By Paul Schwedelson – Reporter, Philadelphia Business Journal
After acquiring a majority of the debt on the historic Wanamaker building, TF Cornerstone is pushing to seize the Center City office property from owner Rubenstein Partners.
With the New York real estate firm now holding the loan, the dynamic of the Wanamaker's ongoing foreclosure case has shifted. Instead of Rubenstein's debt being held by a commercial mortgage-backed securities (CMBS) trust focused on providing a return for its investors, the loan is owned by a developer that could see more opportunity in taking possession of the building’s nine floors of office space.
TF Cornerstone already owns the Wanamaker's 435,000-square-foot retail space that houses Macy’s, paying $40 million for the three-floor department store in 2019. The remaining 954,363 square feet in the 114-year-old building — office space on floors 4 to 12 and the 660-space underground parking garage — is owned by Rubenstein and backs the Philadelphia firm's $124 million mortgage on the property.
The Wanamaker, located across from City Hall at 1300 Market St., embodies the challenges facing Philadelphia’s office market in the wake of a shift to more remote and hybrid work policies driven by the Covid-19 pandemic. The building was placed in receivership in September 2023, and its office occupancy has dropped from 96% in 2020 to just 23%, according to CMBS and receiver's reports.
TF Cornerstone replaced Wilmington Trust, which represented investors in the CMBS trust that previously held the loan, as the plaintiff in the foreclosure case against Rubenstein. The new debtholder is now seeking “to foreclose defendants’ interests in Philadelphia’s storied Wanamaker building,” according to a discovery motion Rubenstein filed Oct. 7 in the Philadelphia Court of Common Pleas.
In a response to the motion, TF Cornerstone called a foreclosure action the “inevitable consequences” of Rubenstein's failure to repay the loan when it matured in June 2023.
Full story: https://tinyurl.com/48tpehs4
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