PhillyDeals: Developer's proposals aimed at attracting Millennial workforce

Bill Glazer of Keystone Property Group plans office-building makeovers.
Bill Glazer of Keystone Property Group plans office-building makeovers. (MICHAEL S. WIRTZ / Staff Photographer)
Posted: February 28, 2014

Bill Glazer, boss at Keystone Property Group, collects aging office buildings, mostly suburban.

He says his Bala Cynwyd-based firm now controls north of 10 million square feet, about seven times the size of the new tower Comcast wants to build at 18th and Arch Streets.

"It's a big job. But it's a fun job," Glazer told me Wednesday, two days after he agreed to pay $231 million for 12 buildings (2.3 million square feet) in the suburbs of New York.

Keystone last year paid $233 million for buildings totaling 1.6 million square feet in Westlakes Office Park in Berwyn, Sentry Park in Blue Bell, and other suburban sites, from the same seller, Mack-Cali Realty Corp., of Edison, N.J., whose bosses now believe there's more money to be made in apartments.

Glazer convinced some cold-eyed lenders, including Deutsche Bank, to back last year's deals - at prices less than half of what suburban buildings used to fetch, or a third of what new construction would cost.

Cheap for a reason, no? "The whole office sector has been a tough space over the past few years," Glazer acknowledged. U.S. employment hasn't yet recovered to 2007 levels.

So how's he going to turn these deals to profits? "By reinventing the workspace with technology, fitness, and lifestyle," Glazer says cheerfully.

What's that mean? He directed me to his proposal for 100 Independence Mall West, the old Rohm & Haas building, where he's asked restaurant owner Michael Schulson to "craft an outdoor beer garden," plus "a very cool cafe" aiming for the street ambience of the Standard Hotel in New York's Meatpacking District.

Pretty picture. How will he extend it to Blue Bell? Glazer urged me to watch how people my kids' age work - same as they hang out: in open areas instead of cubicles, eating healthy stuff, tapping laptops and handhelds, among a crowd doing the same.

"Baby boomers wanted a sense of entitlement: their own office, in the corner. That's not what the Millennial workforce wants," says Glazer. "They want collaboration. They want connectivity. They want the vibe, the energy you can't get sitting by yourself in the office."

So he's urging suburban townships to zone more eating and drinking establishments, even apartments, for his office buildings. Having bought at bargain prices, he can afford glassy lobbies, hiking trails, landscaping, utility upgrades - and lower rents that appeal to little firms and professional offices that have had to make do with funky unrenovated spaces.

Great. Can I meet some of these cool new tenants? "I'll have plenty to show you in the next few months," he promised.

Downtown eats

Having failed to attract department stores, Center City brokers are working on supermarkets. At least one chain active in the suburbs has been scouting grocery space in the Gallery (where owner PREIT is seeking food-based businesses), the Girard Block redevelopment at 11th and Chestnut Streets, and Bart Blatstein's proposed center at the northeast corner of Broad Street and Washington Avenue.

"There are a number of chains I'm talking to. Neighborhoods are exploding with growth and there's not much service retail. But no signed deal," says Blatstein.

215-854-5194 @PhillyJoeD

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