Office Property Owners Successfully Appeal Office Tower’s Value Down 51%
The owners of a struggling 13-story office building that faced default last year have successfully appealed the city to cut its three-year assessed value by half.
The city of Philadelphia’s revision on assessed value for 1500 Spring Garden St., an office that takes up a block between 15th and 16th streets, will save owners Nightingale Properties and InterVest Capital Partners nearly $4M in tax payments, according to the Philadelphia Business Journal.
The city's new 2025 valuation for the office tower will be chopped from $159.2M to $76M. Over three years, the city has dropped the value of the property by 51%.
Following the appeal, Nightingale and InterVest, formerly known as Wafra Capital Partners, are responsible for paying $3.7M to the city for the three-year period, down from $7.6M, PBJ reported.
Nightingale purchased the massive 1500 Spring Garden St. in 2013 before refinancing it in 2018 with a $190M loan from TPG. It fell into payment and maturity default last summer. InterVest also owns a portion of the building, which was 74% occupied according to Morningstar Credit.
The owners’ attorney, Lawrence Arem of Klehr Harrison Harvey Branzburg, told PBJ that vacancy could increase as lease renewal dates come up. He estimated that as many as 20% of occupants could leave.
“The fact the city agreed to these numbers shows that they’re looking at the reality today,” he said.
Building owners will consider potentially selling or renovating the building to compete for tenants, but its new value could keep the building afloat longer.
“Taxes should not be the nail in the coffin,” Arem told the publication. “As values go down, assessments need to go down commensurate with that.”
The reassessment of 1500 Spring Garden is one of the largest property value revisions in Philadelphia in recent years.
Centre Square, the 1.76M SF office complex at 1500 Market St., also owned by Nightingale and InterVest, received a 31% reduction on its 2024 property assessment, from $362.6M to $250M.
Several other struggling office buildings in the Center City and outer business sections of Philadelphia’s core were also appraised or assessed at reduced values. A 1M SF office building at 1818 Market St. reported a new appraised value of $211.3M last month, Bisnow reported. That was down 25% from its initial valuation of $282.1M in 2021, according to Morningstar Credit.
Across Philadelphia, office properties declined by $635M in 2025 assessments. By the time appeals processes wrap up, that total could reach $1B.
