Developer signs deal to build office buildings near Pittsburgh International Airport
June 13, 2014 12:45 PM
Oxford Development Co. is planning to build two higher-end flex office buildings near Pittsburgh International Airport.
By Mark Belko / Pittsburgh Post-Gazette
Office buildings are going up faster than airplanes in the Pittsburgh International Airport corridor these days.
The latest is a 16.2-acre, one- or two-building flex office development on Industry Drive in Findlay being planned by Oxford Development Company.
Allegheny County Airport Authority board members approved a 50-year lease agreement with the Downtown developer Friday to build on land adjacent to the Thermo Fisher Scientific building.
Oxford is considering two options for the property — either one large 95,000-square-foot class A flex office building or two smaller ones, said Shawn Fox, director of business development.
Either way, it plans to start construction by the end of the year and have the space ready for a tenant by next summer, he said.
If two are built, the first would total about 50,000 square feet. A second building, about 45,000 square feet, would be erected after Oxford finds tenants for the first. It would be built within 30 months.
Oxford initially planned for two buildings, but is holding open the option for a single larger one because there are several potential big users in the market that might be interested in such a facility, Mr. Fox said.
It plans to build on speculation, meaning without a signed tenant. Mr. Fox said Oxford is comfortable doing so because of the strength of the market and the demand for office space.
“There’s a lot of growth in the Parkway West market past the [Interstate] 79 interchange, and there’s been a movement to this class A flex office space because it’s a little bit cheaper of a price point, because of the efficiency factor for tenants,” he said.
Oxford will pay $95,000 in the first year to lease the land, with the amount increasing over the course of the 50-year agreement.
The project will be Oxford’s first in the airport corridor, although the developer is looking for “other opportunities,” Mr. Fox said. It also has been expanding its presence in the Pittsburgh market lately, with an apartment project at SouthSide Works on the South Side and an office and residential development in the Strip District.
“We just really like what is going on in the Pittsburgh market. We see continued strength and growth, not only in multifamily but in commercial office space,” Mr. Fox said.
The Oxford project is the latest example of a development boom in the airport corridor, which only several years ago was filled with vacancies.
Burns & Scalo Real Estate Services is erecting a 60,256-square-foot, $12 million office building on the other side of Industry Drive at McClaren Road on eight acres of land and has signed a tenant for half the space.
Continental Real Estate Companies and Chaska Property Advisors are developing four office buildings near Cherrington business park. Two have been completed and leased, and a third is under construction with tenants signed. Construction of a fourth is expected to start in September.
DiCicco Development Inc. has completed construction of the new 130,000-square-foot Westpointe Corporate Center Four in Moon. Calgon Carbon Corp. will take 75,000 square feet of space there for its headquarters.
Jeffrey Ackerman, managing director of CBRE’s Pittsburgh office, said companies have started to migrate to the airport corridor as space has tightened at Southpointe in Washington County and in Cranberry.
As the economy improves, many companies, he said, are looking to upgrade the quality of their space. He doesn’t expect the demand to lessen.
“I don’t think it’s peaked at all. I think it will continue to grow. We’re going to see some significant deals announced over the course of this year,” he said.
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