Investor Update Inventing Tomorrow, Inspiring Today 1st Quarter 2017 - - PDF document

SLIDE 1

Company Profile

Brandywine Realty Trust is one of the largest, publicly traded (NYSE:BDN), full-service, integrated real estate companies in the United States with a core focus in the Philadelphia, Washington, D.C., and Austin markets. Organized as a real estate investment trust (REIT) we

• wn, develop, lease and manage an urban, town center and transit-
• riented portfolio comprising 204 properties and 26.8 million square

feet as of March 31, 2017.

Investor Update

www.brandywinerealty.com | 555 E Lancaster Avenue, Radnor PA 19087 | 610.325.5600

Inventing Tomorrow, Inspiring Today Our Commitment to Shareholder Value, Our Communities and the Environment

 Our deep commitment to shareholder value, our communities

and the environment have been recognized over the years, most recently the Global Real Estate Sustainability Benchmark (“GRESB”) awarded Brandywine with an overall score of “Green Star,” it’s highest award quadrant for the 2nd consecutive year and 5th among office peer set in the United

• States. Additionally Brandywine was awarded LEED gold

certification for Building Design and Construction for its EVO Tower and the 2016 Green Leases Leaders Award given by the US Department of Energy.

Our Innovative Approach

 Capitalize on changing office market demand drivers by

continuing our portfolio shift to CBD, town center, high quality

• ffice and mixed-use projects.

 Ensure future growth through market driven execution of our

multi-phase, multi-year land inventory build-out.

 Create value by executing smart-growth and transit-oriented

developments and redevelopments.

 Revitalize urban and town center properties to optimize value

and improve their competitive position.

The Brandywine Opportunity

 Balanced portfolio approach: Philadelphia’s

steady growth, Austin’s dynamism, and Metro DC’s status as one of the most coveted institutional investment markets in the world provide us with a strong growth profile.

 Our goal is to be Top 3 Landlord in our

targeted markets.

 83% our combined NOI derived from our core

markets of Philadelphia, the Pennsylvania Crescent markets, Austin, TX and Northern Virginia.

 First Quarter 2017 occupancy of 93.2% and

leased of 94% for our wholly-owned portfolio continue to provide significant internal growth as fundamentals improve.

 Targeted 2017 year-end occupancy of

94 – 95% and leased of 95 - 96%.

 Improved growth profile and strengthened our

balance sheet through the sale of $1.4 billion non-core assets at a blended 6.8% cap rate and the addition of high-quality developments since 2015.

 Achieve top quartile credit metrics to support

• ur effort to raise our investment grade rating.

1st Quarter 2017

SLIDE 2

SCHUYLKILL YARDS

Master Development Deal Structure

 5.1 million SF minimum build out, which equates to 255,000 SF

per year over 20 years

 52% office (including lab, academic space) or 2.6 million SF,

which equates to 130,000 SF per year over 20 years

 350,000 SF minimum building size  Land value approximates current market for development  Land for public space conveyed at nominal cost and improvement

costs fully recovered through future land releases

 99-year ground lease executed at commencement of each of the

six development phases

Master Development: Long-Term Flexibility

 Master plan approval: Initial phase approvals

expected by 2Q17. Currently zoned for 2.5M SF.

 Public Space: Design of Drexel Square directly

across 30th Street Station in process.

 Construction to start for both in 1H17 for

1H18 delivery.

 Low initial capital requirements: We anticipate

spending approximately $10 - $15 million over the next 24 months ahead of any construction.

 Long Pre-Lease Timeline: First phase of new

construction totaling approximately 700,000 SF of

• ffice/lab facility targeted for late 2019 / early

2020 delivery.

 Phased Development: Subsequent phases

developed over next 20 years. Extension options allow Brandywine to extend an additional 10 years.

 Flexible Ownership: Brandywine has the ability to

have full ownership, bring in joint venture partners

• r sell development phases to qualified developers.

Schuylkill Yards features 6.5 Acres of publicly accessible open space:

 A 1.3 acre public square in front of a redeveloped existing One Drexel Plaza.  A shared street esplanade along JFK Boulevard that reinforces the pedestrian connection between Drexel, 30th Street Station,

University City and the Armory.

 Over 1.5 miles of vibrant, active streetscapes complete with new pedestrian-friendly urban furniture and bicycle infrastructure.  Development Partners: Brandywine Realty Trust (Master Developer), Gotham Organization, Longfellow Real Estate Partners  Currently in the zoning approval and planning process.

Philadelphia

PENNSYLVANIA

SLIDE 3

Construction continues on FMC Tower at Cira Centre South, Philadelphia’s first vertical neighborhood.

The project represents a high quality addition to Brandywine’s Philadelphia CBD portfolio. Tenants are increasingly seeking the kind of quality environments we specialize in creating. Philadelphia is a stable, and steadily accelerating, market - a top-ranked U.S. city featuring a major transportation hub, a growing residential population, one of the nation’s top two cultural scenes, and an increasingly friendly tax environment. Fueled by such growth industries as education and medicine, resoundingly attractive to millennials, and currently the nation’s eighth largest job center, Philadelphia is a walkable/bikeable city—perfectly positioned for meeting the demands of companies seeking an integrated business and cultural lifestyle—where over 40% of those who work in the city also choose to live there. FMC Tower at Cira Centre South capitalizes on these trends and creates a new standard of excellence to both office tenants and residents seeking a high quality integrated lifestyle. Class A office rents in Philadelphia’s top CBD tech market, University City, grew 25.4 percent to $47.66 from Q4 2014 to Q4 2016. University City also ranked second among the top tech submarkets in terms of net absorption growth, at 23.3 percent, behind only Tempe in

• Phoenix. (Source: CBRE) Direct average asking rent in the entire Philadelphia CBD have increased 7.7% YTD. (Source: JLL)

PHILADELPHIA CBD PORTFOLIO

Brandywine owns 54% of the Trophy Class Inventory with Occupancy at 96.6%

GROWTH MARKETS Philadelphia

PENNSYLVANIA

SLIDE 4

Brandywine is a leading office landlord in the highly dynamic Austin, Texas market, which is currently ranked by ULI’s 2017 Emerging Trends as the top city to watch in terms of overall real estate prospects. However, Austin isn’t just a hot real estate market. It came in #1 on the Best Places to Live in the U.S. (U.S. News and World Reports) and also placed #1 on the Bureau of Economic Analysis’ ranking for the city with the highest rate of business startups. Bust most astonishing for what’s next, JLL ranked Austin the #8 city in the world in terms of future momentum and ability to embrace change and compete globally. Thanks to our joint venture with DRA, our recent land acquisitions, and the acquisition of the 1.1 million square foot (66 acre) Broadmoor campus, Brandywine will continue to expand its leadership position in this key market for years to come. Metro DC is widely considered to be one of the most envied investment markets in the world and the nation’s top region for fastest growing private companies. The Washington Post has named the District as having the most educated residents in the

• country. And the Urban Land Institute has ranked Washington, DC, the nation’s second best real estate investment market. All
• f this bodes extraordinarily well for Brandywine’s regional portfolio as well as our proposed joint venture projects: 4040 Wilson
• Blvd. in Arlington, VA; 25 M St. SE in the Capitol Riverfront market in DC; and a mixed use site in the NOMA market of DC.

GROWTH MARKETS Washington

District of Columbia

Austin

TEXAS

SLIDE 5



Fortress Balance Sheet



Reduce Leverage



Maximize Liquidity



Improve Operating Cash Flow



Increase common dividend

Maximi Maximize ze Fina nanc ncial C Capaci pacity in ty in Un Uncertai certain Time n Times



Continue to improve credit and coverage metrics



No wholly-owned floating rate exposure



Delever balance sheet, reduce cost of debt capital and lengthen debt maturities

2017 2017 Fina Financial Hi Highlights ts



50% FFO and 68% CAD payout ratio



Paid off our 6.9% Series E Preferred Shares with cash-on-hand

Ba Balance Sheet e Sheet Obje Objectives es



Continue deleveraging through asset sales program



Run company at 6.0x debt/EBITDA

• r lower:

» As of 3/31/17, 6.3x debt/EBITDA and 37.5% net debt to total gross assets



Continually assess capital market

• pportunities:

» Unsecured debt issuance; no anticipated issuance until mid-2017



Capital Recycling



Goal: Top 3 Landlord in Every Core Market



Lease vacant space!



Be a net seller while culling portfolio of slower growth assets » $200 $200 millio million of

• f sales

sales tar target in in 2017; 2017; $133 millio $133 million alread already y closed. closed. » Develop urban, multimodal town center high quality growth acceleration properties



Increase investments in our core markets through development / redevelopment » FMC Tower at Cira Centre South (Philadelphia, PA)



Pursue growth opportunities in Philadelphia, Austin and Washington DC by acquiring key strategic land sites and continuing master planning activities on

• ur key multi-phase / multi-year

development sites



Monetize non-core land holdings. As of 3/31/17, under agreement to sell $23 million of land parcels



Continue to reduce number of operating joint ventures

2017 Growt 2017 Growth Objectives Objectives



Complete submarket refinement and increase revenue contributions from urban and town center product



Improve portfolio forward growth rates



Finalize exits from New Jersey and Delaware; reduce Northern Virginia and Maryland revenue contribution



Balance earnings stability during recycling through portfolio lease-up, rent growth and redeployment



Since 2009, Brandywine sold 14.4M SF for $2.3 billion ($157 PSF) at a 7.0% cap rate



Since 2009, Brandywine has purchased 4.4M SF of CBD/Town Center assets for $727 million ($164 PSF)



Submarket Refinement



Reduce commodity, suburban product

Recycle, Redeploy and Create Achieve Top Quartile Peer Operating Fundamentals



Year-end occupancy ranging between 94-95%



Year-end forward leasing ranging between 95-96%



Deliver SS NOI growth of 0-2% (GAAP) and 6-8% (cash)



Keep capital costs between 10-15% of lease revenues



Balance portfolio stability and growth by lengthening lease terms, increasing annual rent escalations and reducing near term rollover exposure



90% achieved on our 2017 $27.7 million speculative revenue target (as of 4/10/17)



Stronger Forward Growth Profile



Lower Future Tenant Rollover

THE PATH AHEAD

Opera Operatio ional l Ex Excellenc cellence Po Portfolio Transf ansformation

• rmation

Gr Growth th St Strategy Ba Balanc lance S e Shee eet t Management nagement

2017 BUSINESS PLAN

SLIDE 6

Forward-Looking Statements

Certain statements in this brochure constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our and our affiliates’ actual results, performance, achievements or transactions to be materially different from any future results, performance, achievements or transactions expressed or implied by such forward-looking statements. Additional information on factors which could impact us and the forward-looking statements contained herein are included in our most recent annual and quarterly reports filed with the Securities and Exchange Commission. Please reference our supplemental package for definitions and reconciliations of non-GAAP financial measures.

High High Quality Quality P Portfolio in Stable Mar io in Stable Markets s (as of 04/10/17)

(1) Includes total number of properties and square footage, % of NOI based on BDN's ownership interest (2) Includes leases executed through 04/10/17 which will commence subsequent to 3/31/17

WHOLLY OWNED JOINT VENTURE TOTAL Sub Submarket arket # Pro # Prop SF SF # Pro # Prop SF SF # Pro # Prop SF SF Philadelphia CBD 10 5,176,218

• 10

5,176,218 PA Crescent Markets 26 3,225,274 5 226,161 31 3,451,435 Dulles Toll Road 13 2,377,479

• 13

2,377,479 Austin – Broadmoor 6 962,975

• 6

962,975 Wilmington CBD 2 501,399

• 2

501,399 Silver Spring / Bethesda

• 4

733,256 4 733,256 Total 57 12,24 243, 3,34 345 9 959,4 ,417 17 66 13,20 202, 2,76 762

Portfolio Shif

• Shift

t

Urban Urban Town Centers Town Centers Comprise 54% Comprise 54% of

• f Total SF

Total SF and 75% and 75% of

• f NOI

NOI

Regi Region # of # of Pro Propert erties Square Square Feet Feet % of % of Tot Total SF l SF 1Q ‘ ‘17 17 % of % of NOI NOI % % Occu Occupied ed % % Leased Leased(2

(2)

• Phila. CBD

10 5,176,218 21.0% 32.7% 96.6% 97.3% PA Suburbs 60 5,724,994 23.3% 27.0% 92.5% 93.0% Metro D.C. 26 4,408,781 17.9% 18.5% 86.4% 88.0% Austin, TX 25 3,697,594 15.0% 12.4% 93.6% 98.1% Subt Subtotal 121 121 19,0 19,007,587 77.2 77.2% 90.6 90.6% 92.4 92.4% 94.0 94.0% Other 63 4,073,033 16.6% 4.4% 89.5% 91.6% Dev/Redev 6 1,512,803 6.2% 5.0% Tot Total 190 190 24,5 24,593,423 100 100.0% 100 100.0% 91.9 91.9% 93.6 93.6%

Wholly Wholly Owned Owned and Join and Joint Venture Properties t Venture Properties(1

(1)

Key 20 y 2017 Business Plan Goals Business Plan Goals (as of 04/10/17)

Same Store NOI Same Store NOI Inc Increa ease

GAAP 0-2% CASH 6-8%

Renta Rental Rate Inc Rate Increa ease

GAAP 5-7% CASH 9-11%



Year-end SS Occupancy 94-95%



Year-end Core Occupancy 94-95%



Year-end Core Leased 95-96%



Funds from Operations $1.33 - $1.40



Cash Available for Distribution Payout Ratio 71% - 64%



Dispositions $200.0MM target 66% 66% achieved achieved



Acquisitions None incorporated



Spec Revenue $27.7MM



Leasing Capital PSF / YR $2.00 - $2.50



Average Lease Term 7.0 Years

20 2017 Capi Capital tal Plan Plan

Uses Uses (MM) (MM) 2017 2017

Dividends $ 86 Mort Amortization 4

• Rev. Maint’g. Cap Ex

35

• Rev. Creating Cap Ex

30 Bond/Preferred Stock 400 Dev/Redev Projects 125 Tot Total Use l Uses $ $ 680 680

Sources (MM) Sources (MM)

CF After Interest Pmts. $125 Sales, including land 75 Term Loan 250 Decrease to Cash 230 Tot Total Source l Sources $ 680 680 12/31/17 31/17 E LOC: $ 0 Cash: $ 5

Liq Liquidit idity

2355 Dulles Corner, Herndon, VA