Radnor’s Brandywine Realty Selling Properties in Response to Nation’s Commercial Real-Estate Decline

By

Photo of Brandywine Realty's Corporate Center in Radnor courtesy of Casaccio Yu Architects.

Sales of U.S. commercial real estate plummeted in February, according to a report in The Wall Street Journal by Peter Grant, signaling that a six-year bull market might be nearing its end.

Just $25.1 billion worth of office buildings, stores, apartment complexes and other commercial property changed hands last month, compared with $47.3 billion in the same month a year earlier, according to deal tracker Real Capital Analytics Inc. In January, sales were $46.2 billion.

Prices, which had been on a steady march higher since 2009, are beginning to plateau, and have started falling in certain sectors and geographies, according to analysts and market participants.

Aware of the trend, Brandywine Realty Trust, based in Radnor, has sold $765 million worth of property this year, including Cira Square, the former U.S. Post Office Building in Philadelphia.

Gerard Sweeney, Brandywine’s chief executive, said the real-estate investment trust is “accelerating” its property sales. “We’ve made the call that given where we are in the real-estate cycle, now is a good time for us to be harvesting value by selling,” he told the Journal.

The Journal indicated that the market has slowed primarily because of forces at work in the global capital markets rather than problems stemming from real estate itself. These forces, which also caused global stock markets to plummet in the first two months of this year, have made debt – the lifeblood of real estate – more expensive and more difficult to obtain.

The most dramatic sign has been the sharp decline in bonds backed by commercial mortgages. In 2015, about $100 billion of commercial mortgage-backed securities were issued. This year experts believe volume will fall to $60 billion to $75 billion.

Click here to read more about Brandywine Realty’s properties sale.

 

Join Our Community

Never miss a Delaware County story!

"*" indicates required fields

Hidden
DT Yes
This field is for validation purposes and should be left unchanged.
Advertisement