Friday, August 12, 2011

Endo Pharmaceuticals looks to expand

by Natalie Kostelni

"Endo Pharmaceuticals Inc. is seeking to expand along the Route 202 Corridor. The company is in the market for more than 350,000 square feet so it can relocate its corporate headquarters from Chadds Ford.

The company has reportedly zeroed in on Valley Creek Corporate Center in Exton after having considered other properties in the Malvern area including Trammell Crow Co.’s Atwater Corporate Center, O’Neill Properties Group’s Uptown Worthington and options offered by Liberty Property Trust and other local developers. Endo has been on and off in the market for roughly two years having tabled its plans only to restart its search for 300,000 to 350,000 square feet of office space.

“We’re not disclosing anything at this time,” said Kevin Wiggins, a spokesman at Endo. “We’ve made no decisions and no announcements. The company is always looking at maximizing its space and making things more efficient.”

Wiggins said that Endo has acquired several companies in recent years and has “a lot of expansion going on.”

Endo has been positioning itself as a one-stop shop for pelvic health. It offers an array of diagnostic tools, medical devices and therapeutic compounds in the urology field, and has done that through a series of acquisitions. For example, Endo closed in June on a $3 billion purchase of American Medical Systems, which expands it in the urology field.

The company currently leases nearly 190,000 square feet in four buildings in Chadds Ford, according to Security and Exchange Commission documents. Those leases expire at a range of dates, the earliest next August and the last one in 2018.

At Valley Creek, the company would reportedly have a couple of buildings constructed and lease them on a long-term basis with options to expand in the future.

While some market observers are skittish that stock market gyrations and other economic turmoil could spook an Endo deal, other brokers have already started to figure in what, if any impact, Endo may have on the Route 202 Corridor office sector.

“An Endo move to the 202 Corridor is a great boost overall for the economy, however it won’t affect absorption particularly in the short run because the company will look to have buildings constructed."

“If they continue to expand further down the road and take existing space, that would affect absorption.”

“It will be a nice addition to that park and stamps it as a high-end business park in the Exton area."

However, Chadds Ford will suffer.

“That area where they are at, Route 1 and 202, is a submarket unto itself, and when they vacate that area, it will make it soft down there."

Valley Creek is owned by Rubenstein Co., a real estate firm in Philadelphia. It is a master planned corporate community on 200 acres on which 1.75 million square feet in 17 building can be constructed over several phases.

Rubenstein got its approvals in 2000 for the development but demand for new office space hasn’t warranted build out of the office park, although the first of five phases of the overall master plan has been constructed. That initial stage entailed three buildings totaling 256,981 square feet."

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