Seneca One Tower, the 38-story skyscraper that dominates Buffalo’s skyline, will be completely empty of tenants within 60 days, while the loan servicing company that controls it continues to seek a buyer.
Real estate sources confirmed that the remaining handful of firms on the upper floors will have to leave the building in the next two months, as loan servicer LNR Partners has decided not to renew any leases or bring in any new tenants.
All of the tenants currently in the building – less than 10 in all, taking up only 4 percent of the space – are either on month-to-month terms or have leases that expire imminently. One of the last larger tenants, brokerage firm UBS, bought out its lease and is relocating, while the others are now looking elsewhere.
Their departure will mean the 853,000-square-foot tower – the tallest privately owned building in Upstate New York – will be completely vacant for the first time since it was constructed more than 44 years ago as the headquarters for Marine Midland Bank. The building was over 95 percent less than three years ago.
Once vacant, Miami Beach-based LNR can downsize the remaining building staff and cut its operating expenses, since it will need only minimum maintenance and security personnel, the real estate sources said. However, it must still preserve and protect the building on behalf of the Wall Street investors that it represents. Those investors held the $91 million mortgage on the building that LNR foreclosed upon after prior owner Seneca One Realty of New York City defaulted on the loan.
In the meantime, the sources said, LNR continues to receive and consider expressions of interest from potential buyers from outside Western New York who are attracted by the lower property prices and higher returns in Buffalo compared to cities like New York, Boston, Chicago or Toronto. But local developers and even national real estate experts agree that the building would ultimately have to be redeveloped into a mixed-use project of residential, hotel, retail and office space, likely at a cost of more than $100 million.
The tower’s crisis was triggered in late 2013, when the building’s top two tenants – HSBC Bank USA and law firm Phillips Lytle LLP – left for renovated or new space in two buildings down the street. Their departures, along with the prior closing of the Canadian Consulate, left Seneca One unable to make its loan payments or even absorb the costs of operating the building. LNR completed the foreclosure on the tower in October 2015 and seized the related parking ramp across Washington Street in March 2016. Since then, it’s been trying unsuccessfully to sell both properties, but has insisted on a highly accelerated timetable, with just two weeks for any buyer to conduct due diligence.