Development opportunities abound in downtown Pittsburgh near central business district

Photo by Joe Wojcik

In early October, 85 employees at Rycon Construction Inc. vacated their offices on Liberty Avenue and moved two blocks away into a new building on Smallman Street in the Strip District.

Their move was symbolic. Rycon was the first firm to inhabit Oxford Development Co.’s 3 Crossings, a mixed-use development along the Allegheny Riverfront that’s expected to bring more than $130 million of office space and apartments, along with shops and restaurants.

John Sabatos, president and COO of Rycon, said the company was out of space and needed room to grow but wanted to stay near the core of the city.

The 3 Crossings project is just one of several urban development projects underway around the edge of downtown, traditionally defined as the 225 acres of land between the point at Point State Park and Grant Street.

Jeremy Waldrup, president of CEO of the Pittsburgh Downtown Partnership, noted how much development — and the construction it implies — is happening or in the works in the greater downtown area, which extends beyond the Central Business District to the North Shore, Station Square, the Strip District, the 28-acre former Civic Arena site in the Lower Hill District and Uptown.

There’s the 3.3 million square feet of office space under construction. There’s a pipeline of more than 4,000 apartments and condos in development or under construction. Add in the slew of new hotels in the works, and Waldrup said there’s still $3.5 billion in the development pipeline. For point of comparison, the city only has seen $4 billion in development since 2006.

“We see the growth of the boundaries of downtown as being extremely positive,” Waldrup said.

Residential boom

More often than not, new residential development has fueled the expansion of downtown, with new apartment and condo projects slated for virtually every corner beyond the Golden Triangle.

Dave McMullen, chief marketing officer for Franjo Construction Corp., said “multifamily has been our bread and butter in construction for the past two years.”

Franjo plans to build three condo projects in the city, including the 38-unit Smallman Place now under construction in the Strip District.

With demand rising for such projects — Smallman Place, for example, generated at least 20 sales agreements within the first week it was posted on the multilist — developers are finding themselves in the driver’s seat for the first time in several years.

“What I’m finding in the city is the jobs are being negotiated, not bid,” McMullen said. “We’re seeing now more than ever design-build and negotiating with these owners because they need us as much as we need them.”

Moving the fringe

As the Rycon and Franjo projects demonstrate, much of the construction activity and opportunities for developers “is mostly happening outside the Triangle,” Waldrup said.

Newmark Grubb Knight Frank in its third-quarter office report noted the downtown fringe outpaced the Central Business District in terms of leasing activity over the summer. That was largely based on two major deals: the decision by the law firm Burns White to lease a 100,000-plus-square-foot building at 3 Crossings, and PNC Financial Services Group Inc.’s renewal of its 359,000-square-foot operation at Nova Place on the North Shore.

Those kinds of leasing successes hold promise for the owners of open land just outside the Central Business District, offering a greater opportunity to build new.

Waldrup, who said he recently met with Buncher about its site, said a new road, Waterfront Place, is all but completed. It will allow the company to begin construction on a mix of buildings at the site, including a 365-unit apartment project by Cleveland-based The NRP Group LLC that already has been approved.

“We’re excited to see these projects finally start to gain traction,” he said.

Connecting back to the core

A key concern for the Pittsburgh Downtown Partnership as the areas around downtown expand is making sure they are connected, much the way the extension of the T line under the Allegheny River has provided a stronger link between the North Shore and downtown.

“It begs the question: how does it continue to grow, and how do these connections continue to be made?” Waldrup asked.

Construction activity in the downtown fringe is picking up at the same time some of downtown’s biggest construction projects are nearing completion, including PNC’s new $400 million headquarters, the Tower at PNC Plaza, which recently wasw previewed for the press, as well as Tower Two-Sixty, Millcraft Investments’ new mixed-use building near Market Square.

There are other projects to look to in the near future.

Even as Millcraft nears completion on Tower Two-Sixty, the company, in partnership with McKnight Realty Partners, is set to begin construction on the $35-plus million 350 Oliver, a retail-parking-residential project slated for Smithfield Street to be built by Carl Walker Construction Inc.

And Waldrup said he’s optimistic that something new will come out of the Pittsburgh Cultural Trust’s revised plan for its former RiverParc site along Penn Avenue downtown, where a $460 million project died during the Great Recession.

“That’ll be the next big thing,” he said.

Tim Schooley covers retail, real estate, construction, hospitality, arts and entertainment, and government. Contact him at or 412-208-3826.