Combined bank may use less office space

PNC Financial Services Group's $5.6 billion acquisition of National City Corp. could result in the combined bank occupying less office space than it now does in the Pittsburgh market, real estate experts said Monday.

But the pendulum could swing the opposite way if PNC consolidates in Pittsburgh any of National City's operations from its base in Cleveland.

And it may take time to find new uses for bank branches that PNC closes, experts believe.

National City leases 162,000 square feet at the 20-story National City Center on Stanwix Street, Downtown, and an additional 275,000 square feet at Allegheny Center on the North Side.

But it recently put more than 50,000 square feet at the Downtown site and 100,000-square-feet at Allegheny Center on the market for sublease, said Jeremy Kronman, commercial broker with CB Richard Ellis/Pittsburgh.

"National City already has done some downsizing, so I'm not sure anything really will change with the merger," said Kronman, who is in charge of leasing at National City Center.

Reed Smith LP, one of the city's largest law firms, is said to be interested in subleasing all of the available National City Center space.

According to a report by Grubb & Ellis Co., Pittsburgh's office vacancy rate declined to 15.5 percent as of Sept. 30 from 16 percent at the end of June.

The Pittsburgh office market could benefit further if PNC consolidates office functions here, Kronman said. "I think moving operations of another bank to Pittsburgh could be very positive, although maybe not so for Cleveland," he said.

Many of National City's retail branches are in prime locations, said Ned Doran, of GVA Oxford, the commercial leasing arm of Oxford Development Co. He worked with National City in recent years to find sites, including offices in Shadyside and Squirrel Hill.

National City operates 158 retail branches in Allegheny, Armstrong, Beaver, Butler, Fayette, Washington and Westmoreland counties, and PNC has 96 offices.

Alternative uses could include professional offices, medical facilities and fast food or small retail stores, Doran said.

National City offers to sublease space

PNC must integrate National City, sell branches, realign work force