Finding a Clearer Vision OAKLAND: DEVELOPING Spring 2017 HIGHEST AND ® BEST USE... opportunities and constraints strategically transformed CEC uses informed analysis to identify and harness the potential of each site’s unique conditions, creatively enhancing value while delivering a conscientious integrated design. CEC’s consulting services are utilized by owners, facility managers, developers, architects and contractors at all points in a property’s life cycle. Services ► Site Selection / Due Diligence ► Planning ► Land Survey ► Landscape Architecture ► Civil Engineering Services ► Geotechnical Engineering ► Construction Phase Services Photo courtesy of Ed Massery Photography ► Building / Site Operation & Maintenance ► Construction Management Expertise ► Acquisition ► Development ► Management ► Redevelopment Employment opportunities available! www.cecinc.com | 800.365.2324 Austin | Boston | Bridgeport | Charlotte | Chicago | Cincinnati | Columbus | Detroit | Export | Greenville Indianapolis | Knoxville | Nashville | Philadelphia | Phoenix | Pittsburgh | Sayre | Sevierville | St. Louis | Toledo PNC REAL ESTATE | Successful commercial real estate owners, developers and investors can envision the properties of the future — even before the first sketch is made. PNC Real Estate shares that vision. As a top five originator,* we offer comprehensive banking insights, solutions and the expertise to put them to work. Whether you need construction, bridge or permanent financing; public equity or debt solutions; treasury management; risk mitigation; or loan syndications, know that we can help bring your vision to life. To learn more, visit pnc.com/realestate. REAL ESTATE BANKING | AGENCY FINANCE | TAX CREDIT CAPITAL | MIDLAND LOAN SERVICES *Top 5 in originations among banks, MBA 2014 ◊ PNC, PNC Bank and Midland Loan Services are registered marks of The PNC Financial Services Group, Inc. (“PNC”). Treasury management and lending products and services, and investment and wealth management and fiduciary services, are provided by PNC Bank, National Association (“PNC Bank”), a wholly owned subsidiary of PNC and Member FDIC. Investment banking and capital markets activities are conducted by PNC through its subsidiaries PNC Bank, PNC Capital Markets LLC, Harris Williams LLC, Harris Williams & Co. Ltd. and Solebury Capital LLC. Services such as public finance investment banking services, securities underwriting, and securities sales and trading are provided by PNC Capital Markets LLC. PNC Capital Markets LLC, Harris Williams LLC and Solebury Capital LLC are registered broker-dealers and members of FINRA and SIPC, and Harris Williams & Co. Ltd. is authorized and regulated by Financial Services Authority (FRN No. 540892). PNC Bank and certain of its affiliates, including PNC TC, LLC, do business as PNC Real Estate. PNC Real Estate provides commercial real estate financing and related services. Through its Tax Credit Capital segment, PNC Real Estate provides lending services, equity investments and equity investment services relating to low income housing tax credit (“LIHTC”) and preservation investments. PNC TC, LLC, an SEC registered investment advisor wholly-owned by PNC Bank, provides investment advisory services to funds sponsored by PNC Real Estate for LIHTC and preservation investments. Registration with the SEC does not imply a certain level of skill or training. This material does not constitute an offer to sell or a solicitation of an offer to buy any investment product. Lending products and services, as well as certain other banking products and services, require credit approval. ©2016 The PNC Financial Services Group, Inc. All rights reserved. CIB RE REB PDF 1115-0104-200041 NICE WORK. PAT COOPER, P.E., P.L.S. Project Manager It’s what we do. No need for fi reworks. Just know we’ve been doing it since 1880. If you look around Pittsburgh, chances are you’re looking at us. And what exceptional project management can do. A FULL-SERVICE CIVIL ENGINEERING FIRM 412.921.4030 GatewayEngineers.com CONTENTS | Spring 2017 05 President’s Message 33 Developer Profile Faros Properties 37 Developing Trend Attracting Creative Workers to Pittsburgh 41 Eye On the Economy 06 Feature Developing Oakland: Divergent Visions 45 Office Market Update Grant Street Associates/ Cushman & Wakefield 49 Industrial Market Update CBRE 55 Capital Market Update 19 2016 NAIOP Pittsburgh Awards 61 Legal / Legislative Outlook Revisions to the Mechanics Lien Law 64 Voices Developers Respond to the New Administration 67 News from the Counties 25 Development Project People / Events Schenley Place 74 www.developingpittsburgh.com 3 Commercial Construction | Service | Power & Industrial | Metal Fabrication www.mckamish.com Building Excellence in the Pittsburgh region for over 40 years President’s Message PUBLISHER It is with great enthusiasm and great A very important part of NAIOP Pitts- Tall Timber Group humility that I take over the post as burgh’s future and that of the region www.talltimbergroup.com NAIOP Pittsburgh president. I have had are our Developing Leaders. A focus of the privilege of serving in a leadership my presidency will be strengthening the EDITOR position for many years and have seen DL group. They are currently planning Jeff Burd the tremendous effort expended by my mixer/site visits to new developments 412-366-1857 predecessors. They have laid a solid in the region; working on a mentorship [email protected] foundation upon which the chapter program; exploring ways to increase can build in 2017. A special thank you the value proposition of DL member- PRODUCTION to Brian Walker who spent two years ship and working with Habitat for Carson Publishing, Inc. in this position and advanced the Humanity Greater Pittsburgh. Kevin J. Gordon chapter’s advocacy initiative in addition [email protected] Of course, the most anticipated event to many other things. for western Pennsylvania’s commercial GRAPHIC DESIGN I am excited to announce that we have real estate industry is upon us. It is 321Blink created partnerships with the Regional NAIOP Pittsburgh’s Annual Awards Industrial Development Corporation banquet that will take place on March 9, CONTRIBUTING PHOTOGRAPHY and the Greater Pittsburgh Chamber of 2017 at the David L. Lawrence Conven- Jim Judkis Commerce that will enhance our advo- tion Center. The banquet is the best Roy Engelbrecht cacy efforts. This year we plan on con- annual opportunity to celebrate excel- Massery Photography tinuing our work on a local, state and lence in development and network. Rob Larson federal level. We are involved in such Elaine Zhou Consider this as your invitation to issues as affordable housing, permitting Dennis Marsico join me at the banquet and become and the environment. Our efforts in this CBRE involved in NAIOP Pittsburgh. area have one goal and that is to create Tall Timber Group a positive environment for commercial Thanks, CONTRIBUTING EDITORS real estate development. Karen Kukish Another hallmark of NAIOP Pittsburgh is our educational programming. I am ADVERTISING SALES happy to say that, while we are only Karen Kukish a little more than a month in to 2017, 412-837-6971 we have had two amazing offerings in [email protected] this area. Our “Economic Update” in partnership with BOMA featured Stu MORE INFORMATION: Hoffman of PNC and “Uber: The Pitts- DevelopingPittsburghTM is published by Tall Timber Group for NAIOP Pittsburgh burgh Strategy” featured David Richter, 412-928-8303 Vice President, Strategic Initiatives. The www.naioppittsburgh.com latter was a rare opportunity to look inside a company on the forefront of No part of this magazine may be repro- Pittsburgh’s new economy and under- duced without written permission by the stand why this region is so important to Publisher. their future. All rights reserved. I am sure that upcoming programs will be as enlightening and pertinent to our This information is carefully gathered industry. Collaborative programming is and compiled in such a manner as to an important part of our plan. We want ensure maximum accuracy. We cannot, to broaden our reach through affiliated and do not, guarantee either the cor- organizations and geographically. In rectness of all information furnished David Weisberg this regard we are working with CREW nor the complete absence of errors and omissions. Hence, responsibility for same and the Washington County Chamber NAIOP Pittsburgh President neither can be, nor is, assumed. of Commerce on two exciting events for 2017. Keep up with regional construction Of course we are always interested in and real estate events at: your ideas for education programming. www.buildingpittsburgh.com Please send them to leo@naioppitts- burgh.com www.developingpittsburgh.com 5 Developing OAKLAND 6 DEVELOPING PITTSBURGH | Spring 2017 OAKLAND ould Oakland be the next East Liberty? The question strikes most real estate professionals C as absurd. The remarkable turnaround in East Liberty transformed a blighted community – cut off from the bustling neighborhoods surrounding it – into the hottest part of town. Oakland has the lowest vacancy rates of any Pittsburgh sub-market. As of January 2017, the highest office rent in the city was being asked – and accepted – in Oakland. Residential FEATURE rentals are in such high demand that landlords in some of Oakland’s neighborhoods can neglect properties and still have waiting lists of tenants. Those aren’t the earmarks of a neighborhood in distress. www.developingpittsburgh.com 7 The first phase of