Brandywine sells some Mt. Laurel holdings to raise cash for city projects
Brandywine Realty Trust is shedding some South Jersey holdings as part of a sell-off aimed at raising money to sustain development plans in Center City and other core markets.
/arc-anglerfish-arc2-prod-pmn.s3.amazonaws.com/public/RNYWSC6ISREQLFA2J2CT6MRAKQ.jpg)
Brandywine Realty Trust is shedding some South Jersey holdings as part of a sell-off aimed at raising money to sustain development plans in Center City and other core markets.
The company, Philadelphia's biggest office landlord, has sold land in Mount Laurel to a hotel operator and is unloading five office buildings nearby, according to documents filed with Burlington County officials.
Radnor-based Brandywine also is said to be shopping the former 30th Street Main Post Office building, which now houses the Internal Revenue Service's local staff, according to John Guinee, an analyst with Stifel Nicolaus & Co.
Proceeds from these sales will likely be funneled into projects such as the FMC Tower near 30th Street Station and the eventual redevelopment of recently acquired properties on Market Street, Guinee said.
"They have a tremendous capital need because of FMC Tower and a few other development deals they have in progress or are about to begin," he said.
Brandywine is earning $2.2 million from the sale of 10 acres at 7000 Midlantic Dr. in Mount Laurel to High Hotels Ltd. of Lancaster in a transaction that closed Sept. 1.
The land, in the company's Laurel Corporate Center, has permits for construction of a 135-room hotel and four restaurants, according to Burlington County Planning Board engineer John Engle.
Other documents filed with the Burlington County Clerk's office indicate the pending sale of five of the office park's buildings on Midlantic Drive and Bishops Gate Boulevard to an entity called Laurel Corporate Center L.L.C.
Together, the buildings encompass more than 560,000 square feet of Class A office space, according to listings on Brandywine's website.
The company sold another Mount Laurel office building last month for $16.5 million, according to a Securities and Exchange Commission filing.
Meanwhile, Stifel Nicolaus's Guinee said he had been told by "numerous people" that Brandywine is seeking a buyer for the former post office building near 30th Street Station, now called GSA Philadelphia Campus, which was renovated at a cost of $252 million in 2010.
A marketing brochure on the 1930s-era property now circulating among brokers identifies it as "Cira Square" in an apparent rebranding effort.
Brandywine chief executive Jerry Sweeney declined comment, saying the company does not talk about transactions that have not been announced.
Guinee said it makes sense for Brandywine to raise capital by selling property rather than stock since its shares have dipped in recent months. The stock closed at $13.13 a share Tuesday, down 18 percent from the start of the year.
That performance "has made raising equity via increased stock interest very unappealing," Guinee said.
Brandywine is completing the $385 million, 49-story FMC Tower near 30th Street Station and is a partner in the $148 million mixed-use 1919 Market Street building. It also is part of a venture developing a $195 million office building in Arlington, Va.
The company will need more cash to develop additional Market Street properties it acquired earlier this year. Sweeney has said Brandywine plans an office and residential tower on the 37,000-square-foot property it bought on the 2100 block of Market Street in July, which includes the site of 2013's deadly building collapse that flattened a thrift store.
The company also is considering plans for a parking structure it purchased at Seventh and Market Streets.
"Brandywine's strategy of aggressively selling assets and redeploying the proceeds into more value-added development is all geared toward - a cliche, but - creating shareholder value," Guinee said.
215-854-2615 @jacobadelman