New York company finalizes purchase of Downtown building
Pittsburgh Post-Gazette
Yet another New York company has snagged a key property in the Golden Triangle.
Pearson Partners has completed its purchase of 525 William Penn Place, the fourth largest office building Downtown, with plans to make major capital improvements.
The firm paid $67.65 million for the 41-story office building, according to Allegheny County real estate records. The property, which has been on the market for more than a year and a half, is located on Fifth Avenue and William Penn Place across from the former Macy’s department store.
With the acquisition, Pearson intends to make significant renovations, including a full lobby makeover. It also plans to add a new tenant lounge, an executive fitness center and a state-of-the-art business center while studying the potential for integral parking.
“We’ve enjoyed great success with our long-standing relationship to the region, and we look forward to repositioning 525 William Penn Place and reintroducing it to the marketplace as Pittsburgh’s next trophy Class A office building,” said David Pearson of Pearson Partners.
BNY Mellon put the property up for sale in early 2015 as part of an effort to cut its real estate costs. In announcing the decision, it also said it planned to move about 1,500 employees out of the building over several years. Ron Sommer, a BNY Mellon spokesman, said the relocation has started and should be completed next year.
The move, coupled with the relocation of the Jones Lang LaSalle real estate firm from the building to Tower Two Sixty on Forbes Avenue, could create sizable vacancies in the 934,000-square-foot building. The prime remaining tenant is Citizens Bank, whose name is on the structure.
At the same time, Pat Greene, who will be leasing the building on behalf of CBRE, said it is wellpositioned to attract new tenants.
He noted the Mellon Square area is in the midst of a resurgence, with new hotels and restaurants opening, the redevelopment of the Macy’s building, and the
conversion of part of the former Alcoa building into apartments.
“The Mellon Square area is really the new Market Square of Pittsburgh,” he said.
Over time, BNY Mellon’s relocation will free up about 600,000 square feet, representing the largest contiguous block of Class A office space in Western Pennsylvania, he said.
Mr. Greene, senior vice president with CBRE Advisory & Transaction Services, declined to comment on any lease negotiations with Citizens or other tenants, which include two law firms.
CBRE represented BNY Mellon in the sale of the building. It also has been hired to lease and manage it.
The skyscraper won’t be Pearson’s first buy in Pittsburgh. It previously owned EQT Plaza Downtown. It also owns several shopping plazas in the region, including Miracle Mile in Monroeville.
Last year, it bought the 212,000-square-foot Park Place Corporate Center in North Fayette, which CBRE manages and leases.
“These guys really know how to take a Class A office building and really turn it into a trophy property,” said Jeffrey Ackerman, CBRE managing director.
Pearson is the latest New Yorker to claim a Downtown property. In April, JMC Holdings LLC, purchased the historic Pennsylvanian, a former train station that now houses apartments. King Penguin Properties has bought three buildings in Downtown.
Another, the 601W Companies, owns U.S. Steel Tower but may soon be putting it up for sale. Faros Properties bought the former Allegheny Center Mall on the North Side and is converting it into a tech center. It also owns several other properties near Downtown.
William Penn Place was constructed in 1951 for Mellon National Bank and U.S. Steel Corp. It was erected on the site of the old Henry Hotel and was one of the first skyscrapers built in Pittsburgh as part of Mayor David Lawrence’s Renaissance I building initiative.