CEO Annual Letter

Investor Letter

March 31, 2023

Brandywine has long believed in the power of real estate to create new realities, broaden perspectives, and change trajectories. We’ve spent more than 25 years developing, owning, operating, and managing dynamic human-centric spaces that bring out the best in people, steward the environment, and positively impact communities and cities.

Our purpose is much deeper than the creation of physical space—it is about enabling success in its wide-ranging definition, from world-changing life science discoveries to heathier lifestyles to connection to community. Our current 23-million square-foot portfolio and future $5 billion development pipeline of wellness-oriented life science, office, multi-family, retail, hospitality, and greenspace, provide a unique, flexible platform for our customers.

We are always guided by our values of community, quality, innovation, and integrity, whether we are developing mixed-use spaces, investing in neighborhood engagement initiatives, or creating spaces that bring people together. In 2022, we continued to bring this ethos to life, all with an unwavering commitment to establish durable value – that is, to create assets that will stand the test of time.

Schuylkill Yards, our mixed-use master-planned neighborhood in partnership with Drexel University, is rising in West Philadelphia:

• We formed a joint venture with a global institutional investor to commence development of 3151 Market Street, a 417,000-square-foot fully dedicated life science tower.
• Our mixed-use tower at 3025 JFK Boulevard has topped out. The 570,000-square-foot building will feature 200,000 square feet of life science/innovation office space, 326 ultra-luxury apartment units, 29,000 square feet of indoor/outdoor amenity space, and 9,000 square feet of retail.
• Located within our Cira Centre property, our 50,000-square-foot life science incubator B+labs became fully leased with 40% of its occupants new to the Philadelphia region.

Activity continued in Radnor, one of Pennsylvania’s strongest submarkets:

• We completed construction and opened 250 Radnor, a 168,000-square-foot adaptive reuse of an existing medical office building, renovated to fully accommodate lab tenants. 250 Radnor is part of Radnor Life Sciences Center
• We commenced a 145,000-square-foot build-to-suit office building at 155 Radnor, fully leased as the North American headquarters for Arkema S.A., a global supplier of specialty materials.

In Austin, the country’s fastest-growing metro and office market, we saw sustained momentum:

• Construction continued at One Uptown, a mixed-use development featuring 347,000 square feet of workspace, 341 residential units, and a showcase amenity program.
• Our 25-story downtown Austin workplace tower 405 Colorado became 96% leased.

And in Metro DC, we saw the start of exciting new projects:

• We announced Discovery Point, our new mixed-use neighborhood within the University of Maryland’s Discovery District. Discovery Point is set to feature 550,000-square feet of class-A innovative spaces encompassing research, office, and retail, plus over 200 multifamily residential units.
• We also commenced the redevelopment of 2340 Dulles Corner Boulevard in Herndon, Virginia, a 268,000 square foot office building after signing an anchor tenant lease representing 84% of the property at 221,000 square feet. Our anchor tenant lease was the largest office lease signed in Northern Virginia in 2022.

Additionally, our ESG program continues to produce strong results. We have been recognized for the eighth straight year as a GRESB (Global Real Estate Sustainability Benchmark) Green Star, demonstrating our commitment to global ESG leadership. We also achieved a five-star rating and an industry-leading score of 92 in 2022, placing Brandywine in the top 20% of the benchmark among all entities.

Entering 2023, we are witnessing an inflection point at which expectations around physical space are shifting. With our 25+ year track record as a trusted partner and our diversified, mixed-use portfolio of flexible space to grow, we find ourselves uniquely suited to meet this moment and deliver exceptional long-term value for a wide range of stakeholders.

We see enormous opportunities in our core markets. Philadelphia currently sits as the second-best hub in the nation for cell and gene therapy, a market that is poised for tremendous growth and is estimated to reach over $21 billion by 2026. The opening of 3025 JFK Boulevard later this year and our fully dedicated Life Science building, 3151 Market, shortly thereafter, will expand our flexible platform for Life Science Companies to grow. We’ll continue to introduce smart urban planning and placemaking in the Philadelphia region, including new community greenspace and investment in transit infrastructure—key contributors to improving quality of life—to help propel Philadelphia’s acceleration as a top life science cluster.

Austin leads the nation in percentage population growth and, according to the Texas State Data Center, is projected to increase another 27.7% by 2030. Additionally, a report from the University of North Carolina’s Kenan Institute of Private Enterprise ranks Austin as the second fastest-growing city in the U.S. out of the 50 largest metropolitan areas. To accommodate this staggering growth, North Austin has emerged as a second downtown and strong employment hub, supported by ongoing efforts to increase transit access. We’re excited to deliver the first phase of our Uptown ATX development in North Austin with the opening of One Uptown. In Metro DC, innovation in quantum physics research is driving demand for mixed-use spaces that catalyze opportunities for collaboration, research, and discovery, and we’ll soon break ground on the first phase of Discovery Point in partnership with University of Maryland.

We are grateful to be supported by so many remarkable Board members, employees, partners, contractors, vendors, and shareholders who help us turn opportunities into accomplishments. On behalf of our Board of Trustees, thank you to our shareholders for helping us realize our shared vision—we remain committed to delivering on our brand promise. We look forward to continuing to provide value to you and growing together in 2023.

With best regards,

With best regards,
Gerard H. Sweeney
President and Chief Executive Officer