SomeraRoad has obtained new financial support as it continues redevelopment activity at SouthSide Works, a mixed-use conversion project in Pittsburgh.
With the help of JLL Capital Markets, the real estate investment company secured a $74 million loan for the approximately 470,000-square-foot, master-planned destination.
SomeraRoad’s vision for SouthSide Works was solid enough to attract the attention of the lending community in today’s uncertain financial environment. After all, as noted in PwC and Urban Land Institute’s Emerging Trends in Real Estate 2022 report, the pandemic “hastened the shifts away from malls and high-street retail to more mixed-use centers.”
JLL Capital Markets’ Nick Unkovic and Jeremy Bernstein, represented SomeraRoad in its pursuit of new financing, which comes in the form of a six-year, floating-rate loan through Dollar Bank.
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Sponsorship likely played a role in the obtainment of the financing as well. In February 2022, SomeraRoad’s reputation helped the company secure a $525 million loan for the refinancing of a 50-property industrial portfolio.
Financing forward movement
Located in Pittsburgh’s South Side neighborhood, SouthSide Works occupies a riverfront site that had once been home to the former J&L Steel Works. The development made a splash in the city with its debut in 2004, bringing a never-before-seen combination of office and retail—roughly 245,000 and 225,000 square feet each, respectively—to Pittsburgh. However, the project, plagued by a souring retail environment, didn’t take flight as planned, and SomeraRoad officially became owner and operator of the mixed-use property in 2020, after having acquired defaulted loans on the asset in 2018.
SomeraRoad immediately announced plans to invest approximately $130 million in improvements to revitalize SouthSide Works and transform it into a true live-work-play destination. And with pandemic-induced delays now in the rearview mirror, the company’s redevelopment agenda is back on track.
With funds in hand, SomeraRoad is prepared to make more of the changes that will result in SouthSide Works’ new incarnation. The company expects to bolster the five-building property’s success by reeling in the next generation of tenants.
The financing from Dollar Bank for the next stage of SouthSide Works’ makeover comes roughly one year after the completion of the redevelopment of one of the property’s five buildings, the former SouthSide Works Cinema. With architecture firm HOK aboard to spearhead the design, SomeraRoad successfully completed the adaptive reuse of the movie theater into The Box Office, a 77,000-square-foot, cutting-edge office building with ground-level retail.
The four remaining structures at SouthSide Works are 2800 Block, 2700 E. Carson, 2600 B2 Block and 2600 E. Carson. SomeraRoad’s changes at the property have already caught the eye of a bevy of tenants, spurring a spate of leasing activity, including the signing of 80,000 square feet of new leases, as well as extensions and renewals totaling 100,000 square feet. Amazon, General Dynamics, Duquesne Energy and the American Eagle headquarters are among the names on the tenant roster.
While Pittsburgh’s office sector has not regained its pre-pandemic health, it is experiencing positive signs. “Tenants appear to be much more active in the marketplace than in 2021, resulting in a higher number of property tours and delivered lease proposals,” according to a third quarter report by Colliers. “There is noticeably more commuter traffic, particularly in the middle of the week and office building parking lots are filling up with greater regularity.”
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