Two greater Philadelphia office properties are more than half-empty following the departure of major healthcare tenants, new loan servicer filings reveal.
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Healthcare and life sciences consulting firm Inizio vacated its 43,500 SF at One South Broad when its lease expired at the end of July, according to servicer commentary reported by Morningstar Credit. The contract accounted for nearly 9% of the gross leasable area in the building.
The Aion Partners property overlooking Philadelphia City Hall is now just 46% occupied as special servicer Rialto Capital Partners seeks a broker to put it on the market, according to commentary dated Oct. 13.
The loan on One South Broad has been in special servicing since September 2022, three months before it was set to mature.
The borrower managed to secure an extension the following year that expired in the fall of 2025, when Rialto initiated bankruptcy proceedings that Aion consented to.
The borrower still owes $34.8M on the $46.5M loan JPMorgan Chase originated in 2012.
Aion, Rialto and Inizio didn't respond to Bisnow’s requests for comment.
Inizio was formed by a 2022 merger of Ashfield Health and Huntsworth Health, the latter of which is listed by Morningstar as the departing One South Broad tenant. The new entity is owned by private equity firm Clayton, Dubilier & Rice, which bought Huntsworth for $511M in 2020.
One South Broad isn't the only greater Philly office property to lose a major healthcare tenant.
Dialysis provider DaVita has vacated its 153,700 SF at AFA Real Estate Partners’ Great Valley Commerce Center before the lease was set to expire at the end of January, according to servicer commentary reported by Morningstar.
The tenant made up more than 43% of the gross leasable area at the Malvern property, which hit Morningstar’s watchlist in August.
The departure will leave the complex approximately 42% occupied less than a year before AFA’s nearly $21.5M loan from KeyBank is set to mature in August 2027. The balance is $17.8M.
The borrower declined Bisnow’s request for comment, and DaVita couldn’t be reached.
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