Last Call: Private Market Real Estate Offering For Pittsburgh Redevelopment - 22.9% Target IRR

A private market offering for a redevelopment project in downtown Pittsburgh is nearing the closing of the funding round with only 25% of shares remaining.

300 Sixth Ave. is a project seeking to reposition a property that previously served as the headquarters of GNC Holding Inc. into a mixed-use development. The 218,225-square-foot building will be transformed to host 253 apartment units and retail businesses with 14,000 square feet of ground-floor space available for lease. 

Offering sponsor GPG-Victrix acquired the property in September 2021 for $9.85 million. Investors are expected to enter the deal under advantageous conditions because of the favorable acquisition cost and built-in tax benefits. The building was originally constructed in 1904 while being designed by legendary architect Daniel Burnham, because of this, the building was granted a historic tax credit for a projected $9.5 million. 

Further value is found in the property being re-developed rather than constructed from the ground up. GPG-Victrix projects a 20% discount compared to the cost of ground-up development. A competitive advantage that the finished product will have in the market is found in the amenity package offered to tenants. The building’s amenities will include a large fitness center, tenant lounge, leasing management office and rooftop deck. Construction is expected to be completed in October 2024.

The demand for multifamily housing is expected to be strong when the development is completed. The project is in downtown Pittsburgh’s Golden Triangle neighborhood and is surrounded by more than 300 restaurants, 230 retailers and numerous employers. The strategic location of the project is expected to bolster a high occupancy rate throughout the estimated seven-year holding period.

• Minimum investment: $35,000
• Target internal rate of return (IRR): 22.9%
• Target equity multiple: 2.94x
• Target cash yield: 7.7%
• Target investment term: seven years

GPG-Victrix is an affiliate of Gordon Property Group, a real estate investment firm with over 55 years of experience in assembling, developing and operating an expansive real estate portfolio. GPG-Victrix was created to convert underused office buildings into multifamily and mixed-use assets, maximizing potential returns. 

The group has extensive experience with similar projects, including redeveloping and repositioning seven comparable projects valued at $370 million. The 300 Sixth Ave. equity offering is being raised through the RealtyMogul platform.

Image: Courtesy of RealtyMogul