PITTSBURGH, March 9 (STL.News) – Somera Road, Inc., a New York-based commercial real estate investment and development firm that invests in value-add properties across the United States, is announcing their majority ownership and operator status of SouthSide Works, effective immediately. The firm acquired the defaulted loans on the property in October 2018, took title of the property in June 2019, and closed on majority and controlling ownership in March 2020, replacing its prior capital partners. As the new owner and operator of SouthSide Works, Somera Road is announcing new leases, a new vision, and plans to invest over $37 million in capital improvements and over $130 million in new development on the property and riverfront parcels.
Somera Road is a New York-based commercial real estate investment and development firm that invests in troubled, value-add properties often overlooked by larger institutional investors. Known for their entrepreneurial and disciplined approaches, Somera Road engages in strategic asset repositioning and redevelopment, targeted capital improvement plans, and best-in-class, and hands-on asset management. Since its inception, Somera Road has acquired over $1.5 billion in real estate totaling approximately 16 million square feet across 49 unique markets. The company’s current portfolio of work includes the Nashville, Memphis, Kansas City, Minneapolis, Las Vegas, Pittsburgh, and Indianapolis markets, among many others. The firm owns office buildings, retail projects, multifamily rental apartments, industrial properties, and hotels.
SouthSide Works is a mixed-used development located in Pittsburgh’s South Side Neighborhood. Located on the site of the former J&L Steel Works site, the property opened in 2004 and was unlike anything the Pittsburgh market had seen. With coveted national retailers and restaurants as the property’s inaugural lessees and new residential opportunities, the 34-acre retail and entertainment complex became a prized destination for locals and visitors alike. While some key tenants remain and thrive, the property fell into financial distress over time, with many storefronts remaining vacant as the retail landscape shifted and competitors entered the market. The property was long over-retailed, with limited office and apartment offerings, as well as a lack of convenience and neighborhood-oriented retail offerings.
A strong mixed-used approach is at the core of the leasing initiatives for the property – with the goal to create a healthy ecosystem where all use cases are complementary and operate in tandem. SouthSide Works remains attractive to retail, office, and apartment tenants, and will be repositioned with more experiential concepts, more food and beverage, more amenities, and an entertainment-driven, community engagement-driven mix. Somera Road has engaged CBRE’s property management team and its office and retail leasing teams to assist with new leasing initiatives.
“SouthSide Works is a microcosm of Pittsburgh whereby it is a blue-collar steel mill site that has been transformed into an upscale mixed-use development. The initial response to the change in Ownership and our collective vision and plans for repositioning has been very strong and well exceeded our expectations,” says Herky Pollock Executive Vice President CBRE.
Two new office leases have recently been signed, and a half dozen new retail leases for community-focused and amenities-based tenants are currently being added and will be announced soon. The new tenant mix will include offerings where the community in and around South Side Works can find daily necessities and conveniences, in addition to new food and beverage & retail options.
SouthSide Works currently houses approximately 280,000 square feet of retail space and approximately 180,000 square feet of office space and 83 multi-family residential units. The company is currently improving common areas and restrooms in the office space and upgrading residential units with new stainless appliances, new flooring, and an improved lobby.
Somera Road is paving the path toward the newest evolution of the SouthSide Works property, providing a truly unique live-work-play experience that integrates the best of Pittsburgh with new thinking and creative innovation.
The group has also tapped Strada Design to lead the design of the capital improvement plan, dedicating over $37 million to property updates. The updates will include the reimagining of SouthSide Works main town square and thoroughfares, expanded greenspace options, wayfinding, adding public art and dog and children play areas, and connecting the complex more effectively to the riverfront and trails. The Urban Redevelopment Authority of Pittsburgh has also approved the assignment of development agreements of riverfront parcels to Somera Road, which the company plans to develop in various functions that include waterfront multi-family residential and office space concepts as well as community parks and greenspace.
“The URA is excited to see a new, more active vision for the SouthSide Works’ existing retail and public spaces, and we are looking forward to working with the Somera Road team to further the City’s community and economic development goals through the development of the remaining riverfront parcels,” URA Executive Director Greg Flisram said.
In addition to improving the current condition of the property, Somera Road is investing in meaningful development that will positively impact the immediate neighborhood and the city. The group is converting the SouthSide Works Cinema to an innovative and creative office space, aptly titled Box Office. The plans convert the theater space into 77,000 square feet of class A modern steel and glass, which will offer prime office space geared toward forward-thinking tech and creative tenants looking to find a home in Pittsburgh or expand their current footprint. Tenants will enjoy immediate access to plentiful food & beverage, fitness, and after-work entertainment options.
With sweeping views and top-of-the line amenities, Somera Road’s vision for Box Office adds an estimated five hundred people to the daily traffic on the property, offering an added incentive for its new retail tenant mix. “The cinema’s grand entry, high ceilings and efficient useable floorplate, coupled with steel and glass improvements, and the adaptive-reuse appeal creates a unique office conversion opportunity Pittsburgh hasn’t seen before,” said Jon Reeser, Somera Road’s Vice President of Acquisitions and head of its Pittsburgh office. Somera Road has engaged the Kansas City, MO-based team at HOK Architecture for initial work on the design and concepting of Box Office and plans to begin work on the project in Summer 2020.
Somera Road is also investing in the development of Pittsburgh’s first Container Park concept. As seen in other progressive markets like San Diego, CA and Nashville, TN, the container park concept focuses on an indoor-outdoor experience and creative use of space for social activation. The Container Park at SouthSide Works will also serve as an important vehicle to connect to the riverfront and trails to the main thoroughfares of the property. The Container Park concept transforms the development into the City’s first true riverfront lifestyle center by drawing river and trail users up through property with an outdoors-friendly focus for active lifestyle users, like cyclists, runners, and dog walkers. Additional greenspace concepts for the riverfront parks also include a large lawn area and dog park. Somera Road has engaged Baltimore, MD-based CanaDev and Pittsburgh, PA-based AE7 for initial work on the design and concepting of Container Park and property greenspaces.
The waterfront multi-family residential and office offerings at SouthSide Works are another key piece of development of the riverfront parcels. In addition to maintaining and improving the current residential offerings at SouthSide Works, Somera Road is planning to develop a true riverfront luxury residence and office space. The group plans to add approximately 230 multi-family units and approximately 200,000 square feet waterfront office space. Plans to develop this space are still in process and will be announced later this year.
“Somera Road is showcasing every aspect of what makes the city so special and bringing it to life. By creating access, supporting innovation, and creatively activating every aspect of SouthSide Works, we’re creating the city lifestyle experience that Pittsburgh deserves,” says Ian Ross, Somera Road’s Principal and Founder.