Brandywine Realty Trust Raises Speculative Revenue Target, Adjusts FFO Guidance

Brandywine Realty Trust reported third-quarter results while management raised its speculative revenue target to $19.5 million. Gerard H. Sweeney, President and Chief Executive Officer, stated that the new target is 11.4% higher than the initial business plan and marks the second time this year the midpoint has been increased. The company also adjusted its 2026 Funds From Operations guidance from a range of $0.53 to $0.57 per diluted share to a Core FFO range of $0.54 to $0.56 per diluted share. This adjustment excludes a $15.4 million loss on the early extinguishment of debt, which amounted to $0.09 per diluted share.

Capital markets activity dominated the quarter, with the company executing $681 million in sales against a business plan target of $305 million. These transactions included the sale of Solaris, a residential project in Austin, Texas, for $136 million. Sweeney noted that the capital markets plan is now completed. The company reduced its combined debt by $390 million during the period, primarily by repurchasing $140 million of its 2028 and 2029 bonds at a weighted-average rate of 8.67%. Following these transactions, Brandywine Realty Trust held $176 million in cash and had no outstanding balance on its $600 million unsecured line of credit.

Financial metrics showed improvement in leverage, with Net Debt/EBITDA decreasing to 7.6x at the end of the quarter from 9.0x in the previous quarter. In addition to debt reduction, the company purchased 4.7 million shares of its common stock during the quarter at an average price of $3.19 per share, totaling $14.9 million. This buyback activity resulted in approximately $1.5 million in annual savings on dividend payments.

The core portfolio remained 89.0% occupied and 90.5% leased during the third quarter. New and renewal leases signed totaled 372,000 square feet in the wholly owned portfolio and 558,000 square feet including joint ventures. The tenant retention ratio stood at 50%, while rental rates increased 10.8% on an accrual basis and 5.7% on a cash basis on a mark-to-market basis.

Disposition activity included the sale of a Philadelphia office property for $240 million on September 30, 2026, which was 3.9% occupied at the time of sale. Other sales included an Austin office property for $151 million in July and two McLean, Virginia properties for $97.1 million in September. The company also completed the sale of its 57% interest in the Solaris residential venture for net proceeds of $16.3 million after repaying a construction loan and preferred partner.

As of October 21, 2026, the One Uptown office venture in Austin is 97% leased.