The powerful Oracle: Landlord makes tough call to spare one tenant for another

In a sign of how tight the Conshohocken, Pa., office submarket is and how competitive it can be to keep marquee tenants, the landlord of Five Tower Bridge booted one company out to make room for another that was expanding.

Hayden Real Estate Investments broke a 50,000-square-foot lease it had with Keystone Foods so that Oracle Corp. could expand by 35,000 square feet. Oracle already occupies 49,000 square feet at Five Tower at 300 Bar Harbor Drive in West Conshohocken, Pa. It is planning to relocate operations it now maintains at Three Bala Plaza in Bala Cynwyd, Pa. Under a 10-year deal, the company will lease a total of 84,000 square feet and become Five Tower’s biggest tenant.

Five Tower is an eight-story, 222,058-square-foot building. Hirtle Callaghan & Co. and BTG International Inc. are among its other big tenants.

In another twist, about 6,000 square feet of offices now occupied by Hayden's real estate firm will eventually also become part of the space Oracle will take.

The situation with Keystone and Oracle played out over the course of the last 11 months and put the real estate company and two of its tenants in odd circumstances. However, it happens from time to time that a landlord needs to cut a deal with one tenant to save another.

“It was hard,” said Tony Hayden Jr. of Hayden Real Estate. “Oracle wanted to take more space and we couldn’t give it to them and we had to work hard to figure it out. We’ve been 100 percent leased and needed a pressure release from somewhere.”

The fear for Hayden was that Oracle would decide to look for new offices outside of Five Tower and completely move out. It was a risk the real estate firm didn’t want to take.

“It could have been bad,” Hayden said.

As part of the deal, Oracle will have a new sign on the top of Five Tower.

Keystone Foods, a global food service supplier, has been a long-term tenant in Five Tower. Just four years ago, it expanded to 50,144 from 44,144 square feet. The company is now out in the market looking for a new home and will eventually move out of Five Tower. Separately, Keystone leases a 150,000-square-foot building at 201 Waverly Blvd. in the Valley View Business Park just outside of Coatesville, Pa.

Source: Philadelphia Business Journal