Putting the November/December edition of BreakingGround into production this week and I was struck by how much of the commercial real estate sector was being driven by the universities and hospitals. I’ve been hearing so much about “eds and meds” that I was sick of hearing the phrase; but…it’s one of those things that you hear too much of because it’s a real thing.

Here are a couple examples of projects that have barely received any coverage but are happening because of the economic engines of CMU and Pitt. The URA recently approved the sals of land in the Pittsburgh Technology Center on Second Avenue to Elmhurst Group, which plans to build 160,000 square feet of “tech flex” space to attract advanced manufacturing, robotics or other technology spin-offs requiring research and maker space. Walnut Capital has received a lot of ink for its Bakery Square, JAA and PAA projects but the intriguing project is the Fifth and Halket property, which is reported to be an office building of several hundred thousand square feet. That property is in the opposite direction that much of the Oakland-driven development is looking but it will plant a flag on the more neglected Downtown side of Oakland, right by the Parkway East interchanges, right on the BRT route. If it becomes a major university or university-related corporate facility, it will be catalytic for the Uptown and South Oakland neighborhoods.

The universities are making construction news on their own. Duquesne announced the modernization of the Palumbo Center yesterday. The $45 million renovation will result in the rebranded UPMC/Cooper Field House. DRS Architects is designing the project, which should bid by early 2019 if the work is to start in the spring. CMU is proposing a new residence hall at Fifth and Clyde. LTL Architects was hired to design the $32 million project. CMU took CM proposals from Jendoco, Mosites and Rycon.

Rycon will do the construction of the AHN Brentwood micro hospital that had its groundbreaking recently. Work has not started yet. UPMC selected PJ Dick for its $15 million ED expansion at the UPMC East campus in Monroeville.

In other construction news, Franjo Construction was reported as the awarded general contractor for the $4.7 million Youghiogheny Administration Building for North Huntingdon Municipal Authority. Cast & Baker was the low bidder on the $4.5 million site prep package for the World Trade Center at the airport. That’s a project that could open up hundreds of millions in new commercial construction over the next decade, a project worth following.

When the Halloween decorations start showing up at Giant Eagle, the contracting season is usually wrapping up for the year. This year, however, there are a number of big projects on the street (and in the pipeline) that the market is making up for the lower number of projects with a much bigger dollar volume.

Part of this is the result of the lag from announcement to construction for some of the big projects that have been in the news over the past year or so.  Mascaro took bids recently on the 410,000 square foot, $350 million UPMC Mercy Vision & Rehabilitation Hospital and the 96,000 square foot TCS Building at CMU. PJ Dick has been bidding the 300,000 square foot Bakery Square 3 office building.

There’s also been a flurry of activity on large projects at the early stages of development.  Hanna Langholz Wilson Ellis is marketing the 1,200-acre Zediker Station site, which sits along I-70 just east of I-79. It’s the largest development site in PA and may be the only one served by both CSX and Norfolk Southern. The Hazelwood Green project has been advertised for developer proposals. Over the long haul, that’s a project that could lead to more than $1 billion in construction. The developer currently on site, RIDC, has reportedly locked up autonomous vehicle company Aptiv for 70,000 square feet to occupy most of the 2nd building in its Mill 19 project. That would trigger the start of the third 90,000 +/- square foot final phase. In the Strip District, Facebook confirmed that it was leasing most or all of District 15, a 105,000 square foot building being developed by RDC on Smallman Street. According to a recent story by Tim Schooley in the Business Times Facebook’s lease is the tip of the iceberg. Schooley quotes JLL’s Dan Adamski estimating that there are 900,000 square feet of user requirements being shopped in the Strip now. That would make for another explosion of office projects. One of those may be JMC Holdings’s proposed adaptation of the Wholey cold storage building on 15th Street. The developer has engaged Desmone Architects to work on a 350,000 square foot re-use but is reported to be looking at hiring an architect to design a new 17-story, 500,000 square foot building on the site.

As intriguing as this tech demand is, it’s worth noting that most, if not all, of it is new in 2018. It was only last year that occupants like Apple and Argo AI were snatching up big chunks of 3 Crossings. When someone says that the emerging technology sector is growing faster than you can understand, this is what they mean.

To be clear from the outset, multi-family construction in Pittsburgh pales in comparison to most major cities (or even Columbus). Our boom of 3,227 units started in 2013 would be an average month in Houston or LA. But, compared to an average of 731 units annually for the previous 15 years, 2013 (and the last three years) have seen a surge in apartment construction.

Like in the rest of the country, lending and investing appetite for multi-family has cooled in Pittsburgh. Rents have stopped growing. Vacancies are rising. This is very normal following a time of increased construction and, in fact, the occupancy levels have been ticking up again in recent months. What is interesting is that senior living is picking up where apartment development dropped off. Since the start of 2016, almost $300 million in new senior living projects (representing about 900 units) are under construction.

Graziano has started construction on the 128-unit Residence at Whitehall project (pictured below) and Lecesse Construction is building the $30 million expansion of the Friendship Village campus in Upper St. Clair. Work is well underway on Continental’s project, The Waters in Marshall (plans are moving for one in Peters as well). Approvals have been received to start the $23 million Stonecrest of Pittsburgh in McCandless, which will be built by BRIDGES & Co.

In project news, CORE Realty is taking bids from subcontractors on the 174-unit apartment, The Chatham Center, a $20 million-plus conversion of eight floors of One Chatham Center. DGS selected Mascaro Construction, Renick Brothers, Shipley Plumbing and Westmoreland Electric as the best-value team for the $43.8 million Tippin Gym project at Clarion University. A. Martini & Co. landed the $3 million Fogo de Chao restaurant in the Oliver Building. Turner was selected for the $5 million Bio-Tech Vivarium renovation at Pitt’s Second Avenue research facility. UPMC is in talks with CMs for its major projects at South Fayette, Jefferson Hills and UPMC Mercy and Children’s campuses. Construction manager J. E. Dunn is in the process of qualifying contractors for the trade packages on Trinity Hospital’s $60 million new bed tower in Steubenville.

Thursday the Parking Authority chose the Davis Companies’ team for the development of the 9th and Penn corner Downtown. The plan is for 185 condos and commercial/retail integrated into a 900-plus-car garage. The Authority chose Davis over competing proposals from Millcraft and Oxford Development. The proposal from the latter apparently involved an mid-rise office tower similar to the one Oxford had proposed for 350 Fifth Avenue and involved a 250,000 square foot tenant that needed construction to start immediately.

AHN short-listed the competitors for construction management of the $25 million cancer institute at AGH to Mascaro, Massaro, PJ Dick and Rycon. Mid-Atlantic Capital is taking final bids from P2 Contracting and Franjo Construction for the build-out of Stonehaven Brewing & Restaurant, a $4 million renovation of the former Spaghetti Warehouse. CDC is reporting that Dinsmore & Shohl picked A. Martini & Company for its $2 million tenant improvement at 6 PPG Place.

During a visit to Sewickley on Nov. 17, I saw the recently-opened new Howard Hanna office on the corner of Thorn and Broad Street and got to experience what can only be calleda building boom in the village of Sewickley. Hanna’s office (picture below) was the fourth new commercial building started in the tiny commercial district in the village. Nearly 60,000 square feet of new office and theater have been started and nearly completed. Around the corner from the commercial activity, demolition was going on to clear the way for the Sewickley Condominiums, a 24-unit luxury development of two buildings on Locust Street by Zamagias Properties. And at the eastern end of the village, Charter Homes built 22 new homes in the last two years.

Another bit of space in the village will soon become a parking garage, infrastructure that is desperately needed. WTW Architects is designing the 250-car garage, which should cost between $5-6 million.

In other project news, the contractor for Hanna’s office, Dick Building Co., was selected to build the new 4,800 sq. ft. First National Bank branch on McKnight Road. MBM Contracting started construction last month on the $1 million Butler Hospital 6th Floor Administration project. Continental Building Co. was hired by Shorenstein Properties to act as construction manager/owner’s rep for the modernization of the One Oxford Centre building, a project that should run $50 million or more.