M&T Realty Capital Refis Buffalo Tower With $120M CMBS Loan

Douglas Development has sealed a $119.5 million debt package to refinance a redeveloped mixed-use tower in Downtown Buffalo, Commercial Observer can first report. 

M&T Realty Capital Corporation (M&T RCC) originated the commercial mortgage-backed securities (CMBS) loan for the developer’s Seneca One project consisting of more than 800,000 square feet of office space, roughly 70,000 square feet of ground-floor retail, and 115 apartment units. Zach Casale and Donna Falzarano, senior vice presidents at M&T RCC, originated the deal through multiple CMBS conduit transactions.

Washington, D.C-based Douglas Development acquired the 40-story building at 1 Seneca Street that was formerly known as One HSBC Center in 2016 and repurposed the property, which was largely vacant following the departure of HSBC in 2013. M&T Bank moved into 15 floors in 2020 as a new anchor tenant with two floors dedicated to a technology hub, and the building added 115 luxury rental apartments the next year as part of a $150 million renovation by Douglas.

Casale noted that M&T RCC supplied the initial construction loan for Douglas’ redevelopment of the tower. The refi process got delayed due to the onset of the COVID-19 pandemic in 2020 followed by escalating interest rates in 2022. 

“We’re chartered to take bank balance sheet loans and put them into the secondary market either with our co-respondent life companies, agency, CMBS, etc., to act as a full-service mortgage banker, so we were always planning to go for the refi. It was just a matter of when,” Casale told CO. “The capital markets got turned upside down during that anticipated timeline, but we were able to move forward and successfully refi the deal about a month ago.” 

Casale said the office portion of the tower has benefited from sizable long-term leases by M&T and Highmark Blue Cross Blue Shield, which moved into the building’s top five floors in 2024. He stressed that the creditworthiness of the two largest tenants coupled with other firms in the research and technology space along with the multifamily and retail components created confidence in the CMBS market for the deal.

Falzarano said the Seneca One project is well positioned for success a decade after Douglas Development acquired the site due to its focus on using the project as a catalyst for more economic development in Buffalo. 

“It was the borrower’s concept to basically use this as the impetus or beginning of a wider community rejuvenation in the center of Buffalo,” Falzarano said. “They have a focus on maximizing value with assets that are not stabilized and bringing them to fruition with an emphasis on giving back to the community.”

Douglas Development did not immediately return a request for comment.

Andrew Coen can be reached at acoen@commercialobserver.com.