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PHILADELPHIA-Towers Perrin, the last of the city’s largest employers with a lease up for renewal, opted to stay put, inking a lease for between 250,000 sf and 300,000 sf in Centre Square I at 1500 Market St., a 32-story building owned by Newton, MA-based HRPT Properties Trust. The term is for five years with an option to extend to 2016.

This was a nail biter for HPRT and the city. The global consulting firm, which was founded here in 1934, entertained offers from One Liberty Place and Bell Atlantic Tower, from West Conshohocken, PA-based Oliver Tyrone Pulver for a new building at 15th and Arch St., and from New Jersey and other states. Dave Campoli, HRPT’s locally based manager, tells GlobeSt.com, “We’ve given them some flexibility in finalizing their exact space requirements.” He acknowledges that the firm will take less space in Centre Square in this lease, which begins in 2006, and also exit 44,000 sf it occupies on two floors of Mellon Bank Center, another HRPT building. “With new leases, however, we’re full at Mellon,” he says.

The Towers Perrin renewal advances a $20-million renovation of Centre Square I and II, which Campoli says is already under way. The renovation included new elevators and HVAC, and a security system update and will expand to the buildings’ shared atrium, and some exterior landscaping, including additional highlighting of the Claus Oldenburg “Clothespin” sculpture. The two buildings have an aggregate 1.8 million sf. “We have some issues coming up,” Campoli acknowledges, but says, “based on Towers Perrin’s space estimates, vacancy in the two-building complex is 7%.”

A package of about $3 million from the state Department of Community and Economic Development supports Towers Perrin’s renewal. It includes an opportunity grant of between $1.5 million and $2 million, $750,000 in job training and a $500,000 equipment loan. Towers Perrin is investing a minimum of $8 million in renovations of its space.

“We ultimately made our decision based on what was best for our clients, our business and our employees,” says Dave Duncan, Tower Perrin’s director of real estate. He says a “thoughtful and measured assessment of all of (the company’s) real estate options in the tri-state area” began more than a year ago. “The economic impact and benefits of each real estate alternative were important considerations,” he adds.

Jim Savard, SVP, and Benjamin Bader, SVP, under the direction of Keith Knox, EVP in the local office of Jones Lang LaSalle, represented Towers Perrin in the lease negotiations. David Jarjisian, SVP, and Christian Dyer, first VP in the local office of CB Richard Ellis, exclusive leasing agent for Centre Square, represented HRPT. No one involved in the negotiations would disclose the value of the lease, nor would others speculate on the rental rate.

According to second-quarter 2004 data from the local offices of Grubb & Ellis and Cushman & Wakefield, respectively, the asking rental rate for class A office space in the West of Broad Street submarket is between $24.07 per sf and $27.83 per sf.

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