Philly's Biggest Office Property Marketed As Conversion Play After Foreclosure
Philadelphia’s largest office property is set to go up for sale later this week, two years after it was foreclosed upon amid the crowdfunding scandal involving Nightingale Properties CEO Elie Schwartz.
Court-appointed receiver CBRE is reportedly preparing to list 1500 Market St., according to Green Street's Real Estate Alert. The space, totaling 2.2M SF, will be pitched as a blank slate prime for residential, retail or hotel conversion.
The property, which is 36% occupied, is expected to fetch just over $100M. That is a more than 80% decline from its appraised value of almost $510M five years ago.
The structure, also known as Centre Square, consists of two towers on top of a four-story base and a sizable parking lot next to Philadelphia City Hall. It was constructed in 1974 and renovated in 2018.
Court documents about CBRE’s upcoming sale of the property surfaced earlier this year.
Nightingale Properties and InterVest Capital Partners, formerly known as Wafra Capital, spent just over $328M on the property in 2017. They refinanced it via a $390M loan from JPMorgan Chase two years later.
Occupancy fell dramatically in the wake of the pandemic, and the property was foreclosed upon in 2023 after the partnership stopped making payments.
Schwartz was charged with wire fraud the following year, accused of bilking hundreds of investors via failed real estate deals financed through the crowdfunding platform CrowdStreet.
The nearly $63M fraud scheme earned Schwartz a seven-plus-year prison sentence. He was also ordered to pay $45M in restitution.
The property at 1500 Market isn't the only one in the neighborhood with a plummeting value.
Accesso Partners’ 1515 Market St. is now worth just $28M, down 68% from when the loan was originated in 2014, Morningstar reported earlier this week.
News of the new appraisal comes as the building’s largest tenant, Temple University, reportedly plans to move out. The school spent about $18M on Terra Hall, the largest piece of the former University of the Arts campus, in February.
Accesso and Temple didn't respond to Bisnow’s requests for comment.
The type of conversion CBRE reportedly plans to pitch for 1500 Market has become a common playbook for struggling Center City office properties.
Alterra Property Group's conversion of 1701 Market St. into a 299-unit apartment building is one of the latest examples.
The company is also working to repurpose vacant office space in the Wanamaker Building through a partnership with TF Cornerstone.
Their plans include 621 new multifamily units and a revitalization of the retail space vacated by Macy’s earlier this year.
