Pittsburgh: a hard search/a little money spent ... and went nowhere

A few years ago I was tired of bumping up against growth-y Sunbelt markets that seemed to already have plenty of storage. I glanced at this:

I found a part of Pittsburgh I liked called Lawrenceville. Path of growth (new townhomes etc), tech startups, etc.

But most importantly (to me at the time), zero storage:

I called brokers, reached out to owners of off-market sites, etc. Considered some really impractical sites.

Finally got a guy named Emil to respond. Looking back I’m surprised he did, because he had a successful, bustling business operating out of the building I wanted.

I crunched some numbers and offered him ~2.5 million bucks. Non-starter.

So, knowing it was time to roll up my sleeves, I linked up through a referral to a sophisticated GC who had built a bunch of storage around Pittsburgh and went up there to tour with him.

The main warehouse was great. It was relatively new, and that’s where most of the value was.

The back couple warehouse spaces were ancient - and in rough shape.

These back buildings were super tall inside. If I did a second floor in these buildings, and two levels in the main building, absolutely maxing out the existing structures, I could get to 100,000+ gross SF:

So I was able to up my offer:

This was enough to get them really serious.

Unfortunately, a little too serious. The whole conversation spurred them to “explore strategic alternatives” and reach out to some competitors about selling the whole business. And maybe even keep the real estate.

It’s a risk you take!

At some point, I got fed up with lack of options in the city and was encouraged by a broker to look at the burbs, such as the fast-growing high-income area near the airport (“Moon Township”).

It wasn’t hard to identify the nicest, busiest stretch of the township. Across from an almost brand-new shopping center with national brands was a vacant 2+ acre parcel whose owners responded warmly to an inquiry of mine.

The GC I toured the warehouse with agreed to walk the entire site with me. He had recently built a big multistory facility on a similar-sized site with a similar slope.

His first thought was to dig test pits, because it looked like the street-level frontage had been filled in at some point, and it would be devastating to our sitework budget if we had to haul off a bunch of bad dirt and bring in new.

For once in my life, I got cheap test pits ($550) by calling a local landscaper.

They came back good!

Note — I trusted this contractor because of the variety of large storage projects around the MSA he had done, and he was more than just a contractor; he bought and rehabbed little buildings for himself, he had a Wharton MBA.

But somehow, the contractor (and I) failed to eyeball just exactly how steep the site really was:

The “stepdown” of the site was crazy. I had spent several hundred bucks on test pits for no reason.

There were no other great sites like this in the township. I tried buying the one existing facility there, to no avail:

Eventually, I could start to see why this MSA is underbuilt, and it’s not just misconceptions about rust belt decline. The right zoning wasn’t always easy to find. The topography is ridiculous, the whole county was pretty fully developed/“built out” many years ago leaving little-to-no attractive undeveloped sites in modern times… the land is not necessarily cheap, it’s expensive to build, and the rents were good but not amazing. Not a great market for ground-up multistory, but good if you can just buy existing, and maybe good for a conversion. Maybe good for single-story.

I could still somehow do a deal there some day. Reached back out to Emil a few minutes ago. Because I’m insane.