PITTSBURGH | Development Rundown II

[eschaton]

Originally Posted by BrianTH

I think the pace of development in the core area of Pittsburgh over the next 20 years or so may surprise a lot of people. But we'll see.

I'm not sure of the exact numbers, but Almono's footprint appears to be bigger than South Side Works and Pittsburgh Technology Center put together - and neither of those are fully built out yet (although within a few years SSW will be finished, and PTC should only have 1-2 unused parcels, IIRC). Depending upon the intensity of development, filling out Almono might require more new construction than has taken place in the entire of the City of Pittsburgh for the last 10-15 years.

Insofar as the northern part of Almono is essentially an extension of Pittsburgh Technology Center, I think it will be successful, because space for large-scale office-park type development in Pittsburgh is drying up, as noted above. But the retail and residential components further south are going to need localized density to feed off each other. A few blocks of market-rate apartments near Hazelwood without nearby amenities will get few takers.

[BrianTH]

I do in fact suspect ongoing fundamental shifts in preferred residential and office site locations combined with self-reinforcing development cycles will accelerate the core area development pace over the next 20 years beyond even what we have seen recently.

By the way, note that the first hotel and apartment projects are going into the PTC. In that sense what it means to expand on the PTC is already changing. And in fact the new master plan supposedly may double the number of residences, on basically the same amount of land (so roughly doubling the residential density).

Meanwhile, the article about the former Gladstone Middle School shows that investors are already willing to hop past the Hazelwood LTC site into Hazelwood proper. And the Second Avenue business district in particular could rapidly be transformed into something pretty cool with just a relatively moderate pace of investment.

But again, we'll see.

[eschaton]

Originally Posted by BrianTH

By the way, note that the first hotel and apartment projects are going into the PTC. In that sense what it means to expand on the PTC is already changing. And in fact the new master plan supposedly may double the number of residences, on basically the same amount of land (so roughly doubling the residential density).

I actually thought about the Walnut Capital apartments at PTC when putting my post together. If they are successful, it will show that renters in Pittsburgh are willing to pay for new-construction apartments in an area which is a convenient drive to many hot areas, but not within reasonable walking distance of a neighborhood business district. Since that's what any residential component of ALMONO will initially be, it will in some senses be a test model for future development upriver.

That said, the experience of PTC also shows some of the underlying softness of office development in Pittsburgh - that in order to fill out the development, they needed to break out off the office-park paradigm and embrace some mixed-use elements.

Originally Posted by BrianTH

Meanwhile, the article about the former Gladstone Middle School shows that investors are already willing to hop past the Hazelwood LTC site into Hazelwood proper. And the Second Avenue business district in particular could rapidly be transformed into something pretty cool with just a relatively moderate pace of investment.

People always talk about the potential of Second Avenue - I just don't see it. It's nothing like East Carson or Butler Street. It isn't even like say the business districts in Uptown or Homestead, which are semi-blighted but mostly intact.

The formerly walkable commercial district in Hazelwood is only around 4-5 blocks long - around 0.4 miles and an eight minute walk. There are of course tons of vacant lots. Even discounting the lots, many buildings have been added over the years, like the post office and the senior apartments, which interrupt the street wall and kinda wreck the pedestrian experience. I'd honestly say Hazelwood has only one decent block of commercial storefronts left, and less than 20 other structures standing which are either used for walkable retail or have the potential of being brought back along the corridor - many of which are quite far apart from each other.

The point I'm getting at is to develop Second Avenue into a functional pedestrian commercial street again, it will need a ton of new-construction infill. However, to reach the point the "missing teeth" begin filling in, it will need to reach South Side/Lawrenceville levels of gentrification, which in turn will be difficult without a fairly full range of nearby walkable commercial amenities. It's a bit of a chicken/egg situation - one I don't see an immediate solution to.

[BrianTH]

Originally Posted by eschaton

Since that's what any residential component of ALMONO will initially be, it will in some senses be a test model for future development upriver.

Agreed, although Heinz Lofts and the Fifth Avenue School Lofts somewhat tested this proposition as well. Among other things, I think bike lanes are going to be a big part of the marketing for projects like this.

That said, the experience of PTC also shows some of the underlying softness of office development in Pittsburgh - that in order to fill out the development, they needed to break out off the office-park paradigm and embrace some mixed-use elements.

I think that is right. It is not enough to offer driving or even transit commutes anymore. Possible office tenants want that walking/biking component as well, including both residences and hotels.

People always talk about the potential of Second Avenue - I just don't see it. It's nothing like East Carson or Butler Street. It isn't even like say the business districts in Uptown or Homestead, which are semi-blighted but mostly intact. . . . The point I'm getting at is to develop Second Avenue into a functional pedestrian commercial street again, it will need a ton of new-construction infill.

I agree you would certainly need a good amount of infill, but that may be more a feature than a bug.

Edit: For example, the main connection point between the LTV site and the Second Avenue district is likely to be Hazelwood Avenue, and right there is plenty of available land to do a very substantial connecting project.

However, to reach the point the "missing teeth" begin filling in, it will need to reach South Side/Lawrenceville levels of gentrification, which in turn will be difficult without a fairly full range of nearby walkable commercial amenities. It's a bit of a chicken/egg situation - one I don't see an immediate solution to.

I think projects like Bakery Square and Eastside show this is really not that hard of a problem to solve. You just need some places to do large mixed-used projects, and then smaller investors can do a lot of the rest.

[eschaton]

Originally Posted by BrianTH

Agreed, although Heinz Lofts and the Fifth Avenue School Lofts somewhat tested this proposition as well. Among other things, I think bike lanes are going to be a big part of the marketing for projects like this.

I'm not sure they are as directly comparable for two reasons. One, they are a bit closer to the downtown core. Second, these were rehabs, not new construction, which probably cut the construction costs significantly and allowed for a good cash flow per unit which otherwise might not have been possible.

Originally Posted by BrianTH

I agree you would certainly need a good amount of infill, but that may be more a feature than a bug.

Edit: For example, the main connection point between the LTV site and the Second Avenue district is likely to be Hazelwood Avenue, and right there is plenty of available land to do a very substantial connecting project.

I think projects like Bakery Square and Eastside show this is really not that hard of a problem to solve. You just need some places to do large mixed-used projects, and then smaller investors can do a lot of the rest.

I'm not saying it's impossible by any means. But Hazelwood, even if Almono is a success, will never be as great of a location as East Liberty is for regional commerce. Some major investor is going to need to take a gamble to begin with. Unless capital markets loosen significantly, or some public money greases the skids, I'm just doubtful we'll see this happen while better investments remain in the region for the major players.

[BrianTH]

Originally Posted by eschaton

I'm not sure they are as directly comparable for two reasons. One, they are a bit closer to the downtown core. Second, these were rehabs, not new construction, which probably cut the construction costs significantly and allowed for a good cash flow per unit which otherwise might not have been possible.

Once you are outside of walking distance I am not sure it matters a lot. And the South Side in particular is just going to be a short, level bike ride away.

As far as I can tell, Heinz Lofts and Fifth Avenue School Lofts didn't have to place their rents below market to attract tenants. So if the same held true in the Hazelwood LTV site, it should be as lucrative as anywhere else supporting new construction.

Unless capital markets loosen significantly, or some public money greases the skids, I'm just doubtful we'll see this happen while better investments remain in the region for the major players.

I think both of those things are going to happen. In fact, as we discussed just a bit ago, the Mill 19 re-use project got $5 million in subsidized loans, and this is on top of a lot more prior public funding.

[dfiler]

I really hope the hazelwood development is forward thinking and continues the pedestrian/bike trail along the river. The plans I've seen so far just have a road along the river instead.

They might not realize it yet, but that greenspace along the river is incredibly attractive, especially to millennials and younger. It makes the southside, oakland, CMU and downtown (and farther) immediately accessible via bike, no matter what kind of traffic jamb might be happening. What I wouldn't give to have the riverfront trail be my daily commute. That site is right on the edge of a well connected network of trails. It is also much of the missing link to connect to Duck Hollow. If that happened, it connects all the way to Frick park and squirell hill / regents square.

[eschaton]

Originally Posted by BrianTH

As far as I can tell, Heinz Lofts and Fifth Avenue School Lofts didn't have to place their rents below market to attract tenants. So if the same held true in the Hazelwood LTV site, it should be as lucrative as anywhere else supporting new construction.

I'm pretty sure Fifth Avenue lofts has a lower price point than units in Downtown or the Strip, reflecting the general lack of local amenities there.

Again to me the key will be if the economics can work for new construction apartments. I mean, even in the Strip District you had rehab projects like the Cork Factory before you started to see the economics of entirely new apartment buildings make sense.

[BrianTH]

Originally Posted by eschaton

I'm pretty sure Fifth Avenue lofts has a lower price point than units in Downtown or the Strip, reflecting the general lack of local amenities there.

I was more thinking like South Side Works or East Liberty. Lots of new construction in those areas, which should give a sense of what it takes rent-wise to make a profit on new construction. I think to be fair too, one should note that generally speaking even nicer rehabs will command a bit less rent than brand new complexes, meaning I think a brand new complex opening today next to Fifth Avenue Lofts would likely come in at a higher price point.

I mean, even in the Strip District you had rehab projects like the Cork Factory before you started to see the economics of entirely new apartment buildings make sense.

I think that had less to do with the Strip specifically and more to do with a general market shift. Again, now there are new apartment buildings going up all over the place, because they have found plenty of demand for them.

[Evergrey]

perhaps I'll hate Tower at PNC Plaza's street-level presence less once the retail begins to take shape...

http://www.bizjournals.com/pittsburgh/news/2015/11/03/milkshake-factory-to-open-downtown.html

Milkshake Factory to open downtown

Nov 3, 2015, 12:06pm EST

The Milkshake Factory, a South Side sweet-tooth staple, is heading to downtown's newest building.

The chocolate shop will soon be opening for business at The Tower of PNC Plaza, the new headquarters building of PNC Financial Services Group Inc. at the corner of Fifth Avenue and Wood Street, PNC announced today.

A retail concept of Edward Marc Chocolatier, which operates a factory in Lawrenceville, The Milkshake Factory committed to a long-term lease for 2,135 square feet of retail space in the building.

According to the PNC announcement, the new store will offer "milkshakes, gourmet chocolates, sundaes, chocolate fondue, Italian cream sodas, hot chocolate and old-fashioned fountain drinks."

Tim Schooley covers retail, real estate, construction, hospitality, arts and entertainment, and government. Contact him at [email protected] or 412-208-3826.

[photoLith]

I didnt know there was any retail space in the new PNC Tower, which street will it be on?

[designer3d712]

Originally Posted by photoLith

I didnt know there was any retail space in the new PNC Tower, which street will it be on?

Red Area is roughly 2,100 sf.
Blue Area is roughly 3,200 sf.

[Private Dick]

Reminder fellow forumers... if you haven't already, GO VOTE!!!!!!

But only if you're going to vote Democratic. If not, stay home.

This is a HUGE opportunity for PA to regain some sanity by Democratic judges taking control of the state supreme court... which can have major implications for whether PA goes red or blue.

[summersm343]

Lol. Nice try. Insta-banned.

[Austinlee]

Originally Posted by summersm343

Lol. Nice try. Insta-banned.

God bless you.



"Dr. Avis
BANNED - Sep 19, 2015

Dr. Avis 2
BANNED - Today"

[Evergrey]

Originally Posted by Private Dick

Reminder fellow forumers... if you haven't already, GO VOTE!!!!!!

But only if you're going to vote Democratic. If not, stay home.

Voting straight Democratic if you live in the North Side also means voting for Darlene Harris.

[East Edge]

I agree but you know that arena site really needs to be right. I know we have all remarked before about height and i would hate to see that site be all low height buildings. It needs to feel like an extension of our downtown and skyline and not some mediocre crap. Im willing to wait for the right opportunity to present itself for the sake of Pittsburgh's future.

Originally Posted by JVC

saw this view of the city yesterday while watching the steelers game and thought - development has crawled to a dead snail's pace at the former civic arena site



let's hope for the sake of the city's national image that the former civic arena site is fully developed before one building is built at almono

[AaronPGH]

Originally Posted by summersm343

Lol. Nice try. Insta-banned.

and here we have the difference between SSP and that godawful other site

[Private Dick]

Originally Posted by Evergrey

Voting straight Democratic if you live in the North Side also means voting for Darlene Harris.

What's your point?!

[JVC]

Originally Posted by East Edge

I agree but you know that arena site really needs to be right. I know we have all remarked before about height and i would hate to see that site be all low height buildings. It needs to feel like an extension of our downtown and skyline and not some mediocre crap. Im willing to wait for the right opportunity to present itself for the sake of Pittsburgh's future.

here's the move - build the crosstown deck

http://www.post-gazette.com/business/dev...c-Arena-development/stories/201510290214

and then convince kennemetal to build a corporate tower on the former civic arena site



having a tall corporate headquarters on that site would "feel like an extension of our downtown"