A rare bright spot in the Center City office market is up for sale after reaching nearly complete occupancy.
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Lubert-Adler Partners is looking to sell its 595K SF trophy office building at 2400 Market St., the Philadelphia Business Journal first reported.
A CBRE team including Vice President Doug Rodio is marketing the property overlooking the Schuylkill River. The brokerage didn't disclose an asking price.
“I’m sorry I’m selling it,” Lubert-Adler partner Dean Adler told Bisnow.
“We're at the end of the life of our fund. I never would have sold this,” he added. “It's the best property we own.”
The building was 99% occupied in June, according to CMBS monitoring firm Morningstar Credit.
The $220M loan tied to the building moved into special servicing last month ahead of its December maturity date. Commentary from special servicer Torchlight Loan Services shared on Oct. 1 says the borrower was looking to sell the property and requested to extend the maturity to May 8, 2027.
“The borrower does not expect the sale to be completed in time to repay the loan by the maturity date,” the commentary says.
Adler said Lubert-Adler has been meeting all of its debt service obligations.
The Fitler Club, a private club featuring coworking spaces and a gym, is the largest tenant at 2400 Market, with 80K SF.
“The Fitler Club is a big differentiator,” Adler said. “We have a pool. We have wellness. We have eating. We have hotel rooms.”
JPMorgan Chase last week announced it signed a 62K SF lease at 2400 Market, where it will relocate from two offices at One Liberty Place and 1735 Market St. The parent company of the radio broadcaster Audacy and the food service firm Aramark occupy 67K SF and 63K SF, respectively, according to Morningstar.
The redevelopment of the property that delivered in late 2018 is a rare success story for the Center City office market, which has been defined by low occupancy and financial distress in the post-pandemic era.
It is one of just two multitenant office buildings completed in the submarket since the early 1990s, CBRE told the PBJ.
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