At Brandywine Realty, a new setup
The Radnor company sold an 80% stake in 29 buildings, but will continue to manage them.
Brandywine Realty Trust, one of the Philadelphia area's biggest landlords, has sold a majority interest in 29 Montgomery County and Allentown office buildings to DRA Advisors L.L.C., of New York, for $245.4 million as it diversifies beyond Philadelphia and prepares new projects like Cira II in University City.
Brandywine, of Radnor, disclosed plans for the sale last month, and announced it signed the deal yesterday. Proceeds will be used to pay down debt.
DRA, whose local holdings formerly included Suburban Square in Ardmore and the Eight Penn Center office tower, receives an 80 percent stake in the Brandywine properties, which total 1.6 million square feet and are more than 95 percent occupied, according to Brandywine.
Brandywine retains a 20 percent interest in the properties included in the sale, and will continue to manage them for the DRA-Brandywine joint venture that will own the buildings, according to a statement from chief executive officer Gerard Sweeney.
The deal includes buildings on Dresher Road, Welsh Road, and Business Center Drive in Horsham, in the Springhouse Corporate Center in Fort Washington, at Greenwood Square in Bensalem, and on Tilghman Street, Windsor Drive, and Snowdrift Road in Allentown.
Overall, Brandywine owns more than 30 million square feet of office space and manages a total of more than 44 million square feet in California, Virginia, Texas and other states as well as in the Philadelphia area.
Two Horsham buildings vacated by previous tenants were excluded from the sale, and an Allentown warehouse has been sold separately, said Robert Fahey, executive vice president of CB Richard Ellis Group Inc., which marketed the properties for Brandywine.
"Three years ago, most of [Brandywine's] portfolio was within two hours of here," Fahey said. "They've really spread out. They're trying to spread their financial resources out further, diversify their portfolio, and make their stock more appealing."
He added, regarding DRA: "It's a good sign for the Philadelphia region [that] someone was willing to invest $250 million in a package of office buildings in a somewhat uncertain capital environment. It speaks well of Philadelphia and of Brandywine as a partner."
Brandywine shares closed yesterday at $18.07, down 19 cents, on the New York Stock Exchange. Analyst John J. Stewart at Credit Suisse in New York rated the stock "neutral" on the news.