AUSTIN-Brandywine Realty Trust has formed a joint venture with DRA Advisors LLC to acquire Brandywine's wholly owned office portfolio in the southwest submarket. The new partnership will pay the Pennsylvania REIT $330 million, with each company owning a 50% interest in the portfolio.
Brandywine will continue providing property management, leasing and construction management services to the portfolio. The REIT and its New York City partner anticipate closing on the transaction during early Q4 of 2013. Eastdil Secured LLC acted as Brandywine's exclusive financial advisor for this transaction.
To pay for the properties, the JV has secured $230.6 million of non-recourse debt through three separate mortgages with a weighted-average majority of five years and an expected weighted-average interest rate of 3.75%. Brandywine and DRA intend to continue pursuing other investments in certain Austin submarkets and will co-invest additional equity in acquisitions meeting specific investment criteria.
Properties to be Acquired by the Joint Venture are:
| Name | Address | Square Feet | Occupancy |
| Barton Skyway | 1221-1601 S. MoPac Expy. | 786,845 | 94.4% |
| The Park on Barton Creek | 3711 S. MoPac Expy. | 205,195 | 100% |
| 7000 West at Lantana | 7000 W. William Cannon Dr. | 136,075 | 100% |
| Cielo Center | 1250 S. Capital of Texas Hwy. | 270,711 | 99.6% |
| TOTAL | 1,398,826 | 96.8% |
"Through our existing joint venture, we enjoy an excellent relationship with DRA Advisors and are excited to expand that platform into the Austin market," states 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."
David Luski, president of DRA Advisors adds, "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."
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