Developer hopes to make Allegheny Center a tech hub
The new owners of Allegheny Center want to make the North Side Pittsburgh’s next technology hub.
New York-based Faros Properties announced Thursday that it is embarking on a multimillion-dollar plan to transform the 1.2 million-square-foot office and parking complex into a center for innovative startups.
The complex, to be renamed Nova Place, will be renovated with an aim of attracting tech companies that are being crowded out of pricier real estate in Oakland and Bakery Square, managing partner Jeremy Leventhal said.
“Cost-effective office solutions within close proximity of the city are in high demand,” Leventhal said. “There’s only so much land available in the East End and Bakery Square. So, companies are growing and running out of space there…that’s why we think this facility fills a nice void.”
The project would bring “a failed model of urbanism to the 21st century,” Mayor Bill Peduto said, and better serve the surrounding communities. The 1960s-era retail mall has been in a state of decline for decades and is only 50 percent occupied, Leventhal said. It will be redesigned with a contemporary campus-like feel, with upgraded offices, common areas and collaborative work spaces, a fitness center, conference center and lounge and bike storage. Demolition began Thursday and the renovations are expected to be completed by December 2016, said Jeremy Kronman, the property’s broker with CBRE.
Faros has office and residential properties in Connecticut, Boston and New York, but has been an active developer in Pittsburgh lately. It acquired Washington Plaza on Centre Avenue in Downtown in November 2012, renaming that property City View Apartments. And last November, it bought Carson Street Commons in the South Side.
The company is keen on the potential of the North Side and, in particular, Allegheny Center because of its proximity to Downtown and cultural institutions. Last year, it purchased Allegheny Center Apartments, a four-building residential complex that was renamed Park View. At the time, the complex was nearly 50 percent vacant, Leventhal said. Today, is it is totally occupied and has a waiting list.
Leventhal said he is confident that Allegheny Center will be fully occupied in the next few years. Innovation Works, which invests in early stage companies, will move next month to the North Side complex from Hazelwood, said Rich Lunak, its president and chief executive. Lunak said he liked the proximity to cultural institutions, the planned upgrades and the potential to have a positive impact on the surrounding community.
Faros will have competition for attracting high-tech tenants. A six-story office building is scheduled to open this fall in East Liberty’s Bakery Square 2.0 complex and will be anchored by Internet search giant Google Inc. Developer Walnut Capital wants to open a second building by next year that would add 200,000 square feet of space in close proximity to many of Pittsburgh’s universities.
Allegheny Center is farther from the intellectual resources and talent in Oakland, but it could be an affordable option for young companies that need to grow quickly, said Jeff Schultz, managing director of commercial real estate firm Newmark Grubb Knight Frank. “Allegheny Center has the ability to satisfy the footprint needs, the parking needs and it’s going to be priced at a market rate that is less than the premium space at Bakery Square,” Schultz said.
Allegheny Center is home to corporate tenants such as PNC Financial Services, Bank of America and AT&T, all of whom have long-term leases and plan to stay, Leventhal said.
PNC has said it hopes to consolidate its scattered workforce Downtown once its new corporate headquarters is completed this fall. A PNC spokeswoman declined Thursday to comment on the renovations at Allegheny Center or the bank’s future there.
Peduto supports the project, though no public tax dollars have been committed, Leventhal said.
Peduto said Faros’ plans were a testament to how Pittsburgh was becoming an attractive place for companies to invest and grow.
“Pittsburgh is viewed internationally as an innovative hub,” Peduto said.
Chris Fleisher is a staff writer for Trib Total Media. He can be reached at 412-320-7854 or firstname.lastname@example.org.