NAIOP panel sizes up Pittsburgh market
Pittsburgh Business Times
Tim Schooley, Reporter
Wednesday, November 14, 2012
Zac Vuncannon, a director for USAA, wasn’t expecting for his company’s first real estate investment in the Pittsburgh market to be as sought after as it was.
When the San Antonio-based insurance and financial conglomerate bought the two-building Park Place Corporate Center in North Fayette last year, Vuncannon said it was more to provide the local title company it owned here room to grow, expecting the remaining space would gradually fill in over time.
“Almost overnight, Williams stepped up,” said Vuncannon of the Tulsa-based oil and gas firm that quickly leased most if not all of its vacant second building. “We’ve seen first hand these energy companies coming in.”
He later added: “We have invested in Pittsburgh so we obviously believe in Pittsburgh.”
Vuncannon’s anecdote was just one shared last evening at a panel discussion of national site consultants and capital markets professionals at the NAIOP Developers’ Showcase at Allegheny Center that sought to gauge where Pittsburgh’s economy and real estate market stands in the national market and where it can improve.
The panel included the kinds of real estate professionals it has in the past, including Dean Barber, principal of a Plano, Texas-based site selection and economic development firm; Eugene Canale, a Pittsburgh native who now is a principal of Minnesota-based site selection firm Hickey & Associates; Will Hearn, principal of Site Dynamics, and a specialist in working with renewable energy and manufacturers; and Bruce Rutherford, an international director of Jones Lang LaSalle who leads the company’s global energy practice.
But this year the event also brought in the kind of money people that help guide major real estate deals. Along with Vuncannon, that included Kim Adamek, a director of acquisitions for CBRE Global Investors; Dan Moore, a managing director for Hines, Tim Wang, a senior vice president and head of investment research and strategy of Clarion Partners.
After the guest panelists received a daylong tour of the market, the panelists saw more strength than weakness, noting Pittsburgh’s rebound.
“One of the things that I fond very surprising to me having not been in Pittsburgh for 20 years was the wow factor that Pittsburgh was really changed,” said Rutherford, describing it as a Silicon Valley of the Midwest for energy. “It really is a neat place that will attract younger people. At the end of the day, that’s the most important thing.”
Wang and Moore both saw Pittsburgh as rising in prominence as an investment market, to varying degrees.
Beyond the country’s major markets of New York, Boston, Washington, D.C., Chicago and Los Angeles, Moore doesn’t see Pittsburgh in quite the same league as some of the other top cities among second tier such as Austin and Seattle yet. But expects it will be in the next 10 years.
As the discussion turned to how much values have increased in the country’s top metros, which he described as super core markets, Wang sees Pittsburgh as a second-tier market that is seeing investment interest.
“Pittsburgh is definitely on the list,” he said.
Also discussed were a host of other issues related to development, such as the region’s tax policies, the importance of education, public incentives and organized labor.
The region, as well as the state, did face some criticism.
Hearn saw the state as a whole lacking in pad-ready sites. But he also saw what he described as “remarkable” brownfield development in the region and state.
Tim Schooley covers retail, real estate, small business, hospitality, arts and entertainment, government and media. Contact him at firstname.lastname@example.org or (412) 208-3826.
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