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Pittsburgh Retail Market Report | Q3 2022

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Von Maur Enters the Pittsburgh Market
Davenport, Iowa based department store, Von Maur announced a lease signing at Simon Property Group’s South Hills Village for 180,000 SF. The new location is planned to open in 2024 as Von Maur will backfill the long vacant former Sears site at the mall. Maur operates over 30 stores throughout the county and the location at South Hills Village will be its first in Pennsylvania. There was more good news related to Von Maur, as president, Jim von Maur indicated a desire to open a second location in Pittsburgh. The commitment from Von Maur reflects well on the continued strength of the overall retail market in the Western PA region.

East Liberty Gains a Boost with Whole Foods Market Opening
East Liberty has long been on the rise, benefiting from what was once deemed, “The Google effect”. The internet titan’s presence at Bakery Square has resulted in a cluster of technology and AI healthcare companies to include Duolingo and McKesson, spawning quality office, retail, and residential development. The retail component gained a big boost with the opening of a nearly 55,000 SF Whole Foods Market store at LG Realty’s new Liberty East office development, the largest such store in Western Pennsylvania. Whole Foods’ significant present in the technology rich East Liberty corridor seems fitting, as the retailer is now under the ownership of e-Commerce giant, Amazon. Whole Foods presence in East Liberty is a reminder that quality grocery store operators are an integral part of any urban eco-system and necessary to support Pittsburgh expanding residential developments in the neighborhoods around the CBD.

Significant Changes Coming to Ross Park Mall
Simon Property Group is working to bring a Dick’s House of Sport store to Ross Park Mall in the former empty Sears store. The building was acquired by Simon in 2018 for $25.75 million and original redevelopment plans to include a wall climbing operator, fitness center and relocation of the food court and later an AMC cineplex and Restoration Hardware never came to fruition, partly due to the impact of the pandemic.
The Dick’s House of Sports transaction continues a trend in the region and across the country of the transformation of traditional retail toward more experiential and entertainment concepts. Additionally, Simon announced a 5,000 SF to 6,500 SF lease signing by Gucci, which should fit in nicely with other high scale Ross Park tenants such as Coach, Louis Vitton and Tiffany. The opening of the new Gucci store is anticipated to be in December of this year and provides further evidence of the confidence that notable high-end retailers have in our region’s ability to support them.
Lastly, Psycho Bunny has signed a 1,896 SF lease and is expected to open on the lower level of the mall, representing the apparel retailer first foray in the Pittsburgh market.

Interest Rates and Inflation Impact the Market
Although Colliers’ Pittsburgh’s retail leasing team has seen steady demand for Class A retail space, there is recognition of cracks in the framework brough on by higher interest rates, continued supply shortages and obstinate inflation. There is anecdotal evidence through transactions either put on hold temporarily or in some cases, indefinitely. In response to the slowdown, two perspectives have emerged:
- There will be a temporary slowdown to adjust to higher interest rates and continue to grapple with inflation.
- This is the beginning of a longer-term slowdown which will be impacted by a wider economic slowdown because of higher interest rates, supply chain issues and continued inflation.
What transpires in the retail marketplace over the remainder of 2022 will reveal which perspective comes to fruition in 2023. In the meantime, there were many positive signs in Q3 2022 that Pittsburgh’s retail market is healthy and demand strong.

Notable Bits & Bites in the Marketplace

•Wisconsin based, Mero Restaurant Group’s Mad Chicken has replaced BRGR at 535 Liberty Avenue, downtown. This is Mad Chicken’s second location in the region as it opened in Ross Park Mall last year.

•Big Spring Spirts announced plans to open The Distillery at South Shore in a seven-story building at 129 McKean Street in the South Side. The location will include a 10,000 SF space in addition to providing for a variety of whiskeys, rum, vodka, bourbon, and gin.

•Altoona based, Sheetz Inc., announced that it plans to open 30 additional locations in the Pittsburgh region, adding to the 40 convenience stores already in its portfolio.

•The Burns and Scalo South Fayette development, The Piazza, announced two new lease signings. Fast food chicken finger chain, Raising Cane will open its first location in Pittsburgh and one of 20 planned for Pennsylvania. Additionally, Pittsburgh’s own, the Milkshake Factory signed a lease and is anticipated to open in early 2023

•The Southside Works announced two new lease signings at the Box Office: Jeni’s Splendid Ice Cream (1,798 SF) and Kura Revolving Sushi Bar (3,820 SF), its first location in Pittsburgh.

•Investor Matt Hicks is renovating six properties along East Ohio Street in the North Side to create a new “restaurant row”. The properties include 700 Cedar Ave, 400 E. Ohio Street, 404 East Ohio Street, 408-410 East Ohio Street, and 707 East Ohio Street.

•Bloomfield (Pittsburgh’s “Little Italy”) lost another Italian restaurant as the recently closed Lombardozzi’s is now for sale. The announcement comes on the heels of the recent closings of Donatelli’s Italian Food Center, Del’s Bar and Ristorante DelPizzo.


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Pittsburgh Retail Market Report | Q3 2022

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Related Experts

Mark Anderson

Senior Vice President | Retail Brokerage

Pittsburgh

I began my commercial real estate career in 1997 after graduating from Gettysburg College with a BA in history.  Initially I concentrated on corporate services work for national tenants.  Since that time I have worked on behalf of numerous fortune 1000 organizations both on the landlord and tenant side and have closed some of the largest transactions in western Pennsylvania.

I  began working on retail projects in 2005 with the ground up development of a 30,000 sf retail center.  Since that time I have focused on retail assignments, representing landlords and tenants in the development and leasing of retail projects throughout western Pennsylvania, West Virginia and south eastern Ohio.  I have worked on a number of ground up retail developments, as well as the leasing of traditional retail strip centers and urban retail projects.  I've represented a number of retail tenants in their location searches, including Wahlburgers, Banfield Pet Hospital, Hooters, Dollar General, Quest Diagnostics, Edward Jones, Emiliano's and many others.  I have been recognized as a retail power broker in the Western Pennsylvania region by Costar and have been represented on the Pittsburgh Business Times largest transactions list a number of times.

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Jonathan Levinson

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I am an Associate at Colliers International in Pittsburgh, Pennsylvania and I specialize in retail leasing, sales and tenant representation in Western Pennsylvania and surrounding area.  I am responsible for providing in-depth, strategic consulting for clients to generate valuable solutions to suit their real estate needs.  I am dedicated to building client relationships and providing the highest quality of service to maximize value and client satisfaction.

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Ralph Egerman

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I have more than 30 years of experience in the commercial real estate industry.  As a Principal at Colliers International | Pittsburgh I am responsible for a full range of real estate services.  Prior to joining Colliers International | Pittsburgh, I was a Principal at NAI Pittsburgh Commerical for more than 5 years where I was reponsible for a full range of real estate services for office, retail, industrial and tenant representation.  I began my career as a member of the brokerage staff of Cushman & Wakefield.  I have worked on commercial deals in 15 states and in South Africa.  

Additionally, I have  worked in development with Carnegie Properties, where I managed investment and leasing for properties in Pittsburgh, Orlando, and Chicago. 

I was a former  Chairman of FamilyLinks Board of Directors, a former Animal Friends Board Member, a former Parent & Child Guidance Center Board Member, a former Member of the Board of Directors of Pittsburgh Metropolitan Area Hispanic Chamber of Commerce, and a former Board Member of the Rivers Club.

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