Shorenstein Properties closes on purchase of One Oxford Centre
January 22, 2016 11:24 PM
One Oxford Centre.
By Mark Belko / Pittsburgh Post-Gazette
A prominent San Francisco real estate investment company is promising to inject new life into One Oxford Centre after acquiring the distinctive Downtown skyscraper Friday.
Shorenstein Properties LLC closed on its purchase of the 45-story office tower little more than two months after the news broke that it had its eye on the property at 301 Grant St.
While no terms were revealed, the firm is believed to have paid about $149 million for the real estate, which features 879,000 square feet of Class A office space and 59,000 square feet of retail.
It marks the first acquisition in Pittsburgh for Shorenstein, which holds 24.8 million square feet of real estate nationwide, with properties in San Francisco, Los Angeles, New York, Boston, Chicago, Philadelphia, Denver, Houston and other cities.
In a press release announcing the purchase, the firm vowed to embark on a “comprehensive capital improvement program” that would include mechanical and building systems upgrades, and renovations to the lobby and common areas such as corridors and restrooms.
The goal, the company stated, is to “solidify the building’s position among the top tier of corporate addresses” in the Golden Triangle.
One Oxford, the third tallest building Downtown, appears to be in need of some help. Its office space currently is 19 percent vacant. Although the property was once a prime upscale shopping destination, much of its retail space is empty.
“It’s a great building. It’s a great location. It just needs somebody who’s going to put some money back into it. Everything I hear about [Shorenstein], that’s what they do and they’re good owners,” said Gerard McLaughlin, executive managing director of the Newmark Grubb Knight Frank real estate firm.
The sale ends the ownership of the building by Oxford Development Co., which built the aluminum, glass and granite skyscraper in 1983 during the city’s second renaissance.
It put the building up for sale in August, basing the decision on the strength of the Downtown real estate market and heightened interest from institutional investors.
“Oxford has been the proud owner of this iconic building since 1983,” said Steve Guy, its president and CEO. “By placing One Oxford Centre in the hands of a high-quality professional owner like Shorenstein, this sale allows us to realize the benefits of this over 30-year investment. We welcome Shorenstein to the Pittsburgh market.”
Oxford, which is headquartered in the building, will stay there, spokeswoman Megan Stearman said. The building also houses law, accounting and financial service firms.
Mr. McLaughlin called the new ownership a “big plus” for the building and the city.
The $149 million is probably a fair price, he said. It averages out to about $135 a square foot. That’s higher than the $119-a-square-foot PPG Place, another prominent Downtown office complex, sold for in 2011.
“It’s a trophy building for the city. Those kinds of buildings are being sold at that kind of price,” Mr. McLaughlin said.
One Oxford Centre was a joint venture between Oxford Development and the Edward J. DeBartolo Corp. It was designed by Hellmuth, Obata & Kassabaum, more commonly known as HOK.
In addition to the office and retail space, it features a five-level atrium that includes a food court, the 73,000-square-foot Rivers Club and an 840-space parking garage.
Shorenstein, founded in 1924, is the latest out-of-town investor to gobble up a prime piece of Downtown real estate.
Raleigh, N.C.-based Highwoods Properties purchased the six-building PPG complex near Market Square for $179.4 million. It has since launched a series of upgrades, including a new outdoor ice rink. It also bought the 32-story EQT Plaza on Liberty Avenue in 2012.
Other properties snagged by outside investors include U.S. Steel Tower, the city’s tallest building; the Liberty Center office tower and the adjoining Westin Convention Center Hotel; the Union Trust Building; and the former Macy’s department store building.
Shorenstein is making the acquisition through Shorenstein Realty Investors Eleven, a $1.22 billion commingled fund formed in 2014. The company was founded by Walter Shorenstein, an adviser to Presidents Lyndon B. Johnson, Jimmy Carter, and Bill Clinton who died in 2010.
Mark Belko: firstname.lastname@example.org or 412-263-1262.
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