Brandywine invests $25M in Center City towers

"Brandywine Realty Trust has invested $25 million for a 25% interest in grey-stone-faced Commerce Square, twin 41-story towers totalling 1.9 million square feet of Class A office space in the 2000 block of Market Street in Center City.

(UPDATED: The deal would value the buildings' equity at $100 million, or around $53 a square foot. Brandywine boss Gerard Sweeney tells me a proper price would also include the building's debt, which totals $238 millon, or another $125 a square foot. That sets the building's total value at around $178 a square foot on a debt + equity financial basis; still less than half replacement cost, so encouraging to financial investors and discouraging to builders.)

Brandywine will own the buildings as minority partner with previous Commerce owner Thomas Properties Group of Los Angeles remaining in control. Brandywine's money - $5 million at closing, $20 million by the end of 2012 - "will provide substantial capital to improve these premier properties and maintain their position among the highest-quality buildings in Center City," Thomas boss James A. Thomas said in a statement. Thomas will "oversee" the investment, Brandywine boss Gerard H. Sweeney said.

The Henry Cobb-designed towers, built in 1987 and 1992 with an enclosed garden and a few postmodern angular stone flourishes, are 89% leased; tenants include Delaware Investments, Ernst & Young, Grant Thornton, and Wolters Kluwer, among others.

The deal follows Brandywine's recent $129 million ($125/sq ft) purchase of the former Bell Atlantic headquarters in a deal with Blackstone Group, New York, itself a bargain, compared to the $400/sq ft price of the city's last big tower, Liberty Property Trust's Comcast Center, in the mid-2000s."