"This asset is the linchpin of a submarket enjoying low vacancy rates in class A properties, escalating market rents and good absorption," Robert Behringer, chairman and CEO of the investment group, says in a press release. The expectation, he says, is the 40-story landmark at 801 Cherry St. will "provide REIT investors with an attractive opportunity to capitalize on a core asset in a prime location with stable current yields backed by major tenants." Tenants in the 97%-leased tower include AmeriCredit Corp., Burlington Resources Inc., HUD and Practitioners Publishing. Brandywine's team will continue to lease and manage the asset.
Steve Hentschel with the New York City-headquartered Lehman Brothers advised the buyer and seller. The holding was ticketed for sale as part of the Plymouth Meeting, PA-based Brandywine's $3.3-billion acquisition of Prentiss Properties Trust.
Still to be learned is the fate of the 1.3-million-sf Cityplace Center at 2711 N. Haskell St., also a landmark but part of the Dallas skyline—-another trophy property in the Prentiss Properties' package. "With this first disposition in Dallas," George H. Sweeney, Brandywine's president and CEO, says in its release, "we have reduced our investment in this market by almost one-third. We will continue to focus throughout the remainder of 2006 on re-deploying capital into our core markets." For the short term, Brandywine used the $58-million net gain from the Burnett Plaza sale to pare its revolving credit facility, but the long-range plan is to reinvest capital from Dallas/Fort Worth asset sales into development opportunities primarily in Northern Virginia. The DFW buildings constitute 11% of Brandywine's portfolio.
Cityplace Center's occupancy financially is 100%, but that's not the case for the physical space. The most critical event in that high rise's future is the planned 2007 exit of 7-Eleven Inc.'s headquarters team to the $100-million, under-construction One Arts Plaza in the Arts District.
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