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An artist’s rendering of the office building planned by Highwoods Properties at SouthSide Works.
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Highwoods Properties plans a smaller building in hopes of attracting a tenant

Highwoods Properties plans a smaller building in hopes of attracting a tenant

If at first you don’t succeed, go smaller.

That’s what Raleigh, N.C.-based Highwoods Properties seems to have in mind with its plan for a new 107,000-square-foot Class A office building on the Monongahela riverfront at SouthSide Works.

For the last two years, Highwoods, the owner of PPG Place and EQT Plaza Downtown has been marketing a much larger 158,000-square-foot office building within the complex next to the Hofbrauhaus restaurant.

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But landing the anchor tenant needed to start construction of that six-story riverfront building has proved to be elusive. That led Highwoods to try a different tack — offer plans for a second, smaller building just a stone’s throw away.

With the smaller footprint, the company hopes to have a better chance of getting the new building off the ground, said Andy Wisniewski, vice president of Highwoods in Pittsburgh.

That’s because the firm, a real estate investment trust, is prepared to start construction if it is able to pre-lease just one floor of the building, Mr. Wisniewski said. It would build the rest on speculation.


(Click image for larger version)

“This allows us, if we can find a user, to have a quicker start up,” he said.

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The smaller building would be erected on a parcel of land between the Hyatt House Hotel and an American Eagle Outfitters building. It would feature 20,000-square-foot floor plates and an all-glass curtain wall design fronting the Mon river.

Mr. Wisniewski said Highwoods has been in discussions with prospective tenants but has not secured any commitments.

Gerard McLaughlin, executive managing director of the Newmark Grubb Knight Frank real estate firm, said the strategy makes sense. “You have less space you have to lease. If they only need a floor [leased] to kick it off, it makes it much easier to do that,” he said.

Mr. McLaughlin added that there are a number of office users looking for space in the 20,000-square-foot range or below.

Pittsburgh, Mr. McLaughlin noted, is a “kick-the-tires” kind of city, meaning that potential tenants like to see the building and space they would be renting before committing.If Highwoods is able to erect the 107,000-square-foot building with only one floor pre-leased, that could make leasing the rest easier.

“Once it is up and built, it stands a much better chance of leasing up and being successful, especially with how tight the office market is Downtown and along the fringe,” Mr. McLaughlin said.

Highwoods is still marketing the larger building, which would be located next to Hofbrauhaus. It would include 30,000-square-foot floor plates, terraces, a restaurant, locker rooms, and bike storage among its amenities.

The two buildings are part of a four-building package Highwoods is planning at SouthSide Works under an agreement with the Soffer Organization, developer of the 34-acre retail, residential, office, and entertainment complex.

A third also would be built on the riverfront near Hofbrauhaus. The fourth would be built at Sidney and 28th streets.

Mark Belko: 412-263-1262 or mbelko@post-gazette.com.

First Published: December 13, 2016, 5:00 a.m.

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An artist’s rendering of the office building planned by Highwoods Properties at SouthSide Works.
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