Office Space

Perhaps those visions of Hollywood glitz for humble Norristown were unduly rosy, like most showbiz dreams. For now, the hyped plan to revive the hard-bitten Montgomery County seat with one of the largest movie studios on the East Coast is off the table, replaced by the more pragmatic construction of office space for a janitorial concern and a Pathmark. The latter, aimed at completion early next year, would be the municipality's first new full-service supermarket in a generation.

Triumphant in his turf war with the Bucks County commissioners, District Attorney Alan Rubenstein yesterday offered a conciliatory parting shot, courtesy of his high-profile Philadelphia lawyer. Shortly after a judge accepted a settlement agreement, Rubenstein announced yesterday morning that Richard A. Sprague, the lawyer whom the district attorney retained to sue the commissioners for more office space, had decided to waive all fees and costs associated with the battle. "No one is going to pay Mr. Sprague," Rubenstein said.

Comcast Corp., Aramark Inc., law firms and a trickle of dot-coms are fueling what appears to be the strongest market for downtown office space in 15 years, a real estate firm said yesterday. The vacancy rate for the nicest space, the so-called Class A and Class B digs, between the rivers and South and Spring Garden Streets fell in June to the lowest level since 1985, according to Grubb & Ellis Co. The firm launched its survey that year. The June vacancy rate was 7.8 percent, down from 9.5 percent in December, the firm said.

Leasing activity in Center City office buildings fell last year although the vacancy rate was stable at 17 percent, Jackson-Cross Co. said yesterday in its annual survey and forecast. Because of the slow pace of the economic recovery and continued corporate cutbacks, the situation is not likely to improve significantly in 1994, Jackson-Cross said. The number of square feet of office space leased last year fell to 1.5 million from 1.7 million in 1992. The Philadelphia real estate company's three competitors, CB Commercial, Cushman & Wakefield and Grubb & Ellis, agreed with that assessment, if not with the percentages, in their year-end surveys and forecasts.

Woodlynde School, a kindergarten-through-12th-grade college-preparatory school housed in the former Strafford Elementary School, is expanding. Jack Rogers, head of school, said yesterday that the school, at 445 Upper Gulph Rd., has purchased an adjacent property for $370,000. The new building, formerly a dentist's home and office, is at the northwest corner of Upper Gulph and Old Eagle School Roads, and will be used as office space. "We have been in our present location for 14 years, and the school is over 20 years old," Rogers said.

Delaware County closed a long-awaited agreement with the Resolution Trust Corp. yesterday that transfers title of the 225,000-square-foot Baldwin Towers to the county. The deal, championed by County Commerce Director J. Patrick Killian and County Councilman Paul G. Mattus, involves the county's selling the building within a month to Preferred Real Estate Investments Inc., of Conshohocken, for $1.52 million. The county will split the proceeds with the RTC. "It is an indication in this day and age that all sections of government can work together," Killian said.

If you needed office space a decade ago, you would call a broker, who would search paper files compiled in various ways. There would be flyers received from other brokers and notes taken by people in the broker's office whenever they had spotted an "available" sign. Hours would be spent verifying information and arranging to get keys or meet leasing agents at specific times. A week or so later came the tours - long days of driving around and inspecting buildings. "Now you don't even need to leave your office," said Paul Garvey, a senior director and commercial broker in the Philadelphia office of Cushman & Wakefield Inc. The first phase of the selection process often can be conducted online, within hours of that first call.

Michael O'Neill, a veteran recycler of vacant industrial sites, sold 3.5 million square feet of office space yesterday, about half the properties his firm put up for sale last summer. The deal with the Buccini/Pollin Group Inc., a privately held real estate investment firm in Wilmington, includes two of O'Neill's high-profile factory conversions - Quaker Park, the old Quaker Chemical Co. plant, in Conshohocken, and River Park, the former Simpson Paper Co. factory in nearby Miquon.

The "space available" signs outside the region's office buildings tell only the start of a story expected to worsen: Tenants are moving out. Layoffs and business closings have reduced the need for cubicles and conference rooms, driving up the region's vacancy rate in the office market to more than 15 percent, according to first quarter 2009 data released Friday. Because commercial real estate is a lagging economic indicator - it takes months for a company's problems to translate into its downsizing - experts predict the darkest point for the industry in this recession might not come until next year.

Two big buildings can make a big difference in a small town. The Chester County Justice Center and an office building proposed by developer Eli Kahn will stretch West Chester's Town Center at its corners, replacing parking lots with office buildings and generating foot traffic that business groups say is crucial to solidifying the borough's downtown. The restaurants, art galleries and shops already downtown are attracting "this kind of construction," said P. Timothy Phelps, executive director of the Greater West Chester Chamber of Commerce.