Stung by higher borrowing costs and slower office demand, Brandywine Realty Trust cut its dividend and said it has no plans to start work on its proposed Cira 2 office towers next to Penn's West Philadelphia campus. It's trying to get a tax break to attract financing for its planned Internal Revenue Service office renovation at the former 30th Street post office.
"At the current time we don't have plans to start either one of those towers" proposed for Cira 2, Brandywine Realty Trust's University City expansion project, chief executive Gerard Sweeney told investors in a conference call this morning.
Mayor Nutter and Gov. Rendell has delivered tax breaks for the site in an attempt to lure up to 1,500 jobs from BlackRock Inc. in New Jersey. But BlackRock has a big new co-owner (Bank of America Corp.), its business (investments) is in turmoil, and it hasn't decided when, or if, it will add Philly jobs.
Questioned by analysts, Sweeney said "a couple of larger tenants are looking at a large bloc of space" in the complex, but "in this environment" he's not scheduling work. Brandywine has at least until 2010 to begin hanging iron or face losing the site, he added.
Also, Brandywine is continuing work on a parking garage at the former Post Office Annex across Walnut St. But it's taken its completed, mostly leased Cira 1 tower off the market, ending the search for an investor, until investment conditions improve. Instead it'll try to sell some suburban Philadelphia buildings. And it's still looking for a partner to help redevelop the Post Office for its main proposed tenant, the federal Internal Revenue Service. Sweeney said he hopes to secure a historic-building tax break for a potential investor.