Brandywine Realty Trust Q4 FY2025 earnings call

• 2025 results in line with business plan, strong operating metrics, flight to quality among tenant base. • Wholly-owned core portfolio occupancy and leasing stats. Forward leasing, spec revenue, tenant retention, leasing activity. Capital ratio, mark-to-market. Tour volume growth, conversion rates. • Philadelphia and Pennsylvania suburbs market dynamics. Brandywine's market share. • Liquidity in solid shape, no outstanding line of credit balance, cash on hand. Bond refinancing opportunities. • Recapitalization of development joint ventures, including 3025 and 3151 buyouts, pipeline details. • 2026 business plan focus on earnings growth, operating results, sales program, core portfolio performance, spec revenue, occupancy, mark-to-market, leasing capital, same-store growth.

Wholly-owned core portfolio is 88.3% occupied and 90.4% leased. Forward leasing commencing after year-end increased 26% to 229,000 square feet. Generated near $27.3 million of spec revenue. Tenant retention target ended at 64% vs original range 59%-61%. Leasing activity for the year approximated 1.6 million square feet. During the quarter, 415,000 square feet of leases executed. Capital ratio for the year was 9.5%. GAAP mark-to-market was 4.2%, new leasing mark-to-market 13% (GAAP) and 4% (cash). Tour volume: fourth quarter exceeded third quarter by 13%, exceeded fourth quarter 2024 by 87%. 45% of new leasing in fourth quarter wholly-owned was flight to quality. Annual tour volume 2025 outpaced 2024 by 20% (fiscal number of tours) and 45% (square footage). In Philadelphia, 95% occupied and 97% leased, Commerce Square joint venture 90% leased. Brandywine captured 54% of new leasing in Market West and University City in 2025. Net effective rents in Philadelphia submarkets increased ~20% since 2021. Pennsylvania suburbs 89.4% leased, Radnor 91% leased. Austin 74% occupied. Operating portfolio leasing pipeline 1.5 million square feet. Core portfolio will add 3025 in first quarter and 250 Radnor in second quarter. Spec revenue targeted $17M - $18M. Year-end occupancy projected to improve 120 basis points. GAAP mark-to-market range 5%-7%, cash mark-to-market -2% to 0%. Leasing capital target 12%-13%. Same-store growth GAAP -1% to +1%, cash 0% to 2%.

• 2026 FFO guidance range $0.51 - $0.59 per share, midpoint $0.55, 5.8% increase over 2025. • Operating metrics: property-level GAAP NOI $292M, increase of $30M from 2025. 3025 JFK to add $17M. Asset sales and move-outs to cause $7M NOI decrease. Unconsolidated joint ventures contribution to improve from $11M loss in 2025 to $1M income in 2026. ATX developments to improve $9M. G&A expense $36M - $37M, $5.5M below 2025. Total interest expense ~$170M, $30M increase from 2025. Termination and other income $9M - $11M vs $6.6M in 2025. Sales activity $290M, first half focus. Financing activity: refinance 3025 JFK loan, consider extension of credit facility, recapitalize ATX joint ventures in second half. No property acquisitions. First quarter property-level NOI ~$70M, FFO contribution from joint ventures positive $0.5M, G&A $12M, total interest expense ~$42M. Capital plan ~$475M, cash on hand $52M at year-end, net debt to EBITDA 8.4 - 8.8, fixed charge ratio 1.8 - 2.0.

Q: Seth Bergey asked about bond refinancing hurdle and share buyback vs debt repurchase.

A: Jerry Sweeney said first course is sales program to improve credit metrics. Primary focus of sales proceeds is to reduce leverage, share buyback optionality when other objectives met.

Q: Anthony Paolone asked about portfolio undervaluation and what to sell.

A: Jerry Sweeney said entire portfolio undervalued. Sale program is company-wide look at marketable assets with 8% average cap rate, focusing on marketable assets now.

Q: Steve Sakwa asked about JV recaps timing.

A: Jerry Sweeney said JV recaps planned for second half of 2026, monitoring leasing progress and market conditions.

Q: Steve Sakwa asked about pipeline color.

A: Jerry Sweeney and George Johnstone said strongest trends in CBD Philadelphia and University City, Radnor and King of Prussia activity, 3151 and One Uptown pipeline.

Q: Upal Rana asked about IBM move-out in Austin and redevelopment.

A: Jerry Sweeney said IBM move-out starting end of first quarter 2026, planning redevelopment of existing building with $30M - $40M cost.

Q: Upal Rana asked about additional dispositions.

A: Jerry Sweeney said $280M - $300M target for 2026, other properties and land holdings queued for sale.

Q: Dylan Burzinski asked about deleveraging and share buybacks.

A: Jerry Sweeney said aim to get to investment-grade leverage, deleveraging through asset sales and NOI growth, considering share buybacks when undervaluation and liquidity allow.

Q: Dylan Burzinski asked about development projects outside Austin.

A: Jerry Sweeney said development projects outside Austin not off sale list, evaluated for refinancing and joint ventures.

Q: Michael Lewis asked about asset sale cap rate and bond proceeds.

A: Jerry Sweeney said average cap rate ~8% for sales, Thomas E. Wirth said proceeds to be used to delever and buy back bonds.

Q: Michael Lewis asked about recap and M&A.

A: Jerry Sweeney said Board and management review strategic direction, focus on deleveraging, stabilizing developments, and recycling assets.