Pittsburgh developer hires firm to recruit major tenants for proposed office tower
A Downtown developer said Wednesday it hired a Seattle-based commercial real estate firm to help secure major tenants for a proposed $200 million office tower where construction has been on hold for about three years.
“We felt it was time to expand our reach into several other key markets, and to do so successfully we looked to Colliers International,” said Steven J. Guy, president and CEO of Downtown's Oxford Development.
Oxford announced a plan to build a 33-story, $238 million tower at 350 Fifth Ave. in May 2012. The developer redesigned the project twice. Last year it proposed reducing the height to 20 stories. Early this year, it said the tower would rise 29 stories with eight stories of built-in parking to make the building stand out in the Golden Triangle and give prospective tenants better views.
Oxford said it wants to secure two large tenants before proceeding with construction.
“We have some good prospects for anchor tenants,” spokeswoman Megan Stearman said, declining to offer specifics.
When asked why the project is taking so long to advance, Stearman said the tenants being sought each would use about 150,000 square feet. The tower's plans include 532,000 square feet of office space, 15,000 square feet of retail space and 400 parking spaces.
“They generally have more complex operations to consider moving. They also begin their search for space with a much longer lead time than tenants with smaller space requirements,” Stearman said.
Guy said Colliers International would help market the tower to potential tenants in the energy, technology, finance and government sectors in areas such as northern California, Austin, Boston, New York and Washington.
Dan Adamski, managing director of commercial real estate firm Jones Lang LaSalle's Downtown office, predicted Oxford's office space would be in high demand — despite rental rates that he estimated would be higher than existing rates Downtown.
“There's a dearth of trophy space right now and very limited options for (tenants looking to lease) 40,000 square feet or larger,” Adamski said, referring to the lack of high-end, Class A offices.
Pittsburgh's 94.2 percent occupancy rate for Class A space ranks second-highest among nearly 50 U.S. markets tracked by Jones Lang LaSalle. Rates are even higher in high-end Class A buildings such as Fifth Avenue Place and BNY Mellon Center, Adamski said.
Large blocks of space are expected to become available in Class A office buildings such as the 64-story U.S. Steel Tower, 41-story 525 William Penn Place and 23-story 11 Stanwix, but Adamski said those buildings rate just below trophy class.
Tom Fontaine is a staff writer for Trib Total Media. Reach him at 412-320-7847.