Mixed Use Property Insurance in Pittsburgh, Pennsylvania

The building meets the street more than once

Pittsburgh’s neighborhood business districts — Shiloh Street up on Mount Washington, Brookline Boulevard, East Ohio Street on the North Side, the older blocks around Forbes and Murray — are where this lens actually lives: brick blocks with a shop at the sidewalk and residences on the floors over it. What the ground does to that stock is the part a general commercial appetite does not assume. On a great many of these sites the block fronts one street at one level and reaches grade again at the rear, a floor or more below, on a way or on a second street entirely. In most of the country that lower level is a basement. Here it is a second ground floor, with its own door, frequently its own tenant, and sometimes its own street number.

For a mixed-use file that turns a description into a question. Every application asks what occupies the ground floor and what occupies the floors above it, and the honest answer on this stock is that the commercial space and the residential entrance may not open onto the same street, may not open at the same elevation, and may not be reached by the same fire apparatus. None of that is a defect. All of it is unpriceable while it is unstated, because an underwriter who cannot picture the building prices the version they can imagine, and the version they imagine is flat.

Access is the sharp end of it. Where the shop fronts a pitched street barely wide enough for cars parked along both curbs, and where the connection to the street above is a public stairway rather than a road, how an aerial truck would set up stops being a formality — the occupants this lens exists for are asleep on the floors over the fire, not standing in the shop. Volunteering that the rear elevation is reached only from a single-lane way reads as an owner who knows their building. Leaving it to be discovered on aerial imagery after a quote has been issued reads as something else.

The separation question lands somewhere unexpected in this stock, too. Between a trading ground floor and residences above it, the thing that actually connects the two occupancies is usually not a wall — it is the stair. Whether that flight is enclosed, whether it discharges straight to the sidewalk or through the back of the shop, and whether it sits inside the masonry or is bolted to the rear elevation are three facts that vary building by building along one block. Where the stair runs up the outside over a yard that falls away, it is doing two jobs at once: it is the residents’ only means of egress, and it is a combustible structure fixed to the outside of a masonry building.

The rear ways these blocks back onto are narrow, and things accumulate in them — the trash, the compressor, the stair, and the restaurant’s exhaust. A duct that terminates in a way is not discharging into open air. It is discharging into a shaft with occupied windows on three sides of it, which is an ordinary grease question on a freestanding building and a life-safety question here. It is also invisible from the street the building is addressed on, which is exactly why it is worth putting in the file yourself.

What the residential half does to the rest of the policy

Much of this stock was heated as one building because it was built as one building: the shopkeeper below, the family above, one boiler, one service, one stack. Generations of tenancies later the ground floor is a coffee roaster and the upper floors are let to people with no connection to it, and the systems have frequently never been divided. In a Pittsburgh February that matters in a way it does not matter in a warm climate. One failure produces two losses on two clocks — burst pipes and lost trading downstairs, and upstairs a building that people are living in and cannot be asked to wait in. Where the shop and the upper floors are separately metered and separately controlled, that is worth saying early; it removes half the questions.

Water runs the other way as well. On a building of this shape the residences sit directly under the roof and the parapet, and the trading floor sits directly under the residential plumbing. A failure at the top lands on the people who live there; a failure in the middle lands on the tenant paying rent to trade. One event, two claims, two different parts of the program, and usually two different opinions about whose fitting let go.

The building also rarely empties all at once, and that is the thing owners on this stock get wrong most often. A storefront can trade every day of a year in which the unit over it never lets, and the reverse happens whenever a stair is out of service and the shop below carries on regardless. Occupancy here is a per-floor fact with a date attached to it, not a single yes or no about a street address, and the file is worth keeping that way while it is easy.

There is also a boundary this brand does not cross, and a city with this much conversion in it is where it gets crossed by accident. What belongs here is a commercial building that carries residential floors — a storefront, a couple of units over it, an owner leasing to businesses. Once the residential portion has become the building and the trading space at the sidewalk is essentially an amenity for it, the risk has turned into a residential product and belongs with a market that writes those. The floors and their uses settle which side of that line a building is on, and they settle it before anything else does.

Stripped down, an underwriter looking at a Pittsburgh block with people living over a storefront wants three things before anything else: what each level is used for, how somebody on the top floor gets to a street, and which of the two occupancies is paying rent this month. Everything else on the submission is refinement.

How the state vacancy provision reads a building in two halves

Pennsylvania does not leave this question entirely to the policy form. It keeps a vacancy provision of its own in the Insurance Company Law, and what that provision looks at is the building — an awkward object to look at when the building is two occupancies that empty on separate schedules. The shop can be trading while the floor over it sits unlet, or the upper units can be full while the storefront is stripped out for its next tenant, and only one of those is visible from the sidewalk. The useful response is unglamorous: know which parts of the premises are in use, know the date each of them stopped being used, and have that settled before somebody adjusting a loss asks for it.

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Where to go next

• How mixed use property risk works generally
• Everything local to Pittsburgh
• What Pennsylvania law says
• Retail Property in Pittsburgh
• Office Property in Pittsburgh

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The lines that answer this exposure

These lines have to answer for the shop, for the people living over it, and for a Pittsburgh building that meets the street at more than one height:

• Business Income & Loss of Rents
• Commercial Property
• General Liability
• Commercial Umbrella
• Tenant Discrimination