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Brandywine Realty Trust Announces Third Quarter 2024 Results And Adjusts And Narrows 2024 Guidance

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Brandywine Realty Trust (NYSE:BDN) reported its Q3 2024 financial results, adjusting and narrowing its 2024 FFO guidance to $0.89-$0.92 per share. Key highlights include:

- Net loss of $(165.5) million, or $(0.96) per share, including $(161.4) million in non-cash impairment charges
- FFO of $39.8 million, or $0.23 per diluted share
- Core portfolio 87.2% occupied and 88.7% leased
- Raised speculative revenue target to $26.3 million, 100% achieved
- Increased annual tenant retention rate by 3.0%
- Completed sale of five Class-B office properties for $65.5 million
- Raised 2024 asset sales target to $150 million at midpoint

The company reported strong progress on its 2024 business plan, exceeding many targets. However, it removed land sales from the plan, impacting earnings by approximately $0.03 per share.

Brandywine Realty Trust (NYSE:BDN) ha riportato i risultati finanziari per il terzo trimestre del 2024, rivedendo e restringendo la previsione FFO per il 2024 a $0.89-$0.92 per azione. I punti salienti includono:

- Perdita netta di $(165.5) milioni, ovvero $(0.96) per azione, comprendente $(161.4) milioni in oneri da svalutazione non monetaria
- FFO di $39.8 milioni, o $0.23 per azione diluita
- Portafoglio principale occupato all'87.2% e affittato all'88.7%
- Obiettivo di reddito speculativo aumentato a $26.3 milioni, raggiunto al 100%
- Aumento del tasso di fidelizzazione annuale degli inquilini del 3.0%
- Vendita completata di cinque proprietà per uffici di classe B per $65.5 milioni
- Aumento dell'obiettivo di vendita di attivi per il 2024 a $150 milioni al midpoint

L'azienda ha riportato forti progressi nel suo piano aziendale per il 2024, superando molti obiettivi. Tuttavia, ha rimosso le vendite di terreni dal piano, influenzando gli utili di circa $0.03 per azione.

Brandywine Realty Trust (NYSE:BDN) reportó sus resultados financieros del tercer trimestre de 2024, ajustando y acotando su guía de FFO para 2024 a $0.89-$0.92 por acción. Los aspectos destacados incluyen:

- Pérdida neta de $(165.5) millones, o $(0.96) por acción, incluyendo $(161.4) millones en cargos por deterioro no monetarios
- FFO de $39.8 millones, o $0.23 por acción diluida
- Cartera principal ocupada al 87.2% y arrendada al 88.7%
- Aumento del objetivo de ingresos especulativos a $26.3 millones, alcanzado al 100%
- Incremento de la tasa de retención anual de inquilinos del 3.0%
- Venta completada de cinco propiedades de oficinas de clase B por $65.5 millones
- Aumento del objetivo de ventas de activos para 2024 a $150 millones en el punto medio.

La compañía reportó un fuerte progreso en su plan de negocios para 2024, superando muchos objetivos. Sin embargo, eliminó las ventas de terrenos del plan, lo que afectará las ganancias en aproximadamente $0.03 por acción.

브랜디와인 리얼티 트러스트 (NYSE:BDN)는 2024년 3분기 재무 결과를 보고하며, 2024년 FFO 예상치를 주당 $0.89-$0.92로 조정하고 좁혔습니다. 주요 사항은 다음과 같습니다:

- 순손실 $(165.5) 백만 달러, 주당 $(0.96), 비현금 손상 비용 $(161.4) 백만 달러 포함
- FFO $39.8 백만 달러, 주당 $0.23
- 주요 포트폴리오 87.2% 점유 및 88.7% 임대
- 투기적 수익 목표를 $26.3 백만 달러로 상향 조정, 100% 달성
- 연간 세입자 유지율을 3.0% 증가
- $65.5 백만 달러에 5개의 B급 오피스 자산 매각 완료
- 2024년 자산 매각 목표를 중간값 $150 백만 달러로 상향 조정

회사는 2024년 사업 계획에서 강력한 진전을 보고하며 많은 목표를 초과 달성했습니다. 그러나 토지 판매를 계획에서 제외하여 주당 약 $0.03의 수익에 영향을 미쳤습니다.

Brandywine Realty Trust (NYSE:BDN) a publié ses résultats financiers pour le troisième trimestre 2024, ajustant et resserrant ses prévisions de FFO pour 2024 entre $0.89 et $0.92 par action. Les points saillants incluent :

- Perte nette de $(165.5) millions, soit $(0.96) par action, comprenant $(161.4) millions de charges de dépréciation non monétaires
- FFO de $39.8 millions, ou $0.23 par action diluée
- Portefeuille principal occupé à 87.2% et loué à 88.7%
- Objectif de revenus spéculatifs porté à $26.3 millions, atteint à 100%
- Taux de fidélisation des locataires annuel augmenté de 3.0%
- Vente de cinq propriétés de bureaux de classe B pour $65.5 millions complétée
- Objectif de ventes d'actifs 2024 relevé à $150 millions au niveau médian

L'entreprise a déclaré avoir réalisé des avancées significatives dans son plan d'affaires 2024, dépassant de nombreux objectifs. Cependant, elle a éliminé les ventes de terrains du plan, ce qui a affecté les bénéfices d'environ $0.03 par action.

Brandywine Realty Trust (NYSE:BDN) hat ihre Finanzresultate für das dritte Quartal 2024 veröffentlicht und die FFO-Prognose für 2024 auf $0.89-$0.92 pro Aktie angepasst und eingegrenzt. Zu den wichtigsten Punkten gehören:

- Nettoverlust von $(165.5) Millionen, oder $(0.96) pro Aktie, einschließlich $(161.4) Millionen an nicht liquiditären Wertminderungen
- FFO von $39.8 Millionen, oder $0.23 pro verwässerter Aktie
- Kerportfolio mit 87.2% besetzt und 88.7% vermietet
- Ziel für spekulative Einnahmen auf $26.3 Millionen erhöht, 100% erreicht
- Jährliche Mieterbindungsquote um 3.0% erhöht
- Verkauf von fünf Bürogebäuden der Klasse B für $65.5 Millionen abgeschlossen
- Ziel für Vermögensverkäufe 2024 auf $150 Millionen im Mittelwert angehoben

Das Unternehmen hat starke Fortschritte bei seinem Geschäftsplan 2024 gemeldet und viele Ziele übertroffen. Es entfernte jedoch Grundstücksverkäufe aus dem Plan, was die Erträge um etwa $0.03 pro Aktie beeinträchtigte.

Positive
  • Raised speculative revenue target to $26.3 million, 100% achieved
  • Increased annual tenant retention rate by 3.0%, exceeding original business plan target
  • Completed sale of five Class-B office properties for $65.5 million
  • Raised 2024 asset sales target to $150 million at midpoint
  • Rental rate mark-to-market increased 14.9% on accrual basis and 8.9% on cash basis
Negative
  • Net loss of $(165.5) million, or $(0.96) per share
  • Non-cash impairment charges of $(161.4) million
  • Removed land sales from 2024 business plan, impacting earnings by $0.03 per share
  • Same store NOI decreased (2.0%) on an accrual basis
  • Adjusted and narrowed 2024 FFO guidance downward to $0.89-$0.92 per share

Insights

Brandywine Realty Trust's Q3 2024 results reveal a mixed financial picture. The company reported a significant net loss of $165.5 million ($0.96 per share), largely due to non-cash impairment charges of $161.4 million. However, Funds from Operations (FFO) remained positive at $39.8 million ($0.23 per diluted share), though down from $50.6 million in Q3 2023.

Key financial metrics show some concerning trends:

  • Core portfolio occupancy decreased to 87.2% from 89.0% year-over-year
  • Same-store NOI decreased 2.0% on an accrual basis
  • Tenant retention rate was low at 42% with negative absorption

On the positive side, rental rate growth was strong at 14.9% on an accrual basis. The company also completed a $65.5 million asset sale, demonstrating progress on its capital recycling strategy. However, the removal of land sales from the 2024 business plan and the narrowing of FFO guidance to $0.89-$0.92 per share suggest some headwinds in the near term.

Brandywine's Q3 results reflect the ongoing challenges in the office real estate sector. The 87.2% occupancy rate, while concerning, is not atypical given current market conditions. The company's focus on increasing its speculative revenue target and tenant retention rate shows proactive management in a difficult environment.

The 14.9% rental rate growth on new leases is a bright spot, indicating that despite lower occupancy, Brandywine can still command premium rates for its properties. This suggests that the quality and location of their assets remain attractive to tenants.

The increased asset sales target from $90 million to $150 million at midpoint demonstrates a strategic shift towards portfolio optimization. However, the removal of land sales from the 2024 plan indicates a softening in the development market, which could impact long-term growth prospects.

The joint venture activity, particularly the increased stake in Commerce Square, shows Brandywine's commitment to core assets, but the associated impairment charge highlights the valuation pressures in the current market. Overall, Brandywine is navigating a challenging market with a mix of defensive and opportunistic strategies.

PHILADELPHIA, Oct. 22, 2024 (GLOBE NEWSWIRE) -- Brandywine Realty Trust (NYSE:BDN) today reported its financial and operating results for the three and nine-month periods ended September 30, 2024.

Management Comments

“During the third quarter we made strong progress on our 2024 business plan highlighted by exceeding many of our targets and for the second consecutive quarter raising both our speculative revenue target and our annual tenant retention rate,” stated Gerard H. Sweeney, President and Chief Executive Officer for Brandywine Realty Trust.  “Based on our 2024 leasing activity, we are raising our speculative revenue target to $26.3 million and this revised target is 100% achieved and represents a 7% increase over our original business plan. In addition, we increased our annual tenant retention rate by 3.0% placing us over 10 percentage points above our original 2024 business plan target. Turning to the capital markets, we made progress on our asset sales target by selling an office portfolio in the Pennsylvania suburbs for $65.5 million and, at the midpoint, we have raised our 2024 asset sales target from $90 million to $150 million. Despite continued improvement in the real estate sales market, we are removing land sales from our 2024 business plan that were projected to generate approximately $5.0 million of earnings, or $0.03 per share. Based on the changes made to our 2024 business plan we are adjusting and further narrowing our FFO range from $0.91 to $0.96 per share to $0.89 to $0.92 per share.”

Third Quarter Highlights

Financial Results

  • Net loss available to common shareholders: $(165.5) million, or $(0.96) per share. Our results include $(161.4) million, or $(0.93) per share, of non-cash impairment charges.
  • Funds from Operations (FFO): $39.8 million, or $0.23 per diluted share.

Portfolio Results

  • Core Portfolio: 87.2% occupied and 88.7% leased.
  • New and Renewal Leases Signed: 298,000 square feet wholly-owned and 558,000 square feet including our joint ventures.
  • Tenant Retention Ratio: 42%.
  • Rental Rate Mark-to-Market: Increased 14.9% on an accrual basis and 8.9% on a cash basis.
  • Same Store Results: Decreased (2.0%) on an accrual basis and increased 1.6% on a cash basis.

Disposition Activity

  • On September 26, 2024, we completed the sale of five Class-B office properties in Plymouth Meeting, Pennsylvania for a gross sales price of $65.5 million. After closing costs and credits, we received net cash proceeds of $44.1 million and provided seller financing to the buyer. The seller financing totaled $15.5 million and has an initial interest rate of 8.25% and matures in 2034 and is subordinate to a first mortgage. Prior to the sale we recognized an impairment loss of $3.3 million on the properties based upon the executed purchase and sale agreement during the third quarter of 2024.

Joint Venture Activity

  • On August 26, 2024, we entered into an agreement to pay down $23 million of the preferred equity position from our current partner in our Commerce Square joint venture, increasing our total interest in the venture to 84%. In connection with the agreed upon transaction, we obtained a 3rd party appraisal, which resulted in the venture impairing our common equity position down to the appraised value. We recorded a $(116.5) million impairment through its equity in loss of unconsolidated real estate ventures during the third quarter as a result of the impairment. During 2020 when we sold a preferred equity interest in the Commerce Square joint venture, we recognized a net gain on disposition of real estate totaling $271.9 million.

Finance Activity

  • We had $40.0 million outstanding balance on our $600.0 million unsecured revolving credit facility as of September 30, 2024.
  • We had $36.5 million of cash and cash equivalents on-hand as of September 30, 2024.

Results for the Three and Nine-Month Periods Ended September 30, 2024

Net loss allocated to common shares totaled $(165.5) million or $(0.96) per share in the third quarter of 2024 compared to a net loss of $(21.7) million or $(0.13) per diluted share in the third quarter of 2023. The 2024 results include impairment losses totaling $(161.4) million, or $(0.93) per share. The 2023 results include an impairment loss totaling $(11.7) million, or $(0.07) per share.

FFO available to common shares and units in the third quarter of 2024 totaled $39.8 million or $0.23 per diluted share versus $50.6 million or $0.29 per diluted share in the third quarter of 2023. Our third quarter 2024 payout ratio ($0.15 common share distribution / $0.23 FFO per diluted share) was 65.2%.

Net loss allocated to common shares totaled $(152.3) million or $(0.88) per share for the first nine months of 2024 compared to net loss of $(39.9) million or $(0.23) per diluted share in the first nine months of 2023.   The 2024 results include impairment losses totaling $(167.8) million or $(0.97) per share and one-time, non-cash income related to the reversal of our negative investment balance in an unconsolidated joint venture totaling $53.8 million, or $0.31 per share. The 2023 results include impairment losses totaling $(16.1) million, or $(0.09) per share.

Our FFO available to common shares and units for the first nine months of 2024 totaled $119.0 million, or $0.68 per diluted share compared to FFO available to common shares and units of $151.1 million, or $0.87 per diluted share, for the first nine months of 2023.   Our first nine months 2024 FFO payout ratio ($0.45 common share distribution / $0.68 FFO per diluted share) was 66.2%.

Operating and Leasing Activity

In the third quarter of 2024, our Net Operating Income (NOI), excluding termination revenues, bad debt expense and other income items, decreased (2.0)% on an accrual basis and increased 1.6% on a cash basis for our 63 same store properties, which were 87.0% and 89.0% occupied on September 30, 2024 and 2023, respectively.

We leased approximately 298,000 square feet and commenced occupancy on 175,000 square feet during the third quarter of 2024. The third quarter occupancy activity includes 102,000 square feet of renewals and 73,000 square feet of new leases. We have an additional 185,000 square feet of executed new leasing scheduled to commence subsequent to September 30, 2024.

Our tenant retention ratio was 42% in our core portfolio with net negative absorption of (68,000) square feet during the third quarter of 2024. Third quarter accrual rental rate growth increased 14.3% on our renewal leasing and 18.0% on new leasing.

At September 30, 2024 our core portfolio of 64 properties comprising 12.2 million square feet was 87.2% occupied and 88.7% leased (reflecting new leases commencing after September 30, 2024) as of October 18, 2024.

Distributions

On September 25, 2024, our Board of Trustees declared a quarterly dividend distribution of $0.15 per common share that will be paid on October 24, 2024 to shareholders of record as of October 9, 2024.

2024 Earnings and FFO Guidance

Based on current plans and assumptions and subject to the risks and uncertainties more fully described in our Securities and Exchange Commission filings, we are adjusting our 2024 loss per share guidance from $(0.01) - $0.04 to $(1.01) - $(0.98) per share and adjusting our 2024 FFO guidance from $0.91 - $0.96 to $0.89 - $0.92 per diluted share. This guidance is provided for informational purposes and is subject to change. The following is a reconciliation of the calculation of 2024 FFO and earnings per diluted share:

Guidance for 2024 Range
    
Loss per diluted share allocated to common shareholders $(1.01) to $(0.98)
Plus: real estate depreciation, amortization 1.24   1.24
Plus: real estate impairments 0.97   0.97
Less:  net gain on real estate venture transactions (0.31)  (0.31)
FFO per diluted share $0.89 to $0.92
 

Our 2024 FFO key assumptions include:

  • Year-end Core Occupancy Range: 87-88%;
  • Year-end Core Leased Range: 88-89%;
  • Rental Rate Growth (accrual): 12-13%;
  • Rental Rate Growth (cash): 1-2%;
  • Same Store (accrual) NOI Growth Range: (1)-1%;
  • Same Store (cash) NOI Growth Range: 1-3%;
  • Speculative Revenue Target: Increased $0.8 million from $25.0 - $26.0 million midpoint to $26.3 million, 100% achieved as of October 18, 2024;
  • Tenant Retention Rate Range: 59-60% increased to 62-63%:   300 Basis Point Improvement at the mid-point and a 10% improvement as compared to our initial business plan;
  • Interest Expense Range: $125 - $130 million;
  • Property Acquisition Activity: None;
  • Property Sales Activity (excluding land): Increased to $140 - $160 million from $80 - $100 million;
  • Joint Venture Activity: Completed the refinancing/recapitalization of our MAP, Cira Square and Mid-Atlantic joint ventures and formation of a new 50/50 joint venture;
  • Development Starts: None;
  • Land Sale Income: reduced from $5.0 million to None;
  • Financing Activity: Completed the refinance of our 2024 Notes ($335.1 million outstanding);
  • Share Buyback Activity: None;
  • Annual earnings and FFO per diluted share based on 176.0 million fully diluted weighted average common shares.

About Brandywine Realty Trust

Brandywine Realty Trust (NYSE: BDN) is one of the largest, publicly traded, full-service, integrated real estate companies in the United States with a core focus in the Philadelphia and Austin markets. Organized as a real estate investment trust (REIT), we own, develop, lease and manage an urban, town center and transit-oriented portfolio comprising 147 properties and 21.1 million square feet as of September 30, 2024. Our purpose is to shape, connect and inspire the world around us through our expertise, the relationships we foster, the communities in which we live and work, and the history we build together. For more information, please visit www.brandywinerealty.com.

Conference Call and Audio Webcast

We will release our third quarter earnings after the market close on Tuesday, October 22, 2024 and will hold our third quarter conference call on Wednesday, October 23, 2024 at 9:00 a.m. Eastern Time.  To access the conference call by phone, please visit this link here, and you will be provided with dial in details.  A live webcast of the conference call will also be available on the Investor Relations page of our website at www.brandywinerealty.com.

Supplemental Information

We produce supplemental information that includes details regarding the performance of the portfolio, financial information, non-GAAP financial measures, same-store information and other useful information for investors. The supplemental information is available via our website, www.brandywinerealty.com, through the “Investor Relations” section.

Looking Ahead – Fourth Quarter 2024 Conference Call

We expect to release our fourth quarter 2024 earnings on Tuesday, February 4, 2025 after the market close and will host our fourth quarter 2024 conference call on Wednesday, February 5, 2025 at 9:00 a.m. Eastern. We expect to issue a press release in advance of these events to reconfirm the dates and times and provide all related information.

Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “will,” “strategy,” “expects,” “seeks,” “believes,” “potential,” or other similar words. Because such statements involve known and unknown risks, uncertainties and contingencies, actual results may differ materially from the expectations, intentions, beliefs, plans or predictions of the future expressed or implied by such forward-looking statements. These forward-looking statements, including our 2024 guidance, are based upon the current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and not within our control. Such risks, uncertainties and contingencies include, among others: risks related to the impact of other potential future outbreaks of infectious diseases on our financial condition, results of operations and cash flows and those of our tenants as well as on the economy and real estate and financial markets; reduced demand for office space and pricing pressures, including from competitors, changes to tenant work patterns that could limit our ability to lease space or set rents at expected levels or that could lead to declines in rent; uncertainty and volatility in capital and credit markets, including changes that reduce availability, and increase costs, of capital or that delay receipt of future debt financings and refinancings; the effect of inflation and interest rate fluctuations, including on the costs of our planned debt financings and refinancings; the potential loss or bankruptcy of tenants or the inability of tenants to meet their rent and other lease obligations; risks of acquisitions and dispositions, including unexpected liabilities and integration costs; delays in completing, and cost overruns incurred in connection with, our developments and redevelopments; disagreements with joint venture partners; unanticipated operating and capital costs; uninsured casualty losses and our ability to obtain adequate insurance, including coverage for terrorist acts; additional asset impairments; our dependence upon certain geographic markets; changes in governmental regulations, tax laws and rates and similar matters; unexpected costs of REIT qualification compliance; costs and disruptions as the result of a cybersecurity incident or other technology disruption; reliance on key personnel; and failure to maintain an effective system of internal control, including internal control over financial reporting. The declaration and payment of future dividends (both timing and amount) is subject to the determination of our Board of Trustees, in its sole discretion, after considering various factors, including our financial condition, historical and forecast operating results, and available cash flow, as well as any applicable laws and contractual covenants and any other relevant factors. Our Board’s practice regarding declaration of dividends may be modified at any time and from time to time. Additional information on factors which could impact us and the forward-looking statements contained herein are included in our filings with the Securities and Exchange Commission, including our Form 10-K for the year ended December 31, 2023 and our Form 10-Q for the quarter ended June 30, 2024. We assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events except as required by law.

Non-GAAP Supplemental Financial Measures

We compute our financial results in accordance with generally accepted accounting principles (GAAP). Although FFO and NOI are non-GAAP financial measures, we believe that FFO and NOI calculations are helpful to shareholders and potential investors and are widely recognized measures of real estate investment trust performance. At the end of this press release, we have provided a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measure.

Funds from Operations (FFO)

We compute FFO in accordance with standards established by the National Association of Real Estate Investment Trusts (NAREIT), which may not be comparable to FFO reported by other REITs that do not compute FFO in accordance with the NAREIT definition, or that interpret the NAREIT definition differently than us. NAREIT defines FFO as net income (loss) before non-controlling interests and excluding gains (losses) on sales of depreciable operating property, impairment losses on depreciable consolidated real estate, impairment losses on investments in unconsolidated real estate ventures and extraordinary items (computed in accordance with GAAP); plus real estate related depreciation and amortization (excluding amortization of deferred financing costs), and after similar adjustments for unconsolidated joint ventures. Net income, the GAAP measure that we believe to be most directly comparable to FFO, includes depreciation and amortization expenses, gains or losses on property sales, extraordinary items and non-controlling interests. To facilitate a clear understanding of our historical operating results, FFO should be examined in conjunction with net income (determined in accordance with GAAP) as presented in the financial statements included elsewhere in this release. FFO does not represent cash flow from operating activities (determined in accordance with GAAP) and should not be considered to be an alternative to net income (loss) (determined in accordance with GAAP) as an indication of our financial performance or to be an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of our liquidity, nor is it indicative of funds available for our cash needs, including our ability to make cash distributions to shareholders. We generally consider FFO and FFO per share to be useful measures for understanding and comparing our operating results because, by excluding gains and losses related to sales of previously depreciated operating real estate assets, impairment losses and real estate asset depreciation and amortization (which can differ across owners of similar assets in similar condition based on historical cost accounting and useful life estimates), FFO and FFO per share can help investors compare the operating performance of a company’s real estate across reporting periods and to the operating performance of other companies.

Net Operating Income (NOI)

NOI (accrual basis) is a financial measure equal to net income available to common shareholders, the most directly comparable GAAP financial measure, plus corporate general and administrative expense, depreciation and amortization, interest expense, non-controlling interest in the Operating Partnership and losses from early extinguishment of debt, less interest income, development and management income, gains from property dispositions, gains on sale from discontinued operations, gains on early extinguishment of debt, income from discontinued operations, income from unconsolidated joint ventures and non-controlling interest in property partnerships. In some cases we also present NOI on a cash basis, which is NOI after eliminating the effects of straight-lining of rent and deferred market intangible amortization. NOI presented by us may not be comparable to NOI reported by other REITs that define NOI differently. NOI should not be considered an alternative to net income as an indication of our performance or to cash flows as a measure of the Company's liquidity or its ability to make distributions. We believe NOI is a useful measure for evaluating the operating performance of our properties, as it excludes certain components from net income available to common shareholders in order to provide results that are more closely related to a property's results of operations. We use NOI internally to evaluate the performance of our operating segments and to make decisions about resource allocations. We concluded that NOI provides useful information to investors regarding our financial condition and results of operations, as it reflects only the income and expense items incurred at the property level, as well as the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and development activity on an unlevered basis.

Same Store Properties

In our analysis of NOI, particularly to make comparisons of NOI between periods meaningful, it is important to provide information for properties that were in-service and owned by us throughout each period presented. We refer to properties acquired or placed in-service prior to the beginning of the earliest period presented and owned by us through the end of the latest period presented as Same Store Properties. Same Store Properties therefore exclude properties placed in-service, acquired, repositioned, held for sale or in development or redevelopment after the beginning of the earliest period presented or disposed of prior to the end of the latest period presented. Accordingly, it takes at least one year and one quarter after a property is acquired for that property to be included in Same Store Properties.

Core Portfolio

Our core portfolio is comprised of our wholly-owned properties, excluding any properties currently in development, re-development or re-entitlement.

Speculative Revenue

Speculative Revenue represents the amount of rental revenue the company projects to be recorded during the current calendar year from new and renewal leasing activity in its core portfolio that has yet to be executed as of the beginning of the year. This revenue is primarily attributable to the absorption of core portfolio square footage that was either vacant at the beginning of the year or the renewal of existing tenants due to expire during the current year.

 
BRANDYWINE REALTY TRUST
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except share and per share data)
 
  September 30, 2024 December 31, 2023
ASSETS    
Real estate investments:    
Operating properties $3,421,599  $3,542,232 
Accumulated depreciation  (1,162,471)  (1,131,792)
Right of use asset - operating leases, net  18,565   19,031 
Operating real estate investments, net  2,277,693   2,429,471 
Construction-in-progress  157,288   135,529 
Land held for development  78,259   82,510 
Prepaid leasehold interests in land held for development, net  27,762   27,762 
Total real estate investments, net  2,541,002   2,675,272 
Cash and cash equivalents  36,498   58,319 
Restricted cash and escrow  6,195   9,215 
Accounts receivable  8,669   11,977 
Accrued rent receivable, net of allowance of $1,332 and $2,672 as of September 30, 2024 and December 31, 2023, respectively  187,873   186,708 
Investment in unconsolidated real estate ventures  602,700   601,227 
Deferred costs, net  88,865   95,984 
Intangible assets, net  6,249   7,694 
Other assets  121,509   86,051 
Total assets $3,599,560  $3,732,447 
LIABILITIES AND BENEFICIARIES' EQUITY    
Secured debt, net $272,181  $255,671 
Unsecured credit facility  40,000    
Unsecured term loan, net  331,797   318,499 
Unsecured senior notes, net  1,617,795   1,564,662 
Accounts payable and accrued expenses  137,406   123,825 
Distributions payable  26,230   26,017 
Deferred income, gains and rent  21,453   24,248 
Intangible liabilities, net  7,558   8,270 
Lease liability - operating leases  23,502   23,369 
Other liabilities  16,908   63,729 
Total liabilities $2,494,830  $2,408,290 
Brandywine Realty Trust's Equity:    
Common Shares of Brandywine Realty Trust's beneficial interest, $0.01 par value; shares authorized 400,000,000; 172,665,995 and 172,097,661 issued and outstanding as of September 30, 2024 and December 31, 2023, respectively  1,724   1,719 
Additional paid-in-capital  3,178,214   3,163,949 
Deferred compensation payable in common shares  20,456   19,965 
Common shares in grantor trust, 1,221,333 and 1,194,127 issued and outstanding as of September 30, 2024 and December 31, 2023, respectively  (20,456)  (19,965)
Cumulative earnings  827,991   979,406 
Accumulated other comprehensive income  (3,773)  (668)
Cumulative distributions  (2,905,554)  (2,827,022)
Total Brandywine Realty Trust's equity  1,098,602   1,317,384 
Noncontrolling interests  6,128   6,773 
Total beneficiaries' equity $1,104,730  $1,324,157 
Total liabilities and beneficiaries' equity $3,599,560  $3,732,447 
     


BRANDYWINE REALTY TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except share and per share data)
 
  Three Months Ended September 30, Nine Months Ended September 30,
   2024   2023   2024   2023 
Revenue        
Rents $117,958  $121,661  $354,975  $360,642 
Third party management fees, labor reimbursement and leasing  6,093   6,553   17,685   18,782 
Other  7,731   1,158   10,952   5,057 
Total revenue  131,782   129,372   383,612   384,481 
Operating expenses        
Property operating expenses  31,900   31,123   95,532   96,608 
Real estate taxes  11,892   12,808   37,019   38,981 
Third party management expenses  2,487   2,468   7,456   7,664 
Depreciation and amortization  44,301   48,966   133,530   141,645 
General and administrative expenses  12,681   8,069   32,726   26,911 
Provision for impairment  37,980   11,666   44,407   16,134 
Total operating expenses  141,241   115,100   350,670   327,943 
Gain on sale of real estate        
Net gain on sale of undepreciated real estate           781 
Total gain on sale of real estate           781 
Operating income (loss)  (9,459)  14,272   32,942   57,319 
Other income (expense):        
Interest and investment income  639   293   2,572   1,318 
Interest expense  (30,561)  (24,355)  (85,104)  (70,677)
Interest expense - amortization of deferred financing costs  (1,247)  (1,110)  (3,753)  (3,251)
Equity in loss of unconsolidated real estate ventures  (125,862)  (10,739)  (153,957)  (24,504)
Net gain on real estate venture transactions  770      54,503   181 
Gain on early extinguishment of debt        941    
Net loss before income taxes  (165,720)  (21,639)  (151,856)  (39,614)
Income tax benefit (provision)     3   (11)  (35)
Net loss  (165,720)  (21,636)  (151,867)  (39,649)
Net loss attributable to noncontrolling interests  500   82   452   140 
Net loss attributable to Brandywine Realty Trust  (165,220)  (21,554)  (151,415)  (39,509)
Nonforfeitable dividends allocated to unvested restricted shareholders  (276)  (159)  (889)  (433)
Net loss attributable to Common Shareholders of Brandywine Realty Trust $(165,496) $(21,713) $(152,304) $(39,942)
PER SHARE DATA        
Basic loss per Common Share $(0.96) $(0.13) $(0.88) $(0.23)
Basic weighted average shares outstanding  172,668,731   172,097,661   172,480,325   171,912,552 
Diluted loss per Common Share $(0.96) $(0.13) $(0.88) $(0.23)
Diluted weighted average shares outstanding  172,668,731   172,097,661   172,480,325   171,912,552 


 
BRANDYWINE REALTY TRUST
FUNDS FROM OPERATIONS
(unaudited, in thousands, except share and per share data)
 
  Three Months Ended September 30, Nine Months Ended September 30,
   2024   2023   2024   2023 
Net loss attributable to common shareholders $(165,496) $(21,713) $(152,304) $(39,942)
Add (deduct):        
Net loss attributable to noncontrolling interests - LP units  (497)  (62)  (455)  (119)
Nonforfeitable dividends allocated to unvested restricted shareholders  276   159   889   433 
Net loss on real estate venture transactions  (7,929)     (61,662)  (181)
Provision for impairment  37,426   11,666   43,853   16,134 
Company's share of impairment of an unconsolidated real estate venture  123,376      123,376    
Depreciation and amortization:        
Real property  38,584   40,493   116,069   118,242 
Leasing costs including acquired intangibles  4,862   7,594   14,785   20,837 
Company’s share of unconsolidated real estate ventures  9,636   12,840   35,782   36,549 
Partners’ share of consolidated real estate ventures  (6)  (8)  (6)  (16)
Funds from operations $40,232  $50,969  $120,327  $151,937 
Funds from operations allocable to unvested restricted shareholders  (420)  (347)  (1,306)  (880)
Funds from operations available to common share and unit holders (FFO) $39,812  $50,622  $119,021  $151,057 
FFO per share - fully diluted $0.23  $0.29  $0.68  $0.87 
Weighted-average shares/units outstanding — fully diluted  175,997,959   173,236,769   175,238,507   172,954,267 
Distributions paid per common share $0.15  $0.19  $0.45  $0.57 
FFO payout ratio (distributions paid per common share/FFO per diluted share)  65%  66%  66%  66%
 

BRANDYWINE REALTY TRUST
SAME STORE OPERATIONS – 3rd QUARTER
(unaudited and in thousands)  

Of the 67 properties owned by the Company as of September 30, 2024, a total of 63 properties ("Same Store Properties") containing an aggregate of 11.9 million net rentable square feet were owned for the entire three months ended September 30, 2024 and 2023. As of September 30, 2024, two properties were recently completed, and two properties were in development/redevelopment. The Same Store Properties were 87.0% and 89.0% occupied as of September 30, 2024 and 2023, respectively. The following table sets forth revenue and expense information for the Same Store Properties:

  Three Months Ended September 30,
   2024   2023 
Revenue    
Rents $107,250  $108,450 
Other  267   233 
Total revenue  107,517   108,683 
Operating expenses    
Property operating expenses  27,815   27,662 
Real estate taxes  10,787   11,631 
Net operating income $68,915  $69,390 
Net operating income - percentage change over prior year  (0.7)%  
Net operating income, excluding other items $68,326  $69,719 
Net operating income, excluding other items - percentage change over prior year  (2.0)%  
Net operating income $68,915  $69,390 
Straight line rents & other  1,019   (878)
Above/below market rent amortization  (225)  (268)
Amortization of tenant inducements  213   136 
Non-cash ground rent expense  239   249 
Cash - Net operating income $70,161  $68,629 
Cash - Net operating income - percentage change over prior year  2.2%  
Cash - Net operating income, excluding other items $69,317  $68,197 
Cash - Net operating income, excluding other items - percentage change over prior year  1.6%  
  Three Months Ended September 30,
   2024   2023 
Net loss: $(165,720) $(21,636)
Add/(deduct):    
Interest and investment income  (639)  (293)
Interest expense  30,561   24,355 
Interest expense - amortization of deferred financing costs  1,247   1,110 
Equity in loss of unconsolidated real estate ventures  125,862   10,739 
Net gain on real estate venture transactions  (770)   
Depreciation and amortization  44,301   48,966 
General & administrative expenses  12,681   8,069 
Income tax provision     (3)
Provision for impairment  37,980   11,666 
Consolidated net operating income  85,503   82,973 
Less: Net operating income of non-same store properties and elimination of non-property specific operations  (16,588)  (13,583)
Same store net operating income $68,915  $69,390 
     

BRANDYWINE REALTY TRUST
SAME STORE OPERATIONS – NINE MONTHS
(unaudited and in thousands)  

Of the 67 properties owned by the Company as of September 30, 2024, a total of 63 properties ("Same Store Properties") containing an aggregate of 11.9 million net rentable square feet were owned for the entire nine months ended September 30, 2024 and 2023. As of September 30, 2024, two properties were recently completed, and two properties were in development/redevelopment. The Same Store Properties were 87.0% and 89.0% occupied as of September 30, 2024 and 2023, respectively. The following table sets forth revenue and expense information for the Same Store Properties:

  Nine Months Ended September 30,
   2024   2023 
Revenue    
Rents $321,266  $324,026 
Other  798   757 
Total revenue  322,064   324,783 
Operating expenses    
Property operating expenses  84,022   84,668 
Real estate taxes  33,871   34,934 
Net operating income $204,171  $205,181 
Net operating income - percentage change over prior year  (0.5)%  
Net operating income, excluding other items $204,262  $205,322 
Net operating income, excluding other items - percentage change over prior year  (0.5)%  
Net operating income $204,171  $205,181 
Straight line rents & other  (173)  (5,704)
Above/below market rent amortization  (706)  (839)
Amortization of tenant inducements  563   398 
Non-cash ground rent expense  722   753 
Cash - Net operating income $204,577  $199,789 
Cash - Net operating income - percentage change over prior year  2.4%  
Cash - Net operating income, excluding other items $203,762  $197,829 
Cash - Net operating income, excluding other items - percentage change over prior year  3.0%  
  Nine Months Ended September 30,
   2024   2023 
Net loss: $(151,867) $(39,649)
Add/(deduct):    
Interest income  (2,572)  (1,318)
Interest expense  85,104   70,677 
Interest expense - amortization of deferred financing costs  3,753   3,251 
Equity in loss of unconsolidated real estate ventures  153,957   24,504 
Net gain on real estate venture transactions  (54,503)  (181)
Net gain on sale of undepreciated real estate     (781)
Gain on early extinguishment of debt  (941)   
Depreciation and amortization  133,530   141,645 
General & administrative expenses  32,726   26,911 
Income tax provision  11   35 
Provision for impairment  44,407   16,134 
Consolidated net operating income  243,605   241,228 
Less: Net operating income of non-same store properties and elimination of non-property specific operations  (39,434)  (36,047)
Same store net operating income $204,171  $205,181 
 

Company / Investor Contact:
Tom Wirth
EVP & CFO
610-832-7434
tom.wirth@bdnreit.com


FAQ

What was Brandywine Realty Trust's (BDN) FFO for Q3 2024?

Brandywine Realty Trust's FFO for Q3 2024 was $39.8 million, or $0.23 per diluted share.

How did Brandywine Realty Trust (BDN) adjust its 2024 FFO guidance?

Brandywine Realty Trust adjusted and narrowed its 2024 FFO guidance from $0.91-$0.96 to $0.89-$0.92 per diluted share.

What was the occupancy rate of Brandywine Realty Trust's (BDN) core portfolio as of September 30, 2024?

Brandywine Realty Trust's core portfolio was 87.2% occupied and 88.7% leased as of September 30, 2024.

How much did Brandywine Realty Trust (BDN) raise its 2024 asset sales target?

Brandywine Realty Trust raised its 2024 asset sales target from $90 million to $150 million at the midpoint.

Brandywine Realty Trust

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