For seven decades, Gateway Center has been part of Pittsburgh’s skyline, a stainless-steel-and-glass complex that helped define the city’s postwar reinvention. This month, it became something else too: a concrete illustration of how far office values have fallen since the loans backing them were written.
The roughly $92 million commercial mortgage-backed securities loan tied to the four-building Gateway Center complex liquidated via a note sale, generating gross proceeds of just $37.4 million against a prior appraised value of $69.5 million, according to an alert from Morningstar Credit reported by Commercial Observer. The sale produced a $64.8 million loss for the CMBS trust that held the debt. Two bond tranches were wiped out entirely, and a third, the Class E junior tranche, lost half its remaining value.
The math traces back to a warning sign that was visible nearly two years earlier. The loan, which represents 64% of the JPMCC 2013-C10 conduit deal, was sent to special servicing in September 2024 after it became clear it would default ahead of its January 2025 maturity. Occupancy across the complex’s four buildings, One through Four Gateway Center, had already fallen as low as 55% by March 2024. Hertz Investment Group, which bought the 1.5 million-square-foot property in 2004 for $55 million, did not respond to a request for comment on the liquidation…