Aion Partners List Philly Office as Forbearance Nears End

Time is ticking on the financial clock for a New York-based office owner facing a loan expiration for a building in Philadelphia’s Center City.

Aion Partners is marketing the 25-story, 464,000-square-foot building at One South Broad Street, the Philadelphia Business Journal reported. The building’s tenants include Wolf Fitness and Insomnia Cookies’ headquarters.

A commercial mortgage-backed securities loan backing the property has been in special servicing since 2022. Aion managed to score a two-year extension on the loan to avoid receivership in 2023, but the balance is still $35.6 million. The servicer of the loan is Rialto Capital.

The loan is set to mature in September. The forbearance period is expected to end at the start of June, according to servicer notes from March. The note said that discussions about resolving the loan were ongoing, though it seems the owner ultimately decided to sell the property.

Newmark is marketing the property. While the building can continue on as office space, marketing materials also suggest the possibility of a residential conversion.

Aion purchased the property in 2014 for $68 million. The building was 88 percent occupied at the time. That has since dropped to 55 percent occupancy as of September, according to CMBS reports. Wells Fargo abandoned 154,000 square feet — a third of the property — in 2020. Later in the year, Electronic Ink left 31,000 square feet, depriving the property of two of its three largest tenants.

Wolf and Insomnia combine to occupy 62,000 square feet. The city’s assessment of the property for the 2025 tax year was $76.6 million.

While the assessed value is above what Aion paid for the property a decade ago, the proof of the building’s value will ultimately be in what a buyer shells out. That could spell bad news, considering the direction of the rest of the market; from tax year 2023 to tax year 2025, the assessed value of offices in the Center City district declined by more than $1 billion, according to the Office of Property Assessments.

— Holden Walter-Warner