SOURCE: Brandywine Realty Trust

December 20, 2007 09:15 ET

Brandywine Realty Trust Completes the Sale and Contribution of a Suburban Philadelphia Office Portfolio Valued at $245.4 Million to a Joint Venture With DRA Advisors LLC

RADNOR, PA--(Marketwire - December 20, 2007) - Brandywine Realty Trust (NYSE: BDN), a real estate investment trust focused on the ownership, management and development of Class A, office properties in selected markets throughout the United States, announced today that it has completed the sale and contribution of 29 suburban Philadelphia office properties to a joint venture consisting of DRA Advisors LLC with an 80% interest and affiliates of Brandywine Realty Trust with a 20% interest. An 89% interest was sold in three of the properties, while 100% interests were sold or contributed in the rest. The portfolio valuation of $245.4 million (reflecting 100% interests throughout) represents a capitalization rate of approximately 7.4% GAAP and 7.2% cash based on trailing twelve-month net operating income (NOI) through September 30, 2007 and approximately 7.9% cash based on preliminary 2008 NOI projections.

The 29 properties, which are listed below, comprise approximately 1.6 million square feet and were 95.3% occupied and 96.4% leased (reflecting future executed leases) as of September 30, 2007. The joint venture has secured $184 million of seven-year, non-recourse, property financings at a rate of 5.78% with an initial, thirty-six month interest-only period followed by monthly principal and interest payments pursuant to a 30-year principal amortization schedule until the January 1, 2015 maturity date. As a result of the sales and contribution transactions, the proceeds from the property financings, the joint venture's payment of its transaction expenses and certain other financial transactions between the parties, Brandywine has realized $235.4 million of gross proceeds and $230.9 million of net proceeds after deducting its own transaction expenses. Brandywine will use the net proceeds from the transaction to reduce outstanding indebtedness under its unsecured revolving credit facility. A subsidiary of Brandywine will be responsible for the management and leasing of the joint venture properties under a separate agreement. Brandywine does not expect that it will declare a special distribution on account of this transaction, subject to a final review of its calendar year 2007 taxable income.

"We are delighted to complete this transaction with DRA Advisors," stated Gerard H. Sweeney, President and Chief Executive Officer of Brandywine Realty Trust. "Working with DRA to structure and close this joint venture has enabled us to get to know this fine organization and benefit from its impressive track record in public-private transactions. The capital we have raised enhances our balance sheet flexibility and will ultimately get recycled into a variety of growth opportunities in our target markets including our current and planned development projects. By retaining a 20% ownership stake and managing the properties, we will share in the upside from this portfolio and contribute to its future success. Overall, this transaction demonstrates the strength of our properties and creates significant value for our stockholders."

"DRA is excited to close on this joint venture with Brandywine," said David Luski, Executive Vice President of New York-based DRA Advisors LLC. "Brandywine has an excellent reputation in the marketplace and we are looking forward to expanding this relationship in the future."

The Philadelphia office of CB Richard Ellis served as Brandywine's exclusive marketing advisor for the transaction. Three properties, aggregating 260,000 square feet, were previously excluded from the joint venture transaction and have been retained by Brandywine.

About DRA Advisors LLC

DRA Advisors LLC is a New York-based registered investment advisor specializing in real estate investment management services for institutional and private investors, including pension funds, university endowments, foundations, and insurance companies. Founded in 1986, the firm currently manages over $9 billion in assets, consisting of over 20 million square feet of office / industrial space, 32 million square feet of retail space and over 19,000 residential units. Additional information about DRA can be found on the company's website at

About Brandywine Realty Trust

Brandywine Realty Trust is one of the largest, publicly-traded, full-service, integrated real estate companies in the United States. Organized as a real estate investment trust and operating in select markets, Brandywine owns, develops and manages a primarily Class A, suburban and urban office portfolio aggregating approximately 44 million square feet, including 29 million square feet which it owns on a consolidated basis. For more information, visit our website at

Net Operating Income (NOI)

NOI is a non-GAAP (generally accepted accounted principles) financial measure equal to net income available to common shareholders, the most directly comparable GAAP financial measure, plus corporate general and administrative expense, depreciation and amortization, interest expense, minority interest in Operating Partnership and losses from early extinguishment of debt, less interest income, development and management income, gains from property dispositions, gains on sale from discontinued operations, income from discontinued operations, income from unconsolidated joint ventures and minority interest in property partnerships. In some cases we also present NOI on a cash basis, which is NOI after eliminating the effects of straight-lining of rent and deferred market intangible amortization. NOI presented by us may not be comparable to NOI reported by other REITs that define NOI differently. NOI should not be considered an alternative to net income as an indication of our performance or to cash flows as a measure of our liquidity or ability to make distributions.

Forward-Looking Statements

Estimates of future earnings per share and FFO per share and certain other statements in this release 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. Such risks, uncertainties and other factors relate to, among others: our ability to lease vacant space and to renew or relet space under expiring leases at expected levels; competition with other real estate companies for tenants; the potential loss or bankruptcy of major tenants; interest rate levels; the availability of debt, equity or other financing; competition for real estate acquisitions; risks of acquisitions, dispositions and developments, including the cost of construction delays and cost overruns; unanticipated operating and capital costs; our ability to obtain adequate insurance, including coverage for terrorist acts; dependence upon certain geographic markets; and general and local economic and real estate conditions, including the extent and duration of adverse changes that affect the industries in which our tenants operate. Additional information on factors which could impact us and the forward-looking statements contained herein are included in our filings with the Securities and Exchange Commission, including our Annual Report for the year ended December 31, 2006. We assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events except as required by law.

Properties to Be Acquired by the Joint Venture

               Property           Location           Square Feet
               --------       -----------------    -----------------

630 DRESHER ROAD                 Horsham, PA                  28,894
650 DRESHER ROAD                 Horsham, PA                  30,071
700 BUSINESS CENTER DRIVE        Horsham, PA                  30,773
800 BUSINESS CENTER DRIVE        Horsham, PA                  51,236
300 WELSH ROAD - BUILDING I      Horsham, PA                  40,042
300 WELSH ROAD - BUILDING II     Horsham, PA                  17,750
1155 BUSINESS CENTER DRIVE       Horsham, PA                  51,388
655 BUSINESS CENTER DRIVE        Horsham, PA                  29,933
755 BUSINESS CENTER DRIVE        Horsham, PA                  38,050
  Subtotal                                                   318,137

SPRINGHOUSE CORPORATE CENTER 1   Ft Washington, PA            59,994
SPRINGHOUSE CORPORATE CENTER 2   Ft Washington, PA            76,287
500 OFFICE CENTER DRIVE          Ft Washington, PA           104,303
501 OFFICE CENTER DRIVE          Ft Washington, PA           114,795
220 COMMERCE DRIVE               Ft Washington, PA            46,080
520 VIRGINIA DRIVE               Ft Washington, PA            56,454
  Subtotal                                                   457,913

ONE GREENWOOD SQUARE             Bensalem, PA                 60,705
TWO GREENWOOD SQUARE             Bensalem, PA                 81,575
THREE GREENWOOD SQUARE           Bensalem, PA                 25,000
  Subtotal                                                   167,280

7010 SNOWDRIFT ROAD              Allentown, PA                33,029
7350 TILGHMAN STREET (1)         Allentown, PA               111,500
7450 TILGHMAN STREET             Allentown, PA               100,000
7150 WINDSOR DRIVE               Allentown, PA                49,420
7535 WINDSOR DRIVE               Allentown, PA               132,375

7360 WINDSOR DRIVE               Allentown, PA                43,600
6990 SNOWDRIFT ROAD BLDG A       Allentown, PA                44,200
6990 SNOWDRIFT ROAD BLDG B       Allentown, PA                27,900
7248 TILGHMAN STREET (1)         Allentown, PA                43,782
6575 SNOWDRIFT ROAD (1)          Allentown, PA                47,091
7310 TILGHMAN STREET             Allentown, PA                40,000
  subtotal                                                   672,897

29 Property Portfolio                                      1,616,227

(1) An 89% interest in this property was sold to the joint venture with a
    Brandywine affiliate retaining the remaining 11% interest.

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