The property is a three-story, class A office facility at 70Valley Stream Parkway. IKON has occupied and controlled it since1997 through a synthetic lease. Terms of IKON's conventional leasewith Lexington are undisclosed. The average asking rental rate forclass A office space in the Exton/Malvern submarket ranges between$23 per sf and $26 per sf, according to brokers who operate inChester County, PA. Cushman & Wakefield of Pennsylvaniarepresented IKON in the negotiations

According to Richard J. Rouse, vice chairman and CIO ofLexington, this is the first transaction that Lexington hascompleted converting a synthetic lease to an operating lease. "Wehope to do more transactions of this type in the future," hesays.

As synthetic leases, which allow companies to control their realestate without having to show it as an asset on the balance sheet,come under increasing scrutiny in the wave of corporate scandals,area brokers tell GlobeSt.com they expect to see more unraveling ofsynthetic leases. "It makes sense for buyers/investors to look forcompanies, especially public ones, that want to rid themselves ofsynthetic leases and still maintain some control over their realestate without having to purchase it," one broker explains.