Brandywine Raises $235M From JV With DRA

RADNOR, PA-Brandywine Realty Trust has entered into an agreement to sell a 1.6-million-sf office portfolio, valued at $245.4 million, to a joint venture with New York City-based DRA Advisors LLC. Under the agreement, Brandywine will retain a 20% interest in the joint venture and also continue to manage the 29 properties.

The deal is expected to close by the end of this year. It is subject to certain conditions, including the JV’s completion of approximately $187 million of secured property financing. The properties are currently unencumbered, Jerry Sweeney, Brandywine’s president and CEO, tells GlobeSt.com. “The JV identified a third-party lender that will place mortgages on the properties.”

The sale represents a cap rate of about 7.4% according to GAAP and 7.2% cash, based on trailing 12-month net operating income through this Sept. 30, and a 7.9% cash yield, based on 2008 projections. Locally based Brandywine expects total proceeds of $235.2 million, which it will use to reduce debt on its unsecured revolving credit facility.