Start Time: 09:00 January 1, 0000 10:04 AM ET Brandywine Realty Trust (NYSE:BDN) Q4 2024 Earnings Conference Call February 05, 2025, 09:00 AM ET Company Participants Gerry Sweeney - President and CEO Tom Wirth - EVP and CFO George Johnstone - EVP, Operations Dan Palazzo - SVP and CAO Conference Call Participants Steve Sakwa - Evercore ISI Anthony Paolone - JPMorgan Dylan Burzinski - Green Street Upal Rana - KeyBanc Capital Markets Michael Lewis - Truist Securities Michael Griffin - Citi Operator Good day, a ...

Financial Data and Key Metrics Changes - The company reported a net loss of $43.3 million or $0.25 per share for the fourth quarter, with FFO at $29.9 million or $0.17 per share, impacted by non-cash impairment charges totaling $23.8 million or $0.14 per share [27] - FFO results were 3% below guidance and 6% below consensus estimates, primarily due to timing and other factors [27] - The company ended 2024 with $90 million in cash and no outstanding balance on its $600 million unsecured line of credit [10][30] Business Line Data and Key Metrics Changes - The wholly owned core portfolio was 87.8% occupied and 89.9% leased, showing sequential improvement [5] - Leasing activity for the year approximated 2.3 million square feet, with 783,000 square feet of leases executed in the fourth quarter, the highest quarterly activity in 2024 [6] - The operating portfolio leasing pipeline remains strong at 1.8 million square feet, with 163,000 square feet in advanced negotiations [9] Market Data and Key Metrics Changes - In Philadelphia, Class A properties accounted for 66% of all lease deals signed in 2024, with the overall CBD portfolio being 93% leased [12] - The CBD recorded 1 million square feet of transactions during 2024, with Brandywine capturing 49% of all office deals [13] - Austin's leasing momentum remains positive, with over 81 tenants actively seeking more than 2.5 million square feet of space [13] Company Strategy and Development Direction - The company aims to leverage improving real estate market trends and position itself for future growth, focusing on liquidity, portfolio stability, and lease-up development [14][42] - 2025 is viewed as a transitional earnings year, with a focus on stabilizing development projects and maintaining minimal balances on the line of credit [15][21] - The company plans to recapitalize or exit several operating joint ventures to reduce debt attribution and improve liquidity [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strength of the operating platform and the quality of developments, despite the current lack of visibility on income timing from development projects [42] - The company noted that tenants are behaving more cautiously due to macroeconomic uncertainties, but discussions with major prospects are ongoing [46][47] - Management highlighted that the overall real estate markets are improving, with a solid operating foundation laid during 2024 [11][12] Other Important Information - The company achieved a tenant retention rate of 63%, exceeding the original target of 51% to 53% [5] - The 2025 FFO guidance is set at a range of $0.60 to $0.72 per share, with a midpoint of $0.66, reflecting a decrease from 2024 levels [21] - The company anticipates a CAD payout ratio of 120% to 150% for 2025, influenced by deferred tenant allowance payments [38] Q&A Session Summary Question: Have any of the larger tenants at 3151 or Uptown ATX gone elsewhere? - Management confirmed that no major prospects have been lost to other buildings, but decision-making timelines have been protracted due to macro uncertainties [44][46] Question: What confidence does the company have around rents and timing to hit yields? - Management indicated that it is more of a timing issue than a pricing issue, with a strong flight to quality observed in the market [48][49] Question: What would be the difference between JV FFO losses for 2025 versus stabilized levels? - Management estimated that income from JVs could ramp up to over $50 million once stabilized, compared to $10 million to $12 million in 2025 [56] Question: Why is the guidance range for 2025 so wide? - The wide range is due to uncertainties in leasing and recapitalization opportunities, with potential upside if leasing occurs faster than anticipated [72][76] Question: Will the $24 million deferred tenant allowance impact only 2025? - Management believes that the deferred tenant allowances will not spill over into 2026, as most have sunset provisions triggering in 2025 [80][84]

For the quarter ended December 2024, Brandywine Realty Trust (BDN) reported revenue of $121.91 million, down 6.4% over the same period last year. EPS came in at $0.17, compared to -$0.91 in the year-ago quarter.The reported revenue represents a surprise of -5.60% over the Zacks Consensus Estimate of $129.14 million. With the consensus EPS estimate being $0.24, the EPS surprise was -29.17%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare ...

PHILADELPHIA, Feb. 04, 2025 (GLOBE NEWSWIRE) -- Brandywine Realty Trust (NYSE:BDN) today reported its financial and operating results for the three and twelve-month periods ended December 31, 2024. Management Comments "We accomplished or exceeded many of our full year 2024 business plan objectives including speculative revenue, tenant retention, our same store NOI results and rental rate mark-to-markets," stated Jerry Sweeney, President and Chief Executive Officer of Brandywine Realty Trust. "In addition to ...

Core Insights - Brandywine Realty Trust reported financial and operational results for the year ending December 31, 2024, highlighting achievements in revenue, tenant retention, and leasing activity [1][2]. Financial Results - The company experienced a net loss available to common shareholders of $(43.3) million, or $(0.25) per share, in Q4 2024, compared to a net loss of $(157.4) million, or $(0.91) per share, in Q4 2023 [6][8]. - Funds from Operations (FFO) available to common shareholders totaled $29.9 million, or $0.17 per diluted share, down from $47.2 million, or $0.27 per diluted share, in the same quarter of the previous year [9][11]. - For the full year 2024, the net loss was $(195.6) million, or $(1.13) per share, compared to $(197.4) million, or $(1.15) per share, in 2023 [10][11]. Portfolio Performance - The core portfolio was 87.8% occupied and 89.9% leased as of December 31, 2024, with a tenant retention ratio of 76% in Q4 and 63% for the full year [12][17]. - Same Store Net Operating Income (NOI) decreased by (1.6)% on an accrual basis but increased by 0.5% on a cash basis [12][44]. Leasing Activity - In Q4 2024, the company signed new and renewal leases totaling 486,000 square feet, with a total of 1,306,000 square feet for the full year [13][15]. - The rental rate mark-to-market increased by 5.9% on an accrual basis and 1.1% on a cash basis [14]. Transaction Activity - The company completed over $300 million in dispositions, exceeding its initial target of $90 million [2]. - Significant sales included the sale of One and Two Barton Skyway for $107.6 million and a 50% interest in 4040 Wilson for $190.5 million [6][7]. Guidance for 2025 - The company provided 2025 guidance for loss per share of $(0.60) to $(0.48) and FFO guidance of $0.60 to $0.72 per diluted share [19][20]. - Key assumptions for 2025 include a year-end core occupancy range of 88-89% and a tenant retention rate range of 59-61% [20].

Growing asset management firm chooses to stay in Philadelphia after extensive searchPHILADELPHIA, Feb. 03, 2025 (GLOBE NEWSWIRE) -- Brandywine Realty Trust (NYSE: BDN) and FS Investments today announced they have entered into a 117,000 square foot, 16-year lease for the Philadelphia-based alternative asset manager’s new global headquarters at 3025 JFK Blvd. in Philadelphia’s dynamic new neighborhood, Schuylkill Yards. FS Investments is one of Philadelphia’s fastest growing companies and is helping Philadelp ...

PHILADELPHIA, Feb. 03, 2025 (GLOBE NEWSWIRE) -- Brandywine Realty Trust (NYSE:BDN) and FS Investments today announced they have entered into a 117,000 square foot, 16-year lease for the Philadelphia-based alternative asset manager's new global headquarters at 3025 JFK Blvd. in Philadelphia's dynamic new neighborhood, Schuylkill Yards. FS Investments is one of Philadelphia's fastest growing companies and is helping Philadelphia reestablish its reputation as a home to leading financial services firms. With ov ...

PHILADELPHIA, Jan. 22, 2025 (GLOBE NEWSWIRE) -- Brandywine Realty Trust (NYSE: BDN) announced today the tax characteristics of its 2024 distributions. The tax reporting will be done on Form 1099-DIV and shareholders are encouraged to consult with their personal tax advisors as to the specific tax treatment of dividends. The characteristics of the Company’s distributions are as follows: Common Shares of Beneficial Interest (CUSIP 105368203) 2024 Dividend DatesRecord 1/4Payment 1/18Record 4/4Payment 4/18Recor ...

Leasing Activity - The company executed 650,000 square feet of leasing activity since last quarter, with Q4 2024 being the highest in 2024 and 18% higher than Q4 2023 [2] - Total leasing activity for 2024 reached 2.2 million square feet with a weighted average lease term of 9.4 years [2] - Over 82% of new leasing activity came from tenants moving to higher quality space, reinforcing the strength of the core portfolio [3] Portfolio and Strategy - The core portfolio remains a solid foundation, with robust leasing in existing assets and progress in development projects [3] - Larger tenant requirements are targeting 2026 occupancy, likely stabilizing commercial development projects by 2026 [3] - The company's mixed-use strategy is designed to capture future growth as the office market stabilizes [4] Company Overview - Brandywine Realty Trust is one of the largest publicly traded, full-service, integrated real estate companies in the US, focusing on the Philadelphia and Austin markets [5] - The company owns, develops, leases, and manages a portfolio of 147 properties totaling 21.1 million square feet as of September 30, 2024 [5] Management Commentary - The CEO highlighted the leasing momentum as a reflection of the strength of high-quality assets and the appeal of mixed-use developments [4] - The company's strategy of curating mixed-use environments is expected to drive long-term value creation [4]

Company Overview - Brandywine Realty Trust 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 [3] - The company owns develops leases and manages an urban town center and transit-oriented portfolio comprising 147 properties and 21 1 million square feet as of September 30 2024 [3] - Brandywine Realty Trust is organized as a real estate investment trust (REIT) [3] Recent Transactions - The company completed the sale of 4040 Wilson a mixed-use development in Arlington VA for $190 5 million ($95 25 million for Brandywine’s 50% share) [2][4] - The Dabney and Brittons Hill portfolio in Richmond VA was sold for $66 8 million generating approximately $15 5 million of net proceeds to Brandywine for its 50% ownership interest [5] - Brandywine also sold an 11-acre land parcel operating under a long-term parking lease valued at $8 5 million [5] - Combined gross sale proceeds from these transactions amounted to $265 8 million [4] Financial Performance - Year-to-date gross proceeds from asset sales approach $310 million [2][6] - The company has generated $191 million of net cash proceeds from these transactions [6] - Brandywine significantly outperformed its original 2024 sales target of $90 0 million and revised sales target of $150 0 million [6] Strategic Objectives - The transactions advance Brandywine’s strategic objectives to improve its competitive position reduce forward capital commitments and generate incremental liquidity for future investments [4] - The proceeds will strengthen the company’s balance sheet and support reinvestment in strategic initiatives that align with its vision and market strategy [6] - Brandywine is committed to redeploying capital in high-quality core markets with significant growth potential while enhancing financial flexibility [6] Property Details - 4040 Wilson has 405 000 square feet of office retail and residential space as well as 494 parking spaces [2] - The property was 96% leased (residential) and 94% leased (commercial) at the time of sale [2] - The Dabney and Brittons Hill portfolio consists of 14 industrial/flex buildings totaling 643 000 square feet and was fully leased at closing [5]