Another California company has jumped into the Pittsburgh real estate market in a big way.
Los Angeles-based CBRE Global Investors has completed its acquisition of the 27-story Liberty Center, a prominent Downtown office tower that is home to Federated Investors.
The purchase is the first in Pittsburgh for CBRE Global Investors, a large real estate investment firm with $87.9 billion in assets under management as of Sept. 30.
No price was disclosed, but the acquisition is believed to be in the neighborhood of $98 million.
CBRE Global Investors is the second big California real estate firm to gobble up a prime piece of Downtown real estate in the last year.
Last January, San Francisco-based Shorenstein Properties LLC paid $148.7 million to buy One Oxford Centre, one of Downtown’s most distinctive skyscrapers, with plans to invest as much as $50 million more in improvements. It also has been pushing the limit on rents, asking for as much as $34 a square foot for space — an unprecedented rate for an existing office building in the Golden Triangle.
For years, CBRE Global Investors paid little attention to the Pittsburgh market. But that has changed recently with the rise of eds and meds and the emergence of a knowledge-based economy fueled by the likes of Google and Uber, said Mike Burrichter, a principal in the business.
“It has never been a target market. It is a target market now,” he said. “It is one of the success stories for renewal in the Rust Belt. It has turned the corner from being a steel town to a more service-oriented city.”
The firm is acquiring the building at 1001 Liberty Ave. from Greenwich, Conn.-based Starwood Capital Group, which paid $135 million in August 2013 in a deal that included the adjacent Westin Convention Center Hotel. The hotel is not part of the CBRE purchase.
Mr. Burrichter said Starwood did a good job in making improvements to the skyscraper, which is 85 percent occupied. As a result, CBRE is not planning extensive renovations but does intend to upgrade an exterior courtyard.
The firm rates Liberty Center as “one of the top five buildings” Downtown. It also likes the skyscraper’s location, given the growth that has been occurring in the adjacent Strip District.
“I love the downtown. It reminds me of sort of a miniature Chicago. There’s a lot of stuff going on Downtown. It’s a walkable downtown,” Mr. Burrichter said.
The fact another large out-of-town institutional investor is buying property in Pittsburgh shows the strength of the market, local real estate brokers said.
“I think it speaks well of our market that a global investor like this whose business is real estate is purchasing a building in our market,” said Dan Adamski, Jones Lang LaSalle managing director.
Starwood put Liberty Center up for sale less than three years after buying it. Mr. Burrichter couldn’t say how long CBRE intends to hold on to the real estate. “We like to think of ourselves as smart investors and that means selling at the right time. I don’t know that we can put a timetable on it,” he said.
Mark Belko: mbelko@post-gazette.com or 412-263-1262.
First Published: January 6, 2017, 5:00 a.m.