Brandywine Realty Trust Disposes of Three Properties for $56.3M

Brandywine received $56.3 million of net proceeds for the sale of three properties.

By Anca Gagiuc, Associate Editor

Encino Trace, Austin
Encino Trace, Austin

Austin, TexasBrandywine Realty Trust proceeded with its strategy of trading non-core assets by announcing the sale of two office properties located in Austin, Texas and the sale of the Residence Inn Tower Bridge hotel located in Conshohocken, Penn. The company received $56.3 million of net proceeds for the two transactions.

In the first transaction, Brandywine sold Encino Trace to an existing joint venture between Brandywine and DRA Advisors LLC, keeping 50 percent ownership interest in the joint venture. The transaction closed on December 31, 2015. At stabilization, the sale value of the project reached $91.3 million, or $285 per square foot, while at the time of the sale, Brandywine acquired project costs of $76.7 million. The joint venture will fund the remaining costs.

The two properties encompass 320,000 square feet with Encino Trace I 100 percent leased and Encino Trace II 17 percent leased. After closing and transaction costs, Brandywine’s net proceeds totaled $35.9 million. In addition, Brandywine financed Encino Trace I with a $30 million five-year first mortgage at 185 basis points over the London Inter-Bank Offered Rate. A similar mortgage is taken under consideration for Encino Trace II after it stabilizes. After closing and reserves, the company’s share of the mortgage proceeds totaled $14.3 million.

In the second transaction, the sale of the Residence Inn Tower Bridge, a 137-room hotel located in Conshohocken, Penn., Brandywine owned 50 percent of the property as part of a joint venture which originally built the hotel in 2001. The sale closed on December 30, 2015 at $26.5 million, or $193,430 per key. After repaying debt, transaction costs, and holdbacks, the company’s share of the net cash proceeds totaled $6.1 million.

The $56.3 million of net proceeds are expected to be used to fund current developments, reduce debt, and general corporate purposes.

Image courtesy of Encino Trace