"The sales market remains challenging with no real velocity," said Gerard Sweeney, Brandywine's chief executive officer, during its second-quarter conference call. "The investment market remains in a state of flux."

In the second quarter, Brandywine sold one property for $26.5 million, bringing its year-to-date dispositions to $36.6 million. The locally based firm, which owns just over 37 million square feet of office and industrial around the country, has an additional $85 million under contract.

On the leasing end, Brandywine's second-quarter occupancy came in at 89.7%, down from 92.9% during the same year-ago period. But Sweeney said he is optimistic about the overall leasing picture, pointing to the Philadelphia CBD; Austin, TX; and the Washington, DC area as bright spots in the portfolio. "The tenant psychology is gradually beginning to change," he said.

Meanwhile, though leasing was up in central and southern New Jersey during the quarter, Sweeney said that area could pose future problems. "There seems to be an overhang of space in both of those submarkets," he observed.

Brandywine's second-quarter was $3.5 million, down from $5.7 million in last year's same period. FFO rose to $59.2 million from $50.4 million.