PHILADELPHIA | Kimpton Monaco Hotel (& Boyd Restoration) | 320 FT / 97 M | 28 FLOORS

[rricci]

Pension fund takes control of Philadelphia's 10 Rittenhouse Square condo building

By Alan J. Heavens
Inquirer Real Estate Writer

A pension fund representing thousands of workers, mostly in the construction trades, has taken control of the luxury 10 Rittenhouse Square project in a dispute over the fund's $57 million stake in the building.

The 33-story Robert A.M. Stern signature building at 130 S. 18th St. - with 135 condominiums priced from $600,000 to $15 million, plus retail and restaurant space - opened in November, more than two years behind schedule, because of litigation over preservation and zoning issues.

That delay, coupled with a deepening recession, resulted in sales below what are considered necessary to begin repaying more than $300 million in debt owed to the project's senior lender, Istar Financial Group of New York, and the pension fund, the Delaware Valley Real Estate Investment Fund, which manages the retirement nest eggs of 47,200 workers in the region.

According to data from city Board of Revision of Taxes and other sources, only about three dozen units have sold or gone to settlement.

Because of those low numbers and concerns about Istar's intentions for the building, the pension fund filed suit Friday in Common Pleas Court, seeking "to save Center City's premier residential condominium development from the depredations of a troubled hedge fund and rogue lender."

In 2006, the pension fund provided 10 Rittenhouse's developer, ARCWheeler L.L.C., with two loans to launch the project - the first for $25 million, the second for $5 million. With late charges and accrued interest, the pension fund is now owed $57 million.

In 2007, Istar lent $216.5 million to ARCWheeler to build the high-rise.

I'm worried about what this does to the prospects of this project. Does anyone have any information or predictions? I think this project would be a boon to West Chestnut, and to the downtown in general.

[brian.odonnell20]

this might not go through until later this year into next year... idk

[We Got Five]

Well we know that it's not getting any funding from the state at this time, unlike the 4th and Race Hotel project. I would say that this is on the back burner for several years.

[hammersklavier]

Yeah, by the sounds of it ARC's putting their efforts into 4th & Race at the moment. Bummer, this would have wonderfully revitalized that block.

[aro1419]

I really hope that this will get built in the future...

[phillyaggie]

I kinda lost hope for this project when Hal Wheeler passed away of massive heart attack earlier this year.

And then with the 10 Rittenhouse problems, I can't imagine ARC wants to take on this project. And considering that Kimpton is buying (bought already?) the Lafayette Building near Independence Mall to convert it into a hotel, they may not be too interested in this project anymore either.

[gd1]

Hi