Presby Tower Moving Forward

UPMC selected the Whiting Turner/PJ Dick team was selected to build the $700 million new Heart and Transplant Hospital at UPMC Presbyterian. The new tower will be designed over the next year with construction anticipated in Mid-2019. The Heart & Transplant Hospital is one of three major specialty hospitals being developed by UPMC in the city.

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In Moon Township, Albert Higley Co. has started construction on the $55 million Tapestry Senior Living, a conversion of the 206,000 square foot former Embassy Suites that Crown Senior Living is developing. Bear Construction has started construction on the 140-room, 12.4 million Hilton Garden Inn being developed by Millcraft Hospitality in Center Township, Monaca PA.

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Some Follow Up

Friday’s big news may have been the unexpected slowdown in hiring in the U.S. job market but there was some project news of note in Pittsburgh.  The PBX reported that J.C. Orr was the low general (at $45.6 million) on the $73.5 million new Altoona High School. That’s a good sign for the public market, at least in terms of the impact of rising prices on bids. News from distributors and specialty contractors suggests that more budgets may prove to be too low in the coming months. The bids on the $75 million Peters Township High School will be worth noting in that regard.

In the private sector, Burchick Construction was selected to build the $5 million Heights of Thorn Hill office building for Elmhurst Group. Champion Construction started construction on the 90,000 square foot Southpointe Fieldhouse. Volpatt Construction was awarded a contract for $3.5 million in renovations to Wean Hall/Doherty Hall classroom renovations at Carnegie Mellon. CMU also short-listed Mascaro and Mosites to determine the CM for the $45 million Health and Fitness Center project. DGA Construction has started work on the Refinery Condos, a 30-unit adaptive re-use of the former plant/warehouse at 2545 Penn Avenue that Joe Hardy is redeveloping. And the revised $15 million St. Clair Hospital central plant project has gone out to bid to PJ Dick, Landau, Mascaro, Massaro, MBM, Mosites, and Volpatt.

US Construction Up Again

The Census Bureau reported on February construction activity April 2 and the data showed a reversal of the recent trend in private/public spending. February’s construction totals reached a record $1.273 trillion (seasonally-adjusted), an increase of 3.1% over February 2017.  The AGC’s Ken Simonson noted that the increase was the result of a 5.5% jump in private-nonresidential spending. Spending declined in 12 of the 13 public construction categories, including the largest – highways and streets – which saw a drop of 0.1% from January and 5.1% from last year.
total us construction spending

The $80 million Peters Twp. High School has been released for bidding, due May 10. Bids are out on early packages at the AHN Wexford Hospital being managed by Massaro/Gilbane. CMU took proposals last week from Jendoco, Mascaro, Mosites, PJ Dick, and Rycon on its $45 million Health & Wellness Center – a renovation of Skibo Hall. Pitt selected A. Martini & Co. for its $3.2 million Thaw Hall renovation. The Steelers tabbed Mascaro Construction to build the $2.5 million expansion of Bud Light Pub 33 at Heinz Field. Turner Construction was awarded the 20,000 sq. ft.  build-out of Cozen O’Connor’s space in One Oxford Centre. Franjo was awarded the contract for the new Aldi’s in Greensburg. Nexus Construction has started work on the first of The Healing Center’s medical marijuana dispensaries in Monroeville and Washington. PA Turnpike Commission awarded Trumbull Corp. the $37.8 million contract for Section 55C1-2 of the Southern Beltway.

Construction Inflation Jumps Again

Bureau of Labor Statistics released information on February’s producer price index (PPI), which showed construction outpacing the overall inflation rate by a considerable amount. Year-over-year (y/y) the PPI for all finished products was up 2.8%. For construction the PPI increase for final demand rose 3.5%.

The AGC’s Ken Simonson noted spikes (note: no declines) in a number of categories. “Materials important to construction that had notable one- or 12-month price changes include diesel fuel, down 2.0% in February but up 38% y/y; lumber and plywood, up 4.4% for the month and 13% y/y; aluminum mill shapes, 2.9% and 12%, respectively; copper and brass mill shapes, -0.9% and 10%; gypsum products, 7.2% and 8.0%; and steel mill products, 2.3% and 4.8%. Among services important to construction, the PPI for truck transportation of freight rose 0.6% for the month and 5.6% y/y.”

feb ppi

In local construction news, CMU’s $45 million Health & Wellness Center – a renovation of Skibo Hall – has gone out for RFP to Jendoco, Mascaro, Mosites, PJ Dick, and Rycon. Construction of a temporary helipad is getting underway as the first phase of the $21 million emergency department renovation. MBM Contracting is the project’s CM. Stantec is the architect. And nearly 20 years of trying, word is that the $40 million Shannon Transit Village is moving forward. The 152-unit apartment with ground floor retail and a 375-car garage is being developed by Jim Aiello (JRA Development) and built by Mascaro Construction. A schedule for construction is not set, however.

Tech Keeps Driving

This morning’s Bureau of Labor Statistics report on February’s job creation blew the doors off the forecast. Employers created 313,000 jobs in February, at least 100,000 more than expected. It’s a reflection of small business confidence in the economy and a reaction to the lower business taxes. Here in Pittsburgh, construction keeps getting a boost from the rapid growth in tech jobs.

job creation history

Rycon Construction was awarded the $7.9 million fit-out for Argo AI, one of Uber’s competitors in the autonomous vehicle game, which is going into 3 Crossings. Dick Building Co. got a contract for about $1 million in renovations for a company called Robotany at the M. Berger Industrial Park in South Side. Robotany grows greens hydroponically and is expanding to put robotics to work planting, feeding and harvesting. Turner is reported to have the $120 million Pitt/UPMC Immune Transplant and Therapy Center, the conversion of the former Ford Building in Shadyside.

In more conventional construction news, Franjo Construction was awarded the $7 million A & L Motors BMW dealership in Monroeville. A permit was issued in McCandless to A. Martini & Co. for a $32 million McCandless Senior Living, being developed by CA Ventures at McCandless Crossing. Burns & Scalo Real Estate has its 150,000 sq. ft. , $34 million Riviera Office Building out to subcontractors for bid. And the $700 million UPMC Heart and Transplant Hospital at Presbyterian is going out for CM proposals (along with the UPMC Hillman Cancer Hospital) to four teams: Clark Construction/Dick Building Co., Massaro/AECOM, PJ Dick/Whiting Turner and Rycon/Skanska.

Correction note:

In the Spring edition of DevelopingPittsburgh, there was an error in the feature article, p. 14. The quote from Mike Coonley should read, “When we have the opportunity we will still put our hat in the ring. We don’t have a lot of available buildings or but we do have lots of sites.” Armstrong County EDC has 20- and 12-acre pads along with several other smaller lots at the 925-acre Northpointe business park. West Hills Industrial Park, at the intersection of SR28 and 422, has 185 acres with multiple sites available. 

Spring Bidding Season Heats Up

With budgeting going on for a few of the major projects in the region – including the $350 million Eye Institute at UPMC Mercy and the $220 million AHN Wexford hospital – the public bidding market is heating up as well. The Pittsburgh Builders Exchange is reporting that Reynolds Construction Management has set a March 21 bid date for the new $75 million Altoona High School project. The PBX also reports that the $27 million Westmoreland County Community College Founder’s Hall project will bid March 29. Bid schedules for the $80 million Peters High and $50 million Franklin Regional elementary schools haven’t been announced but will be hotly pursued when they are released.

In the private sector, CMU selected PJ Dick for its $20 million Posner Hall GSIA project. CMU’s Advanced Robotics for Manufacturing Institute $13 million tenant buildout at the Mill 19 in Hazelwood Green was awarded to Jendoco Construction. UPMC Health Plan selected TEDCO for the $2 million renovation of the 6th floor at its USS Tower headquarters. TEDCO was also awarded the $1 million Children’s Adolescent Medicine renovation by UPMC. Sentinel Construction is managing the construction of a new 59,000 square foot medical office and outpatient surgery center for Heritage Valley Health in Center Township, next to the Beaver Valley Mall. The project is part of the Bluffs at Glade Path being developed by Castlebrook Development. Rycon Construction was selected to build out the $9 million Chartwell Lab for UPMC at the former Industrial Scientific headquarters in North Fayette.

Commercial Real Estate Enthusiasm

Burns & Scalo Real Estate hosted a brokers luncheon Tuesday and its president, Jim Scalo, was exceptionally upbeat about the next few years. Scalo characterized 2016-2017 as slow years for transactions and decisions because of uncertainty surrounding the election and the ensuing Trump administration. Citing the Tax Cuts and Jobs Act that was passed in late 2017, Scalo explained that he had seen a dramatic upswing in activity since the start of 2018, both in terms of leasing and interest. His forecast was for a strong year for corporate and technology users in 2018, followed by at least two more great years. With the rapid pace of change in Pittsburgh’s economy, Scalo was reluctant to look beyond 2020, but he made it clear that there was no reason to expect a slowdown in 2021 or beyond.

Burns & Scalo is currently working to develop a 150,000 sq. ft. Class A Riviera office building in the Oakland/Pittsburgh Technology Center riverfront. Construction is scheduled for later this year, although the proposed riverfront zoning changes are a potential drag on the project. Burns & Scalo also plans to start a spec office in Robinson at its Boardwalk site, as well as Beacon II at the Abele Business Park in South Fayette.

Brokers at the luncheon echoed the enthusiasm Scalo had. Industrial brokers were beaming about deals pending in the Wheeling-to-Washington corridor and the airport area. One broker talked about the space at Nova Place, which was once thought to be a white elephant on the North Side, becoming scarce. With rents in the high $20s/sq. ft., Nova Place has succeeded in re-branding itself as a tech hub in high demand.

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Nova Place’s main concourse. Photo courtesy Perkins Eastman.

In project news, Mistick Construction was selected for the 183-unit, $30 million Solana at Cranberry project. CMU selected Landau Building Co. for the $3.5 million Warner Hall renovation. PJ Dick has started construction on the $6-7 million renovation of the former Cadillac dealership at Craft Place and the Boulevard in Oakland into offices. The developer, Walnut Capital, is said to have a single user for the project. St. Vincent University finalized its list of contractors for its $14 million library project. Jendoco, Landau, Mascaro, Massaro, PJ Dick, and Poole Anderson will be asked to propose on the project.