Mandel Group Acquires Historic Building in Downtown St. Louis
Mandel Group, Inc. announced today that it completed acquisition of the historic Merchandise Mart building, comprising 213 loft apartments, in downtown Saint Louis, Missouri.
Merchandise Mart
Milwaukee‐based developer Mandel Group, Inc. announced today that it completed acquisition of the historic Merchandise Mart building, comprising 213 loft apartments, within the Washington Avenue Loft District in downtown Saint Louis, Missouri. The acquisition was completed by Merchandise Mart Equity LLC, an affiliate sponsored by Mandel Group.
The granite and heavy masonry structure, constructed in 1889, was originally a dry goods warehouse before being acquired, restored and converted to apartments in 2003. The total cost of the conversion and restoration at that time exceeded $45 million, an investment supported in part through the use of historic rehab tax credits and affordable housing tax credits. “The property appealed to us in part because we were able to acquire the asset well below its replacement cost today, and far below the original cost”, commented Jason Babcock, Vice President | Director of Acquisitions for Mandel Group. “It’s right in the heart of a vibrant mixed‐use downtown neighborhood that’s experiencing sizable reinvestment. We expect the property to gain value both through enhanced operations but also due to the dynamics of the surrounding area.” The location boasts a WalkScore of 98.
At the time of closing the property’s occupancy rate was 85%. Mandel Property Services, Inc. has assumed responsibility for property management and operations and expects to increase property performance to match the market’s current average occupancy rates in the mid‐90s. “Merchandise Mart is a beautiful building with some incredible apartments that we could never afford to replicate today” added Barry R. Mandel, President & CEO of Mandel Group. “While the acquisitions market has tightened substantially, we’ve been fortunate to continue finding these types of opportunities in select Midwestern markets.”
Downtown Saint Louis is experiencing hundreds of millions of dollars of reinvestment, and substantial job creation in key technology and financial services sectors. The City recently announced over $1 billion in new building permits for the latest fiscal year, and will be seeing several large new projects undertaken in the next few years including a $1.75 billion, 3,100 employee campus development for the National Geospatial Intelligence Agency, a federal agency charged with managing, protecting and analyzing geospatial intelligence for the US military and intelligence communities. In the private sector, accounting firm KPMG picked downtown St. Louis to become one of the firm’s largest U.S. tech hubs, and is in the process of adding 175 jobs to its already robust staff of St. Louis‐based professionals.
Technology and start‐up based employment is anchored by the “T‐Rex” Incubator, located one block from Merchandise Mart and home to over 110 start‐up businesses that have created hundreds of new career opportunities for young professionals. LockerDome, a social media and native advertising digital platform founded in St. Louis in 2008, recently announced plans to move its headquarters to within three blocks of Merchandise Mart with the intention of adding more than 300 employees over a several year period.
Formerly known as the Garment District of St. Louis, Washington Avenue has been transformed into an eclectic urban corridor following a $17 million streetscape redevelopment completed in 2001. Since then, the Loft District has become known for its nightlife venues, new and trendy dining destinations, and loft building conversions. Optimally located, Washington Avenue offers residents convenient walking access to the Central Business District, Convention Center, and Gateway Arch. The neighborhood enjoys service via several stations of the MetroLink subway/light rail system.
Doug Childers of HFF brokered the transaction on behalf of the seller.
NOTE: This press release was submitted to Urban Milwaukee and was not written by an Urban Milwaukee writer. While it is believed to be reliable, Urban Milwaukee does not guarantee its accuracy or completeness.
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