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Brandywine Realty Trust Announces $121 Million Sale Of Princeton Pike Corporate Center And A Recap Of Its 2012 Fourth Quarter Investment And Capital Market Activities

Stocks in this article: BDN









RADNOR, Pa., Feb. 1, 2013 /PRNewswire/ -- Brandywine Realty Trust (NYSE:BDN) announced today that it has entered into a definitive agreement to sell Princeton Pike Corporate Center, an eight-building, 800,546 square foot office park located in Lawrenceville, New Jersey, for $121.0 million or $151 per square foot.  The sale is expected to close within the next thirty days with the net proceeds used to retire existing debt including balances under our unsecured revolving credit facility.  As part of the transaction, we granted the purchaser a 7.5-year option to acquire our three remaining development parcels in the park.

We also completed the following additional investment activities:

  • During the fourth quarter, the $34.8 million acquisition of 1900 Market Street, a 456,922 square foot office building located in the central business district of Philadelphia, Pennsylvania, in close proximity to our Commerce Square joint venture properties and 1919 Market Street development site.  1900 Market Street is currently 76% occupied and will be redeveloped over the next several years with significant interior, exterior and mechanical system upgrades to position the asset as a Class A office building.  The redevelopment program will commence in early 2013 and be completed by late 2015 in anticipation of Cozen O'Connor, the building's largest tenant at 203,667 square feet, vacating its lease at expiration in December 2015.  In the interim, the building's existing tenant base, current below-market leases and purchase price will provide an attractive yield. 
  • During the fourth quarter, the $32.1 million acquisition of 7000 West at Lantana, a 136,075 square foot, two-building, Class A office complex located in the Southwest submarket of Austin, Texas.  7000 West at Lantana is 100% occupied through June 2022 by ArthroCare Corporation, and provides operating synergies, an expanded marketing platform and an improved rollover profile for our desirable Southwest Austin portfolio.
  • During the fourth quarter, the $2.1 million acquisition of a 10.0 acre parcel of land adjacent to our 2291 Wood Oak Drive building in Herndon, Virginia.  The site is currently used for additional parking by our 2291 Wood Oak tenants and can ultimately support a mixed-use project encompassing retail, multifamily or build-to-suit office space.
  • Subsequent to year-end, the funding of the remaining $5.9 million of our $25.0 million aggregate investment in One and Two Commerce Square, a 92% occupied, 1.9 million square foot, two-building, Class A office complex located in the central business district of Philadelphia, Pennsylvania.  Our investment reflects a preferred 25% stake in these properties which are controlled by affiliates of the Thomas Properties Group Inc.

During the fourth quarter we also completed the following capital market transactions:

  • The previously disclosed $250.0 million 3.95% ten-year unsecured note financing due February 15, 2023, generating net proceeds of $246.1 million
  • The previously disclosed tender for a total of $149.9 million of our unsecured notes maturing in 2015 and 2016, incurring a $20.5 million charge on the early extinguishment of debt as well as $0.4 million of accelerated deferred financing charges.
  • The previously disclosed optional redemption of all 2.3 million of our 7.375% Series D Cumulative Redeemable Preferred Shares with a total outlay of $58.3 million comprising the $57.5 million par redemption plus $0.8 million of distributions for this partial period.  We will recognize a $2.0 million preferred share redemption expense in the fourth quarter of 2012 related to this redemption.
  • The repayment of $150.0 million of our $250.0 million unsecured bank term loan due February 1, 2016, incurring a $3.0 million charge on the termination of associated interest rate hedging contracts as well as $0.7 million of accelerated deferred financing charges.
  • The pre-payment of the $54.9 million balance on a series of mortgage loans comprising our 7.25% Newtown Square/ Berwyn Park/Libertyview secured financing without penalty and the pre-payment of the $1.1 million balance on our 7.75% Southpoint III mortgage loan with a $60.7 thousand penalty and $19.3 thousand of accelerated deferred financing charges. 
  • The redemption of 811,984 limited partnership units from the estate of a former unit holder for total cash consideration of $9.7 million reflecting a calculated price of $12.00 per unit.

We will recognize in our results for the fourth quarter of 2012 a total of $26.6 million of non-recurring cash and accelerated charges related to the preferred share redemption, unsecured note tenders, early debt repayments and termination of interest rate hedge contracts. As a result of these various investment and capital market activities, we ended 2012 with a $69.0 million outstanding balance on our $600.0 million unsecured revolving credit facility.

"The sale of Princeton Pike reduces New Jersey's contribution to just 5.5% of overall Company revenues and amplifies our shift to a more urban and transit-oriented portfolio with better growth characteristics," stated Gerard H. Sweeney, President and Chief Executive Officer of Brandywine Realty Trust. "Within our consolidated portfolio, we ended 2012 as a $97.7 million net seller, in line with our capital recycling and disposition goals. Our Philadelphia and Austin acquisitions reflect value creation, market positioning and pricing below replacement costs.  Our fourth quarter capital market activity reduced our overall cost of capital, improved our coverage ratios, mitigated the risk of rising rates, expanded our unencumbered asset pool and lengthened our maturity profile with no maturities until November 2014.  Our 2013 objectives are on track and we look forward to continued improvement of our operating metrics and balance sheet."

About Brandywine Realty TrustBrandywine Realty Trust is one of the largest, publicly traded, full-service, integrated real estate companies in the United States.  Organized as a real estate investment trust and operating in select markets, Brandywine owns, leases and manages an urban, town center and suburban office portfolio comprising 297 properties and 34.6 million square feet, including 221 properties and 25.1 million square feet owned on a consolidated basis and 57 properties and 7.0 million square feet in 19 unconsolidated real estate ventures all as of December 31, 2012. For more information, please visit www.brandywinerealty.com.

Forward-Looking StatementsCertain statements in this release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance, achievements or transactions of the Company and its affiliates or industry results to be materially different from any future results, performance, achievements or transactions expressed or implied by such forward-looking statements.  Such risks, uncertainties and other factors relate to, among others, the Company's ability to lease vacant space and to renew or relet space under expiring leases at expected levels, the potential loss of major tenants, interest rate levels, the availability and terms of debt and equity financing, competition with other real estate companies for tenants and acquisitions, risks of real estate acquisitions, dispositions and developments, including cost overruns and construction delays, unanticipated operating costs and the effects of general and local economic and real estate conditions.  Additional information or factors which could impact the Company and the forward-looking statements contained herein are included in the Company's filings with the Securities and Exchange Commission, including our Form 10-K for the year ended December 31, 2011.  The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.



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