Wednesday, August 27, 2014
Inquirer Daily News

Suburban office shrinkage: Pru, ING, Aetna

Mergers and consolidations are dumping properties into the leasing market

Suburban office shrinkage: Pru, ING, Aetna

Corporate takeovers and the smartphone-tablet-PC-based work-at-home movement explains why nobody's building suburban offices anymore. Three Philly-area examples:

- Capmark Financial Group has hired the Philadelphia-based Binswanger real estate brokerage to sell four buildings at Prudential Financial's longtime office campus in Horsham, near the PA 611 exit on the Pennsyvlania Turnpike. The buildings at 508 Prudential Road and at 116, 118 and 120 Welsh Road, which date to 1984,are single-story, stand-alone structures, totalling 128,700 sq ft, on 10.6 acres. All for sale. 

Why does't Pru need the space? Upper Dublin Township last year still listed Prudential's local employment at 6,500, according to a bond prospectus reviewed by my colleague Michael Armstrong. But when Mike called to check, the company told him its current employment in the entire Philadelphia-Wilmington region is now closer to 3,300.

- Virginia-based Capital One Corp. is vacating the six-story onetime Pennsylvania Railroad office building next to Wilmington's Frank Furness-designed Amtrak/Septa train station. Capital One took over the 47,000 sq ft building and at least three other downtown office centers housing around 1,000 workers total when it bought ING Direct Bank last year, but the giant bank is consolidating operations with HSBC's former credit card shop, and no longer needs the room.

Cap One's rep, Summit Realty Advisers LLC, has hired CBRE Group and brokers Dan Reeder, John Caczowka and Brian Hopkins to find new tenants. They're offering it "fully furnished" as of April 1. No immediate comment from Capital One officials about how many jobs they are cutting or what other real estate may go vacant.

- US Healthcare filled "3 owned buildings atd at least 5 other leased office building properties" in the Blue Bell and King of Prussia area in the late 1990s when it was bought by Aetna Inc., along with a printshop and warehouse. All that space is now down to just "two owned buildings" (and a third, no longer needed, that is leased out), Aetna spokesman Elden Roskelley told me last week, after the Wall St Journal reported nearly half of Aetna's corporate workforce no longer goes into the office because it now works from home. 

Joseph N. DiStefano
About this blog

PhillyDeals posts raw drafts and updates of Joseph N. DiStefano's columns and stories about Philly-area finance, investment, commercial real estate, tech, hiring and public spending, which he's been writing since 1989, mostly for the Philadelphia Inquirer.

DiStefano studied economics, history and a little engineering at Penn, taught writing at St. Joe's, and has written the book Comcasted, more than a thousand columns, and thousands of articles, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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