A private equity real estate fund from New York has paid $4.25 million for a Downtown building that has a storied past.
Now known as the Lawyers Building, the art deco structure on Forbes Avenue caught the eye of King Penguin Opportunity Fund, a company that owns nearly a dozen properties in New York City and plans to invest more than it paid into its new Pittsburgh property.
“We’re trying to bring New York hip and cool to Pittsburgh,” said Michael Mikelic, King Penguin fund manager.
The acquisition of the 25-story building is the fund’s first in Pittsburgh. Mr. Mikelic said he and partner Edward Rivadeneira studied new markets to enter and settled on the Steel City for a number of reasons, including the diversity of the economy, the growing Marcellus Shale industry, the architecture and the proximity to New York.
“We liked the market,” he said.
King Penguin, with close to $100 million in assets, has big plans for the building located along Forbes at Cherry Way, near Macy’s. One is to change its name back to Pittsburgher, which is what it was called when it opened in 1928 as a hotel.
In its 37 years of operation, the 400-room Pittsburgher was considered one of the city’s top hotels, a frequent haunt of politicians, sports figures, celebrities and show business notables.
Among those who stayed there were Franklin Delano Roosevelt, boxer Jack Dempsey, golfer Arnold Palmer, actor Lon Chaney and Ed Sullivan. Robert Kennedy and former city mayor David L. Lawrence once met in the building. Mr. Mikelic believes the basement harbored a speakeasy during Prohibition.
The hotel was closed in 1965, its owner citing monthly losses of $12,000. It was sold the next year for $775,000 and converted into office space.
In addition to the name change, King Penguin will spend in excess of the purchase price to upgrade the elevators and interior. It plans to convert two floors into flex office space and is studying the idea of adding a rooftop deck. The developer also intends to create a separate entrance into the building’s basement, where it plans to open a restaurant, perhaps one with ties to New York City. The new owner also will be upgrading the signs and is thinking about hiring an artist to paint a large mural on the wall facing Grant Street and the City-County Building.
King Penguin has teamed up with local architect Rob Pfaffmann to make the improvements. Mr. Mikelic said the property has “a stigma of being a tired building,” thus one reason for the many upgrades.
The building currently is less than 80 percent occupied. King Penguin would like to boost that to 90 percent or higher and to move it from a class C building to class B.
Mr. Mikelic said the Lawyers Building might not be his company’s only acquisition in Pittsburgh. The fund, which has rented an apartment Downtown, is considering other real estate investments. “We are looking for other opportunities in the Downtown market,” he said.
First Published: February 6, 2015, 5:00 a.m.
