Biomeme Signs Deal to Double Space, Relocate Center City Headquarters

Biomeme Inc., a diagnostic startup behind a rapid Covid-19 test, has signed a lease on 44,000 square feet to relocate its headquarters, lab and production space to 401 N. Broad St. in Center City.

The company is currently housed in about 20,000 square feet at 1015 Chestnut St. and has grown during the pandemic as a result of its Covid test, which also detects variants that have been transmitted around the world.

The company, which previously invented a medical device called a PCR thermocycler that allows users to analyze DNA from an iPhone, received a $3 million grant from Pennsylvania’s Redevelopment Assistance Capital Program to help fund the build-out of its new headquarters at 401 N. Broad, where it signed a 10-year lease.

Biomeme will join Nerd Street Gamers, another new tenant to the building. Last year, Nerd Street leased 35,000 square feet at 401 N. Broad and will relocate its headquarters to the 11-story, 1.3-million-square-foot building.

“Having Nerds and Biomeme changes the profile of that building in a big way,” said Gary Lozoff, a broker with Tactix Real Estate Advisors who represented Biomeme. Christian Dyer of CBRE Inc. represented Netrality Data Centers, the landlord.

“It’s no coincidence we’re getting the next generation of companies,” said Gerald M. Marshall, CEO of Netrality. “What’s really interesting about Nerd Street and Biomeme is the infrastructure and connectivity that our telecom tenants and customers bring to the building. What makes our systems reliable is we have dual power, generators, backup generators, and all of that makes the systems robust and really drives the reliability these folks look for. It’s really the starting point for both of these deals.”

The building at 401 N. Broad was originally constructed in 1930 for Reading Co. and was redeveloped into one of the most important telecom hotels along the East Coast. The property is considered the most fiber-dense, network-neutral facility between New York and Virginia, making it ideal for a tenant such as Nerd Street.

There were other characteristics of the building that appealed to Biomeme for its lab and manufacturing operations such as heavy floor loading, wide column spacing, high ceilings, redundant electric utility feeds, mechanical systems that have supply and exhaust air ventilation, as well as secure loading docks.

It took a while for Biomeme to decide upon 401 N. Broad. Lozoff was hired by the company in April 2020 as it was finalizing the rapid Covid test and ramping up production. It decided to look for space that would accommodate all of the uses it needed including lab, headquarters, manufacturing and fulfillment rather than split them up into two different locations. Once that approach was finalized, the search was on.

“They had no desire to be in University City,” Lozoff said.

Outside of the Philadelphia Navy Yard, University City is where life sciences companies have clustered in Philadelphia. However, options and timing didn’t work in University City and the company also couldn’t find space that had some other attributes important to it such as space with lots of natural light and expansive floorplates.

It looked at space in Kensington but that didn’t work when it came to minimizing dislocation of employees. It finally focused on East of Broad and zeroed in on 401 N. Broad.

Though the rail station is further away compared to its space at 10th and Chestnut, it has access to the Rail Park. As part of the deal with Biomeme, Netrality is replacing the windows in its space that will allow some to be operable as well as double the size of the building’s bike room to accommodate 60 bikes. North Broad is also undergoing increased development activity and a renaissance.

“There is some risk to ultimately going to 401 N. Broad,” Lozoff said. “No other company doing what they do is located in that geography.”

Not yet. Netrality has decided to focus on attracting life sciences companies to the building, which is a tact many landlords are exploring as demand for space by these companies has increased as traditional office space has waned.

“We have identified 100,000 square feet of space that works for life science companies,” Marshall said.

Biomeme has taken roughly half of that, leaving another 51,866 square feet that Netrality is marketing to these firms. With the Nerd Street and Biomeme leases, the building now has 332,829 square feet of vacant space. The landlord is building out two lab spec suites of which one is 3,065 square feet and the other 3,754 square feet.

*Article courtesy of The Philadelphia Business Journal

For more information about Philadelphia office space for sale or lease in Philadelphia or about any other Philadelphia properties for sale or lease, please contact WCRE at 215-799-6900.

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New labs and offices to rise at Navy Yard as part of recently chosen team’s first $400M phase of development

Ensemble Real Estate Investments and Mosaic Development Partners are preparing to break ground on two new biotech buildings at the Navy Yard, their first projects since being selected last year to lead an expected $2.5 billion in fresh development over 109 acres of the former barracks in South Philadelphia.

The two life-science projects ― a lab and office building and a drug-manufacturing plant ― are part of a first phase of development under the deal that Ensemble and Mosaic struck with the Philadelphia Industrial Development Corp., which manages the Navy Yard on the city’s behalf.

That initial phase is expected to involve $400 million in new construction and to include the Navy Yard’s first residential properties, the companies and PIDC said in a release on Tuesday.

“Commencement of [these] initial life sciences projects will launch the next exciting chapter of development at the Navy Yard,” said Kate McNamara, a PIDC vice president. They “will bring high-quality jobs to the Navy Yard, support growing companies in the advanced life-sciences sector, and contribute to development of this dynamic campus.”

Ensemble developed the Navy Yard’s Marriott hotel and later acquired several other buildings there — including the headquarters of FS Investments and WuXi AppTec.’s biotech-manufacturing lab — from the tract’s previous main developer, Liberty Property Trust.

Ensemble is now the largest private property owner at the former base, with 10 buildings there under its ownership.

Mosaic has led projects in Philadelphia neighborhood involving $120 million in investment since 2012, including the Eastern Lofts apartments in Brewerytown.

The Navy Yard, which employed 40,000 at its peak, came under city ownership in 2000 after the U.S. Defense Department decommissioned the site as a military base.

Under PIDC’s watch, Liberty Property Trust turned a centrally located 80-acre section of the former barracks into what is known as the Corporate Center, a collection of contemporary buildings — some by renowned architects — comprising 800,000 square feet of office and lab space.

When Liberty decided in 2018 to cease work on office projects such as those at the Navy Yard, nearly all of the Corporate Center’s development parcels had been built on or spoken for, setting the stage for the next phases of work at the 1,200-acre South Philadelphia tract.

Ensemble and Mosaic were selected by PIDC in July to lead that work.

The team’s first new building is to be a three-story, 100,000-square-foot lab and office building that would rise at 1201 Normandy Place, near the Corporate Center Development, Ensemble and Mosaic said Tuesday.

It will be built as a “speculative” project, meaning that work will begin without having tenants lined up for the space, and is expected to be completed before the end of next year, the companies said.

Ensemble and Mosaic will also soon begin marketing another nearby property, at 333 Rouse Blvd., as a development site for life-science companies seeking a custom-built drug-manufacturing plant, the developers said.

That property can accommodate a facility of up to 120,000 square feet, they said.

Future tenants of the planned buildings also may be eligible for breaks on some city and state taxes through the Navy Yard’s designation as a Keystone Opportunity Zone if they create enough jobs or invest enough money there.

“The Navy Yard is a critical component in the growth of life-science companies in the region,” said Mark Seltzer, an Ensemble senior vice president for development. “Our new buildings will create much-needed inventory.”

The construction sites are near a 12-acre section of the Navy Yard that’s being called the Historic Core District, which PIDC has said would become the Navy Yard’s “downtown.”

The area, largely bounded by 11th and 12th Streets, between Flagship Avenue and Normandy Place, is seen as accommodating 1,000 to 1,500 apartments in restored buildings, along with restaurants and shops to serve residents and nearby office workers and lab techs, PIDC officials have said.

The other site in the new development push is being called the Mustin District, after the former Henry C. Mustin Naval Air Facility airfield that once occupied much of the tract. Its 97 acres extend east from League Island Boulevard.

Officials have said the district could support as much as three million square feet of new office, lab, and production space, emulating the Corporate Center’s atmosphere, and could also potentially accommodate residential buildings along its quarter-mile waterfront.

This “represents a unique opportunity to build community and add density, while making the most of the waterfront access and incredible open spaces that have already grown in use and importance during this past year,” said Mosaic co-founder Leslie Smallwood-Lewis.

*Article courtesy of The Inquirer

For more information about Philadelphia office space for sale or lease in Philadelphia or about any other Philadelphia properties for sale or lease, please contact WCRE at 215-799-6900.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier Philadelphia commercial real estate broker that provides a full range of Philadelphia commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Philadelphia commercial properties for buyers, tenants, investors and sellers.

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One South Broad turns to lab conversion to fill vacant Wells Fargo office space

One South Broad St., a 464,000-square-foot building, is the latest Philadelphia office property to enter the life sciences fray.

Aion Partners of New York, which owns the 26-story building, is marketing 108,418 square feet over floors three through eight as space that can be converted into labs. The six contiguous floors were vacated last year by Wells Fargo, which relocated to Two Logan Square.

Landlords in Philadelphia and its suburbs are sensing an opportunity in the region’s growing life sciences sector and looking to convert vacant office space into lab space. About 1 million square feet or more of these tenants are being tracked in the Philadelphia market.

Examples of buildings in Philadelphia that are in the midst of a conversion or are being considered for labs include converting several floors in Cira Centre, turning some space in the Curtis into labs, and evaluating whether to transform several floors in the Wanamaker.

Not every building is a candidate for conversion and there are several minimum requirements that allow for space to be adapted into labs. For example, ceilings need to be at least 15 feet high to house mechanical duct work. Floor load, or the amount of weight it can handle, is important for lab equipment. Mechanical systems, ventilation, electrical power redundancies and vibration mitigation are also crucial to accommodate lab space.

Life sciences companies tend to gravitate to locations that are already hubs of research and educational institutions such as University City, though that doesn’t mean Center City or suburban locations aren’t conducive for these firms.

A study of the space at One South Broad was conducted to ascertain whether lab space would work in the building, which was constructed in 1932 by John Wanamaker during the Great Depression for his men’s department store.

The ceiling height in the building ranges from 16 feet to 20 feet, which provides enough room for mechanicals necessary for lab space. Old elevator shafts can be used for air circulation and exhaust.

Rents on the space will run in the mid-$40s a square foot.

Aion Partners bought One South Broad in 2014 for $68 million. At the time, it was 88% occupied with Wells Fargo as its anchor tenant, leasing 33% of the property until 2020.

*Article courtesy of Philadelphia Business Journal

For more information about Philadelphia office space for sale or lease in Philadelphia or about any other Philadelphia properties for sale or lease, please contact WCRE at 215-799-6900.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier Philadelphia commercial real estate broker that provides a full range of Philadelphia commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Philadelphia commercial properties for buyers, tenants, investors and sellers.

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Shorenstein Secures $223 Million Refinancing of Philadelphia Office High-Rise

Shorenstein Properties has tapped into the commercial mortgage-backed securities market to refinance its 1818 Market St. Class A office building in downtown Philadelphia, according to analysis of the loan being rolled into a new offering likely to come to market next week.

Barclays Capital Real Estate provided a two-year, floating-rate, interest-only loan totaling $222.9 million, according to S&P Global Ratings. The loan has three 12-month extension options. Barclays has contributed the loan to a CMBS deal, BSST 2021-1818.

Shorenstein officials did not immediately respond to requests for comment from CoStar News.

The loan is secured by the 37-story, 999,828-square-foot multitenant building.

Shorenstein purchased the property in April 2015 for $184.75 million, or about $188 per square foot, according to CoStar data. Bank of America had provided $174 million in acquisition financing.

Since that deal, Shorenstein has spent $94 million through last month on renovations, tenant improvements and leasing costs, according to S&P Global. The property was appraised at $282.1 million for the purposes of the refinancing.

The refinancing returned about $44 million in equity to Shorenstein, S&P Global said.

The largest tenant in the property is WSFS Financial, after which the building is named, which occupies 96,800 square feet in a lease that runs through 2028. WSFS, which has it headquarters in Wilmington, Delaware, took over the space in its March 2019 purchase of Beneficial Bancorp, for which the building was previously named.

In its CMBS presale analysis, S&P Global said it believes there remains high, but moderating, uncertainty about the evolution of the coronavirus pandemic and its economic effects.

Shorenstein is facing at least one other major loan maturity this year. It has a $350 million CMBS loan coming due in November on its 1.1 million-square-foot 1407 Broadway office building in New York.

*Article courtesy of CoStar

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Corporate Suites, a New York Co-working Operator, Takes Space at 123 S. Broad

Corporate Suites, a coworking operator based in New York, has signed a 15-year lease on 24,000 square feet at 123 S. Broad St. in Center City, making its first foray into Philadelphia.

The firm will occupy the 15th floor of the office building and expects to be in operation by September.

Though co-working struggled during the pandemic with some operators such as WeWork closing locations and others, such as Regus, filing Chapter 11 bankruptcy protection on some spaces it leased, there is a belief coworking will regain some of its popularity as people seek alternatives to working from home as the pandemic dissipates.

SSH Real Estate, which owns 123 S. Broad, felt the building was lacking in not having a coworking tenant and had sought Corporate Suites as a tenant.

“The deal was in the works early last year but was delayed because of the coronavirus,” said Pete Soens, a partner at SSH Real Estate.

When talks picked back up, it became apparent to Soens that certain types of coworking will be in high demand as people get back to in-person work.

“We like their business model,” Soens said. “It’s a different model than WeWork. It’s more for professionals, small companies and individuals. We think with the location of 123 across from the Union League and near City Hall, we think the business professional will be drawn to it.”

The shape of the floor that Corporate Suites will occupy will enable it to provide more private offices, small suites, and some coworking areas versus a completely open office plan, Soens said.

The Corporate Suites model includes short-term leases on fully furnished suites and provides conference rooms and office services. SSH is anticipating the firm could eventually expand into another floor and doubling in size.

SSH plans to leverage Corporate Suites services as an amenity for some of the smaller tenants it has in the building and even look to capture some of those who use the space and may later need formal office space.

With this lease, 123 S. Broad reaches 70% occupancy as it chips away at about 150,000 square feet of space vacated by Wells Fargo.

*Article courtesy of Philadelphia Business Journal

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Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier Philadelphia commercial real estate broker that provides a full range of Philadelphia commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Philadelphia commercial properties for buyers, tenants, investors and sellers.

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AmerisourceBergen Readies for Summer Move to New HQ at Sora West in Conshohocken

As the development of office component of Sora West in Conshohocken draws to a completion over the next several months, AmerisourceBergen Corp. has already begun preparing for its move into its new headquarters this summer.

As such, the Fortune 50 pharmaceutical distributor will join a growing list of companies that have faced the ordeal of relocating into new offices during a pandemic – Toll Brothers Inc., Macquarie, Fisher Phillips — or just weeks before employees were sent to work from home last March as in the case of Signant Health in Blue Bell.

Some firms preparing to move into new headquarters, such as Hamilton Lane, have already decided they don’t need as much space as anticipated. In October 2019, Hamilton Lane signed a lease to occupy 130,000 square feet at Seven Tower Bridge, which is under construction in Conshohocken. Last summer, it had decided to shed one of those floors and expects to occupy about 100,000 square feet.

New spaces has also meant an opportunity to reimagine and reconfigure portions of their new offices to accommodate changes brought on by the coronavirus. Many of these alterations, which were foreign just a year ago, have now become commonly accepted and expected.

At the groundbreaking of its new $200 million headquarters at 2222 Market St. last September, Morgan Lewis executives confirmed the law firm remained committed to the building but would evaluate the interior design through a new lens brought on by the coronavirus and employees working from home.

In the case of AmerisourceBergen, there are “some in-office experiences that may differ from our original plans prior to the Covid-19 pandemic,” said Lauren Esposito, spokeswoman at the company, in an email.

At its new 11-story, 429,122-square-foot building at 125 E. Elm St., the company is installing furniture, products and coverings that can be easily cleaned and disinfected, and have picked fabrics that can be bleached as needed, Esposito said. Offices and cubicles will be “safely” spaced and the company intends to clean, every day on an hourly basis, all high-touch points as part of a new, standard office protocols.

The company also put in touch-free appliances, such as drinking dispensers, soap machines and water faucets.

“We are using science and data to make decisions and validate recommendations and procedures,” she said. “We rely on CDC and WHO guidelines as guidance continues to evolve. We have also engaged an external medical advisor to provide an objective interpretation of these guidelines to help us make the right decisions for our company.”

As originally planned, AmerisourceBergen (NYSE: ABC) intends to occupy the entire building but it will carve out a “small portion” of the space that will not have any offices and will be used as needed “to keep our employees comfortable, healthy and safe.” About 1,500 employees are expected to work out of the building.

In the meantime, the company continues to have its employees work remotely here and across its other offices and is taking a measured approach to returning to physical offices including at its new home in Conshohocken.

“While we remain hopeful that we can return to the office this summer, we must continue to work within a fluid timeline while we reassess the multiple factors that go into a phased re-entry plan across the enterprise in order to keep our employees safe,” Esposito said.

In addition to AmerisourceBergen’s offices, Sora West will include a new hotel and two restaurants. Keystone Property Group, the developer, officially broke ground on the project in April 2019 and this month moved forward with construction of the hotel.

*Article courtesy of Philadelphia Business Journal

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Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier Philadelphia commercial real estate broker that provides a full range of Philadelphia commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Philadelphia commercial properties for buyers, tenants, investors and sellers.

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Brandywine Expects to Break Ground on $287M Schuylkill Yards Building in March

Brandywine Realty Trust has secured two partners — one an undisclosed global institutional investor — on the development of a $287 million project at Schuylkill Yards and is making progress on its lease negotiations with Dechert at Cira Centre.

The Philadelphia real estate investment trust said Dechert, one of Philadelphia’s largest law firms, is in discussions to occupy 110,000 square feet in the upper floors of Cira Centre. The firm currently occupies around 240,000 square feet space in the office tower and is scheduled to give some of its space back this year, Brandywine executives said during a fourth quarter conference call on Wednesday.

Brandywine also said it has a life sciences incubator that will occupy several floors in Cira Centre it is converting into lab space. Cira Centre recently lost BakerHostetler as a tenant. The law firm, which had 80,000 square feet, is relocating to 1735 Market St. in Center City.

Brandywine continues to shift its focus more on life sciences space and the new building at Schuylkill Yards is part of that effort. The project, referred to as the West Tower at Schuylkill Yards, will rise at 3025 John F. Kennedy Blvd. The site is adjacent to Amtrak’s 30th Street Station.

The 570,000-square-foot project involves 326 apartments and 200,000 square feet of life sciences space as well as 29,000 square feet of amenity space and 9,000 square feet of retail space. In the company’s conference call on Wednesday, executives said that it has 300,000 square feet of prospective tenants for the office-lab space in the new building and is tracking other life sciences tenants that could lead to potentially kicking off another building at Schuylkill Yards this year. The company has designed a $300 million, 500,000-square-foot life sciences building at 3151 Market St.

Gotham Organization, a New York real estate company that has built apartments and commercial space, will partner with Brandywine (NYSE: BDN) on the multifamily portion of the new Schuylkill Yards’ project. Brandywine expects to break ground next month and complete the building by October 2023.

Among other highlights from its four quarter, Brandywine paid in late November $9.7 million for a 119,763-square-foot office building at 1505-11 Race St. in Philadelphia. The property is part of a portfolio of buildings up for sale that used to be occupied by Hahnemann University Hospital. The building is fully occupied and the company said it intends to redevelop the building once the tenant vacates.

In Radnor, it bought for $20.3 million a 169,834-square-foot office building at 250 King of Prussia Road. The building was purchased from Penn Medicine, which relocated those operations to a newly constructed building across the street. Brandywine expects to begin redevelopment of the King of Prussia Road building this year.

*Article courtesy of Philadelphia Business Journal

For more information about Philadelphia office space for sale or lease in Philadelphia or about any other Philadelphia properties for sale or lease, please contact WCRE at 215-799-6900.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier Philadelphia commercial real estate broker that provides a full range of Philadelphia commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Philadelphia commercial properties for buyers, tenants, investors and sellers.

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2000 Market Wraps Up $12M in Renovations

Nahla Capital has completed $12 million in interior and exterior renovations to 2000 Market St. and signed a handful of lease renewals at the Center City office building.

“We have had good momentum even during the pandemic,” said P.J. Van Hoof, senior associate at Nahla Capital. “We had more smaller tenants that were expiring and with those tenants, we have been solving with short-term solutions.”

It’s not uncommon for tenants not to make long-term leasing decisions during the pandemic but rather strike a short-term renewal to provide it with some time to figure out its space needs in the future. Hamburg Süd, a global shipping company located in the building for the last 10 years, was one of the tenants that renewed its lease but also downsized. It signed a five-year deal on 14,295 square feet, shrinking from 22,000 square feet.

Duff & Phelps, a financial consulting firm, exercised an option to expand by 3,000 square feet, growing to 17,000 square feet from 14,000 square feet. The company had renewed for seven years at the end of 2019.

Medtrics Lab, a digital health company, signed a new, three-year lease on 2,600 square feet. InnovAge Life, which provides medical care to seniors, renewed its lease on 3,624 square feet for 24 months, and Toppan Merrill, a communications company, renewed for 25 months on 4,209 square feet. The building is 90% leased.

The office market has fluctuated since last March with some tenants willing to make leasing commitments but many deciding to delay those decisions.

Nahla partnered with the merchant banking division of Goldman Sachs to buy 2000 Market for $126.4 million in July 2018. The 29-story, 665,649-square-foot office building was built in 1973 and, after purchasing the tower, Nahla undertook a series of renovations. It installed four new cooling towers, upgraded the elevators, fire alarm and security systems and restored the façade.

The lobby was also renovated. That project was supposed to have begun last March but was delayed because of the pandemic. Once the project ramped up two months later, work was accelerated since it could be conducted throughout the day with little disruption since most tenants still have employees working from home.

Nahla retained architectural firm Soulis & Berlic to design the space so that an illuminated wall of Nestos marble panels is a focal point. The lobby has new wood paneled elevator banks, lighting and seating areas and is much more contemporary.

Renovations to the building’s shared conference facility are underway as is the installation of ultra-violet duct cleaning technology.

With the renovations nearly completed and the occupancy steady, Nahla doesn’t plan to sell the building at this point. “Our next big push is to focus on leasing,” Van Hoof said. “Though 90% is a healthy occupancy, we think there is still room to improve the building.”

*Article courtesy of Philadelphia Business Journal

For more information about Philadelphia office space for sale or lease in Philadelphia or about any other Philadelphia properties for sale or lease, please contact WCRE at 215-799-6900.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier Philadelphia commercial real estate broker that provides a full range of Philadelphia commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Philadelphia commercial properties for buyers, tenants, investors and sellers.

Please visit our websites for a full listing of Philadelphia commercial properties for lease or sale through our Philadelphia commercial real estate brokerage firm.

BakerHostetler Signs Deal to Move Philadelphia Office

BakerHostetler has signed a 16-year lease to relocate its Philadelphia offices from Cira Centre in University City to BNY Mellon Center at 1735 Market St. in the Central Business District.

The Cleveland-based law firm leased 45,121 square feet, a reduction from the 80,000 square feet it had occupied at Cira Centre. BakerHostetler’s lease was scheduled to expire this year at the Brandywine Realty Trust-owned building. In 2014, the law firm merged with Woodcock Washburn, which was one of Cira Centre’s original tenants, and inherited its office space.

BakerHostetler, which has 65 attorneys in Philadelphia, is the second law firm in recent weeks to sign a long-term lease. Blank Rome, one of Philadelphia’s largest law firms, committed to a new 16-year lease on space in the Center City building where it currently resides — One Logan Square, which is also owned by Brandywine Realty.

BakerHostetler was one of two prominent Philadelphia law firm tenants at Cira Centre in the market and exploring what to do once their leases expired at the office building. Dechert is the other firm.

Dechert, which occupies around 240,000 square feet at Cira Centre, has been looking for new office space for nearly two years. The firm did sign last year a lease on 34,987 square feet at 1735 Market, though that was just one part of its overall space strategy.

BakerHostetler will occupy floors 31 and 32 at 1735 Market and its lease brings the 51-story, 1.3-million-square-foot office tower up to 90% occupied. Unlike Blank Rome’s new lease that built in options to contract the amount of space it occupies, the BakerHostetler deal includes expansion options.

The law firm is expected to relocate into the building later this year.

*Article courtesy of Philadelphia Business Journal

For more information about Philadelphia office space for sale or lease in Philadelphia or about any other Philadelphia properties for sale or lease, please contact WCRE at 215-799-6900.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier Philadelphia commercial real estate broker that provides a full range of Philadelphia commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Philadelphia commercial properties for buyers, tenants, investors and sellers.

Please visit our websites for a full listing of Philadelphia commercial properties for lease or sale through our Philadelphia commercial real estate brokerage firm.

Wanamaker Reckoning: Tenants Set to Vacate More Than Half of Office Space at Center City Landmark

The Wanamaker building is facing 500,000 square feet of vacant space after Children’s Hospital of Philadelphia exercised an option to terminate its lease at the building and two other tenants decided to move out.

The 1.4-million-square-foot building at 100 Penn Square East in Center City has 950,000 square feet of office space and the remainder is retail space occupied by Macy’s. With those tenant defections, the building faces having more than half of its office space vacant.

The vacancies come at a point when corporations are reevaluating their office space needs during the pandemic and delaying decisions on long-term leases. In spite of those challenges, there is hope that demand for space by life sciences companies may fill some of gaps left in Wanamaker and other Center City buildings.

Life sciences companies are increasingly in the market looking for office-lab space and the conversion of existing office space to accommodate these tenants is being considered by many downtown landlords. Though expensive, the cost to convert space is less and faster than ground-up development.

A recent report pegs the amount of space being sought by life sciences companies within Philadelphia at nearly 725,000 square feet, which is roughly double the amount since the beginning of the year.

CHOP occupies 300,000 square feet at the Wanamaker and expanded by more than 50,000 square feet last year.

CHOP said it is reevaluating its office space in preparation for a post-Covid world and is in discussions to “identify new lease terms.”

“We are committed to creating work environments that advance our mission, make the best use of our resources and enable our employees to meet and collaborate according to their needs,” CHOP said in a statement.

CHOP has several development projects in various stages that could eventually shift employees from Wanamaker closer to the hospital’s main campus in University City.

Two agencies within the General Services Administration were the other defections from Wanamaker. The Army Corps of Engineers, which had 113,000 square feet, and Housing and Urban Development, which occupied 119,000 square feet, have signed a lease to occupy the former Environmental Protection Agency space at 1650 Arch St.

Wanamaker was purchased in 2017 in a $200 million deal, the company was aware of the potential for CHOP and the GSA to move on from the building. That risk corresponded with the company’s plans to move forward with a $30 million renovation of the building that included updating the lobby and other common areas, improving the courtyard and adding several amenities including Mindspace, a coworking operator that signed a lease on 42,000 square feet.

The strategy involved completing those improvements in an attempt to bring Wanamaker up to Class A space and increase rents by $10 a square foot.

The space will come available between 2021 and 2023, which will purportedly be post-pandemic. By then, most companies will return to making long-term decisions on their office space needs and providing some wiggle room before the space no longer has a tenant paying rent.

The size of the floorplates, ceiling heights and other characteristics appear to accommodate such conversions. The company also needs to consider how that might work with other tenants in the building.

*Article courtesy of Philadelphia Business Journal

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