"Construction continues on budget and on schedule for fourth quarter 2005," he says. The building contains 694,596 sf of office space and 33,129 sf of retail and conference facilities. It is the first office tower to be constructed in Center City in a decade and is a designated Keystone Opportunity Zone.
The KOZ designation, designed to lure new businesses from out of town, provides office tenants with a package of city and state tax abatements through to 2018. On condition of anonymity, a Center City office broker tells GlobeSt.com, "the tax breaks more than offset the premium rental rate," which he says "is in the high $20s to low $30s per sf. Over 10 to 12 years, the large tenants will save millions." Two of the three largest tenants in the building are law firms relocating from Center City into an aggregate of 354,000 sf.
Meanwhile, Sweeney also announced Brandywine's first-quarter performance. Of the entire portfolio, he says, "average rental rates on renewals remain flat, we have seen the expected downward pressure on new lease rates, and our tenant retention rate was slightly higher than our forecast. The market remains challenging."
During first quarter, average occupancy at same store properties reached 92%, up from 91.3% during the same quarter a year ago. Quarterly rental rate growth on new leases dropped 9.6% on a straight-line basis and quarterly rental rate on renewals increased just 0.6%.
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