Southern Beltway: Developers are ready to jump on opportunities from the new highway

Tim Schooley
Pittsburgh Business Times

John Kosky can see it coming.

From the small farm on which he lives in South Fayette, he looks out his window and sees cars and trucks heading along the newly opened stretch of the Southern Beltway, a 13-mile toll road. “I live next to the beltway. I sit there and watch. You can see the traffic at night,” he said. “Since it opened in October, it has been a steady increase.”

It's a daily view of that gradual increase for a toll road that existed for more than 30 years as a kind of bureaucratic pipe dream. Now, with the road finally open, he can envision a new future for all that rolling land spreading out along the Southern Beltway, including about 500 acres of which he owns, much of it assembled by his father, some by himself.

As the owner of this land and of John Kosky Contracting Inc., he said he's had recent talks with different developers interested in a mix of commercial and residential projects on his land spurred by the new highway, although they’re deals not far enough along to reveal more specifics.

“You have three four-lane highways that come through and connect through South Fayette,” he said. “There’s not too many places that have the connectivity that we have.”

With all that land offering a once-in-a-generation development blank slate, the new stretch of the Southern Beltway extends from the nexus of Interstate 79 and Route 50 through South Fayette and Bridgeville to Route 22 in Imperial where it reaches the Findlay Connector, a route from Route 22 to Pittsburgh International Airport that was previously completed in 2006. A third phase of the Southern Beltway, which would run from I-79 to the Mon/Fayette Expressway, is still in the design phase with no set timetable.

The completion of the $800 million 13-mile stretch from Route 22 to I-79 offers plenty of development opportunities for the exits along it. Lou Oliva, executive managing director of the Pittsburgh office of Newmark, sees great timing for the opening of the Southern Beltway and the company whose industrial property he represents, Imperial Land Corp. A long-established player in the region, Imperial Land's holdings total about 5,000 acres, 3,000 of them in Findlay Township and North Fayette and another 2,000 in Robinson Township in Washington County, a site now unlocked for new development along the Southern Beltway.

Oliva said the company's approximately 1.5 million-square-foot Findlay Industrial Park and Westport Woods properties are now almost completely built out.

They were projects that ramped up quickly a little more than 10 years ago after the opening of the Findlay Connector, which now is part of the larger Southern Beltway. It attracted corporate tenants such as Gordon Food Service, which occupied a 420,000-square-foot building about five years ago, Inc. and many others to new industrial buildings strategically located near major roads and Pittsburgh International Airport.

Expect the same game plan for Imperial Land Corp. at its land along the new stretch of the Southern Beltway.

"It's a very similar situation," Oliva said. "We're basically going to repeat hopefully with the same success at this site in Washington County what we did in Allegheny County in Findlay Township."

Oliva and Newmark have already been pushing out marketing for what Imperial Land has dubbed the Fort Cherry Development District, a mixed-use site of around 900 acres at Exit 11 of the new toll road.

Oliva said he hopes to have one parcel at the Fort Cherry Development District under agreement soon and is in discussions over others, as Imperial Land executes its game plan of developing the land and selling it to other ground-up developers. The project is mostly funded privately but with some state grants.

Meanwhile, thanks in part to the pandemic, Oliva said demand for industrial buildings, mostly for distribution, has continued to boom.

"The class A space is almost 100% occupied, and we see continued demand,” Oliva said.

Oliva noted one major difference between the completion of the Southern Beltway now versus the Findlay Connector more than 10 years ago.

"The connectivity is huge," he said of how the new road allows broader access across the southern and western suburbs.

Jared Imperatore, a vice president of retail brokerage for JLL who lives in South Fayette and represents the ongoing Newbury Market redevelopment in the community along I-79, expects the Southern Beltway to increase the project's draw.

Reporting the project's new BJ's Wholesale Club store, the region's first, opened to strong sales, Imperatore said he expects the Southern Beltway could increase traffic at Newbury by 30%.

"It’s a way easier commute if you’re coming from Robinson (Township, located along the Parkway West)," he said.

Kelley Hoover Heckathorne, a senior brokerage advisor for Burns Scalo Real Estate, said she continues to be active in office leasing at the company's Southpointe holdings, where she said there's more going on than people may realize. She leased more than 60,000 square feet there last year and more than 70,000 the year before.

Calling the Southern Beltway a "game changer for Southpointe," she explained the basic dynamic that made the development so successful to start: A combination of offices along with homes and amenity-serving retail along with four high-quality school districts nearby.

All of it is now better connected thanks to the Southern Beltway.

"The people who are running these companies live in the South. If they have people coming in from out of town to the airport, the Southern Beltway makes it even closer," she said. "It's a better connection."

As he works toward new plans for his property, Kosky expects the development to come will bring the Fort Cherry School District into the kind of prominence over the next 20 years that South Fayette's experiences now.

"You’ll see a mix at those interchanges of commercial and residential take off," he said.