Wednesday, February 25, 2015

Kairos Renovating Fort Washington Executive Center

by Steve Lubetkin

Trying to capitalize on a current boom in demand for upgraded space in the western and northwestern Philadelphia suburban market, Kairos Real Estate Partners is renovating its latest acquisition, the Fort Washington Executive Center.

The Center is the home of anchor tenants NutriSystem, AstraZenaca Pharmaceuticals, McNeil and AmeriHealth Administrators. Kairos and Artemis Real Estate Partners acquired the property from CW Capital Asset Management late last year. Terms of the deal were not disclosed.

“There has been a flight to quality that tenants are taking advantage of lower rents to move to better buildings than they historically would have,” Stephen J. Gleason, Kairos Real Estate Partners president, tells exclusively. “Tenants are trading up from B-minus properties to A-minus properties. There is a lot of demand, especially for large blocks of space. In the markets where we operate, from Fort Washington to King of Prussia, there is a dearth of 30,000-foot blocks of space and above. We’re starting to see demand coming in from other submarkets and we’re finally seeing tenants fighting over the few blocks of space that are remaining.”

The nearly 400,000 square-foot class A office buildings, situated on a 40.15-acre site, are located at 600, 601 and 602 Office Center Drive in Fort Washington. The total combined occupancy rate is currently 79% as Kairos inked a long-term lease agreement with Allstate for 25,000 square feet in December. The amenity-rich property includes a full-service café, fitness center, and landscaped central courtyard.

Kairos is comfortable that the office market of the future has a place for suburban office properties.

“We’ve read all the press about the death of the suburbs, and we don’t believe it,” Gleason says. “We definitely feel that well-located properties will continue to be attractive to strong, creditworthy tenants if they have the right amenities that allow them to attract and retain employees.”

Kairos plans to significantly upgrade the Fort Washington properties, much like the firm's recently completed repositioning of Triad at 2200 Renaissance Blvd. in King of Prussia. The Triad venture between Kairos and Artemis included the creation and renovation of the full-service cafe, fitness center, conference center and the dramatic 55' high center atrium.

Fort Washington Executive Center provides many benefits to large corporate users, including: abundant electrical power fed from two separate PECO substations; nine-foot finished ceiling heights; efficient floor plates; and, on-site surface and structured parking at an above-standard ratio of 5.3 spaces per 1,000 square feet of rentable area.

Located just 16 miles northwest of Philadelphia’s CBD, Office Center Drive is conveniently accessible to the area’s two major roadways, as it sits just one mile from the interchange of PA Route 309 and the Pennsylvania Turnpike. In addition, the property enjoys direct access to the Virginia Drive slip ramp of the Pennsylvania Turnpike, located just 0.2 miles away via Office Center Drive.

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