini & Co. has been providing construction management and general contracting expertise to meet your project needs. www.amartinigc.com | 412.828.5500 Brunner Cory Morton Photography PUBLISHER Tall Timber Group President’s Message www.talltimbergroup.com EDITOR As my second and final term as • Streamlining DEP state Jeff Burd president for NAIOP Pittsburgh is permitting processes 412-366-1857 coming to a close at the end of 2018, [email protected] • Support of the Bus Rapid I am pleased to report that the chapter Transit between Oakland and is strong and, more importantly, Downtown Pittsburgh PRODUCTION positioned well for the future of Carson Publishing, Inc. commercial real estate in the region. • Allow for 1031 like-kind real Kevin J. Gordon estate exchanges to be recognized In my two years as president, we have [email protected] in Pennsylvania had a great deal of successes. We • Pushing for reduction of proposed GRAPHIC DESIGN have continued to focus on the three core goals that grew out of our 2017 increase to Electric Standby Tariff 321Blink strategic plan – advocacy, membership with Public Utility Commission and communications. These will guide CONTRIBUTING PHOTOGRAPHY • Visits to Washington DC to NAIOP Pittsburgh as we plan for the discuss commercial real estate Port Authority of Allegheny County future. Highlights have included: Desmone Architecture development issues with our RIDC • Hired three outstanding people elected officials. Allegheny Conference on Community starting with Brandon Mendoza • Support for infrastructure and Development (Executive Director), David Caliguiri transportation investment. (Public Affairs Consultant) and Erica Tall Timber Group Loftus (Chapter Administrator). • Ensure capital and credit markets meet the current and future CONTRIBUTING EDITORS • Record sponsorship and greater needs of the commercial real Karen Kukish than 650 guests at our 25th Annual estate industry. Awards Banquet in 2018. ADVERTISING SALES • Support of Environment and • Honored our outgoing Executive Energy Efficiency. Karen Kukish Director Leo Castagnari who 412-837-6971 served NAIOP Pittsburgh well for • Re-engaging the Construction [email protected] twenty years. I would encourage Legislative Council and with the others to recognize Leo with a Building Owners and Manager’s MORE INFORMATION: contribution to the Castagnari Association’s legislative affairs DevelopingPittsburghTM is published by Family Charitable Fund through committee to combine efforts Tall Timber Group for NAIOP Pittsburgh pittsburghfoundation.org. on shared goals. 412-928-8303 • Became active and engaged in • Restarting of the statewide www.naioppittsburgh.com local issues impacting commercial initiative in conjunction with real estate investment and NAIOP Philadelphia to address No part of this magazine may be development in the region issues affecting both eastern reproduced without written permission including the City of Pittsburgh’s and western Pennsylvania. by the Publisher. Riverfront Zoning initiative and the The groundwork has been established All rights reserved. increase in the City of Pittsburgh’s for NAIOP Pittsburgh and Western real estate transfer tax. Pennsylvania to continue to thrive as This information is carefully gathered • Hosted innovative and attractive NAIOP Pittsburgh has been investing and compiled in such a manner as to programming by our Developing resources for the betterment of the ensure maximum accuracy. We cannot, Leaders with project tours across commercial estate community. It’s been and do not, guarantee either the cor- the region including a half-day bus an honor to be at the helm during this rectness of all information furnished tour for multiple airport properties, exciting time. nor the complete absence of errors and a project tour of the Kaufmann’s Thank you! omissions. Hence, responsibility for same Grand on Fifth Avenue luxury neither can be, nor is, assumed. apartment project and a lunchtime tour of 420 Boulevard of the Keep up with regional construction Allies with special guest speaker and real estate events at: Dan Gilman, Mayor Peduto’s www.buildingpittsburgh.com Chief of Staff. • Continuation of the Mentorship Program for our Developing Leaders. • Visits to Harrisburg to discuss commercial real estate development issues with our elected and public officials. Agenda items included: David Weisberg NAIOP Pittsburgh President www.developingpittsburgh.com 5 Providing strong legislative leadership to advance your business and commercial real estate. naioppittsburgh.com My NAIOP Pittsburgh membership has been a huge asset as I’ve grown in my career, offering access to key players in the industry. JOIN US AND ADVANCE YOUR BUSINESS. RYAN SCHWOTZER President, Crossgates, Inc. NAIOP member since 2010 naiop.org/joinus Join NAIOP now and get the rest of the year free! EXECUTIVE DIRECTOR’S MESSAGE s I begin my tenure as executive When it comes to membership, I will be I am hoping to see many of you at our director at NAIOP Pittsburgh, I focused on retention, growth, and driving upcoming events, including the 19th A am excited about the wealth of ROI. I value all of our members and I Annual Night At The Fights on November opportunity in Pittsburgh and the unique want to see their businesses succeed. I 1st, please reach out to me if you’re role that NAIOP occupies in advancing this believe NAIOP Pittsburgh can continue to interested in sponsoring and/or attending region. As I reflect on NAIOP Pittsburgh’s support our members’ growth, while also the event. Further, in the coming months, strategic positioning, I am focused on enhancing the benefits of our membership. I am planning on meeting with as many transforming our advocacy strategy, further In the coming months, under the board’s of you as possible. If you have project developing ROI for our membership, and leadership, I will be exploring ways to concerns or other matters, please feel free revamping our communications strategies enhance our membership benefits. NAIOP to reach out to me. I am here to help you to ensure we are meeting our stakeholders Pittsburgh will have an open-door policy and your businesses grow. on the platforms they utilize. for all our members. If you have a policy concern or a membership issue, please feel Sincerely, When it comes to advocacy, we will be free to reach out to me. proactive, and we will show leadership in the policy development process. This Given the communications environment proactive approach will allow for greater we are currently in, where we see the success and influence. Additionally, NAIOP President of the United States engaging in Pittsburgh will further develop our strategic direct communication with his followers relationships with our region’s elected via his Twitter account, NAIOP Pittsburgh leaders and other like-minded advocacy cannot afford to ignore this paradigm shift. groups. I will also seek to leverage the Given this new environment, we will be relationships of our members, many working to revamp our communications of whom have deep connections and strategy with a mobile and social first Brandon J. Mendoza relationships with our region’s elected and approach. We will evaluate our website and Executive Director NAIOP Pittsburgh civic leadership. social media sites to ensure members have the best experience possible. NAIOP ADVOCACY UPDATE n 2017, NAIOP Pittsburgh’s Board of for NAIOP than anyone and he will be By engaging our members and Directors participated in a strategic missed. His departure gave NAIOP an developing a responsible alternative, Iplanning session to set the course of opportunity to bring in a new Executive NAIOP was able to have numerous the organization for the next decade. The Director, Brandon Mendoza. Brandon meaningful discussions with local elected process was very informative and insightful was previously a public affairs expert officials. Working with the Mayor’s for all participants. We learned a lot with the Greater Pittsburgh Chamber of administration and members of City about our membership and their different Commerce – an affiliate of the Allegheny Council, NAIOP was able to positively concerns and priorities. However, one Conference, where he led local and affect the legislation. area clearly became the top priority for federal government affairs. everyone involved; advocacy. Going forward, NAIOP Pittsburgh will This year, NAIOP participated in a be engaging on a number of federal, As a result of the strategic plan, NAIOP number of meetings and discussions state, and local policy issues, including has made several changes to tackle with local elected officials regarding the advancing the Oakland-Downtown Bus advocacy issues on behalf of our 350 proposed Riverfront Zoning legislation. Rapid