Brandywine Realty Trust is closing in on signing a tenant that would take over a full floor of lab space at its Cira Centre building at 2929 Arch St. in University City.
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The Philadelphia-based public real estate firm is in the midst of negotiations with an unnamed tenant to lease a 27K SF chunk of the 28-story building, according to an earnings call this week reported on by the Philadelphia Business Journal. That space is now being built out as an expansion of Brandywine’s B+labs incubator.
The potential tenant could be a sign of renewed vitality for University City’s life sciences scene, which was 14.1% vacant in Q2, according to a report from CBRE.
Leasing activity has been sluggish of late, with the city dropping two spots to eighth place in CBRE's most recent annual ranking of top life sciences markets, Bisnow reported last month. But The Wistar Insitute last week announced a $24M expansion at 3675 Market St, set to focus on HIV and other viral illness vaccine research.
The new activity has Brandywine bullish on the potential of its B+labs. Graduate lab space takes up the fully leased ninth floor of Cira Centre, and the incubator space is 91% occupied.
CEO Gerard Sweeney told analysts on the call that Brandywine is considering its growth options there.
“Our B+labs incubator and graduate space programs continue to perform well, so we’re seeing a very healthy pipeline there,” Sweeney said. “So with more capital starting to come back into that market, we’re hoping that we’ll get some near-term growth opportunities coming out of B+labs incubator and B+labs graduate level spaces.”
Brandywine’s newest 400K SF life sciences building at 3151 Market St. also has major prospects eyeing space as its first tenant, although the building will not be ready until the fourth quarter, Sweeney said. Brandywine said tenants are interested in 350K SF at the building, and it is in negotiations for more than one-third of its total square footage.
Brandywine completed a 28-story building at 3025 John F. Kennedy Blvd. a year ago, which has 200K SF of space on the second through eighth floors for office or life sciences tenants.
It pivoted the building to mixed-use in late 2023 and now features 326 residential units above those floors. About 73% of the residential units are leased, along with 15% of the commercial space.
“We are very encouraged with what we’re hearing on the capital raising front,” Sweeney said during the call. “We believe that will generate some additional activity in the near term.”
Brandywine reported $38M in funds from operations over the quarter, down from $50M during the same period of 2023.
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