Brandywine buys 1920s building on former Hahnemann hospital campus

Brandywine Realty Trust has acquired a 1920s office building on Hahnemann University Hospital’s medical campus, the second property in the defunct health center to find a buyer since the hospital’s owner declared bankruptcy in mid-2019.

An affiliate of Brandywine, Philadelphia’s dominant office landlord, paid $9.7 million in October for the 13-story high-rise, known as the Bellet Building, at 1501 Race St. on the edge of the hospital campus, according to data from real estate tracker the CoStar Group.

The property is Brandywine’s first known acquisition along the North Broad Street corridor. Nearly all of the company’s Philadelphia holdings are on the west side of Center City and in University City, where it is leading development of Schuylkill Yards, a planned district of new office and residential towers.

A Brandywine spokesperson did not immediately respond to questions about the company’s plans for the building, which currently counts Drexel University among its tenants.

The Race Street property was purchased from an affiliate of Harrison Street Real Estate Capital of Chicago, one of the firms that teamed up to buy Hahnemann from Tenet Healthcare Corp. in early 2018, transaction records show.

In the first sale of hospital property, the E-Z Park parking-lot chain paid $1.4 million in March 2020 for a 4,000 square-foot lot at 211 N. Broad St. that the company had previously leased, records show.

That property was bought from an affiliate of California-based investment banker Joel Freedman’s Paladin Healthcare, Harrison Street’s partner on the Hahnemann acquisition in 2018, according to the records.

What once was the Hahnemann campus sprawls over nearly six acres, centered on Broad Street along the Vine Street Expressway, comprising seven medical buildings, a parking garage, and surface lots.

When it was acquired by Harrison Street and Freedman, the investment groups set up the deal so that a separate Freedman-backed company called Philadelphia Academic Health System would lease most of that space as the hospital’s operator.

Because of that arrangement, Harrison Street and Freedman’s group were able to retain ownership of the hospital real estate when Philadelphia Academic filed for bankruptcy protection in June 2019.

Most of that real estate, comprising an estimated 1.5 million square feet of hospital space, remains vacant.