Brandywine Realty Trust, the dominant landlord in Philadelphia's slow-moving office sector, says it has agreed to pay $69 million and take on $238 million in debt to acquire the 75 percent of One and Two Commerce Square that it doesn't already own from Parkway Properties Inc.
The combined price works out to about $175 a square foot, down from the $178 a square foot Brandywine paid three years ago (including $25 million in cash, plus debt) to buy a 25 percent stake in the I.M. Pei & Partners-designed, diamond-top towers that occupy the 2000 block of Market Street.
The new price implies a lower valuation than the price from that earlier deal on a per-square-foot basis, which reminds us how the city's office market remains stuck at the rents of 10 and 20 years ago.
In a statement, Brandywine chief executive Gerard H. Sweeney said the price was a lot cheaper than new construction. He said the 41-story complex was 88 percent leased to banks and other tenants, and said the prospect for rent increases as well as filling vacancies is "significant."
Sweeney and other city landlords have been trying to attract the handful of tenants, like FMC Corp., that are currently looking for significant new space in a slow market.
Source: Philly.com
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