AUSTIN, Texas — The tidy Broadmoor office campus occupied by IBM near the Texas capital’s northern edge could hardly be less like the ramshackle patchwork of parking lots and aged buildings that sprawl beside 30th Street Station in Philadelphia.
But the two sites are where Philadelphia-based Brandywine Realty Trust is mapping out similarly ambitious development projects that could transform their cities — and the Philadelphia-based company itself.
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Brandywine is already a dominant office landlord in both cities, with holdings in Philadelphia that include University City’s Cira Centre and FMC Tower buildings, and the One, Two and Three Logan Square towers in Center City. Its 14-acre Schuylkill Yards development is under construction to the west of the 30th Street train station.
In Austin, it’s rolling out a Texas-sized version of those plans: a dense district of towers encompassing offices, dwellings, shops, and hotel rooms served by a new commuter rail station that the company is working to have located at the 66-acre site, an area more than 1½ times as big as the Philadelphia Zoo.
“When we look at those two developments, they’re very large-scale in both cities and can have a long-term accretive impact on their evolution,” Brandywine’s president and chief executive, Gerard H. “Jerry” Sweeney, said. “Both Broadmoor and Schuylkill Yards have a scale that I think really can inspire people."
Brandywine was a 12-year-old owner of suburban offices, mostly in the Philadelphia region, when it entered the Austin market through its acquisition of Dallas-based Prentiss Properties Trust in 2006.
Through the deal, Brandywine assumed a portfolio largely of low-rise commercial buildings and development sites along the increasingly traffic-choked highways that serve Austin’s suburbs and outlying business districts.
Brandywine has since tweaked those holdings, selling off some properties and redeveloping others, while making new acquisitions, its growth coinciding with Austin’s rise as a tech hub.
Since Brandywine’s entry into the market, the Austin metropolitan area’s inventory of office space grew 31 percent to 109.8 million square feet, while average rents shot up 71 percent to $38.35 a square foot, according to data from the real estate tracker the CoStar Group.
By comparison, metro Philadelphia’s office inventory increased less than 6 percent during that time, while rents increased 23 percent to $25.54 a foot.
Many attribute Austin’s breakneck growth to its University of Texas campus, which draws talented students from throughout the state, as well as to the city’s cultural vibe and natural beauty, which inspire those young adults to stick around after graduating.
Companies such as Samsung Electronics Co., Apple Inc., and Facebook Inc. have flocked to the city to employ those grads.
“It’s been a period of extraordinary explosion down here,” said William D. Redd, Brandywine’s executive vice president overseeing development in Austin. “We just happened to be here working at it when extraordinary things started to happen and have been the beneficiary.”
Brandywine controls about three million square feet of office space — the equivalent of almost 2½ Comcast Center towers — spread among 22 buildings in metropolitan Austin, according to CoStar.
That’s just a fraction of the 13.2 million square feet of office space it owns in metro Philadelphia, a market that it dominates. But its Austin holdings were big enough to make it that region’s biggest office landlord, too, until earlier this year, when Atlanta-based Cousins Property Inc. acquired TIER REIT of Dallas, assuming its assets in the area.
Sam Houston, a partner with the Austin-based developer and consultant HPI Real Estate Services & Investments, said that Brandywine has earned a reputation for owning high-quality offices in sought-after locations but that it’s also known for a reluctance to take risks relative to other players in the fast-growing market.
For example, Brandywine broke ground in March on its first project in Austin’s downtown — a 200,000-square-foot glass tower atop about a dozen stories of parking known as 405 Colorado — only after closing in on a deal to sign the international law firm DLA Piper as an anchor tenant.
Others wouldn’t have waited for such an agreement to start construction, wagering that pressing demand for high-end offices in the city center would make the building easy to fill, Houston said. But he said Brandywine’s risk-aversion is not atypical among developers used to slower-growth markets, such as Philadelphia.
“They’ve certainly had opportunities to grow more by being a little more aggressive,” Houston said.
With its Broadmoor project, Brandywine may have a chance to alter that conservative image.
The development currently accommodates rows of six- and eight-story masonry buildings built in the 1990s by Prentiss in a joint venture with International Business Machines Corp. to house offices and research labs.
The property is about 10 miles north of downtown Austin but sits to the immediate east of the Domain complex of office and apartment buildings, which also includes a shopping district owned by Indianapolis-based Simon Property Group, whose other holdings include the King of Prussia Mall.
Just to the west of Broadmoor is a 50-acre site where Charles Schwab Corp. is building a campus of office buildings for itself.
In 2015, Brandywine bought out IBM’s interest in the Broadmoor property, with a view toward redeveloping the site.
It has since worked with officials in Austin to have the campus’ land-use regulations loosened to permit six million square feet of development, divided roughly evenly between homes and offices. Also planned are more than 20 acres of parkland, about 380,000 square feet of shops and restaurants, and nearly 250,000 square feet of hotel space.
It is designing the site’s first building, a 350,000-square-foot office tower that it plans to begin marketing later this year.
The most transformative aspect of the project could be one drawn from its rail-adjacent Schuylkill Yards playbook: the train station’s relocation to Broadmoor’s eastern edge from a site farther south at a cost of about $12 million. Brandywine and surrounding community stakeholders are working through details on funding the station.
Paired with planned enhancements to the now-little-used rail line that would serve the new station, riders could be whisked between downtown Austin and the expanding sites to the north in as little as 15 minutes, Redd said.
“We’re betting on the future and trying to put our money where our mouth is in terms of believing in mass transit,” he said. “Long term, a mix of uses tied together in an urban fabric with a link into transportation is how things are going and how things ought to go.”
Michael Lewis, an analyst covering Brandywine with the financial services firm SunTrust Robinson Humphrey, said investors would likely applaud the company’s move to double down on its two strongest markets, both of which have solid opportunities for continued growth.
“Growing their strongholds in Philadelphia and Austin is the way to go,” he said. “If you look in the crystal ball out five years and they’re making progress at Schuylkill Yards and they’re making progress at Broadmoor and they’re dominant landlords in the two markets, I think that makes for a good investment thesis.”
Sweeney, meanwhile, said he sees the company’s holdings in Philadelphia and Austin as complementing each other.
“When we juxtaposed Austin’s growth track record and how high that historically has been, compared to the stable-and-steady growth track record out of the Philadelphia region, they create a good economic balance,” he said.