Is the Observer Building for Sale?
Billions in debt might mean for sale signs for the Observer
Real estate magnate Sam Zell's decision earlier this summer to put the Chicago Tribune building up for sale set off a wave of speculation about the fate of the beloved landmark, and it got us thinking: what if newspaper chain McClatchy sold the Charlotte Observer building?
Like the Tribune Co., which was bought by Zell in 2007, the Observer's parent company is deeply in debt. A McClatchy spokesman wouldn't return our calls about whether the chain plans to get itself out of hock by selling its real estate, but we couldn't stop ourselves from doing a little speculating on our own.
Real estate analyst Chuck Graham said the Observer building, a 414,000-square-foot, thirty-seven-year-old modernist fortress that houses the paper's main newsroom and printing presses, doesn't -- to put it politely -- have the architectural value of Tribune Tower, a neo-Gothic masterpiece. But in the super-tight uptown office market, it could be prized for its square footage. The four acres upon which the building sits, along with an additional adjacent five acres the Observer owns, would draw interest, says analyst Frank Warren, citing its prominent Tryon Street address and high I-277 visibility.
The tax value of the spread is about $28.5 million. One appraiser told us that he'd seen uptown land prices of between $50 and $100 a square foot. That would put the market cost of the Observer's dirt at $19.6 million to $39.2 million.
Sounds like a lot, but given that McClatchy's debt is about $2.5 billion, it wouldn't make much of a dent. We've got a soft spot for old-fashioned print media, so we hope they'll be churning out newspapers at the corner of Stonewall and Tryon for years to come.