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Buyer sought for BlueCross complex

The owner of BlueCross Blue-Shield of Western New York's corporate headquarters in downtown Buffalo is putting the complex up for sale.

The move by Indianapolis-based developer Duke Realty Corp. will not affect BlueCross BlueShield's operations or the 1,300 employees who work in the complex, said Karen Merkel-Liberatore, director of public relations for the health insurer.

"This is truly a real estate transaction," Merkel-Liberatore said. "It is a sale of the space. It has no impact on BlueCross BlueShield of Western New York as an organization. We are not moving. We are very solid."

The $110 million, 469,000-square-foot complex is located near the Niagara Thruway and has an adjacent parking ramp. Employees moved in during summer 2007, shifting from a Main Street location near Canisius College.

BlueCross BlueShield of Western New York's 17-year lease on the complex began in 2007. The agreement contains several options for renewal, Merkel-Liberatore said.

The complex also houses CB Richard Ellis' Buffalo office, which manages the property. That relationship will continue, said Jeffrey LiPuma, managing partner of the firm.

LiPuma said he sees Duke's decision to put the property on the market as a positive sign, reflecting Duke's confidence in the commercial real estate market. "You've got national, large-scale investors that will be looking at Buffalo," he said.

Duke, a real estate investment trust, always had planned to sell the Buffalo property once it opened, and the timing for putting it on the market seemed right, said Whit Annibali, Duke's vice president of dispositions.

The Chicago-based real estate firm Jones Lang LaSalle began marketing the BlueCross BlueShield building a few weeks ago on behalf of Duke.

"We've been pleased with the response," Annibali said. He said an asking price has not been attached to the complex, but that the building itself, its location and its tenant are all assets.

The property is being marketed to private equity firms, public and private REITs, foreign capital and wealthy individuals, Annibali said. Duke hopes to wrap up the sale within a few months, once it gets an acceptable offer.

The construction of the complex drew attention a few years ago for its size, the cleanup of a former brownfield site, and the fact that it kept a major employer within the city.

The planned sale brings to mind some other prominent downtown office property sales in recent years.

In 2005, Seneca One Realty bought One HSBC Center, Buffalo's tallest building, for $85 million, plus an additional $10 million for an adjacent parking ramp. That same year, a Nebraska real estate investment company bought Niagara Center on South Elmwood Avenue for $70 million. Key Center sold for $41 million in 2001.

e-mail: mglynn@buffnews.com