So you thought the closing of the Statler was bad news for Buffalo? In what could be a devastating blow to downtown and its commercial real estate market, HSBC is considering moving out of its iconic HSBC Center office space when its lease expires in 2013 While the rumor of the bank looking at its options has been circulating for weeks, The Buffalo News got the bank to confirm its space search.
HSBC employees occupy 2/3 of the 38-story building straddling Main Street, or 650,000 sq.ft. The bank says it is looking at options while also negotiating with current landlord Seneca One Realty LLC on a lease renewal.
From bank spokesman Neil Brazil in today’s News:
“The company is currently looking at a range of options, one of which is to maintain the status quo,” Brazil said. “We’re still in the early stages of this process, and a final decision is not expected for some months.”
However, Brazil downplayed the significance of the property evaluation, saying that it’s a continuing process. “This is really standard business practice that all corporations do from time to time,” Brazil said. “Taking a look at our corporate real estate options is just one of the reviews that we carry out.”
The bank has issued a request for proposals to developers and property owners for new space. Its due diligence is good business and may only be a tool for negotiating a new lease. This is no time to play chicken. Buffalo’s business community and elected leaders need to unite in a push to keep the bank downtown.
Downtown sources say that developers are looking for sites that can accommodate a 500,000 sq.ft. building and parking for 1600 cars. Those same sources say that the bank has also had high-level negotiations with Uniland Development. One scenario (rumor) floating around has the bank relocating to a new Amherst corporate campus.
Losing the bank would be a giant blow to downtown. When Goldome and Empire Saving Bank collapsed in the early 1990’s, it took the downtown office market nearly decade to absorb the vacant office space. HSBC’s employees make up nearly ten percent of downtown’s private sector workforce.
This is more than a private landlord/tenant business discussion. The City has a lot to lose in this.