A vacancy-riddled Center City office property is set to hit the auction block next month after it fell into receivership over the summer.
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1650 Arch, a 553K SF tower across from Comcast Center, has been scheduled for an auction Nov. 5, the Philadelphia Business Journal reported. The building is owned by ASI Management affiliate 1650 Arch Investor LP.
Bids will be accepted online and in person outside the New York Supreme Court building in Manhattan. Colliers Senior Vice President Carl Neilson is handling the auction process on behalf of administrative agent Acore Capital Mortgage.
The loan has an outstanding balance of $43M, down from the nearly $47M the company reportedly owed when the property entered receivership in July.
The building was just 52% occupied at the time, a steep drop from 93% when an affiliate of Delphi Financial Group originated the nearly $76M loan in 2018.
The lender has the option to participate in the auction and use the money it is owed as a contribution toward its bid. The process would be similar to how TF Cornerstone acquired much of the Wanamaker Building during a June auction, as previous owner Rubenstein Partners owed it roughly $120M.
Vacancy at 1650 Arch rose when the U.S. Environmental Protection Agency moved out of more than 300K SF in 2021, PBJ reported.
Part of that space was backfilled by a 108K SF U.S. Army Corps of Engineers lease. Architecture firm Ballinger inked a deal for 46.5K SF in June, shortly before news of the building entering receivership broke.
ASI didn't respond to Bisnow’s request for comment.
Vacancy in the Center City submarket remained steady at 20.4% last quarter, according to JLL. But empty office space isn't spread evenly in the neighborhood as tenants have gravitated toward higher-end buildings.
Residential conversions are often floated as a solution for underutilized office buildings like 1650 Arch.
Those ranks include PMC Property Group's conversion of Three Parkway, which is just one block away.
CORRECTION, OCT. 22, 9:17 A.M. ET: . A previous version of the story incorrectly identified the developer behind the residential conversion at Three Parkway. It has been updated.
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