The future of Buffalo’s tallest building will soon be determined. An auction for the nearly one million square foot One Seneca Tower is scheduled to be held at 3 PM today. HSBC vacated the tower when its lease expired in 2013. Bank employees occupied 2/3 of the 38-story building straddling Main Street, or 650,000 sq.ft. Law firm Phillips Lytle moved to One Canalside and the tower lost tenants Capital One Financial, the Canadian Consulate, and others . The exodus left the tower over 95 percent vacant. Seneca One Realty LLC defaulted on their loan and the building was foreclosed on.
As for the lay of the land, a group of corporate investors (including banks) currently holds the note – the group is owed approximately $75 million via mortgage defaults (in a perfect world, that is what they are hoping the building fetches to recoup losses). There will be some lowball bids to start (possibly starting around $20 million). From there, the owners (who are looking to hold onto the building), and group of capital investors (who hold the note and don’t want to take a big loss), could be competing against a host of widespread developers/investors that have been putting teams together to snag the property at a deal or no one at all.
A deal? Whoever ends up with the tower will be (most likely) looking at mixed use potential. The building is dated and would need a ton of work and money to bring it up to a functional mixed-use property. That means that any potential investor would have to consider the bidding price, as well as the cost to rehab the building.
For the right price, someone could actually make money on the building. Apparently there are a number of eyes watching, with some intriguing plans. Once again, even if the selling price is low enough, the building is super expensive to simply run. There’s also a lot of available office space in Buffalo, though little true Class A space. Residential units would be pricey (but incredible). The right team might already have some leads regarding regional corporations looking to move into the city, as well as a practiced hand at residential development. Those hedging bets are looking at the lending team, that would not want to see a significant loss and would likely roll it over down the road.
*The parking ramp is not part of this auction. That will be auctioned off at a later date.