REPORT: Facing Foreclosure, 1.4M SF Wanamaker Building Slated For Office-To-Resi Conversion
One of Center City’s most iconic distressed office buildings could undergo a residential conversion following foreclosure proceedings expected to wrap up early next year.
New York-based development company TF Cornerstone plans to transform the 1.4M SF structure at 1300 Market St. into apartments once the foreclosure process is complete, according to the Philadelphia Business Journal, which cited an unnamed source.
The vintage skyscraper’s current owner, Rubenstein Partners, is in the midst of bankruptcy proceedings in the Philadelphia Court of Common Pleas. TF Cornerstone acquired the majority of the building’s office debt in July and is pushing to advance the foreclosure case.
The two parties will have an opportunity to hash it out during a settlement conference scheduled for Jan. 6. If they don't come to an agreement, a trial will begin on March 3.
The Wanamaker Building’s floor plate is roughly 100K SF, about five times larger than the ideal size for an office-to-residential conversion, the PBJ reported. One feasible but pricey solution would entail hollowing out the historically protected structure for an interior courtyard.
TF Cornerstone, which also bought the 435K SF Macy’s space on the first three floors of the building for $40M in 2019, has extensive experience with office conversions in New York City.
Its projects include 95 Horatio Street, a former refrigeration facility in the Meatpacking District that was converted to 318 residential units, and The Fairfax, a former FBI headquarters building that became 313 residences.
Last week, the company and partner Dune Real Estate announced plans for a new $1B office conversion venture called Alta Residential.
“Dune and TF Cornerstone have identified the conversion of office buildings to residential as a generational opportunity given the scale of the distress in office real estate together with the unmet demand for housing in the U.S.,” the companies said in a Tuesday press release.
In addition to TF Cornerstone’s hometown, Alta Residential will target the office markets in Washington, D.C., Boston, Atlanta, Dallas, San Francisco, Los Angeles, Charlotte and Raleigh, North Carolina.
Rubenstein paid $200M for a majority stake in the Wanamaker Building in 2017. It was 96% occupied at the time. That rate dropped to 36% when advertising firm Digitas vacated its space last year.
Rubenstein listed the building for sale in 2021 after several high-profile tenants, including the General Services Administration, the Department of Housing and Urban Development and the Children's Hospital of Philadelphia, moved out in the wake of the pandemic.
The building went into receivership in September 2023. Details about TF Cornerstone’s plans to buy it first emerged in July.
