UPMC to move 1,400 more workers to U.S. Steel Tower

| Wednesday, March 27, 2013, 12:01 a.m.

UPMC plans a major expansion in U.S. Steel Tower, moving 1,400 employees from other locations to Downtown.

A number of other tenants have moved or will move out of the 64-story skyscraper to make room, including PNC Bank and Gateway Health Plan.

“By October, we expect 3,750 employees to occupy 23 floors of the tower,” said Susan Manko, a UPMC spokeswoman. “Currently, about 2,350 UPMC employees occupy 15 floors,” she said. UPMC is the building's largest tenant.

The newcomers are personnel from UPMC Health Plan, the health care system's insurance unit, and from other corporate and administrative branches, she said. They will be moving from Oakland and other locations that UPMC owns or leases.

“Our administrative support functions are being moved out of our hospitals and clinical facilities because of growing demand for our clinical and patient care service,” she said. “It makes economic and logistical sense to centralize functions at our headquarters in U.S. Steel Tower.”

Several tenants said they left U.S. Steel Tower because there is little or no room for expansion.

Towers Watson, a benefits consultant, moved most of its employees into One PPG Place because it needed room, spokesman Josh Wozman said.

“We identified space in PPG Place where we gained the space, which was not available in (U.S. Steel Tower),” Wozman said. A unit of Towers Watson will remain there, but about 75 percent of its 200 employees relocated.

Gateway Health Plan, a managed care provider, signed a lease for 5 12 floors at Four Gateway Center, Downtown, plus an option for two more floors.

“Gateway will move in Friday, and I expect it will complete the move by Monday,” said Paul Horan, of Colliers International/Pittsburgh, who handled the lease. Gateway Health will be leaving space it subleased from PNC.

Michael Blackwood, Gateway CEO, said last year that the company's operations require keeping staff on the same floor as much as possible, and each floor in Four Gateway offers that space.

PNC Bank announced plans to move out of four floors at U.S. Steel Tower for space at 500 Smithfield, the former Lord & Taylor building, according to a report by commercial real estate firm Jones Lang LaSalle. PNC said it will move in either late 2013 or early 2014. PNC purchased the Lord & Taylor building in June and has been converting it from retail into office space.

PNC will maintain other operations in U.S. Steel Tower upon renewal of a lease, according to the Jones Lang LaSalle report.

PNC spokesman Fred Solomon declined to comment on its leases at U.S. Steel Tower.

Brokerage firm Janney Montgomery Scott LLC moved to PPG Place in December, said Jim Foley, branch manager.

“PPG's space was a better size for our company. We found the area around PPG Place had more restaurants and events than we found on Grant Street. And the personnel that UPMC was bringing into the building were more clerical and administrative than the professional employees who are important for our business,” he said.

The building did have at least one major renewal when U.S. Bankruptcy Court renewed for 54,936 square feet.

The tenant moves are expected to result in occupancy levels at U.S. Steel Tower declining from nearly 100 percent to 93.5 percent, according to the Jones Lang LaSalle report.

Todd Swisher of CBRE Inc., in charge of leasing of the building, could not be reached for comment.

Still undecided are the plans of the building's name tenant — U.S. Steel Corp., which occupies 14 floors.

In early 2012, the steelmaker said it is exploring whether to renew its headquarters lease there or to move on plans to construct a build-to-suit campus with occupancy in 2017, when its lease expires.

The company is not close to a decision, spokesman Chuck Rice said on Tuesday.

Sam Spatter is a staff writer for Trib Total Media. He can be reached at 412-320-7843 or sspatter@tribweb.com.

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