From UrbanMilwaukee.com: 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. Merchandise Mart occupies a city block bounded by Washington Avenue, 10th, 11th, and St. Charles Streets.
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.