Waddell & Reed headquarters construction to continue

Waddell & Reed broke ground earlier this year on an 18-story headquarters at 1400 Baltimore Ave., though a recent sell of the company and  planned 2021 acquisition could throw off its local relocation plan.

The breakup of Waddell & Reed into at least two pieces suggests that the company won’t need an entire 18-story headquarters building, between the duplication and attrition often connected to big acquisitions.

Regardless of whether the company’s initially pledged 919 workers still move to Downtown, its headquarters building almost certainly will see construction continue, said Tim Schaffer, president of AREA Real Estate Advisors.

“There’s no way that construction is going to cease on the (Waddell & Reed) project because the credit is still there,” Schaffer said. “In fact, the credit may be better today than it was when they started the project.”

Macquarie Asset Management’s $1.7 billion acquisition plan for Waddell & Reed Financial Inc. has many skeptical on if the company will use the space once construction is complete.

Part of Australian financial services company Macquarie Group, Macquarie Asset Management will pay $25 for each outstanding share of Waddell & Reed, which closed at $17.01 on Wednesday. After that transaction wraps around mid-2021, Boston-based LPL Financial Holdings Inc. (Nasdaq: LPLA) will pay $300 million for Waddell & Reed’s wealth management business.

Gib Kerr, director of capital markets in Cushman & Wakefield’s Kansas City office, agreed that construction presumably would continue. Depending on the nature of Waddell & Reed’s 15-year lease, he said, the firm might be “on the hook” with the downtown building for the long term, even if Macquarie has its sights set elsewhere.

In that scenario, Kerr said, Waddell & Reed could sublease office space to other tenants, similar to what happened at the 38-story Town Pavilion, 1100 Walnut St., the area’s second-tallest office building.