A New York real estate firm is in negotiations to acquire a distressed Center City office property after buying up the majority of its debt.
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Rubenstein Partners, which owns the nine-story office portion of the Wanamaker Building at 1300 Market St., is in talks to sell to New York-based TF Cornerstone, according to a tenant cited in the Philadelphia Business Journal.
The troubled building is nearly empty and was placed into receivership last September amid foreclosure proceedings. Its debtholders are attempting to satisfy the remaining $112M balance left unpaid on the building’s mortgage.
Rubenstein Partners said it was engaged in “significant” discussions with TF Cornerstone.
“On behalf of building ownership, Rubenstein Partners continues to focus on pursuing a positive path forward and exploring alternatives for the office component of the historic Wanamaker building,” a Rubenstein Partners spokesperson said in a statement to the PBJ. “Although we cannot provide details at this time, that pursuit has included discussions with the building’s lender and others, including significant recent discussions with affiliates of TF Cornerstone.”
TF Cornerstone has also acquired the A-note for the overdue commercial-backed securities loan on the Wanamaker, the largest tranche of the loan and senior to other notes, an unnamed source told the PBJ.
The remaining CMBS loan for the office property has an A1 note for $62.4M of the debt and an A2 note for $11.3M. It was unclear whether TF Cornerstone had purchased both notes or just the A1, the PBJ reported.
TF Cornerstone declined to comment on the proceedings to Bisnow.
TF Cornerstone bought the 435K SF Macy's retail space at the base of the Wanamaker for $40M in 2019, putting it in pole position to acquire the property, according to the PBJ. Acquiring the largest portion of Rubenstein's CMBS debt also sets it up to buy the building outright.
A trial date in the foreclosure case is currently set for January in Philadelphia's Court of Common Pleas.
The Wanamaker is not the only prominent office building to fall on hard times in recent years. The former GlaxoSmithKline offices in Navy Yard and the former Centre Square building at 1500 Market St. have fallen into receivership as well.
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