Parmenter Buys One Financial Plaza for $47M

ST. LOUIS-G REIT Inc. has sold its majority share in the 434,000-sf One Financial Plaza office building for $47 million to Parmenter Realty Partners. G REIT owned 77.6% of the building, and tenant-in-common investors owned the remaining 22.4%.

The 12-story tower was built in 1985, and is 85% occupied, with tenants including Jacobs Engineering Inc., Stifel Nicolaus & Co. and the Federal Reserve Bank of St. Louis. The property is at the corner of Broadway and Washington. G-REIT bought the building in August 2004 for $37 million, and after payments cleared about $11.5 million from the sale. The company has sold 13 properties, including this one, as part of a stockholder-approved plan of liquidation.

Parmenter has acquired $35.7 million in financing for the purchase from New York City-based Centerline Capital Group, which contributed the loan to a securitization which bought the remainder. “By purchasing the non-rated tranch and acting as a special servicer, we ensure that the loan won’t be sold,” says Michael L. Allen, managing director with Centerline’s Commercial Real Estate Group.

Steve Bronner, managing principal with Parmenter, says that his company has tracked St. Louis for a number of years. “Historically, this market has been kind of limping along,” Bronner tells GlobeSt.com. “We’ve now seen good indications of a positive trend. Occupancies have climbed to 90%, and there’s been positive absorption, that’s going to stat showing some effect. Our basis is $108 per foot, we think the average rents will have an upside to them.” He says that the lease rates in the building average $16 to $17 per sf, “but we think it will approach $20 per sf.”

Bronner says the city’s office difficulties and return to power can be traced. “St. Louis was hurt when the city passed an employment tax, we saw a significant outflow of a lot of jobs,” he says. “However, the suburban market rents have increased to the point where it’s cheaper to rent space downtown, even with paying the tax.” Also, he says a number of employers want to be downtown, to reach the closer southern Illinois worker base. “The western suburbs just are not as convenient,” Bronner says.