T
he fate of the Wanamaker building in Philadelphia's Center City appears to be shifting, with its office portion likely headed for a residential conversion. A source close to the matter revealed that New York-based TF Cornerstone has entered the picture, purchasing a majority of the debt backing the office portion earlier this year and subsequently foreclosing on Rubenstein Partners. Despite Rubenstein's potential exit, TF Cornerstone remains committed to pursuing a conversion.

    TF Cornerstone recently announced a $1 billion joint venture with Dune Real Estate Partners to advance office-to-residential conversions nationwide. The firm has completed 15 such conversions totaling 5 million square feet and is expected to target cities like New York, Boston, and Los Angeles. With 73 commercial-to-residential conversions already completed in 2024 and 309 projects in the pipeline, including a majority of office-to-residential conversions, the Wanamaker building's conversion won't be an isolated case.

    However, converting the 954,000-square-foot, 79 percent vacant office on Market Street will be challenging due to its large floorplates. Rubenstein Partners has owned the property since purchasing it for $200 million in 2017 and sold the retail portion to TF Cornerstone for $40 million in 2019.