Regus paid an undisclosed nominal sum to lease the business center. Under the agreement, Regus will manage the center, make capital improvements and procure tenants for the space. The business center houses 33 offices and three conference rooms. It also features an on-site receptionist to answer phones, greet visitors and provide administrative support; a business café with wireless internet; and a furnished reception area.
Barry Layton, who manages Penn Center East on behalf of LG Realty Advisors, tells GlobeSt.com that there has long been a business center in building one, but tenants for the space had fallen off in recent years. "Having the amount of space we have in the park and the number of buildings, sometime years ago the owners decided it was a good idea to have this space so we could accommodate tenants of all sizes," Layton explains. "It had kind of gotten worn down and wasn't doing very well. When I came here, I embarked on a mission to get Regus to look at the property and consider coming out here. It took about a year, but we were able to finalize the transaction."
This is the third Regus property in the Pittsburgh area. The company also operates space downtown on the 43rd floor of the One Oxford Plaza building at 301 Grant St. and space west of the city on the third floor of Foster Plaza Building five at 651 Holiday Dr. Layton points out that Regus taking the new space to the east of the city helps round out their presence in the Pittsburgh area.
According to Layton, the deal was beneficial for both Regus and the property owners, a partnership of New York City-based Investcorp Real Estate Group and Fort Lauderdale, FL-based Gumberg Asset Management Corp.
"It was good for Regus because the business center was an existing concern, so they had some base of operation," he says. "With their expertise and their network all around the country and the world, they've already begun to put tenants in there that we wouldn't have been able to do on our own. We look at them as a real asset to Penn Center East, because they're the expert in that business and will certainly make the center a viable concern. And having the center there will continue to enable Penn Center East to accommodate tenants of virtually any size."
Penn Center East is a mixed-use development that comprises seven class A office buildings totaling 625,000 sf, more than 300,000 sf of retail space and a 241-unit luxury apartment building. The property was developed by locally based Soffer Organization between 1964 and 1982, with the retail component being added in 1999. In April 2007, the commercial aspects of the property were sold to Investcorp and Gumberg for $71 million.
Specific terms of the transaction were not disclosed. Calls to Regus seeking comment were not returned as of press time.
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