PHILADELPHIA, PA—Brandywine Realty Trust is selling Cira Square, the former main US Post Office complex in the University City district of Philadelphia for $354 million. It's the largest of a group of property sales the real estate investment trust announced Wednesday that Brandywine says will generate $389 million.
"The transactions reinforce our stated goals of prefunding our development pipeline and further improving our financial capacity through accelerated dispositions," Brandywine president and CEO Gerard H. Sweeney says. "The sale of Cira Square reflects our ability to both create and harvest value and will generate a significant gain to our shareholders. We acquired the historic post office building in 2007, embarked on a multi-year renovation of this iconic Philadelphia landmark and rebranded it as Cira Square. The other asset sales represent our continued efforts to reduce our ownership in non-core assets and markets."
The five office properties Brandywine is selling contain an aggregate of slightly more than 1.2 million rentable square feet. The Cira Square property totals 862,700 square feet and is 100% leased to the General Services Administration and occupied by the Internal Revenue Service. Brandywine expects the sale to close in the first half of the first quarter 2016, and says it will use the proceeds to prepay the current mortgage totaling $177.4 million, and the mortgage on the 1,662-space parking garage at the newly constructed Cira Centre South totaling $35.5 million.
After the transaction, Brandywine will continue to provide management services at the Cira Square property.
Brandywine also sold three office properties totaling 196,100 square feet in Carlsbad, CA, for $30.4 million, or $155 per square foot; a 1.6 acre development site at the corner of Second and King Streets in Wilmington, DE, for $6.5 million; and a 158,000 square foot flex/office property in King of Prussia, PA, for $4.6 million, or $29 per square foot.
Brandywine says it expects the transactions to result in a net gain of approximately $96.7 million. Brandywine expects to use the net proceeds to fund current development commitments, reduce debt and general corporate purposes.
Brandywine did not respond to a request from GlobeSt.com for further comment on the transactions.
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Steve Lubetkin
Steve Lubetkin is the New Jersey and Philadelphia editor for GlobeSt.com. He is currently filling in covering Chicago and Midwest markets until a new permanent editor is named. He previously filled in covering Atlanta. Steve’s journalism background includes print and broadcast reporting for NJ news organizations. His audio and video work for GlobeSt.com has been honored by the Garden State Journalists Association, and he has also been recognized for video by the New Jersey Chapter of the Society of Professional Journalists. He has produced audio podcasts on CRE topics for the NAR Commercial Division and the CCIM Institute. Steve has also served (from August 2017 to March 2018) as national broadcast news correspondent for CEOReport.com, a news website focused on practical advice for senior executives in small- and medium-sized companies. Steve also reports on-camera and covers conferences for NJSpotlight.com, a public policy news coverage website focused on New Jersey government and industry; and for clients of StateBroadcastNews.com, a division of The Lubetkin Media Companies LLC. Steve has been the computer columnist for the Jewish Community Voice of Southern New Jersey, since 1996. Steve is co-author, with Toronto-based podcasting pioneer Donna Papacosta, of the book, The Business of Podcasting: How to Take Your Podcasting Passion from the Personal to the Professional. You can email Steve at [email protected].
