BRANDYWINE REALTY TRUST (Form: 10-Q, Received: 05/10/2007 15:39:47)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


þ		Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2007


o		Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to


Commission file number		001-9106 (Brandywine Realty Trust) 000-24407 (Brandywine Operating Partnership, L.P.)

Brandywine Realty Trust
Brandywine Operating Partnership, L.P.

(Exact name of registrant as specified in its charter)


MARYLAND (Brandywine Realty Trust)		23-2413352
DELAWARE (Brandywine Operating Partnership L.P.)		23-2862640

(State or other jurisdiction of
Incorporation or organization)		(I.R.S. Employer Identification No.)

555 East Lancaster Avenue
Radnor, Pennsylvania		19087

(Address of principal executive offices)		(Zip Code)


Registrant’s telephone number, including area code		(610) 325-5600

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.


Brandywine Realty Trust		Yes þ No o
Brandywine Operating Partnership, L.P.		Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, accelerated filer, or a non-accelerated filer. See definitions of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.


Brandywine Realty Trust		Large accelerated filer þ Accelerated filer o Non-accelerated filer o
Brandywine Operating Partnership, L.P.		Large accelerated filer o Accelerated filer þ Non-accelerated filer o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).


Brandywine Realty Trust		Yes o No þ
Brandywine Operating Partnership, L.P.		Yes o No þ

A total of 87,045,858 Common Shares of Beneficial Interest, par value $0.01 per share, were outstanding as of May 9, 2007.

TABLE OF CONTENTS


	PART I - FINANCIAL INFORMATION

	Brandywine Realty Trust
		Page

Item 1.	Financial Statements (unaudited)

	Consolidated Balance Sheets as of March 31, 2007 and December 31, 2006		3

	Consolidated Statements of Operations for the three-month periods ended March 31, 2007 and 2006		4

	Consolidated Statements of Other Comprehensive Income for the three-month periods ended March 31, 2007 and 2006		5

	Consolidated Statements of Cash Flows for the three-month periods ended March 31, 2007 and March 31, 2006		6

	Notes to Unaudited Consolidated Financial Statements		7

	Brandywine Operating Partnership, L.P.

Item 1.	Financial Statements (unaudited)

	Consolidated Balance Sheets as of March 31, 2007 and December 31, 2006		30

	Consolidated Statements of Operations for the three-month periods ended March 31, 2007 and 2006		31

	Consolidated Statements of Other Comprehensive Income for the three-month periods ended March 31, 2007 and 2006		32

	Consolidated Statements of Cash Flows for the three-month periods ended March 31, 2007 and March 31, 2006		33

	Notes to Unaudited Consolidated Financial Statements		34

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations		56

Item 3.	Quantitative and Qualitative Disclosures about Market Risk		68

Item 4.	Controls and Procedures		68

	PART II - OTHER INFORMATION

Item 1.	Legal Proceedings		68

Item 1A.	Risk Factors		69

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		69

Item 3.	Defaults Upon Senior Securities		69

Item 4.	Submission of Matters to a Vote of Security Holders		69

Item 5.	Other Information		69

Item 6.	Exhibits		69

	Signatures		71
Amended and Restated 1997 Long-Term Incentive Plan
2007 Non-Qualified Employee Share Purchase Plan
Restricted Share Award
Statement re Computation of Ratios of Brandywine Realty Trust
Statement re Computation of Ratios of Brandywine Operating Partnership, L.P.
Certification of Chief Executive Officer
Certification of Chief Financial Officer
Certification of Chief Executive Officer, in its capacity as the general partner
Certification of Chief Financial Officer, in its capacity as the general partner
Certification of Chief Executive Officer, as Adopted Pursuant to Section 906
Certification of Chief Financial Officer, as Adopted Pursuant to Section 906
Certification of Chief Executive Officer, in its capacity as the general partner, as Adopted Pursuant to Section 906
Certification of Chief Financial Officer, in its capacity as the general partner, as Adopted Pursuant to Section 906

Filing Format

This combined Form 10-Q is being filed separately by Brandywine Realty Trust and Brandywine Operating Partnership, L.P.

PART I — FINANCIAL INFORMATION

Item 1. — Financial Statements

BRANDYWINE REALTY TRUST

CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except share and per share information)


	March 31,			December 31,
	2007			2006

ASSETS
Real estate investments:
Operating properties	$	4,773,814		$	4,927,305
Accumulated depreciation		(522,286	)		(515,698	)

Operating real estate investments, net		4,251,528			4,411,607
Development land and construction-in-progress		346,555			328,119

Total real estate investments, net		4,598,083			4,739,726
Cash and cash equivalents		3,885			25,379
Cash escrowed with qualified intermediary (Note 3)		109,102			—
Accounts receivable, net		18,339			19,957
Accrued rent receivable, net		72,433			71,589
Asset held for sale, net		127,333			126,016
Investment in real estate ventures, at equity		72,983			74,574
Deferred costs, net		77,002			73,708
Intangible assets, net		248,384			281,251
Other assets		107,936			96,818

Total assets	$	5,435,480		$	5,509,018

LIABILITIES AND BENEFICIARIES’ EQUITY
Mortgage notes payable	$	879,232		$	883,920
Unsecured notes, net of discounts		1,908,435			2,208,310
Unsecured credit facility		404,000			60,000
Accounts payable and accrued expenses		103,650			108,400
Distributions payable		42,321			42,760
Tenant security deposits and deferred rents		58,655			55,697
Acquired below market leases, net		76,639			92,527
Other liabilities		16,620			14,661
Mortgage notes payable and other liabilities held for sale		14,404			20,826

Total liabilities		3,503,956			3,487,101
Minority interest — partners’ share of consolidated real estate ventures		—			34,428
Minority interest attributable to continuing operations — LP units		87,664			89,563
Commitments and contingencies (Note 14)
Beneficiaries’ equity:
Preferred Shares (shares authorized—20,000,000):
7.50% Series C Preferred Shares, $0.01 par value; issued and outstanding—2,000,000 in 2007 and 2006		20			20
7.375% Series D Preferred Shares, $0.01 par value; issued and outstanding—2,300,000 in 2007 and 2006		23			23
Common Shares of beneficial interest, $0.01 par value; shares authorized 200,000,000; issued and outstanding—87,302,191 in 2007 and 88,327,041 in 2006		872			883
Additional paid-in capital		2,277,828			2,311,541
Cumulative earnings		443,136			423,764
Accumulated other comprehensive income (loss)		2,428			1,576
Cumulative distributions		(880,447	)		(839,881	)

Total beneficiaries’ equity		1,843,860			1,897,926

Total liabilities, minority interest and beneficiaries’ equity	$	5,435,480		$	5,509,018

The accompanying notes are an integral part of these consolidated financial statements.

BRANDYWINE REALTY TRUST

CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except share and per share information)


	For the three-month periods
	ended March 31,
	2007			2006

Revenue:
Rents	$	137,940		$	123,069
Tenant reimbursements		20,823			16,634
Other		4,338			4,215

Total revenue		163,101			143,918
Operating Expenses:
Property operating expenses		61,232			55,181
Depreciation and amortization		62,047			51,212
Administrative expenses		7,269			8,490

Total operating expenses		130,548			114,883

Operating income		32,553			29,035
Other Income (Expense):
Interest income		787			2,650
Interest expense		(40,358	)		(40,378	)
Interest expense — Deferred financing costs		(1,258	)		(479	)
Equity in income of real estate ventures		754			965

Income (loss) before minority interest		(7,522	)		(8,207	)
Minority interest — partners’ share of consolidated real estate ventures		(116	)		298
Minority interest attributable to continuing operations — LP units		411			435

Income (loss) from continuing operations		(7,227	)		(7,474	)

Discontinued operations:
Income from discontinued operations		1,776			5,246
Net gain on disposition of discontinued operations		26,009			—
Minority interest — partners’ share of consolidated real estate ventures		—			(187	)
Minority interest attributable to discontinued operations — LP units		(1,186	)		(227	)

Income from discontinued operations		26,599			4,832

Net income (loss)		19,372			(2,642	)
Income allocated to Preferred Shares		(1,998	)		(1,998	)

Income (loss) allocated to Common Shares	$	17,374		$	(4,640	)


Basic earnings per Common Share:
Continuing operations	$	(0.10	)	$	(0.11	)
Discontinued operations		0.30			0.05

	$	0.20		$	(0.05	)


Diluted earnings per Common Share:
Continuing operations	$	(0.10	)	$	(0.11	)
Discontinued operations		0.30			0.05

	$	0.19		$	(0.05	)


Dividends declared per Common Share	$	0.44		$	0.44

Basic weighted average shares outstanding		88,287,426			89,299,967

Diluted weighted average shares outstanding		89,236,342			89,742,981

The accompanying notes are an integral part of these consolidated financial statements.

BRANDYWINE REALTY TRUST

CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME
(unaudited, in thousands)


	For the three-month periods
	ended March 31,
	2007			2006

Net income (loss)	$	19,372		$	(2,642	)
Other comprehensive income:
Unrealized gain (loss) on derivative financial instruments		1,450			1,758
Less: minority interest — consolidated real estate venture partner’s share of unrealized gain (loss) on derivative financial instruments		—			(513	)
Settlement of forward starting swaps		—			3,266
Reclassification of realized (gains)/losses on derivative financial instruments to operations, net		9			96
Unrealized gain (loss) on available-for-sale securities		(607	)		(592	)

Total other comprehensive income (loss)		852			4,015

Comprehensive income	$	20,224		$	1,373

The accompanying notes are an integral part of these consolidated financial statements.

BRANDYWINE REALTY TRUST

CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)


	Three-month periods
	ended March 31,
	2007			2006

Cash flows from operating activities:
Net income (loss)	$	19,372		$	(2,642	)
Adjustments to reconcile net income (loss) to net cash from operating activities:
Depreciation		48,508			41,079
Amortization:
Deferred financing costs		1,257			480
Deferred leasing costs		3,842			2,166
Acquired above (below) market leases, net		(3,613	)		(1,939	)
Acquired lease intangibles		14,247			16,806
Deferred compensation costs		1,213			776
Straight-line rent		(7,063	)		(7,708	)
Provision for doubtful accounts		500			1,056
Real estate venture income in excess of distributions		(84	)		(486	)
Net gain on sale of interests in real estate		(26,009	)		—
Minority interest		891			(319	)
Changes in assets and liabilities:
Accounts receivable		5,416			(4,018	)
Other assets		(11,167	)		(7,482	)
Accounts payable and accrued expenses		7,286			3,870
Tenant security deposits and deferred rents		3,390			10,918
Other liabilities		(7,465	)		2,681

Net cash from operating activities		50,521			55,238
Cash flows from investing activities:
Acquisition of Prentiss		—			(935,856	)
Acquisition of properties		—			(12,480	)
Acquisition of minority interest — partners’ share of consolidated real estate venture		(63,732	)		—
Sales of properties, net		109,127			134,064
Capital expenditures		(68,015	)		(52,364	)
Investment in unconsolidated real estate ventures		(512	)		(358	)
Cash distributions from unconsolidated real estate ventures in excess of equity in income		1,849			1,717
Leasing costs		(9,259	)		(2,621	)

Net cash from investing activities		(30,542	)		(867,898	)
Cash flows from financing activities:
Proceeds from Credit Facility borrowings		442,000			215,000
Repayments of Credit Facility borrowings		(98,000	)		(205,000	)
Proceeds from mortgage notes payable		—			20,520
Repayments of mortgage notes payable		(4,695	)		(6,807	)
Proceeds from term loan		—			750,000
Repayments of term loan		—			(750,000	)
Proceeds from unsecured notes		—			847,818
Repayments of unsecured notes		(299,866	)		—
Proceeds from forward starting swap termination		—			3,266
Repayments on employee stock loans		—			10
Debt financing costs		(72	)		(5,581	)
Exercise of stock options		6,166			1,923
Repurchases of Common Shares		(44,677	)		—
Distributions paid to shareholders		(41,031	)		(27,985	)
Distributions to minority interest holders		(1,298	)		(1,377	)

Net cash from financing activities		(41,473	)		841,787

Increase (decrease) in cash and cash equivalents		(21,494	)		29,127
Cash and cash equivalents at beginning of period		25,379			7,174

Cash and cash equivalents at end of period	$	3,885		$	36,301

Supplemental disclosure:
Cash paid for interest, net of capitalized interest	$	24,023		$	23,350
Supplemental disclosure of non-cash activity:
Common shares issued in the Prentiss acquisition		—			1,022,173
Operating Partnership units issued in Prentiss acquisitions		—			64,103
Operating Partnership units issued in property acquisitions		—			13,819
Cash escrowed with qualified intermediary (Note 3)		109,102			—
Debt, minority interest and other liabilities, net, assumed in the Prentiss acquisition		—			679,520

The accompanying notes are an integral part of these consolidated financial statements.

BRANDYWINE REALTY TRUST

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007

1. THE COMPANY

Brandywine Realty Trust, a Maryland real estate investment trust, or REIT, is a self-administered and self-managed real estate investment trust, or REIT, active in acquiring, developing, redeveloping, leasing and managing office and industrial properties. Brandywine Realty Trust owns its assets and conducts its operations through Brandywine Operating Partnership, L.P. a Delaware limited partnership (the “Operating Partnership”) and subsidiaries of the Operating Partnership. Brandywine Realty Trust, the Operating Partnership and their consolidated subsidiaries are collectively referred to below as the “Company.”

As of March 31, 2007, the Company owned 236 office properties, 23 industrial facilities and one mixed-use property (collectively, the “Properties”) containing an aggregate of approximately 26.5 million net rentable square feet. The Company also has six properties under development and 12 properties under redevelopment containing an aggregate 2.7 million net rentable square feet. As of March 31, 2007, the Company consolidates three office properties owned by real estate ventures containing 0.4 million net rentable square feet. Therefore, the Company wholly owns or consolidates 281 properties with an aggregate of 29.6 million net rentable square feet. As of March 31, 2007, the Company owned economic interests in 11 unconsolidated real estate ventures that contain approximately 2.8 million net rentable square feet (collectively, the “Real Estate Ventures”). The Properties and the properties owned by the Real Estate Ventures are located in and surrounding Philadelphia, PA, Wilmington, DE, Southern and Central New Jersey, Richmond, VA, Metropolitan Washington, D.C., Dallas/Fort Worth, TX, Austin, TX, Oakland and San Diego, CA.

As more fully described in Note 3, on January 5, 2006, the Company acquired Prentiss Properties Trust (“Prentiss”) pursuant to an Agreement and Plan of Merger (the “Merger Agreement”) that the Company entered into with Prentiss on October 3, 2005.

Brandywine Realty Trust is the sole general partner of the Operating Partnership and, as of March 31, 2007, owned a 95.7% interest in the Operating Partnership. The Company conducts its third-party real estate management services business primarily through four management companies (collectively, the “Management Companies”): Brandywine Realty Services Corporation (“BRSCO”), BTRS, Inc. (“BTRS”), Brandywine Properties I Limited, Inc. (“BPI”) and Brandywine Properties Management, L.P. (“BPM”). Each of BRSCO, BTRS and BPI is a taxable REIT subsidiary. The Operating Partnership owns a 95% interest in BRSCO and the remaining 5% interest is owned by a partnership comprised of a current executive and former executive of the Company, each of whom is a member of the Company’s Board of Trustees. The Operating Partnership owns, directly and indirectly, 100% of each of BTRS, BPI and BPM.

As of March 31, 2007, the Management Companies were managing properties containing an aggregate of approximately 41.1 million net rentable square feet, of which approximately 26.5 million net rentable square feet related to Properties owned by the Company and approximately 12.8 million net rentable square feet related to properties owned by third parties and Real Estate Ventures. Unless otherwise indicated, all references to square feet represent net rentable area.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements have been prepared by the Company without audit except as to the balance sheet as of December 31, 2006, which has been derived from audited data, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the included disclosures are adequate to make the information presented not misleading. In the opinion of management, all adjustments (consisting solely of normal recurring matters) for a fair statement of the financial position of the Company as of March 31, 2007, the results of its operations for the three-month periods ended March 31, 2007 and

BRANDYWINE REALTY TRUST

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007

2006 and its cash flows for the three-month periods ended March 31, 2007 and 2006 have been included. The results of operations for such interim periods are not necessarily indicative of the results for a full year. These consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and footnotes included in the Company’s 2006 Annual Report on Form 10-K. Certain prior period amounts have been reclassified to conform to the current period presentation.

Principles of Consolidation

When the Company obtains an economic interest in an entity, the Company evaluates the entity to determine if the entity is deemed a variable interest entity (“VIE”), and if the Company is deemed to be the primary beneficiary, in accordance with FASB Interpretation No. 46R, “Consolidation of Variable Interest Entities” (“FIN 46R”). When an entity is not deemed to be a VIE, the Company considers the provisions of EITF 04-05, “Determining Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners Have Certain Rights” (“EITF 04-05”). The Company consolidates (i) entities that are VIEs and of which the Company is deemed to be the primary beneficiary and (ii) entities that are non-VIEs which the Company controls and the limited partners do not have the ability to dissolve the entity or remove the Company without cause nor substantive participating rights. Entities that the Company accounts for under the equity method (i.e. at cost, increased or decreased by the Company’s share of earnings or losses, less distributions) include (i) entities that are VIEs and of which the Company is not deemed to be the primary beneficiary (ii) entities that are non-VIEs which the Company does not control, but over which the Company has the ability to exercise significant influence and (iii) entities that are non-VIE’s that the Company controls through its general partner status, but the limited partners in the entity have the substantive ability to dissolve the entity or remove the Company without cause or have substantive participating rights. The Company will reconsider its determination of whether an entity is a VIE and who the primary beneficiary is, and whether or not the limited partners in an entity have substantive rights, if certain events occur that are likely to cause a change in the original determinations. The portion of these entities not owned by the Company is presented as minority interest as of and during the periods consolidated. All intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Management makes significant estimates regarding revenue, impairment of long-lived assets, allowance for doubtful accounts and deferred costs.

Operating Properties

Operating properties are carried at historical cost less accumulated depreciation and impairment losses. The cost of operating properties reflects their purchase price or development cost. Costs incurred for the acquisition and renovation of an operating property are capitalized to the Company’s investment in that property. Ordinary repairs and maintenance are expensed as incurred; major replacements and betterments, which improve or extend the life of the asset, are capitalized and depreciated over their estimated useful lives. Fully-depreciated assets are removed from the accounts.

Purchase Price Allocation

The Company allocates the purchase price of properties to net tangible and identified intangible assets acquired based on fair values. Above-market and below-market in-place lease values for acquired properties are recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) the Company’s estimate of the fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-

BRANDYWINE REALTY TRUST

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007

cancelable term of the lease. Capitalized above-market lease values are amortized as a reduction of rental income over the remaining non-cancelable terms of the respective leases. Capitalized below-market lease values are amortized as an increase to rental income over the remaining non-cancelable terms of the respective leases, including any fixed-rate renewal periods.

Other intangible assets also include amounts representing the value of tenant relationships and in-place leases based on the Company’s evaluation of the specific characteristics of each tenant’s lease and the Company’s overall relationship with the respective tenant. The Company estimates the cost to execute leases with terms similar to the remaining lease terms of the in-place leases, including leasing commissions, legal and other related expenses. This intangible asset is amortized to expense over the remaining term of the respective leases. Company estimates of value are made using methods similar to those used by independent appraisers or by using independent appraisals. Factors considered by the Company in this analysis include an estimate of the carrying costs during the expected lease-up periods considering current market conditions and costs to execute similar leases. In estimating carrying costs, the Company includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods, which primarily range from three to twelve months. The Company also considers information obtained about each property as a result of its pre-acquisition due diligence, marketing and leasing activities in estimating the fair value of the tangible and intangible assets acquired. The Company also uses the information obtained as a result of its pre-acquisition due diligence as part of its consideration of FIN 47, and when necessary, will record a conditional asset retirement obligation as part of its purchase price.

Characteristics considered by the Company in allocating value to its tenant relationships include the nature and extent of the Company’s business relationship with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and expectations of lease renewals, among other factors. The value of tenant relationship intangibles is amortized over the remaining initial lease term and expected renewals, but in no event longer than the remaining depreciable life of the building. The value of in-place leases is amortized over the remaining non-cancelable term of the respective leases and any fixed-rate renewal periods.

In the event that a tenant terminates its lease, the unamortized portion of each intangible, including market rate adjustments, in-place lease values and tenant relationship values, would be charged to expense.

Revenue Recognition

Rental revenue is recognized on the straight-line basis from the later of the date of the commencement of the lease or the date of acquisition of the property subject to existing leases, which averages minimum rents over the terms of the leases. The cumulative difference between lease revenue recognized under this method and contractual lease payment terms is recorded as “accrued rent receivable” on the accompanying balance sheets. The straight-line rent adjustment increased revenue by approximately $7.1 and $7.7 million for the three-month periods ended March 31, 2007 and 2006. The leases also typically provide for tenant reimbursement of a portion of common area maintenance and other operating expenses to the extent that a tenant’s pro rata share of expenses exceeds a base year level set in the lease. Tenant receivables and accrued rent receivables are carried net of the allowances for doubtful accounts of $8.7 million as of March 31, 2007 and $9.3 million as of December 31, 2006. The allowance is based on management’s evaluation of the collectability of receivables, taking into account tenant specific considerations as well as the overall credit of the tenant portfolio. Other income is recorded when earned and is primarily comprised of termination fees received from tenants, bankruptcy settlement fees, third party leasing commissions, and third party management fees. During the three-month periods ended March 31, 2007 and 2006, other income includes termination fees of $1.3 million and $0.6 million, respectively. Deferred rents represent rental revenue received prior to their due dates.

Stock-Based Compensation Plans

The Company maintains shareholder-approved equity incentive plans. The Compensation Committee of the Company’s Board of Trustees authorizes awards under these plans. In May 2005, the Company’s shareholders approved an amendment to the Amended and Restated 1997 Long-Term Incentive Plan (the “1997 Plan”) that increased the number of common shares that may be issued or subject to award under the 1997 Plan from 5,000,000 to

BRANDYWINE REALTY TRUST

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007

6,600,000. The May 2005 amendment provided that 500,000 of the shares under the 1997 Plan are available solely for awards under options and share appreciation rights that have an exercise or strike price not less than the market price of the common shares on the date of award, and the remaining 6,100,000 shares are available for any type of award under the 1997 Plan. Incentive stock options may not be granted at exercise prices less than fair value of the shares at the time of grant. All options awarded by the Company to date are non-qualified stock options that generally vested over two to ten years. As of March 31, 2007, 2.5 million shares remained available for future award under the 1997 Plan. As part of the Company’s January 2006 acquisition of Prentiss, the Company assumed Prentiss’ three share incentive plans. As of March 31, 2007, approximately 1.6 million common shares remain available for issuance or subject to award under the assumed Prentiss share incentive plans.

On January 1, 2002, the Company began to expense the fair value of stock-based compensation awards granted subsequent to January 1, 2002 over the applicable vesting period as a component of general and administrative expenses in the Company’s consolidated Statements of Operations. The Company recognized stock-based compensation expense of $1.2 million and $0.8 million during the three-month periods ended March 31, 2007 and 2006.

Accounting for Derivative Instruments and Hedging Activities

The Company accounts for its derivative instruments and hedging activities under SFAS No. 133 (“SFAS 133”), Accounting for Derivative Instruments and Hedging Activities , and its corresponding amendments under SFAS No. 138, Accounting for Certain Derivative Instruments and Hedging Activities — An Amendment of SFAS 133 . SFAS 133 requires the Company to measure every derivative instrument (including certain derivative instruments embedded in other contracts) at fair value and record them in the balance sheet as either an asset or liability. For derivatives designated as fair value hedges, the changes in fair value of both the derivative instrument and the hedged item are recorded in earnings. For derivatives designated as cash flow hedges, the effective portions of changes in the fair value of the derivative are reported in other comprehensive income. Changes in fair value of derivative instruments and ineffective portions of hedges are recognized in earnings in the current period. For the three-month periods ended March 31, 2007 and 2006, the Company was not party to any derivative contract designated as a fair value hedge and there are no ineffective portions of our cash flow hedges.

The Company actively manages its ratio of fixed-to-floating rate debt. To manage its fixed and floating rate debt in a cost-effective manner, the Company, from time to time, enters into interest rate swap agreements as cash flow hedges, under which it agrees to exchange various combinations of fixed and/or variable interest rates based on agreed upon notional amounts.

Income Taxes

Brandywine Realty Trust has elected to be treated as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”). In addition, Brandywine Realty Trust has several subsidiary REITs. In order to maintain their qualification as a REIT, Brandywine Realty Trust and its REIT subsidiaries are required to, among other things, distribute at least 90% of its REIT taxable income to its stockholders and meet certain tests regarding the nature of its income and assets. As REITs, Brandywine Realty Trust and its REIT subsidiaries are not subject to federal income tax with respect to the portion of its income that meets certain criteria and is distributed annually to the stockholders. Accordingly, no provision for federal income taxes is included in the accompanying consolidated financial statements with respect to the operations of these operations. Brandywine Realty Trust and its REIT subsidiaries intend to continue to operate in a manner that allows them to continue to meet the requirements for taxation as REITs. Many of these requirements, however, are highly technical and complex. If Brandywine Realty Trust or one of its REIT subsidiaries were to fail to meet these requirements, Brandywine Realty Trust would be subject to federal income tax. Brandywine Realty Trust is subject to certain state and local taxes. Provision for such taxes has been included in general and administrative expenses in Brandywine Realty Trust’s Consolidated Statements of Operations and Comprehensive Income.

Brandywine Realty Trust may elect to treat one or more of its subsidiaries as a taxable REIT subsidiary (“TRS”). In

BRANDYWINE REALTY TRUST

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007

general, a TRS of Brandywine Realty Trust may perform additional services for tenants of Brandywine Realty Trust and generally may engage in any real estate or non-real estate related business (except for the operation or management of health care facilities or lodging facilities or the provision to any person, under a franchise, license or otherwise, of rights to any brand name under which any lodging facility or health care facility is operated). A TRS is subject to corporate federal income tax. Brandywine Realty Trust has elected to treat certain of its corporate subsidiaries as TRSs, these entities provide third party property management services and certain services to tenants that could not otherwise be provided.

New Pronouncements

In February 2007, the FASB issued Statement No. 159, “ The Fair Value Option for Financial Assets and Financial Liabilities ” (“SFAS 159”), which gives entities the option to measure eligible financial assets, financial liabilities and firm commitments at fair value on an instrument-by-instrument basis, that are otherwise not permitted to be accounted for at fair value under other accounting standards. The election to use the fair value option is available when an entity first recognizes a financial asset or financial liability or upon entering into a firm commitment. Subsequent changes (i.e., unrealized gains and losses) in fair value must be recorded in earnings. Additionally, SFAS 159 allows for a one-time election for existing positions upon adoption, with the transition adjustment recorded to beginning retained earnings. The Company is currently assessing the potential impact that the adoption of SFAS 159 will have on its financial position and results of operations.

In September 2006, the FASB issued Statement No. 157, Fair Value Measurements (“SFAS No. 157”). SFAS No. 157 provides guidance for using fair value to measure assets and liabilities. This statement clarifies the principle that fair value should be based on the assumptions that market participants would use when pricing the asset or liability. SFAS No. 157 establishes a fair value hierarchy, giving the highest priority to quoted prices in active markets and the lowest priority to unobservable data. SFAS No. 157 applies whenever other standards require assets or liabilities to be measured at fair value. This statement is effective in fiscal years beginning after November 15, 2007. The Company is currently evaluating the impact and believes that the adoption of this standard on January 1, 2008 will not have a material effect on our consolidated financial statements.

In June 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an Interpretation of FASB Statement No. 109 (“FIN 48”). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on description, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company adopted the provisions of FIN 48 on January 1, 2007. As a result of the implementation of FIN 48, the Company recognized no material adjustments regarding its tax accounting treatment. The Company expects to recognize interest and penalties, to the extent incurred related to uncertain tax positions, if any, as income tax expense, which would be included in general and administrative expense.

3. REAL ESTATE INVESTMENTS

As of March 31, 2007 and December 31, 2006, the gross carrying value of the Company’s operating properties was as follows (amounts in thousands):


	March 31, 2007		December 31, 2006
Land	$	724,642	$	756,400
Building and improvements		3,665,362		3,807,040
Tenant improvements		383,810		363,865

		4,773,814		4,927,305

BRANDYWINE REALTY TRUST

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007

Acquisitions and Dispositions

The Company’s acquisitions are accounted for by the purchase method. The results of each acquired property are included in the Company’s results of operations from their respective purchase dates.

2007

During the three-months ended March 31, 2007, the Company acquired the remaining 49% interest in a consolidated real estate venture previously owned by Stichting Pensioenfonds ABP containing ten office properties for a purchase price of $63.7 million. The Company owned a 51% interest in this real estate venture through the acquisition of Prentiss in January 5, 2006 and had already consolidated this venture. This purchase was accounted for as a step acquisition and the difference between the purchase price of the minority interest and the carrying value of the pro rata share of the assets of the real estate venture was allocated to the real estate venture’s assets and liabilities based on their relative fair value.

During the three-months ended March 31, 2007, the Company sold seventeen office properties containing an aggregate of 2.2 million net rentable square feet and 4.7 acres of land for an aggregate sales price of $234.1 million. The net proceeds from the sale of ten of these properties, totaling $109.1 million, have been recorded as cash escrowed with qualified intermediary in the Company’s Consolidated Balance Sheet because the cash is held in escrow for the purpose of potentially accomplishing a like-kind exchange under Section 1031 of the Code. The Company is in the process of identifying replacement assets to accomplish the like-kind exchange by May 14, 2007 and purchase such assets by the statutory expiration date of September 26, 2007.

2006

Prentiss Acquisition

On January 5, 2006, the Company acquired Prentiss pursuant to the Merger Agreement that the Company entered into with Prentiss on October 3, 2005. In conjunction with the Company’s acquisition of Prentiss, designees of The Prudential Insurance Company of America (“Prudential”) acquired certain of Prentiss’ properties that contain an aggregate of approximately 4.32 million net rentable square feet for a total consideration of approximately $747.7 million. Through its acquisition of Prentiss (and after giving effect to the Prudential acquisition of Prentiss’ properties), the Company acquired a portfolio of 79 office properties (including 13 properties that were owned by consolidated Real Estate Ventures and seven properties that were owned by an unconsolidated Real Estate Venture) that contain an aggregate of 14.0 million net rentable square feet. The results of the operations of Prentiss have been included in the Company’s condensed consolidated financial statements since January 5, 2006.

The Company funded the approximately $1.05 billion cash portion of the merger consideration, related transaction costs and prepayments of approximately $543.3 million in Prentiss mortgage debt at the closing of the merger through (i) a $750 million unsecured term loan; (ii) approximately $676.5 million of cash from Prudential’s acquisition of the Prentiss properties; and (iii) approximately $195.0 million through borrowing under a revolving credit facility.

The following table summarizes the fair value of the assets acquired and liabilities assumed at the date of acquisition of Prentiss (in thousands):

BRANDYWINE REALTY TRUST

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007


	At January 5, 2006
Real estate investments
Land — operating	$	282,584
Building and improvements		1,942,728
Tenant improvements		120,610
Construction in progress and land inventory		57,329

Total real estate investments acquired		2,403,251

Rent receivables		6,031
Other assets acquired:
Intangible assets:
In-place leases		187,907
Relationship values		98,382
Above-market leases		26,352

Total intangible assets acquired		312,641
Investment in real estate ventures		66,921
Investment in marketable securities		193,089
Other assets		8,868

Total other assets		581,519

Total assets acquired		2,990,801

Liabilities assumed:
Mortgage notes payable		532,607
Unsecured notes		78,610
Secured note payable		186,116
Security deposits and deferred rent		6,475
Other liabilities:
Below-market leases		78,911
Other liabilities		43,995

Total other liabilities assumed		122,906
Total liabilities assumed		926,714
Minority interest		104,658

Net assets acquired	$	1,959,429

In the acquisition of Prentiss, each then outstanding Prentiss common share was converted into the right to receive 0.69 of a Brandywine common share and $21.50 in cash (the “Per Share Merger Consideration”) except that 497,884 Prentiss common shares held in the Prentiss Deferred Compensation Plan converted solely into 720,737 Brandywine common shares. In addition, each then outstanding unit (each, a “Prentiss OP Unit”) of limited partnership interest in the Prentiss operating partnership subsidiary was, at the option of the holder, converted into Prentiss Common Shares with the right to receive the Per Share Merger Consideration or 1.3799 Class A Units of the Operating Partnership (“Brandywine Class A Units”). Accordingly, based on 49,375,723 Prentiss common shares outstanding and 139,000 Prentiss OP Units electing to receive merger consideration at closing of the acquisition, the Company issued 34,541,946 Brandywine common shares and paid an aggregate of approximately $1.05 billion in cash to the accounts of the former Prentiss shareholders. Based on 1,572,612 Prentiss OP Units outstanding at closing of the acquisition that did not elect to receive merger consideration, the Operating Partnership issued 2,170,047 Brandywine Class A Units. In addition, options issued by Prentiss that were exercisable for an aggregate of 342,662 Prentiss common shares were converted into options exercisable for an aggregate of 496,037 Brandywine common shares at a weighted average exercise price of $22.00 per share. Through its acquisition of Prentiss the Company also assumed approximately $611.2 million in aggregate principal amount of Prentiss debt.

Each Brandywine Class A Unit that was issued in the merger is subject to redemption at the option of the holder. The Operating Partnership may, at its option, satisfy the redemption either for an amount, per unit, of cash equal to the then market price of one Brandywine common share (based on the prior ten-day trading average) or for one Brandywine common share.

BRANDYWINE REALTY TRUST

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007

For purposes of computing the total purchase price reflected in the financial statements, the Brandywine common shares (including restricted common shares), operating partnership units and options that were issued in the Prentiss transaction were valued based on the average trading price per Brandywine common share of $29.54. The average trading price was based on the average of the high and low trading prices for each of the two trading days before, the day of and the two trading days after the merger was announced (i.e., September 29, September 30, October 3, October 4 and October 5).

The Company considered the provisions of FIN 47 for these acquisitions and, where necessary, recorded a conditional asset retirement obligation as part of the purchase price. The aggregate asset retirement recorded in connection with the Prentiss acquisition was approximately $2.7 million.

Pro forma information relating to the acquisition of Prentiss is presented below as if Prentiss was acquired and the related financing transactions occurred on January 1, 2006. These pro forma results are not necessarily indicative of the results which actually would have occurred if the acquisition had occurred on the first day of the periods presented, nor does the pro forma financial information purport to represent the results of operations for future periods (in thousands, except per share amounts):


	Three-month period
	ended March 31, 2006
	(unaudited)
Pro forma revenue	$	147,322

Pro forma loss from continuing operations		(7,124	)

Pro forma loss allocated to common shares		(4,289	)

Earnings per common share from continuing operations
Basic — as reported	$	(0.11	)

Basic — as pro forma	$	(0.10	)

Diluted — as reported	$	(0.11	)

Diluted — as pro forma	$	(0.10	)


Earnings per common share
Basic — as reported	$	(0.05	)

Basic — as pro forma	$	(0.05	)

Diluted — as reported	$	(0.05	)

Diluted — as pro forma	$	(0.05	)

Subsequent to its acquisition of Prentiss and the related sale of certain properties to Prudential, the Company sold eight of the acquired properties that contained an aggregate of 1.6 million net rentable square feet during the three-month period ended March 31, 2006. One additional property acquired in the acquisition of Prentiss was classified as held for sale at March 31, 2006.

During the quarter ended March 31, 2007, the Company sold four of the acquired properties that contained an aggregate of 1.1 million net rentable square feet and a 4.7 acre parcel of land. As of March 31, 2007, one of the acquired properties was classified as held for sale.

Since January 5, 2006, the Company has sold a total of 21 of the acquired properties that contained an aggregate of 4.0 million net rentable square feet and two parcels of land totaling 15.6 acres. Upon the completion of the sale of the one property classified as held for sale at March 31, 2007 (which occurred on April 30, 2007), the Company no longer has any wholly owned properties in Dallas, TX.

Other Acquisitions and Dispositions

BRANDYWINE REALTY TRUST

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007

In addition to the acquisition activity related to Prentiss, during the three-month period ended March 31, 2006, the Company also acquired one office property containing 93.0 net rentable square feet for $10.2 million.

4. INVESTMENT IN UNCONSOLIDATED VENTURES

As of March 31, 2007, the Company had an aggregate investment of approximately $73.0 million in 11 unconsolidated Real Estate Ventures (net of returns of investment). The Company formed these ventures with unaffiliated third parties, or acquired them, to develop office properties or to acquire land in anticipation of possible development of office properties. Nine of the Real Estate Ventures own 15 office buildings that contain an aggregate of approximately 2.8 million net rentable square feet, one Real Estate Venture developed a hotel property that contains 137 rooms and one Real Estate Venture is developing an office property located in Albemarle County, VA.

The Company accounts for its unconsolidated interests in its Real Estate Ventures using the equity method. Unconsolidated interests range from 6% to 50%, subject to specified priority allocations in certain of the Real Estate Ventures.

The Company also has investments in three unconsolidated Real Estate Ventures that are variable interest entities under FIN 46R and of which the Company is the primary beneficiary, and one investment in a Real Estate Venture for which the Company serves as the general partner and the limited partner does not have substantive participating rights.

The amounts reflected below (except for Company’s share of equity and income) are based on the historical financial information of the individual Real Estate Ventures. One of the Real Estate Ventures, acquired in connection with the Prentiss acquisition, had a negative equity balance on a historical cost basis as a result of historical depreciation and distributions of excess financing proceeds. The Company reflected its acquisition of this Real Estate Venture interest at its relative fair value as of the date of the purchase of Prentiss. The difference between allocated cost and the underlying equity in the net assets of the investee is accounted for as if the entity were consolidated (i.e., allocated to the Company’s relative share of assets and liabilities with an adjustment to recognize equity in earnings for the appropriate additional depreciation/amortization).

The following is a summary of the financial position of the Real Estate Ventures as of March 31, 2007 and December 31, 2006 (in thousands):


	2007		2006
Operating property, net of accumulated depreciation	$	376,574	$	365,168
Other assets		42,645		52,935
Liabilities		26,333		28,764
Debt		358,659		332,589
Equity		39,610		56,888
Company’s share of equity (Company’s basis)		72,983		74,574

The following is a summary of results of operations of the Real Estate Ventures for the three-month periods ended March 31, 2007 and 2006 (in thousands):


	Three-month periods
	ended March 31,
	2007		2006
Revenue	$	18,314	$	19,724
Operating expenses		6,297		7,994
Interest expense, net		5,238		4,994
Depreciation and amortization		4,229		4,873
Net income		2,551		1,862
Company’s share of income (Company basis)		754		965

BRANDYWINE REALTY TRUST

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007

As of March 31, 2007, the Company had guaranteed repayment of approximately $0.6 million of loans for the Real Estate Ventures. The Company also provides customary environmental indemnities and completion guarantees in connection with construction and permanent financing both for its own account and on behalf of the Real Estate Ventures.

5. DEFERRED COSTS

As of March 31, 2007 and December 31, 2006, the Company’s deferred costs were comprised of the following (in thousands):


	March 31, 2007
			Accumulated			Deferred Costs,
	Total Cost		Amortization			net
Leasing Costs	$	88,913	$	(29,083	)	$	59,830
Financing Costs		22,322		(5,150	)		17,172

Total	$	111,235	$	(34,233	)	$	77,002


	December 31, 2006
			Accumulated			Deferred Costs,
	Total Cost		Amortization			net
Leasing Costs	$	83,629	$	(28,278	)	$	55,351
Financing Costs		24,648		(6,291	)		18,357

Total	$	108,277	$	(34,569	)	$	73,708

6. INTANGIBLE ASSETS

As of March 31, 2007 and December 31, 2006, the Company’s intangible assets were comprised of the following (in thousands):


	March 31, 2007
			Accumulated
	Total Cost		Amortization			Deferred Costs, net
In-place lease value	$	183,089	$	(51,153	)	$	131,936
Tenant relationship value		119,377		(22,375	)		97,002
Above market leases acquired		31,878		(12,432	)		19,446

Total	$	334,344	$	(85,960	)	$	248,384

Below market leases acquired	$	103,865	$	(27,226	)	$	76,639


	December 31, 2006
			Accumulated
	Total Cost		Amortization			Deferred Costs, net
In-place lease value	$	207,513	$	(52,293	)	$	155,220
Tenant relationship value		124,605		(19,572	)		105,033
Above market leases acquired		32,667		(11,669	)		20,998

Total	$	364,785	$	(83,534	)	$	281,251

Below market leases acquired	$	118,536	$	(26,009	)	$	92,527

BRANDYWINE REALTY TRUST

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007

As of March 31, 2007, the Company’s annual amortization for its intangible assets/liabilities is as follows (in thousands, and assuming no early lease terminations):


	Assets		Liabilities
2007	$	39,395	$	14,009
2008		45,049		14,747
2009		39,795		12,758
2010		33,920		10,258
2011		27,040		8,471
Thereafter		63,185		16,396

Total	$	248,384	$	76,639

7. DEBT OBLIGATIONS

The following table sets forth information regarding the Company’s debt obligations outstanding at March 31, 2007 and December 31, 2006 (in thousands):

BRANDYWINE REALTY TRUST

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007

MORTGAGE DEBT


							Effective
	March 31,			December 31,			Interest		Maturity
Property / Location	2007			2006			Rate		Date
Interstate Center		—			552		6.19%		Mar-07
The Bluffs		10,700			10,700		6.00%	(a), (b)	Apr-07
Pacific Ridge		14,500			14,500		6.00%	(a), (b)	Apr-07
Pacific View/Camino		26,000			26,000		6.00%	(a), (b)	Apr-07
Computer Associates Building		31,000			31,000		6.00%	(a), (b)	Apr-07
Presidents Plaza		30,900			30,900		6.00%	(a), (b)	Apr-07
440 & 442 Creamery Way		5,379			5,421		8.55%	(b)	May-07
481 John Young Way		2,277			2,294		8.40%		Nov-07
400 Commerce Drive		11,742			11,797		7.12%		Jun-08
Two Logan Square		71,054			71,348		5.78%	(a)	Jul-09
200 Commerce Drive		5,821			5,841		7.12%	(a)	Jan-10
1333 Broadway		24,311			24,418		5.18%	(a)	May-10
The Ordway		46,033			46,199		7.95%	(a)	Aug-10
World Savings Center		27,424			27,524		7.91%	(a)	Nov-10
Plymouth Meeting Exec.		43,949			44,103		7.00%	(a)	Dec-10
Four Tower Bridge		10,591			10,626		6.62%		Feb-11
Arboretum I, II, III & V		22,623			22,750		7.59%		Jul-11
Midlantic Drive/Lenox Drive/DCC I		62,289			62,678		8.05%		Oct-11
Research Office Center		42,040			42,205		7.64%	(a)	Oct-11
Concord Airport Plaza		38,245			38,461		7.20%	(a)	Jan-12
Six Tower Bridge		14,655			14,744		7.79%		Aug-12
Newtown Square/Berwyn Park/Libertyview		63,011			63,231		7.25%		May-13
Coppell Associates		3,682			3,737		6.89%		Dec-13
Southpoint III		4,822			4,949		7.75%		Apr-14
Tysons Corner		100,000			100,000		4.84%	(a)	Aug-15
Coppell Associates		16,600			16,600		5.75%		Mar-16
Grande A		59,190			59,513		7.48%		Jul-27
Grande B		77,120			77,535		7.48%		Jul-27

Principal balance outstanding		865,958			869,626
Plus: unamortized fixed-rate debt premiums		13,274			14,294

Total mortgage indebtedness	$	879,232		$	883,920


UNSECURED DEBT:
Line-of-Credit		404,000			60,000		Libor + 0.80%		Dec-09
2009 Five Year Notes		275,000			275,000		4.62%		Nov-09
2014 Ten Year Notes		250,000			250,000		5.53%		Nov-14
Private Placement Notes due 2008		113,000			113,000		4.34%		Dec-08
2010 Five Year Notes		300,000			300,000		5.61%		Dec-10
Indenture IA (Preferred Trust I)		27,062			27,062		Libor + 1.25%		Mar-35
Indenture IB (Preferred Trust I)		25,774			25,774		Libor + 1.25%		Apr-35
Indenture II (Preferred Trust II)		25,774			25,774		Libor + 1.25%		Jul-35
2009 Three Year Notes		-			300,000		Libor + 0.45		Apr-09
2012 Six Year Notes		300,000			300,000		5.77%		Apr-12
2016 Ten Year Notes		250,000			250,000		5.95%		Apr-16
3.874% Exchangeable Notes		345,000			345,000		3.87%		Oct-11
Principal balance outstanding		2,315,610			2,271,610
Plus: unamortized fixed-rate debt premiums		(3,175	)		(3,300	)

Total mortgage indebtedness	$	2,312,435		$	2,268,310

Total Debt Obligations	$	3,191,667		$	3,152,230

(a) Loans were assumed upon acquisition of the related property. Interest rates presented above reflect the market rate at the time of acquisition.

(b) In April, 2007, the Company elected to prepay the loan on the date indicated in the Maturity date column.

BRANDYWINE REALTY TRUST

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007

The mortgage note payable balance of $5.1 million for Norriton Office Center as of December 31, 2006, not included in the table above, is included in Mortgage notes payable and other liabilities held for sale on the consolidated balance sheets.

During the three-month periods ended March 31, 2007 and 2006, the Company’s weighted-average effective interest rate on its mortgage notes payable was 6.67% and 6.30%, respectively.

On March 28, 2006, the Operating Partnership completed an underwritten public offering of (1) $300,000,000 aggregate principal amount of unsecured floating rate notes due 2009 (the “2009 Notes”), (2) $300,000,000 aggregate principal amount of 5.75% unsecured notes due 2012 (the “2012 Notes”) and (3) $250,000,000 aggregate principal amount of 6.00% unsecured notes due 2016 (the “2016 Notes”). Brandywine Realty Trust guaranteed the payment of principal and interest on the 2009 Notes, the 2012 Notes and the 2016 Notes. The Company used proceeds from these notes to repay a term loan obtained to finance a portion of the consideration paid in the Prentiss merger and to reduce borrowings under the Company’s revolving credit facility.

On October 4, 2006, the Operating Partnership completed an offering of $300.0 million aggregate principal amount of 3.875% senior convertible notes due 2026 in an offering made in reliance upon an exemption from registration rights under Rule 144A under the Securities Act of 1933 and issued an additional $45 million of exchangeable notes on October 16, 2006 to cover over-allotments. At certain times and upon the occurrence of certain events, the notes are convertible into cash up to their principal amount and, with respect to the remainder, if any, of the exchange value in excess of such principal amount, cash or shares of the Company’s common share. The initial exchange rate is 25.4065 shares per $1,000 principal amount of notes (which is equivalent to an initial exchange price of $39.36 per share). The notes may not be redeemed by the Company prior to October 20, 2011 (except to preserve the Company’s status as a REIT for U.S, federal income tax purposes), but are redeemable anytime thereafter, in whole or in part, at a redemption price equal to the principal amount of the notes plus any accrued and unpaid interest (including additional interest), if any. In addition, on October 20, 2011, October 15, 2016, and October 15, 2021, or upon the occurrence of certain change in control transactions prior to October 20, 2011, note holders may require the Company to repurchase all or a portion of the notes at a purchase price equal to the principal amount plus any accrued and unpaid interest on the notes. Net proceeds from the October 2006 Debt Offering were used to repurchase approximately $60.0 million of the Company’s common stock at a price of $32.80 per share and for general corporate purposes, including the repayment of outstanding borrowings under the Company’s unsecured revolving credit facility.

On November 29, 2006, the Company gave notice of redemption of the 2009 Notes and redeemed the 2009 Notes on January 2, 2007.

The Operating Partnership’s indenture relating to unsecured notes contains financial restrictions and requirements, including (1) a leverage ratio not to exceed 60%, (2) a secured debt leverage ratio not to exceed 40%, (3) a debt service coverage ratio of greater than 1.5 to 1.0, and (4) an unencumbered asset value of not less than 150% of unsecured debt.

In addition, the note purchase agreement relating to the Operating Partnership’s $113 million principal unsecured notes due 2008 contains covenants that are similar to the covenants in the indenture.

The Company utilizes credit facility borrowings for general business purposes, including the acquisition, development and redevelopment of properties and the repayment of other debt. In December 2005, the Company replaced its then existing credit facility with a $600.0 million unsecured credit facility (the “Credit Facility”) that matures in December 2009, subject to a one-year extension option. Borrowings under the Credit Facility generally bear interest at LIBOR plus a spread over LIBOR ranging from 0.55% to 1.10% based on the Company’s unsecured senior debt rating. The Company has the option to increase the Credit Facility to $800.0 million subject to the absence of any defaults and the Company’s ability to acquire additional commitments from its existing lenders or new lenders. As of March 31, 2007, the Company had $404.0 million of borrowings and $24.2 million of letters of credit outstanding under the Credit Facility, leaving $171.8 million of unused availability. For the three-month periods ended March 31, 2007 and 2006, the weighted-average interest rate on the Credit Facility, including the effect of interest rate hedges, was 6.1% and 5.4%, respectively.

BRANDYWINE REALTY TRUST

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007

The Credit Facility requires the maintenance of ratios related to minimum net worth, debt-to-total capitalization and fixed charge coverage and includes non-financial covenants.

As of March 31, 2007, the Company’s aggregate scheduled principal payments of debt obligations, excluding amortization of discounts and premiums, are as follows (in thousands):


2007	$	129,683
2008		138,227
2009		762,306
2010		453,803
2011		481,158
Thereafter		1,216,391

Total indebtedness	$	3,181,568

8. RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS

Risk Management

In the normal course of its on-going business operations, the Company encounters economic risk. There are three main components of economic risk: interest rate risk, credit risk and market risk. The Company is subject to interest rate risk on its interest-bearing liabilities. Credit risk is the risk of inability or unwillingness of tenants to make contractually required payments. Market risk is the risk of declines in the value of properties due to changes in rental rates, interest rates or other market factors affecting the valuation of properties held by the Company.

Use of Derivative Financial Instruments

The Company’s use of derivative instruments is limited to the utilization of interest rate agreements or other instruments to manage interest rate risk exposures and not for speculative purposes. The principal objective of such arrangements is to minimize the risks and/or costs associated with the Company’s operating and financial structure, as well as to hedge specific transactions. The counterparties to these arrangements are major financial institutions with which the Company and its affiliates may also have other financial relationships. The Company is potentially exposed to credit loss in the event of non-performance by these counterparties. However, because of the high credit ratings of the counterparties, the Company does not anticipate that any of the counterparties will fail to meet these obligations as they come due. The Company does not hedge credit or property value market risks.

In March 2007, in anticipation of the offering of $300 million of 5.70% unsecured guaranteed notes due May 1, 2017 (“2017 Notes”) (See Note 15), the Company entered into two treasury lock agreements. The treasury lock agreements were designated as cash flow hedges on interest rate risk and qualified for hedge accounting. Each of the treasury lock agreements were for notional amounts of $75.0 million for an expiration of 10 years at all-in rates of 4.5585% and 4.498% and had fair values of $0.7 million and $1.0 million, respectively at March 31, 2007. The agreements were settled in April 2007 upon completion of the offering of the 2017 Notes at a total benefit of $1.1 million. This benefit will be recorded as a component of accumulated other comprehensive income in the accompanying consolidated balance sheet and amortized over the term of the 2017 Notes.

In March 2006, in anticipation of the offering of the 2009 Notes, the 2012 Notes and the 2016 Notes, the Company entered into forward starting swaps. The forward starting swaps were designated as cash flow hedges of interest rate risk and qualified for hedge accounting. The forward starting swaps were for notional amounts totaling $200.0 million at an all-in-rate of 5.2%. Two of the forward starting swaps had a six year maturity date and one had a ten year maturity date. The forward starting swaps were settled in March 2006 upon the completion of the offering of the 2009, 2012, and 2016 Notes at a total benefit of approximately $3.3 million. The benefit was recorded as a component of accumulated other comprehensive income in the accompanying consolidated balance sheet and is being amortized to interest expense over the term of the unsecured notes.

BRANDYWINE REALTY TRUST

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007

The Company entered into two interest rate swaps in January 2006 aggregating $90 million in notional amount as part of its acquisition of Prentiss. The instruments are used to hedge the risk of interest cash outflows on secured variable rate debt on properties that were included as part of the real estate venture in which the Company purchased the remaining 49% of the minority interest partner’s share in March 2007. One of the swaps with a notional amount of $20 million has a maturity date of February 1, 2010 at an all-in rate of 4.675% and had a fair value of $0.1 million at March 31, 2007. The other, with a notional amount of $70 million, has a maturity date of August 1, 2008 at an all in rate of 4.675% and had a fair value of $0.3 million at March 31, 2007. The agreements were settled in April 2007 in connection with the repayment of five mortgage notes (see Note 7), at a total benefit of $0.4 million.

The Company formally assesses, both at inception of the hedge and on an on-going basis, whether each derivative is highly-effective in offsetting changes in cash flows of the hedged item. If management determines that a derivative is not highly-effective as a hedge or if a derivative ceases to be a highly-effective hedge, the Company will discontinue hedge accounting prospectively.

Concentration of Credit Risk

Concentrations of credit risk arise when a number of tenants related to the Company’s investments or rental operations are engaged in similar business activities, or are located in the same geographic region, or have similar economic features that would cause their inability to meet contractual obligations, including those to the Company, to be similarly affected. The Company regularly monitors its tenant base to assess potential concentrations of credit risk. Management believes the current credit risk portfolio is reasonably well diversified and does not contain any unusual concentration of credit risk. No tenant accounted for 5% or more of the Company’s rents during the three-month periods ended March 31, 2007 or 2006.

9. DISCONTINUED OPERATIONS

For the three-month periods ended March 31, 2007, income from discontinued operations relates to 17 properties that the Company sold during 2007 and one property designated as held for sale as of March 31, 2007. The following table summarizes the revenue and expense information for properties classified as discontinued operations for the three-month period ended March 31, 2007 (in thousands):


	Three-month period
	ended March 31, 2007
Revenue:
Rents	$	10,937
Tenant reimbursements		684
Other		69

Total revenue		11,690

Expenses:
Property operating expenses		4,012
Real estate taxes		1,308
Depreciation and amortization		4,594

Total operating expenses		9,914

Income from discontinued operations before gain on sale of interests in real estate and minority interest		1,776

Net gain on sale of interests in real estate		26,009
Minority interest attributable to discontinued operations — LP units		(1,186	)

Income from discontinued operations	$	26,599

BRANDYWINE REALTY TRUST

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007

For the three-month period ended March 31, 2006, income from discontinued operations relates to properties sold during 2006 and 2007 and one property held for sale at March 31, 2007. The following table summarizes the revenue and expense information for the properties classified as discontinued operations for the three-month period ended March 31, 2006 (in thousands):


	Three-month period
	ended March 31, 2006
Revenue:
Rents	$	24,713
Tenant reimbursements		2,469
Other		370

Total revenue		27,552

Expenses:
Property operating expenses		9,411
Real estate taxes		3,487
Depreciation and amortization		9,122

Total operating expenses		22,020

Operating income		5,532
Interest expense		(286	)


Income from discontinued operations before gain on sale of interests in real estate and minority interest		5,246

Minority interest — partners’ share of consolidated real estate venture		(187	)
Minority interest attributable to discontinued operations — LP units		(227	)

Income from discontinued operations	$	4,832

The following table summarizes the balance sheet information for the property identified as held for sale at March 31, 2007 (in thousands):


Real Estate Investments:
Operating Property	$	114,237
Accumulated depreciation		(7,774	)

		106,463

Other assets		20,870

Total Assets Held for Sale	$	127,333


Other liabilities	$	14,404

Discontinued operations have not been segregated in the consolidated statements of cash flows. Therefore, amounts for certain captions will not agree with respective data in the consolidated statements of operations.

10. MINORITY INTEREST IN OPERATING PARTNERSHIP AND REAL ESTATE VENTURES

The Company is the sole general partner of the Operating Partnership and, as of March 31, 2007, owned a 95.7% interest in the Operating Partnership. On March 14, 2007, the Operating Partnership declared a $0.44 per unit cash distribution to holders of Class A Units totaling $1.7 million.

As of March 31, 2007, the Company owned interests in three consolidated real estate ventures that own three office properties containing approximately 0.4 million net rentable square feet. Minority interest in consolidated real estate ventures represents the portion of these consolidated real estate ventures not owned by the Company.

BRANDYWINE REALTY TRUST

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007

On March 1, 2007, the Company acquired the remaining 49% interest in a real estate venture previously owned by Stichting Pensioenfonds ABP containing ten office properties for a purchase price of $63.7 million. The Company owned a 51% interest in this real estate venture through the acquisition of Prentiss in January 5, 2006.

11. BENEFICIARIES’ EQUITY

Earnings per Share (EPS)

The following table details the number of shares and net income used to calculate basic and diluted earnings per share (in thousands, except share and per share amounts; results may not add due to rounding):


	Three-month periods ended March 31,
	2007						2006
	Basic			Diluted			Basic			Diluted

Income (loss) from continuing operations	$	(7,227	)	$	(7,227	)	$	(7,474	)	$	(7,474	)
Income (loss) from discontinued operations		26,599			26,599			4,832			4,832
Income allocated to Preferred Shares		(1,998	)		(1,998	)		(1,998	)		(1,998	)

Net income available to common shareholders	$	17,374		$	17,374		$	(4,640	)	$	(4,640	)


Weighted-average shares outstanding		88,287,426			88,287,426			89,299,967			89,299,967
Contingent securities/Stock based compensation		—			948,916			—			443,014

Total weighted-average shares outstanding		88,287,426			89,236,342			89,299,967			89,742,981


Earnings per Common Share:
Continuing operations	$	(0.10	)	$	(0.10	)	$	(0.11	)	$	(0.11	)
Discontinued operations		0.30			0.30			0.05			0.05

	$	0.20		$	0.19		$	(0.05	)	$	(0.05	)

Securities (including Class A Units of the Operating Partnership) totaling 3,939,284 and 4,115,314 as of March 31, 2007 and 2006, respectively, were excluded from the earnings per share computations because their effect would have been antidilutive.

Common and Preferred Shares

On March 14, 2007, the Company declared a distribution of $0.44 per Common Share, totaling $38.6 million, which was paid on April 18, 2007 to shareholders of record as of April 4, 2007. On March 14, 2007, the Company declared distributions on its Series C Preferred Shares and Series D Preferred Shares to holders of record as of March 30, 2007. These shares are entitled to a preferential return of 7.50% and 7.375%, respectively. Distributions paid on April 16, 2007 to holders of Series C Preferred Shares and Series D Preferred Shares totaled $0.9 million and $1.1 million, respectively.

In 2003, the Company issued 2,000,000 7.50% Series C Cumulative Redeemable Preferred Shares (the “Series C Preferred Shares”) for net proceeds of $48.1 million. The Series C Preferred Shares are perpetual. The Company may not redeem Series C Preferred Shares before December 30, 2008 except to preserve its REIT status. On or after December 30, 2008, the Company, at its option, may redeem the Series C Preferred Shares, in whole or in part, by paying $25.00 per share plus accrued but unpaid dividends.

In 2004, the Company issued 2,300,000 7.375% Series D Cumulative Redeemable Preferred Shares (the “Series D Preferred Shares”) for net proceeds of $55.5 million. The Series D Preferred Shares are perpetual. The Company may not redeem Series D Preferred Shares before February 27, 2009 except to preserve its REIT status. On or after

BRANDYWINE REALTY TRUST

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007

February 27, 2009, the Company, at its option, may redeem the Series D Preferred Shares, in whole or in part, by paying $25.00 per share plus accrued but unpaid dividends.

Common Share Repurchases

The Company repurchased 1,301,000 shares during the three-month period ending March 31, 2007 for an aggregate consideration of $44.7 million under its share repurchase program. As of March 31, 2007, the Company may purchase an additional 1,018,800 shares under the plan. Repurchases may be made from time to time in the open market or in privately negotiated transactions, subject to market conditions and compliance with legal requirements. The share repurchase program does not contain any time limitation and does not obligate the Company to repurchase any shares. The Company may discontinue the program at any time.

12. SHARE BASED COMPENSATION

In December 2004, the FASB issued SFAS No. 123(R), “Share-Based Payment” (“SFAS 123(R)”). SFAS 123(R) is an amendment of SFAS 123 and requires that the compensation cost relating to share-based payment transactions be recognized in the financial statements. The cost is required to be measured based on the fair value of the equity or liability instruments issued. SFAS 123(R) also contains additional minimum disclosures requirements including, but not limited to, the valuation method and assumptions used, amounts of compensation capitalized and modifications made. The effective date of SFAS 123(R) was subsequently amended by the SEC to be as of the beginning of the first interim or annual reporting period of the first fiscal year that begins on or after December 15, 2005, and allows several different methods of transition. The Company adopted SFAS 123(R) using the prospective method on January 1, 2006. This adoption did not have a material effect on our consolidated financial statements.

Stock Options

At March 31, 2007, the Company had 1,087,575 options outstanding under its shareholder approved equity incentive plan. No options were unvested as of March 31, 2007 and therefore there is no remaining unrecognized compensation expense associated with these options. Option activity as of March 31, 2007 and changes during the three months ended March 31, 2007 were as follows:


				Weighted		Weighted Average
				Average		Remaining Contractual		Aggregate Intrinsic
	Shares			Exercise Price		Term (in years)		Value (in 000's)
Outstanding at January 1, 2007		1,286,070		$	26.45		1.50		8,739
Granted		—			—		—		—
Exercised		(198,495	)		28.80		0.87		1,171
Forfeited		—			—		—		—

Outstanding at March 31, 2007		1,087,575		$	26.03		1.32		8,029


Vested at March 31, 2007		1,087,575		$	26.03		1.32		8,029

Exercisable at March 31, 2007		1,087,575		$	26.03		1.32		8,029

There were no option awards granted to employees during the three-month period ended March 31, 2007.

The Company has the ability and intent to issue shares upon stock option exercises. Historically, the Company has issued new common shares to satisfy such exercises.

Restricted Stock Awards

BRANDYWINE REALTY TRUST

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007

The Company’s primary form of share-based compensation has been restricted shares issued under a shareholder approved equity incentive plan that authorizes various equity-based awards. As of March 31, 2007, 457,496 restricted shares were outstanding and vest over five to seven years from the initial grant date. The remaining compensation expense to be recognized for the 457,496 restricted shares outstanding at March 31, 2007 was approximately $14.9 million. That expense is expected to be recognized over a weighted average remaining vesting period of 4.6 years. For the three-month period ended March 31, 2007 and 2006, the Company recognized $0.8 million of compensation expense included in general and administrative expense in each period related to outstanding restricted shares. The following table summarizes the Company’s restricted share activity for the three-months ended March 31, 2007:


				Weighted
				Average Grant
	Shares			Date Fair value
Non-vested at January 1, 2007		338,860		$	28.23
Granted		216,828			35.19
Vested		(96,068	)		26.28
Forfeited		(2,124	)		30.55

Non-vested at March 31, 2007		457,496		$	31.90

Outperformance Program

On August 28, 2006, the Compensation Committee of the Company’s Board of Trustees adopted a long-term incentive compensation program (the “outperformance program”). The Company will make payments (in the form of common shares) to executive-participants under the outperformance program only if total shareholder return exceeds percentage hurdles established under the outperformance program. The dollar value of any payments will depend on the extent to which our performance exceeds the hurdles. The Company established the outperformance program under the 1997 Plan.

If the total shareholder return (share price appreciation plus cash dividends) during a three-year measurement period exceeds either of two hurdles (with one hurdle keyed to the greater of a fixed percentage and an industry-based index, and the other hurdle keyed to a fixed percentage), then the Company will fund an incentive compensation pool in accordance with a formula and make pay-outs from the compensation pool in the form of vested and restricted common shares. The awards issued are accounted for in accordance with FASB No. 123R. The fair value of the awards on the date of grant, as adjusted for estimated forfeitures, was approximately $5.6 million and will be amortized into expense over the five-year period beginning on the date of grant using a graded vesting attribution model. The fair value of $5.6 million on the date of grant represents approximately 86.5% of the total that may be awarded; the remaining amount available will be valued when the awards are granted to individuals. In January 2007, the Company awarded an additional 4.5% under the outperformance program. The fair value of the additional award is $0.3 million and will be amortized over the remaining portion of the 5 year period. For the three-month period ended March 31, 2007, the Company recognized $0.4 million of compensation expenses related to the outperformance program.

13. SEGMENT INFORMATION

The Company currently manages its portfolio within nine segments: (1) Pennsylvania—West, (2) Pennsylvania—North, (3) New Jersey, (4) Urban, (5) Richmond, Virginia, (6) Northern California (7) Southern California, (8) Metropolitan Washington, D.C. and (9) Southwest. The Pennsylvania—West segment includes properties in Chester, Delaware and Montgomery counties in the Philadelphia suburbs of Pennsylvania. The Pennsylvania—North segment includes properties north of Philadelphia in Bucks, Lehigh and Montgomery counties. The New Jersey segment includes properties in counties in the southern part of New Jersey including Burlington, Camden and Mercer counties and in Bucks County, Pennsylvania. The Urban segment includes properties in the City of Philadelphia, Pennsylvania and the state of Delaware. The Richmond, Virginia segment includes properties primarily in Albemarle, Chesterfield and Henrico counties, the City of Richmond and Durham, North Carolina. The Northern California segment includes

BRANDYWINE REALTY TRUST

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007

properties in the City of Oakland and Concord. The Southern California segment includes properties in San Diego County. The Metropolitan Washington, D.C. segment includes properties in Northern Virginia and Suburban Maryland. The Southwest segment includes properties in Travis County of Texas. Corporate is responsible for cash and investment management, development of certain real estate properties during the construction period, and certain other general support functions.

BRANDYWINE REALTY TRUST

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007

Segment information as of and for the three-month periods ended March 31, 2007 and 2006 is as follows (in thousands):


	Pennsylvania —		Pennsylvania —						Richmond,		Northern		Southern		Metropolitan
	West		North		New Jersey		Urban		Virginia		California		California		Washington, D.C.		Southwest		Corporate			Total
As of March 31, 2007:
Real estate investments, at cost:
Operating properties	$	926,700	$	440,726	$	554,586	$	575,636	$	250,935	$	402,033	$	105,810	$	1,284,748	$	232,640	$	—		$	4,773,814
Development and construction-in-progress		—		—		—		—		—		—		—		—		—		346,555			346,555

As of December 31, 2006:
Real estate investments, at cost:
Operating properties	$	922,347	$	530,436	$	570,009	$	568,008	$	244,519	$	396,927	$	95,942	$	1,255,940	$	343,177	$	—		$	4,927,305
Development and construction-in-progress		—		—		—		—		—		—		—		—		—		328,119			328,119

For the three-months ended March 31, 2007:
Total revenue	$	27,509	$	19,481	$	24,675	$	23,455	$	8,940	$	15,091	$	3,141	$	32,385	$	8,239	$	185		$	163,101
Property operating expenses		11,696		7,641		11,264		9,734		3,495		6,679		1,727		11,785		4,222		(7,011	)		61,232

Net operating income	$	15,813	$	11,840	$	13,411	$	13,721	$	5,445	$	8,412	$	1,414	$	20,600	$	4,017	$	7,196		$	101,869


For the three-months ended March 31, 2006:
Total revenue	$	25,233	$	18,275	$	23,695	$	19,560	$	7,483	$	13,678	$	2,674	$	26,157	$	9,409	$	(2,246	)	$	143,918
Property operating expenses		8,468		9,776		9,815		8,871		2,966		5,137		1,103		9,270		3,795		(4,020	)		55,181

Net operating income	$	16,765	$	8,499	$	13,880	$	10,689	$	4,517	$	8,541	$	1,571	$	16,887	$	5,614	$	1,774		$	88,737

BRANDYWINE REALTY TRUST

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007

Net operating income is defined as total revenue less property operating expenses. Below is a reconciliation of consolidated net operating income to net income or loss (in thousands):


	Three-month periods
	ended March 31,
	2007			2006
Consolidated net operating income (loss)	$	101,869		$	88,737
Less:
Interest income		787			2,650
Interest expense		(40,358	)		(40,378	)
Deferred financing costs		(1,258	)		(479	)
Depreciation and amortization		(62,047	)		(51,212	)
Administrative expenses		(7,269	)		(8,490	)
Minority interest — partners’ share of consolidated real estate ventures		(116	)		298
Minority interest attributable to continuing operations — LP units		411			435
Plus:
Equity in income of real estate ventures		754			965

Income (loss) from continuing operations		(7,227	)		(7,474	)
Income (loss) from discontinued operations		26,599			4,832

Net income (loss)	$	19,372		$	(2,642	)

14. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

The Company is involved from time to time in litigation on various matters, including disputes with tenants and disputes arising out of agreements to purchase or sell properties. Given the nature of the Company’s business activities, these lawsuits are considered routine to the conduct of its business. The result of any particular lawsuit cannot be predicted, because of the very nature of litigation, the litigation process and its adversarial nature, and the jury system. The Company does not expect that the liabilities, if any, that may ultimately result from such legal actions will have a material adverse effect on the consolidated financial position, results of operations or cash flows of the Company.

There have been lawsuits against owners and managers of multifamily and office properties asserting claims of personal injury and property damage caused by the presence of mold in residential units or office space. The Company has been named as a defendant in two lawsuits in the State of New Jersey that allege personal injury as a result of the presence of mold. One lawsuit was dismissed by way of summary judgment with prejudice. Unspecified damages are sought on the remaining lawsuit. The Company has referred this lawsuit to its environmental insurance carrier and, as of the date of this Form 10-Q, the insurance carrier is tendering a defense to this claim.

Environmental

As an owner of real estate, the Company is subject to various environmental laws of federal, state, and local governments. The Company’s compliance with existing laws has not had a material adverse effect on its financial condition and results of operations, and the Company does not believe it will have a material adverse effect in the future. However, the Company cannot predict the impact of unforeseen environmental contingencies or new or changed laws or regulations on its current Properties or on properties that the Company may acquire.

Ground Rent

Future minimum rental payments under the terms of all non-cancelable ground leases under which the Company is the lessee are expensed on a straight-line basis regardless of when payments are due.

BRANDYWINE REALTY TRUST

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007

Other Commitments or Contingencies

As part of the Company’s September 2004 acquisition of a portfolio of 14 properties (the “TRC Acquisition”), the Operating Partnership agreed to issue to the sellers up to a maximum of $9.7 million of Class A Units of the Operating Partnership if certain of the acquired properties achieve at least 95% occupancy prior to September 21, 2007. At March 31, 2007 the maximum amount payable under this arrangement was $1.2 million.

As part of the TRC acquisition, the Company acquired an interest in Two Logan Square, a 696,477 square foot office building in Philadelphia, Pennsylvania, primarily through a second and third mortgage secured by this property pursuant to which the Company receives substantially all cash flows from the property. The Company currently does not expect to take title fee to Two Logan Square until, at the earliest, September 2019. In the event that the Company takes title to Two Logan Square upon a foreclosure of its mortgages, the Company has agreed to make a payment to an unaffiliated third party with a residual interest as a fee owner of this property. The amount of the payment would be $0.6 million if the Company must pay a state and local transfer tax upon taking title, or $2.9 million if no transfer tax is payable upon the transfer.

As part of the Prentiss acquisition, TRC acquisition and several of our other acquisitions, the Company has agreed not to sell certain of the acquired properties. In the case of TRC, the Company agreed not to sell certain of the acquired properties for periods ranging from three to 15 years from the acquisition date as follows: 201 Radnor Financial Center, 555 Radnor Financial Center and 300 Delaware Avenue (three years); One Rodney Square and 130/150/170 Radnor Financial Center (10 years); and One Logan Square, Two Logan Square and Radnor Corporate Center (15 years). In the case of the Prentiss acquisition, the Company assumed the obligation of Prentiss not to sell Concord Airport Plaza before March 2018 and 6600 Rockledge before July 2008. The Company also owns 14 other properties that aggregate 1.0 million square feet and has agreed not to sell these properties for periods that expire through 2008. These agreements generally provide that the Company may dispose of the subject Properties only in transactions that qualify as tax-free exchanges under Section 1031 of the Code or in other tax deferred transactions. In the event that the Company sells any of the properties within the applicable restricted period in non-exempt transactions, the Company has agreed to pay significant tax liabilities that would be incurred by the parties who sold the applicable property.

The Company invests in its Properties and regularly incurs capital expenditures in the ordinary course of business to maintain the Properties. The Company believes that such expenditures enhance the competitiveness of the Properties. The Company also enters into construction, utility and service contracts in the ordinary course of business which may extend beyond one year. These contracts include terms that provide for cancellation with insignificant or no cancellation penalties.

15. SUBSEQUENT EVENTS

The Company repaid five mortgage notes totaling $113.1 million in April 2007 (notice of which was given in March 2007) and one mortgage note totaling $5.4 million in May 2007. The Company funded the repayments of these notes from borrowings under its Credit Facility and there was no prepayment penalties associated with these prepayments.

In April 2007, the Company, through its Operating Partnership, sold $300 million of 5.70% unsecured guaranteed notes due May 1, 2017. Interest on the notes will be payable semi-annually on May 1 and November 1, commencing November 1, 2007. The net proceeds of the offering were used to repay indebtedness under the Credit Facility.

During April 2007, the Company sold one property, classified as held for sale at March 31, 2007, totaling 1.3 million net rentable square feet for a sales price of $115.0 million. The Company may receive an additional $10.0 million from the buyer should certain events occur at the property in the future.

During April 2007, the Company repurchased 265,000 shares for $8.8 million under it share repurchase program.

PART I — FINANCIAL INFORMATION

Item 1. — Financial Statements

BRANDYWINE OPERATING PARTNERSHIP, L.P.
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except share and per share information)


	March 31,			December 31,
	2007			2006
ASSETS
Real estate investments:
Operating properties	$	4,773,814		$	4,927,305
Accumulated depreciation		(522,286	)		(515,698	)

Operating real estate investments, net		4,251,528			4,411,607

Development land and construction-in-progress		346,555			328,119

Total real estate investments, net		4,598,083			4,739,726
Cash and cash equivalents		3,885			25,379
Cash escrowed with qualified intermediary (Note 3)		109,102			—
Accounts receivable, net		18,339			19,957
Accrued rent receivable, net		72,433			71,589
Asset held for sale, net		127,333			126,016
Investment in real estate ventures, at equity		72,983			74,574
Deferred costs, net		77,002			73,708
Intangible assets, net		248,384			281,251
Other assets		107,936			96,818

Total assets	$	5,435,480		$	5,509,018

LIABILITIES AND PARTNERS’ EQUITY
Mortgage notes payable	$	879,232		$	883,920
Unsecured notes, net of discounts		1,908,435			2,208,310
Unsecured credit facility		404,000			60,000
Accounts payable and accrued expenses		103,650			108,400
Distributions payable		42,321			42,760
Tenant security deposits and deferred rents		58,655			55,697
Acquired below market leases, net		76,639			92,527
Other liabilities		16,620			14,661
Mortgage notes payable and other liabilities held for sale		14,404			20,826

Total liabilities		3,503,956			3,487,101
Minority interest — partners’ share of consolidated real estate ventures		—			34,436
Commitments and contingencies (Note 14)
Redeemable limited partnership units at redemption value;
3,939,284 and 3,961,235 issued and outstanding in 2007 and 2006, respectively		135,039			131,711
Partners’ equity:
7.50% Series D Preferred Mirror Units; 2,000,000 issued and outstanding in 2007 and 2006		47,912			47,912
7.375% Series E Preferred Mirror Units; 2,300,000 issued and outstanding in 2007 and 2006		55,538			55,538
General Partnership Capital, 87,302,191 and 88,327,041 units issued and outstanding in 2007 and 2006, respectively		1,690,608			1,750,745
Accumulated other comprehensive loss		2,427			1,575

Total partners’ equity		1,796,485			1,855,770

Total liabilities, minority interest, and partners’ equity	$	5,435,480		$	5,509,018

The accompanying notes are an integral part of these consolidated financial statements.

BRANDYWINE OPERATING PARTNERSHIP, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except share and per share information)


	For the three-month periods
	ended March 31,
	2007			2006
Revenue:
Rents	$	137,940		$	123,069
Tenant reimbursements		20,823			16,634
Other		4,338			4,215

Total revenue		163,101			143,918
Operating Expenses:
Property operating expenses		61,232			55,181
Depreciation and amortization		62,047			51,212
Administrative expenses		7,269			8,490

Total operating expenses		130,548			114,883

Operating income		32,553			29,035
Other Income (Expense):
Interest income		787			2,650
Interest expense		(40,358	)		(40,378	)
Interest expense — Deferred financing costs		(1,258	)		(479	)
Equity in income of real estate ventures		754			965

Income (loss) before minority interest		(7,522	)		(8,207	)
Minority interest — partners’ share of consolidated real estate ventures		(116	)		298

Income (loss) from continuing operations		(7,638	)		(7,909	)
Discontinued operations:
Income from discontinued operations		1,776			5,246
Net gain on disposition of discontinued operations		26,009			—
Minority interest — partners’ share of consolidated real estate ventures		—			(187	)

Income from discontinued operations		27,785			5,059

Net income (loss)		20,147			(2,850	)
Income allocated to Preferred Units		(1,998	)		(1,998	)

Income (loss) allocated to Common Partnership Units	$	18,149		$	(4,848	)

Basic earnings per Common Partnership Unit:
Continuing operations	$	(0.10	)	$	(0.11	)
Discontinued operations		0.30			0.05

	$	0.20		$	(0.05	)

Diluted earnings per Common Partnership Unit:
Continuing operations	$	(0.10	)	$	(0.11	)
Discontinued operations		0.30			0.05

	$	0.19		$	(0.05	)


Basic weighted average Common Partnership Unit		92,227,034			93,318,834

Diluted weighted average Common Partnership Unit		93,175,950			93,761,848

The accompanying notes are an integral part of these consolidated financial statements.

BRANDYWINE OPERATING PARTNERSHIP, L.P.
CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME
(unaudited, in thousands)


	For the three-month
	periods ended March 31,
	2007			2006
Net income (loss)	$	18,149		$	(4,848	)
Other comprehensive income:
Unrealized gain (loss) on derivative financial instruments		1,450			1,758
Less: minority interest — consolidated real estate venture partner’s share of unrealized gain (loss) on derivative financial instruments		—			(513	)
Settlement of forward starting swaps		—			3,266
Reclassification of realized (gains)/losses on derivative financial instruments to operations, net		9			96
Unrealized gain (loss) on available-for-sale securities		(607	)		(592	)

Total other comprehensive income (loss)		852			4,015

Comprehensive income	$	19,001		$	(833	)

The accompanying notes are an integral part of these consolidated financial statements.

BRANDYWINE OPERATING PARTNERSHIP L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)


	Three-month periods
	ended March 31,
	2007			2006
Cash flows from operating activities:
Net income (loss)	$	18,149		$	(4,848	)
Adjustments to reconcile net income (loss) to net cash from operating activities:
Depreciation		48,508			41,079
Amortization:
Deferred financing costs		1,257			480
Deferred leasing costs		3,842			2,166
Acquired above (below) market leases, net		(3,613	)		(1,939	)
Acquired lease intangibles		14,247			16,806
Deferred compensation costs		1,213			776
Straight-line rent		(7,063	)		(7,708	)
Provision for doubtful accounts		500			1,056
Real estate venture income in excess of distributions		(84	)		(486	)
Net gain on sale of interests in real estate		(26,009	)		—
Minority interest		2,114			1,887
Changes in assets and liabilities:
Accounts receivable		5,416			(4,018	)
Other assets		(11,167	)		(7,482	)
Accounts payable and accrued expenses		7,286			3,870
Tenant security deposits and deferred rents		3,390			10,918
Other liabilities		(7,465	)		2,681

Net cash from operating activities		50,521			55,238
Cash flows from investing activities:
Acquisition of Prentiss		—			(935,856	)
Acquisition of properties		—			(12,480	)
Acquisition of minority interest — partners’ share of consolidated real estate venture		(63,732	)		—
Sales of properties, net		109,127			134,064
Capital expenditures		(68,015	)		(52,364	)
Investment in unconsolidated real estate ventures		(512	)		(358	)
Cash distributions from unconsolidated real estate ventures in excess of equity in income		1,849			1,717
Leasing costs		(9,259	)		(2,621	)

Net cash from investing activities		(30,542	)		(867,898	)
Cash flows from financing activities:
Proceeds from Credit Facility borrowings		442,000			215,000
Repayments of Credit Facility borrowings		(98,000	)		(205,000	)
Proceeds from mortgage notes payable		—			20,520
Repayments of mortgage notes payable		(4,695	)		(6,807	)
Proceeds from term loan		—			750,000
Repayments of term loan		—			(750,000	)
Proceeds from unsecured notes		—			847,818
Repayments of unsecured notes		(299,866	)		—
Proceeds from forward starting swap termination		—			3,266
Repayments on employee stock loans		—			10
Debt financing costs		(72	)		(5,581	)
Exercise of stock options		6,166			1,923
Repurchases of Common Partnership Units		(44,677	)		—
Distributions paid to preferred and common partnership unitholders		(42,329	)		(29,362	)

Net cash from financing activities		(41,473	)		841,787

Increase (decrease) in cash and cash equivalents		(21,494	)		29,127
Cash and cash equivalents at beginning of period		25,379			7,174

Cash and cash equivalents at end of period	$	3,885		$	36,301

Supplemental disclosure:
Cash paid for interest, net of capitalized interest	$	24,023		$	23,350
Supplemental disclosure of non-cash activity:
Common shares issued in the Prentiss acquisition		—			1,022,173
Operating Partnership units issued in Prentiss acquisitions		—			64,103
Operating Partnership units issued in property acquisitions		—			13,819
Cash escrowed with qualified intermediary (Note 3)		109,102			—
Debt, minority interest and other liabilities, net, assumed in the Prentiss acquisition		—			679,520
The accompanying notes are an integral part of these consolidated financial statements.

BRANDYWINE OPERATING PARTNERSHIP, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007

1. ORGANIZATION AND NATURE OF OPERATIONS

Brandywine Operating Partnership, L.P. (the “Partnership”) is the entity through which Brandywine Realty Trust, a Maryland real estate investment trust (the “Company”), a self-administered and self-managed real estate investment trust, conducts its business and own its assets. The Partnership’s activities include acquiring, developing, redeveloping, leasing and managing office and industrial properties. The Company’s common shares of beneficial interest are publicly traded on the New York Stock Exchange under the ticker symbol “BDN”. As of March 31, 2007, the Partnership owned 236 office properties, 23 industrial facilities and one mixed-use property (collectively, the “Properties”) containing an aggregate of approximately 26.5 million net rentable square feet. The Partnership also has six properties under development and 12 properties under redevelopment containing an aggregate 2.7 million net rentable square feet. As of March 31, 2007, the Partnership consolidates three office properties owned by real estate ventures containing 0.4 million net rentable square feet. Therefore, the Partnership wholly owns or consolidates 281 properties with an aggregate 29.6 million net rentable square feet. As of March 31, 2007, the Partnership owned economic interests in 11 unconsolidated real estate ventures that contain approximately 2.8 million net rentable square feet (collectively, the “Real Estate Ventures”). The Properties and the properties owned by the Real Estate Ventures are located in and surrounding Philadelphia, PA, Wilmington, DE, Southern and Central New Jersey, Richmond, VA, Metropolitan Washington, D.C., Dallas/Fort Worth, TX, Austin, TX, Oakland and San Diego, CA.

As more fully described in Note 3, on January 5, 2006, the Partnership acquired Prentiss Properties Trust (“Prentiss”) pursuant to an Agreement and Plan of Merger (the “Merger Agreement”) that the Partnership entered into with Prentiss on October 3, 2005.

The Company is the sole general partner of the Partnership and, as of March 31, 2007 owned a 95.7 % interest in the Partnership. The Company conducts its third-party real estate management services business primarily through four management companies (collectively, the “Management Companies”), Brandywine Realty Services Corporation (“BRSCO”), BTRS, Inc., Brandywine Properties I Limited, Inc. (“BPI”), and Brandywine Properties Management, L.P. (“BPM”). BRSCO, BTRS, Inc. and BPI are taxable REIT subsidiaries. The Partnership owns a 95% interest in BRSCO and the remaining 5% interest is owned by a partnership comprised of a current executive and former executive of the Company, each of whom is a member of the Company’s Board of Trustees. The Partnership owns, directly and indirectly, 100% of each of BTRS, Inc., BPI and BPM.

As of March 31, 2007 the Management Companies were managing properties containing an aggregate of approximately 41.1 million net rentable square feet, of which approximately 26.5 million net rentable square feet related to Properties owned by the Partnership and approximately 12.8 million net rentable square feet related to properties owned by third parties and certain Real Estate Ventures. Unless otherwise indicated, all references to square feet represent net rentable area.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements have been prepared by the Partnership without audit except as to the balance sheet as of December 31, 2006, which has been derived from audited data, pursuant to the rules and regulations of the U.S. Securities and Exchange Commission. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the Partnership believes that the included disclosures are adequate to make the information presented not misleading. In the opinion of management, all adjustments (consisting solely of normal recurring matters) for a fair statement of the financial position of the Partnership as of March 31, 2007, the results of its operations for the three-month periods ended March 31, 2007 and 2006 and its cash flows for the three-month periods ended March 31, 2007 and 2006 have been included. The results of operations for such interim periods are not necessarily indicative of the results for a full year. These consolidated financial statements should be read in conjunction with the Partnership’s consolidated financial

BRANDYWINE OPERATING PARTNERSHIP, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007

statements and footnotes included in the Partnership’s 2006 Annual Report on Form 10-K. Certain prior period amounts have been reclassified to conform to the current period presentation.

Principles of Consolidation

When the Partnership obtains an economic interest in an entity, the Partnership evaluates the entity to determine if the entity is deemed a variable interest entity (“VIE”), and if the Partnership is deemed to be the primary beneficiary, in accordance with FASB Interpretation No. 46R, “Consolidation of Variable Interest Entities” (“FIN 46R”). When an entity is not deemed to be a VIE, the Partnership considers the provisions of EITF 04-05, “Determining Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners Have Certain Rights” (“EITF 04-05”). The Partnership consolidates (i) entities that are VIEs and of which the Partnership is deemed to be the primary beneficiary and (ii) entities that are non-VIEs which the Partnership controls and the limited partners do not have the ability to dissolve the entity or remove the Partnership without cause nor substantive participating rights. Entities that the Partnership accounts for under the equity method (i.e. at cost, increased or decreased by the Partnership’s share of earnings or losses, less distributions) include (i) entities that are VIEs and of which the Partnership is not deemed to be the primary beneficiary (ii) entities that are non-VIEs which the Partnership does not control, but over which the Partnership has the ability to exercise significant influence and (iii) entities that are non-VIE’s that the Partnership controls through its general partner status, but the limited partners in the entity have the substantive ability to dissolve the entity or remove the Partnership without cause or have substantive participating rights. The Partnership will reconsider its determination of whether an entity is a VIE and who the primary beneficiary is, and whether or not the limited partners in an entity have substantive rights, if certain events occur that are likely to cause a change in the original determinations. The portion of these entities not owned by the Partnership is presented as minority interest as of and during the periods consolidated. All intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

Operating Properties

Operating properties are carried at historical cost less accumulated depreciation and impairment losses. The cost of operating properties reflects their purchase price or development cost. Costs incurred for the acquisition and renovation of an operating property are capitalized to the Partnership’s investment in that property. Ordinary repairs and maintenance are expensed as incurred; major replacements and betterments, which improve or extend the life of the asset, are capitalized and depreciated over their estimated useful lives. Fully-depreciated assets are removed from the accounts.

Purchase Price Allocation

The Partnership allocates the purchase price of properties to net tangible and identified intangible assets acquired based on fair values. Above-market and below-market in-place lease values for acquired properties are recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) the Partnership’s estimate of the fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of the lease. Capitalized above-market lease values are amortized as a reduction of rental income over the remaining non-cancelable terms of the respective leases. Capitalized below-market lease values

BRANDYWINE OPERATING PARTNERSHIP, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007

are amortized as an increase to rental income over the remaining non-cancelable terms of the respective leases, including any fixed-rate renewal periods.

Other intangible assets also include amounts representing the value of tenant relationships and in-place leases based on the Partnership’s evaluation of the specific characteristics of each tenant’s lease and the Partnership’s overall relationship with the respective tenant. The Partnership estimates the cost to execute leases with terms similar to the remaining lease terms of the in-place leases, including leasing commissions, legal and other related expenses. This intangible asset is amortized to expense over the remaining term of the respective leases. Partnership estimates of value are made using methods similar to those used by independent appraisers or by using independent appraisals. Factors considered by the Partnership in this analysis include an estimate of the carrying costs during the expected lease-up periods considering current market conditions and costs to execute similar leases. In estimating carrying costs, the Partnership includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods, which primarily range from three to twelve months. The Partnership also considers information obtained about each property as a result of its pre-acquisition due diligence, marketing and leasing activities in estimating the fair value of the tangible and intangible assets acquired. The Partnership also uses the information obtained as a result of its pre-acquisition due diligence as part of its consideration of FIN 47, and when necessary, will record a conditional asset retirement obligation as part of its purchase price.

Characteristics considered by the Partnership in allocating value to its tenant relationships include the nature and extent of the Partnership’s business relationship with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and expectations of lease renewals, among other factors. The value of tenant relationship intangibles is amortized over the remaining initial lease term and expected renewals, but in no event longer than the remaining depreciable life of the building. The value of in-place leases is amortized over the remaining non-cancelable term of the respective leases and any fixed-rate renewal periods.

Revenue Recognition

Stock-Based Compensation Plans

The Partnership Agreement provides for the issuance by the Partnership to its general partner, the Company, of a number of Common Partnership Units equal to the number of common shares issued by the Company, the net proceeds of which are contributed to the Partnership. When the Company issues common shares under its equity-based plan, the Partnership issues to the Company an equal number of Common Partnership Units. The Company maintains shareholder-approved equity incentive plans. The Compensation Committee of the Company’s

BRANDYWINE OPERATING PARTNERSHIP, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007

Board of Trustees authorizes awards under these plans. In May 2005, the Company’s shareholders approved an amendment to the Amended and Restated 1997 Long-Term Incentive Plan (the “1997 Plan”) that increased the number of common shares that may be issued or subject to award under the 1997 Plan from 5,000,000 to 6,600,000. The May 2005 amendment provided that 500,000 of the shares under the 1997 Plan are available solely for awards under options and share appreciation rights that have an exercise or strike price not less than the market price of the common shares on the date of award, and the remaining 6,100,000 shares are available for any type of award under the 1997 Plan. Incentive stock options may not be granted at exercise prices less than fair value of the shares at the time of grant. All options awarded by the Company to date are non-qualified stock options that generally vested over two to ten years. As of March 31, 2007, 2.5 million common shares remained available for future award under the 1997 Plan. As part of the Company’s January 2006 acquisition of Prentiss, the Company assumed Prentiss’ three share incentive plans. As of March 31, 2007, approximately 1.6 million common shares remained available for issuance or subject to award under the assumed Prentiss share incentive plans.

On January 1, 2002, the Partnership began to expense the fair value of stock-based compensation awards granted subsequent to January 1, 2002 over the applicable vesting period as a component of general and administrative expenses in the Partnership’s consolidated Statements of Operations. The Partnership recognized stock-based compensation expense of $1.2 million and $0.8 million during the three-month periods ended March 31, 2007 and 2006.

Accounting for Derivative Instruments and Hedging Activities

The Partnership accounts for its derivative instruments and hedging activities under SFAS No. 133 (“SFAS 133”), Accounting for Derivative Instruments and Hedging Activities , and its corresponding amendments under SFAS No. 138, Accounting for Certain Derivative Instruments and Hedging Activities — An Amendment of SFAS 133 . SFAS 133 requires the Partnership to measure every derivative instrument (including certain derivative instruments embedded in other contracts) at fair value and record them in the balance sheet as either an asset or liability. For derivatives designated as fair value hedges, the changes in fair value of both the derivative instrument and the hedged item are recorded in earnings. For derivatives designated as cash flow hedges, the effective portions of changes in the fair value of the derivative are reported in other comprehensive income. Changes in fair value of derivative instruments and ineffective portions of hedges are recognized in earnings in the current period. For the three-month periods ended March 31, 2007 and 2006, the Partnership was not party to any derivative contract designated as a fair value hedge and there are no ineffective portions of our cash flow hedges.

The Partnership actively manages its ratio of fixed-to-floating rate debt. To manage its fixed and floating rate debt in a cost-effective manner, the Partnership, from time to time, enters into interest rate swap agreements as cash flow hedges, under which it agrees to exchange various combinations of fixed and/or variable interest rates based on agreed upon notional amounts.

Income Taxes

No federal or state income taxes are payable by the Partnership, and accordingly, no provision for taxes has been made in the accompanying consolidated financial statements. The partners are to include their respective share of the Partnership’s profits or losses in their individual tax returns. The Partnership’s tax returns and the amount of allocable Partnership profits and losses are subject to examination by federal and state taxing authorities. If such examination results in changes to Partnership profits or losses, then the tax liability of the partners would be changed accordingly.

The Partnership has several subsidiary real estate investment trusts (“REITs”) that have elected to be treated as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”). In order to maintain their qualification as a REIT, the REIT subsidiaries are required to, among other things, distribute at least 90% of its REIT taxable income to its stockholders and meet certain tests regarding the nature of its income and assets. The REIT subsidiaries are not subject to federal income tax with respect to the portion of its income that meets certain criteria and is distributed annually to the stockholders. Accordingly, no provision for federal income taxes is included in the accompanying consolidated financial statements with respect to the operations of these operations. The REIT

BRANDYWINE OPERATING PARTNERSHIP, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007

subsidiaries intend to continue to operate in a manner that allows them to continue to meet the requirements for taxation as REITs. Many of these requirements, however, are highly technical and complex. If one of the REIT subsidiaries were to fail to meet these requirements, the REIT subsidiaries would be subject to federal income tax. The Partnership is subject to certain state and local taxes. Provision for such taxes has been included in general and administrative expenses in the Partner’s Consolidated Statements of Operations and Comprehensive Income.

The Partnership may elect to treat one or more of its subsidiaries as a taxable REIT subsidiary (“TRS”). In general, a TRS of the Partnership may perform additional services for tenants of the Partnership and generally may engage in any real estate or non-real estate related business (except for the operation or management of health care facilities or lodging facilities or the provision to any person, under a franchise, license or otherwise, of rights to any brand name under which any lodging facility or health care facility is operated). A TRS is subject to corporate federal income tax. The Partnership has elected to treat certain of its corporate subsidiaries as TRSs, these entities provide third party property management services and certain services to tenants that could not otherwise be provided.

New Pronouncements

In February 2007, the FASB issued Statement No. 159, “ The Fair Value Option for Financial Assets and Financial Liabilities ” (“SFAS 159”), which gives entities the option to measure eligible financial assets, financial liabilities and firm commitments at fair value on an instrument-by-instrument basis, that are otherwise not permitted to be accounted for at fair value under other accounting standards. The election to use the fair value option is available when an entity first recognizes a financial asset or financial liability or upon entering into a firm commitment. Subsequent changes (i.e., unrealized gains and losses) in fair value must be recorded in earnings. Additionally, SFAS 159 allows for a one-time election for existing positions upon adoption, with the transition adjustment recorded to beginning retained earnings. The Partnership is currently assessing the potential impact that the adoption of SFAS 159 will have on its financial position and results of operations.

In September 2006, the FASB issued Statement No. 157, Fair Value Measurements (“SFAS No. 157”). SFAS No. 157 provides guidance for using fair value to measure assets and liabilities. This statement clarifies the principle that fair value should be based on the assumptions that market participants would use when pricing the asset or liability. SFAS No. 157 establishes a fair value hierarchy, giving the highest priority to quoted prices in active markets and the lowest priority to unobservable data. SFAS No. 157 applies whenever other standards require assets or liabilities to be measured at fair value. This statement is effective in fiscal years beginning after November 15, 2007. The Partnership is currently evaluating the impact and believes that the adoption of this standard on January 1, 2008 will not have a material effect on our consolidated financial statements.

In June 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an Interpretation of FASB Statement No. 109 (“FIN 48”). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in a Partnership’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on description, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Partnership adopted FIN 48 on January 1, 2007. As a result of the implementation of FIN 48, the Partnership recognized no material adjustments regarding its tax accounting treatment. The Partnership expects to recognize interest and penalties, to the extent incurred related to uncertain tax positions, if any, as income tax expense, which would be included in general and administrative expense.

3. REAL ESTATE INVESTMENTS

As of March 31, 2007 and December 31, 2006, the gross carrying value of the Partnership’s operating properties was as follows (amounts in thousands):

BRANDYWINE OPERATING PARTNERSHIP, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007


	March 31, 2007		December 31, 2006
Land	$	724,642	$	756,400
Building and improvements		3,665,362		3,807,040
Tenant improvements		383,810		363,865

		4,773,814		4,927,305

Acquisitions and Dispositions

The Partnership’s acquisitions are accounted for by the purchase method. The results of each acquired property are included in the Partnership’s results of operations from their respective purchase dates.

2007

During the three-months ended March 31, 2007, the Partnership acquired the remaining 49% interest in a consolidated real estate venture previously owned by Stichting Pensioenfonds ABP containing ten office properties for a purchase price of $63.7 million. The Partnership owned a 51% interest in this real estate venture through the acquisition of Prentiss in January 5, 2006 and had already consolidated this venture. This purchase was accounted for as a step acquisition and the difference between the purchase price of the minority interest and the carrying value of the pro rata share of the assets of the real estate venture was allocated to the real estate venture’s assets and liabilities based on their relative fair value.

During the three-months ended March 31, 2007, the Partnership sold seventeen office properties containing an aggregate of 2.2 million net rentable square feet and 4.7 acres of land for an aggregate sales price of $234.1 million. The net proceeds from the sale of ten of these properties, totaling $109.1 million, have been recorded as cash escrowed with qualified intermediary in the Partnership’s Consolidated Balance Sheets because the cash is held in escrow for the purpose of potentially accomplishing a like-kind exchange under Section 1031 of the Code. The Partnership is in the process of identifying replacement assets to accomplish the like-kind exchange by May 14, 2007 and purchase such assets by the statutory expiration date of September 26, 2007.

2006

Prentiss Acquisition

On January 5, 2006, the Partnership acquired Prentiss pursuant to the Merger Agreement that the Partnership entered into with Prentiss on October 3, 2005. In conjunction with the Partnership’s acquisition of Prentiss, designees of The Prudential Insurance Company of America (“Prudential”) acquired certain of Prentiss’ properties that contain an aggregate of approximately 4.32 million net rentable square feet for a total consideration of approximately $747.7 million. Through its acquisition of Prentiss (and after giving effect to the Prudential acquisition of Prentiss’ properties), the Partnership acquired a portfolio of 79 office properties (including 13 properties that were owned by consolidated Real Estate Ventures and seven properties that were owned by an unconsolidated Real Estate Venture) that contain an aggregate of 14.0 million net rentable square feet. The results of the operations of Prentiss have been included in the Partnership’s condensed consolidated financial statements since January 5, 2006.

The Partnership funded the approximately $1.05 billion cash portion of the merger consideration, related transaction costs and prepayments of approximately $543.3 million in Prentiss mortgage debt at the closing of the merger through (i) a $750 million unsecured term loan (ii) approximately $676.5 million of cash from Prudential’s acquisition of Prentiss properties; and (iii) approximately $195.0 million through borrowing under a revolving credit facility.

The following table summarizes the fair value of the assets acquired and liabilities assumed at the date of acquisition of Prentiss (in thousands):

BRANDYWINE OPERATING PARTNERSHIP, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007


	At January 5, 2006
Real estate investments
Land — operating	$	282,584
Building and improvements		1,942,728
Tenant improvements		120,610
Construction in progress and land inventory		57,329

Total real estate investments acquired		2,403,251

Rent receivables		6,031

Other assets acquired:
Intangible assets:
In-place leases		187,907
Relationship values		98,382
Above-market leases		26,352

Total intangible assets acquired		312,641
Investment in real estate ventures		66,921
Investment in marketable securities		193,089
Other assets		8,868

Total other assets		581,519

Total assets acquired		2,990,801

Liabilities assumed:
Mortgage notes payable		532,607
Unsecured notes		78,610
Secured note payable		186,116
Security deposits and deferred rent		6,475
Other liabilities:
Below-market leases		78,911
Other liabilities		43,995

Total other liabilities assumed		122,906
Total liabilities assumed		926,714
Minority interest		104,658

Net assets acquired	$	1,959,429

BRANDYWINE OPERATING PARTNERSHIP, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007

For purposes of computing the total purchase price reflected in the financial statements, the Brandywine common shares (including restricted common shares), Partnership units and options that were issued in the Prentiss transaction were valued based on the average trading price per Brandywine common share of $29.54. The average trading price was based on the average of the high and low trading prices for each of the two trading days before, the day of and the two trading days after the merger was announced (i.e., September 29, September 30, October 3, October 4 and October 5).

The Partnership considered the provisions of FIN 47 for these acquisitions and, where necessary, recorded a conditional asset retirement obligation as part of the purchase price. The aggregate asset retirement recorded in connection with the Prentiss acquisition was approximately $2.7 million.


	Three-month period
	ended March 31, 2006
	(unaudited)
Pro forma revenue	$	147,322

Pro forma loss from continuing operations		(7,544	)

Pro forma loss allocated to common shares		(4,482	)

Earnings per common share from continuing operations
Basic — as reported	$	(0.11	)

Basic — as pro forma	$	(0.10	)


Diluted — as reported	$	(0.11	)

Diluted — as pro forma	$	(0.10	)


Earnings per common share
Basic — as reported	$	(0.05	)

Basic — as pro forma	$	(0.05	)


Diluted — as reported	$	(0.05	)

Diluted — as pro forma	$	(0.05	)

Subsequent to its acquisition of Prentiss and the related sale of certain properties to Prudential, the Partnership sold eight of the acquired properties that contained an aggregate of 1.6 million net rentable square during the three-month period ended March 31, 2006. One additional property acquired in the acquisition of Prentiss was classified as held for sale at March 31, 2006.

During the quarter ended March 31, 2007, the Partnership sold four of the acquired properties that contained an aggregate of 1.1 million net rentable square feet and a 4.7 acres parcel of land. As of March 31, 2007, one of the acquired properties was classified as held for sale.

Since January 5, 2006, the Partnership has sold a total of 21 of the acquired properties that contained an aggregate of 4.0 million net rentable square feet and two parcels of land totaling 15.6 acres. Upon the completion of the sale of the one property classified as held for sale at March 31, 2007 (which occurred on April 30, 2007), the Partnership no longer has any wholly owned properties in Dallas, TX.

BRANDYWINE OPERATING PARTNERSHIP, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007

Other Acquisitions and Dispositions

In addition to the acquisition activity related to Prentiss, during the three-month period ended March 31, 2006, the Partnership also acquired one office property containing 93.0 net rentable square feet for $10.2 million.

4. INVESTMENT IN UNCONSOLIDATED VENTURES

As of March 31, 2007, the Partnership had an aggregate investment of approximately $73.0 million in 11 unconsolidated Real Estate Ventures (net of returns of investment). The Partnership formed these ventures with unaffiliated third parties, or acquired them, to develop office properties or to acquire land in anticipation of possible development of office properties. Nine of the Real Estate Ventures own 15 office buildings that contain an aggregate of approximately 2.8 million net rentable square feet, one Real Estate Venture developed a hotel property that contains 137 rooms and one Real Estate Venture is developing an office property located in Albemarle County, VA.

The Partnership accounts for its unconsolidated interests in its Real Estate Ventures using the equity method. Unconsolidated interests range from 6% to 50%, subject to specified priority allocations in certain of the Real Estate Ventures.

The Partnership also has investments in three consolidated Real Estate Ventures that are variable interest entities under FIN 46R and of which the Partnership is the primary beneficiary.

The amounts reflected below (except for Partnership’s share of equity and income) are based on the historical financial information of the individual Real Estate Ventures. One of the Real Estate Ventures, acquired in connection with the Prentiss acquisition, had a negative equity balance on a historical cost basis as a result of historical depreciation and distributions of excess financing proceeds. The Partnership reflected its acquisition of this Real Estate Venture interest at its relative fair value as of the date of the purchase of Prentiss. The difference between allocated cost and the underlying equity in the net assets of the investee is accounted for as if the entity were consolidated (i.e., allocated to the Partnership’s relative share of assets and liabilities with an adjustment to recognize equity in earnings for the appropriate additional depreciation/amortization).

The following is a summary of the financial position of the Real Estate Ventures as of March 31, 2007 and December 31, 2006 (in thousands):


	2007		2006
Operating property, net of accumulated depreciation	$	376,574	$	365,168
Other assets		42,645		52,935
Liabilities		26,333		28,764
Debt		358,659		332,589
Equity		39,610		56,888
Partnership’s share of equity (Partnership’s basis)		72,983		74,574

The following is a summary of results of operations of the Real Estate Ventures for the three-month periods ended March 31, 2007 and 2006 (in thousands):

BRANDYWINE OPERATING PARTNERSHIP, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007


	Three-month periods
	ended March 31,
	2007		2006
Revenue	$	18,314	$	19,724
Operating expenses		6,297		7,994
Interest expense, net		5,238		4,994
Depreciation and amortization		4,229		4,873
Net income		2,551		1,862
Partnership’s share of income (Partnership basis)		754		965

As of March 31, 2007, the Partnership had guaranteed repayment of approximately $0.6 million of loans for the Real Estate Ventures. The Partnership also provides customary environmental indemnities and completion guarantees in connection with construction and permanent financing both for its own account and on behalf of the Real Estate Ventures.

5. DEFERRED COSTS

As of March 31, 2007 and December 31, 2006, the Partnership’s deferred costs were comprised of the following (in thousands):


	March 31, 2007
			Accumulated			Deferred Costs,
	Total Cost		Amortization			net
Leasing Costs	$	88,913	$	(29,083	)	$	59,830
Financing Costs		22,322		(5,150	)		17,172

Total	$	111,235	$	(34,233	)	$	77,002


	December 31, 2006
			Accumulated			Deferred Costs,
	Total Cost		Amortization			net
Leasing Costs	$	83,629	$	(28,278	)	$	55,351
Financing Costs		24,648		(6,291	)		18,357

Total	$	108,277	$	(34,569	)	$	73,708

6. INTANGIBLE ASSETS

As of March 31, 2007 and December 31, 2006, the Partnership’s intangible assets were comprised of the following (in thousands):

BRANDYWINE OPERATING PARTNERSHIP, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007


	March 31, 2007
			Accumulated
	Total Cost		Amortization			Deferred Costs, net
In-place lease value	$	183,089	$	(51,153	)	$	131,936
Tenant relationship value		119,377		(22,375	)		97,002
Above market leases acquired		31,878		(12,432	)		19,446

Total	$	334,344	$	(85,960	)	$	248,384


Below market leases acquired	$	103,865	$	(27,226	)	$	76,639


	December 31, 2006
			Accumulated
	Total Cost		Amortization			Deferred Costs, net
In-place lease value	$	207,513	$	(52,293	)	$	155,220
Tenant relationship value		124,605		(19,572	)		105,033
Above market leases acquired		32,667		(11,669	)		20,998

Total	$	364,785	$	(83,534	)	$	281,251


Below market leases acquired	$	118,536	$	(26,009	)	$	92,527

As of March 31, 2007, the Partnership’s annual amortization for its intangible assets/liabilities are as follows (in thousands and assuming no early lease terminations):


	Assets		Liabilities
2007	$	39,395	$	14,009
2008		45,049		14,747
2009		39,795		12,758
2010		33,920		10,258
2011		27,040		8,471
Thereafter		63,185		16,396

Total	$	248,384	$	76,639

7. DEBT OBLIGATIONS

The following table sets forth information regarding the Partnership’s debt obligations outstanding at March 31, 2007 and December 31, 2006 (in thousands):

BRANDYWINE OPERATING PARTNERSHIP, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007

MORTGAGE DEBT


							Effective
	March 31,			December 31,			Interest		Maturity
Property / Location	2007			2006			Rate		Date
Interstate Center		—			552		6.19%		Mar-07
The Bluffs		10,700			10,700		6.00%	(a), (b)	Apr-07
Pacific Ridge		14,500			14,500		6.00%	(a), (b)	Apr-07
Pacific View/Camino		26,000			26,000		6.00%	(a), (b)	Apr-07
Computer Associates Building		31,000			31,000		6.00%	(a), (b)	Apr-07
Presidents Plaza		30,900			30,900		6.00%	(a), (b)	Apr-07
440 & 442 Creamery Way		5,379			5,421		8.55%	(b)	May-07
481 John Young Way		2,277			2,294		8.40%		Nov-07
400 Commerce Drive		11,742			11,797		7.12%		Jun-08
Two Logan Square		71,054			71,348		5.78%	(a)	Jul-09
200 Commerce Drive		5,821			5,841		7.12%	(a)	Jan-10
1333 Broadway		24,311			24,418		5.18%	(a)	May-10
The Ordway		46,033			46,199		7.95%	(a)	Aug-10
World Savings Center		27,424			27,524		7.91%	(a)	Nov-10
Plymouth Meeting Exec.		43,949			44,103		7.00%	(a)	Dec-10
Four Tower Bridge		10,591			10,626		6.62%		Feb-11
Arboretum I, II, III & V		22,623			22,750		7.59%		Jul-11
Midlantic Drive/Lenox Drive/DCC I		62,289			62,678		8.05%		Oct-11
Research Office Center		42,040			42,205		7.64%	(a)	Oct-11
Concord Airport Plaza		38,245			38,461		7.20%	(a)	Jan-12
Six Tower Bridge		14,655			14,744		7.79%		Aug-12
Newtown Square/Berwyn Park/Libertyview		63,011			63,231		7.25%		May-13
Coppell Associates		3,682			3,737		6.89%		Dec-13
Southpoint III		4,822			4,949		7.75%		Apr-14
Tysons Corner		100,000			100,000		4.84%	(a)	Aug-15
Coppell Associates		16,600			16,600		5.75%		Mar-16
Grande A		59,190			59,513		7.48%		Jul-27
Grande B		77,120			77,535		7.48%		Jul-27

Principal balance outstanding		865,958			869,626

Plus: unamortized fixed-rate debt premiums		13,274			14,294

Total mortgage indebtedness	$	879,232		$	883,920


UNSECURED DEBT:
Line-of-Credit		404,000			60,000		Libor + 0.80%		Dec-09
2009 Five Year Notes		275,000			275,000		4.62%		Nov-09
2014 Ten Year Notes		250,000			250,000		5.53%		Nov-14
Private Placement Notes due 2008		113,000			113,000		4.34%		Dec-08
2010 Five Year Notes		300,000			300,000		5.61%		Dec-10
Indenture IA (Preferred Trust I)		27,062			27,062		Libor + 1.25%		Mar-35
Indenture IB (Preferred Trust I)		25,774			25,774		Libor + 1.25%		Apr-35
Indenture II (Preferred Trust II)		25,774			25,774		Libor + 1.25%		Jul-35
2009 Three Year Notes		—			300,000		Libor + 0.45		Apr-09
2012 Six Year Notes		300,000			300,000		5.77%		Apr-12
2016 Ten Year Notes		250,000			250,000		5.95%		Apr-16
3.874% Exchangeable Notes		345,000			345,000		3.87%		Oct-11


Principal balance outstanding		2,315,610			2,271,610

Plus: unamortized fixed-rate debt premiums		(3,175	)		(3,300	)

Total mortgage indebtedness	$	2,312,435		$	2,268,310


Total Debt Obligations	$	3,191,667		$	3,152,230


(a)		Loans were assumed upon acquisition of the related property. Interest rates presented above reflect the market rate at the time of acquisition.

(b)		In April 2007, the Partnership has elected to prepay the loan on the date indicated in the Maturity date column.

BRANDYWINE OPERATING PARTNERSHIP, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007

During the three-month periods ended March 31, 2007 and 2006, the Partnership’s weighted-average effective interest rate on its mortgage notes payable was 6.67% and 6.30%, respectively.

On March 28, 2006, the Partnership completed an underwritten public offering of (1) $300,000,000 aggregate principal amount of unsecured floating rate notes due 2009 (the “2009 Notes”), (2) $300,000,000 aggregate principal amount of 5.75% unsecured notes due 2012 (the “2012 Notes”) and (3) $250,000,000 aggregate principal amount of 6.00% unsecured notes due 2016 (the “2016 Notes”). The Company guaranteed the payment of principal and interest on the 2009 Notes, the 2012 Notes and the 2016 Notes. The Partnership used proceeds from these notes to repay a term loan obtained to finance a portion of the consideration paid in the Prentiss merger and to reduce borrowings under its revolving credit facility.

On October 4, 2006, the Partnership completed an offering of $300.0 million aggregate principal amount of 3.875% senior convertible notes due 2026 in an offering made in reliance upon an exemption from registration rights under Rule 144A under the Securities Act of 1933 and issued an additional $45 million of exchangeable notes on October 16, 2006 to cover over-allotments. At certain times and upon the occurrence of certain events, the notes are convertible into cash up to their principal amount and, with respect to the remainder, if any, of the exchange value in excess of such principal amount, cash or shares of the Company’s common shares. The initial exchange rate will be 25.4065 shares per $1,000 principal amount of notes (which is equivalent to an initial exchange price of $39.36 per share). The notes may not be redeemed by the Company prior to October 20, 2011 (except to preserve the Company’s status as a REIT), but are redeemable anytime thereafter, in whole or in part, at a redemption price equal to the principal amount of the notes plus any accrued and unpaid interest (including additional interest), if any. In addition, on October 20, 2011, October 15, 2016, and October 15, 2021, or upon the occurrence of certain change in control transactions prior to October 20, 2011, note holders may require the Company to repurchase all or a portion of the notes at a purchase price equal to the principal amount plus any accrued and unpaid interest on the notes. Net proceeds from the October 2006 Debt Offering were used to repurchase approximately $60.0 million of the Company’s common stock at a price of $32.80 per share and for general corporate purposes, including the repayment of outstanding borrowings under the Company’s unsecured revolving credit facility.

On November 29, 2006, the Partnership gave notice of redemption of the 2009 Notes and redeemed the 2009 Notes on January 2, 2007.

The indenture relating to the unsecured notes contains financial restrictions and requirements, including (1) a leverage ratio not to exceed 60%, (2) a secured debt leverage ratio not to exceed 40%, (3) a debt service coverage ratio of greater than 1.5 to 1.0, and (4) an unencumbered asset value of not less than 150% of unsecured debt. In addition, the note purchase agreement relating to the Partnership’s $113 million unsecured notes due 2008 contains covenants that are similar to the covenants in the indenture.

The Partnership utilizes credit facility borrowings for general business purposes, including the acquisition, development and redevelopment of properties and the repayment of other debt. In December 2005, the Partnership replaced its then existing credit facility with a $600.0 million unsecured credit facility (the “Credit Facility”) that matures in December 2009, subject to a one-year extension option. Borrowings under the Credit Facility generally bear interest at LIBOR plus a spread over LIBOR ranging from 0.55% to 1.10% based on the Company’s unsecured senior debt rating. The Partnership has the option to increase the Credit Facility to $800.0 million subject to the absence of any defaults and the Partnership’s ability to acquire additional commitments from its existing lenders or new lenders. As of March 31, 2007, the Partnership had $404.0 million of borrowings and $24.2 million of letters of credit outstanding under the Credit Facility, leaving $171.8 million of unused availability. For the three-month periods ended March 31, 2007 and 2006, the weighted-average interest rate on the Credit Facility, including the effect of interest rate hedges, was 6.1% and 5.4%, respectively.

BRANDYWINE OPERATING PARTNERSHIP, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007

The Credit Facility requires the maintenance of ratios related to minimum net worth, debt-to-total capitalization and fixed charge coverage and includes non-financial covenants.

As of March 31, 2007, the Partnership’s aggregate scheduled principal payments of debt obligations, excluding amortization of discounts and premiums, are as follows (in thousands):


2007	$	129,683
2008		138,227
2009		762,306
2010		453,803
2011		481,158
Thereafter		1,216,391

Total indebtedness	$	3,181,568

8. RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS

Risk Management

In the normal course of its on-going business operations, the Partnership encounters economic risk. There are three main components of economic risk: interest rate risk, credit risk and market risk. The Partnership is subject to interest rate risk on its interest-bearing liabilities. Credit risk is the risk of inability or unwillingness of tenants to make contractually required payments. Market risk is the risk of declines in the value of properties due to changes in rental rates, interest rates or other market factors affecting the valuation of properties held by the Partnership.

Use of Derivative Financial Instruments

The Partnership’s use of derivative instruments is limited to the utilization of interest rate agreements or other instruments to manage interest rate risk exposures and not for speculative purposes. The principal objective of such arrangements is to minimize the risks and/or costs associated with the Partnership’s operating and financial structure, as well as to hedge specific transactions. The counterparties to these arrangements are major financial institutions with which the Partnership and its affiliates may also have other financial relationships. The Partnership is potentially exposed to credit loss in the event of non-performance by these counterparties. However, because of the high credit ratings of the counterparties, the Partnership does not anticipate that any of the counterparties will fail to meet these obligations as they come due. The Partnership does not hedge credit or property value market risks.

In March 2007, in anticipation of the offering of $300 million of 5.70% unsecured guaranteed notes due May 1, 2017 (“2017 Notes”) (See Note 15), the Partnership entered into two treasury lock agreements. The treasury lock agreements were designated as cash flow hedges on interest rate risk and qualified for hedge accounting. Each of the treasury lock agreements were for notional amounts of $75.0 million for an expiration of 10 years at all-in rates of 4.5585% and 4.498% and had fair values of $0.7 million and $1.0 million, respectively at March 31, 2007. The agreements were settled in April 2007 upon completion of the offering of the 2017 Notes at a total benefit of $1.1 million. This benefit will be recorded as a component of accumulated other comprehensive income in the accompanying consolidated balance sheet and amortized over the term of the 2017 Notes.

In March 2006, in anticipation of the offering of the 2009 Notes, the 2012 Notes and the 2016 Notes, the Partnership entered into forward starting swaps. The forward starting swaps were designated as cash flow hedges of interest rate risk and qualified for hedge accounting. The forward starting swaps were for notional amounts totaling $200.0 million at an all-in-rate of 5.2%. Two of the forward starting swaps had a six year maturity date and one had a ten year maturity date. The forward starting swaps were settled in March 2006 upon the completion of the offering of the 2009, 2012, and 2016 Notes at a total benefit of approximately $3.3 million. The benefit was recorded as a component of accumulated other comprehensive income in the accompanying consolidated balance sheet and is being amortized to interest expense over the term of the unsecured notes.

BRANDYWINE OPERATING PARTNERSHIP, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007

The Partnership entered into two interest rate swaps in January 2006 aggregating $90 million in notional amount as part of its acquisition of Prentiss. The instruments are used to hedge the risk of interest cash outflows on secured variable rate debt on properties that were included as part of the real estate venture in which the Partnership purchased the remaining 49% of the minority interest partner’s share in March 2007. One of the swaps with a notional amount of $20 million has a maturity date of February 1, 2010 at an all-in rate of 4.675% and had a fair value of $0.1 million at March 31, 2007. The other, with a notional amount of $70 million, has a maturity date of August 1, 2008 at an all in rate of 4.675% and had a fair value of $0.3 million at March 31, 2007. The agreements were settled in April 2007 in connection with the repayment of five mortgage notes (see Note 7), at a total benefit of $0.4 million.

The Partnership formally assesses, both at inception of the hedge and on an on-going basis, whether each derivative is highly-effective in offsetting changes in cash flows of the hedged item. If management determines that a derivative is not highly-effective as a hedge or if a derivative ceases to be a highly-effective hedge, the Partnership will discontinue hedge accounting prospectively.

Concentration of Credit Risk

Concentrations of credit risk arise when a number of tenants related to the Partnership’s investments or rental operations are engaged in similar business activities, or are located in the same geographic region, or have similar economic features that would cause their inability to meet contractual obligations, including those to the Partnership, to be similarly affected. The Partnership regularly monitors its tenant base to assess potential concentrations of credit risk. Management believes the current credit risk portfolio is reasonably well diversified and does not contain any unusual concentration of credit risk. No tenant accounted for 5% or more of the Partnership’s rents during the three-month periods ended March 31, 2007 or 2006.

9. DISCONTINUED OPERATIONS

For the three-month periods ended March 31, 2007, income from discontinued operations relates to 17 properties that the Partnership sold during 2007 and one property designated as held for sale as of March 31, 2007. The following table summarizes the revenue and expense information for properties classified as discontinued operations for the three-month period ended March 31, 2007 (in thousands):


	Three-month period
	ended March 31, 2007
Revenue:
Rents	$	10,937
Tenant reimbursements		684
Other		69

Total revenue		11,690

Expenses:
Property operating expenses		4,012
Real estate taxes		1,308
Depreciation and amortization		4,594

Total operating expenses		9,914

Income from discontinued operations before gain on sale of interests in real estate and minority interest		1,776

Net gain on sale of interests in real estate		26,009

Income from discontinued operations	$	27,785

For the three-month period ended March 31, 2006, income from discontinued operations relates to properties sold during 2006 and 2007 and one property held for sale March 31, 2007. The following table summarizes the revenue and expense information for the properties classified as discontinued operations for the three-month period ended March 31, 2006 (in thousands):

BRANDYWINE OPERATING PARTNERSHIP, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007


	Three-month period
	ended March 31, 2006
Revenue:
Rents	$	24,713
Tenant reimbursements		2,469
Other		370

Total revenue		27,552

Expenses:
Property operating expenses		9,411
Real estate taxes		3,487
Depreciation and amortization		9,122

Total operating expenses		22,020

Operating income		5,532

Interest expense		(286	)


Income from discontinued operations before gain on sale of interests in real estate and minority interest		5,246

Minority interest — partners’ share of consolidated real estate venture		(187	)

Income from discontinued operations	$	5,059

The following table summarizes the balance sheet information for the property identified as held for sale at March 31, 2007 (in thousands):


Real Estate Investments:
Operating Property	$	114,237
Accumulated depreciation		(7,774	)

		106,463

Other assets		20,870

Total Assets Held for Sale	$	127,333


Other liabilities	$	14,404

10. MINORITY INTEREST IN REAL ESTATE VENTURES

As of March 31, 2007, the Partnership owned interests in three consolidated real estate ventures that own three office properties containing approximately 0.4 million net rentable square feet. Minority interest in consolidated real estate ventures represents the portion of these consolidated real estate ventures not owned by the Partnership.

On March 1, 2007, the Partnership acquired the remaining 49% interest in a real estate venture previously owned by Stichting Pensioenfonds ABP containing ten office properties for a purchase price of $63.7 million. The Partnership owned a 51% interest in this real estate venture through the acquisition of Prentiss in January 5, 2006.

11. PARTNERS’ EQUITY

Earnings per Common Partnership Unit

The following table details the number of units and net income used to calculate basic and diluted earnings per common partnership unit (in thousands, except unit and per unit amounts; results may not add due to rounding):

BRANDYWINE OPERATING PARTNERSHIP, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007


	Three-month periods ended March 31,
	2007						2006
	Basic			Diluted			Basic			Diluted
Income (loss) from continuing operations	$	(7,638	)	$	(7,638	)	$	(7,909	)	$	(7,909	)
Income (loss) from discontinued operations		27,785			27,785			5,059			5,059
Income allocated to Preferred Units		(1,998	)		(1,998	)		(1,998	)		(1,998	)

Net income available to common partnership unitholders	$	18,149		$	18,149		$	(4,848	)	$	(4,848	)


Weighted-average common partnership units outstanding		92,227,034			92,227,034			93,318,834			93,318,834
Contingent securities/Stock based compensation		—			948,916			—			443,014

Total weighted-average partnership units outstanding		92,227,034			93,175,950			93,318,834			93,761,848


Earnings per Common Partnership Unit:
Continuing operations	$	(0.10	)	$	(0.10	)	$	(0.11	)	$	(0.11	)
Discontinued operations		0.30			0.30			0.05			0.05

	$	0.20		$	0.19		$	(0.05	)	$	(0.05	)

Common Partnership Unit and Preferred Mirror Units

On March 14, 2007, the Partnership declared a $0.44 per unit cash distribution to holders of Class A Units totaling $1.7 million.

On March 14, 2007, the Partnership declared a distribution of $0.44 per Common Partnership Unit, totaling $38.6 million, which was paid on April 18, 2007 to unitholders of record as of April 4, 2007. On March 14, 2007, the Partnership declared distributions on its Series D Preferred Mirror Units and Series E Preferred Mirror Units to holders of record as of March 30, 2007. These units are entitled to a preferential return of 7.50% and 7.375%, respectively. Distributions paid on April 16, 2007 to holders of Series D Preferred Mirror Units and Series E Preferred Mirror Units totaled $0.9 million and $1.1 million, respectively.

Common Share Repurchases

The Partnership repurchased 1,301,000 shares during the three-month period ending March 31, 2007 for an aggregate consideration of $44.7 million under its share repurchase program. As of March 31, 2007, the Partnership may purchase an additional 1,018,800 shares under the plan. Repurchases may be made from time to time in the open market or in privately negotiated transactions, subject to market conditions and compliance with legal requirements. The share repurchase program does not contain any time limitation and does not obligate the Partnership to repurchase any shares. The Partnership may discontinue the program at any time.

12. SHARE BASED COMPENSATION

In December 2004, the FASB issued SFAS No. 123(R), “Share-Based Payment” (“SFAS 123(R)”). SFAS 123(R) is an amendment of SFAS 123 and requires that the compensation cost relating to share-based payment transactions be recognized in the financial statements. The cost is required to be measured based on the fair value of the equity or liability instruments issued. SFAS 123(R) also contains additional minimum disclosures requirements including, but not limited to, the valuation method and assumptions used, amounts of compensation capitalized and modifications made. The effective date of SFAS 123(R) was subsequently amended by the SEC to be as of the beginning of the first interim or annual reporting period of the first fiscal year that begins on or after December 15, 2005, and allows several different methods of transition. The Partnership adopted SFAS 123(R) using the prospective method on January 1, 2006. This adoption did not have a material effect on our consolidated financial statements.

BRANDYWINE OPERATING PARTNERSHIP, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007

Stock Options


				Weighted		Weighted Average
				Average		Remaining Contractual		Aggregate Intrinsic
	Shares			Exercise Price		Term (in years)		Value (in 000’s)
Outstanding at January 1, 2007		1,286,070		$	26.45		1.50		8,739
Granted		—			—		—		—
Exercised		(198,495	)		28.80		0.87		1,171
Forfeited		—			—		—		—

Outstanding at March 31, 2007		1,087,575		$	26.03		1.32		8,029

Vested at March 31, 2007		1,087,575		$	26.03		1.32		8,029
Exercisable at March 31, 2007		1,087,575		$	26.03		1.32		8,029

There were no option awards granted to employees during the three-month period ended March 31, 2007.

The Company has the ability and intent to issue shares upon stock option exercises. Historically, the Company has issued new common shares to satisfy such exercises.

Restricted Stock Awards


				Weighted
				Average Grant
	Shares			Date Fair value
Non-vested at January 1, 2007		338,860		$	28.23
Granted		216,828			35.19
Vested		(96,068	)		26.28
Forfeited		(2,124	)		30.55

Non-vested at March 31, 2007		457,496		$	31.90

Outperformance Program

BRANDYWINE OPERATING PARTNERSHIP, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007

which our performance exceeds the hurdles. The Company established the outperformance program under the 1997 Plan.

13. SEGMENT INFORMATION

The Partnership currently manages its portfolio within nine segments: (1) Pennsylvania—West, (2) Pennsylvania—North, (3) New Jersey, (4) Urban, (5) Richmond, Virginia, (6) Northern California (7) Southern California, (8) Metropolitan Washington, D.C. and (9) Southwest. The Pennsylvania—West segment includes properties in Chester, Delaware and Montgomery counties in the Philadelphia suburbs of Pennsylvania. The Pennsylvania—North segment includes properties north of Philadelphia in Bucks, Lehigh and Montgomery counties. The New Jersey segment includes properties in counties in the southern part of New Jersey including Burlington, Camden and Mercer counties and in Bucks County, Pennsylvania. The Urban segment includes properties in the City of Philadelphia, Pennsylvania and the state of Delaware. The Richmond, Virginia segment includes properties primarily in Albemarle, Chesterfield and Henrico counties, the City of Richmond and Durham, North Carolina. The Northern California segment includes properties in the City of Oakland and Concord. The Southern California segment includes properties in San Diego County. The Metropolitan Washington, D.C. segment includes properties in Northern Virginia and Suburban Maryland. The Southwest segment includes properties in Travis County of Texas. Corporate is responsible for cash and investment management, development of certain real estate properties during the construction period, and certain other general support functions.

BRANDYWINE OPERATING PARTNERSHIP, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007

Segment information as of and for the three-month periods ended March 31, 2007 and 2006 is as follows (in thousands):



	Pennsylvania—		Pennsylvania—						Richmond,		Northern		Southern		Metropolitan
	West		North		New Jersey		Urban		Virginia		California		California		Washington, D.C.		Southwest		Corporate			Total
As of March 31, 2007:
Real estate investments, at cost:
Operating properties	$	926,700	$	440,726	$	554,586	$	575,636	$	250,935	$	402,033	$	105,810	$	1,284,748	$	232,640	$	—		$	4,773,814
Development and construction-in-progress		—		—		—		—		—		—		—		—		—		346,555			346,555

As of December 31, 2006:
Real estate investments, at cost:
Operating properties	$	922,347	$	530,436	$	570,009	$	568,008	$	244,519	$	396,927	$	95,942	$	1,255,940	$	343,177	$	—		$	4,927,305
Development and construction-in-progress		—		—		—		—		—		—		—		—		—		328,119			328,119

For the three-months ended March 31, 2007:
Total revenue	$	27,509	$	19,481	$	24,675	$	23,455	$	8,940	$	15,091	$	3,141	$	32,385	$	8,239	$	185		$	163,101
Property operating expenses		11,696		7,641		11,264		9,734		3,495		6,679		1,727		11,785		4,222		(7,011	)		61,232

Net operating income	$	15,813	$	11,840	$	13,411	$	13,721	$	5,445	$	8,412	$	1,414	$	20,600	$	4,017	$	7,196		$	101,869


For the three-months ended March 31, 2006:
Total revenue	$	25,233	$	18,275	$	23,695	$	19,560	$	7,483	$	13,678	$	2,674	$	26,157	$	9,409	$	(2,246	)	$	143,918
Property operating expenses		8,468		9,776		9,815		8,871		2,966		5,137		1,103		9,270		3,795		(4,020	)		55,181

Net operating income	$	16,765	$	8,499	$	13,880	$	10,689	$	4,517	$	8,541	$	1,571	$	16,887	$	5,614	$	1,774		$	88,737

BRANDYWINE OPERATING PARTNERSHIP, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007

Net operating income is defined as total revenue less property operating expenses. Below is a reconciliation of consolidated net operating income to net income or loss (in thousands):


	Three-month periods
	ended March 31,
	2007			2006
Consolidated net operating income (loss)	$	101,869		$	88,737
Less:
Interest income		787			2,650
Interest expense		(40,358	)		(40,378	)
Deferred financing costs		(1,258	)		(479	)
Depreciation and amortization		(62,047	)		(51,212	)
Administrative expenses		(7,269	)		(8,490	)
Minority interest — partners’ share of consolidated real estate ventures		(116	)		298
Plus:
Equity in income of real estate ventures		754			965

Income (loss) from continuing operations		(7,638	)		(7,909	)
Income (loss) from discontinued operations		27,785			5,059

Net income (loss)	$	20,147		$	(2,850	)

14. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

The Partnership is involved from time to time in litigation on various matters, including disputes with tenants and disputes arising out of agreements to purchase or sell properties. Given the nature of the Partnership’s business activities, these lawsuits are considered routine to the conduct of its business. The result of any particular lawsuit cannot be predicted, because of the very nature of litigation, the litigation process and its adversarial nature, and the jury system. The Partnership does not expect that the liabilities, if any, that may ultimately result from such legal actions will have a material adverse effect on the consolidated financial position, results of operations or cash flows of the Partnership.

There have been lawsuits against owners and managers of multifamily and office properties asserting claims of personal injury and property damage caused by the presence of mold in residential units or office space. The Partnership has been named as a defendant in two lawsuits in the State of New Jersey that allege personal injury as a result of the presence of mold. One lawsuit was dismissed by way of summary judgment with prejudice. Unspecified damages are sought on the remaining lawsuit. The Partnership has referred this lawsuit to its environmental insurance carrier and, as of the date of this Form 10-Q, the insurance carrier is tendering a defense to this claim.

Environmental

As an owner of real estate, the Partnership is subject to various environmental laws of federal, state, and local governments. The Partnership’s compliance with existing laws has not had a material adverse effect on its financial condition and results of operations, and the Partnership does not believe it will have a material adverse effect in the future. However, the Partnership cannot predict the impact of unforeseen environmental contingencies or new or changed laws or regulations on its current Properties or on properties that the Partnership may acquire.

Ground Rent

Future minimum rental payments under the terms of all non-cancelable ground leases under which the Partnership is the lessee are expensed on a straight-line basis regardless of when payments are due.

Other Commitments or Contingencies

BRANDYWINE OPERATING PARTNERSHIP, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2007

As part of the Partnership’s September 2004 acquisition of a portfolio of 14 properties (the “TRC Acquisition”), the Operating Partnership agreed to issue to the sellers up to a maximum of $9.7 million of Class A Units of the Operating Partnership if certain of the acquired properties achieve at least 95% occupancy prior to September 21, 2007. At March 31, 2007 the maximum amount payable under this arrangement was $1.2 million.

As part of the TRC acquisition, the Partnership acquired an interest in Two Logan Square, a 696,477 square foot office building in Philadelphia, Pennsylvania, primarily through a second and third mortgage secured by this property pursuant to which the Partnership receives substantially all cash flows from the property. The Partnership currently does not expect to take title fee to Two Logan Square until, at the earliest, September 2019. In the event that the Partnership takes title to Two Logan Square upon a foreclosure of its mortgages, the Partnership has agreed to make a payment to an unaffiliated third party with a residual interest as a fee owner of this property. The amount of the payment would be $0.6 million if the Partnership must pay a state and local transfer tax upon taking title, or $2.9 million if no transfer tax is payable upon the transfer.

As part of the Prentiss acquisition, TRC acquisition and several of our other acquisitions, the Partnership has agreed not to sell certain of the acquired properties. In the case of TRC, the Partnership agreed not to sell certain of the acquired properties for periods ranging from three to 15 years from the acquisition date as follows: 201 Radnor Financial Center, 555 Radnor Financial Center and 300 Delaware Avenue (three years); One Rodney Square and 130/150/170 Radnor Financial Center (10 years); and One Logan Square, Two Logan Square and Radnor Corporate Center (15 years). In the case of the Prentiss acquisition, the Partnership assumed the obligation of Prentiss not to sell Concord Airport Plaza before March 2018 and 6600 Rockledge before July 2008. The Partnership also owns 14 other properties that aggregate 1.0 million square feet and has agreed not to sell these properties for periods that expire through 2008. These agreements generally provide that the Partnership may dispose of the subject Properties only in transactions that qualify as tax-free exchanges under Section 1031 of the Code or in other tax deferred transactions. In the event that the Partnership sells any of the properties within the applicable restricted period in non-exempt transactions, the Partnership has agreed to pay significant tax liabilities that would be incurred by the parties who sold the applicable property.

The Partnership invests in its Properties and regularly incurs capital expenditures in the ordinary course of business to maintain the Properties. The Partnership believes that such expenditures enhance the competitiveness of the Properties. The Partnership also enters into construction, utility and service contracts in the ordinary course of business which may extend beyond one year. These contracts include terms that provide for cancellation with insignificant or no cancellation penalties.

15. SUBSEQUENT EVENTS

The Partnership repaid five mortgage notes totaling $113.1 million in April 2007 (notice of which was given in March 2007) and one mortgage note totaling $5.4 million in May 2007. The Partnership funded the repayments of these notes from borrowings under its Credit Facility and there was no prepayment penalties associated with these prepayments.

In April 2007, the Partnership sold $300 million of 5.70% unsecured guaranteed notes due May 1, 2017. Interest on the notes will be payable semi-annually on May 1 and November 1, commencing November 1, 2007. The net proceeds of the offering will be used to repay indebtedness under the Credit Facility.

During April 2007, the Partnership sold one property, classified as held for sale at March 31, 2007, totaling 1.3 million net rentable square feet for a sales price of $115.0 million. The Partnership may receive an additional $10.0 million from the buyer should certain events occur at the property in the future.

During April 2007, the Company repurchased 265,000 shares for $8.8 million under its share repurchase program.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. This Quarterly Report on Form 10-Q and other materials filed by us with the SEC (as well as information included in oral or other written statements made by us) contain statements that are forward-looking, including statements relating to business and real estate development activities, acquisitions, dispositions, future capital expenditures, financing sources, governmental regulation (including environmental regulation) and competition. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “will,” “should” and similar expressions, as they relate to us, are intended to identify forward-looking statements. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, we can give no assurance that our expectations will be achieved. As forward-looking statements, these statements involve important risks, uncertainties and other factors that could cause actual results to differ materially from the expected results and, accordingly, such results may differ from those expressed in any forward-looking statements made by us or on our behalf. Factors that could cause actual results to differ materially from our expectations include, but are not limited to:

	•		changes in general economic conditions;

	•		changes in local real estate conditions (including changes in rental rates and the number of competing properties);

	•		changes in the economic conditions affecting industries in which our principal tenants compete;

	•		our failure to lease unoccupied space in accordance with our projections;

	•		our failure to re-lease occupied space upon expiration of leases;

	•		the bankruptcy of major tenants;

	•		changes in prevailing interest rates;

	•		the unavailability of equity and debt financing;

	•		unanticipated costs associated with the acquisition and integration of our acquisitions;

	•		unanticipated costs to complete and lease-up pending developments;

	•		impairment charges;

	•		increased costs for, or lack of availability of, adequate insurance, including for terrorist acts;

	•		demand for tenant services beyond those traditionally provided by landlords;

	•		potential liability under environmental or other laws;

	•		earthquakes and other natural disasters;

	•		risks associated with state and local tax audits:

	•		the existence of complex regulations relating to our status as a REIT and to our acquisition, disposition and development activities, the adverse consequences of our failure to qualify as a REIT;

	•		the impact of newly adopted accounting principles on our accounting policies and on period-to-period comparisons of financial results and the other risks identified in the “Risk Factors” section and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2006.

Given these uncertainties, we caution readers not to place undue reliance on forward-looking statements. We assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events except as required by law.

The discussion that follows is based primarily on our consolidated financial statements as of March 31, 2007 and December 31, 2006 and for the three months ended March 31, 2007 and 2006 and should be read along with the consolidated financial statements and related notes appearing elsewhere in this report. The ability to compare one period to another may be significantly affected by acquisitions completed, development properties placed in service and dispositions made during those periods.

OVERVIEW

As of March 31, 2007, our portfolio consisted of 236 office properties, 23 industrial facilities and one mixed-use property that contain an aggregate of approximately 26.5 million net rentable square feet. We also have 6 properties under development and 12 properties under redevelopment containing an aggregate 2.7 million net rentable square feet. As of March 31, 2007, we consolidate 3 office properties owned by real estate ventures containing 0.4 million net rentable square feet. Therefore, we wholly own or consolidate 281 properties with an aggregate of 29.6 million net

rentable square feet. We held economic interests in 11 unconsolidated real estate ventures that contain approximately 2.8 million net rentable square feet (the “Real Estate Ventures”) formed with third parties to develop or own commercial properties.

As of March 31, 2007 we managed our portfolio within nine geographic segments: (1) Pennsylvania—West, (2) Pennsylvania—North, (3) New Jersey, (4) Urban, (5) Richmond, Virginia, (6) Northern California, (7) Southern California, (8) Metropolitan Washington, D.C. and (9) Southwest. The Pennsylvania—West segment includes properties in Chester, Delaware and Montgomery counties in the Philadelphia suburbs of Pennsylvania. The Pennsylvania—North segment includes properties north of Philadelphia in Bucks, Lehigh and Montgomery counties. The New Jersey segment includes properties in counties in the southern and central parts of New Jersey including Burlington, Camden and Mercer counties and in Bucks County, Pennsylvania. The Urban segment includes properties in the City of Philadelphia, Pennsylvania and the state of Delaware. The Richmond, Virginia segment includes properties primarily in Albemarle, Chesterfield and Henrico counties, the Cities of Richmond and Durham, North Carolina. The Northern California segment includes properties in the City of Oakland and Concord. The Southern California segment includes properties in San Diego County. The Metropolitan Washington D.C. segment includes properties in Northern Virginia and Suburban Maryland. The Southwest segment includes properties in Travis County of Texas.

We generate cash and revenue from leases of space at our properties and, to a lesser extent, from the management of properties owned by third parties and from investments in the Real Estate Ventures. Factors that we evaluate when leasing space include rental rates to be paid, costs of tenant improvements, the tenant creditworthiness, current and expected operating costs, vacancy levels and demand for office and industrial space. We also generate cash through sales of assets, including assets that we do not view as core to our portfolio, either because of location or expected growth potential, and assets that are commanding premium prices from third party investors.

Our financial and operating performance is dependent upon the demand for office, industrial and other commercial space in our markets, our leasing results, our acquisition, disposition and development activity, our financing activity, our cash requirements and economic and market conditions, including prevailing interest rates.

We seek revenue growth through an increase in occupancy of and rental rates at our portfolio. Our occupancy was 93.0% at March 31, 2007, or 87.5% including eighteen properties under development or redevelopment.

As we seek to increase revenue through our operating, financing and investment activities, we also seek to minimize operating risks, including (i) tenant rollover risk, (ii) tenant credit risk and (iii) development risk.

Tenant Rollover Risk :
We are subject to the risk that tenant leases, upon expiration, are not renewed, that space may not be relet, or that the terms of renewal or reletting (including the cost of renovations) may be less favorable to us than the current lease terms. Leases accounting for approximately 7.6% of our aggregate annualized base rents as of March 31, 2007 (representing approximately 7.3% of the net rentable square feet of the Properties) expire without penalty through the end of 2007. We maintain an active dialogue with our tenants in an effort to achieve a high level of lease renewals. Our retention rate for leases that were scheduled to expire in the three-month period ended March 31, 2007 was 72.0%. If we were unable to renew leases for a substantial portion of the space under expiring leases, or to promptly relet this space, at anticipated rental rates, our cash flow would be adversely impacted.

Tenant Credit Risk :
In the event of a tenant default, we may experience delays in enforcing our rights as a landlord and may incur substantial costs in protecting our investment. Our management regularly evaluates our accounts receivable reserve policy in light of its tenant base and general and local economic conditions. The accounts receivable allowances were $8.7 million or 8.7% of total receivables (including accrued rent receivable) as of March 31, 2007 compared to $9.3 million or 9.0% of total receivables (including accrued rent receivable) as of December 31, 2006.

Development Risk :
As of March 31, 2007, we had in development or redevelopment 18 sites aggregating approximately 2.7 million square feet. We estimate the total cost of these projects to be $373.0 million and we had incurred $234.0 million of these costs as of March 31, 2007. We are actively marketing space at these projects to prospective tenants but can

provide no assurance as to the timing or terms of any leases of space at these projects. As of March 31, 2007, we owned approximately 387 acres of undeveloped land. Risks associated with development of this land include construction cost increases or overruns and construction delays, insufficient occupancy rates, building moratoriums and inability to obtain zoning, land-use, building, occupancy and other required governmental approvals.

RECENT ACQUISITIONS AND DISPOSITIONS

During the three month period ended March 31, 2007, we sold 17 properties, containing an aggregate of 2.2 million net rentable square feet, and a 4.7 acre land parcel and we acquired the 49% minority interest in one of our consolidated real estate ventures that owns 10 office properties containing an aggregate of 1.1 million net rentable square feet.

Highlights of the three months ended March 31, 2007 include:

— On January 18, 2007, we sold Norriton Office Center, an office property located in East Norriton, Pennsylvania containing 73,394 net rentable square feet, for a sales price of $7.8 million.

— On January 19, 2007, we sold four office properties located in Dallas, Texas containing 1,091,186 net rentable square feet and a 4.7 acre land parcel, for an aggregate sales price of $107.1 million.

— On January 31, 2007, we sold George Kachel Farmhouse, an office property located in Reading, Pennsylvania containing 1,664 net rentable square feet, for an aggregate sales price of $0.2 million.

— On March 30, 2007, we sold 1007 Laurel Oak, an office property located in Voorhees, New Jersey containing 78,205 net rentable square feet, for an aggregate sales price of $7.0 million.

— On March 30, 2007, we sold 10 office properties located in Reading and Harrisburg, Pennsylvania containing 940,486 net rentable square feet, for a sales price of $112.0. We structured this transaction to qualify as a like-kind exchange under Section 1031 of the Code and the cash from the sale is held by a qualified intermediary for purposes of accomplishing the like-kind exchange. We expect to identify a replacement property prior to May 14, 2007 and consummate the acquisition of the replacement property prior to September 26, 2007.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Certain accounting policies are considered to be critical accounting policies, as they require management to make assumptions about matters that are highly uncertain at the time the estimate is made and changes in accounting policies are reasonably likely to occur from period to period. Management bases its estimates and assumptions on historical experience and current economic conditions. On an on-going basis, management evaluates its estimates and assumptions including those related to revenue, impairment of long-lived assets and the allowance for doubtful accounts. Actual results may differ from those estimates and assumptions.

Our Annual Report on Form 10-K for the year ended December 31, 2006 contains a discussion of our critical accounting policies. There have been no significant changes in our critical accounting policies since December 31, 2006. See also Note 2 in our unaudited consolidated financial statements for the three-month period ended March 31, 2007 set forth herein. Management discusses our critical accounting policies and management’s judgments and estimates with our Audit Committee.

RESULTS OF OPERATIONS

Comparison of the Three-Month Periods Ended March 31, 2007 and 2006

The table below shows selected operating information for the “Same Store Property Portfolio” and the “Total Portfolio.” The Same Store Property Portfolio consists of 257 Properties containing an aggregate of approximately 25.3 million net rentable square feet that we owned for the entire three-month periods ended March 31, 2007 and substantially all of the period ended March 31, 2006. We consider the properties that we acquired in the Prentiss merger on January 5, 2006 as part of our Same Store Portfolio, therefore the results of operations for the quarter ended March 31, 2006 do not include four days of activity. This table also includes a reconciliation from the Same Store Property Portfolio to the Total Portfolio net income (i.e., all properties owned by us during the three-month periods ended March 31, 2007 and 2006) by providing information for the properties which were acquired, under development (including lease-up assets) or placed into service and administrative/elimination information for the three-month periods ended March 31, 2007 and 2006 (in thousands).

The Total Portfolio net income presented in the table agrees to the net income of Brandywine Realty Trust. The only difference between the reported net income of Brandywine Realty Trust and Brandywine Operating Partnership is the allocation of the minority interest attributable to continuing and discontinued operations for limited partnership units that is on the statement of operations for Brandywine Realty Trust.

Comparison of three-months ended March 31, 2007 to the three-months ended March 31, 2006


													Properties					Development						Administrative/
	Same Store Property Portfolio												Acquired					Properties (a)						Eliminations (b)						Total Portfolio
							Increase/			%																										Increase/			%
(dollars in thousands)	2007			2006			(Decrease)			Change			2007			2006		2007			2006			2007			2006			2007			2006			(Decrease)			Change
Revenue:
Cash rents	$	113,350		$	107,932		$	5,418			5.0	%	$	4,756		$	—	$	9,625		$	7,035		$	(880	)	$	103		$	126,851		$	115,070		$	11,781			10	%
Straight-line rents		3,372			4,851			(1,479	)		-30.5	%		127			—		4,745			1,209			—			—			8,244			6,060			2,184			36	%
Rents — FAS 141		2,258			2,064			194			9.4	%		713			—		(126	)		(125	)		—			—			2,845			1,939			906			47	%

Total rents		118,980			114,847			4,133			3.6	%		5,596			—		14,244			8,119			(880	)		103			137,940			123,069			14,871			12	%
Tenant reimbursements		19,346			15,739			3,607			22.9	%		268			—		1,100			773			109			122			20,823			16,634			4,189			25	%
Termination fess		558			589			(31	)		-5.3	%		772			—		—			—						—			1,330			589			741			126	%
Other, excluding termination fees		661			785			(124	)		-15.8	%		17			—		36			28			2,294			2,813			3,008			3,626			(618	)		-17	%

Total revenue		139,545			131,960			7,585			5.7	%		6,653			—		15,380			8,920			1,523			3,038			163,101			143,918			19,183			13	%

Property operating expenses		56,439			52,758			3,681			7.0	%		1,481			—		6,828			5,035			(3,516	)		(2,612	)		61,232			55,181			6,051			11	%

Subtotal		83,106			79,202			3,904			4.9	%		5,172			—		8,552			3,885			5,039			5,650			101,869			88,737			13,132			15	%

Administrative expenses		—			—			—			0.0	%		—			—		—			—			—			—			7,269			8,490			(1,221	)		-14	%
Depreciation and amortization		48,038			48,565			(527	)		-1.1	%		2,805			—		10,422			2,199			782			448			62,047			51,212			10,835			21	%

Operating Income (loss)	$	35,068		$	30,637		$	4,431			14.5	%	$	2,367		$	—	$	(1,870	)	$	1,686		$	4,257		$	5,202		$	32,553		$	29,035		$	3,518			12	%

Number of properties		257			257									4					20												281
Square feet		25,294			25,294									747					3,515												29,556
Occupancy %		93.3	%		91.7	%								97.4	%				46.8	%											87.5	%

Other Income (Expense):
Interest income																															787			2,650			(1,863	)		-70	%
Interest expense																															(40,358	)		(40,378	)		20			0	%
Interest expense — Deferred financing costs																															(1,258	)		(479	)		(779	)		163	%
Equity in income of real estate ventures																															754			965			(211	)		-22	%

Income (loss) before minority interest																															(7,522	)		(8,207	)		685			-8	%
Minority interest — partners’ share of consolidated real estate ventures																															(116	)		298			(414	)		-139	%
Minority interest attributable to continuing operations — LP units																															411			435			(24	)		-6	%

Income (loss) from continuing operations																															(7,227	)		(7,474	)		247			-3	%
Income (loss) from discontinued operations																															26,599			4,832			21,767			450	%

Net Income (loss)																														$	19,372		$	(2,642	)	$	22,014			-833	%

Earnings per common share																														$	0.20			($0.05	)	$	0.25			-500	%

EXPLANATORY NOTES


(a)		— Results include: eighteen developments and redevelopments and two properties placed in service

(b)		— Represents certain revenues and expenses at the corporate level as well as various intercompany costs that are eliminated in consolidation

Revenue

Cash rents from the Total Portfolio increased by $11.8 million during the three month period ended March 31, 2007 compared to the same period in 2006, primarily reflecting:

	1)		An additional $5.4 million at the Same Store Portfolio from increased occupancy and increased rents received on lease renewals.

	2)		An additional $4.8 million from four properties that we acquired after the first quarter of 2006.

	3)		An additional $2.5 million from increased occupancy at one of our development properties (Cira Centre).

Straight-line rents at the Total Portfolio increased by $2.2 million, primarily reflecting an increase of $3.5 million in straight line rents from commencement of leases at our development properties, offset by a $1.5 million decrease in straight line rental income at the Same Store Portfolio. Approximately $0.8 million of this decrease resulted from free rent recognized in the first quarter of 2006 and the balance resulted from the shortening of the remaining stipulated increase period in leases.

Our rents at the Total Portfolio that we recognized from the net amortization of above and below market leases at acquired properties, in conformity with SFAS No. 141, increased by $0.9 million primarily as a result of four properties that we acquired after the first quarter of 2006.

Tenant reimbursements at the Total Portfolio increased by $4.2 million primarily as a result of increased operating expenses of $6.1 million.

Property Operating Expenses

Property operating expenses at the Total Portfolio increased by $6.1 million during the three month period ended March 31, 2007 compared to the same period in 2006, primarily reflecting:

	1)		An increase of $3.7 million at the Same Store Portfolio, primarily due to increased occupancy and real estate tax reassessments. Increased occupancy at our properties causes an increase in the amount of expense incurred for utilities, security, and janitorial services.

	2)		The incurrence of $1.5 million of property operating expenses for the four properties that we acquired after the first quarter of 2006.

	3)		An increase of $1.8 million at our development properties, with approximately $1.1 million attributable to increased occupancy at the Cira Centre over the first quarter of 2006 and the balance reflecting the timing of properties being placed in service and occupancy by tenants.

Depreciation and Amortization Expense

Depreciation and amortization increased by $10.9 million during the three month period ended March 31, 2007 compared to the same period in 2006, primarily reflecting:

	1)		The incurrence of $2.8 million of depreciation and amortization expense on account of the four properties acquired after the first quarter of 2006.

	2)		The incurrence of $2.4 million of depreciation and amortization expense during the first quarter of 2007 on account of Cira Centre, which we placed in service in the fourth quarter of 2006.

	3)		The incurrence of $2.8 million of accelerated amortization related to customer relationship and in-place lease intangible assets for one of our properties now included in Development Properties. The value ascribed to these intangibles considered renewal periods and when the renewals did not occur the remaining value of the intangibles was written off and the property was placed into development for future tenants.

	4)		The incurrence of $2.0 million of accelerated depreciation associated with tenant move-outs, primarily one tenant that was in a Development Property. There was no termination fee received in connection with this move-out as a result of the tenant’s bankruptcy.

Administrative Expenses

Our administrative expenses decreased by approximately $1.2 million during the three month period ended March 31, 2007 compared to the same period in 2006, primarily reflecting higher fees in 2006 incurred as part of our integration activities following our merger with Prentiss.

Interest Income/ Expense

We used our investment in marketable securities to paydown defeased debt in the fourth quarter of 2006. This paydown caused a decrease of $1.9 million in interest income.

Interest expense — deferred financing costs increased by $0.8 million as a result of unsecured notes that were entered into subsequent to the first quarter of 2006.

Minority Interest-partners’ share of consolidated real estate ventures

Minority interest-partners’ share of consolidated real estate ventures represents the portion of income from our consolidated joint ventures that is allocated to our minority interest partners.

As of March 31, 2007 we held an ownership interest in 3 properties through consolidated joint ventures, compared to 14 properties owned by consolidated joint ventures at March 31, 2006, one of which was sold in the third quarter of 2006. On March 1, 2007 we acquired the minority interest partners’ share of 10 properties for $63.7 million.

Minority Interest attributable to continuing operations — LP units

Minority interest attributable to continuing operations — LP units, represents the equity in loss (income) attributable to the portion of the Operating Partnership not owned by us. Minority interests owned 4.6% of the Operating Partnership as of March 31, 2007 and 2006

Discontinued Operations

During the quarter ending March 31, 2007, we sold one property in East Norriton, PA, four properties in Dallas, TX, and 11 properties in Reading and Harrisburg, PA and one in Voorhees, NJ. These properties had total revenue of $11.7 million, operating expenses of $9.9 million, gains on sale of $26.0 million and minority interest attributable to discontinued operations of $1.1 million.

The March 31, 2006 amount is reclassified to include the operations of the properties sold during the first quarter of 2007, as well as the 23 properties that were sold during the year ending December 31, 2006. Therefore, the discontinued operations amount for the quarter ending March 31, 2006 includes 40 properties with total revenue of $27.5 million, operating expenses of $22.0 million, interest expense of $0.3 million and minority interest of $0.4 million. Of the 23 properties that were sold during the year ending December 31, 2006, eight were sold in the quarter ending March 31, 2006. The eight properties that were sold in the first quarter of 2006 did not have gains on sale since such properties were acquired as part of the Prentiss merger and the value ascribed to those properties in purchase accounting was the fair value amount that the properties were sold for.

Net Income

Net income increased by $22.0 million from the first quarter of 2006 primarily as a result of the gains recognized on the buildings sold of $26.0 million, offset by the other items noted above.

Earnings Per Share

Earnings per share was $0.20 in the first quarter of 2007 as compared to a loss per share of $(0.05) in the first quarter of 2006 as a result of the factors described above and a decrease in the average number of common shares outstanding. The decrease in the average number of common shares outstanding is the result of 1.3 million shares repurchased in 2007 and 1.2 million shares repurchased in 2006, subsequent to the end of the first quarter. This decrease in the number of shares is partially offset by the issuance of shares upon option exercises and restricted share vesting.

LIQUIDITY AND CAPITAL RESOURCES

General

Our principal liquidity needs for the next twelve months are as follows:

	•		fund normal recurring expenses,

	•		fund capital expenditures, including capital and tenant improvements and leasing costs,

	•		fund current development and redevelopment costs, and

	•		fund distributions declared by our Board of Trustees.

We believe that our liquidity needs will be satisfied through cash flows generated by operations and financing activities. Rental revenue, expense recoveries from tenants, and other income from operations are our principal sources of cash that we use to pay operating expenses, debt service, recurring capital expenditures and the minimum distributions required to maintain our REIT qualification. We seek to increase cash flows from our properties by maintaining quality standards for our properties that promote high occupancy rates and permit increases in rental rates while reducing tenant turnover and controlling operating expenses. Our revenue also includes third-party fees generated by our property management, leasing, development and construction businesses. We believe our revenue, together with proceeds from equity and debt financings, will continue to provide funds for our short-term liquidity needs. However, material changes in our operating or financing activities may adversely affect our net cash flows. Such changes, in turn, would adversely affect our ability to fund distributions, debt service payments and tenant improvements. In addition, a material adverse change in our cash provided by operations would affect the financial performance covenants under our unsecured credit facility and unsecured notes.

Our principal liquidity needs for periods beyond twelve months are for costs of developments, redevelopments, property acquisitions, scheduled debt maturities, major renovations, expansions and other non-recurring capital improvements. We draw on multiple financing sources to fund our long-term capital needs. We use our credit facility for general business purposes, including the acquisition, development and redevelopment of properties and the repayment of other debt. In April 2007 and March 2006, we sold $300 million and $850 million, respectively of unsecured notes and in October 2006, we completed an offering of $345.0 million of convertible notes and expect to utilize the debt and equity markets for other long-term capital needs.

Our ability to incur additional debt is dependent upon a number of factors, including our credit ratings, the value of our unencumbered assets, our degree of leverage and borrowing restrictions imposed by our current lenders. We currently have investment grade ratings for prospective unsecured debt offerings from three major rating agencies. If a rating agency were to downgrade our credit rating, our access to capital in the unsecured debt market would be more limited and the interest rate under our existing credit facility would increase.

Our ability to sell common and preferred shares is dependent on, among other things, general market conditions for REITs, market perceptions about our company and the current trading price of our shares. We regularly analyze which source of capital is most advantageous to us at any particular point in time. The equity markets may not be consistently available on terms that we consider attractive.

The impact of asset sales during 2006 and through the first quarter of 2007 has also been a significant source of cash. During the first quarter of 2007 we sold 17 properties, containing an aggregate of 2.2 million net rentable square feet and a land parcel containing 4.7 acres for aggregate proceeds of $234.1 million. We have several options for proceeds from asset sales, which include acquiring assets in our core markets, repaying debt, repurchasing our shares, or a combination of these options. In the case of the sale of our March 2007 sale of 10 properties in Reading and Harrisburg, Pennsylvania, we have escrowed the proceeds of sale with a qualified intermediary in anticipation of the completion of a tax-deferred like-kind exchange.

Cash Flows

The following summary discussion of our cash flows is based on the consolidated statement of cash flows and is not meant to be an all-inclusive discussion of the changes in our cash flows for the periods presented.

As of March 31, 2007 and December 31, 2006, we maintained cash and cash equivalents of $3.9 million and $25.4 million, respectively, a decrease of $21.5 million. This increase was the result of the following changes in cash flow from our activities for the three-month period ended March 31 (in thousands):


Activity	2007			2006
Operating	$	50,521		$	55,238
Investing		(30,542	)		(867,898	)
Financing		(41,473	)		841,787

Net cash flows	$	(21,494	)	$	29,127

Our principal source of cash flows is from the operation of our properties. The decrease in cash inflows is primarily the result of the timing of cash receipts from our tenants and cash expenditures in the normal course of operations of our properties.

The decrease in cash outflows from investing activities is primarily attributable to our acquisition of Prentiss on January 5, 2006 resulting in a cash outflow of $935.9 million compared to the $63.7 million outflow incurred in the first quarter of 2007 for the acquisition of the 49% minority interest partners’ share in the Brandywine Office Investors real estate venture. These outflows were offset by net proceeds on property sales of $109.1 and $134.1 for the quarters ending March 31, 2007 and 2006, respectively.

Decreased cash flow from financing activities is primarily attributable to our repurchase of 1.3 million shares for $44.7 million in the quarter ended March 31, 2007 compared to our issuance of $850.0 million of unsecured notes for the same period in 2006. During the quarter ended March 31, 2007 we repaid our $300.0 million 2009 three year floating rate note, issued in March 2006, using proceeds from our Credit Facility.

Capitalization

Indebtedness

On March 28, 2006, we consummated the public offering of (1) $300 million aggregate principal amount of unsecured floating rate notes due 2009, (2) $300 million aggregate principal amount of its 5.75% notes due 2012 and (3) $250 million aggregate principal amount of its 6.00% notes due 2016. We guaranteed the payment of principal of and interest on the Notes.

On October 4, 2006, we completed an offering of $300 million aggregate principal amount of 3.875% senior convertible notes due 2026 in an offering made in reliance upon an exemption from registration rights under Rule 144A under the Securities Act of 1933 and issued an additional $45 million of exchangeable notes on October 16, 2006 to cover over-allotments. At certain times and upon the occurrence of certain events, the notes are convertible into cash up to their principal amount and, with respect to the remainder, if any, of the conversion value in excess of such principal amount, cash or our common shares. The initial conversion rate will be 25.4065 shares per $1,000 principal amount of notes (which is equivalent to an initial conversion price of $39.36 per share). The notes may not be redeemed by us prior to October 20, 2011 (except to preserve our status as a REIT for U.S, federal income tax purposes), but are redeemable anytime thereafter, in whole or in part, at a redemption price equal to the principal amount of the notes plus any accrued and unpaid interest (including additional interest), if any. In addition, on October 20, 2011, October 15, 2016, and October 15, 2021, or upon the occurrence of certain change in control transactions prior to October 20, 2011, note holders may require us to repurchase all or a portion of the notes at a purchase price equal to the principal amount plus any accrued and unpaid interest on the notes. We used net proceeds from the October 2006 note sale to repurchase approximately $60.0 million of common shares at a price of $32.80 per share and for general corporate purposes, including the repayment of outstanding borrowings under our unsecured revolving credit facility.

On November 29, 2006, we called for redemption our $300 million floating rate guaranteed notes due 2009 and repaid these notes on January 2, 2007 in accordance with the November call. As a result of the early repayment of these notes, we incurred accelerated amortization of the $1.4 million in associated deferred financing costs in the fourth quarter 2006.

As of March 31, 2007, we had approximately $3.2 billion of outstanding indebtedness. The table below summarizes our mortgage notes payable, our unsecured notes and our revolving credit facility at March 31, 2007 and December 31, 2006:


*Balance:*
Fixed rate	$	2,709,057		$	2,718,173
Variable rate		482,610			439,162

Total	$	3,191,667		$	3,157,335

*Percent of Total Debt:*
Fixed rate		85	%		86	%
Variable rate		15	%		14	%

Total		100	%		100	%

*Weighted-average interest rate at period end:*
Fixed rate		5.65	%		5.61	%
Variable rate		6.04	%		5.97	%
Total		5.71	%		5.66	%

The variable rate debt shown above generally bears interest based on various spreads over LIBOR (the term of which is selected by us).

On April 30, 2007, our Operating Partnership consummated the public offering of $300 million aggregate principal amount of its 5.70% Guaranteed Notes due 2017 and used proceeds of these note to reduce borrowings under the credit facility.

We have used credit facility borrowings for general business purposes, including the acquisition, development and redevelopment of properties and the repayment of other debt. In December 2005, we replaced our then existing unsecured credit facility with a $600 million unsecured credit facility (the “Credit Facility”) that matures in December 2009, subject to a one year extension option upon payment of a fee and the absence of any defaults. Borrowings under the new Credit Facility generally bear interest at LIBOR (LIBOR was 5.32% as of March 31, 2007) plus a spread over LIBOR ranging from 0.55% to 1.10% based on our unsecured senior debt rating. We have an option to increase the maximum borrowings under the Credit Facility to $800 million subject to the absence of any defaults and our ability to obtain additional commitments from our existing or new lenders. The Credit Facility requires the maintenance of certain ratios related to minimum net worth, debt to total capitalization and fixed charge coverage and various non-financial covenants. We believe that we are in compliance with all financial covenants as of March 31, 2007.

The indenture under which we have issued our unsecured notes and note purchase agreements that governs an additional $113 million unsecured note contain financial restrictions and requirements, including (1) a leverage ratio not to exceed 60%, (2) a secured debt leverage ratio not to exceed 40%, (3) a debt service coverage ratio of greater than 1.5 to 1.0, and (4) an unencumbered asset value of not less than 150% of unsecured debt. In addition, the note purchase agreement relating to the 2008 Notes contains covenants that are similar to the above covenants. At March 31, 2007, we were in compliance with each of these financial restrictions and requirements.

We have mortgage loans that are collateralized by certain of our properties. Payments on mortgage loans are generally due in monthly installments of principal and interest, or interest only.

We intend to refinance or repay our mortgage loans as they mature, primarily through the use of unsecured debt or equity.

The amount of indebtedness that we may incur, and the policies with respect thereto, are not limited by our declaration of trust and bylaws, and are solely within the discretion of our board of trustees, limited only by various financial covenants in the indenture and our credit agreements.

Equity

On March 14, 2007, we declared a distribution of $0.44 per Common Share, totaling $38.6 million, which we paid on April 18, 2007 to shareholders of record as of April 4, 2007. The Operating Partnership simultaneously declared a $0.44 per unit cash distribution to holders of Class A Units totaling $1.7 million.

On March 14, 2007, we declared distributions on our Series C Preferred Shares and Series D Preferred Shares to holders of record as of March 30, 2007. These shares are entitled to a preferential return of 7.50% and 7.375%, respectively. Distributions paid on April16, 2007 to holders of Series C Preferred Shares and Series D Preferred Shares totaled $0.9 million and $1.1 million, respectively.

We maintain a share repurchase program under which our Board has authorized us to repurchase our common shares from time to time. Our Board initially authorized this program in 1998 and has periodically replenished capacity under the program, including, most recently, on May 2, 2006 when our Board restored capacity to 3.5 million common shares. During the three-month period ended March 31, 2007, we repurchased approximately 1.3 million common shares under this program at an average price of $34.34 per share, leaving approximately 1.0 million shares in remaining capacity. Our Board has not limited the duration of the program and it may be terminated at any time.

Shelf Registration Statement

Together with our Operating Partnership, we maintain a shelf registration statement that registered common shares, preferred shares, depositary shares and warrants and unsecured debt securities. Subject to our ongoing compliance with securities laws, and if warranted by market conditions, we may offer and sell equity and debt securities from time to time under the registration statement.

Short- and Long-Term Liquidity

We believe that our cash flow from operations is adequate to fund our short-term liquidity requirements. Cash flow from operations is generated primarily from rental revenues and operating expense reimbursements from tenants and management services income from providing services to third parties. We intend to use these funds to meet short-term liquidity needs, which are to fund operating expenses, debt service requirements, recurring capital expenditures, tenant allowances, leasing commissions and the minimum distributions required to maintain our REIT qualification under the Internal Revenue Code.

We expect to meet our long-term liquidity requirements, such as for property acquisitions, development, investments in real estate ventures, scheduled debt maturities, major renovations, expansions and other significant capital improvements, through cash from operations, borrowings under its Credit Facility, other long-term secured and unsecured indebtedness, the issuance of equity securities and the proceeds from the disposition of selected assets.

Inflation

A majority of our leases provide for reimbursement of real estate taxes and operating expenses either on a triple net basis or over a base amount. In addition, many of our office leases provide for fixed base rent increases. We believe that inflationary increases in expenses will be significantly offset by expense reimbursement and contractual rent increases.

Commitments and Contingencies

The following table outlines the timing of payment requirements related to our contractual commitments as of March 31, 2007:


	Payments by Period (in thousands)
			Less than						More than
	Total		1 Year		1-3 Years		3-5 Years		5 Years
Mortgage notes payable (a)	$	865,958	$	129,683	$	108,533	$	289,961	$	337,781
Revolving credit facility		404,000		—		404,000		—		—
Unsecured debt (a)		1,911,610		—		388,000		645,000		878,610
Ground leases (b)		279,956		1,736		3,472		3,636		271,112
Other liabilities		2,005		—		1,317		—		688

	$	3,463,529	$	131,419	$	905,322	$	938,597	$	1,488,191


(a)		Amounts do not include unamortized discounts and/or premiums.

(b)		Future minimum rental payments under the terms of all non-cancelable ground leases under which we are the lessee are expensed on a straight-line basis regardless of when payments are due.

We intend to refinance or repay our mortgage notes payable as they become due or repay those that are secured by properties being sold.

As part of our acquisition of the TRC Properties in September 2004, we agreed to issue to the sellers up to a maximum of $9.7 million of Class A Units of the Operating Partnership if certain of the acquired properties achieve at least 95% occupancy prior to September 21, 2007. The maximum number of Units that we are obligated to issue declines monthly and, as of March 31, 2007, the maximum balance payable under this arrangement was $1.2 million, with no amount currently due.

As part of the TRC acquisition, we acquired our interest in Two Logan Square, a 696,477 square foot office building in Philadelphia, primarily through a second and third mortgage secured by this property. We currently do not expect to take title to Two Logan Square until, at the earliest, September 2019. In the event that we take fee title to Two Logan Square upon a foreclosure of our mortgage, we have agreed to make a payment to an unaffiliated third party with a residual interest in the fee owner of this property. The amount of the payment would be $0.6 million if we must pay a state and local transfer upon taking title, and $2.9 million if no transfer tax is payable upon the transfer.

As part of the Prentiss acquisition, the TRC acquisition and several of our other acquisitions, we agreed not to sell certain of the acquired properties. In the case of the TRC acquisition, we agreed not to sell certain of the acquired properties for periods ranging from three to 15 years from the acquisition date as follows: 201 Radnor Financial Center, 555 Radnor Financial Center and 300 Delaware Avenue (three years); One Rodney Square and 130/150/170 Radnor Financial Center (10 years); and One Logan Square, Two Logan Square and Radnor Corporate Center (15 years). In the case of the Prentiss acquisition, we assumed the obligation of Prentiss not to sell Concord Airport Plaza before March 2018 and 6600 Rockledge before July 2008. We also own 14 other properties that aggregate 1.0 million square feet and have agreed not to sell these properties for periods that expire by the end of 2008. Our agreements generally provide that we may dispose of the subject properties only in transactions that qualify as tax-free exchanges under Section 1031 of the Internal Revenue Code or in other tax deferred transactions. In the event that we sell any of the properties within the applicable restricted period in non-exempt transactions, we would be required to pay significant tax liabilities that would be incurred by the parties who sold us the applicable property.

We invest in our properties and regularly incur capital expenditures in the ordinary course to maintain the properties. We believe that such expenditures enhance our competitiveness. We also enter into construction, utility and service contracts in the ordinary course of business which may extend beyond one year. These contracts typically provide for cancellation with insignificant or no cancellation penalties.

Interest Rate Risk and Sensitivity Analysis

The analysis below presents the sensitivity of the market value of our financial instruments to selected changes in market rates. The range of changes chosen reflects our view of changes which are reasonably possible over a one-year period. Market values are the present value of projected future cash flows based on the market rates chosen.

Our financial instruments consist of both fixed and variable rate debt. As of March 31, 2007, our consolidated debt consisted of $879.2 million in fixed rate mortgages, $404.0 million variable rate borrowings under our Credit Facility and $1.9 billion in unsecured notes (net of discounts) of which $1.83 billion are fixed rate borrowings and $78.6 million are variable rate borrowings. All financial instruments were entered into for other than trading purposes and the net market value of these financial instruments is referred to as the net financial position. Changes in interest rates have different impacts on the fixed and variable rate portions of our debt portfolio. A change in interest rates on the fixed portion of the debt portfolio impacts the net financial instrument position, but has no impact on interest incurred or cash flows. A change in interest rates on the variable portion of the debt portfolio impacts the interest incurred and cash flows, but does not impact the net financial instrument position.

If market rates of interest on our variable rate debt increase by 1%, the increase in annual interest expense on our variable rate debt would decrease future earnings and cash flows by approximately $4.8 million. If market rates of interest on our variable rate debt decrease by 1%, the decrease in interest expense on our variable rate debt would increase future earnings and cash flows by approximately $4.8 million.

If market rates of interest increase by 1%, the fair value of our outstanding fixed-rate debt would decrease by approximately $103.3 million. If market rates of interest decrease by 1%, the fair value of our outstanding fixed-rate debt would increase by approximately $110.4 million.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Market risk is the exposure to loss resulting from changes in interest rates, commodity prices and equity prices. In pursuing our business plan, the primary market risk to which we are exposed is interest rate risk. Changes in the general level of interest rates prevailing in the financial markets may affect the spread between our yield on invested assets and cost of funds and, in turn, our ability to make distributions or payments to our shareholders. While we have not experienced any significant credit losses, in the event of a significant rising interest rate environment and/or economic downturn, defaults could increase and result in losses to us which adversely affect our operating results and liquidity.

There have been no material changes in Quantitative and Qualitative disclosures in 2007 from the disclosures included in our Annual Report on Form 10-K for the year ended December 31, 2006. Reference is made to Item 7 included in our Annual Report on Form 10-K for the year ended December 31, 2006 and the caption “Interest Rate Risk and Sensitivity Analysis” under Item 2 of this Quarterly Report on Form 10-Q.

Item 4. Controls and Procedures

	(a)		Evaluation of disclosure controls and procedures. Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act) as of the end of the period covered by this quarterly report, have concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.

	(b)		Changes in internal controls over financial reporting. There was no change in the Company’s internal control over financial reporting that occurred during the period covered by this quarterly report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Part II. OTHER INFORMATION

Item 1. Legal Proceedings

Not applicable.

Item 1A. Risk Factors

There has been no material change to the risk factors previously disclosed by us in our Form 10-K for the fiscal year ended December 31, 2006.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table summarizes the share repurchases during the three-month period ended March 31, 2007:

Total

Purchased as

Shares that May

Number of

Average

Part of Publicly

Yet Be Purchased

Price Paid Per

Announced Plans

Under the Plans

Purchased

or Programs

or Programs (a)

2007:

January

—

2,319,800

February

—

2,319,800

March

1,301,000

34.34

1,301,000

1,018,800

Total

1,301,000


(a)		On May 2, 2006, our Board of Trustees authorized an increase in the number of common shares that we may repurchase, whether in open-market or privately negotiated transactions. The Board authorized us to purchase up to an aggregate of 3,500,000 common shares (inclusive of the remaining share repurchase availability under the Board’s prior authorization from September 2001). There is no expiration date on the share repurchase program.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Submission of Matters to a Vote of Security Holders

Not applicable.

Item 5. Other Information

(I)

•

We held our annual meeting of shareholders on May 9, 2007. At the meeting, each of the ten individuals nominated for election to our Board of Trustees was elected to the Board. These individuals will serve on the Board until the next annual meeting of shareholders and until their successors are elected and qualified or until their earlier resignation. The number of shares cast for or withheld for each nominee is set forth below:


Trustee	For		Withheld
Walter D’Alessio		81,277,885		680,203
D. Pike Aloian		81,636,876		321,212
Thomas F. August		76,724,716		5,233,372
Donald E. Axinn		67,991,394		13,966,694
Wyche Fowler		81,638,270		319,818
Michael J. Joyce		81,692,258		265,830
Anthony A. Nichols Sr.		80,951,549		1,006,539
Michael V. Prentiss		76,725,961		5,232,127
Charles P. Pizzi		81,337,394		620,694
Gerard H. Sweeney		81,283,927		674,161

•

At our annual meeting of shareholders, our shareholders voted as follows to ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the calendar year 2007 as follows:


–	Votes for	81,839,917
–	Votes Against	32,296
–	Abstentions	19,196

•

At our annual meeting of shareholders, our shareholders approved the amendment and restatement of our Amended and Restated 1997 Long-Term Incentive Plan, voting as follows:


–	Votes for	72,411,880
–	Votes Against	3,816,076
–	Abstentions	109,452
–	Broker Non-Votes	5,620,680

•

At our annual meeting of shareholders, our shareholders approved the 2007 Non-Qualified Share Purchase Plan, voting as follows:


–	Votes for	76,075,023
–	Votes Against	188,980
–	Abstentions	73,406
–	Broker Non-Votes	5,620,679

(II)

•

At our annual meeting of shareholders, each non-employee Trustee received his annual trustee fee of $35,000, payable in cash or common shares at the election of non-employee Trustee, and his $40,000 annual restricted share award (1,209 shares), the form of which is attached as Exhibit 10.7.

Item 6. Exhibits

(a)

Exhibits

	10.1		Employment letter agreement with Darryl M. Dunn (incorporated by reference to Brandywine’s Current Report on Form 8-K filed on January 9, 2007)**

	10.2		Performance Share Award to President and Chief Executive Officer (incorporated by reference to Brandywine’s Current Report on Form 8-K filed on February 14, 2007)**

	10.3		Form of Performance Award to Executives other than President and Chief Executive Officer (incorporated by reference to Brandywine’s Current Report on Form 8-K filed on February 14, 2007)**

	10.4		Amended and Restated Employment Agreement for President and Chief Executive Officer (incorporated by reference to Brandywine’s Current Report on Form 8-K filed on February 14, 2007)**

	10.5		Amended and Restated 1997 Long-Term Incentive Plan**

	10.6		2007 Non-Qualified Employee Share Purchase Plan**

	10.7		Form of 2007 Restricted Share Award to Non-Employee Trustees

	12.1		Statement re Computation of Ratios of Brandywine Realty Trust

	12.2		Statement re Computation of Ratios of Brandywine Operating Partnership, L.P.

	31.1		Certification of the Chief Executive Officer of Brandywine Realty Trust pursuant to 13a-14 under the Securities Exchange Act of 1934

	31.2		Certification of the Chief Financial Officer of Brandywine Realty Trust pursuant to 13a-14 under the Securities Exchange Act of 1934

	31.3		Certification of the Chief Executive Officer of Brandywine Realty Trust, in its capacity as the general partner of Brandywine Operating Partnership, L.P., pursuant to 13a-14 under the Securities Exchange Act of 1934

	31.4		Certification of the Chief Financial Officer of Brandywine Realty Trust, in its capacity as the general partner of Brandywine Operating Partnership, L.P., pursuant to 13a-14 under the Securities Exchange Act of 1934

	32.1		Certification of the Chief Executive Officer of Brandywine Realty Trust pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

	32.2		Certification of the Chief Financial Officer of Brandywine Realty Trust pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

	32.3		Certification of the Chief Executive Officer of Brandywine Realty Trust, in its capacity as the general partner of Brandywine Operating Partnership, L.P., pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

	32.4		Certification of the Chief Financial Officer of Brandywine Realty Trust, in its capacity as the general partner of Brandywine Operating Partnership, L.P., pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


**		Management contract or compensatory plan or arrangement

SIGNATURES OF REGISTRANT

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	BRANDYWINE REALTY TRUST (Registrant)


Date: May 10, 2007	By :	/s/ Gerard H. Sweeney

	Gerard H. Sweeney, President and Chief Executive Officer (Principal Executive Officer)


Date: May 10, 2007	By :	/s/ Howard M. Sipzner

	Howard M. Sipzner, Executive Vice President and Chief Financial Officer (Principal Financial Officer)


Date: May 10, 2007	By :	/s/ Darryl M. Dunn

	Darryl M. Dunn, Vice President, Chief Accounting Officer & Treasurer (Principal Accounting Officer)

SIGNATURES OF REGISTRANT

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	BRANDYWINE OPERATING PARTNERSHIP, L.P. (Registrant)

	BRANDYWINE REALTY TRUST, as general partner


Date: May 10, 2007	By :	/s/ Gerard H. Sweeney

	Gerard H. Sweeney, President and Chief Executive Officer (Principal Executive Officer)


Date: May 10, 2007	By :	/s/ Howard M. Sipzner

	Howard M. Sipzner, Executive Vice President and Chief Financial Officer (Principal Financial Officer)


Date: May 10, 2007	By :	/s/ Darryl M. Dunn

	Darryl M. Dunn, Vice President, Chief Accounting Officer & Treasurer (Principal Accounting Officer)

Exhibit 10.5

BRANDYWINE REALTY TRUST
AMENDED AND RESTATED 1997 LONG-TERM INCENTIVE PLAN
(As amended effective May 9, 2007)

SECTION 1. Purpose; Definitions . The purpose of the Brandywine Realty Trust 1997 Long-Term Incentive Plan (the “Plan”) is to offer to certain employees and trustees of Brandywine Realty Trust (the “Company”), organized as a Maryland real estate investment trust, and its subsidiaries, equity interests in the Company, options to acquire equity interests in the Company, and other performance-based incentive awards, thereby attracting, retaining and motivating such persons, and strengthening the mutuality of interests between such persons and the Company’s shareholders. The Plan was originally adopted effective May 12, 1997 and has previously been amended with shareholder approval effective May 15, 1998 and May 2, 2005.

The Board of Trustees has amended and restated the Plan, effective May 9, 2007, subject to the approval of the Company’s shareholders at the Annual Meeting of Shareholders to be held May 9, 2007, to reflect the merger of the Prentiss Properties Trust 2005 Share Incentive Plan (the “Prentiss Plan”) with and into the Plan, effective May 9, 2007. Shares reserved for issuance under incentive awards granted under the Prentiss Plan before May 9, 2007 shall be issued in accordance with the terms of such incentive award and the Prentiss Plan as in effect immediately before May 9, 2007, provided that if a participant’s right to issuance of Shares under the Prentiss Plan lapses, expires or is forfeited, such Shares shall be available for issuance under this Plan in accordance with the terms and conditions hereof. Shares reserved for issuance under the Prentiss Plan that are not reserved for issuance under incentive awards granted under the Prentiss Plan as of May 9, 2007 shall be available for issuance pursuant to awards under this Plan in accordance with the terms and conditions hereof.

For purposes of the Plan, the following initially capitalized words and phrases shall be defined as set forth below, unless the context clearly requires a different meaning:

a. “Affiliate” means, with respect to a person or entity, a person that directly or indirectly controls, or is controlled by, or is under common control with such person or entity.

b. “Board” means the Board of Trustees of the Company, as constituted from time to time.

c. “Cause” occurs when the Participant, as determined by the Board:

(i) has engaged in any type of disloyalty to the Company, including without limitation, fraud, embezzlement, theft, or dishonesty in the course of his employment or engagement, or has otherwise breached any fiduciary duty owed to the Company;

(ii) has been convicted of a felony;

(iii) has disclosed trade secrets or confidential information of the Company; or

(iv) has breached any agreement with or duty to the Company in respect of confidentiality, non-disclosure, non-competition or otherwise.

d. “Change of Control” means:

(i) the acquisition in one or more transactions by any “Person” (as the term person is used for purposes of Sections 13(d) or 14(d) of the Exchange Act) of “Beneficial ownership” (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of twenty-five percent (25%) or more of the combined voting power of the Company’s then outstanding voting securities (the “Voting Securities”), provided that for purposes of this clause (i) Voting Securities acquired directly from the Company by any Person shall be excluded from the determination of such Person’s Beneficial ownership of Voting Securities (but such Voting Securities shall be included in the calculation of the total number of Voting Securities then outstanding); or

(ii) approval by shareholders of the Company of:

(A) a merger, reorganization or consolidation involving the Company if the shareholders of the Company immediately before such merger, reorganization or consolidation do not or will not own directly or indirectly immediately following such merger, reorganization or consolidation, more than fifty percent (50%) of the combined voting power of the outstanding voting securities of the company resulting from or surviving such merger, reorganization or consolidation in substantially the same proportion as their ownership of the Voting Securities outstanding immediately before such merger, reorganization or consolidation; or

(B) a complete liquidation or dissolution of the Company; or

(iii) acceptance by shareholders of the Company of shares in a share exchange if the shareholders of the Company immediately before such share exchange do not or will not own directly or indirectly immediately following such share exchange more than fifty percent (50%) of the combined voting power of the outstanding voting securities of the entity resulting from or surviving such share exchange in substantially the same proportion as their ownership of the Voting Securities outstanding immediately before such share exchange; or

(iv) a change in the composition of the Board over a period of twenty four (24) months or less such that a majority of the Board members ceases to be comprised of individuals who either: (i) have been board members continuously since the beginning of such period; or (ii) have been elected or nominated for election as Board members during such period by at least a majority of the Board members described in clause (i) who were still in office at the time such election or nomination was approved by the Board.

e. “Code” means the Internal Revenue Code of 1986, as amended from time to time, and any successor thereto.

f. “Committee” means the Committee appointed by the Board in accordance with Section 2 of the Plan, if one is appointed, in which event in connection with this Plan, the Committee shall possess all of the power and authority of, and shall be authorized to take any and all actions required to be taken hereunder by, and make any and all determinations required to be taken hereunder by, the Board.

g. “Disability” means a disability of an employee or a trustee which renders such employee or trustee unable to perform the full extent of his duties and responsibilities by reason of his illness or incapacity which would entitle that employee or trustee to receive Social Security Disability Income under the Social Security Act, as amended, and the regulations promulgated thereunder. “Disabled” shall mean having a Disability. The determination of whether a Participant is Disabled shall be made by the Board, whose determination shall be conclusive; provided that,

(i) if a Participant is bound by the terms of an employment agreement between the Participant and the Company, whether the Participant is “Disabled” for purposes of the Plan shall be determined in accordance with the procedures set forth in said employment agreement, if such procedures are therein provided; and

(ii) a Participant bound by such an employment agreement shall not be determined to be Disabled under the Plan any earlier than he would be determined to be disabled under his employment agreement.

h. “Exchange Act” means the Securities Exchange Act of 1934, as amended.

i. “Fair Market Value” means, as of any date: (i) the closing price of the Shares as reported on the principal nationally recognized stock exchange on which the Shares are traded on such date, or if no Share prices are reported on such date, the closing price of the Shares on the next preceding date on which there

were reported Share prices; or (ii) if the Shares are not listed or admitted to unlisted trading privileges on a nationally recognized stock exchange, the closing price of the Shares as reported by The NASDAQ Market on such date, or if no Share prices are reported on such date, the closing price of the Shares on the next preceding date on which there were reported Share prices; or (3) if the Shares are not listed or admitted to unlisted trading privileges on a nationally recognized stock exchange or traded on The NASDAQ Market, then the Fair Market Value shall be determined by the Board acting in its discretion, which determination shall be conclusive.

j. “Incentive Stock Option” means any Option intended to be and designated as an “Incentive Stock Option” within the meaning of Section 422 of the Code.

k. “Long-Term Performance Award” or “Long-Term Award” means an award made pursuant to Section 8 hereof that is payable in cash and/or Shares (including Restricted Shares, Performance Shares and Performance Units) in accordance with the terms of the grant, based on Company, business unit and/or individual performance, in each case as determined by the Committee and as set forth in the grant letter.

l. “Non-Employee Trustee” shall have the meaning set forth in Rule 16b-3(b)(3) promulgated by the Securities and Exchange Commission under the Exchange Act, or any successor definition adopted by the Securities and Exchange Commission (substituting the word “trustee” for “director”); provided, however, that the Board or the Committee may, in its sole discretion, substitute the definition of “outside director” provided in the regulations under Section 162(m) of the Code in place of the definition of Non-Employee Director contained in the Exchange Act.

m. “Non-Qualified Stock Option” means any Option that is not an Incentive Stock Option.

n. “Participant” means an employee or trustee of the Company or a Subsidiary to whom an award is granted pursuant to the Plan or a corporation, limited liability company, limited partnership or other entity owned directly and indirectly by one or more employees or trustees of the Company or a Subsidiary to whom an award is granted pursuant to the Plan.

o. “Performance Share” means an award made pursuant to Section 9 hereof of the right to receive Shares at the end of a specified performance period.

p. “Performance Unit” means an award made pursuant to Section 10 hereof of the right to receive cash at the end of a specified performance period.

q. “Restricted Shares” means an award of Shares that is subject to restrictions pursuant to Section 7 hereof.

r. “Retirement” means termination of the employment of a Participant with the Company, an Affiliate (including parent) or a Subsidiary other than (i) a termination effected at the direction of the Company or parent (whether or not the Company effects such termination for Cause), (ii) termination on account of Disability, or (iii) termination on account of death. With respect to a trustee who is not also an employee of the Company, Retirement shall occur at such time as the individual ceases to be a trustee.

s. “Rules” means Section 16 of the Exchange Act and the regulations promulgated thereunder.

t. “SAR” means a share appreciation right granted under the Plan and described in Section 6 hereof.

u. “Securities Broker” means a registered securities broker acceptable to the Company who agrees to effect the cashless exercise of an Option pursuant to Section 5(k) hereof.

v. “Share” means a common share of beneficial interest, $.01 par value per share, of the Company, subject to substitution or adjustment as provided in Section 3(c) hereof.

w. “Stock Option” or “Option” means any option to purchase Shares (including Restricted Shares, if the Committee so determines) granted pursuant to Section 5 hereof.

x. “Subsidiary” means, in respect of the Company or parent, a subsidiary company, whether now or hereafter existing, as defined in Sections 424(f) and (g) of the Code, and any other entity 50% or more of the economic interests in which are owned, directly or indirectly, by the Company.

y. “Trustee” means a member of the Board.

SECTION 2. Administration . The Plan shall be administered by the Board. The Board may at any time by a unanimous vote, with each member voting, appoint a Committee consisting of not less than two Trustees to administer the Plan on behalf of the Board, subject to such terms and conditions as the Board may prescribe, provided that each Committee member shall be a Non-Employee Trustee. Members of the Committee shall serve for such period of time as the Board may determine. Members of the Board or the Committee who are eligible for awards or have been granted awards may vote on any matters affecting the administration of the Plan or any awards pursuant to the Plan.

If a Committee is appointed, all references to actions to be taken by the Board in the administration of the Plan shall be construed as references to the Committee.

From time to time the Board may increase the size of the Committee and appoint additional members thereto (provided such new members are Non-Employee Trustees), remove members (with or without Cause) and appoint new members in substitution therefor, fill vacancies however caused, or remove all members of the Committee and thereafter directly administer the Plan.

The Board shall have full authority to grant to eligible persons under Section 4: (i) Options, (ii) SARs, (iii) Restricted Shares, (iv) Long-Term Performance Awards, (v) Performance Shares and/or (vi) Performance Units. In particular, the Board shall have the authority:

a. to select the persons to whom Options, SARs, Restricted Shares, Long-Term Performance Awards, Performance Shares and Performance Units may from time to time be granted hereunder;

b. to determine whether and to what extent Incentive Stock Options, Non-Qualified Stock Options, SARs, Restricted Shares, Long-Term Performance Awards, Performance Shares and Performance Units, or any combination thereof, are to be granted hereunder;

c. to determine the number of Shares, if any, to be covered by each such award granted hereunder;

d. to determine the terms and conditions, not inconsistent with the terms of the Plan, of any award granted hereunder, including, but not limited to, the Share price and any restriction or limitation, any vesting provisions, or any vesting acceleration or forfeiture waiver regarding any Option or other award and/or the Shares relating thereto, or the length of the period following termination of employment of any Participant during which any Option or SAR may be exercised (which, in the case of an Incentive Stock Option, shall be no longer than one year in the case of the termination of employment of a Participant by reason of death or Disability, or three months in the case of the termination of employment of a Participant for any reason other than death or Disability), based on such factors as the Board shall determine, in its sole discretion;

e. to determine whether and under what circumstances an Option may be exercised without a payment of cash under Section 5(k); and

f. to determine whether, to what extent and under what circumstances Shares and other amounts payable with respect to an award under the Plan may be deferred either automatically or at the election of the Participant; and

g. to make such arrangements with a Subsidiary for awards to be made to a Participant by such Subsidiary and for the transfer of Shares to such Subsidiary for the purpose of delivery to such Participant, as the Board may deem necessary or appropriate to further the purposes of the Plan.

The Board shall have the authority to adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan as it shall, from time to time, deem advisable; to interpret the terms and provisions of the Plan and any award issued under the Plan (and any agreements relating thereto); to amend the terms of any agreement relating to any award issued under the Plan, provided that the Participant consents to such

amendment; and to otherwise supervise the administration of the Plan. The Board may correct any defect, supply any omission or reconcile any inconsistency in the Plan or in any award granted in the manner and to the extent it shall deem necessary to carry out the intent of the Plan.

All decisions made by the Board pursuant to the provisions of the Plan shall be final and binding on all persons, including the Company and Participants. No member of the Board shall be liable for any good faith determination, act or failure to act in connection with the Plan or any award made under the Plan.

SECTION 3. Shares Subject to the Plan .

a. Shares Subject to the Plan . The Shares to be subject or related to awards under the Plan shall be authorized and unissued Shares of the Company or Shares previously issued and subsequently acquired by or on behalf of the Company. The maximum number of Shares available for awards under the Plan is 8,399,552 (provided that 164,717 of such Shares are available only if and to the extent that a participant’s right to issuance of Shares under the Prentiss Plan lapses, expires or is forfeited) . All of such Shares shall be available for Non-Qualified Stock Options, Incentive Stock Options, Restricted Shares, SARS, Long-Term Performance Awards and/or Performance Shares, except that 500,000 of such Shares shall be available solely for Non-Qualified Stock Options, Incentive Stock Options and SARS that meet the Specified Limitation described below in this Section 3(a) (such 500,000 Shares referred to in the preceding clause being hereinafter referred to as the “Restricted Pool”). The Company may reserve for the purposes of the Plan the maximum number of Shares available for award under the Plan. If and to the extent that an SAR, Long-Term Performance Award or Performance Unit is settled in cash or payable solely in cash, such award shall not reduce the number of Shares subject to the Plan. No individual shall be granted, over the term of the Plan, Options or SARs exercisable for more than an aggregate of 4,500,000 Shares. In order for a Non-Qualified Stock Option or Incentive Stock Option to meet the Specified Limitation, it must have an exercise price per Share purchasable under the Option of not less than 100% of the Fair Market Value of the Share on the date of the grant, and in order for an SAR to meet the Specified Limitation, it must entitle the recipient to receive, upon exercise thereof, the excess of the Fair Market Value of the Share covered by the SAR on the date of exercise over the Fair Market Value of a Share on the date of the grant.

b. Effect of the Expiration or Termination of Awards . If and to the extent that an award made under the Plan expires, terminates or is canceled or forfeited for any reason, the number of Shares associated with the expired, terminated, canceled or forfeited portion of the award shall again become available for award under the Plan.

c. Other Adjustment . In the event of any merger, reorganization, consolidation, recapitalization, Share distribution or dividend, Share split or combination, or other change in entity structure affecting the Shares, such substitution or adjustment shall be made in the aggregate number, type and issuer of the securities reserved for issuance under the Plan, in the number and Option price of securities subject to outstanding Options granted under the Plan and in the number and price of securities subject to other awards made under the Plan, as may be determined to be appropriate by the Board in its sole discretion, provided that the number of securities subject to any award shall always be a whole number. The Board, in its sole discretion, shall make appropriate equitable anti-dilution adjustments to the number of then-outstanding SARs, and to the Fair Market Value upon which the value of such SARs is based.

SECTION 4. Eligibility . Trustees and other employees of the Company or its Subsidiaries, and a corporation, limited liability company, limited partnership or other entity owned directly and indirectly by one or more employees or trustees of the Company or a Subsidiary, are eligible to be granted awards under the Plan. Trustees and other employees who are not employees of the Company or of a Subsidiary that is a subsidiary as defined in Section 424(f) and (g) of the Code, are eligible to be granted awards under the Plan, but are not eligible to be granted Incentive Stock Options.

SECTION 5. Options . Options granted under the Plan may be of two types: (i) Incentive Stock Options or (ii) Non-Qualified Stock Options. Options may be granted alone, in addition to or in tandem with other awards granted under the Plan. Any Option granted under the Plan shall be in such form as the Board may from time to time approve.

The Board shall have the authority to grant any Participant eligible under Section 4 Incentive Stock Options, Non-Qualified Stock Options, or both types of Options (in each case with or without SARs). To the extent that any Option does not qualify as an Incentive Stock Option, it shall constitute a Non-Qualified Stock Option.

Options granted under the Plan shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Board shall deem appropriate; provided, however, that the provisions of Option awards need not be the same with respect to each Participant:

a. Option Price . The exercise price per Share purchasable under a Non-Qualified Stock Option shall be determined by the Board; provided that the exercise price per Share of an Option awarded under the Restricted Pool shall meet the Specified Limitation; and the exercise price per Share purchasable under an Incentive Stock Option shall be 100% of the Fair Market Value of the Share on the date of the grant. However, any Incentive Stock Option granted to any Participant who, at the time the Option is granted, owns more than 10% of the voting power of all classes of shares of the Company or of a Subsidiary that is a subsidiary company as defined in Section 424(f) and (g) of the Code, shall have an exercise price per Share of not less than 110% of Fair Market Value per Share on the date of the grant.

b. Option Term . The term of each Option shall be fixed by the Board, but no Option shall be exercisable more than ten years after the date the Option is granted. However, any Incentive Stock Option granted to any Participant who, at the time such Option is granted, owns more than 10% of the voting power of all classes of shares of the Company or of a Subsidiary that is a subsidiary company as defined in Section 424(f) and (g) of the Code, may not have a term of more than five years. No Option may be exercised by any person after expiration of the term of the Option.

c. Exercisability . Options shall vest and be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Board at the time of grant. If the Board provides, in its discretion, that any Option is exercisable only in installments, the Board may waive such installment exercise provisions at any time at or after grant, in whole or in part, based on such factors as the Board shall determine, in its sole discretion.

d. Method of Exercise . Subject to the exercise provisions under Section 5(c) and the termination provisions set forth in Sections 5(f) through (i), Options may be exercised in whole or in part at any time and from time to time during the term of the Option, by giving written notice of exercise to the Company specifying the number of Shares to be purchased. Such notice shall be accompanied by payment in full of the purchase price, either by certified or bank check, or such other instrument as the Board may accept. As determined by the Board, in its sole discretion, at or after grant, payment in full or in part of the exercise price of an Option may be made in the form of Shares that are not unvested Restricted Shares based on the Fair Market Value of the Shares on the date the Option is exercised; provided, however, that, in the case of an Incentive Stock Option, the right to make a payment in the form of already owned Shares may be authorized only at the time the Option is granted.

No Shares shall be issued upon exercise of an Option until full payment therefor has been made. A Participant shall not have the right to distributions or dividends or any other rights of a shareholder with respect to Shares subject to the Option until the Participant has given written notice of exercise, has paid in full for such Shares, and, if requested, has given the representation described in Section 13(a) hereof.

e. Non-transferability of Options . Unless otherwise determined by the Board, no Option shall be transferable by the Participant otherwise than by will or by the laws of descent and distribution and all Options shall be exercisable, during the Participant’s lifetime, only by the Participant or, in the event of his Disability, by his personal representative.

f. Termination by Reason of Death . Subject to Section 5(i), if a Participant’s service with the Company or any Subsidiary terminates by reason of death, any Option held by such Participant may thereafter be exercised, to the extent then exercisable or on such accelerated basis as the Board may

determine at or after grant, by the legal representative of the estate or by the legatee of the Participant under the will of the

Participant, for a period expiring (i) at such time as may be specified by the Board at or after the time of grant, or (ii) if not specified by the Board, then one year from the date of death, or (iii) if sooner than the applicable period specified under (i) or (ii) above, then upon the expiration of the stated term of such Option.

g. Termination by Reason of Disability . Subject to Section 5(i), if a Participant’s service with the Company or any Subsidiary terminates by reason of Disability, any Option held by such Participant may thereafter be exercised by the Participant or his personal representative, to the extent it was exercisable at the time of termination, or on such accelerated basis as the Board may determine at or after grant, for a period expiring (i) at such time as may be specified by the Board at or after the time of grant, or (ii) if not specified by the Board, then six months from the date of termination of service, or (iii) if sooner than the applicable period specified under (i) or (ii) above, then upon the expiration of the stated term of such Option; provided, however, that if the Participant dies within such period, any unexercised Option held by such Participant shall, at the sole discretion of the Board, thereafter be exercisable to the extent to which it was exercisable at the time of death for a period of one (1) year from the date of such death (or such other period as may be specified by the Board) or until the expiration of the stated term of such Option, whichever period is shorter.

h. Other Termination . Subject to Section 5(i), if a Participant’s service with the Company or any Subsidiary terminates for any reason other than death or Disability, any Option held by such Participant may thereafter be exercised by the Participant, to the extent it was exercisable at the time of such termination or on such accelerated basis as the Board may determine at or after the time of grant, for a period expiring (i) at such time as may be specified by the Board at or after the time of grant, or (ii) if not specified by the Board, then thirty (30) days from the date of termination of service, or (iii) if sooner than the applicable period specified under (i) or (ii) above, then upon the expiration of the stated term of such Option.

i. Change of Control . In the event of a Change of Control, the Board may, in its sole discretion, cause all outstanding Options to immediately become fully exercisable.

j. Incentive Stock Option Limitations . To the extent required for “incentive stock option” status under Section 422 of the Code, the aggregate Fair Market Value (determined as of the time of grant) of the Shares with respect to which Incentive Stock Options are exercisable for the first time by the Participant during any calendar year under the Plan and/or any other plan of the Company or any Subsidiary shall not exceed $100,000. For purposes of applying the foregoing limitation, Incentive Stock Options shall be taken into account in the order granted.

k. Cashless Exercise . The Company may, in the sole discretion of the Board, cooperate in a “cashless exercise” of an Option. The cashless exercise shall be effected by the Participant delivering to the Securities Broker instructions to sell a sufficient number of Shares to cover the costs and expenses associated therewith.

SECTION 6. Share Appreciation Rights .

a. Grant . SARs may be granted alone (“Stand-Alone SARs”) or in conjunction with all or part of any Option granted under the Plan (“Tandem SARs”). In the case of a Non-Qualified Stock Option, a Tandem SAR may be granted either at or after the time of the grant of such Option. In the case of an Incentive Stock Option, a Tandem SAR may be granted only at the time of the grant of such Option.

b. Exercise .

(i) Tandem SARs . A Tandem SAR or applicable portion thereof shall terminate and no longer be exercisable upon the termination or exercise of the related Option or portion thereof, except that, unless otherwise determined by the Board, in its sole discretion at the time of grant, a Tandem SAR granted with respect to less than the full number of Shares covered by a related Option shall be reduced only after such related Option is exercised or otherwise terminated with respect to the number of Shares not covered by the Tandem SAR.

A Tandem SAR may be exercised by a Participant by surrendering the applicable portion of the related Option, only at such time or times and to the extent that the Option to which such Tandem SAR relates shall be exercisable in accordance with the provisions of Section 5 and this Section 6. Options which have been so surrendered, in whole or in part, shall no longer be exercisable to the extent the related Tandem SARs have been exercised.

Upon the exercise of a Tandem SAR, a Participant shall be entitled to receive, upon surrender to the Company of all (or a portion) of an Option in exchange for cash and/or Shares, an amount equal to the excess of (A) the Fair Market Value, as of the date such Option (or such portion thereof) is surrendered, of the Shares covered by such Option (or such portion thereof) over (B) the aggregate exercise price of such Option (or such portion thereof).

Upon the exercise of a Tandem SAR, the Option or part thereof to which such Tandem SAR is related shall be deemed to have been exercised and (for the purpose of the limitation set forth in Section 3(a) of the Plan on the number of Shares available for awards under the Plan) the number of Shares available for awards under the Plan shall be reduced by the number of Shares, if any, issued upon such exercise; provided however, that if the Tandem SAR is from the Restricted Pool (as defined in Section 3(a) of the Plan), then the number of Shares available for awards under the Plan shall instead be reduced by the total number of Tandem SARs that are exercised and settled for Shares and not the number of Shares, if any, issued upon such exercise.

A Tandem SAR may be exercised only if and when the Fair Market Value of the Shares subject to the Option exceeds the exercise price of such Option.

(ii) Stand-Alone SARs . A Stand-Alone SAR may be exercised by a Participant giving notice of intent to exercise to the Company, provided that all or a portion of such Stand-Alone SAR shall have become vested and exercisable as of the date of exercise.

Upon the exercise of a Stand-Alone SAR, a Participant shall be entitled to receive, in either cash and/or Shares, as determined by the Board, an amount equal to the excess, if any, of (A) the Fair Market Value, as of the date such SAR (or portion of such SAR) is exercised, of the Shares covered by such SAR (or portion of such SAR) over (B) the Fair Market Value of the Shares covered by such SAR (or a portion of such SAR) as of the date such SAR (or a portion of such SAR) was granted.

For the purpose of the limitation set forth in Section 3(a) of the Plan on the number of Shares available for awards under the Plan, upon the exercise of a Stand-Alone SAR, the number of Shares available for awards under the Plan shall be reduced by the number of Shares, if any, issued under, and upon the exercise of, the Stand-Alone SAR; provided however, that if the Stand-Alone SAR is from the Restricted Pool (as defined in Section 3(a) of the Plan), then the number of Shares available for awards under the Plan shall instead be reduced by the total number of Stand-Alone SARs that are exercised and settled for Shares and not the number of Shares, if any, issued upon such exercise.

c. Terms and Conditions . SARs shall be subject to such terms and conditions, not inconsistent with the provisions of the Plan, as shall be determined from time to time by the Board, in its sole discretion; provided, however, that the provisions of SAR awards need not be the same with respect to each Participant. Such terms and conditions include the following:

(i) Non-Transferability . Unless otherwise determined by the Board, no SAR shall be transferable by the Participant otherwise than by will or by the laws of descent and distribution and all SARs shall be exercisable, during the Participant’s lifetime, only by the Participant or, in the event of his Disability, by his personal representative.

(ii) Term of SAR . The term of each SAR shall be fixed by the Board, provided that the term of a Tandem SAR shall be determined by the terms of the applicable Option, and provided further that the term of a Stand-Alone SAR shall be ten (10) years, unless another term is specified by the Board.

(iii) Exercisability . SARs shall vest and be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Board at the time of grant, provided

that the term of a Tandem SAR shall be determined by the terms of the applicable Option. A Participant shall not have any rights as a shareholder with respect to any SAR.

(iv) Termination of Employment . Unless otherwise specified in the terms of an award, SARs shall be subject to the terms of Sections 5(f)-(h) with respect to exercise upon termination of employment.

(v) Change of Control . In the event of a Change of Control, the Board may, in its sole discretion, cause all outstanding SARs to immediately become fully exercisable.

SECTION 7. Restricted Shares .

a. Administration . Restricted Shares may be issued either alone or in addition to other awards granted under the Plan. The Board shall determine the persons to whom, and the time or times at which, grants of Restricted Shares will be made, the number of Shares to be awarded, the price (if any) to be paid by the recipient of Restricted Shares, the time or times within which such awards may be subject to forfeiture, and all other conditions of the awards.

The Board may condition the vesting of Restricted Shares upon the attainment of specified performance goals or such other factors as the Board may determine, in its sole discretion, at the time of the award. The Board may award Restricted Shares that vest without regard to the attainment of specified performance goals.

The provisions of Restricted Share awards need not be the same with respect to each Participant.

b. Awards and Certificates . The prospective recipient of a Restricted Share award shall not have any rights with respect to such award, unless and until such recipient has executed an agreement evidencing the award and has delivered a fully executed copy thereof to the Company, and has otherwise complied with the applicable terms and conditions of such award. The purchase price for Restricted Shares may be zero.

Each Participant receiving a Restricted Share award shall be issued a share certificate in respect of such Restricted Shares. Such certificate shall be registered in the name of such Participant, and shall bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such award, substantially in the following form:

“The transferability of this certificate and the shares represented hereby are subject to the terms and conditions (including forfeiture) of the Brandywine Realty Trust Amended and Restated 1997 Long-Term Incentive Plan, as amended, and an Agreement entered into between the registered owner and Brandywine Realty Trust. Copies of such Plan and Agreement are on file in the principal offices of Brandywine Realty Trust and will be made available to any Shareholder without charge upon request to the Secretary of the Company.”

The Board may require that the share certificates evidencing Restricted Shares be held in custody by the Company until the restrictions thereon shall have lapsed, and that, as a condition of any Restricted Share award, the Participant shall have delivered to the Company a share power, endorsed in blank, relating to the Shares covered by such award.

c. Restrictions and Conditions . The Restricted Shares awarded pursuant to this Section 7 shall be subject to the following restrictions and conditions:

(i) During a period set by the Board commencing with the date of such award (the “Restriction Period”), the Participant shall not be permitted to sell, transfer, pledge, assign or otherwise encumber Restricted Shares awarded under the Plan. The Board, in its sole discretion, may provide for the lapse of such restrictions in installments and may accelerate or waive such restrictions in whole or in part, based on service, performance and/or such other factors or criteria as the Board may determine, in its sole discretion. The Board may, in its sole discretion, issue Restricted Shares under the Plan for which all restrictions are waived, including, but not limited to, Restricted Shares issued to Trustees as part or all of their Trustees’ fees for any period.

(ii) Except as provided in this paragraph (ii) and Section 7(c)(i), once the Participant has been issued a certificate or certificates for Restricted Shares, the Participant shall have, with respect to the Restricted Shares, all of the rights of a shareholder of the Company, including the right to vote the Shares, and the right to receive any cash distributions or dividends. The Board, in its sole discretion, as determined at the time of award, may permit or require the payment of cash distributions or dividends to be deferred and, if the Board so determines, reinvested in additional Restricted Shares to the extent Shares are available under Section 3 of the Plan.

(iii) Subject to the applicable provisions of the award agreement and this Section 7, upon termination of a Participant’s service with the Company for reasons other than death or Disability during the Restriction Period, all Restricted Shares still subject to restriction shall be forfeited by the Participant. Subject to the provisions of the Plan, the Board, in its sole discretion, may provide for the lapse of such restrictions in installments and may waive such restrictions, in whole or in part, at any time, based on such factors as the Board shall deem appropriate in its sole discretion. Unless otherwise provided in an award agreement, upon the death or Disability of a Participant during the Restriction Period, restrictions will lapse with respect to a percentage of the Restricted Shares award granted to the Participant that is equal to the percentage of the Restriction Period that has elapsed as of the date of death or the date on which such Disability commenced (as determined by the Board in its sole discretion), and a share certificate or share certificates representing such Shares, without bearing the restrictive legend described in Section 7(b), shall be delivered by the Company to the Participant or the Participant’s estate, as the case may be, in exchange for the share certificate or share certificates that contain such restrictive legend.

(iv) In the event of hardship or other special circumstances of a Participant whose service with the Company is involuntarily terminated (other than for Cause), the Board may, in its sole discretion, waive in whole or in part any or all remaining restrictions with respect to such Participant’s Restricted Shares, based on such factors as the Board may deem appropriate.

(v) If and when the Restriction Period expires without a prior forfeiture of the Restricted Shares subject to such Restriction Period, the certificates for such Shares, without bearing the restrictive legend described in Section 7(b), shall be promptly delivered by the Company to the Participant, in exchange for the share certificate or share certificates that contain such restrictive legend.

(vi) In the event of a Change of Control, the Board, in its sole discretion, may cause all Restricted Shares remaining subject to forfeiture to immediately cease to be subject to forfeiture and a share certificate or shares certificates representing such Shares, without bearing the restrictive legend described in Section 7(b), shall be issued by the Company and delivered to the Participant, in exchange for the share certificate or share certificates that contain such restrictive legend.

SECTION 8. Long-Term Performance Awards .

a. Awards and Administration . Long-Term Performance Awards may be awarded either alone or in addition to other awards granted under the Plan. Prior to award of a Long-Term Performance Award, the Board shall determine the nature, length and starting date of the performance period (the “performance period”) for each Long-Term Performance Award. Performance periods may overlap and Participants may participate simultaneously with respect to Long-Term Performance Awards that are subject to different performance periods and/or different performance factors and criteria. Prior to award of a Long-Term Performance Award, the Board shall determine the performance objectives to be used in awarding Long-Term Performance Awards and determine the extent to which such Long-Term Performance Awards have been earned. Performance objectives may vary from Participant to Participant and between groups of Participants and shall be based upon such Company, business unit and/or individual performance factors and criteria as the Board may deem appropriate, including, but not limited to, earnings per Share or return on equity.

At the beginning of each performance period, the Board shall determine for each Long-Term Performance Award subject to such performance period the range of dollar values and/or number of Shares

to be awarded to the Participant at the end of the performance period if and to the extent that the relevant measure(s) of performance for such Long-Term Performance Award is (are) met. Such dollar values or number of Shares may be fixed or may vary in accordance with such performance and/or other criteria as may be specified by the Board, in its sole discretion.

b. Adjustment of Awards . In the event of special or unusual events or circumstances affecting the application of one or more performance objectives to a Long-Term Performance Award, the Board may revise the performance objectives and/or underlying factors and criteria applicable to the Long-Term Performance Awards affected, to the extent deemed appropriate by the Board, in its sole discretion, to avoid unintended windfalls or hardship.

c. Termination of Service . Unless otherwise provided in the applicable award agreements, if a Participant terminates service with the Company during a performance period because of death, Disability or Retirement, such Participant (or his estate) shall be entitled to a payment with respect to each outstanding Long-Term Performance Award at the end of the applicable performance period:

(i) based, to the extent relevant under the terms of the award, upon the Participant’s performance for the portion of such performance period ending on the date of termination and the performance of the applicable business unit(s) for the entire performance period, and

(ii) pro-rated, where deemed appropriate by the Board, for the portion of the performance period during which the Participant was employed by or served on the Board of the Company, all as determined by the Board, in its sole discretion.

However, the Board may provide for an earlier payment in settlement of such award in such amount and under such terms and conditions as the Board deems appropriate, in its sole discretion.

Except as otherwise determined by the Board, if a Participant terminates service with the Company during a performance period for any other reason, then such Participant shall not be entitled to any payment with respect to the Long-Term Performance Awards subject to such performance period, unless the Board shall otherwise determine, in its sole discretion.

In the event of a Change of Control, the Board may, in its sole discretion, cause all conditions applicable to a Long-Term Performance Award to immediately terminate and a share certificate or share certificates representing Shares subject to such award, or cash, as the case may be, to be issued and/or delivered to the Participant.

d. Form of Payment . The earned portion of a Long-Term Performance Award may be paid currently or on a deferred basis, together with such interest or earnings equivalent as may be determined by the Board, in its sole discretion. Payment shall be made in the form of cash or whole Shares, including Restricted Shares, either in a lump sum payment or in annual installments commencing as soon as practicable after the end of the relevant performance period, all as the Board shall determine at or after grant. A Participant whose Long-Term Performance Award is payable in Shares or Restricted Shares shall not have any rights as a shareholder until such share certificate or share certificates have been issued to such Participant, and, if requested, the Participant has given the representation described in Section 13(a) hereof.

SECTION 9. Performance Shares .

a. Awards and Administration . The Board shall determine the persons to whom and the time or times at which Performance Shares shall be awarded, the number of Performance Shares to be awarded to any such person, the duration of the period (the “performance period”) during which, and the conditions under which, receipt of the Shares will be deferred, and the other terms and conditions of the award in addition to those set forth below.

The Board may condition the receipt of Shares pursuant to a Performance Share award upon the attainment of specified performance goals or such other factors or criteria as the Board shall determine, in its sole discretion.

The provisions of Performance Share awards need not be the same with respect to each Participant, and such awards to individual Participants need not be the same in subsequent years.

b. Terms and Conditions . Performance Shares awarded pursuant to this Section 9 shall be subject to the following terms and conditions and such other terms and conditions, not inconsistent with the terms of this Plan, as the Board shall deem desirable:

(i) Conditions . The Board, in its sole discretion, shall specify the performance period during which, and the conditions under which, the receipt of Shares covered by the Performance Share award will be deferred.

(ii) Share Certificate . At the expiration of the performance period, if the Board, in its sole discretion, determines that the conditions specified in the Performance Share agreement have been satisfied, a share certificate or share certificates evidencing the number of Shares covered by the Performance Share award shall be issued and delivered to the Participant. A Participant shall not be deemed to be the holder of Shares, or to have the rights of a holder of Shares, with respect to the Performance Shares unless and until a share certificate or share certificates evidencing such Shares are issued to such Participant. If, with respect to an award of Performance Shares, the Board determines after the expiration of the performance period that a Participant is not entitled to the entire number of Performance Shares represented by the award, then the Shares representing the portion of the award that is not paid to the Participant shall again become available for award under the Plan, subject to Section 3(b).

(iii) Death, Disability or Retirement . Subject to the provisions of the Plan, and unless otherwise provided in the Performance Share Agreement, if a Participant terminates service with the Company during a performance period because of death, Disability or Retirement, such Participant (or his estate) shall be entitled to receive, at the expiration of the performance period, a percentage of Performance Shares that is equal to the percentage of the performance period that had elapsed as of the date of termination, provided that the Board, in its sole discretion, determines that the conditions specified in the Performance Share agreement have been satisfied. In such event, a share certificate or share certificates evidencing such Shares shall be issued and delivered to the Participant or the Participant’s estate, as the case may be.

(iv) Termination of Service . Unless otherwise determined by the Board at the time of grant, the Performance Shares will be forfeited upon a termination of service during the performance period for any reason other than death, Disability or Retirement.

(v) Change of Control . In the event of a Change of Control, the Board may, in its sole discretion, cause all conditions applicable to the Performance Shares to immediately terminate and a share certificate or share certificates evidencing Shares subject to the Share award to be issued and delivered to the Participant.

SECTION 10. Performance Units .

a. Awards and Administration . The Board shall determine the persons to whom and the time or times at which Performance Units shall be awarded, the number of Performance Units to be awarded to any such person, the duration of the period (the “performance period”) during which, and the conditions under which, a Participant’s right to Performance Units will be vested, the ability of Participants to defer the receipt of payment of such Performance Units, and the other terms and conditions of the award in addition to those set forth below.

A Performance Unit shall have a fixed dollar value.

The Board may condition the vesting of Performance Units upon the attainment of specified performance goals or such other factors or criteria as the Board shall determine, in its sole discretion.

The provisions of Performance Unit awards need not be the same with respect to each Participant, and such awards to individual Participants need not be the same in subsequent years.

b. Terms and Conditions . Performance Units awarded pursuant to this Section 10 shall be subject to the following terms and conditions and such other terms and conditions, not inconsistent with the terms of this Plan, as the Board shall deem desirable:

(i) Conditions . The Board, in its sole discretion, shall specify the performance period during which, and the conditions under which, the Participant’s right to Performance Units will be vested.

(ii) Vesting . At the expiration of the performance period, the Board, in its sole discretion, shall determine the extent to which the performance goals have been achieved, and the percentage of the Performance Units of each Participant that have vested.

(iii) Death, Disability or Retirement . Subject to the provisions of this Plan, and unless otherwise provided in the award agreement, if a Participant terminates service with the Company during a performance period because of death, Disability or Retirement, such Participant (or the Participant’s estate) shall be entitled to receive, at the expiration of the performance period, a percentage of Performance Units that is equal to the percentage of the performance period that had elapsed as of the date of termination, provided that the Board, in its sole discretion, determines that the conditions specified in the Performance Unit agreement have been satisfied, and payment thereof shall be made to the Participant or the Participant’s estate, as the case may be.

(iv) Termination of Service . Unless otherwise determined by the Board at the time of grant, the Performance Units will be forfeited upon a termination of service during the performance period for any reason other than death, Disability or Retirement.

(v) Change of Control . In the event of a Change of Control, the Board may, in its sole discretion, cause all conditions applicable to Performance Units to immediately terminate and cash representing the full amount of such award to be paid to the Participant.

SECTION 11. Amendments and Termination . The Board may amend, alter or discontinue the Plan at any time, but no amendment, alteration or discontinuation shall be made which would impair the rights of a Participant with respect to an Option, SAR, Restricted Share, Long-Term Performance Award, Performance Share or Performance Unit which has been granted under the Plan, without the Participant’s consent, or which, without the approval of such amendment within one year (365 days) of its adoption by the Board, by a majority of the votes cast at a duly held shareholder meeting at which a quorum representing a majority of the Company’s outstanding voting shares is present (either in person or by proxy) (“Shareholder Approval”), would:

a. except as expressly provided in the Plan, increase the total number of Shares reserved for the purposes of the Plan;

b. change the persons or class of persons eligible to participate in the Plan; or

c. extend the maximum Option term under Section 5(b) of the Plan.

Repricing of Options or SARs shall not be permitted without Shareholder Approval. For this purpose, a “repricing” means: (A) except as permitted by Section 3(c), changing the terms of an outstanding Option or SAR to lower its exercise price; and (B) repurchasing for cash or canceling an Option or SAR on a date when its exercise price is greater than the Fair Market Value of the underlying shares in exchange for another award, unless the cancellation and exchange occurs in connection with an event described in Section 3(c). Subject to the above provisions, the Board shall have broad authority to amend the Plan to take into account changes in applicable tax laws and accounting rules, as well as other developments.

SECTION 12. Unfunded Status of Plan . The Plan is intended to constitute an “unfunded” plan for incentive and deferred compensation. With respect to any payments not yet made to a Participant by the Company, nothing contained herein shall give any such Participant any rights that are greater than those of a general creditor of the Company. In its sole discretion, the Board may authorize the creation of trusts or other arrangements to meet the obligations created under the Plan to deliver Shares or payments in lieu of Shares or with respect to awards hereunder.

SECTION 13. General Provisions .

a. The Board may require each person acquiring Shares or a Share-based award under the Plan to represent to and agree with the Company in writing that the Participant is acquiring the Shares or Share-based award for investment purposes and without a view to distribution thereof and as to such

other matters as the Board believes are appropriate to ensure compliance with applicable Federal and state securities laws. The certificate evidencing such award and any securities issued pursuant thereto may include any legend which the Board deems appropriate to reflect any restrictions on transfer and compliance with securities laws.

All certificates for Shares or other securities delivered under the Plan shall be subject to such share transfer orders and other restrictions as the Board may deem advisable under the rules, regulations, and other requirements of the Securities Act of 1933, as amended, the Exchange Act, any stock exchange upon which the Shares are then listed, and any other applicable Federal or state securities laws, and the Board may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.

b. Nothing contained in the Plan shall prevent the Board from adopting other or additional compensation arrangements, subject to shareholder approval if such approval is required by law or any stock exchange upon which the Shares are then listed; and such arrangements may be either generally applicable or applicable only in specific cases.

c. The adoption of the Plan shall not confer upon any employee of the Company or a Subsidiary any right to continued employment with the Company or such Subsidiary, nor shall it interfere in any way with the right of the Company or such Subsidiary to terminate the employment of any of its employees at any time.

d. No later than the date as of which an amount first becomes includable in the gross income of the Participant for Federal income tax purposes with respect to any award under the Plan, the Participant shall pay to the Company, or make arrangements satisfactory to the Board regarding the payment, of any Federal, state or local taxes of any kind required by law to be withheld with respect to such amount. Unless otherwise determined by the Board, the minimum required withholding obligations may be settled with Shares, including Shares that are part of the award that gives rise to the withholding requirement. The obligations of the Company under the Plan shall be conditional on such payment or arrangements and the Company shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the Participant.

e. At the time of grant of an award under the Plan, the Board may provide that the Shares received as a result of such grant shall be subject to a right of first refusal, pursuant to which the Participant shall be required to offer to the Company any Shares that the Participant wishes to sell, with the price being the then Fair Market Value of the Shares, subject to such other terms and conditions as the Board may specify at the time of grant.

f. The Board shall establish such procedures as it deems appropriate for a Participant to designate a beneficiary to whom any amounts payable in the event of the Participant’s death are to be paid.

g. The Plan and all awards made and actions taken thereunder shall be governed by and construed in accordance with the laws of the State of Maryland.

SECTION 14. Effective Date of Plan . This Plan shall become effective on the date that it is adopted by the Board; provided, however, that it shall not be an Incentive Stock Option Plan if it is not approved, within one year (365 days) of its adoption by the Board, by a majority of the votes cast at a duly held shareholder meeting at which a quorum representing a majority of Company’s outstanding voting shares is present, either in person or by proxy. The Board may make awards hereunder prior to approval of the Plan; provided, however, that any and all Incentive Stock Options so awarded automatically shall be converted into Non-Qualified Stock Options if the Plan is not approved by shareholders within 365 days of its adoption.

SECTION 15. Term of Plan . No Option, SAR, Restricted Share, Long-Term Performance Award, Performance Share or Performance Unit shall be granted pursuant to the Plan on or after the tenth (10th) anniversary of the latest date of shareholder approval of either the Plan or an amendment to the Plan, but awards granted prior to such tenth (10th) anniversary may extend beyond that date.

Exhibit 10.6

BRANDYWINE REALTY TRUST 2007 NON-QUALIFIED EMPLOYEE SHARE PURCHASE PLAN

1. Purpose.

The Brandywine Realty Trust 2007 Non-Qualified Employee Share Purchase Plan (the “Plan”) is intended to encourage and facilitate the purchase of common shares of beneficial interest of Brandywine Realty Trust (the “Company”) by employees of the Company and any Participating Companies, thereby attracting high quality employees and providing employees with a personal stake in the Company and a long range inducement to remain in the employ of the Company and Participating Companies.

2. Definitions.

a. “Account” means a bookkeeping account established by the Committee on behalf of a Participant to hold Payroll Deductions.

b. “Approved Leave of Absence” means a leave of absence that has been approved by the applicable Participating Company in such a manner as the Committee may determine from time to time.

c. “Board” means the Board of Trustees of the Company.

d. “Business Day” means a day on which the national stock exchanges are open for trading.

e. “Code” means the Internal Revenue Code of 1986, as amended.

f. “Committee” means the Compensation Committee of the Board.

g. “Company” means Brandywine Realty Trust.

h. “Compensation” means the regular base salary, overtime payments, bonuses, and commissions paid to a Participant by one or more Participating Company during such individual’s period of participation in the Plan, plus any pre-tax contributions made by the Participant to any cash-or-deferred arrangement that meets the requirements of section 401(k) of the Code or any cafeteria benefit program that meets the requirements of section 125 of the Code, now or hereafter established by any Participating Company. Any and all contributions (other than contributions subject to sections 401(k) and 125 of the Code) made on the Participant’s behalf by a Participating Company under any employee benefit or welfare plan now or hereafter established, and any profit-sharing distributions and other incentive-type payments, shall not be included in Compensation.

i. “Election Form” means the form acceptable to the Committee which an Employee shall use to make an election to purchase Shares through Payroll Deductions pursuant to the Plan.

j. “Eligible Employee” means an Employee who meets the requirements for eligibility under Section 3 of the Plan.

k. “Employee” means any person, including an officer, who is classified by a Participating Company as its employee, is on an employee payroll of a Participating Company, and whose wages and other salary is required to be reported by a Participating Company on Internal Revenue Service Form W-2 for federal income tax purposes. A person who is not classified by a Participating Company as its employee, even if such person is retroactively re-characterized as an employee by a third party or a Participating Company, shall not be an Employee.

l. “Enrollment Date” means, with respect to a given Offering Period, a date established from time to time by the Committee, which shall not be later than the first day of such Offering Period.

m. “Fair Market Value” means the closing price per Share as reported on the principal securities exchange on which the Shares are listed or admitted to trading or, if not listed or admitted to trading on any

such exchange, Fair Market Value shall be determined by the Committee acting in its discretion, which determination shall be conclusive.

n. “Offering” means an offering of Shares to Eligible Employees pursuant to the Plan.

o. “Offering Commencement Date” means the first Business Day on or after each March 1, June 1, September 1 or December 1 of each year.

p. “Offering Period” means the period extending from and including an Offering Commencement Date through and including the following Offering Termination Date.

q. “Offering Termination Date” means the last Business Day in the period ending each May 31, August 31, November 30 and February 28 (or February 29, if applicable), immediately following an Offering Commencement Date.

r. “Option Price” means, with respect to any particular Offering Period, an amount equal to 85% of the average of the Fair Market Values for each Business Day during that Offering Period.

s. “Participant” means an Employee who meets the requirements for eligibility under Section 3 of the Plan and who has timely delivered an Election Form to the Committee.

t. “Participating Company” means each of the Company and Subsidiaries of the Company.

u. “Payroll Deductions” means amounts withheld from a Participant’s Compensation pursuant to the Plan, as described in Section 5 of the Plan.

v. “Plan” means the Brandywine Realty Trust 2007 Non-Qualified Employee Share Purchase Plan, as set forth in this document, and as may be amended from time to time.

w. “Plan Termination Date” means the earlier of: (1) the Offering Termination Date for the Offering in which the maximum number of Shares specified in Section 4 of the Plan have been issued pursuant to the Plan; or (2) the date as of which the Board chooses to terminate the Plan as provided in Section 15 of the Plan.

x. “Plan Year” means each 12 consecutive month period that begins on June 1 or any anniversary thereof and ends on the next following May 31.

y. “Shares” means common shares of beneficial interest of the Company, $.01 par value per share, subject to adjustment or substitution as provided in Section 10(a).

z. “Subsidiary” means, in respect of the Company, a subsidiary company, whether now or hereafter existing, as defined in Sections 424(f) and (g) of the Code, and any other entity, whether now or hereafter existing, 50% or more of the economic interests in which are owned, directly or indirectly, by the Company.

aa. “Successor-in-Interest” means the Participant’s executor or administrator, or such other person or entity to whom the Participant’s rights under the Plan shall have passed by will or the laws of descent and distribution.

bb. “Termination Form” means the form acceptable to the Committee which an Employee shall use to withdraw from an Offering pursuant to Section 8 of the Plan.

3. Eligibility and Participation.

a. Eligibility . Each individual who is an Employee scheduled to work twenty (20) or more hours per week on an Offering Commencement Date shall be eligible to participate in the Plan with respect to the Offering that commences on that date.

b. Leave of Absence . An Employee on an Approved Leave of Absence shall be eligible to participate in the Plan, subject to the provisions of Sections 5(d) and 8(d) of the Plan.

c. Commencement of Participation . An Employee who meets the eligibility requirements of Sections 3(a) and 3(b) of the Plan shall become a Participant by completing an Election Form and filing it with the Company on or before the applicable Enrollment Date. Payroll Deductions for a Participant shall commence on the applicable Offering Commencement Date when his or her authorization for Payroll Deductions becomes effective, and shall end on the Plan Termination Date, unless sooner terminated pursuant to Section 8 of the Plan.

4. Shares Per Offering.

The Plan shall be implemented by a series of Offerings that shall terminate on the Plan Termination Date. Offerings shall be made with respect to Compensation payable for each Offering Period occurring on or after the Effective Date referred to in Section 16 and ending with the Plan Termination Date. Shares available for any Offering shall be the difference between the maximum number of Shares that may be issued under the Plan, as determined pursuant to Section 10(a) of the Plan, for all of the Offerings, less the actual number of Shares purchased by Participants pursuant to prior Offerings. If the total number of Shares for which options are exercised on any Offering Termination Date exceeds the maximum number of Shares available, the Committee shall make a pro rata allocation of Shares available for delivery and distribution in as nearly a uniform manner as practicable, and as it shall determine to be fair and equitable, and the unapplied Account balances shall be returned to Participants as soon as practicable following the Offering Termination Date.

5. Payroll Deductions.

a. Amount of Payroll Deductions . An Eligible Employee who wishes to participate in the Plan shall file an Election Form (authorizing payroll deductions) with the Committee prior to the applicable Enrollment Date, and shall designate on such Election Form the portion of his or her Compensation that he or she elects to have withheld for the purchase of Shares. Such portion elected to be withheld shall be a whole percentage of the Eligible Employee’s Compensation, but not less than 1% nor more than 20%, and in any event, may not exceed $50,000 in any Plan Year.

b. Participants’ Accounts . All Payroll Deductions with respect to a Participant pursuant to Section 5(a) of the Plan shall commence on the first payroll following the Enrollment Date and shall continue until terminated by the Participant as provided in Section 8. All Payroll Deductions will be credited to the Participant’s Account under the Plan. The amounts collected from the Participant shall not be held in any segregated account or trust fund and may be commingled with the general assets of the Company and Participating Companies and used for general corporate purposes.

c. Changes in Payroll Deductions . A Participant may discontinue his or her participation in the Plan at any time as provided in Section 8(a) of the Plan. If a Participant wishes to change his or her Payroll Deductions, he or she may do so by filing a new Election Form with the Company at any time. The rate of Payroll Deductions shall be effective as soon as reasonably practicable after such form has been received by the Company. The new Payroll Deduction rate shall be a whole percentage of the Eligible Employee’s Compensation, but not less than 1% nor more than 20%, and Payroll Deductions may not, in any event, exceed $50,000 in any Plan Year.

d. Leave of Absence . A Participant who goes on an Approved Leave of Absence before the Offering Termination Date after having filed an Election Form with respect to such Offering may:

(1) withdraw the balance credited to his or her Account pursuant to Section 8(b) of the Plan;

(2) discontinue contributions to the Plan but remain a Participant in the Plan through the Offering Termination Date immediately following the commencement of such Approved Leave of Absence; or

(3) remain a Participant in the Plan during such Approved Leave of Absence through the Offering Termination Date immediately following the commencement of such Approved Leave of Absence, and continue the authorization for the Participating Company to make Payroll Deductions for each payroll period out of continuing payments to such Participant, if any.

6. Granting of Options.

On each Offering Termination Date, each Participant shall be deemed to have been granted an option to purchase a minimum of one (1) Share and a maximum number of Shares that shall be a number of whole Shares equal to the quotient obtained by dividing the balance credited to the Participant’s Account as of the Offering Termination Date, by the Option Price.

7. Exercise of Options.

a. Automatic Exercise . With respect to each Offering, a Participant’s option for the purchase of Shares granted pursuant to Section 6 of the Plan shall be deemed to have been exercised automatically on the Offering Termination Date applicable to such Offering.

b. Fractional Shares and Minimum Number of Shares . Fractional Shares shall not be issued under the Plan. Amounts credited to an Account remaining after the application of such Account to the exercise of options for a minimum of one (1) full Share shall be credited to the Participant’s Account for the next succeeding Offering, or, at the Participant’s election, returned to the Participant as soon as practicable following the Offering Termination Date, without interest.

c. Transferability of Option . No option granted to a Participant pursuant to the Plan shall be transferable other than by will or by the laws of descent and distribution, and no such option shall be exercisable during the Participant’s lifetime other than by the Participant.

d. Delivery of Shares . Subject to applicable securities laws, the Company shall credit Shares acquired on the exercise of options during an Offering Period as soon as practicable following the Offering Termination Date to a custodial account designated by the Committee and established for the benefit of the Participant. The Company shall cause a certificate to be delivered as soon as administratively practicable, subject to applicable securities laws, following a Participant’s request for Shares acquired on the exercise of options during an Offering Period.

8. Withdrawals.

a. Withdrawal of Account . A Participant may elect to withdraw the balance credited to the Participant’s Account by providing a Termination Form to the Committee at any time before the Offering Termination Date applicable to any Offering.

b. Amount of Withdrawal . A Participant may withdraw all, but not less than all, of the amounts credited to the Participant’s Account by giving a Termination Form to the Committee. All amounts credited to such Participant’s Account shall be paid without interest as soon as practicable following the Committee’s receipt of the Participant’s Termination Form, and no further Payroll Deductions will be made with respect to the Participant.

c. Termination of Employment . Upon termination of a Participant’s employment for any reason other than death, including termination due to disability or continuation of a leave of absence, all amounts credited to such Participant’s Account shall be returned without interest to the Participant. In the event of a Participant’s (1) termination of employment due to death or (2) death after termination of employment but before the

Participant’s Account has been returned, all amounts credited to such Participant’s Account shall be returned without interest to the Participant’s Successor-in-Interest.

d. Leave of Absence . A Participant who is on an Approved Leave of Absence shall, subject to the Participant’s election pursuant to Section 5(d) of the Plan, continue to be a Participant in the Plan until the the end of the first Offering ending after commencement of such Approved Leave of Absence. A Participant who has been on an Approved Leave of Absence for more than 90 days shall not be eligible to participate in any Offering that begins on or after the commencement of such Approved Leave of Absence so long as such leave of absence continues.

9. Interest.

No interest shall be paid or allowed with respect to amounts paid into the Plan or credited to any Participant’s Account.

10. Shares.

a. Maximum Number of Shares . No more than 1,250,000 Shares may be issued under the Plan. Such Shares shall be authorized but unissued or reacquired Shares of the Company, including Shares purchased on the open market. The number of Shares available for any Offering and all Offerings will be automatically equitably and proportionately adjusted for share dividends, share splits, share combinations, reorganizations and other similar events. All Shares issued pursuant to the Plan shall be validly issued, fully paid and nonassessable.

b. Participant’s Interest in Shares . A Participant shall have no interest in Shares subject to an option until such option has been exercised.

c. Registration of Shares . Shares to be delivered to a Participant under the Plan shall be registered in the name of the Participant.

d. Restrictions on Exercise . The Committee may, in its discretion, require as conditions to the exercise of any option such conditions as it may deem necessary to assure that the exercise of options is in compliance with applicable securities laws.

11. Expenses.

The Participating Companies shall pay all fees and expenses incurred (excluding individual Federal, state, local or other taxes) in connection with the Plan. No charge or deduction for any such expenses will be made to a Participant upon the termination of his or her participation under the Plan or upon the distribution of certificates representing Shares purchased with his or her contributions.

12. Taxes.

The Participating Companies shall have the right to withhold from each Participant’s Compensation an amount equal to all Federal, state, city or other taxes as the Participating Companies shall determine are required to be withheld by them in connection with the grant, exercise of the option or disposition of Shares. In connection with such withholding, the Participating Companies may make any such arrangements as are consistent with the Plan as it may deem appropriate, including the right to withhold from Compensation paid to a Participant other than in connection with the Plan and the right to withdraw such amount from the amount standing to the credit of the Participant’s Account.

13. Plan and Contributions Not to Affect Employment.

The Plan shall not confer upon any Employee any right to continue in the employ of the Participating Companies.

14. Administration.

The Plan shall be administered by the Committee. The Committee shall have authority to interpret the Plan, to prescribe, amend and rescind rules and regulations relating to it, and to make all other determinations deemed necessary or advisable in administering the Plan, with or without the advice of counsel. The determination of the Committee on the matters referred to in this paragraph shall be conclusive and binding upon all persons in interest.

15. Amendment and Termination.

The Board may terminate the Plan at any time and may amend the Plan from time to time in any respect; provided, however, that upon any termination of the Plan, all Shares or Payroll Deductions (to the

extent not yet applied to the purchase of Shares) under the Plan shall be distributed to the Participants, provided further, that no amendment to the Plan shall affect the right of a Participant to receive his or her proportionate interest in the Shares or his or her Payroll Deductions (to the extent not yet applied to the purchase of Shares) under the Plan, and provided further, that the Company may seek shareholder approval of an amendment to the Plan if such approval is determined to be required by or advisable under the regulations of the Securities or Exchange Commission or the Internal Revenue Service, the rules of any stock exchange or system on which the Shares are listed or other applicable law or regulation.

16. Effective Date.

The Plan shall be effective on May 9, 2007, subject to the approval by the Company’s shareholders at the Annual Meeting of Shareholders to be held May 9, 2007.

17. Government and Other Regulations.

The purchase of Shares under the Plan shall be subject to all applicable laws, rules and regulations, and the Committee shall have the power to make each grant under the Plan subject to such conditions as it deems necessary or appropriate to comply with the then-existing requirements of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, including Rule 16b-3 (or any similar rule) of the Securities and Exchange Commission.

18. Non-Alienation.

No Participant shall be permitted to assign, alienate, sell, transfer, pledge or otherwise encumber his interest under the Plan prior to the exercise, crediting and registration of such interest in Shares. Any attempt at assignment, alienation, sale, transfer, pledge or other encumbrance shall be void and of no effect.

19. Notices.

Any notice required or permitted hereunder shall be sufficiently given only if delivered personally, telecopied, or sent by first class mail, postage prepaid, and addressed:

If to the Company:
Brandywine Realty Trust
555 East Lancaster Avenue
Radnor, PA 19087
Attn: Secretary

or any other address provided pursuant to written notice.

If to the Participant: At the address on file with the Company from time to time.

20. Successors.

The Plan shall be binding upon and inure to the benefit of any successors or assigns of the Company.

21. Severability.

If any part of this Plan shall be determined to be invalid or void in any respect, such determination shall not affect, impair, invalidate or nullify the remaining provisions of this Plan which shall continue in full force and effect.

22. Acceptance.

The election by any Eligible Employee to participate in this Plan constitutes his or her acceptance of the terms of the Plan and his or her agreement to be bound hereby.

23. Applicable Law.

This Plan shall be construed in accordance with the law of the State of Maryland, to the extent not preempted by applicable Federal law.

Exhibit 10.7

FORM OF
BRANDYWINE REALTY TRUST
RESTRICTED SHARE AWARD

This is a Restricted Share Award dated as of May 9, 2007, from Brandywine Realty Trust, a Maryland real estate investment trust (the “Company”) to ___(“Grantee”). Terms used herein as defined terms and not defined herein have the meanings assigned to them in the Amended and Restated Brandywine Realty Trust 1997 Long-Term Incentive Plan, as amended from time to time (the “Plan”).

1. Definitions . As used herein:

(a) “ Award ” means the award of Restricted Shares hereby granted.

(b) “ Board ” means the Board of Trustees of the Company, as constituted from time to time.

(d) “ Code ” means the Internal Revenue Code of 1986, as amended from time to time, and any successor thereto.

(e) “ Committee ” means the Committee appointed by the Board in accordance with Section 2 of the Plan, if one is appointed and in existence at the time of reference. If no Committee has been appointed pursuant to Section 2, or if such a Committee is not in existence at the time of reference, “Committee” means the Board.

(f) “ Date of Grant ” means May 9, 2007, the date on which the Company awarded the Restricted Shares.

(g) “ Disability ” means “Disability” as defined in the Plan.

(h) “ Fair Market Value ” means “Fair Market Value” as defined in the Plan.

(i) “ Restricted Period ” means, with respect to each Restricted Share, the period beginning on the Date of Grant and ending on the applicable Vesting Date for such Restricted Share.

(j) “ Restricted Shares ” means the 1,209 Shares which are subject to vesting and forfeiture in accordance with the terms of this Award.

(k) “ Rule 16b-3 ” means Rule 16b-3 promulgated under the 1934 Act, as in effect from time to time.

(l) “ Share ” means a common share of beneficial interest, $.01 par value per share, of the Company, subject to substitution or adjustment as provided in Section 3(c) of the Plan.

(m) “ Trustee ” means a member of the Board.

(n) “ Vesting Date ” means the date on which the restrictions imposed under Paragraph 3 on a Restricted Share lapse, as provided in Paragraph 4.

2. Grant of Restricted Shares . Subject to the terms and conditions set forth herein and in the Plan, the Company hereby grants to Grantee the Restricted Shares.

3. Restrictions on Restricted Share . Subject to the terms and conditions set forth herein and in the Plan, prior to the Vesting Date in respect of Restricted Shares, Grantee shall not be permitted to sell, transfer, pledge or assign such Restricted Shares. Share certificates evidencing Restricted Shares shall be held in custody by the Company until the restrictions thereon have lapsed. Concurrently herewith, Grantee shall deliver to the Company a share power, endorsed in blank, relating to the Restricted Shares covered by the Award. During the Restricted Period, share certificates evidencing Restricted Shares shall bear a legend in substantially the following form:

THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS (INCLUDING FORFEITURE) OF THE BRANDYWINE REALTY TRUST AMENDED AND RESTATED 1997 LONG-TERM INCENTIVE PLAN, AS AMENDED, AND AN AGREEMENT ENTERED INTO BETWEEN THE REGISTERED OWNER AND BRANDYWINE REALTY TRUST. COPIES OF SUCH PLAN AND AGREEMENT ARE ON FILE IN THE PRINCIPAL OFFICES OF BRANDYWINE REALTY TRUST AND WILL BE MADE AVAILABLE TO ANY SHAREHOLDER WITHOUT CHARGE UPON REQUEST TO THE SECRETARY OF THE COMPANY.

4. Lapse of Restrictions for Restricted Shares .

(a) Subject to the terms and conditions set forth herein and in the Plan, the restrictions set forth in Paragraph 3 on each Restricted Share that has not been forfeited as provided in Paragraph 5 shall lapse on the earlier of: (i) the applicable Vesting Date in respect of such Restricted Share; (ii) Grantee’s termination of service as a Trustee before the applicable Vesting Date because of Grantee’s death or Disability; or (iii) upon the occurrence of a Change of Control.

(b) Subject to Paragraph 4(a), a Vesting Date for Restricted Shares subject to the Award shall occur in accordance with the following schedule:

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	(i)		One-third of the Restricted Shares will vest on May 9, 2008;

	(ii)		An additional one-third of the Restricted Shares will vest on May 9, 2009;

	(iii)		An additional one-third of the Restricted Shares will vest on May 9, 2010.

5. Forfeiture of Restricted Shares .

(a) Subject to the terms and conditions set forth herein, if Grantee terminates service as a Trustee prior to the Vesting Date for a Restricted Share for reasons other than death or Disability or a Change of Control, Grantee shall forfeit any such Restricted Share which has not vested as of such termination of service. Upon a forfeiture of the Restricted Shares as provided in this Paragraph 5, the Restricted Shares shall be deemed canceled.

(b) The provisions of this Paragraph 5 shall not apply to Restricted Shares as to which the restrictions of Paragraph 3 have lapsed.

6. Rights of Grantee . During the Restricted Period, with respect to the Restricted Shares, Grantee shall have all of the rights of a shareholder of the Company, including the right to vote the Restricted Shares and the right to receive any distributions or dividends payable on Shares.

7. Notices . Any notice to the Company under this Award shall be made to:

Brandywine Realty Trust
555 East Lancaster Avenue
Suite 100
Radnor, PA 19087
Attention: Chief Financial Officer

or such other address as may be provided to Grantee by written notice. Any notice to Grantee under this Award shall be made to Grantee at the address listed in the Company’s records. All notices under this Award shall be deemed to have been given when hand-delivered, telecopied or delivered by first class mail, postage prepaid, and shall be irrevocable once given.

8. Securities Laws . The Committee may from time to time impose any conditions on the Restricted Shares as it deems necessary or advisable to ensure that the Plan satisfies the conditions of Rule 16b-3, and that Shares are issued and resold in compliance with the Securities Act of 1933, as amended.

9. Delivery of Shares . Upon a Vesting Date, the Company shall notify Grantee (or Grantee’s legal representatives, estate or heirs, in the event of Grantee’s death before a Vesting Date) that the restrictions on the Restricted Shares have lapsed. Within ten (10) business days of a Vesting Date, the Company shall, without payment from Grantee for the Restricted Shares, deliver to Grantee a certificate for the Restricted Shares without any legend or

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restrictions, except for such restrictions as may be imposed by the Committee, in its sole judgment, under Paragraph 8, provided that no certificates for Shares will be delivered to Grantee until appropriate arrangements have been made with Company for the withholding of taxes (if any) which may be due with respect to such Shares. The Company is authorized to cancel a number of Shares for which the restrictions have lapsed having an aggregate Fair Market Value equal to the required tax withholdings (if any). The Company may condition delivery of certificates for Shares upon the prior receipt from Grantee of any undertakings which it may determine are required to assure that the certificates are being issued in compliance with federal and state securities laws. The right to payment of any fractional Shares shall be satisfied in cash, measured by the product of the fractional amount times the Fair Market Value of a Share on the Vesting Date, as determined by the Committee.

10. Award Not to Create Board Entitlement . The Award granted hereunder shall not confer upon Grantee any right to continue on the Board.

11. Miscellaneous .

(a) The address for Grantee to which notice, demands and other communications are to be given or delivered under or by reason of the provisions hereof shall be the Grantee’s address as reflected in the Company’s records.

(b) This Award and all questions relating to its validity, interpretation, performance and enforcement shall be governed by and construed in accordance with the laws of Pennsylvania.


		BRANDYWINE REALTY TRUST

		BY:


		TITLE: President and Chief Executive Officer

Accepted:

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Exhibit 12.1

Brandywine Realty Trust
Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Share Distributions
(in thousands)


	For the three-months ended March 31,						For the years ended December 31,
	2007			2006			2006			2005			2004			2003			2002
Earnings before fixed charges:
Add:
Income (loss) from continuing operations (a)	$	(7,227	)	$	(7,474	)	$	(18,423	)	$	33,065		$	49,784		$	65,588		$	35,977
Minority interest attributable to continuing operations		(411	)		(435	)		(1,493	)		1,059			2,183			8,827			8,813
Fixed charges — per below		46,967			44,959			191,614			86,191			61,443			69,476			76,950
Less:
Capitalized interest		(3,764	)		(2,545	)		(9,537	)		(9,603	)		(3,030	)		(1,503	)		(2,949	)
Preferred Distributions of consolidated subsidiaries		—			—			—			—			(832	)		(7,069	)		(7,069	)


Earnings before fixed charges	$	35,565		$	34,505		$	162,161		$	110,712		$	109,548		$	135,319		$	111,722


Fixed charges and Preferred Distributions:
Interest expense (including amortization)	$	41,616		$	40,857		$	175,784		$	73,918		$	54,610		$	57,835		$	63,522
Capitalized interest		3,764			2,545			9,537			9,603			3,030			1,503			2,949
Proportionate share of interest for unconsolidated real estate ventures		1,587			1,557			6,293			2,670			2,971			3,069			3,410
Distributions to preferred unitholders in Operating Partnership		—			—			—			—			832			7,069			7,069

Total Fixed Charges		46,967			44,959			191,614			86,191			61,443			69,476			76,950
Income allocated to preferred shareholders		1,998			1,998			7,992			7,992			9,720			11,906			11,906

Total Preferred Distributions		1,998			1,998			7,992			7,992			9,720			11,906			11,906

Total combined fixed charges and preferred distributions	$	48,965		$	46,957		$	199,606		$	94,183		$	71,163		$	81,382		$	88,856

Ratio of earnings to combined fixed charges and preferred distributions		(b	)		(b	)		(b	)		1.18			1.54			1.66			1.26


(a)		Amounts for the three-months ended March 31, 2007 and 2006 and for the years ended December 31, 2006, 2005, 2004, 2003 and 2002 have been reclassified to present properties sold consistent with the presentation for the period ended March 31, 2007. As a result, operations have been reclassified to discontinued operations from continuing operations for all periods presented.

(b)		Due to the registrant’s loss in the period, the coverage ratio was less than 1:1. The registrant must generate additional earnings of $13,400 and $12,452 for the three-months ended March 31, 2007 and 2006, respectively and $37,445 for the year ended December 31, 2006 to achieve a coverage ratio of 1:1.

Exhibit 12.2

Brandywine Operating Partnership, L.P.
Computation of Ratio of Earnings to Combined Fixed Charges
(in thousands)


	For the three-months ended March 31,						For the years ended December 31,
	2007			2006			2006			2005			2004			2003			2002
Earnings before fixed charges:
Add:
Income (loss) from continuing operations	$	(7,638	)	$	(7,909	)	$	(19,451	)	$	34,148		$	52,419		$	74,882		$	45,352
Minority interest — partners’ share of consolidated real estate ventures		(116	)		298			(270	)		154			(206	)		—			—
Fixed charges — per below		46,967			44,959			191,614			86,191			60,611			62,407			69,881
Less:
Capitalized interest		(3,764	)		(2,545	)		(9,537	)		(9,603	)		(3,030	)		(1,503	)		(2,949	)


Earnings before fixed charges	$	35,449		$	34,803		$	162,356		$	110,890		$	109,794		$	135,786		$	112,284


Fixed charges:
Interest expense (including amortization)	$	41,616		$	40,857		$	175,784		$	73,918		$	54,610		$	57,835		$	63,522
Capitalized interest		3,764			2,545			9,537			9,603			3,030			1,503			2,949
Proportionate share of interest for unconsolidated real estate ventures		1,587			1,557			6,293			2,670			2,971			3,069			3,410

Total Fixed Charges		46,967			44,959			191,614			86,191			60,611			62,407			69,881

Ratio of earnings to combined fixed charges		(b	)		(b	)		(b	)		1.29			1.81			2.18			1.61


(a)		Amounts for the three-months ended March 31, 2007 and 2006 and for the years ended December 31, 2006, 2005, 2004, 2003 and 2002 have been reclassified to present properties sold consistent with the presentation for the period ended March 31, 2007. As a result, operations have been reclassified to discontinued operations from continuing operations for all periods presented.

(b)		Due to the registrant’s loss in the period, the coverage ratio was less than 1:1. The registrant must generate additional earnings of $11,518 and $10,156 for the three-months ended March 31, 2007 and 2006, respectively and $29,258 for the year ended December 31, 2006 to achieve a coverage ratio of 1:1.

Exhibit 31.1

CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED

I, Gerard H. Sweeney, certify that:

1.		I have reviewed this quarterly report on Form 10-Q of Brandywine Realty Trust:

2.		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered in this report;

3.		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.		The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15(d)-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	a.		Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by other within those entities, particularly during the period in which this report is being prepared;

	b.		Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c.		Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d.		Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

	a.		All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b.		Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: May 10, 2007		/s/ Gerard H. Sweeney

		Gerard H. Sweeney President and Chief Executive Officer

Exhibit 31.2

CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED

I, Howard M. Sipzner, certify that:

1.		I have reviewed this quarterly report on Form 10-Q of Brandywine Realty Trust:

2.		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered in this report;

3.		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.		The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15(d)-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	a.		Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by other within those entities, particularly during the period in which this report is being prepared;

	b.		Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c.		Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d.		Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

	a.		All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b.		Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: May 10, 2007		/s/ Howard M. Sipzner

		Howard M. Sipzner Executive Vice President and Chief Financial Officer

Exhibit 31.3

CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED

I, Gerard H. Sweeney, certify that:

1.		I have reviewed this quarterly report on Form 10-Q of Brandywine Operating Partnership, L.P.:

2.		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered in this report;

3.		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.		The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15(d)-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	a.		Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by other within those entities, particularly during the period in which this report is being prepared;

	b.		Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c.		Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d.		Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

	a.		All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b.		Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: May 10, 2007		/s/ Gerard H. Sweeney

		Gerard H. Sweeney President and Chief Executive Officer

Exhibit 31.4

CERTIFICATION PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED

I, Howard M. Sipzner, certify that:

1.		I have reviewed this quarterly report on Form 10-Q of Brandywine Operating Partnership, L.P.:

2.		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered in this report;

3.		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.		The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15(d)-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	a.		Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by other within those entities, particularly during the period in which this report is being prepared;

	b.		Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c.		Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d.		Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

	a.		All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b.		Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date: May 10, 2007	/s/ Howard M. Sipzner
	Howard M. Sipzner
	Executive Vice President and Chief Financial Officer

Exhibit 32.1

RULE 13(a)-14(b) CERTIFICATION
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002*

In connection with the Quarterly Report of Brandywine Realty Trust (the “Company”) on Form 10-Q for the quarter ended March 31, 2007 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Gerard H. Sweeney, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.		The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

2.		The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Gerard H. Sweeney
Gerard H. Sweeney
President and Chief Executive Officer
Date: May 10, 2007

* A signed original of this written statement required by Section 906 has been provided to Brandywine Realty Trust and will be retained by Brandywine Realty Trust and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 32.2

RULE 13(a)-14(b) CERTIFICATION
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002*

In connection with the Quarterly Report of Brandywine Realty Trust (the “Company”) on Form 10-Q for the quarter ended May 31, 2007 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Howard M. Sipzner, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.		The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

2.		The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Howard M. Sipzner
Howard M. Sipzner
Executive Vice President and Chief Financial Officer
Date: May 10, 2007


*		A signed original of this written statement required by Section 906 has been provided to Brandywine Realty Trust and will be retained by Brandywine Realty Trust and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 32.3

RULE 13(a)-14(b) CERTIFICATION
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002*

In connection with the Quarterly Report of Brandywine Operating Partnership, L.P. (the “Partnership”) on Form 10-Q for the quarter ended March 31, 2007 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Gerard H. Sweeney, President and Chief Executive Officer of Brandywine Realty Trust, the Partnership’s sole general partner, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.		The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

2.		The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Partnership.

/s/ Gerard H. Sweeney
Gerard H. Sweeney
President and Chief Executive Officer
Date: May 10, 2007


*		A signed original of this written statement required by Section 906 has been provided to Brandywine Realty Trust and will be retained by the Partnership and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 32.4

RULE 13(a)-14(b) CERTIFICATION
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002*

In connection with the Quarterly Report of Brandywine Operating Partnership, L.P. (the “Partnership”) on Form 10-Q for the quarter ended March 31, 2007 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Howard M. Sipzner, Executive Vice President and Chief Financial Officer of Brandywine Realty Trust, the Partnership’s sole general partner, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.		The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

2.		The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Partnership.

/s/ Howard M. Sipzner
Howard M. Sipzner
Executive Vice President and Chief Financial Officer
Date: May 10, 2007


*		A signed original of this written statement required by Section 906 has been provided to Brandywine Realty Trust and will be retained by the Partnership and furnished to the Securities and Exchange Commission or its staff upon request.