Hertz Purchase of Gateway Center Closes

December 17, 2004

Hertz Investment Group, a Los Angeles-based real estate investment company, closed Friday on the $55 million purchase of four Gateway Center office buildings, two parking garages and the 10-plus acres that sit underneath the Pittsburgh Hilton.

The Gateway buildings and property were put up for sale in September by Trizec Properties Inc., a Chicago-based real estate investment trust that is reducing the number of cities in which it owns property. Trizec (NYSE:TRZ) bought Gateway in 1995 for $57.35 million from Equitable Life Assurance Co., Gateway's original developer.

Hertz's bid was accepted in October by Trizec, which said it has divested itself of Pittsburgh properties.

Gateway is Hertz's first acquisition in the Pittsburgh area.

The four buildings that make up Gateway were constructed between 1952 and 1960, and have a combined 1.5 million square feet of office space. Major Gateway tenants include Dollar Bank, which operates its corporate headquarters in Three Gateway Center, and KDKA, which operates its TV and radio studios in One Gateway Center. Palomino, an upscale restaurant, is located in Four Gateway Center.

Hertz was founded in 1979 and now has a real estate portfolio that includes office buildings, retail centers, luxury hotels, theaters and multifamily residential properties. The bulk of its holdings are in California and in the South and include such prominent Los Angeles properties as the Standard Oil Building, the Wiltern Center, California Mart and Wilshire Square, as well as the Beverly Hills Medical Center in Beverly Hills, Calif., Dominion Tower in New Orleans, the Claridge House in Memphis and Shelbourne in Miami.