Station Square, Downtown Pittsburgh tower for sale
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The new year probably will bring a new owner for Station Square, the 34-year-old entertainment, dining, retail and office complex perched along the bank of the Monongahela River.
Cleveland developer Forest City Enterprises, which has owned the South Side complex since 1994, has hired the CBRE Inc. real estate firm to market the 669,800-square-foot "one-of-a-kind" property for sale. It has not set an asking price.
Station Square is not the only property Forest City is looking to shed in the Pittsburgh market. The developer also has engaged CBRE to sell Liberty Center, a 27-story office tower it has owned since 1986, and the adjoining 618-room Westin Convention Center Hotel, Downtown.
Forest City spokesman Jeff Linton said CBRE has just begun the marketing efforts for the Westin and the 526,000-square-foot Liberty Center, home to Federated Investors.
Given the strength of the Pittsburgh office market, "Now is a good time to look at the potential sale of that asset," he said.
Mr. Linton said the company decided to put Station Square and the other properties up for sale as part of a year-old strategy to focus on major markets -- New York, Boston, Washington D.C., Los Angeles, Dallas, Denver and San Francisco -- where it has a significant presence.
In "legacy" and "non-core" markets like Pittsburgh, "we're looking for the opportunity to sell at the right price," he said.
Included in the Station Square sale are the Landmarks Building, home to the Grand Concourse restaurant and office tenants; the Commerce Court office and retail complex; Bessemer Court, which includes a dancing water feature and restaurants like Hard Rock Cafe and Joe's Crab Shack; the Freight House Shops, which houses restaurants, shops, and the Bradford School; and the East Warehouse, with a mix of night spots.
The ground lease to Station Square's newest attraction, the Pittsburgh Riverhounds soccer stadium, also is part of the sale, as are the property's 3,464 parking spaces. The only real estate Forest City plans to retain within the complex is the 399-room Sheraton Station Square hotel.
CBRE began offering Station Square for sale late in 2012. The sale already has received "a lot of interest" from local and national investment groups, said Jeffrey Ackerman, incoming managing director of CBRE's Pittsburgh office.
"We're moving with a lot of cautiousness and making sure we get the right interested parties to the table," he said.
Forest City bought Station Square, a former Pittsburgh and Lake Erie railroad terminal, from the Pittsburgh History & Landmarks Foundation in 1994. In 1998, it acquired the Sheraton.
Four years later, it completed a $25 million, 104-room expansion to the hotel and the $25 million Bessemer Court project that brought Hard Rock and other restaurants and the 100-foot-wide fountain synchronized to lights and music to the center of the complex.
Most recently, Station Square added the soccer stadium and is preparing to open Texas De Brazil, a Brazilian-American steakhouse, or churrascaria, whose waiters go table to table with skewers of fire-grilled steak, sausage, lamb, chicken and other meats for diners.
Mr. Ackerman said the offices in the 379,144-square-foot Commerce Court building, with tenants like U.S. Bank and Wesco International, are fully occupied, while those in the 82,688-square-foot Landmarks Building are 80 percent filled.
While Forest City is most interested in selling Station Square and the Liberty and Westin properties, Mr. Linton said it might be willing to be part of a joint venture if a potential buyer is interested in such an arrangement.
"I think our preference is to sell, but we're open to other options," he said.
Peter Sukernek, vice president and general manager of Howard Hanna Commercial Real Estate Services, said Station Square may have been hurt by development on the North Shore and Downtown in the last few years but is still a strong property.
"It remains an excellent location," he said. "The hotel is a destination hotel to a lot of people who come here from out of town. That area has always been a bustling place. It has always been a tourist area. The soccer stadium, I would think, is a major amenity to that area. I think it's a nice property."
No timetable has been set for selling either Station Square or the other properties. Mr. Linton said Forest City would not sell any of them if the price isn't to its liking.
"It's not a fire sale," he said.
The Mall at Robinson, which Forest City also owns, is not for sale. Forest City has decided to retain its portfolio of regional malls throughout the country, Mr. Linton said.
First Published January 3, 2013 12:32 am