Somera Road Takes Majority Stake in SouthSide Works; Plans Major Upgrades, New Development

PITTSBURGH— New York City-based commercial real estate investment and development firm Somera Road, Inc. has acquired the majority interest and operator status of the troubled SouthSide Works property here.

Somera Road acquired the defaulted loans on the property in October 2018, took title of the property in June 2019 and closed on the majority and controlling ownership this month, replacing its prior capital partners.

As the new owner and operator of SouthSide Works, Somera Road is now offering a new vision, and plans to invest more than $37 million in capital improvements, as well as more than $130 million in new development on the property and riverfront parcels.

SouthSide Works is a mixed-used development located in Pittsburgh’s South Side neighborhood. Located on the site of the former J&L Steel Works site, the 34-acre property opened in 2004 with national retailers and restaurants. While some key tenants remain and thrive, the property fell into financial distress over time, with many storefronts remaining vacant. The property was long over-retailed, with limited office and apartment offerings, as well as a lack of convenience and neighborhood-oriented retail offerings, Somera Road states.

SouthSide Works currently houses approximately 280,000 square feet of retail space and approximately 180,000 square feet of office space and 83 multi-family residential units. The company is currently improving common areas and restrooms in the office space and upgrading residential units with new stainless appliances, new flooring and an improved lobby.

Somera Road says that its new vision for the property calls for a strong mixed-used approach. SouthSide Works  will be repositioned with more experiential concepts, more food and beverage, more amenities, and an entertainment-driven, community engagement-driven mix. Somera Road has engaged CBRE’s property management team and its office and retail leasing teams to assist with new leasing initiatives.

“SouthSide Works is a microcosm of Pittsburgh whereby it is a blue-collar steel mill site that has been transformed into an upscale mixed-use development. The initial response to the change in ownership and our collective vision and plans for repositioning has been very strong and well exceeded our expectations,” says Herky Pollock EVP of CBRE.

Two new office leases have recently been signed, and a half dozen new retail leases for community-focused and amenities-based tenants are currently being added and will be announced soon. The new tenant mix will include offerings where the community in and around South Side Works can find daily necessities and conveniences, in addition to new food and beverage and retail options.

Somera Road has also tapped Strada Design to lead the design of the capital improvement plan, dedicating more than $37 million to property updates. The updates will include the reimagining of SouthSide Works main town square and thoroughfares, expanded green space options, way-finding, adding public art and dog and children play areas, and connecting the complex more effectively to the riverfront and trails. The Urban Redevelopment Authority of Pittsburgh has also approved the assignment of development agreements of riverfront parcels to Somera Road, which the company plans to develop in various functions that include waterfront multi-family residential and office space concepts as well as community parks and green space.

In addition to improving the current condition of the property, Somera Road is converting the SouthSide Works Cinema to an innovative and creative office space, titled “Box Office.” The plans convert the theater space into 77,000 square feet of class A modern steel and glass, which will offer prime office space geared toward forward-thinking tech and creative tenants.

Somera Road’s vision for Box Office adds an estimated 500 people to the daily traffic on the property, offering an added incentive for its new retail tenant mix. Somera Road has engaged the Kansas City, MO-based team at HOK Architecture for initial work on the design and concepting of Box Office and plans to begin work on the project in the summer of 2020.

Somera Road is also investing in the development of Pittsburgh’s first Container Park concept.

Somera Road is also planning to develop a riverfront luxury residence and office space. The group plans to add approximately 230 multi-family units and approximately 200,000 square feet waterfront office space. Plans to develop this space are still in process and will be announced later this year, according to Somera Road.

“Somera Road is showcasing every aspect of what makes the city so special and bringing it to life. By creating access, supporting innovation, and creatively activating every aspect of SouthSide Works, we’re creating the city lifestyle experience that Pittsburgh deserves,” says Ian Ross, Somera Road’s principal and founder.

Since its inception, Somera Road has acquired more than $1.5 billion in real estate totaling approximately 16 million square feet across 49 unique markets. The company’s current portfolio of work includes the Nashville, Memphis, Kansas City, Minneapolis, Las Vegas, Pittsburgh, and Indianapolis markets, among many others. The firm owns office buildings, retail projects, multifamily rental apartments, industrial properties and hotels.

In addition to its New York City headquarters, Somera Road also has offices in Pittsburgh, Cleveland, Kansas City and Nashville.