Wednesday, August 3, 2011

Cozen O’Connor sues its landlord, OSEB

by Jeff Blumenthal

"Cozen O’Connor has sued its landlord at the 1900 Market building in Philadelphia, claiming it has breached a recently signed lease extension by failing to properly maintain the site.

Among the firm’s complaints in the lawsuit filed last week in Philadelphia Common Pleas Court are: an often malfunctioning HVAC system, elevators that frequently break down, an atrium that leaks when it rains, inadequate cleaning services and foul odors wafting from the loading dock.

The 575-lawyer Cozen was one of the initial tenants when it opened in 1981. But relations between the law firm and its landlord, OSEB Associates, have been strained. Cozen ended a two-year search for new headquarters space last summer when it decided to sign a five year extension in which the rent price was decided through arbitration. Cozen now pays less than $15.68 per square foot (or about $3.2 million per year), compared to $25.50 per square foot in the last three years of the previous lease arrangement. The firm has 203,000 square feet of space in the building.
Cozen CEO Tad Decker said the firm filed the lawsuit because it believes OSEB has breached the lease agreement. Decker said the firm is not using the lawsuit to break the lease and sign elsewhere.

“We’re just upset that certain things have not been maintained,” Decker said. “If these things are problems now, what are they going to be like four years from now? They promised the building would be maintained like a Class A building and it’s not. They have a duty to maintain it and if they don’t agree to do that, we want the lease terminated. We don’t want to move necessarily but we’re not going to stay if half the elevators don’t work.”

In the lawsuit, Cozen asks the court to declare OSEB in breach of the lease and that the firm be entitled to be released from any obligations connected it.

Decker said the firm has held talks with the Three Logan building at 1717 Arch St. but that it is exploring several options if things do not work out at 1900 Market.

OSEB could not be reached for comment.

1900 Market is a 456,922-square-foot building that has roughly 100,000 square feet of contiguous space available on the 7th and 8th floors and another large chunk, roughly 200,000 square feet. This could also come available depending on if and when Cozen O’Connor makes a leap from the building. Cozen O’Connor has been forced to be creative with its space after adding 60 lawyers from Wolf Block in 2009 to give it 250 lawyers and more than 500 people in Center City. Some lawyers have been relocated to offices in West Conshohocken and Cherry Hill, which has become increasingly popular."

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