A 44-story high-rise skyscraper recently sold for $3.6 million, a fraction of its 2006 price, reflecting declining demand in the North American office market amid an emerging telecommuting trend.
The former AT&T Center, one of the tallest towers in St. Louis, Missouri, USA, which sold for $205 million in 2006, just changed hands again earlier this month.
Highlights
- 44-story St. Louis skyscraper sold for $3.6M, underscoring the drop in office market demand.
- Once valued at $205M in 2006, the towering property's value crashed to $2.50 per sq. ft.
- The property's steep discount contrasts with higher commercial real estate prices in NYC.
The 1.46 million-square-foot building located on 909 Chestnut Street is now owned by Boston-based Goldman Group, CoStar reported on April 10.
A St. Louis skyscraper sold at a steep discount amid shifting office market dynamics
Image credits: Wikipedia
The firm bought the property via CoStar Group's Ten-X auction exchange from SomeraRoad Holdings, a commercial real estate investor and developer that paid just $4.5 million for it two years ago.
On a per-square-foot basis, the tower’s value over 18 years dropped from about $140 to $2.50, according to CoStar data.
To put this into perspective, an 8,200-square-foot commercial building located in an industrial zone of New York City is typically priced at $4.5 million, as per this Zillow listing.
Moreover, a 2,000-square-foot commercial building located in the heart of the Big Apple can cost about $4.1 million, as shown again on this Zillow listing.
Image credits: Urban Angle
The block on which the long-vacant St. Louis property sits was declared a decaying area by the St. Louis Planning Commission in 2023, the commercial real estate information news outlet mentioned.
SomeraRoad had reportedly proposed renovating the existing building to develop 306 apartments, 300 hotel rooms, and 37,000 square feet of retail, subsequently reducing the office square footage by 1.2 million square feet.
Nevertheless, the real estate investor's plan to redevelop the tower never materialized.
Despite plans for redevelopment, the St. Louis tower remains in a decaying area, with proposed renovations never coming to fruition
Image credits: Wampa-One/Flickr
Charles Goldman, principal of new owner Goldman Group, didn’t reportedly say what his firm intended to do with the skyscraper, saying his company was “still digesting the sale.”
Redeveloping the property may be challenging due to shifts in office space utilization following the COVID-19 pandemic, which hastened the acceptance of remote and hybrid work arrangements.
US office vacancies hit a fresh peak in the first quarter as needs continued to evolve with hybrid work setups, Bloomberg reported earlier this month.
Image credits: FOX 2 St.Louis
Moreover, vacancies rose to a record 19.8%, a preliminary report revealed, from 19.6% in the fourth quarter of 2023.
The AT&T Tower is the second-largest vacant office building in the US, and it has been empty since 2017, CoStar data showed.
The largest empty office structure in the country is the 1.59 million-square-foot 5400 Legacy Drive in Plano, Texas.
Developer NexPoint reportedly paid $125 million for that property in 2018 and planned for it to be the center of a $4 billion life science campus that would include hundreds of apartments and a hotel.
The tower's value plummeted from $140 to $2.50 per sq. ft over 18 years, sharply contrasting NYC's commercial property prices
Image credits: zillow.com
Nearly two years into the pandemic, roughly six in ten U.S. workers who said their jobs could mainly be done from home (59%) were working from home all or most of the time, Pew Research Center reported in February 2022.
The vast majority of these workers (83%) said they were working from home even before the omicron variant started to spread in the US.
Consequently, this marked a decline from October 2020, when 71% of those with jobs that could be done from home were working from home all or most of the time, but it’s still much higher than the 23% who said they teleworked frequently before the coronavirus outbreak.
"Let's put this into affordable housing," a reader commented
