Brandywine Realty Trust has sold a 30% stake in One and Two Commerce Square for $115 million, raising money to invest back into the company’s future projects.

Brandywine, a Philadelphia real estate investment trust, said it closed on the transaction with an undisclosed global institutional investor in a deal the company values as a $600 million joint venture. A Brandywine spokeswoman said that at the request of the investor, the company isn’t divulging the name at this time.

Brandywine, which released second quarter results late Wednesday, is scheduled to have a quarterly earnings call Thursday.

As part of the deal, Brandywine (NYSE: BDN) and the undisclosed buyer will invest $20 million into the 1.9-million-square-foot Center City office complex. The transaction is subject to an existing $222 million mortgage, and Brandywine said it raised around $100 million in net cash proceeds as part of the transaction.

Brandywine said it will continue in its role as property manager and leasing agent for the two, 40-story building complex that totals 1.9 million square feet. Commerce Square includes a 519-space underground parking garage and a 30,000-square-foot courtyard.

Tenants include Ernst & Young, Pew Charitable Trusts and Stradley Ronon Stevens & Young.

“This transaction creates a valuable partnership with one of the world’s top real estate investors, marking their first direct office investment in downtown Philadelphia,” Brandywine said in a statement.

The deal with the investor allows it to be passive and gives Brandywine the ability to raise capital without diluting shareholder value.

Brandywine also said the deal positions Commerce Square for continued growth and will generate $100 million “to accelerate the execution of our business plan.”

Commerce Square was built in the late 1980s and early 1990s. Brandywine said it will record a gain on the transaction during the third quarter in excess of $270 million subject to final closing settlements.

Brandywine Realty Trust purchased One and Two Commerce Square in 2013 for $331.8 million, or $175 a square foot. The company acquired the properties from Parkway Properties Inc., which merged with Thomas Properties Group Inc.

The deal helped solidify Brandywine as the lead landlord of Center City trophy space.

Brandywine reported second-quarter funds from operations — a key industry metric for REITs — of $57.7 million, or 34 cents per share, down from $62.2 million, or 35 cents per share, in the year ago period.

*Article courtesy of Philadelphia Business Journal

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Independence Health Group, parent company to Independence Blue Cross, has closed on buying its Center City headquarters building for $360 million, or $450 a square foot.

The Philadelphia Business Journal first reported last month that Independence had put the 800,000-square-foot building at 1901 Market St. under contract.

Piedmont Office Realty Trust Inc. (NYSE:PDM) was the seller of the 45-story building, which it acquired for $174 million in 2003. Piedmont is based just outside of Atlanta.

Independence is the region’s largest health insurer and had previously owned the 31-year-old skyscraper. It sold 1901 Market St. in the mid-1990s to Prudential Insurance Co. for what was believed to be around $150 million.

“The purchase of our headquarters at 1901 Market Street is a special moment for our company. More importantly, it signifies our long-term commitment to this neighborhood, the City of Philadelphia and to the amazing people who live and work here,” said Independence Health Group CEO Daniel J. Hilferty, in a statement.

Nearly 2,500 of the insurance company’s employees work from the building.

Since it was built, the building has been associated with the insurer and has become part of its brand. It is a prominent building in Philadelphia’s skyline and has Independence Blue Cross’ name on top of it. Over the last eight years, more than $110 million in upgraded were made to the building including a new lobby, outdoor plaza, renovations throughout for a more modern look, new mechanical systems and other amenities.

The insurer occupies other space along West Market Street including 218,000 square feet across four floors at 1900 Market St.

The roughly $450 per square foot sale price represents one of the top transactions for a Philadelphia office building on a per-square-foot basis. However, it doesn’t break the record of $628 per square foot set by the 2018 sale of GlaxoSmithKline’s headquarters at the Philadelphia Navy Yard.

Independence recently invested upwards of $100 million in top-to-bottom upgrades to the building.

The insurer, one of Center City’s largest employers, has had a commitment to the building for the long term. Independence Blue Cross has a lease on the space until 2033 and has two 10-year options to remain in the space.

Independence Blue Cross saw its profit more than quadruple in 2018, largely because of a significant decline in medical claims spending. The insurer generated a profit of $324 million on revenue of $16.3 billion. In 2017 the parent company of Independent Blue Cross has a net income of $77 million and revenues of $16.4 billion. It ended 2018, the most recent financials available, with a $2.9 billion surplus, which is in the “efficient” range as defined by the Pennsylvania Insurance Department.

*Article courtesy of Philadelphia Business Journal

For more information about Philly office space for sale or lease in Philadelphia or about any other Philadelphia properties for sale or lease, please contact WCRE at 215-799-6900.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier Philadelphia commercial real estate broker that provides a full range of Philadelphia commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Philadelphia commercial properties for buyers, tenants, investors and sellers.

Please visit our websites for a full listing of Philadelphia commercial properties for lease or sale through our Philadelphia commercial real estate brokerage firm

The Barer Institute, a collaborative cancer drug development initiative started by Rafael Holdings, Inc., intends to lease space at the planned 3.0 University Place development in University City.

The institute signed a non-binding letter of intent to occupy 2,500 square feet on the fifth floor of the building that will feature 10 other suites totaling 2,500 square feet each and dedicated to startup companies. The developer refers to these spaces as “Growth Pods.”

The Barer Institute is a subsidiary of Rafael Holdings (NYSE: RFL) of Newark, N.J. The company owns commercial real estate properties in North Jersey and Israel and also owns interests in two clinical-stage pharmaceutical companies focused on the development and commercialization of oncology drugs.

The pending lease helps fill some of the space at the proposed $100 million, 250,000-square-foot building that is being developed at 41st and Market streets by University Place Associates, a Philadelphia real estate company that has built two other buildings in the vicinity of 30th and Market streets and has plans to build a bigger campus there. In April, the Wistar Institute, a nonprofit research organization, entered into a long-term lease on 8,000 square feet for up to 10 years. Wistar has an option to take additional space in the future.

Other tenants that have committed to the building include Ben Franklin Technology Partners and Fulton Bank. In all, 80,000 square feet is leased so far.

Barer taking space in the building is a testament to leveraging Wistar’s presence as an “anchor-collaborator and strategic tenant,” said Anthony Maher, president of UPA. “We think it’s a powerful narrative and we think there will be more,” he said.

UPA is marketing the remaining space to tenants and there has been interest, Maher said. The second floor is the biggest at 39,000 square feet, and the company is dedicating that to cell-gene companies who want to manufacture in University City.

UPA expects to have its permit in June and to break ground on the project soon afterward, Maher said. It is finalizing financing now between two groups, he said.

“There is a lot of dry powder on the sidelines interested in our project,” Maher said. “They are now calling the life science-lab market the hottest and most preferred asset class that will lead coming out of Covid.”

*Article courtesy of Philadelphia Business Journal

For more information about Philly office space for sale or lease in Philadelphia or about any other Philadelphia properties for sale or lease, please contact WCRE at 215-799-6900.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier Philadelphia commercial real estate broker that provides a full range of Philadelphia commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Philadelphia commercial properties for buyers, tenants, investors and sellers.

Please visit our websites for a full listing of Philadelphia commercial properties for lease or sale through our Philadelphia commercial real estate brokerage firm.

At the height of the coronavirus pandemic, Piedmont Office Realty Trust has managed to get 1901 Market St. under agreement for $360 million.

Known better as the headquarters for Independence Blue Cross, the 45-story, 801,000-square-foot office tower was put on the market in late February and was expected to trade for an estimated $370 million. Piedmont said in a statement that it entered into a binding contract to sell the building for $360 million. The sale is supposed to close this summer, the company said.

No additional information was available, including the name of the prospective buyer.

If the building sells at $360 million, or roughly $450 per square foot, it will be one of the top transactions for a Philadelphia office building on a per-square-foot basis. However, it wouldn’t break the record of $628 per square foot set by the 2018 sale of GlaxoSmithKline’s headquarters at the Philadelphia Navy Yard.

The building was developed in 1987 for Independence Blue Cross, which has a long-term lease on the space until 2033. It has two 10-year options to remain in the space.

The pending deal highlights how some investors continue to scout for deals during the pandemic, and underscores the attractiveness of top-tier properties leased to big-name tenants over the long term.

Piedmont, an Atlanta-based real estate investment trust, bought the building in 2003 for $174 million and in recent years invested $100 million to upgrade the lobby, build out an outdoor plaza and install new mechanical systems. The real estate company also renovated the building’s floors to a more contemporary style and added cafés and other gathering areas.

Atlanta-based Piedmont (NYSE: PDM) focuses on acquiring buildings leased on a long-term basis and most often to single tenants. This is the only building the company owns in Philadelphia and its focus has shifted to the Sunbelt markets of Atlanta, Orlando and Dallas. It said on a Feb. 5 fourth-quarter earnings call that it planned to dispose of 1901 Market and use the “anticipated gain” from the sale of the building to help fund a $400 million acquisition in Dallas, which will become its second-largest market based on revenue.

*Article courtesy Philadelphia Business Journal

For more information about Philly office space for sale or lease in Philadelphia or about any other Philadelphia properties for sale or lease, please contact WCRE at 215-799-6900.

Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier Philadelphia commercial real estate broker that provides a full range of Philadelphia commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Philadelphia commercial properties for buyers, tenants, investors and sellers.

Please visit our websites for a full listing of Philadelphia commercial properties for lease or sale through our Philadelphia commercial real estate brokerage firm.