Gateway Center, the Downtown development that launched Pittsburgh's first Renaissance in the early 1950s, has a new owner.
Hertz Investment Group, based in Santa Monica, Calif., late Thursday completed the purchase from Trizec Properties Inc., of Chicago, of Gateway Buildings One, Two, Three and Four, along with the Gateway parking garage and land beneath the Pittsburgh Hilton & Towers, for $55 million.
Hertz was identified by the Pittsburgh Tribune-Review on Oct. 21 as the potential buyer.
Judah Hertz, founder and chief executive officer of Hertz Investment, said his firm now is looking at other purchase opportunities in the Pittsburgh area.
Traditionally, the company seeks investments in the central business district, although Hertz emphasized the entire area was being considered.
Trizec, a real estate investment trust, acquired Gateway Center in 1995 for about $57.3 million, from Equitable Life Assurance Society of the U.S., the original developer of the Center.
The Pittsburgh office of Holliday Fenoglio Fowler L.P., a large national commercial real estate capital intermediary firm, was the agent for Trizec and negotiated the sale with Hertz.
Not included in the sale are 11 Stanwix Street (the former Westinghouse Building) nor the I.W. Abel Building (formerly Gateway Five), headquarters of the United Steelworkers of America. Neither are the State Office Building, Gateway Towers condominium and the Pittsburgh Hilton.
The latest survey of Downtown's office market by Grubb & Ellis Co., showed an 18.7 percent vacancy rate at the end of the third quarter of 2004 for the four Gateway buildings, which was in line with the vacancy average for all buildings in the central business district.
Trizec previously had disclosed that the reason it was selling Gateway Center was a corporate decision to "reposition its portfolio of properties to concentrate in markets where it has more than one or two investments."
Gateway Center was its only local investment for Trizec.
Hertz Investment Group owns or manages more than 100 properties throughout the nation, ranging from high-rise office buildings to retail centers, multifamily developments, hotels and international market centers.
