Temple University is planning to vacate 130K SF in a Center City office tower wading through special servicing, according to Morningstar Credit.
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The school occupies 26% of the 502K SF building owned by Florida-based Accesso Partners. The property was 72% occupied as of last month, according to servicer comments, meaning occupancy in the building could dip into the mid-40th percentile with Temple's departure.
Temple’s lease doesn’t expire until January 2027, but it appears set to move out before then, according to Morningstar.
The move would follow the university spending $18M on Terra Hall, the largest piece of the former University of the Arts campus along Broad Street, in February. The property is set to become Temple's new Center City campus.
It isn’t clear when Temple will move out of 1515 Market or into Terra Hall. The university didn’t immediately respond to a request for comment.
“Accesso is working closely with the special servicer on 1515 Market on a potential loan modification that considers the remaining two years on the Temple lease,” a spokesperson for the company told Bisnow.
“We will be envisioning our plan for the property in the coming months as we take this time to market the future availability.”
Accesso secured a short-term loan extension on the property in September, ahead of the UArts disposition process, which wrapped up in a Delaware bankruptcy court last month.
“The modification extended the maturity date to 7/1/25 in exchange for a principal pay down of the Loan, increased reporting, and new cash equity to reserves,” Morningstar's April report says. “New modification discussions about the upcoming maturity have commenced.”
The roughly $63M loan originated in 2014 and now has a balance of about $57M. It entered special servicing in December 2023 after 1515 Market’s occupancy began to fall in the wake of the pandemic.
As of last month, Temple “was evaluating [whether] or not they would renew at the subject property,” according to servicer commentary.
1515 Market was constructed in 1960 and renovated in 2017. It doesn’t have any parking spaces but does have a direct underground connection to the Southeastern Pennsylvania Transportation Authority.
The building only faces one other lease expiration among its top five tenants before 2031.
The lease for HDR Engineering Inc.’s 12K SF at 1515 Market is up next February, but that tenant only accounts for about 2.4% of the building’s gross leasable area.
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