The hottest property type in the market (aside from natural gas projects) remains multi-family. Five years after the housing crisis started it remains more difficult to buy a house than normal conditions, yet the need for housing increases more each year. With big financing chasing apartment projects all over the country the conditions are right for an apartment boom – and later an apartment glut of course. For 2012 it appears the number of multi-family units started will be up over 25% and here in Pittsburgh there is a wave of apartments also breaking.
Last week’s announcement by Massaro and Dawson Co. of a 320-unit apartment at the South Hills Village transit station marked yet another of a string of similar projects. With a day or so, NRP Group from Cleveland was identified as the developer interested in the Warrendale Point site for another 300-plus units. That brings the number of units in the pipeline for 2013-2014 – of projects over 100 units – to over 3,500, of which fewer than 400 have started.
Another announcement that helped the market was that Morgan Management was finalizing negotiations to acquire the apartments that Nationwide Insurance developed through Continental Communities almost 15 years ago. Morgan had expressed interest in having 2,000 or more units in Pittsburgh and was looking at a number of new construction sites. This aquisition may change that strategy and keep the market from getting saturated quite so fast, but an overbuilt apartment market still looks likely by 2015. With home ownership getting easier to accomplish, a tipping point looms with higher rents and lower interest rates that will require only more reasonable lending conditions to trigger. Look for that spark to occur next year, maybe as quickly as the spring buying season.
The contracting market remains unspectacular now. After a minor post-Labor Day surge, bidding has slowed again. Two projects of interest are out. The first is the $15 million Rosenbaum Family House job down at WVUH, a project that has to happen to allow the $250 million Ruby Hospital expansion to occur. WVUH has invited Landau, MBM, G. A. Brown and Volpatt to bid on Oct. 4.
The other interesting job is a new WalMart at the Northern Lights Shopping Center site in Economy on Route 65. With retail still struggling in the U. S. , Pittsburgh remains a countercyclical market, with low vacancy rates and new construction. WalMart scaled back plans for new stores again this year but after opening one in North Huntingdon earlier, they have moved ahead with another in the area. The Economy project bids on Oct. 10 with Adena, dck, Carlson, Fiore, L. Keeley, Pike and Tri-C invited.