Dechert has signed a short-term renewal on about 109,000 square feet of office space over four floors at Cira Centre.
Dechert, one of Philadelphia’s largest law firms, had been in discussions for some time with the building’s landlord, Brandywine Realty Trust, to occupy four floors in the upper section of Cira Centre. The firm had originally occupied around 240,000 square feet space in the office tower and gave back three floors.
Brandywine officials said during a call with analysts on Thursday that it had extended Dechert’s lease a year ago for 12 months and further extended that lease with the firm in a deal that commences in 2022. A representative from Dechert couldn’t be reached for comment. Glenn Blumenfeld of Tactix Real Estate Advisors represented Dechert and declined comment.
Companies are signing short-term lease arrangements with more frequency to give them some extra time to figure out what their future space needs are post-pandemic. That surely figured into Dechert’s decision, and landlords have been accommodating to keep buildings occupied.
Firms are also shrinking their footprints as they right-size the amount of space they need post pandemic. Many are realizing they don’t as much space as they go to a hybrid model of work, providing employees the flexibility to work from home and in the office. Two other law firms, BakerHostetler and Blank Rome, reduced the amount of space they took in recent lease deals.
In addition, Dechert is dealing with ongoing litigation surrounding a tax break the law firm is seeking in a potential future relocation of its office space in Philadelphia.
Before committing to the renewal, Dechert had been focused on JFK Towers, an office complex in Schuylkill Yards that is proposed by Brandywine and located in a Keystone Opportunity Zone.
Last summer, Commonwealth Court ruled against the Pennsylvania Department of Community and Economic Development, saying that Dechert could relocate for a second time into an opportunity zone. Cira Centre was in an opportunity zone when Dechert moved into it and the firm received the tax break benefits that it provided. The proposed JFK Towers are also in an opportunity zone.
DCED has appealed the Commonwealth Court ruling and no decision has been rendered. It is unclear how the lease renewal at Cira Centre affects Dechert’s interest in Schuylkill Yards.
Brandywine (NYSE: BDN) is in the process of repositioning Cira Centre. It is converting floors three through nine into life sciences space. Brandywine also teamed up with the Pennsylvania Biotechnology Center of Bucks County to create B.Labs, a life science incubator at Cira Centre.
The 50,000-square-foot B.Labs, expected to open during the fourth quarter of this year, is being designed to provide collaboration and research space for startup, early-stage and established biotech and pharmaceutical companies. B.Labs will have event space on the second floor of the Cira Centre and incubator space on the third and fourth floors.
It is also dealing with a vacancy left by BakerHostetler, which signed a 16-year lease on 45,121 square feet at BNY Mellon Center at 1735 Market St. in the Central Business District. It had been in 80,000 square feet at Cira Centre.
*Article courtesy of The Philadelphia Business Journal
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