Brandywine Narrows Losses, Revenue Dips Amid Asset Revaluation

TL;DR

Brandywine's losses are shrinking thanks to fewer write-downs, but falling revenue and asset values mean this REIT is still a tough hold.

AI Summary

Brandywine Operating Partnership, L.P. (the "Company") reported a net loss of $25.998 million for the three months ended September 30, 2025, a significant improvement from the $165.720 million net loss in the same period of 2024. For the nine months ended September 30, 2025, the net loss was $141.990 million, also an improvement from the $151.867 million loss in the prior year. Total revenue decreased to $121.417 million for the three months ended September 30, 2025, down from $131.782 million in 2024, primarily due to a reduction in rents from $117.958 million to $114.742 million. Operating expenses saw a substantial decrease, falling to $96.255 million for the three months ended September 30, 2025, from $141.241 million in 2024, largely driven by a lower provision for impairment, which was $0 in 2025 compared to $37.980 million in 2024. The Company's total assets decreased from $3.492 billion as of December 31, 2024, to $3.319 billion as of September 30, 2025, mainly due to a reduction in operating real estate investments, net, from $2.221 billion to $2.048 billion. Total liabilities increased slightly from $2.447 billion to $2.472 billion over the same period, with unsecured senior notes increasing from $1.618 billion to $1.776 billion. The Company's equity decreased from $1.044 billion to $846.902 million.

Why It Matters

This 10-Q reveals Brandywine's efforts to stabilize its financial position by significantly reducing impairment charges, which is a positive signal for investors concerned about asset values in the real estate sector. However, the continued decline in revenue, particularly rents, suggests ongoing challenges in its core business, potentially impacting future dividend sustainability and competitive standing against other REITs. Employees might face pressure if cost-cutting measures continue, while customers could see changes in property management or offerings. The broader market will watch how Brandywine navigates a high-interest rate environment and evolving office space demand, as its performance can be a bellwether for the commercial real estate market.

Risk Assessment

Risk Level: medium — The company reported a net loss of $25.998 million for the three months ended September 30, 2025, and a total liabilities increase to $2.472 billion from $2.447 billion as of December 31, 2024. While the reduction in impairment charges is positive, the decline in total revenue from $131.782 million to $121.417 million for the three months ended September 30, 2025, indicates ongoing operational challenges.

Analyst Insight

Investors should monitor future revenue trends and occupancy rates closely, as the decline in rents suggests underlying weakness in the core business. Consider holding existing positions if the trend of reduced impairment charges continues, but new investments should be approached cautiously until a clear path to revenue growth is established.

Financial Highlights

debt To Equity

2.92

revenue

$121,417,000

operating Margin

N/A

total Assets

$3,319,401,000

total Debt

$2,269,450,000

net Income

-$25,998,000

eps

-$0.15

gross Margin

N/A

cash Position

$75,478,000

revenue Growth

-7.9%

Revenue Breakdown

Key Numbers

• $25.998M — Net Loss (Q3 2025) (Significant improvement from $165.720M net loss in Q3 2024)
• $121.417M — Total Revenue (Q3 2025) (Decrease from $131.782M in Q3 2024)
• $0 — Provision for Impairment (Q3 2025) (Down from $37.980M in Q3 2024, driving loss reduction)
• $3.319B — Total Assets (Sep 30, 2025) (Decrease from $3.492B as of Dec 31, 2024)
• $2.472B — Total Liabilities (Sep 30, 2025) (Slight increase from $2.447B as of Dec 31, 2024)
• $1.776B — Unsecured Senior Notes (Sep 30, 2025) (Increased from $1.618B as of Dec 31, 2024)
• $846.902M — Total Beneficiaries' Equity (Sep 30, 2025) (Decreased from $1.044B as of Dec 31, 2024)
• $0.15 — Basic Loss per Common Share (Q3 2025) (Improved from $0.96 in Q3 2024)
• 173,699,039 — Common Shares Outstanding (Sep 30, 2025) (Slight increase from 172,665,995 as of Dec 31, 2024)
• 99.7% — Parent Company Ownership in Operating Partnership (As of September 30, 2025, indicating strong control)

Key Players & Entities

• BRANDYWINE OPERATING PARTNERSHIP, L.P. (company) — Registrant for 10-Q filing
• Brandywine Realty Trust (company) — Parent Company and sole general partner of the Operating Partnership
• SEC (regulator) — Securities and Exchange Commission
• $25.998 million (dollar_amount) — Net loss for three months ended September 30, 2025
• $165.720 million (dollar_amount) — Net loss for three months ended September 30, 2024
• $141.990 million (dollar_amount) — Net loss for nine months ended September 30, 2025
• $151.867 million (dollar_amount) — Net loss for nine months ended September 30, 2024
• $121.417 million (dollar_amount) — Total revenue for three months ended September 30, 2025
• $131.782 million (dollar_amount) — Total revenue for three months ended September 30, 2024
• $37.980 million (dollar_amount) — Provision for impairment for three months ended September 30, 2024

FAQ

Risk Factors

• Increased Unsecured Senior Notes [medium — financial]: Unsecured senior notes increased from $1.618 billion to $1.776 billion as of September 30, 2025. This rise in debt, coupled with a decrease in total equity, could increase financial leverage and risk.
• Declining Total Assets and Equity [medium — financial]: Total assets decreased from $3.492 billion to $3.319 billion, primarily due to a reduction in operating real estate investments. Concurrently, total beneficiaries' equity fell from $1.044 billion to $846.902 million, indicating a potential strain on the company's financial foundation.
• Reduction in Operating Real Estate Investments [medium — operational]: The decrease in operating real estate investments, net, from $2.221 billion to $2.048 billion suggests a potential divestment strategy or a decline in the value of existing properties. This could impact future rental income and operational scale.
• Revenue Decline [medium — financial]: Total revenue for Q3 2025 was $121.417 million, down from $131.782 million in Q3 2024, primarily due to a decrease in rents from $117.958 million to $114.742 million. This trend needs careful monitoring for sustained impact.
• Significant Net Loss Improvement [low — financial]: While the net loss improved significantly to $25.998 million in Q3 2025 from $165.720 million in Q3 2024, the company still reported a substantial loss. The improvement was largely driven by a $37.980 million reduction in impairment charges.

Industry Context

Brandywine Operating Partnership, L.P. operates within the real estate investment trust (REIT) sector, specifically focusing on office and life science properties. The industry is characterized by its sensitivity to economic cycles, interest rate fluctuations, and evolving tenant demands for workspace. Companies in this sector often manage large portfolios of physical assets, requiring significant capital investment and ongoing operational management.

Regulatory Implications

As a publicly traded entity, Brandywine Operating Partnership, L.P. is subject to SEC regulations and accounting standards, requiring transparent financial reporting. Changes in real estate laws, zoning, or environmental regulations could impact property development and operations. Compliance with debt covenants and reporting requirements for its various debt instruments is also crucial.

What Investors Should Do

1. Monitor Debt Levels and Servicing Capacity
2. Analyze Real Estate Portfolio Performance
3. Evaluate Drivers of Net Loss Improvement

Glossary

Beneficiaries' Equity

Represents the total equity attributable to the beneficiaries of the trust, which includes common shares, additional paid-in-capital, and retained earnings. (The decrease in beneficiaries' equity from $1.044 billion to $846.902 million indicates a reduction in the owners' stake in the company.)

Operating Properties

Refers to real estate properties that are actively used in the company's business operations and generate rental income. (The decrease in operating properties from $3.374 billion to $3.265 billion suggests a potential reduction in the company's core real estate portfolio.)

Provision for Impairment

An expense recognized when the carrying amount of an asset exceeds its recoverable amount, indicating a loss in value. (The absence of a provision for impairment in Q3 2025 ($0) compared to $37.980 million in Q3 2024 was a significant factor in the improved net loss.)

Unsecured Senior Notes

Debt instruments issued by the company that are not backed by specific collateral, ranking higher than subordinated debt but lower than secured debt. (The increase in unsecured senior notes from $1.618 billion to $1.776 billion signifies an increase in the company's long-term, uncollateralized borrowing.)

Common Shares of Brandywine Realty Trust's beneficial interest

Represents ownership units in Brandywine Realty Trust, which is the parent entity of Brandywine Operating Partnership, L.P. (The slight increase in outstanding shares from 172,665,995 to 173,699,039 could indicate stock issuance, potentially diluting existing shareholders.)

Year-Over-Year Comparison

Compared to the prior year's filing, Brandywine Operating Partnership, L.P. has shown a significant improvement in its net loss for the three months ended September 30, 2025, reducing it from $165.720 million to $25.998 million. This was largely driven by a substantial decrease in the provision for impairment, which fell from $37.980 million to $0. However, total revenue saw a decline from $131.782 million to $121.417 million, primarily due to lower rents. Total assets decreased, while total liabilities saw a slight increase, with a notable rise in unsecured senior notes, contributing to a decrease in total beneficiaries' equity.

Key Financial Figures

• $0.01 — hares of Beneficial Interest, par value $0.01 per share of Brandywine Realty Trust, w

Filing Documents

• bdn-20250930.htm (10-Q) — 2361KB
• exhibit101-bdnxfirstamendm.htm (EX-10.1) — 52KB
• bdnex311q32025.htm (EX-31.1) — 9KB
• bdnex312q32025.htm (EX-31.2) — 9KB
• bdnex313q32025.htm (EX-31.3) — 10KB
• bdnex314q32025.htm (EX-31.4) — 10KB
• bdnex321q32025.htm (EX-32.1) — 5KB
• bdnex322q32025.htm (EX-32.2) — 5KB
• bdnex323q32025.htm (EX-32.3) — 5KB
• bdnex324q32025.htm (EX-32.4) — 5KB
• 0000790816-25-000046.txt ( ) — 10855KB
• bdn-20250930.xsd (EX-101.SCH) — 66KB
• bdn-20250930_cal.xml (EX-101.CAL) — 111KB
• bdn-20250930_def.xml (EX-101.DEF) — 436KB
• bdn-20250930_lab.xml (EX-101.LAB) — 744KB
• bdn-20250930_pre.xml (EX-101.PRE) — 642KB
• bdn-20250930_htm.xml (XML) — 1476KB

— FINANCIAL INFORMATION

PART I — FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements Brandywine Realty Trust

Financial Statements of Brandywine Realty Trust

Financial Statements of Brandywine Realty Trust 6 Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024 6 Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and 2024 7 Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2025 and 2024 8 Consolidated Statements of Beneficiaries' Equity for the three and nine months ended September 30, 2025 and 2024 9 Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 11 Brandywine Operating Partnership, L.P.

Financial Statements of Brandywine Operating Partnership, L.P

Financial Statements of Brandywine Operating Partnership, L.P. 12 Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024 12 Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and 2024 13 Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2025 and 2024 14 Consolidated Statements of Partners' Equity for the three and nine months ended September 30, 2025 and 2024 15 Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 17 Notes to Unaudited Consolidated Financial Statements 18

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 31

Quantitative and Qualitative Disclosures about Market Risk

Item 3. Quantitative and Qualitative Disclosures about Market Risk 47

Controls and Procedures

Item 4. Controls and Procedures 49

— OTHER INFORMATION

PART II — OTHER INFORMATION 50

Legal Proceedings

Item 1. Legal Proceedings 50

Risk Factors

Item 1A. Risk Factors 50

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 50

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 50

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 50

Other Information

Item 5. Other Information 50

Exhibits

Item 6. Exhibits 51

Signatures

Signatures 52 Filing Format This combined Form 10-Q is being filed separately by Brandywine Realty Trust and Brandywine Operating Partnership, L.P. 4 Table of Contents Glossary Defined terms used in this Form 10-Q: Average annual rent Represents total initial contractual rental rate under the applicable leases (as impacted by free rent) plus contractual fixed rent increases due under the applicable leases averaged over the total terms (without regard to extension options) of the applicable leases. For comparison purposes, the Company excludes new leases of space when the previous lease of such space ended more than 12 months prior to the signing date for the new leases. Core Portfolio/Core Properties Includes all wholly-owned operating properties. Does not include Properties under development/redevelopment, recently completed not-stabilized Properties, and properties held for sale. Funds From Operations ("FFO") Is a non-GAAP financial measure, which the Company believes is useful to investors. The Company computes 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 the Company. NAREIT defines FFO as net income (loss) before noncontrolling interests of unitholders (preferred and common) 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 adjustment for unconsolidated real estate ventures. Net income, the GAAP measure that the Company believes to be most directly comparable to FFO,

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

— Financial Statements

Item 1. — Financial Statements BRANDYWINE REALTY TRUST CONSOLIDATED BALANCE SHEETS (unaudited, in thousands, except share and per share information) September 30, 2025 December 31, 2024 ASSETS Real estate investments: Operating properties $ 3,265,410 $ 3,374,780 Accumulated depreciation ( 1,234,678 ) ( 1,171,803 ) Right of use asset - operating leases, net 17,957 18,412 Operating real estate investments, net 2,048,689 2,221,389 Construction-in-progress 94,635 94,628 Land held for development 73,395 81,318 Prepaid leasehold interests in land held for development, net 27,762 27,762 Total real estate investments, net 2,244,481 2,425,097 Cash and cash equivalents 75,478 90,229 Restricted cash and escrows 1,050 5,948 Accounts receivable 15,493 12,703 Accrued rent receivable, net of allowance of $ 424 and $ 909 as of September 30, 2025 and December 31, 2024, respectively 183,153 184,312 Investment in unconsolidated real estate ventures 594,203 570,455 Deferred costs, net 77,449 84,317 Intangible assets, net 3,845 5,505 Other assets 124,249 113,647 Total assets $ 3,319,401 $ 3,492,213 LIABILITIES AND BENEFICIARIES' EQUITY Secured debt, net $ 243,171 $ 275,338 Unsecured term loans, net 249,288 318,949 Unsecured senior notes, net 1,776,991 1,618,527 Accounts payable and accrued expenses 128,485 129,717 Distributions payable 14,108 26,256 Deferred income, gains and rent 16,041 35,414 Intangible liabilities, net 6,536 7,292 Lease liability - operating leases 23,676 23,546 Other liabilities 14,203 12,587 Total liabilities $ 2,472,499 $ 2,447,626 Commitments and contingencies (See Note 14) Brandywine Realty Trust's Equity: Common Shares of Brandywine Realty Trust's beneficial interest, $ 0.01 par value; shares authorized 400,000,000 ; 173,699,039 and 172,665,995 issued and outstanding as of September 30, 2025 and December 31, 2024, respectively 1,734 1,724 Additional paid-in-capital 3,198,013 3,182,621 Deferred compensation payab

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