Unidentified buyer acquires two Downtown properties for $8.35 million
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A mystery buyer paid $8.35 million for two more Downtown properties Wednesday, giving it control over virtually an entire block of Wood Street between Forbes and Fifth avenues.
Kimross Real Estate LLC paid $4,175,000 each for the buildings, one at the corner of Wood and Fifth across from the Capital Grille restaurant and the other at 318-20 Fifth, which represents about half of the building that now houses a Rite Aid store.
In August, the same company bought a building at 444 Wood for $700,000. It followed three other acquisitions in the block. In May, Carol Jean Management LLC purchased the vacant Lerner's of New York store, with entrances at 306 Fifth and 440 Wood, for $3.1 million.
About a month later, Autonomous Investors LLC acquired two buildings at Forbes and Wood for $3 million and put tenants on notice that they would have to leave.
The purchases appear to be the work of a single buyer, or perhaps a group of buyers working in concert, as part of a broad assemblage for redevelopment purposes.
While the true identity of the buyer is not known, many in the real estate community believe it is PNC Financial Services Group, which opened its Three PNC Plaza office building near the affected block earlier this year.
All three companies making the purchases were incorporated in Delaware within two months of each other in 2009. All also are using Langholz Wilson Ellis, a Downtown real estate firm, as their mortgage agent. In fact, J. Keefe Ellis, a Langholz principal, is listed as vice president of Kimross in documents filed Wednesday in Allegheny County's real estate department.
With the latest acquisitions, the buyer controls nearly all the property on the east side of Wood Street between Fifth and Forbes. The footprint stretches up Fifth and Forbes to Warner Centre.
The only properties still needed to fill in the missing pieces are three Urban Redevelopment Authority properties on Wood near Forbes and, presumably, the other half of the Rite Aid building.
If completed, the assemblage would total more than 25,000 square feet -- big enough to erect a large Class A office building.
Kimross paid more than $1,000 a square foot for the properties acquired Wednesday, making the transactions perhaps the largest in Pittsburgh history.
According to sources, Herky Pollock, an executive vice president of CB Richard Ellis/Pittsburgh, represented Marx Realty and Improvement Co. of New York, a management firm for the partnerships that sold the two properties, in the transactions. He declined comment Wednesday.
Mr. Ellis could not be reached for comment.
In some ways, the acquisitions appear to bear PNC's fingerprints. The company, for instance, worked with Langholz Wilson Ellis on the property transactions needed for the Three PNC project. In addition, PNC has essentially filled up its portion of space in the new office tower, which it shares with the Reed Smith law firm and the Fairmont Hotel.
The block of Wood Street in question also is adjacent to PNC's headquarters Downtown, making it a prime spot for expansion.
Asked if PNC was the buyer, spokesman Fred Solomon replied, "That's all speculation and we don't comment on speculation." As for whether the bank was running out of space Downtown, Mr. Solomon said, "I would say that we have the space we need at this time."
Other names that have been tossed about include Point Park University, which has acquired numerous properties near the center of its campus at Wood and Boulevard of the Allies, and U.S. Steel, which now has offices in the U.S. Steel Tower on Grant Street. Point Park has denied being the buyer and U.S. Steel has said it does not respond to rumors or speculation.
Yarone Zober, Mayor Luke Ravenstahl's chief of staff and URA board chairman, said Wednesday night he does not know who the buyer is. He said no one so far has approached the URA about buying its Wood Street properties.
Nonetheless, he added the URA is ready to discuss a sale.
"If it's development that's good for Pittsburgh and good for Downtown, then absolutely. That's why we're holding onto these properties. We're willing to entertain reasonable offers on these properties as long as we know the project will make Pittsburgh and Downtown as great and as good as they can be," he said.
He added he has heard talk of a possible office or retail development at the site but has seen no definitive plans.
Whatever the future reuse, the buyer does not appear to be in any hurry to get it started. Tenants at the newly acquired building at Fifth and Wood said Wednesday they have been told the buyer would honor their leases, one of which runs another 31/2 years.
"I heard [a sale] could happen. If it does, I heard they won't rush us out of here," said John Vazquez, owner of Black and Gold Forever at Fifth and Wood.
First Published December 16, 2010 12:00 am