New owners of Divine Lorraine want to return the historic property to its roots

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More than 130 years ago, architect Willis G. Hale built Lorraine Apartments on North Broad Street near Fairmount Avenue as one of the first luxury apartment buildings in Philadelphia.

Over the years, it’s been used as a hotel, affordable housing for the Divine Peace Mission Movement led by Rev. Major J. Divine, sat vacant for 20 years, was renovated into apartments, and most recently, an extended-stay hotel.

Now, the building is going back to its deep roots, with plans to reopen as an apartment complex.

The Mint House Hotel inside Divine Lorraine operated between May 2022 and Jan. 1, 2025. The concept was that each suite had all the amenities of an apartment, such as a full kitchen and laundry, but was available for short-term rental. Plus, the professionally designed apartments doubled as retail showrooms, everything was for sale too.

It was not immediately clear the vacancy rate of the hotel or its prices, but online reviews for the rooms averaged about $200 a night on weekends.

There are 110 units, 100 of which are in the main building and the rest in the annex. The plan is to rent the apartments both as furnished and unfurnished units.

While the new apartments are expected to be leased as early as April, the new rental prices have not yet been determined.

“We’re canvassing the market, going to see what we think is the right pricing for this product,” said Brian Morris, managing director at Susquehanna Structured Capital, the new owners of the building. “It differentiates itself from some of the other buildings that are much newer. It’s a beautiful asset and I think that people like that kind of character.”

The commercial tenants will remain open, which include The Daily coffee shop, Foundation cocktail bar, Annex restaurant bar and the Broad Hall event space, in addition to the Cicala and Sorellina restaurants.

“North Broad has been undergoing a lot of revitalization and there’s a lot of new apartments coming online, but a lot of that is already being absorbed. And I think with new retail there as well, it’s a very vibrant neighborhood,” Morris said.

From vacant to vibrant

In 2015, Eric Blumenfeld, of EB Realty, spent $44 million to renovate Divine Lorraine into a luxury apartment complex that opened in early 2017.

Blumenfeld did not respond to an interview request for this news story.

Despite the renovations, the building was more than half empty by May 2017. At the time, the most affordable unit was a one-bedroom for $1,480 a month, while its most expensive unit was a two-bedroom that cost $2,695 a month.

In 2018, Divine Lorraine advertised apartments for rent starting at $1,375 for a one-bedroom and $2,070 for a two-bedroom, according to its Facebook page.

By September 2020, that dropped to $1,580 for a one-bedroom and $1,995 for a two-bedroom apartment. By March 2021, the management company offered rental concessions of two months free with a 10% discount for move-ins and a 14-month lease.

Developer struggles financially

As a developer of several properties along North Broad Street such as Lofts 640, the Studebaker Building and Divine Lorraine renovations, Blumenfeld took out several loans, court records show.

In July 2018, Guggenheim Life and Annuity Company loaned him $41 million, then Susquehanna Structured Capital loaned him another $20 million.

Susquehanna Structured Capital is a subsidiary of Susquehanna International Group, a financial services firm founded by Jeffrey Yass.

About $7.4 million of those loans were dedicated for Divine Lorraine commercial space and annex building renovations, plus $4.3 million for construction of the Studebaker building.

Both of those loans went into default by 2020, court records show. By 2022, a foreclosure was scheduled for Divine Lorraine but a settlement deal in court was reached before the sale.

During this process, Susquehanna Structured Capital purchased the Guggenheim debt of $35 million.

In October 2023, the city of Philadelphia filed a municipal lien against Divine Lorraine for $5,382 in unpaid water bills.

As of October 2024, Blumenfeld owed about $50 million to its lenders, which included Susquehanna Structured Capital LLC, Finch Property Holdings and Guggenheim Life and Annuity Company.

Blumenfeld argued in court that there was a coordinated effort among the lenders to force him to liquidate his properties to repay debts and garner more equity in buildings that would continue to increase in value.

Rift over hotel plans

Blumenfeld claimed in court that lender Finch “objected to and feigned surprise and extreme concerns over the planned conversion of the Divine Lorraine from apartments to a hotel,” despite that being part of the plan since 2018.

A judge has already ruled in favor of the lenders, which is why Susquehanna Structured Capital now controls Divine Lorraine.

Morris declined to comment directly about the court case, which is still active, with a settlement conference scheduled for March 6.

“Eric Blumenfeld no longer has any ownership stake in the Divine Lorraine building,” he said.