Spring EQ consolidates Philadelphia offices as companies upgrade space

By Katie Burke CoStar News

Several years after calling its employees back to the office, a mortgage lending firm tired of being spread across several buildings is consolidating its Philadelphia headquarters under one roof.

Spring EQ took over an entire floor in the Cira Center office tower overlooking the Schuylkill River. The move enables it to let go of two separate leased spaces and bring its more than 250 employees in the area together at a single address.

The company is preparing to move into just shy of 27,000 square feet at the Brandywine Realty-owned building. The space is smaller than it had collectively occupied prior to the decision, but company executives believe it will be far more efficient in the aftermath of transitioning back to in-person work.

And even though the size of the new office will be smaller, the price tag is far higher — a worthwhile investment given that the 2929 Arch St. space is expected to help with productivity by having all of its sales, operations and technology teams side by side, said Spring EQ Chief Executive Joe Steffa.

The company, founded about a decade ago and acquired by private equity giant Cerberus Capital Management last year, has previously operated across several offices in Radnor and Conshohocken, Pennsylvania, as well as an outpost at 300 Fellowship Road in Mount Laurel, New Jersey.

Office rents in the South Jersey suburb average less than $26 per square foot, according to CoStar data. By comparison, premium office options in Center City Philadelphia have climbed to about $52 a square foot.

Since the acquisition, Spring's workforce has ballooned to more than 500 employees, most of whom are expected to commute to a physical office at least three days a week. And with access to Cira Centre features such as a media room, fitness center and a variety of different workspace types, Steffa said the firm expects the new headquarters to help with recruiting and retention.

It's a move other companies nationwide are making as they aim to beef up their attendance policies and attract the best talent.

While some of those decisions have meant downsizing their square footage, many have come with a larger investment in the space, as tenants prove willing to pay higher rents for better-quality options.

The flight-to-quality shift has been a critical ingredient in the national office market's post-pandemic recovery, separating the properties at the highest end of the quality spectrum from the less desirable alternatives still struggling with large blocks of vacant space. With almost no new construction moving through the country's development pipeline, tenants are also accelerating their real estate decisions as the pool of attractive, available options quickly shrinks.

As a result of that building competition, rents among trophy office properties have increased sharply over the past year. Philadelphia has some catching up to do compared to other top markets such as New York or San Francisco, and while rent growth has been challenged in recent years, top-tier buildings have captured the bulk of recent leasing activity and pushed record rates.

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