Centre Square is less and less the center of a thriving Philadelphia office market.
Law firm Dilworth Paxson is closing in on an agreement to relocate from 1500 Market Street in the Center City neighborhood to One Liberty Place, the Philadelphia Business Journal reported. The law firm is eyeing 50,000 square feet at One Liberty Place, a 40 percent reduction in its local office portfolio.
While that’s a nick to Philadelphia’s office landscape, it’s a gash to InterVest and Elie Schwartz’s Nightingale Properties, the owners of Centre Square. The building has been in receivership for a year since ownership defaulted on a $368 million loan.
Centre Square is 69 percent occupied, according to a CMBS report, and 53 percent leased through the end of next year. That percentage doesn’t include the looming departure of Dilworth, its fifth largest tenant, whose lease expires at the end of the year.
Dilworth moved into the building in 2007, agreeing to a 15-year lease to take over space from Comcast. The law firm, founded by former Philadelphia Mayor Richardson Dilworth, relocated from the BNY Mellon Bank Center.
The exits from Centre Square have been fast and furious in recent years. Tenants that have left since 2020 include Willis Towers Watson (244,000 square feet), Comcast (90,000), Berwind (48,000) and Conrad O’Brien (40,000). Santander closed its bank branch on the ground floor last month.
This year, ownership of the two-building, 1.8-million-square-foot complex scored a victory when they negotiated down the property tax assessment of the offices from $362.6 million to $250 million for this year and $275 million for last year.
Nightingale and InterVest will save approximately $2.8 million for the two years.
The duo acquired the office property in 2017 for $328 million.
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