Downtown Pittsburgh property owners test commercial real estate market

Pittsburgh Business Times - by Tim Schooley

If there’s one thing Gary Horwitz, president of Los Angeles-based Hertz Investment Group, wants to make clear about his company’s plans to sell the 1.5 million-square-foot Gateway Center Downtown, it’s this: They’re not selling because they have to.

“It’s not a distressed sale. We’re selling this because we think it is the right time,” he said, adding the company is considering purchasing other property in town. “I think it will be a good investment, and I think it will encourage us to invest in other properties in Pittsburgh.”

For reasons all their own, Downtown has seen a number of significant properties go up for sale recently.

Unlike five or six years ago, when local brokerage professionals were describing the market as the worst in 30 years, Pittsburgh’s commercial real estate sector today is outperforming a national market that continues to struggle.

Property owners such as Hertz are seeking to capitalize on that position.

In addition to Gateway Center’s potential, Hertz’s commercial brokers — the Los Angeles office of Grubb & Ellis — are marketing the strength of Pittsburgh and its Downtown, which includes a low 7.6 percent vacancy rate for Class A office property, a top-five ranking for overall real estate market performance, a mix of Fortune 500 companies and an emerging energy sector.

Not far from Gateway Center, the Southwestern Pennsylvania chapter of the American Red Cross acknowledged this week it is working to hire a commercial real estate firm to put its Downtown office building up for sale and to help it find new property in which to operate. The Red Cross expects to choose a brokerage firm in the next few weeks and put its four-story, 38,000-square-foot headquarters building on the market soon after, said Brian Knavish, the organization’s director of media relations.

Both properties join the Oliver Building; EQT Plaza, formerly known as Dominion Tower; and the Regional Enterprise Tower among major Downtown buildings recently marketed for sale.

“Everything is up for sale Downtown now,” said Ned Doran, an executive vice president with GVA Oxford.

EYES ON HERTZ
The local real estate community will watch closely to see if Hertz, which bought the property in 2004 from TrizecHahn Corp., can turn a profit on the sale of Gateway. The company paid $55 million for the property and invested another $8 million in upgrades.

Stephen Blank, a senior fellow at the Urban Land Institute who follows real estate capital markets and investment, said commercial real estate values remain down, by some estimates nearly 40 percent.

“Values are clearly down peak to trough from 2007 to the end of 2009,” he said.

That trend, coupled with more stringent financing terms, poses challenges for sellers, Blank said. At the same time, he sees improvements in the overall market and a lot of capital on the sidelines.

Dan Puntil, a senior vice president who manages the office of Grandbridge Real Estate Capital, said the national investment community is beginning to consider Pittsburgh in ways it hasn’t before.

“There’s a lot of people out there looking for real estate deals right now,” Puntil said. “Pittsburgh has always been somewhat overlooked by the investment community. Lately, there are some people coming into the market.”

Horwitz sees that as the case. He said the company decided to put the property on the market after it generated a strong number of inquiries.

“The motivating factor is we’re a national real estate company. We operate in 12 markets throughout the United States, and Pittsburgh has consistently been the strongest of those markets,” he said. “We’re really reacting to consistent requests of inquiry for Gateway Center.”

NAI Pittsburgh Commercial is a Pittsburgh proud locally owned and operated company. To see some of the investment and development opportunities available in the Pittsburgh region click here.

NAI Pittsburgh Commercial brokers awarded at SIOR Luncheon

NAI Pittsburgh Commercial brokers awarded at the Society of Industrial & Office Realtors (“SIOR”) Top Brokers and 2009 Deals of the Year Luncheon

On Tuesday, February 23, 2010, the Western Pennsylvania Chapter of Society of Industrial & Office Realtors (“SIOR”) held its annual awards banquet at the Duquesne Club in Downtown Pittsburgh to honor accomplished commercial real estate professionals around the region for transactions completed in 2009.

Paul D. Horan, Founding Principal of NAI Pittsburgh Commercial and John C. Bilyak, Principal & Director of Industrial Brokerage, were awarded the SIOR Industrial Lease of the Year Award. Mr. Horan and Mr. Bilyak represented Benshaw, Inc. in the 183,000 square foot lease of 615 Alpha Drive in RIDC Industrial Park.

NAI Pittsburgh Commercial is a Pittsburgh proud locally owned and operated company. To see some of the investment and development opportunities available in the Pittsburgh region CLICK HERE

Conveyor Belt Manufacturer Fenner Dunlop Americas has Relocated Corporate Headquarters to Pittsburgh

Strategic location is cited as value-add by one of the newest companies to join the region’s energy economy supply chain

(PITTSBURGH – November 30, 2009)

Fenner Dunlop Americas, a wholly owned subsidiary of Fenner, PLC, a UK public company, has moved its corporate headquarters from the suburban Atlanta community of Scottdale, Ga. to Pittsburgh.

Leasing 15,000 square feet of office space in the Omega Corporate Center in Robinson Township (Allegheny County), Fenner Dunlop is now strategically located – a critical consideration during the site selection process, according to company officials.

“We wanted to be close to our North American belting product manufacturing facilities in both Ohio and Canada, as well as to key locations in our newly acquired service businesses – including Conveyor Service Corporation in Blairsville, Pa. (Indiana County), which we acquired last year – and major customer regions,” said Cassandra Pan, president of Fenner Dunlop Americas. “Operating from Pittsburgh puts Fenner Dunlop at the heart of its North American business, allowing for optimal business management. We’re close to where it’s all happening and closer to our customers.”

The headquarters relocation is expected to create approximately 40 jobs including several executives relocating from Atlanta and several new local hires. In addition to the efforts of the local commercial real estate firm NAI Pittsburgh, other development partners including the Pennsylvania Department of Community and Economic Development, Allegheny County Economic Development and the Pittsburgh Regional Alliance worked collaboratively in support of this business investment win.

Founded in 1861 in the UK, the company primarily manufactured leather belting. Today, Fenner Dunlop has operations across Europe, North and South America, Australia, China, India and South Africa and attributes much of its substantial growth to a number of major acquisitions over the last 30 years.

One such acquisition occurred in 2001and resulted in the formation of Fenner Dunlop Conveyor Belting Worldwide, which comprises the company’s core business of manufacturing conveyor belts and related products and services.

Fenner Dunlop provides total conveyor belt solutions to the coal and hard rock mining industry for surface and underground mines worldwide. As such a provider, the company is now integrated into the Pittsburgh region’s energy economy, which comprises innovation leadership and supply chain expertise across traditional and alternative energy sectors. One of these sectors is coal—a fossil fuel found in ample supply in the Pittsburgh region, where public and private R&D abounds to advance clean coal technology. CONSOL Energy Inc., world-headquartered in Washington County, is the largest producer of high-Btu bituminous coal in the United States and a major customer of Fenner Dunlop.

“Fenner Dunlop conveyor belts and the steel structures on which the belts ride are the principal ways that CONSOL moves coal from its mines. We have literally hundreds of miles of Fenner Dunlop belting in our mines, as well as overland belts. These allow CONSOL to meet its customers’ demands for coal - a fuel staple now and for the future,” said CONSOL Energy CEO Brett Harvey, who also chairs the Pittsburgh Regional Alliance Partnership. “CONSOL Energy is pleased that one of its major vendors has made the decision to join the almost 800 energy-related companies that call the Pittsburgh region home,” said Harvey.

“During the recent Pittsburgh [G-20] Summit, President Obama hailed Pittsburgh for its transformation to a model 21st-century economy. That economy includes leadership related to energy—both traditional and alternative. Our innovative edge, coupled with a historic expertise in manufacturing, is amassing a diverse and robust energy supply chain in the region. For that and other reasons, companies like Fenner Dunlop have strategically selected southwestern Pennsylvania – a place gaining recognition as the nation’s new energy capital. From Pittsburgh, these companies are operating to supply the resources, products and components that will ultimately influence the delivery of energy – not only domestically, but globally – in efficient and more sustainable ways,” said Allegheny Conference on Community Development CEO Dennis Yablonsky.

With the mining industry as a primary customer, Fenner Dunlop also recognizes that the Mine Safety and Health Administration’s Pittsburgh Safety and Health Technology Center in Bruceton, PA – just south of Pittsburgh – played a part in the company’s relocation decision. “Nationally and internationally, conveyor belt fire safety in underground mines is a critical concern. Fenner Denlop is at the forefront of belt fire safety and believes it’s strategic to be close to the organization that is uniquely influencing standards compliance around our core business,” said Fenner Dunlop President Cassandra Pan.

While Fenner Dunlop’s conveyor belting operations are largely reliant on the mining industry, the company has also developed a range of belting-related products including moving walkways, parcel handling, plasterboard forming belts, stable matting and agricultural equipment. More information is available at http://www.fennerdunlopamericas.com/.

NAI Pittsburgh Commercial is a Pittsburgh proud locally owned and operated company. To see some of the investment and development opportunities available in the Pittsburgh region CLICK HERE

Signs of Improvement: Pittsburgh Office Vacancy Decreases Q2 2009

Office Vacancies in Pittsburgh Slip

Trib Live: Staff and wire reports Saturday August 22, 2009

The vacancy rate in Pittsburgh's office market declined in the second quarter to 18.2 percent from the 18.7 percent at the end of the first quarter, according to a report issued Friday.

New leases signed for space Downtown included First Niagara Bank for 50,000 square feet at 11 Stanwix St. and Direct Energy's 52,000 square feet at Liberty Center, said a report by GVA Oxford.

Other leases include West Penn Allegheny Health Systems moving its executives to Alcoa Business Service Center on the North Shore; and Expedient Communications relocating its headquarters from Norfolk, Va., to Two Allegheny Center, also on the North Shore.

NAI Pittsburgh Commercial represented the Landlord in the West Penn Allegheny Health Systems lease.

NAI Pittsburgh Commercial is a Pittsburgh proud locally owned and operated company. To see some of the Office and development opportunities available in the Pittsburgh region CLICK HERE.

NAI Global Named #4 Commercial Real Estate Brokerage in the World

NAI Global Named #4 Commercial Real Estate Brokerage in the World

National Real Estate Investor magazine's April issue just arrived, including the annual Top 25 Brokerages listing.

NAI Global was named the fourth largest brokerage, in a tie with Colliers International. NAI's total investment sales and lease transactions for 2008 totaled $42 billion.

Look for the full listing, and an article on distressed properties featuring an interview with Jeff Finn about the Commercial Property PowerSale, on www.nreionline.com.

NAI Pittsburgh Commercial is a locally owned and Pittsburgh proud commercial real estate brokerage. Click here for listings.

Commercial Real Estate Trend: U.S. Retailers to Expand Internationally Post-Recession

As the economic recession strengthens its hold, you may have noticed a number of major retail and restaurant brands changing their commercial real estate habits. Whether it’s big box retailers halting construction or cancelling plans for new U.S. sites, or fast food retail chains moving slower in approving franchise licenses or closing underperforming locations, the change in their growth plans is evident.

While many of these changes can be attributed to the current economy, it doesn’t mean that when the recession ends and people begin to ramp up their spending habits again, that these big name brands will resume their manifest destiny plan across the U.S. In discussions with retail brands across North America – from big box home improvement and entertainment/electronics retailers to small network retailers – it is clear that the greatest potential for growth is to look beyond the U.S. for future expansion.

Opportunities abound in markets around the world, like the growing consumer bases in China and India, that are much more attractive than picking a new pad site somewhere in the U.S. that just further segments an existing market. Companies are thinking long-term and international. That doesn’t rule out any new U.S. sites, but the long-term strategy will be to market their U.S. locations heavily to capture market share, and to expand globally to increase it.

George Anderson is Vice President of NAI Global Market Analytics, a service for retailers, banks, financial insitutions and corporate end users. Working together with NAI ReStore, the retail arm of NAI Global, NAI Global Market Analytics helps clients optimize their store, branch and distribution networks.

To learn more about Market Analytics and other services provided to Retail Clients from NAI Pittsburgh please click NAI PITTSBURGH RETAIL.

Agency Representation: Industrial Expertise

John C. Bilyak, Jeffrey Adams and William Leone, SIOR of NAI Pittsburgh Commercial represented the landlord in the 147,310 SF lease to Elliott Company at I-70 Commerce Center in Pittsburgh, PA.

NAI Pittsburgh Commercial offers expertise in Landlord/Agency representation. Please visit NAI Pittsburgh to learn more about our expertise and services offered.

Tenant Representation: Benshaw, Inc.

Paul D. Horan and John C. Bilyak of NAI Pittsburgh Commercial represented Benshaw, Inc. in the 183,000 SF lease by Benshaw, Inc. in the RIDC Industrial Park in O’Hara Township, PA.

Pittsburgh's own U.S. Steel: Attracting green technology jobs

Industries of the Future Choosing Brownfields as Their New Home

U.S. Steel's Keystone Industrial Port Complex (KIPC) was featured in a recent U.S. Environmental Protection Agency newsletter for its success in attracting revolutionary "green" technology jobs from around the world to this 4,000-acre brownfield site in Pennsylvania. NAI Global serves as advisor to U.S. Steel and along with NAI Mertz oversees sales and leasing activity at the KIPC site. Brownfield projects like KIPC are expected to benefit from "green" provisions in President Obama's economic stimulus package.

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NAI Pittsburgh Commercial is a part of the NAI Global managed network of commercial real estate firms. Click here to learn more about NAI Pittsburgh's Corporate Services.