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Though the suburban office market remains relatively dead in terms of leases, one new occupier recently closed a deal to buy its own building: a charter school.
Commonwealth Charter Academy has purchased the 106K SF building at 70 Valley Stream Parkway in Malvern, Pennsylvania, for $15.6M in a deal that was agreed to in principle in February. The outbreak of the coronavirus pandemic delayed due diligence proceedings for months, according to Avison Young principal Scott Williams, who represented the school with his colleague Ryan FitzPatrick, a vice president at Avison Young.
The three-story office building, which CCA purchased from an LLC called Star 79VS Owner, was previously the U.S. headquarters of office supply company Ricoh. When CCA reached its initial agreement, it had planned to use the building to consolidate locations in Norristown, Bryn Mawr and Center City. With the increased demand it has experienced since the outbreak, it will now keep those offices and use its Malvern location as a pure expansion.
One thing that the pandemic has not changed is the school's strategy for hosting in-person classes. CCA has conducted classes almost exclusively online from its founding, and its comfort with the format has drawn demand from parents frustrated with how some area school districts are responding to the challenge of remote learning, Williams told Bisnow.
“With charter schools as a whole, parents are looking at their options now to see whether they’re happy in their current school district or want to go to a charter school,” Williams said. “Because from what I’ve seen, there’s a distinct difference in teaching.”
Williams and FitzPatrick specialize in placing charter schools in new real estate in the Philadelphia area, and office buildings have been the preferred landing spot in recent years. Due to the construction cost involved with building a dedicated school from scratch, buying is cheaper, even including the cost of renovation, Williams said.
CCA's virtual curriculum differs from the remote learning forced upon so many schools this year. Depending on the metropolitan area in which it opens, a CCA location has a vocational focus with the intention of preparing its students for the next phase of education in a specific career. In Harrisburg, CCA's AgWorks teaches farming and cultivation, while TechWorks in the Pittsburgh area teaches engineering and other tech-oriented disciplines.
In keeping with Philadelphia's strongest industry, CCA's MedWorks schools in the area prepare students for healthcare-focused careers. Of the Malvern building's square footage, 60% to 70% will be dedicated to open space in which CCA will build demonstration spaces to simulate healthcare environments, both for on-camera virtual lessons and the occasional in-person practical lesson, Williams said. The rest of the 106K SF will be devoted to office and administrative space when the building opens, which could be as soon as Q2 next year.
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