Brandywine Forms JV with Creek Investments - Analyst Blog
December 21 2011 - 12:15PM
Zacks
Brandywine Realty (BDN) recently announced that
it has formed a joint venture (JV) with Current Creek Investments,
a wholly owned subsidiary of The Allstate
Corporation (ALL). Both Current Creek and Brandywine will
own 50% interest in three metropolitan DC properties contributed by
Brandywine. The joint venture bought the properties from Brandywine
for $156.0 million.
The joint venture secured $90.0 million of non-recourse property
financings with a weighted-average maturity of 7.4 years.
Brandywine will provide property management, leasing, and
construction management services in the venture.
Brandywine has received proceeds worth $120.1 million after
deducting the costs associated with the formation of the JV. The
net proceeds from the transaction will be used to reduce the
company's debt under its unsecured revolving credit facility and
for other general corporate purposes.
Additionally, Current Creek and Brandywine have each allocated
$75 million in equity to pursue additional office property
investments in the metropolitan DC sub markets. This venture is a
win-win situation for both the partners and will enable them to
enhance their respective portfolios and expand their
relationship.
The company reported funds from operations (FFO) of $60.3
million or 41 cents per share in the third quarter of 2011 compared
with $45.6 million or 32 cents per share in the year-earlier
quarter. Fund from operations, a widely used metric to gauge the
performance of REITs, is obtained after adding depreciation and
amortization and other non-cash expenses to net income.
Brandywine Realty is one of the largest, publicly traded
integrated real estate companies in the United States. Brandywine
owns, develops, manages and has ownership interests in a primarily
Class A, suburban and urban office portfolio comprising 307
properties spanning 35.1 million square feet.
Brandywine Realty currently retains a Zacks #3 Rank, which
translates into a short-term Hold rating. We are also maintaining
our long-term Neutral recommendation on the stock.
ALLSTATE CORP (ALL): Free Stock Analysis Report
ALLSTATE CORP (ALL): Free Stock Analysis Report
BRANDYWINE RT (BDN): Free Stock Analysis Report
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