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Price for PPG Place could be $200 million
Thursday, July 01, 1999 By Dan Fitzpatrick, Post-Gazette Staff Writer
The Hillman Co., an investment company headed by Pittsburgh billionaire Henry Hillman, is expected to close today on its purchase of PPG Place, paying between $180 million and $200 million.
The sale of the 1.57 million-square-foot office and retail complex would be the largest commercial real estate transaction Downtown since 1984, when the 64-story USX Tower sold for $293 million.
PPG Industries Inc., the paint and glass maker that built the neo-Gothic complex in 1984 and now occupies one-half of the 40-story One PPG Place building, will remain in the complex under a long-term lease.
Grubb & Ellis Co., which manages and leases the complex, brokered this deal for PPG. Before Hillman confirmed its interest in the complex two-and-a-half months ago, Grubb & Ellis had been marketing PPG Place nationwide. After the sale, Grubb & Ellis is expected to remain as property manager and leasing agent.
Hillman is purchasing PPG Place under the name of affiliate Market Associates. At $180-$200 million, Hillman is getting a good price, said Jack Norris, chairman and CEO of CB Richard Ellis/ Pittsburgh.
The price could have been higher, but Hillman agreed to give PPG Industries a reasonable rental rate over the next 15 years and options to take space beyond that.
For Hillman, the real estate alone will cost more than $180 million, but the value of property inside the complex, such as furniture, may drive the total to about $200 million.
Hillman, which co-developed Fifth Avenue Place on Stanwix Street and Liberty Avenue, sold a sizable chunk of its real estate portfolio five years ago to a partnership called WCB Properties that includes Wall Street investment house Goldman, Sachs & Co. and former Hillman executives Coleman Benedict and Michael Chase.
Despite the portfolio sale, Hillman still has 20 holdings nationwide, including a large office complex in Boston called International Place and 4,000 acres of land near Jacksonville, Fla., that it plans to use for new homes and golf courses.
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