Liberty Center, a prominent Downtown office tower, is back on the market less than three years after being acquired by a Greenwich, Conn.-based global investment firm.
Starwood Capital Group has hired the CBRE real estate firm and HFF Pittsburgh to assist in the sale of the 27-story office tower, home to Federated Investors, whose name is at the top of the building, as well as other tenants.
No asking price is listed in an executive summary obtained by the Pittsburgh Post-Gazette.
Starwood acquired the office high-rise at Liberty Avenue and Grant Street from Cleveland developer Forest City Enterprises in August 2013 in a $135 million deal that included the adjacent Westin Convention Center Hotel.
The 616-room hotel is not being offered for sale this time around.
Liberty Center is the latest of several prominent Downtown office buildings to hit the market in the last year and a half.
Oxford Development Co. put the 45-story One Oxford Centre up for sale in August and ended up selling it to San Francisco-based Shorenstein Properties for $148.7 million.
BNY Mellon offered the 42-story 525 William Penn Place for sale in January 2015. It is under agreement to be purchased by a New York real estate company but the deal has yet to be finalized.
Chicago-based M&J Wilkow bought the 22-story 20 Stanwix Street office building for $38.1 million last August.
Built in 1986, the 529,289-square-foot Liberty Center is 85 percent leased and has undergone millions of dollars in renovations since Starwood bought the property. Retail tenants include Starbucks, Bill’s Bar and Burgers, and the U.S. Post Office.
Starwood officials could not be reached for comment Thursday. Representatives for CBRE and HFF did not return phone calls.
Dan Adamski, managing director of Jones Lang LaSalle, said the building, considered a Downtown trophy property, likely will attract much interest.
Pittsburgh, he noted, has the second-lowest vacancy rate of 41 markets studied by Jones Lang LaSalle and continues to be very attractive to large institutional investors, most of them from out of town.
He noted that Downtown properties tend to offer better returns to those investors than real estate in larger cities.
“The big money funds are looking for smaller markets that can offer bigger yields but are still considered safe,” he said, adding that Pittsburgh is “one of the prettiest girls at the dance” in that regard.
Among those who could be interested in Liberty Center are investors who struck out trying to acquire buildings such as Oxford Centre or 20 Stanwix but who are still trying to break into the Downtown real estate market.
“There are a number of bridesmaids out there,” Mr. Adamski said.
Gregg Broujos, managing director and founding principal of the Colliers International real estate firm, said his office gets calls every day from investors looking for properties Downtown.
“Every time a trophy asset like that comes on the market there are multiple bids and a large amount of interest from outside the city,” he said.
By separating Liberty Center from the hotel, Starwood likely will increase the pool of potential buyers, “which is going to drive your price up,” Mr. Adamski noted.
Besides the office building itself, a 480-space underground parking garage is included in the sale.
Mark Belko: mbelko@post-gazette.com or 412-263-1262.
First Published: May 26, 2016, 6:06 p.m.
Updated: May 27, 2016, 2:37 a.m.
