Mine Safety Appliance Co. owns the business park. On condition of anonymity, an area broker tells GlobeSt.com the price of the land was $14 million. Wells has an option on an adjacent 23-acre parcel that would allow expansion of up to 1.2 million sf.
Dallas-based Trammell Crow Real Estate Development & Investment Inc., now an independently operated subsidiary of CB Richard Ellis, is developing the three-building, 770,000-sf complex, which will be owned by Wells REIT II. Westinghouse has signed a 15-year lease for the facility under an agreement that begins with completion of the second phase of the project.
Phase one calls for a five-story, 440,000-sf central building to be completed in mid-2009, followed by a second phase containing two four-story buildings of approximately 160,000 sf each that will flank phase one. They are scheduled for occupancy in mid-2010. The construction cost for both phases is $180 million.
This culminates a seven-state, two-year site search, conducted for Westinghouse by a team in the New York City office of the Addison, TX-based Staubach Co. Drew Saunders, senior managing director of Staubach corporate services, tells GlobeSt.com, "The aggregate net value of the lease is $220 million, and, with operating expenses and taxes, it's closer to $360 million." He says, equipped with the identification of the land, the building plan and projected costs, Staubach put the package out for bid, and Wells was the successful bidder.
Other key members of the Staubach team are James Koster, managing principal of capital markets, and Ann Marie Woessner, SVP of business and economic incentives. They were involved in negotiating incentives for the project among municipalities in all seven states and in the ultimate lease negotiation here. Jeremy Kronman, EVP at CB Richard Ellis/Pittsburgh LP, represented Wells REIT II in the lease negotiations.
According to published reports, the state's incentive package to win Westinghouse was about $100 million. As GlobeSt.com previously reported, Gov. Ed Rendell signed legislation allowing for Strategic Development Area designations, primarily aimed at keeping Westinghouse in Pennsylvania. Like Keystone Opportunity Zones, SDAs provide for generous tax abatements, but unlike KOZs, do not have to be in blighted areas.
"This is the best example of Pittsburgh's resurgence in the engineering, technology and manufacturing sector," Kronman tells GlobeSt.com. "The resurgence in medical and financial fields is well known, but hidden behind that is its regained strength in engineering and technical sectors." He also says, and Jeff Goggins, managing director of TCC's Conshohocken-based Northeast territory, confirms that this facility is being designed for LEED certification.
Goggins tells GlobeSt.com his company has been involved with MSA in four other buildings in the Cranberry Woods complex. Groundbreaking for the first phase of the Westinghouse complex will take place next month, he says.
This will be Wells REIT II's second property in Metro Pittsburgh. It also owns 2000 Park Ln. in North Fayette Two. "This is going to be a true class A corporate campus that should serve Westinghouse and our investors well for many years to come," says Jeff Gilder, chief investment officer of Well Real Estate Funds, in a statement. A Wells principal could not be reached by deadline.
"Our new facility will be highly efficient and cost competitive, enabling us to better serve the need of our customers and the nuclear power industry well into the future," says Tony Greco, SVP of human resources and corporate relations for Westinghouse, in a statement.
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