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Vanguard Group purchases another office building in Chester County

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Investment giant Vanguard Group is adding office space in the Philadelphia area, even as hybrid work is the norm among many employers.

The company last week purchased a nine-year-old high-end office complex in Malvern, near the heart of the company’s operations in Chester County’s Great Valley.

“If you want a job, there are certain jobs that do what employers want you to do,” said Glenn Blumenfeld of Tactics Real Estate Advisors, a tenant brokerage firm. “Comcast recently said he wants someone who’s in the office three days a week. They say he’s one of the few companies in the city that can do that. It’s a company.”

When asked about plans for future hybrid work, Vanguard declined to comment, simply showing its commitment to a “hybrid working model.”

In 2018, Vanguard acquired approximately one-sixth of its approximately 300,000 square foot office complex at 1400 Atwater Drive. Equus Capital PartnersAnother 90,000 square feet of the complex has been subleased to Frontline Education, a K-12 management software company.

The two five-story buildings were built in 2013 for the pharmaceutical company Endo International. filed for bankruptcy earlier this year After being sued by more than 3,000 local and state governments, individuals and other organizations over its role in the opioid crisis,

Endo’s lease on the office complex expires at the end of 2024, and the company plans to remain there during that time.

“The change in building ownership will not impact our current space, operations and services,” Endo’s director of corporate affairs, Linda Huss, said in an email.

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Endo still has 300 employees based at 1400 Atwater Drive, and Huss said it is looking for new office space in the area. However, the company is using a full remote model, so the footprint is likely to be smaller.

“Our building needs are changing, and we are evaluating the optimal office space requirements for evolving ways of working,” says Huss. “Endo is committed to the Malvern area.”

Vanguard purchased a site on Atwater Drive, less than a 10-minute drive from its corporate headquarters, for an undisclosed amount.

The company employs 20,000 people worldwide, about 1,200 more than at this time last year. The majority of Vanguard employees work in the greater Philadelphia area and primarily in Chester County.

Vanguard media representative Alyssa Thornton said: “We have the potential to expand our real estate footprint, such as the purchase of 1400 Atwater, to ensure our office space and locations fit our current and future needs. “Located just two miles from our main Malvern campus, this new building offers ample opportunities for expansion and collaboration across our Pennsylvania locations.”

Like many high-profile employers, including Comcast, since the introduction of the COVID-19 vaccine, Vanguard has allowed employees to work from home on a hybrid schedule of up to two days. However, that still means an expectation of working primarily face-to-face and living within commuting distance.

“There’s clearly less demand for office space, but the idea that every business would allow everyone to work from home all the time is not realistic,” said another place. “There is no culture. There is no interpersonal communication.”

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Vanguard owns over 2 million square feet of office space and leases over 1 million square feet of space in the Philadelphia area.

The Atwater Drive property’s appeal is enhanced by its condition and the pre-existing presence of a Vanguard on the property. Given rising interest rates and rising construction costs, it will be difficult to build new office buildings.

Blumenfeld estimates that new construction could cost between $500 and $600 per square foot. Whatever they paid, he said, in theory, it would be a fraction of the cost of new construction on such a scale.

“Having nice buildings and trying to bring people together has always been part of their culture,” says Blumenfeld. “They’re constantly looking for nearby buildings and land as they grow, so they can keep everyone close.”

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