M&J Wilkow lands publicly traded tech firm for Southpointe office property
July 16, 2020
By Tim Schooley
Pittsburgh Business Times
More than three years after it bought it, Chicago-based M&J Wilkow has a major new tenant for 275 Technology Drive at Southpointe, the one-time headquarters of Ansys Inc.
The company has landed a 40,000-square-foot lease for almost half the building with Maryland-based Inovalon, a publicly traded tech firm working in the health care niche.
Inovalon (NASDAQ: INOV) did not response for comment to confirm the new lease.
But Carmine DiLucente, a vice president in the Pittsburgh office of CBRE, who is representing the property, confirmed that Inovalon is taking the space.
He expects the new tenant will make for what will feel like a new building at 275 Technology Drive, one of Southpointe's earlier office properties. Built about 20 years ago, the building will now undergo a full renovation as part of a new office deal that has proven to be relatively rare amid the economic slow down of the Covid-19 pandemic.
Noting that M&J Wilkow's willingness to upgrade the property "was all based on signing a tenant," DiLucente said, "now that we’ve done that, it will be like a brand new building."
Inovalon isn't necessarily new to Southpointe.
Around the same time M&J Wilkow bought the building, Inovalon established a presence at Southpointe in 2016 when the company bought local firm Creehan Holding Inc., a fast-growing specialty pharmacy and medications management software company based at the Washington County business park.
The building is two stories and totals 107,872 square feet, a size which ANSYS outgrew, leading it to move to the Zenith Ridge development within Southpointe a few years ago. New upgrades at the building are expected to include a new roof, building systems and HVAC, a new facade and lobby, along with a fitness center and new outdoor amenities including free WiFi and soft-seating as well as a sports court.
No estimates were provided on the total cost of the renovations, with the company expecting to occupy the space by the end of the year,
DiLucente noted the lease "is one of the larger deals that have happened in the park in quite some time" at Southpointe,
Recent quarterly office reports bear that out.
A new report from JLL for the second quarter puts the total vacancy at Southpointe, which continues to deal with the cutbacks and consolidations of oil and gas firms pulling back from the Marcellus Shale play, at 19.5 percent, with no real new office absorption to speak of amid the pandemic, with a little more than 11,000 square feet coming available so far this year.
DiLucente noted the challenges of bringing such negotiations to fruition amid a pandemic that has shut down many if not most offices.
"We were working on it pre-Covid. When Covid hit, a lot of companies hit pause," he said, noting the level of commitment it takes for a company to finalize a deal in the middle of a pandemic. "This company understands the necessity of having nice office space and I think they're playing the long game here."