Brandywine boosts UCity holdings

Brandywine Realty Trust, which last year boosted its Center City office holdings by buying the Bell Atlantic and twin Commerce Center towers, has picked up 3020 Market St. by foreclosing on the property's $18.8 million mortgage.

The building, home recently to Lincoln University's Philadelphia campus and about 40% vacant, is a short walk from Brandywine's Cira and ex-30th St Post Office developments and cements Brandywine's role as lead landlord in the city's highest-rent office district on the west bank of the Schuylkill. "Our game is to invest capital" and find more tenants, Sweeney told me. 

Brandywine shares rose back above $9 for the first time in a month as the Radnor-based property owner reported higher-than-expected profits (see earnings statement here).  Conference call transcript  here at FT's Seeking Alpha.

In reports to investor clients: Janney analyst Daniel P. Donlan calls Brandywine stock a bargain because it trades at a discount to other office owners. But John W. Guinee at Stifel Nicolaus worries that Brandywine's offices in Washington's Virginia suburbs are "burdened by defense contractor space contractions and federal government belt tightening," and that Brandywine's efforts to fill its average 14% vacancies "will stress the dividend for years."

Metro Philly and suburban Washington, Brandywine's key markets, are "not as good as New York, Boston or San Francisco, but better than Dallas, Atlanta, Phoenix, etc." writes William A. Crow at Raymond James. Brandywine needs "accelerated private sector job growth" and assurance the federal government budget negotiations won't further damage "Mid-Atlantic office fundamentals."