Scott Schroeder and his partner visited Pittsburgh last spring to investigate a possible deal on a portfolio of hotel properties and ended up leaving with their heart sold on the city and a landmark building Downtown.
That initial attraction produced tangible results last week when Greenway Realty Holdings, Mr. Schroeder’s company, purchased the former Salvation Army building and an adjacent parking lot Downtown for $2.8 million.
Mr. Schroeder, a Greenway principal, said the New Jersey-based commercial real estate company is evaluating a couple of options for the property but the intent right now is to convert it into a boutique hotel with a “Pittsburgh-centric concept.”
Greenway has been working with the Strada architectural firm on possible options for the building, which sits on Third Avenue and the Boulevard of the Allies near the Art Institute of Pittsburgh. Another possibility is a residential reuse, Mr. Schroeder said.
“Right now that’s sort of a secondary focus,” he said.
The former headquarters of the Salvation Army of Western Pennsylvania fell into Greenway’s lap after two previous deals to sell the building fell apart. MinSec Companies, a suburban Philadelphia firm that provided counseling services to help prisoners make the transition out of jail, was unable to complete a purchase in 2011. Two years before that, Cleveland-based Polaris Real Estate Equities had an agreement to acquire the property but ended up backing out.
Mr. Schroeder said he and his partner, Victor Afonso, “literally stumbled” across the property last spring while in town scouting out the hotel portfolio deal. That deal never materialized, but the two fell in love with the city and the circa-1920s Salvation Army building, which features a chapel, a cafeteria-scale kitchen and a gym.
Both liked the architecture and felt the property “had the ability to be turned around and brought back to life. We pursued it for a while and finally were able to close on it on Friday,” Mr. Schroeder said.
Greenway envisions a boutique hotel with 125 to 130 rooms at the location. It hopes to make a firm decision on a use in the next month or two.
The only hotel the company currently owns is the Distrikt Hotel in Times Square in New York City, a property Mr. Schroeder said it rebuilt from the ground up. The spelling is a nod to the city’s Dutch origins and every three floors in the 155-room boutique hotel are dedicated to a different NYC neighborhood.
Greenway’s other holdings involve flex space, office and distribution properties.
The former Salvation Army building marks Greenway’s first acquisition in the region, but Mr. Schroeder noted that his company is open to others.
“We’re not looking at any particular project but we definitely will consider others,” he said. “We were thrilled by the city and intrigued by what we see as a lot of potential there. It’s a great city.”
Handling the sale for the Salvation Army was Dan Sliger, vice president of the CBRE real estate firm. The property was first listed for sale in 2007, at a time the Salvation Army was seeking between $5 million and $6 million for it. The building has been vacant since the agency moved its Western Pennsylvania headquarters to Carnegie several years ago.
Mark Belko: email@example.com or 412-263-1262.