Triad building in King of Prussia gets $3.6M makeover

In 2002, Mack-Cali Realty Corp. paid $26.3 million to buy the Triad building, an office structure in the heart of the Renaissance Corporate Center in King of Prussia, Pa.

The building at 2200 Renaissance Blvd. was another example of how the New Jersey real estate investment trust was expanding its presence in suburban Philadelphia. At the time, the four-story building was 90 percent leased to a cadre of credit tenants including GlaxoSmithKline, MDS Pharma Services, and Henkel Corp. Mack-Cali bought it from an affiliate of JP Morgan Fleming Investment Management Inc.

About 10 years after buying the building, Mack-Cali decided to give it back to the lender and moved on amid a time when decisions like that became all too common. It was during the economic downturn and many office owners found themselves with properties that fell in value, were unable to renegotiate terms of their loans and made the call to cut their loses by moving on.

The situation allowed Kairos Real Estate Partners to swoop and pick up the 180,000-square-foot building for $8.1 million. It bought the property with Artemis Real Estate Partners of Chevy Chase, Md. That was in March 2013 and the building was 20 percent leased.

Constructed in 1985, Kairos decided the building not only had leasing issues but needed a significant makeover.

"It was extremely tired and had a lot of deferred maintenance," said Steve Gleason, who formed Kairos.

The real estate company spent $3.6 million making interior and exterior improvements including to the HVAC systems, common areas, atrium, parking and other areas including incorporating a café, fitness facility and conference center.

The work was recently completed and leasing has picked up a little. The building is now 38 percent occupied. Some companies that lease space include Spring Mill Partners, which leases 3,000 square feet; Workpays.me, which occupies 5,000 square feet; Genomind Inc., which takes 9,000 square feet; and Seasons Hospice & Palliative Care, which is in 5,000 square feet. Jim Dugan and Mike Maloney of Newmark Grubb Knight Frank oversee the leasing.

"We were attracted to the location and the opportunity to do a full renovation and still be able to offer the building a price point to tenants who are being priced out of Conshohocken and Radnor," Gleason said. "That has been validated by the leases we have signed."

Rents at Triad run about $24.75 a square foot.

While much has changed with the Triad building, Gleason decided to keep its name.

"A lot of people re-brand by changing the name but not the building," he said. "We thought it was important to change the building rather than the name."

Source: Philadelphia Business Journal