By Sam Spatter
Published: Wednesday, June 5, 2013, 12:01 a.m.
As Oxford Development Co. celebrated the 30th anniversary Tuesday of its signature Downtown building at One Oxford Centre, questions remained about the status of its proposed $238 million skyscraper on Smithfield Street.
Several tentative deadlines — the most recent being autumn 2012 — have passed without final plans for the six-story building. Oxford is considering whether to build a 33-story high-rise office tower or make $40 million in upscale renovations to the existing building.
At the celebration, Mark Mason, Oxford founder and vice chairman, said a decision could be made in two months. Securing an anchor tenant appeared to be one of the chief obstacles to building a high-rise tower.
The office market in Pittsburgh is tight and demand is healthy, but local commercial real estate officials have mixed feelings about Oxford’s chances of landing a major tenant.
“It is a good time to be in the commercial real estate business,” said Jim Scalo, president and CEO of Burns & Scalo Real Estate Services, Inc. Scalo has been seeking a major tenant for his proposed 16-story high-rise office building on a parking lot on Ft. Pitt Boulevard.
There have been a number of potential tenants suggested for Oxford’s new office building, with U.S. Steel Corp. being one of the favorites.
U.S. Steel has not revealed whether it plans to remain in the U.S. Steel Tower after its lease expires in 2017 or find a new home in Downtown Pittsburgh, in the Strip District or near Pittsburgh International Airport.
Chevron Corp., which also came up as a possible tenant, is apparently looking to set up its regional headquarters in Moon, where it has obtained options on several parcels. Royal Dutch Shell Plc, which is proposing to build a cracker plant in Beaver County, remains a potential as does Exxon Mobil Corp.
Downtown’s office market has improved over the past few years with overall office occupancy at about 90 percent. However, several market reports say premier space is more scarce, with more than 95 percent of Downtown’s total taken.
“I am of the opinion that (with) the (office) market strength of Downtown, Oxford may be able to build to suit an office building for a tenant. I am optimistic Oxford will identify an anchor tenant,” said Paul Horan, of Colliers International/Pittsburgh.
But Richard Beynon, president, Beynon & Co., said Downtown proper and the greater Downtown area, “has considerable space available for tenants, so it may be difficult for Oxford to obtain a tenant of the size needed for a new office tower.”
He added, “It may be better to revamp the existing building for any new tenant.”
Renovations would include a redesigned entrance along Fifth Avenue, all new mechanical systems and upscale finishes. It would contain 173,375 square feet of premier office space and 22,600 square feet of retail/restaurant space.
There is at least one new office building scheduled to start construction this year.
Millcraft Investments of Washington County plans to start work on its $95 million Gardens at Market Square, which will include 125,000 square feet of office space. It also will have a 197-room Hilton Garden Inn, 25,000 square feet of first-floor retail and a 335-space parking garage.
The lone new office tower under construction Downtown is The Tower at PNC Plaza, a $400 million, 33-story building being built by PNC Financial Services Group for its national headquarters. Only PNC will occupy the building.
Scalo said Downtown could see “another high-rise or two” being built.
During ceremonies at One Oxford Centre in celebrating its anniversary, Anne Lewis, Oxford board chairman and widow of Eddie Lewis, who conceived the idea of constructing a building offering multi-tenancy, said 1983 has a double meaning for her.
“Not only did the building open, but that year, Eddie proposed to me,” she said.
Sam Spatter is a staff writer for Trib Total Media. He can be reached at 412-320-7843 or firstname.lastname@example.org.