Oxford Development Co. is pitching a revised plan for a new office tower Downtown — 20 stories instead of 33 with a soaring 18-foot-high lobby and a host of eco-friendly features.
Dubbed 350 Fifth, the new high-rise would be built on the west side of Smithfield Street between Forbes and Fifth avenues, replacing an existing Oxford-owned building, which would be demolished.
For two years, the developer has been debating whether to renovate the nearly vacant building at 441 Smithfield at a cost of $40 million or build a new 33-story high-rise at the site. But it was unable to secure the anchor tenant needed to make the latter work.
Wanting to leave its own imprint on Downtown’s resurgence, it has now settled on a third option — a striking 20-story glass and aluminum tower envisioned for multiple tenants.
In its marketing materials, Oxford touted the new building as the “most efficient Class A high-rise in Pittsburgh” with a “smart” design intended to make the space more cost effective for its users.
The 521,000-square-foot project is expected to cost $190 million to $200 million. In addition to the office square footage, Oxford is planning street level retail and restaurant space and underground parking for more than 100 vehicles.
While lease rates are expected to be high because of the new construction, Oxford is trying to sell prospective tenants on open floor plans and a raised floor system under which there would be room to run data and telecommunications cables and components related to the heating and air conditioning.
The goal of the design is to enable tenants to utilize the space they are paying for in the most effective way, thus lowering the overall cost of occupying it.
On a website set up to market the project, Oxford stated the high-rise would allow tenants to utilize 92 percent of the space they are renting compared to an average of 76 to 80 percent in other Class A buildings in the Pittsburgh market.
Oxford declined comment Thursday. The Post-Gazette learned of the revised plan after viewing the project’s website. Details and videos relating to the proposed high-rise can be found at www.350fifthpittsburgh.com. Only a few weeks ago, the site was still marketing the 33-story skyscraper and the $40 million renovation.
The website makes no reference to the building renovation project, a sign that Oxford has dropped that idea.
Among other amenities, the new 20-story building would feature LED lighting, waste recycling, eco-friendly cleaning techniques, and lighting controls.
In addition to a virtual tour of the building, the website shows videos touting the city as a whole, an indication that Oxford not only is trying to attract prospective tenants in the region but those from other states as well.
The Oxford high-rise would represent the third new office building under development Downtown.
PNC Financial Services Group is building its new headquarters, the 33-story Tower at PNC Plaza, on Wood Street between Forbes and Fifth, to be completed next summer. All of that space will be used by PNC employees.
Less than a block away on Forbes, Millcraft Investment is erecting the 18-story, $103 million Gardens at Market Square office, hotel, and retail complex. It currently is marketing up to 128,000 square feet of office space to potential users.
The revised Oxford project is being pitched at a time when top-of-the-line Class A space is becoming increasingly scarce Downtown, with an occupancy rate of 93.1 percent, according to the Newmark Grubb Knight Frank real estate firm.
Gerry McLaughlin, Newmark Grubb executive managing director, said Thursday the market is “as ripe as it’s ever been in the past 10 to 15 years” for new office construction Downtown.
But he added the big drawback remains the high rental rate that would have to be charged to tenants to pay for the space. He estimated it would have to be at least in the mid $30 range per square foot when the going rate for existing Class A space Downtown is $28.16 a square foot.
“My only question is whether the market is ready to pay that high of a rental rate. It’s not going to be an inexpensive building to build and therefore the rental rate is going to be pretty high,” he said.
The efficiencies touted by Oxford could make a difference, he noted, but he wondered whether the savings would be enough to offset the cost.
“There is some credence to what they’re saying but it’s still going to be a high number at that,” he said.
On the other hand, there are few options for tenants looking for more than 100,000 square feet of space in the Golden Triangle.
“It’s probably as good as a market as we’ve seen in quite awhile for a new building to come out of the ground,” Mr. McLaughlin said.
Mark Belko: firstname.lastname@example.org or 412-263-1262.