3 Crossings Phase 2 (And other office news)

Oxford Development recently announced that it was going to move its office later this year to 25,000 square feet in the Riverfront West Building at 3 Crossings, almost coincidental to the news that Honeywell was taking 25,000 square feet of the former Bosch leasehold at 2555 Smallman Street. Today, Oxford made the first of what may be several big announcements on the second phase of 3 Crossings, confirming that Smith & Nephew was taking 45,000 square feet of the Stacks at 3 Crossings building. The $16.5 million Stacks core and shell is under construction by Rycon.


Rendering by Perkins Eastman.

Oxford also released more information about the full next phase of 3 Crossings, which will be located along Smallman Street and AVRR, between 28th and 29th Street. A design/build team of Mascaro Construction and Indovina Associates will be delivering a $16 million multi-modal center with more than 600 parking spaces. Including the two-building Stacks project (which is a rebuilding of the Packaging Corporation of America’s former buildings), 3 Crossings Phase 2 will have six office buildings totaling 600,000 square feet. Rycon Construction will also be building the 178,000 square foot 2 Hopper Place office building, which is being designed by WTW Architects for construction later this year.

Steve Guy, Oxford’s CEO, said that the heightened demand from users had surprised them, even though Oxford expected the project to move quickly. Guy suggested that another two or three office buildings, plus the multi-modal center, could be under construction by early 2020.

3 Crossings was developed in anticipation of the growth of the AI/robotics/autonomous vehicle industries in Pittsburgh and the landing of Petuum, Argo AI and Bosch proved that concept correct. The Smith & Nephew lease shows that trend still has legs.

Oxford’s announcement came 24 hours after Carlow University and Elmhurst Group broke the news that they had come to an agreement on the development of a 225,000 square foot office building in Oakland on Fifth Avenue at Craft Place. Elmhurst’s Bill Hunt explained that the rapid expansion of technology and medical innovation in Oakland drove the decision to proceed with the building, which will be directly across Fifth Avenue from the 10-story Innovation Research Tower being developed by Walnut Capital.

In construction news, F. J. Busse was awarded the $3.5 million renovation of the 20th floor of the Federated Investors Tower. A. Martini & Co. has started work on the $12 million Buchanan Ingersoll TI at the Union Trust Building. Wildwood Country Club chose the team of R. A. Glancy and HHSDR Architects & Engineers to design/build its $4 million expansion/renovation. Franjo Construction broke ground on the $2.5 million new Jaguar dealership for A & L Motors in Monroeville. MBM Contracting started work on the $3 million-plus renovation of the Asbury Heights patient wing in Mt. Lebanon.


Pittsburgh Jobs Bump

Department of Labor data this week showed Pittsburgh’s seven-county unemployment rate dipped to 3.6%, which is lower than the national rate of 3.8%. That’s the lowest since February 1970. Even more encouraging in the data was the estimate that Pittsburgh’s workforce grew by 8,000 in February, the second straight month of increased workforce. The Pittsburgh economy has been creating more new jobs each month than the net growth numbers, but the rapid retirement rate was consistently dragging the numbers down. Attracting population – and thereby workers – has been a major stumbling block for the region’s business attraction efforts. Let’s hope two months becomes a trend.

pgh y-o-y jobs

One of the job creators in Pittsburgh, Facebook, is taking bids on the buildout of its 105,000 square foot VR space in District 15 in the Strip. Proposals are due from Burchick Construction, RDC Design + Build and Turner on April 5. RDC is also out to bid for subcontractors on its next building, the 260,000 square foot + 387-car garage District 15 Beta.

ConstructConnect is reporting that Carl Walker Construction was the low bidder on the Washington County Courthouse Square Parking Garage and Plaza renovations, at $8.5 million or $13.4 million depending on options selected. DiMarco Construction was the low general on the $6 million Gill Hall Elementary School addition. Volpatt Construction was selected for the $1.2 million West Penn Hospital ERCP project.

College Work Keeps Coming

The impending crisis for higher education is a real thing. There is a demographic cliff coming in the next five years that presents an existential threat to colleges and universities that aren’t prepared or positioned properly to deal with the shrinking enrollment. This problem is a major reason why you’re seeing Robert Morris proactively reorganize its colleges and curriculum. The good news for Pittsburgh is that the major higher ed institutions in the region are already well-positioned; and there capital spending belies the coming slowdown for colleges.

Pitt has issued an RFP for architectural service for its $100 million Center for Human Performance, part of the $400 million Victory Heights athletic complex. Pitt is also interviewing four finalists for its $100 million One Bigelow Square project and will put the $70 chilled water plant out for CM proposals soon. PJ Dick has started construction on the $30 million renovation/expansion of the Graduate School of Industrial Administration at Carnegie Mellon, one of six major projects in preconstruction or underway at the campus. Penn State has issued a request for letters of interest for A/E firms for its $92 million Liberal Arts Research & Teaching Building.


Massaro Corp. is putting the new $5 million, 21,000 square foot Best of Batch Clubhouse out to bid. Massaro was also successful on a $1.5 million AHN neuro renovation at St. Vincent Hospital in Erie. MBM Contracting has started construction on the $9 million GI Lab at Allegheny General Hospital. MM Marra Construction is underway with the $2 million expansion of Pusadee’s Garden in Lawrenceville.  Turner Construction was awarded the $6 million Braskem USA lab renovations at the Pittsburgh Technology Center and a $3 million fit-out for Facebook at CMU. 

Check out the March/April BreakingGround to see what big data will mean for construction.

Big Office Development News

Two big office developments made the news last week, both on the fringe of the Golden Triangle. Projects like these, and the boom in the Strip District, show the potential for the central business district to burst its traditional boundaries.


Gensler rendering of the $100 million Lower Hill development.

The developers of the former Civic Arena site revealed their plans for a $100 million mixed-use development that is far closer to reality than expected. The Cuccini/Pollin Group unveiled details of the project, which includes 810,000 square feet of office, 190,000 square feet of retail, 50,000 square feet of entertainment, and a 220-room hotel. The first office is rumored to be a mid-rise with a corporate HQ tenant as a lead. Names like FNB and Peoples Gas have been linked to the project.

Intergen Real Estate Group will be responsible for the residential phases of the Arena site, led by KBK Enterprises, the Keith Key company that has redeveloped former Housing Authority of City of Pittsburgh communities in the Hill and is currently working in Larimer.


Trammel Crow’s proposed office and hotel development west of Station Square. Rendering by Hord Coplan Macht.

Trammel Crow announced plans for three office buildings, totaling 400,000 square feet, earlier last week. The project will develop along East Carson Street, just east of Station Square and immediately behind the Glass House apartments that Rycon Construction is building for Trammel Crow now. Plans also include a new hotel. The first of the buildings will be branded Glass Works and will be 120,000 square feet. The other buildings will be dubbed Bottle Works and Forge Works. Trammel Crow is working on landing a lead tenant now, but has not ruled out going the speculative route. No CM has been hired.

Franjo Construction was awarded the $10 million Friendship Hub at the Allegheny Center Alliance Church on the North Side. Franjo also started construction on the $20 million conversion of the Commonwealth Building into 150 apartments. The Mascaro/Barton Malow team was selected by Pitt to build its $90 million Student Recreation Center. Turner Construction was awarded the $14 million Ostermayer Lab at Penn State Greater Allegheny Campus in McKeesport. Penn State has its $310 million College of Engineering buildings out for CM proposals, to be awarded in May.

The Airport Revealed

The Allegheny County Airport Authority unveiled the first views of the developed design for the terminal modernization program last week. The $1.1 billion project will proceed in 2 major pieces. One includes the new parking garage, ground transportation center, car rental center, and related facilities, for which the ACAA is working with Turner Construction to award a CM contract. The larger piece will be the landside/airside terminal work, which includes a new terminal building, for which PJ Dick/Hunt AECOM have been selected. No contracts for construction management have officially been awarded.

Pittsburgh International Airport. © ACAA

The roadway and enabling packages are scheduled to get out to bid around year’s end, with bids hoped for on building packages by mid-2020.

The bid market continues to be competitive. Bids came in last week on the North Allegheny McKnight Elementary. As was the case with the Franklin Elementary, the $17 million total of the apparent low bidders was below the published estimate. Nello Construction was the low general. Nello was also low on both the Franklin Regional elementary bids from the week earlier, which came in at or just below the overall $55 million estimate.

In follow up on some other projects, Landau Building Co. was selected for the $1.4 million Sarah Heinz House job. Rycon Construction was selected to provide pre-construction CM services for the proposed $1 million Carnegie Library of Homestead – Phase 1 Renovations. Bear Construction will be building the new 45,000 square foot facility for KTA Tator in the RIDC West in Findlay Township. Massaro Corp. is taking bids for its GMP on Washington Presbyterian Church.

Commercial Project News

The strong Pittsburgh economic performance is driving an upswing in spec office projects. While Oakland, the Strip and Second Avenue have received most of the publicity for spec commercial activity, the suburbs aren’t dead yet. Construction just got underway on a two-building spec office project called The Boardwalk in North Fayette Township. The $55 million, 220,000 square foot development is being built by Burns & Scalo Real Estate Services. It has landed a tenant for the first building and will follow through with the second building after that is completed. Burns & Scalo is looking at other land in the Airport Corridor for additional spec development.

190124_BW 1+2_View 1 (WO SIGN)

The Boardwalk. Image courtesy NEXT Architecture.

Following up other commercial projects that have been bid, Franjo is doing pre-construction on the $20 million-plus conversion of the Commonwealth Building into apartments Downtown. Rycon Construction was awarded the $7 million addition to the Sunrise Assisted Living in McCandless.  C & C Contractors was awarded the $22 million expansion of the Cemetery of the Alleghenies, near Southpointe. Burchick Construction was awarded a $4.5 million contract by General Services Administration to renovate the Weis Courthouse on Grant Street. The MEP packages are out to bid for the new $150 million Children’s Hospital at WVU Medicine in Morgantown. Yates Construction is the CM for that project. Wildwood Country Club invited Burchick Construction, R. A. Glancy, GoGreen Construction and Wm. Miller’s Sons to submit design/build proposals on its $4 million renovation/expansion.

Some Surprising Results

The final tally of housing starts in Pittsburgh found several surprising changes from 2017, and the trends of the previous five years or so. Most notable among these was the steep decline in construction of new multi-family product. After five years of at least 2,100 new apartment or condo units, construction of new multi-family in the metropolitan Pittsburgh market fell 52.3 percent to 1,234 units. As has been true during the past decade, the preponderance of these new units were started within the city of Pittsburgh. There were 584 multi-family units permitted in the city proper, nearly half the total for the region.



Another trend that broke in 2018 was the output of townhouse or other attached homes. Driven by empty-nesters and first-time buyers, townhome construction has been supported by the demographics of Pittsburgh and the scarcity of single-family detached homes priced under $250,000 to $300,000. Both of those drivers were stronger in 2018, but construction of new single-family attached homes dropped 23.6 percent, or 244 units. There is little or no evidence that demand for townhouses declined, other than anecdotal evidence that younger buyers aren’t entering the market or aren’t interested in entering by the townhouse route. It’s likely that the decline, like with detached homes, stems from the lack of lots and new development.

The bright spot for residential construction in 2018 was the traditional single-family detached home, which saw a 11.3 percent increase to 2,193 units. The 222-unit jump from 2017 nearly offset the decline in attached homes.

There were a couple of other interesting notes in the housing data. In the more active communities, there were more new homes than during the past few years. The municipality with the most new single-family homes, Pine Township, saw 162 new detached homes get underway. That’s the most new homes started in any municipality since before the Great Recession. And there were four communities with at least 100 new homes. There were zero apartments built in any of the top ten communities for single-family homes. And while apartment construction slowed, the City of Pittsburgh still had the most new residential units by far, with 673 units overall and 89 single-family dwellings.

There was a surprise in the public bid market last week as well. Bids were opened for the Franklin Elementary School additions and alterations in North Allegheny. The project was expected to come in around $30 million but the apparent low bidders totals were less than $24 million. That’s a pleasant surprise for the owner, especially if there were alternates that can add to the scope of work for the project. There is a second project out to bid at NA that should be in the $20+ million range and two projects of very similar size out at Franklin Regional School District. The results give an early reading as to how the K-12 market is responding to what is otherwise a busy construction industry. You can view the apparent low bidders at the Builders Exchange.

In unofficial construction news, Massaro Corp. was selected as CM for the $60 million Conemaugh Hospital Building B expansion in Johnstown. Turner Construction was tabbed for the $125 million 1501 Penn Avenue tower and Franjo Construction was successful on the $40 million Arsenal apartments second phase. Construction on the latter two still has a ways to go.