Brandywine to keep selling S. Jersey, Del. offices: report

Brandywine Realty Trust, the dominant office landlord in Center City Philadelphia, Radnor, and other local high-end markets, is "unlikely" to buy many more buildings, but will stay focused on "exiting South Jersey, Delaware, Richmond (Va.), suburban Maryland submarkets, and California," writes analyst John W. Guinee in a June 10 report for clients of the investment bank Stifel & Co. 

Brandywine is managing relatively heavy debt and high borrowing costs; it retains the power to keep developing high-end properties in places like University City, where it is currently preparing the 49-story FMC tower; it remains open to "alternative uses," such as apartments on sites where companies aren't interested in building (though its stores-and-apartments project on Market St. West with Independence Blue Cross remains on the drawing board).

Brandywine's increased concentration in Center City -- a low-priced commercial property market by East Coast urban standards -- keeps acquisition costs down, but low value follows low revenues: "Philadelphia and its surroundings have never been markets with visible rental rate growth," Guinee concludes. He's still recommending investors buy the stock (it's around $15 vs. his target of $16.50) but admits Brandywine's tendency toward full disclosure of its prospects and plans, while helpful to investors, also leaves it "subject to criticism at the slightest miss."