Brandywine Realty Trust, the Radnor company that is the dominant office landlord in Center City, says it has a partner and detailed plans to build a 29-story, 321-apartment, $140 million tower on the grassy lot it controls at 1919 Market St. in Center City. The 455,000 sq. ft. tower will include 24,000 sq. ft. of commercial space, mostly leased to Independence Blue Cross (IBC) and the CVS drugstore chain. Statement here.
Brandywine's 50-50 joint venture partner for 1919 Market is Berwyn-based LCOR CalSTRS, a successor to the former Linpro Co., which now manages property investments for the California State Teachers Retirement System. The partners arranged to borrow $88.9 million for the project, pricing the credit at Libor plus 2.25%. Equity investment is $59.2 million, split by the two partners; Brandywine's half includes the $13 million value of the land. The company projects a cash yield (rent/cost) of 7% a year (vs 8% for Brandywine's $385 million FMC office/apartment tower, and 7.6% at Brandywine's $158 million Evo apartment project, both in University City).
In 2012, Brandywine proposed a mixed 292-apartment/ 55,000 sq ft-commercial project for the same space, with IBC as a partner, targeted to open this year. The project stalled until Brandywine found its new investor, with IBC as tenant instead of partner. The delay had the result of strengthening Brandywine at the expense of would-be competing office developers along that stretch of Market St., Timothy Monahan of broker Savills Studley told me last summer.
In a statement, Brandywine said the apartments would be targeted to wealthy tenants, with "full concierge service" and a rooftop fitness center, garden, pool and golf simulator, among other amenities, plus a 215-car parking garage open to the public. The architect is Barton Partners; the builder is Hunter Roberts Construction Group; construction is to begin "immediately," with the building expected to open in 2016.
"We understand and recognize the value of walkable, mixed-use projects," which have fed Center City's residential boom, LCOR president Thomas O'Brien said in a statement.
"Brandywine has a significant investment in the Philadelphia central business district," where the company controls seven million sq. ft. of office space, including the nearby Commerce Plaza towers, and is "committed to the resurgence" of the Market Street West area, said Brandywine CEO Gerard Sweeney in a statement.