The lease has an aggregate value of about $250 million. It has a 20-year term and calls for an expansion to 500,000 sf within five years, Andy Wisniewski, SVP in the local office of CB Richard Ellis, tells GlobeSt.com. He and CBRE colleagues Todd Cwynar, Dave Stevenson, and Anita Spano negotiated for the building owner, an entity of which Apollo Real Estate Advisors is the general partner.
"UPMC has been quietly staging about 60,000 sf of temporary space in the building," Wisniewski says. "It will move into the initial 200,000 sf over the next nine to 12 months."
The 64-story, 2.3-million-sf building at 600 Grant St. is Downtown's tallest. It was built for US Steel Corp. in 1970. Wisniewski says it is currently 82% occupied, and the initial UPMC move will take occupancy to 96%.
"This represents true absorption in the Downtown market," he says, where the class A office occupancy stands at about 85%. Asking rent rates for class A space in the submarket range from $22 per sf to $25 per sf. "The space UPMC vacates in Oakland will be absorbed by infill from the medical center," he adds. UPMC owns most of the facilities it is vacating.
It is also Western Pennsylvania's largest employer. In a statement issued prior to the official announcement, UPMC officials say, "This move to Downtown Pittsburgh will efficiently consolidate UPMC's corporate and administrative functions in one location and reflects UPMC's commitment to the city and the community."
At the announcement Jeffrey Romoff, UPMC president and CEO, says, "we believe our presence will help to promote the revitalization of downtown Pittsburgh." Government officials, including Mayor Like Ravenstahl and Dan Onorato, Allegheny County chief executive, also welcomed the move as a sign of the area's ongoing renaissance.
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