Property Types Office
May 12, 2009
By: Adam Perrotta, News Writer
Brandywine Realty Trust is the latest firm to take advantage of the relatively stable government-related development market. Despite the continuing credit crunch and still-foundering economy that has laid low commercial property deals across the globe, Brandywine has received funding commitments of $209.3 million and $46.7 million, respectively, for a Philadelphia office rehabilitation and nearby parking garage project, both of which will be occupied by the Internal Revenue Service.
The office project involves the redevelopment of the 862,000-square-foot 30 South Street building in the city’s University City neighborhood, which carries a total cost of $260.5 million. Across the street from that project, Brandywine is developing a 1,662-space parking garage with a $95 million price tag. The 20-year, fully-amortizing loans were provided by undisclosed lenders and carry a fixed interest rate of 5.95 percent.
One factor that likely instilled confidence in the projects among lenders was the fact that the IRS has agreed to pre-lease the entirety of the office complex, as well as 94 percent of the parking garage. In the current environment of businesses closing and downsizing, it’s a good bet that the IRS--despite the likely wishes of the recent "tea party" participants, among others--is going to be existent, not to mention solvent, for the foreseeable future.
Government-related projects are currently one of the most well-positioned niches of the commercial real estate market. The government’s recent stimulus efforts will result in increased space needs for many new and existing agencies--and the coming increase in demand could be a boon to owners and developers.
In early April, Duke Realty broke ground on a $1 billion Alexandria, Va., office complex for the Defense Department. The 1.3 million-square-foot project is scheduled to deliver as scheduled in September of 2011. And last December, work began on the $724 million San Antonio Military Medical Center in Texas.
And investors are taking notice as well. In late April, a 228,000-square-foot office property in the D.C. suburb of Rockville, Md., drew a good deal of bidder interest before selling for $43.5 million to The JBG Cos. The property houses a division of the Department of Health and Human Services.
By: Adam Perrotta, News Writer
Brandywine Realty Trust is the latest firm to take advantage of the relatively stable government-related development market. Despite the continuing credit crunch and still-foundering economy that has laid low commercial property deals across the globe, Brandywine has received funding commitments of $209.3 million and $46.7 million, respectively, for a Philadelphia office rehabilitation and nearby parking garage project, both of which will be occupied by the Internal Revenue Service.
The office project involves the redevelopment of the 862,000-square-foot 30 South Street building in the city’s University City neighborhood, which carries a total cost of $260.5 million. Across the street from that project, Brandywine is developing a 1,662-space parking garage with a $95 million price tag. The 20-year, fully-amortizing loans were provided by undisclosed lenders and carry a fixed interest rate of 5.95 percent.
One factor that likely instilled confidence in the projects among lenders was the fact that the IRS has agreed to pre-lease the entirety of the office complex, as well as 94 percent of the parking garage. In the current environment of businesses closing and downsizing, it’s a good bet that the IRS--despite the likely wishes of the recent "tea party" participants, among others--is going to be existent, not to mention solvent, for the foreseeable future.
Government-related projects are currently one of the most well-positioned niches of the commercial real estate market. The government’s recent stimulus efforts will result in increased space needs for many new and existing agencies--and the coming increase in demand could be a boon to owners and developers.
In early April, Duke Realty broke ground on a $1 billion Alexandria, Va., office complex for the Defense Department. The 1.3 million-square-foot project is scheduled to deliver as scheduled in September of 2011. And last December, work began on the $724 million San Antonio Military Medical Center in Texas.
And investors are taking notice as well. In late April, a 228,000-square-foot office property in the D.C. suburb of Rockville, Md., drew a good deal of bidder interest before selling for $43.5 million to The JBG Cos. The property houses a division of the Department of Health and Human Services.
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