Buffalo's tallest building, the HSBC Center, is up for sale as part of package deal that includes similar "trophy" buildings in St. Louis and Louisville, Ky.
The three office towers are owned by Seneca One Realty, a New York City-based real estate investment group led by Mark Karasick. Seneca One has contracted with the Chicago office of real estate brokerage Holliday Fenoglio Fowler to market the package of properties.
Neither Seneca One nor the real estate firm could be reached to comment. Sources familiar with the property offering pegged the asking price for the three buildings, totaling more than 3 million square feet, at around $500 million.
In addition to the 38-story, 1.1-million-square-foot HSBC Center, Seneca One also is offering Metropolitan Square in St. Louis, and the Aegon Center in Louisville. Like HSBC, both of those office towers are the tallest buildings in their communities, standing 42 stories and 35 stories, respectively.
On its Web site, Holliday Fenoglio Fowler describes the three structures as "trophy towers."
"The landmark nature of each trophy building's location and architecture will ensure the continued dominance in the local leasing market and enable ownership to charge rents that are unobtainable at any other property in the local market," the online brochure reads.
All three Class A buildings enjoy high tenancy rates and stable anchor tenants with long-term leases.
The broker touts the HSBC Center as a property whose "imposing size establishes its presence in the skyline, and its outdoor plaza area cements its importance to the cultural life and cityscape of downtown Buffalo."
Seneca One acquired HSBC Center, whose anchor tenant is HSBC Bank USA, in January 2005 for a head-turning $85 million, the highest price ever commanded by a Buffalo building. The investors paid an additional $10 million for an adjacent parking ramp used by building tenants.
The new owner raised eyebrows again in July 2006, when it put the building back on the market with a $121 million price tag.
Veteran commercial real estate broker Jim Militello, of Buffalo's JR
Militello Realty, said while buyers will size up each of the three buildings on its own merits, there is a "wow" factor in bundling them as a package.
"The package gets attention. It's a nice marketing move," Militello said. "There might be a buyer out there who is willing to stretch a little bit more to get prestige buildings in three cities."
The three-tower offering is aimed at a sophisticated national or international investor, according to Militello.
"This is something for a big player with a large portfolio. This isn't something a local buyer is going to entertain," he added.
Militello said another benefit of packaging the downtown landmarks is the ability to build in a discount and still capture a profit for the seller.
"Let's say the final sale price is a little under what they'd go for as individual properties, the seller can still net a respectable profit. It can work," he added.
Seneca One purchased St. Louis' landmark Metropolitan Square in 2005 for $165 million. It added the Aegon Center in Louisville in March 2004, paying $128.5 million.