Walnut Capital has run out of room to build at Bakery Square. But that won’t stop the developer from expanding.
The Shadyside-based developer has purchased the Matthews International building at 6515 Penn adjacent to Bakery Square with plans to lease it as office space.
“We feel this is an opportunity for the Bakery Square complex to continue to grow,” said Todd Reidbord, Walnut Capital president and founding partner.
Matthews International, a North Shore-based company that makes funeral products among other things, has owned the building for several decades. As part of the deal, its offices will remain at the site for a short period of time before relocating.
The purchase comes as Walnut Capital is in the middle of work on Bakery Office Three, a nine-story office building on the Shadyside end of the sprawling complex. That development gobbled up the last of the space available for new construction at Bakery Square.
Mr. Reidbord said the two-story Matthews building will add 60,467 square feet and about 100 parking spaces to Bakery Square. Walnut Capital paid about $12 million for the property.
“We think it’s a great complement to everything else we’re doing over there,” he said. “It’s a hugely key acquisition for us.”
Walnut Capital plans to rename the property Bakery Office Four. It shares a common party wall with part of Bakery Square.
The building currently houses Matthews business units, according to marketing materials. As part of the sale, Matthews was agreeable to relocating if given a reasonable time to do so.
According to a statement from Matthews, the sale of the building closed last week. “Matthews International continuously evaluates our real estate portfolio so we can make the best use of our space, bring teammates together and modernize facilities to help us better serve clients, collaborate and be a better place to work,” said Ann Wilson, senior director of culture and people strategies, in an emailed statement.
Ms. Wilson said employees at the site will be relocated to other Matthews offices in the region. “There are no impacts on employee jobs or changes to our business,” she said.
Walnut Capital hasn’t started marketing the office space yet but Mr. Reidbord expects interest to be strong. He said there are always inquiries from firms looking for space in and around Bakery Square.
The Matthews property will join the three other office buildings, 350 apartments, 52 for-sale townhouses, a hotel, retail, and two parking garages spread over 20 acres on both sides of Penn at Bakery Square.
About 1, 250 employees of Philips Sleep and Respiratory Care will move into Bakery Square Three in fall 2020 when that building is finished. Philips is relocating its headquarters from Murrysville.
Mr. Reidbord said a little under 100,000 square feet of office space is available for lease in that building.
Bakery Square, which sits on the Larimer-Shadyside border, also is home to Google’s Pittsburgh headquarters, as well as UPMC, Carnegie Mellon University, and University of Pittsburgh offices. It houses 15 tenants overall.
The site is part of the old Nabisco plant, which Walnut Capital acquired in 2008.
In 2013, the developer added the Reizenstein School to the portfolio, paving the way for Bakery Square 2.0 on the Shadyside side of Penn Avenue.
The Jones Lang LaSalle real estate firm marketed the Matthews building for sale.
Mark Belko: mbelko@post-gazette.com or 412-263-1262.
Updated at 5:21 p.m. on Oct. 1, 2019
First Published: October 1, 2019, 6:44 p.m.
