Chicago real estate investor buys at Southpointe
October 12, 2016
Tim Schooley
Pittsburgh Business Times
Chicago-based M&J Wilkow Ltd. is extending its investment in the Pittsburgh market to Southpointe.
After first entering the region’s commercial real estate market by buying the Waterfront in Homestead, three buildings downtown and Penn Center East in Wilkins Township, M&J Wilkow has closed on buying 275 Technology Drive, the two-story, 108,000-square-foot former headquarters of Ansys (Nasdaq: ANSS), which has sat vacant since the company left it for a new, larger office at nearby Zenith Ridge. No purchase price was disclosed.
The closed sale kicks off the marketing for the 18-year-old property for M&J Wilkow and JLL. Jeff Adams, who works in the agency leasing group in the Pittsburgh office of JLL, is representing the 275 Technology Drive property for lease.
Pledging a multimillion-dollar renovation that will add a new outdoor patio and other amenities, M&J Wilkow is renaming the property Apex 275 Southpointe, taken from the building's site at one of the highest points within the Southpointe master plan, one that Sweeney said offers great branding opportunity for nearby Interstate 79.
M & J Wilkow Vice President Marty Sweeney said his company has been tracking the property for two years and finally believed that “the pricing made sense” on a completely vacant suburban office redevelopment of a kind that M&J Wilkow has pursued throughout the country.
Don't let Southpointe's office vacancy rate of almost 22 percent distract from the opportunity, emphasized Sweeney, who said his company bought the property for cash and is prepared to wait for the right tenant.
"If you're a tenant who is looking for 100,000 square feet or larger, and you want to control your own environment and brand the building for yourself, this is your only choice,” he said of a lack of large blocks of office space in Pittsburgh's suburbs. “We're only competing against one or two other buildings anywhere" in Pittsburgh's suburbs, he added.
It's a property that comes with an adjoining 3.5 acres of land that could allow for a 50,000-square-foot expansion.
Sweeney expects Apex 275 has an advantage over the other major suburban office property with a large block of space, the former GlaxoSmithKline campus on the Parkway West that Burns & Scalo Real Estate Services bought recently, since it's completely vacant.
"We’re looking for the big tenant," he said.
While M&J Wilkow is buying into Southpointe at a relative low point for the Washington County business park, Sweeney sees strong fundamentals. That includes a corporate mix broader than the energy companies Southpointe became known for during the Marcellus Shale boom, a 30-minute drive to Shell's new cracker plant under development in Beaver County, and a Findlay connector highway extension funded and to be built in the near future that will make a Southpointe address a much shorter drive to Pittsburgh International Airport.
"I view the softness in Southpointe as the opportunity to get in," said Sweeney.
M&J Wilkow bought the 18-year-old building from New York-based Lexington Realty Trust. David Koch, an executive vice president for CBRE who marketed the property for sale with colleague Gerry Dudley, declined comment.