Less to Bid, More to Build

With all the recent announcements of big projects in the pipeline, it’s hard not to be bullish on construction in Western PA; however, the current market is less than target-rich. Bidding has slowed significantly, even for Memorial Day, and it appears that the early summer period will be slower than last year until some of the projects that are in preconstruction are put out by the CM.

Among the projects awarded recently are the $9.8 million CCAC West Hall, awarded to Allegheny Construction Group; a $1.7 million renovation and expansion of Riverview Children’s Center in Verona, which will be built by A. Martini & Co. and the St. Sebastian’s Narthex expansion in Ross that Rycon Construction is building. PJ Dick has started work on the $100 million+ research and office for Johnson Controls in York PA.

Two interesting real estate deals announced this week should bring construction opportunities as early as the end of summer. Uber Technologies signed a lease in the 53,000 sq. ft. former Restaurant Depot space in Lawrenceville. Strada Architecture is designing the fit-out. Uber is in the process of selecting a CM. A list of contractors could not be confirmed but the company is rumored to be talking to Continental Building Systems, PJ Dick and Franjo. Faros Properties unveiled its plans for the former Allegheny Center Mall yesterday, branding the 1.2 million sq. ft. space as Nova Place. Estimates of the investment needed were in the $200 million range.

Oxford Ready to Start Work on 250 Industry Drive

Oxford Development Co. announced that it had landed an anchor tenant and was holding a groundbreaking ceremony on May 18 for its $13 million 250 Industry Drive flex office project in Findlay Township. Oxford said that the tenant would be revealed at the 10:00 ceremony. Al Neyer Inc. is the contractor for the 85,000 square foot project.

A. Martini & Company was the apparent low bidder on the $1.8 million phase three of the addition to St. Ferdinand’s Roman Catholic Church in Cranberry township.

Mixed Bag of Starts in April

With some of the more desirable projects in the region in the final stages before starting – Ensinger Plastics, GE, Union Trust Building – there were a handful of nonresidential projects started in April that underscore the strength of the regional economy at the moment.

In the ultra-tight industrial/flex space market, Al Neyer got underway with a new 47,245 sq. ft. building at Elmhurst’s Airside Business Park in Moon Twp. and the new 86,000 sq. ft. warehouse and office for Paragon Foods at the RIDC Thorn Hill Industrial Park in Marshall Twp. Buncher started work on the 77,000 sq. ft. Building 2000 at its Jackson’s Pointe Commerce Park north of Zelienople. Modal Construction is building industrial flex Building 3 and 5 for the Ridilla Family Trust in Hempfield, totaling 52,000 sq. ft.

Suburban neighborhood retail continues to flourish in the face of an industry-wide shift in balance between bricks-and-mortar and online sales. Montana’s Ribs and Chops is being built out by Gilcon Construction at Southpointe Town Center. Another Five Guys Burgers is going into the Old Mill in Washington PA. Metro Properties has started the next building at its Park Place development at Race Track Road and Route 19.

School work is gearing up for summer. Yarborough was awarded the general contract for a $1 million vestibule security project at several Hampton Township schools. Work in underway at Moon, West Allegheny and North Allegheny School District projects. In the private sector, Groom Construction from Boston has started on a new 10,000 sq. ft. Kiddie Academy in Bridgeville.

Quiet Hearing on the Cracker

Yesterday was the public hearing on the DEP air pollution control permit for the Shell ethane cracker in Monaca. During my research on the cracker for the May/June BreakingGround, I spoke to a couple of people who noted the timetable for the DEP process and predicted that the permit was a fait accompli. Both said the hearing might have some bluster from opponents but that the DEP would grant the permit, and probably soon.

Those first predictions came true. There was, in fact, little opposition to the permit and surprising support (which is unusual in such hearings). The lack of public comment against the project was newsworthy, as the papers found little to write about it (although the Business Times was able to put a negative spin on it). Comments will be accepted by DEP until next Friday, May 15, after which the decision will occur.

In other development news, the announcement of JLL as the developer/representative coincided with the release of an RFQ for the first office building (sort of CIC2) and a hotel along Forbes Avenue. The request drew responses from 13 developers, including out-of-town entities like Clayco and Davis Companies that are already working in Pittsburgh. Among the seven local firms that responded were Elmhurst, Oxford, Mosites and Walnut Capital – all companies with projects ongoing in the Oakland/Shadyside market. The expectation is that construction will begin before the year ends.

In project news, Al Neyer Inc. started work on the new 86,000 sq. ft. refrigerated warehouse and office for Paragon Foods in Thorn Hill Industrial Park. Shannon Construction was successful in the Cabot Oil & Gas fit-out of 56,000 sq. ft. at 2000 Park Lane. PJ Dick is about to start work on the $14 million Penn Highland Building, a 78-unit new apartment project for Walnut Capital in East Liberty.

PPG Stays in Town

PPG Industries has committed to renewing its lease in the signature One PPG Place when it expires in 2018. Highwoods Properties made reference to the renewal in its conference call April 29, letting the cat out of the bag on what had been whispered around town for a month or so. Avison Young handled the transaction for PPG.

The decision to take 350,000 square feet is a significant vote of confidence for the Pittsburgh region – and Downtown – from an employer that is growing its top and bottom line. It keeps the revitalization of Market Square on an upward arc as well. Coupled with Rice Energy’s decision to expand and take 150,000 square feet at Burns & Scalo’s third building at Zenith Ridge in Southpointe, the PPG announcement adds some upbeat news to the Pittsburgh office market, which had been buffeted a bit lately by the prospect of vacancy from USSteel’s downsizing and the Citizen’s Bank decision to sell the 525 William Penn Place building.

Chuck Bunch, PPG’s CEO, commented that the decision reflects the coatings manufacturer’s continued expansion in Pittsburgh. With the past year PPG has filled one of the vacated Westinghouse campus buildings in Cranberry and invested roughly $15 million to update research facilities in Harmar.

GE Project Getting Underway

Grading has started on preparing for the construction of General Electric’s new 125,000 sq. ft. advanced manufacturing and research facility at Chapman Westport in Findlay Twp. Evans General Contracting from the Atlanta area is the contractor for the $30 million project, to be know as the Center for Additive Technology Advancement.

GE’s building is here in part because of the research into advanced materials that is happening at Carnegie Mellon. It’s not hard to envision a GE building located in the new north campus at CMU if University President Subra Suresh’s vision for the next phase of expansion comes to life. Last week master developer JLL announced that CMU had engaged it to help bring 450,000 sq. ft. of office, plus hotels and retail to fruition along Forbes Ave. at the Hollow. A day later Dr. Suresh spoke of his vision of several major office buildings as part of the Tepper Quadrangle, which will be anchored by the $110 million Tepper School of Business. Given the success Google has had with its partnership and hiring at CMU, it isn’t hard to imagine similar corporate locations for companies like GE, Amazon or the next tech giant looking at being at the heart of such an innovation corridor. Work on Tepper should begin around the end of 2015.

Through an owner’s rep, a request for developers went out again for a new convention center hotel. Past iterations called for as many as 1,000 rooms and would have run $100 million or more to develop. That cost is likely 25-50% off by this time but the added rooms are aimed at pushing Pittsburgh above the threshold for attracting the largest conventions to town.

K-12 Bid Results

Monday night the Moon Area School District awarded contracts for the Brooks and Allard Elementary School projects, which bid April 8.  The successful general contractor was Nello Construction at a combined total of about $9.6 million. Bids were also taken last Thursday and Friday for the $7.5 million Marshall Middle School in North Allegheny and the $12 million McKee Elementary School in West Allegheny.

The results for those schools are below:

k-12 low bids

Google interviewed A. Martini & Co., Mascaro, PJ Dick, Rycon and Turner yesterday for the tenant improvements for its new 66,000 sq. ft. space at Bakery Square 2.0.