Teleflex Corp. responded to American industrial decline by selling or closing down its old car, boat and factory controls plants. It shrank its workforce by half (and by two-thirds in the U.S.)., and switched to the medical-devices business. It worked, if the stock market is the measure: The company has been trading at record levels.
Next step was to do something about its old Limerick Township headquarters. "We were in a large campus, off the main thoroughfares, where we had manufacturing facilities for the now-divested operations, reflective of our previous era," says Cam Hicks, Teleflex's vice president for global HR.
"We wanted a place where we could get access to new talent, and position ourselves for growth, while increasing our visibility, without a net increase in commute time" for headquarters workers scattered through Philadelphia's western suburbs.
Last week the company moved into its new digs at CrossPoint, a Tredyffrin office park near US 202, which has itself been recycled out of foreclosure. To build the center, 1970s-era buildings at the former Valley Forge Office Center have been connected by a glass atrium packed with amenities that office workers used to have to drive off to find, and updated from an earlier, Monopoly-board vision of suburban business, which set office parks here, restaurants up there, recreation over that way.
In the new Teleflex headquarters space, "there's a sense of openness and space as you walk in the foyer," says Hicks. "The open design, a lot of light, some very attractive shared meeting space, a gym, a restaurant. And King of Prussia Mall and Wegmans and a lot of other restaurants are just down the road. You don't have to get down on the highway and go a few exits, like at our last place."
It's a stark turnaround for what had become an obsolescent and declining corporate outpost in the late 2000s. After General Electric and Keystone Blue Cross moved offices out of the Valley Forge center, owner Bill Glazer's Keystone Properties of Bala Cynwyd defaulted on more than $40 milllion in debt secured by the property in 2010, and the loan servicer put it up for sale.
Boston developer Jonathan Davis, backed by investment funds, outbid the West Conshohocken-based MIM-Hayden investor group, paying around $30 million. Broker Pat Aurangio, from CBRE Inc.'s New York office, then suggested Davis approach members of the Hayden family who he'd just outbid about forming a partnership to update the project, noting they were "well-connected" locally, Davis recounts. The two groups hit it off, and have since bought into the Oaklands office center in Exton and Five Tower Bridge in West Conshhohocken together.
Teleflex moved in 130 employees last week; it has room to boost the staff to 200. The new owners have also attracted offices of two media software-based companeis, Rovi Corp. and ColdLight Solutions. The building is still more than 30% vacant. Davis says he's working hard to fill the remaining space: "We're carpet-bombing the market."
Don't cool companies want to be downtown these days? "There's a very strong interest among millennials to live in the city," Davis agreed. "And employers in fast-growing industries say they can't find the people they need. So employers are focusing a little less on where the CEO llives and more on places where high-value (hires) want to live," which has sparked a mini-boom of tech company satellite offices in Center City Philadelphia as well as New York, Boston and parts of Florida, places where Davis' firm is active.
But suburban townships like Tredyffrin, faced with office vacancies and escalating school taxes that have to be paid by voters when employers decline and depart, are moving quickly to help landlords stay local instead of heading downtown. "The township really expedited the approval process," Davis told me. "They were very much in favor of seeing new life and quality invested here."
The urban trend "is real, but it's also overblown," Davis concluded. "There are issues around moving into the city. Parking is very expensive. Real estate tends to be expensive. They have a higher wage tax in Philadlephia."
Downtown may be more appropriate for fast-growing companies selling "disruptive technologies, where they're growing at 30 percent a year and don't worry so much about their costs," he added. But big, suburban-based companies like Vanguard Group, TE Connectivity and local branches of national companies like Microsoft are upgading, not leaving, the suburbs, he noted. "As your products and industry mature, the competition gets intense, you have to focus more on the bottom line. A lot of things milennials and high-value emploeyes are looking for can be provided in a suburban environment. These buildings have a lot of new collaborative spaces. We have free Wifi all through it. They are full of light. There's a garden in the back you can see right through the building, with all the daylight. That's difficult to do in a buliding in the city. These buildings are starting to redefine the suburban office... And you can still drive right up and park for free. "