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BRANDYWINE REALTY TRUST

(BDN)
  Report
Delayed Nyse  -  04:00 2022-09-30 pm EDT
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BRANDYWINE REALTY TRUST Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)

07/29/2022 | 05:33pm EDT
The Private Securities Litigation Reform Act of 1995 (the "1995 Act") 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. We intend such forward-looking statements to be covered by the
safe-harbor provisions of the 1995 Act. 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 might cause actual results to differ
materially from our expectations, many of which may be more likely to impact us
as a result of the ongoing COVID-19 pandemic, are set forth in the "Risk
Factors" section of our Annual Report on Form 10-K for the year ended
December 31, 2021. Accordingly, 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.

The discussion that follows is based primarily on our consolidated financial
statements as of June 30, 2022 and December 31, 2021 and for the three and six
months ended June 30, 2022 and 2021 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


During the six months ended June 30, 2022, we owned and managed properties
within five segments: (1) Philadelphia CBD, (2) Pennsylvania Suburbs,
(3) Austin, Texas, (4) Metropolitan Washington, D.C., and (5) Other. The
Philadelphia CBD segment includes properties located in the City of Philadelphia
in Pennsylvania. The Pennsylvania Suburbs segment includes properties in
Chester, Delaware and Montgomery counties in the Philadelphia suburbs. The
Austin, Texas segment includes properties in the City of Austin, Texas. The
Metropolitan Washington, D.C. segment includes properties in Northern Virginia,
Washington, D.C. and Southern Maryland. The Other segment includes properties in
Camden County, New Jersey and New Castle County, Delaware. In addition to the
five segments, our corporate group is responsible for cash and investment
management, development of certain real estate properties during the
construction period, and certain other general support functions.

We generate cash and revenue from leases of space at our Properties and, to a
lesser extent, from the management and development of properties owned by third
parties and from investments in the unconsolidated real estate ventures. Factors
that we evaluate when leasing space include rental rates, costs of tenant
improvements, tenant creditworthiness, current and expected operating costs, the
length of the lease term, vacancy levels and demand for space. We continue to
seek revenue growth throughout our portfolio by increasing occupancy and rental
rates. We also generate cash through sales of assets, including assets that we
do not view as core to our business plan, 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,
residential, parking, and retail 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.

Adverse changes in economic conditions, including the ongoing effects of the
global COVID-19 pandemic and the current inflationary environment, could result
in a reduction of the availability of financing and higher borrowing costs. We
continue to closely monitor the impact of the COVID-19 pandemic and inflation on
all aspects of our business, including how it is impacting our tenants,
employees, and business partners. Vacancy rates may increase, and rental rates
and rent collection rates may decline as the current economic climate may
negatively impact tenants. The long-term impact of the ongoing COVID-19 pandemic
on the global economy and our tenants and prospective tenants remains uncertain
and will depend on new information which may emerge concerning the severity of
COVID-19, new variants of COVID-19 and the actions taken to contain it or treat
its impact. In addition, the government responses to control the pandemic are
creating disruption in the global economy and supply chains and adversely
impacting many industries, including owners and developers of office and
mixed-use buildings.

Overall economic conditions, including but not limited to labor shortages, supply chain constraints, inflation, and deteriorating financial and credit markets, could have a dampening effect on the fundamentals of our business, including increases in past due accounts, tenant defaults, lower occupancy and reduced effective rents. These adverse conditions could impact our net

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income and cash flows and could have a material adverse effect on our financial
condition. We believe that the quality of our assets and the strength of our
balance sheet will enable us to raise capital, if necessary, in various forms
and from different sources, including through secured or unsecured loans from
banks, pension funds and life insurance companies. However, there can be no
assurance that we will be able to borrow funds on terms that are economically
attractive or at all.

The table below summarizes selected operating and leasing statistics of our
wholly owned properties for the three and six months ended June 30, 2022 and
2021:

                                                                                                                Three Months Ended June 30,                     Six Months Ended June 30,
                                                                                                                2022                    2021                   2022                    2021
Leasing Activity
Core Properties (1):
Total net rentable square feet owned                                                                         12,996,825              12,949,078             12,996,825              12,949,078
Occupancy percentage (end of period)                                                                               89.6   %                90.5  %                89.6   %                90.5  %
Average occupancy percentage                                                                                       88.9   %                90.4  %                89.4   %                89.9  %

Total Portfolio, less properties in development/redevelopment (2): Tenant retention rate (3)

                                                                                          70.3   %                57.5  %                60.6   %                54.1  %
New leases and expansions commenced (square feet)                                                               247,597                 156,372                359,694                 185,475
Leases renewed (square feet)                                                                                    137,103                  95,853                519,458                 262,677
Net absorption (square feet)                                                                                     27,391                  19,798               (224,973)               (145,328)

Percentage change in rental rates per square foot (4): New and expansion rental rates

                                       26.2   %                32.7  %                23.9   %                29.8  %
Renewal rental rates                                                                                                8.3   %                13.3  %                17.9   %                11.6  %
Combined rental rates                                                                                              18.4   %                22.2  %                19.6   %                18.7  %
Weighted average lease term for leases commenced (years)                                                            8.0                     8.5                    8.3                     7.1
Capital Costs Committed (5):
Leasing commissions (per square foot)                                                                     $       10.45           $       12.61          $       11.95           $       10.15
Tenant Improvements (per square foot)                                                                     $       39.59           $       35.01          $       35.81           $       27.87
Total capital per square foot per lease year                                                              $        4.85           $        4.29          $        4.44           $        3.83


(1)Does not include properties under development, redevelopment, held for sale,
or sold.
(2)Includes leasing related to completed developments and redevelopments, as
well as sold properties.
(3)Calculated as percentage of total square feet.
(4)Includes base rent plus reimbursement for operating expenses and real estate
taxes.
(5)Calculated on a weighted average basis for leases commenced during the
quarter. Does not include properties under development/redevelopment.

In seeking 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, will not be
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 that accounted for approximately 3.3% of our aggregate final
annualized base rents as of June 30, 2022 (representing approximately 4.8% of
the net rentable square feet of the properties) are scheduled to expire without
penalty in the remainder of 2022. We maintain an active dialogue with our
tenants in an effort to maximize lease renewals. If we are unable to
renew leases or relet space under expiring leases, at anticipated rental rates,
or if tenants terminate their leases early, 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 evaluates our accrued rent receivable reserve policy in light of our tenant base and general and local economic conditions. Our accrued rent receivable allowance was $4.0 million or 2.1% of our accrued rent

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receivable balance as of June 30, 2022 compared to $4.1 million or 2.4% of our accrued rent receivable balance as of December 31, 2021.


If economic conditions deteriorate, including as a result of the ongoing
COVID-19 pandemic and the current inflationary environment, we may experience
increases in past due accounts, defaults, lower occupancy and reduced effective
rents. These conditions would negatively affect our future net income and cash
flows and could have a material adverse effect on our financial condition.

Development Risk


Development projects are subject to a variety of risks, including construction
delays, construction cost overruns, building moratoriums, inability to obtain
financing on favorable terms, inability to lease space at projected rates,
inability to enter into construction, development and other agreements on
favorable terms, and unexpected environmental and other hazards.

As of June 30, 2022 the following active development and redevelopment projects
remain under construction in progress and we were proceeding on the following
activity (dollars, in thousands):

                                                                                                                                                        

Estimated

     Property/Portfolio Name                Location             Expected Completion Date           Activity Type           Approximate Square Footage             Costs             Amount Funded
405 Colorado Street (a)                 Austin, TX                     Q2 2021 (c)                   Development                      205,803                  $  121,987          $      103,312
250 King of Prussia Road (b)            Radnor, PA                       Q3 2022                    Redevelopment                     168,294                  $   82,854          $       52,134
2340 Dulles Corner Boulevard (d)        Herndon, VA                      Q2 2023                    Redevelopment                     268,365           

$ 117,974 $ 68,266



(a)Estimated costs include $2.1 million of existing property basis through a
ground lease. Project includes 520 parking spaces.
(b)Total project costs includes $20.6 million of existing property basis.
(c)The parking garage and occupied portions of the office building were placed
into service during 2021.
(d)Total project costs include $58.0 million of existing property basis.

In addition to the properties listed above, we have classified one parking facility in Philadelphia, Pennsylvania as redevelopment.


On December 1, 2021, we entered into two joint venture agreements to develop One
Uptown, a $328.4 million mixed-used project in Austin, Texas. Construction of
the project commenced during the fourth quarter of 2021 and we have funded $75.9
million of the total estimated project costs as of June 30, 2022. Under the
joint venture agreement, we are required to fund an additional $7.4 million of
the project costs. The remaining $245.1 million of the estimated total project
costs is expected to be funded by our joint venture partner and proceeds from
$206.7 million in construction loans that closed on July 29, 2022. See Note 3,
''Real Estate Investments," to our Consolidated Financial Statements for
additional information regarding the project.

On July 14, 2022, we entered into a joint venture agreement to develop 3151
Market Street, a $307 million life science project in Philadelphia,
Pennsylvania. Construction of the project commenced during the second quarter of
2022 and we have funded $43.0 million of the total estimated project costs as of
June 30, 2022. Under the joint venture agreement, we are required to fund an
additional $24.6 million of the project costs. The remaining $239.4 million of
the estimated total project costs is expected to be funded by our joint venture
partner and proceeds of an expected $185 million in construction loans. See Note
3, ''Real Estate Investments," to our Consolidated Financial Statements for
additional information regarding the project.

As of June 30, 2022 the following active unconsolidated real estate venture development projects remain under construction in progress and we were proceeding on the following activity (dollars, in thousands):

                                                                                                                                                                                                                     Our Share
                                                                                                                                                 Estimated                                 Construction Loan       Remaining to
    Property/Portfolio Name                   Location               Expected Completion Date               Approximate Square Footage             Costs             Amount Funded             Financing             be 

Funded

3025 JFK Boulevard (55%)               Philadelphia, PA                      Q3 2023                                                 (a)       $  287,272          $       99,371          $      186,727          $        -       (b)


(a)Mixed used building with 428,000 rentable square feet consisting of 200,000
SF of life science/innovation office, 219,000 SF of residential (326 units), and
9,000 SF of retail.
(b)We have fully funded our equity commitment of $55.3 million. The remaining
amount of the estimated costs to be funded of $187.9 million will be funded by
our joint venture partner and the available borrowings under the $186.7 million
construction loan.
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CRITICAL ACCOUNTING POLICIES AND ESTIMATES


Management's Discussion and Analysis of Financial Condition and Results of
Operations discuss our consolidated financial statements, which have been
prepared in accordance with GAAP. The preparation of these financial statements
in conformity with GAAP 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 estimate are reasonably
likely to occur from period to period. Management bases its estimates and
assumptions on historical experience and current economic conditions.

Our Annual Report on Form 10-K for the year ended December 31, 2021 contains a
discussion of our critical accounting policies. There have been no significant
changes in our critical accounting policies since December 31, 2021.
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RESULTS OF OPERATIONS


The following discussion is based on our consolidated financial statements for
the three and six months ended June 30, 2022 and 2021. We believe that
presentation of our consolidated financial information, without a breakdown by
segment, will effectively present important information useful to our investors.

Net operating income ("NOI") as presented in the comparative analysis below is a
non-GAAP financial measure defined as total revenue less property operating
expenses, real estate taxes and third party management expenses. Property
operating expenses that are included in determining NOI consist of costs that
are necessary and allocable to our operating properties such as utilities,
property-level salaries, repairs and maintenance, property insurance, and
management fees. General and administrative expenses that are not reflected in
NOI primarily consist of corporate-level salaries, amortization of share awards
and professional fees that are incurred as part of corporate office management.
NOI is a non-GAAP financial measure that we use internally to evaluate the
operating performance of our real estate assets by segment, as presented in Note
13, ''Segment Information," to our consolidated financial statements, and of our
business as a whole. We believe NOI provides useful information to investors
regarding our financial condition and results of operations because it reflects
only those income and expense items that are incurred at the property level.
While NOI is a relevant and widely used measure of operating performance of real
estate investment trusts, it does not represent cash flow from operations or net
income as defined by GAAP and should not be considered as an alternative to
those measures in evaluating our liquidity or operating performance. NOI does
not reflect interest expenses, real estate impairment losses, depreciation and
amortization costs, capital expenditures and leasing costs. We believe that net
income, as defined by GAAP, is the most appropriate earnings measure. See Note
13, ''Segment Information," to our Consolidated Financial Statements for a
reconciliation of NOI to our consolidated net income as defined by GAAP.

Comparison of the Three Months Ended June 30, 2022 and June 30, 2021

The following comparison for the three months ended June 30, 2022 to the three months ended June 30, 2021, makes reference to the effect of the following:


(a)"Same Store Property Portfolio," which represents 73 properties containing an
aggregate of approximately 12.9 million net rentable square feet, and represents
properties that we owned and consolidated for the three-month periods ended
June 30, 2022 and 2021. The Same Store Property Portfolio includes properties
acquired or placed in service on or prior to April 1, 2021 and owned and
consolidated through June 30, 2022, excluding properties classified as held for
sale,
(b)"Total Portfolio," which represents all properties owned and consolidated by
us during the three months ended June 30, 2022 and 2021,
(c)"Recently Completed/Acquired Property," which represents one property placed
into service or acquired on or subsequent to April 1, 2021,
(d)"Development/Redevelopment Properties," which represents four properties
currently in development/redevelopment. A property is excluded from our Same
Store Property Portfolio and moved into Development/Redevelopment in the period
that we determine to proceed with development/redevelopment for a future
development strategy, and
(e)"Q2 2021 through Q2 2022 Dispositions," which represents three properties
disposed of from April 1, 2021 through June 30, 2022.
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Comparison of three months ended June 30, 2022 to the three months ended
June 30, 2021
                                                                                                                                  Recently Completed/Acquired
                                                                   Same Store Property Portfolio                                          Properties                          Development/Redevelopment Properties                  Other (Eliminations) (a)                                      Total Portfolio
(dollars and square feet in millions
except per share amounts)                        2022                    2021            $ Change            % Change                 2022                2021                         2022                         2021              2022               2021             2022             2021            $ Change             % Change
Revenue:
Rents                                       $    110.1                $ 109.0          $     1.1                  1.0  %              $1.2              $ 0.1          $               1.5                        $ 0.1          $        4.1          $  2.0          $ 116.9          $ 111.2          $     5.7                    5.1  %
Third party management fees, labor
reimbursement and leasing                            -                      -                  -                    -  %               -                    -                            -                            -                   5.9             6.6              5.9              6.6               (0.7)                 (10.6) %
Other                                              0.3                    0.3                  -                    -  %               -                    -                            -                            -                   0.9             1.9              1.2              2.2               (1.0)                 (45.5) %
Total revenue                                    110.4                  109.3                1.1                  1.0  %              1.2                 0.1                          1.5                          0.1                  10.9            10.5            124.0            120.0                4.0                    3.3  %
Property operating expenses                       29.3                   27.5                1.8                  6.5  %              0.1                   -                          0.3                         (0.7)                  3.4             2.5             33.1             29.3                3.8                   13.0  %
Real estate taxes                                 13.1                   13.3               (0.2)                (1.5) %              0.1                 0.1                          0.3                          0.8                   0.2             0.4             13.7             14.6               (0.9)                  (6.2) %
Third party management expenses                      -                      -                  -                    -  %               -                    -                            -                            -                   2.8             3.6              2.8              3.6               (0.8)                 (22.2) %
Net operating income                              68.0                   68.5               (0.5)                (0.7) %              1.0                   -                          0.9                            -                   4.5             4.0             74.4             72.5                1.9                    2.6  %
Depreciation and amortization                     39.6                   40.0               (0.4)                (1.0) %              0.6                   -                          0.6                            -                   3.1             2.7             43.9             42.7                1.2                    2.8  %
General & administrative expenses                    -                      -                  -                    -  %               -                    -                            -                            -                   8.3             8.4              8.3              8.4               (0.1)                  (1.2) %

Net gain on disposition of real
estate                                                                                                                                                                                                                                                                    (0.1)            (0.1)                 -                      -  %
Net gain on sale of undepreciated
real estate                                                                                                                                                                                                                                                               (4.1)               -               (4.1)                     -  %
Operating income (loss)                     $     28.4                $  28.5          $    (0.1)                (0.4) %              $0.4              $   -          $               0.3                        $   -          $       (6.9)         $ (7.1)         $  26.4          $  21.5          $     4.9                   22.8  %
Number of properties                                73                     73                                                                1                                           4                                                                                  78
Square feet                                       12.9                   12.9                                                              0.1                                         0.6                                                                                13.8
Core Occupancy % (b)                              89.5   %               90.5  %                                                         100.0  %
Other Income (Expense):
Interest and investment income                                                                                                                                                                                                                                             0.4              1.7               (1.3)                 (76.5) %
Interest expense                                                                                                                                                                                                                                                         (16.3)           (15.5)              (0.8)                   5.2  %
Interest expense - Deferred financing
costs                                                                                                                                                                                                                                                                     (0.8)            (0.7)              (0.1)                  14.3  %

Equity in loss of unconsolidated real
estate ventures                                                                                                                                                                                                                                                           (5.0)            (7.2)               2.2                  (30.6) %

Net income (loss)                                                                                                                                                                                                                                                      $   4.7          $  (0.2)         $     4.9                (2450.0) %
Net income attributable to Common
Shareholders of Brandywine Realty
Trust                                                                                                                                                                                                                                                                  $  0.03          $     -          $    0.03                      -  %



(a)Represents certain revenues and expenses at the corporate level as well as
various intercompany costs that are eliminated in consolidation, third-party
management fees, provisions for impairment, and changes in the accrued rent
receivable allowance. Other/(Eliminations) also includes properties sold and
properties classified as held for sale.
(b)Pertains to Core Properties.

Total Revenue


Rents from the Total Portfolio increased primarily as a result of the following:
•$1.2 million increase related to the commencement of operations of B.Labs, a
life science incubator lab in our Philadelphia CBD segment, during the first
quarter of 2022;
•$1.1 million increase related to our Recently Completed/Acquired Property;
•$1.2 million increase related to a development property in our Austin, Texas
segment that was partially placed into service during the third quarter of 2021;
and
•$0.8 million increase related to the residential and hotel components at the
FMC Tower in our Philadelphia CBD segment related to higher occupancy partially
due to the lifting of COVID-19 pandemic restrictions.

Third party management fees, labor reimbursement, and leasing income decreased
primarily due to a $0.5 million decrease related to a third party management
contract terminated in the fourth quarter of 2021 and a $0.3 million decrease in
fees earned from our MAP Venture primarily related to decreases in leasing
commissions and construction management fees.

Other income decreased primarily due to $0.7 million in excess insurance proceeds related to a property in our Austin, Texas segment as well as $0.4 million in proceeds related to a legal settlement during the second quarter of 2021.


Property Operating Expenses

Property operating expenses across our Total Portfolio increased primarily as a result of the following:

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•$0.7 million increase related to a development property in our Austin, Texas
segment that was partially placed into service during the third quarter of 2021;
•$0.6 million increase related to the commencement of operations of B.Labs, a
life science incubator lab in our Philadelphia CBD segment, during the first
quarter of 2022; and
•$0.5 million increase at the restaurant component of FMC Tower primarily as a
result of the lifting of COVID-19 pandemic restrictions.

The remaining increase of $2.0 million is primarily related to miscellaneous
increases in property operating expenses across our Total Portfolio, primarily
driven by increases in property-related employee compensation expenses,
marketing expenses, and repairs and maintenance.

Depreciation and Amortization


Depreciation and amortization expense increased primarily as a result of the
following:
•$0.6 million increase related to commencement of operations of B.Labs, a life
science incubator lab in our Philadelphia CBD segment, during the first quarter
of 2022; and
•$0.6 million increase related to our Recently Completed/Acquired Property.

Net Gain on Sale of Undepreciated Real Estate


The gain of $4.1 million recognized during the three months ended June 30, 2022
is related to the sale of one parcel of land in our Metropolitan Washington,
D.C. segment and the sale of a portfolio of four parcels of land and two office
buildings in our Other segment.

Interest and Investment Income


Interest and investment income decreased primarily as a result of a $1.2 million
decrease related to our preferred equity investment in a single-purpose entity
that owned two stabilized office buildings located in Austin, Texas, which
closed on December 31, 2020 and was redeemed prior to maturity on September 3,
2021.

Equity in loss of unconsolidated real estate ventures


Equity in loss of unconsolidated real estate ventures decreased primarily due to
the following:
•$1.9 million decrease associated with our Commerce Square Venture primarily due
to a decrease in the amortization of in-place lease intangibles during the three
months ended June 30, 2022 compared to the three months ended June 30, 2021;
•$0.4 million decrease related to our 4040 Wilson Venture primarily; and
•$0.3 million decrease associated with our 1919 Market Venture.

Comparison of the Six Months Ended June 30, 2022 and June 30, 2021

The following comparison for the six months ended June 30, 2022 to the six months ended June 30, 2021, makes reference to the effect of the following:


(a)"Same Store Property Portfolio," which represents 73 properties containing an
aggregate of approximately 12.9 million net rentable square feet, and represents
properties that we owned and consolidated for the six-month periods ended
June 30, 2022 and 2021. The Same Store Property Portfolio includes properties
acquired or placed in service on or prior to January 1, 2021 and owned and
consolidated through June 30, 2022 excluding properties classified as held for
sale,
(b)"Total Portfolio," which represents all properties owned and consolidated by
us during the six months ended June 30, 2022 and 2021,
(c)"Recently Completed/Acquired Property," which represents one property placed
into service or acquired on or subsequent to January 1, 2021,
(d)"Development/Redevelopment Properties," which represents four properties
currently in development/redevelopment. A property is excluded from our Same
Store Property Portfolio and moved into Development/Redevelopment in the period
that we determine to proceed with development/redevelopment for a future
development strategy, and
(e)"YTD 2021 and 2022 Dispositions," which represents three properties disposed
of from January 1, 2021 through June 30, 2022.

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Comparison of the six months ended June 30, 2022 to the six months ended June
30, 2021

                                                                  Same Store Property Portfolio                               Recently Completed/Acquired Properties              Development/Redevelopment Properties                  Other (Eliminations) (a)                                      Total Portfolio
(dollars and square feet in millions
except per share amounts)                       2022                    2021            $ Change            % Change                2022                      2021                        2022                        2021                2022                2021             2022             2021            $ Change         % Change
Revenue:
Rents                                      $    220.8                $ 219.9          $     0.9                  0.4  %       $       2.3                   $ 0.1          $              2.6                       $  0.2          $         7.1          $   4.5          $ 232.8          $ 224.7          $     8.1                   3.6  %
Third party management fees, labor
reimbursement and leasing                           -                      -                  -                    -  %                 -                       -                           -                            -                   11.0             13.3             11.0             13.3               (2.3)                (17.3) %
Other                                             0.6                    0.5                0.1                 20.0  %                 -                       -                         0.1                            -                    7.0              2.4              7.7              2.9                4.8                 165.5  %
Total revenue                                   221.4                  220.4                1.0                  0.5  %               2.3                     0.1                         2.7                          0.2                   25.1             20.2            251.5            240.9               10.6                   4.4  %
Property operating expenses                      58.0                   55.5                2.5                  4.5  %               0.3                    (0.1)                        0.6                         (1.1)                   5.8              3.9             64.7             58.2                6.5                  11.2  %
Real estate taxes                                26.2                   26.4               (0.2)                (0.8) %               0.1                     0.1                         0.5                          1.6                    0.8              1.3             27.6             29.4               (1.8)                 (6.1) %
Third party management expenses                     -                      -                  -                    -  %                 -                       -                           -                            -                    5.3              6.5              5.3              6.5               (1.2)                (18.5) %
Net operating income                            137.2                  138.5               (1.3)                (0.9) %               1.9                     0.1                         1.6                         (0.3)                  13.2              8.5            153.9            146.8                7.1                   4.8  %
Depreciation and amortization                    79.5                   77.6                1.9                  2.4  %               1.1                       -                         1.0                          0.4                    6.0              5.2             87.6             83.2                4.4                   5.3  %
General & administrative expenses                   -                      -                  -                    -  %                 -                       -                           -                            -                   18.3             14.9             18.3             14.9                3.4                  22.8  %

Net gain on disposition of real
estate                                                                                                                                                                                                                                                                         (0.1)            (0.1)                 -                     -  %
Net gain on sale of undepreciated
real estate                                                                                                                                                                                                                                                                    (5.0)            (2.0)              (3.0)                150.0  %
Operating income (loss)                    $     57.7                $  60.9          $    (3.2)                (5.3) %       $       0.8                   $ 0.1          $              0.6                       $ (0.7)         $       (11.1)         $ (11.6)         $  53.1          $  50.8          $     2.3                   4.5  %
Number of properties                               73                     73                                                            1                                                   4                                                                                    78
Square feet                                      12.9                   12.9                                                          0.1                                                 0.6                                                                                  13.8
Core Occupancy % (b)                             89.5   %               90.5  %                                                     100.0     %
Other Income (Expense):
Interest and investment income                                                                                                                                                                                                                                                  0.9              3.4               (2.5)                (73.5) %
Interest expense                                                                                                                                                                                                                                                              (32.1)           (31.8)              (0.3)                  0.9  %
Interest expense - Deferred
financing costs                                                                                                                                                                                                                                                                (1.5)            (1.4)              (0.1)                  7.1  %

Equity in loss of unconsolidated
real estate ventures                                                                                                                                                                                                                                                           (9.5)           (14.2)               4.7                 (33.1) %

Income tax provision                                                                                                                                                                                                                                                           (0.1)               -               (0.1)                    -  %
Net income                                                                                                                                                                                                                                                                  $  10.8          $   6.8          $     4.0                  58.8  %
Net income attributable to Common
Shareholders of Brandywine Realty
Trust                                                                                                                                                                                                                                                                       $  0.06          $  0.04          $    0.02                  50.0  %


(a)Represents certain revenues and expenses at the corporate level as well as
various intercompany costs that are eliminated in consolidation, third-party
management fees, provisions for impairment, and changes in the accrued rent
receivable allowance. Other/(Eliminations) also includes properties sold and
properties classified as held for sale.
(b)Pertains to Core Properties.

Total Revenue


Rents from the Total Portfolio increased primarily as a result of the following:
•$2.3 million increase related to a development property in our Austin, Texas
segment that was partially placed into service during the third quarter of 2021;
•$2.2 million increase related to our Recently Completed/Acquired Property;
•$2.0 million increase related to the residential and hotel components at the
FMC Tower in our Philadelphia CBD segment related to higher occupancy partially
due to the lifting of COVID-19 pandemic restrictions; and
•$1.4 million increase related to the commencement of operations of B.Labs, a
life science incubator lab in our Philadelphia CBD segment, during the first
quarter of 2022.

Third party management fees, labor reimbursement, and leasing income decreased
primarily due to a $1.1 million decrease in fees earned from our MAP Venture
primarily related to decreases in leasing commissions and construction
management fees, $1.0 million decrease related to a third party management
contract terminated in the fourth quarter of 2021, and $0.3 million decrease as
a result of the sale of the final property at our Allstate Venture during the
fourth quarter of 2021.
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Other income increased primarily as a result of the following:
•$3.4 million in excess insurance proceeds received during the six months ended
June 30, 2022 offset by $0.7 million received during the six months ended June
30, 2021 related to a property in our Austin, Texas segment; and
•$2.2 million of settlement proceeds received from a general contractor for
liquidated damages as a result of a construction delay at a property in our
Austin, Texas segment.

Property Operating Expenses


Property operating expenses across our Total Portfolio increased primarily as a
result of the following:
•$1.4 million increase related to the commencement of operations of B.Labs, a
life science incubator lab in our Philadelphia CBD segment, during the first
quarter of 2022;
•$1.4 million increase related to a development property in our Austin, Texas
segment that was partially placed into service during the third quarter of 2021;
•$0.8 million increase at the restaurant component of FMC Tower primarily as a
result of the lifting of COVID-19 pandemic restrictions; and
•$0.3 million increase related to the Recently Completed/Acquired Property.

The remaining increase of $2.6 million is related to miscellaneous increases in property operating expenses across our Total Portfolio, primarily driven by increased use of our properties by the tenants as a result of lifting of COVID-19 pandemic restrictions and increases in property-related employee compensation expenses, marketing expenses, and repairs and maintenance.

Real Estate Taxes

Real estate taxes decreased primarily due to a $1.1 million decrease across properties in our Pennsylvania Suburbs segment as a result of tax reassessments.

Depreciation and Amortization


Depreciation and amortization expense increased primarily as a result of the
following:
•$3.3 million increase in depreciation expense due to the reassessment of the
estimated useful life of seven properties in our Austin, Texas segment pursuant
to future demolition plans as part of our Broadmoor master development plan
beginning in the second quarter of 2021; and
•$1.2 million increase related to the commencement of operations of B.Labs, a
life science incubator lab in our Philadelphia CBD segment, during the first
quarter of 2022.

General and Administrative

General and administrative expenses increased primarily as a result of a $2.4
million recovery of previously expensed legal fees incurred in pursuit of a
settlement that was received in the first quarter of 2021. In addition, $1.4
million of the increase is related to increased non-cash compensation expense
during the six months ended June 30, 2022 compared to the six months ended June
30, 2021.

Net Gain on Sale of Undepreciated Real Estate

The gain of $5.0 million recognized during the six months ended June 30, 2022 is due to the following:


•$3.4 million related to the sale of a parcel of land in our Metropolitan
Washington, D.C. segment; and
•$0.6 million related to the sale of a portfolio of five parcels of land and
three operating properties in our Other segment.

The gain of $2.0 million recognized during the six months ended June 30, 2021 is
related to the formation of the 3025 JFK Venture, which resulted in
deconsolidation of the project and recognition of our investment in the real
estate venture at fair value.

Interest and Investment Income


Interest and investment income decreased by $2.5 million primarily as a result
of our preferred equity investment in a single-purpose entity that owned two
stabilized office buildings located in Austin, Texas, which closed on December
31, 2020 and was redeemed prior to maturity on September 3, 2021.

Equity in Loss of Unconsolidated Real Estate Ventures

Equity in loss of unconsolidated real estate ventures increased primarily due to the following:

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•$3.1 million decrease associated with our Commerce Square Venture primarily due
to a decrease in the amortization of in-place lease intangibles during the six
months ended June 30, 2022 compared to the six months ended June 30, 2021;
•$0.6 million decrease associated with our 1919 Market Venture;
•$0.6 million decrease associated with our 4040 Wilson Venture; and
•$0.4 million decrease associated with MAP Venture.
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LIQUIDITY AND CAPITAL RESOURCES

General


Our principal liquidity funding needs for the next twelve months are as follows:
•normal recurring expenses;
•capital expenditures, including capital and tenant improvements and leasing
costs;
•debt service and principal repayment obligations;
•current development and redevelopment costs;
•commitments to unconsolidated real estate ventures;
•distributions to shareholders to maintain our REIT status;
•possible acquisitions of properties, either directly or indirectly through the
acquisition of equity interest therein; and
•possible common share repurchases.

We expect to satisfy these needs using one or more of the following:
•cash flows from operations;
•distributions of cash from our unconsolidated real estate ventures;
•cash and cash equivalent balances;
•availability under our unsecured credit facility;
•secured construction loans and long-term unsecured indebtedness;
•sales of real estate or contributions of interests in real estate to joint
ventures; and
•issuances of Parent Company equity securities and/or units of the Operating
Partnership.

As of June 30, 2022, the Parent Company owned a 99.7% interest in the Operating
Partnership. The remaining interest of approximately 0.3% pertains to common
limited partnership interests owned by non-affiliated investors who contributed
property to the Operating Partnership in exchange for their interests. As the
sole general partner of the Operating Partnership, the Parent Company has full
and complete responsibility for the Operating Partnership's day-to-day
operations and management. The Parent Company's source of funding for its
dividend payments and other obligations is the distributions it receives from
the Operating Partnership.

As summarized above, we believe that our liquidity needs will be satisfied
through available cash balances and cash flows from operations, financing
activities and real estate sales. Rental revenue and other income from
operations are our principal sources of cash 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 that our revenue, together with proceeds
from property sales 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. With uncertain
economic conditions, vacancy rates may increase, effective rental rates on new
and renewed leases may decrease and tenant installation costs, including
concessions, may increase in most or all of our markets during 2022 and possibly
beyond. As a result, our revenues and cash flows could be insufficient to cover
operating expenses, including increased tenant installation costs, pay debt
service or make distributions to shareholders over the short-term. If this
situation were to occur, we expect that we would finance cash deficits through
borrowings under our unsecured credit facility and other sources of debt and
equity financings. In addition, a material adverse change in cash provided by
operations could adversely affect our compliance with financial performance
covenants under our unsecured credit facility, including unsecured term loans
and unsecured notes. As of June 30, 2022 we were in compliance with all of our
debt covenants and requirement obligations.

On June 30, 2022, we executed the 2022 Credit Agreement, which, among other
things, provides for the Revolving Credit Facility and Term Loan. As of June 30,
2022, based on the Operating Partnership's unsecured senior debt rating, the
applicable margin for revolving loans under the Revolving Credit Facility was
105.0 basis points (excluding the applicable facility fee of 25 basis points)
and was 120.0 basis points for the Term Loan, plus, in each case, a daily SOFR
adjustment of 10 basis points. Through a series of interest rate swaps, the
$250.0 million principal amount of the Term Loan has a fixed interest rate of
2.87% until October 8, 2022. See Note 7, ''Debt Obligations," for further
information.

In addition, we are continuing to monitor the ongoing COVID-19 pandemic and the
related economic impacts, inflation, market volatility, and business disruption,
and its impact on our tenants. The severity and duration of the pandemic and its
impact on our operations and liquidity is uncertain and continues to evolve
globally. However, if the pandemic continues, there will likely be continued
negative economic impacts, market volatility, and business disruption which
could negatively impact our tenants'
                                       41

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Table of Contents ability to pay rent, our ability to lease vacant space, and our ability to complete development and redevelopment projects, and these consequences, in turn, could materially impact our results of operations.


We have granted rent relief requests primarily to our co-working and retail
tenants. The relief requests have substantially all been in the form of rent
deferral for varying lengths of time, but were primarily repaid in 2020 and
2021. For those tenants we believe require rent relief, we have granted
deferrals and, in some instances, rent abatements while receiving extended lease
terms through favorable lease extensions. We continue to assess the merits of
rent deferral requests and can give no assurances on the outcomes of these
ongoing negotiations, the amount and nature of the rent relief packages and
ultimate recovery of the amounts deferred.

We use multiple financing sources to fund our long-term capital needs. When
needed, we use borrowings under our unsecured credit facility for general
business purposes, including to meet debt maturities and to fund distributions
to shareholders as well as development and acquisition costs and other expenses.
In light of the volatility in financial markets and economic uncertainties, it
is possible, that one or more lenders under our unsecured credit facility could
fail to fund a borrowing request. Such an event could adversely affect our
ability to access funds under our unsecured credit facility when needed to fund
distributions or pay expenses.

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 lenders. If one or more
rating agencies were to downgrade our unsecured credit rating, our access to the
unsecured debt market would be more limited and the interest rate under our
unsecured credit facility and unsecured term loan would increase.

The Parent Company unconditionally guarantees the Operating Partnership's unsecured debt obligations, which, as of June 30, 2022, amounted to $2,042.6 million. We did not have any secured debt obligations on our wholly-owned portfolio as of June 30, 2022.

Capital Markets


The Parent Company issues equity from time to time, the proceeds of which it
contributes to the Operating Partnership in exchange for additional interests in
the Operating Partnership, and guarantees debt obligations of the Operating
Partnership. The Parent Company's ability to sell common shares and preferred
shares is dependent on, among other things, general market conditions for REITs,
market perceptions about the Company as a whole and the current trading price of
the Parent Company's shares. The Parent Company maintains a shelf registration
statement that covers the offering and sale of common shares, preferred shares,
depositary shares, 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
shelf registration statement or in transactions exempt from registration.

See Note 11, ''Beneficiaries' Equity of the Parent Company," to our Consolidated
Financial Statements for further information related to our share repurchase
program. We expect to fund any additional share repurchases with a combination
of available cash balances and availability under our unsecured credit facility.
The timing and amounts of any repurchases will depend on a variety of factors,
including market conditions, regulatory requirements, share prices, capital
availability and other factors as determined by our management team. The
repurchase program does not require the purchase of any minimum number of shares
and may be suspended or discontinued at any time without notice.

Capital Recycling


The Operating Partnership also considers net sales of selected properties and
recapitalization of unconsolidated real estate ventures as additional sources of
managing its liquidity. During the six months ended June 30, 2022, we closed on
the sale of three parcels of land for net cash proceeds of $38.8 million as well
as a portfolio of 3 office properties and 5 parcels of land in Gibbsboro, New
Jersey for net cash proceeds of $4.0 million.

As of June 30, 2022, we had $28.8 million of cash and cash equivalents and
$381.7 million of available borrowings under our unsecured credit facility, net
of $4.3 million in letters of credit outstanding. Based on the foregoing, as
well as cash flows from operations net of dividend requirements, we believe we
have sufficient capital to fund our remaining capital requirements on existing
development and redevelopment projects and pursue additional attractive
investment opportunities. We expect that our primary uses of capital during the
remainder of 2022 will be to fund our current development and redevelopment
projects.

Cash Flows

The following discussion of our cash flows is based on the consolidated statement of cash flows and is not meant to be a comprehensive discussion of the changes in our cash flows for the periods presented.

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As of June 30, 2022 and December 31, 2021, we maintained cash and cash equivalents and restricted cash of $29.8 million and $28.3 million, respectively. We report and analyze our cash flows based on operating activities, investing activities, and financing activities. The following table summarizes changes in our cash flows (in thousands):

                                    Six Months Ended June 30,
Activity                  2022             2021        (Decrease) Increase
Operating            $   78,494         $ 79,126      $               (632)
Investing              (188,862)         (68,403)                 (120,459)
Financing               111,848           (9,288)                  121,136
Net cash flows       $    1,480         $  1,435      $                 45


Our principal source of cash flows is from the operation of our Properties. Our
Properties provide a relatively consistent stream of cash flows that provides us
with the resources to fund operating expenses, debt service and quarterly
dividends. The decrease in operating cash flows is primarily due to the timing
of operating expense payments.

Cash is used in investing activities to fund acquisitions, development, or
redevelopment projects and recurring and nonrecurring capital expenditures. We
selectively invest in new projects that enable us to take advantage of our
development, leasing, financing, and property management skills and invest in
existing buildings that meet our investment criteria. During the six months
ended June 30, 2022, when compared to the six months ended June 30, 2021, the
change in investing cash flows was due to the following activities (in
thousands):

                                                                                          (Decrease)
                                                                                           Increase
Acquisitions of real estate                                                             $     (3,446)
Capital expenditures and capitalized interest                                               (124,945)
Capital improvements/acquisition deposits/leasing costs                                      (14,309)
Joint venture investments                                                                    (11,145)
Proceeds from the sale of properties                                                          34,067
Capital distributions from unconsolidated real estate ventures                                   569
Other investing activities                                                                    (1,250)

Increase in net cash used in investing activities                                       $   (120,459)


We generally fund our investment activity through the sale of real estate,
property-level financing, credit facilities, senior unsecured notes, and
construction loans. From time to time, we may issue common or preferred shares
of beneficial interest, or the Operating Partnership may issue common or
preferred units of limited partnership interest. During the six months ended
June 30, 2022, when compared to the six months ended June 30, 2021, the change
in financing cash flows was due to the following activities (in thousands):

                                                                (Decrease) 

Increase

   Proceeds from debt obligations                              $            

100,000

   Repayments of debt obligations                                           

33,000

   Redemption of limited partnership units                                  

(1,772)


   Dividends and distributions paid                                         

(113)

   Debt financing costs paid                                                

(6,641)

   Other financing activities                                               

(3,338)

   Increase in net cash provided by financing activities       $            

121,136

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Capitalization

Indebtedness

The table below summarizes indebtedness under our unsecured debt at June 30,
2022 and December 31, 2021:

                                                 June 30, 2022      December 31, 2021
                                                        (dollars in thousands)
Balance: (a)
Fixed rate                                      $  1,750,000       $       1,750,000
Variable rate - unhedged                             292,610                 101,610
Total                                           $  2,042,610       $       1,851,610
Percent of Total Debt:
Fixed rate                                              85.7  %                 94.5  %
Variable rate - unhedged                                14.3  %                  5.5  %
Total                                                  100.0  %                100.0  %
Weighted-average interest rate at period end:
Fixed rate                                               3.8  %                  3.8  %
Variable rate - unhedged                                 2.5  %                  1.3  %
Total                                                    3.7  %                  3.7  %
Weighted-average maturity in years:
Fixed rate                                                  4.2                  4.0
Variable rate - unhedged                                    6.5                 10.6
Total                                                       4.5                  4.4

(a)Consists of unpaid principal and does not reflect premium/discount or deferred financing costs.


Scheduled principal payments and related weighted average annual effective
interest rates for our debt as of June 30, 2022 were as follows (dollars in
thousands):

                                                                                                       Weighted Average
                                                                         Principal                     Interest Rate of
                         Period                                          maturities                      Maturing Debt
2022 (six months remaining)                                          $             -                                   -  %
2023                                                                         350,000                                3.87  %
2024                                                                         350,000                                3.78  %
2025                                                                               -                                   -  %
2026                                                                         214,000                                2.59  %
2027                                                                         700,000                                3.61  %
2028                                                                               -                                   -  %
2029                                                                         350,000                                4.30  %
2030                                                                               -                                   -  %
2031                                                                               -                                   -  %
Thereafter                                                                    78,610                                2.44  %
Totals                                                               $     2,042,610                                3.65  %


We anticipate refinancing our $350 million 3.95% Guaranteed Notes prior to the
February 2023 maturity with similar guaranteed notes that will likely have a
term between five and ten years. In the current interest rate environment, we
anticipate the new guaranteed notes will have an effective interest rate that is
above the current effective interest rate.

Unsecured Debt


The Operating Partnership is the issuer of our unsecured notes which are fully
and unconditionally guaranteed by the Parent Company. The indenture under which
the Operating Partnership issued its unsecured notes contains financial
covenants, including: (i) a leverage ratio not to exceed 60%; (ii) a secured
debt leverage ratio not to exceed 40%; (iii) a debt service coverage ratio of
greater than 1.5 to 1.0; and (iv) an unencumbered asset value of not less than
150% of unsecured debt. The Operating Partnership is in compliance with all
covenants as of June 30, 2022.

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  Table of Contents
The charter documents of the Parent Company and Operating Partnership do not
limit the amount or form of indebtedness that the Operating Partnership may
incur, and its policies on debt incurrence are solely within the discretion of
the Parent Company's Board of Trustees, subject to the financial covenants in
the 2022 Credit Agreement, the indenture and other credit agreements.

Equity


In order to maintain its qualification as a REIT, the Parent Company is required
to, among other things, pay dividends to its shareholders of at least 90% of its
REIT taxable income. See Note 11, ''Beneficiaries' Equity of the Parent
Company," to our Consolidated Financial Statements for further information
related to our dividends declared for the second quarter of 2022.

Inflation


Substantially all our leases are structured as base year or triple net leases
which provide for reimbursement billings for operating expense pass-through
charges, real estate tax and insurance reimbursements on a per square-foot
basis, or in some cases, annual reimbursement of operating expenses above
certain per square-foot allowances. In addition, approximately 96% of our leases
(as a proportion of our wholly-owned portfolio square feet) contain effective
annual rent escalations that are either fixed (generally ranging from 2.5% to
3.0%) or indexed based on a consumer price index or other indices. Accordingly,
we do not believe that our cash flows or earnings from real estate operations
are subject to significant risks from inflation. However, a period of high
inflation would cause an increase in the borrowing cost on our variable rate
debt and would have an impact on our ability to refinance existing debt or
obtain new debt at favorable terms.

Contractual Obligations

Refer to our Annual Report on Form 10-K for the year ended December 31, 2021 for a discussion of our contractual obligations.

There have been no material changes, outside the ordinary course of business, to these contractual obligations during the three months ended June 30, 2022.

Funds from Operations (FFO)


Pursuant to the revised definition of FFO adopted by the Board of Governors of
the National Association of Real Estate Investment Trusts ("NAREIT"), we
calculate FFO by adjusting net income/(loss) attributable to common unit holders
(computed in accordance with GAAP) for gains (or losses) from sales of
properties, impairment losses on depreciable consolidated real estate,
impairment losses on investments in unconsolidated real estate ventures driven
by a measurable decrease in the fair value of depreciable real estate held by
the unconsolidated real estate ventures, real estate related depreciation and
amortization, and after similar adjustments for unconsolidated real estate
ventures. Our calculation of FFO includes gains from sale of undepreciated real
estate and other assets, considered incidental to our main business, to third
parties or unconsolidated real estate ventures. FFO is a non-GAAP financial
measure. We believe that the use of FFO combined with the required GAAP
presentations, has been beneficial in improving the understanding of operating
results of REITs among the investing public and making comparisons of REITs'
operating results more meaningful. We consider FFO to be a useful measure for
reviewing comparative operating and financial performance because, by excluding
property impairments, gains or losses related to sales of previously depreciated
operating real estate assets and real estate depreciation and amortization, FFO
can help the investing public compare the operating performance of a company's
real estate between periods or as compared to other companies. Our computation
of FFO may not be comparable to FFO reported by other REITs or real estate
companies that do not define the term in accordance with the current NAREIT
definition or that interpret the current NAREIT definition differently.

We consider net income, as defined by GAAP, to be the most comparable earnings
measure to FFO. While FFO and FFO per unit are relevant and widely used measures
of operating performance of REITs, FFO does not represent cash flow from
operations or net income as defined by GAAP and should not be considered as
alternatives to those measures in evaluating our liquidity or operating
performance. We believe that to further understand our performance, FFO should
be compared with our reported net income/(loss) attributable to common unit
holders and considered in addition to cash flows in accordance with GAAP, as
presented in our consolidated financial statements.
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The following table presents a reconciliation of net income attributable to
common unitholders to FFO for the three and six months ended June 30, 2022 and
2021:

                                                       Three Months Ended June 30,                     Six Months Ended June 30,
                                                       2022                    2021                   2022                    2021
                                                                    (amounts in thousands, except share information)
Net income (loss) attributable to common         $        4,555          $        (268)         $       10,510          $       6,551
unitholders
Add (deduct):
Amount allocated to unvested restricted                      98                     94                     246                    240

unitholders


Net gain on disposition of real estate                     (144)                   (68)                   (144)                  (142)

Depreciation and amortization:
Real property                                            36,631                 34,294                  72,793                 65,828
Leasing costs including acquired intangibles              6,597                  7,954                  13,591                 16,234
Company's share of unconsolidated real estate            12,903                 14,060                  24,198                 27,791

ventures

Partners' share of consolidated real estate                  (5)                    (5)                    (10)                   (10)

ventures

Funds from operations                            $       60,635          $  

56,061 $ 121,184 $ 116,492 Funds from operations allocable to unvested

                (154)                  (150)                   (392)                  (363)
restricted shareholders
Funds from operations available to common share  $       60,481          $  

55,911 $ 120,792 $ 116,129 and unit holders (FFO) Weighted-average shares/units outstanding - 172,043,498

            171,792,415             171,985,863            171,699,909
basic (a)
Weighted-average shares/units outstanding -         172,776,896            173,289,294             173,149,640            172,958,591

fully diluted (a)

(a)Includes common shares and partnership units outstanding through the three and six months ended June 30, 2022 and 2021, respectively.

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