Upstate’s largest office building and, perhaps, best investment opportunity by Schechter

One Seneca Tower (Tower), formally known as One HSBC Center, is Upstate New York’s largest office building. The Tower consists of 1,170,000 s/f on a gross basis, 855,000 s/f of which is rentable office space. It’s 40 stories high, has 27 elevators, contains a 460 space underground parking garage owned and operated by the city of Buffalo through 2022, and an attached 814 space parking ramp (Ramp). Just a few years ago, the Tower was almost completely occupied by tenants; however, HSBC Bank, which occupied more than 75% of the total space, and the Phillips Lytle law firm, left the Tower after their leases expired, leaving the Tower less than 5% occupied. As a result of the imminent departures of the two largest tenants, the lenders initiated a foreclosure proceeding in late 2013. The State Supreme Court appointed me as Receiver of the Tower and Ramp, with responsibility to safeguard the value of the assets until the foreclosure proceedings were complete. In October 2015, a foreclosure sale for the Tower took place and the lenders, led by LNR Partners as Special Servicer, gained control with a bid of $28,000,000, a small fraction of the almost $94,000,000 owed on the defaulted loans, including interest and penalties. The foreclosure sale for the Ramp is tentatively scheduled for February 2016. Assuming the lenders also secure control of the Ramp, at some point in the near future, prospective buyers will have an opportunity to shape the Buffalo-area real estate market. Over the past few years, the greater Buffalo metropolitan area has seen significant public and private real estate-related investment. In recent articles, local reporters have stated that this area has benefited from almost $20,000,000,000 of development, with more on the horizon. Several local pundits, and planning organizations such as the Urban Land Institute, have suggested that the local real estate market will have a difficult time absorbing that much office space. Most have suggested that the likely future of the Tower will be mixed-use, containing residential, office, retail, hotel and other possibilities. The Tower and Ramp will provide a great opportunity for the right buyer to capitalize on the Buffalo-area’s recent resurgence. Please stay tuned... Richard Schechter is senior executive advisor and associate real estate broker with Cushman & Wakefield/Pyramid Brokerage Company, Buffalo, N.Y.