The real estate publication, Commercial Observer has reported that Hercules Plaza in downtown is on special servicing status after downsizing of space by major tenants Ashland and magazine publisher Conde Nast.
The owner of the building is an entity of Wilmington-based McConnell Johnson Real Estate, which also owns the adjacent, 1201 North Market Street Building.
Commercial Observer says the owner is seeking a modification of a loan for the building near the Brandywine on the north edge of downtown. That led to the servicing designation. It was the second time a modification has been sought, the publicaiton noted.
Ashland is the last remnant of Hercules Incorporated, the long-time Delaware company and DuPont antitrust spin-off that was sold several years ago to Kentucky-based Ashland.
The building – with its impressive atrium and lobby and outdoor stone orbs that spin in moving water – served as headquarters for Hercules, but throughout much of its history also was the home to other tenants.
The building has faced its challenges that include a configuration suited to a single corporate tenant – Hercules and limited amount of parking.
Those qualities have kept Hercules from the trophy building status that draws tenants in the current market.
Trophy buildings were the subject of a recent report from real estate brokerage firm CBRE that showed leasing performance and rents on a par with other buildings in the Philadelphia area.
McConnell Johnson has been praised within the local brokerage community and by an unnamed source in the Commercial Observer piece for its work in upgrading and maintaining the building.
Hercules Plaza is slated to become the home for the Wilmington Board of Trade, a proposed small cap stock exchange that has received a loan from New Castle County. However, the 15,000 square feet is only a tiny fraction of the vacant space in the 600,000-square-foot building.
Using vacant space in the building, McConnell Johnson has formed 1313 Innovation, a business incubator.
Meanwhile, Ashland has undergone a restructuring that resulted in the sale of a Delaware-based unit now known as Solenis. That business leases space north Wilmington. Solenis is owned by a private equity firm and is making “bolt on” acquisitions in paper and other types of chemicals.
McConnell Johnson officials did not respond to a request for comment and Ashland officials did not immediately respond to an inquiry on the status of their presence in the building.
