Tenant woes put Nemours Building in special servicing status | Philadelphia Citybizlist

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A $56.3 million loan backed by the 14-story, 540,000 square foot Nemours Building in Wilmington  has been transferred to special servicing due to a major tenant’s “financial difficulties,” according to Trepp, a company that tracks financial matters  in commercial real estate.

According to special servicer notes, the lease modification “will negatively impact the ability to service the loan and the borrower has requested a loan modification.” The loan is current and does not mature until 2016.

The property was built in 1935 and was appraised for $81.45 million in 2006, according to Trepp, which reports that the loan was underwritten when the building was 85 percent occupied. In 2010 and 2011, occupancy was around 90 percent.

The servicer notes say the tenant with financial difficulties occupies 22 percent of the building, but Trepp’s data shows the building’s largest tenant is the law firm Connolly, Bove, Lodge & Hutz LLP, which occupies only 106,312 square feet, or 19.62 percent of the asset. The second largest tenant is Delaware Claims Processing Facility, which occupies 55,590 square feet, or 10.26 percent of the asset.

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In July, Delaware Law Weekly reported that Connolly Bove Lodge & Hutz, was mulling a dissolution after struggles related to key departures and underperforming satellite offices. The firm has since seen a spin-off of its litigation practice.

For further details, click on this story from Citybizlist.com

via Tenant Difficulties Puts Wilmington’s Nemours Building in Special Servicing | Philadelphia Citybizlist.

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