CEO Annual Letter

2023 Annual Report

Shareholder Letter

Nearly 30 years ago, Brandywine was founded with 200,000 square feet and a handful of customers. Since our inception in 1994, our portfolio has grown to more than 22 million square feet encompassing office, mixed-use, life science, and retail properties. Our core values of quality, innovation, integrity, and community have earned the trust of 1,300 of the world’s leading companies who call our buildings home and the more than 300 employees representing our brand every day. While much has changed since our early days, we remain steadfast in our mission to create best-in-class built environments that serve as bridges to the people and communities they serve. Our unwavering commitment to quality led us to completely reshape our portfolio ahead of shifting workplace dynamics and will serve as our guidepost into the future. We know success looks different for each of our customers, and we are committed to partnering with each of them to ensure our physical platform supports their unique goals, brand, and mission.

2023 was a year of evolution for Brandywine. Amid challenging economic and financial conditions, we remained crisply focused on three key areas that serve as the foundation for sustainable long-term growth: Operational Excellence, Accretive Development, and Balance Sheet Management.

Operational Excellence – Quality of Space, Experience, & Building Performance
The vast majority of our portfolio are top-tier assets in strong growth markets, enabling Brandywine to benefit from the office sector’s continued flight to quality. We have seen this thesis proven out, especially in two key Pennsylvania Suburban submarkets, Radnor and King of Prussia, as well as Center City Philadelphia. In Radnor, our portfolio is 91.4% leased, our King of Prussia portfolio is 98.4% leased, and our Center City portfolio is 96.9% leased. In 2023, we executed leases totaling 1.5 million square feet within our wholly-owned portfolio and 1.2 million square feet in our joint venture portfolio, resulting in a combined activity of 2.7 million square feet as tenants continue to seek high-quality, well-located, and highly amenitized properties. In fact, during 2023, 58% of all new leasing was with customers moving up the quality curve. This trend line will clearly benefit our portfolio in the years to come.

At Brandywine, quality refers not only to our physical spaces but also extends to every customer touchpoint and experience from our Leasing teams to our Property and Engineering teams who ensure smooth operations and serve our customers each day. These interactions build sustaining trust and long-lasting customer relationships, especially as markets change and the value proposition in our industry evolves to providing physical spaces that unlock the greatest potential of people and businesses. Through Leasing and Property Management Summits and other career enrichment strategies, our continued culture of empowered, high-performance teams consistently seek to raise the bar on our highest standard of excellence.

Over the past year, Brandywine also achieved new levels of performance in environmental, social, and governance (ESG) activities. Furthering our commitment as an industry leader, we received our second 5-star rating from GRESB, were awarded Dynegy Energy’s Leadership in Sustainability Award, and our GRESB – TCFD alignment obtained an A rating. Brandywine was also named to USA TODAY’s inaugural list of "America's Climate Leaders” which recognizes companies that have reduced their carbon footprint in recent years.

Development – Diversification & Accretive Value
Now more than ever we are all seeking seamless experiences between work and life. At Brandywine, employee engagement and well-being are the objectives of our unique, high-quality workplaces. Our diverse portfolio of high-quality workspaces, state-of-the-art laboratories, and mixed-use developments ensure that we continue to deliver on these fronts.

At Schuylkill Yards, we are creating a mixed-use, master-planned neighborhood right outside William H. Gray III 30th Street Station, at the nexus of Philadelphia’s Center City business district and its life sciences hub in University City. In 2023, we:

• Completed 3025 JFK, the first ground-up building in the master plan. The 29-story premier mixed-use development features 326 luxury apartments, 200,000 square feet of life science/innovation office space, 30,000 square feet of indoor-outdoor amenity space, and 9,000 square feet of retail.
• Signed the first office lease at 3025 JFK with global law firm Goodwin which will occupy 31,000 square feet on the 7th and 8th floors.
• Topped out at 3151 Market, our 12-story fully dedicated life science building featuring 417,000 square feet of customizable life science, innovation, and office space.

At Uptown ATX, a 66-acre mixed-use transit-oriented community in North Austin, known as Austin’s Second Downtown, is taking shape. Highlights from 2023 include:

• The delivery of One Uptown, our first ground-up project at Uptown ATX comprised 348,000 square feet of Class A office and 15,000 square feet of street-level retail.
• Topped out at Solaris House, our 13-story, 341-unit residential project connected to One Uptown via a 24,000-square-foot shared amenity deck.

In Radnor, Pennsylvania, construction continued at 155 Radnor, a 145,000-square-foot build-to-suit office building fully leased as the North American headquarters for a global supplier of specialty materials.

In Dulles, Virginia, the redevelopment of 2340 Dulles Corner Blvd was delivered including capital improvements to the building’s systems and amenities to provide a modernized work environment. Our lead tenant, a global mobile telecommunications company, completed its move-in, occupying 221,000 square feet.

The life sciences industry continues to represent a significant growth opportunity for Brandywine, particularly in Philadelphia, one of the fastest-rising life sciences markets in the country. Due to increased demand at our life sciences incubator B+labs, which is 93% leased, we commenced the conversion of the 9th floor of Cira Centre from office space into move-in ready graduate lab space. The conversion represents 27,000 square feet of life science space and is currently 100% leased to existing B+labs customers. In 2023, Brandywine also announced a partnership with Hatch BioFund, an early-stage life sciences venture capital firm headquartered in the Philadelphia region, to support the advancement of life sciences companies in Greater Philadelphia.

Balance Sheet Management
Despite challenging market conditions during 2023, Brandywine maintained a stable financial position underscored by a $600M line of credit at full capacity, long-standing banking relationships, and strong financial partners. We improved our leverage and liquidity positions through strategic disposition and refinancing activities. These included the sale of Three Barton Skyway, 8521 Leesburg Pike, and 200 North Radnor Chester Road, totaling 341,000 square feet and net cash proceeds of $75.3 million.

As we look ahead, we are committed to further optimizing the value of our portfolio through a broadened tenant base and the introduction of new uses for our real estate. We will continue to opportunistically divest non-core assets and see our development pipeline to stabilization while continuing to firm up the fundamentals of our core business.

Thanks to the great efforts of our employees, partners, contractors, vendors, and the support of our stakeholders, we continue to deliver on our mission. It is our privilege to provide the physical platforms that support our customers’ success. We look forward to continuing to provide the highest level of customer service and thoughtful community engagement in our industry. On behalf of our Board of Trustees, thank you to our shareholders for your enduring support and belief in our brand promise.

With best regards,

Gerard H. Sweeney
President and Chief Executive Officer