Pittsburgh Renovations Report Renovations Annual Report 2018 Renovations underway at 420 Boulevard of the Allies (the former Art Institute building) include all-new tenant amenities such as a fitness center and rooftop deck
2 Renovations Annual Report 2018 Pittsburgh Renovations Report 2018 The recently completed gym in the rec333 tenant amenity center at Penn Center East in Monroeville
3 Renovations Annual Report 2018 Overview $ s in our report The following report highlights 28 office renovation projects in the Pittsburgh market. Our study considers any renovations that affect office properties classified as Trophy Class, Class A and Class B. The winners (2017) 11 out of the current 28 office renovation projects have been completed. Thus far, the Union Trust has benefitted the most. With just 39 percent occupancy when purchased out of bankruptcy in 2014, today the Trophy Class building is seeing over 91 percent occupancy; a more than 133 percent increase. Rounding out the top three are Nova Place (Allegheny Center) with a 7 percent occupancy increase post-renovations and the Koppers with a 5 percent increase.
4 Renovations Annual Report 2018 Highlights Overview Renovation Projects Office properties currently undergoing renovations / completed renovations within last 3 years. 28 Renovation projects 15 Located in the Central Business District 2 5 3 Individual 2 Portfolio Trophy Purchased in 2017 Fringe 7 East 1 Renovation projects by region West 3 Oakland / East End 1 Southpointe 1 CBD 15
5 Renovations Annual Report 2018 Outside investment has been strong the last three years in Pittsburgh. As new owners are entering the market, they are breathing new life into the old office product and helping Pittsburgh keep pace with modern real estate trends. What updates we are seeing 36% include new fitness facilities Findings 21% include new tenant lounges 59% average occupancy across our study 36% 25% include new conference space include new food options Rendering of the rooftop amenities at The Grand (former Macy's building) owned by Core Realty
6 Renovations Annual Report 2018 Featured Union s Trust Top left: The newly designed auditorium and pre-function space on the 11th floor. Bottom left: Dynamic meeting space on 1st floor. Right: The newly designed lobby features a plush blue carpet with the Union Trust's signature glass dome design.
7 Renovations Annual Report 2018 The Union Trust Details Originally built: 1916 Sold: 2014 Cost: $14,000,000 Ownership: The Davis Companies, Boston Total square feet: 545,000 Occupancy at purchase: 39% Occupancy today: 91% Renovations complete: YES Pictured above: The new fitness center on the Union Trust 's 9th floor offers a hip, fully equipped, energetic space to work out with free weights or machines, or to catch a yoga class. This space features the original steel beams and trusses in homage to our Steel City. Renovations Fitness center (pictured) New media room Main first floor atrium finishes and added retail Lower-level garage New restaurants: Union Standard and Eddie V's HVAC updates Exterior cleaning
8 Renovations Annual Report 2018 Featured s 20 Stanwix Class A 20 Stanwix Street Pittsburgh, PA Purchase Details Purchase Price $38.1M Purchased in 2015 by M&J Wilkow Renovation Details 9,000 SF of tenant amenities, including fitness center and tenant lounge
9 Renovations Annual Report 2018 Renovation Details 500k RSF of creative office 100k RSF of retail > 1 acre of public riverfront green space used for farmers markets and concerts The Highline Located in the Fringe Terminal Way Pittsburgh, PA 15219 Originally known as the Pittsburgh Terminal s, this riverfront property was once considered the largest cargo warehouse between New York City and Chicago. Today, owner McKnight Realty Partners is bringing new life with creative office space, retail and green space. Nova Place Located on the North Side (Fringe) and formally known as Allegheny Center, Nova Place is home to companies like Alloy 26, Confluence and United Healthcare Group. Ownership Faros Properties Office Square Footage 1,232,509 (3 buildings) Occupancy 77%
10 Renovations Annual Report 2018 Class Submarket Data renovation details Office Square Footage Affected Sale Price Current Owner Renovations Complete? Current Occupancy % 11 Stanwix A CBD 435,635 $81,325,000 M&J Wilkow No 94% 1600 Smallman Street A Fringe 140,000 Pending Pending: McCaffery Interests No 0% 20 Stanwix A CBD 360,820 $38,100,000 M&J Wilkow Yes 63% 2100 Wharton St B Fringe 232,743 N/A 2908 Smallman B Fringe 25,000 $725,000 2949 Smallman B Fringe 15,000 $1,320,000 420 Boulevard of the Allies 525 William Penn Place Wharton Lender Associates 2908 Smallman LP Smallman Red LLC Yes 77% No 0% No 0% A CBD 155,000 $10,000,000 M&J Wilkow No 0% A CBD 942,655 $67,700,000 Pearson Partners No 65% 606 Liberty Ave B CBD 48,404 $3,800,000 AB 606 Pgh LLC Yes 86% Allegheny B CBD 150,000 $7,000,000 Nova Place (Allegheny Center) American Red Cross B Fringe 1,232,509 $67,500,000 B CBD 38,000 $2,900,000 King Penguin Properties Faros Properties Fourth River Development LLC Yes 62% Yes 77% No 8% Apex 275 B Southpointe 108,000 $8,250,000 M&J Wilkow No 0% Cherrington Corporate Center Foster Plaza (Bldgs 1-7, 10) Hazelwood Green - Mill 19 A/B West 454,700 $27,302,542 Rugby Realty No 67% A/B West 716,159 $43,697,458 Rugby Realty No 91% A East 94,000 N/A RIDC No 66% Koppers B CBD 356,439 $17,241,000 Rugby Realty Yes 75% One Oxford Centre Trophy CBD 1,011,000 $152,000,000 Shorenstein No 76%
11 Renovations Annual Report 2018 s like the Post-Gazette are pending commitment from an anchor tenant before commencing planned redevelopment Class Submarket Office Square Footage Affected Sale Price Current Owner Renovations Complete? Current Occupancy % Penn Center East A/B East 625,000 $38,396,626 M&J Wilkow Yes 76% Pitt B CBD 40,161 $2,900,000 Post-Gazette B CBD 150,000 N/A Produce Terminal A Fringe 75,000 Pending SmithKline Beecham The Grand at Fifth Avenue A West 105,000 $6,150,000 Hippeus Capital Pittsburgh Post-Gazette Pending: McCaffery Interests Horizon Properties Group Yes 0% No 100% No 0% Yes 0% A CBD 50,000 $15,000,000 Core Realty No 0% The Highline B Fringe 500,000 $12,500,000 The Icon on Smithfield B CBD 203,643 $10,400,000 The Pittsburgher B CBD 130,000 $4,250,000 Union Trust Trophy CBD 545,000 $14,000,000 McKnight Realty Partners Stark Enterprises King Penguin Properties The Davis Companies No 47% No 11% Yes 44% Yes 91%
Tobiah Bilski Senior Research Analyst +1 412 208 1400 About JLL JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. A Fortune 500 company, JLL helps real estate owners, occupiers and investors achieve their business ambitions. In 2017, JLL had revenue of $7.9 billion and fee revenue of $6.7 billion; managed 4.6 billion square feet, or 423 million square meters; and completed investment sales, acquisitions and finance transactions of approximately $170 billion. At the end of 2017, JLL had nearly 300 corporate offices, operations in over 80 countries and a global workforce of 82,000. As of December 31, 2017, LaSalle had $58.1 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit www.jll.com. 2018 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.