HFF Secures $90M Refi for Pittsburgh-Area Campus
- Jul 25, 2018
Working on behalf of Quattro LP—an affiliate of Burns Scalo Real Estate—HFF has arranged a $90 million refinancing for Zenith Ridge Corporate Campus. Starwood Mortgage Capital provided the 10-year, fixed-rate loan for the three Class A office buildings totaling 486,000 square feet in the Pittsburgh suburb of Canonsburg, Pa. Quattro is a partnership of Jim Scalo, Jack Scalo, John Verbanac and Charles Zappala.
The property was developed by Burns Scalo Real Estate, which manages and leases space at the campus. The assets are LEED Certified and were completed in 2014 and 2016. The complex comprises Zenith Ridge 1, 2 and 3 located in Southpointe Business Park, a southwestern suburban area of Pittsburgh. BSRE announced plans to construct the first two buildings in February 2012. The firm is a full-service brokerage, management and development organization with over 5 million square feet of office space in the region.
All three buildings were fully leased as of May, when Ansys Inc., an engineering software development company which already has its 186,000-square-foot headquarters at 2600 Ansys Drive in Zenith Ridge, took an additional 31,000 square feet in Building II at 2400 Zenith Ridge Road. Other tenants in the five-story building include Regus, EQT Corp., Wells Fargo, Langan, Alladin Food Management and RBC Wealth Management, according to Yardi Matrix.
The campus has walking trails, outdoor exercise stations, ping pong tables, communal fire pits, and outdoor patios and meeting areas. It is within a short walk of South Pointe Town Center’s residential, retail, restaurant and hospitality offerings. Interstate 79 is nearby and provides easy access to downtown Pittsburgh and Pittsburgh International Airport is located 15 miles away.
The HFF debt placement team was led by Senior Managing Director Mark Popovich.
Office market moves
There has been significant activity in Southpointe Business Park in recent months. In February, Mexico-based The Aztec Fund entered the Pittsburgh area market by acquiring a 98,314-square-foot, Class A office building at 501 Technology Drive. HFF’s Popovich and his colleague, Nick Unkovic, represented the seller, Laurus Corp., in the $20.5 million transaction.
The Ansys deal at Zenith Ridge was cited as one of the key lease transactions for the second quarter by Cushman & Wakefield in a recent Pittsburgh office market report. The Ansys lease, which came in at third among the top four lease transactions, was for new space while the second lease listed in the report was a renewal of 34,911 square feet by Columbia Gas of Pennsylvania at 121 Champion Way, also in Southpointe.
The Pittsburgh office market had an overall vacancy rate of 11 percent, while Washington County, where Southpointe is located, had an overall vacancy rate of 9.4 percent in the second quarter, according to the Cushman & Wakefield report. Of the 856,278 square feet of office space under construction in the market, Washington County accounted for 27,000 square feet. Overall average asking rent for Class A properties like those at Southpointe in Washington County were at $23.61 per square foot, well below the $30.72 per square foot overall average asking rent in Pittsburgh’s central business district.
Image courtesy of HFF