Despite the loss of its three biggest tenants, the pending departure of a fourth and an imminent foreclosure on the entire property, Buffalo’s tallest building is not completely empty.
In fact, it’s even gaining new tenants.
In recent months, under the direction of its court-appointed receiver and the lender whose interests he represents, several small new office tenants have signed on for short-term leases at the downtown skyscraper known as One Seneca Tower.
Most recently, a small consulting firm providing design and build services for the pharmaceutical trade industry has signed a one-year lease on the 28th floor.
4FrontConsulting will occupy just under 2,000 square feet of space, where it will employ a “handful” of workers, said Richard Schechter, the court-appointed receiver who is managing the tallest privately owned building in upstate New York.
There are now about 18 tenants, on the top 10 floors of the 38-story tower, led by the Knox Foundation, the Oishei Foundation and the Seneca Nation’s investment firm, as well as a handful of smaller office users.
The building’s future remains uncertain. With the departure late last year of HSBC Bank USA and law firm Phillips Lytle LLP – which together occupied 85 percent of the 850,000-square-foot tower – and the closing of the Canadian consulate, the enormous building is about 95 percent vacant. Another large tenant, accounting firm PricewaterhouseCoopers, is planning to relocate as well. And all floors below the 28th are empty.
The building’s owner, New York City-based Seneca One Realty, has a $75 million “balloon” payment due early next year on its 10-year-old loan, and it’s widely expected to default. So the loan servicers, CWCapital Asset Management and LNR Property LLC, initiated foreclosure proceedings in court at the end of last year to take control of the building so they can recover as much of the balance as they can by reselling it.
CWCapital has been leading the foreclosure process to date, but LNR is now seeking control as the “special servicer.” A final resolution and foreclosure sale is still weeks or months away.
Meanwhile, Seneca One has largely been sidelined, with many of its local employees laid off, including former Chief Operating Officer Stephen Fitzmaurice, who is now overseeing the Hotel Niagara in Niagara Falls at the representative for Canadian real estate investment firm JSK International, which owns the hotel.