By Katie Burke CoStar News
One of the nation's largest office owners reported gains in occupancy and lease lengths as it works to build back some of its pandemic-related losses.
Brandywine Realty Trust, a Philadelphia-based real estate investment trust, pointed to longer lease-up periods among some of its newest developments as a sticking point in an effort to stabilize its portfolio for the year ahead. The landlord reported more than 2.3 million square feet of new and renewal deals last year, with roughly 783,000 square feet of that signed within the last quarter of 2024 alone.
"From a broader perspective, our real estate markets are improving, and we're seeing that every day," Brandywine CEO Jerry Sweeney told analysts on the company's earnings call Wednesday. "There are encouraging signs of stabilization, and during last year, we laid a solid operating foundation to capitalize on these improving office market dynamics."
In Philadelphia, for example, the REIT landed nearly half of the roughly 1 million square feet of office deals signed throughout the city's central business district last year, Sweeney said, largely due to the landlord's concentration of high-end properties across its portfolio.
In a sign of renewed tenant demand — with much of that targeted toward the nicest and newest properties — the Brandywine CEO said tour activity "remains well above pre-pandemic levels," and that more than 60% of the leases the company signed in the fourth quarter last year were a result of tenants upgrading their office space to higher quality options.
The REIT's portfolio includes roughly 65 properties that collectively span about 12 million square feet is now just shy of 90% leased, a slight boost compared to the previous quarter.
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