Asked to address the impact of Comcast Center, the 1.2-million-sf tower being developed by Malvern-based Liberty Property Trust, Sweeney cited several Center City buildings with large vacancies and said that could be exacerbated when the new building's "vacancies come on line." Comcast has preleased less than half of the building's space. "From a neighborhood improvement standpoint," he said, "long term, it will add further value to our One and Two Logan Square buildings." Acquisition of those properties and development of Cira Centre, he added, was based on the premise that Comcast Center would be built.
Regarding the suburban portion of the Brandywine portfolio and overall office market conditions in this area, he predicted a decline in vacancy rates, flat rental rates, positive net absorption and minimal new construction throughout 2005. "The uptick in market activity is a far cry from leading to an increase in rental rates," he said. "Slowly improving conditions" make each transaction hotly contested, and "pressure on rents will continue."
Brandywine's Radnor Financial Center, the former Wyeth property, was 19% leased at year-end 2004, "ahead of the three-year lease-up schedule we assumed." In all, the company's portfolio was 92.7% leased at year-end, "and we're looking for reaching the mid-90% range this year."
For the first time since 2002, the portfolio experienced positive net absorption, he reported, with absorption of 1.3 million sf in the last quarter of 2004 and 4.4 million sf of positive absorption for the full year.
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