Commercial Real Estate Direct
By Orest Mandzy
September 30, 2025
The $57.21 million CMBS loan against the 502,217-square-foot 1515 Market St. office building in downtown, or Center City, Philadelphia, has been extended by another two years. The loan, securitized through JPMBB Commercial Mortgage Securities Trust, 2014-C26, matured in January.
Unable to line up sufficient financing, the collateral building’s owner—Accesso Partners—sought the loan’s transfer to special servicer Midland Loan Services so it could negotiate a possible term extension. The Hallandale Beach, Fla., investment manager, which bought the property in 2014 for $85.3 million, initially was able to negotiate a short-term forbearance agreement. It paid down principal by $100,000.
It’s now sewn up a two-year extension. It also has an option allowing for another one year of term. It’s not known yet if it has further paid down principal. The loan has been amortizing on a 30-year schedule since the start of 2020.
The extra time allows Accesso to complete a repositioning of the 65-year-old building. It is renovating its conference facilities and lobby and is building out speculative suites in an effort slated to be completed sometime next year.
“We believe our work to carry out significant renovations and improvements at the property will lead to strong future leasing activity and momentum,” explained Deb Kolar, chief asset officer and general manager of Accesso.
Accesso’s planned improvements to the building, which has direct access to a commuter-rail hub, are vital as it faces substantial challenges. Temple University, which leases 130,213 sf under an agreement that rolls in June 2027, houses its downtown campus in the space. But it recently purchased 201-211 South Broad St. from the now defunct University of the Arts, to which it will relocate its campus.
To be sure, the Philadelphia office market has become bifurcated, with the city’s best buildings benefiting from leasing interest at the cost of lesser-quality buildings. Eight loans in the CMBS universe with a balance of $784.87 million against Philadelphia office buildings are in some form of distress. That’s 31.4% of the universe of 39 Philadelphia office loans, which have a balance of $2.5 billion.
Class-B and -C buildings in Philadelphia have a nearly 22% vacancy rate, according to Colliers, which pegged the class-A rate at 13.9% in the second quarter, down from 14.7% in the first. The vacancy rate for trophy space is just more than 10%.
Meanwhile, at least six office properties are in the process of being converted to apartments, taking a substantial amount of space offline, which should have a positive impact on the office market.