Tag: Burns & Scalo

Local Talent

In March I had the pleasure of being involved with the pre-selection process for a new downtown office tower that Burns & Scalo is proposing. On March 29 the developer held a media event to announce the finalists for the project’s design (which ultimately won’t be decided until they get a lead tenant) and the evening was a revelation for me about the talent of local architects.

First a disclaimer. I was approached to be a juror in February and initially declined, citing the obvious lack of qualifications. My friend Holly Childs persisted by assuring me that they wanted someone known in the industry who was not an architect but understood the business. And to counter balance my lack of qualifications the others selected as jurors were architect Elmer Burger from Point Park University and Tracy Myers, who is curator of the Heinz Architectural Center at the Carnegie Museum.

In mid-March the three jurors met at the Burns & Scalo suite at the Duquesne Club and reviewed eight small renderings (8″ X 11″) to recommend three finalists. It was tough getting down from five to three but the resulting choices were comfortable with all of us.

Two weeks later, when the media event was held, we got to see all the entries in full size form and it was much more impressive. What struck me was that the designs of all the architects were buildings that I wanted to see built. There were some that did not fit well along Ft. Pitt Blvd. but would have been spectacular in other sites. One in particular, a geometric structure with multiple blocks and terraces designed by Anne Chen and Gary Carlough of EDGE Studio, should be the next academic building built at Pitt (or better at WVU). The Design Alliance submitted this unusual looking stacked cube design that was probably unfeasible for a commercial office and looked out of context along the Mon but would be a tremendous corporate office building tied to a global brand or something.

Jim Scalo created the design challenge to create some excitement about a new downtown office and to show off the talents of local architects (some of whom may have had a large user in tow). The results accomplished the latter mission for certain. With any luck there will be a dozen or more opportunities for new 300,000 square foot plus offices in the next decade. Without doubt some of those will be designed by some high profile New York or Houston-based architect. Here’s hoping that at least a few of the owners/developers of those offices to come get a look at the work that these eight firms did before looking out of town.

The Office Building Surge

Data from the Bureau of Labor Statistics shows job growth in metro Pittsburgh was roughly 25,000 in 2011. That growth, in concert with very little new construction in recent years has created generational low vacancy rates in the region and moved rents much higher over the past three years.

Estimates of office vacancy run between 8.6 percent and 11.2 percent, according to reports by CoStar, PA Commercial, CB-Richard Ellis and Jones Lang LaSalle at year’s end. According to Grubb & Ellis’ Office Trends Report for 2012 the office space available for sublease was also low. Estimated at just over 350,000 square feet, the office sublease inventory is expected to remain even with that of 2011, which is roughly half the ten-year average for space. Grubb & Ellis also tracked 406,000 square feet of office construction in 2011, only 15 percent of which was available for lease.

BreakingGround magazine’s research database is tracking over 3 million square feet in office projects being proposed within the past year. That total excludes the 800,000 square foot 4 PNC and 250,000 square foot Mylan Labs headquarters to be started this year, as well as the space being rumored as build-to-suit for corporate users like USSteel, Exxon Mobil, GNC and Guardian Security. And the developers include a roster of Pittsburgh firms who have delivered multiple offices into the market over the past decade, including Chaska Property Advisors, Spectra Development, Burns & Scalo Real Estate, Horizon Properties and the Elmhurst Group. The market awakening has revived the Oakland Portal project, with developer L. W. Molnar announcing plans for 300,000 square feet of office.

This litany of projects is speculative product, meaning that construction will be subject to success in pre-leasing and financing. The number of 100,000 square foot users conducting property searches currently indicates that more than a few will find anchor tenants in the coming year. Using historical ratios for planning to construction you would expect to see construction total one million square feet in 2012 in addition to the owner-occupied construction being planned. For all offices the new construction should be four times the volume of 2011.

Some of the specific projects are:

Burns & Scalo, two buildings at Southpointe II totaling 250,000 sq. ft. Horizon Properties, buildings at Southpointe II and Southpointe Town Center, 300,000 sq. ft. Keystone Property Group, two buildings at Keystone Summit in Marshall Twp. totaling 275,000 sq. ft. Elmhurst Group, Cranberry Crossings 90,000 sq. ft., Schenley Gardens in Oakland 110,000 sq. ft. & McClaren Woods 130,000 sq. ft. Chaska Properties, the Pittsburgh International Business Park in Moon Twp. totaling 350,000 sq. ft. In Cranberry, Creative Real Estate proposes 400,000 sq. ft. at the Summit at Cranberry Woods and Spectra Development is planning 1.1 million sq. ft. at the I-79/Route 228 interchange.

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