Brandywine Realty Trust Announces Austin, Texas Joint Venture with DRA Advisors LLC; Brandywine Contributes Wholly-Owned Office Properties Valued at $330 Million

PR Newswire

RADNOR, Pa., Sept. 16, 2013 /PRNewswire/ -- Brandywine Realty Trust (BDN), a real estate investment trust focused on the ownership, management and development of urban, town center and suburban office properties in the mid-Atlantic region and other select markets throughout the United States, announced today that it has formed a joint venture (the "Venture") with DRA Advisors LLC ("DRA").  Brandywine and DRA will each own a 50% interest in the Venture that will acquire Brandywine's wholly-owned office portfolio located in the Southwest submarket in Austin, Texas. Brandywine will continue to provide property management, leasing, and construction management services.

Brandywine and DRA intend to jointly pursue additional office opportunities in targeted Austin sub-markets and plan to co-invest additional equity in acquisitions that meet certain investment criteria.

The Venture will acquire the properties from Brandywine for $330.0 million or $236 per square foot, representing a capitalization rate of approximately 6.7% cash and 7.0% GAAP based on current net operating income.  The joint venture has secured $230.6 million of non-recourse debt through three separate mortgages that have a weighted-average maturity of 5.0 years and an expected weighted-average interest rate of 3.75%.  The transaction and related financings are expected to close early in the fourth quarter.

Properties to be Acquired by the Joint Venture

Portfolio

# of

 Buildings

Square Feet

Currently

Leased

            Barton Skyway

4

786,845

94.4%

            The Park on Barton Creek

2

205,195

100.0%

            7000 West at Lantana

2

136,075

100.0%

            Cielo Center

3

270,711

99.6%


11

1,398,826

96.8%

Brandywine expects to receive $271.6 million of proceeds, after deducting $5.7 million of transaction and joint venture formation costs.  Brandywine expects to use the net proceeds to further advance our growth and deleveraging strategy.

"Through our existing joint venture, we enjoy an excellent relationship with DRA Advisors and are excited to expand that platform into the Austin market," stated Gerard H. Sweeney, President and Chief Executive Officer 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 added, "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."

Eastdil Secured, LLC acted as Brandywine's exclusive financial advisor for this transaction.

About DRA Advisors

DRA Advisors is a registered investment advisor specializing in real estate investment and management services for institutional and private investors.  DRA currently has $11 billion in assets under management.  Since 1986, DRA's focus has been consistent: conservative, value-added real estate investments in the office, retail, multi-family and industrial sectors in the United States.  DRA's acquisitions since inception include over 1,000 properties valued at over $20 billion.

About Brandywine Realty Trust

Brandywine Realty Trust is one of the largest, publicly traded, full-service, integrated real estate companies in the United States.  Organized as a real estate investment trust and operating in select markets, Brandywine owns, leases and manages an urban, town center and suburban office portfolio comprising 283 properties and 32.9 million square feet, including 210 properties and 24.2 million square feet owned on a consolidated basis and 54 properties and 6.2 million square feet in 17 unconsolidated real estate ventures all as of June 30, 2013. For more information, please visit www.brandywinerealty.com.

Forward-Looking Statements

Certain statements in this release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance, achievements or transactions of the Company and its affiliates or industry results to be materially different from any future results, performance, achievements or transactions expressed or implied by such forward-looking statements.  Such risks, uncertainties and other factors relate to, among others, the Company's ability to lease vacant space and to renew or relet space under expiring leases at expected levels, the potential loss of major tenants, interest rate levels, the availability and terms of debt and equity financing, competition with other real estate companies for tenants and acquisitions, risks of real estate acquisitions, dispositions and developments, including cost overruns and construction delays, unanticipated operating costs and the effects of general and local economic and real estate conditions.  Additional information or factors which could impact the Company and the forward-looking statements contained herein are included in the Company's filings with the Securities and Exchange Commission, including our Form 10-K for the year ended December 31, 2012.  The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

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