Brandywine Realty Trust (BDN - Free Report) is focusing on redevelopment efforts to fortify its office portfolio. Per an article, the company is reportedly enhancing the 150 Radnor Financial Center office campus and will incur capital expenditures worth $14 million.
The 350,000-square-foot office building located in Radnor will be upgraded with communal gathering spaces, a center with numerous glass-enclosed conference rooms and a new café. Further, the lobby and atrium will be redesigned.
This overhaul comes on the heels of other suburban office landlords spending significant amounts in property improvements to modernize these office spaces with various amenities, such as conference centers, dining options, dynamic work areas and outdoor gathering spaces.
Such efforts to refurbish office buildings enable landlords to execute lease deals at favorable terms. In addition, this redevelopment will likely improve tenant retention and productivity, as well as attract new tenants.
In fact, it offers opportunities to capture the prevailing high demand for office space that has shot up owing to recovery in the economy and job market. This is because as the economy revives, business grows and therefore, corporate sectors seek expansion, renting more space to accommodate the increased workforce. This is providing significant impetus to office landlords like Boston Properties, Inc. (BXP - Free Report) , Cousins Properties Incorporated (CUZ - Free Report) and Kilroy Realty Corporation (KRC - Free Report) .
In a statement, the company said that the renovations aim to accomplish that at Radnor Financial “while also creating a stronger sense of community within the workplace”.
Notably, in 2005, it initiated a $25-million renovation at 555 Lancaster to overhaul the interior and exterior of the 238,000-square-foot building.
While these transformative measures will incrementally add value to the company’s properties, such efforts are capital intensive and may hurt short-term margins. Additionally, any hike in interest rate could curb its ability to finance these strategic projects.
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