Spruced-up Oxford Centre on display
Owner hopes upgrades will lead to higher rents
Like the host of a HGTV fixer up show, Shorenstein Properties is ready for the big reveal.
Only the remake involved is not a rundown split level in Scott Township, but one of Downtown’s most iconic skyscrapers — One Oxford Centre.
The San Francisco-based real estate investment firm has spent $50 million overhauling the lobby, adding Downtown’s first food hall and bulking up tenant amenities in a bid to make the venerable 45-story skyscraper a signature building in Pittsburgh.
On Tuesday, it will show off the improvements to local commercial brokers, hoping to command as much as $35 a square foot — an amount that pushes the envelope for office rents in the Downtown market.
There will be a lot to digest — from marble floors in the elevators to travertine stone imported from Italy in the upgraded lobby. Gone are the escalators that for decades whisked visitors to the third and
fourth floors, and the two stories of retail that gave the building a mini-mall feel.
In their place are collaborative work spaces, an 8,000square-foot conference center that can be reconfigured to suit tenant needs, and second and third floor office space where retail once reigned. New elevators zip riders to their floors and new HVAC systemshave been installed.
Those changes and others, including $3 million in upgrades to the Rivers Club, are designed to reposition Oxford Centre with its distinctive aluminum and glass octagonal towers as “the signature building on the skyline,” said Christopher Caltabiano, Shorenstein senior vice president.
With the renovations to the structure built in the early 1980s, tenants will be experiencing the same level of amenities and polish as those in top Class A trophy properties in cities such as New York, Chicago, San Francisco, and Washington, D.C., he said.
Given that, and generous tenant improvement packages to build out space, Mr. Caltabiano believes Shorenstein can get the office rents it wants for the building it bought for $148.7 million. “This building stands alone by itself.”
Local brokers offered a more measured view.
“I think it’s aggressive,” said Gerard McLaughlin, the Newmark Knight Frank executive managing director who represented the Buchanan Ingersoll & Rooney law firm in lease negotiations to move from Oxford Centre to the Union Trust Building in October 2019.
Newmark Knight placed the average asking rate for Class A space in Downtown at $29.36 a square foot in the first quarter.
Dan Adamski, managing director of the Jones Lang LaSalle real estate firm, said there have been tenants, most notably Buchanan Ingersoll, that have left Oxford Centre since Shorenstein took over in 2016. He noted it is difficult to increase rental rates before improvements have been completed.
“They are very savvy folks. I think they feel confident that they can push rental rates higher because of the amenities and the experience [offered to tenants],” he said.
Gregg Broujos, Colliers International managing director, said $35 a square foot might not be out of the question for some tenants. “Shorenstein has turned that into a building that you would typically see in New York or Boston or Washington, D.C., and there are some tenants who are going to appreciate the new Oxford Centre and pay the relevant rate,” he said.
Jeremy Kronman, a CBRE executive vice president who is marketing office space at Oxford Centre, said tenants have signed new leases or renewed or expanded leases accounting for more than 300,000 square feet of space since Shorenstein took over in 2016.
Among new tenants that have signed leases are the Cozen O’Connor and Post & Schell law firms.
“This building had the bones for it and the shape for it and with Shorenstein, now has the capital for it. It’s great for our city to have a building like this,” he said.
Among the changes is a 8,000-square-foot wood-paneled second floor conference room with 70-inch flat screen TVs. The space can be reconfigured to serve as a tenant lounge, a training center, a board room, or even a mock trial court, depending on the need.
The conference room and two levels of office space in the same area have replaced retail that at one time hosted some of Downtown’s most fashionable boutiques, including K. Barchetti Shops.
While much of the retail has been removed, a card shop and St. Moritz Chocolatier remain, sharing a common space. Chick-fil-A has a small second floor spot, and a juicebar also is in the works.
In the main lobby, Shorenstein added the travertine stone and new furniture and swapped some of the gray colors for white to convert the space into “grand urban room for the public,” said Jeff Young, principal with Perkins Eastman, the architectural firm behind the renovations.
The goal, Mr. Young said, was to make the space a “modern version of the William Penn Hotel lobby.”
Outside, Shorenstein installed a bronze-colored ribbon that wraps around the building from Third Avenue to Fourth Avenue, improved signage and installed lighting to better illuminate the main entranceoff Grant Street.
Only time will tell whether all the improvements will help the firm command the rents it wants.
“I would say whether they do or they don’t will be a good test for the health of our market,”Mr. Adamski said.