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Section 1: 8-K (8-K)

bdn-8k_20190424.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 24, 2019

Brandywine Realty Trust

Brandywine Operating Partnership, L.P.

(Exact name of registrant as specified in charter)

 

Maryland

(Brandywine Realty Trust)

 

001-9106

 

23-2413352

 

 

 

 

 

Delaware

(Brandywine Operating Partnership, L.P.)

 

000-24407

(Commission file number)

 

23-2862640

(I.R.S. Employer

Identification Number)

(State or Other Jurisdiction of

Incorporation or Organization)

 

 

 

 

 

2929 Walnut Street, Suite 1700

Philadelphia, PA 19104

(Address of principal executive offices)

 

(610) 325-5600

(Registrant's telephone number, including area code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

 

 

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

 

 

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 

 

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2).

Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 

 

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Item 2.02Results of Operations and Financial Condition

The information in this Item 2.02 - “Results of Operations and Financial Condition,” including the press release attached as an exhibit to this Current Report, is being furnished and shall not be deemed to be “filed” for any purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, and shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing.

On April 24, 2019, we issued a press release announcing our financial results for the three months ended March 31, 2019.  That press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.

The press release includes “non-GAAP financial measures” within the meaning of the Securities and Exchange Commission's Regulation G.  With respect to such non-GAAP financial measures, we have disclosed in the press release the most directly comparable financial measure calculated and presented in accordance with generally accepted accounting principles (“GAAP”) and have provided a reconciliation of such non-GAAP financial measures to the most directly comparable GAAP financial measure.

Item 9.01Financial Statements and Exhibits

Exhibits

99.1

 

Brandywine Realty Trust Press Release dated April 24, 2019.

 

 

Signatures

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrants have duly caused this report to be signed on their behalf by the undersigned, hereunto duly authorized.

 

 

Brandywine Realty Trust

 

 

 

 

By:

/s/ Thomas E. Wirth

 

 

Thomas E. Wirth

 

 

Executive Vice President and Chief Financial Officer

 

 

 

Brandywine Operating Partnership L.P.,

 

 

 

 

By:

Brandywine Realty Trust, its sole General Partner

 

 

 

 

By:

/s/ Thomas E. Wirth

 

 

Thomas E. Wirth

 

 

Executive Vice President and Chief Financial Officer

 

Date: April 24, 2019

 

 

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(Back To Top)

Section 2: EX-99.1 (EX-99.1)

bdn-ex991_6.htm

Exhibit 99.1

 

 

Company / Investor Contact:

Tom Wirth

EVP & CFO

610-832-7434

tom.wirth@bdnreit.com

 

 

 

Brandywine Realty Trust Announces First Quarter Results

And Narrows 2019 Guidance

 

 

Philadelphia, PA, April 24, 2019 — Brandywine Realty Trust (NYSE:BDN) today reported its financial and operating results for the three months ended March 31, 2019.

Management Comments

“Our 2019 business plan is off to an excellent start,” stated Gerard H. Sweeney, President and Chief Executive Officer for Brandywine Realty Trust. “From an operating perspective, we are now 92% complete on our 2019 speculative revenue target and have experienced positive mark-to-market rent growth on both a cash and accrual basis. Based on our current leasing activity, for the second consecutive quarter, we are increasing our speculative revenue target by $0.5 million to $32.0 million.  In addition to our positive operating results, we continue to increase our presence in Austin through our development pipeline.  We commenced operations of Four Points 3 which is a fully-leased 165,000 square foot building located in Northwest Austin.  We are also excited to have commenced our 204,000 square foot development located at 405 Colorado in Austin’s CBD and we signed a lease with our anchor tenant who will occupy 35% of the building.  After a productive first quarter, we are narrowing our current 2019 guidance range from $1.37-$1.47 to $1.39-$1.45.”

First Quarter 2019 Highlights

Financial Results

 

Net income allocated to common shareholders; $3.9 million, or $0.02 per diluted share.

 

Funds from Operations (FFO); $60.1 million, or $0.34 per diluted share.  

Portfolio Results

 

Core portfolio was 92.1% occupied and 95.2% leased.

 

New and renewal leases signed:  930,000 square feet.

 

Tenant retention ratio:  66%.

 

Rental rate mark-to-market increased 14.6% on an accrual basis and increased 3.7% on a cash basis.

 

Same store net operating income: (0.1%) on an accrual basis and 4.0% on a cash basis.

2019 Business Plan Revisions

 

Speculative Revenue:  An increase from $31.5 million to $32.0 million, 92% achieved.

 

Renewal Rate MTM:  Increase range from 8-10% to 9-11% on an accrual basis.

 

Tenant Retention:  Increase from 57% to 61%.

 

 

 

2929 Walnut Street, Suite 1700, Philadelphia, PA 19104 Phone: (610) 325-5600 • Fax: (610) 325-5622

 


 

Recent Transaction Activity

Joint Venture Activity

 

Our northern Virginia joint venture in which we own a 15% equity interest, completed two portfolio mortgages with $207.3 million of initial borrowings.  The first portfolio mortgage totaled $113.1 million and closed on March 29, 2019 and the second portfolio mortgage totaled $94.2 million and closed on April 11, 2019.  After closing costs, we received net proceeds totaling $30.5 million in April 2019.

Development

 

As previously announced, we have commenced the development of 405 Colorado located in the Austin, Texas CBD.  The project is comprised of a 204,000 square foot office building above a structured parking garage containing 520 parking spaces.  We have signed a lease with an anchor tenant that will occupy approximately 35% of the project and total estimated cost to develop is $114.0 million.  We currently intend to fund the project with cash-on-hand and our unsecured line of credit.

2019 Finance / Capital Markets Activity

 

We have $160.5 million outstanding on our $600.0 million unsecured revolving credit facility as of March 31, 2019.

 

 

We have $14.4 million of cash and cash equivalents on-hand as of March 31, 2019.

Results for the Three Months Ended March 31, 2019

Net income allocated to common shares totaled $3.9 million, or $0.02 per diluted share, in the first quarter of 2019 compared to a net income allocated to common shares of $44.2 million, or $0.25 per diluted share in the first quarter of 2018.  First quarter of 2018 results include gains on property sales totaling $37.3 million, or $0.21 per diluted share.

FFO available to common shares and units in the first quarter of 2019 totaled $60.1 million, or $0.34 per diluted share, versus $57.3 million or $0.32 per diluted share in the first quarter of 2018.  Our first quarter 2019 payout ratio ($0.19 common share distribution / $0.34 FFO per diluted share) was 55.9%.  

Operating and Leasing Activity

In the first quarter of 2019, our Net Operating Income (NOI) excluding termination revenues and other income items decreased (0.1%) on an accrual basis and increased 4.0% on a cash basis for our 74 same store properties, which were 92.2% and 92.8% occupied on March 31, 2019 and March 31, 2018, respectively.

We leased approximately 930,000 square feet and commenced occupancy on 817,000 square feet during the first quarter of 2019.  The first quarter occupancy activity includes 412,000 square feet of renewals, 233,000 square feet of new leases and 172,000 square feet of tenant expansions.  We executed on an additional 509,000 square feet of new leases scheduled to commence subsequent to March 31, 2019.

We achieved a 66% tenant retention ratio in our core portfolio with net negative absorption of 66,000 square feet during the first quarter of 2019.  First quarter rental rate growth increased 14.6% as our renewal rental rates increased 14.9% and our new lease/expansion rental rates increased 13.6%, all on an accrual basis.

At March 31, 2019, our core portfolio of 92 properties comprising 16.4 million square feet was 92.1% occupied and we are now 95.2% leased (reflecting new leases commencing after March 31, 2019).

Distributions

On February 21, 2019, our Board of Trustees declared a quarterly cash dividend of $0.19 per common share and OP Unit that was paid on April 18, 2019 to holders of record on April 4, 2019.

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2019 Earnings and FFO Guidance

Based on current plans and assumptions and subject to the risks and uncertainties more fully described in our Securities and Exchange Commission filings, we are adjusting our 2019 net income guidance of $0.29 - $0.39 to $0.18 - $0.24 per diluted share and 2019 FFO guidance of $1.37 - $1.47 to $1.39 - $1.45 per diluted share.  This guidance is provided for informational purposes and is subject to change.  The following is a reconciliation of the calculation of 2019 FFO and earnings per diluted share:

Guidance for 2019

 

 

 

Range

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per diluted share allocated to common shareholders

$

0.18

 

to

$

0.24

 

 

Plus: real estate depreciation, amortization

 

1.21

 

 

 

1.21

 

 

 

 

 

 

 

 

 

 

 

FFO per diluted share

$

1.39

 

to

$

1.45

 

Our 2019 FFO key assumptions to include:

 

Core Occupancy improving to a range of 94-95% by year-end 2019 and 95-96% leased;

 

9-11% increase in overall lease rates on an accrual basis;

 

2-4% increase in overall lease rates on a cash basis;

 

0-2% increase in 2019 same store accrual-based NOI;

 

1-3% increase in 2019 same store cash NOI;

 

Speculative Revenue Target:  $32.0 million, 92% achieved;

 

Change in Lease Accounting Treatment:  $7.9 million decrease to earnings, or $0.04 per diluted share;

 

Tenant Retention Rate:  61%;

 

$0.19 per share quarterly dividend;

 

Acquisition Activity:  none

 

Sales Activity:  none

 

One Development Start: 405 Colorado, Austin, Texas

 

Annual earnings and FFO per diluted share based on 178.4 million fully diluted weighted average common shares.

About Brandywine Realty Trust

Brandywine Realty Trust (NYSE: BDN) is one of the largest, publicly traded, full-service, integrated real estate companies in the United States with a core focus in the Philadelphia, Washington, D.C., and Austin markets.  Organized as a real estate investment trust (REIT), we own, develop, lease and manage an urban, town center and transit-oriented portfolio comprising 180 properties and 24.9 million square feet as of March 31, 2019, which excludes assets held for sale.  Our purpose is to shape, connect and inspire the world around us through our expertise, the relationships we foster, the communities in which we live and work, and the history we build together.  For more information, please visit www.brandywinerealty.com.

Conference Call and Audio Webcast

BDN management will discuss 2019 financial results and earnings guidance for fiscal 2019 on Thursday, April 25, 2019 at 9:00 a.m. Eastern Time.  The conference call can be accessed by dialing 1-833-818-6810 and providing conference ID: 3887879.  Beginning two hours after the conference call, a taped replay of the call can be accessed through Friday, May 10, 2019, by calling 1-855-859-2056 and entering access code 3887879.  The conference call can also be accessed via a webcast on our website at www.brandywinerealty.com.

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Looking Ahead Second Quarter 2019 Conference Call

We anticipate we will release our second quarter 2019 earnings on Monday, July 22, 2019, after the market close and will host our second quarter 2019 conference call on Tuesday, July 23, 2019 at 9:00 a.m. Eastern Time.  We expect to issue a press release in advance of these events to reconfirm the dates and times and provide all related information.

Forward-Looking Statements

Estimates of future earnings per share, FFO per share, common share dividend distributions and certain other statements in this release constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance, achievements or transactions to be materially different from any future results, performance, achievements or transactions expressed or implied by such forward-looking statements.  Such risks, uncertainties and other factors relate to, among others: our ability to lease vacant space and to renew or relet space under expiring leases at expected levels; competition with other real estate companies for tenants; the potential loss or bankruptcy of major tenants; interest rate levels; the availability of debt, equity or other financing; risks of acquisitions, dispositions and developments, including the cost of construction delays and cost overruns; unanticipated operating and capital costs; our ability to obtain adequate insurance, including coverage for terrorist acts; dependence upon certain geographic markets; and general and local economic and real estate conditions, including the extent and duration of adverse changes that affect the industries in which our tenants operate. The declaration and payment of future dividends (both timing and amount) is subject to the determination of our Board of Trustees, in its sole discretion, after considering various factors, including the Company's financial condition, historical and forecast operating results, and available cash flow, as well as any applicable laws and contractual covenants and any other relevant factors. The Company's practice regarding payment of dividends may be modified at any time and from time to time.  Additional information on factors which could impact us and the forward-looking statements contained herein are included in our filings with the Securities and Exchange Commission, including our Form 10-K for the year ended December 31, 2018. We assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events except as required by law.

Non-GAAP Supplemental Financial Measures

We compute our financial results in accordance with generally accepted accounting principles (GAAP).  Although FFO and NOI are non-GAAP financial measures, we believe that FFO and NOI calculations are helpful to shareholders and potential investors and are widely recognized measures of real estate investment trust performance.  At the end of this press release, we have provided a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measure.

Funds from Operations (FFO)

We compute FFO in accordance with standards established by the National Association of Real Estate Investment Trusts (NAREIT), which may not be comparable to FFO reported by other REITs that do not compute FFO in accordance with the NAREIT definition, or that interpret the NAREIT definition differently than us.  NAREIT defines FFO as net income (loss) before non-controlling interests and excluding gains (losses) on sales of depreciable operating property, impairment losses on depreciable consolidated real estate, impairment losses on investments in unconsolidated real estate ventures and extraordinary items (computed in accordance with GAAP); plus real estate related depreciation and amortization (excluding amortization of deferred financing costs), and after similar adjustments for unconsolidated joint ventures.  Net income, the GAAP measure that we believe to be most directly comparable to FFO, includes depreciation and amortization expenses, gains or losses on property sales, extraordinary items and non-controlling interests.  To facilitate a clear understanding of our historical operating results, FFO should be examined in conjunction with net income (determined in accordance with GAAP) as presented in the financial statements included elsewhere in this release.  FFO does not represent cash flow from operating activities (determined in accordance with GAAP) and should not be considered to be an alternative to net income (loss) (determined in accordance with GAAP) as an indication of our financial performance or to be an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of our liquidity, nor is it indicative of funds available for our cash needs, including our ability to make cash distributions to shareholders.

-4-

 


 

Net Operating Income (NOI)

NOI is a financial measure equal to net income available to common shareholders, the most directly comparable GAAP financial measure, plus corporate general and administrative expense, depreciation and amortization, interest expense, non-controlling interest in the Operating Partnership and losses from early extinguishment of debt, less interest income, development and management income, gains from property dispositions, gains on sale from discontinued operations, gains on early extinguishment of debt, income from discontinued operations, income from unconsolidated joint ventures and non-controlling interest in property partnerships. In some cases we also present NOI on a cash basis, which is NOI after eliminating the effects of straight-lining of rent and deferred market intangible amortization. NOI presented by us may not be comparable to NOI reported by other REITs that define NOI differently. NOI should not be considered an alternative to net income as an indication of our performance or to cash flows as a measure of the Company's liquidity or its ability to make distributions. We believe NOI is a useful measure for evaluating the operating performance of our properties, as it excludes certain components from net income available to common shareholders in order to provide results that are more closely related to a property's results of operations. NOI is used internally to evaluate the performance of our operating segments and to make decisions about resource allocations.  We concluded that NOI provides useful information to investors regarding our financial condition and results of operations, as it reflects only the income and expense items incurred at the property level, as well as the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and development activity on an unlevered basis.

Core Portfolio

Our core portfolio is comprised of our wholly-owned properties, excluding any properties currently in development, re-development or re-entitlement.


-5-

 


 

 

BRANDYWINE REALTY TRUST

CONSOLIDATED BALANCE SHEETS

(in thousands)

 

March 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

ASSETS

 

(unaudited)

 

 

 

 

 

Real estate investments:

 

 

 

 

 

 

 

 

Operating properties

 

$

4,015,879

 

 

$

3,953,319

 

Right of use asset - operating leases

 

 

22,175

 

 

 

-

 

Accumulated depreciation

 

 

(891,125

)

 

 

(865,462

)

Operating real estate investments, net

 

 

3,146,929

 

 

 

3,087,857

 

Construction-in-progress

 

 

112,176

 

 

 

150,263

 

Land held for development

 

 

88,047

 

 

 

86,401

 

Prepaid leasehold interests in land held for development, net

 

 

39,897

 

 

 

39,999

 

Total real estate investments, net

 

 

3,387,049

 

 

 

3,364,520

 

Assets held for sale, net

 

 

7,345

 

 

 

11,599

 

Cash and cash equivalents

 

 

14,449

 

 

 

22,842

 

Accounts receivable, net of allowance of $284 and $1,653 as of March 31, 2019 and December 31, 2018, respectively

 

 

21,780

 

 

 

16,394

 

Accrued rent receivable, net of allowance of $11,018 and $11,266 as of March 31, 2019 and December 31, 2018, respectively

 

 

168,781

 

 

 

165,243

 

Investment in real estate ventures, at equity

 

 

161,568

 

 

 

169,100

 

Deferred costs, net

 

 

95,293

 

 

 

91,075

 

Intangible assets, net

 

 

119,903

 

 

 

131,348

 

Other assets

 

 

139,761

 

 

 

126,400

 

Total assets

 

$

4,115,929

 

 

$

4,098,521

 

LIABILITIES AND BENEFICIARIES' EQUITY

 

 

 

 

 

 

 

 

Mortgage notes payable, net

 

$

319,132

 

 

$

320,869

 

Unsecured credit facility

 

 

160,500

 

 

 

92,500

 

Unsecured term loan, net

 

 

248,168

 

 

 

248,042

 

Unsecured senior notes, net

 

 

1,366,997

 

 

 

1,366,635

 

Accounts payable and accrued expenses

 

 

112,375

 

 

 

125,696

 

Distributions payable

 

 

34,107

 

 

 

33,632

 

Deferred income, gains and rent

 

 

24,749

 

 

 

28,293

 

Acquired lease intangibles, net

 

 

29,813

 

 

 

31,783

 

Lease liability - operating leases

 

 

22,402

 

 

 

-

 

Other liabilities

 

 

16,194

 

 

 

18,498

 

Total liabilities

 

$

2,334,437

 

 

$

2,265,948

 

 

 

 

 

 

 

 

 

 

Brandywine Realty Trust's Equity:

 

 

 

 

 

 

 

 

Common Shares of Brandywine Realty Trust's beneficial interest, $0.01 par value; shares authorized 400,000,000; 176,001,580 and 176,873,324 issued and outstanding as of March 31, 2019 and December 31, 2018, respectively

 

 

1,761

 

 

 

1,770

 

Additional paid-in-capital

 

 

3,187,312

 

 

 

3,200,850

 

Deferred compensation payable in common shares

 

 

14,640

 

 

 

14,021

 

Common shares in grantor trust, 1,012,542 and 977,120 issued and outstanding as of March 31, 2019 and December 31, 2018, respectively

 

 

(14,640

)

 

 

(14,021

)

Cumulative earnings

 

 

795,186

 

 

 

796,513

 

Accumulated other comprehensive income

 

 

2,560

 

 

 

5,029

 

Cumulative distributions

 

 

(2,217,469

)

 

 

(2,183,909

)

Total Brandywine Realty Trust's equity

 

 

1,769,350

 

 

 

1,820,253

 

Noncontrolling interests

 

 

12,142

 

 

 

12,320

 

Total beneficiaries' equity

 

 

1,781,492

 

 

 

1,832,573

 

Total liabilities and beneficiaries' equity

 

$

4,115,929

 

 

$

4,098,521

 

 

 


-6-

 


 

BRANDYWINE REALTY TRUST

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands, except share and per share data)

 

Three Months Ended March 31,

 

 

2019

 

 

2018

 

Revenue

 

 

 

 

 

 

 

Rents

$

138,098

 

 

$

126,759

 

Third party management fees, labor reimbursement and leasing

 

3,955

 

 

 

7,674

 

Other

 

1,843

 

 

 

1,925

 

Total revenue

 

143,896

 

 

 

136,358

 

Operating expenses:

 

 

 

 

 

 

 

Property operating expenses

 

39,481

 

 

 

39,332

 

Real estate taxes

 

15,783

 

 

 

12,422

 

Third party management expenses

 

2,117

 

 

 

4,750

 

Depreciation and amortization

 

51,980

 

 

 

43,291

 

General and administrative expenses

 

9,844

 

 

 

8,723

 

Total operating expenses

 

119,205

 

 

 

108,518

 

Gain on sale of real estate

 

 

 

 

 

 

 

Net gain on sale of undepreciated real estate

 

1,001

 

 

 

22

 

Total gain on sale of real estate

 

1,001

 

 

 

22

 

Operating income

 

25,692

 

 

 

27,862

 

Other income (expense):

 

 

 

 

 

 

 

Interest income

 

525

 

 

 

703

 

Interest expense

 

(20,357

)

 

 

(19,533

)

Interest expense - amortization of deferred financing costs

 

(666

)

 

 

(627

)

Equity in loss of Real Estate Ventures

 

(1,358

)

 

 

(825

)

Net gain on real estate venture transactions

 

259

 

 

 

37,263

 

Net income before income taxes

 

4,095

 

 

 

44,843

 

Income tax provision

 

(29

)

 

 

(138

)

Net income

 

4,066

 

 

 

44,705

 

Net income attributable to noncontrolling interests

 

(57

)

 

 

(376

)

Net income attributable to Brandywine Realty Trust

 

4,009

 

 

 

44,329

 

Nonforfeitable dividends allocated to unvested restricted shareholders

 

(119

)

 

 

(114

)

Net income attributable to Common Shareholders of Brandywine Realty Trust

$

3,890

 

 

$

44,215

 

 

 

 

 

 

 

 

 

PER SHARE DATA

 

 

 

 

 

 

 

Basic income per Common Share

$

0.02

 

 

$

0.25

 

Basic weighted average shares outstanding

 

175,857,358

 

 

 

178,395,525

 

 

 

 

 

 

 

 

 

Diluted income per Common Share

$

0.02

 

 

$

0.25

 

Diluted weighted average shares outstanding

 

176,464,218

 

 

 

179,788,311

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-7-

 


 

BRANDYWINE REALTY TRUST

FUNDS FROM OPERATIONS

(unaudited, in thousands, except share and per share data)

Three Months Ended March 31,

 

 

2019

 

 

2018

 

Reconciliation of Net Income to Funds from Operations:

 

 

 

 

 

 

 

Net income attributable to common shareholders

$

3,890

 

 

$

44,215

 

Add (deduct):

 

 

 

 

 

 

 

Net income attributable to noncontrolling interests - LP units

 

23

 

 

 

371

 

Nonforfeitable dividends allocated to unvested restricted shareholders

 

119

 

 

 

114

 

Net gain on real estate venture transactions

 

(259

)

 

 

(37,263

)

Depreciation and amortization:

 

 

 

 

 

 

 

Real property

 

36,142

 

 

 

34,608

 

Leasing costs including acquired intangibles

 

15,406

 

 

 

8,306

 

Company’s share of unconsolidated real estate ventures

 

5,041

 

 

 

7,164

 

Partners’ share of consolidated real estate ventures

 

(53

)

 

 

(55

)

Funds from operations

$

60,309

 

 

$

57,460

 

Funds from operations allocable to unvested restricted shareholders

 

(214

)

 

 

(203

)

Funds from operations available to common share and unit holders (FFO)

$

60,095

 

 

$

57,257

 

 

 

 

 

 

 

 

 

FFO per share - fully diluted

$

0.34

 

 

$

0.32

 

 

 

 

 

 

 

 

 

Weighted-average shares/units outstanding - fully diluted

 

177,447,089

 

 

 

181,268,110

 

 

 

 

 

 

 

 

 

Distributions paid per common share

$

0.19

 

 

$

0.18

 

 

 

 

 

 

 

 

 

FFO payout ratio (distributions paid per common share/FFO per diluted share)

 

55.9

%

 

 

56.3

%

 

 


-8-

 


 

BRANDYWINE REALTY TRUST

SAME STORE OPERATIONS – 1st QUARTER

(unaudited and in thousands)

 

 

Of the 96 properties owned by the Company as of March 31, 2019, a total of 74 properties ("Same Store Properties") containing an aggregate of 14.1 million net rentable square feet were owned for the entire three-month periods ended March 31, 2019 and 2018. As of March 31, 2019, 18 properties were recently completed/acquired, one property was in development and three properties were in redevelopment. Average occupancy for the Same Store Properties was 92.3% and 92.7% during the three-month periods ended March 31, 2019 and 2018, respectively. The following table sets forth revenue and expense information for the Same Store Properties:

 

 

Three Months Ended March 31,

 

 

 

2019

 

 

2018

 

Revenue

 

 

 

 

 

 

 

 

Rents

 

$

112,709

 

 

$

111,664

 

Other

 

 

373

 

 

 

305

 

Total revenue

 

 

113,082

 

 

 

111,969

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

Property operating expenses

 

 

32,867

 

 

 

32,820

 

Real estate taxes

 

 

11,627

 

 

 

10,301

 

Net operating income

 

$

68,588

 

 

$

68,848

 

 

 

 

 

 

 

 

 

 

Net operating income - percentage change over prior year

 

 

-0.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Net operating income, excluding net termination fees & other

 

$

67,909

 

 

$

67,993

 

 

 

 

 

 

 

 

 

 

Net operating income, excluding net termination fees & other - percentage change over prior year

 

 

-0.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Net operating income

 

$

68,588

 

 

$

68,848

 

Straight line rents & other

 

 

(1,830

)

 

 

(4,078

)

Above/below market rent amortization

 

 

(346

)

 

 

(459

)

Amortization of tenant inducements

 

 

232

 

 

 

265

 

Non-cash ground rent

 

 

196

 

 

 

22

 

Cash - Net operating income

 

$

66,840

 

 

$

64,598

 

 

 

 

 

 

 

 

 

 

Cash - Net operating income - percentage change over prior year

 

 

3.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash - Net operating income, excluding net termination fees & other

 

$

66,059

 

 

$

63,517

 

 

 

 

 

 

 

 

 

 

Cash - Net operating income, excluding net termination fees & other - percentage change over prior year

 

 

4.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31,

 

 

 

2019

 

 

2018

 

Net income:

 

$

4,066

 

 

$

44,705

 

Add/(deduct):

 

 

 

 

 

 

 

 

Interest income

 

 

(525

)

 

 

(703

)

Interest expense

 

 

20,357

 

 

 

19,533

 

Interest expense - amortization of deferred financing costs

 

 

666

 

 

 

627

 

Equity in loss of Real Estate Ventures

 

 

1,358

 

 

 

825

 

Net gain on real estate venture transactions

 

 

(259

)

 

 

(37,263

)

Net gain on sale of undepreciated real estate

 

 

(1,001

)

 

 

(22

)

Depreciation and amortization

 

 

51,980

 

 

 

43,291

 

General & administrative expenses

 

 

9,844

 

 

 

8,723

 

Income tax provision

 

 

29

 

 

 

138

 

Consolidated net operating income

 

 

86,515

 

 

 

79,854

 

Less: Net operating income of non-same store properties and elimination of non-property specific operations

 

 

(17,927

)

 

 

(11,006

)

Same store net operating income

 

$

68,588

 

 

$

68,848

 

 

 

 

 

-9-

 

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