Brandywine Realty Trust (NYSE:BDN) today reported its financial and
operating results for the three months ended March 31, 2023.
Management Comments
“During the first quarter, we made excellent
progress on our 2023 business plan highlighted by achieving 71% of
our speculative revenue target based on the midpoint of our
guidance,” stated Gerard H. Sweeney, President and Chief Executive
Officer for Brandywine Realty Trust. “We continue to see positive
mark-to-market rent increases of 14.9% and 4.2% on an accrual and
cash basis. Our same store portfolio generated positive net
operating income growth of 2.2% and 3.6% on an accrual and cash
basis as well. We continue to make solid progress on all of our
active development and redevelopment projects with two developments
scheduled for delivery later this year. The 10% growth in our
leasing pipeline is further evidence of tenant preferences in
flight to quality workplaces. Our liquidity position was further
strengthened by closing a $70 million unsecured term loan. We have
no wholly-owned maturities until October 2024. With steady progress
being made on our 2023 business plan, as well as all of our
operating and financial metric targets, we are maintaining our FFO
range of $1.12 to $1.20 per share.”
First Quarter 2023
Highlights
Financial Results
- Net loss
allocated to common shareholders; ($5.3) million, or ($0.03) per
share.
- Funds from
Operations (FFO); $50.8 million, or $0.29 per diluted share.
Portfolio Results
- Core Portfolio:
89.0% occupied and 90.4% leased.
- New and renewal
leases signed: 357,000 square feet.
- Rental rate
mark-to-market: Increased 14.9% on an accrual basis and 4.2% on a
cash basis.
- Same store net
operating income: 2.2% on an accrual basis and 3.6% on a cash
basis.
Transaction Activity
Finance Activity
- On March 1,
2023, we closed on a $70 million unsecured term loan. We intend to
use the net proceeds from the loan for general corporate purposes,
and pending such use, we have invested the proceeds in money market
accounts at various financial institutions. The loan has a
scheduled maturity date of February 28, 2025 (subject to our option
to extend for twelve months on customary terms) and bears interest
at the secured overnight financing rate (SOFR) plus 185 basis
points.
- As previously
announced, we repaid 100% of our outstanding 2023 Notes. On
December 20, 2022, we repaid approximately $295.7 million of the
2023 Notes through a tender offer to the existing bond holders and
subsequently on January 20, 2023 we repaid the remaining $54.3
million of the 2023 Notes. All of the 2023 Notes were repurchased
or redeemed at par plus any accrued interest with proceeds from our
December 2028 Guaranteed Note issuance, cash-on-hand and our
unsecured line of credit.
- As previously
announced, we entered into a non-recourse secured loan agreement in
the aggregate principal amount of $245.0 million which bears
interest at 5.875% (the “Secured Loan”). The Secured Loan has a
scheduled maturity date of February 6, 2028 and may be prepaid in
full on or after March 6, 2025, subject to a prepayment premium,
and may be prepaid in full on or after August 6, 2027 without any
prepayment premium. The Secured Loan is collateralized by 7
wholly-owned properties. Net cash proceeds totaled $235.7 million
and were used to escrow $15.2 million for property-level 2023
reserves and capital, to fully pay-off the outstanding balance on
our $600.0 million unsecured line of credit and other corporate
purposes.
- As of March 31,
2023, we had no outstanding balance on our $600.0 million unsecured
line of credit.
- As of March 31,
2023, we had $96.9 million of cash and cash equivalents
on-hand.
Results for the Three Months Ended March
31, 2023
Net loss allocated to common shares totaled
($5.3) million, or ($0.03) per share, in the first quarter of 2023
compared to a net income allocated to common shares of $5.9
million, or $0.03 per diluted share in the first quarter of
2022.
FFO available to common shares and units in the
first quarter of 2023 totaled $50.8 million, or $0.29 per diluted
share, versus $60.3 million or $0.35 per diluted share in the first
quarter of 2022. Our first quarter 2023 payout ratio ($0.19 common
share distribution / $0.29 FFO per diluted share) was 65.5%.
Operating and Leasing
Activity
In the first quarter of 2023, our Net Operating
Income (NOI) excluding termination revenues and other income items
increased 2.2% on an accrual basis and 3.6% on a cash basis for our
72 same store properties, which were 89.0% and 89.3% occupied on
March 31, 2023 and March 31, 2022, respectively.
We leased approximately 357,000 square feet and
commenced occupancy on 175,000 square feet during the first quarter
of 2023. The first quarter occupancy activity includes 109,000
square feet of renewals, 46,000 square feet of new leases and
20,000 square feet of tenant expansions. We executed on an
additional 180,000 square feet of new leases scheduled to commence
subsequent to March 31, 2023. Consistent with our business plan, we
achieved a 45% tenant retention ratio in our core portfolio with
negative absorption of (109,000) square feet during the first
quarter of 2023. First quarter rental rate growth increased 14.9%
as our renewal rental rates increased 15.2% and our new
lease/expansion rental rates increased 13.8%, all on an accrual
basis.
At March 31, 2023, our core portfolio of 72
properties comprising 12.8 million square feet was 89.0% occupied
and, as of April 14, 2023, we are now 90.4% leased (reflecting new
leases commencing after March 31, 2023).
Distributions
On February 16, 2023, our Board of Trustees
declared a quarterly cash dividend of $0.19 per common share and OP
Unit that was paid on April 19, 2023 to holders of record on April
5, 2023.
2023 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
2023 loss per share guidance from ($0.12) - ($0.04) per share to
($0.15) - ($0.07) per share due to projected higher depreciation
and amortization expense and we are maintaining our 2023 FFO
guidance of $1.12 - $1.20 per diluted share. This guidance is
provided for informational purposes and is subject to change. The
following is a reconciliation of the calculation of 2023 FFO and
earnings per diluted share:
Guidance for 2023 |
Range |
|
|
|
|
|
|
Loss per share allocated to common
shareholders |
($0.15) |
to |
($0.07) |
|
Plus: real estate depreciation, amortization |
1.27 |
|
1.27 |
|
FFO per diluted share |
$1.12 |
to |
$1.20 |
Our 2023 FFO key assumptions include:
- Year-end Core
Occupancy Range: 90-91%;
- Year-end Core
Leased Range: 91-92%;
- Rental Rate
Growth (accrual): 11-13%;
- Rental Rate
Growth (cash): 4-6%;
- Same Store
(accrual) NOI Growth Range: 0-2%;
- Same Store
(cash) NOI Growth Range: 2.5-4.5%;
- Speculative
Revenue Target: $17.0 - $19.0 million, $12.8 million
achieved;
- Tenant
Retention Rate Range: 49-51%;
- Property
Acquisition Activity: None;
- Property Sales
Activity: $100 - $125 million;
- Joint Venture
Activity: None;
- Development
Starts: None;
- Financing
Activity: $245 Million Secured Financing (complete); $70.0
Million 2-Year Unsecured Term Loan (complete); and Construction
Loan at 155 King of Prussia Rd in Radnor, PA;
- Share Buyback
Activity: None;
- Annual
earnings and FFO per diluted share based on 174.0 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, Austin and Washington, D.C. markets. Organized as a
real estate investment trust (REIT), we own, develop, lease and
manage an urban, town center and transit-oriented portfolio
comprising 163 properties and 23.0 million square feet as of March
31, 2023 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
We will release our first quarter earnings after
the market close on Wednesday, April 19, 2023 and will hold our
first quarter conference call on Thursday, April 20, 2023 at 9:00
a.m. Eastern Time. To access the conference call by phone, please
visit this link here, and you will be provided with dial in
details. A live webcast of the conference call will also be
available on the Investor Relations page of our website at
www.brandywinerealty.com.
Looking Ahead – Second Quarter 2023
Conference Call
We expect to release our second quarter 2023
earnings on Tuesday, July 26, 2023, after the market close and will
host our second quarter 2023 conference call on Wednesday, July 27,
2023 at 9:00 a.m. Eastern. 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
This press release contains certain
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Such forward-looking
statements can generally be identified by our use of
forward-looking terminology such as “will,” “strategy,” “expects,”
“seeks,” “believes,” “potential,” or other similar words. Because
such statements involve known and unknown risks, uncertainties and
contingencies, actual results may differ materially from the
expectations, intentions, beliefs, plans or predictions of the
future expressed or implied by such forward-looking statements.
These forward-looking statements, including our 2023 guidance and
the progress of our projects under development, are based upon the
current beliefs and expectations of our management and are
inherently subject to significant business, economic and
competitive uncertainties and contingencies, many of which are
difficult to predict and not within our control. Such risks,
uncertainties and contingencies include, among others: risks
related to the impact of COVID-19 and other potential future
outbreaks of infectious diseases on our financial condition,
results of operations and cash flows and those of our tenants as
well as on the economy and real estate and financial markets;
reduced demand for office space and pricing pressures, including
from competitors, that could limit our ability to lease space or
set rents at expected levels or that could lead to declines in
rent; uncertainty and volatility in capital and credit markets,
including changes that reduce availability, and increase costs, of
capital or that delay receipt of our planned debt financings and
refinancings; the effect of inflation and interest rate
fluctuations, including on the costs of our planned debt financings
and refinancings; the potential loss or bankruptcy of tenants or
the inability of tenants to meet their rent and other lease
obligations; risks of acquisitions and dispositions, including
unexpected liabilities and integration costs; delays in completing,
and cost overruns incurred in connection with, our developments and
redevelopments; disagreements with joint venture partners;
unanticipated operating and capital costs; uninsured casualty
losses and our ability to obtain adequate insurance, including
coverage for terrorist acts; asset impairments; our dependence upon
certain geographic markets; changes in governmental regulations,
tax laws and rates and similar matters; unexpected costs of REIT
qualification compliance; and costs and disruptions as the result
of a cybersecurity incident or other technology disruption. 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 our 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. Our Board’s practice regarding declaration 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, 2022. 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. We generally consider FFO and FFO
per share to be useful measures for understanding and comparing our
operating results because, by excluding gains and losses related to
sales of previously depreciated operating real estate assets,
impairment losses and real estate asset depreciation and
amortization (which can differ across owners of similar assets in
similar condition based on historical cost accounting and useful
life estimates), FFO and FFO per share can help investors compare
the operating performance of a company’s real estate across
reporting periods and to the operating performance of other
companies.
Net Operating Income (NOI)
NOI (accrual basis) 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. We
use NOI 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.
Same Store Properties
In our analysis of NOI, particularly to make
comparisons of NOI between periods meaningful, it is important to
provide information for properties that were in-service and owned
by us throughout each period presented. We refer to properties
acquired or placed in-service prior to the beginning of the
earliest period presented and owned by us through the end of the
latest period presented as Same Store Properties. Same Store
Properties therefore exclude properties placed in-service,
acquired, repositioned, held for sale or in development or
redevelopment after the beginning of the earliest period presented
or disposed of prior to the end of the latest period presented.
Accordingly, it takes at least one year and one quarter after a
property is acquired for that property to be included in Same Store
Properties.
Core Portfolio
Our core portfolio is comprised of our
wholly-owned properties, excluding any properties currently in
development, re-development or re-entitlement.
BRANDYWINE REALTY
TRUSTCONSOLIDATED BALANCE
SHEETS(unaudited, in thousands, except share and
per share data)
|
March 31, 2023 |
|
December 31, 2022 |
ASSETS |
|
|
|
Real estate investments: |
|
|
|
Operating properties |
$ |
3,632,495 |
|
|
$ |
3,617,240 |
|
Accumulated depreciation |
|
(1,096,199 |
) |
|
|
(1,063,060 |
) |
Right of use asset - operating leases, net |
|
19,505 |
|
|
|
19,664 |
|
Operating real estate investments, net |
|
2,555,801 |
|
|
|
2,573,844 |
|
Construction-in-progress |
|
236,040 |
|
|
|
218,869 |
|
Land held for development |
|
67,923 |
|
|
|
76,499 |
|
Prepaid leasehold interests in land held for development, net |
|
27,762 |
|
|
|
35,576 |
|
Total real estate investments, net |
|
2,887,526 |
|
|
|
2,904,788 |
|
Cash and cash equivalents |
|
96,945 |
|
|
|
17,551 |
|
Restricted cash and escrow |
|
16,126 |
|
|
|
— |
|
Accounts receivable |
|
13,446 |
|
|
|
11,003 |
|
Accrued rent receivable, net of allowance of $3,828 and $3,947 as
of March 31, 2023 and December 31, 2022,
respectively |
|
182,523 |
|
|
|
179,771 |
|
Investment in unconsolidated real estate ventures |
|
583,775 |
|
|
|
567,635 |
|
Deferred costs, net |
|
95,037 |
|
|
|
96,639 |
|
Intangible assets, net |
|
16,394 |
|
|
|
18,451 |
|
Other assets |
|
95,339 |
|
|
|
78,667 |
|
Total assets |
$ |
3,987,111 |
|
|
$ |
3,874,505 |
|
LIABILITIES AND
BENEFICIARIES' EQUITY |
|
|
|
Secured term loan, net |
$ |
241,231 |
|
|
$ |
— |
|
Unsecured credit facility |
|
— |
|
|
|
88,500 |
|
Unsecured term loan, net |
|
317,848 |
|
|
|
248,168 |
|
Unsecured senior notes, net |
|
1,574,221 |
|
|
|
1,628,370 |
|
Accounts payable and accrued expenses |
|
114,370 |
|
|
|
132,440 |
|
Distributions payable |
|
32,823 |
|
|
|
32,792 |
|
Deferred income, gains and rent |
|
24,039 |
|
|
|
25,082 |
|
Intangible liabilities, net |
|
9,921 |
|
|
|
10,322 |
|
Lease liability - operating leases |
|
23,218 |
|
|
|
23,166 |
|
Other liabilities |
|
56,222 |
|
|
|
52,331 |
|
Total liabilities |
$ |
2,393,893 |
|
|
$ |
2,241,171 |
|
Brandywine Realty Trust's Equity: |
|
|
|
Common Shares of Brandywine Realty Trust's beneficial interest,
$0.01 par value; shares authorized 400,000,000; 171,727,703 and
171,569,807 issued and outstanding as of March 31, 2023 and
December 31, 2022, respectively |
|
1,717 |
|
|
|
1,716 |
|
Additional paid-in-capital |
|
3,156,507 |
|
|
|
3,153,229 |
|
Deferred compensation payable in common shares |
|
19,746 |
|
|
|
19,601 |
|
Common shares in grantor trust, 1,153,359 and 1,179,643 issued and
outstanding as of March 31, 2023 and December 31, 2022,
respectively |
|
(19,746 |
) |
|
|
(19,601 |
) |
Cumulative earnings |
|
1,170,936 |
|
|
|
1,176,195 |
|
Accumulated other comprehensive income (loss) |
|
(1,410 |
) |
|
|
3,897 |
|
Cumulative distributions |
|
(2,742,139 |
) |
|
|
(2,709,405 |
) |
Total Brandywine Realty Trust's equity |
|
1,585,611 |
|
|
|
1,625,632 |
|
Noncontrolling interests |
|
7,607 |
|
|
|
7,702 |
|
Total beneficiaries' equity |
$ |
1,593,218 |
|
|
$ |
1,633,334 |
|
Total liabilities and beneficiaries' equity |
$ |
3,987,111 |
|
|
$ |
3,874,505 |
|
BRANDYWINE REALTY
TRUSTCONSOLIDATED STATEMENTS OF
OPERATIONS(unaudited, in thousands, except share
and per share data)
|
Three months ended March 31, |
|
2023 |
|
2022 |
Revenue |
|
|
|
Rents |
$ |
120,848 |
|
|
$ |
115,901 |
|
Third party management fees, labor reimbursement and leasing |
|
6,002 |
|
|
|
5,108 |
|
Other |
|
2,377 |
|
|
|
6,496 |
|
Total revenue |
|
129,227 |
|
|
|
127,505 |
|
Operating
expenses |
|
|
|
Property operating expenses |
|
33,594 |
|
|
|
31,548 |
|
Real estate taxes |
|
14,602 |
|
|
|
13,813 |
|
Third party management expenses |
|
2,639 |
|
|
|
2,557 |
|
Depreciation and amortization |
|
45,600 |
|
|
|
43,782 |
|
General and administrative expenses |
|
9,482 |
|
|
|
10,000 |
|
Total operating expenses |
|
105,917 |
|
|
|
101,700 |
|
Gain on sale of real
estate |
|
|
|
Net gain on sale of undepreciated real estate |
|
781 |
|
|
|
897 |
|
Total gain on sale of real estate |
|
781 |
|
|
|
897 |
|
Operating
income |
|
24,091 |
|
|
|
26,702 |
|
Other income
(expense): |
|
|
|
Interest and investment income |
|
505 |
|
|
|
440 |
|
Interest expense |
|
(22,653 |
) |
|
|
(15,742 |
) |
Interest expense - amortization of deferred financing costs |
|
(1,027 |
) |
|
|
(709 |
) |
Equity in income of
unconsolidated real estate ventures |
|
(6,167 |
) |
|
|
(4,563 |
) |
Net income (loss)
before income taxes |
|
(5,251 |
) |
|
|
6,128 |
|
Income tax (provision) benefit |
|
(25 |
) |
|
|
(27 |
) |
Net income
(loss) |
|
(5,276 |
) |
|
|
6,101 |
|
Net income attributable to
noncontrolling interests |
|
17 |
|
|
|
(8 |
) |
Net income (loss)
attributable to Brandywine Realty Trust |
|
(5,259 |
) |
|
|
6,093 |
|
Nonforfeitable dividends
allocated to unvested restricted shareholders |
|
(70 |
) |
|
|
(148 |
) |
Net income (loss)
attributable to Common Shareholders of Brandywine Realty
Trust |
$ |
(5,329 |
) |
|
$ |
5,945 |
|
PER SHARE
DATA |
|
|
|
Basic income (loss) per Common
Share |
$ |
(0.03 |
) |
|
$ |
0.03 |
|
Basic weighted average shares
outstanding |
|
171,673,167 |
|
|
|
171,294,949 |
|
Diluted income (loss) per
Common Share |
$ |
(0.03 |
) |
|
$ |
0.03 |
|
Diluted weighted average
shares outstanding |
|
171,673,167 |
|
|
|
172,888,994 |
|
BRANDYWINE REALTY
TRUSTFUNDS FROM
OPERATIONS(unaudited, in thousands, except share
and per share data)
|
Three months ended March 31, |
|
2023 |
|
2022 |
Reconciliation of Net
Income (Loss) to Funds from Operations: |
|
|
|
Net income (loss) attributable to common shareholders |
$ |
(5,329 |
) |
|
|
$ |
5,945 |
|
|
Add (deduct): |
|
|
|
Net income (loss) attributable to NCI - LP units |
|
(16 |
) |
|
|
|
10 |
|
|
Nonforfeitable dividends allocated to unvested restricted
shareholders |
|
70 |
|
|
|
|
148 |
|
|
Depreciation and amortization: |
|
|
|
Real property |
|
38,630 |
|
|
|
|
36,162 |
|
|
Leasing costs including acquired intangibles |
|
6,140 |
|
|
|
|
6,994 |
|
|
Company's share of unconsolidated real estate ventures |
|
11,564 |
|
|
|
|
11,295 |
|
|
Partner's share of unconsolidated real estate ventures |
|
(4 |
) |
|
|
|
(5 |
) |
|
Funds from operations |
$ |
51,055 |
|
|
|
$ |
60,549 |
|
|
Funds from operations allocable to unvested restricted
shareholders |
|
(224 |
) |
|
|
|
(238 |
) |
|
Funds from operations
available to common share and unit holders (FFO) |
$ |
50,831 |
|
|
|
$ |
60,311 |
|
|
FFO per share - fully
diluted |
$ |
0.29 |
|
|
|
$ |
0.35 |
|
|
Weighted-average shares/units
outstanding - fully diluted |
|
172,823,496 |
|
|
|
|
173,521,633 |
|
|
Distributions paid per common
share |
$ |
0.19 |
|
|
|
$ |
0.19 |
|
|
FFO payout ratio
(distributions paid per common share/FFO per diluted share) |
|
65.5 |
|
% |
|
|
54.3 |
|
% |
BRANDYWINE REALTY
TRUSTSAME STORE OPERATIONS –
1st QUARTER(unaudited and
in thousands)
Of the 77 properties owned by the Company as of
March 31, 2023, a total of 72 properties ("Same Store
Properties") containing an aggregate of 12.8 million net rentable
square feet were owned for the entire three months ended March 31,
2023 and 2022. As of March 31, 2023, 1 property was recently
completed/acquired, and 4 properties were in
development/redevelopment. Average occupancy for the Same Store
Properties was 89.0% and 89.3% during the three-month periods ended
March 31, 2023 and 2022, respectively. The following table
sets forth revenue and expense information for the Same Store
Properties:
|
Three months ended March 31, |
|
2023 |
|
2022 |
Revenue |
|
|
|
Rents |
$ |
113,722 |
|
|
|
$ |
110,317 |
|
|
Other |
|
284 |
|
|
|
|
304 |
|
|
Total revenue |
|
114,006 |
|
|
|
|
110,621 |
|
|
Operating
expenses |
|
|
|
Property operating expenses |
|
30,604 |
|
|
|
|
28,509 |
|
|
Real estate taxes |
|
13,415 |
|
|
|
|
13,082 |
|
|
Net operating income |
$ |
69,987 |
|
|
|
$ |
69,030 |
|
|
Net operating income - percentage change over prior
year |
|
1.4 |
|
% |
|
|
Net operating income, excluding other items |
$ |
69,776 |
|
|
|
$ |
68,268 |
|
|
Net operating income, excluding other items - percentage
change over prior year |
|
2.2 |
|
% |
|
|
Net operating
income |
$ |
69,987 |
|
|
|
$ |
69,030 |
|
|
Straight line rents & other |
|
(2,278 |
) |
|
|
|
(2,880 |
) |
|
Above/below market rent amortization |
|
(376 |
) |
|
|
|
(548 |
) |
|
Amortization of tenant inducements |
|
219 |
|
|
|
|
188 |
|
|
Non-cash ground rent expense |
|
200 |
|
|
|
|
204 |
|
|
Cash - Net operating income |
$ |
67,752 |
|
|
|
$ |
65,994 |
|
|
Cash - Net operating income - percentage change over prior
year |
|
2.7 |
|
% |
|
|
Cash - Net operating income, excluding other
items |
$ |
66,891 |
|
|
|
$ |
64,543 |
|
|
Cash - Net operating income, excluding other items -
percentage change over prior year |
|
3.6 |
|
% |
|
|
|
Three Months Ended March 31, |
|
2022 |
|
2021 |
Net income (loss): |
$ |
(5,276 |
) |
|
|
$ |
6,101 |
|
|
Add/(deduct): |
|
|
|
Interest income |
|
(505 |
) |
|
|
|
(440 |
) |
|
Interest expense |
|
22,653 |
|
|
|
|
15,742 |
|
|
Interest expense - amortization of deferred financing costs |
|
1,027 |
|
|
|
|
709 |
|
|
Equity in loss of unconsolidated real estate ventures |
|
6,167 |
|
|
|
|
4,563 |
|
|
Net gain on sale of undepreciated real estate |
|
(781 |
) |
|
|
|
(897 |
) |
|
Depreciation and amortization |
|
45,600 |
|
|
|
|
43,782 |
|
|
General & administrative expenses |
|
9,482 |
|
|
|
|
10,000 |
|
|
Income tax provision (benefit) |
|
25 |
|
|
|
|
27 |
|
|
Consolidated net operating income |
|
78,392 |
|
|
|
|
79,587 |
|
|
Less: Net operating income of
non-same store properties and elimination of non-property specific
operations |
|
(8,405 |
) |
|
|
|
(10,557 |
) |
|
Same store net operating income |
$ |
69,987 |
|
|
|
$ |
69,030 |
|
|
Company / Investor Contact: |
|
|
|
Tom Wirth |
|
EVP & CFO |
|
610-832-7434 |
|
tom.wirth@bdnreit.com |
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