Cardone Industries will not occupy a new 53,920-square-foot building in Bala Cynwyd as its new headquarters and will instead try to find another tenant to sublease the space.
The building at 15 Kings Grant Drive adds to a growing list of companies subleasing all or a portion of their offices due to operational changes or as a result of the pandemic. The coronavirus has led most companies to institute work-from-home policies and, as their offices sit empty, prompted them to re-evaluate how much space they actually need. Other firms have determined they don’t need the space for other, sometimes financial, reasons.
For example, Hamilton Lane has decided to sublease 27,000 square feet, or a single floor, at Seven Tower Bridge in Conshohocken, where it will relocate its headquarters. The investment firm initially leased 130,000 square feet for a new headquarters at the building under construction but now expects to occupy roughly 100,000 square feet. The company said it was as a result of the coronavirus and changing its need for all of the space. It anticipates to implement a hybrid remote and in-office model, when it does eventually move in and, therefore, doesn’t need as much space.
Bryn Mawr Trust (NASDAQ: BMTC) intends to sell a building and terminate leases on two otherslocated across the street from its headquarters on Lancaster Avenue in Bryn Mawr by the end of the year. The company plan to allow more of its employees to work from home on a permanent basis post pandemic, prompting it to reevaluate its real estate needs. The changes means it will cut its footprint by 33,000 square feet.
Cardone signed a 15-year lease in 2018 at the Kings Grant office building, which is owned by Keystone Property Group, a Conshohocken-based real estate company. Keystone secured a $14.75 million loan and launched a $15 million gut renovation to the vacant property in anticipation of the used-auto parts re-manufacturer moving into it.
The building has all new windows, doors, HVAC, electrical and mechanical upgrades, landscaping and a new parking structure.
Cardone’s relocation of its headquarters from Northeast Philadelphia to Bala Cynwyd was first thrown into doubt in early 2019 when the Cardone family relinquished ownership of the company to Brookfield Asset Management. That’s when a move to Bala Cynwyd was put on hold while Brookfield evaluated various aspects of the auto parts re-manufacturer.
By August 2019, when Cardone was supposed to make the move to Bala and didn’t, the market was convinced no move would happen at all. The company had two options: Cardone could not move in and meet its lease obligations to pay rent and leave the building vacant; or not move in and find a new tenant to sublease the space. It went with the latter.
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