Kiran Patel says the days of turmoil at the Wyndham Grand Pittsburgh are finally over.
“The city and people at large want to see this property not as an eyesore,” Patel, the hotel’s owner since 2011, said this week.
Nearly $15 million in renovations were completed in January, adding three floors to the front of the building, more meeting space and a pool with a breathtaking view of the Fort Pitt Bridge and the Point.
But getting there was not easy. Patel, a Tampa physician and businessman, had to navigate the hotel out of bankruptcy, manage union unrest over a new contact, and complete the renovation project that was stalled for at least two years under the previous owners.
Downtown Pittsburgh skyscrapers are filling up fast. Occupancy rate in many buildings is in the 90 percent range. This is a drastic change from a few years ago when many buildings had high vacancy rates. Owners were making deals with tenants to keep them.
Now landlords are naming their price and tenants are willing to pay the asking rates. Several large buildings have come off the market after investors decided they could not reinvest anywhere else and get a better return than in downtown Pittsburgh. Pittsburgh, New York and San Francisco had the largest increases in average office rents in the fourth quarter of 2010.
The Gateway Center Complex (four buildings) was recently taken off the market as well as the 32-story EQT Tower. The owners decided retaining ownership was in their best interest given Pittsburgh’s bullish market.
Eleven Stanwix Street has gone from a 50 percent to a 94 percent occupancy rate. The building is now up for sale but the owner is still receiving calls to lease space. The Oliver Building and the Regional Enterprise Tower are also for sale. The USX Tower (Pittsburgh’s tallest building at 64-stories) is in the process of being sold and has reached a tentative agreement with the new group of investors. The purchase price is around $250 million according to the Wall Street Journal.
As occupancy rates climb and office space becomes scare, tenants are willing to pay higher rates to be in a full building (which is characterized as being in the upper 80 to lower 90 percentage leased category).