A year after PNC Financial Service Group announced plans to build a $400 million skyscraper Downtown, another office tower could be in the works less than a block away.
Oxford Development Co. is considering the construction of an office high-rise in the block of Smithfield Street between Forbes and Fifth avenues if it can find a tenant to partner in the venture.
The proposed tower would replace a seven-story office building the company owns at the site. As an alternative to the high-rise, Oxford is considering extensive renovations to the existing space in an effort to attract new tenants and boost occupancy.
Oxford expects to make a formal announcement Thursday. In an advisory emailed Monday, it said it would be unveiling "350 Fifth," which it described as a "new revitalization project in the Fifth and Forbes corridor."
"Oxford Development Company is holding a press conference on Thursday ... about the company planning a major revitalization project in Downtown Pittsburgh that will kick off later this year," Mark Grasso, the firm's director of corporate communications, said in a statement.
He declined further comment.
While few details were available Monday, Oxford, according to sources, intends to market the site for a new office tower totaling as much as 30 stories tall and some 600,000 square feet.
If it is successful, it would demolish the existing building to make way for the new complex. The other option under study is to extensively upgrade the current structure, built in 1917 and renovated in 1985.
The 213,015-square-foot building is slightly more than three quarters empty. Allegheny County's Area Agency on Aging, part of the department of human services, occupies 37,684 square feet of space on portions of the second and third floors. Ground level retail includes a First Niagara Bank and a Sbarro Pizza.
County Executive Rich Fitzgerald said he has been told that Oxford is considering a "couple of different options" for the site, including the possibility of a new office tower.
"I think the good news is that there's such a demand for Class A office space in Downtown that we do have developers who are interested in making these types of investments," he said.
The vacancy rate for top-of-the-line Class A space in the central business district was a very low 6.9 percent in the first quarter, according to the Grubb & Ellis real estate firm. The overall vacancy rate for all types of space was 17.4 percent. As a result of short supply and high demand, Class A rental rates increased by 33 cents to $25.95 for the quarter.
Oxford's interest in a new high-rise or extensive renovations to 441 Smithfield comes at a time when U.S. Steel and several energy companies are considering Downtown and other locations for their headquarters.
U.S. Steel is considering a move from its longtime home at U.S. Steel Tower to the suburbs or perhaps another location Downtown. Chevron and Shell Oil Co. also are looking for more space in the region and are said to be considering Downtown as part of the mix.
Oxford Development is not new to skyscraper building. It was a key player in the city's second renaissance, the developer behind the 45-story One Oxford Centre on Grant Street, one of Downtown's most distinctive buildings.
PNC, meanwhile, is planning to build the world's greenest skyscraper on Wood Street between Fifth and Forbes. The 33-story office tower should be ready in June 2015.
Mark Belko: firstname.lastname@example.org or 412-263-1262. First Published May 22, 2012 4:00 AM