Mika Realty Group of Los Angeles has a tentative agreement to buy The James H. Reed Building, the headquarters of the Reed Smith law firm.
Reed Smith put up for sale the nine-story building at 435 Sixth Ave. in June 2007 on the heels of the firm's decision to relocate its Pittsburgh hub in June 2009 to the $179 million Three PNC Plaza under construction at Fifth Avenue and Market Street.
"For a variety of business reasons, we are unable to discuss any sale of the building in any specific terms until we have a closed deal," said Jamie Moss, a spokeswoman for Reed Smith.
Jeffrey Ackerman, a commercial real estate broker with CB Richard Ellis/Pittsburgh who has been marketing the building on behalf of the law firm, confirmed a buyer has been selected, but declined further comment.
Rick Barreca, CEO of Mika Realty, also declined comment, citing similar reasons.
Reed Smith hasn't listed a purchase price for the 181,348-square-foot building, which has a market value of $16.78 million, according to Allegheny County records.
The structure, formerly headquarters for Duquesne Light Co., was built in 1902 and renovated in 1985.
The building is owned by Reed Smith LLP and 435 Sixth Avenue Associates. The two entities are composed of current and former Reed Smith law firm partners.
Reed Smith employs 650 people Downtown, including about 500 at the Reed building. About 210 of those employees are attorneys, Moss said.
When the building was put up for sale last year, Ackerman described it as being ideal for possible conversion to residential use or a hotel, but said it also could remain as an office building.
The pending sale comes as the Downtown office market has shown some improvement -- from a vacancy rate of about 20 percent to about 18 percent in the past year.
The University of Pittsburgh Medical Center committed to take a 515,000-square-feet of office space at the city's tallest skyscraper, the 64-story U.S. Steel Tower, and Bank of New York Mellon took about 350,000 square feet of space at One Mellon Center off the market to provide room for expansion.
Then early this month, Mika scored its first major lease at its newly purchased Union Trust Building -- with Siemens Engineering, a unit of Siemens AG, signing a 10-year lease to occupy floors three to six in the landmark building.
Mika recently started a promised multimillion-dollar renovation of the building, where Siemens will have space large enough to accommodate as many as 1,200 employees.
Union Trust's new ownership group includes Michael Kamen, founder of privately held Mika, and a business associate, Gerson Fox, also of Los Angeles, and others, including the company's CEO, Rick Barreca.
"I think the office market is resilient and on its way back," said Jon Harrigan, president of Pennsylvania Commercial Real Estate, a Downtown brokerage firm.
UPMC at U.S. Steel Tower and Siemens at the Union Trust are "grand slams" that bode well for the future of the market, Harrigan said.
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