- Tim Schooley – Reporter- Pittsburgh Business Times
Don’t expect all the new apartments coming on the market in and around downtown Pittsburgh to sit empty for long once they’re completed.
That’s the confident consensus expressed — with occasional caveats — by a panel of local developers who are playing a major role in creating a residential community in the urban core of Pittsburgh. The meeting of the first Developers Forum of the Downtown Pittsburgh Community Development Corp. was held Wednesday afternoon at Heinz 57 Center.
Asked about the prospects of increasing vacancy in a market in which more than 2,000 apartments are in the works, Lucas Piatt, president and COO of Millcraft Investments Inc., acknowledged the concern as the executive of a company whose downtown residential properties include Piatt Place and River Vue.
“I think that the projection of 20,000 people living in the greater downtown is absolutely achievable,” said Piatt, echoing the expressed downtown residential population goal of Mayor Bill Peduto. “I think we’ll see that the projects that are positioned in great locations next to great amenities in the core of the city will all be very strong.”
There are about 12,000 residents living in greater downtown right now.
Piatt was joined on the panel by Bill Gatti, president of Trek Development Group, which developed 900 Penn Ave. as an apartment conversion in the late ’90s; Ralph Falbo, the lead developer of the 151 First Side condo development; Izzy Rudolph of McKnight Realty Partners, which owns a number of major downtown buildings; Shawn Fox, vice president of business development for Oxford Development Co., Todd Palcic, developer of the Lando Lofts; and Kevin McMahon, president and CEO of the Pittsburgh Cultural Trust.
Gatti described ongoing challenges and the ongoing need for extra financial support, but sees a major differences developing residential downtown now compared to when Trek converted 900 Penn.
“It is a different place. Market deals are working. You still need to cobble together all the resources you can,” he said, comparing 900 Penn with a later project. “It took us 10 years to reprise 900 Penn Ave. with the Century Building. But now the momentum is really growing.”
Todd Palcic, who has specialized in taking on smaller buildings for residential conversions, was candid in how difficult such projects are to make economically feasible, given how the costs of development can leave little room for profit from a smaller number of units.
“With the smaller high-rise buildings, it’s a very unlikely that you can make it work economically without some support from the city or a nonprofit,” said Palcic.
Yet Falbo sees opportunity in smaller buildings for projects with tax credits for affordable housing and sees a downtown residential market still barely touched for apartments at affordable rents.
“I don’t think we’ve touched the lower end of the market. I think that’s possible in some of these smaller buildngs around the city,” said Falbo. “I think that market is untapped because the younger people and the service people want to be downtown. They just can’t afford it.”