Chicago developer eyes Downtown Art Institute building
March 27, 2014 10:08 PM
The Art Institute of Pittsburgh building on the Boulevard of the Allies, Downtown.
By Mark Belko / Pittsburgh Post-Gazette
A Chicago developer dipped its toe into the Downtown real estate market for the first time last year when it purchased the Federal Reserve Bank on Grant Street. Now it looks like it’s ready to lay down more roots.
M&J Wilkow Ltd. appears to be close to completing a deal to buy the nine-story building on the Boulevard of the Allies that houses the Art Institute of Pittsburgh.
No terms have been disclosed.
If the developer closes on the transaction, it would mark its second purchase Downtown in the last eight months.
In July, M&J Wilkow bought the Federal Reserve Bank for $3.75 million, with the goal of either turning it into a boutique hotel or a Class A office complex. In November, it sold the 220,000-square-foot property to St. Louis-based Drury Hotels, which is converting the building into a 180-room Drury Inn and Suites. It is expected to open in late 2015.
Martin Sweeney, vice president of asset management for M&J Wilkow, declined to comment on whether the developer had the Art Institute of Pittsburgh property under agreement.
But he added that his firm is actively searching for opportunities in Pittsburgh.
“We continue to have a strong interest in acquiring real estate property in and around Downtown Pittsburgh. We think very highly of the market dynamics and we would be interested in furthering our holdings there,” he said.
Devra Pransky, an Art Institute spokeswoman, said she could not comment on any pending real estate transaction or confirm that M&J Wilkow was the buyer.
But both she and Tyler Gronbach, another spokesperson, said that the Art Institute intends to remain in the building even if it is sold.
The Jones Lang LaSalle real estate firm began marketing the 177,508-square-foot property for sale earlier this year on behalf of the struggling Education Management Corp., the Art Institute’s parent company.
Although it did not disclose an asking price, Jones Lang LaSalle stated that the property would be 100 percent leased by the Art Institute through a leaseback transaction. The school would consider a leaseback term of up to two years with another one-year option, it added.
At the time, EDMC, which has been dealing with financial problems and lawsuits, was promising to fully guarantee the lease, which was to include a $1.9 million base rent in the first year with an annual 2-percent increase.
Mr. Gronbach would not say whether such terms were part of the proposed deal.
“In terms of what has or hasn’t been agreed to, we can’t speculate on what that might be, but our intention is to remain in the building after it is sold,” he said.
The building, built in 1920 and renovated in 1999, includes office, classroom and laboratory space.
M&J Wilkow and Big Shopping Centers USA also own the Waterfront shopping complex in Homestead, a property they paid more than $110 million for in 2012.
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