PHILADELPHIA — Brandywine Realty Trust (NYSE: BDN), a Radnor, Pa.-based REIT, has entered into an agreement to dispose of its interests in Cira Square, a 29-story, 862,700-square-foot office tower in Philadelphia, for $354 million. The former U.S. Post Office complex is located in the University City submarket and was fully leased at the time of sale to the U.S. General Services Administration. The primary tenant is the Internal Revenue Service.
“The sale of Cira Square reflects our ability to both create and harvest value and will generate a significant gain to our shareholders,” says Gerard Sweeney, president and CEO of Brandywine Realty Trust.
The buyer is a South Korean fund sponsored by Seoul-based Korea Investment Management Co., according to the Philadelphia Daily News.
Brandywine expects to close the transaction in the first half of the first quarter 2016. In connection with the anticipated sale, the REIT plans to prepay the current mortgage totaling $177.4 million.
After the transaction, Brandywine will continue to provide management services at the property. In addition to the sale, the company anticipates prepaying the Cira Centre South Garage mortgage totaling $35.5 million, which will unencumber the 1,662-space facility.
The REIT acquired the office building in 2007 and renovated and rebranded the asset as Cira Square.
Brandywine Realty Trust owns, develops, leases and manages an urban, town center and transit-oriented portfolio comprising 239 properties totaling 30.7 million square feet as of Sept. 30. The company’s primary geographic focus is Philadelphia, Washington, D.C., and Austin, Texas.
The REIT’s stock price closed on Wednesday, Dec. 23 at $13.42 per share, down from $15.96 per share at this time last year.
— John Nelson