Bakery Square Self Storage buys property in Larimer

Over the course of its life, a five-story, red-brick building on Hamilton Avenue in Larimer has served as a meat packing plant, a furniture store and a Salvation Army warehouse.

Now it will be doing warehousing of a different sort.

Bakery Square Self Storage LLC has purchased the property for $1.275 million with plans to convert it into self-storage units to serve the Larimer and East Liberty area.

The new owner, an investment self storage group based in Florida, closed on the purchase earlier this month, said Rich Beynon, president of Beynon & Co., the real estate broker on the sale. The 90,000-square-foot building had a list price of $1.3 million.

Mr. Beynon said the group is planning substantial improvements to the property, which is behind the Bakery Square development.

The purchase price illustrates just how much values have been climbing in the area, which is teeming with new apartments, restaurants, retailers and offices. BBB II LP, the company that sold the building to Bakery Square Self Storage, bought it from the Salvation Army for $525,000 in 2008. Seven years before that, the Salvation Army purchased it from Carload Furniture for $450,000.

“When we bought it, we thought the area would be improving and we thought it would be a good real estate investment long term. The area just improved quicker than we anticipated,” said Mr. Beynon, who is a partner in BBB.

He sees self-storage units as a good use for the building, particularly given all the nearby residential development.

Walnut Capital — the developer behind Bakery Square, Bakery Square 2.0 and two East Liberty apartment projects — had the building under agreement last year but ended up not buying it. The firm had considered using the real estate for office space.

 

By Mark Belko / Pittsburgh Post-Gazette

2015 Diamond Awards: Richard Beynon

2014 Christmas Lunch 045Growing up with a business in the family,Richard Beynon had no doubts about his career path.

While attending Wittenberg University in Ohio to work on his bachelor’s degree in business administration, he went the extra mile with his education.

“I took night classes because they didn’t offer real estate courses,” he recalled.

With that under his belt, he joined Pittsburgh commercial real estate and independent insurance agency Beynon & Co. after graduation in 1981.

At the time, the company was located downtown in the landmark Jenkins Arcade, serving as building manager for owner First Federal Savings & Loan Association. Shortly afterward, the decision was made to raze the building.

“When they were started to tear that down, we had to move a lot of the tenants,” Beynon said, with his company helping to work out terms of cancellation with those who had leases extending past 1983. “That was a great educational process.”

While gaining experience with the company — founded as C.C. McKallip Co. in 1912 and renamed Beynon & Co. after his father, William, took over in 1965 — Beynon earned his Pennsylvania salesman’s license in 1982 and broker’s license in 1992.

In 2000, he was named president and chief operating officer, and today is responsible for overseeing the firm’s real estate, insurance and property management divisions.

He is co-owner of the company along with his brother Robert, who serves as chief executive officer, and sister Diane Landers, the vice president and chief marketing officer at GAI Consultants Inc.

Richard Beynon is a strong proponent of professional development, for himself and others in the company.

“The learning process is what I think keeps you invigorated, as a spark for new ideas and new ways of doing things,” he said.

A native of the Baldwin-Whitehall area and current resident of Upper St. Clair, Beynon is active in numerous nonprofit organizations, including Wesley Spectrum Services, Young Life, Whale’s Tale, the Women’s Center and Shelter of Pittsburgh, Society of St. Vincent DePaul and American Cancer Society.

He is past chairman of the Pittsburgh Downtown Partnership and serves on its board of directors and executive committee. The organization promotes initiatives to help keep the city – and by extension, the region – growing and viable.

Beynon encourages his employees to follow suit.

“I try to say to my people, you have to, first, do what you like to do,” he said. “Do it because you want to help.”

Richard Beynon

President, Beynon & Co.

Years with company: 34

Leadership style: Results-oriented

What’s your top piece of advice when it comes to leading a company?

Be the engine to keep things moving forward. You have to keep everyone moving in the right direction. Keep them focused, and keep that motor running.

Harry Funk is a freelance writer.

Cultural District Building Sold

713 Penn Avenue, known as the Bonn Building, an 8 story building was built in 1893 in a Romanesque architectural style for jeweler Moses Bonn.

 

The current owner Ronald S. Mahla purchased the building in 1965 and made it the home to Mahla Office Furniture.

 

William J Beynon  of  Beynon and Company was the Real Estate Broker who helped in the purchase the building back in 1965.

 

We are proud to say in Feb of 2015 ……50 years later ……the building was sold by Richard L. Beynon of Beynon and Company for over 1 million!

 

mahla

Mellon Square imbued with new vitality

In the aftermath of the Great Recession, Mellon Square was surrounded by some of downtown’s most desolate properties, accounting for nearly one million square feet of vacancy.

Today, the area is poised for a dynamic revitalization, following a $10 million renovation of Mellon Square Park.

To understand the turnaround, consider this real estate roll call, circa 2011:

• The Union Trust Building, more than 70 percent empty and facing foreclosure;

• The James Reed Building, completely vacant and headed to foreclosure;

• The Regional Enterprise Tower, the aluminum-clad former headquarters of Alcoa, taken back by its bank and with 33 percent vacancy;

• The Henry W. Oliver Building, recently bought by McKnight Realty Partners after the former owner defaulted on a $29 million loan for the half-empty building;

• The former Lord & Taylor department store, empty for years in an historic Mellon Bank branch building.

The only consolation at the time was that the Saks Fifth Avenue store hadn’t yet been shuttered.

Fast-forward to 2015 and the picture has changed dramatically. On Jan. 21, San Francisco-based Kimpton Hotels & Restaurants opened the new 244-room Hotel Monaco Pittsburgh in the former James Reed Building. A Beaux Arts-style building that once housed law firm Reed Smith, the hotel is decorated with an eclectic mix of Victorian-style and Mid-Century modern furnishings.

“We’re really proud of what we were able to create here in this great old building,” said Mike DeFrino, San Francisco-based CEO of Kimpton, who came to town for the opening.

Soon, there will be three hotels in Mellon Square. A new 228-suite Embassy Suites Hotel should be completed in the Henry Oliver Building by year-end, joining the long-established Omni William Penn on the square.

Across from Kimpton’s new hotel, Philadelphia-based PMC Property Group is renovating the former Alcoa building, splitting the property between office and residential use.

The Lord & Taylor building has been rebranded as 500 Smithfield. It’s a fully used facility of PNC Financial Services Group Inc., while the empty Saks Fifth Avenue is being redeveloped by McKnight and Millcraft Investments into a 77-unit condo development.

Among the former problem properties, the only one that is still an office building is Union Trust. It is undergoing renovations and leasing under new owners The Davis Cos.

To be sure, the opportunity to transform Mellon Square was always there, given the area’s architecture.

“Get the right owners, and those buildings will do very well,” predicted Pittsburgh Downtown Partnership Chairman Rich Beynon back in 2011.

Standard Life Building sold for over $5M

Once part of Pittsburgh’s “Wall Street,” the Standard Life Building, Downtown, has sold for more than $5 million, and the new owner has plans to upgrade its apartments and add “a little pizzazz” to the street-level retail space.

Pele Investment Group closed on the sale of the 12½-story building at Fourth Avenue and Smithfield Street last week after bidding on the property during an online auction sponsored by Auction.com and the Beynon & Co. real estate firm in November.

The auction did not produce a sale, but Pele, a local group, ended up working out a deal in the aftermath to secure the property, said Richard Beynon, president of Beynon & Co.

“We had tremendous interest in the building from all across the nation. It was probably one of the most active listings I’ve had in a long time,” he said. “It just shows the demand for properties in the Pittsburgh area and Pittsburgh being on the map for investors from all over the nation.”

The sales price, at more than $5 million, was more than double the $2 million former owner Penn Hills Place LLC and Penn Hills Arms LLC paid for the property after buying it at sheriff sale in 2013.

It also was far higher than the $525,000 starting bid on the auction. The building is assessed at $2.4 million.

“The income the building was producing substantiated the price of over $5 million,” Mr. Beynon said.

Designed by Alden & Harlow and known for its turn-of-the-century Romanesque revival architecture, the building anchored one end of Fourth Avenue in what was then known as Pittsburgh’s Wall Street because of the many financial institutions in the area.

Built in 1902 for offices, the upper floors of the structure were converted to student housing in 2005 and then turned into apartments by the Penn Hills Place and Penn Hills Arms partnership.

Mr. Beynon said Pele is planning major upgrades to the apartments in hopes of attracting professionals who work in Downtown.

The building, with 41 units, is 97 percent occupied, with rents ranging from $800 to $1,200 a month. With the improvements, the rents will increase, Mr. Beynon said.

At street level, Pele is hoping to secure a high-end deli or “something with a little pizzazz” to occupy the 1,600-square-foot retail space.

Mr. Beynon noted it is a corner spot close to One Oxford Centre, Macy’s, Point Park University and the Art Institute of Pittsburgh.

For Mr. Beynon, the transaction has special meaning. It marks the fourth time he has sold the property. “Not too many people get to sell one building four times in their lifetime,” he noted.

Two Downtown Pittsburgh buildings to be converted to housing

Two 19th-century buildings on Penn Avenue are about to join the residential renaissance in Downtown.

Trek Development Group and Q Development have teamed up to purchase the two eight-story buildings at 711 and 713 Penn for about $2.4 million with plans to convert them to apartments.

William Gatti, Trek CEO and president, said both are important and strategic properties in the heart of the cultural district “and we’re very excited to begin exploration of our residential conversion.”

The partnership is considering as many as 50 units within the existing buildings, but Mr. Gatti said there may be a way to add more floors — and more units — to the top of each property.

As more and more apartments in Downtown are renting for $1,200 a month or higher, Trek and Q are looking at the potential for adding more affordable units to the mix.

“It’s a core value of our company to provide unique living experiences that serve a broad range of incomes, something that I think is very important for the Downtown market long term,” Mr. Gatti said. “We’re always looking for ways to serve the middle market. We don’t have rent projections of price points set for this location, but we’re going to be looking at that closely over the next six months.”

Trek and Q would like to start construction on the conversion this year, although Mr. Gatti stressed that no timetable has been set.

The new project will supplement Trek’s other residential holdings in the cultural district.

It owns the 60-unit Century Building on Seventh Street and has another 25 apartments at 900 Penn. The newly purchased properties are located across from Benedum Center.

“We’ve had our eye on them for years. … We were just waiting for the right opportunity,” Mr. Gatti said.

The vacant McNally Building at 711 Penn was built in 1896 and was previously owned by David Forbes, who also had envisioned it for possible residential use. Howard Hanna broker Jay Phoebe, who represented Mr. Forbes in the sale, said the building was on the market for only six months.

The building at 713 Penn has been owned for the last 50 years by the owners of Mahla Office Furniture, which has a showroom on the first floor. The real estate became available when Mahla decided to combine operations at its location at 1201 Penn in the Strip District. That move will take place Feb. 19.

The 713 Penn structure, said Rich Beynon, who represented Mahla in the sale, was built in 1893 and originally known as the Bonn Building.

Mahla purchased the real estate in 1965, with Mr. Beynon’s father, William, serving as the broker in the sale. “So 50 years later, it comes back around and we’re able to sell it for the same owner,” Mr. Beynon said.

While some concern was raised at a development forum last week about the large number of residential units in the pipeline in and near Downtown — about 2,400 in all — Mr. Gatti didn’t see that as an issue.

“I think the right properties in the right locations that are well designed and well managed and priced right will do well. We’re looking at everything that’s getting built and making sure we’re not cannibalizing the market. I’m confident that it’s not a zero sum game anymore. It’s a growing market,” he said.

Office-building developers busy in Pittsburgh

Almost overnight, it seems, developers are stepping forward with bold proposals for big, new office projects in or near Downtown.

Alco Parking President Merrill Stabile announced a plan Oct. 8 to build two 11-story office towers and a 1,227-space parking garage in a lot he owns behind PNC Park.

The next day, Raleigh, N.C.-based Highwoods Properties unveiled a proposal to erect a six-story glass office building on the Monongahela riverfront at SouthSide Works as part of a four-building deal with the Soffer Organization.

And in August, Oxford Development Co. pitched a plan for its Smithfield Street property — a 20-story office high-rise that it’s billing as the most efficient in the city.

Why the flurry of proposals?

It’s all about the office market in and near Downtown, local real estate experts say. It’s very tight, with top-of-the-line Class A office space tough to find. Developers are hoping to capitalize on the shortage.

“Probably what’s driving it is the strength of the market. I would think developers would want to take advantage of that if they’re in control of viable sites,” said Jon Harrigan, CEO of Pennsylvania Commercial Real Estate Inc., Downtown.

It doesn’t hurt to test the waters, he added.

“If I were in their situation, I would be doing the same thing. You want to make sure your oar is in the water in case there’s an anchor tenant searching for a new home,” he said.

Richard Beynon, president of the Beynon & Co. real estate firm, said it’s not unusual to see such proposals when the office market is tight. Historically, when Class A occupancy rates hit the mid-90s Downtown, new development takes place.

That last happened in the mid-1980s, resulting in the construction of Liberty Center, Fifth Avenue Place and EQT Plaza, he said.

According to the Newark Grubb Knight Frank real estate firm, the Class A vacancy rate is 7 percent Downtown and 9.6 percent on the fringe — the North Side, South Side and Strip District.

For tenants looking for 25,000 square feet of office space or more, there are “few options either Downtown or on the fringe,” said Gerard M. McLaughlin, Newmark Grubb executive managing director.

“The bottom line is that there’s not a lot of good Class A space available,” he said.

The shortage of space does not necessarily translate into tenants. Oxford, for example, has been trying for two years to secure an anchor tenant for its new office tower, one that started out at 33 stories and has since been reduced to 20.

Like Oxford, Mr. Stabile and Highwoods are waiting to secure a tenant before they start construction. Those projects differ from the new PNC office tower, which is being built by the bank for the bank.

Jonathan D. Bonime, vice president of Fischer & Co., a firm that represents tenants, said there’s a good reason companies don’t jump at the chance to be the first tenants in a new office building in or near Downtown: price.

Building Downtown is expensive and asking rents for new space typically top $30 a square foot, he said. For many of the tenants that he represents, the rate “makes them blink, that’s for sure.” Some won’t consider it. Rates for new space on the North Shore or SouthSide Works probably would be less, but not substantially so, Mr. Beynon said.

Although Class A space is tight, deals can be found in “good” Class B buildings such as the Frick, Union Trust, Koppers and Gulf, where rents generally run in the lower $20 range per square foot, Mr. Bonime said.

For tenants seeking 20,000 square feet of space, leasing a new office building at $30 a square foot compared with existing space at $22 will cost an extra $160,000 a year, or $1.6 million over a 10-year lease, he noted. “That’s a big number,” he said.

He predicted a race among developers such as Mr. Stabile, Highwoods and Oxford to be the first to land a tenant for their projects.

“I think there are people out there willing to pay the price. I don’t think there’s enough out there willing to pay the price to fill out these projects,” he said. “I just don’t see the demand unless there are people coming in from out of town that I don’t know about. I don’t see the internal Pittsburgh demand for that many projects at one time.”

The developers themselves are more confident.

Andy Wisniewski, Highwoods vice president in Pittsburgh, said the Raleigh real estate trust has been bullish on the city since it bought PPG Place Downtown three years ago.

“We think the quality of the building, the amenities of the building, are factors that are going to differentiate one site over another. We believe the plan we put together offers the right mix of amenities and building features to attract the next large user,” he said.

Mr. Stabile said CBRE, the broker for his proposed office towers, already has received calls from people interested in the project. He said he decided to pitch the development now because of market conditions.

“When you look around, you see most of the buildings full. That wasn’t the case two years ago. Now there’s a very healthy absorption of office space that has occurred,” he said. “We just felt the time was right.”

Mark Belko: mbelko@post-gazette.com

Alco president thinks outside the lots

Three years ago, the Pittsburgh Stadium Authority rejected Merrill Stabile’s pitch for a 10-story office tower between the North Shore’s PNC Park and Heinz Field.

So Stabile, 55, decided to think bigger.

Now, the parking magnate is proposing twin towers that would rise 16 stories above West General Robinson Street, on parking lots behind PNC Park. The Stabile family began acquiring the land in the late 1960s.

“This isn’t some knee-jerk reaction,” Stabile said of the development proposal announced last week.

“We always knew this was a great site. To have 2.5 acres of land that is right near the Golden Triangle, we always knew it could be something bigger and better than a parking lot,” Stabile said. “We decided that now is a good time to start planning.”

Stabile, president of Alco Parking Corp., said CBRE Pittsburgh, the region’s largest commercial real estate broker, which is marketing the site, received several inquiries since announcing the preliminary plans on Wednesday. Plans call for two 11-story office towers on top of a five-story parking garage with more than 1,200 parking spaces and a small park on the garage roof, similar to Downtown’s Mellon Square. The existing lots between Marriott’s Residence Inn and Spring Hill Suites have about 400 spaces. Stabile said he would not seek public funding.

“That’s a lot of space to be offered at one time on the North Shore,” said Richard Beynon, president of Downtown-based Beynon & Co., a commercial real estate and insurance firm.

“Before the developer can begin construction, he should have a tenant, but the project is nice to see for the city,” Beynon said, adding the North Shore has become an extension of Downtown with plenty of available parking. “This is a good location for this type of development.”

Stabile envisions the towers becoming the local home for a large national or international corporation, citing candidates in the technology, energy and financial services sectors as strong contenders. He declined to identify possible tenants, but said that U.S. Steel Corp., whose lease expires at U.S. Steel Tower in 2017 and is routinely mentioned as a possible tenant for new office space, is not a likely candidate. Stabile hasn’t spoken with the company.

“Ideally, it would be someone who doesn’t already have a strong presence in Pittsburgh. I prefer not to be cannibalizing the existing market. We’re interested in trying to grow the pie,” Stabile said.

Residential developers are among those who reached out, Stabile said. He did not identify them.

“There is significant demand for residential (units). We’re trying to keep an open mind. That second tower might be residential. We’re considering that as a possibility,” Stabile said.

Stabile is not planning any retail or restaurant development, adding, “We already have enough of that on the North Shore. What I think the North Shore needs is more people to fill the restaurants and bars on the 200 or so days a year when there are no major events (at PNC Park, Heinz Field or Stage AE).”

Other office, residential and parking projects are in the works on the North Shore.

Columbus, Ohio-based Continental Real Estate Cos. has exclusive development rights between the stadiums under a 2003 agreement with the Stadium Authority, Pirates and Steelers. Continental is considering a residential tower of up to 10 stories at North Shore Drive and Mazeroski Way, and nearing completion on two, three-story office buildings on North Shore Drive. Stadium Authority board members voted Thursday to study where to place 541 new parking spaces, to replace ones lost to development projects.

“I don’t think the projects conflict with one another. A rising tide lifts all vessels,” Stabile said.

The Steelers declined to comment, while Pirates, Continental and Stadium Authority officials did not return messages.

Kevin Acklin, Mayor Bill Peduto’s development chief, declined to comment on the project, but said, “We are very excited to see continued interest in private development on the North Shore.”

Sam Spatter contributed. Tom Fontaine is a staff writer for Trib Total Media. He can be reached at 412-320-7847 or tfontaine@tribweb.com.

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41-unit Standard Life building downtown to be auctioned off

In a downtown real estate market in which there’s been relatively little sales activity, the Standard Life building is set to be auctioned off early next month.

Designed by Alden & Harlow and built in 1902, the building was bought out of sheriff’s sale by a group called Penn Hills Associates last year, which has now contracted with Auction.com and Beynon & Co. to auction the property off.

The auction is scheduled to start on Tuesday, Nov. 4, with bidding to be completed on Nov. 6.

Rich Beynon, president of downtown-based Beynon & Co., said that early expressed interest in the property has been so great that he believes the starting bid price of $1.25 million, a modest value of $36,585 per unit, will be far surpassed.

Beynon can be expected to tout a property he’s representing, but he said interested parties have already attempted to buy the building for more than that before the auction process.

“It’ll go so much higher than that,” he said. “We’ve already been turning down offers going in.”

While the tallest building in its downtown neighborhood when it opened more than a century ago, the Standard Life building’s 40,000 square feet makes it comparatively small in contrast with the office towers of the golden triangle today.

Initially built as an office property, the Standard Life building was converted to apartments in 2007 and recently renovated. More than 90 percent leased, the building generates rents of between $800 and $1,400 a month for its one- and two-bedroom apartments, said Beynon.

Beynon added the seller opted to pursue an auction to generate a larger pool of buyers for it, emphasizing that this will not be a distressed property sale, as commercial property auctions in Pittsburgh are often perceived to be.

“The demand for Pittsburgh real estate is at such a premium that they wanted to put it out to the investors to see what the property might bring,” he said, adding that he’s received more than 100 inquiries about it. “We’ve had tremendous response on it.”

Tim Schooley covers retail, real estate, construction, hospitality, arts and entertainment, and government. Contact him at tschooley@bizjournals.com

Busy Beaver busy expanding in city

After years of being in the back of the minds of local shoppers, Busy Beaver is suddenly working hard to live up to its name.

The home improvement retailer has made a conspicuous expansion into the city, announcing May 1 it will open a new location in a former Giant Eagle grocery store in Lawrenceville.

Steven Derr, director of marketing for Busy Beaver, said the retailer has been working to rejuvenate its longtime business after Oakmont investor Joe Kallen bought the 13-store chain last September.

Since then, Busy Beaver has remodeled four of its 13 stores and been advertising on local radio as it prepares to introduce itself to the East End city neighborhood later this year, Derr said.

“We’re definitely going to do a little bit more to get our name out there,” Derr said. “We have some goals to open some more stores here in the future.”

Kallen is also a principal of Oakmont-based Asset Management Associates Corp., a real estate development firm.

The retailer is taking a one-at-a-time approach to expansion while going up against the much larger Home Depot, which has long operated a store in East Liberty. While Busy Beaver’s store will be 22,000 square feet, the East Liberty Home Depot is more than 100,000 square feet.

Yet Rich Beynon, president of downtown-based Beynon & Co., which represented the empty store, said he’s seen a need for a smaller store like Busy Beaver in Lawrenceville. He cited a time when he needed a lock for the empty store and realized his best option for getting one was to drive to Home Depot, well outside the neighborhood.

It’s an observation that speaks to the lack of hardware stores in many communities, which may allow a chain such as Busy Beaver to get closer to its customers than a big-box retailer can.

“They’re (Busy Beaver) starting to expand. It’s an interesting story,” Beynon said. “Joe’s young but seems to be aggressive in wanting to put more stores in.”

Beynon expects the new Lawrenceville Busy Beaver store will be well-positioned to serve the demands of home-renovation projects going on in the neighborhood as well as in the larger East End, which is seeing accelerating gentrification in neighborhoods full of fixer-upper homes.

Derr said do-it-yourself homeowners are Busy Beaver’s main customers, with the retailer selling a range of home improvement categories such as hardware, building materials, lawn and garden, storage, paints and stains and a number of others.

“We’ve been around for more than 50 years, and people don’t really recognize Busy Beaver as a unique Pittsburgh brand, and we’re trying to bring that back,” Derr said.

Busy Beaver

Based: Harmar Township

Number of employees: 275

Number of stores: 13

What’s new: The company is expanding into the city, with plans to open a new location in Lawrenceville.

Tim Schooley covers retail, real estate, construction, hospitality, arts and entertainment, and government. Contact him at tschooley@bizjournals.com or 412-208-3826.