Brandywine's 93%-Leased Level Holds in Q2

PLYMOUTH MEETING, PA-Brandywine Realty Trust’s portfolio was 92.9% leased at the end of the second quarter and the retention rate for the quarter was 80.4%. Quarterly rental rates on new leases slipped 5.3% on a straight-line basis, while rental rates on renewals dropped just 0.8%, according to the locally based REIT’s second-quarter report.

Gerard H. Sweeney, president and CEO, said performance was “better than forecast and an improvement over past quarters, but still indicative of a continuing competitive environment.” Cira Centre, the company’s Center City landmark, is now 93% pre-leased, he reports, and Radnor Financial Center leasing is at 26%.

Of the latter, Sweeney said, “we have owned it for nine months and have reintroduced it to the market. Our objectives for the property are on track and activity is increasing.” In response to a question during a conference call, he said major Radnor leases were in negotiation and identified the types of prospects as “pharmaceutical and financial-service companies.”

Sweeney cited positive absorption in the Pennsylvania suburbs, “up dramatically from a year ago,” singling out King of Prussia, Conshohocken and Plymouth Meeting for marked improvement. “There’s still a long way to go, but the trend is positive.”

Brandywine has a land inventory of approximately 4.8 million sf, including 300,000 sf in New Jersey and about 500,000 sf in Plymouth Meeting. “If the market continues to improve, we will have starts in third quarter,” he said, although no new construction is currently under way other than Cira Centre, which is scheduled to reach completion by the end of the year.