The sale of downtown’s First Federal Plaza could mark the transition of one of the last remaining – yet largely vacant – office towers.
Owners want $10.8 million for the 21-story building with the distinctive saucer-like top. They announced the sale last week, describing the decision as “bittersweet.”
“First Federal Plaza is a landmark in our downtown community, and it has been so rewarding to have been a part of its story for more than 25 years,” Chris Hill, part of the property’s ownership group, said in a statement. “At the same time, we are genuinely excited to see what the next chapter of First Federal Plaza is going to look like.”
The building hits the market at a time when the area is set up for considerable investment -- from the possible residential conversion of the Times Square building to the overhaul of the vacant former Riverside Hotel. Also, the city applied for $10 million in state funding to help reinvigorate the area around Main and State streets, which suffers from some of the highest vacancy rates in the city.
Rochester, like the rest of the nation, is struggling with office vacancies. The pandemic fueled a work-from-home shift. Extensive road repairs to Main and State streets in recent years further complicated matters, making the building hard to access.
"For purposes of a new developer or investor to come in, the building could be delivered effectively vacant,” said CBRE’s Alex Amorese, who is marketing the property. “Any large remaining occupiers of significance will be vacating the building, you know, within the immediate future.”
That does not include an M&T Bank branch and a restaurant, both of which Amorese expects to stay. But he said having the upper floors empty and available for renovation is a huge positive in the eyes of investors.
Hill and his team have pursued a variety of redevelopment options, including a one-time plan to repurpose much of the building for apartments. Amorese foresees a mixed-use redevelopment with upper floors converted to apartments, hotel rooms, event space or reuse for government offices.
And the top floor, which once housed Changing Scenes restaurant, could rotate once more.
“According to ownership, the components of the restaurant rotation are still in place, and could be made operational again,” Amorese said. “Does that ultimately happen? That's obviously to be determined depending on what a future investor wants to do with that upper floor.”
There have been varying accounts over the years on whether the mechanics were mothballed or disassembled.
How quickly the building could move is unclear. The RG&E building at 89 East Ave has been on the market since January 2019. These are buildings with expansive floors designed for a single tenant, he said, making conversion to other uses like apartments a challenge.
While First Federal Plaza is large, he said, many of the floors measure just 11,000 square feet.
“That’s unique to this market,” Amorese said, “where they’re not these palatial 20-, 30-, 40,000-square-foot floor plates that are very difficult to convert. So we are pretty excited about the prospect of investors and developers being able to wrap their heads around, ‘OK, these are floor plates that we can probably make work pretty easily without having to come up with more challenging solutions to make this a profitable venture.”
The sale price is set at almost twice the $5.5 million taxable assessed value.
