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Thread: How would you handle the HSBC Tower?

  1. #1
    Tony Fracasso - Admin
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    How would you handle the HSBC Tower?

    Emptying HSBC Center presents a towering problem

    As Buffalo goes through its biggest real estate boom in decades, one
    dark cloud hangs over the revival: the prospect that downtown’s tallest
    building could soon have as much as 38 stories of empty office space.


    While
    the owners of One HSBC Center make the case for public money to
    renovate and revive the building, some of their real estate rivals are
    starting to make the opposite case: Let it fail.


    The outcome of
    the argument could have a big effect on whether Buffalo’s boom grows or
    fails. Seneca One Realty, which owns the building, warns of damage to
    the entire downtown commercial market if the building were foreclosed
    upon and sold, suggesting that a new owner could desperately slash rents
    to lure tenants from other buildings. That, in turn, could cause a
    downward spiral for older office facilities.
    Read the full story in the Buffalo News by Jonathan Epstein



    Would you rather keep the money in your own pocket for your own needs or would you rather bail out the people who own the HSBC tower?

    Do you feel sorry for the IDA/lawyers who will get their cut by handling the incentive package to renovate/revive the building?

    Words of wisdom:

    “I don’t see why there’s any need for the government to get involved,”
    said Jim Militello, president of J.R. Militello Realty. “Should we write
    checks to every landlord to help them keep the lights on?”
    Here is what Jim does

    http://www.militello.com/

    J. R. Militello Realty, Inc. was founded by Jim Militello and Jerry Workman in 1989 in
    response to the demand for technical expertise in today's changing and highly complex real
    estate market. The firm is staffed by real estate professionals with extensive
    experience in matters of finance, marketing, development and government.[/FONT]

    In a short period of
    time, Militello Realty has grown to become one of the largest commercial brokers in
    Western New York
    . Its computer capabilities and real estate knowledge database are
    unparalleled in this market.

    Our licensed real
    estate brokers
    and sales agents include Michael R. Alpern, Carey Anderson,
    Carl Buzak, Kelly Ann Green, Michael Hollander, Peter Jaremka, Ed Mills,
    and D. Scott Roth. Tom Kinsella gives us an in-house appraisal
    capability. JoAnn DiGiulio and Mike
    Sweitzer provide research and other support services. Additional employes, sales
    agents, and strategic partners are available to assist in specific projects and
    transactions. Call us at (716) 856-2872


    This was interesting from Jonathon's article.

    The tower could be 95 percent vacant within a year, after its two
    dominant tenants move out by December. That would leave the New York
    City owners
    without the revenue stream to keep up the building’s monthly
    mortgage payments, not to mention unable to meet a $75 million,
    one-time “balloon” payment due in January 2015.
    I don't know about you but I don't care about business people in New York City. Only businesses we should be concerned with our businesses that are locally owned and operated in Buffalo New York/Erie County. We want cash flow coming into our community not out of our community.


    More words of wisdom..


    “Let the building be foreclosed. We don’t care,” said Carl Paladino,
    founder and chairman of Ellicott Development Co., the biggest private
    property owner in the city. “If the owners made a bad investment, they
    should suffer the consequences.”

    Others concur.
    Carl owns


    http://www.ellicottdevelopment.com/

    Ellicott Development is a first-class full service real estate
    development and management company
    with over 40 years of experience in
    developing and managing commercial real estate and retail properties in
    the Buffalo-Niagara, Upstate New York and Western Pennsylvania regions.
    Our properties include office retail, flex space, hotels, residential
    and mixed-use projects
    .



    “Not a
    nickel of taxpayer money should be spent to bail out a developer or a
    bank in that type of a situation,” said Sheldon Berlow, a longtime
    Buffalo broker now at Pyramid Brokerage Co. of Buffalo. “For the
    taxpayer to subsidize the mortgagee or the investor, both of whom made
    errors, is preposterous.”
    Sheldon Berlow is a broker for

    http://www.pyramidbrokerage.com/

    Pyramid Brokerage started operations in 1971. That's over 40 years in
    your markets. And we're the only regional commercial broker to make
    Commercial Property News' top 100 list of influential commercial brokers
    nationwide
    .
    From that article:

    “It’s a worthwhile building to do it for, only because of the size,”
    said Greg Oehler, chief operating officer of Hunt Commercial Real
    Estate, which represents Seneca One. “You can’t just leave it sitting
    there vacant.”
    Of course he is going to say that What else are you going to say when your client is on the hook for millions...

    Another items:

    “People make investments, take risk and seek reward. Sometimes it works
    out; sometimes it doesn’t. That’s OK,” said Zemsky, who is also managing
    partner of Larkin Development Group, owner of the Larkin at Exchange
    Building. “The government’s job here is not to bail out the owner.”
    Zemsky is cool

    He runs

    http://www.larkindg.com/

    INNOVATION is what made The Larkin Company the most successful marketing
    and manufacturing firms of its time and is what inspired Larkin
    Development Group to restore the Larkin at Exchange Building, and other
    landmark office buildings in the central business district of Buffalo,
    New York.
    Here is the funny thing. If the few people who are against helping Seneca One receiving hand outs were in the same spot their hands would be out looking for incentives also.

  2. #2
    Member leftWNYbecauseofBS's Avatar
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    The owners of the tower setup Seneca One Realty LLC...a limited liability company to insulate themselves from any potential problems with the building. That was their right. It was also their choice to vastly overpay for the building at $93 Million back in 2005.

    The public should be insulated as well from any liability for the tower running into vacancy issues. Let it fail. Let the owners lose their money and allow another LLC to purchase at a correct price.

  3. #3
    Member leftWNYbecauseofBS's Avatar
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    Quote Originally Posted by WNYresident View Post
    Here is the funny thing. If the few people who are against helping Seneca One receiving hand outs were in the same spot their hands would be out looking for incentives also.

    Looks like to me the only people who are in favor of public money are the hired brokers at Hunt who work for Seneca One.

  4. #4
    Tony Fracasso - Admin
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    One Seneca Tower now worth a quarter of its sale price

    It’s official: The nearly vacant One Seneca Tower is worth only about a quarter of what a group of New York City investors paid for it less than a decade ago.
    Read more on this by David Robinson in the Buffalo News

  5. #5
    Member leftWNYbecauseofBS's Avatar
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    Quote Originally Posted by WNYresident View Post
    One Seneca Tower now worth a quarter of its sale price
    Read more on this by David Robinson in the Buffalo News

    That price is going to give this building a very, very good chance.

    At the very least the new owner could keep it at office and price the leasing out in such a way that the space becomes a good deal. At the most, that price would leave room for upgrades or a conversion.

  6. #6
    Tony Fracasso - Admin
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    Would be cool if the Sabres owner buys it. He would have one heck of a commitment to our community. The Sabres with the Harbor Center, maybe the Bills and then the office tower.

  7. #7
    Member leftWNYbecauseofBS's Avatar
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    Quote Originally Posted by WNYresident View Post
    Would be cool if the Sabres owner buys it. He would have one heck of a commitment to our community. The Sabres with the Harbor Center, maybe the Bills and then the office tower.

    Could be good and could be bad.

    If Pegula owns the Sabres, Bills, HarborCenter and Seneca One...that's a lot of power for one person. One person who could get upset at stupid political moves at some point. Buffalo and Erie County has a history of stupid politicians.

  8. #8
    Tony Fracasso - Admin
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    He might get upset and help have them and the political party who supports them replaced.

  9. #9
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    I would have this company take care of it

    http://jtbservices.com/

  10. #10
    Member NY The Vampire State's Avatar
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    It should of been the new corporate HQ of Tim Hortons after deciding to move here because AMERICA'S corporate tax rate was lower. I guess I'm still dreaming though.
    Democrats & Republicans Suck Alike.

  11. #11
    Member 300miles's Avatar
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    Quote Originally Posted by leftWNYbecauseofBS View Post
    Could be good and could be bad.

    If Pegula owns the Sabres, Bills, HarborCenter and Seneca One...that's a lot of power for one person.
    Agreed. Variety is better. We don't want to depend on any one person or company for our future

  12. #12
    Tony Fracasso - Admin
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    So seeing the building is going to be auctioned off how much do we think they may get?

  13. #13
    Member leftWNYbecauseofBS's Avatar
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    Quote Originally Posted by WNYresident View Post
    So seeing the building is going to be auctioned off how much do we think they may get?
    Not as much as they would get if they auctioned the parking ramp together with the tower.

    They are essentially trying to sell a vacant 38-story, 851,000 sq foot building without a single connected parking spot. Pretty stupid if you ask me.

  14. #14
    Tony Fracasso - Admin
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    Why couldn't the tenants park/pay like most businesses do in the city?

  15. #15
    Member leftWNYbecauseofBS's Avatar
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    Quote Originally Posted by WNYresident View Post
    Why couldn't the tenants park/pay like most businesses do in the city?

    What does that have to do with the value of the building? Of course the new owner of the building could try and lease 851k square feet w/o parking but the amount they would get is much less than if they had parking. Thus, the value of the building during the auction will reflect that.

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