NORTHEAST SNAPSHOT, JUNE 2007
Pittsburgh Retail Market
The Pittsburgh retail market is catching up with other retail markets across the country with the introduction of the city’s first lifestyle projects. These developments are making their mark in the Pittsburgh market, and large retail centers, combined with a large influx of residential development, have Pittsburghers looking at shopping and living from a new point of view.
Some of the new lifestyle centers include the 885,000-square-foot Cranberry Town Center in Cranberry Township, Butler County. Simon Property Group is developing the 770,000-square-foot retail component, which is slated for completion fall 2009.
Dominic Gigliotti is developing a 174-acre retail and residential “legacy development” in Wexford, Pine Township. The Village of Pine will boast up to 200,000 square feet of retail space and 499 residential units.
Bakery Square, located in Pittsburgh’s East End neighborhood in Allegheny County, will feature 132,000 square feet of retail space, 153,000 square feet of office space, 38 residential units and a 120-room hotel in an old Nabisco bakery complex. Walnut Capital is developing the complex, which hopes to benefit from the tremendous growth that has occurred recently in this area.
The Tanger Outlet Mall and Bass Pro Shop in Washington County, a 150-store outlet center near the new Meadowlands racetrack and casino, is currently underway, as is Faison’s Settler’s Ridge, a 580,000-square-foot retail development just minutes from Pittsburgh International Airport in Robinson Township in Allegheny County.
The Shops at Heritage Creek in Adams Township in Butler County is a 130,000-square-foot retail project currently under development from residential developer, Don Rogers, and Creative Real Estate; and RAR is developing the 28-acre, mixed-use Warrendale Village in Marshall Township in Allegheny County. The development features a 14-acre retail section.
Butler County is seeing even more retail development with the 250,000-square-foot Shoppes at Cranberry retail center at the intersection of Interstate 79 and Route 228 in Cranberry Township. Youngstown, Ohio-based Tom Petrarca is developing this retail center. The Streets of Cranberry, also in Cranberry Township, is a 108,000-square-foot, open-air retail center that Continental Real Estate opened recently.
The more active retail developers in the Pittsburgh market — Simon Property Group, Gigliotti Properties, Walnut Capital, Tanger, Petrarca Properties, Faison and Continental Real Estate — are introducing their centers to a market with vacancy rates for Class A space in the 6 to 7 percent range and rental rates ranging from $20 to $35 per square foot. Class B vacancy rates are closer to 9 percent and rental rates are averaging between $12 and $14 per square foot.
Retail developers are seeking out spaces surrounding Allegheny County, such as Butler, Westmoreland and Washington counties. Lower taxes and more readily available land are the primary drivers of this development. The recent announcement by Westinghouse Corporation to relocate to Cranberry Township with a need of up to 1 million square feet of office space is the main impetus for the retail surge in Cranberry, while the new casino license awarded to the Meadowlands racetrack was the catalyst for the Tanger project in Washington County.
Submarkets that will possibly be tapped in the near future due to the tremendous growth in the Pittsburgh MSA (population of 2.4 million) are Murrysville in Westmoreland County, the downtown Pittsburgh area, pockets of Washington County, and the Cranberry, Jackson Township and Zelienople areas of Butler County.
Pittsburgh’s growth has retailers jumping at the chance to open new locations in this thriving retail market. A 144,000-square-foot Nordstrom opened at the Ross Park Mall in Ross Township, Stein Mart opened at the McIntyre Center in McCandless and Gordon Food Service has the construction of several new locations underway. Coldwater Creek, White House|Black Market, Kirklands, and Christopher and Banks have all opened new stores at The Streets of Cranberry. On the food side — Sausalito’s, Cinco De Mayo, Tijuana Flats, Chipotle and Taco Del Mar have entered the Pittsburgh market.
The Golden Triangle in downtown Pittsburgh is currently undergoing an absolute residential living transformation, with thousands of condos and apartments hitting the market in the near future. This influx of 24-hour living will be an incredible driver of the retail market. Mixed-use developments like Piatt Place (50,000 square feet of retail space and 65 condominiums) and 3 PNC Plaza (a 23-story mixed-use tower) are welcome sights to a city that never really experienced a healthy residential life in its downtown neighborhood. The unique and creative apartment complex at The Cork Factory, a 400-unit project developed by local businessman Chuck Hammel, is now accepting its new residents, and will also feature approximately 50,000 square feet of neighborhood retail space. And finally, the Pittsburgh Cultural Trust is planning a $470 million development in the area between the famed Cultural District and the Allegheny River. This project is mostly residential in its make-up and will provide an even greater contribution to the 24/7 lifestyle that will require new and creative retail projects.
— Gregg Broujos is a principal at NAI Pittsburgh Commercial.
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