SUPPLY & DEMAND
As interest in Oakland drives a need for space, a busy corner could see more construction
Since 1928, the property at Forbes and Coltart avenues in Oakland has been through a lot of changes.
It has housed Murdoch Chevrolet, an A&P supermarket, a Foodland, a Giant Eagle and a CVS. Now it may be the site of another new office complex in a neighborhood teeming with development.
Murland Associates Limited Partnership is considering putting a 150,000- to 200,000-square-foot office building at the site, which is now home to the CVS and WholeRen Education.
The proposed development could be twice as big as the eight-story office complex Murland is finishing up on the opposite side of the intersection in what was once the old Chevrolet dealership’s used car lot.
That 95,000-square-foot building, which should be completed in early June, has been leased to the University of Pittsburgh. The first floor will go to CVS, which will be moving into the space from across the street.
Molly Murdoch Finnell, a representative of the Murdoch family, which owns both Forbes Avenue properties, said plans for the second office building are still in the preliminary stages.
“Nothing’s final,” she said. Nonetheless, Murland has been talking to Baltimore-based Wexford Science + Technology LLC, a company that works with universities, academic medical centers and major research institutions on creating innovation districts.
“Wexford is a niche developer that builds lab office space,” Ms. Finnell said. “They probably would be the developer.”
Murland plans to demolish the two-story
building that currently houses the CVS to make way for the new development. Ms. Finnell said the lease for WholeRen, the other tenant, is expiring.
The site also includes a surface parking lot that would become part of the new building’s footprint.
Ms. Finnell said Murland is looking for a potential tenant that would fit in with the innovation district concept described in a Washington, D.C.-based Brookings Institution study that identified Oakland as a place for academic researchers to work closely with entrepreneurs.
While she doesn’t necessarily see Pitt leasing the new space, she said the building could end up supporting the university in some way. “You never know. We’re not quite to that point yet,” she said.
Wanda Wilson, executive director of Oakland Planning and Development Corp., said the organization has not had any detailed discussions with Murland about the project and that it was too early to take a position.
So much construction
Plans for the new building come at a time when Oakland, one of the tightest office markets in the region, is in the midst of a building boom, with high demand for space prompting developers to take chances.
One of the most active is Shadyside-based Walnut Capital, which has unveiled plans for a 12-story office building on Fifth Avenue near Carlow University.
It also has started work within the five-story Pittsburgh Athletic Association clubhouse on Fifth across from the Cathedral of Learning as part of a $25 million rehab that will include office and restaurant space and a new fitness center and club room.
Walnut Capital is in the process of redeveloping the
Jewish Federation of Greater Pittsburgh headquarters — two buildings at 234 and 242 McKee Place totaling 14,000 square feet.
It also is finishing up an $8 million project to convert a former Cadillac dealership at 3224 Blvd. of the Allies near UPMC Magee-Womens Hospital into 41,000 square feet of office space. UPMC is believed to be taking all of that space.
A lot of demand
Dan Adamski, Jones Lang LaSalle managing director, said there’s a simple reason for all of the activity — supply and demand.
The Oakland and East End have an office vacancy rate below 3 percent, making those markets ripe for more development.
One reason there has been so much activity in the Strip District, which has become the region’s tech hub, is that there are few options available right now in Oakland, Mr. Adamski said
Last year, a third of Pittsburgh’s total leasing activity involved tech companies, which took about 700,000 square feet of space. In addition, a third of all leasing activities took place in Downtown fringe markets like the Strip, the North Shore and the South Side.
“These areas all function as outlet valves for demand that cannot be satiated in Oakland. Companies are seeking proximity to Pittsburgh’s specialized talent, and the universities and hospitals in Oakland are the epicenter of that talent,” Mr. Adamski said.
Given such factors, he expects to see even more development in Oakland in the future.
“Oakland boasts the highest average rental rates in the region, and demand is strong, so development will continue,” he said.
“Oakland boasts the highest average rental rates in the region, and demand is strong, so development will continue.” — Dan Adamski, Jones Lang LaSalle managing director