Monday, April 1, 2024

Former GSK office building in Navy Yard set for sheriff's sale to satisfy $78M foreclosure judgment

By Paul Schwedelson – Reporter, Philadelphia Business Journal
One of the Philadelphia Navy Yard's signature office properties is scheduled to be sold at a sheriff’s sale in June.

Hailed for ushering in a new era of workspaces when it was built for pharmaceutical giant GlaxoSmithKline a little more than a decade ago, the building at 5 Crescent Drive is now mired in foreclosure procedures over its owner's unpaid $85 million mortgage on the property.

The 207,779-square-foot office building will go up for public auction on the online platform Bid4Assets on June 4 to satisfy a foreclosure judgment against owner Korea Investment Management Co. Ltd., according to documents filed with the Court of Common Pleas in Philadelphia.
The building has been vacant since early 2022, when GSK downsized and relocated its offices to the FMC Tower in University City. GSK (NYSE: GSK) continues to pay rent on the Navy Yard space despite no longer occupying the building. The company's 15.5-year lease on the entirety of 5 Crescent Drive, which was custom-built for the Big Pharma firm by developer Liberty Property Trust, does not expire until September 2028.

Korea Investment Management bought the building from Liberty Property Trust for $130.5 million in May 2018, with the price of $628 per square foot setting a record for Philadelphia office sales. The company's $85 million loan on the building was originated by Goldman Sachs the same month, and the debt was subsequently converted into a commercial mortgage-backed security (CMBS) and sold to investors.

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