Tuesday, October 28, 2025

Brandywine bets on improving office dynamics with purchase of high-profile tower

 By Katie Burke CoStar News

In Philadelphia, office tour activity is on the rise as tenants hunt for larger amounts of space. Brandywine Realty Trust is one firm widening its bet on the market's brightening dynamics with a deal to acquire its joint venture partner's stake in a prominent Philadelphia development.

The real estate investment trust dropped $70.5 million to become the sole owner of the mixed-use tower at 3025 John F. Kennedy Blvd., a property split between office and residential that spans about 570,000 square feet. The Philadelphia-based firm, one of the project's original developers, initially had a 66% stake in the project.

The buyout deal is a small slice of the REIT's burgeoning optimism in the national office market's recovery.

"From an overall standpoint, the real estate markets and overall sentiment continue to improve," Brandywine CEO Jerry Sweeney told analysts on the company's recent earnings call. "Our pipeline activity continues to grow, tour volume remains at very healthy levels, rent levels and concession packages remain very much in line with our business plan and in select submarkets and buildings, and we continue to push both nominal and effective rents."

The 200,000-square-foot office portion of the 28-story building at the heart of the REIT's Schuylkill Yards development finished in 2023, and speaks to the demand Brandywine is seeing for "high-quality, highly amenitized buildings."

The offices are more than 90% leased to tenants including law firm Goodwin Procter and financial services provider Future Standard. The 326 multifamily units spread across the upper levels of the project are 99% occupied.

Brandywine declined to disclose the identity of its global institutional investment partner. The buyout deal, which closed earlier this month, also meant the REIT has assumed responsibility for the $178 million construction loan the joint venture took out to finance the roughly $325 million project. That debt is scheduled to mature in July, and CEO Jerry Sweeney said he is weighing whether to refinance the property next year in order to cut down on interest expenses.

“With the debt coming due, we think we have some positive refinancing outcomes at a very straightforward level,” Sweeney said. He added that the construction loan for the building is currently held to an 8% interest rate. If the REIT decided to refinance, Brandywine could net an annual savings of about $4 million.

Brightened outlook

To be clear, Brandywine is still slogging through some residual pandemic-related impacts that have resulted in declining occupancy and a challenged leasing landscape across its office portfolio. The landlord signed about 343,000 square feet of new and renewal deals throughout the quarter ended Sept. 30, boosting its total leased rate to just shy of 90.5% — a slight but steady boost compared to the same period last year.

Yet the ingredients for a widespread recovery, such as larger spatial requirements among tenants and boosted leasing activity, are pushing a number of the nation's largest landlords to widen their bets on the market's continued improvement.

BXP, for example, has kicked off construction for two ground-up developments in New York and Washington, D.C. Tishman Speyer recently closed its first Manhattan office purchase since 2019. And Kilroy Realty is drawing up plans for its long-awaited Flower Mart development in San Francisco.

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Friday, October 24, 2025

Quarry Center in Havertown, PA, co-anchored by Giant and Lowe's, sells for more than $80M

 By Paul Schwedelson – Reporter, Philadelphia Business Journal

A 222,500-square-foot shopping center in Havertown with two national anchor tenants has sold for more than $80 million, according to an industry source.

Developer Eureka Ventures traded Quarry Center to Ohio-based Mid-America Management Corp. roughly four months after putting the Delaware County retail property on the market.

The sale price for Quarry Center comes out to more than $360 per square foot.

Buyer Mid-America Management is an investment firm based outside Cleveland with a $1 billion portfolio that includes more than 50 retail, industrial and residential properties.

Quarry Center is co-anchored by a Giant supermarket and a Lowe’s home improvement store, which together make up about 77% of the property’s income. The shopping center was built in 2013 and remains fully occupied by all of its original tenants, including an Xfinity Store, Panera Bread and Chipotle.

The 31-acre property is located at 116 Township Line Road near the intersection of routes 1 and 3.

Full story:  https://www.bizjournals.com/philadelphia/news/2025/10/23/quarry-center-sold-lowes-giant-retail.html

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Brandywine pays $70.5M for partner’s stake in University City building

 By Paul Schwedelson – Reporter, Philadelphia Business Journal

Brandywine Realty Trust has acquired its joint venture partner's stake in 3025 John F. Kennedy Blvd. for $70.5 million, giving it complete ownership of the 570,000-square-foot property.

Philadelphia-based Brandywine originally had a 66% stake in the recently developed building, while its global institutional investment partner owned the balance. Brandywine (NYSE: BDN) declined to name the former joint venture partner. As part of the deal, Brandywine also assumed its share of the debt on the property.

The 28-story mixed-use University City building, just west of 30th Street Station,is split between 326 apartments on floors 10 through 28 and 200,000 square feet of office space on floors two through eight. Shared amenity space is on the ninth floor.

The project's total cost was $325 million, Brandywine reported.

Construction was completed in the fourth quarter of 2023, and Brandywine reported this week the residential portion of the building is 99% leased. The office portion will be 92% leased when anchor tenant Future Standard takes occupancy in the first quarter of 2026. Law firm Goodwin Procter occupies 31,000 square feet in the building.

Brandywine and its global institutional investor partner exercised a one-year loan extension for the property in the second quarter. Following the acquisition of the partner’s equity stake, Brandywine CEO Jerry Sweeney said Thursday on the company’s quarterly earnings call with investors that the firm is considering refinancing in 2026.

“With the debt coming due, we think we have some positive refinancing outcomes at a very straightforward level,” Sweeney said.

Full story: https://www.bizjournals.com/philadelphia/news/2025/10/23/brandywine-3025-jfk-equity-stake-acquired.html

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Wednesday, October 22, 2025

Rising US office leasing still remains below pre-pandemic pace

 By Phil Mobley CoStar Analytics

Leasing volume in the U.S. office market ticked up in the third quarter, according to preliminary estimates, but remains just shy of its pre-2020 norm.

The total square footage leased on new agreements — excluding renewals — is estimated to have reached between 100 million and 110 million square feet, or about 1.2% of inventory. While this marks a modest increase over recent quarters, it still trails the quarterly average of 115 million square feet recorded between 2015 and 2019.









A closer look at the data reveals that small lease sizes continue to weigh on overall volume. For more than two years, the average lease size has been 15% to 20% below its pre-pandemic level. At the same time, the number of transactions has been edging upward and is now nearly 10% higher than before 2020.

One possible explanation for this shift is the limited availability of large blocks of premium new space typically sought by major occupiers. With hiring generally slow, many large tenants appear to be renewing existing leases rather than expanding or relocating into new space.

The recovery in leasing is not evenly distributed across the country. A handful of major cities are seeing activity well above pre-2020 levels. New York leads the nation, buoyed by a strong rebound in office attendance and robust hiring by big banks. Charlotte, North Carolina, as well as Miami, Houston and Dallas-Fort Worth, also posted strong and accelerating leasing, driven by comparatively solid population and economic growth. San Francisco, meanwhile, has nearly returned to its pre-pandemic leasing pace, as artificial intelligence companies and other tech firms have begun to backfill a glut of sublet space.


In contrast, leasing in several other markets remains well below pre-pandemic norms. Cities such as Boston, Chicago, Los Angeles, San Diego and Washington, D.C., continue to lag, probably reflecting ongoing adjustments to per-worker space needs and local economic factors.

Despite generally slow hiring and an uncertain economic outlook, the upward trend in leasing volume signals that tenants still have an appetite for office space. However, with the supply pipeline contracting and prime availabilities becoming scarce, sustaining high levels of leasing may prove challenging. Some tenants may find themselves reconsidering space they previously passed over if their needs become acute.

1650 Arch St., Center City office tower with $43M debt heads to auction

Paul Schwedelson / Philadelphia Business Journal

The foreclosure case for 1650 Arch St. could be nearing an end.

1650 Arch Investor LP, the affiliate of ASI Management that owns the 553,000-square-foot office building, is scheduled to be sold at a public auction on Nov. 5. Bidding will be conducted online, as well as in person in front of the New York Supreme Court building in Manhattan, according to a published auction notice.

The half-vacant Center City property was hit with a foreclosure complaint in the Philadelphia Court of Common Pleas in June and has been in receivership since July.

An affiliate of Wilmington-based Delphi Financial Group originated a $75.8 million loan on 1650 Arch St. to Philadelphia-based ASI Management in 2018, according to the foreclosure complaint. The loan’s maturity date was later extended two years to July 2024, but the complaint shows ASI Management did not pay off the debt.

The auction notice states the loan has an outstanding balance of $43 million.

ACORE Capital Mortgage is the administrative agent for the loan and is offering 1650 Arch Investor LP for sale on behalf of the lender. OPEX CRE Management is the property’s receiver. Colliers’ Carl Neilson is leading the auction process.

As the debtholder, Delphi Financial Group has the option to join the bidding and use the full amount it is owed as a credit toward the purchase price. The scenario is similar to the process that played out with the Wanamaker building earlier this year, when New York real estate firm TF Cornerstone leveraged the $120 million in debt it held on that distressed office property to acquire it at auction and complete a foreclosure process.

Full story:  https://www.bizjournals.com/philadelphia/news/2025/10/20/center-city-office-tower-auction-date-set-loan.html

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