Commercial real estate decline -tallest buildings in ST. Louis for $3.6 million,

quote:

---

In the latest sign of how lower demand is hitting parts of the U.S. office market, one of the tallest towers in St. Louis that sold for $205 million in 2006 has changed hands again this week — for about $3.6 million.

The former One AT&T Center, a 44-story high-rise totaling 1.46 million square feet at 909 Chestnut St., is now owned by Boston-based Goldman Group. 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.

The block on which the long-vacant property sits was declared a blighted area by the St. Louis Planning Commission in 2023. SomeraRoad had proposed renovating the existing building to develop 306 apartments, 300 hotel rooms and 37,000 square feet of retail, thus reducing the office square footage by 1.2 million square feet.

The company's plan to redevelop the tower never materialized. Charles Goldman, principal of Goldman Group, wouldn’t disclose to CoStar what his firm intended to do with the property, saying his company was “still digesting the sale.” At 588 feet, the former One AT&T Center is taller than all but the 630-foot Gateway Arch monument in St. Louis and the 593-foot One Metropolitan Square office building.

A redevelopment of the property could face significant challenges as office space use has changed after the pandemic accelerated the adoption of remote and hybrid work policies. Higher interest rates have also led some companies to scale back on costs for real estate and employees.

The nation’s central business districts have seen their office vacancy rate climb from a low of 8.9% in the third quarter of 2018 to 16% this past quarter, according to CoStar data. St. Louis’ current office vacancy surpasses that at nearly 18.6%. Without the empty 909 Chestnut tower, St. Louis’ vacancy would dip to about 14.3%.

AT&T Tower is the second-largest vacant office building in the United States and has been empty since 2017, CoStar data shows. The largest empty office structure in the country is the 1.59 million-square-foot 5400 Legacy Drive in Plano, Texas. Developer NexPoint paid $125 million for that property in 2018 and plans for it to be the center of a $4 billion life science campus that would include hundreds of apartments and a hotel.

---