Elie Schwartz’s Nightingale Properties and InterVest Capital Partners are “very likely” to sell Centre Square in the Center City neighborhood, the property’s receiver said, as per the Philadelphia Business Journal.
The property has been in receivership for nearly two years and the foreclosure process has been quiet since April 2023.
Wells Fargo filed to foreclose in January 2023 on behalf of investors in the CMBS trust that owns the debt. Nightingale and InterVest owe more than $375 million on the overdue CMBS loan backing the 1.8-million-square-foot office complex.
CBRE, the court-appointed receiver, recently indicated to the courts that it is preparing to market the property. The receiver wants to eliminate several court requirements for that process, though, including the broker provision that would require updates of the sales process in court filings. The fear is that it would hamper efforts to market the property directly to real estate professionals.
“If the receiver is required to file a motion to obtain court approval of all brokerage terms including the list price, it is inevitable that a Philadelphia media source will be the first to publish a piece about the imminent sale of the property and the critical and free advertising to 40,000 real estate professionals through Green Street News will be lost,” the receiver’s filing stated.
What the two-building property would command on the market remains to be seen, but ownership should brace themselves. CBRE sales broker Jerry Kranzel testified that the property is worth “substantially less” than the debt. The most recent appraisal in September came in at $223.5 million.
Occupancy at Centre Square has also continued to fall off. Last year, law firm Dilworth Paxson agreed to relocate from 1500 Market Street to One Liberty Place, leaving 83,000 square feet behind. Saul Ewing is set to exit 111,000 square feet next year. Other tenants part of the exodus have included Willis Towers Watson, Berwind and Comcast.
In total, occupancy at the property is only 63 percent, according to CoStar.
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