Downtown condo sales are going well in some spots, not so well in others
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Sitting area off the main room in a 151 First Side condo.
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With the first residents getting ready to move into the former Lazarus-Macy's department store, the Downtown condominium market has reached another milestone in its development.
But as the recession grows worse nationwide, there are signs the market for higher priced condos Downtown may be slowing even as bigger developers continue to profess confidence about the future of the city center as a residential neighborhood.
One who has lost her enthusiasm for the market is Holly Brubach, a former style editor for the New York Times.
Ms. Brubach purchased the Granite Building at Sixth Avenue and Wood Street next to the Duquesne Club in late 2005 with the intent of converting it into luxury condominiums -- six units for sale and two floors for her personal use.
But after three years of marketing with lots of nibbles and one sale that ultimately fell through, Ms. Brubach is now looking for a new use for the building.
She attributed the lack of sales to bad timing. "I mistook the condo market," she said.
Ms. Brubach said there was lots of interest in the units, which ranged from $700,000 for a "vanilla box" to $995,000 for built-out space. All were roughly 3,000 square feet.
"There were a number of people who looked at them. I think part of the difficulty was the size. From what I understand, successful units Downtown have been smaller than that," she said.
Price did not appear to be a problem, she said, adding that some potential buyers "couldn't get over how reasonable they were." Some thought parking was an issue, however.
Ms. Brubach, who lives in a rental in the Strip District, now intends to market the building, which has street-level retail space, for another purpose. She's not sure exactly what that will be just yet.
"I still haven't given up on the building. I think it's a beautiful building in a great location. I'm still optimistic I can make something happen," she said.
About a block away, at the former Lazarus-Macy's store, 34 of 60 luxury condos priced from $300,000 have been sold. Only six of those sales have come since August.
"Sales are a little bit slow because of the economy but the prospects aren't," said Lucas Piatt, executive vice president of developer Millcraft Industries.
"We still have a lot of walk-up traffic. A lot of people are interested in purchasing. A lot of people are reviewing contracts. At this time, we're still positive about it."
Millcraft has spent $65 million transforming the failed department store into condos, office and retail space. Mr. Piatt still sees Downtown as a strong market but said it is taking prospects longer to commit "because, obviously, people read the news every day."
"I don't think it's gloom or doom or anything like that. I think it's reflective of the housing market as a whole," he said.
"Obviously nobody is recession proof. But I think our buyers are recession-resistant. By no means do I feel interest has slowed or anything of that nature."
At the former Union National Bank at Wood and Fourth Avenue, 32 of 61 condos ranging in price from $190,000 to $1.2 million have been sold with contracts out on two more. Twelve units have sold since March 2007.
While David W. Bishoff, president of E.V. Bishoff Co. of Columbus, Ohio, acknowledged sales were very slow in December, he said volume has picked up dramatically since the first of the year.
While the 21-story building, now known as the Carlyle, isn't close to being filled, Mr. Bishoff is pleased with the progress to date.
"Typically in a development such as this, if you can sell a third before you open the doors, you're doing pretty well," he said. "The buying public isn't used to buying off a set of floor plans."
Mr. Bishoff is bullish enough on the Downtown residential market that he's planning to convert three other properties the company owns into housing at some point.
One of those is the 20-story Commonwealth Building on Fourth next to the Carlyle. He also has plans for apartments or condos in a seven-story building on Third Avenue and wants to build new housing in a parking lot on Fourth.
"Our first priority is to finish up the Carlyle, get the units sold," he said.
Carole Clifford, a real estate agent who is helping sell units in the Carlyle, said traffic Downtown is good. She said sales are on track or even ahead of expectations. "I still think Downtown is the hottest market in Pittsburgh," she said.
She won't get any argument from Kathy Wallace, vice president of Solara Ventures, a Philadelphia developer that has converted buildings at 941 Penn Ave., Downtown and the former Otto Milk building in the Strip District into condominiums.
At 941 Penn, all 17 units have been sold at prices ranging from $350,000 to $1.6 million, although two condos are now being resold.
Solara also has 22 of 56 condos in the Otto Milk building under contract, with prices ranging from $183,000 for a one bedroom to $1.3 million for a top-floor penthouse. The firm began marketing the units only last fall.
She has seen no evidence of a slowdown, joking, "I haven't taken a breath in the last month. It's been crazy.
"I don't know whether to have empathy or to get frustrated when I hear people say the market is down because I just don't see it," she said.
Ms. Wallace said sales have been "especially brisk" for condos priced in the mid-$200,000 to mid-$300,000 range. Interestingly enough, the cheapest condos in the Otto Milk building -- the $183,000 one-bedroom units with 773 square feet -- haven't sold yet.
At the new Three PNC Plaza building on Fifth Avenue, Howard Hanna has accepted deposits or agreements on five of 28 luxury condos since marketing began at the end of November.
The customized units start at $500,000 but those sold so far have been in the $750,000 to $800,000 range, said Helen Hanna Casey, president of Howard Hanna Real Estate Services.
"We're pretty excited about what we have so far," she said.
More than 70 percent of the units have been sold at 151 First Side condo tower on Fort Pitt Boulevard, where prices started at $200,000.
In November, Duquesne Light President and CEO Morgan K. O'Brien and his wife, Kathleen, purchased one of the penthouses on the 18th floor for almost $2.4 million, according to county real estate records.
If the economy has affected anything Downtown, the impact is being felt on the supply side. Few new condo projects are being launched because credit is so tough to get, said Hollie Geitner, Pittsburgh Downtown Partnership spokeswoman.
"But as far as demand, demand for Downtown living is extremely high," she said.
The partnership recorded 26 condo sales Downtown last year, with the average price for the units above $400,000.
Ms. Geitner expects sales at Piatt Place and the Carlyle to pick up now that units have been completed. "Now people can really see them. They're not going in and seeing something under construction."
Cindy Kamin, senior vice president and member of the national multi-housing group at CB Richard Ellis, isn't surprised that condo activity has slowed down somewhat given the economy.
But she added the Pittsburgh market as a whole is outperforming much of the country, with housing values appreciating while those in many other cities have dropped 10 to 15 percent.
Such stability can't hurt sales Downtown.
"At the end of the day, Pittsburgh is like a blue chip stock," said Ms. Clifford. "It appreciates three to four percent a year, no matter what."
First Published March 1, 2009 12:00 am
