Big Tenants Looking for Space...But Not Downtown

According to the Post-Dispatch, three major office tenants are scouting out new space in the 100,000- to 150,000 sf range in St. Louis County.

Fireman’s Fund currently operates its national catastrophe response operations out of Earth City and has expanded in recent years to approximately 370 employees.  It’s looking to lease 130,000 sf in 2009.  Cigna is based in Clayton and Verizon is based in Chesterfield.

None of these tenants is apparently interested in downtown?  Why?

Imagine if all THREE were to lease space downtown.  Suddenly, the recent hits that downtown has taken (Macy's, loss of Centene, etc.) don't seem so bad.

Any one of them could serve as the anchor tenant for a new office tower and actually help with the revitalization of downtown, be it in Ballpark Village or elsewhere.  The Sherwood Medical Building at 1915 Olive also has more than 140,000 sf available at $18.50 psf with 278 indoor parking spaces.

Meanwhile, at the Monkey Building...

Tom Carnahan’s Wind Capital Group has leased 16,000 sf of space in the 30,000 sf Monkey Building at 1426 Washington for its headquarters.  The firm is currently located at 1010 Market Street.

The SkyHouse sales center on the building’s first floor has closed, but the building’s owners, RileyWaldrop, are now preparing the 2,612 sf space so that it can be marketed to a new retail tenant.

City Approves Demolition of Salvageable Buildings on North Riverfront

Just north of Laclede's Landing on Leonor K. Sullivan (Wharf Street, to some), sits a strip of three historic buildings owned by the St. Louis Land Reutilization Authority (LRA) - a two-story brick warehouse, a four-story brick warehouse, and a single-story stone structure. They're in relatively close proximity to the Ashley Street powerhouse and the Laclede Power Building, which is slated to be renovated by Trailnet to serve as the starting point for the riverfront bike trail. It's also surrounded by vacant lots.

While the buildings are structurally sound, the four-story building has suffered a partial collapse of its rear wall. Buildings in much worse condition have been renovated all over the city, and despite their years of neglect, these buildings are all good candidates for rehabilitation. And for some reason, the LRA wants to demolish them so that they can...well, they actually don't have any redevelopment plans for the site. Can't they work to find a developer and get these properties back on the tax rolls? The renovation of these buildings could possibly help spur some new construction, bridging Laclede's Landing with the potentially-soon-to-be-up-and-coming North Broadway district. What good is a vacant lot going to be?

Re-opening the "Why Not Downtown?" File

Good news: Benjamin F. "Tad" Edwards IV has left Wachovia Securities to form his own brokerage firm, Benjamin F. Edwards & Co.

Bad news: It will be located in Clayton.

While downtown is not perfect for every business, Edwards' new firm would have been an ideal fit for downtown, bolstering its financial services presence. In this case, the argument for choosing Clayton is most likely its proximity to Edwards' clients. However, the brokerage business is a relationship business. If Edwards had decided to locate downtown, would it have caused his clients to switch to a financial advisor located closer to their homes? Doubtful.

In order for downtown to turn the corner, it will do so on the backs of small firms with growth potential like Benjamin F. Edwards & Co. Instead, we're left with another missed opportunity.

University of Phoenix Opens New Downtown Location

The University of Phoenix has opened a new 9,000 square foot downtown location on the 9th floor of the Metropolitan Square building. The downtown learning center occupies half of the 9th floor and includes four classrooms as well as a student resource center. The new location already has 122 students enrolled with hopes of reaching an enrollment figure of 280 in the coming years.

Downtown Firm Leading Wind Power Revolution

With backing from Deere & Co. and a recent $150 million cash infusion from Irish renewable energy company NTR plc, Tom Carnahan’s Wind Capital Group is poised to become a major player in wind energy development in North America. And best of all, it’s based in downtown St. Louis at 1010 Market Street.

Wind Capital Group currently operates three wind farms in Missouri and has ambitious plans to develop additional wind farm projects in eight states across the Midwest and beyond. The firm recently made news as one of its wind farms helped Rock Port, Missouri become the first city in the country capable of meeting 100 percent of its electricity demand from wind power.

Good News for Downtown Macy's

According to MayorSlay.com, Macy’s has given the mayor a vote of confidence in the downtown store, keeping it open and upgrading its merchandise to gear it to downtown professionals – a wise move considering that downtown offers a daytime population of 90,000 potential shoppers.

The downtown Macy’s offers office workers an incredibly convenient shopping option, but it’s only worthwhile if the store offers the same quality merchandise that the Galleria or West County stores offer. Perhaps this will be the first step in that direction.

Mayor Slay also reports that Macy’s will retain ownership of the Railway Exchange Building and market its upper floors for office use.

Urgent Care Center Planned for Truman Building

Dr. Sonny Saggar purchased the Truman Building at 916 Olive for $1.1 million and plans to open an urgent care facility in the 4,000 sf ground floor space. Dr. Saggar has contracted with Cardinal Realty to handle the leasing of the building’s upper floors and is considering gearing the space to health and wellness-related businesses. A family medical practice and a gym have already expressed interest. With its high daytime population and growing residential base, and very few nearby health care options, Dr. Saggar will be serving an untapped market while completing the revitalization of the 900 block of Olive.

Whether or not Dr. Saggar decides to keep the neon visage of Harry Truman on the building remains to be seen. It practically gives the building landmark status, making it memorable and easy for patients and clients to locate. If not, I hope he can find a new home for it elsewhere downtown.

Gill Building Update

As reported in the Business Journal, Mark Pitilangas, owner of several smaller buildings in the 1000 and 1100 blocks of Olive, has purchased the Gill Building at 622 Olive for $600,000.

According to the article, Pitilangas is in negotiations with a national restaurant chain to occupy the mezzanine and first floor of the building, which is scheduled to receive $400,000 in renovations.

Convention Plaza Development Stalls Out

In September 2006, Saaman Development purchased the two-story, 18,000 sf building at 1335 Convention Plaza and an adjacent 100-car parking lot from Fallon Investments for $1.275 million ($70 psf). The building is just a block away from the Washington Avenue loft district, but is somewhat isolated, surrounded by a sea of parking lots.

At the time, Saaman's Mark Rubin said:

"We don't have any immediate plans for the lot. But, strategically, as other redevelopment occurs downtown, the next natural wave would be new construction, either residential or commercial. The allure of a vacant parking lot is it allows for new construction. There is a contingent out there that wants new construction opposed to rehabbed space, because, obviously, new space gives you a lot more versatility."

I visited Saaman’s web site to see if any announcements had been made regarding this property, only to find that their site is down and the domain is available for sale. Has Saaman gone out of business? A January 2008 article in the Business Journal revealed that the firm was forced to make layoffs due to the slowdown in the housing market, and at the time had just eight employees.

The building and parking lot are listed for sale for $1,650,000 or for lease at $9.25 psf. It was renovated in 1999, and appears to be the victim of an unfortunate recladding job – it would be interesting to see what the original building looks like underneath. City records indicate that it was built in 1927, so perhaps it would be available for historic tax credits.

Don Woehle of CB Richard Ellis is the listing agent – (314) 588-1623.

Buy Me!

1010 Locust Street - known to most as the former Blustein's Bride House - is listed for sale. Built in 1886, this four-story, 16,800 sf stunner needs a little TLC to return it to its former glory.

Loftworks has a number of projects either underway or completed nearby - the Lofts @ 315 right next door, the Farm and Home Savings Building across the street, and the Syndicate and Louderman Buildings just a block away to the east and west, respectively.

Also across the street, the Locust Building at 1015 Locust is under new ownership and scheduled to receive extensive renovations in the near future. The Alverne Building, immediately to the west of 1010 Locust, remains on the market.

The asking price is $1,195,000 ($71.13 psf).

Patrick T. McKay of Hilliker Corporation is the listing agent - (314) 781-0001