One of America’s hardest hit cities since the global recession hit is Pittsburgh, Pennsylvania. A news bite just the other day tells of just how deeply the city’s properties have been hit too. The US Steel Tower, the tallest building on the Three Rivers, is apparently on the rocks and slated for sale too. If ever there were an barometric needle. Much depends on who moves in, maybe Google will buy the place?
The Pittsburgh Tribune reported Friday on Five Mile Capital Partners’ situation as fund managers for the tower’s investors – basically the fund’s debt is not being repaid – a restructure seeming evident. Area Property Partners, the New York firm that owns a big chunk of the Steel Towers estimated $228 million in loans, failed to get an extension last Fall – the necessity for restructuring or sale being likely. But the 64 story tower built back in Pitsburgh’s heyday in 1970 represents a bit more than someone’s balance sheet statistic – it is indicative of a great city’s plight.
Pittsburgh’s plight since the “wonder years” of big steel is well known. And the city’s resilience despite catastrophic industry loss and job sector devastation are to be noted too. After all the home of the Pittsburgh Steelers is notorious for being able to take it on the chin. November’s whopping 35% drop in home sales is just another poke at an otherwise indestructible town too. Despite such horrible numbers jobs in Pittsburgh are actually stable, even getting better say some. And looking at the Steel Tower deal from another barometric symbolism stance, a sale or restructure may be a tipping point of sorts?
There is some glimmer of hope on Pittsburgh’s horizon, a Clear Capital assessment of city real estate markets recently indicated Pittsburgh as one city set to climb out, at least a bit, from the lowest home prices on record. And too, following very smart people into markets, it looks like Pittsburgh may become something of a new tech hub – Google has just doubled their office space at Bakery Square (image below) at Eastside to nearly 100,000 square feet. And where Google goes, others including success are sure to follow.
In Pittsburgh, like everywhere else, investors and the average guy on the street are looking for signs. And the signs seem good for Pittsburgh from projected hotel revenue for 2011 to expansion in the commercial real estate market, could indicate the bottom has been reached, and a rebound is in progress. US Steel’s Tower does point up after all. Pittsburgh is certainly one market that has to be scrutinized carefully. When the real estate balloon does being to fill with air again, the prudent investor will make a killing. Take note of Google, they don’t tend to lose.
For information about leasing office space in the US Steel Tower, those interested can visit the official Winthrop Management site.