☒ | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
☐ | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Maryland | ||||||||||||||||||||||||||
(Brandywine Realty Trust) | 001-9106 | 23-2413352 | ||||||||||||||||||||||||
Delaware | ||||||||||||||||||||||||||
(Brandywine Operating Partnership, L.P.) | 000-24407 | 23-2862640 | ||||||||||||||||||||||||
(State or Other Jurisdiction of Incorporation or Organization) | (Commission file number) | (I.R.S. Employer Identification Number) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Common Shares of Beneficial Interest | BDN | NYSE |
Brandywine Realty Trust | Yes | ☒ No ☐ | |||||||||
Brandywine Operating Partnership, L.P. | Yes | ☒ No ☐ |
Brandywine Realty Trust | Yes | ☒ No ☐ | |||||||||
Brandywine Operating Partnership, L.P. | Yes | ☒ No ☐ |
Large accelerated filer | ☒ | Accelerated filer ☐ | Non-accelerated filer ☐ | ||||||||
Smaller reporting company | ☐ | Emerging growth company | ☐ |
Large accelerated filer ☐ | Accelerated filer ☐ | Non-accelerated filer | ☒ | ||||||||
Smaller reporting company ☐ | Emerging growth company | ☐ |
Brandywine Realty Trust | Yes | ☐ | No ☒ | ||||||||
Brandywine Operating Partnership, L.P. | Yes | ☐ | No ☒ |
Page | |||||
March 31, 2022 | December 31, 2021 | ||||||||||
ASSETS | |||||||||||
Real estate investments: | |||||||||||
Operating properties | $ | 3,517,995 | $ | 3,472,602 | |||||||
Accumulated depreciation | (980,860) | (957,450) | |||||||||
Right of use asset - operating leases, net | 20,150 | 20,313 | |||||||||
Operating real estate investments, net | 2,557,285 | 2,535,465 | |||||||||
Construction-in-progress | 283,323 | 277,237 | |||||||||
Land held for development | 94,411 | 114,604 | |||||||||
Prepaid leasehold interests in land held for development, net | 27,762 | 27,762 | |||||||||
Total real estate investments, net | 2,962,781 | 2,955,068 | |||||||||
Assets held for sale, net | 25,205 | 562 | |||||||||
Cash and cash equivalents | 39,306 | 27,463 | |||||||||
Accounts receivable | 14,214 | 11,875 | |||||||||
Accrued rent receivable, net of allowance of $4,081 and $4,133 as of March 31, 2022 and December 31, 2021, respectively | 170,275 | 167,210 | |||||||||
Investment in unconsolidated real estate ventures | 461,389 | 435,506 | |||||||||
Deferred costs, net | 87,652 | 86,862 | |||||||||
Intangible assets, net | 25,580 | 28,556 | |||||||||
Other assets | 148,493 | 133,094 | |||||||||
Total assets | $ | 3,934,895 | $ | 3,846,196 | |||||||
LIABILITIES AND BENEFICIARIES' EQUITY | |||||||||||
Unsecured credit facility | $ | 156,000 | $ | 23,000 | |||||||
Unsecured term loan, net | 249,738 | 249,608 | |||||||||
Unsecured senior notes, net | 1,580,845 | 1,580,978 | |||||||||
Accounts payable and accrued expenses | 130,073 | 150,151 | |||||||||
Distributions payable | 32,814 | 32,765 | |||||||||
Deferred income, gains and rent | 24,758 | 23,849 | |||||||||
Intangible liabilities, net | 12,085 | 12,981 | |||||||||
Lease liability - operating leases | 23,014 | 22,962 | |||||||||
Other liabilities | 49,705 | 48,683 | |||||||||
Total liabilities | $ | 2,259,032 | $ | 2,144,977 | |||||||
Commitments and contingencies (See Note 15) | |||||||||||
Brandywine Realty Trust's Equity: | |||||||||||
Common Shares of Brandywine Realty Trust's beneficial interest, $0.01 par value; shares authorized 400,000,000; 171,383,912 and 171,126,257 issued and outstanding as of March 31, 2022 and December 31, 2021, respectively | 1,714 | 1,712 | |||||||||
Additional paid-in-capital | 3,147,231 | 3,146,786 | |||||||||
Deferred compensation payable in common shares | 19,386 | 18,491 | |||||||||
Common shares in grantor trust, 1,185,541 and 1,169,703 issued and outstanding as of March 31, 2022 and December 31, 2021, respectively | (19,386) | (18,491) | |||||||||
Cumulative earnings | 1,128,465 | 1,122,372 | |||||||||
Accumulated other comprehensive income (loss) | 1,920 | (2,020) | |||||||||
Cumulative distributions | (2,611,294) | (2,578,583) | |||||||||
Total Brandywine Realty Trust's equity | 1,668,036 | 1,690,267 | |||||||||
Noncontrolling interests | 7,827 | 10,952 | |||||||||
Total beneficiaries' equity | $ | 1,675,863 | $ | 1,701,219 | |||||||
Total liabilities and beneficiaries' equity | $ | 3,934,895 | $ | 3,846,196 |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Revenue | |||||||||||
Rents | $ | 115,901 | $ | 113,484 | |||||||
Third party management fees, labor reimbursement and leasing | 5,108 | 6,651 | |||||||||
Other | 6,496 | 634 | |||||||||
Total revenue | 127,505 | 120,769 | |||||||||
Operating expenses | |||||||||||
Property operating expenses | 31,548 | 28,935 | |||||||||
Real estate taxes | 13,813 | 14,761 | |||||||||
Third party management expenses | 2,557 | 2,978 | |||||||||
Depreciation and amortization | 43,782 | 40,343 | |||||||||
General and administrative expenses | 10,000 | 6,584 | |||||||||
Total operating expenses | 101,700 | 93,601 | |||||||||
Gain on sale of real estate | |||||||||||
Net gain on disposition of real estate | — | 74 | |||||||||
Net gain on sale of undepreciated real estate | 897 | 1,993 | |||||||||
Total gain on sale of real estate | 897 | 2,067 | |||||||||
Operating income | 26,702 | 29,235 | |||||||||
Other income (expense): | |||||||||||
Interest and investment income | 440 | 1,674 | |||||||||
Interest expense | (15,742) | (16,293) | |||||||||
Interest expense - amortization of deferred financing costs | (709) | (709) | |||||||||
Equity in loss of unconsolidated real estate ventures | (4,563) | (6,924) | |||||||||
Net income before income taxes | 6,128 | 6,983 | |||||||||
Income tax provision | (27) | (19) | |||||||||
Net income | 6,101 | 6,964 | |||||||||
Net income attributable to noncontrolling interests | (8) | (43) | |||||||||
Net income attributable to Brandywine Realty Trust | 6,093 | 6,921 | |||||||||
Nonforfeitable dividends allocated to unvested restricted shareholders | (148) | (146) | |||||||||
Net income attributable to Common Shareholders of Brandywine Realty Trust | $ | 5,945 | $ | 6,775 | |||||||
Basic income per Common Share | $ | 0.03 | $ | 0.04 | |||||||
Diluted income per Common Share | $ | 0.03 | $ | 0.04 | |||||||
Basic weighted average shares outstanding | 171,294,949 | 170,624,741 | |||||||||
Diluted weighted average shares outstanding | 172,888,994 | 171,636,120 |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Net income | $ | 6,101 | $ | 6,964 | |||||||
Comprehensive income: | |||||||||||
Unrealized gain on derivative financial instruments | 3,764 | 910 | |||||||||
Amortization of interest rate contracts (1) | 188 | 188 | |||||||||
Total comprehensive income | 3,952 | 1,098 | |||||||||
Comprehensive income | 10,053 | 8,062 | |||||||||
Comprehensive income attributable to noncontrolling interest | (20) | (49) | |||||||||
Comprehensive income attributable to Brandywine Realty Trust | $ | 10,033 | $ | 8,013 |
Number of Common Shares | Number of Rabbi Trust/Deferred Compensation Shares | Common Shares of Brandywine Realty Trust's beneficial interest | Additional Paid-in Capital | Deferred Compensation Payable in Common Shares | Common Shares in Grantor Trust | Cumulative Earnings | Accumulated Other Comprehensive Income (Loss) | Cumulative Distributions | Noncontrolling Interests | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE, December 31, 2021 | 171,126,257 | 1,169,703 | $ | 1,712 | $ | 3,146,786 | $ | 18,491 | $ | (18,491) | $ | 1,122,372 | $ | (2,020) | $ | (2,578,583) | $ | 10,952 | $ | 1,701,219 | |||||||||||||||||||||||||||||||||||||||||||||
Net income | 6,093 | 8 | 6,101 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | 3,940 | 12 | 3,952 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Redemption of LP Units | (4,006) | (4,006) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation activity | 277,061 | 68,540 | 2 | 1,653 | 1,655 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share Issuance from/(to) Deferred Compensation Plan | (19,406) | (52,702) | (249) | 895 | (895) | (249) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reallocation of Noncontrolling interest | (959) | 959 | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions declared $0.19 per share) | (32,711) | (98) | (32,809) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE, March 31, 2022 | 171,383,912 | 1,185,541 | $ | 1,714 | $ | 3,147,231 | $ | 19,386 | $ | (19,386) | $ | 1,128,465 | $ | 1,920 | $ | (2,611,294) | $ | 7,827 | $ | 1,675,863 | |||||||||||||||||||||||||||||||||||||||||||||
Number of Common Shares | Number of Rabbi Trust/Deferred Compensation Shares | Common Shares of Brandywine Realty Trust's beneficial interest | Additional Paid-in Capital | Deferred Compensation Payable in Common Shares | Common Shares in Grantor Trust | Cumulative Earnings | Accumulated Other Comprehensive Income (Loss) | Cumulative Distributions | Noncontrolling Interests | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE, December 31, 2020 | 170,572,964 | 1,160,494 | $ | 1,707 | $ | 3,138,152 | $ | 17,516 | $ | (17,516) | $ | 1,110,083 | $ | (7,561) | $ | (2,448,238) | $ | 10,505 | $ | 1,804,648 | |||||||||||||||||||||||||||||||||||||||||||||
Net income | 6,921 | 43 | 6,964 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | 1,092 | 6 | 1,098 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation activity | 108,345 | 12,719 | 2,502 | 2,502 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share Issuance from/(to) Deferred Compensation Plan | (18,058) | (61,436) | (198) | 142 | (142) | (198) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions declared ($0.19 per share) | (32,573) | (187) | (32,760) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE, March 31, 2021 | 170,663,251 | 1,111,777 | $ | 1,707 | $ | 3,140,456 | $ | 17,658 | $ | (17,658) | $ | 1,117,004 | $ | (6,469) | $ | (2,480,811) | $ | 10,367 | $ | 1,782,254 | |||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 6,101 | $ | 6,964 | |||||||
Adjustments to reconcile net income to net cash from operating activities: | |||||||||||
Depreciation and amortization | 43,782 | 40,343 | |||||||||
Amortization of deferred financing costs | 709 | 709 | |||||||||
Amortization of debt discount/(premium), net | (488) | (488) | |||||||||
Amortization of stock compensation costs | 3,280 | 2,606 | |||||||||
Straight-line rent income | (3,149) | (4,085) | |||||||||
Amortization of acquired above (below) market leases, net | (875) | (1,350) | |||||||||
Ground rent expense | 205 | 297 | |||||||||
Provision for doubtful accounts | — | 253 | |||||||||
Net gain on sale of interests in real estate | (897) | (2,067) | |||||||||
Loss from unconsolidated real estate ventures, net of distributions | 4,563 | 6,924 | |||||||||
Income tax provision | 27 | 19 | |||||||||
Changes in assets and liabilities: | |||||||||||
Accounts receivable | (2,609) | (939) | |||||||||
Other assets | (9,208) | (10,491) | |||||||||
Accounts payable and accrued expenses | (14,550) | 4,991 | |||||||||
Deferred income, gains and rent | 992 | 1,302 | |||||||||
Other liabilities | 632 | (3,812) | |||||||||
Net cash provided by operating activities | 28,515 | 41,176 | |||||||||
Cash flows from investing activities: | |||||||||||
Acquisition of properties | (3,446) | — | |||||||||
Proceeds from the sale of properties | 1,481 | 79 | |||||||||
Capital expenditures for tenant improvements | (15,148) | (7,202) | |||||||||
Capital expenditures for redevelopments | (31,942) | (6,339) | |||||||||
Capital expenditures for developments | (30,455) | (6,681) | |||||||||
Advances for the purchase of tenant assets, net of repayments | 270 | (443) | |||||||||
Investment in unconsolidated real estate ventures | (26,762) | (1,884) | |||||||||
Deposits for real estate | (2,550) | — | |||||||||
Capital distributions from unconsolidated real estate ventures | 3,010 | 3,934 | |||||||||
Leasing costs paid | (5,245) | (2,713) | |||||||||
Net cash used in investing activities | (110,787) | (21,249) | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from credit facility borrowings | 138,000 | 33,000 | |||||||||
Repayments of credit facility borrowings | (5,000) | (20,000) | |||||||||
Exercise of stock options, net | — | (63) | |||||||||
Shares used for employee taxes upon vesting of share awards | (2,103) | (758) | |||||||||
Redemption of limited partnership units | (4,006) | — | |||||||||
Distributions paid to shareholders | (32,604) | (32,516) | |||||||||
Distributions to noncontrolling interest | (157) | (187) | |||||||||
Net cash provided by (used in) financing activities | 94,130 | (20,524) | |||||||||
Increase/(Decrease) in cash and cash equivalents and restricted cash | 11,858 | (597) | |||||||||
Cash and cash equivalents and restricted cash at beginning of period | 28,300 | 47,077 | |||||||||
Cash and cash equivalents and restricted cash at end of period | $ | 40,158 | $ | 46,480 | |||||||
Reconciliation of cash and cash equivalents and restricted cash: | |||||||||||
Cash and cash equivalents, beginning of period | $ | 27,463 | $ | 46,344 | |||||||
Restricted cash, beginning of period | 837 | 733 | |||||||||
Cash and cash equivalents and restricted cash, beginning of period | $ | 28,300 | $ | 47,077 | |||||||
Cash and cash equivalents, end of period | $ | 39,306 | $ | 45,717 | |||||||
Restricted cash, end of period | 852 | 763 | |||||||||
Cash and cash equivalents and restricted cash, end of period | $ | 40,158 | $ | 46,480 | |||||||
Supplemental disclosure: | |||||||||||
Cash paid for interest, net of capitalized interest during the three months ended March 31, 2022 and 2021 of $2,186 and $1,421, respectively | $ | 9,637 | $ | 10,106 | |||||||
Cash paid for income taxes | 1 | 1 | |||||||||
Supplemental disclosure of non-cash activity: | |||||||||||
Dividends and distributions declared but not paid | 32,814 | 32,763 | |||||||||
Change in investment in real estate ventures as a result of deconsolidation | — | 32,761 | |||||||||
Change in operating real estate from deconsolidation of operating properties | — | (30,073) | |||||||||
Change in other assets as a result of deconsolidation of operating properties | — | (2,688) | |||||||||
Change in capital expenditures financed through accounts payable at period end | (909) | (4,827) | |||||||||
Change in capital expenditures financed through retention payable at period end | (1,475) | (3,752) |
March 31, 2022 | December 31, 2021 | ||||||||||
ASSETS | |||||||||||
Real estate investments: | |||||||||||
Operating properties | $ | 3,517,995 | $ | 3,472,602 | |||||||
Accumulated depreciation | (980,860) | (957,450) | |||||||||
Right of use asset - operating leases, net | 20,150 | 20,313 | |||||||||
Operating real estate investments, net | 2,557,285 | 2,535,465 | |||||||||
Construction-in-progress | 283,323 | 277,237 | |||||||||
Land held for development | 94,411 | 114,604 | |||||||||
Prepaid leasehold interests in land held for development, net | 27,762 | 27,762 | |||||||||
Total real estate investments, net | 2,962,781 | 2,955,068 | |||||||||
Assets held for sale, net | 25,205 | 562 | |||||||||
Cash and cash equivalents | 39,306 | 27,463 | |||||||||
Accounts receivable | 14,214 | 11,875 | |||||||||
Accrued rent receivable, net of allowance of $4,081 and $4,133 as of March 31, 2022 and December 31, 2021, respectively | 170,275 | 167,210 | |||||||||
Investment in unconsolidated real estate ventures | 461,389 | 435,506 | |||||||||
Deferred costs, net | 87,652 | 86,862 | |||||||||
Intangible assets, net | 25,580 | 28,556 | |||||||||
Other assets | 148,493 | 133,094 | |||||||||
Total assets | $ | 3,934,895 | $ | 3,846,196 | |||||||
LIABILITIES AND PARTNERS' EQUITY | |||||||||||
Unsecured credit facility | $ | 156,000 | $ | 23,000 | |||||||
Unsecured term loan, net | 249,738 | 249,608 | |||||||||
Unsecured senior notes, net | 1,580,845 | 1,580,978 | |||||||||
Accounts payable and accrued expenses | 130,073 | 150,151 | |||||||||
Distributions payable | 32,814 | 32,765 | |||||||||
Deferred income, gains and rent | 24,758 | 23,849 | |||||||||
Intangible liabilities, net | 12,085 | 12,981 | |||||||||
Lease liability - operating leases | 23,014 | 22,962 | |||||||||
Other liabilities | 49,705 | 48,683 | |||||||||
Total liabilities | $ | 2,259,032 | $ | 2,144,977 | |||||||
Commitments and contingencies (See Note 15) | |||||||||||
Redeemable limited partnership units at redemption value; 516,467 and 823,983 issued and outstanding as of March 31, 2022 and December 31, 2021, respectively | 7,338 | 11,140 | |||||||||
Brandywine Operating Partnership, L.P.'s equity: | |||||||||||
General Partnership Capital; 171,383,912 and 171,126,257 units issued and outstanding as of March 31, 2022 and December 31, 2021, respectively | 1,664,107 | 1,689,611 | |||||||||
Accumulated other comprehensive income (loss) | 1,586 | (2,366) | |||||||||
Total Brandywine Operating Partnership, L.P.'s equity | 1,665,693 | 1,687,245 | |||||||||
Noncontrolling interest - consolidated real estate ventures | 2,832 | 2,834 | |||||||||
Total partners' equity | $ | 1,668,525 | $ | 1,690,079 | |||||||
Total liabilities and partners' equity | $ | 3,934,895 | $ | 3,846,196 |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Revenue | |||||||||||
Rents | $ | 115,901 | $ | 113,484 | |||||||
Third party management fees, labor reimbursement and leasing | 5,108 | 6,651 | |||||||||
Other | 6,496 | 634 | |||||||||
Total revenue | 127,505 | 120,769 | |||||||||
Operating expenses | |||||||||||
Property operating expenses | 31,548 | 28,935 | |||||||||
Real estate taxes | 13,813 | 14,761 | |||||||||
Third party management expenses | 2,557 | 2,978 | |||||||||
Depreciation and amortization | 43,782 | 40,343 | |||||||||
General and administrative expenses | 10,000 | 6,584 | |||||||||
Provision for impairment | — | — | |||||||||
Total operating expenses | 101,700 | 93,601 | |||||||||
Gain on sale of real estate | |||||||||||
Net gain on disposition of real estate | — | 74 | |||||||||
Net gain on sale of undepreciated real estate | 897 | 1,993 | |||||||||
Total gain on sale of real estate | 897 | 2,067 | |||||||||
Operating income | 26,702 | 29,235 | |||||||||
Other income (expense): | |||||||||||
Interest and investment income | 440 | 1,674 | |||||||||
Interest expense | (15,742) | (16,293) | |||||||||
Interest expense - amortization of deferred financing costs | (709) | (709) | |||||||||
Equity in loss of unconsolidated real estate ventures | (4,563) | (6,924) | |||||||||
Net income before income taxes | 6,128 | 6,983 | |||||||||
Income tax provision | (27) | (19) | |||||||||
Net income | 6,101 | 6,964 | |||||||||
Net loss attributable to noncontrolling interests - consolidated real estate ventures | 2 | 1 | |||||||||
Net income attributable to Brandywine Operating Partnership | 6,103 | 6,965 | |||||||||
Nonforfeitable dividends allocated to unvested restricted unitholders | (148) | (146) | |||||||||
Net income attributable to Common Partnership Unitholders of Brandywine Operating Partnership, L.P. | $ | 5,955 | $ | 6,819 | |||||||
Basic income per Common Partnership Unit | $ | 0.03 | $ | 0.04 | |||||||
Diluted income per Common Partnership Unit | $ | 0.03 | $ | 0.04 | |||||||
Basic weighted average common partnership units outstanding | 171,927,588 | 171,606,375 | |||||||||
Diluted weighted average common partnership units outstanding | 173,521,633 | 172,617,754 |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Net income | $ | 6,101 | $ | 6,964 | |||||||
Comprehensive income: | |||||||||||
Unrealized gain on derivative financial instruments | 3,764 | 910 | |||||||||
Amortization of interest rate contracts (1) | 188 | 188 | |||||||||
Total comprehensive income | 3,952 | 1,098 | |||||||||
Comprehensive income | 10,053 | 8,062 | |||||||||
Comprehensive loss attributable to noncontrolling interest - consolidated real estate ventures | 2 | 1 | |||||||||
Comprehensive income attributable to Brandywine Operating Partnership | $ | 10,055 | $ | 8,063 |
General Partner Capital | |||||||||||||||||||||||||||||
Units | Amount | Accumulated Other Comprehensive Income | Noncontrolling Interest - Consolidated Real Estate Ventures | Total Partners' Equity | |||||||||||||||||||||||||
BALANCE, December 31, 2021 | 171,126,257 | $ | 1,689,611 | $ | (2,366) | $ | 2,834 | $ | 1,690,079 | ||||||||||||||||||||
Net income | 6,103 | (2) | 6,101 | ||||||||||||||||||||||||||
Other comprehensive loss | 3,952 | 3,952 | |||||||||||||||||||||||||||
Deferred compensation obligation | (19,406) | (249) | (249) | ||||||||||||||||||||||||||
Repurchase and retirement of LP units | (4,006) | (4,006) | |||||||||||||||||||||||||||
Share-based compensation activity | 277,061 | 1,655 | 1,655 | ||||||||||||||||||||||||||
Adjustment of redeemable partnership units to liquidation value at period end | 3,704 | 3,704 | |||||||||||||||||||||||||||
Distributions declared to general partnership unitholders ($0.19 per unit) | (32,711) | (32,711) | |||||||||||||||||||||||||||
BALANCE, March 31, 2022 | 171,383,912 | $ | 1,664,107 | $ | 1,586 | $ | 2,832 | $ | 1,668,525 | ||||||||||||||||||||
General Partner Capital | |||||||||||||||||||||||||||||
Units | Amount | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interest - Consolidated Real Estate Ventures | Total Partners' Equity | |||||||||||||||||||||||||
BALANCE, December 31, 2020 | 170,572,964 | $ | 1,800,945 | $ | (7,935) | $ | 72 | $ | 1,793,082 | ||||||||||||||||||||
Net income | 6,965 | (1) | 6,964 | ||||||||||||||||||||||||||
Other comprehensive income | 1,098 | 1,098 | |||||||||||||||||||||||||||
Deferred compensation obligation | (18,058) | (198) | (198) | ||||||||||||||||||||||||||
Share-based compensation activity | 108,345 | 2,502 | 2,502 | ||||||||||||||||||||||||||
Adjustment of redeemable partnership units to liquidation value at period end | (1,294) | (1,294) | |||||||||||||||||||||||||||
Distributions declared to general partnership unitholders ($0.19 per unit) | (32,573) | (32,573) | |||||||||||||||||||||||||||
BALANCE, March 31, 2021 | 170,663,251 | $ | 1,776,347 | $ | (6,837) | $ | 71 | $ | 1,769,581 | ||||||||||||||||||||
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 6,101 | $ | 6,964 | |||||||
Adjustments to reconcile net income to net cash from operating activities: | |||||||||||
Depreciation and amortization | 43,782 | 40,343 | |||||||||
Amortization of deferred financing costs | 709 | 709 | |||||||||
Amortization of debt discount/(premium), net | (488) | (488) | |||||||||
Amortization of stock compensation costs | 3,280 | 2,606 | |||||||||
Straight-line rent income | (3,149) | (4,085) | |||||||||
Amortization of acquired above (below) market leases, net | (875) | (1,350) | |||||||||
Ground rent expense | 205 | 297 | |||||||||
Provision for doubtful accounts | — | 253 | |||||||||
Net gain on sale of interests in real estate | (897) | (2,067) | |||||||||
Loss from unconsolidated real estate ventures, net of distributions | 4,563 | 6,924 | |||||||||
Income tax provision | 27 | 19 | |||||||||
Changes in assets and liabilities: | |||||||||||
Accounts receivable | (2,609) | (939) | |||||||||
Other assets | (9,208) | (10,491) | |||||||||
Accounts payable and accrued expenses | (14,550) | 4,991 | |||||||||
Deferred income, gains and rent | 992 | 1,302 | |||||||||
Other liabilities | 632 | (3,812) | |||||||||
Net cash provided by operating activities | 28,515 | 41,176 | |||||||||
Cash flows from investing activities: | |||||||||||
Acquisition of properties | (3,446) | — | |||||||||
Proceeds from the sale of properties | 1,481 | 79 | |||||||||
Capital expenditures for tenant improvements | (15,148) | (7,202) | |||||||||
Capital expenditures for redevelopments | (31,942) | (6,339) | |||||||||
Capital expenditures for developments | (30,455) | (6,681) | |||||||||
Advances for the purchase of tenant assets, net of repayments | 270 | (443) | |||||||||
Investment in unconsolidated real estate ventures | (26,762) | (1,884) | |||||||||
Deposits for real estate | (2,550) | — | |||||||||
Capital distributions from unconsolidated real estate ventures | 3,010 | 3,934 | |||||||||
Leasing costs paid | (5,245) | (2,713) | |||||||||
Net cash used in investing activities | (110,787) | (21,249) | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from credit facility borrowings | 138,000 | 33,000 | |||||||||
Repayments of credit facility borrowings | (5,000) | (20,000) | |||||||||
Exercise of stock options, net | — | (63) | |||||||||
Shares used for employee taxes upon vesting of share awards | (2,103) | (758) | |||||||||
Redemption of limited partnership units | (4,006) | — | |||||||||
Distributions paid to preferred and common partnership units | (32,761) | (32,703) | |||||||||
Net cash provided by (used in) financing activities | 94,130 | (20,524) | |||||||||
Increase/(Decrease) in cash and cash equivalents and restricted cash | 11,858 | (597) | |||||||||
Cash and cash equivalents and restricted cash at beginning of period | 28,300 | 47,077 | |||||||||
Cash and cash equivalents and restricted cash at end of period | $ | 40,158 | $ | 46,480 | |||||||
Reconciliation of cash and cash equivalents and restricted cash: | |||||||||||
Cash and cash equivalents, beginning of period | $ | 27,463 | $ | 46,344 | |||||||
Restricted cash, beginning of period | 837 | 733 | |||||||||
Cash and cash equivalents and restricted cash, beginning of period | $ | 28,300 | $ | 47,077 | |||||||
Cash and cash equivalents, end of period | $ | 39,306 | $ | 45,717 | |||||||
Restricted cash, end of period | 852 | 763 | |||||||||
Cash and cash equivalents and restricted cash, end of period | $ | 40,158 | $ | 46,480 | |||||||
Supplemental disclosure: | |||||||||||
Cash paid for interest, net of capitalized interest during the three months ended March 31, 2022 and 2021 of $2,186 and $1,421, respectively | $ | 9,637 | $ | 10,106 | |||||||
Cash paid for income taxes | 1 | 1 | |||||||||
Supplemental disclosure of non-cash activity: | |||||||||||
Dividends and distributions declared but not paid | 32,814 | 32,763 | |||||||||
Change in investment in real estate ventures as a result of deconsolidation | — | 32,761 | |||||||||
Change in operating real estate from deconsolidation of operating properties | — | (30,073) | |||||||||
Change in other assets as a result of deconsolidation of operating properties | — | (2,688) | |||||||||
Change in capital expenditures financed through accounts payable at period end | (909) | (4,827) | |||||||||
Change in capital expenditures financed through retention payable at period end | (1,475) | (3,752) |
Number of Properties | Rentable Square Feet | ||||||||||
Office properties | 72 | 12,097,300 | |||||||||
Mixed-use properties | 5 | 942,334 | |||||||||
Core Properties | 77 | 13,039,634 | |||||||||
Development property | 1 | 205,803 | |||||||||
Redevelopment properties | 3 | 432,699 | |||||||||
The Properties | 81 | 13,678,136 |
March 31, 2022 | December 31, 2021 | ||||||||||
Land | $ | 410,103 | $ | 410,144 | |||||||
Building and improvements | 2,696,233 | 2,653,492 | |||||||||
Tenant improvements | 411,659 | 408,966 | |||||||||
Total | $ | 3,517,995 | $ | 3,472,602 |
Property/Portfolio Name | Acquisition Date | Location | Property Type | Rentable Square Feet/Acres | Purchase Price | |||||||||||||||||||||||||||
631 Park Avenue | January 21, 2022 | King of Prussia, PA | Land | 3.3 acres | $ | 3,650 |
Property/Portfolio Name | Disposition Date | Location | Property Type | Rentable Square Feet/Acres | Sales Price | Gain/(Loss) on Sale (a) | ||||||||||||||||||||||||||||||||
Gateway G & H | January 20, 2022 | Richmond, VA | Land | 10.0 acres | $ | 1,600 | $ | 897 |
March 31, 2022 | December 31, 2021 | ||||||||||
Net property | $ | 1,939,193 | $ | 1,563,263 | |||||||
Other assets | 519,361 | 434,687 | |||||||||
Other liabilities | 403,715 | 331,947 | |||||||||
Debt, net | 1,210,476 | 956,668 | |||||||||
Equity (a) | 844,363 | 709,335 |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Revenue | $ | 53,216 | $ | 53,357 | |||||||
Operating expenses | (28,592) | (28,987) | |||||||||
Interest expense, net | (7,469) | (7,374) | |||||||||
Depreciation and amortization | (21,283) | (24,893) | |||||||||
Net loss | $ | (4,128) | $ | (7,897) | |||||||
Ownership interest % | Various | Various | |||||||||
Company's share of net loss | $ | (4,617) | $ | (6,541) | |||||||
Basis adjustments and other | 54 | (383) | |||||||||
Equity in loss of unconsolidated real estate ventures | $ | (4,563) | $ | (6,924) |
Three Months Ended March 31, | ||||||||||||||
Lease Revenue | 2022 | 2021 | ||||||||||||
Fixed contractual payments | $ | 88,763 | $ | 86,380 | ||||||||||
Variable lease payments | 24,331 | 24,148 | ||||||||||||
Total | $ | 113,094 | $ | 110,528 |
March 31, 2022 | |||||||||||||||||
Total Cost | Accumulated Amortization | Intangible Assets, net | |||||||||||||||
Intangible assets, net: | |||||||||||||||||
In-place lease value | $ | 63,601 | $ | (38,245) | $ | 25,356 | |||||||||||
Tenant relationship value | 167 | (98) | 69 | ||||||||||||||
Above market leases acquired | 486 | (331) | 155 | ||||||||||||||
Total intangible assets, net | $ | 64,254 | $ | (38,674) | $ | 25,580 | |||||||||||
Total Cost | Accumulated Amortization | Intangible Liabilities, net | |||||||||||||||
Intangible liabilities, net: | |||||||||||||||||
Below market leases acquired | $ | 24,485 | $ | (12,400) | $ | 12,085 | |||||||||||
December 31, 2021 | |||||||||||||||||
Total Cost | Accumulated Amortization | Intangible Assets, net | |||||||||||||||
Intangible assets, net: | |||||||||||||||||
In-place lease value | $ | 72,376 | $ | (44,066) | $ | 28,310 | |||||||||||
Tenant relationship value | 167 | (97) | 70 | ||||||||||||||
Above market leases acquired | 486 | (310) | 176 | ||||||||||||||
Total intangible assets, net | $ | 73,029 | $ | (44,473) | $ | 28,556 | |||||||||||
Total Cost | Accumulated Amortization | Intangible Liabilities, net | |||||||||||||||
Intangible liabilities, net: | |||||||||||||||||
Below market leases acquired | $ | 27,025 | $ | (14,044) | $ | 12,981 |
Assets | Liabilities | ||||||||||
2022 (nine months remaining) | $ | 6,665 | $ | 1,691 | |||||||
2023 | 6,724 | 1,540 | |||||||||
2024 | 4,433 | 1,321 | |||||||||
2025 | 3,255 | 1,044 | |||||||||
2026 | 1,195 | 754 | |||||||||
Thereafter | 3,308 | 5,735 | |||||||||
Total | $ | 25,580 | $ | 12,085 |
March 31, 2022 | December 31, 2021 | Effective Interest Rate | Maturity Date | |||||||||||||||||||||||
UNSECURED DEBT | ||||||||||||||||||||||||||
$600 million Unsecured Credit Facility | $ | 156,000 | $ | 23,000 | LIBOR + 1.10% | July 2022 | (a) | |||||||||||||||||||
Term Loan - Swapped to fixed | 250,000 | 250,000 | 2.87% | October 2022 | ||||||||||||||||||||||
$350.0M 3.95% Guaranteed Notes due 2023 | 350,000 | 350,000 | 3.87% | February 2023 | ||||||||||||||||||||||
$350.0M 4.10% Guaranteed Notes due 2024 | 350,000 | 350,000 | 3.78% | October 2024 | ||||||||||||||||||||||
$450.0M 3.95% Guaranteed Notes due 2027 | 450,000 | 450,000 | 4.03% | November 2027 | ||||||||||||||||||||||
$350.0M 4.55% Guaranteed Notes due 2029 | 350,000 | 350,000 | 4.30% | October 2029 | ||||||||||||||||||||||
Indenture IA (Preferred Trust I) | 27,062 | 27,062 | LIBOR + 1.25% | March 2035 | ||||||||||||||||||||||
Indenture IB (Preferred Trust I) | 25,774 | 25,774 | LIBOR + 1.25% | April 2035 | ||||||||||||||||||||||
Indenture II (Preferred Trust II) | 25,774 | 25,774 | LIBOR + 1.25% | July 2035 | ||||||||||||||||||||||
Principal balance outstanding | 1,984,610 | 1,851,610 | ||||||||||||||||||||||||
Plus: original issue premium (discount), net | 7,699 | 8,187 | ||||||||||||||||||||||||
Less: deferred financing costs | (5,726) | (6,211) | ||||||||||||||||||||||||
Total unsecured indebtedness | $ | 1,986,583 | $ | 1,853,586 | ||||||||||||||||||||||
2022 (nine months remaining) | $ | 406,000 | |||
2023 | 350,000 | ||||
2024 | 350,000 | ||||
2025 | — | ||||
2026 | — | ||||
Thereafter | 878,610 | ||||
Total principal payments | 1,984,610 | ||||
Net unamortized premiums/(discounts) | 7,699 | ||||
Net deferred financing costs | (5,726) | ||||
Outstanding indebtedness | $ | 1,986,583 | |||
March 31, 2022 | December 31, 2021 | ||||||||||||||||||||||
Carrying Amount (a) | Fair Value | Carrying Amount (a) | Fair Value | ||||||||||||||||||||
Unsecured notes payable | $ | 1,502,235 | $ | 1,515,265 | $ | 1,502,368 | $ | 1,588,780 | |||||||||||||||
Variable rate debt | $ | 484,348 | $ | 466,999 | $ | 351,218 | $ | 344,754 | |||||||||||||||
Notes receivable (b) | $ | 44,430 | $ | 44,862 | $ | 44,430 | $ | 45,230 |
Hedge Product | Hedge Type | Designation | Notional Amount | Strike | Trade Date | Maturity Date | Fair value | |||||||||||||||||||||||||||||||||||||||||||||||||
3/31/2022 | 12/31/2021 | 3/31/2022 | 12/31/2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Swap | Interest Rate | Cash Flow | (a) | $ | 250,000 | $ | 250,000 | 2.868 | % | October 8, 2015 | October 8, 2022 | $ | (545) | $ | (2,461) | |||||||||||||||||||||||||||||||||||||||||
$ | 250,000 | $ | 250,000 |
Three Months Ended March 31, | |||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||
Basic | Diluted | Basic | Diluted | ||||||||||||||||||||
Numerator | |||||||||||||||||||||||
Net income | $ | 6,101 | $ | 6,101 | $ | 6,964 | $ | 6,964 | |||||||||||||||
Net income attributable to noncontrolling interests | (8) | (8) | (43) | (43) | |||||||||||||||||||
Nonforfeitable dividends allocated to unvested restricted shareholders | (148) | (148) | (146) | (146) | |||||||||||||||||||
Net income attributable to common shareholders | $ | 5,945 | $ | 5,945 | $ | 6,775 | $ | 6,775 | |||||||||||||||
Denominator | |||||||||||||||||||||||
Weighted-average shares outstanding | 171,294,949 | 171,294,949 | 170,624,741 | 170,624,741 | |||||||||||||||||||
Contingent securities/Share based compensation | — | 1,594,045 | — | 1,011,379 | |||||||||||||||||||
Weighted-average shares outstanding | 171,294,949 | 172,888,994 | 170,624,741 | 171,636,120 | |||||||||||||||||||
Earnings per Common Share: | |||||||||||||||||||||||
Net income attributable to common shareholders | $ | 0.03 | $ | 0.03 | $ | 0.04 | $ | 0.04 |
Three Months Ended March 31, | |||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||
Basic | Diluted | Basic | Diluted | ||||||||||||||||||||
Numerator | |||||||||||||||||||||||
Net income | $ | 6,101 | $ | 6,101 | $ | 6,964 | $ | 6,964 | |||||||||||||||
Net loss attributable to noncontrolling interests | 2 | 2 | 1 | 1 | |||||||||||||||||||
Nonforfeitable dividends allocated to unvested restricted unitholders | (148) | (148) | (146) | (146) | |||||||||||||||||||
Net income attributable to common unitholders | $ | 5,955 | $ | 5,955 | $ | 6,819 | $ | 6,819 | |||||||||||||||
Denominator | |||||||||||||||||||||||
Weighted-average units outstanding | 171,927,588 | 171,927,588 | 171,606,375 | 171,606,375 | |||||||||||||||||||
Contingent securities/Share based compensation | — | 1,594,045 | — | 1,011,379 | |||||||||||||||||||
Total weighted-average units outstanding | 171,927,588 | 173,521,633 | 171,606,375 | 172,617,754 | |||||||||||||||||||
Earnings per Common Partnership Unit: | |||||||||||||||||||||||
Net income attributable to common unitholders | $ | 0.03 | $ | 0.03 | $ | 0.04 | $ | 0.04 |
Shares | Weighted Average Grant Date Fair Value | |||||||||||||
Non-vested at January 1, 2022 | 474,978 | $ | 13.51 | |||||||||||
Granted | 306,555 | $ | 13.30 | |||||||||||
Vested | (3,440) | $ | 13.30 | |||||||||||
Forfeited | (670) | $ | 14.96 | |||||||||||
Non-vested at March 31, 2022 | 777,423 | $ | 13.43 |
RPSU Grant Date | ||||||||||||||||||||||||||
3/5/2020 | 3/5/2021 | 3/3/2022 | Total | |||||||||||||||||||||||
(Amounts below in shares, unless otherwise noted) | ||||||||||||||||||||||||||
Non-vested at January 1, 2022 | 314,055 | 374,161 | — | 688,216 | ||||||||||||||||||||||
Granted | — | — | 516,852 | 516,852 | ||||||||||||||||||||||
Non-vested at March 31, 2022 | 314,055 | 374,161 | 516,852 | 1,205,068 | ||||||||||||||||||||||
Measurement Period Commencement Date | 1/1/2020 | 1/1/2021 | 1/1/2022 | |||||||||||||||||||||||
Measurement Period End Date | 12/31/2022 | 12/31/2023 | 12/31/2024 | |||||||||||||||||||||||
Granted | 319,600 | 380,957 | 516,852 | |||||||||||||||||||||||
Fair Value of Units on Grant Date (in thousands) | $ | 5,389 | $ | 6,389 | $ | 7,551 |
Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||||||||
Total revenue | Operating expenses (a) | Net operating income | Total revenue | Operating expenses (a) | Net operating income | ||||||||||||||||||||||||||||||
Philadelphia CBD | $ | 53,471 | $ | (19,743) | $ | 33,728 | $ | 51,227 | $ | (17,411) | $ | 33,816 | |||||||||||||||||||||||
Pennsylvania Suburbs | 31,807 | (10,158) | 21,649 | 31,740 | (10,694) | 21,046 | |||||||||||||||||||||||||||||
Austin, Texas | 24,915 | (10,293) | 14,622 | 26,175 | (9,720) | 16,455 | |||||||||||||||||||||||||||||
Metropolitan Washington, D.C. | 5,195 | (3,428) | 1,767 | 4,675 | (4,199) | 476 | |||||||||||||||||||||||||||||
Other | 3,604 | (2,010) | 1,594 | 3,213 | (2,282) | 931 | |||||||||||||||||||||||||||||
Corporate | 8,513 | (2,286) | 6,227 | 3,739 | (2,368) | 1,371 | |||||||||||||||||||||||||||||
Operating properties | $ | 127,505 | $ | (47,918) | $ | 79,587 | $ | 120,769 | $ | (46,674) | $ | 74,095 |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Net income | $ | 6,101 | $ | 6,964 | |||||||
Plus: | |||||||||||
Interest expense | 15,742 | 16,293 | |||||||||
Interest expense - amortization of deferred financing costs | 709 | 709 | |||||||||
Depreciation and amortization | 43,782 | 40,343 | |||||||||
General and administrative expenses | 10,000 | 6,584 | |||||||||
Equity in loss of unconsolidated real estate ventures | 4,563 | 6,924 | |||||||||
Less: | |||||||||||
Interest and investment income | 440 | 1,674 | |||||||||
Income tax provision | (27) | (19) | |||||||||
Net gain on disposition of real estate | — | 74 | |||||||||
Net gain on sale of undepreciated real estate | 897 | 1,993 | |||||||||
Consolidated net operating income | $ | 79,587 | $ | 74,095 |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Leasing Activity | |||||||||||
Core Properties (1): | |||||||||||
Total net rentable square feet owned | 13,039,634 | 12,949,078 | |||||||||
Occupancy percentage (end of period) | 89.4 | % | 90.3 | % | |||||||
Average occupancy percentage | 89.9 | % | 90.4 | % | |||||||
Total Portfolio, less properties in development/redevelopment (2): | |||||||||||
Tenant retention rate (3) | 55.9 | % | 51.9 | % | |||||||
New leases and expansions commenced (square feet) | 112,097 | 29,103 | |||||||||
Leases renewed (square feet) | 382,355 | 166,824 | |||||||||
Net absorption (square feet) | (252,364) | (165,126) | |||||||||
Percentage change in rental rates per square foot (4): | |||||||||||
New and expansion rental rates | 7.3 | % | 8.7 | % | |||||||
Renewal rental rates | 21.3 | % | 8.2 | % | |||||||
Combined rental rates | 20.4 | % | 8.3 | % | |||||||
Weighted average lease term for leases commenced (years) | 8.5 | 3.3 | |||||||||
Capital Costs Committed (5): | |||||||||||
Leasing commissions (per square foot) | $ | 13.02 | $ | 2.93 | |||||||
Tenant Improvements (per square foot) | $ | 33.12 | $ | 8.16 | |||||||
Total capital per square foot per lease year | $ | 4.16 | $ | 3.25 |
Property/Portfolio Name | Location | Expected Completion Date | Activity Type | Approximate Square Footage | Estimated Costs | Amount Funded | ||||||||||||||||||||||||||||||||
405 Colorado Street (a) | Austin, TX | Q2 2021 (c) | Development | 205,803 | $ | 121,864 | $ | 96,808 | ||||||||||||||||||||||||||||||
250 King of Prussia Road (b) | Radnor, PA | Q2 2022 | Redevelopment | 168,294 | $ | 82,854 | $ | 39,018 | ||||||||||||||||||||||||||||||
Property/Portfolio Name | Location | Expected Completion Date | Approximate Square Footage | Estimated Costs | Amount Funded | Construction Loan Financing | Our Share Remaining to be Funded | ||||||||||||||||||||||||||||||||||||||||
3025 JFK Boulevard (55%) | Philadelphia, PA | Q3 2023 | (a) | $ | 287,272 | $ | 76,935 | $ | 186,727 | $ | — | (b) | |||||||||||||||||||||||||||||||||||
Same Store Property Portfolio | Recently Completed/Acquired Properties | Development/Redevelopment Properties | Other (Eliminations) (a) | Total Portfolio | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(dollars and square feet in millions except per share amounts) | 2022 | 2021 | $ Change | % Change | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rents | $ | 110.8 | $ | 111.0 | $ | (0.2) | (0.2) | % | $1.2 | $ | — | $ | 1.1 | $ | 0.1 | $ | 2.8 | $ | 2.4 | $ | 115.9 | $ | 113.5 | $ | 2.4 | 2.1 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Third party management fees, labor reimbursement and leasing | — | — | — | — | % | — | — | — | — | 5.1 | 6.7 | 5.1 | 6.7 | (1.6) | (23.9) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other | 0.3 | 0.2 | 0.1 | 50.0 | % | — | — | — | — | 6.2 | 0.4 | 6.5 | 0.6 | 5.9 | 983.3 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total revenue | 111.1 | 111.2 | (0.1) | (0.1) | % | 1.2 | — | 1.1 | 0.1 | 14.1 | 9.5 | 127.5 | 120.8 | 6.7 | 5.5 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property operating expenses | 28.9 | 28.1 | 0.8 | 2.8 | % | 0.1 | (0.1) | 0.3 | (0.4) | 2.2 | 1.3 | 31.5 | 28.9 | 2.6 | 9.0 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real estate taxes | 13.2 | 13.1 | 0.1 | 0.8 | % | 0.1 | 0.1 | 0.2 | 0.8 | 0.3 | 0.8 | 13.8 | 14.8 | (1.0) | (6.8) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Third party management expenses | — | — | — | — | % | — | — | — | — | 2.6 | 3.0 | 2.6 | 3.0 | (0.4) | (13.3) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net operating income | 69.0 | 70.0 | (1.0) | (1.4) | % | 1.0 | — | 0.6 | (0.3) | 9.0 | 4.4 | 79.6 | 74.1 | 5.5 | 7.4 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 40.0 | 37.7 | 2.3 | 6.1 | % | 0.6 | — | 0.4 | 0.4 | 2.8 | 2.3 | 43.8 | 40.4 | 3.4 | 8.4 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
General & administrative expenses | — | — | — | — | % | — | — | — | — | 10.0 | 6.6 | 10.0 | 6.6 | 3.4 | 51.5 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net gain on disposition of real estate | — | (0.1) | 0.1 | (100.0) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net gain on sale of undepreciated real estate | (0.9) | (2.0) | 1.1 | (55.0) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating income (loss) | $ | 29.0 | $ | 32.3 | $ | (3.3) | (10.2) | % | $0.4 | $ | — | $ | 0.2 | $ | (0.7) | $ | (3.8) | $ | (4.5) | $ | 26.7 | $ | 29.2 | $ | (2.5) | (8.6) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of properties | 76 | 76 | 1 | 4 | 81 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Square feet | 12.9 | 12.9 | 0.1 | 0.6 | 13.9 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Core Occupancy % (b) | 89.3 | % | 90.3 | % | 100.0 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income (Expense): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest and investment income | 0.4 | 1.7 | (1.3) | (76.5) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest expense | (15.7) | (16.3) | 0.6 | (3.7) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest expense — Deferred financing costs | (0.7) | (0.7) | — | — | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity in loss of unconsolidated real estate ventures | (4.6) | (6.9) | 2.3 | (33.3) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | $ | 6.1 | $ | 7.0 | $ | (0.9) | (12.9) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to Common Shareholders of Brandywine Realty Trust | $ | 0.03 | $ | 0.04 | $ | (0.01) | (25.0) | % |
Three Months Ended March 31, | ||||||||||||||||||||
Activity | 2022 | 2021 | (Decrease) Increase | |||||||||||||||||
Operating | $ | 28,515 | $ | 41,176 | $ | (12,661) | ||||||||||||||
Investing | (110,787) | (21,249) | (89,538) | |||||||||||||||||
Financing | 94,130 | (20,524) | 114,654 | |||||||||||||||||
Net cash flows | $ | 11,858 | $ | (597) | $ | 12,455 |
(Decrease) Increase | ||||||||
Acquisitions of real estate | $ | (3,446) | ||||||
Capital expenditures and capitalized interest | (57,323) | |||||||
Capital improvements/acquisition deposits/leasing costs | (4,369) | |||||||
Joint venture investments | (24,878) | |||||||
Proceeds from the sale of properties | 1,402 | |||||||
Capital distributions from unconsolidated real estate ventures | (924) | |||||||
Increase in net cash used in investing activities | $ | (89,538) |
(Decrease) Increase | ||||||||
Proceeds from debt obligations | $ | 105,000 | ||||||
Repayments of debt obligations | 15,000 | |||||||
Redemption of limited partnership units | (4,006) | |||||||
Dividends and distributions paid | (58) | |||||||
Other financing activities | (1,282) | |||||||
Increase in net cash provided by financing activities | $ | 114,654 |
March 31, 2022 | December 31, 2021 | ||||||||||
(dollars in thousands) | |||||||||||
Balance: (a) | |||||||||||
Fixed rate | $ | 1,750,000 | $ | 1,750,000 | |||||||
Variable rate - unhedged | 234,610 | 101,610 | |||||||||
Total | $ | 1,984,610 | $ | 1,851,610 | |||||||
Percent of Total Debt: | |||||||||||
Fixed rate | 88.2 | % | 94.5 | % | |||||||
Variable rate - unhedged | 11.8 | % | 5.5 | % | |||||||
Total | 100.0 | % | 100.0 | % | |||||||
Weighted-average interest rate at period end: | |||||||||||
Fixed rate | 3.8 | % | 3.8 | % | |||||||
Variable rate - unhedged | 1.5 | % | 1.3 | % | |||||||
Total | 3.6 | % | 3.7 | % | |||||||
Weighted-average maturity in years: | |||||||||||
Fixed rate | 3.8 | 4.0 | |||||||||
Variable rate - unhedged | 4.7 | 10.6 | |||||||||
Total | 3.9 | 4.4 |
Period | Principal maturities | Weighted Average Interest Rate of Maturing Debt | ||||||||||||
2022 (nine months remaining) | $ | 406,000 | 2.35 | % | ||||||||||
2023 | 350,000 | 3.87 | % | |||||||||||
2024 | 350,000 | 3.78 | % | |||||||||||
2025 | — | — | % | |||||||||||
2026 | — | — | % | |||||||||||
2027 | 450,000 | 4.03 | % | |||||||||||
2028 | — | — | % | |||||||||||
2029 | 350,000 | 4.30 | % | |||||||||||
2030 | — | — | % | |||||||||||
2031 | — | — | % | |||||||||||
Thereafter | 78,610 | 1.52 | % | |||||||||||
Totals | $ | 1,984,610 | 3.56 | % |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
(amounts in thousands, except share information) | |||||||||||
Net income attributable to common unitholders | $ | 5,955 | $ | 6,819 | |||||||
Add (deduct): | |||||||||||
Amount allocated to unvested restricted unitholders | 148 | 146 | |||||||||
Net gain on disposition of real estate | — | (74) | |||||||||
Depreciation and amortization: | |||||||||||
Real property | 36,162 | 31,534 | |||||||||
Leasing costs including acquired intangibles | 6,994 | 8,280 | |||||||||
Company’s share of unconsolidated real estate ventures | 11,295 | 13,731 | |||||||||
Partners’ share of consolidated real estate ventures | (5) | (5) | |||||||||
Funds from operations | $ | 60,549 | $ | 60,431 | |||||||
Funds from operations allocable to unvested restricted shareholders | (238) | (213) | |||||||||
Funds from operations available to common share and unit holders (FFO) | $ | 60,311 | $ | 60,218 | |||||||
Weighted-average shares/units outstanding — basic (a) | 171,927,588 | 171,606,375 | |||||||||
Weighted-average shares/units outstanding — fully diluted (a) | 173,521,633 | 172,617,754 |
(a) | Exhibits | ||||||||||
Exhibits No. | Description | ||||||||||
10.1 | |||||||||||
10.2 | |||||||||||
10.3 | |||||||||||
31.1 | |||||||||||
31.2 | |||||||||||
31.3 | |||||||||||
31.4 | |||||||||||
32.1 | |||||||||||
32.2 | |||||||||||
32.3 | |||||||||||
32.4 | |||||||||||
101.1 | The following materials from the Quarterly Reports on Form 10-Q of Brandywine Realty Trust and Brandywine Operating Partnership, L.P. for the quarter ended March 31, 2022 formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statement of Equity, (iv) the Consolidated Statements of Cash Flows, and (v) Notes to Consolidated Financial Statements, detailed tagged and filed herewith. | ||||||||||
104 | Cover Page Interactive Data File – the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
BRANDYWINE REALTY TRUST (Registrant) | ||||||||||||||
Date: | April 27, 2022 | By: | /s/ Gerard H. Sweeney | |||||||||||
Gerard H. Sweeney, President and Chief Executive Officer | ||||||||||||||
(Principal Executive Officer) | ||||||||||||||
Date: | April 27, 2022 | By: | /s/ Thomas E. Wirth | |||||||||||
Thomas E. Wirth, Executive Vice President and Chief Financial Officer | ||||||||||||||
(Principal Financial Officer) | ||||||||||||||
Date: | April 27, 2022 | By: | /s/ Daniel Palazzo | |||||||||||
Daniel Palazzo, Vice President and Chief Accounting Officer | ||||||||||||||
(Principal Accounting Officer) |
BRANDYWINE OPERATING PARTNERSHIP, L.P. (Registrant) BRANDYWINE REALTY TRUST, as general partner | ||||||||||||||
Date: | April 27, 2022 | By: | /s/ Gerard H. Sweeney | |||||||||||
Gerard H. Sweeney, President and Chief Executive Officer | ||||||||||||||
(Principal Executive Officer) | ||||||||||||||
Date: | April 27, 2022 | By: | /s/ Thomas E. Wirth | |||||||||||
Thomas E. Wirth, Executive Vice President and Chief Financial Officer | ||||||||||||||
(Principal Financial Officer) | ||||||||||||||
Date: | April 27, 2022 | By: | /s/ Daniel Palazzo | |||||||||||
Daniel Palazzo, Vice President and Chief Accounting Officer | ||||||||||||||
(Principal Accounting Officer) |
Participant: | ___________________ | ||||
Effective Date: | March 3, 2022 | ||||
Target Award Amount: | ______ RSUs |
Average FFO Growth Percentage | Percentage of Component Earned | |||||||
Target | 2.75% | 50% | ||||||
Above target | 3.00% | 75% | ||||||
3.25% | 100% | |||||||
3.50% | 150% | |||||||
Maximum or above | 4.00% | 200% |
Aggregate Investment Activity | Percentage of Component Earned | |||||||
Target | $1,100,000 | 50% | ||||||
Above target | $1,150,000 | 75% | ||||||
$1,200,000 | 100% | |||||||
$1,250,000 | 150% | |||||||
Maximum or above | $1,300,000 | 200% |
BRANDYWINE REALTY TRUST By: ___________________________________ Name: Title: Date: | PARTICIPANT ___________________________________ Name: [Name] Date: |
Trust’s TSR Percentile Ranking | Percentage of Base Units Deliverable in Shares | ||||
Below 25th percentile | 0% | ||||
25th percentile (threshold) | 50% | ||||
50th percentile (target) | 100% | ||||
75% percentile or above (maximum) | 200% |
12/31/2024 Share Value of One Share | $20 | |||||||
+ Dividends over Measurement Period on One Share | +1.92 | |||||||
$21.92 | ||||||||
Divided by 3/3/2022 Share Value of One Share | /$16 | |||||||
1.37 | ||||||||
TSR | 37% |
Trust’s TSR Percentile Ranking | Percentage of Base Units Deliverable in Shares | Shares | ||||||||||||
Below 25th | 0% | 0 | ||||||||||||
25th | 50% | 125 | ||||||||||||
37.5th | 75% | 187 (plus cash for 0.5 Share) | ||||||||||||
50th | 100% | 250 | ||||||||||||
62.5th | 150% | 375 | ||||||||||||
75th or above | 200% | 500 |
Signature of Participant | Date | ||||
ACCEPTED: [insert name of Employer] By: Date: |
Date: April 27, 2022 | /s/ Gerard H. Sweeney | |||||||
Gerard H. Sweeney President and Chief Executive Officer |
Date: April 27, 2022 | /s/ Thomas E. Wirth | |||||||
Thomas E. Wirth Executive Vice President and Chief Financial Officer |
Date: April 27, 2022 | /s/ Gerard H. Sweeney | |||||||
Gerard H. Sweeney | ||||||||
President and Chief Executive Officer |
Date: April 27, 2022 | /s/ Thomas E. Wirth | |||||||
Thomas E. Wirth | ||||||||
Executive Vice President and Chief Financial Officer |
/s/ Gerard H. Sweeney | |||||
Gerard H. Sweeney President and Chief Executive Officer | |||||
Date: April 27, 2022 |
/s/ Thomas E. Wirth | |||||
Thomas E. Wirth Executive Vice President and Chief Financial Officer | |||||
Date: April 27, 2022 |
/s/ Gerard H. Sweeney | |||||
Gerard H. Sweeney | |||||
President and Chief Executive Officer | |||||
Date: April 27, 2022 |
/s/ Thomas E. Wirth | |||||
Thomas E. Wirth | |||||
Executive Vice President and Chief Financial Officer | |||||
Date: April 27, 2022 |