Brandywine Realty Trust(US:BDN)2025-04-29 22:19Occupancy and Leasing - As of March 31, 2025, occupancy at Core Properties was 86.6%, down from 87.7% in the same period of 2024[148] - The tenant retention rate decreased to 55.4% in Q1 2025 from 67.3% in Q1 2024[148] - New leases and expansions commenced totaled 94,934 square feet, compared to 129,325 square feet in Q1 2024[148] - The average annual rent per square foot decreased to $36.68 from $44.21 year-over-year[148] - The percentage change in rental rates for new and expansion leases was 6.8%, down from 16.8% in the previous year[148] - Total net rentable square feet owned decreased to 11,930,549 from 12,698,115 year-over-year[148] - Same Store Occupancy remained stable at 86.0% for both Q1 2025 and Q1 2024[168] - Approximately 96% of the company's leases contain annual rent escalations, which are generally fixed between 2.0% to 3.0% per lease year[193] Financial Performance - Total revenue for Q1 2025 was $121.5 million, a decrease of 4.0% compared to $126.5 million in Q1 2024[168] - Net operating income (NOI) for Q1 2025 was $74.0 million, down 6.4% from $79.1 million in Q1 2024[168] - General and administrative expenses increased by 57.7% to $17.5 million in Q1 2025, compared to $11.1 million in Q1 2024[168] - Interest expense rose by 27.1% to $31.9 million in Q1 2025, up from $25.1 million in Q1 2024[168] - The company reported a net loss of $27.1 million in Q1 2025, a 65.2% increase from a net loss of $16.4 million in Q1 2024[168] - The company recognized a net gain of $3.1 million from the disposition of real estate in Q1 2025[171] - Funds from operations (FFO) for the three months ended March 31, 2025, were $24,663 thousand, down from $41,181 thousand in 2024, reflecting a decrease of 40%[198] - The company's operating margins decreased to 61.9% for the three months ended March 31, 2025, from 63.5% in the same period of 2024[194] Debt and Liquidity - The company issued $400 million in 8.875% Guaranteed Notes due 2029 in April 2024, with net proceeds of approximately $391.8 million[176] - The company expects to satisfy liquidity needs through cash flows from operations, financing activities, and real estate sales[175] - The company is in compliance with all debt covenants and requirement obligations as of March 31, 2025[175] - As of March 31, 2025, the Parent Company's unsecured debt obligations amounted to $1,943.6 million, while secured debt obligations were $283.4 million[181] - The total debt as of March 31, 2025, was $2,239.983 million, with 95.4% being fixed-rate debt[188] - The weighted-average interest rate for total debt was 6.2% as of March 31, 2025[188] - The company had $29.4 million in cash and cash equivalents and $495.8 million available under its unsecured credit facility as of March 31, 2025[183] - The company experienced a decrease in cash flows from operating activities by $17,496 thousand compared to the previous year[186] - The Operating Partnership is in compliance with all financial covenants as of March 31, 2025, including a leverage ratio not exceeding 60%[190] Interest Rate Risk - The total outstanding principal balance of variable rate debt was approximately $432.0 million, with a fair value of approximately $407.8 million[204] - A 100-basis point increase in market interest rates would decrease the fair value of the variable rate debt by approximately $11.2 million[204] - The fair value of unsecured notes was $1,524.7 million, with a 100-basis point change equating to a change of approximately $15.5 million[203] - If market rates increase by 100 basis points, the fair value of secured fixed rate debt would increase by approximately $6.2 million[202] - If market rates decrease by 100 basis points, the fair value of secured fixed rate debt would decrease by approximately $6.4 million[202] - The company has not experienced significant credit losses, but rising interest rates could lead to increased defaults and losses[199] - The company uses derivative instruments to manage interest rate risk exposures, not for speculative purposes[204] Internal Controls and Compliance - The evaluation of disclosure controls and procedures concluded that they are effective as of the end of the reporting period[210] - There were no changes in internal control over financial reporting that materially affected the company during the reporting period[210] Development Projects - Development projects include 3025 JFK Boulevard with estimated costs of $320,111,000 and completion expected in Q4 2023[160] - Approximately 2.6% of total square footage is scheduled to expire without penalty during the remainder of 2025[156] - The accrued rent receivable allowance was $0.9 million, representing 0.5% of the accrued rent receivable balance as of March 31, 2025[157]