A commercial mortgage-backed securities loan tied to Pittsburgh’s Gateway Center office complex has been wiped out at a loss of nearly $65 million, according to the trust’s own July distribution report filed with federal regulators. The write-off marks one of the largest single-asset CMBS losses tied to a downtown Pittsburgh, Pennsylvania, office property since the pandemic reshaped demand for aging towers.
The $91.8 million loan on the four-building complex was liquidated for gross proceeds of $37.7 million, according to a Form 10-D distribution report that J.P. Morgan Chase Commercial Mortgage Securities Trust 2013-C10 filed with the U.S. Securities and Exchange Commission on July 28. After deducting more than $10.4 million in servicing and workout expenses, the trust recorded a realized loss of $64,803,916.56 on the loan, tied to a July 17 distribution date.
The loss confirms what CMBS analysts had projected for months as Gateway Center’s four office towers β One, Two, Three and Four Gateway Center, totaling roughly 1.47 million square feet near Point State Park in Downtown Pittsburgh β struggled with vacancy well above 60 percent even as the loan neared its final maturity deadline.
How the loan unraveled
The loan financed the complex as part of a 2013 conduit securitization. It first matured in January 2023 and was extended twice β to January 2024 and then to January 2025 β before the borrower, an affiliate of Hertz Investment Group of California, ultimately defaulted. The special servicer’s commentary in the SEC filing states the loan transferred to special servicing on Aug. 16, 2024, “for imminent maturity default,” and matured without repayment on Jan. 1, 2025.
Wells Fargo Bank, acting as trustee for the CMBS trust, filed a foreclosure action against Hertz in Allegheny County in October 2024, according to the Pittsburgh Tribune-Review, alleging the borrower owed roughly $84 million and had failed to keep the property in “good and safe condition.” A judge appointed CBRE as receiver for the complex on Oct. 23, 2024 β a date confirmed in the servicer’s own SEC filing β while the foreclosure case proceeded without a scheduling order.
Rather than carry the case through a contested foreclosure trial, the special servicer marketed the distressed note for sale. New York-based Namdar Realty Group, a frequent buyer of distressed retail and office debt, acquired the mortgage note β not the underlying property, which Hertz still technically owned β according to CBRE vice chairman Jeremy Kronman, who confirmed the transaction to the Tribune-Review. Allegheny County property records show the mortgage was transferred to an entity called Gateway Center Holdings on June 29.
The SEC filing shows the loan’s collateral was appraised at $69.5 million as of September 2025, itself down sharply from the loan’s outstanding balance. The eventual $37.7 million in gross liquidation proceeds came in nearly 46 percent below even that reduced valuation, underscoring how thin the buyer pool has become for large, aging, downtown office assets.
Occupancy and cash flow had been deteriorating for years
Gateway Center β a stainless-steel-and-glass complex whose towers opened in stages starting in 1952 and were renovated in 2012 β was 61.2 percent occupied as of April 2026, per the servicer’s filing. Cash flow had turned negative: the debt-service coverage ratio, a measure of a property’s income relative to its loan payments, was approximately 0.61 for the 2025 fiscal year and had fallen further, to roughly negative 0.25, through April 2026, meaning the property was not generating enough income to cover even a fraction of its debt payments.
Hertz Investment Group bought the complex in 2004 for $55 million, according to the Tribune-Review. KDKA-TV is among the complex’s larger tenants.
What it means
The realized loss is a matter of public record in the trust’s SEC filing, as is the loan’s default and foreclosure timeline. The precise price Namdar paid for the note has not been publicly disclosed. The property itself remains owned by Hertz-affiliated entities for now, with CBRE continuing to manage leasing and deferred maintenance as receiver; Namdar’s plans for the note, including whether it will pursue foreclosure to take title, have not been announced.
The loss is a fresh data point in a broader reckoning for office-backed CMBS distress, which climbed to a 2026 high in July, led by office loans nationally. Unlike that market-wide trend, Gateway Center’s loss is now fully realized and booked into investor distributions, rather than merely flagged as delinquent or in special servicing β a distinction CMBS bondholders in the deal’s junior tranches are likely already feeling, given how a $64.8 million loss against a roughly $92 million balance would exhaust lower-rated certificate classes in the capital stack. It follows other office-loan writedowns lenders have absorbed this year, including Blackstone Mortgage Trust’s second-quarter net loss tied to a Chicago office loan reserve.
What to watch: Whether Namdar pursues foreclosure to take direct ownership of the complex, what it plans for leasing or redevelopment of four aging downtown towers, and whether Pittsburgh’s broader downtown office market β grappling with elevated vacancy across multiple large blocks β sees additional CMBS-backed properties move toward distressed sales in the coming months.
