Roanoke City Council voted 6-1 on Monday to sell the landmark Commonwealth Building in downtown Roanoke located across the street from City Hall. The building was constructed in 1932 and has served as a center for governmental offices on all levels – most recently serving the Virginia State Department of General Services and the State Bankruptcy Court.
The selling price of only $3.7 million was a bit of shock to many including some members of council. The building was recently appraised at $4.8 million and the square foot selling price based on 81,856 square feet of space works out to $45.20. According to a leading local commercial real estate firm, new office construction in the area typically goes for over $150 per square foot, leaving the new owner over $100 per square foot to renovate the building – something the same firm estimated would take $40 per square foot to complete. The amount of money potentially left on the table would then amount to $60 per square foot – or over $4.9 million.
The estimate to rebuild the Commonwealth Building as it stands today with its granite facade and other architectural amenities is estimated to cost over $350 a square foot. So the actual replacement value of what the purchaser received for his 3.7 million bid is closer to $28.5 million.
One local broker who wished to remain anonymous observed that, “the real shame of the whole transaction is that until recently the city had the building fully leased to state and federal offices and gave them all notice that they needed to move out so that the school board, housing authority and other city offices could move in. But that never happened and once the majority of the existing tenants had been forced to relocate they then decided to sell it. Most people would maximize the value of their property before selling, but the city kind of did the opposite.”
So instead of a fully rented landmark building that produced a solid income stream of over $350,000 a year from the state alone, the city will take a single payment for the property that is approximately 1/4 its present day replacement cost and 1/8 its actual “architectural” replacement cost.
Mayor David Bowers cast the lone dissenting vote in opposition to the sale.
By Stuart Revercomb [email protected]
