School in an office? Tredyffrin-Easttown considers proposal as commercial real estate market lags

After the pandemic’s remote work transformation took much of white-collar labor out of the office, developers snatched up underused corporate buildings, flipping them into luxury residential apartments and lavish medical centers.

Soon they could also become public school classrooms.

In a proposal to transform a corporate office building into a new elementary school, the Tredyffrin-Easttown School District school board this month overwhelmingly approved a tentative deal to purchase a 15-acre Berwyn property in what would be a $64.4 million project.

The proposed elementary school, which would be the Chester County district’s sixth, would not only ease the burden on a district with a rising cohort of school-age children, it also would allow for full-day kindergarten and additional special-needs programs.

Charter schools, with fewer facility requirements than larger public school districts, have spent a lot on corporate office conversions in recent years, reorganizing interior walls, adding additional windows, and tacking on gymnasiums and cafeterias to meet their needs. But Tredyffrin-Easttown’s proposal marks one of the first instances of a Philadelphia-area school district considering an office-to-school renovation.

Growing districts may also signal an opportunity for a struggling corporate real estate market that, although more stable since the pandemic, has left landlords and building owners open to creative new uses for their properties.

“There are a number of office buildings that are vacant — either the leases have expired, or they’re available for sublet,” said Jeff Mack, a commercial real estate executive in the Philadelphia region. “There’s a lot of opportunity.”

When the MaST Community Charter School launched two state-of-the-art suburban campuses in 2019, it chose the former corporate headquarters of a Fortune 500 beverage-packing company in Northeast Philadelphia as the site for one of the schools.

Keith Fallon, executive vice president of EwingCole — the architecture firm that oversaw the MaST III project — had little trouble converting the space. The office already featured a “fluid” design, Fallon said, with moveable walls that designers could reconfigure into new layouts. His team later constructed a free-standing gymnasium.

What challenges Tredyffrin-Easttown might face remain to be seen.

During public meetings this winter, school board officials lauded the idea of converting the three-story, 86,000-square-foot office building at 1200 W. Swedesford Rd. into the district’s next elementary school.

The board presented two other comparably priced construction plans, but each would require building from scratch on district-owned land that, between limited space and uneven terrain, would present their own hurdles.

The Tredyffrin-Easttown school board has described the building on West Swedesford Road as something of a Goldilocks situation, just the right amount of interior space, a location near existing populations of school children, and ample room to construct playing fields and other additions.

Residents have responded with few objections. Some parents, citing the cost of full-day kindergarten programs, said they fully supported the Swedesford Road conversion, which the school board said could take less time to complete than new construction.

But first the board will have to determine whether the project is even feasible; in January, Tredyffrin-Easttown placed a six-figure deposit with Brandywine Realty Trust, the office building’s owner, giving its design team two months to assess the building’s fit for a school. The district will then have the option to purchase the property for $15.95 million this spring.

Since March 2020, few offices have been spared from the effects of hybrid work.

In 2022, nearly one in four suburban Philadelphia offices was empty, according to the real estate company CBRE. The city’s offices didn’t fare much better, and by the end of 2023, the entire region’s offices had about 22% vacancy overall, CBRE data show.

Although some landlords have lured companies back, others have increasingly sought out smaller spaces for teams that rarely spend five days a week at their desks. In Philadelphia’s suburbs, that’s led to what Katie Wenger, a Radnor-based CBRE agent, calls a “flight to quality.”

To attract talent, Wenger said, downsizing companies are flocking to compact, high-end spaces in walkable business districts, such as the Main Line. In turn, Wenger said, the owners of sprawling, more traditional office spaces have struggled to find stable, long-term tenants — and are more open to alternative uses of their buildings.

“From a landlord’s perspective, if there’s not a foreseeable strong demand in the near term, this is a really unique, unicorn-type opportunity that I think could pique someone’s interest,” Wenger said of Tredyffrin-Easttown’s proposal for the Swedesford Road building. “It really speaks to the whole repositioning of assets that are kind of in the middle ground.”

For Tredyffrin-Easttown schoolteacher Katie Walter, a new elementary school can’t come soon enough.

According to a school board presentation, the district considers its elementary school population, at just under 2,500 students, “stable but high,” and predicts that number will remain steady throughout the 2030s.

“My first classroom was a classroom that was made out of what was a storage closet and workspace for teachers,” Walter said at a Jan. 17 school board meeting. “... We’ve gotten to the point where we can’t maximize the space any further than what we have.”

But in the highly developed suburbs, finding space for a surplus of students is not always an easy task.

In Lower Merion, a new $90 million middle school opened in 2022 to ease elementary overcrowding. The project also enabled the district to offer full-day kindergarten this fall.

Officials had been trying to secure a location to build the new Black Rock Middle School in the eastern part of the township, at the St. Charles Borromeo Seminary. But they lost out to Main Line Health, and instead bought property in the western part of the township, on the site of a historic mansion in Villanova.

“Generally, school districts are limited in their choices” on where to put a new school, said Dan Bernheim, a Lower Merion Township commissioner who was president of the board at the time of the location search. Among the limiting factors: busing logistics and space for playing fields, the latter of which has been highly controversial at the Black Rock site.

Bernheim said the St. Charles location would have been ideal — “I will go to my grave saying that’s where the school should have been” — but when that failed, the current Black Rock site became “the prime target — maybe the only target.”

Hannah Barrick, executive director of the Pennsylvania Association of School Business Officials, said the association is aware of a few school districts in the state that have bought and renovated commercial space.

Proposals like that of Tredyffrin-Easttown have occurred “relatively rarely, as schools were often priced out of the opportunity to purchase commercial facilities when they were in high demand,” Barrick said.

But with changes in the market and commercial property usage, “perhaps there will be additional opportunities and something we see more frequently,” Barrick said.