Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _____________________________________________________________________________________________ FORM 10-Q _____________________________________________________________________________________________ (Mark One) ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2025 or ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exch ...

Group 1 - The commercial real estate market is currently facing significant turmoil due to economic, geopolitical, and public policy uncertainties [1] - These uncertainties have been impacting the market for several months, leading to a lack of clarity in future projections [1]

Core Viewpoint - Brandywine Realty Trust (NYSE: BDN) is identified as an office REIT that has been sold off excessively, suggesting potential undervaluation and investment opportunity [1]. Group 1: Company Overview - Brandywine Realty Trust operates as an office Real Estate Investment Trust (REIT) [1]. - The company is highlighted for its potential to provide stable passive income and possible mean reversion, aligning with value and income-focused investment strategies [1]. Group 2: Investment Perspective - The author emphasizes a focus on high-yield REITs, particularly during the COVID-19 pandemic, indicating a strategic shift towards identifying undervalued assets in the real estate sector [1]. - The investment approach is rooted in fundamental economic insights to assess market trends, which may benefit investors looking for stable income sources [1].

Company Overview - Brandywine Realty Trust (NYSE: BDN) has experienced a 30% decline since the beginning of 2025, resulting in a significant increase in its dividend yield, which was already in double digits at the end of 2024 [1] - The company recently declared a quarterly cash dividend of $0.15 per share [1] Market Context - The equity market is characterized by daily price fluctuations that can lead to substantial wealth creation or destruction over the long term [1] - Pacifica Yield is focused on long-term wealth creation by targeting undervalued high-growth companies, high-dividend stocks, REITs, and green energy firms [1]

Financial Performance - Net loss attributable to common shareholders was $27.4 million, or $0.16 per diluted share, compared to a net loss of $16.7 million, or $0.10 per diluted share in Q1 2024[7]. - Funds from operations (FFO) available to common shareholders for the first quarter of 2025 was $24,663, a decline of 40.0% from $41,181 in the first quarter of 2024[34]. - Basic loss per common share for the first quarter of 2025 was $(0.16), compared to $(0.10) in the first quarter of 2024[32]. - The company reported a net loss attributable to common shareholders of $(27,404) for the first quarter of 2025, compared to $(16,704) in the first quarter of 2024[34]. - The Company reported a net loss of $27.056 million in Q1 2025, compared to a net loss of $16.414 million in Q1 2024[38]. Revenue and Income - Total revenue for the first quarter of 2025 was $121,516, down 3.8% from $126,484 in the first quarter of 2024[32]. - Total revenue for Same Store Properties increased to $107.834 million in Q1 2025 from $107.139 million in Q1 2024, representing a year-over-year growth of 0.65%[38]. - Net operating income (NOI) for Same Store Properties decreased by 1.3% year-over-year to $67.118 million in Q1 2025 from $67.991 million in Q1 2024[38]. - Consolidated net operating income was $73.925 million in Q1 2025, down from $79.070 million in Q1 2024[38]. - Cash net operating income rose by 3.5% year-over-year to $67.224 million in Q1 2025, compared to $64.941 million in Q1 2024[38]. Occupancy and Leasing - Core portfolio occupancy was 86.6% and leased was 89.2% as of March 31, 2025[11]. - New and renewal leases signed totaled 235,000 square feet in the wholly-owned portfolio, with a total of 340,000 square feet including joint ventures[5]. - The tenant retention ratio was 55% for the first quarter of 2025[10]. - Same Store Properties occupancy rates were 86.4% in 2025, slightly down from 86.5% in 2024[38]. - The Schuylkill Yards residential development project Avira is now 96% leased, with stabilization anticipated later this quarter[2]. Guidance and Financial Ratios - The company narrowed its 2025 FFO guidance from $0.60 - $0.72 per diluted share to $0.61 - $0.71 per diluted share[13]. - The FFO payout ratio for the first quarter of 2025 was 107%, compared to 63% in the first quarter of 2024[34]. Assets and Liabilities - Total assets as of March 31, 2025, were $3,423,786, a decrease from $3,492,213 as of December 31, 2024[30]. - Total liabilities decreased to $2,424,390 as of March 31, 2025, from $2,447,626 as of December 31, 2024[30]. - Cash and cash equivalents decreased significantly to $29,428 as of March 31, 2025, from $90,229 as of December 31, 2024[30]. Expenses - Operating expenses for the first quarter of 2025 totaled $109,414, an increase from $103,560 in the first quarter of 2024[32]. - Interest expense increased to $31.845 million in Q1 2025 from $25.049 million in Q1 2024, reflecting a significant rise in financing costs[38]. - General and administrative expenses rose to $17.470 million in Q1 2025, up from $11.104 million in Q1 2024, indicating increased operational costs[38]. Operating Income - Same store net operating income (NOI) decreased by 2.6% on an accrual basis but increased by 2.3% on a cash basis[9]. - Net Operating Income (NOI) for the first quarter of 2025 was $15,161, a decrease of 33.8% compared to $22,924 in the same period of 2024[31].

Financial Data and Key Metrics Changes - The first quarter FFO was $0.14 per share, with a net loss of $27.4 million or $0.16 per share [7][37] - The capital ratio was 12.2%, slightly above the 2025 business plan range [12] - The CAD payout ratio for the first quarter was 169.4%, significantly elevated due to older tenant allowances and accrued preferred dividends [48] Business Line Data and Key Metrics Changes - The quarterly retention rate was 55%, with leasing activity approximating 340,000 square feet [8] - The operating portfolio ended the quarter at 86.6% occupied and 89.2% leased, with Philadelphia at 93% occupied and 96% leased [10] - The mark-to-market was 8.9% on a GAAP basis and 2.3% on a cash basis, both above business plan expectations [12] Market Data and Key Metrics Changes - The vacancy rate in Philadelphia is 18%, with 50% of that concentrated in just 14 buildings [18] - Austin recorded over 112 tenants actively seeking more than 3.7 million square feet of space, a 33% increase in demand over the fourth quarter of 2024 [20] - The Life Science sector continues to recover, supported by a strong regional healthcare ecosystem [19] Company Strategy and Development Direction - The company aims to stabilize its development projects, with a focus on the residential developments at 3025 JFK and One Uptown [23] - The development pipeline is projected to generate about $41 million of annualized NOI upon stabilization [30] - The company is exploring mixed-use developments and potential monetization strategies to address the current discount to NAV [102][106] Management's Comments on Operating Environment and Future Outlook - Management noted that macroeconomic uncertainty is affecting decision-making but has not significantly delayed larger prospects [60] - The operating platform remains stable with limited near-term rollover risk, and liquidity is in excellent shape [54] - The company is optimistic about capturing demand in both Philadelphia and Austin as the market improves [22] Other Important Information - The company has no unsecured bond maturities until November 2027, and 95.4% of wholly-owned debt is fixed [41] - The anticipated second quarter property-level operating income is approximately $70 million, slightly above the first quarter [42] - The company is not planning any property acquisitions or ATM activity for the year [45] Q&A Session Summary Question: Can you provide more color on the leasing pipeline, particularly in Austin? - Management noted increased tour activity and interest from technology and financial service companies, with a mix of smaller and larger space requirements [58][70] Question: How is the macro environment affecting decision-making? - Management indicated that while decision-making is slower, larger prospects have not paused due to macro uncertainty [60][61] Question: What is the status of the 300 Delaware conversion project? - The conversion is expected to yield around 7.5% with minimal NOI loss, as the property has been under-leased for years [81][84] Question: How has the buyer pool composition changed in the current market? - There is a reemergence of institutional buyers, with a significant increase in their participation in the office buying pool [91][92] Question: What is the strategy regarding recapitalizing development projects? - The company is exploring various options, including reducing equity stakes and potentially pooling assets for better value propositions [99][100] Question: Are tenants asking for more concessions or smaller spaces? - There has been no significant change; most tenants are maintaining their space, with some downsizing while upgrading to higher quality [115] Question: What is the status of the GSA as a tenant? - The GSA lease is active until 2030, with ongoing discussions about future plans, and they are utilizing all their parking spaces [120][121] Question: What is the impact of Spark Therapeutics' layoffs on the lease? - Spark, owned by Roche, has a strong credit lease with no early termination rights, and their research activities continue [129][130]

Q1 2025 Executive Summary (unaudited in millions, except square footage and acreage) BRANDYWINE REALTY TRUST | Page 1 3151 Market Street (dedicated life science building), Schuylkill Yards, Philadelphia, PA 2025 FIRST QUARTER S U P P L E M E N T A L INFORMATION PACKAGE QUALITY • INNOVATION • INTEGRITY • COMMUNITY Table of Contents | | Page | | --- | --- | | Executive Summary | 1 | | 2025 Business Plan Trend Line | 3 | | Development Summary | 8 | | Balance Sheet and Liquidity | 13 | | Land Inventory | 14 | | ...

Brandywine Realty Trust (BDN) Q1 2025 Earnings Call April 23, 2025 09:00 AM ET Company Participants Gerard Sweeney - President, CEO & TrusteeThomas E. Wirth - Executive VP & CFOAnthony Paolone - Executive DirectorGeorge Johnstone - EVP, OperationsSeth Bergey - Senior Research AssociateMichael Lewis - Cyber Security Group ManagerGabrielle Horvath - Senior Equity Research Associate Conference Call Participants Steve Sakwa - Senior Managing Director & Senior Equity Research AnalystDylan Burzinski - Senior Anal ...

Financial Performance - For the quarter ended March 2025, Brandywine Realty Trust reported revenue of $121.52 million, down 3.9% year-over-year, with an EPS of $0.14 compared to -$0.10 in the same quarter last year [1] - The reported revenue exceeded the Zacks Consensus Estimate of $121.06 million by 0.38%, while the EPS fell short of the consensus estimate of $0.15 by 6.67% [1] Revenue Breakdown - Revenue from rents was $114.43 million, surpassing the two-analyst average estimate of $113.35 million, reflecting a year-over-year decline of 3.9% [4] - Revenue from third-party management fees, labor reimbursement, and leasing was $5.83 million, exceeding the average estimate of $5.26 million, with a year-over-year change of -1.1% [4] - Revenue from other sources was $1.26 million, significantly below the estimated $5.25 million, representing a year-over-year decline of 20.4% [4] Stock Performance - Shares of Brandywine Realty Trust have returned -17.6% over the past month, compared to a -8.9% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Core Insights - Brandywine Realty Trust reported a net loss of $27.4 million, or $0.16 per diluted share, for Q1 2025, compared to a net loss of $16.7 million, or $0.10 per diluted share, in Q1 2024 [4][7][32] - Funds from Operations (FFO) available to common shareholders totaled $24.7 million, or $0.14 per diluted share, down from $41.2 million, or $0.24 per diluted share, in the same quarter last year [5][36] - The company achieved 92% of its speculative revenue target for 2025 and experienced positive rental rate increases of 8.9% on an accrual basis [2][7] Financial Results - Total revenue for Q1 2025 was $121.5 million, a decrease from $126.5 million in Q1 2024 [32] - Operating expenses increased to $109.4 million from $103.6 million year-over-year [33] - The company’s net operating income (NOI) for same-store properties decreased by 2.6% on an accrual basis but increased by 2.3% on a cash basis [6][38] Portfolio and Leasing Activity - The core portfolio was 86.6% occupied and 89.2% leased as of March 31, 2025 [9][38] - Approximately 235,000 square feet of new and renewal leases were signed in Q1 2025, with an additional 306,000 square feet scheduled to commence after March 31, 2025 [8][9] - The tenant retention ratio was reported at 55% for the quarter [8] Liquidity and Debt Management - The company maintained a strong liquidity position with $65 million outstanding on its $600 million unsecured line of credit and $29.4 million in cash and cash equivalents as of March 31, 2025 [2][7] - Brandywine Realty Trust repaid a $70 million unsecured term loan on its maturity date [7][9] Guidance and Future Outlook - The company narrowed its FFO guidance for 2025 from a range of $0.60 to $0.72 per share to $0.61 to $0.71 per share [2][11] - The adjusted loss per share guidance for 2025 is now $(0.56) to $(0.46) [11]