Cutting-edge innovations like driverless cars and unmanned drones, as well as advancements in fields related to life sciences, are transforming Pittsburgh’s economy and building its reputation as a fast-growing hotbed for robotics and artificial intelligence technologies. But as GeekWire aptly noted in their reporting, “The rise of Robotics Row is as much about real estate as it is tech.”
From a Steel City to a Robotics City, Pittsburgh is breathing new life into some of the massive facilities that were a part of the past industrial economy. Just look at the emergence of “Robotics Row” in Lawrenceville and the Strip District. It all started with the redevelopment and transformation of a former steel mill and chocolate factory.
The Lawrenceville Technology Center, an urban technology park, has been home to companies like Uber, Aurora Innovation, Seegrid, Carnegie Robotics, Caterpillar’s Pittsburgh Automation Center, HEBI Robotics, RedZone Robotics, nanoGriptech, and Helomics.
The section of the site called the “Chocolate Factory” formerly housed an A&P storehouse and then a chocolate factory. It was bought by the Regional Industrial Development Corporation of Southwestern Pennsylvania (RIDC), a Pittsburgh-based nonprofit that specializes in redeveloping abandoned, obsolete industrial sites, in 1996 and has since been renovated into a multi occupancy, office/high-tech manufacturing facility.
“As the robotics industry continues to grow in Pittsburgh, RIDC is working in partnership with these companies to understand and provide for their future growth needs.”
In 2002, RIDC also took ownership of the 14-acre Heppenstall Steel Company site and built out the former Heppenstall building, a 30,000-square foot heavy industrial high-bay facility, into what is now Carnegie Robotics, a spin-off from the nearby National Robotics Engineering Center (NREC). This industrial renovation project was recognized in 2017 by NAIOP as one of the top reuse projects in North America.
With its proximity to local universities commercializing cutting-edge robotics research and development, RIDC knew the property could become a valuable asset for the community and foresaw how an expanding marketplace for robotics could become stunted by a lack of suitable real estate. Revitalizing this industrial site not only created an anchor for the community as a whole, it also helped create a center of gravity for a budding Pittsburgh robotics industry.
As the robotics industry continues to grow in Pittsburgh, RIDC is working in partnership with these companies to understand and provide for their future growth needs. Whether they need space for R&D and labs or large open spaces for testing autonomous vehicles, early stage companies with aggressive growth plans often encounter challenges in the real estate market.
Let’s look at a few:
Companies spun-off from universities.
Some traditional landlords might consider these ventures risky. They have no independent financial history, may have little or no revenue from operations, and only a handful of employees. It’s likely that none of them have ever run a business before. All these factors make it difficult to find a landlord who will sign a lease agreement.
Early-stage companies can expand rapidly with changing needs.
A company may only have a few employees at the outset, but it can quickly outgrow space even over the course of a relatively short-term lease. In its early stages, the company might want to start out in a small, urban office, close to its university sponsor and a pool of talented young people. A year later, they might receive a government contract that requires larger space for employees, a larger lab and R&D facility and a location with more remote outdoor space for test tracks or airspace for testing drones.
But to sum it up, what robotics companies want when making site selection decisions is a landlord that is flexible, accommodating and a trusted partner – someone who is willing to weather the ups and downs of an unpredictable business – and make sure they have the right space at the right time. That means having a large, diverse portfolio of properties and the willingness to work with companies should they need to expand before their current lease is up.
And they want to be near other companies in their fields – a hub of like-minded people where the potential for business synergies is ripe.
Navigating these challenges in a city like Pittsburgh and with an entity like RIDC can make finding space relatively easy, but it takes a nonprofit, entrepreneurial approach to redevelopment and commercial real estate.