Downtown's Downturn
The Wall Street Journal reports: Two trophy-office-building sales in the St. Louis region have highlighted a sad truth for its downtown area: St. Louis is still losing its struggle with the suburbs when it comes to attracting office tenants.
In downtown St. Louis, Positive Investments Inc. paid $47.9 million late last year for Bank of America Plaza, a 30-story office tower with views of the city's signature Gateway Arch. At $64 a square foot, that is a mere half what KBS Realty Advisors' KBS REIT II paid earlier this month for the two-building Pierre Laclede complex in the city's wealthy Clayton, Mo., suburb, west of downtown St. Louis.
Just as troubling for downtown, the Bank of America building showed a sharper decline in value in the wake of the economic downturn. The Bank of America building traded at $82 million in 2003, according to Real Capital Analytics. The $47.9 million price tag in the most recent transaction, meanwhile, was less than the roughly $51 million mortgage on the property, according to Trepp, a firm that tracks the commercial-property debt market. The seller, Gramercy Capital Corp., of New York, declined to comment. The seller of Pierre Laclede, BPG Properties Ltd., of Philadelphia, took a bit of a hit when selling that property, named after the French fur trader who founded St. Louis. But the hit was smaller. BPG purchased the building in 2006 for $75 million and just sold it for about $74.3 million.
View the full article on The Wall Street Journal: Downtown's Downturn
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Posted by: Mark Alferman