28 projects worth $1 billion under construction and more on the way: Downtown in midst of building boom

Downtown and its fringe are teeming with development, with 28 projects worth $1 billion under construction and much more in the pipeline.

By Mark Belko for Pittsburgh Post-Gazette

May 1, 2018

PITTSBURGH, PA -Downtown and its fringe are teeming with development, with 28 projects worth $1 billion under construction and much more in the pipeline.

That’s one of the key findings of the 2018 State of Downtown Pittsburgh report prepared by the Pittsburgh Downtown Partnership and released Tuesday during an event at the Union Trust Building.

In all, the partnership reported $8.5 billion in investment in Greater Downtown — the Golden Triangle, the Strip District, the North and South shores, Uptown, the Bluff and the lower Hill District — over the last 10 years.

That includes $3.9 billion in active or announced projects as well as $4.6 billion in completed development since 2008. Within the 28 projects currently under construction are 400 new hotel rooms and 1,467 residential units, according to the report.

An aerial view of the  downtown skyline and Point State Park with the Allegheny and Monongahela Rivers  forming the Ohio, Tuesday April 10, 2018 in Pittsburgh.

“What I’m excited to see is that it’s not one specific neighborhood. Everyone has seen an increase in value and number,” said Jeremy Waldrup, the PDP’s president and CEO.

The pace of the investment may be most succinctly represented in one statistic — the number of building permits issued in Greater Downtown soared 91 percent in 2017, from 288 in 2016 to 551 last year. The total value of the investment jumped 72 percent to $374.2 million last year.

Downtown led the pack last year with 348 permits issued, followed by the booming Strip with 77, the Bluff area with 72, the North Shore with 43, and the South Shore with 11.

“I think it goes to show that investors are really confident in the market,” Mr. Waldrup said.

Among the projects contributing to the growth are the opening of the Distrikt Hotel on the Boulevard of the Allies, construction of 350 Oliver retail space and parking garage at the former Saks Fifth Avenue site on Smithfield Street, and improvements to One Oxford Centre on Grant Street and the former Art Institute of Pittsburgh building on the boulevard.

On the fringe, the construction activity includes the expansion of the Carnegie Science Center, the mid-2018 completion of a 364-unit apartment complex in the Riverfront Landing development in the Strip, and start of work at the Riverfront West office building to be anchored by Argo AI in the 3 Crossings complex, also in the Strip.

One of those confident of the market is Beauty Shoppe, the co-working operator that announced Tuesday that it would be occupying 12,000 square feet of space in the historic Pitt Building at the corner of Smithfield Street and Boulevard of the Allies in June. It will be the co-working organization’s fifth location in the region.

“We feel this project will bring vibrancy to the Pitt Building in a way that fosters inclusion for anyone doing business in Downtown Pittsburgh,” said Beauty Shoppe CEO Matthew Ciccone.

The Pittsburgh Downtown Partnership report found that 110,000 square feet of co-working space had opened in Greater Downtown in the last three years.

On the retail side, the report noted Waffles INCaffeinated had signed a lease to occupy 3,000 feet of space in the former Macy’s/Kaufmann’s building on Smithfield Street.

It also stated that Stark Enterprises had lined up occupants for the ground level retail space in the former Frank & Seder department store across the street. The Cleveland-based real estate development company is planning 60,000 square feet of retail in the vacant seven-story building. Mr. Waldrup said he did not know any specifics on retail tenants.

“We were told that there are leases out,” he said.

On the down side, 8,538 square feet of retail space will be emptying out at Piatt Place on Wood Street with the expected departure of the McCormick & Schmick’s seafood restaurant, according to the report.

“Their lease is expiring. However, they have agreed to allow us to market the space — and stay in place — until we find a suitable marquee restaurant replacement,” said Herky Pollock, a CBRE executive vice president who is brokering the location.

Also of concern was Greater Downtown hotel occupancy, which was down half a percent from the five-year average of 67 percent in 2017. While that was one percent higher than 2016, the $155 average daily rate last year in Greater Downtown hotels was the lowest since 2013.

The declines came as another 815 hotel rooms opened in Greater Downtown between the start of 2016 and the end of 2017. Another 386 rooms are expected to debut by the end of this year.

“I think the hotel market is something we will continue to look at,” Mr. Waldrup said, adding that Greater Downtown is still the strongest hotel submarket in the region.

On the residential side, apartment occupancy rebounded to 94 percent in the 2018 first quarter, up 6 percent from the same period last year.

Over the last eight years, the number of residential units in Greater Downtown has grown by 2,078. Another 4,100 are either under construction or in the pipeline. This year alone, 13 new residential developments totaling 1,335 units will get started.

At the same time, the number of residents has jumped by more than 4,400 to 15,060 since 2000. The number in Downtown alone has more than doubled to 5,201 from 2,576.

Mark Belko: mbelko@post-gazette.com or 412-263-1262.

Updated at 6 p.m., May 1, 2018

Read Article

Social media & sharing icons powered by UltimatelySocial