A Commercial Mortgage-Backed Securities (CMBS) loan worth $92 million, secured by the Gateway Center, a prominent office complex in Downtown Pittsburgh, was liquidated through a note sale. This resulted in a $64.8 million loss for the CMBS trust, according to a report from Morningstar Credit.
The $94 million loan, which comprised 64 percent of the JPMCC 2013-C10 Conduit Deal, was transferred to special servicing in September 2024. This occurred as a default was anticipated before its maturity in January 2025. Occupancy for the Gateway Center's four office buildings stood at just 55 percent in March 2024.
Morningstar Credit reported that the gross proceeds amounted to only $37.4 million. This figure is significantly below the previously estimated value of $69.5 million. Within the trust, two tranches were fully written off, while the junior Class E tranche lost half of its value.
Historical Significance and Development of the Gateway Center
The office complex was acquired by Hertz Investment Group in 2004 for $55 million. A product of the post-war boom in brutalist architecture, the Gateway Center has shaped Pittsburgh's skyline since the early 1950s, when construction of the buildings was completed. The development, featuring 1.5 million square feet of office space spread across One Gateway Center, Two Gateway Center, Three Gateway Center, and Four Gateway Center, was progressively opened between 1952 and 1960. Its façade is made of stainless steel and glass.
The development was part of the "Pittsburgh Renaissance," which took place between 1946 and 1974. At that time, the 23-hectare commercial area known as Gateway Center was known as "the nation's first comprehensive urban redevelopment project undertaken without federal aid," according to the Pittsburgh History & Landmarks Foundation.
When the National Park Service designated the Downtown Pittsburgh neighbourhood near the Allegheny River as the "Pittsburgh Renaissance Historic District" in 2013, the four Gateway Center buildings were cited as "essential contributing properties" to this distinction.
