Brandywine RT and DRA Advisors LLC Form Joint Venture on $330 Million Office Properties
- Sep 20, 2013
Pennsylvania-based Brandywine Realty Trust, which specializes in the ownership, management and development of urban, town center and office properties, has announced a joint venture with New York-based DRA Advisors LLC that will place Brandywine’s entire office portfolio from the Southwest submarket of Austin into 50 percent ownership by each company.
Brandywine’s portfolio totals 1,398,826 square feet of space spread between the following 11 buildings: Barton Skyway, which has four buildings encompassing 786,845 square feet with 94.4 percent occupancy, the Park on Barton Creek, a fully-leased, two-building property with 205,195 square feet of space, 7000 West at Lantana, also fully-leased with two buildings that feature 136,075 square feet of space, and the final property, Cielo Center, which offers 290,711 square feet of space throughout three buildings and is 99.6 percent occupied.
Brandywine’s exclusive financial advisor is Eastdil Secured LLC.
In the transaction, which is expected to close early in the fourth quarter, the joint venture will pay $330 million ($236 per square foot) for the properties, representing a capitalization rate of approximately 6.7% cash and 7.0% GAAP.
Brandywine’s expectation of the sale is of $271.6 million of proceeds, post deduction of the $5.7 million paid for the transaction and venture formation costs. The intention of the two companies is to extend their investments in targeted Austin submarkets.
“Through our existing joint venture, we enjoy an excellent relationship with DRA Advisors and are excited to expand that platform into the Austin market,” says Gerard H. Sweeney, President and CEO of Brandywine Realty Trust. ”DRA is a well-regarded real estate investor and this transaction enables us to harvest current value in the contributed portfolio, meaningfully participate in its future appreciation and create a co-investment vehicle to accelerate our growth in Austin with a high quality partner. The going forward equity commitment by both parties positions us well to continue growing our position as one of Austin’s leading landlords.
“We have been pleased with our existing partnership with Brandywine in the mid-Atlantic region and we look forward to expanding our successful relationship into the vibrant Austin office market. We believe that Austin is one of the most desirable investment markets in the country and, over time, we hope to increase the size of the portfolio and expand our market share.”
Photo courtesy of Brandywine Realty Trust.