Friday, August 10, 2012

Brandywine Realty trying to fill planned Cira South in Phila.

by Natalie Kostelni
Brandywine Realty Trust has relaunched an extensive marketing campaign of its Cira Centre South complex at 30th Street in Philadelphia as it attempts to seize on conditions that may finally get the long-awaited project under way.

This comes four years after the real estate marketing the Cira South campus. In early 2008, Brandywine was trying to lure BlackRock Group as an anchor tenant to the project but that never happened. It mothballed Cira South until financial markets stabilized, the economy began to improve and the office market started to show some signs it would support new construction.

“We did think there were enough signs of recovery that we wanted to get ahead of the curve and do the marketing campaign,” said Jerry Sweeney, president and chief executive of Brandywine. “We are having a lot of conversations with a lot of tenants in and outside of the region.”

The Radnor real estate investment trust redesigned its Cira South brochure and created a multimedia marketing campaign that went out to 650 companies outside of the Philadelphia area. It has also held presentations before companies and others to make them aware of the project and what Philadelphia has to offer.

The entire Northeast Corridor was blanketed with particular emphasis on New York, Northern New Jersey and the Washington, D.C., areas. The company is sensitive to trying to nab tenants outside of Center City since it came under fire for luring several downtown firms, such as a Lubert Adler, Dechert, Woodcock Washburn and others, to Cira Centre, which sits in a Keystone Opportunity Zone. The KOZ designation gives tenants who move into the space breaks on state and local taxes. Brandywine experienced some backlash from many downtown landlords and others who bristled when taxpaying tenants hopped across the Schuylkill River into the Cira Centre. Cira South has KOZ status until 2025.

“We have a large pool of square footage in Center City Philadelphia but to counter-balance that potential, we’ve kicked off the Northeast marketing campaign,” Sweeney said.
Brandywine owns One, Two and Three Logan Square as well as has an interest in the Commerce Square office complex and could draw tenants from there. Some firms renting space in Cira Centre need to expand and don’t have room in that 29-story, 731,000-square-foot complex.

Brandywine does have one tenant locked up. The University of Pennsylvania has already committed to a tad under 100,000 square feet. The trophy market is also playing into the situation.

“Large blocks of trophy space are scarce and that presents a development opportunity. All trophy tenants want to stay in trophy space and don’t want to take a step down.”

Tenants who fit into that category include: Drinker Biddle, which is now in One Logan Square; Pepper Hamilton, which is in Two Logan Square; FMC Corp., which is at Mellon Bank Center at 1735 Market St.; and Glenmede Trust Co., which occupies space at One Liberty Place at 1650 Market St., and reportedly looked at the idea of a Cira South move.

Some parts of the Cira South campus have been tweaked since it was first unveiled. The complex still consists of two towers — Cira South Walnut and Cira South Chestnut — however, some components in the buildings have changed.
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