Dan McCaffery, CEO, McCaffery Interests

In an interview with Invest:, Dan McCaffery, CEO of McCaffery Interests, said that resilience, adaptability, and community-focused development are central to navigating today’s volatile real estate landscape. “As for what’s next, we’ll adapt. We’ll revise our strategies to meet the realities in front of us,” McCaffery said, reflecting on industry challenges and the promise of future transformation.

What changes over the past year have impacted the company the most, and in what ways?

Ironically, I think the lack of major changes over the past year has had a real impact. Things have been relatively static. Sure, things are happening, but compared to previous years, it has been quiet. The election occurred, and the months that followed were filled with uncertainty. People have been cautious, and rightfully so. There are new strategies coming out of Washington, and many of them are unprecedented, at least in my experience. So right now, like many in our industry, we’re testing the waters and feeling out what’s next. We haven’t stopped moving forward, but the climate is restrained.

In our sector, the banks are like hidden players. They don’t want to step out too soon, and when they stay conservative, the equity side hesitates too, unless they take on greater risk. You can feel things starting to shift, but it has been a very constrained period. There’s a kind of bottleneck happening right now. I wouldn’t call it pure caution. It’s a kind of thoughtful hesitation. Our clients, whether residents, office users, or retailers, are all being thoughtful. And in that sense, caution is a good thing.

What initiatives do you consider most transformative for McCaffery’s footprint in the region?

I’d say we’re more followers than trailblazers. The major transformations are really driven by the city itself: massive investments in infrastructure like the airport, hospitals, and universities. The universities are a huge part of Pittsburgh’s identity and have remained strong even as the city shifted away from its steel industry roots. While steel once defined Pittsburgh and wasn’t exactly favored by environmentalists, that era is behind us.

What’s remarkable is that even as the steel jobs went offshore, Pittsburgh retained its intellectual and logistical infrastructure. It didn’t lose its connectivity to the rest of the country or the strength of its academic institutions. Now, equity and debt houses are seriously talking about Pittsburgh again. Not long ago, that wasn’t the case. The city is becoming a world-class market once more.

The U.S. Steel acquisition is another huge moment. It’ll bring massive investment, and that will only benefit the region. Pittsburgh is on an upward trajectory, and we’re proud to be part of that.

What trends are you seeing in Pittsburgh’s rental market, and how are you adapting unit designs to meet the needs of a more long-term tenant base?

Rental housing has traditionally been seen as temporary, and while that’s still true in many ways, there’s a growing sense of permanence among renters today. When I was younger renting was just a stepping stone toward buying a house. We were married by 22 or 23 and already thinking about owning a home. That timeline has changed drastically. People are waiting longer to get married and enjoying the freedom that comes with renting.

Now, we’re seeing renters by choice — people who are content staying in rentals for five, six, or even 10 years. That’s a significant shift. Places like the Strip District have become very successful residential neighborhoods because they cater to that lifestyle.

How does tenant feedback shape your designs?

Community is a big part of what renters want today. Even if someone only has a small one-bedroom apartment, they value communal spaces like gyms, lounges, and rooftop terraces. We’re designing larger community rooms because people want to be around others. They may go to the lounge with a big TV not to watch a show but to meet people and socialize. That’s how young people live today.

Interestingly, this phase of life eventually leads to people wanting their own space again. That’s why we’re also building more rental homes, not just apartments. These homes are smaller, more efficient, and designed specifically for renters who want a bit more autonomy. They offer a middle ground between apartment living and full homeownership.

It fits the current stage of life for many. But once you meet someone, settle down, and maybe have a child, your concept of community shifts. That’s when you start needing more space again. 

Based on your experience in the Strip District and beyond, how would you assess your collaboration with the city of Pittsburgh and community leaders?

The collaboration has been excellent. I wish I had a horror story to share, but I really don’t. In other cities, developers can run into frustrating roadblocks, but Pittsburgh hasn’t been like that for us. Sure, sometimes I want to do something on Monday and end up waiting a couple of weeks, but that’s part of the process. I don’t expect to walk in and get immediate approval just because I want it.

Take the Terminal Building, for example. That project was massive — it spans over five city blocks and had been sitting empty for years. Naturally, the city had a lot of questions and ideas. And they should. That level of scrutiny is warranted. It wasn’t always easy, but in hindsight, it made the project better. People joke about how long it took, but I think the approval process was thorough and necessary.

When you see the Terminal Building thriving, you don’t think about the difficulties. You just see the success. Some objections were silly, sure, but many were thoughtful and helped shape the project for the better.

What are your key goals and priorities for the next two to three years?

The last couple of years have been rough. Honestly, sometimes I just say a few prayers that things don’t get worse. Interest rates went through the roof, and then we had the pandemic, which drastically changed how people use buildings. Office spaces emptied out, and real estate investment slowed to a crawl.

Looking forward, I’m hopeful. Not blindly hopeful, but realistically so. We need to get back to a greater sense of normalcy. It’s unsustainable to have buildings that sold for $350 million being resold for $70 million. That kind of loss affects pension funds, banks, and developers. So yes, the past four years have been very tough for our industry.

As for what’s next, we’ll adapt. We’ll revise our strategies to meet the realities in front of us. Retail is going through a rebirth, too. Many legacy retailers closed, but that’s opened the door for a new generation. And people’s lifestyles are changing. They’re not cooking much at home. Like in Spain or France, they’re living more publicly, eating out on weekdays and enjoying the city. That’s shaping how we think about retail and residential development going forward.