Listen to article \u2022\u00a00:00 min<\/p>\n
Since the COVID-19 pandemic, office owner Brandywine Realty Trust has been shedding some of its lower-performing buildings \u2014 culminating in this year\u2019s blockbuster $240 million sale of 3151 Market St<\/a>. to Burlington Stores for that company\u2019s new headquarters. <\/p>\n On Thursday, Brandywine CEO Jerry Sweeney announced that his company would target even more sales in 2027.<\/p>\n \u201cWe do anticipate about another $200 million \u2014 maybe more \u2014 in sales next year,\u201d Sweeney said on Brandywine\u2019s third-quarter earnings call.<\/p>\n Brandywine is the dominant office building owner in Philadelphia<\/a>. It also has 13 buildings in Austin, Texas<\/a>, and substantial holdings in the Washington, D.C., area and other parts of Virginia.<\/p>\n \u201cSome of those [sales] will still be in market assets,\u201d Sweeney said. \u201cSome of those will be in what we consider to be some of our noncore markets. But some of that may be land parcels.\u201d<\/p>\n He said the company is looking hard at its land holdings as liquidation targets. <\/p>\n In a message to The Inquirer after the call, Sweeney said that specific properties would be selected for disposal early next year. <\/p>\n \u201cWe are looking at our entire portfolio and haven\u2019t really selected any specific project,\u201d Sweeney said. \u201cMy guess is that Philly area assets could be a part of the \u201927 program.\u201d<\/p>\n Although Philadelphia\u2019s office sector has been in turmoil<\/a> following the pandemic, Brandywine has been one of the few winners. The company\u2019s top-of-the-market buildings have attracted and retained tenants as many other older buildings have seen soaring vacancies<\/a>. <\/p>\n In the city, 96% of Brandywine\u2019s office holdings are leased. In the first nine months of 2026, 60% of all new leasing in University City<\/a> and Center City<\/a> were in Brandywine buildings, even though their market share is just 15% in those locations.<\/p>\n In the Philadelphia suburbs, Brandywine\u2019s properties are 93% leased, but its Austin portfolio continues to lag with an occupancy rate of 66%. <\/p>\n 2027 looks stable in terms of its existing tenancy. Only two companies with leases over 30,000 square feet of space in Brandywine\u2019s portfolio expire next year, and both are expected to renew.<\/p>\n On the earnings call, Sweeney was asked for more information on the sale of 3151 Market St<\/a>., built to host laboratory space, and what it said about the company\u2019s push into the life sciences market, which has been struggling in recent years.<\/p>\n \u201cClearly, the life science market changed since we commenced construction of that project,\u201d Sweeney said. \u201cDemand drivers are still there, but they\u2019re much more muted than the demand levels were several years ago.\u201d<\/p>\n He said they had pivoted to a mixed office-and-lab strategy and had promising conversations with potential tenants, but the sale to Burlington Stores provided a solid base for Brandywine\u2019s larger Schuylkill Yards ambitions<\/a>. <\/p>\n \u201cThe decision for us came down to this: We had the ability through that building to bring a Fortune 500 company with over 2,000 employees \u2026 to further cement Schuylkill Yards as the place to be with mass transit access in the city,\u201d Sweeney said.<\/p>\n