With new owners and a plan to adapt the century-old office building, the giant Railway Exchange Building in the middle of downtown may be empty for only a couple more years.
The new owners of the Railway Exchange, built in 1914, plan to fill about half of the 1.2 million-square-foot building with apartments and build out the rest with a combination of office space, common areas and ground-floor retail.
Joining Hudson Holdings, which purchased the 21-story building at the end of January, is Amos Harris, the local developer involved with the MX District (Mercantile Exchange), the Laurel apartments and the National Blues Museum just to the north on Washington Avenue.
Harris, who described himself as a “local partner,” said the plan was to build out an estimated 600 or so apartments in the structure, some luxury and others with lower rents. Construction could start by the third quarter of next year.
“We’re going to try and do a mix to meet the market demand,” he said.
Harris was in St. Louis Thursday with Andrew “Avi” Greenbaum, a founder and principal of Hudson Holdings of Delray Beach, Fla.
“Hudson is very excited to add such a monumental asset to our portfolio,” Greenbaum said in a statement. “We are looking forward to working closely with the city of St. Louis on this historic adaptive re-use project.”
Beyond apartments, figuring out what to do with the other half of the space is still a work in progress. There might be 100,000 square feet or so of office space, although Harris said that at this point the amount was still a guess. A health club, pool and maybe even a day care center might also be part of the amenity mix.
“That’s one of the options, but there’s a ton of options out there,” Harris said.
New York-based MLK Real Estate Capital arranged the $20 million in financing for Hudson Holdings to purchase the building. It was a “challenging transaction” to finance the purchase of such a large building that isn’t producing any income, MLK managing principal Solomon Kinraich said.
“There were a lot of obstacles to overcome,” Kinraich said.
The Railway Exchange Building has been empty since 2013, after Macy’s closed its downtown location, leaving vacant a building that takes up an entire city block in the heart of downtown. Bordered by Sixth, Seventh, Olive and Locust streets, the Railway Exchange once housed Famous-Barr’s flagship department store and the offices of its parent company, May Department Stores, which was acquired by Macy’s parent in 2005.
The building had been owned by Rick Yackey, who bought the Railway Exchange in 2010 but was unable to move forward with a redevelopment.
Hudson Holdings has undertaken a number of historic renovations in the Midwest, including the nearly century-old Huntington Building in downtown Cleveland, the Textile Building in Cincinnati, and the Mark Twain Building in downtown Kansas City.
The developers are still putting together a financing package for the redevelopment, and they expect to present a larger plan seeking development incentives from the city’s economic development arm in the coming months.