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Philadelphia

Nightingale, InterVest nab lower tax assessment on Philly offices

Troubled Centre Square complex to save $3M on property taxes

Nightingale, Wafra Nab Reduced Assessment on Philly Office
Nightingale Properties’ Elie Schwartz; 1500 Market Street (Getty, Linkedin, 1500marketstreet)

Nightingale Properties scored a successful negotiation over its troubled Philadelphia office complex.

Elie Schwartz’s Nightingale and InterVest, formerly known as Wafra Capital Partners, negotiated down the property tax assessment of the Centre Square office property in Philadelphia’s Center City neighborhood, the Philadelphia Business Journal reported.

Initially assessed at $362.6 million — the third-highest among Philadelphia properties having the valuations appealed — the value is being lowered to $250 million for 2024 and $275 million for 2023.

The assessment is more than $100 million below what it could’ve been for 2024, and the city’s property tax rate means the owners of 1500 Market Street will save about $2.8 million for the two applicable tax years.

Things remain dire for the owners at the 1.8 million-square-foot, two-building complex. 

Since the onset of the pandemic, insurance firm Towers Watson vacated 244,000 square feet, investment manager Berwind left 48,000 square feet, Comcast left 90,000 square feet and law firm Conrad O’Brien departed from 40,000 square feet. Several significant leases are set to soon expire for the property, which is 53 percent leased through 2025.

The property has been in receivership since April. The loan was transferred to a special servicer in August 2022 due to “imminent monetary default” after the owners failed to pay off a $368 million commercial mortgage-backed security loan by the maturity date. The property could’ve been foreclosed upon at the end of last year, but ownership received a six-month extension to resolve the matter.

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The owners acquired the office property in 2017 for $328 million.

Schwartz’s headaches go far beyond a property tax assessment in Philadelphia. He’s on the hook for more than $50 million as part of a settlement over misappropriated money from two office deals. He made his first $3 million payment to CrowdStreet investors on Tuesday, barely beating a deadline that would have declared the owner in default.

Nightingale has either lost or is facing foreclosure on several other assets, including the Whale Building in Brooklyn and 111 Wall Street in Manhattan.

— Holden Walter-Warner

This article has been updated to clarify InterVest, formerly known as Wafra Capital Partners, is an owner in the property.

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Nightingale PropertiesWafra Capital PartnersElie Schwartz
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DistressOffice MarketPhiladelphiaTaxes