Shuttered Hahnemann University Hospital properties get $16.25 million bankruptcy bid

Nearly six years after the bankruptcy and closure of Hahnemann University Hospital in Center City, a New York real estate developer has made a preliminary bid of $16.25 million for a collection of Hahnemann properties, including the two empty patient towers at Broad and Race Streets.

Dwight City Group LLC’s bid, disclosed in a Hahnemann bankruptcy filing Wednesday, will set the baseline for an auction proposed for July 16, if the sale plan receives court approval. Additional bids would be due July 11, under the proposed schedule.

Dwight City Group hopes to turn the building into a mix of hotel and residential uses, although the exact proportions devoted to each section are not clear yet. They would also include space for a food and beverage business.

Judah Angster, Dwight City’s CEO, said planning for the site is in very early stages.

“It’s an important location for the city,” Angster said. “We think that because it’s across the street from the Convention Center, if we master plan it the right way, it’ll completely change the dynamic of that section of North Broad.”

The bid by Dwight City, known as a “stalking horse” bid, is the first significant sign of movement in the Hahnemann bankruptcy since 2022.

That’s when the Hahnemann real estate became part of the bankruptcy estate. They had been separately owned by Joel Freedman, a California businessman, who in 2018 borrowed almost all of the money to buy Hahnemann and St. Christopher’s Hospital for Children from Tenet Healthcare Corp. for $170 million.

St. Chris and its real estate were sold separately about six months after the bankruptcy in late June 2019.

The two main hospital buildings, known as North and South Towers, are expected to need extensive remediation, including asbestos removal. The buildings’ utilities and other systems are tightly connected to buildings on the same block that are owned by Iron Stone Real Estate.

Iron Stone bought New College Building, which is used by Drexel University, and the former Bobst Building in 2021 from Harrison Street Real Estate, which helped Freedman finance the Hahnemann and St. Chris acquisitions. Iron Stone turned the Bobst building into Race Street Labs.

Dwight City’s bid does not include Martinelli Park, which is across Vine Street from Hahnemann’s North Tower.

Dwight City Group is based in New York but has offices in Upper Darby. It entered the Philadelphia market in 2020 and is known for adapting historic buildings to new uses.

Over the past five years, it has orchestrated five adaptive reuse projects around the region largely in working-class city and inner-ring suburban neighborhoods.

Angster said that their bid for the Hahnemann buildings fits within their larger mission of finding new uses for historic buildings.

Angster stressed that this is the very beginning of their bid for the property.

“These buildings are interconnected and very complicated,” Angster said. “The complexity of the utility systems, how they interconnect between all of the buildings, is something we’re trying to fully understand and comprehend.”

Dwight City Group also sought to obtain numerous University of the Arts buildings in the bidding for the shuttered education institution’s south Broad Street real estate. They won control of Anderson Hall, which they will be turning into an 84-unit apartment building, but lost out on the iconic Hamilton Hall to Lindsey Scannapieco’s company Scout.

The acquisition of the Hahnemann buildings would be Dwight City Group’s most ambitious project in Philadelphia yet, and their second Center City development after Anderson Hall.

“Because you’re so close to the Convention Center, we think that the area could serve very well if we bring in the right hotel operator,” Angster said.