UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant To Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 3, 2004
Brandywine Realty Trust	
(Exact name of issuer as specified in charter)	

MARYLAND	 	 	 	 	1-9106	 	 	 	 	23-2413352	 	
(State or Other
Jurisdiction
of Incorporation or
Organization)	 	 	 		(Commission
file
number) 	 	 	 		(I.R.S. Employer
Identification
Number) 	 	

	 	 	 			 	 	 			 	
401 Plymouth Road, Suite 500
Plymouth Meeting, Pennsylvania 19462
(Address of principal executive offices)
(610) 325-5600
(Registrant’s telephone number, including area code)

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Item 8.01.           Other Events
     Brandywine Realty Trust (the “Company”) is re-issuing in an updated format its historical financial statements in connection with Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS 144”). During the quarter ended June 30, 2004, the Company sold a property and in compliance with SFAS 144 has reported revenue, expenses and gain on sale from the sale of this property as discontinued operations for each period presented in its quarterly report for the quarter ended June 30, 2004 (including the comparable period of the prior year). Under SEC requirements, the same reclassification as discontinued operations required by SFAS 144 following the sale of a property is required for previously issued annual financial statements for each of the three years shown in the Company’s last annual report on Form 10-K/A, if those financials are incorporated by reference in subsequent filings with the SEC made under the Securities Act of 1933, as amended, even though those financial statements relate to periods prior to the date of the sale. This reclassification has no effect on the Company’s reported net income. 
          This Report on Form 8-K updates Items 6, 7, 8 and 15(a)1 and 2 of the Company’s 2003 Form 10-K/A filed on June 22, 2004, to reflect the property sold during the quarter ended June 30, 2004 as discontinued operations. All other items of the Form 10-K/A remain unchanged. The unchanged and updated sections of the Company’s Form 10-K/A are attached hereto as exhibit 99.1. No attempt has been made to update matters in the Form 10-K/A except to the extent expressly provided above.
Item 9.01.           Financial Statements and Exhibits
Exhibit Number	 	 	Description	 	
 	 	 	 	 	
23.1	 	 	Consent of Independent Registered Public Accounting Firm	 	
 	 	 	 	 	
99.1     	 	 	Brandywine Realty Trust Updated Form 10-K/A	 	

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Signatures
Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
 	 	BRANDYWINE REALTY TRUST	

Date: September 3, 2004	By: 	/s/ Gerard H. Sweeney          	
 	 	Gerard H. Sweeney	
 	 	President and Chief Executive Officer	

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EXHIBIT INDEX
Exhibit Number	 	 	Description	 	
 	 	 		 	
23.1	 	 	Consent of Independent Registered Public Accounting Firm	 	
 	 	 	 	 	
99.1	 	 	Brandywine Realty Trust Form 10-K	 	

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statement on Form S-3 (Nos. 333-52952, 333-69653, 333-56237, 333-20999, 333-109010, 333-53359, 333-46647, and 333-117078) and Form S-8 (Nos. 333-52957, 333-28427, 333-14243) of Brandywine Realty Trust of our report dated June 18, 2004, except for Note 21, as to which the date is September 1, 2004, relating to the financial statements and financial statement schedules, which appears in this Current Report on Form 8-K.
/s/ PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
September 1, 2004
TABLE OF CONTENTS
	 	Page	
Item 1.	Business	2	
			
Item 2.	Properties	16	
			
Item 3.	Legal Proceedings	24	
			
Item 4.	Submission of Matters to a Vote of Security Holders	25	
			
Item 5.	Market for Registrant’s Common Equity and Related Shareholder Matters and Issuer Purchases of Equity Securities	25	
			
Item 6.	Selected Financial Data	27	
			
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27	
			
Item 7A.	Quantitative and Qualitative Disclosure About Market Risk	44	
			
Item 8.	Financial Statements and Supplementary Data	39	
			
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	39	
			
Item 9A.	Controls and Procedures	40	
			
Item 10.	Trustees and Executive Officers of the Registrant	40	
			
Item 11.	Executive Compensation	40	
			
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters	40	
			
Item 13.	Certain Relationships and Related Transactions	40	
			
Item 14.	Principal Accountant Fees and Services	40	
			
Item 15.	Exhibits, Financial Statements, Schedules and Reports on Form 8-K	41	
		
SIGNATURES	46	
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PART I
Item 1. Business
General
As used herein, the terms “we,” “us,” “our” or the “Company” refer to Brandywine Realty Trust, a Maryland real estate investment trust, individually or together with its subsidiaries, including Brandywine Operating Partnership, L.P. (the “Operating Partnership”), a Delaware limited partnership. We are a self-administered and self-managed real estate investment trust (“REIT”) active in acquiring, developing, redeveloping, leasing and managing office and industrial properties. As of December 31, 2003, we owned 208 office properties, 25 industrial facilities and one mixed-use property (the “Properties”) containing an aggregate of approximately 15.7 million net rentable square feet. We were also performing management and leasing services for 41 properties containing an aggregate of 3.6 million net rentable square feet. In addition, as of December 31, 2003, we held economic interests in ten unconsolidated real estate ventures (the “Real Estate Ventures”) that we formed with third parties to develop or own commercial properties. The Real Estate Ventures own ten office buildings that contain approximately 1.8 million net rentable square feet. As of December 31, 2003, we had an aggregate investment in the Real Estate Ventures of approximately $15.9 million (net of returns of invested amounts). We also own approximately 445 acres of undeveloped land and hold options to purchase approximately 61 additional acres. The Properties are located in the office and industrial markets in and surrounding Philadelphia, Pennsylvania, New Jersey and Richmond, Virginia.
Recent Developments
On January 12, 2004, we sold 2,645,000 Common Shares for net proceeds of approximately $69.3 million. We used the net proceeds to reduce the outstanding balance under our revolving credit facility.
On February 3, 2004, we entered into an agreement with Commonwealth Atlantic Operating Properties, Inc., the holder of 1,950,000 then outstanding Series B Preferred Units (the “Series B Preferred Units”) in the Operating Partnership. The Series B Preferred Units had an aggregate stated value of $97.5 million and accrued distributions at 7.25% per annum. During February 2004, we redeemed all of the Series B Preferred Units for an aggregate price of $93.0 million, together with accrued but unpaid distributions from January 1, 2004.
On February 27, 2004, we sold 2,300,000 7.375% Series D Cumulative Redeemable Preferred Shares for net proceeds of approximately $55.5 million. We used the net proceeds to reduce the outstanding balance under our revolving credit facility, including amounts advanced under our revolving credit facility to fund the redemption of Series B Preferred Units.
On March 3, 2004, we sold 1,840,000 Common Shares for net proceeds of approximately $50.7 million. We used the net proceeds to reduce the outstanding balance under our revolving credit facility.
Business Objective
Our business objective is to maximize return on investment and to accomplish our objective we seek to:
	•	maximize cash flow through leasing strategies designed to capture potential rental growth as rental rates increase and as below-market leases are renewed;	

	•	attain a high tenant retention rate through aggressive tenant service programs responsive to the varying needs of our diverse tenant base;	

	•	increase economic diversification while maximizing economies of scale;	
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	•	develop high-quality office and industrial properties on our existing inventory of land, as warranted by market conditions;	

	•	capitalize on our redevelopment expertise to selectively acquire, redevelop and reposition underperforming properties in desirable locations; 	

	•	acquire high-quality office and industrial properties and portfolios of such properties at attractive yields in selected submarkets within the Mid-Atlantic region that we expect will experience economic growth and provide barriers to entry; and	

	•	pursue joint venture opportunities with high-quality partners having attractive real estate holdings or significant financial resources.	
We expect to continue to concentrate our real estate activities in submarkets within the Mid-Atlantic region where we believe that: (i) barriers to entry (such as zoning restrictions, utility availability, infrastructure limitations, development moratoriums and limited developable land) will create supply constraints on office and industrial space; (ii) current market rents and absorption statistics justify limited new construction activity; (iii) we can maximize market penetration by accumulating a critical mass of properties and thereby enhance operating efficiencies; and (iv) there is potential for economic growth.
Organization
Brandywine Realty Trust was organized and commenced its operations in 1986 as a Maryland REIT. We own our assets and conduct our operations through the Operating Partnership and subsidiaries of the Operating Partnership. As of December 31, 2003, our ownership interest in the Operating Partnership entitled us to approximately 95.8% of the Operating Partnership’s distributions after distributions by the Operating Partnership to holders of its then outstanding Series B Preferred Units. Our structure as an “UPREIT” is designed, in part, to permit persons contributing properties to us to defer some or all of the tax liability they might otherwise incur in a sale of properties. We conduct our real estate management services through Brandywine Realty Services Corporation (the “Management Company”), a subsidiary of which 95% is owned by the Operating Partnership. The remaining five percent is owed by a partnership comprised of two executives of the Company. See “Management Activities.”
Our executive offices are located at 401 Plymouth Road, Suite 500, Plymouth Meeting, Pennsylvania 19462 and our telephone number is (610) 325-5600. We have an internet website at www.brandywinerealty.com. We also have regional offices in Mount Laurel, New Jersey and Richmond, Virginia.
Credit Facility
We maintain an unsecured credit facility (the “Credit Facility”) with a bank group (comprising 21 banks) led by Bank of America, N.A. A majority of our direct and indirect subsidiaries are parties to the Credit Facility, as guarantors. The Credit Facility provides up to $500 million in credit availability for working capital advances and letters of credit. As of December 31, 2003, there was unused availability of $184.3 million under the Credit Facility. The Credit Facility is scheduled to mature in June 2004, but may be extended at our election for a period of one year upon payment of a fee equal to .25% of the amount of the Credit Facility at the time of extension.
Advances under the Credit Facility currently bear interest at the London Inter-Bank Offered Rate (“LIBOR”) (1.12% at December 31, 2003) plus 1.50%. The spread over LIBOR varies, based on our leverage, from a low of 1.25% to a high of 1.75%. We have the option to elect an interest rate equal to the higher of the Federal Funds rate plus .75% or Bank of America’s prime rate plus .25%. We generally elect the interest rate based on LIBOR for all or most of our borrowings under the Credit Facility. An alternative rate and pricing structure are set forth in the Credit Facility if we obtain an investment grade debt rating, from at least two of the three major rating agencies.
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We have entered into interest rate swap and rate cap agreements designed to reduce the impact of interest rate changes on certain variable rate debt. At December  31, 2003, we had interest rate swap agreements for notional principal amounts aggregating $175  million. The swap agreements effectively fix the LIBOR portion of our interest rate on $100  million of Credit Facility borrowings at 4.230% and $75  million of Credit Facility borrowings at 4.215%, in each case until June 2004. The interest rate cap agreement effectively limits the interest rate on a mortgage with a notional value of $28  million at 8.7% until July 2004.
The Credit Facility contains provisions limiting: the incurrence of additional debt; the granting of liens; the consummation of mergers and consolidations; the disposition of assets and interests in subsidiaries; the making of loans and investments; and the payment of dividends. The restriction on dividends permits us to pay dividends in the amount required for us to retain our qualification as a REIT under the Internal Revenue Code of 1986, and otherwise limits dividends to 90% of our funds from operations, as defined in the Credit Facility.
The Credit Facility also contains financial covenants that require us to maintain a debt service coverage ratio, an interest coverage ratio, a fixed charge coverage ratio, an unsecured debt ratio and an unencumbered cash flow ratio above certain specified minimum levels; to maintain net worth above an amount determined on a specified formula; and to maintain a leverage ratio and a secured debt ratio below certain maximum levels. Another financial covenant limits the percentage of our total assets (on a consolidated basis) that can be held by subsidiaries not party to the Credit Facility.
Term Loan
We entered into a $100  million unsecured term loan (the “Term Loan”) in July 2002. We used the proceeds of the Term Loan to repay existing indebtedness, consisting primarily of indebtedness that had been outstanding under the Credit Facility. The Term Loan, like the Credit Facility, is recourse to us, including those of our subsidiaries that are parties, as guarantors, to the Term Loan agreement (which are the same subsidiaries that are guarantors of the Credit Facility). Bank of America, N.A. serves as administrative agent for a group of lenders under the Term Loan, as it does for the lenders under the Credit Facility, although the groups of lenders are not identical under the Term Loan and Credit Facility.
There is no required principal amortization of the Term Loan prior to maturity. The Term Loan matures on July  15, 2005, subject to two extensions of one year each upon payment by us of an extension fee and the absence of any defaults at the time of each extension.
The Term Loan bears interest at a per annum floating rate equal to the one, two, three or six month LIBOR, plus between 1.05% and 1.90% (1.12% at December  31, 2003), depending on our the leverage and debt rating. At our option, the Term Loan may bear interest at the prime rate plus .25%. Interest is due at the end of the LIBOR term, unless a six month LIBOR term is selected, in which case interest is also paid at the end of the third month of the LIBOR term. If we elect interest based on the prime rate, then interest payments will be due monthly.
The Term Loan agreement contains financial and operating covenants identical to those in the Credit Facility agreement. In addition, the Term Loan agreement, like the Credit Facility agreement, requires payment of prepayment premiums in certain instances.
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Additional Debt
     Mortgage Indebtedness. The following table sets forth information regarding our mortgage indebtedness outstanding at December  31, 2003:
 	 	 	 	 	 	 	 	 	Annual
Debt	 	 	 	 	
 	 	 	Principal	 	 	Interest	 	 	Service	 	 	 	 	
 	 	 	Balance	 	 	Rate	 	 	(in 000’s)	 	 	Maturity	 	
Property/Location	 	 	(in 000’s)	 	 	(a)	 	 	(a) (b)	 	 	Date	 	
	 			 			 			 			 	
630 Allendale Road (c)	 	$	19,797	 	 	2.62	%	$	529	 	 	Mar-04	 	
400 Berwyn Park (c)	 	 	15,726	 	 	2.72	%	 	431	 	 	Jul-04	 	
1000 Howard Boulevard	 	 	3,647	 	 	9.25	%	 	803	 	 	Nov-04	 	
Croton Road	 	 	6,209	 	 	7.81	%	 	590	 	 	Jan-06	 	
111 Arrandale Blvd.	 	 	1,152	 	 	8.65	%	 	150	 	 	Aug-06	 	
429 Creamery Way	 	 	3,235	 	 	8.30	%	 	410	 	 	Sep-06	 	
Interstate Center (a)	 	 	1,131	 	 	3.00	%	 	204	 	 	Mar-07	 	
440 & 442 Creamery	 	 	5,862	 	 	8.55	%	 	631	 	 	Jul-07	 	
Norriton Office Center	 	 	5,342	 	 	8.50	%	 	524	 	 	Oct-07	 	
481 John Young Way	 	 	2,475	 	 	8.40	%	 	261	 	 	Nov-07	 	
400 Commerce Drive	 	 	12,346	 	 	7.12	%	 	1,059	 	 	Jun-08	 	
200 Commerce Drive	 	 	6,165	 	 	7.12	%	 	556	 	 	Jan-10	 	
Plymouth Meeting Executive Campus	 	 	48,299	 	 	7.00	%	 	4,142	 	 	Dec-10	 	
Arboretum I, II, III & V	 	 	24,109	 	 	7.59	%	 	2,235	 	 	Jul-11	 	
993, 997 and 2000 Lenox Drive, 2000, 4000, 9000 Midlantic Drive and 1 Righter Parkway	 	 	65,993	 	 	8.05	%	 	6,325	 	 	Oct-11	 	
Newtown Square, Berwyn, Libertyview	 	 	66,000	 	 	7.25	%	 	5,333	 	 	May-13	 	
Southpoint III	 	 	6,257	 	 	7.75	%	 	887	 	 	Apr-14	 	
Grande B (30 properties)	 	 	81,704	 	 	7.48	%	 	7,444	 	 	Jul-27	 	
Grande A (23 properties)	 	 	 	 	 	 	 	 	 	 	 	 	 	
     Tranche 1	 	 	63,526	 	 	7.48	%	 	6,086	 	 	Jul-27	 	
     Tranche 2 (a)	 	 	20,000	 	 	1.88	%	 	384	 	 	Jul-27	 	
     Tranche 3 (a)	 	 	3,684	 	 	2.05	%	 	77	 	 	Jul-27	 	
 	 			 	 	 	 			 	 	 	 	
     Total mortgage indebtedness	 	$	462,659	 	 	 	 	$	39,061	 	 	 	 	
 	 			 	 	 	 			 	 	 	 	
(a)	For loans that bear interest at a variable rate, the rates in effect at December  31, 2003 have been assumed to remain constant.	
(b)	“Annual Debt Service” is calculated by annualizing the regularly scheduled principal and interest amortization.	
(c)	“Annual Debt Service” for construction loans that require payment of interest only is calculated by annualizing the interest payment based on the outstanding debt balances and rates in effect at December  31, 2003.	
Guaranties. As of December  31, 2003, we had guaranteed repayment of approximately $17.4  million of loans on behalf of the Real Estate Ventures, including a $16.2  million guaranty that terminated in January 2004. See Item 2. Properties – Real Estate Ventures. We also provide customary environmental indemnities in connection with construction and permanent financing both for our own account and on behalf of Real Estate Ventures.
Management Activities
We conduct our third-party real estate management services business through the Management Company, a taxable REIT subsidiary. As of December  31, 2003, the Management Company was managing properties containing an aggregate of approximately 19.3  million net rentable square feet, of which approximately 15.7  million net rentable square feet related to Properties owned by us and approximately 3.6  million net rentable square feet related to properties owned by third parties.
Geographic Segments
We currently manage our portfolio of Properties within three segments: (1) Pennsylvania, (2) New Jersey and (3) Virginia. (See Note 12 to the Financial Statements.)
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Competition
The leasing of real estate is highly competitive. The Properties compete for tenants with similar properties primarily on the basis of location, total occupancy costs (including base rent and operating expenses), services provided, and the design and condition of the improvements. We also face competition when attempting to acquire real estate, including competition from domestic and foreign financial institutions, other REIT’s, life insurance companies, pension funds, partnerships and individual investors.
Employees
As of December  31, 2003, we had 237 full-time employees.
Environmental Regulations
As an owner and operator of real estate, we are subject to various environmental laws of federal, state and local governments. Compliance with existing laws has not had a material adverse effect on our financial condition and results of operations, and management does not believe it will have such an impact in the future. However, we cannot predict the impact of unforeseen environmental contingencies or new or changed laws or regulations on our Properties, properties that we have sold or on properties that may be acquired by us in the future. See “Risk Factors – Environmental problems at the Properties are possible and may be costly.”
Other
We do not have any foreign operations and our business is not seasonal. Our operations are not dependent on a single tenant or a few tenants as no single tenant accounted for more than 10% of our total 2003 revenue.
Availability of SEC Reports
We file annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K and other information with the SEC. Members of the public may read and copy materials that we file with the SEC at the SEC’s Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. Members of the public may also obtain information on the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet web site that contains reports, proxy and information statements and other information regarding issuers, including us, that file electronically with the SEC. The address of that site is http://www.sec.gov. Our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K and other information filed by us with the SEC are available, without charge, on our Internet web site, http://www.brandywinerealty.com, as soon as reasonably practicable after they are filed electronically with the SEC. Copies are also available, without charge, from Secretary, Brandywine Realty Trust, 401 Plymouth Road, Suite 500, Plymouth Meeting, PA 19462.
Risk Factors
The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. Certain information included in this Annual Report on Form 10-K and other materials filed by us with the Securities and Exchange Commission (as well as information included in oral statements or other written statements made or to be made by us) contain statements that are forward-looking, such as statements relating to business development and real estate development activities, acquisitions, dispositions, future capital expenditures, financing sources and availability, and the effects of regulation (including environmental regulation) and competition. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, we can give no
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assurance that our expectations will be achieved. As forward-looking statements, these statements involve risks, uncertainties and other factors that could cause actual results to differ materially from the expected results and, accordingly, such results may differ from those expressed in any forward-looking statements made by, or on behalf of us. Factors that could cause actual results to differ materially from our management’s current expectations include, but are not limited to, changes in general economic conditions, changes in local real estate conditions (including changes in rental rates and the number of competing properties), changes in the economic conditions affecting industries in which our principal tenants compete, our failure to lease unoccupied space in accordance with our projections, our failure to re-lease occupied space upon expiration of leases, the bankruptcy of major tenants, changes in prevailing interest rates, the unavailability of equity and debt financing, unanticipated costs associated with the acquisition and integration of our acquisitions, unanticipated costs to complete and lease-up pending developments, increased costs for, or lack of availability of, adequate insurance, including for terrorist acts, demand for tenant services beyond those traditionally provided by landlords, potential liability under environmental or other laws, the existence of complex regulations relating to our status as a REIT and to our acquisition, disposition and development activities, the adverse consequences of our failure to qualify as a REIT and the other risks identified in this Annual Report on Form 10-K. We assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.
Our operations are concentrated in the Mid-Atlantic region, and our operational and financial performance depend on the economies in the markets in which we have a presence; changes in such markets may adversely affect our financial condition.
Our Properties are located in suburban markets in Pennsylvania, New Jersey, Virginia and Delaware. We thus do not have a broad geographic distribution of our properties. Like other real estate markets, these markets have experienced economic downturns in the past, and they are currently experiencing a downturn similar to the broader economic slowdown in the U.S. Such a downturn can lead to lower occupancy rates and, consequentially, downward pressure on rental rates. They can also result in companies experiencing difficulty with their cash flow, which might cause them to delay or miss making their lease payments or to declare bankruptcy. Furthermore, such a climate might affect the timing of lease commitments by new tenants or of lease renewals by existing tenants as such parties delay or defer their leasing decisions in order to get the most current information possible about trends in their businesses or industries. A prolonged decline in the economies of these real estate markets could adversely affect our financial position, results of operations, cash flow, and ability to make distributions to shareholders.
Financially distressed tenants may reduce our cash flow.
If one or more of our tenants were to experience financial difficulties, including bankruptcy, insolvency or general downturn of business, there could be an adverse effect our financial performance and distributions to shareholders.
We cannot assure you that any tenant that files for bankruptcy protection will continue to pay us rent. A bankruptcy filing by or relating to one of our tenants or a lease guarantor would bar all efforts by us to collect pre-bankruptcy debts from that tenant or the lease guarantor, or their property, unless we receive an order permitting us to do so from the bankruptcy court. In addition, we cannot evict a tenant solely because of its bankruptcy. A tenant or lease guarantor bankruptcy could delay our efforts to collect past due balances under the relevant leases, and could ultimately preclude collection of these sums. If a lease is assumed by the tenant in bankruptcy, all pre-bankruptcy balances due under the lease must be paid to us in full. However, if a lease is rejected by a tenant in bankruptcy, we would have only a general unsecured claim for damages. Any unsecured claim we hold may be paid only to the extent that funds are available and only in the same percentage as is paid to all other holders of unsecured claims, and there are restrictions under bankruptcy laws that limit the amount of the claim we can make if a lease is rejected. As a result, it is likely that we would recover substantially less than the full value of any unsecured claims we hold. For additional detail on tenant credit risk, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview – Tenant Credit Risk.
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We may be unable to renew leases or relet space as leases expire.
If tenants do not to renew their leases upon expiration, we may be unable to relet the subject space. Even if the tenants do renew their leases or we can relet the space, the terms of renewal or reletting (including the cost of required renovations) may be less favorable than current lease terms. Certain leases grant the tenants an early termination right upon payment of a termination penalty. For additional detail on the risk of non-renewal of expiring leases, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview – Tenant Rollover Risk.
New development and acquisitions may not produce results in accordance with our expectations and may require development and renovation costs exceeding our estimates.
Once made, our investments may not produce results in accordance with our expectations. Our actual renovation and improvement costs in bringing an acquired property up to market standards may exceed our estimates.
In addition, we are active in developing and redeveloping office properties. Risks associated with these activities include:
 	•	the unavailability of favorable financing, including permanent financing to repay construction financing;	
 	 	 	
 	•	construction costs exceeding original estimates, due to increases in interest rates and increased materials, labor or other costs;	
 	 	 	
 	•	construction and lease-up delays resulting in increased debt service, fixed expenses and construction or renovation costs;	
 	 	 	
 	•	complications (including building moratoriums and anti-growth legislation) in obtaining necessary zoning, occupancy and other governmental permits; and	
 	 	 	
 	•	insufficient occupancy levels and rental rates at a newly completed property causing the property to be unprofitable.	
For additional detail on development risks, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview – Development Risk.
Some potential losses are not covered by insurance.
We carry comprehensive liability, fire, extended coverage and rental loss insurance on all of our Properties. We believe the policy specifications and insured limits of these policies are adequate and appropriate. There are, however, types of losses, such as lease and other contract claims and acts of war, that generally are not insured. Some of our existing insurance policies expire in June 2004. We cannot be assured that we will be able to renew insurance coverage in an adequate amount or at reasonable prices. In addition, insurance companies may no longer offer coverage against certain types of losses, such as losses due to terrorist acts and mold, or, if offered, these types of insurance may be prohibitively expensive. Should an uninsured loss or a loss in excess of insured limits occur, we could lose all or a portion of the capital we have invested in a Property, as well as the anticipated future revenue from the Property. In such an event, we might nevertheless remain obligated for any mortgage debt or other financial obligations related to the Property. We cannot be assured that material losses in excess of insurance proceeds will not occur in the future. If any of our Properties were to experience a catastrophic loss, it could seriously disrupt our operations, delay revenue and result in large expenses to repair or rebuild the Property. Such events could adversely affect our cash flow and ability to make distributions to shareholders.
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Because real estate is illiquid, we may not be able to sell Properties when appropriate.
Real estate investments generally, and large office and industrial properties like those that we own, in particular, often cannot be sold quickly. Consequently, we may not be able to vary our portfolio promptly in response to changes in economic or other conditions. In addition, the Internal Revenue Code of 1986 (the “Code”) limits our ability to sell properties held for fewer than four years. Furthermore, Properties that we acquired in exchange for units in the Operating Partnership often have a low tax basis. If we were to dispose of any of these Properties in a taxable transaction, we may be required to distribute a significant amount of the taxable gain to our security holders under the requirements of the Internal Revenue Code of 1986 applicable to REITs and this could, in turn, impact our cash flow and ability to make distributions to shareholders. In addition, purchase options and rights of first refusal held by certain tenants or partners in Real Estate Ventures may also limit our ability to sell certain properties. Any of these factors could adversely affect our cash flow and ability to make distributions to shareholders as well as the ability of someone to purchase us, even if a purchase were in our shareholders’ best interests.
We have agreed not to sell certain of our Properties.
We have agreed with the former owners of 13 of our Properties aggregating approximately 1.1  million net rentable square feet not to sell these Properties for varying periods of time in transactions that would trigger taxable income to the former owners, subject to certain exceptions. Some of these agreements are with affiliates of current trustees of our company. In addition, we may enter into similar agreements with sellers of Properties acquired by us in the future. These agreements generally provide that we may dispose of the applicable Properties in transactions that qualify as tax-free exchanges under Section  1031 of the Code or in other tax deferred transactions. Such transactions can be difficult and result in the property acquired in exchange for the disposed of property inheriting the tax attributes (including tax protection covenants) of the disposed of property. Without suffering adverse financial consequences, we may be precluded from selling certain Properties other than in transactions that would qualify as tax-free exchanges for federal income tax purposes.
Our operating costs might rise, which might reduce our profitability and have an adverse effect on our cash flow and our ability to make distributions to shareholders.
We might face higher operating expenses as a result of rising costs generally and, in particular, as a result of increased costs following the terrorist attacks in the U.S. on September  11, 2001. For example, it might cost more in the future than in the past for building security, property/casualty and liability insurance, and property maintenance. Following the September 11th attacks, we have increased the level of security at our Properties. We might not be able to pass along the increased costs associated with such increased building security to our tenants, which could reduce our profitability and cash flow. Some of our existing insurance policies expire in June 2004. As a result of the terrorist attacks and other market conditions, the cost of premiums for comparable coverage might be significantly higher when it is time to renew our coverage, which could increase our operating expenses and reduce our profitability and our cash flow. Because of rising costs in general, we might experience increases in our property maintenance costs, such as for cleaning, electricity, and heating, ventilation and air conditioning. In general, under our leases with tenants, we pass on a portion of these costs to them. We cannot be assured, however, that tenants will actually bear the full burden of these higher costs, or that such increased costs will not lead them, or other prospective tenants, to seek office space elsewhere. If operating expenses increase, the availability of other comparable office space in our specific geographic markets might limit our ability to increase rents, which could reduce our profitability (if operating expenses increase without a corresponding increase in revenues) and limit our ability to make distributions to shareholders.
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We face significant competition from other real estate developers.
We compete with real estate developers, operators and institutions for tenants and acquisition and development opportunities. Some of these competitors have significantly greater financial resources than we do. Such competition may reduce the number of suitable investment opportunities offered to us, interfere with our ability to attract and retain tenants and may increase vacancies, which increases supply and lowers market rental rates, reduces our bargaining leverage and adversely affects our ability to improve our operating leverage. In addition, some of our competitors may be willing, because their properties may have vacancy rates higher than those for our properties, to make space available at lower prices than the space in our properties. We cannot be assured that this competition will not adversely affect our cash flow and ability to make distributions to shareholders.
Our ability to make distributions is subject to various risks.
We have been paying quarterly distributions to our shareholders. Our ability to make distributions in the future will depend upon:
 	•	the operational and financial performance of our Properties;	
 	 	 	
 	•	capital expenditures with respect to existing and newly acquired Properties;	
 	 	 	
 	•	the amount of, and the interest rates on, our debt; and	
 	 	 	
 	•	the absence of significant expenditures relating to environmental and other regulatory matters.	
Certain of these matters are beyond our control and any significant difference between our expectations and actual results could have a material adverse effect on our cash flow and our ability to make distributions to shareholders.
Changes in the law may adversely affect our cash flow.
Because increases in income and service taxes are generally not passed through to tenants under leases, such increases may adversely affect our cash flow and ability to make expected distributions to shareholders. The Properties are also subject to various regulatory requirements, such as those relating to the environment, fire and safety. Our failure to comply with these requirements could result in the imposition of fines and damage awards. Also, the costs to comply with any new or different regulations could adversely affect our cash flow and our ability to make distributions. While we believe that the Properties are currently in material compliance with all such requirements, we cannot be assured that these requirements will not change or that newly imposed requirements will not require significant unanticipated expenditures.
Our indebtedness subjects us to additional risks.
Debt Financing and Existing Debt Maturities. Like other real estate companies, we are subject to risks normally associated with debt financing, such as the insufficiency of cash flow to meet required debt service payment obligations and the inability to refinance existing indebtedness. If our debt cannot be paid, refinanced or extended at maturity, in addition to our failure to repay our debt, we may not be able to make distributions to shareholders at expected levels or at all. Furthermore, an increase in our interest expense could adversely affect our cash flow and ability to make distributions to shareholders. If we do not meet our debt service obligations, any Properties securing such indebtedness could be foreclosed on, which would have a material adverse effect on our cash flow and ability to make distributions and, depending on the number of Properties foreclosed on, could threaten our continued viability.
Risk of Rising Interest Rates and Variable Rate Debt. Increases in interest rates on variable rate indebtedness would increase our interest expense, which could adversely affect our cash flow and ability to make distributions to shareholders. As of December  31, 2003, outstanding borrowings of approximately $290.3  million bear interest at variable rates.
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No Limitation on Debt. Our organizational documents do not contain any limitation on our ability to incur additional debt. Accordingly, subject to limitations in our credit facilities, we could increase our outstanding debt without restriction. The increased debt service could adversely affect our cash flow and ability to make distributions and could increase the risk of default on our indebtedness.
Environmental problems at the Properties are possible and may be costly.
Federal, state and local laws, ordinances and regulations may require a current or previous owner or operator of real estate to investigate and clean up hazardous or toxic substances or releases at such property. The owner or operator may be forced to pay for property damage and for investigation and clean-up costs incurred by others in connection with environmental contamination. Such laws typically impose clean-up responsibility and liability without regard to whether the owner or operator knew of or caused the presence of the contaminants. Even if more than one person may have been responsible for the contamination, each person covered by the environmental laws may be held responsible for all of the clean-up costs incurred. In addition, third parties may sue the owner or operator of a site for damages and costs resulting from environmental contamination emanating from that site. These costs may be substantial and the presence of such substances may adversely affect the owner’s ability to sell or rent such property or to borrow using such property as collateral.
Environmental laws that govern the presence, maintenance and removal of asbestos require that owners or operators of buildings containing asbestos properly manage and maintain the asbestos, notify and train those who may come into contact with asbestos and undertake special precautions, including removal or other abatement, if asbestos would be disturbed during renovation or demolition of a building. Such laws may impose fines and penalties on building owners or operators who fail to comply with these requirements and may allow third parties to seek recovery from owners or operators for personal injury associated with exposure to asbestos fibers.
Independent environmental consultants have conducted a standard Phase I or similar general environmental site assessment (“ESA”) of each of our Properties to identify potential sources of environmental contamination and assess environmental regulatory compliance. For a number of the Properties, the Phase I ESA either referenced a prior Phase II ESA obtained on such Property or prompted us to have a Phase II ESA of such Property conducted. A Phase II ESA generally involves invasive procedures, such as soil sampling and testing or the installation and monitoring of groundwater wells. While the ESAs conducted have identified environmental contamination on a few of the Properties, they have not revealed any environmental contamination, liability or compliance concern that we believe would have a material adverse effect on our cash flow or ability to make distributions to shareholders. It is possible that the existing ESAs relating to the Properties do not reveal all environmental contaminations, liabilities or compliance concerns which currently exist, and it is also possible that the cost of remediating identified contamination may exceed current estimates. In addition, future properties which we acquire may be subject to environmental conditions.
While we have an ongoing maintenance program in place to address indoor air quality, inquiries about indoor air quality may necessitate special investigation and, depending on the results, remediation. Indoor air quality issues can stem from inadequate ventilation, chemical contaminants from indoor or outdoor sources, and biological contaminants such as molds, pollen, viruses and bacteria. Indoor exposure to chemical or biological contaminants above certain levels can be alleged to be connected to allergic reactions or other health effects and symptoms in susceptible individuals. If these conditions occur at one of our Properties, we may need to undertake a targeted remediation program, including without limitation, steps to increase indoor ventilation rates and eliminate sources of contaminants. Such remediation programs are costly and could necessitate the temporary relocation of some or all of the property’s tenants or require rehabilitation of the affected property.
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Americans with Disabilities Act compliance could be costly.
Under the Americans with Disabilities Act of 1990 (“ADA”), all public accommodations and commercial facilities, including office buildings, must meet certain federal requirements related to access and use by disabled persons. Compliance with the ADA requirements could involve removal of structural barriers from certain disabled persons’ entrances which could adversely affect our financial condition and results of operations. Other federal, state and local laws may require modifications to or restrict further renovations of our Properties with respect to such accesses. Although we believe that our properties are currently in material compliance with present requirements, noncompliance with the ADA or similar or related laws or regulations could result in the United States government imposing fines or private litigants being awarded damages against us. In addition, we do not know whether existing requirements will change or whether compliance with future requirements will require significant unanticipated expenditures. Such costs may adversely affect our cash flow and ability to make distributions.
By holding Properties through the Operating Partnership and various joint ventures, we are exposed to additional risks.
We own the Properties and interests in Real Estate Ventures through the Operating Partnership. In the future, we expect to continue to participate with other entities in property ownership through joint ventures or partnerships. Partnership or joint venture investments may involve risks not otherwise present in direct investments. Such risks include:
 	•	the potential bankruptcy of our partners or co-venturers;	
 	 	 	
 	•	a conflict between our business goals and those of our partners or co-venturers; and	
 	 	 	
 	•	actions taken by our partners or co-venturers contrary to our instructions or objectives.	
There is no limitation under our organizational documents as to the amount of funds which we may invest in partnerships or joint ventures.
Our status as a REIT is dependent on compliance with federal income tax requirements.
Our failure to qualify as a REIT would have serious adverse consequences to our shareholders. We believe that since 1986, we have qualified for taxation as a REIT for federal income tax purposes. We plan to continue to meet the requirements for taxation as a REIT. Many of these requirements are highly technical and complex. The determination that we are a REIT requires an analysis of various factual matters and circumstances that may not be totally within our control. For example, to qualify as a REIT, at least 95% of our gross income must come from certain sources that are itemized in the REIT tax laws. We are also required to distribute to shareholders at least 90% of our REIT taxable income (excluding net capital gains). The fact that we hold our assets through the Operating Partnership and its subsidiaries further complicates the application of the REIT requirements. Even a technical or inadvertent mistake could jeopardize our REIT status. Furthermore, Congress and the IRS might change the tax laws and regulations, and the courts might issue new rulings that make it more difficult, or impossible, for us to remain qualified as a REIT. We do not believe, however, that any pending or proposed tax law changes would jeopardize our REIT status.
To maintain REIT status, a REIT may not own more than 10% of the securities of any corporation, except for a qualified REIT subsidiary (which must be wholly owned by the REIT), taxable REIT subsidiary or another REIT.
If we fail to qualify as a REIT, we would be subject to federal income tax at regular corporate rates. Also, unless the IRS granted us relief under certain statutory provisions, we would remain disqualified as a REIT for four years following the year we first failed to qualify. If we failed to qualify as a REIT, we would be required to pay significant income taxes and would, therefore, have less money available for investments or for distributions to shareholders. This would likely have a material adverse effect on the value of our securities. In addition, we would no longer be required to make any distributions to shareholders.
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In order to make the distributions required to maintain our REIT status, we may need to borrow funds. To obtain the favorable tax treatment associated with REIT qualification, we generally will be required to distribute to shareholders at least 90% of our annual REIT taxable income (excluding net capital gains). In addition, we will be subject to tax on our undistributed net taxable income and net capital gain and a 4% nondeductible excise tax on the amount, if any, by which certain distributions paid by us with respect to any calendar year are less than the sum of 85% of ordinary income plus 95% of capital gain net income for the calendar year, plus certain undistributed amounts from prior years.
We intend to make distributions to shareholders to comply with the distribution provisions of the Code and to avoid income and other taxes. Our income will consist primarily of our share of the income of the Operating Partnership and our cash flow will consist primarily of our share of distributions from the Operating Partnership. Differences in timing between the receipt of income and the payment of expenses in arriving at taxable income (of the Company or the Operating Partnership) and the effect of required debt amortization payments could require us to borrow funds on a short-term basis or to liquidate funds on adverse terms to meet the REIT qualification distribution requirements.
Failure of the Operating Partnership (or a subsidiary partnership) to be treated as a partnership would have serious adverse consequences to our shareholders. If the IRS were to successfully challenge the tax status of the Operating Partnership or any of its subsidiary partnerships for federal income tax purposes, the Operating Partnership or the affected subsidiary partnership would be taxable as a corporation. In such event, we would cease to qualify as a REIT and the imposition of a corporate tax on the Operating Partnership or a subsidiary partnership would reduce the amount of cash available for distribution from such partnership to us and our shareholders.
We do pay some taxes. Even if we qualify as a REIT, we are required to pay certain federal, state and local taxes on our income and Properties. In addition, the Management Company is subject to federal, state and local income tax at regular corporate rates on its net taxable income derived from its management, leasing and related service business. If we have net income from a prohibited transaction, such income will be subject to a 100% tax.
We own a subsidiary REIT. One of our subsidiaries, Atlantic American Properties Trust (“AAPT”), that indirectly holds 22 of the Properties, elected to be taxed as a REIT for the year ended December  31, 1997. So long as we seek to maintain AAPT’s REIT status, AAPT will be subject to all the requirements and risks associated with maintaining REIT status summarized above, including the limitation on the ownership of more than 10% of the securities of any corporation (other than a qualified REIT subsidiary, taxable REIT subsidiary or another REIT).
We are dependent upon our key personnel.
We are dependent upon the efforts of our executive officers, particularly Gerard H. Sweeney. The loss of Mr.  Sweeney’s services could have an adverse affect on our operations and would entitle the banks under our Credit Facility to accelerate the amounts due thereunder. Although we have an employment agreement with Mr.  Sweeney for a term extending to May  7, 2005, this agreement does not restrict his ability to become employed by a competitor following the termination of his employment with us. We do not have keyman life insurance coverage for Mr.  Sweeney.
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Limitations exist with respect to a third party’s ability to acquire us or effectuate a change in control.	
Limitations imposed to protect our REIT status. In order to protect us against loss of our REIT status, our Declaration of Trust limits any shareholder from owning more than 9.8% in value of our outstanding shares, subject to certain exceptions. The ownership limit may have the effect of precluding acquisition of control of the Company. If anyone acquires shares in excess of the ownership limit, we may:
 	•	consider the transfer to be null and void;	
 	 	 	
 	•	not reflect the transaction on our books;	
 	 	 	
 	•	institute legal action to stop the transaction;	
 	 	 	
 	•	not pay dividends or other distributions with respect to those shares;	
 	 	 	
 	•	not recognize any voting rights for those shares; and	
 	 	 	
 	•	consider the shares held in trust for the benefit of a person to whom such shares may be transferred.	
Limitation due to our ability to issue preferred shares. Our Declaration of Trust authorizes the Board of Trustees to issue preferred shares. The Board of Trustees may establish the preferences and rights of any preferred shares issued which could have the effect of delaying or preventing someone from taking control of us, even if a change in control were in our shareholders’ best interests.
Limitation imposed by the Maryland Business Combination Law. The Maryland General Corporation Law, as applicable to Maryland real estate investment trusts, establishes special restrictions against “business combinations” between a Maryland real estate investment trust and “interested shareholders” or their affiliates unless an exemption is applicable. An interested shareholder includes a person who beneficially owns, and an affiliate or associate of the trust who, at any time within the two-year period prior to the date in question, was the beneficial owner of, ten percent or more of the voting power of our then-outstanding voting shares. Among other things, the law prohibits (for a period of five years) a merger and certain other transactions between the trust and an interested shareholder unless the Board of Trustees approved the transaction before the party became an interested shareholder. The five-year period runs from the most recent date on which the interested shareholder became an interested shareholder. Thereafter, any such business combination must be recommended by the Board of Trustees and approved by two super-majority shareholder votes unless, among other conditions, the trust’s common shareholders receive a minimum price for their shares and the consideration is received in cash or in the same form as previously paid by the interested shareholder for its shares or unless the Board of Trustees approved the transaction before the party in question became an interested shareholder. The business combination statute could have the effect of discouraging offers to acquire us and of increasing the difficulty of consummating any such offers, even if our acquisition would be in our shareholders’ best interests. We have exempted any business combination involving Safeguard Scientifics, Inc., the Commonwealth of Pennsylvania State Employees’ Retirement System and a voting trust established for its benefit, Morgan Stanley Asset Management Inc. and two funds managed by it, Lazard Freres Real Estate Investors, L.L.C., Five Arrows Realty Securities III L.L.C., Gerard H. Sweeney (the Company’s President and Chief Executive Officer) and any of their respective affiliates or associates.
Maryland Control Share Acquisition Act. Maryland law provides that “control shares” of a real estate investment trust acquired in a “control share acquisition” shall have no voting rights except to the extent approved by a vote of two-thirds of the vote eligible to be cast on the matter under the Maryland Control Share Acquisition Act. “Control Shares” means shares that, if aggregated with all other shares previously acquired by the acquirer, would entitle the acquirer to exercise voting power in electing trustees within one of the following ranges of voting power: one-tenth or more but less than one-third, one-third or more but less than a majority or a majority or more of all voting power. A “control share acquisition” means the acquisition of control shares, subject to certain exceptions. If voting rights or control shares acquired in a control share acquisition are not approved at a shareholder’s meeting, then subject to certain conditions and limitations the issuer may redeem any or all of the control shares for fair value. If voting rights of such control shares are approved at a shareholder’s meeting and the acquirer becomes entitled to
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vote a majority of the shares entitled to vote, all other shareholders may exercise appraisal rights. Any control shares acquired in a control share acquisition which are not exempt under our bylaws will be subject to the Maryland Control Share Acquisition Act. Our bylaws contain a provision exempting from the control share acquisition statute any and all acquisitions by any person of our shares. There can be no assurance that this provision will not be amended or eliminated at any time in the future.
Many factors can have an adverse effect on the market value of our securities.	
Like any publicly traded company, a number of factors might adversely affect the price of our securities, many of which are beyond our control. These factors include:
 	•	Increases in market interest rates, relative to the dividend yield on our shares. If market interest rates go up, prospective purchasers of our securities may require a higher yield. Higher market interest rates would not, however, result in more funds for us to distribute and, to the contrary, would likely increase our borrowing costs and potentially decrease funds available for distribution. Thus, higher market interest rates could cause the market price of our common shares to go down.	
 	 	 	
 	•	Anticipated benefit of an investment in our securities as compared to investment in securities of companies in other industries (including benefits associated with tax treatment of dividends and distributions).	
 	 	 	
 	•	Perception by market professionals of REITs generally and REITs comparable to us in particular.	
 	 	 	
 	•	Perception by market participants of our potential for payment of cash distributions and for growth.	
 	 	 	
 	•	Level of institutional investor interest in our securities.	
 	 	 	
 	•	Relatively low trading volumes in securities of REITs.	
 	 	 	
 	•	Our results of operations and financial condition.	
 	 	 	
 	•	Investor confidence in the stock market generally.	
The market value of our Common Shares is based primarily upon the market’s perception of our growth potential and our current and potential future earnings and cash distributions. Consequently, our Common Shares may trade at prices that are higher or lower than our net asset value per Common Share. If our future earnings or cash distributions are less than expected, it is likely that the market price of our Common Shares will diminish.
The issuance of preferred securities may adversely affect the rights of holders of Common Shares.	
Because our Board of Trustees has the power to establish the preferences and rights of each class or series of Preferred Shares, it may afford the holders in any series or class of preferred shares preferences, distributions, powers and rights, voting or otherwise, senior to the rights of holders of Common Shares. The Board of Trustees also has the power to establish the preferences and rights of each class or series of units in the Operating Partnership, and may afford the holders in any series or class of preferred units preferences, distributions, powers and rights, voting or otherwise, senior to the rights of holders of common units.
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Item 2. Properties	
Operating Property Acquisitions
We acquired the following operating properties during the year ended December 31, 2003:
Month of Acquisition	 	 	Property/Portfolio Name	 	 	Location	 	 	# of Buildings	 	 	Rentable Square Feet	 	 	Purchase Price	 	
	 			 			 			 			 			 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(in 000’s)	 	
Oct-03	 	 	Swedesford Road	 	 	King of Prussia, PA	 	 	4	 	 	247,817	 	$	44,800,000	 	
Dec-03	 	 	989 Lenox Drive	 	 	Lawrenceville, NJ	 	 	1	 	 	112,055	 	 	20,000,000	 	
 	 	 	 	 	 	 	 		 		 		 	
 	 	 	Total Office Property Acquisitions	 	 	 	 	 	5	 	 	359,872	 	$	64,800,000	 	
 	 	 	 	 	 	 	 		 		 		 	
During 2003, we acquired one parcel of land, containing 10.0 acres, for $3.0 million.
Development Properties Placed in Service
We placed in service the following properties during the year ended December 31, 2003:
Month Placed in Service	 	 	Property/Portfolio Name	 	 	Location	 	 	# of Buildings	 	 	Rentable Square Feet	 	 	Net Investment	 	
	 			 			 			 			 			 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(in 000’s)	 	
Jan-03	 	 	401 Plymouth Road	 	 	Plymouth Meeting, PA	 	 	1	 	 	200,000	 	$	39,433	 	
Feb-03	 	 	400 Berwyn Park	 	 	Berwyn, PA	 	 	1	 	 	125,000	 	 	19,992	 	
Jul-03	 	 	935 First Avenue	 	 	King of Prussia, PA	 	 	1	 	 	103,092	 	 	14,990	 	
 	 	 	 	 	 	 	 		 		 		 	
 	 	 	Total Office Properties Placed in Service	 	 	 	 	 	3	 	 	428,092	 	$	74,415	 	
 	 	 	 	 	 	 	 		 		 		 	
We place a property under development in service once a property reaches 95% occupancy or one year after the completion of shell construction, whichever is earlier.
Property Sales and Dispositions
We sold or disposed of the following properties during the year ended December 31, 2003:
Month of Sale	 	 	Property/Portfolio Name	 	 	Location	 	 	# of Bldgs.	 	 	Rentable Square Feet	 	 	Sales/Disposition Price	 	
	 			 			 			 			 			 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(in 000’s)	 	
Feb-03	 	 	Greentree Exec. Campus	 	 	Marlton, NJ	 	 	—	 	 	28,444	 	$	2,560	 	
May-03	 	 	200 Nationwide Drive	 	 	Harrisburg, PA	 	 	1	 	 	2,500	 	 	875	 	
Jul-03	 	 	1000 Lincoln Drive East	 	 	Marlton, NJ	 	 	1	 	 	40,600	 	 	1,950	 	
Jul-03	 	 	Greentree Exec. Campus	 	 	Marlton, NJ	 	 	1	 	 	10,506	 	 	1,025	 	
Sep-03	 	 	55 Ames Court	 	 	Long Island, NY	 	 	1	 	 	90,000	 	 	5,350	 	
Oct-03	 	 	104 Windsor Drive	 	 	East Windsor, NJ	 	 	1	 	 	65,980	 	 	8,400	 	
Oct-03	 	 	Berkshire Boulevard	 	 	Wyomissing, PA	 	 	2	 	 	95,766	 	 	8,625	 	
Oct-03	 	 	3000 Lincoln Drive	 	 	Marlton, NJ	 	 	1	 	 	36,070	 	 	3,303	 	
Oct-03	 	 	4000/5000/9000 Lincoln Drive	 	 	Marlton, NJ	 	 	2	 	 	103,810	 	 	9,343	 	
Dec-03	 	 	I & III Christina Centre (a)	 	 	Wilmington, DE	 	 	2	 	 	632,797	 	 	112,800	 	
 	 	 	 	 	 	 	 		 		 		 	
 	 	 	Total Properties Sold	 	 	 	 	 	12	 	 	1,106,473	 	$	154,231	 	
 	 	 	 	 	 	 	 		 		 		 	
(a)	These two properties were contributed to a joint venture in which we retained a 20% interest.	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
During 2003, we sold four parcels of land, containing 24.1 acres, for $4.2 million.
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Properties	
As of December 31, 2003, we owned 208 office properties, 25 industrial facilities and one mixed-use property that contained an aggregate of approximately 15.7 million net rentable square feet. The properties are located in the markets in and surrounding Philadelphia, Pennsylvania; New Jersey; and Richmond, Virginia. As of December 31, 2003, the Properties were approximately 90.7% leased to 1,025 tenants and had an average age of approximately 16.7 years. The office properties are primarily one to three story suburban office buildings containing an average of approximately 60,580 net rentable square feet. The industrial properties accommodate a variety of tenant uses, including light manufacturing, assembly, distribution and warehousing. We carry comprehensive liability, fire, extended coverage and rental loss insurance covering all of the Properties, with policy specifications and insured limits which we believe are adequate.
We had the following projects in development or redevelopment as of December 31, 2003:
Project Name	 	 	Location	 	 	Rentable Square Feet	 	 	% Leased as of 12/31/03	 	 	Estimated Project Completion Date	 	 	Estimated Project Stabilization Date (a)	 	 	Total Cost Incurred as of 12/31/03	 	 	Estimated Total Development Cost (b)	 	
	 			 			 			 			 			 			 			 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(in 000’s)	 	 	(in 000’s)	 	
Under Development:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cira Centre	 	 	Philadelphia, PA	 	 	727,000	 	 	51%	 	 	Dec-05	 	 	Apr-07	 	$	6,116	 	$	190,807	 	
Bishops Gate	 	 	Mount Laurel, NJ	 	 	53,700	 	 	69%	 	 	Jul-04	 	 	Jul-05	 	 	1,480	 	 	7,924	 	
6990 Snowdrift (Bldg A)	 	 	Allentown, PA	 	 	44,200	 	 	69%	 	 	Oct-03	 	 	Dec-04	 	 	5,243	 	 	5,713	 	
6990 Snowdrift (Bldg B)	 	 	Allentown, PA	 	 	27,900	 	 	0%	 	 	Dec-03	 	 	Dec-04	 	 	2,246	 	 	3,289	 	
 	 	 	 	 		 	 	 	 	 	 	 	 	 	 		 		 	
 	 	 	 	 	 	852,800	 	 	 	 	 	 	 	 	 	 	 	15,085	 	 	207,733	 	
 	 	 	 	 		 	 	 	 	 	 	 	 	 	 		 		 	
Under Redevelopment:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
7535 Windsor Drive	 	 	Allentown, PA	 	 	128,061	 	 	50%	 	 	Oct-03	 	 	Dec-04	 	$	2,412	 	$	3,432	 	
855 Springdale Drive	 	 	West Whitefield, PA	 	 	50,750	 	 	0%	 	 	Dec-04	 	 	Dec-05	 	 	169	 	 	3,400	 	
501 Office Center Drive	 	 	Fort Washington, PA	 	 	114,837	 	 	47%	 	 	Oct-03	 	 	Dec-04	 	 	214	 	 	10,889	 	
 	 	 	 	 		 	 	 	 	 	 	 	 	 	 		 		 	
 	 	 	 	 	 	293,648	 	 	 	 	 	 	 	 	 	 	 	2,795	 	 	17,721	 	
 	 	 	 	 		 	 	 	 	 	 	 	 	 	 		 		 	
 	 	 	 	 	 	1,146,448	 	 	 	 	 	 	 	 	 	 	$	17,880	 	$	225,454	 	

(a)	Stabilization date represents date at which the property is projected to be 95% leased.	
(b)	Total development cost includes land acquisition costs, land carry costs, hard and soft construction costs, tenant improvements and broker commissions.	
The following table sets forth information with respect to the Properties at December 31, 2003:
17

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Property Name	 	Location	 	State	 	Year
Built	 	Net
Rentable
Square
Feet	 	Percentage
Leased as of
December 31,
2003 (a)	 	Total Base
Rent for the
Twelve
Months
Ended
December 31,
2003 (b)
(000’s)	 	Average
Annualized
Rental Rate
as of
December 31,
2003 (c)	 	
	 			 			 			 			 			 			 			 	
PENNSYLVANIA SEGMENT	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
100-300 Gundy Drive	 	 	Reading	 	 	PA	 	 	1970	 	 	439,167	 	 	96.8	%	$	6,939	 	$	15.69	 	
401 Plymouth Road	 	 	Plymouth Meeting	 	 	PA	 	 	2001	 	 	202,662	 	 	87.6	%	 	4,435	 	 	27.64	 	
Philadelphia Marine Center	 	 	(d) Philadelphia	 	 	PA	 	 	Various	 	 	181,900	 	 	100.0	%	 	1,411	 	 	4.97	 	
300 Corporate Center Drive	 	 	Camp Hill	 	 	PA	 	 	1989	 	 	175,280	 	 	100.0	%	 	3,391	 	 	20.63	 	
111 Presidential Boulevard	 	 	Bala Cynwyd	 	 	PA	 	 	1997	 	 	173,095	 	 	32.7	%	 	3,346	 	 	28.51	 	
751-761 Fifth Avenue	 	 	King Of Prussia	 	 	PA	 	 	1967	 	 	158,000	 	 	100.0	%	 	500	 	 	3.15	 	
630 Allendale Road	 	 	King of Prussia	 	 	PA	 	 	2000	 	 	150,000	 	 	100.0	%	 	3,678	 	 	24.25	 	
640 Freedom Business Center	 	 	(d) King Of Prussia	 	 	PA	 	 	1991	 	 	132,000	 	 	98.3	%	 	2,761	 	 	26.43	 	
100 Katchel Blvd	 	 	Reading	 	 	PA	 	 	1970	 	 	131,082	 	 	100.0	%	 	2,953	 	 	21.04	 	
52 Swedesford Square	 	 	East Whiteland Twp.	 	 	PA	 	 	1988	 	 	131,017	 	 	100.0	%	 	2,862	 	 	23.69	 	
105 / 140 Terry Drive	 	 	Newtown	 	 	PA	 	 	1982	 	 	128,666	 	 	92.5	%	 	1,703	 	 	15.06	 	
7535 Windsor Drive	 	 	Allentown	 	 	PA	 	 	1988	 	 	128,061	 	 	—	 (e)	 	—	 	 	—	 	
400 Berwyn Park	 	 	Berwyn	 	 	PA	 	 	1999	 	 	124,172	 	 	42.5	%	 	1,692	 	 	30.67	 	
101 Lindenwood Drive	 	 	Malvern	 	 	PA	 	 	1988	 	 	118,121	 	 	95.5	%	 	2,501	 	 	21.49	 	
501 Office Center Drive	 	 	Fort Washington	 	 	PA	 	 	1974	 	 	114,837	 	 	—	 (e)	 	—	 	 	—	 	
7130 Ambassador Drive	 	 	Allentown	 	 	PA	 	 	1991	 	 	114,049	 	 	100.0	%	 	527	 	 	6.49	 	
7350 Tilghman Street	 	 	Allentown	 	 	PA	 	 	1987	 	 	111,500	 	 	100.0	%	 	1,976	 	 	19.10	 	
300 Berwyn Park	 	 	Berwyn	 	 	PA	 	 	1989	 	 	109,919	 	 	100.0	%	 	2,207	 	 	24.56	 	
50 Swedesford Square	 	 	East Whiteland Twp.	 	 	PA	 	 	1986	 	 	109,800	 	 	100.0	%	 	1,928	 	 	18.22	 	
920 Harvest Drive	 	 	Blue Bell	 	 	PA	 	 	1990	 	 	104,505	 	 	100.0	%	 	2,100	 	 	20.09	 	
442 Creamery Way	 	 	Exton	 	 	PA	 	 	1991	 	 	104,500	 	 	100.0	%	 	598	 	 	6.72	 	
935 First Avenue	 	 	King of Prussia	 	 	PA	 	 	2001	 	 	103,090	 	 	—	 	 	—	 	 	—	 	
100 Brandywine Boulevard	 	 	Newtown	 	 	PA	 	 	2002	 	 	102,000	 	 	100.0	%	 	2,681	 	 	23.26	 	
500 Office Center Drive	 	 	Fort Washington	 	 	PA	 	 	1974	 	 	101,303	 	 	99.0	%	 	1,944	 	 	22.15	 	
7450 Tilghman Street	 	 	Allentown	 	 	PA	 	 	1986	 	 	100,000	 	 	81.2	%	 	1,358	 	 	18.91	 	
301 Lindenwood Drive	 	 	Malvern	 	 	PA	 	 	1984	 	 	97,624	 	 	85.5	%	 	1,622	 	 	18.71	 	
555 Croton Road	 	 	King of Prussia	 	 	PA	 	 	1999	 	 	96,909	 	 	100.0	%	 	2,898	 	 	31.14	 	
500 North Gulph Road	 	 	King Of Prussia	 	 	PA	 	 	1979	 	 	93,082	 	 	71.5	%	 	1,378	 	 	21.08	 	
620 West Germantown Pike	 	 	Plymouth Meeting	 	 	PA	 	 	1990	 	 	90,169	 	 	73.4	%	 	2,106	 	 	29.63	 	
610 West Germantown Pike	 	 	Plymouth Meeting	 	 	PA	 	 	1987	 	 	90,152	 	 	94.2	%	 	2,481	 	 	31.83	 	
630 West Germantown Pike	 	 	Plymouth Meeting	 	 	PA	 	 	1988	 	 	89,925	 	 	86.2	%	 	2,081	 	 	27.99	 	
600 West Germantown Pike	 	 	Plymouth Meeting	 	 	PA	 	 	1986	 	 	89,681	 	 	94.0	%	 	2,213	 	 	30.18	 	
630 Freedom Business Center	 	 	(d) King Of Prussia	 	 	PA	 	 	1989	 	 	86,683	 	 	94.3	%	 	1,976	 	 	27.16	 	
620 Freedom Business Center	 	 	(d) King Of Prussia	 	 	PA	 	 	1986	 	 	86,559	 	 	45.4	%	 	778	 	 	14.47	 	
1200 Swedsford Road	 	 	Berwyn	 	 	PA	 	 	1994	 	 	86,000	 	 	100.0	%	 	1,587	 	 	21.38	 	
595 East Swedesford Road	 	 	Wayne	 	 	PA	 	 	1998	 	 	81,890	 	 	100.0	%	 	381	 	 	26.25	 	
3331 Street Road – Greenwood Square	 	 	Bensalem	 	 	PA	 	 	1986	 	 	81,575	 	 	100.0	%	 	1,623	 	 	20.95	 	
1050 Westlakes Drive	 	 	Berwyn	 	 	PA	 	 	1984	 	 	80,000	 	 	100.0	%	 	2,415	 	 	28.73	 	
One Progress Avenue	 	 	Horsham	 	 	PA	 	 	1986	 	 	79,204	 	 	100.0	%	 	841	 	 	11.54	 	
1060 First Avenue	 	 	(d) King Of Prussia	 	 	PA	 	 	1987	 	 	77,718	 	 	52.5	%	 	1,199	 	 	21.24	 	
741 First Avenue	 	 	King Of Prussia	 	 	PA	 	 	1966	 	 	77,184	 	 	100.0	%	 	580	 	 	8.42	 	
323 Norristown Road	 	 	Lower Gwyned	 	 	PA	 	 	1988	 	 	76,287	 	 	97.1	%	 	295	 	 	5.03	 	
1040 First Avenue	 	 	(d) King Of Prussia	 	 	PA	 	 	1985	 	 	75,488	 	 	64.0	%	 	1,490	 	 	26.36	 	
200 Berwyn Park	 	 	Berwyn	 	 	PA	 	 	1987	 	 	75,025	 	 	84.0	%	 	1,519	 	 	28.04	 	
1020 First Avenue	 	 	(d) King Of Prussia	 	 	PA	 	 	1984	 	 	74,556	 	 	100.0	%	 	1,642	 	 	21.52	 	
1000 First Avenue	 	 	(d) King Of Prussia	 	 	PA	 	 	1980	 	 	74,139	 	 	96.9	%	 	1,713	 	 	24.07	 	
160 - 180 West Germantown Pike	 	 	East Norriton	 	 	PA	 	 	1982	 	 	73,394	 	 	69.6	%	 	968	 	 	17.97	 	
436 Creamery Way	 	 	Exton	 	 	PA	 	 	1991	 	 	72,300	 	 	89.1	%	 	596	 	 	11.96	 	
14 Campus Boulevard	 	 	Newtown Square	 	 	PA	 	 	1998	 	 	69,542	 	 	100.0	%	 	1,332	 	 	22.78	 	
500 Enterprise Road	 	 	Horsham	 	 	PA	 	 	1990	 	 	66,751	 	 	100.0	%	 	934	 	 	19.73	 	
575 East Swedesford Road	 	 	Wayne	 	 	PA	 	 	1985	 	 	66,503	 	 	98.1	%	 	312	 	 	28.52	 	
925 Harvest Drive	 	 	Blue Bell	 	 	PA	 	 	1990	 	 	63,663	 	 	92.9	%	 	1,155	 	 	20.34	 	
429 Creamery Way	 	 	Exton	 	 	PA	 	 	1996	 	 	63,420	 	 	100.0	%	 	749	 	 	13.80	 	
610 Freedom Business Center	 	 	(d) King Of Prussia	 	 	PA	 	 	1985	 	 	62,991	 	 	88.6	%	 	1,312	 	 	26.56	 	
980 Harvest Drive	 	 	Blue Bell	 	 	PA	 	 	1988	 	 	62,379	 	 	100.0	%	 	1,446	 	 	25.07	 	
426 Lancaster Avenue	 	 	Devon	 	 	PA	 	 	1990	 	 	61,102	 	 	100.0	%	 	1,122	 	 	19.14	 	
18

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Property Name	 	Location	 	State	 	Year
Built	 	Net
Rentable
Square
Feet	 	Percentage
Leased as of
December 31,
2003 (a)	 	Total Base
Rent for the
Twelve
Months
Ended
December 31,
2003 (b)
(000’s)	 	Average
Annualized
Rental Rate
as of
December 31,
2003 (c)	 	
	 			 			 			 			 			 			 			 	
3329 Street Road – Greenwood Square	 	 	Bensalem	 	 	PA	 	 	1985	 	 	60,705	 	 	100.0	%	 	930	 	 	20.43	 	
1180 Swedesford Road	 	 	Berwyn	 	 	PA	 	 	1987	 	 	60,371	 	 	100.0	%	 	1,684	 	 	29.29	 	
1160 Swedesford Road	 	 	Berwyn	 	 	PA	 	 	1986	 	 	60,099	 	 	91.7	%	 	1,465	 	 	25.25	 	
200 Corporate Center Drive	 	 	Camp Hill	 	 	PA	 	 	1989	 	 	60,000	 	 	100.0	%	 	1,071	 	 	18.43	 	
321 Norristown Road	 	 	Lower Gwyned	 	 	PA	 	 	1988	 	 	59,994	 	 	98.9	%	 	953	 	 	17.05	 	
100 Berwyn Park	 	 	Berwyn	 	 	PA	 	 	1986	 	 	57,731	 	 	68.4	%	 	876	 	 	31.07	 	
440 Creamery Way	 	 	Exton	 	 	PA	 	 	1991	 	 	57,218	 	 	100.0	%	 	518	 	 	11.87	 	
640 Allendale Road	 	 	King of Prussia	 	 	PA	 	 	2000	 	 	56,034	 	 	100.0	%	 	310	 	 	6.25	 	
565 East Swedesford Road	 	 	Wayne	 	 	PA	 	 	1984	 	 	55,789	 	 	82.5	%	 	224	 	 	29.29	 	
680 Allendale Road	 	 	King Of Prussia	 	 	PA	 	 	1962	 	 	52,528	 	 	100.0	%	 	544	 	 	11.90	 	
2240/50 Butler Pike	 	 	Plymouth Meeting	 	 	PA	 	 	1984	 	 	52,229	 	 	100.0	%	 	886	 	 	20.89	 	
650 Park Avenue	 	 	King Of Prussia	 	 	PA	 	 	1968	 	 	51,711	 	 	14.9	%	 	258	 	 	6.31	 	
1155 Business Center Drive	 	 	Horsham	 	 	PA	 	 	1990	 	 	51,388	 	 	86.4	%	 	579	 	 	18.90	 	
486 Thomas Jones Way	 	 	Exton	 	 	PA	 	 	1990	 	 	51,372	 	 	79.9	%	 	620	 	 	18.13	 	
800 Business Center Drive	 	 	Horsham	 	 	PA	 	 	1986	 	 	51,236	 	 	100.0	%	 	598	 	 	12.15	 	
855 Springdale Drive	 	 	Exton	 	 	PA	 	 	1986	 	 	50,750	 	 	—	 (e)	 	—	 	 	—	 	
660 Allendale Road	 	 	King of Prussia	 	 	PA	 	 	1962	 	 	50,635	 	 	100.0	%	 	365	 	 	8.33	 	
15 Campus Boulevard	 	 	Newtown Square	 	 	PA	 	 	2002	 	 	50,000	 	 	100.0	%	 	1,338	 	 	25.00	 	
875 First Avenue	 	 	King Of Prussia	 	 	PA	 	 	1966	 	 	50,000	 	 	100.0	%	 	605	 	 	18.50	 	
630 Clark Avenue	 	 	King Of Prussia	 	 	PA	 	 	1960	 	 	50,000	 	 	100.0	%	 	301	 	 	7.02	 	
620 Allendale Road	 	 	King Of Prussia	 	 	PA	 	 	1961	 	 	50,000	 	 	79.8	%	 	837	 	 	20.45	 	
7150 Windsor Drive	 	 	Allentown	 	 	PA	 	 	1988	 	 	49,420	 	 	100.0	%	 	644	 	 	14.77	 	
479 Thomas Jones Way	 	 	Exton	 	 	PA	 	 	1988	 	 	49,264	 	 	84.2	%	 	566	 	 	16.49	 	
17 Campus Boulevard	 	 	Newtown Square	 	 	PA	 	 	2001	 	 	48,565	 	 	100.0	%	 	1,224	 	 	25.55	 	
520 Virginia Drive	 	 	Fort Washington	 	 	PA	 	 	1987	 	 	48,122	 	 	100.0	%	 	902	 	 	19.75	 	
11 Campus Boulevard	 	 	Newtown Square	 	 	PA	 	 	1998	 	 	47,700	 	 	100.0	%	 	1,077	 	 	22.83	 	
456 Creamery Way	 	 	Exton	 	 	PA	 	 	1987	 	 	47,604	 	 	100.0	%	 	364	 	 	7.89	 	
6575 Snowdrift Road	 	 	Allentown	 	 	PA	 	 	1988	 	 	47,091	 	 	100.0	%	 	568	 	 	13.11	 	
220 Commerce Drive	 	 	Fort Washington	 	 	PA	 	 	1985	 	 	46,080	 	 	89.5	%	 	871	 	 	20.82	 	
7248 Tilghman Street	 	 	Allentown	 	 	PA	 	 	1987	 	 	43,782	 	 	78.3	%	 	552	 	 	17.49	 	
110 Summit Drive	 	 	Exton	 	 	PA	 	 	1985	 	 	43,660	 	 	100.0	%	 	392	 	 	11.76	 	
585 East Swedesford Road	 	 	Wayne	 	 	PA	 	 	1998	 	 	43,635	 	 	100.0	%	 	226	 	 	28.38	 	
7360 Windsor Drive	 	 	Allentown	 	 	PA	 	 	2001	 	 	43,600	 	 	100.0	%	 	935	 	 	23.67	 	
1100 Cassett Road	 	 	Berwyn	 	 	PA	 	 	1997	 	 	43,480	 	 	100.0	%	 	1,106	 	 	26.68	 	
467 Creamery Way	 	 	Exton	 	 	PA	 	 	1988	 	 	42,000	 	 	100.0	%	 	498	 	 	17.88	 	
300 Welsh Road – Building I	 	 	Horsham	 	 	PA	 	 	1980	 	 	40,042	 	 	55.3	%	 	575	 	 	21.01	 	
7310 Tilghman Street	 	 	Allentown	 	 	PA	 	 	1985	 	 	40,000	 	 	92.6	%	 	471	 	 	17.16	 	
150 Corporate Center Drive	 	 	Camp Hill	 	 	PA	 	 	1987	 	 	39,401	 	 	93.9	%	 	626	 	 	18.54	 	
1336 Enterprise Drive	 	 	West Goshen	 	 	PA	 	 	1989	 	 	39,330	 	 	100.0	%	 	720	 	 	20.50	 	
600 Park Avenue	 	 	King Of Prussia	 	 	PA	 	 	1964	 	 	39,000	 	 	100.0	%	 	530	 	 	15.33	 	
412 Creamery Way	 	 	Exton	 	 	PA	 	 	1999	 	 	38,098	 	 	57.9	%	 	548	 	 	19.98	 	
755 Business Center Drive	 	 	Horsham	 	 	PA	 	 	1998	 	 	38,050	 	 	100.0	%	 	576	 	 	22.88	 	
18 Campus Boulevard	 	 	Newtown Square	 	 	PA	 	 	1990	 	 	37,374	 	 	85.3	%	 	758	 	 	23.06	 	
457 Creamery Way	 	 	Exton	 	 	PA	 	 	1990	 	 	36,019	 	 	100.0	%	 	427	 	 	16.37	 	
100 Arrandale Boulevard	 	 	Exton	 	 	PA	 	 	1997	 	 	34,931	 	 	100.0	%	 	485	 	 	18.60	 	
7010 Snowdrift Road	 	 	Allentown	 	 	PA	 	 	1991	 	 	33,029	 	 	100.0	%	 	447	 	 	18.53	 	
300 Lindenwood Drive	 	 	Allentown	 	 	PA	 	 	1991	 	 	33,000	 	 	100.0	%	 	671	 	 	21.18	 	
2260 Butler Pike	 	 	Plymouth Meeting	 	 	PA	 	 	1984	 	 	31,892	 	 	100.0	%	 	466	 	 	14.32	 	
700 Business Center Drive	 	 	Horsham	 	 	PA	 	 	1986	 	 	30,773	 	 	33.0	%	 	21	 	 	17.50	 	
120 West Germantown Pike	 	 	Plymouth Meeting	 	 	PA	 	 	1984	 	 	30,546	 	 	50.0	%	 	271	 	 	17.87	 	
650 Dresher Road	 	 	Horsham	 	 	PA	 	 	1984	 	 	30,071	 	 	100.0	%	 	684	 	 	21.75	 	
655 Business Center Drive	 	 	Horsham	 	 	PA	 	 	1997	 	 	29,849	 	 	100.0	%	 	391	 	 	15.76	 	
468 Thomas Jones Way	 	 	Exton	 	 	PA	 	 	1990	 	 	28,934	 	 	100.0	%	 	543	 	 	18.37	 	
630 Dresher Road	 	 	Horsham	 	 	PA	 	 	1987	 	 	28,894	 	 	100.0	%	 	664	 	 	23.98	 	
1700 Paoli Pike	 	 	Malvern	 	 	PA	 	 	2000	 	 	28,000	 	 	100.0	%	 	274	 	 	16.75	 	
140 West Germantown Pike	 	 	Plymouth Meeting	 	 	PA	 	 	1984	 	 	25,357	 	 	100.0	%	 	504	 	 	23.40	 	
3333 Street Road – Greenwood Square	 	 	Bensalem	 	 	PA	 	 	1988	 	 	25,000	 	 	100.0	%	 	539	 	 	21.49	 	
800 Corporate Circle Drive	 	 	Harrisburg	 	 	PA	 	 	1979	 	 	24,862	 	 	100.0	%	 	389	 	 	15.97	 	
2490 Boulevard of the Generals	 	 	King Of Prussia	 	 	PA	 	 	1975	 	 	20,600	 	 	100.0	%	 	420	 	 	20.40	 	
481 John Young Way	 	 	Exton	 	 	PA	 	 	1997	 	 	19,275	 	 	100.0	%	 	405	 	 	21.89	 	
100 Lindenwood Drive	 	 	Malvern	 	 	PA	 	 	1985	 	 	18,400	 	 	100.0	%	 	134	 	 	9.00	 	
500 Nationwide Drive	 	 	Harrisburg	 	 	PA	 	 	1977	 	 	18,027	 	 	100.0	%	 	324	 	 	18.66	 	
600 Corporate Circle Drive	 	 	Harrisburg	 	 	PA	 	 	1978	 	 	17,858	 	 	100.0	%	 	288	 	 	15.55	 	
19

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Property Name	 	Location	 	State	 	Year
Built	 	Net
Rentable
Square
Feet	 	Percentage
Leased as of
December 31,
2003 (a)	 	Total Base
Rentfor the
Twelve
Months
Ended
December 31,
2003 (b)
(000’s)	 	Average
Annualized
Rental Rate
as of
December 31,
2003 (c)	 	
	 			 			 			 			 			 			 			 	
300 Welsh Road — Building II	 	 	Horsham	 	 	PA	 	 	1980	 	 	17,750	 	 	100.0	%	 	347	 	 	21.35	 	
748 Springdale Drive	 	 	Exton	 	 	PA	 	 	1986	 	 	13,950	 	 	100.0	%	 	253	 	 	19.03	 	
200 Lindenwood Drive	 	 	Malvern	 	 	PA	 	 	1984	 	 	12,600	 	 	50.0	%	 	120	 	 	19.05	 	
2404 Park Drive	 	 	Harrisburg	 	 	PA	 	 	1983	 	 	11,000	 	 	64.8	%	 	137	 	 	14.63	 	
111 Arrandale Road	 	 	Exton	 	 	PA	 	 	1996	 	 	10,479	 	 	100.0	%	 	204	 	 	21.04	 	
2401 Park Drive	 	 	Harrisburg	 	 	PA	 	 	1984	 	 	10,074	 	 	33.2	%	 	119	 	 	17.50	 	
George Kachel Farmhouse	 	 	Reading	 	 	PA	 	 	2000	 	 	1,664	 	 	100.0	%	 	33	 	 	20.03	 	
400 Commerce Drive	 	 	Newark	 	 	DE	 	 	1997	 	 	154,086	 	 	100.0	%	 	2,268	 	 	15.07	 	
One Righter Parkway	 	 	(d) Wilmington	 	 	DE	 	 	1989	 	 	104,828	 	 	100.0	%	 	2,293	 	 	24.23	 	
Two Righter Parkway	 	 	(d) Wilmington	 	 	DE	 	 	1987	 	 	95,514	 	 	100.0	%	 	1,919	 	 	21.02	 	
200 Commerce Drive	 	 	Newark	 	 	DE	 	 	1998	 	 	68,034	 	 	100.0	%	 	1,073	 	 	15.85	 	
100 Commerce Drive	 	 	Newark	 	 	DE	 	 	1989	 	 	62,787	 	 	57.8	%	 	523	 	 	17.81	 	
111/113 Pencader Drive	 	 	Newark	 	 	DE	 	 	1990	 	 	52,665	 	 	72.4	%	 	344	 	 	11.20	 	
     	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
NEW JERSEY SEGMENT	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
50 East State Street	 	 	Trenton	 	 	NJ	 	 	1989	 	 	305,884	 	 	92.2	%	 	5,127	 	 	24.63	 	
1009 Lenox Drive	 	 	Lawrenceville	 	 	NJ	 	 	1989	 	 	180,460	 	 	100.0	%	 	4,379	 	 	26.28	 	
10000 Midlantic Drive	 	 	Mt. Laurel	 	 	NJ	 	 	1990	 	 	179,098	 	 	100.0	%	 	3,083	 	 	23.17	 	
33 West State Street	 	 	Trenton	 	 	NJ	 	 	1988	 	 	167,774	 	 	100.0	%	 	2,975	 	 	28.85	 	
Main Street — Plaza 1000	 	 	Voorhees	 	 	NJ	 	 	1988	 	 	162,364	 	 	88.1	%	 	3,256	 	 	23.47	 	
55 U.S. Avenue	 	 	Gibbsboro	 	 	NJ	 	 	1982	 	 	138,982	 	 	25.5	%	 	328	 	 	9.50	 	
457 Haddonfield Road	 	 	Cherry Hill	 	 	NJ	 	 	1990	 	 	121,737	 	 	97.8	%	 	2,511	 	 	23.41	 	
2000 Midlantic Drive	 	 	Mt. Laurel	 	 	NJ	 	 	1989	 	 	121,658	 	 	97.3	%	 	1,910	 	 	21.22	 	
2000 Lenox Drive	 	 	Lawrenceville	 	 	NJ	 	 	2000	 	 	119,114	 	 	100.0	%	 	3,200	 	 	27.71	 	
700 East Gate Drive	 	 	Mt. Laurel	 	 	NJ	 	 	1984	 	 	118,899	 	 	100.0	%	 	2,397	 	 	23.14	 	
989 Lenox Drive	 	 	Lawrenceville	 	 	NJ	 	 	1984	 	 	112,055	 	 	89.9	%	 	20	 	 	26.26	 	
993 Lenox Drive	 	 	Lawrenceville	 	 	NJ	 	 	1985	 	 	111,124	 	 	100.0	%	 	2,726	 	 	23.19	 	
1000 Howard Boulevard	 	 	Mt. Laurel	 	 	NJ	 	 	1988	 	 	105,312	 	 	100.0	%	 	2,166	 	 	22.21	 	
One South Union Place	 	 	Cherry Hill	 	 	NJ	 	 	1982	 	 	99,573	 	 	90.4	%	 	1,446	 	 	18.84	 	
997 Lenox Drive	 	 	Lawrenceville	 	 	NJ	 	 	1987	 	 	97,277	 	 	100.0	%	 	2,084	 	 	24.25	 	
1000 Atrium Way	 	 	Mt. Laurel	 	 	NJ	 	 	1989	 	 	97,158	 	 	87.7	%	 	1,768	 	 	21.36	 	
1120 Executive Boulevard	 	 	Marlton	 	 	NJ	 	 	1987	 	 	95,278	 	 	100.0	%	 	2,035	 	 	24.58	 	
15000 Midlantic Drive	 	 	Mt. Laurel	 	 	NJ	 	 	1991	 	 	84,056	 	 	88.9	%	 	1,326	 	 	23.03	 	
220 Lake Drive East	 	 	Cherry Hill	 	 	NJ	 	 	1988	 	 	78,509	 	 	100.0	%	 	1,741	 	 	23.26	 	
1007 Laurel Oak Road	 	 	Voorhees	 	 	NJ	 	 	1996	 	 	78,205	 	 	100.0	%	 	621	 	 	7.94	 	
10 Lake Center Drive	 	 	Marlton	 	 	NJ	 	 	1989	 	 	76,359	 	 	100.0	%	 	1,604	 	 	23.44	 	
200 Lake Drive East	 	 	Cherry Hill	 	 	NJ	 	 	1989	 	 	76,352	 	 	88.7	%	 	1,699	 	 	23.47	 	
Three Greentree Centre	 	 	Marlton	 	 	NJ	 	 	1984	 	 	69,300	 	 	100.0	%	 	1,377	 	 	20.73	 	
King & Harvard Avenue	 	 	Cherry Hill	 	 	NJ	 	 	1974	 	 	67,444	 	 	100.0	%	 	1,336	 	 	20.59	 	
9000 Midlantic Drive	 	 	Mt. Laurel	 	 	NJ	 	 	1989	 	 	67,299	 	 	100.0	%	 	862	 	 	19.38	 	
6 East Clementon Road	 	 	Gibbsboro	 	 	NJ	 	 	1980	 	 	66,236	 	 	98.0	%	 	982	 	 	16.94	 	
701 East Gate Drive	 	 	Mt. Laurel	 	 	NJ	 	 	1986	 	 	61,794	 	 	78.2	%	 	1,146	 	 	21.36	 	
210 Lake Drive East	 	 	Cherry Hill	 	 	NJ	 	 	1986	 	 	60,604	 	 	100.0	%	 	1,319	 	 	22.89	 	
308 Harper Drive	 	 	Mt. Laurel	 	 	NJ	 	 	1976	 	 	59,500	 	 	86.4	%	 	1,114	 	 	20.98	 	
305 Fellowship Drive	 	 	Mt. Laurel	 	 	NJ	 	 	1980	 	 	56,824	 	 	95.2	%	 	1,181	 	 	23.11	 	
Two Greentree Centre	 	 	Marlton	 	 	NJ	 	 	1983	 	 	56,075	 	 	100.0	%	 	948	 	 	20.88	 	
309 Fellowship Drive	 	 	Mt. Laurel	 	 	NJ	 	 	1982	 	 	55,911	 	 	100.0	%	 	1,193	 	 	23.43	 	
One Greentree Centre	 	 	Marlton	 	 	NJ	 	 	1982	 	 	55,838	 	 	84.7	%	 	990	 	 	20.08	 	
8000 Lincoln Drive	 	 	Marlton	 	 	NJ	 	 	1997	 	 	54,923	 	 	67.1	%	 	745	 	 	20.54	 	
307 Fellowship Drive	 	 	Mt. Laurel	 	 	NJ	 	 	1981	 	 	54,485	 	 	92.3	%	 	1,098	 	 	22.03	 	
303 Fellowship Drive	 	 	Mt. Laurel	 	 	NJ	 	 	1979	 	 	53,848	 	 	76.1	%	 	723	 	 	21.21	 	
1000 Lenox Drive	 	 	Lawrenceville	 	 	NJ	 	 	1982	 	 	52,264	 	 	100.0	%	 	—	 	 	22.50	 	
2 Foster Avenue	 	 	Gibbsboro	 	 	NJ	 	 	1974	 	 	50,761	 	 	94.6	%	 	234	 	 	4.97	 	
4000 Midlantic Drive	 	 	Mt. Laurel	 	 	NJ	 	 	1998	 	 	46,945	 	 	100.0	%	 	905	 	 	21.40	 	
Five Eves Drive	 	 	Marlton	 	 	NJ	 	 	1986	 	 	45,564	 	 	95.2	%	 	716	 	 	18.00	 	
161 Gaither Drive	 	 	Mount Laurel	 	 	NJ	 	 	1987	 	 	44,739	 	 	100.0	%	 	895	 	 	21.05	 	
Main Street — Piazza	 	 	Voorhees	 	 	NJ	 	 	1990	 	 	41,408	 	 	100.0	%	 	679	 	 	16.56	 	
30 Lake Center Drive	 	 	Marlton	 	 	NJ	 	 	1986	 	 	40,287	 	 	100.0	%	 	789	 	 	20.11	 	
20 East Clementon Road	 	 	Gibbsboro	 	 	NJ	 	 	1986	 	 	38,260	 	 	94.6	%	 	673	 	 	18.75	 	
Two Eves Drive	 	 	Marlton	 	 	NJ	 	 	1987	 	 	37,532	 	 	100.0	%	 	660	 	 	18.08	 	
1255 Broad Street	 	 	Bloomfield	 	 	NJ	 	 	1981	 	 	37,478	 	 	100.0	%	 	590	 	 	23.88	 	
304 Harper Drive	 	 	Mt. Laurel	 	 	NJ	 	 	1975	 	 	32,978	 	 	100.0	%	 	618	 	 	20.37	 	
Main Street — Promenade	 	 	Voorhees	 	 	NJ	 	 	1988	 	 	31,445	 	 	90.7	%	 	452	 	 	16.58	 	
Four B Eves Drive	 	 	Marlton	 	 	NJ	 	 	1987	 	 	27,011	 	 	100.0	%	 	344	 	 	17.34	 	
815 East Gate Drive	 	 	Mt. Laurel	 	 	NJ	 	 	1986	 	 	25,500	 	 	100.0	%	 	291	 	 	17.85	 	
 
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Property Name	 	Location	 	State	 	Year
Built	 	Net
Rentable
Square
Feet	 	Percentage
Leased as of
December 31,
2003 (a)	 	Total Base
Rentfor the
Twelve
Months
Ended
December 31,
2003 (b)
(000’s)	 	Average
Annualized
Rental Rate
as of
December 31,
2003 (c)	 	
	 			 			 			 			 			 			 			 	
817 East Gate Drive	 	 	Mt. Laurel	 	 	NJ	 	 	1986	 	 	25,351	 	 	100.0	%	 	357	 	 	15.59	 	
Four A Eves Drive	 	 	Marlton	 	 	NJ	 	 	1987	 	 	24,687	 	 	57.1	%	 	241	 	 	12.91	 	
1 Foster Avenue	 	 	Gibbsboro	 	 	NJ	 	 	1972	 	 	24,255	 	 	100.0	%	 	85	 	 	—	 	
4 Foster Avenue	 	 	Gibbsboro	 	 	NJ	 	 	1974	 	 	23,372	 	 	88.3	%	 	109	 	 	7.92	 	
7 Foster Avenue	 	 	Gibbsboro	 	 	NJ	 	 	1983	 	 	22,158	 	 	100.0	%	 	333	 	 	18.01	 	
10 Foster Avenue	 	 	Gibbsboro	 	 	NJ	 	 	1983	 	 	18,651	 	 	70.7	%	 	199	 	 	17.18	 	
305 Harper Drive	 	 	Mt. Laurel	 	 	NJ	 	 	1979	 	 	14,980	 	 	100.0	%	 	124	 	 	8.96	 	
5 U.S. Avenue	 	 	Gibbsboro	 	 	NJ	 	 	1987	 	 	5,000	 	 	100.0	%	 	22	 	 	4.40	 	
50 East Clementon Road	 	 	Gibbsboro	 	 	NJ	 	 	1986	 	 	3,080	 	 	100.0	%	 	145	 	 	47.01	 	
5 Foster Avenue	 	 	Gibbsboro	 	 	NJ	 	 	1968	 	 	2,000	 	 	100.0	%	 	—	 	 	—	 	
     	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
VIRGINIA SEGMENT	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
600 East Main Street	 	 	Richmond	 	 	VA	 	 	1986	 	 	424,228	 	 	72.1	%	 	5,882	 	 	19.39	 	
300 Arboretum Place	 	 	Richmond	 	 	VA	 	 	1988	 	 	212,635	 	 	100.0	%	 	3,686	 	 	17.33	 	
6802 Paragon Place	 	 	Richmond	 	 	VA	 	 	1989	 	 	143,217	 	 	81.1	%	 	2,724	 	 	16.97	 	
2511 Brittons Hill Road	 	 	Richmond	 	 	VA	 	 	1987	 	 	132,103	 	 	100.0	%	 	589	 	 	5.72	 	
2100-2116 West Laburnam Avenue	 	 	Richmond	 	 	VA	 	 	1976	 	 	127,300	 	 	93.9	%	 	1,819	 	 	15.29	 	
1957 Westmoreland Street	 	 	Richmond	 	 	VA	 	 	1975	 	 	121,815	 	 	100.0	%	 	533	 	 	5.04	 	
2201-2245 Tomlynn Street	 	 	Richmond	 	 	VA	 	 	1989	 	 	85,860	 	 	91.2	%	 	551	 	 	8.11	 	
100 Gateway Centre Parkway	 	 	Richmond	 	 	VA	 	 	2001	 	 	74,585	 	 	100.0	%	 	1,470	 	 	19.98	 	
9011 Arboretum Parkway	 	 	Richmond	 	 	VA	 	 	1991	 	 	72,932	 	 	100.0	%	 	1,109	 	 	16.84	 	
4805 Lake Brooke Drive	 	 	Glen Allen	 	 	VA	 	 	1996	 	 	61,657	 	 	81.4	%	 	879	 	 	17.15	 	
9100 Arboretum Parkway	 	 	Richmond	 	 	VA	 	 	1988	 	 	57,519	 	 	100.0	%	 	1,063	 	 	18.75	 	
2812 Emerywood Parkway	 	 	Henrico	 	 	VA	 	 	1980	 	 	56,076	 	 	55.8	%	 	229	 	 	11.74	 	
2277 Dabney Road	 	 	Richmond	 	 	VA	 	 	1986	 	 	50,400	 	 	100.0	%	 	251	 	 	6.43	 	
9200 Arboretum Parkway	 	 	Richmond	 	 	VA	 	 	1988	 	 	49,542	 	 	100.0	%	 	606	 	 	12.03	 	
9210 Arboretum Parkway	 	 	Richmond	 	 	VA	 	 	1988	 	 	48,012	 	 	83.3	%	 	420	 	 	10.30	 	
2212-2224 Tomlynn Street	 	 	Richmond	 	 	VA	 	 	1985	 	 	45,353	 	 	100.0	%	 	251	 	 	6.93	 	
2221-2245 Dabney Road	 	 	Richmond	 	 	VA	 	 	1994	 	 	45,250	 	 	84.1	%	 	259	 	 	8.23	 	
2201 Dabney Road	 	 	Richmond	 	 	VA	 	 	1962	 	 	45,000	 	 	100.0	%	 	105	 	 	2.87	 	
2251 Dabney Road	 	 	Richmond	 	 	VA	 	 	1983	 	 	42,000	 	 	90.0	%	 	208	 	 	6.57	 	
2161-2179 Tomlynn Street	 	 	Richmond	 	 	VA	 	 	1985	 	 	41,550	 	 	50.5	%	 	180	 	 	6.58	 	
2256 Dabney Road	 	 	Richmond	 	 	VA	 	 	1982	 	 	33,600	 	 	100.0	%	 	208	 	 	7.16	 	
2246 Dabney Road	 	 	Richmond	 	 	VA	 	 	1987	 	 	33,271	 	 	100.0	%	 	288	 	 	9.50	 	
2244 Dabney Road	 	 	Richmond	 	 	VA	 	 	1993	 	 	33,050	 	 	100.0	%	 	297	 	 	9.71	 	
9211 Arboretum Parkway	 	 	Richmond	 	 	VA	 	 	1991	 	 	30,791	 	 	100.0	%	 	395	 	 	13.60	 	
2248 Dabney Road	 	 	Richmond	 	 	VA	 	 	1989	 	 	30,184	 	 	85.6	%	 	188	 	 	8.98	 	
2130-2146 Tomlynn Street	 	 	Richmond	 	 	VA	 	 	1988	 	 	29,700	 	 	100.0	%	 	182	 	 	10.02	 	
2120 Tomlyn Street	 	 	Richmond	 	 	VA	 	 	1986	 	 	23,850	 	 	85.5	%	 	104	 	 	7.48	 	
2240 Dabney Road	 	 	Richmond	 	 	VA	 	 	1984	 	 	15,389	 	 	100.0	%	 	139	 	 	10.08	 	
4364 South Alston Avenue	 	 	Durham	 	 	NC	 	 	1985	 	 	56,601	 	 	100.0	%	 	1,121	 	 	18.98	 	
 	 	 	 	 	 	 	 	 	 	 		 	 	 	 	 	 	 	 	 	 	
TOTAL ALL PROPERTIES / WEIGHTED AVG.	 	 	 	 	 	 	 	 	 	 	 	15,732,942	 	 	90.7%	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 		 	 	 	 	 	 	 	 	 	 	
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(a)	Calculated by dividing net rentable square feet included in leases signed on or before December 31, 2003 at the property by the aggregate net rentable square feet of the Property.	
(b)	“Total Base Rent” for the twelve months ended December 31, 2003 represents base rents received during such period, excluding tenant reimbursements, calculated in accordance with generally accepted accounting principles (GAAP) determined on a straight-line basis. Tenant reimbursements generally include payment of real estate taxes, operating expenses and common area maintenance and utility charges.	
(c)	“Average Annualized Rental Rate” is calculated as follows: (i) for office leases written on a triple net basis, the sum of the annualized contracted base rental rates payable for all space leased as of December 31, 2003 (without giving effect to free rent or scheduled rent increases that would be taken into account under GAAP) plus the 2003 budgeted operating expenses excluding tenant electricity; and (ii) for office leases written on a full service basis, the annualized contracted base rent payable for all space leased as of December 31, 2003. In both cases, the annualized rental rate is divided by the total square footage leased as of December 31, 2003 without giving effect to free rent or scheduled rent increases that would be taken into account under GAAP.	
(d)	This Property is subject to a ground lease.	
(e)	These properties are under redevelopment and are excluded from the percentages for Weighted Average Percentage Leased and Average Annualized Rental Rate information.	
The following table shows certain information regarding rental rates and lease expirations for the Properties at December 31, 2003, assuming none of the tenants exercises renewal options or termination rights, if any, at or prior to scheduled expirations:
Year of
Lease
Expiration
December 31,	 	Number of
Leases
Expiring
Within the
Year	 	Rentable
Square
Footage
Subject to
Expiring
Leases	 	Final
Annualized
Base Rent
Under
Expiring
Leases (a)	 	Final
Annualized
Base Rent
Per Square
Foot Under
Expiring
Leases	 	Percentage
of Total Final
Annualized
Base Rent
Under
Expiring
Leases	 	Cumulative
Total	 	
	 			 			 			 			 			 			 	
2004	 	 	262	 	 	1,803,339	 	 	28,997,114	 	 	16.08	 	 	10.8	%	 	10.8%	 	
2005	 	 	248	 	 	2,552,830	 	 	47,246,198	 	 	18.51	 	 	17.7	%	 	28.5%	 	
2006	 	 	198	 	 	1,849,265	 	 	33,814,565	 	 	18.29	 	 	12.7	%	 	41.2%	 	
2007	 	 	137	 	 	1,691,701	 	 	30,611,739	 	 	18.10	 	 	11.5	%	 	52.6%	 	
2008	 	 	144	 	 	1,521,460	 	 	32,525,673	 	 	21.38	 	 	12.2	%	 	64.8%	 	
2009	 	 	71	 	 	1,090,063	 	 	22,485,545	 	 	20.63	 	 	8.4	%	 	73.2%	 	
2010	 	 	40	 	 	1,143,830	 	 	26,373,818	 	 	23.06	 	 	9.9	%	 	83.1%	 	
2011	 	 	20	 	 	623,396	 	 	11,265,465	 	 	18.07	 	 	4.2	%	 	87.3%	 	
2012	 	 	15	 	 	612,623	 	 	11,315,519	 	 	18.47	 	 	4.2	%	 	91.5%	 	
2013	 	 	7	 	 	211,593	 	 	5,440,520	 	 	25.71	 	 	2.0	%	 	93.6%	 	
2014 and thereafter	 	 	27	 	 	896,177	 	 	17,211,028	 	 	19.20	 	 	6.4	%	 	100.0%	 	
 	 		 		 		 		 		 	 	 	 	
 	 	 	1,169	 	 	13,996,277	 	$	267,287,184	 	$	19.10	 	 	100.0%	 	 	 	 	

	 	
(a)	“Final Annualized Base Rent” for each lease scheduled to expire represents the cash rental rate of base rents, excluding tenant reimbursements, in the final month prior to expiration multiplied by 12. Tenant reimbursements generally include payment of real estate taxes, operating expenses and common area maintenance and utility charges.	
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At December 31, 2003, the Properties were leased to 1,025 tenants that are engaged in a variety of businesses. The following table sets forth information regarding leases at the Properties with the 20 tenants with the largest amounts leased based upon Annualized Escalated Rent from the Properties as of December 31, 2003:
 	 	 	 	Weighted	 	 	 	 	 	 	 	 	 	 Percentage of	 	
 	 	 	 	Average	 	Aggregate	 	Percentage	 	Annualized	 	Aggregate	 	
 	 	Number	 	Remaining	 	Square	 	of Aggregate	 	Escalated	 	Annualized	 	
 	 	of	 	Lease Term	 	Feet	 	Leased	 	Rent (in	 	Escalated	 	
Tenant Name (a)	 	Leases	 	in Months	 	Leased	 	Square Feet	 	000) (b)	 	Rent	 	
	 			 			 			 			 			 			 	
State of New Jersey	 	 	6	 	 	57	 	 	442,451	 	 	3.2	%	 	12,639	 	 	4.3	%	
Computer Sciences Corporation	 	 	6	 	 	33	 	 	345,284	 	 	2.5	%	 	7,021	 	 	2.4	%	
Verizon	 	 	5	 	 	44	 	 	237,126	 	 	1.7	%	 	5,635	 	 	1.9	%	
Penske Truck Leasing	 	 	1	 	 	204	 	 	308,205	 	 	2.2	%	 	5,419	 	 	1.8	%	
Lockheed Martin	 	 	8	 	 	23	 	 	336,678	 	 	2.4	%	 	4,302	 	 	1.5	%	
Omnicare Clinical Research	 	 	1	 	 	79	 	 	150,000	 	 	1.1	%	 	3,938	 	 	1.3	%	
First Consulting Group	 	 	1	 	 	52	 	 	118,138	 	 	0.8	%	 	3,689	 	 	1.3	%	
Parsons Corporation	 	 	4	 	 	50	 	 	174,689	 	 	1.2	%	 	3,669	 	 	1.2	%	
Hartford Life	 	 	4	 	 	41	 	 	169,170	 	 	1.2	%	 	3,567	 	 	1.2	%	
Aventis Behring	 	 	1	 	 	46	 	 	143,025	 	 	1.0	%	 	3,361	 	 	1.1	%	
General Electric	 	 	3	 	 	22	 	 	119,861	 	 	0.9	%	 	2,980	 	 	1.0	%	
Travelers	 	 	4	 	 	16	 	 	148,689	 	 	1.1	%	 	2,920	 	 	1.0	%	
Highmark Corporation	 	 	4	 	 	82	 	 	135,298	 	 	1.0	%	 	2,902	 	 	1.0	%	
ICT Group	 	 	2	 	 	137	 	 	117,151	 	 	0.8	%	 	2,862	 	 	1.0	%	
Keystone Health Plan Central	 	 	1	 	 	8	 	 	122,101	 	 	0.9	%	 	2,735	 	 	0.9	%	
Kimberly Clark Corporation (Scott Paper)	 	 	2	 	 	26	 	 	99,329	 	 	0.7	%	 	2,590	 	 	0.9	%	
Automotive Rentals	 	 	4	 	 	80	 	 	120,952	 	 	0.9	%	 	2,582	 	 	0.9	%	
AstraZeneca	 	 	2	 	 	34	 	 	107,328	 	 	0.8	%	 	2,491	 	 	0.8	%	
Dermik Labs	 	 	1	 	 	80	 	 	80,000	 	 	0.6	%	 	2,459	 	 	0.8	%	
Aetna Life Insurance	 	 	1	 	 	18	 	 	104,505	 	 	0.7	%	 	2,309	 	 	0.8	%	
 	 			 			 			 			 			 			 	
Consolidated Total/Weighted Average	 	 	61	 	 	60	 	 	3,579,980	 	 	25.7	%	$	80,070	 	 	27.1	%	

	 	
(a)	The identified tenant includes affiliates in certain circumstances.	
(b)	Annualized Escalated Rent represents the monthly Escalated Rent for each lease in effect at December 31, 2003 multiplied by 12. Escalated Rent represents fixed base rental amounts plus tenant reimbursements which include payment of real estate taxes, operating expenses and common area maintenance and utility charges. The Company estimates operating expense reimbursements based on historical amounts and comparable market data.	
The following table sets forth the year-end occupancy percentages of the Company’s Properties for the last five years:
Year ended December 31,	 	Occupancy %	 	

2003	 	 	90.7	%	
2002	 	 	91.0	%	
2001	 	 	92.2	%	
2000	 	 	95.6	%	
1999	 	 	94.1	%	
 	
Real Estate Ventures	
As of December 31, 2003, we had invested approximately $15.9 million in ten unconsolidated Real Estate Ventures (net of returns of investment received). We formed these ventures with unaffiliated third parties to develop office properties or to acquire land in anticipation of possible development of office properties. Nine of the Real Estate Ventures own ten office buildings that contain an aggregate of approximately 1.8 million net rentable square feet and one Real Estate Venture developed a hotel property that contains 137 rooms. At December 31, 2003, the operating properties owned by the Real Estate Ventures were approximately 81% leased to 80 tenants.
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Our investment in Real Estate Ventures is as follows (in thousands):
 	 	 	 	 	 	 	 	Company’s Share	 	 	 	 	 	 	 	
 	 	 	 	 	 	Real Estate	 	of Real Estate	 	Current	 	 	 	 	
 	 	Ownership	 	Carrying	 	Venture	 	Venture	 	Interest	 	Debt	 	
 	 	Percentage (1)	 	Amount	 	Debt at 100%	 	Income (Loss)	 	Rate	 	Maturity	 	
 	 			 			 			 			 			 			 	
Two Tower Bridge Associates	 	 	35	%	$	2,409	 	$	10,501	 	$	290	 	 	6.82	%	 	May-08	 	
Four Tower Bridge Associates	 	 	65	%	 	2,454	 	 	11,000	 	 	(21	)	 	6.62	%	 	Feb-11	 	
Five Tower Bridge Associates	 	 	15	%	 	—	 	 	30,600	 	 	—	 	 	6.77	%	 	Feb-09	 	
Six Tower Bridge Associates	 	 	65	%	 	113	 	 	15,683	 	 	(46	)	 	7.79	%	 	Aug-12	 	
Eight Tower Bridge Associates	 	 	6	%	 	1,147	 	 	38,219	 	 	(189	)	 	3.34	%	 	Feb-05	 	
Tower Bridge Inn Associates	 	 	50	%	 	2,291	 	 	11,547	 	 	(235	)	 	8.50	%	 	Apr-07	 	
1000 Chesterbrook Boulevard	 	 	50	%	 	3,373	 	 	27,860	 	 	456	 	 	6.88	%	 	Nov-11	 	
PJP Building Two, LC	 	 	30	%	 	15	 	 	5,738	 	 	30	 	 	6.12	%	 	Nov-23	 	
PJP Building Five, LC	 	 	25	%	 	238	 	 	5,753	 	 	94	 	 	2.69	%	 	Oct-05	 	
Macquarie	 	 	20	%	 	3,813	 	 	74,500	 	 	64	 	 	4.62	%	 	Jan-09	 	
Florig, LP (2)	 	 	30	%	 	—	 	 	—	 	 	(861	)	 	N/A	 	 	N/A	 	
Invesco Partnership, L.P. (3)	 	 	35	%	 	—	 	 	—	 	 	470	 	 	N/A	 	 	N/A	 	
 	 	 	 	 		 		 		 	 	 	 	 	 	 	
 	 	 	 	 	$	15,853	 	$	231,401	 	$	52	 	 	 	 	 	 	 	

(1)	Ownership percentage represents our entitlement to residual distributions after payments of priority returns.	
(2)	During 2003, the Company recorded an impairment charge of $861,000 associated with this non-operating real estate venture. This amount consisted primarily of legal and acquisition costs related to a parcel of land that ultimately was not acquired.	
(3)	Our interest consists solely of a residual profits interest.	
 	
Item 3.   Legal Proceedings	
We are involved from time to time in litigation on various matters, which include disputes with tenants and disputes arising out of agreements to purchase or sell properties. Given the nature of our business activities, these lawsuits are considered routine to the conduct of its business. The result of any particular lawsuit cannot be predicted, because of the very nature of litigation, the litigation process and its adversarial nature, and the jury system.
As we have reported in our prior Annual Report on Form 10-K, we are a defendant in a case in which the plaintiffs allege that we breached our obligation to purchase a portfolio of properties for approximately $83.0 million. On July 9, 1999, the Superior Court of New Jersey, Camden County, dismissed the complaint against us with prejudice. Plaintiffs subsequently filed a motion for reconsideration, which motion the Superior Court denied. Plaintiffs then appealed to the Appellate Division, which is the intermediate appellate level court in New Jersey. In December 2000, the Appellate Division affirmed in part and reversed in part the Chancery Division’s earlier dismissal of the entire action. The Appellate Division affirmed the dismissal of the non-contractual counts in the Complaint, but reversed the contract and reformation counts and remanded these to the lower court for further proceedings. We sought review of this decision by the Supreme Court of New Jersey, but that Court declined to consider the appeal. The case thereafter returned to the Chancery Division, where written and oral discovery was conducted in 2002 and in the first quarter of 2003. Discovery terminated on February 14, 2003. We filed a motion for summary judgment seeking dismissal of all counts against us, and judgment for us on our counterclaim. The Chancery Division granted our summary judgment motion on March 25, 2003 and dismissed the case with prejudice. Plaintiffs appealed the judgment in our favor, and we do not know whether plaintiffs will be successful in their appeal.
There have been recent reports of lawsuits against owners and managers of multifamily and office properties asserting claims of personal injury and property damage caused by the presence of mold in residential units or office space. We have been named as a defendant in two lawsuits that allege personal injury as a result of the presence of mold. Unspecified damages are sought. We have referred these lawsuits to our environmental insurance carrier and, as of the date of this Form 10-K, the insurance carrier is tendering a defense to these claims.
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Item 4.   Submission of Matters to a Vote of Security Holders	
We did not submit any matters to a vote of security holders in the fourth quarter of the fiscal year ended December 31, 2003.
PART II
Item 5.   Market for Registrant’s Common Equity and Related Shareholder Matters and Issuer Purchases of Equity Securities	
Our Common Shares are traded on the New York Stock Exchange (“NYSE”) under the symbol “BDN.” On March 10, 2004, there were 373 holders of record of our Common Shares. On March 10, 2004, the last reported sales price of the Common Shares on the NYSE was $28.88. The following table sets forth the quarterly high and low closing sales price per share reported on the NYSE for the indicated periods and the distributions paid by us with respect to each such period.
 	 	 	 	 	 	Distributions	 	
 	 	Share Price	 	Share Price	 	Declared For 	 	
 	 	 High	 	Low 	 	 Quarter	 	
 	 			 			 			 	
First Quarter 2002	 	$	23.90	 	$	20.24	 	$	0.44	 	
Second Quarter 2002	 	$	26.00	 	$	22.91	 	$	0.44	 	
Third Quarter 2002	 	$	24.96	 	$	20.20	 	$	0.44	 	
Fourth Quarter 2002	 	$	22.57	 	$	19.08	 	$	0.44	 	
 	 	 	 	 	 	 	 	 	 	 	
First Quarter 2003	 	$	22.00	 	$	19.32	 	$	0.44	 	
Second Quarter 2003	 	$	24.84	 	$	21.00	 	$	0.44	 	
Third Quarter 2003	 	$	25.72	 	$	23.87	 	$	0.44	 	
Fourth Quarter 2003	 	$	27.74	 	$	24.63	 	$	0.44	 	
Future distributions by us will be declared at the discretion of the Board of Trustees and will depend on our actual cash flow, our financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Internal Revenue Code of 1986 and such other factors as our Board of Trustees deems relevant.
During 2003 and through the date of this Annual Report on Form 10-K, we did not issue any securities that were not registered under the Securities Act of 1993.
The following table provides information as of December 31, 2003 with respect to compensation plans under which our equity securities are authorized for issuance:
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Equity Compensation Plan Information as of December 31, 2003
 	 	 	(a)	 	 	(b)	 	 	(c)	 	
 	 			 			 			 	
Plan category	 	 	Number of securities to be issued upon exercise of outstanding options, warrants and rights	 	 	Weighted-average exercise price of outstanding options, warrants and rights	 	 	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))	 	
 	 	 	 	 	 	 	 	 	 	 	
Equity compensation plans approved by security holders (1)	 	 	2,773,444	 	 	$26.70 (2)	 	 	1,265,045	 	
 	 	 	 	 	 	 	 	 	 	 	
Equity compensation plans not approved by security holders	 	 	—	 	 	—	 	 	—	 	
 	 			 			 			 	
Total	 	 	2,773,444	 	 	$26.70 (2)	 	 	1,265,045	 	

(1)	Relates to our 1997 Long-Term Incentive Plan.	
(2)	Weighted-average exercise price of outstanding options; excludes restricted Common Shares.	
During the quarter ended December 31, 2003, we did not purchase any of our outstanding equity securities.
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Item 6.   Selected Financial Data	
(in thousands, except per Common Share data and number of properties)
Year Ended December 31,	 	2003	 	2002	 	2001	 	2000(A)	 	1999(A)	 	
 	 			 			 			 			 			 	
Operating Results	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total revenue	 	$	305,657	 	$	291,034	 	$	270,489	 	$	254,100	 	$	247,480	 	
Net income	 	 	86,678	 	 	62,984	 	 	33,722	 	 	52,158	 	 	34,606	 	
Income allocated to Common Shares	 	 	54,174	 	 	51,078	 	 	21,816	 	 	40,252	 	 	29,816	 	
Earnings per Common Share	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic	 	$	1.43	 	$	1.40	 	$	0.57	 	$	1.12	 	$	0.80	 	
Diluted	 	$	1.43	 	$	1.39	 	$	0.57	 	$	1.12	 	$	0.80	 	
Cash distributions declared per Common Share	 	$	1.76	 	$	1.76	 	$	1.70	 	$	1.62	 	$	1.57	 	
Balance Sheet Data	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Real estate investments, net of accumulated depreciation	 	$	1,695,355	 	$	1,745,981	 	$	1,812,909	 	$	1,674,341	 	$	1,702,353	 	
Total assets	 	 	1,855,776	 	 	1,919,288	 	 	1,960,203	 	 	1,821,103	 	 	1,825,276	 	
Total indebtedness	 	 	867,659	 	 	1,004,729	 	 	1,009,165	 	 	866,202	 	 	839,634	 	
Total liabilities	 	 	950,431	 	 	1,097,793	 	 	1,108,213	 	 	923,961	 	 	895,083	 	
Minority interest	 	 	133,488	 	 	135,052	 	 	143,834	 	 	144,974	 	 	145,941	 	
Beneficiaries’ equity	 	 	771,857	 	 	686,443	 	 	708,156	 	 	752,168	 	 	784,252	 	
Other Data	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash flows from:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating activities	 	 	118,793	 	 	128,836	 	 	152,040	 	 	103,123	 	 	81,495	 	
Investing activities	 	 	(34,068	)	 	5,038	 	 	(123,682	)	 	(32,372	)	 	69,195	 	
Financing activities	 	 	(102,974	)	 	(120,532	)	 	(30,939	)	 	(60,403	)	 	(158,073	)	
Property Data	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Number of properties owned at year end	 	 	234	 	 	238	 	 	270	 	 	250	 	 	251	 	
Net rentable square feet owned at year end	 	 	15,733	 	 	16,052	 	 	17,312	 	 	16,471	 	 	16,607	 	

 	(A) In 2000, the Operating Partnership held a 95% economic interest in Brandywine Realty Services Corporation (the “Management Company”) through its ownership of 100% of the Management Company’s non-voting preferred stock and 5% of its voting common stock. Effective January 1, 2001, the Company converted its non-voting equity interest in the Management Company to a voting interest. Accordingly, the Company owns 95% of the equity of and has voting control over the Management Company. Therefore, the 2003, 2002 and 2001 financial results of the Management Company have been consolidated. For purposes of the Selected Financial Data, the 2000 and 1999 results of operations presented above have been restated to reflect this presentation.	 	
 	 	 	
Item 7.   Management’s Discussion and Analysis of Financial Condition and Results of Operations	
The following discussion should be read in conjunction with the financial statements appearing elsewhere herein. The results of operations and cash flows of the Company include the historical results of operations of the Properties held by the Company during the years ended December 31, 2003, 2002 and 2001. This Annual Report on Form 10-K contains forward-looking statements for purposes of the Securities Act of 1933 and the Securities Exchange Act of 1934 and as such may involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, there can be no assurance that these expectations will be realized. See Item 1. Business — Risk Factors.
OVERVIEW	
The Company currently manages its portfolio within three geographic segments: (1) Pennsylvania, (2) New Jersey and (3) Virginia. The Company believes it has established an effective platform in these office and industrial markets that provides a foundation for achieving its goals of maximizing market penetration and optimizing operating economies of scale.
During 2003, the Company sold eight office properties containing an aggregate of approximately 343,000 net rentable square feet, two industrial properties containing an aggregate of approximately 131,000 net rentable square feet and four parcels of land containing an aggregate of approximately 24.1 acres for an
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aggregate of $45.6 million. In December 2003, the Company sold two office properties containing an aggregate of approximately 633,000 net rentable square feet for an aggregate of $112.8 million, of which $52.9 million of proceeds were used to pay off existing mortgage notes payable secured by the two properties. The Company retained a 20% interest in a venture that purchased the properties. The Company recognized a gain on the partial sale of approximately $18.5 million for the piece sold and deferred the gain on the piece retained. The Company also purchased five office properties containing approximately 360,000 net rentable square feet and one parcel of land containing approximately 10.0 acres for an aggregate of $67.8 million.
The Company receives income primarily from rental revenue (including tenant reimbursements) from the Properties and, to a lesser extent, from the management of properties owned by third parties and from investments in the Real Estate Ventures.
The Company’s financial performance is dependent upon the demand for office and other commercial space in its markets. Current economic conditions, including recessionary pressures and capital market volatility, have enhanced the challenges facing the Company.
In the current economic climate, the Company continues to seek revenue growth through an increase in occupancy of its portfolio (90.7% at December 31, 2003). However, with a downturn in general leasing activity, owners of commercial real estate, including the Company, are experiencing longer periods in which to lease unoccupied space, and may face higher capital costs and leasing commissions to achieve targeted tenancies.
As the Company seeks to increase revenue, management also focuses on strategies to minimize operating risks, including (i) tenant rollover risk, (ii) tenant credit risk and (iii) development risk.
Tenant Rollover Risk: 
The Company is subject to the risk that, upon expiration, leases may not be renewed, the space may not be relet, or the terms of renewal or reletting (including the cost of renovations) may be less favorable than the current lease terms. Leases accounting for approximately 10.8% of the aggregate annualized base rents from the Properties as of December 31, 2003 (representing approximately 11.6% of the net rentable square feet of the Properties) expire without penalty in 2004. The Company maintains an active dialogue with its tenants in an effort to achieve a high level of lease renewals. The Company’s retention rate for leases that were scheduled to expire in the year ended December 31, 2003 was 80.2%. If the Company is unable to renew leases for a substantial portion of the space under expiring leases, or to promptly relet this space, at anticipated rental rates, the Company’s cash flow could be adversely impacted.
Tenant Credit Risk:
In the event of a tenant default, the Company may experience delays in enforcing its rights as a landlord and may incur substantial costs in protecting its investment. Management regularly evaluates its accounts receivable reserve policy in light of its tenant base and general and local economic conditions. The accounts receivable allowance was $4.0 million or 11.2% of total receivables (including accrued rent receivable) as of December 31, 2003 compared to $4.6 million or 12.5% of total receivables (including accrued rent receivable) as of December 31, 2002.
Development Risk:
The Company currently has in development or redevelopment seven sites aggregating approximately 1.1 million square feet. The total cost of these projects is estimated to be $225.5 million, of which $17.9 million was incurred as of December 31, 2003. While the Company is actively marketing space at these projects to prospective tenants, management cannot provide assurance as to the timing or terms of any leases of such space. As of December 31, 2003, the Company owned approximately 445 acres of undeveloped land and held options to purchase approximately 61 additional acres. Risks associated with development of this land include construction cost overruns and construction delays, insufficient occupancy rates and inability to obtain necessary zoning, land-use, building, occupancy and other required governmental approvals.
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CRITICAL ACCOUNTING POLICIES	
Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
The Company’s significant accounting policies are described in Note 2 to the consolidated financial statements included this Annual Report on Form 10-K. While the estimates and judgments associated with the application of these accounting policies may be affected by different assumptions or conditions, the Company believes the estimates and judgments associated with the reported amounts are appropriate in the circumstances. The following identifies critical accounting policies that are used in preparing the Company’s consolidated financial statements, including those policies which require significant judgment and estimates:
Revenue Recognition
Rental revenue is recognized on a straight-line basis over the lease term regardless of when payments are due. Certain lease agreements contain provisions that require tenants to reimburse a pro rata share of real estate taxes and common area maintenance costs.
Real Estate Investments
Real estate investments are carried at cost. The Company records acquisition of real estate investments under the purchase method of accounting and allocates the purchase price to land, buildings and intangible assets on a relative fair value basis. Depreciation is computed using the straight-line method over the useful lives of buildings and capital improvements (25 to 40 years) and over the shorter of the lease term or the life of the asset for tenant improvements. Direct construction costs related to the development of Properties and land holdings are capitalized as incurred. The Company expenses routine repair and maintenance expenditures.
Impairment of Long-Lived Assets
Management reviews investments in real estate and real estate ventures for impairment if facts and circumstances indicate that the carrying value of such assets may not be recoverable. Measurement of any impairment loss will be based on the fair value of the asset, determined using customary valuation techniques, such as the present value of expected future cash flows.
In accordance with SFAS No. 144 (“SFAS 144”), Accounting for the Impairment or Disposal of Long-Lived Assets, long-lived assets, such as real estate investments and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of would be separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilities relating to assets classified as held-for-sale would be presented separately in the appropriate asset and liability sections of the balance sheet.
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Income Taxes
The Company may elect to treat one or more of its corporate subsidiaries as a taxable REIT subsidiary (“TRS”). In general, a TRS of the Company may perform additional services for tenants of the Company and generally may engage in any real estate or non-real estate related business (except for the operation or management of health care facilities or lodging facilities or the providing to any person, under a franchise, license or otherwise, rights to any brand name under which any lodging facility or health care facility is operated). A TRS is subject to corporate federal income tax. The Company has elected to treat certain of its corporate subsidiaries as a TRS. If the Company fails to qualify as a REIT in any taxable year, the Company will be subject to federal income tax (including any applicable alternative minimum tax) on its taxable income at regular corporate tax rates.
Allowance for Doubtful Accounts
The Company maintains an allowance for doubtful accounts that represents an estimate of losses that may be incurred from the inability of tenants to make required payments. The allowance is an estimate based on two calculations that are combined to determine the total amount reserved. First, the Company evaluates specific accounts where it has been determined that a tenant may have an inability to meet its financial obligations. In these situations, the Company uses its judgment, based on the facts and circumstances, and records a specific reserve for that tenant against amounts due to reduce the receivable to the amount that the Company expects to collect. These reserves are reevaluated and adjusted as additional information becomes available. Second, a reserve is established for all tenants based on a range of percentages applied to aging categories. These percentages are based on historical collection and write-off experience. If the financial condition of the Company’s tenants were to deteriorate, additional allowances may be required.
Deferred Costs
The Company incurs direct costs related to the financing, development and leasing of the Properties. Management exercises judgment in determining whether such costs meet the criteria for capitalization or must be expensed. Capitalized financing fees are amortized over the related loan term and capitalized leasing costs are amortized over the related lease term. Management re-evaluates the remaining useful lives of leasing costs as the creditworthiness of the Company’s tenants and economic and market conditions change.
Purchase Price Allocation
The Company allocates the purchase price of properties to net tangible and identified intangible assets acquired based on fair values. Above-market and below-market in-place lease values for acquired properties are recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) the Company’s estimate of the fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancellable term of the lease. Capitalized above-market lease values are amortized as a reduction of rental income over the remaining non-cancellable terms of the respective leases. Capitalized below-market lease values amortized as an increase of rental income over the remaining non-cancellable terms of the respective leases, including any fixed-rate renewal periods.
The aggregate value of other intangibles acquired is measured based on the difference between (i) the property valued with in-place leases adjusted to market rental rates and (ii) the property valued as if it was vacant. The Company estimates the cost to execute leases with terms similar to the remaining lease terms of the in-place leases, include leasing commissions, legal and other related expenses. This intangible asset is amortized to expense over the remaining term of the respective leases. Company estimates of value are made using methods similar to those used by independent appraisers. Factors considered by the Company in their analysis include an estimate of the carrying costs during the expected lease-up periods considering current market conditions and costs to execute similar leases. The Company also considers information obtained about each property as a result of its pre-acquisition due diligence, marketing and leasing activities in estimating the fair value of the tangible and intangible assets acquired. In estimating carrying costs, the Company includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods, which primarily range from three to twelve months.
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The total amount of these other intangible assets is further allocated to tenant relationships and in-place leases based on the Company’s evaluation of the specific characteristics of each tenant’s lease and the Company’s overall relationship with the respective tenant. Characteristics considered by the Company in allocating value to its tenant relationships include the nature and extent of the Company’s business relationship with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and expectations of lease renewals, among other factors. The value of tenant relationship intangibles is amortized over the remaining initial lease term and renewals, but in no event longer than the remaining depreciable life of the building. The value of in-place leases is amortized over the remaining non-cancellable term of the respective leases and any fixed-rate renewal periods.
In the event that a tenant terminates its lease, the unamortized portion of each intangible, including market rate adjustments, in-place lease values and tenant relationship values, would be charged to expense.
RESULTS OF OPERATIONS
Comparison of the Year Ended December 31, 2003 to the Year Ended December 31, 2002
 	 	 	 	 	 	Year Ended December 31,	 	 	 	Dollar
Change	 	 	Percent
Change	
 	 	 	 	 	 		 	 	 		 	 		
 	 	 	 	 	 	2003	 	 	 	2002	 	 	 		 	 		
 	 	 	 	 	 		 	 	 		 	 	 		 	 		
 	 	 	 	 	 	(amounts in thousands)	 	 	 	 	
 	 	 	 	 	 		 	 	 	 	
Revenue:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	Rents	$	256,944 	 	 	$	248,073 	 	 	$	8,871 	 	 	3.6	%	
 	 	 	Tenant reimbursements	 	37,755 	 	 	 	33,261	 	 	 	4,494 	 	 	13.5	%	
 	 	 	Other	 	10,958 	 	 	 	9,700 	 	 	 	1,258 	 	 	13.0	%	
 	 	 	 	 			 	 			 	 			 	 		 	
 	 	 	 	Total revenue	 	305,657 	 	 	 	291,034 	 	 	 	14,623 	 	 	5.0	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating Expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	Property operating expenses	 	80,648 	 	 	 	74,956 	 	 	 	5,692 	 	 	7.6	%	
 	 	 	Real estate taxes	 	27,887 	 	 	 	25,195 	 	 	 	2,692 	 	 	10.7	%	
 	 	 	Interest	 	57,835 	 	 	 	63,522 	 	 	 	(5,687	)	 	-9.0	%	
 	 	 	Depreciation and amortization	 	60,437 	 	 	 	56,031 	 	 	 	4,406 	 	 	7.9	%	
 	 	 	Administrative expenses	 	14,464 	 	 	 	14,804 	 	 	 	(340	)	 	-2.3	%	
 	 	 	 	 			 	 			 	 			 	 		 	
 	 	 	 	Total operating expenses	 	241,271 	 	 	 	234,508 	 	 	 	6,763 	 	 	2.9	%	

Income from continuing operations before equity in 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	income of real estate ventures, net gain on sales	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	and minority interest	 	64,386 	 	 	 	56,526 	 	 	 	7,860 	 	 	13.9	%	
Equity in income of real estate ventures	 	52 	 	 	 	987 	 	 	 	(935	)	 	-94.7	%	
 			 	 			 	 			 	 		 	
Income from continuing operations before net gain 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	on sales and minority interest 	 	64,438 	 	 	 	57,513 	 	 	 	6,925 	 	 	12.0	%	
Net gain on sales of interest in real estate	 	20,537 	 	 	 	5	 	 	 	20,532 	 	 	100.0	%	
Minority interest 	 	(9,265	)	 	 	(9,337	)	 	 	72	 	 	-0.8	%	
 			 	 			 	 			 	 		 	
Income from continuing operations 	 	75,710	 	 	 	48,181 	 	 	 	27,529	 	 	57.1	%	
Income from discontinued operations, net of 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	minority interest 	 	10,968 	 	 	 	14,803 	 	 	 	(3,835	)	 	-25.9	%	
 	 	 	 	 			 	 			 	 			 	 		 	
 	 	 	Net income 	$	86,678	 	 	$	62,984 	 	 	$	23,694	 	 	37.6	%	
 	 	 	 	 			 	 			 	 			 	 		 	
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The results of operations for the years ended December 31, 2003 and 2002 include the respective operations of the Properties. Of the 234 Properties owned by the Company as of December 31, 2003, a total of 211 Properties containing an aggregate of approximately 13.6 million net rentable square feet (“Same Store Properties”) were owned for the entire twelve-month periods ended December 31, 2003 and 2002. 
Revenue increased to $305.7 million for 2003 as compared to $291.0 million for 2002, primarily due to increased rental rates and additional properties in 2003, offset by decreased occupancy. The straight-line rent adjustment increased revenues by $5.9 million in 2003 and $5.8 million in 2002. Revenue for Same Store Properties increased to $247.0 million in 2003 from $242.3 million in 2002. This increase was the result of increased occupancy as well as increased tenant reimbursements from higher operating expenses in 2003 as compared to 2002. Average occupancy for the Same Store Properties increased to 91.0% in 2003 from 90.9% in 2002. Other revenue represents lease termination fees, bankruptcy settlement proceeds, leasing commissions, third-party management fees and interest income. Other revenue increased to $11.0 million in 2003 from $9.7 million in 2002 primarily due to bankruptcy settlement proceeds received in 2003.
Property operating expenses increased to $80.6 million in 2003 as compared to $75.0 million in 2002, primarily due to increased snow removal costs and additional properties in 2003. Property operating expenses included a provision for doubtful accounts of $.2 million in 2003 and $.9 million in 2002 to provide for increased tenant credit risk. Property operating expenses for the Same Store Properties increased to $75.3 million in 2003 as compared to $69.7 million in 2002 as a result of increased snow removal costs in 2003 as compared to 2002.
Real estate taxes increased to $27.9 million in 2003 as compared to $25.2 million in 2002, primarily due to increased real estate tax assessments in 2003 and additional properties in 2003. Real estate taxes for the Same Store Properties increased to $22.9 million in 2003 as compared to $21.6 million in 2002 as a result of higher tax rates and property assessments.
Interest expense decreased to $57.8 million in 2003 as compared to $63.5 million in 2002, primarily due to decreased interest rates and decreased average borrowings during 2003. Average outstanding debt balances for 2003 were $948.7 million as compared to $1.0 billion for 2002. The Company’s weighted-average interest rate from its unsecured credit facilities after giving effect to hedging activities on the unsecured credit facilities decreased to 4.60% in 2003 from 5.41% in 2002 and on mortgage notes payable decreased to 7.09% in 2003 from 7.27% in 2002.
Depreciation increased to $53.3 million in 2003 as compared to $50.4 million in 2002 primarily due to additional properties in 2003 and additional depreciation from increased tenant improvements during 2003. Amortization, related to deferred leasing costs, increased to $7.1 million in 2003 as compared to $5.6 million in 2002, primarily due to increased leasing activity and additional properties in 2003.
Administrative expenses decreased to $14.5 million in 2003 as compared to $14.8 million in 2002, primarily due to decreased amortization of restricted stock.
Equity in income of Real Estate Ventures decreased to $52,000 in 2003 as compared to $1.0 million in 2002. During 2003, the Company recorded an impairment charge of $861,000 associated with the write-down its investment in a non-operating joint venture.
During 2003, the Company sold four parcels of land containing an aggregate of 24.1 acres for an aggregate of $4.2 million, realizing an aggregate gain of $2.0 million. In addition, the Company sold two office properties containing an aggregate of approximately 633,000 net rentable square feet for an aggregate of $112.8 million, of which $52.9 million of proceeds were used to pay off existing mortgage notes payable secured by the two properties. The Company recognized a gain on the sale of approximately $18.5 million, which is recorded in net gain on sale of real estate interests due to a continuing 20% interest that the Company has maintained in the properties. During 2002, the Company sold two land parcels containing an aggregate of 12.8 acres for $.7 million with a minimal net gain realized.
Minority interest from continuing operations represents the equity in income attributable to the portion of the Operating Partnership not owned by the Company. Minority interest from continuing operations was $9.3 million in 2003 and 2002.
Discontinued operations decreased to $11.0 million in 2003 as compared to $14.8 million in 2002 primarily due to net gain on sales of real estate investments of $8.6 million in 2002. During 2003, the Company sold eight office properties containing an aggregate of 343,000 net rentable square feet and two industrial properties containing an aggregate of 131,000 net rentable square feet for an aggregate of $41.4 million, realizing an aggregate gain of $9.7 million. During 2002, the Company sold 23 office properties containing an aggregate of 1.4 million net rentable square feet and 20 industrial properties containing an aggregate of .9 million net rentable square feet for an aggregate of $190.1 million, realizing a net gain of $8.6 million. The Company also recorded an impairment loss in 2002 of $665,000 related to one property held-for-sale for which the anticipated net sales price is less than the book value of the asset.
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Comparison of the Year Ended December 31, 2002 to the Year Ended December 31, 2001
 	 	 	 	Year Ended December 31, 
	 	 	Dollar
Change	 	 	Percent
Change	 	
 	 	 	 	 	2002	 	 	 	2001	 	 						
 	 	 	 			 	 			 			 	 		 	
 	 	 	 	 	(amounts in thousands)	 	 	 	 	
 	 	 	 	 		 	 	 	 	
Revenue:	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Rents	$	248,073 	 	 	$	228,149 	 	$	19,924 	 	 	8.7	%	
 	 	Tenant reimbursements	 	33,261 	 	 	 	31,993 	 	 	1,268 	 	 	4.0	%	
 	 	Other	 	9,700 	 	 	 	10,347 	 	 	(647	)	 	-6.2	%	
 	 	 	 			 	 			 			 	 		 	
 	 	 	Total revenue	 	291,034 	 	 	 	270,489	 	 	20,545	 	 	7.6	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating Expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Property operating expenses	 	74,956 	 	 	 	70,604 	 	 	4,352 	 	 	6.2	%	
 	 	Real estate taxes	 	25,195 	 	 	 	22,435 	 	 	2,760 	 	 	12.3	%	
 	 	Interest	 	63,522 	 	 	 	67,496 	 	 	(3,974	)	 	-5.9	%	
 	 	Depreciation and amortization	 	56,031 	 	 	 	67,224 	 	 	(11,193	)	 	-16.7	%	
 	 	Administrative expenses	 	14,804 	 	 	 	15,177 	 	 	(373	)	 	-2.5	%	
 	 	Non-recurring charges	 	—	 	 	 	6,600 	 	 	(6,600	)	 	—	 	
 	 	 	 			 	 			 			 	 		 	
 	 	 	Total operating expenses	 	234,508 	 	 	 	249,536 	 	 	(15,028	)	 	-6.4	%	

Income from continuing operations before equity in 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	income of real estate ventures, net gain on sales	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	and minority interest	 	56,526 	 	 	 	20,953	 	 	35,573	 	 	169.8	%	
Equity in income of real estate ventures	 	987 	 	 	 	2,768 	 	 	(1,781	)	 	-64.3	%	
 	 	 	 			 	 			 			 	 		 	
Income from continuing operations before net gain 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	on sales and minority interest 	 	57,513 	 	 	 	23,721	 	 	33,792	 	 	142.5	%	
Net gain on sales of interest in real estate	 	5	 	 	 	4,524 	 	 	(4,519	)	 	-99.9	%	
Minority interest 	 	(9,337	)	 	 	(7,818	)	 	(1,519	)	 	19.4	%	
 	 	 	 			 	 			 			 	 		 	
Income from continuing operations 	 	48,181 	 	 	 	20,427	 	 	27,754	 	 	131.0	%	
Income from discontinued operations, net of 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	minority interest 	 	14,803 	 	 	 	13,295	 	 	1,508	 	 	11.3	%	
 	 	 	 			 	 			 			 	 		 	
 	 	Net income 	$	62,984 	 	 	$	33,722 	 	$	29,262 	 	 	86.8	%	

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The results of operations for the years ended December 31, 2002 and 2001 include the respective operations of the Properties. Of the 238 Properties owned by the Company as of December 31, 2002, a total of 194 Properties containing an aggregate of 13.2 million net rentable square feet (“Same Store Properties”) were owned for the entire twelve-month periods ended December 31, 2002 and 2001. 
Revenue increased to $291.0 million for 2002 as compared to $270.5 million for 2001, primarily due to increased rental rates and additional properties in 2002, offset by decreased occupancy. The straight-line rent adjustment increased revenues by $5.8 million in 2002 and $5.4 million in 2001. Revenue for Same Store Properties decreased to $233.3 million in 2002 from $236.6 million in 2001. This decrease was the result of decreased occupancy in 2002 as compared to 2001. Average occupancy for the Same Store Properties decreased to 90.4% in 2002 from 94.5% in 2001. Other revenue represents lease termination fees, leasing commissions, third-party management fees and interest income. Other revenue decreased to $9.7 million in 2002 from $10.3 million in 2001 primarily due to reduced interest income earned in 2002 as compared to 2001.
Property operating expenses increased to $75.0 million in 2002 as compared to $70.6 million in 2001, primarily due to increased insurance and security costs and additional properties in 2002. Property operating expenses included a provision for doubtful accounts of $.9 million in 2002 and $2.9 million in 2001 to provide for increased tenant credit risk. Property operating expenses for the Same Store Properties increased to $71.2 million in 2002 as compared to $69.9 million in 2002 as a result of higher insurance and security costs.
Real estate taxes increased to $25.2 million in 2002 as compared to $22.4 million in 2001, primarily due to increased real estate tax assessments in 2002 and additional properties in 2002. Real estate taxes for the Same Store Properties increased to $21.9 million in 2002 as compared to $20.8 million in 2001 as a result of higher tax rates and property assessments.
Interest expense decreased to $63.5 million in 2002 as compared to $67.5 million in 2001, primarily due to decreased interest rates, partially offset by increased average borrowings during 2002. Average outstanding debt balances for 2002 were $1.0 billion as compared to $949.5 million for 2001. The Company’s weighted-average interest rate on its unsecured credit facilities after giving effect to hedging activities on the unsecured credit facilities decreased to 5.41% in 2002 from 6.48% in 2001 and on its mortgage notes payable decreased to 7.27% in 2002 from 7.39% in 2001.
Depreciation decreased to $50.4 million in 2002 as compared to $62.9 million in 2001 primarily due to a change made by the Company in the estimated useful lives of buildings from 25 to 40 years. The impact of this change in useful lives was $19.0 million or $.53 per share for the year ended December 31, 2002. Management determined that the longer period better reflected the useful lives of the buildings. Amortization, related to deferred leasing costs, increased to $5.6 million in 2002 as compared to $4.3 million in 2001, primarily due to increased leasing activity and additional properties in 2002.
Administrative expenses decreased to $14.8 million in 2002 as compared to $15.2 million in 2001, primarily due to decreased amortization of restricted stock.
Equity in income of Real Estate Ventures decreased to $1.0 million in 2002 as compared to $2.8 million in 2001. The 2001 results include a $785,000 gain on the sale of the Company’s interests in a Real Estate Venture. In addition, the Company acquired the remaining partnership interests in three Real Estate Ventures, and, accordingly, the results attributable to these properties are now consolidated from the date of acquisition.
During 2002, the Company sold two land parcels containing an aggregate of 12.8 acres for $.7 million with minimal net gain realized. During 2001, the Company sold three office properties, eight industrial properties and four land parcels for $31.3 million, realizing a net gain of $4.5 million. 
Minority interest from continuing operations represents the equity in income attributable to the portion of the Operating Partnership not owned by the Company. Minority interest from continuing operations increased to $9.3 million in 2002 as compared to $7.8 million in 2001, primarily due to increased results of continuing operations in 2002 as compared to 2001.
Discontinued operations increased to $14.8 million in 2002 from $13.3 million in 2001 primarily due to net gain on sales of real estate investments of $8.6 million in 2002. During 2002, the Company sold 23 office properties containing an aggregate of 1.4 million net rentable square feet and 20 industrial properties containing an aggregate of .9 million net rentable square feet for an aggregate of $190.1 million, realizing a net gain of $8.6 million. The Company also recorded an impairment loss in 2002 of $665,000 related to one property held-for-sale for which the anticipated net sales price was less than the book value of the asset.
 
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LIQUIDITY AND CAPITAL RESOURCES	
 	
Cash Flows	
During 2003, the Company generated $118.8 million in cash flow from operating activities. Other sources of cash in-flows consisted of: (i) $220.0 million of proceeds from the Term Loan and draws on the Credit Facility, (ii) $159.1 million in net proceeds from share issuances, (iii) $87.5 million of net proceeds from property sales, (iv) $3.3 million of cash distributions from Real Estate Ventures, (v) $2.5 million from payments on employee loans and (vi) $1.9 million of escrowed cash. During 2003, cash out-flows consisted of: (i) $222.0 million of Credit Facility repayments, (ii) $91.4 million of Preferred Share redemptions, including $1.2 million of related warrant repurchases, (iii) $82.1 million of mortgage note repayments, (iv) $78.8 million of distributions to shareholders, (v) $67.5 million for property acquisitions, (vi) $50.9 million to fund capital expenditures, (vii) $10.2 million of distributions to minority interest holders, (viii) $7.8 million of leasing costs, (ix) $.5 million of additional investment in Real Estate Ventures and (x) $.1 million of debt costs.
During 2002, the Company generated $128.8 million in cash flow from operating activities. Other sources of cash in-flows consisted of: (i) $115.0 million of proceeds from the Term Loan and draws on the Credit Facility, (ii) $78.0 million of net proceeds from property sales, (iii) proceeds from $20.2 million of additional mortgage notes payable, (iv) $2.6 million of escrowed cash, (v) $2.0 million of cash distributions from Real Estate Ventures and (vi) $1.7 million from payments on employee loans. During 2002, cash out-flows consisted of: (i) $102.3 million of Credit Facility repayments, (ii) $75.0 million of distributions to shareholders, (iii) $48.6 million of mortgage note repayments, (iv) $38.8 million to fund capital expenditures, (v) $25.1 million for property acquisitions, (vi) $20.2 million to repurchase Common Shares and minority interest units in the Operating Partnership, (vii) $13.1 million of leasing costs, (viii) $10.6 million of distributions to minority interest holders, (ix) $.7 million of debt costs and (x) $.4 million of additional investment in Real Estate Ventures.
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During 2001, the Company generated $152.0 million in cash flow from operating activities. Other sources of cash in-flows consisted of: (i) proceeds from $135.2 million of additional mortgage notes payable, (ii) $91.0 million of proceeds from draws on the Credit Facility, (iii) $31.3 million of net proceeds from property sales, (iv) $5.5 million of cash distributions from Real Estate Ventures and (v) $1.0 million from payments on employee loans. During 2001, cash out-flows consisted of: (i) $127.9 million of mortgage note repayments, (ii) $107.4 million to fund capital expenditures, (iii) $72.5 million of distributions to shareholders, (iv) $40.4 million for property acquisitions, (v) $35.0 million to repay borrowings under the Credit Facility, (vi) $10.7 million of distributions to minority interest holders, (vii) $9.2 million of leasing costs, (viii) $6.5 million to repurchase Common Shares and minority interest units in the Operating Partnership, (ix) $5.6 million of debt costs, (x) $2.5 million of additional investment in Real Estate Ventures and (xi) $1.0 million of escrowed cash.
Capitalization	
At December 31, 2003, the Company maintained a $500 million Credit Facility. (See Item 1. Business-Credit Facility)
As of December 31, 2003, the Company had approximately $867.7 million of debt outstanding, consisting of $305.0 million of borrowings under the Credit Facility, $100 million of borrowings under the Term Loan and $462.7 million of mortgage notes payable. The mortgage notes payable consists of $402.3 million of fixed rate loans and $60.4 million of variable rate loans. Additionally, the Company has entered into interest rate swap agreements to fix the interest rate on $175 million of the Credit Facility. The mortgage loans mature between March 2004 and July 2027. As of December 31, 2003, the Company also had $10.7 million of letters of credit outstanding under the Credit Facility and $184.3 million of unused availability under the Credit Facility. For the year ended December 31, 2003, the weighted-average interest rate under the Credit Facility and the related swap agreements was 4.60%, the weighted-average interest rate for the Term Loan was 2.95% and the weighted-average interest rate for borrowings under mortgage notes payable and the related cap agreements was 7.09%.
The following table outlines the timing of payment requirements related to the Company’s commitments as of December 31, 2003:
 	 	Payments by Period (in thousands)

 	 	Total	 	Less than
1 Year	 	1-3 Years	 	3-5 Years	 	More than
5 Years	 	
 	 			 			 			 			 			 	
Mortgage notes payable:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Fixed rate	 	$	402,321	 	$	10,277	 	$	24,759	 	$	40,259	 	$	327,026	 	
Variable rate	 	 	24,815	 	 	172	 	 	407	 	 	552	 	 	23,684	 	
Construction loans	 	 	35,523	 	 	35,523	 	 	—	 	 	—	 	 	—	 	
 	 			 			 			 			 			 	
 	 	 	462,659	 	 	45,972	 	 	25,166	 	 	40,811	 	 	350,710	 	
Revolving credit facility	 	 	305,000	 	 	305,000	 	 	—	 	 	—	 	 	—	 	
Unsecured debt	 	 	100,000	 	 	—	 	 	100,000	 	 	—	 	 	—	 	
Other liabilities	 	 	11,027	 	 	10,279	 	 	748	 	 	—	 	 	—	 	
 	 			 			 			 			 			 	
 	 	$	878,686	 	$	361,251	 	$	125,914	 	$	40,811	 	$	350,710	 	
 	 			 			 			 			 			 	
The Company intends to refinance its mortgage notes payable as they become due or repay those that are secured by properties being sold. In May 2004, we obtained a $450 million unsecured credit facility. The credit facility will mature in 2007. We have the option to increase the credit facility to a maximum of $600 million. The credit facility bears interest at LIBOR plus a spread over LIBOR ranging from .65% to 1.35% based on our leverage and unsecured debt ratings.
On January 12, 2004, we sold 2,645,000 Common Shares for net proceeds of approximately $69.3 million. We used the net proceeds to reduce the outstanding balance under our revolving credit facility.
On February 3, 2004, we entered into an agreement with Commonwealth Atlantic Operating Properties, Inc., the holder of 1,950,000 then outstanding Series B Preferred Units (the “Series B Preferred Units”) in the Operating Partnership. The Series B Preferred Units had an aggregate stated value of $97.5 million and accrued distributions at 7.25% per annum. During February 2004, we redeemed all of the Series B Preferred Units for an aggregate price of $93.0 million, together with accrued but unpaid distributions from January 1, 2004.
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On February 27, 2004, we sold 2,300,000 7.375% Series D Cumulative Redeemable Preferred Shares for net proceeds of approximately $55.5 million. We used the net proceeds to reduce the outstanding balance under our revolving credit facility, including amounts advanced under our revolving credit facility to fund the redemption of Series B Preferred Units.
On March 3, 2004, we sold 1,840,000 Common Shares for net proceeds of approximately $50.7 million. We used the net proceeds to reduce the outstanding balance under our revolving credit facility.
As of December 31, 2003, the Company’s debt-to-market capitalization ratio was 40.5%. As a general policy, the Company intends, but is not obligated, to adhere to a policy of maintaining a long-term average debt-to-market capitalization ratio of no more than 50%.
The Company’s Board of Trustees approved a share repurchase program authorizing the Company to repurchase up to 4,000,000 of its outstanding Common Shares. Through December 31, 2003, the Company had repurchased 3.2 million of its Common Shares at an average price of $17.75 per share. Under the share repurchase program, the Company has the authority to repurchase an additional 762,000 shares. No time limit has been placed on the duration of the share repurchase program. The following table summarizes the share repurchases during the three years ended December 31, 2003:
 	 	Years Ended December 31,
	 	
 	 	2003	 	2002	 	2001	 	
 	 			 			 			 	
Repurchased amount (shares)	 	 	—	 	 	491,074	 	 	373,713	 	
Repurchased amount ($, in thousands)	 	$	—	 	$	11,053	 	$	7,294	 	
Average price per share	 	$	—	 	$	22.51	 	$	19.52	 	
The following table summarized the Class A Units tendered for redemption during the three years ended December 31, 2003:
 	 	Years Ended December 31,
	 	
 	 	2003	 	2002	 	2001	 	
 	 			 			 			 	
Repurchased amount (units)	 	 	—	 	 	364,222	 	 	3,247	 	
Repurchased amount ($, in thousands)	 	$	—	 	$	8,536	 	$	64	 	
Average price per unit	 	$	—	 	$	23.44	 	$	19.72	 	
 	
Short- and Long-Term Liquidity	
The Company believes that cash flow from operations and current financing alternatives are adequate to fund its short-term liquidity requirements for 2004. Cash flow from operations is generated primarily from rental revenues, operating expense reimbursements from tenants, and by providing management services to third parties. The Company intends to use these funds to meet its principal short-term liquidity needs, which are to fund operating expenses, debt service requirements, recurring capital expenditures, tenant allowances, leasing commissions and the minimum distributions required to maintain the Company’s REIT qualifications under the Internal Revenue Code.
On December 18, 2003, the Board of Trustees declared a quarterly dividend distribution of $0.44 per share, paid on January 15, 2004 to common shareholders of record as of December 31, 2003. Distributions of $1.76 per share were declared in 2003 and 2002.
Future distributions by us will be declared at the discretion of the Board of Trustees and will depend on our actual cash flow, our financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Internal Revenue Code of 1986 and such other factors as our Board of Trustees deems relevant.
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The Company expects to meet its long-term liquidity requirements, such as for property acquisitions, development, investments in real estate ventures, scheduled debt maturities, major renovations, expansions and other significant capital improvements, through borrowings under its Credit Facility, long-term secured and unsecured indebtedness, the issuance of equity securities and the disposition of certain properties.
Off-Balance Sheet Arrangements	
The Company is not dependent on the use of any off-balance sheet financing arrangements for liquidity. The Company’s off-balance sheet arrangements are discussed in Note 6 to the financial statements: “Investment in Unconsolidated Real Estate Ventures”.  Additional information about the debt of the Company’s unconsolidated Real Estate Ventures is included in “Item 2 — Properties”.
Inflation	
A majority of the Company’s leases provide for escalations of real estate taxes and operating expenses either on a triple net basis or over a base amount. In addition, many of the office leases provide for fixed base rent increases. The Company believes that inflationary increases in expenses will be significantly offset by expense reimbursement and contractual rent increases.
Interest Rate Risk and Sensitivity Analysis	
The analysis below presents the sensitivity of the market value of the Company’s financial instruments to selected changes in market rates. The range of changes chosen reflects the Company’s view of changes which are reasonably possible over a one-year period. Market values are the present value of projected future cash flows based on the market rates chosen.
The Company’s financial instruments consist of both fixed and variable rate debt. As of December 31, 2003, the Company’s consolidated debt consisted of $402.3 million in fixed rate mortgages and $60.4 million in variable rate mortgage notes, $305.0 million borrowings under its Credit Facility and $100.0 million under its Term Loan. All financial instruments were entered into for other than trading purposes and the net market value of these financial instruments is referred to as the net financial position. Changes in interest rates have different impacts on the fixed and variable rate portions of the Company’s debt portfolio. A change in interest rates on the fixed portion of the debt portfolio impacts the net financial instrument position, but has no impact on interest incurred or cash flows. A change in interest rates on the variable portion of the debt portfolio impacts the interest incurred and cash flows, but does not impact the net financial instrument position.
The Company has entered into interest rate swap and rate cap agreements designed to reduce the impact of interest rate changes on its variable rate debt. At December 31, 2003, the Company had interest rate swap agreements for notional principal amounts aggregating $175 million. The swap agreements effectively fix the LIBOR interest rate on $100 million of Credit Facility borrowings at 4.230% and on $75 million of Credit Facility borrowings at 4.215%, in each case until June 2004. The interest rate cap agreement effectively limits the interest rate on a mortgage with a notional value of $28 million at 8.7% until July 2004. The impact of the cap agreement is recorded as a component of interest expense.
If market rates of interest on our variable rate debt increase by 1%, the increase in annual interest expense on our variable rate debt would decrease future earnings and cash flows by approximately $3.8 million. If market rates of interest on our variable rate debt decrease by 1%, the decrease in interest expense on our variable rate debt would increase future earnings and cash flows by approximately $3.8 million. If market rates of interest increase by 1%, the fair value of our total outstanding debt would decrease by approximately $24.5 million. If market rates of interest decrease by 1%, the fair value of our total outstanding debt would increase by approximately $27.1 million.
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Item 8. Financial Statements and Supplementary Data	
The financial statements and supplementary financial data are listed under Item 15(a) and filed as part of this Annual Report on Form 10-K/A. See Item 15.
PricewaterhouseCoopers LLP (“PWC”) is the Company’s independent registered public accounting firm. KPMG LLP (“KPMG”) provides the Company with tax compliance and advisory services. The Audit Committee of the Board of Trustees of the Company has approved the provision of services by PWC and KPMG to the Company.
Report of Management	
The management of the Company is responsible for the preparation of the financial statements and related financial information included in this annual report. The statements were prepared in conformity with accounting principles generally accepted in the United States of America and, accordingly, include amounts that are based on informed estimates and judgments.
Management maintains a system of internal controls to provide reasonable assurance that assets are safeguarded and that transactions are properly authorized and accurately recorded. The concept of reasonable assurance is based on the recognition that there are inherent limitations in all systems of internal accounting control and that the costs of such systems should not exceed the benefits expected to be derived. The Company continually reviews and modifies these systems, where appropriate, to maintain such assurance. The system of internal controls includes careful selection, training and development of operating and financial personnel, well-defined organizational responsibilities and communication of Company policies and procedures throughout the organization.
The selection of the Company’s independent auditors, PWC, has been approved by the Audit Committee of the Board of Trustees. The Audit Committee of the Board of Trustees, comprised solely of non-employee Trustees, meets periodically with the Company’s independent auditors and management to review the financial statements and related information and to confirm that they are properly discharging their responsibilities. In addition, the independent auditors meet with the Audit Committee, without the presence of management, to discuss their findings and their observations on other relevant matters. Recommendations made by PWC are considered and appropriate action is taken to respond to these recommendations.
Gerard H. Sweeney, President and Chief Executive Officer
Christopher P. Marr, Senior Vice President and Chief Financial Officer
Timothy M. Martin, Vice-President and Chief Accounting Officer
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
On May 23, 2002, the Company dismissed Arthur Andersen LLP (“Arthur Andersen”) as its independent public accountants and appointed KPMG LLP (“KPMG”) as its independent public accountants. The decision to dismiss Arthur Andersen and to retain KPMG was approved by the Audit Committee. Arthur Andersen’s reports on the Company’s consolidated financial statements as of and for the fiscal years ended December 31, 2001 and 2000 did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles.
During the Company’s fiscal years ended December 31, 2001 and 2000, and the subsequent interim period through May 30, 2002, there were no disagreements between the Company and Arthur Andersen on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to Arthur Andersen’s satisfaction, would have caused them to make reference to the subject matter of the disagreement in connection with their reports.
None of the reportable events described under Item 304(a)(1)(v) of Regulation S-K occurred within the Company’s fiscal years ended December 31, 2001 and 2000 and the subsequent interim period through May 30, 2002.
A copy of Arthur Andersen’s letter dated May 30, 2002 with respect to certain of the above statements is attached as Exhibit 16 to the Company’s Form 8-K filed with the Securities and Exchange Commission on May 30, 2002.
During the Company’s fiscal years ended December 31, 2001 and 2000, and the subsequent interim period through May 30, 2002, neither the Company nor anyone acting on behalf of the Company consulted with KPMG regarding any of the matters or events set forth in Item 304(a)(2) of Regulation S-K.
On June 19, 2003, the Company informed KPMG that they would be dismissed effective as of June 19, 2003.
The audit report of KPMG on the Company’s consolidated financial statements for the years ended December 31, 2002 and 2001 did not contain an adverse opinion or a disclaimer of opinion and was not qualified or modified as to uncertainty, audit scope or accounting principles, except that effective January 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. During its audit for the fiscal years ended December 31, 2002 and 2001, and for the subsequent interim period through June 25, 2003, (i) there were no disagreements with KPMG on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to KPMG’s satisfaction, would have caused KPMG to make reference to the subject matter of such disagreements in their reports, and (ii) there have been no reportable events as defined in Item 304(a)(1)(v) of Regulation S-K. 
The Audit Committee authorized the dismissal of KPMG and appointment of PWC. The Company retained PWC as its independent accountants effective June 19, 2003.
During the Company’s fiscal years ended December 31, 2002 and 2001, and for the subsequent interim period through June 25, 2003, neither the Company nor anyone acting on behalf of the Company engaged PWC regarding any of the items described in Item 304(a)(2) of Regulation S-K.
A copy of KPMG’s letter dated June 25, 2003 with respect to certain of the above statements is attached as Exhibit 16.1 to the Company’s Form 8-K filed with the Securities and Exchange Commission on June 25, 2003.
In April 2004, the Company engaged PWC to reaudit its consolidated financial statements as of and for the years ended December 31, 2002 and 2001.
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Item 9A. Controls and Procedures	
The Company’s Chief Executive Officer and Chief Financial Officer, after evaluating the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this annual report, have concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in rules and forms of the Securities and Exchange Commission.
PART III
Item 10. Trustees and Executive Officers of the Registrant	
Incorporated herein by reference to the Company’s definitive proxy statement to be filed with respect to its Annual Meeting of Shareholders expected to be held on May 3, 2004.
The Company has adopted a code of ethics that applies to its employees, including its principal executive officer, principal financial officer and principal accounting officer. The Company has posted its code of ethics on its internet website at www.brandywinerealty.com.
Item 11. Executive Compensation	
Incorporated herein by reference to the Company’s definitive proxy statement to be filed with respect to its Annual Meeting of Shareholders expected to be held on May 3, 2004.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters	
Incorporated herein by reference to the Company’s definitive proxy statement to be filed with respect to its Annual Meeting of Shareholders expected to be held on May 3, 2004.
Item 13. Certain Relationships and Related Transactions	
Incorporated herein by reference to the Company’s definitive proxy statement to be filed with respect to its Annual Meeting of Shareholders expected to be held on May 3, 2004.
Item 14. Principal Accountant Fees and Services	
Audit Fees. Fees to PWC for audit services totaled approximately $413,000 in 2003, including fees associated with the annual audit, review of the Company’s quarterly reports on Form 10-Q and procedures relating to Company securities offerings. The Company did not pay PWC fees for audit services in 2002. Fees to KPMG for audit services totaled approximately $320,000 in 2003 and approximately $692,000 in 2002, including fees associated with the annual audit for 2002, review of the Company’s quarterly reports on Form 10-Q and procedures relating to Company securities offerings.
Audit-Related Fees. The Company did not pay either PWC or KPMG fees for audit-related services in 2003 or 2002.
Tax Fees. The Company did not pay PWC fees for tax services in 2003 or 2002. Fees to KPMG for tax services, including tax advice and tax planning, totaled approximately $267,000 in 2003 and $106,000 in 2002. Fees to KPMG for tax compliance services totaled approximately $162,000 in 2003 and $201,000 in 2002.
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Item 15. Exhibits, Financial Statements, Schedules and Reports on Form 8-K	
 	 	 	 	
 	 	(a)	1. and 2. Financial Statements and Schedules	
The financial statements and schedules listed below are filed as part of this annual report on the pages indicated.
Index to Financial Statements and Schedules	
 	
 	 	 	Page	 	
 	 	 	 	 	
Report of Independent Registered Public Accounting Firm	 	 	F-1	 	
 	 	 	 	 	
Consolidated Balance Sheets as of December 31, 2003 and December 31, 2002	 	 	F-2	 	
 	 	 	 	 	
Consolidated Statements of Operations for the Years Ended December 31, 2003, 2002 and 2001	 	 	F-3	 	
 	 	 	 	 	
Consolidated Statements of Beneficiaries’ Equity and Comprehensive Income for the Years Ended December 31, 2003, 2002 and 2001	 	 	F-4	 	
 	 	 	 	 	
Consolidated Statements of Cash Flows for the Years Ended December 31, 2003, 2002 and 2001	 	 	F-5	 	
 	 	 	 	 	
Notes to Consolidated Financial Statements	 	 	F-6	 	
 	 	 	 	 	
Schedule II — Valuation and Qualifying Accounts	 	 	F-29	 	
 	 	 	 	 	
Schedule III — Real Estate and Accumulated Depreciation	 	 	F-30	 	
 	 	 	 	 	
 	 	3.	Exhibits	
 	 	 	 	
Exhibits No.	Description	 	
(1)	3.1.1	Amended and Restated Declaration of Trust of the Company (amended and restated as of May 12, 1997)	 	
(2)	3.1.2	Articles of Amendment to Declaration of Trust of the Company (September 4, 1997)	 	
(3)	3.1.3	Articles of Amendment to Declaration of Trust of the Company	 	
(4)	3.1.4	Articles Supplementary to Declaration of Trust of the Company (September 28, 1998)	 	
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Exhibits No.	Description	 	
(5)	3.1.5	Articles of Amendment to Declaration of Trust of the Company (March 19, 1999)	 	
(6)	3.1.6	Articles Supplementary to Declaration of Trust of the Company (April 19, 1999)	 	
(7)	3.1.7	Articles Supplementary to Declaration of Trust of the Company (December 30, 2003)	 	
(8)	3.1.8	Articles Supplementary to Declaration of Trust of the Company (February 5, 2004)	 	
(9)	3.2	Amended and Restated Bylaws of the Company	 	
(10)	10.1	Second Amended and Restated Partnership Agreement of Brandywine Realty Services Partnership	 	
(11)	10.2	Amended and Restated Articles of Incorporation of Brandywine Realty Services Corporation	 	
(12)	10.3	Amended and Restated Agreement of Limited Partnership of Brandywine Operating Partnership, L.P. (the “Operating Partnership”)	 	
(12)	10.4	Amendment No. 1 to Amended and Restated Agreement of Limited Partnership of the Operating Partnership	 	
(12)	10.5	First Amendment to Amended and Restated Agreement of the Operating Partnership	 	
(13)	10.6	Second Amendment to the Amended and Restated Agreement of Limited Partnership Agreement of the Operating Partnership	 	
(14)	10.7	Third Amendment to the Amended and Restated Agreement of Limited Partnership of the Operating Partnership	 	
(14)	10.8	Tax Indemnification Agreement dated May 8, 1998, by and between the Operating Partnership and the parties identified on the signature page	 	
(15)	10.9	Contribution Agreement dated as of July 10, 1998 (Axinn)	 	
(15)	10.10	Form of Donald E. Axinn Options **	 	
(4)	10.11	Fourth Amendment to the Amended and Restated Agreement of Limited Partnership of the Operating Partnership	 	
(4)	10.12	Fifth Amendment to the Amended and Restated Agreement of Limited Partnership of the Operating Partnership	 	
(4)	10.13	Sixth Amendment to the Amended and Restated Agreement of Limited Partnership of the Operating Partnership	 	
(26)	10.14	Seventh Amendment to the Amended and Restated Agreement of Limited Partnership of the Operating Partnership	 	
(26)	10.15	Eighth Amendment to the Amended and Restated Agreement of Limited Partnership of the Operating Partnership	 	
(26)	10.16	Ninth Amendment to the Amended and Restated Agreement of Limited Partnership of the Operating Partnership	 	
(26)	10.17	Tenth Amendment to the Amended and Restated Agreement of Limited Partnership of the Operating Partnership	 	
(26)	10.18	Eleventh Amendment to the Amended and Restated Agreement of Limited Partnership of the Operating Partnership	 	
(26)	10.19	Twelfth Amendment to the Amended and Restated Agreement of Limited Partnership of the Operating Partnership	 	
(4)	10.20	First Amendment to Contribution Agreement (Axinn)	 	
(16)	10.21	Form of Board of Trustees Designation Letter (Lazard)	 	
(9)	10.22	Agreement dated as of December 31, 2001 with Anthony A. Nichols, Sr. **	 	
(10)	10.23	Amended and Restated Employment Agreement dated as of May 7, 2002 of Gerard H. Sweeney**	 	
(5)	10.24	Amended and Restated Non-Qualified Stock Option Award to Anthony A. Nichols, Sr. **	 	
(5)	10.25	Amended and Restated Non-Qualified Stock Option Award to Gerard H. Sweeney **	 	
(5)	10.26	Severance Agreement (Anthony S. Rimikis) **	 	
(5)	10.27	Third Amendment to Restricted Share Award to Gerard H. Sweeney.**	 	
(5)	10.28	Restricted Share Award to Anthony S. Rimikis.**	 	
(17)	10.29	Restricted Share Award to Gerard H. Sweeney **	 	
(18)	10.30	Fourth Amendment to Restricted Share Award to Gerard H. Sweeney**	 	
(18)	10.31	Severance Agreement (Barbara L. Yamarick)**	 	
(18)	10.32	Severance Agreement (Anthony A. Nichols, Jr.)**	 	
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Exhibits No.	Description	 	
(18)	10.33	Severance Agreement (H. Jeffrey De Vuono)**	 	
(18)	10.34	Severance Agreement (George Sowa)**	 	
(18)	10.35	Severance Agreement (Bradley W. Harris)**	 	
(18)	10.36	Restricted Share Award to Gerard H. Sweeney**	 	
(18)	10.37	Restricted Share Award to Anthony S. Rimikis**	 	
(18)	10.38	Restricted Share Award to Barbara L. Yamarick**	 	
(18)	10.39	Restricted Share Award to Anthony A. Nichols, Jr.**	 	
(18)	10.40	Restricted Share Award to H. Jeffrey De Vuono**	 	
(18)	10.41	Restricted Share Award to George Sowa**	 	
(18)	10.42	Restricted Share Award to Bradley W. Harris**	 	
(19)	10.43	2002 Restricted Share Award for Gerard H. Sweeney**	 	
(19)	10.44	2002 Form of Restricted Share Award for Executive Officers**	 	
(20)	10.45	Third Amended and Restated Credit Agreement	 	
(21)	10.46	Term Credit Agreement	 	
(21)	10.47	Consent and First Amendment to Third Amended and Restated Credit Agreement	 	
(21)	10.48	Second Amendment to Third Amended and Restated Credit Agreement	 	
(22)	10.49	2002 Restricted Share Award to Christopher P. Marr**	 	
(22)	10.50	Severance Agreement to Christopher P. Marr**	 	
(23)	10.51	2002 Non-Qualified Option to Gerard H. Sweeney**	 	
(11)	10.52	Executive Deferred Compensation Plan**	 	
(11)	10.53	2003 Restricted Share Award to Gerard H. Sweeney**	 	
(11)	10.54	2003 Restricted Share Award to Anthony S. Rimikis**	 	
(11)	10.55	2003 Restricted Share Award to Barbara L. Yamarick**	 	
(11)	10.56	2003 Restricted Share Award to Anthony A. Nichols, Jr.**	 	
(11)	10.57	2003 Restricted Share Award to H. Jeffrey DeVuono**	 	
(11)	10.58	2003 Restricted Share Award to George D. Sowa**	 	
(11)	10.59	2003 Restricted Share Award to Bradley W. Harris**	 	
(11)	10.60	2003 Restricted Share Award to Brad A. Molotsky**	 	
(11)	10.61	2003 Restricted Share Award to Christopher P. Marr**	 	
(24)	10.62	Letter to Cohen & Steers Capital Management, Inc.	 	
(7)	10.63	Redemption and Conversion Agreement with Five Arrows Realty Securities III L.L.C.	 	
(25)	10.64	Purchase Agreement with Commonwealth Atlantic Operating Properties Inc.	 	
(26)	12.1	Statement re Computation of Ratios	 	
(26)	14.1	Code of Business Conduct and Ethics	 	
(26)	21.1	List of Subsidiaries of the Company	 	
 	23.1	Consent of PricewaterhouseCoopers LLP	 	
 	31.1	Certification Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934	 	
 	31.2	Certification Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934	 	
 	32.1	Certification Pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934	 	
 	32.2	Certification Pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934	 	
 	 	
1.	Previously filed as an exhibit to the Company’s Form 8-K dated June 9, 1997 and incorporated herein by reference.	
 	 	
2.	Previously filed as an exhibit to the Company’s Form 8-K dated September 10, 1997 and incorporated herein by reference.	
 	 	
3.	Previously filed as an exhibit to the Company’s Form 8-K dated June 3, 1998 and incorporated herein by reference.	
 	 	
4.	Previously filed as an exhibit to the Company’s Form 8-K dated October 13, 1998 and incorporated herein by reference.	
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5.	Previously filed as an exhibit to the Company’s Form 10-K for the fiscal year ended December 31, 1999 and incorporated herein by reference.	
 	 	
6.	Previously filed as an exhibit to the Company’s Form 8-K dated April 26, 1999 and incorporated herein by reference.	
 	 	
7.	Previously filed as an exhibit to the Company’s Form 8-A dated December 29, 2003 and incorporated herein by reference.	
 	 	
8.	Previously filed as an exhibit to the Company’s Form 8-A dated February 5, 2004 and incorporated herein by reference.	
 	 	
9.	Previously filed as an exhibit to the Company’s Form 8-K dated October 14, 2003 and incorporated herein by reference.	
 	 	
10.	Previously filed as an exhibit to the Company’s Registration statement of Form S-11 (File No. 33-4175) and incorporated herein by reference.	
 	 	
11.	Previously filed as an exhibit to the Company’s Form 10-K for the fiscal year ended December 31, 2002 and incorporated herein by reference.	
 	 	
12.	Previously filed as an exhibit to the Company’s Form 8-K dated December 17, 1997 and incorporated herein by reference.	
 	 	
13.	Previously filed as an exhibit to the Company’s Form 8-K dated August 13, 1998 and incorporated herein by reference.	
 	 	
14.	Previously filed as an exhibit to the Company’s Form 8-K dated May 14, 1998 and incorporated herein by reference.	
 	 	
15.	Previously filed as an exhibit to the Company’s Form 8-K dated July 30, 1998 and incorporated herein by reference.	
 	 	
16.	Previously filed as an exhibit to the Company’s Form 8-K dated August 13, 1998 and incorporated herein by reference.	
 	 	
17.	Previously filed as an exhibit to the Company’s Form 10-K for the fiscal year ended December 31, 1997 and incorporated herein by reference.	
 	 	
18.	Previously filed as an exhibit to the Company’s Form 10-K for the fiscal year ended December 31, 2000 and incorporated herein by reference.	
 	 	
19.	Previously filed as an exhibit to the Company’s Form 10-Q for the quarter ended June 30, 2002 and incorporated herein by reference.	
 	 	
20.	Previously filed as an exhibit to the Company’s Form 8-K dated July 12, 2001 and incorporated herein by reference.	
 	 	
21.	Previously filed as an exhibit to the Company’s Form 8-K dated July 16, 2002 and incorporated herein by reference.	
 	 	
22.	Previously filed as an exhibit to the Company’s Form 8-K dated August 27, 2002 and incorporated herein by reference.	
 	 	
23.	Previously filed as an exhibit to the Company’s Form 10-Q for the quarter ended September 30, 2002 and incorporated herein by reference.	
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24.	Previously filed as an exhibit to the Company’s Form 10-Q for the quarter ended June 30, 2003 and incorporated herein by reference.	
 	 	
25.	Previously filed as an exhibit to the Company’s Form 8-K dated February 3, 2004 and incorporated herein by reference.	
 	 	
26.	Previously filed as an exhibit to the Company’s Form 10-K for the year ended December 31, 2003.	
** Management contract or compensatory plan or arrangement.
 	(b)	Reports on Form 8-K	
During the three months ended December 31, 2003 and through March 12, 2004, the Company filed or furnished the following:
 	(i)	Current Report on Form 8-K filed October 14, 2003 (reporting under Items 5 and 7).	
 	 	 	
 	(ii)	Current Report on Form 8-K filed October 15, 2003 (reporting under Items 5 and 7).	
 	 	 	
 	(iii)	Current Report on Form 8-K furnished October 24, 2003 (reporting under Items 7, 9 and 12).	
 	 	 	
 	(iv)	Current Report on Form 8-K filed December 9, 2003 (reporting under Items 5 and 7).	
 	 	 	
 	(v)	Current Report on Form 8-K filed December 24, 2003 (reporting under Item 5).	
 	 	 	
 	(vi)	Current Report on Form 8-K filed December 29, 2003 (reporting under Items 5 and 7).	
 	 	 	
 	(vii)	Current Report on Form 8-K filed January 7, 2004 (reporting under Items 5 and 7).	
 	 	 	
 	(viii)	Current Report on Form 8-K filed February 3, 2004 (reporting under Items 5 and 7).	
 	 	 	
 	(ix)	Current Report on Form 8-K filed February 5, 2004 (reporting under Items 5 and 7).	
 	 	 	
 	(x)	Current Report on Form 8-K furnished February 12, 2004 (reporting under Items 7 and 12).	
 	 	 	
 	(xi)	Current Report on Form 8-K filed February 27, 2004 (reporting under Items 5 and 7).	
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in Plymouth Meeting, Pennsylvania on September 2, 2004.
 	 BRANDYWINE REALTY TRUST	
 	  	
 	By:	/ s/ Gerard H. Sweeney
Gerard H. Sweeney		
 	 	President and Chief Executive Officer 		
 
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Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders
of Brandywine Realty Trust:
In our opinion, the consolidated financial statements listed in the index appearing under Item 15(a)(1) and (2) present fairly, in all material respects, the consolidated financial position of Brandywine Realty Trust and its subsidiaries (the “Company”) at December 31, 2003 and 2002, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2003 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the consolidated financial statements schedules listed in the index appearing under Item 15(a)(1) and (2), present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. These consolidated financial statements and consolidated financial statement schedules are the responsibility of the Company’s management; our responsibility is to express an opinion on these consolidated financial statements and consolidated financial statement schedules based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP

Philadelphia, Pennsylvania
June 18, 2004, except as to Note 21, as to which the date is September 1, 2004.
F-1

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BRANDYWINE REALTY TRUST
CONSOLIDATED BALANCE SHEETS
(in thousands, except number of shares)
 	 	December 31,
	 	
 	 	2003	 	2002	 	
 	 			 			 	
ASSETS	 	 	 	 	 	 	 	
Real estate investments:	 	 	 	 	 	 	 	
Operating properties	 	$	1,869,744	 	$	1,890,009	 	
Accumulated depreciation	 	 	(268,091	)	 	(245,230	)	
 	 			 			 	
 	 	 	1,601,653	 	 	1,644,779	 	
Construction-in-progress	 	 	29,787	 	 	41,986	 	
Land held for development	 	 	63,915	 	 	59,216	 	
 	 			 			 	
 	 	 	1,695,355	 	 	1,745,981	 	
 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	 	8,552	 	 	26,801	 	
Escrowed cash	 	 	14,388	 	 	16,318	 	
Accounts receivable, net	 	 	5,206	 	 	3,657	 	
Accrued rent receivable, net	 	 	26,652	 	 	28,333	 	
Marketable securities	 	 	12,052	 	 	11,872	 	
Assets held for sale	 	 	5,317	 	 	7,666	 	
Investment in real estate ventures, at equity	 	 	15,853	 	 	14,842	 	
Deferred costs, net	 	 	27,269	 	 	29,271	 	
Other assets	 	 	45,132	 	 	34,547	 	
 	 			 			 	
Total assets	 	$	1,855,776	 	$	1,919,288	 	
 	 			 			 	
LIABILITIES AND BENEFICIARIES’ EQUITY	 	 	 	 	 	 	 	
Mortgage notes payable	 	$	462,659	 	$	597,729	 	
Borrowings under Credit Facility	 	 	305,000	 	 	307,000	 	
Unsecured term loan	 	 	100,000	 	 	100,000	 	
Accounts payable and accrued expenses	 	 	30,290	 	 	27,576	 	
Distributions payable	 	 	20,947	 	 	21,186	 	
Tenant security deposits and deferred rents	 	 	16,123	 	 	22,276	 	
Other liabilities	 	 	15,360	 	 	22,006	 	
Liabilities related to assets held for sale	 	 	52	 	 	20	 	
 	 			 			 	
Total liabilities	 	 	950,431	 	 	1,097,793	 	
 	 	 	 	 	 	 	 	
Minority interest	 	 	133,488	 	 	135,052	 	
 	 	 	 	 	 	 	 	
Commitments and contingencies	 	 	—	 	 	—	 	
Beneficiaries’ equity:	 	 	 	 	 	 	 	
Preferred Shares (shares authorized-10,000,000):	 	 	 	 	 	 	 	
7.25% Series A Preferred Shares, $0.01 par value;	 	 	 	 	 	 	 	
issued and outstanding-750,000	 	 	 	 	 	 	 	
in 2003 and 2002	 	 	8	 	 	8	 	
8.75% Series B Preferred Shares, $0.01 par value;	 	 	 	 	 	 	 	
issued and outstanding- no shares	 	 	 	 	 	 	 	
in 2003 and 4,375,000 in 2002	 	 	—	 	 	44	 	
7.50% Series C Preferred Shares, $0.01 par value;	 	 	 	 	 	 	 	
issued and outstanding-2,000,000 in 2003	 	 	 	 	 	 	 	
and no shares issued and outstanding in 2002	 	 	20	 	 	—	 	
Common Shares of beneficial interest, $0.01 par value;	 	 	 	 	 	 	 	
shares authorized-100,000,000; issued and outstanding–	 	 	 	 	 	 	 	
41,040,710 in 2003 and 35,226,315 in 2002	 	 	410	 	 	352	 	
Additional paid-in capital	 	 	936,730	 	 	841,659	 	
Share warrants	 	 	401	 	 	401	 	
Cumulative earnings	 	 	310,212	 	 	225,010	 	
Accumulated other comprehensive loss	 	 	(2,158	)	 	(6,402	)	
Cumulative distributions	 	 	(473,766	)	 	(374,629	)	
 	 			 			 	
Total beneficiaries’ equity	 	 	771,857	 	 	686,443	 	
 	 			 			 	
Total liabilities and beneficiaries’ equity	 	$	1,855,776	 	$	1,919,288	 	
 	 			 			 	
The accompanying notes are an integral part of these consolidated financial statements.
 
F-2

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BRANDYWINE REALTY TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share information)
 	 	Year ended December 31,
	 	
 	 	2003	 	2002	 	2001	 	
 	 			 			 			 	
Revenue:	 	 	 	 	 	 	 	 	 	 	
Rents	 	$	256,944	 	$	248,073	 	$	228,149	 	
Tenant reimbursements	 	 	37,755	 	 	33,261	 	 	31,993	 	
Other	 	 	10,958	 	 	9,700	 	 	10,347	 	
 	 			 			 			 	
Total revenue	 	 	305,657	 	 	291,034	 	 	270,489	 	
 	 	 	 	 	 	 	 	 	 	 	
Operating Expenses:	 	 	 	 	 	 	 	 	 	 	
Property operating expenses	 	 	80,648	 	 	74,956	 	 	70,604	 	
Real estate taxes	 	 	27,887	 	 	25,195	 	 	22,435	 	
Interest	 	 	57,835	 	 	63,522	 	 	67,496	 	
Depreciation and amortization	 	 	60,437	 	 	56,031	 	 	67,224	 	
Administrative expenses	 	 	14,464	 	 	14,804	 	 	15,177	 	
Non-recurring charges	 	 	—	 	 	—	 	 	6,600	 	
 	 			 			 			 	
Total operating expenses	 	 	241,271	 	 	234,508	 	 	249,536	 	
 	 			 			 			 	
Income from continuing operations before equity in income of real estate ventures, net gains on sales and minority interest	 	 	64,386	 	 	56,526	 	 	20,953	 	
Equity in income of real estate ventures	 	 	52	 	 	987	 	 	2,768	 	
 	 			 			 			 	
Income from continuing operations before net gains on sales and minority interest	 	 	64,438	 	 	57,513	 	 	23,721	 	
Net gains on sales of interests in real estate	 	 	20,537	 	 	5	 	 	4,524	 	
 	 			 			 			 	
Income before minority interest	 	 	84,975	 	 	57,518	 	 	28,245	 	
Minority interest attributable to continuing operations	 	 	(9,265	)	 	(9,337	)	 	(7,818	)	
 	 			 			 			 	
Income from continuing operations	 	 	75,710	 	 	48,181	 	 	20,427	 	
Discontinued operations:	 	 	 	 	 	 	 	 	 	 	
Income from discontinued operations	 	 	1,802	 	 	7,061	 	 	14,099	 	
Net gain on disposition of discontinued operations	 	 	9,690	 	 	8,557	 	 	—	 	
Minority interest	 	 	(524	)	 	(815	)	 	(804	)	
 	 			 			 			 	
Income from discontinued operations	 	 	10,968	 	 	14,803	 	 	13,295	 	
 	 			 			 			 	
Net income	 	 	86,678	 	 	62,984	 	 	33,722	 	
Income allocated to Preferred Shares	 	 	(11,906	)	 	(11,906	)	 	(11,906	)	
Preferred Share redemption/conversion charge	 	 	(20,598	)	 	—	 	 	—	 	
 	 			 			 			 	
Income allocated to Common Shares	 	$	54,174	 	$	51,078	 	$	21,816	 	
 	 			 			 			 	
Basic earnings per Common Share:	 	 	 	 	 	 	 	 	 	 	
Continuing operations	 	$	1.13	 	$	0.98	 	$	0.20	 	
Discontinued operations	 	 	0.30	 	 	0.42	 	 	0.37	 	
 	 			 			 			 	
 	 	$	1.43	 	$	1.40	 	$	0.57	 	
 	 			 			 			 	
Diluted earnings per Common Share:	 	 	 	 	 	 	 	 	 	 	
Continuing operations	 	$	1.13	 	$	0.97	 	$	0.20	 	
Discontinued operations	 	 	0.30	 	 	0.42	 	 	0.37	 	
 	 			 			 			 	
 	 	$	1.43	 	$	1.39	 	$	0.57	 	
 	 			 			 			 	
The accompanying notes are an integral part of these consolidated financial statements.
F-3

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BRANDYWINE REALTY TRUST
CONSOLIDATED STATEMENTS OF BENEFICIARIES’ EQUITY AND COMPREHENSIVE INCOME
For the years ended December 31, 2003, 2002 and 2001
(in thousands, except number of shares)
 	 	Number of
Preferred
A Shares	 	Par Value of
Preferred
A Shares	 	Number of
Preferred
B Shares	 	Par Value of
Preferred
B Shares	 	Number of
Preferred
C Shares	 	Par Value of
Preferred
C Shares	 	Number of
Common
Shares	 	Par Value of
Common
Shares	 	Additional
Paid-in
Capital	 	Employee
Stock
Loans	 	Share
Warrants	 	Cumulative
Earnings	 	Accumulated
Other
Comprehensive
Income (Loss)	 	Cumulative
Distributions	 	Total	 	
 	 			 			 			 			 			 			 			 			 			 			 			 			 			 			 			 	
BALANCE, January 1, 2001	 	 	750,000	 	$	8	 	 	4,375,000	 	$	44	 	 	—	 	$	—	 	 	35,681,314	 	$	357	 	$	854,375	 	$	(6,837	)	$	908	 	$	131,256	 	$	(1,731	)	$	(226,212	)	$	752,168	 	
Comprehensive income:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	33,722	 	 	 	 	 	 	 	 	33,722	 	
Other comprehensive income:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cumulative effect of adopting SFAS 133	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(1,300	)	 	 	 	 	 	 	
Unrealized loss on derivative financial instruments	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(3,371	)	 	 	 	 	 	 	
Unrealized gain on available-for-sale securities	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1,815	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 		 	 	 	 	 	 	 	
Total other comprehensive income	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(2,856	)	 	 	 	 	(2,856	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 		 	
Total comprehensive income	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	30,866	 	
Vesting of Restricted Stock	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	175,411	 	 	2	 	 	3,983	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	3,985	 	
Repurchase of Common Shares	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(373,713	)	 	(4	)	 	(7,290	)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(7,294	)	
Employee stock loans used to purchase Common Shares	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	71,276	 	 	1	 	 	1,385	 	 	(1,386	)	 	 	 	 	 	 	 	 	 	 	 	 	 	—	 	
Payment/forgiveness of employee stock loans	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	2,524	 	 	 	 	 	 	 	 	 	 	 	 	 	 	2,524	 	
Accretion of Preferred Share discount	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1,476	 	 	 	 	 	 	 	 	(1,476	)	 	 	 	 	 	 	 	—	 	
Exercise of warrants/options	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	86,647	 	 	 	 	 	(17	)	 	 	 	 	(507	)	 	 	 	 	 	 	 	 	 	 	(524	)	
Preferred Share distributions	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(11,906	)	 	(11,906	)	
Distributions ($1.70 per share)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(61,663	)	 	(61,663	)	
 	 			 			 			 			 			 			 			 			 			 			 			 			 			 			 			 	
BALANCE, December 31, 2001	 	 	750,000	 	 	8	 	 	4,375,000	 	 	44	 	 	—	 	 	—	 	 	35,640,935	 	 	356	 	 	853,912	 	 	(5,699	)	 	401	 	 	163,502	 	 	(4,587	)	 	(299,781	)	 	708,156	 	
Comprehensive income:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	62,984	 	 	 	 	 	 	 	 	62,984	 	
Other comprehensive income:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Unrealized loss on derivative financial instruments	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(2,548	)	 	 	 	 	 	 	
Unrealized gain on available-for-sale securities	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	733	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 		 	 	 	 	 	 	 	
Total other comprehensive income	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(1,815	)	 	 	 	 	(1,815	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 		 	
Total comprehensive income	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	61,169	 	
Vesting of Restricted Stock	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	76,454	 	 	1	 	 	1,895	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1,896	 	
Repurchase of Common Shares	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(491,074	)	 	(5	)	 	(11,048	)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(11,053	)	
Payment/forgiveness of employee stock loans	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1,658	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1,658	 	
Accretion of Preferred Share discount	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1,476	 	 	 	 	 	 	 	 	(1,476	)	 	 	 	 	 	 	 	—	 	
Amortization of stock options	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	43	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	43	 	
Exercise of warrants/options	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(578	)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(578	)	
Preferred Share distributions	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(11,906	)	 	(11,906	)	
Distributions ($1.76 per share)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(62,942	)	 	(62,942	)	
 	 			 			 			 			 			 			 			 			 			 			 			 			 			 			 			 	
BALANCE, December 31, 2002	 	 	750,000	 	 	8	 	 	4,375,000	 	 	44	 	 	—	 	 	—	 	 	35,226,315	 	 	352	 	 	845,700	 	 	(4,041	)	 	401	 	 	225,010	 	 	(6,402	)	 	(374,629	)	 	686,443	 	
Comprehensive income:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	86,678	 	 	 	 	 	 	 	 	86,678	 	
Other comprehensive income:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Unrealized loss on derivative financial instruments	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	4,194	 	 	 	 	 	 	 	
Unrealized gain on available-for-sale securities	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	50	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 		 	 	 	 	 	 	 	
Total other comprehensive income	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	4,244	 	 	 	 	 	4,244	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 		 	
Total comprehensive income	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	90,922	 	
Vesting of Restricted Stock	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	82,912	 	 	1	 	 	1,767	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1,768	 	
Issuance of Preferred Shares	 	 	 	 	 	 	 	 	 	 	 	 	 	 	2,000,000	 	 	20	 	 	 	 	 	 	 	 	47,892	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	47,912	 	
Conversion of Preferred Shares	 	 	 	 	 	 	 	 	(1,093,750	)	 	(11	)	 	 	 	 	 	 	 	1,093,750	 	 	11	 	 	3,828	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(3,828	)	 	–	 	
Redemption of Preferred Shares, net of minority interest	 	 	 	 	 	 	 	 	(3,281,250	)	 	(33	)	 	 	 	 	 	 	 	 	 	 	 	 	 	(74,647	)	 	 	 	 	 	 	 	 	 	 	 	 	 	(16,770	)	 	(91,450	)	
Issuance of Common Shares, net of minority interest	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	4,587,500	 	 	45	 	 	110,937	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	110,982	 	
Conversion of Class A minority interest units	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	50,233	 	 	1	 	 	1,205	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1,206	 	
Payment/forgiveness of employee stock loans	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	2,509	 	 	 	 	 	 	 	 	 	 	 	 	 	 	2,509	 	
Accretion of Preferred Share discount	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	1,476	 	 	 	 	 	 	 	 	(1,476	)	 	 	 	 	 	 	 	—	 	
Amortization of stock options	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	104	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	104	 	
Preferred Share distributions	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(11,906	)	 	(11,906	)	
Distributions ($1.76 per share)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(66,633	)	 	(66,633	)	
 	 			 			 			 			 			 			 			 			 			 			 			 			 			 			 			 	
BALANCE, December 31, 2003	 	 	750,000	 	$	8	 	 	—	 	$	—	 	 	2,000,000	 	$	20	 	 	41,040,710	 	$	410	 	$	938,262	 	$	(1,532	)	$	401	 	$	310,212	 	$	(2,158	)	$	(473,766	)	$	771,857	 	
 	 			 			 			 			 			 			 			 			 			 			 			 			 			 			 			 	
The accompanying notes are an integral part of these consolidated financial statements.
 
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BRANDYWINE REALTY TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
	 	Year ended December 31,
	 	
	 	2003	 	2002	 	2001	 	
 	 			 			 			 	
Cash flows from operating activities:	 	 	 	 	 	 	 	 	 	 	
Net income	 	$	86,678	 	$	62,984	 	$	33,722	 	
Adjustments to reconcile net income to net cash from operating activities:	 	 	 	 	 	 	 	 	 	 	
Depreciation	 	 	54,353	 	 	52,944	 	 	73,031	 	
Amortization:	 	 	 	 	 	 	 	 	 	 	
Deferred financing costs	 	 	2,304	 	 	1,795	 	 	3,790	 	
Deferred leasing costs	 	 	7,032	 	 	5,820	 	 	5,158	 	
Deferred compensation costs	 	 	2,869	 	 	3,182	 	 	3,710	 	
Straight-line rental income	 	 	(5,917	)	 	(5,930	)	 	(6,206	)	
Provision for doubtful accounts	 	 	189	 	 	894	 	 	2,867	 	
Net gain on sales of interests in real estate	 	 	(30,227	)	 	(8,562	)	 	(4,524	)	
Non-recurring charge	 	 	—	 	 	—	 	 	6,600	 	
Impairment loss on assets held-for-sale	 	 	—	 	 	665	 	 	—	 	
Minority interest	 	 	9,789	 	 	10,152	 	 	8,622	 	
Changes in assets and liabilities:	 	 	 	 	 	 	 	 	 	 	
Accounts receivable	 	 	(1,462	)	 	2,582	 	 	(212	)	
Other assets	 	 	(4,232	)	 	11,029	 	 	17,464	 	
Accounts payable and accrued expenses	 	 	1,911	 	 	(6,040	)	 	4,292	 	
Tenant security deposits and deferred rents	 	 	(2,432	)	 	(521	)	 	5,058	 	
Other liabilities	 	 	(2,062	)	 	(2,158	)	 	(1,332	)	
 	 			 			 			 	
Net cash from operating activities	 	 	118,793	 	 	128,836	 	 	152,040	 	
 	 	 	 	 	 	 	 	 	 	 	
Cash flows from investing activities:	 	 	 	 	 	 	 	 	 	 	
Acquisition of properties	 	 	(67,490	)	 	(25,146	)	 	(40,359	)	
Sales of properties, net	 	 	87,461	 	 	78,019	 	 	31,335	 	
Capital expenditures	 	 	(50,885	)	 	(38,787	)	 	(107,405	)	
Investment in real estate ventures	 	 	(521	)	 	(446	)	 	(2,495	)	
Increase in escrowed cash	 	 	1,930	 	 	2,553	 	 	(1,016	)	
Cash distributions from real estate ventures in excess of income	 	 	3,258	 	 	1,969	 	 	5,492	 	
Leasing costs	 	 	(7,821	)	 	(13,124	)	 	(9,234	)	
 	 			 			 			 	
Net cash from investing activities	 	 	(34,068	)	 	5,038	 	 	(123,682	)	
 	 	 	 	 	 	 	 	 	 	 	
Cash flows from financing activites:	 	 	 	 	 	 	 	 	 	 	
Proceeds from notes payable, Credit Facility	 	 	220,000	 	 	15,000	 	 	91,000	 	
Repayment of notes payable, Credit Facility	 	 	(222,000	)	 	(102,325	)	 	(35,000	)	
Proceeds from Term Loan	 	 	–	 	 	100,000	 	 	–	 	
Proceeds from mortgage notes payable	 	 	–	 	 	20,186	 	 	135,165	 	
Repayment of mortgage notes payable	 	 	(82,131	)	 	(48,646	)	 	(127,876	)	
Debt financing costs	 	 	(112	)	 	(658	)	 	(5,557	)	
Repayments on employee stock loans	 	 	2,509	 	 	1,658	 	 	1,024	 	
Proceeds from issuances of shares, net	 	 	159,107	 	 	—	 	 	—	 	
Redemption of Preferred Shares	 	 	(91,422	)	 	—	 	 	—	 	
Repurchases of Common Shares and minority interest units	 	 	—	 	 	(20,165	)	 	(6,494	)	
Distributions paid to shareholders	 	 	(78,754	)	 	(75,022	)	 	(72,534	)	
Distributions to minority interest holders	 	 	(10,171	)	 	(10,560	)	 	(10,667	)	
 	 			 			 			 	
Net cash from financing activities	 	 	(102,974	)	 	(120,532	)	 	(30,939	)	
 	 			 			 			 	
(Decrease) increase in cash and cash equivalents	 	 	(18,249	)	 	13,342	 	 	(2,581	)	
Cash and cash equivalents at beginning of year	 	 	26,801	 	 	13,459	 	 	16,040	 	
 	 			 			 			 	
Cash and cash equivalents at end of year	 	$	8,552	 	$	26,801	 	$	13,459	 	
 	 			 			 			 	
Supplemental disclosure:	 	 	 	 	 	 	 	 	 	 	
Cash paid for interest, net of capitalized interest	 	$	52,645	 	$	61,814	 	$	74,736	 	
 	 	 	 	 	 	 	 	 	 	 	
The accompanying notes are an integral part of these consolidated financial statements.
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BRANDYWINE REALTY TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2003, 2002 AND 2001
1.	ORGANIZATION AND NATURE OF OPERATIONS	
Brandywine Realty Trust, a Maryland Real Estate Investment Trust (collectively with its subsidiaries, the “Company”), is a self-administered and self-managed real estate investment trust (a “REIT”) active in acquiring, developing, redeveloping, leasing and managing office and industrial properties. As of December 31, 2003, the Company’s portfolio included 208 office properties, 25 industrial facilities and one mixed-use property (collectively, the “Properties”) that contained an aggregate of approximately 15.7 million net rentable square feet. The Properties are located in the office and industrial markets in and surrounding Philadelphia, Pennsylvania, New Jersey and Richmond, Virginia. As of December 31, 2003, the Company also held economic interests in ten unconsolidated real estate ventures (the “Real Estate Ventures”) formed with third parties to develop or own commercial properties.
The Company’s interest in its assets is held through Brandywine Operating Partnership, L.P., a Delaware limited partnership (the “Operating Partnership”). The Company is the sole general partner of the Operating Partnership and, as of December 31, 2003, was entitled to approximately 95.8% of the Operating Partnership’s distributions after distributions to holders of then outstanding Series B Preferred Units (as defined in Note 3 below). The Operating Partnership owns a 95% interest in a taxable REIT subsidiary, Brandywine Realty Services Corporation, a Pennsylvania corporation (the “Management Company”), that, as of December 31, 2003, was performing management and leasing services for properties containing an aggregate of approximately 19.3 million net rentable square feet, of which approximately 15.7 million net rentable square feet related to properties owned by the Company and approximately 3.6 million net rentable square feet related to properties owned by third parties. The remaining 5% of the Management Company is owned by a partnership comprised of two executives of the Company.
2.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	
 	
Principles of Consolidation	
The accompanying consolidated financial statements include all accounts of the Company, its majority-owned and/or controlled subsidiaries, which consist principally of the Operating Partnership as well as the Management Company (consolidated subsequent to January 1, 2001, see below). The portion of these entities not owned by the Company is presented as minority interest as of and during the periods consolidated. All intercompany accounts and transactions have been eliminated in consolidation.
See Investments in Unconsolidated Real Estate Ventures in Note 6 for the Company’s treatment of unconsolidated real estate venture interests. All significant intercompany accounts and transactions have been eliminated.
Management Company	
The Management Company, a taxable REIT subsidiary, provides management, leasing, construction, development, redevelopment and other real estate related services for the Company’s properties and for third parties. Prior to December 31, 2000, the Company owned 100% of the Management Company’s non-voting preferred stock and 5% of its voting common stock and accounted for its investment using the equity method. Effective January 1, 2001, the Company converted its non-voting interest in the Management Company to a voting interest. As a result, the Company owns 95% of the Management Company’s equity, has voting control and, therefore, has consolidated the Management Company since January 1, 2001.
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Use of Estimates	
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Management makes significant estimates regarding revenue, impairment of long-lived assets, allowance for doubtful accounts and deferred costs.
Operating Properties	
Operating properties are carried at historical cost less accumulated depreciation and impairment losses. The cost of operating properties reflects their purchase price or development cost. Costs incurred for the acquisition and renovation of an operating property are capitalized to the Company’s investment in that property. Ordinary repairs and maintenance are expensed as incurred; major replacements and betterments, which improve or extend the life of the asset, are capitalized and depreciated over their estimated useful lives. Fully- depreciated assets are removed from the accounts.
Purchase Price Allocation	
The Company allocates the purchase price of properties to net tangible and identified intangible assets acquired based on fair values. Above-market and below-market in-place lease values for acquired properties are recorded based on the present value (using an interest rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) the Company’s estimate of the fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancellable term of the lease. Capitalized above-market lease values are amortized as a reduction of rental income over the remaining non-cancellable terms of the respective leases. Capitalized below-market lease values amortized as an increase of rental income over the remaining non-cancellable terms of the respective leases, including any fixed-rate renewal periods.
The aggregate value of other intangibles acquired is measured based on the difference between (i) the property valued with in-place leases adjusted to market rental rates and (ii) the property valued as if it was vacant. The Company estimates the cost to execute leases with terms similar to the remaining lease terms of the in-place leases, include leasing commissions, legal and other related expenses. This intangible asset is amortized to expense over the remaining term of the respective leases. Company estimates of value are made using methods similar to those used by independent appraisers. Factors considered by the Company in their analysis include an estimate of the carrying costs during the expected lease-up periods considering current market conditions and costs to execute similar leases. The Company also considers information obtained about each property as a result of its pre-acquisition due diligence, marketing and leasing activities in estimating the fair value of the tangible and intangible assets acquired. In estimating carrying costs, the Company includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods, which primarily range from three to twelve months.
The total amount of these other intangible assets is further allocated to tenant relationships and in-place leases based on the Company’s evaluation of the specific characteristics of each tenant’s lease and the Company’s overall relationship with the respective tenant. Characteristics considered by the Company in allocating value to its tenant relationships include the nature and extent of the Company’s business relationship with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and expectations of lease renewals, among other factors. The value of tenant relationship intangibles is amortized over the remaining initial lease term and renewals, but in no event longer than the remaining depreciable life of the building. The value of in-place leases is amortized over the remaining non-cancellable term of the respective leases and any fixed-rate renewal periods.
In the event that a tenant terminates its lease, the unamortized portion of each intangible, including market rate adjustments, in-place lease values and tenant relationship values, would be charged to expense.
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As of December 31, 2003 and 2002, intangible assets and acquired lease liabilities consist of the following:
 	 	As of December 31,
	 	
 	 	2003	 	2002	 	
 	 			 			 	
 	 	(amounts in thousands)	 	
Intangible assets (included in Other Assets and Other Liabilities):	 	 	 	 	 	 	 	
Acquired lease asset, net of accumulated amortization of $345 and $99, respectively	 	$	1,866	 	$	607	 	
Value of In-Place leases, net of accumulated amortization of $564 and $256, respectively	 	 	3,533	 	 	959	 	
Value of tenant relationships, net of accumulated amortization of $84 in 2003	 	 	2,033	 	 	—	 	
 	 			 			 	
Net intangible assets	 	$	7,432	 	$	1,566	 	
 	 			 			 	
Acquired lease liability, net of accumulated amortization of $869 and $558, respectively	 	$	1,305	 	$	1,547	 	

Depreciation and Amortization 
The costs of buildings and improvements are depreciated using the straight-line method based on the following useful lives: buildings and improvements (five to 40 years) and tenant improvements (the shorter of the lease term or the life of the asset).
Effective January 1, 2002, the Company changed the estimated useful lives of various buildings from 25 to 40 years. This change resulted in an increase of net income of $19.0 million or $.53 per share for the year ended December 31, 2002. Management determined the longer period to be a better estimate of the useful lives of the buildings.
Construction in Progress	
Project costs directly associated with the development and construction of a real estate project are capitalized as construction in progress. In addition, interest, real estate taxes and general and administrative expenses that are directly associated with the Company’s development activities are capitalized until completion of the building shell. Once the building shell of a real estate project is completed, the costs capitalized to construction in progress are transferred to land and buildings. Direct construction costs totaling $1.7 million in 2003, $2.2 million in 2002 and $2.7 million in 2001 and interest totaling $1.5 million in 2003, $2.9 million in 2002 and $5.2 million in 2001 were capitalized related to development of certain Properties and land holdings.
Impairment of Long-Lived Assets	
Statement of Financial Accounting Standard No. 144 (“SFAS 144”), Accounting for the Impairment or Disposal of Long-Lived Assets, provides a single accounting model for long-lived assets as held-for-sale, broadens the scope of businesses to be disposed of that qualify for reporting as discontinued operations and changes the timing of recognizing losses on such operations. The company adopted SFAS 144 on January 1, 2002. 
In accordance with SFAS 144, long-lived assets, such as real estate investments and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. Assets to be disposed of are separately presented in the balance sheet and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The other assets and liabilities related to assets classified as held-for-sale are presented separately in the consolidated balance sheet. For the year ended December 31, 2002, the Company recorded an impairment charge associated with an asset held-for-sale (See Note 9). The Company recorded no impairment losses for the years ended December 31, 2003 and 2001.
Cash and Cash Equivalents	
Cash and cash equivalents are highly-liquid investments with original maturities of three months or less. The Company maintains cash equivalents in financial institutions in excess of insured limits, but believes this risk is mitigated by only investing in or through major financial institutions.
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Escrowed Cash	
Restricted cash consists of cash held as collateral to provide credit enhancement for the Company’s mortgage debt, cash for property taxes, capital expenditures and tenant improvements.
Accounts Receivable
Leases with tenants are accounted for as operating leases. Minimum annual rentals under tenant leases are recognized on a straight-line basis over the term of the related lease. Accrued rent receivable represents the amount that straight-line rental income exceeds rents currently due under the lease agreements. Included in current tenant receivables are tenant reimbursements which are comprised of amounts recoverable from tenants for common area maintenance expenses and certain other recoverable expenses that are recognized as revenue in the period in which the related expenses are incurred. As of December 31, 2003 and 2002, no tenant represents more than 10% of accounts receivable.
Tenant receivables and accrued rent receivables are carried net of the allowances for doubtful accounts of $1.5 million and $2.5 million in 2003 and $2.3 million and $2.3 million in 2002. Management’s determination of the adequacy of these allowances is based primarily upon evaluations of historical loss experience, individual receivables and current economic conditions.
Marketable Securities	
The Company accounts for its investments in equity securities according to the provisions of SFAS 115, Accounting for Certain Investments in Debt and Equity Securities, which requires securities classified as “available-for-sale” to be stated at fair value. Adjustments to fair value of available-for-sale securities are recorded as a component of other comprehensive income (loss). A decline in the market value of equity securities below cost that is deemed to be other than temporary results in a reduction in the carrying amount to fair value. The impairment is charged to earnings and a new cost basis for the security is established.
As of December 31, 2003, the Company had no material exposure to market risk (including foreign currency exchange risk, commodity price risk or equity price risk).
Investments in Unconsolidated Real Estate Ventures	
The Company accounts for its investments in unconsolidated Real Estate Ventures under the equity method of accounting as the Company exercises significant influence, but does not control these entities under the provisions of the entities’ governing agreements. These investments are recorded initially at cost, as Investments in Real Estate Ventures, and subsequently adjusted for equity in earnings and cash contributions and distributions.
On a periodic basis, management assesses whether there are any indicators that the value of the Company’s investments in unconsolidated Real Estate Ventures may be impaired. An investment is impaired only if management’s estimate of the value of the investment is less than the carrying value of the investment. To the extent impairment has occurred, the loss shall be measured as the excess of the carrying amount of the investment over the value of the investment. During the year ended December 31, 2003, the Company recorded an impairment charge associated with an investment in a non-operating Real Estate Venture (see Note 9).
Deferred Costs	
Costs incurred in connection with property leasing are capitalized as deferred leasing costs. Deferred leasing costs consist primarily of leasing commissions that are amortized on the straight-line method over the life of the respective lease which generally ranges from one to 15 years. Management re-evaluates the remaining useful lives of leasing costs as economic and market conditions change. Internal direct leasing costs deferred totaled $3.9 million in 2003, $3.6 million in 2002 and $3.1 million in 2001.
Costs incurred in connection with debt financing are capitalized as deferred financing costs and charged to interest expense over the terms of the related debt agreements. Deferred financing costs consist
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primarily of loan fees which are amortized over the related loan term. Total accumulated amortization related to these costs was $5.0 million in 2003 and $3.5 million in 2002.
Other Assets	
As of December 31, 2003, other assets included a direct financing lease of $16.1 million, intangible assets related to property acquisitions of $6.2 million, prepaid real estate taxes of $5.4 million, deposits on properties to be purchased in 2004 totaling $5.1 million, cash surrender value of life insurance of $3.7 million, furniture, fixtures and equipment of $2.1 million and $6.5 million of other assets. As of December 31, 2002, other assets included a direct financing lease of $16.0 million, prepaid real estate taxes of $5.6 million, promissory notes of $4.0 million, furniture, fixtures and equipment of $2.1 million and $6.8 million of other assets.
Fair Value of Financial Instruments	
Carrying amounts reported in the balance sheet for cash, accounts receivable, other assets, accounts payable and accrued expenses, and borrowings under the Credit Facility approximate fair value. Accordingly, these items have been excluded from the fair value disclosures.
Revenue Recognition	
Rental revenue is recognized on the straight-line basis from the later of the date of the origination of the lease or the date of acquisition of the facility subject to existing leases, which averages minimum rents over the terms of the leases. The cumulative difference between lease revenue recognized under this method and contractual lease payment terms is recorded as “accrued rent receivable” on the accompanying balance sheets. The straight-line rent adjustment increased revenue by approximately $5.9 million in 2003, $5.9 million in 2002 and $6.2 million in 2001. The leases also typically provide for tenant reimbursement of common area maintenance and other operating expenses. Deferred rental revenue represents rental revenue received from tenants prior to their due dates.
No tenant represented greater than 10% of the Company’s rental revenue in 2003, 2002 or 2001.
Income Taxes	
The Company elects to be taxed as a real estate investment trust under Sections 856-860 of the Internal Revenue Code. In management’s opinion, the requirements to maintain this election are being met. Accordingly, no provision for Federal income taxes has been reflected in the financial statements.
Earnings and profits, which determine the taxability of distributions to shareholders, differ from net income reported for financial reporting purposes due to differences in cost basis, the estimated useful lives used to compute depreciation, and the allocation of net income and loss for financial versus tax reporting purposes. The tax basis in the Company’s assets was $1.4 billion as of December 31, 2003 and $1.3 billion as of December 31, 2002.
The Company is subject to a 4% Federal excise tax, if sufficient taxable income is not distributed within prescribed time limits. The excise tax equals 4% of the annual amount, if any, by which the sum of (a) 85% of the Company’s ordinary income and (b) 95% of the Company’s net capital gain exceeds cash distributions and certain taxes paid by the Company. No excise tax was incurred in 2003, 2002, or 2001.
The Management Company is subject to Federal and state income taxes. There was no provision required for income taxes in 2003, 2002 and 2001.
Earnings Per Share	
Basic earnings per share is calculated by dividing income applicable to Common Shares by the weighted-average number of shares outstanding during the period. Diluted earnings per share includes the effect of common share equivalents outstanding during the period.
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Stock-Based Compensation Plans	
In December 2002, the Financial Accounting Standards Board issued SFAS 148 (“SFAS 148”), Accounting for Stock-Based Compensation — Transition and Disclosure. SFAS 148 amends SFAS 123 (“SFAS 123”), Accounting for Stock-Based Compensation, to provide alternative methods of transition for an entity that voluntarily adopts the fair value recognition method of recording stock option expense. SFAS 148 also amends the disclosure provisions of SFAS 123 and APB Opinion No. 28, Interim Financial Reporting, to require disclosure in the summary of significant accounting policies of the effects of an entity’s accounting policy with respect to stock options on reported net income and earnings per share in annual and interim financial statements. The Company adopted SFAS 148 on a prospective basis for all grants subsequent to January 1, 2002.
Prior to 2002, the Company accounted for stock options issued under the recognition and measurement provisions of APB Opinion No. 25, Accounting for Stock Issued to Employees and Related Interpretations. The following table illustrates the effect on net income and earnings per share if the fair value based method had been applied to all outstanding and unvested awards in each period (in thousands, except per share amounts):
 	 	Year ended December 31,
	 	
 	 	2003	 	2002	 	2001	 	
 	 			 			 			 	
Net income available to Common Shares, as reported	 	$	54,174	 	$	51,078	 	$	21,816	 	
Add: Stock based compensation expense included in reported net income	 	 	2,740	 	 	2,553	 	 	2,828	 	
Deduct: Total stock based compensation expense determined under fair value recognition method for all awards	 	 	(3,191	)	 	(3,231	)	 	(3,506	)	
 	 			 			 			 	
Pro forma net income available to Common Shares	 	$	53,723	 	$	50,400	 	$	21,138	 	

Earnings per Common Share	 	 	 	 	 	 	 	 	 	 	
Basic — as reported	 	$	1.43	 	$	1.40	 	$	0.57	 	
 	 			 			 			 	
Basic — pro forma	 	$	1.41	 	$	1.38	 	$	0.55	 	

Diluted — as reported	 	$	1.43	 	$	1.39	 	$	0.57	 	
 	 			 			 			 	
Diluted — pro forma	 	$	1.41	 	$	1.37	 	$	0.55	 	

Comprehensive Income	
Comprehensive income or loss is recorded in accordance with the provisions of SFAS 130 (“SFAS 130”), Reporting Comprehensive Income. SFAS 130 establishes standards for reporting comprehensive income and its components in financial statements. Comprehensive income includes unrealized gains and losses on available-for-sale securities and the effective portions of changes in the fair value of derivatives.
Accounting for Derivative Instruments and Hedging Activities	
The Company accounts for its derivative instruments and hedging activities under SFAS No. 133 (“SFAS 133”), Accounting for Derivative Instruments and Hedging Activities, and its corresponding amendments under SFAS No. 138, Accounting for Certain Derivative Instruments and Hedging Activities — An Amendment of SFAS 133. SFAS 133 requires the Company to measure every derivative instrument (including certain derivative instruments embedded in other contracts) at fair value and record them in the balance sheet as either an asset or liability. For derivatives designated as fair value hedges, the changes in fair value of both the derivative instrument and the hedged item are recorded in earnings. For derivatives designated as cash flow hedges, the effective portions of changes in the fair value of the derivative are reported in other comprehensive income. Changes in fair value of derivative instruments and ineffective portions of hedges are recognized in earnings in the current period. For the year ended December 31, 2003, the Company was not party to any derivative contract designated as a fair value hedge.
The Company actively manages its ratio of fixed-to-floating rate debt. To manage its fixed and floating rate debt in a cost-effective manner, the Company, from time to time, enters into interest rate swap agreements as cash flow hedges, under which it agrees to exchange various combinations of fixed and/or variable interest rates based on agreed upon notional amounts. See Note 8.
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New Pronouncements	
As of January 1, 2003, the Company adopted SFAS No 145 (“SFAS 145”), Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections. In adopting SFAS 145, the Company has reclassified an extraordinary item recorded during 2001 relating to the write-off of $1.1 million of unamortized deferred financing costs as interest expense. 
In January 2003, the FASB issued FASB Interpretation No. 46 (“FIN 46”), “Consolidation of Variable Interest Entities,” an interpretation of ARB 51. FIN 46 provides guidance on identifying entities for which control is achieved through means other than through voting rights (a “variable interest entity” or “VIE”), and how to determine when and which business enterprise should consolidate a VIE. This new models for consolidation applies to an entity which either (1) the equity investors (if any) do not have a controlling financial interest or (2) the equity investment at risk is insufficient to finance that entity’s activities without receiving additional subordinated financial interest from other parties. The provisions of this interpretation apply to the first fiscal year or interim period ending after December 15, 2003.
The Company was originally required to implement the consolidation guidance established in Interpretation No. 46 (“FIN 46”), Consolidation of Variable Interest Entities, immediately for new or modified transactions and by July 1, 2003 for the Variable Interest Entities (“VIEs”) with which the Company became involved prior to February 1, 2003. However, in October 2003 and December 2003, the FASB deferred application of FIN 46 twice from July 1, 2003 to December 31, 2003, and then to March 31, 2004 for VIEs entered into prior to February 1, 2003. The Company is in process of determining whether it will need to consolidate previously unconsolidated VIEs or to deconsolidate previously consolidated VIEs. Based upon its relationships with such entities, the Company believes that the implementation of the consolidation guidance will not have a material effect on the Company’s consolidated financial position.
In May 2003, the FASB issued SFAS No. 150 (“SFAS 150”), Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. SFAS 150 generally applies to instruments that are mandatorily redeemable, that represent obligations that will be settled with a variable number of the Company’s shares, or that represent an obligation to purchase a fixed number of the Company’s shares. For instruments within its scope, the statement requires classification as a liability with initial measurement at fair value. Subsequent measurement depends upon the certainty of the terms of the settlement (amount, timing) and whether the obligation will be settled by a transfer of assets or by issuance of a variable number of equity shares. SFAS 150 is applicable now for instruments issued since SFAS 150 was issued, and as of July 1, 2003, for instruments that predate SFAS 150’s issuance. On November 7, 2003, the FASB issued Financial Statement Position 150-3 which among other things deferred indefinitely certain portions of SFAS 150 affecting the accounting for minority interests representing non-controlling interests in finite life entities. The adoption of SFAS 150, as modified, did not have a significant effect at adoption nor is it expected to have a significant prospective impact on the Company’s financial position, results of operations or comprehensive income.
Emerging Issue Task Force 00-21 (“EITF 00-21”), Accounting for Revenue Arrangements with Multiple Deliverables, issued during the fourth quarter of 2003, provides guidance on revenue recognition for revenues derived from a single contract that contains multiple products or services. EITF 00-21 also provides additional requirements to determine when these revenues may be recorded separately for accounting purposes. EITF 00-21 did not impact our consolidated financial statements.
In December 2003, the SEC issued Staff Accounting Bulletin No. 104 (“SAB 104”), Revenue Recognition, which supercedes SAB 101, Revenue Recognition in Financial Statements. SAB 104’s primary purpose is to rescind the accounting guidance contained in SAB 101 related to multiple element revenue arrangements, superceded as a result of the issuance of EITF 00-21. SAB 104 did not impact our consolidated financial statements.
3.	MINORITY INTEREST	
Minority interest is comprised of Class A Units of limited partnership interest (“Class A Units”) and Series B Preferred Units of limited partnership interest (“Series B Preferred Units”). The Operating Partnership issued these interests to persons that contributed assets to the Operating Partnership. The Operating Partnership is obligated to redeem, at the request of a holder, each Class A Unit for cash or one Common Share, at the option of the Company. Each Series B Preferred Unit has a stated value of $50.00
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and is convertible, at the option of the holder, into Class A Units at a conversion price of $28.00. The Series B Preferred Units bear a preferred distribution of 7.25% per annum, subject to an increase in the event quarterly distributions paid to holders of Common Shares exceed $0.51 per share. Income allocated to minority interest includes the amount of the Series B Preferred Unit distribution and the prorata share of net income of the Operating Partnership allocated to the Class A Units. The Company declared distributions of $7.1 million in 2003, 2002 and 2001 to the holders of Series B Preferred Units and $3.1 million in 2003, $3.3 million in 2002 and $3.7 million in 2001 to holders of Class A Units. As of December 31, 2003 and 2002, the Company had the following Class A Units and Series B Preferred Units held by third party investors:
 	 	As of December 31,
	 	
 	 	2003	 	2002	 	
 	 			 			 	
Class A Units	 	 	1,737,203	 	 	1,787,436	 	
Series B Preferred Units	 	 	1,950,000	 	 	1,950,000	 	
Subsequent to December 31, 2003, the Company redeemed all of the Series B Preferred Units (see Note 21).
4.	REAL ESTATE INVESTMENTS	
As of December 31, 2003 and 2002, the carrying value of the Company’s Properties is as follows:
 	 	December 31,
	 	
 	 	2003	 	2002	 	
 	 			 			 	
 	 	(amounts in thousands)	 	
Land	 	$	342,424	 	$	353,111	 	
Building and improvements	 	 	1,426,925	 	 	1,442,819	 	
Tenant improvements	 	 	100,395	 	 	94,079	 	
 	 			 			 	
 	 	$	1,869,744	 	$	1,890,009	 	

5.	ACQUISITIONS AND DISPOSITIONS OF REAL ESTATE INVESTMENTS	
The Company’s acquisitions were accounted for by the purchase method. The results of each acquired property are included in the Company’s results of operations from their respective purchase dates.
2003	
During 2003, the Company sold eight office properties containing an aggregate of approximately 343,000 net rentable square feet, two industrial properties containing an aggregate of approximately 131,000 net rentable square feet and four parcels of land containing an aggregate of approximately 24.1 acres for an aggregate of $45.6 million. In December 2003, the Company sold two office properties containing an aggregate of approximately 633,000 net rentable square feet for an aggregate of $112.8 million, of which $52.9 million of proceeds were used to pay off existing mortgage notes payable secured by the two properties. The Company retained a 20% interest in the venture that purchased the properties. The Company recognized a gain on the partial sale of approximately $18.5 million, which is recorded in net gain on sale of real estate interests due to a continuing 20% interest that the Company has maintained in the properties for the portion sold and deferred the gain on the piece retained.. The gain on sale and historical results for these properties have not been reflected as discontinued operations because of the Company’s continuing involvement. The Company also purchased five office properties containing approximately 360,000 net rentable square feet and one parcel of land containing approximately 10.0 acres for an aggregate of $67.8 million.
2002	
During 2002, the Company sold 23 office properties containing an aggregate of 1.4 million net rentable square feet, 20 industrial properties containing an aggregate of .9 million net rentable square feet and two parcels of land containing an aggregate of 12.8 acres for an aggregate of $190.8 million, realizing a net gain of $8.6 million before minority interest. The Company also purchased seven office properties containing 617,000 net rentable square feet and one parcel of land containing 9.0 acres for an aggregate of $99.1 million.
 
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2001	
During 2001, the Company sold three office and eight industrial properties, containing 440,000 net rentable square feet, and four parcels of land, containing 15.8 acres, for $31.3 million, realizing a net gain of $4.5 million. Seven of the properties were sold for $21.6 million realizing an aggregate gain of $4.3 million, four of the properties were sold for $7.1 million, realizing an aggregate loss of $.7 million and four land parcels were sold for $2.6 million realizing an aggregate gain of $.9 million. The Company also acquired two office properties, containing 146,000 net rentable square feet, and three parcels of land, containing 36.0 acres, for $31.5 million, of which $4.2 million was satisfied with an exchange of property.
In addition to the sales and acquisitions above, the Company consummated an exchange of properties with Prentiss Properties Acquisition Partners, L.P. (“Prentiss”) during 2001. The Company acquired from Prentiss 30 properties (29 office and 1 industrial) containing 1.6 million net rentable square feet and 6.9 acres of developable land for total consideration of $215.2 million. The Company conveyed to Prentiss four office properties located in Northern Virginia that contain an aggregate of 657,000 net rentable square feet, assumed $79.7 million of mortgage debt secured by certain of the Prentiss properties, issued a $7.8 million promissory note, paid $15.9 million at closing and agreed to make additional payments totaling $7.0 million (including $5.4 million of payments discounted at 7.5%) over a three-year period subsequent to closing. The Company also contributed to Prentiss its interest in a real estate venture that owns two additional office properties that contain an aggregate of 452,000 net rentable square feet and received a combination of preferred and common units of limited partnership interest in Prentiss having a value of $10.7 million, as of the closing. In addition as part of the Prentiss transaction in June 2001, the Company purchased a 103,000 square foot building then under construction for $4.2 million and six acres of related developable land for $5.7 million.
6.	INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES	
As of December 31, 2003, the Company had an aggregate investment of approximately $15.9 million in ten Real Estate Ventures (net of returns of investment received by the Company). The Company formed these ventures with unaffiliated third parties to develop office properties or to acquire land in anticipation of possible development of office properties. Nine of the Real Estate Ventures own ten office buildings that contain an aggregate of approximately 1.8 million net rentable square feet and one Real Estate Venture developed a hotel property that contains 137 rooms.
The Company accounts for its non-controlling interests in the Real Estate Ventures using the equity method. Non-controlling ownership interests generally range from 6% to 65%. Ownership percentages represent the Company’s entitlement to residual distributions after payments of priority returns. The Company’s investments, initially recorded at cost, are subsequently adjusted for the Company’s net equity in the ventures’ income or loss and cash contributions and distributions.
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The Company’s investment in Real Estate Ventures as of December 31, 2003 is as follows (in thousands):
 	 	Ownership
Percentage (1)	 	Carrying
Amount	 	Real Estate
Venture
Debt at 100%	 	Company’s Share
of Real Estate
Venture
Income (Loss)	 	Current
Interest
Rate	 	Debt
Maturity	 	
 	 			 			 			 			 			 			 	
Two Tower Bridge Associates	 	 	35	%	$	2,409	 	$	10,501	 	$	290	 	 	6.82%	 	 	May-08	 	
Four Tower Bridge Associates	 	 	65	%	 	2,454	 	 	11,000	 	 	(21	)	 	6.62%	 	 	Feb-11	 	
Five Tower Bridge Associates	 	 	15	%	 	—	 	 	30,600	 	 	—	 	 	6.77%	 	 	Feb-09	 	
Six Tower Bridge Associates	 	 	65	%	 	113	 	 	15,683	 	 	(46	)	 	7.79%	 	 	Aug-12	 	
Eight Tower Bridge Associates	 	 	6	%	 	1,147	 	 	38,219	 	 	(189	)	 	3.34%	 	 	Feb-05	 	
Tower Bridge Inn Associates	 	 	50	%	 	2,291	 	 	11,547	 	 	(235	)	 	8.50%	 	 	Apr-07	 	
1000 Chesterbrook Boulevard	 	 	50	%	 	3,373	 	 	27,860	 	 	456	 	 	6.88%	 	 	Nov-11	 	
PJP Building Two, LC	 	 	30	%	 	15	 	 	5,738	 	 	30	 	 	6.12%	 	 	Nov-23	 	
PJP Building Five, LC	 	 	25	%	 	238	 	 	5,753	 	 	94	 	 	2.69%	 	 	Oct-05	 	
Macquarie	 	 	20	%	 	3,813	 	 	74,500	 	 	64	 	 	4.62%	 	 	Jan-09	 	
Florig, LP (2)	 	 	 30	%	 	 —	 	 	 —	 	 	 (861	)	 	 N/A	 	 	 N/A	 	
Invesco Partnership, L.P. (3)	 	 	 35	%	 	 —	 	 	 —	 	 	 470	 	 	 N/A	 	 	 N/A	 	

 	 	 	 	 	$	15,853	 	$	231,401	 	$	52	 	 	 	 	 	 	 	
 	 	 	 	 		 		 		 	 	 	 	 	 	 	
(1)	Ownership percentage represents the Company’s entitlement to residual distributions after payments of priority returns.	
  		
(2)	During 2003, the Company recorded an impairment charge of $861,000 associated with this non-operating real estate venture. This amount consisted primarily of legal and acquisition costs related to a parcel of land that ultimately was not acquired.	
  		
(3)	Company’s interest consists solely of a residual profits interest.		
The following is a summary of the financial position of the unconsolidated Real Estate Ventures in which the Company had investment interests as of December 31, 2003 and 2002 (in thousands):
 	 	December 31,	 	
 	 				 	
 	 	2003	 	2002	 	
 	 			 			 	
Net property	 	$	322,196	 	$	193,552	 	
Other assets	 	 	29,982	 	 	20,163	 	
Liabilities	 	 	27,900	 	 	3,186	 	
Debt	 	 	231,401	 	 	149,129	 	
Equity	 	 	92,877	 	 	61,400	 	
Company’s share of equity	 	 	15,853	 	 	14,842	 	
The following is a summary of results of operations of the unconsolidated Real Estate Ventures in which the Company had interests as of December 31, 2003, 2002 and 2001 (in thousands):
 	 	Year ended December 31,
	 	
 	 	2003	 	2002	 	2001	 	
 	 			 			 			 	
Revenue	 	$	29,703	 	$	27,219	 	$	24,117	 	
Operating expenses	 	 	11,576	 	 	10,406	 	 	8,237	 	
Interest expense, net	 	 	9,585	 	 	9,212	 	 	7,495	 	
Depreciation and amortization	 	 	8,085	 	 	5,531	 	 	3,211	 	
Net (loss) income	 	 	457	 	 	2,070	 	 	5,174	 	
Company’s share of income	 	 	52	 	 	987	 	 	2,768	 	
The following is a summary of the financial position as of December 31, 2003 and the results of operations for the year ended December 31, 2003 for each of the unconsolidated Real Estate Ventures in which the Company had interests as of December 31, 2003 (in thousands):
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 	 	1000
Chesterbrook
Boulevard
Partnership	 	Two
Tower
Bridge
Associates	 	Four
Tower
Bridge
Associates	 	Five
Tower
Bridge
Associates	 	Six
Tower
Bridge
Associates	 	Eight
Tower
Bridge
Associates	 	Tower
Bridge Inn
Associates	 	PJP Building
Two, LC	 	PJP Building
Five, LC	 	BDN/
Macquire
LLC	 	Total	 	
 	 			 			 			 			 			 			 			 			 			 			 			 	
Assets	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net Property	 	$	30,885	 	$	12,488	 	$	13,038	 	$	39,026	 	$	15,143	 	$	57,270	 	$	15,149	 	$	5,642	 	$	6,684	 	$	126,871	 	$	322,196	 	
Other Assets	 	 	3,238	 	 	740	 	 	613	 	 	4,429	 	 	1,151	 	 	2,063	 	 	947	 	 	747	 	 	678	 	 	15,376	 	 	29,982	 	
 	 			 			 			 			 			 			 			 			 			 			 			 	
Total Assets	 	$	34,123	 	$	13,228	 	$	13,651	 	$	43,455	 	$	16,294	 	$	59,333	 	$	16,096	 	$	6,389	 	$	7,362	 	$	142,247	 	$	352,178	 	

Liabilities and Equity	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other Liabilities	 	$	244	 	$	378	 	$	240	 	$	967	 	$	487	 	$	556	 	$	342	 	$	220	 	$	47	 	$	24,419	 	$	27,900	 	
Debt	 	 	27,860	 	 	10,501	 	 	11,000	 	 	30,600	 	 	15,683	 	 	38,219	 	 	11,547	 	 	5,738	 	 	5,753	 	 	74,500	 	 	231,401	 	
 	 			 			 			 			 			 			 			 			 			 			 			 	
Total Liabilities	 	 	28,104	 	 	10,879	 	 	11,240	 	 	31,567	 	 	16,170	 	 	38,775	 	 	11,889	 	 	5,958	 	 	5,800	 	 	98,919	 	 	259,301	 	
Equity	 	 	6,019	 	 	2,349	 	 	2,411	 	 	11,888	 	 	124	 	 	20,558	 	 	4,207	 	 	431	 	 	1,562	 	 	43,328	 	 	92,877	 	
 	 			 			 			 			 			 			 			 			 			 			 			 	
Total Liabilities and Equity	 	$	34,123	 	$	13,228	 	$	13,651	 	$	43,455	 	$	16,294	 	$	59,333	 	$	16,096	 	$	6,389	 	$	7,362	 	$	142,247	 	$	352,178	 	

Revenues	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Revenues	 	$	5,079	 	$	2,057	 	$	2,255	 	$	5,976	 	$	2,966	 	$	1,507	 	$	4,245	 	$	915	 	$	855	 	$	788	 	$	26,643	 	
Tenant reimbursements and other	 	 	526	 	 	376	 	 	397	 	 	466	 	 	518	 	 	109	 	 	—	 	 	12	 	 	308	 	 	348	 	 	3,060	 	
 	 			 			 			 			 			 			 			 			 			 			 			 	
Total Revenue	 	 	5,605	 	 	2,433	 	 	2,652	 	 	6,442	 	 	3,484	 	 	1,616	 	 	4,245	 	 	927	 	 	1,163	 	 	1,136	 	 	29,703	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating Expenses	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Property Operating Expenses	 	 	743	 	 	744	 	 	843	 	 	1,545	 	 	907	 	 	1,214	 	 	2,483	 	 	357	 	 	327	 	 	219	 	 	9,382	 	
Real Estate Taxes	 	 	430	 	 	148	 	 	148	 	 	382	 	 	233	 	 	363	 	 	265	 	 	49	 	 	60	 	 	112	 	 	2,190	 	
Depreciation and Amortization	 	 	1,239	 	 	367	 	 	676	 	 	2,009	 	 	807	 	 	1,567	 	 	711	 	 	210	 	 	236	 	 	263	 	 	8,085	 	
Interest	 	 	1,929	 	 	479	 	 	728	 	 	2,004	 	 	1,231	 	 	1,635	 	 	990	 	 	205	 	 	164	 	 	220	 	 	9,585	 	
Administrative Expenses	 	 	4	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	—	 	 	4	 	
 	 			 			 			 			 			 			 			 			 			 			 			 	
Total Operating Expenses	 	 	4,345	 	 	1,738	 	 	2,395	 	 	5,940	 	 	3,178	 	 	4,779	 	 	4,449	 	 	821	 	 	787	 	 	814	 	 	29,246	 	
 	 			 			 			 			 			 			 			 			 			 			 			 	
Net Income	 	$	1,260	 	$	695	 	$	257	 	$	502	 	$	306	 	$	(3,163	)	$	(204	)	$	106	 	$	376	 	$	322	 	$	457	 	

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As of December 31, 2003, the aggregate principal payments of non-recourse debt payable to third-parties is as follows (in thousands):
2004	 	$	1,644	 	
2005	 	 	45,542	 	
2006	 	 	1,823	 	
2007	 	 	12,411	 	
2008 and thereafter	 	 	169,981	 	
 	 		 	
 	 	$	231,401	 	
 	 		 	
As of December 31, 2003, the Company had guaranteed repayment of approximately $17.4 million of loans on behalf of the Real Estate Ventures, including a $16.2 million guaranty that terminated in January 2004. See Item 2. Properties — Real Estate Ventures. The Company also provides customary environmental indemnities in connection with construction and permanent financing both for its own account and on behalf of its Real Estate Ventures.
7.	INDEBTEDNESS	
 	
Credit Facility	
 	
The Company utilizes credit facility borrowings for general business purposes, including the acquisition of properties and the repayment of other debt. The Company maintains a $500 million unsecured credit facility (the “Credit Facility”) that matures in June 2004. Borrowings under the Credit Facility bear interest at 30-day LIBOR (LIBOR was 1.12% at December 31, 2003) plus 1.5% per annum, with the spread over LIBOR subject to reductions from .10% to .25% or increases of .25% based on the Company’s leverage. As of December 31, 2003, the Company had $305.0 million of borrowings and $10.7 million of letters of credit outstanding under the Credit Facility, leaving $184.3 million of unused availability. The weighted-average interest rate on the Company’s unsecured credit facilities was 4.60% in 2003, 5.41% in 2002, and 6.48% in 2001.	
  
Unsecured Term Loan	
The Company also maintains a $100 million term loan. The term loan is unsecured and matures on July 15, 2005, subject to two extensions of one year each upon payment of an extension fee and the absence of any defaults at the time of each extension. There are no scheduled principal payments prior to maturity. The term loan bears interest at a spread over the one, two, three or six month LIBOR that varies between 1.05% and 1.90% per annum (1.12% as of December 31, 2003), based on the Company’s leverage ratio. The weighted-average interest rate on the Company’s term loan was 3.0% in 2003 and 3.0% in 2002.
Mortgage Notes Payable	
As of December 31, 2003, the Company had $462.7 million of mortgage notes payable, secured by 93 of the Properties and certain land holdings. Fixed rate mortgages, totaling $402.3 million, require payments of principal and/or interest (or imputed interest) at rates ranging from 7.00% to 9.25% per annum and mature on dates from November 2004 through July 2027. Variable rate mortgages, totaling $60.4 million, require payments of principal and/or interest at rates ranging from 30-day LIBOR plus .76% to 1.60% per annum or 75% of prime (prime rate was 4.00% at December 31, 2003) and mature on dates from March 2004 through July 2027. The weighted-average interest rate on the Company’s mortgages was 7.09% in 2003, 7.27% in 2002, and 7.39% in 2001.
Debt Covenants	
The Credit Facility and Term Loan require the maintenance of certain ratios related to minimum net worth, debt-to-total capitalization and fixed charge coverage and various non-financial covenants. As of December 31, 2003, the Company was in compliance with all debt covenants. As of December 31, 2003, the carrying value of the Company’s debt was below fair market value by approximately $85.7 million, as determined by using year-end interest rates and market conditions.
Principal Payments	
The following table outlines the timing of payment requirements related to the Company’s indebtedness as of December 31, 2003:
 
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 	 	Payments by Period (in thousands)
	 	
 	 	 	 	Less than	 	 	 	 	 	More than	 	
 	 	Total	 	1 Year	 	1-3 Years	 	3-5 Years	 	5 Years	 	
 	 			 			 			 			 			 	
Mortgage notes payable:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Fixed rate	 	$	402,321	 	$	10,277	 	$	24,759	 	$	40,259	 	$	327,026	 	
Variable rate	 	 	24,815	 	 	172	 	 	407	 	 	552	 	 	23,684	 	
Construction loans	 	 	35,523	 	 	35,523	 	 	—	 	 	—	 	 	—	 	
 	 			 			 			 			 			 	
 	 	 	462,659	 	 	45,972	 	 	25,166	 	 	40,811	 	 	350,710	 	
Revolving credit facility	 	 	305,000	 	 	305,000	 	 	—	 	 	—	 	 	—	 	
Unsecured debt	 	 	100,000	 	 	—	 	 	100,000	 	 	—	 	 	—	 	
 	 			 			 			 			 			 	
 	 	$	867,659	 	$	350,972	 	$	125,166	 	$	40,811	 	$	350,710	 	

8.	RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS	
 	
Risk Management	
In the normal course of its on-going business operations, the Company encounters economic risk. There are three main components of economic risk: interest rate risk, credit risk and market risk. The Company is subject to interest rate risk on its interest-bearing liabilities. Credit risk is the risk of inability or unwillingness of tenants to make contractually required payments. Market risk is the risk of declines in the value of properties due to changes in rental rates, interest rates or other market factors affecting the valuation of properties held by the Company.
Use of Derivative Financial Instruments	
The Company’s use of derivative instruments is limited to the utilization of interest rate agreements or other instruments to manage interest rate risk exposures and not for speculative purposes. The principal objective of such arrangements is to minimize the risks and/or costs associated with the Company’s operating and financial structure, as well as to hedge specific transactions. The counterparties to these arrangements are major financial institutions with which the Company and its affiliates may also have other financial relationships. The Company is potentially exposed to credit loss in the event of non-performance by these counterparties. However, because of the high credit ratings of the counterparties, the Company does not anticipate that any of the counterparties will fail to meet these obligations as they come due. The Company does not hedge credit or property value market risks.
The Company formally assesses, both at inception of the hedge and on an on-going basis, whether each derivative is highly-effective in offsetting changes in cash flows of the hedged item. If management determines that a derivative is not highly-effective as a hedge or if a derivative ceases to be a highly-effective hedge, the Company will discontinue hedge accounting prospectively.
The following table summarizes the terms and fair values of the Company’s derivative financial instruments at December 31, 2003 (in thousands).
 	 	 	 	Notional	 	 	 	 	 	Fair	 	
Hedge Product	 	Hedge Type	 	Amount	 	Strike	 	Maturity	 	Value (Liability)	 	
	 			 			 			 			 			 	
Cap	 	 	Cash flow	 	$	28,000	 	 	8.700	%	 	7/12/2004	 	$	—	 	
Swap	 	 	Cash flow	 	 	100,000	 	 	4.230	%	 	6/29/2004	 	 	(1,733	)	
Swap	 	 	Cash flow	 	 	50,000	 	 	4.215	%	 	6/29/2004	 	 	(863	)	
Swap	 	 	Cash flow	 	 	25,000	 	 	4.215	%	 	6/29/2004	 	 	(431	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 		 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	(3,027	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 		 	
The Company has entered into interest rate swap and rate cap agreements designated as cash flow hedges that are designed to reduce the impact of interest rate changes on its variable rate debt. At December 31, 2003, the Company had interest rate swap agreements for notional principal amounts aggregating $175 million. The swap agreements effectively fix the 30-day LIBOR interest rate on $100 million of Credit Facility borrowings at 4.230% per annum and on $75 million of Credit Facility borrowings at 4.215% per annum, in each case until June 2004. The weighted-average interest rate on borrowings under the Credit
 
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Facility, including the effect of cash flow hedges, was 4.60% in 2003, 5.41% in 2002 and 6.48% in 2001. The interest rate cap agreement effectively limits the interest rate on a mortgage with a notional value of $28 million at 8.7% per annum until July 2004. The notional amount at December 31, 2003 provides an indication of the extent of the Company’s involvement in these instruments at that time, but does not represent exposure to credit, interest rate or market risks.
As of December 31, 2003, the maximum length of time until which the Company was hedging its exposure to the variability in future cash flows was through June 2004. There was no gain or loss reclassified from accumulated other comprehensive loss into earnings during 2003, 2002 and 2001 as a result of the discontinuance of a cash flow hedge due to the probability of the original forecasted transaction not occurring.
Over time, the unrealized gains and losses held in Other Comprehensive Income (“OCI”) will be reclassified to earnings in the same period(s) in which the hedged items are recognized in earnings. The current balance held in OCI is expected to be reclassified to earnings over the lives of the current hedging instruments, or for realized losses on forecasted debt transactions, over the related term of the debt obligation, as applicable. The Company expects that $3.0 million of net hedging losses will be reclassified into earnings over the next twelve months.
Concentration of Credit Risk	
Concentrations of credit risk arise when a number of tenants related to the Company’s investments or rental operations are engaged in similar business activities, or are located in the same geographic region, or have similar economic features that would cause their inability to meet contractual obligations, including those to the Company, to be similarly affected. The Company regularly monitors its tenant base to assess potential concentrations of credit risk. Management believes the current credit risk portfolio is reasonably well diversified and does not contain any unusual concentration of credit risk. No tenant accounted for 10% or more of the Company’s rents during 2003, 2002 and 2001. See Note 12 for geographic segment information.
9.	DISCONTINUED OPERATIONS	
For the years ended December 31, 2003, 2002 and 2001, income from discontinued operations relates to 54 properties containing approximately 2.8 million net rentable square feet that the Company sold between January 1, 2002 and December 31, 2003 and two properties containing approximately 82,000 net rentable square feet that the Company has designated as “held-for-sale” as of December 31, 2003. The following table summarizes information for two properties designated as held-for-sale as of December 31, 2003 and December 31, 2002:
 	 	December 31,	
 	 		
 	 	2003	 	2002	
 	 			 			
 	 	(amounts in thousands) 	
 	 	 	 	 	 	 	
Real Estate Investments:	 	 	 	 	 	 	
Operating Properties	 	$	6,143	 	$	8,729	
Accumulated depreciation	 	 	(906)	 	 	(1,235)	
 	 		 	 		
 	 	 	5,237	 	 	7,494	
Construction-in-progress	 	 	—	 	 	55 	
 	 			 			
 	 	 	5,237	 	 	7,549	
 	 	 	 	 	 	 	
Accrued rent receivable	 	 	65	 	 	87	
Deferred costs, net	 	 	15	 	 	2	
Other assets	 	 	—	 	 	28	
 	 		 			
 	 	$	5,317	 	$	7,666	
 	 		 			
Tenant security deposits and deferred rents	 	$	52	 	$	20	
 	 		 			
The following table summarizes revenue and expense information for the 54 properties sold since January 1, 2002 and the two properties designated as held-for-sale as of December 31, 2003 (in thousands):
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 	 	Year Ended December 31,
	 	
 	 	2003	 	2002	 	2001	 	
 	 			 			 			 	
Revenue:	 	 	 	 	 	 	 	 	 	 	
Rents	 	$	5,090	 	$	14,568	 	$	34,631	 	
Tenant reimbursements	 	 	781	 	 	2,146	 	 	5,258	 	
Other	 	 	35	 	 	665	 	 	447	 	
 	 			 			 			 	
Total revenue	 	 	5,906	 	 	17,379	 	 	40,336	 	
 	 	 	 	 	 	 	 	 	 	 	
Expenses:	 	 	 	 	 	 	 	 	 	 	
Property operating expenses	 	 	2,264	 	 	4,676	 	 	9,938	 	
Real estate taxes	 	 	892	 	 	2,244	 	 	5,334	 	
Depreciation and amortization	 	 	948	 	 	2,733	 	 	10,965	 	
Impairment loss on assets held-for-sale	 	 	—	 	 	665	 	 	—	 	
 	 			 			 			 	
Total operating expenses	 	 	4,104	 	 	10,318	 	 	26,237	 	
 	 	 	 	 	 	 	 	 	 	 	
Income from discontinued operations before net gain on sale	 	 	 	 	 	 	 	 	 	 	
   of interests in real estate and minority interest	 	 	1,802	 	 	7,061	 	 	14,099	 	
Net gain on sales of interest in real estate	 	 	9,690	 	 	8,557	 	 	—	 	
Minority interest	 	 	(524	)	 	(815	)	 	(804	)	
 	 			 			 			 	
Income from discontinued operations	 	$	10,968	 	$	14,803	 	$	13,295	 	
 	 			 			 			 	
In 2002, the Company recorded an impairment charge of $665,000 in its consolidated statements of operations related to one of the assets held-for-sale.
Discontinued operations have not been segregated in the consolidated statements of cash flows. Therefore, amounts for certain captions will not agree with respective data in the Consolidated Statements of Operations.
10.	PREFERRED SHARES AND BENEFICIARIES’ EQUITY	
In 1998, the Company issued $37.5 million of convertible preferred shares with a 7.25% coupon rate (the Series A Preferred Shares). Each Series A Preferred Share has a stated value of $50.00 and is convertible into Common Shares, at the option of the holder, at a conversion price of $28.00. The Series A Preferred Shares distribution is subject to an increase, if quarterly distributions paid to Common Share holders exceeds $0.51 per share. The Series A Preferred Shares are perpetual and may be redeemed, at the Company’s option, at par beginning in January 2004.
In 1999, the Company issued $105.0 million of convertible preferred shares with an 8.75% coupon rate (the Series B Preferred Shares) for net proceeds of $94.8 million. Each Series B Preferred Share was convertible into one Common Shares and was entitled to quarterly dividends equal to the greater of $0.525 per share or the quarterly dividend on a Common Share. As part of the transaction in which the Company issued Series B Preferred Shares, the Company issued the holder of the Series B Preferred Shares seven-year warrants exercisable for 500,000 Common Shares at an exercise price of $24.00 per share.
On December 30, 2003, the holder converted 1,093,750 shares of the Series B Preferred Shares into 1,093,750 Common Shares, and the Company redeemed the remaining 3,281,250 Series B Preferred Shares at $27.50 per share for approximately $90.2 million (plus accrued distributions thereon for the period from October 1, 2003 through the redemption date) and purchased 250,000 warrants with an exercise price of $24.00 per share for approximately $1.2 million. The Company incurred a charge of $20.6 million associated with the redemption/conversion of the Series B Preferred Shares.
On December 30, 2003, the Company also issued 2,000,000 shares of 7.50% Series C Cumulative Redeemable Preferred Shares for net proceeds of $48.1 million. The Series C Preferred Shares are perpetual. The Company may not redeem Series C Preferred Shares before December 30, 2008 except to preserve its REIT status. On or after December 30, 2008, the Company, at its option, may redeem Series C Preferred Shares, in whole or in part, by paying $25.00 per share plus accrued but unpaid dividends.
The Company’s Board of Trustees has approved a share repurchase program authorizing the Company to repurchase up to 4,000,000 of its outstanding Common Shares. Through December 31, 2003, the
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Company had repurchased 3.2 million of its Common Shares at an average price of $17.75 per share. Under the share repurchase program, the Company has the authority to repurchase an additional 762,000 shares. No time limit has been placed on the duration of the share repurchase program. The following table summarizes the share repurchases during the three years ended December 31, 2003:
 	 	Year ended December 31,
	 	
 	 	2003	 	2002	 	2001	 	
 	 			 			 			 	
Repurchased amount (shares)	 	 	—	 	 	491,074	 	 	373,713	 	
Repurchased amount ($, in thousands)	 	$	—	 	$	11,053	 	$	7,294	 	
Average price per share	 	$	—	 	$	22.51	 	$	19.52	 	
The following table summarizes the Class A Units tendered for redemption in cash during the three years ended December 31, 2003:
 	 	Year ended December 31,
	 	
 	 	2003	 	2002	 	2001	 	
 	 			 			 			 	
Repurchased amount (units)	 	 	—	 	 	364,222	 	 	3,247	 	
Repurchased amount ($, in thousands)	 	$	—	 	$	8,536	 	$	64	 	
Average price per unit	 	$	—	 	$	23.44	 	$	19.72	 	
At December 31, 2003, 362,321 unvested restricted Common Shares were held by employees of the Company. The restricted shares are amortized over their respective vesting periods of three to eight years from dates of the original award. Included in administrative expenses, the Company recorded compensation expense of $2.6 million in 2003, $2.5 million in 2002 and $2.8 million in 2001 related to these shares.
As of December 31, 2003, there were warrants outstanding exercisable for 250,000 Common Shares at an exercise price of $24.00.
11.	STOCK BASED COMPENSATION AND EMPLOYEE BENEFITS	
The Company maintains a plan that authorizes the issuance of various equity-based awards including incentive stock options. The terms and conditions of option awards are determined by the Board of Trustees. Incentive stock options may not be granted at exercise prices less than fair value of the stock at the time of grant. Options granted by the Company generally vest over two to five years. All options awarded by the Company to date are non-qualified stock options. As of December 31, 2003, the Company is authorized to issue five million equity-based awards of which 1.3 million shares remain available for future issuance under the plan.
The following table summarizes option activity for the three years ended December 31, 2003: 

 	 	Number	 	Weighted-	 	 	 	 	 	 	 	
 	 	of Shares	 	Average	 	Grant Price Range	 	
 	 	Under	 	Exercise	 		 	
 	 	Option	 	Price	 	From	 	To	 	
 	 			 			 			 			 	
Balance at January 1, 2001	 	 	2,623,714	 	$	26.36	 	$	6.21	 	$	29.04	 	
Exercised	 	 	(83,333	)	 	19.50	 	 	19.50	 	 	19.50	 	
Canceled	 	 	(61,582	)	 	27.53	 	 	25.25	 	 	29.04	 	
 	 		 	 	 	 	 	 	 	 	 	 	
Balance at December 31, 2001	 	 	2,478,799	 	 	26.56	 	 	6.21	 	 	29.04	 	
Granted	 	 	100,000	 	 	19.50	 	 	19.50	 	 	19.50	 	
Exercised	 	 	(55,000	) 	 	19.50	 	 	19.50	 	 	19.50	 	
Canceled	 	 	(151,172	)	 	22.22	 	 	19.50	 	 	29.04	 	
 	 		 	 	 	 	 	 	 	 	 	 	
Balance at December 31, 2002 and 2003	 	 	2,372,627	 	 	26.70	 	 	6.21	 	 	29.04	 	
 	 		 	 	 	 	 	 	 	 	 	 	
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The following table summarizes stock options outstanding as of December 31, 2003:
 	 	 	 	 Weighted-	 	 	 	 	 	 	 	 	 	
 	 	 	 	Average	 	Weighted-	 	 	 	Weighted-	 	
Range of	 	Number of	 	Remaining	 	Average	 	Number of	 	Average	 	
Exercise	 	Options	 	Contractual	 	Exercise	 	Options	 	Exercise	 	
Prices	 	Outstanding	 	Life	 	Price	 	Exercisable	 	Price	 	
	 			 			 			 			 			 	
$6.21 to $14.31	 	 	46,667	 	 	.6 years	 	$	12.00	 	 	46,667	 	$	12.00	 	
$19.50	 	 	100,000	 	 	1.6	 	 	19.50	 	 	33,330	 	 	19.50	 	
$24.00 to $29.04	 	 	2,225,960	 	 	4.1	 	 	27.33	 	 	2,225,960	 	 	27.33	 	
$6.21 to $29.04	 	 	2,372,627	 	 	3.9	 	 	26.70	 	 	2,305,957	 	 	26.91	 	
Based on the Black-Scholes option pricing model, the estimated weighted-average fair value of stock options granted was $2.51 in 2002. Assumptions made in determining estimates of fair value include: risk-free interest rate of 2.7% in 2002, a volatility factor of .280 in 2002, a dividend yield of 8.4% in 2002, and a weighted-average life expectancy of 3 years in 2002.
Effective January 1, 2002, the Company voluntarily adopted the fair value recognition provisions of SFAS 123, prospectively for all employee awards granted, modified, or settled after January 1, 2002 (see Note 2). Accordingly, the Company recorded compensation expense of $104,000 in 2003 and $43,000 in 2002. This compensation expense relates to the Company’s grant of 100,000 stock options during 2002.
The Company sponsors a 401(k) defined contribution plan for its employees. Each employee may contribute up to 100% of annual compensation, subject to specific limitations under the Internal Revenue Code. At its discretion, the Company can make matching contributions equal to a percentage of the employee’s elective contribution and profit sharing contributions. Employees vest in employer contributions over a three-year service period. The Company contributions were $821,000 in 2003, $816,000 in 2002 and $669,000 in 2001.
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12.	SEGMENT INFORMATION	
The Company currently manages its portfolio within three segments: (1) Pennsylvania, (2) New Jersey and (3) Virginia. Corporate is responsible for cash and investment management and certain other general support functions.
Segment information for the three years ended December 31, 2003, 2002 and 2001 is as follows (in thousands):
 	 	Pennsylvania	 	New Jersey	 	Virginia	 	Corporate	 	Total	 	
 	 			 			 			 			 			 	
2003:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Real estate investments, at cost:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating properties	 	$	1,146,350	 	$	508,906	 	$	214,488	 	$	—	 	$	1,869,744	 	
Construction-in-progress	 	 	25,162	 	 	4,043	 	 	582	 	 	—	 	 	29,787	 	
Land held for development	 	 	38,723	 	 	15,352	 	 	9,840	 	 	—	 	 	63,915	 	
Assets held for sale	 	 	—	 	 	3,649	 	 	1,668	 	 	—	 	 	5,317	 	
Total revenue	 	$	185,204	 	$	88,453	 	$	27,841	 	$	4,159	 	$	305,657	 	
Property operating expenses and real estate taxes	 	 	64,106	 	 	34,278	 	 	10,151	 	 	—	 	 	108,535	 	
 	 			 			 			 			 			 	
Net operating income	 	$	121,098	 	$	54,175	 	$	17,690	 	$	4,159	 	$	197,122	 	
 	 			 			 			 			 			 	
2002:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Real estate investments, at cost:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating properties	 	$	1,169,919	 	$	506,818	 	$	213,272	 	$	—	 	$	1,890,009	 	
Construction-in-progress	 	 	51,469	 	 	3,619	 	 	3,039	 	 	—	 	 	58,127	 	
Land held for development	 	 	25,051	 	 	10,023	 	 	8,001	 	 	—	 	 	43,075	 	
Assets held for sale, at cost	 	 	—	 	 	7,666	 	 	—	 	 	—	 	 	7,666	 	
Total revenue	 	$	178,139	 	$	84,291	 	$	26,652	 	$	1,952	 	$	291,034	 	
Property operating expenses and real estate taxes	 	 	60,102	 	 	30,543	 	 	9,506	 	 	—	 	 	100,151	 	
 	 			 			 			 			 			 	
Net operating income	 	$	118,037	 	$	53,748	 	$	17,146	 	$	1,952	 	$	190,883	 	
 	 			 			 			 			 			 	
2001:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total revenue	 	$	159,663	 	$	80,986	 	$	27,309	 	$	2,531	 	$	270,489	 	
Property operating expenses and real estate taxes	 	 	52,931	 	 	30,182	 	 	9,926	 	 	—	 	 	93,039	 	
 	 			 			 			 			 			 	
Net operating income	 	$	106,732	 	$	50,804	 	$	17,383	 	$	2,531	 	$	177,450	 	
 	 			 			 			 			 			 	
Net operating income is defined as total revenue less property operating expenses and real estate taxes. Below is a reconciliation of consolidated net operating income to consolidated income from continuing operations:
 	 	Year Ended December 31
	 	
 	 	2003	 	2002	 	2001	 	
 	 			 			 			 	
 	 	(amounts in thousands)	 	
Consolidated net operating income	 	$	197,122	 	$	190,883	 	$	177,450	 	
Less:	 	 	 	 	 	 	 	 	 	 	
Interest expense	 	 	57,835	 	 	63,522	 	 	67,496	 	
Depreciation and amortization	 	 	60,437	 	 	56,031	 	 	67,224	 	
Administrative expenses	 	 	14,464	 	 	14,804	 	 	15,177	 	
Non-recurring charges	 	 	—	 	 	—	 	 	6,600	 	
Minority interest attributable to continuing	 	 	 	 	 	 	 	 	 	 	
operations	 	 	9,265	 	 	9,337	 	 	7,818	 	
Plus:	 	 	 	 	 	 	 	 	 	 	
Equity in income of real estate ventures	 	 	52	 	 	987	 	 	2,768	 	
Net gains on sales of interests in real estate	 	 	20,537	 	 	5	 	 	4,524	 	
Income from discontinued operations	 	 	10,968	 	 	14,803	 	 	13,295	 	
 	 			 			 			 	
Net income	 	$	86,678	 	$	62,984	 	$	33,722	 	

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13.	NET INCOME PER COMMON SHARE	
The following table details the number of shares and net income used to calculate basic and diluted earnings per share for the three years ended December 31, 2003 (in thousands, except per share amounts):
 	 	For the year ended December 31,
	 	
 	 	2003
	 	2002
	 	2001
	 	
 	 	 	Basic	 	 	Diluted	 	 	Basic	 	 	Diluted	 	 	Basic	 	 	Diluted	 	
 	 		 		 		 		 		 		 	
Income from continuing operations	 	$	75,710	 	$	75,710	 	$	48,181	 	$	48,181	 	$	20,427	 	$	20,427	 	
Income from discontinued operations	 	 	10,968	 	 	10,968	 	 	14,803	 	 	14,803	 	 	13,295	 	 	13,295	 	
Income allocated to Preferred Shares	 	 	(11,906	)	 	(11,906	)	 	(11,906	)	 	(11,906	)	 	(11,906	)	 	(11,906)	 	
Preferred Share redemption/conversion charge	 	 	(20,598	)	 	(20,598	)	 	—	 	 	—	 	 	—	 	 	—	 	
 	 			 			 			 			 			 			 	
 	 	 	54,174	 	 	54,174	 	 	51,078	 	 	51,078	 	 	21,816	 	 	21,816	 	
Preferred Share discount amortization	 	 	(1,476	)	 	(1,476	)	 	(1,476	)	 	(1,476	)	 	(1,476	)	 	(1,476	)	
 	 			 			 			 			 			 			 	
Income available to common shareholders	 	$	52,698	 	$	52,698	 	$	49,602	 	$	49,602	 	$	20,340	 	$	20,340	 	
 	 			 			 			 			 			 			 	
Weighted-average shares outstanding	 	 	36,937,467	 	 	36,937,467	 	 	35,513,813	 	 	35,513,813	 	 	35,646,842	 	 	35,646,842	 	
Options, warrants and unvested restricted stock	 	 	—	 	 	150,402	 	 	—	 	 	131,997	 	 	—	 	 	27,809	 	
 	 			 			 			 			 			 			 	
Total weighted-average shares outstanding	 	 	36,937,467	 	 	37,087,869	 	 	35,513,813	 	 	35,645,810	 	 	35,646,842	 	 	35,674,651	 	
 	 			 			 			 			 			 			 	
Earnings per Common Share:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Continuing operations	 	$	1.13	 	$	1.13	 	$	0.98	 	$	0.97	 	$	0.20	 	$	0.20	 	
Discontinued operations	 	 	0.30	 	 	0.30	 	 	0.42	 	 	0.42	 	 	0.37	 	 	0.37	 	
 	 			 			 			 			 			 			 	
 	 	$	1.43	 	$	1.43	 	$	1.40	 	$	1.39	 	$	0.57	 	$	0.57	 	
 	 			 			 			 			 			 			 	
Securities totaling 6,558,632 in 2003, 11,256,776 in 2002 and 11,622,922 in 2001 were excluded from the earnings per share computations above as their effect would have been antidilutive. Certain preferred equity and preferred operating partnership units would participate in earnings at certain levels whether or not distributed. These thresholds have not been met in years presented and therefore, no additional participation has occurred.
14.	DISTRIBUTIONS (UNAUDITED):	
 	 	
 	 	Year ended December 31
	 	
 	 	2003	 	2002	 	2001	 	
 	 			 			 			 	
 	 	(amounts in thousands)	 	
Common Share Distributions:	 	 	 	 	 	 	 	 	 	 	
Ordinary income	 	$	1.43	 	$	1.65	 	$	1.60	 	
Capital gain	 	 	0.33	 	 	0.11	 	 	0.10	 	
 	 			 						 	
Total distributions per share	 	$	1.76	 	$	1.76	 	$	1.70	 	
 	 			 						 	
Percentage classified as ordinary income	 	 	81.3	%	 	93.8	%	 	94.1	%	
Percentage classified as capital gain	 	 	18.7	%	 	6.2	%	 	5.9	%	
 	 	 	 	 	 	 	 	 	 	 	
Preferred Share Distributions:	 	 	 	 	 	 	 	 	 	 	
Total distributions declared	 	$	11,906,000	 	$	11,906,000	 	$	11,906,000	 	
 	 	
15.	RELATED-PARTY TRANSACTIONS	
In 1998, the Board authorized the Company to make loans totaling up to $5.0 million to enable employees of the Company to purchase Common Shares at fair market value. The loans have five-year terms, are full recourse, and are secured by the Common Shares purchased. Interest, payable quarterly, accrues on the loans at the lower of the interest rate borne on borrowings under the Company’s Credit Facility or a rate based on the dividend payments on the Common Shares. As of December 31, 2003, the interest rate was 2.62% per annum. The loans are payable at the earlier of the stated maturity date or 90 days following the employee’s termination. As of December 31, 2003, the outstanding balance of these loans totaled $1.5 million and were secured by an aggregate of 85,163 Common Shares.
 
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The Company owns 384,615 shares of US Realtel, Inc. (“USR”) Common Stock and holds warrants exercisable for 600,000 additional shares. The warrants have an exercise price of $8.00 per share and expire on December 31, 2004. In addition, the Company held warrants exercisable for 123,077 shares at an exercise price of $3.25, and these warrants expire on August 15, 2005. As of December 31, 2003, the Company’s recorded value for its investment in USR was $1.1 million. An officer of the Company holds a position on USR’s Board of Directors.
In February 2000, the Company loaned an aggregate of $2.5 million to two executive officers to enable them to purchase Common Shares of the Company. One loan had a four-year term and bears interest at the lower of the Company’s cost of funds or a rate based on the dividend payable on the Common Shares, but not to exceed 10% annum. This loan was subject to forgiveness over a three-year period, with the amount of forgiveness tied to the Company’s total shareholder return compared to the total shareholder return of peer group companies. This loan was also subject to forgiveness in the event of a change of control of the Company. This loan was reflected as a reduction in beneficiaries equity. In 2001, the Company recorded a $4.1 million charge in connection with the executive’s transition to a non-executive, non-managerial status and to restructure the other loan. Principal and interest totaling $1.0 million was forgiven related to these loans in 2003 and $.9 million in 2002 and 2001.
In connection with the sale by the Company of a land parcel in 2003, the Company paid a $42,000 commission to Kevin Nichols, son of Anthony A. Nichols, Sr., Chairman of the Board of the Company, for brokerage services relating to the sale.
Robert Larson, a Trustee of the Company, is a managing director of Lazard Freres & Co. LLC (“Lazard”). The Company paid Lazard a fee of approximately $909,000 for investment banking services related to the Company’s sale of two office properties to a Real Estate Venture in the fourth quarter of 2003.
16.	OPERATING LEASES	
The Company leases properties to tenants under operating leases with various expiration dates extending to 2020. As of December 31, 2003, leases covering approximately 1.8 million square feet or 12.8% of the net rentable square footage are scheduled to expire during 2004. Minimum future rentals on non-cancelable leases at December 31, 2003 are as follows (in thousands):
Year
	 	Minimum Rent
	 	
2004	 	$	249,836	 	
2005	 	 	216,862	 	
2006	 	 	178,757	 	
2007	 	 	148,915	 	
2008	 	 	116,708	 	
2009 and thereafter	 	 	344,434	 	
 	 			 	
 	 	$	1,255,512	 	
 	 			 	
Total minimum future rentals presented above do not include amounts to be received as tenant reimbursements for increases in certain operating costs.
17.	SUMMARY OF QUARTERLY RESULTS (UNAUDITED)	
The following is a summary of quarterly financial information as of and for the years ended December 31, 2003 and 2002 (in thousands, except per share data):
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 	 	1st
Quarter	 	2nd
Quarter	 	3rd
Quarter	 	4th
Quarter	 	
 	 			 			 			 			 	
2003:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total revenue	 	$	75,241	 	$	74,464	 	$	77,178	 	$	78,774	 	
Net income	 	 	13,917	 	 	13,524	 	 	17,400	 	 	41,837	 	
Income allocated to Common Shares	 	 	10,941	 	 	10,548	 	 	14,424	 	 	18,261	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic earnings per Common Share	 	$	0.30	 	$	0.29	 	$	0.38	 	$	0.46	 	
Diluted earnings per Common Share	 	$	0.30	 	$	0.29	 	$	0.37	 	$	0.46	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
2002:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total revenue	 	$	69,021	 	$	72,491	 	$	74,390	 	$	75,132	 	
Net income	 	 	23,469	 	 	12,800	 	 	13,968	 	 	12,747	 	
Income allocated to Common Shares	 	 	20,492	 	 	9,823	 	 	10,992	 	 	9,771	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic earnings per Common Share	 	$	0.56	 	$	0.26	 	$	0.30	 	$	0.27	 	
Diluted earnings per Common Share	 	$	0.55	 	$	0.26	 	$	0.30	 	$	0.27	 	
The summation of quarterly earnings per share amounts do not necessarily equal year to date amounts.
18.	COMMITMENTS AND CONTINGENCIES	
 	
Legal Proceedings	
The Company is involved from time to time in litigation on various matters, including disputes with tenants and disputes arising out of agreements to purchase or sell properties. Given the nature of the Company’s business activities, these lawsuits are considered routine to the conduct of its business. The result of any particular lawsuit cannot be predicted, because of the very nature of litigation, the litigation process and its adversarial nature, and the jury system.
The Company is a defendant in a case in which the plaintiffs allege that the Company breached its obligation to purchase a portfolio of properties of approximately $83.0 million. On July 9, 1999, the Superior Court of New Jersey, Camden County, dismissed the complaint against the Company with prejudice. Plaintiffs subsequently filed a motion for reconsideration, which motion the Superior Court denied. Plaintiffs then appealed to the Appellate Division, which is the intermediate appellate level court in New Jersey. In December 2000, the Appellate Division affirmed in part and reversed in part the Chancery Division’s earlier dismissal of the entire action. The Appellate Division affirmed the dismissal of the non-contractual counts in the Complaint, but reversed the contract and reformation counts and remanded these to the lower court for further proceedings. The Company sought review of this decision by the Supreme Court of New Jersey, but that Court declined to consider the appeal. The case thereafter returned to the Chancery Division, where written and oral discovery were conducted in 2002 and in the first quarter of 2003. Discovery terminated on February 14, 2003. The Company filed a motion for summary judgment seeking dismissal of all counts against it, and judgment for the Company on our counterclaim. The Chancery Division granted the Company’s summary judgment motion on March 25, 2003 and dismissed the case with prejudice. Plaintiffs appealed the judgment in our favor, and the Company does not know whether plaintiffs will be successful in their appeal.
There have been recent reports of lawsuits against owners and managers of multifamily and office properties asserting claims of personal injury and property damage caused by the presence of mold in residential units or office space. The Company has been named as a defendant in two lawsuits that allege personal injury as a result of the presence of mold. Unspecified damages are sought. The Company has referred these lawsuits to its environmental insurance carrier and, as of the date of this Form 10-K, the insurance carrier is tendering a defense to these claims.
Letters-of-Credit	
In connection with certain mortgages, the Company is required to maintain leasing and capital reserve accounts with the mortgage lenders through letters-of-credit which totaled $11.5 million at December 31, 2003. The Company is also required to maintain escrow accounts for taxes, insurance and tenant security
 
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deposits that amounted to $14.4 million at December 31, 2003. The related tenant rents are deposited into the loan servicer’s depository accounts, which are used to fund debt service, operating expenses, capital expenditures and the escrow and reserve accounts, as necessary. Any excess cash is included in cash and cash equivalents.
Other Commitments	
As of December 31, 2003, the Company owned 446 acres of land for future development and held options to purchase 61 additional acres.
19.	ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)	
The following table details the components of accumulated other comprehensive income (loss) as of and for the three years ended December 31, 2003 (in thousands):
 	 	Unrealized Gains
(Losses) on Securities	 	Cash Flow
Hedges	 	Accumulated Other
Comprehensive Loss	 	
 	 			 			 			 	
Balance at January 1, 2001	 	$	(1,731	)	$	—	 	$	(1,731	)	
Change during year	 	 	1,816	 	 	(7,921	)	 	(6,105	)	
Reclassification adjustments for losses reclassified into operations	 	 	—	 	 	3,249	 	 	3,249	 	
 	 			 			 			 	
Balance at December 31, 2001	 	 	85	 	 	(4,672	)	 	(4,587	)	
Change during year	 	 	733	 	 	(7,954	)	 	(7,221	)	
Reclassification adjustments for losses	 	 	 	 	 	 	 	 	 	 	
reclassified into operations	 	 	—	 	 	5,406	 	 	5,406	 	
 	 			 			 			 	
Balance at December 31, 2002	 	$	818	 	$	(7,220	)	$	(6,402	)	
Change during year	 	 	51	 	 	(1,118	)	 	(1,067	)	
Reclassification adjustments for losses	 	 	 	 	 	 	 	 	 	 	
reclassified into operations	 	 	—	 	 	5,311	 	 	5,311	 	
 	 			 			 			 	
Balance at December 31, 2003	 	$	869	 	$	(3,027	)	$	(2,158	)	
 	 			 			 			 	
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20.	SUBSEQUENT EVENTS 	
On January 12, 2004, the Company sold 2,645,000 Common Shares in an underwritten public offering for net proceeds (net of transaction costs) of $69.3 million.
On February 3, 2004, the Company entered into an agreement to redeem 1,950,000 Series B Preferred Units, with a stated aggregate value of $97.5 million, on or before March 15, 2003 for an aggregate price of $93.0 million plus accrued but unpaid dividends from January 1, 2004. The Company subsequently redeemed all of such Units.
On February 27, 2004, the Company sold 2,300,000 7.375% Series D Cumulative Redeemable Preferred Shares, each with a liquidation preference of $25.00 per share in an underwritten public offering for net proceeds (net of transaction costs) of $55.5 million.
On March 3, 2004, the Company sold 1,840,000 Common Shares in an underwritten public offering for net proceeds (net of transaction costs) of $50.7 million.
In May 2004, the Company obtained a $450 million unsecured credit facility. The credit facility will mature in May 2007. The Partnership has the option to increase the credit facility to a maximum of $600 million. The credit facility bears interest at LIBOR plus a spread over LIBOR ranging from .65% to 1.35% based on the Company’s leverage and unsecured debt ratings.
21.	OTHER EVENTS 	
The Company is revising its historical financial statements in connection with its application of SFAS No. 144. During the quarter ended June 30, 2004, the Company sold a property and in compliance with SFAS No. 144, the Company has reported revenue, expenses and gain on sale from this property as income from discontinued operations for each period presented in its quarterly report filed since the date of the sales (including the comparable period of the prior year). However, the rules and regulations of the Securities and Exchange Commission (the “SEC”) applicable to the Company require that the Company reclassify the reported revenue, expenses from these properties as income from discontinued operations in its financial statements for the period presented in its Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2004, and in its annual financial statements for each of the three years presented in the Company’s Annual Report on Form 10-K/A for the fiscal year ended December 31, 2003, if those financials are incorporated by reference in a registration statement to be filed with the SEC under the Securities Act of 1933, as amended, even though those financial statements relate to a period prior to the transactions giving rise to the reclassification. 
This reclassification as discontinued operations has no effect on the Company’s reported net income available to common shareholders as reported in prior SEC filings. Instead, they present the revenue and expenses relating to properties sold and held for sale as a single line item titled discontinued operations, rather than presenting the revenues and expenses along with the Company’s other results of operations. In addition to the financial statements themselves, certain disclosures contained in Note 9, Note 12, Note 13 and Note 17 have been modified to reflect the effects of these reclassifications. 
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Brandywine Realty Trust
Schedule II
Valuation and Qualifying Accounts
(in thousands)
Description	 	Balance at
Beginning
of Period	 	Additions

Charged to
expense	 	Deductions	 	Balance
at End
of Period	 	
	 			 			 			 			 	
Allowance for doubtful accounts:	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Year ended December 31, 2003	 	$	4,576	 	$	189	 	$	734	 	$	4,031	 	

Year ended December 31, 2002	 	$	4,532	 	$	894	 	$	850	 	$	4,576	 	

Year ended December 31, 2001	 	$	2,427	 	$	2,867	 	$	762	 	$	4,532	 	
 	 			 			 			 			 	
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Brandywine Realty Trust
Schedule III
Real Estate and Accumulated Depreciation
(in thousands)
 	 	 	 	 	 	 	 	Initial Cost
	 	Gross Amount at Which Carried
December 31, 2003
	 	 	 	 	 	 	 	 	 	 	
 	 	City	 	State	 	Encumberances at
December 31, 2003	 	Land	 	Building and
Improvements	 	Net
Improvements
(Retirements)
Since
Acquisition	 	Land	 	Building and
Improvements	 	Total (a)	 	Accumulated
Depreciation at
December 31,
2003 (b)	 	Date of
Construction	 	Date
Acquired	 	Depreciable
Life	 	
	 			 			 			 			 			 			 			 			 			 			 			 			 			 	
One Greentree Centre	 	 	Marlton	 	 	NJ	 	 	—	 	 	345	 	 	4,440	 	 	401	 	 	345	 	 	4,841	 	 	5,186	 	 	2,656	 	 	1982	 	 	1986	 	 	40	 	
Three Greentree Centre	 	 	Marlton	 	 	NJ	 	 	—	 	 	323	 	 	6,024	 	 	91	 	 	323	 	 	6,115	 	 	6,438	 	 	3,856	 	 	1984	 	 	1986	 	 	40	 	
Two Greentree Centre	 	 	Marlton	 	 	NJ	 	 	—	 	 	264	 	 	4,693	 	 	104	 	 	264	 	 	4,797	 	 	5,061	 	 	2,998	 	 	1983	 	 	1986	 	 	40	 	
110 Summit Drive	 	 	Exton	 	 	PA	 	 	—	 	 	403	 	 	1,647	 	 	157	 	 	403	 	 	1,804	 	 	2,207	 	 	446	 	 	1985	 	 	1996	 	 	40	 	
1155 Business Center Drive	 	 	Horsham	 	 	PA	 	 	2,468	 	 	1,029	 	 	4,124	 	 	(182	)	 	1,029	 	 	3,942	 	 	4,971	 	 	1,291	 	 	1990	 	 	1996	 	 	40	 	
120 West Germantown Pike	 	 	Plymouth Meeting	 	 	PA	 	 	—	 	 	685	 	 	2,773	 	 	400	 	 	685	 	 	3,173	 	 	3,858	 	 	812	 	 	1984	 	 	1996	 	 	40	 	
1336 Enterprise Drive	 	 	West Goshen	 	 	PA	 	 	—	 	 	731	 	 	2,946	 	 	51	 	 	731	 	 	2,997	 	 	3,728	 	 	716	 	 	1990	 	 	1996	 	 	40	 	
140 West Germantown Pike	 	 	Plymouth Meeting	 	 	PA	 	 	—	 	 	481	 	 	1,976	 	 	236	 	 	481	 	 	2,212	 	 	2,693	 	 	701	 	 	1984	 	 	1996	 	 	40	 	
18 Campus Boulevard	 	 	Newtown Square	 	 	PA	 	 	3,408	 	 	787	 	 	3,312	 	 	22	 	 	787	 	 	3,334	 	 	4,121	 	 	1,003	 	 	1990	 	 	1996	 	 	40	 	
2240/50 Butler Pike	 	 	Plymouth Meeting	 	 	PA	 	 	—	 	 	1,104	 	 	4,627	 	 	603	 	 	1,104	 	 	5,230	 	 	6,334	 	 	1,791	 	 	1984	 	 	1996	 	 	40	 	
2260 Butler Pike	 	 	Plymouth Meeting	 	 	PA	 	 	—	 	 	661	 	 	2,727	 	 	157	 	 	661	 	 	2,884	 	 	3,545	 	 	813	 	 	1984	 	 	1996	 	 	40	 	
33 Street Road — Greenwood Square I	 	 	Bensalem	 	 	PA	 	 	—	 	 	851	 	 	3,407	 	 	419	 	 	851	 	 	3,826	 	 	4,677	 	 	1,008	 	 	1985	 	 	1996	 	 	40	 	
33 Street Road — Greenwood Square II	 	 	Bensalem	 	 	PA	 	 	—	 	 	1,126	 	 	4,511	 	 	924	 	 	1,126	 	 	5,435	 	 	6,561	 	 	1,593	 	 	1985	 	 	1996	 	 	40	 	
33 Street Road — Greenwood Square III	 	 	Bensalem	 	 	PA	 	 	—	 	 	350	 	 	1,401	 	 	101	 	 	350	 	 	1,502	 	 	1,852	 	 	367	 	 	1985	 	 	1996	 	 	40	 	
456 Creamery Way	 	 	Exton	 	 	PA	 	 	—	 	 	635	 	 	2,548	 	 	(47	)	 	635	 	 	2,501	 	 	3,136	 	 	635	 	 	1987	 	 	1996	 	 	40	 	
457 Haddonfield Road	 	 	Cherry Hill	 	 	NJ	 	 	11,410	 	 	2,142	 	 	9,120	 	 	2,536	 	 	2,142	 	 	11,656	 	 	13,798	 	 	4,072	 	 	1990	 	 	1996	 	 	40	 	
468 Creamery Way	 	 	Exton	 	 	PA	 	 	—	 	 	526	 	 	2,112	 	 	(37	)	 	526	 	 	2,075	 	 	2,601	 	 	562	 	 	1990	 	 	1996	 	 	40	 	
486 Thomas Jones Way	 	 	Exton	 	 	PA	 	 	—	 	 	806	 	 	3,256	 	 	(92	)	 	806	 	 	3,164	 	 	3,970	 	 	852	 	 	1990	 	 	1996	 	 	40	 	
500 Enterprise Road	 	 	Horsham	 	 	PA	 	 	—	 	 	1,303	 	 	5,188	 	 	(790	)	 	1,303	 	 	4,398	 	 	5,701	 	 	1,245	 	 	1990	 	 	1996	 	 	40	 	
500 North Gulph Road	 	 	King of Prussia	 	 	PA	 	 	—	 	 	1,303	 	 	5,201	 	 	785	 	 	1,303	 	 	5,986	 	 	7,289	 	 	1,630	 	 	1979	 	 	1996	 	 	40	 	
650 Dresher Road	 	 	Horsham	 	 	PA	 	 	1,713	 	 	636	 	 	2,501	 	 	314	 	 	636	 	 	2,815	 	 	3,451	 	 	733	 	 	1984	 	 	1996	 	 	40	 	
6575 Snowdrift Road	 	 	Allentown	 	 	PA	 	 	—	 	 	601	 	 	2,411	 	 	473	 	 	601	 	 	2,884	 	 	3,485	 	 	1,050	 	 	1988	 	 	1996	 	 	40	 	
700 Business Center Drive	 	 	Horsham	 	 	PA	 	 	1,478	 	 	550	 	 	2,201	 	 	226	 	 	550	 	 	2,427	 	 	2,977	 	 	611	 	 	1986	 	 	1996	 	 	40	 	
7248 Tilghman Street	 	 	Allentown	 	 	PA	 	 	—	 	 	731	 	 	2,969	 	 	70	 	 	731	 	 	3,039	 	 	3,770	 	 	839	 	 	1987	 	 	1996	 	 	40	 	
7310 Tilghman Street	 	 	Allentown	 	 	PA	 	 	—	 	 	553	 	 	2,246	 	 	582	 	 	553	 	 	2,828	 	 	3,381	 	 	869	 	 	1985	 	 	1996	 	 	40	 	
800 Business Center Drive	 	 	Horsham	 	 	PA	 	 	2,234	 	 	896	 	 	3,585	 	 	19	 	 	896	 	 	3,604	 	 	4,500	 	 	899	 	 	1986	 	 	1996	 	 	40	 	
8000 Lincoln Drive	 	 	Marlton	 	 	NJ	 	 	—	 	 	606	 	 	2,887	 	 	(194	)	 	606	 	 	2,693	 	 	3,299	 	 	699	 	 	1983	 	 	1996	 	 	40	 	
One Progress Avenue	 	 	Horsham	 	 	PA	 	 	—	 	 	1,399	 	 	5,629	 	 	144	 	 	1,399	 	 	5,773	 	 	7,172	 	 	1,507	 	 	1986	 	 	1996	 	 	40	 	
One Righter Parkway	 	 	Talleyville	 	 	DE	 	 	10,680	 	 	2,545	 	 	10,195	 	 	282	 	 	2,545	 	 	10,477	 	 	13,022	 	 	2,633	 	 	1989	 	 	1996	 	 	40	 	
1 Foster Avenue	 	 	Gibbsboro	 	 	NJ	 	 	—	 	 	93	 	 	364	 	 	35	 	 	93	 	 	399	 	 	492	 	 	83	 	 	1972	 	 	1997	 	 	40	 	
10 Foster Avenue	 	 	Gibbsboro	 	 	NJ	 	 	—	 	 	244	 	 	971	 	 	72	 	 	244	 	 	1,043	 	 	1,287	 	 	224	 	 	1983	 	 	1997	 	 	40	 	
100 Berwyn Park	 	 	Berwyn	 	 	PA	 	 	7,135	 	 	1,180	 	 	7,290	 	 	158	 	 	1,180	 	 	7,448	 	 	8,628	 	 	1,717	 	 	1986	 	 	1997	 	 	40	 	
100 Commerce Drive	 	 	Newark	 	 	DE	 	 	—	 	 	1,160	 	 	4,633	 	 	516	 	 	1,160	 	 	5,149	 	 	6,309	 	 	1,151	 	 	1989	 	 	1997	 	 	40	 	
100 Katchel Blvd	 	 	Reading	 	 	PA	 	 	—	 	 	1,881	 	 	7,423	 	 	139	 	 	1,881	 	 	7,562	 	 	9,443	 	 	1,747	 	 	1970	 	 	1997	 	 	40	 	
1000 Atrium Way	 	 	Mt. Laurel	 	 	NJ	 	 	—	 	 	2,061	 	 	8,180	 	 	390	 	 	2,061	 	 	8,570	 	 	10,631	 	 	1,957	 	 	1989	 	 	1997	 	 	40	 	
1000 Howard Boulevard	 	 	Mt. Laurel	 	 	NJ	 	 	3,647	 	 	2,297	 	 	9,288	 	 	434	 	 	2,297	 	 	9,722	 	 	12,019	 	 	2,474	 	 	1988	 	 	1997	 	 	40	 	
10000 Midlantic Drive	 	 	Mt. Laurel	 	 	NJ	 	 	—	 	 	3,206	 	 	12,857	 	 	1,127	 	 	3,206	 	 	13,984	 	 	17,190	 	 	3,255	 	 	1990	 	 	1997	 	 	40	 	
100-300 Gundy Drive	 	 	Reading	 	 	PA	 	 	—	 	 	6,495	 	 	25,180	 	 	5,829	 	 	6,495	 	 	31,009	 	 	37,504	 	 	6,931	 	 	1970	 	 	1997	 	 	40	 	
1007 Laurel Oak Road	 	 	Voorhees	 	 	NJ	 	 	—	 	 	1,563	 	 	6,241	 	 	17	 	 	1,563	 	 	6,258	 	 	7,821	 	 	1,314	 	 	1996	 	 	1997	 	 	40	 	
105/140 Terry Drive	 	 	Newtown	 	 	PA	 	 	—	 	 	2,299	 	 	8,238	 	 	2,256	 	 	2,299	 	 	10,494	 	 	12,793	 	 	2,575	 	 	1974	 	 	1997	 	 	40	 	
111 Presidential Boulevard	 	 	Bala Cynwyd	 	 	PA	 	 	—	 	 	5,419	 	 	21,612	 	 	850	 	 	5,419	 	 	22,462	 	 	27,881	 	 	4,711	 	 	1974	 	 	1997	 	 	40	 	
1120 Executive Boulevard	 	 	Mt. Laurel	 	 	NJ	 	 	—	 	 	2,074	 	 	8,415	 	 	762	 	 	2,074	 	 	9,177	 	 	11,251	 	 	2,166	 	 	1987	 	 	1997	 	 	40	 	
15000 Midlantic Drive	 	 	Mt. Laurel	 	 	NJ	 	 	—	 	 	3,061	 	 	12,254	 	 	8	 	 	3,061	 	 	12,262	 	 	15,323	 	 	2,813	 	 	1991	 	 	1997	 	 	40	 	
2 Foster Avenue	 	 	Gibbsboro	 	 	NJ	 	 	—	 	 	185	 	 	730	 	 	23	 	 	185	 	 	753	 	 	938	 	 	158	 	 	1974	 	 	1997	 	 	40	 	
20 East Clementon Road	 	 	Gibbsboro	 	 	NJ	 	 	—	 	 	769	 	 	3,055	 	 	248	 	 	769	 	 	3,303	 	 	4,072	 	 	760	 	 	1986	 	 	1997	 	 	40	 	
200 Berwyn Park	 	 	Berwyn	 	 	PA	 	 	9,592	 	 	1,533	 	 	9,460	 	 	606	 	 	1,533	 	 	10,066	 	 	11,599	 	 	2,308	 	 	1987	 	 	1997	 	 	40	 	
2000 Midlantic Drive	 	 	Mt. Laurel	 	 	NJ	 	 	9,421	 	 	2,202	 	 	8,823	 	 	462	 	 	2,202	 	 	9,285	 	 	11,487	 	 	2,236	 	 	1989	 	 	1997	 	 	40	 	
220 Commerce Drive	 	 	Fort Washington	 	 	PA	 	 	—	 	 	1,086	 	 	4,338	 	 	536	 	 	1,086	 	 	4,874	 	 	5,960	 	 	1,099	 	 	1974	 	 	1997	 	 	40	 	
F-30

Back to Contents
Brandywine Realty Trust
Schedule III
Real Estate and Accumulated Depreciation
(in thousands)
 	 	 	 	 	 	 	 	Initial Cost
	 	Gross Amount at Which Carried
December 31, 2003
	 	 	 	 	 	 	 	 	 	 	
 	 	City	 	State	 	Encumberances at
December 31, 2003	 	Land	 	Building and
Improvements	 	Net
Improvements
(Retirements)
Since
Acquisition	 	Land	 	Building and
Improvements	 	Total (a)	 	Accumulated
Depreciation at
December 31,
2003 (b)	 	Date of
Construction	 	Date
Acquired	 	Depreciable
Life	 	
	 			 			 			 			 			 			 			 			 			 			 			 			 			 	
300 Berwyn Park	 	 	Berwyn	 	 	PA	 	 	13,200	 	 	2,206	 	 	13,422	 	 	334	 	 	2,206	 	 	13,756	 	 	15,962	 	 	3,093	 	 	1989	 	 	1997	 	 	40	 	
300 Welsh Road — Building I	 	 	Horsham	 	 	PA	 	 	2,297	 	 	894	 	 	3,572	 	 	161	 	 	894	 	 	3,733	 	 	4,627	 	 	862	 	 	1985	 	 	1997	 	 	40	 	
300 Welsh Road — Building II	 	 	Horsham	 	 	PA	 	 	1,038	 	 	396	 	 	1,585	 	 	109	 	 	396	 	 	1,694	 	 	2,090	 	 	371	 	 	1985	 	 	1997	 	 	40	 	
321 Norristown Road	 	 	Lower Gwyned	 	 	PA	 	 	—	 	 	1,290	 	 	5,176	 	 	1,292	 	 	1,290	 	 	6,468	 	 	7,758	 	 	1,490	 	 	1972	 	 	1997	 	 	40	 	
323 Norristown Road	 	 	Lower Gwyned	 	 	PA	 	 	—	 	 	1,685	 	 	6,751	 	 	757	 	 	1,685	 	 	7,508	 	 	9,193	 	 	1,669	 	 	1988	 	 	1997	 	 	40	 	
4 Foster Avenue	 	 	Gibbsboro	 	 	NJ	 	 	—	 	 	183	 	 	726	 	 	76	 	 	183	 	 	802	 	 	985	 	 	163	 	 	1974	 	 	1997	 	 	40	 	
4000 Midlantic Drive	 	 	Mt. Laurel	 	 	NJ	 	 	3,158	 	 	714	 	 	5,085	 	 	(1,948	)	 	714	 	 	3,137	 	 	3,851	 	 	716	 	 	1981	 	 	1997	 	 	40	 	
5 Foster Avenue	 	 	Gibbsboro	 	 	NJ	 	 	—	 	 	9	 	 	32	 	 	25	 	 	9	 	 	57	 	 	66	 	 	9	 	 	1968	 	 	1997	 	 	40	 	
5 U.S. Avenue	 	 	Gibbsboro	 	 	NJ	 	 	—	 	 	21	 	 	81	 	 	2	 	 	21	 	 	83	 	 	104	 	 	18	 	 	1987	 	 	1997	 	 	40	 	
50 East Clementon Road	 	 	Gibbsboro	 	 	NJ	 	 	—	 	 	114	 	 	964	 	 	4	 	 	114	 	 	968	 	 	1,082	 	 	203	 	 	1986	 	 	1997	 	 	40	 	
500 Office Center Drive	 	 	Ft. Washington	 	 	PA	 	 	—	 	 	1,617	 	 	6,480	 	 	1,052	 	 	1,617	 	 	7,532	 	 	9,149	 	 	2,079	 	 	1985	 	 	1997	 	 	40	 	
501 Office Center Drive	 	 	Ft. Washington	 	 	PA	 	 	—	 	 	1,796	 	 	7,192	 	 	768	 	 	1,796	 	 	7,960	 	 	9,756	 	 	1,943	 	 	1985	 	 	1997	 	 	40	 	
55 U.S. Avenue	 	 	Gibbsboro	 	 	NJ	 	 	—	 	 	1,116	 	 	4,435	 	 	51	 	 	1,116	 	 	4,486	 	 	5,602	 	 	943	 	 	1982	 	 	1997	 	 	40	 	
6 East Clementon Road	 	 	Gibbsboro	 	 	NJ	 	 	—	 	 	1,345	 	 	5,366	 	 	340	 	 	1,345	 	 	5,706	 	 	7,051	 	 	1,298	 	 	1980	 	 	1997	 	 	40	 	
655 Business Center Drive	 	 	Horsham	 	 	PA	 	 	1,810	 	 	544	 	 	2,529	 	 	572	 	 	544	 	 	3,101	 	 	3,645	 	 	911	 	 	1997	 	 	1997	 	 	40	 	
7 Foster Avenue	 	 	Gibbsboro	 	 	NJ	 	 	—	 	 	231	 	 	921	 	 	135	 	 	231	 	 	1,056	 	 	1,287	 	 	238	 	 	1983	 	 	1997	 	 	40	 	
748 Springdale Drive	 	 	Exton	 	 	PA	 	 	—	 	 	236	 	 	931	 	 	142	 	 	236	 	 	1,073	 	 	1,309	 	 	311	 	 	1986	 	 	1997	 	 	40	 	
855 Springdale Drive	 	 	Exton	 	 	PA	 	 	—	 	 	838	 	 	3,370	 	 	80	 	 	838	 	 	3,450	 	 	4,288	 	 	796	 	 	1986	 	 	1997	 	 	40	 	
9000 Midlantic Drive	 	 	Mt. Laurel	 	 	NJ	 	 	6,135	 	 	1,472	 	 	5,895	 	 	114	 	 	1,472	 	 	6,009	 	 	7,481	 	 	1,367	 	 	1989	 	 	1997	 	 	40	 	
Five Eves Drive	 	 	Marlton	 	 	NJ	 	 	—	 	 	703	 	 	2,819	 	 	649	 	 	703	 	 	3,468	 	 	4,171	 	 	1,061	 	 	1986	 	 	1997	 	 	40	 	
Four A Eves Drive	 	 	Marlton	 	 	NJ	 	 	—	 	 	539	 	 	2,168	 	 	167	 	 	539	 	 	2,335	 	 	2,874	 	 	657	 	 	1987	 	 	1997	 	 	40	 	
Four B Eves Drive	 	 	Marlton	 	 	NJ	 	 	—	 	 	588	 	 	2,369	 	 	95	 	 	588	 	 	2,464	 	 	3,052	 	 	628	 	 	1987	 	 	1997	 	 	40	 	
King & Harvard	 	 	Cherry Hill	 	 	NJ	 	 	—	 	 	1,726	 	 	1,069	 	 	2,193	 	 	1,726	 	 	3,262	 	 	4,988	 	 	956	 	 	1979	 	 	1997	 	 	40	 	
Main Street – Piazza	 	 	Voorhees	 	 	NJ	 	 	—	 	 	696	 	 	2,802	 	 	88	 	 	696	 	 	2,890	 	 	3,586	 	 	693	 	 	1990	 	 	1997	 	 	40	 	
Main Street – Plaza 1000	 	 	Voorhees	 	 	NJ	 	 	—	 	 	2,729	 	 	10,931	 	 	2,522	 	 	2,729	 	 	13,453	 	 	16,182	 	 	3,220	 	 	1988	 	 	1997	 	 	40	 	
Main Street – Promenade	 	 	Voorhees	 	 	NJ	 	 	—	 	 	531	 	 	2,052	 	 	207	 	 	531	 	 	2,259	 	 	2,790	 	 	597	 	 	1988	 	 	1997	 	 	40	 	
Main Street- CAM	 	 	Voorhees	 	 	NJ	 	 	—	 	 	3	 	 	11	 	 	98	 	 	3	 	 	109	 	 	112	 	 	31	 	 	1997	 	 	40	 	 	 	 	
One South Union Place	 	 	Cherry Hill	 	 	NJ	 	 	—	 	 	771	 	 	8,047	 	 	480	 	 	771	 	 	8,527	 	 	9,298	 	 	2,547	 	 	1980	 	 	1997	 	 	40	 	
Two Eves Drive	 	 	Marlton	 	 	NJ	 	 	—	 	 	818	 	 	3,461	 	 	128	 	 	818	 	 	3,589	 	 	4,407	 	 	962	 	 	1987	 	 	1997	 	 	40	 	
1000 First Avenue	 	 	King of Prussia	 	 	PA	 	 	4,516	 	 	2,772	 	 	10,936	 	 	277	 	 	2,772	 	 	11,213	 	 	13,985	 	 	1,991	 	 	1980	 	 	1998	 	 	40	 	
1009 Lenox Drive	 	 	Lawrenceville	 	 	NJ	 	 	—	 	 	4,876	 	 	19,284	 	 	3,304	 	 	4,876	 	 	22,588	 	 	27,464	 	 	4,932	 	 	1989	 	 	1998	 	 	40	 	
1020 First Avenue	 	 	King of Prussia	 	 	PA	 	 	3,610	 	 	2,168	 	 	8,576	 	 	435	 	 	2,168	 	 	9,011	 	 	11,179	 	 	1,590	 	 	1984	 	 	1998	 	 	40	 	
1040 First Avenue	 	 	King of Prussia	 	 	PA	 	 	4,940	 	 	2,860	 	 	11,282	 	 	1,156	 	 	2,860	 	 	12,438	 	 	15,298	 	 	2,675	 	 	1985	 	 	1998	 	 	40	 	
1060 First Avenue	 	 	King of Prussia	 	 	PA	 	 	4,415	 	 	2,712	 	 	10,953	 	 	6	 	 	2,712	 	 	10,959	 	 	13,671	 	 	1,941	 	 	1987	 	 	1998	 	 	40	 	
14 Campus Boulevard	 	 	Newtown Square	 	 	PA	 	 	5,340	 	 	2,244	 	 	4,217	 	 	(3	)	 	2,244	 	 	4,214	 	 	6,458	 	 	992	 	 	1998	 	 	1998	 	 	40	 	
150 Corporate Center Drive	 	 	Camp Hill	 	 	PA	 	 	—	 	 	964	 	 	3,871	 	 	273	 	 	964	 	 	4,144	 	 	5,108	 	 	849	 	 	1987	 	 	1998	 	 	40	 	
160-180 West Germantown Pike	 	 	East Norriton	 	 	PA	 	 	5,342	 	 	1,603	 	 	6,418	 	 	653	 	 	1,603	 	 	7,071	 	 	8,674	 	 	1,515	 	 	1982	 	 	1998	 	 	40	 	
1957 Westmoreland Street	 	 	Richmond	 	 	VA	 	 	2,773	 	 	1,061	 	 	4,241	 	 	284	 	 	1,061	 	 	4,525	 	 	5,586	 	 	911	 	 	1975	 	 	1998	 	 	40	 	
200 Corporate Center Drive	 	 	Camp Hill	 	 	PA	 	 	—	 	 	1,647	 	 	6,606	 	 	60	 	 	1,647	 	 	6,666	 	 	8,313	 	 	1,300	 	 	1989	 	 	1998	 	 	40	 	
2100-2108 West Laburnum	 	 	Richmond	 	 	VA	 	 	1,131	 	 	2,482	 	 	8,846	 	 	1,840	 	 	2,482	 	 	10,686	 	 	13,168	 	 	1,875	 	 	1976	 	 	1998	 	 	40	 	
2120 Tomlynn Street	 	 	Richmond	 	 	VA	 	 	771	 	 	281	 	 	1,125	 	 	147	 	 	281	 	 	1,272	 	 	1,553	 	 	248	 	 	1986	 	 	1998	 	 	40	 	
2130-2146 Tomlynn Street	 	 	Richmond	 	 	VA	 	 	1,022	 	 	353	 	 	1,416	 	 	289	 	 	353	 	 	1,705	 	 	2,058	 	 	280	 	 	1988	 	 	1998	 	 	40	 	
2169-79 Tomlynn Street	 	 	Richmond	 	 	VA	 	 	1,064	 	 	423	 	 	1,695	 	 	25	 	 	423	 	 	1,720	 	 	2,143	 	 	307	 	 	1985	 	 	1998	 	 	40	 	
2201-2245 Tomlynn Street	 	 	Richmond	 	 	VA	 	 	2,762	 	 	1,020	 	 	4,067	 	 	476	 	 	1,020	 	 	4,543	 	 	5,563	 	 	979	 	 	1989	 	 	1998	 	 	40	 	
2212-2224 Tomlynn Street	 	 	Richmond	 	 	VA	 	 	1,284	 	 	502	 	 	2,014	 	 	71	 	 	502	 	 	2,085	 	 	2,587	 	 	372	 	 	1985	 	 	1998	 	 	40	 	
2221-2245 Dabney Road	 	 	Richmond	 	 	VA	 	 	1,331	 	 	530	 	 	2,123	 	 	27	 	 	530	 	 	2,150	 	 	2,680	 	 	384	 	 	1994	 	 	1998	 	 	40	 	
2240 Dabney Road	 	 	Richmond	 	 	VA	 	 	661	 	 	264	 	 	1,059	 	 	8	 	 	264	 	 	1,067	 	 	1,331	 	 	193	 	 	1984	 	 	1998	 	 	40	 	
2244 Dabney Road	 	 	Richmond	 	 	VA	 	 	1,367	 	 	550	 	 	2,203	 	 	1	 	 	550	 	 	2,204	 	 	2,754	 	 	390	 	 	1993	 	 	1998	 	 	40	 	
F-31

Back to Contents
Brandywine Realty Trust
Schedule III
Real Estate and Accumulated Depreciation
(in thousands)
 	 	 	 	 	 	 	 	Initial Cost
	 	Gross Amount at Which Carried
December 31, 2003
	 	 	 	 	 	 	 	 	 	 	
 	 	City	 	State	 	Encumberances at
December 31, 2003	 	Land	 	Building and
Improvements	 	Net
Improvements
(Retirements)
Since
Acquisition	 	Land	 	Building and
Improvements	 	Total (a)	 	Accumulated
Depreciation at
December 31,
2003 (b)	 	Date of
Construction	 	Date
Acquired	 	Depreciable
Life	 	
	 			 			 			 			 			 			 			 			 			 			 			 			 			 	
2246 Dabney Road	 	 	Richmond	 	 	VA	 	 	1,131	 	 	455	 	 	1,822	 	 	1	 	 	455	 	 	1,823	 	 	2,278	 	 	323	 	 	1987	 	 	1998	 	 	40	 	
2248 Dabney Road	 	 	Richmond	 	 	VA	 	 	1,359	 	 	512	 	 	2,049	 	 	176	 	 	512	 	 	2,225	 	 	2,737	 	 	442	 	 	1989	 	 	1998	 	 	40	 	
2251 Dabney Road	 	 	Richmond	 	 	VA	 	 	1,023	 	 	387	 	 	1,552	 	 	121	 	 	387	 	 	1,673	 	 	2,060	 	 	321	 	 	1983	 	 	1998	 	 	40	 	
2256 Dabney Road	 	 	Richmond	 	 	VA	 	 	907	 	 	356	 	 	1,427	 	 	44	 	 	356	 	 	1,471	 	 	1,827	 	 	279	 	 	1982	 	 	1998	 	 	40	 	
2277 Dabney Road	 	 	Richmond	 	 	VA	 	 	1,262	 	 	507	 	 	2,034	 	 	1	 	 	507	 	 	2,035	 	 	2,542	 	 	360	 	 	1986	 	 	1998	 	 	40	 	
2401 Park Drive	 	 	Harrisburg	 	 	PA	 	 	—	 	 	182	 	 	728	 	 	18	 	 	182	 	 	746	 	 	928	 	 	145	 	 	1984	 	 	1998	 	 	40	 	
2404 Park Drive	 	 	Harrisburg	 	 	PA	 	 	—	 	 	167	 	 	668	 	 	90	 	 	167	 	 	758	 	 	925	 	 	201	 	 	1983	 	 	1998	 	 	40	 	
2490 Boulevard of the Generals	 	 	King of Prussia	 	 	PA	 	 	—	 	 	348	 	 	1,394	 	 	45	 	 	348	 	 	1,439	 	 	1,787	 	 	302	 	 	1975	 	 	1998	 	 	40	 	
2511 Brittons Hill Road	 	 	Richmond	 	 	VA	 	 	3,036	 	 	1,202	 	 	4,820	 	 	93	 	 	1,202	 	 	4,913	 	 	6,115	 	 	898	 	 	1987	 	 	1998	 	 	40	 	
2812 Emerywood Parkway	 	 	Henrico	 	 	VA	 	 	3,286	 	 	1,069	 	 	4,281	 	 	1,268	 	 	1,069	 	 	5,549	 	 	6,618	 	 	844	 	 	1980	 	 	1998	 	 	40	 	
300 Arboretum Place	 	 	Richmond	 	 	VA	 	 	14,872	 	 	5,450	 	 	21,892	 	 	2,076	 	 	5,450	 	 	23,968	 	 	29,418	 	 	4,968	 	 	1988	 	 	1998	 	 	40	 	
300 Corporate Center Drive	 	 	Camp Hill	 	 	PA	 	 	—	 	 	4,823	 	 	19,301	 	 	317	 	 	4,823	 	 	19,618	 	 	24,441	 	 	3,938	 	 	1989	 	 	1998	 	 	40	 	
303 Fellowship Drive	 	 	Mt. Laurel	 	 	NJ	 	 	2,591	 	 	1,493	 	 	6,055	 	 	476	 	 	1,493	 	 	6,531	 	 	8,024	 	 	1,342	 	 	1979	 	 	1998	 	 	40	 	
304 Harper Drive	 	 	Mt. Laurel	 	 	NJ	 	 	1,220	 	 	657	 	 	2,674	 	 	446	 	 	657	 	 	3,120	 	 	3,777	 	 	726	 	 	1975	 	 	1998	 	 	40	 	
305 Fellowship Drive	 	 	Mt. Laurel	 	 	NJ	 	 	2,576	 	 	1,421	 	 	5,768	 	 	789	 	 	1,421	 	 	6,557	 	 	7,978	 	 	1,621	 	 	1980	 	 	1998	 	 	40	 	
305 Harper Drive	 	 	Mt. Laurel	 	 	NJ	 	 	367	 	 	223	 	 	913	 	 	1	 	 	223	 	 	914	 	 	1,137	 	 	162	 	 	1979	 	 	1998	 	 	40	 	
307 Fellowship Drive	 	 	Mt. Laurel	 	 	NJ	 	 	2,643	 	 	1,565	 	 	6,342	 	 	276	 	 	1,565	 	 	6,618	 	 	8,183	 	 	1,327	 	 	1981	 	 	1998	 	 	40	 	
308 Harper Drive	 	 	Mt. Laurel	 	 	NJ	 	 	—	 	 	1,643	 	 	6,663	 	 	432	 	 	1,643	 	 	7,095	 	 	8,738	 	 	1,291	 	 	1976	 	 	1998	 	 	40	 	
309 Fellowship Drive	 	 	Mt. Laurel	 	 	NJ	 	 	2,783	 	 	1,518	 	 	6,154	 	 	945	 	 	1,518	 	 	7,099	 	 	8,617	 	 	1,442	 	 	1982	 	 	1998	 	 	40	 	
33 West State Street	 	 	Trenton	 	 	NJ	 	 	—	 	 	6,016	 	 	24,091	 	 	105	 	 	6,016	 	 	24,196	 	 	30,212	 	 	4,825	 	 	1988	 	 	1998	 	 	40	 	
426 Lancaster Avenue	 	 	Devon	 	 	PA	 	 	—	 	 	1,689	 	 	6,756	 	 	15	 	 	1,689	 	 	6,771	 	 	8,460	 	 	1,399	 	 	1990	 	 	1998	 	 	40	 	
4364 South Alston Avenue	 	 	Durham	 	 	NC	 	 	2,846	 	 	1,622	 	 	6,419	 	 	771	 	 	1,622	 	 	7,190	 	 	8,812	 	 	1,292	 	 	1985	 	 	1998	 	 	40	 	
4805 Lake Brooke Drive	 	 	Glen Allen	 	 	VA	 	 	4,134	 	 	1,640	 	 	6,567	 	 	121	 	 	1,640	 	 	6,688	 	 	8,328	 	 	1,192	 	 	1996	 	 	1998	 	 	40	 	
50 East State Street	 	 	Trenton	 	 	NJ	 	 	—	 	 	8,926	 	 	35,735	 	 	546	 	 	8,926	 	 	36,281	 	 	45,207	 	 	7,239	 	 	1989	 	 	1998	 	 	40	 	
50 Swedesford Square	 	 	Frazer	 	 	PA	 	 	6,304	 	 	3,902	 	 	15,254	 	 	365	 	 	3,902	 	 	15,619	 	 	19,521	 	 	2,769	 	 	1988	 	 	1998	 	 	40	 	
500 Nationwide Drive	 	 	Harrisburg	 	 	PA	 	 	—	 	 	173	 	 	850	 	 	787	 	 	173	 	 	1,637	 	 	1,810	 	 	367	 	 	1977	 	 	1998	 	 	40	 	
52 Swedesford Square	 	 	Frazer	 	 	PA	 	 	6,975	 	 	4,241	 	 	16,579	 	 	779	 	 	4,241	 	 	17,358	 	 	21,599	 	 	3,299	 	 	1986	 	 	1998	 	 	40	 	
520 Virginia Drive	 	 	Ft. Washington	 	 	PA	 	 	—	 	 	845	 	 	3,455	 	 	380	 	 	845	 	 	3,835	 	 	4,680	 	 	975	 	 	1987	 	 	1998	 	 	40	 	
600 Corporate Circle Drive	 	 	Harrisburg	 	 	PA	 	 	—	 	 	363	 	 	1,452	 	 	75	 	 	363	 	 	1,527	 	 	1,890	 	 	300	 	 	1978	 	 	1998	 	 	40	 	
600 East Main Street	 	 	Richmond	 	 	VA	 	 	16,450	 	 	9,808	 	 	38,255	 	 	2,876	 	 	9,808	 	 	41,131	 	 	50,939	 	 	7,483	 	 	1986	 	 	1998	 	 	40	 	
600 Park Avenue	 	 	King of Prussia	 	 	PA	 	 	—	 	 	1,012	 	 	4,048	 	 	3	 	 	1,012	 	 	4,051	 	 	5,063	 	 	810	 	 	1964	 	 	1998	 	 	40	 	
610 Freedom Business Center	 	 	King of Prussia	 	 	PA	 	 	5,339	 	 	2,017	 	 	8,070	 	 	668	 	 	2,017	 	 	8,738	 	 	10,755	 	 	1,989	 	 	1985	 	 	1998	 	 	40	 	
620 Allendale Road	 	 	King of Prussia	 	 	PA	 	 	—	 	 	1,020	 	 	3,839	 	 	980	 	 	1,020	 	 	4,819	 	 	5,839	 	 	1,034	 	 	1961	 	 	1998	 	 	40	 	
620 Freedom Business Center	 	 	King of Prussia	 	 	PA	 	 	7,239	 	 	2,770	 	 	11,014	 	 	798	 	 	2,770	 	 	11,812	 	 	14,582	 	 	2,436	 	 	1986	 	 	1998	 	 	40	 	
630 Clark Avenue	 	 	King of Prussia	 	 	PA	 	 	—	 	 	547	 	 	2,190	 	 	1	 	 	547	 	 	2,191	 	 	2,738	 	 	438	 	 	1960	 	 	1998	 	 	40	 	
630 Freedom Business Center	 	 	King of Prussia	 	 	PA	 	 	7,138	 	 	2,773	 	 	11,144	 	 	460	 	 	2,773	 	 	11,604	 	 	14,377	 	 	2,566	 	 	1989	 	 	1998	 	 	40	 	
640 Allendale Road	 	 	King of Prussia	 	 	PA	 	 	—	 	 	439	 	 	432	 	 	1,327	 	 	439	 	 	1,759	 	 	2,198	 	 	97	 	 	2001	 	 	1998	 	 	40	 	
640 Freedom Business Center	 	 	King of Prussia	 	 	PA	 	 	11,203	 	 	4,222	 	 	16,891	 	 	1,453	 	 	4,222	 	 	18,344	 	 	22,566	 	 	3,769	 	 	1991	 	 	1998	 	 	40	 	
650 Park Avenue	 	 	King of Prussia	 	 	PA	 	 	—	 	 	1,916	 	 	4,378	 	 	903	 	 	1,916	 	 	5,281	 	 	7,197	 	 	1,032	 	 	1968	 	 	1998	 	 	40	 	
660 Allendale Road	 	 	King of Prussia	 	 	PA	 	 	—	 	 	396	 	 	3,343	 	 	(1,636	)	 	396	 	 	1,707	 	 	2,103	 	 	592	 	 	1962	 	 	1998	 	 	40	 	
680 Allendale Road	 	 	King of Prussia	 	 	PA	 	 	—	 	 	689	 	 	2,756	 	 	678	 	 	689	 	 	3,434	 	 	4,123	 	 	784	 	 	1962	 	 	1998	 	 	40	 	
700 East Gate Drive	 	 	Mt. Laurel	 	 	NJ	 	 	6,048	 	 	3,569	 	 	14,436	 	 	723	 	 	3,569	 	 	15,159	 	 	18,728	 	 	2,884	 	 	1984	 	 	1998	 	 	40	 	
701 East Gate Drive	 	 	Mt. Laurel	 	 	NJ	 	 	2,971	 	 	1,736	 	 	6,877	 	 	588	 	 	1,736	 	 	7,465	 	 	9,201	 	 	1,326	 	 	1986	 	 	1998	 	 	40	 	
7010 Snowdrift Way	 	 	Allentown	 	 	PA	 	 	1,370	 	 	818	 	 	3,324	 	 	101	 	 	818	 	 	3,425	 	 	4,243	 	 	612	 	 	1991	 	 	1998	 	 	40	 	
7150 Windsor Drive	 	 	Allentown	 	 	PA	 	 	1,751	 	 	1,035	 	 	4,219	 	 	168	 	 	1,035	 	 	4,387	 	 	5,422	 	 	882	 	 	1988	 	 	1998	 	 	40	 	
7350 Tilghman Street	 	 	Allentown	 	 	PA	 	 	—	 	 	3,414	 	 	13,716	 	 	1,087	 	 	3,414	 	 	14,803	 	 	18,217	 	 	3,049	 	 	1987	 	 	1998	 	 	40	 	
741 First Avenue	 	 	King of Prussia	 	 	PA	 	 	—	 	 	1,287	 	 	5,151	 	 	210	 	 	1,287	 	 	5,361	 	 	6,648	 	 	1,069	 	 	1966	 	 	1998	 	 	40	 	
7450 Tilghman Street	 	 	Allentown	 	 	PA	 	 	5,090	 	 	2,867	 	 	11,631	 	 	1,265	 	 	2,867	 	 	12,896	 	 	15,763	 	 	2,741	 	 	1986	 	 	1998	 	 	40	 	
F-32

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Brandywine Realty Trust
Schedule III
Real Estate and Accumulated Depreciation
(in thousands)
 	 	 	 	 	 	 	 	Initial Cost
	 	Gross Amount at Which Carried
December 31, 2003
	 	 	 	 	 	 	 	 	 	 	
 	 	City	 	State	 	Encumb-
erances at
December 31,
2003	 	Land	 	Building and
Improvements	 	Net
Improvements
(Retirements)
Since
Acquisition	 	Land	 	Building and
Improvements	 	Total (a)	 	Accumulated
Depreciation at
December 31,
2003 (b)	 	Date of
Construction	 	Date
Acquired	 	Depreciable
Life	 	
	 			 			 			 			 			 			 			 			 			 			 			 			 			 	
751-761 Fifth Avenue	 	 	King of Prussia	 	 	PA	 	 	—	 	 	1,097	 	 	4,391	 	 	3	 	 	1,097	 	 	4,394	 	 	5,491	 	 	879	 	 	1967	 	 	1998	 	 	40	 	
7535 Windsor Drive	 	 	Allentown	 	 	PA	 	 	5,659	 	 	3,376	 	 	13,400	 	 	747	 	 	3,376	 	 	14,147	 	 	17,523	 	 	2,609	 	 	1988	 	 	1998	 	 	40	 	
755 Business Center Drive	 	 	Horsham	 	 	PA	 	 	2,156	 	 	1,362	 	 	2,334	 	 	646	 	 	1,362	 	 	2,980	 	 	4,342	 	 	935	 	 	1998	 	 	1998	 	 	40	 	
800 Corporate Circle Drive	 	 	Harrisburg	 	 	PA	 	 	—	 	 	414	 	 	1,653	 	 	115	 	 	414	 	 	1,768	 	 	2,182	 	 	369	 	 	1979	 	 	1998	 	 	40	 	
815 East Gate Drive	 	 	Mt. Laurel	 	 	NJ	 	 	1,078	 	 	636	 	 	2,584	 	 	119	 	 	636	 	 	2,703	 	 	3,339	 	 	569	 	 	1986	 	 	1998	 	 	40	 	
817 East Gate Drive	 	 	Mt. Laurel	 	 	NJ	 	 	1,005	 	 	611	 	 	2,426	 	 	74	 	 	611	 	 	2,500	 	 	3,111	 	 	441	 	 	1986	 	 	1998	 	 	40	 	
875 First Avenue	 	 	King of Prussia	 	 	PA	 	 	—	 	 	618	 	 	2,473	 	 	3,259	 	 	618	 	 	5,732	 	 	6,350	 	 	822	 	 	1966	 	 	1998	 	 	40	 	
9011 Arboretum Parkway	 	 	Richmond	 	 	VA	 	 	4,884	 	 	1,857	 	 	7,702	 	 	279	 	 	1,857	 	 	7,981	 	 	9,838	 	 	1,492	 	 	1991	 	 	1998	 	 	40	 	
9100 Arboretum Parkway	 	 	Richmond	 	 	VA	 	 	3,736	 	 	1,362	 	 	5,489	 	 	540	 	 	1,362	 	 	6,029	 	 	7,391	 	 	1,248	 	 	1988	 	 	1998	 	 	40	 	
920 Harvest Drive	 	 	Blue Bell	 	 	PA	 	 	—	 	 	2,433	 	 	9,738	 	 	502	 	 	2,433	 	 	10,240	 	 	12,673	 	 	2,126	 	 	1990	 	 	1998	 	 	40	 	
9200 Arboretum Parkway	 	 	Richmond	 	 	VA	 	 	2,634	 	 	985	 	 	3,973	 	 	253	 	 	985	 	 	4,226	 	 	5,211	 	 	792	 	 	1988	 	 	1998	 	 	40	 	
9210 Arboretum Parkway	 	 	Richmond	 	 	VA	 	 	2,867	 	 	1,110	 	 	4,474	 	 	87	 	 	1,110	 	 	4,561	 	 	5,671	 	 	812	 	 	1988	 	 	1998	 	 	40	 	
9211 Arboretum Parkway	 	 	Richmond	 	 	VA	 	 	1,536	 	 	582	 	 	2,433	 	 	78	 	 	582	 	 	2,511	 	 	3,093	 	 	444	 	 	1991	 	 	1998	 	 	40	 	
922 Swedesford Road	 	 	Frazer	 	 	PA	 	 	—	 	 	218	 	 	1	 	 	(1	)	 	218	 	 	—	 	 	218	 	 	—	 	 	1986	 	 	1998	 	 	40	 	
925 Harvest Drive	 	 	Blue Bell	 	 	PA	 	 	—	 	 	1,671	 	 	6,606	 	 	252	 	 	1,671	 	 	6,858	 	 	8,529	 	 	1,354	 	 	1990	 	 	1998	 	 	40	 	
993 Lenox Drive	 	 	Lawrenceville	 	 	NJ	 	 	12,155	 	 	2,811	 	 	17,996	 	 	(5,986	)	 	2,811	 	 	12,010	 	 	14,821	 	 	2,361	 	 	1985	 	 	1998	 	 	40	 	
997 Lenox Drive	 	 	Lawrenceville	 	 	NJ	 	 	10,095	 	 	2,410	 	 	9,700	 	 	199	 	 	2,410	 	 	9,899	 	 	12,309	 	 	2,040	 	 	1987	 	 	1998	 	 	40	 	
Marine Center – Pier #12	 	 	Philadelphia	 	 	PA	 	 	—	 	 	—	 	 	—	 	 	356	 	 	—	 	 	356	 	 	356	 	 	48	 	 	1998	 	 	40	 	 	 	 	
Marine Center – Pier #24	 	 	Philadelphia	 	 	PA	 	 	—	 	 	—	 	 	—	 	 	59	 	 	—	 	 	59	 	 	59	 	 	7	 	 	1998	 	 	40	 	 	 	 	
Marine Center Pier #13-15	 	 	Philadelphia	 	 	PA	 	 	—	 	 	—	 	 	—	 	 	106	 	 	—	 	 	106	 	 	106	 	 	76	 	 	1998	 	 	40	 	 	 	 	
Philadelphia Marine Center	 	 	Philadelphia	 	 	PA	 	 	—	 	 	532	 	 	2,196	 	 	37	 	 	532	 	 	2,233	 	 	2,765	 	 	395	 	 	 	 	 	1998	 	 	40	 	
11 Campus Boulevard	 	 	Newtown Square	 	 	PA	 	 	4,775	 	 	1,112	 	 	4,067	 	 	595	 	 	1,112	 	 	4,662	 	 	5,774	 	 	720	 	 	1999	 	 	1999	 	 	40	 	
2000 Lenox Drive	 	 	Lawrenceville	 	 	NJ	 	 	14,349	 	 	2,291	 	 	12,221	 	 	2,984	 	 	2,291	 	 	15,205	 	 	17,496	 	 	2,518	 	 	1999	 	 	1999	 	 	40	 	
630 Allendale Road	 	 	King of Prussia	 	 	PA	 	 	19,797	 	 	2,836	 	 	4,028	 	 	15,961	 	 	2,836	 	 	19,989	 	 	22,825	 	 	2,654	 	 	1999	 	 	1999	 	 	40	 	
630 Dresher Road	 	 	Horsham	 	 	PA	 	 	—	 	 	771	 	 	3,083	 	 	796	 	 	771	 	 	3,879	 	 	4,650	 	 	558	 	 	1987	 	 	1999	 	 	40	 	
7130 Ambassador Drive	 	 	Allentown	 	 	PA	 	 	—	 	 	761	 	 	3,046	 	 	10	 	 	761	 	 	3,056	 	 	3,817	 	 	446	 	 	1991	 	 	1999	 	 	40	 	
1050 Westlakes Drive	 	 	Berwyn	 	 	PA	 	 	—	 	 	2,611	 	 	10,445	 	 	1,762	 	 	2,611	 	 	12,207	 	 	14,818	 	 	1,765	 	 	1984	 	 	2000	 	 	40	 	
1700 Paoli Pike	 	 	East Goshen	 	 	PA	 	 	—	 	 	458	 	 	559	 	 	2,923	 	 	458	 	 	3,482	 	 	3,940	 	 	233	 	 	2000	 	 	2000	 	 	40	 	
10 Lake Center Drive	 	 	Marlton	 	 	NJ	 	 	—	 	 	1,880	 	 	7,521	 	 	366	 	 	1,880	 	 	7,887	 	 	9,767	 	 	577	 	 	1989	 	 	2001	 	 	40	 	
100 Arrandale Boulevard	 	 	Exton	 	 	PA	 	 	—	 	 	970	 	 	3,878	 	 	2	 	 	970	 	 	3,880	 	 	4,850	 	 	267	 	 	1997	 	 	2001	 	 	40	 	
100 Gateway Centre Parkway	 	 	Richmond	 	 	VA	 	 	—	 	 	391	 	 	5,410	 	 	1,256	 	 	391	 	 	6,666	 	 	7,057	 	 	724	 	 	2001	 	 	2001	 	 	40	 	
100 Lindenwood Drive	 	 	Malvern	 	 	PA	 	 	—	 	 	473	 	 	1,892	 	 	527	 	 	473	 	 	2,419	 	 	2,892	 	 	178	 	 	1985	 	 	2001	 	 	40	 	
101 Lindenwood Drive	 	 	Malvern	 	 	PA	 	 	—	 	 	4,152	 	 	16,606	 	 	171	 	 	4,152	 	 	16,777	 	 	20,929	 	 	1,171	 	 	1988	 	 	2001	 	 	40	 	
1100 Cassett Road	 	 	Berwyn	 	 	PA	 	 	—	 	 	1,695	 	 	6,779	 	 	4	 	 	1,695	 	 	6,783	 	 	8,478	 	 	466	 	 	1997	 	 	2001	 	 	40	 	
111 Arrandale Boulevard	 	 	Exton	 	 	PA	 	 	1,152	 	 	262	 	 	1,048	 	 	1	 	 	262	 	 	1,049	 	 	1,311	 	 	72	 	 	1996	 	 	2001	 	 	40	 	
111/113 Pencader Drive	 	 	Newark	 	 	DE	 	 	—	 	 	1,092	 	 	4,366	 	 	3	 	 	1,092	 	 	4,369	 	 	5,461	 	 	300	 	 	1990	 	 	2001	 	 	40	 	
1160 Swedesford Road	 	 	Berwyn	 	 	PA	 	 	—	 	 	1,781	 	 	7,124	 	 	430	 	 	1,781	 	 	7,554	 	 	9,335	 	 	640	 	 	1986	 	 	2001	 	 	40	 	
1180 Swedesford Road	 	 	Berwyn	 	 	PA	 	 	—	 	 	2,086	 	 	8,342	 	 	345	 	 	2,086	 	 	8,687	 	 	10,773	 	 	651	 	 	1987	 	 	2001	 	 	40	 	
161 Gaither Drive	 	 	Mt. Laurel	 	 	NJ	 	 	—	 	 	1,016	 	 	4,064	 	 	342	 	 	1,016	 	 	4,406	 	 	5,422	 	 	351	 	 	1987	 	 	2001	 	 	40	 	
17 Campus Boulevard	 	 	Newtown Square	 	 	PA	 	 	5,197	 	 	1,108	 	 	5,155	 	 	22	 	 	1,108	 	 	5,177	 	 	6,285	 	 	625	 	 	2001	 	 	2001	 	 	40	 	
200 Lake Drive East	 	 	Cherry Hill	 	 	NJ	 	 	—	 	 	2,069	 	 	8,275	 	 	168	 	 	2,069	 	 	8,443	 	 	10,512	 	 	597	 	 	1989	 	 	2001	 	 	40	 	
200 Lindenwood Drive	 	 	Malvern	 	 	PA	 	 	—	 	 	324	 	 	1,295	 	 	2	 	 	324	 	 	1,297	 	 	1,621	 	 	89	 	 	1984	 	 	2001	 	 	40	 	
210 Lake Drive East	 	 	Cherry Hill	 	 	NJ	 	 	—	 	 	1,645	 	 	6,579	 	 	164	 	 	1,645	 	 	6,743	 	 	8,388	 	 	475	 	 	1986	 	 	2001	 	 	40	 	
220 Lake Drive East	 	 	Cherry Hill	 	 	NJ	 	 	—	 	 	2,144	 	 	8,798	 	 	514	 	 	2,144	 	 	9,312	 	 	11,456	 	 	781	 	 	1988	 	 	2001	 	 	40	 	
30 Lake Center Drive	 	 	Marlton	 	 	NJ	 	 	—	 	 	1,043	 	 	4,171	 	 	145	 	 	1,043	 	 	4,316	 	 	5,359	 	 	303	 	 	1986	 	 	2001	 	 	40	 	
300 Lindenwood Drive	 	 	Malvern	 	 	PA	 	 	—	 	 	848	 	 	3,394	 	 	237	 	 	848	 	 	3,631	 	 	4,479	 	 	233	 	 	1984	 	 	2001	 	 	40	 	
301 Lindenwood Drive	 	 	Malvern	 	 	PA	 	 	—	 	 	2,729	 	 	10,915	 	 	648	 	 	2,729	 	 	11,563	 	 	14,292	 	 	839	 	 	1986	 	 	2001	 	 	40	 	
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Brandywine Realty Trust
Schedule III
Real Estate and Accumulated Depreciation
(in thousands)
 	 	 	 	 	 	 	 	Initial Cost
	 	Gross Amount at Which Carried
December 31, 2003
	 	 	 	 	 	 	 	 	 	 	
 	 	City	 	State	 	Encumb-
erances at
December 31,
2003	 	Land	 	Building and
Improvements	 	Net
Improvements
(Retirements)
Since
Acquisition	 	Land	 	Building
and
Improvements	 	Total (a)	 	Accumulated
Depreciation at
December 31,
2003 (b)	 	Date of
Construction	 	Date
Acquired	 	Depreciable
Life	 	
	 			 			 			 			 			 			 			 			 			 			 			 			 			 	
412 Creamery Way	 	 	Exton	 	 	PA	 	 	—	 	 	1,195	 	 	4,779	 	 	436	 	 	1,195	 	 	5,215	 	 	6,410	 	 	437	 	 	1999	 	 	2001	 	 	40	 	
429 Creamery Way	 	 	Exton	 	 	PA	 	 	3,235	 	 	1,368	 	 	5,471	 	 	3	 	 	1,368	 	 	5,474	 	 	6,842	 	 	376	 	 	1996	 	 	2001	 	 	40	 	
436 Creamery Way	 	 	Exton	 	 	PA	 	 	—	 	 	994	 	 	3,978	 	 	14	 	 	994	 	 	3,992	 	 	4,986	 	 	279	 	 	1991	 	 	2001	 	 	40	 	
440 Creamery Way	 	 	Exton	 	 	PA	 	 	3,093	 	 	982	 	 	3,927	 	 	87	 	 	982	 	 	4,014	 	 	4,996	 	 	296	 	 	1991	 	 	2001	 	 	40	 	
442 Creamery Way	 	 	Exton	 	 	PA	 	 	2,769	 	 	894	 	 	3,576	 	 	2	 	 	894	 	 	3,578	 	 	4,472	 	 	246	 	 	1991	 	 	2001	 	 	40	 	
457 Creamery Way	 	 	Exton	 	 	PA	 	 	—	 	 	777	 	 	3,107	 	 	2	 	 	777	 	 	3,109	 	 	3,886	 	 	214	 	 	1990	 	 	2001	 	 	40	 	
467 Creamery Way	 	 	Exton	 	 	PA	 	 	—	 	 	906	 	 	3,623	 	 	2	 	 	906	 	 	3,625	 	 	4,531	 	 	249	 	 	1988	 	 	2001	 	 	40	 	
479 Thomas Jones Way	 	 	Exton	 	 	PA	 	 	—	 	 	1,075	 	 	4,299	 	 	260	 	 	1,075	 	 	4,559	 	 	5,634	 	 	346	 	 	1988	 	 	2001	 	 	40	 	
481 John Young Way	 	 	Exton	 	 	PA	 	 	2,475	 	 	496	 	 	1,983	 	 	2	 	 	496	 	 	1,985	 	 	2,481	 	 	136	 	 	1997	 	 	2001	 	 	40	 	
555 Croton Road	 	 	King of Prussia	 	 	PA	 	 	6,209	 	 	4,486	 	 	17,943	 	 	121	 	 	4,486	 	 	18,064	 	 	22,550	 	 	1,261	 	 	1999	 	 	2001	 	 	40	 	
7360 Windsor Drive	 	 	Allentown	 	 	PA	 	 	—	 	 	1,451	 	 	3,618	 	 	2,039	 	 	1,451	 	 	5,657	 	 	7,108	 	 	708	 	 	2001	 	 	2001	 	 	40	 	
Two Righter Parkway	 	 	Wilmington	 	 	DE	 	 	—	 	 	2,802	 	 	11,217	 	 	7	 	 	2,802	 	 	11,224	 	 	14,026	 	 	1,001	 	 	1987	 	 	2001	 	 	40	 	
100 Brandywine Boulevard	 	 	Newtown	 	 	PA	 	 	—	 	 	1,784	 	 	9,811	 	 	2,971	 	 	1,784	 	 	12,782	 	 	14,566	 	 	767	 	 	2002	 	 	2002	 	 	40	 	
1000 Lenox Drive	 	 	Lawrenceville	 	 	NJ	 	 	—	 	 	1,174	 	 	4,696	 	 	3	 	 	1,174	 	 	4,699	 	 	5,873	 	 	176	 	 	1982	 	 	2002	 	 	40	 	
15 Campus Boulevard	 	 	West Goshen	 	 	PA	 	 	5,943	 	 	1,164	 	 	3,896	 	 	2,127	 	 	1,164	 	 	6,023	 	 	7,187	 	 	532	 	 	2002	 	 	2002	 	 	40	 	
200 Commerce Drive	 	 	Newark	 	 	DE	 	 	6,165	 	 	911	 	 	4,414	 	 	1,552	 	 	911	 	 	5,966	 	 	6,877	 	 	877	 	 	1998	 	 	2002	 	 	40	 	
400 Berwyn Park	 	 	Berwyn	 	 	PA	 	 	15,726	 	 	2,657	 	 	4,462	 	 	12,947	 	 	2,657	 	 	17,409	 	 	20,066	 	 	1,105	 	 	2002	 	 	2002	 	 	40	 	
400 Commerce Drive	 	 	Newark	 	 	DE	 	 	12,346	 	 	2,528	 	 	9,220	 	 	4,495	 	 	2,528	 	 	13,715	 	 	16,243	 	 	2,381	 	 	1997	 	 	2002	 	 	40	 	
401 Plymouth Road	 	 	Plymouth Meeting	 	 	PA	 	 	—	 	 	6,198	 	 	16,131	 	 	16,467	 	 	6,198	 	 	32,598	 	 	38,796	 	 	2,327	 	 	2002	 	 	2002	 	 	40	 	
600 Plymouth Mtg Exec Campus	 	 	Plymouth Meeting	 	 	PA	 	 	12,439	 	 	3,652	 	 	15,288	 	 	266	 	 	3,652	 	 	15,554	 	 	19,206	 	 	726	 	 	1986	 	 	2002	 	 	40	 	
980 Harvest Drive	 	 	Blue Bell	 	 	PA	 	 	—	 	 	2,079	 	 	7,821	 	 	27	 	 	2,079	 	 	7,848	 	 	9,927	 	 	266	 	 	1988	 	 	2002	 	 	40	 	
Four Plymouth Mtg Exec Campus	 	 	Plymouth Meeting	 	 	PA	 	 	11,791	 	 	3,572	 	 	14,435	 	 	198	 	 	3,572	 	 	14,633	 	 	18,205	 	 	691	 	 	1990	 	 	2002	 	 	40	 	
Three Plymouth Mtg Exec Campus	 	 	Plymouth Meeting	 	 	PA	 	 	12,078	 	 	3,558	 	 	14,743	 	 	348	 	 	3,558	 	 	15,091	 	 	18,649	 	 	713	 	 	1988	 	 	2002	 	 	40	 	
Two Paragon Place	 	 	Richmond	 	 	VA	 	 	—	 	 	2,917	 	 	11,454	 	 	760	 	 	2,917	 	 	12,214	 	 	15,131	 	 	548	 	 	1989	 	 	2002	 	 	40	 	
Two Plymouth Mtg Exec Campus	 	 	Plymouth Meeting	 	 	PA	 	 	11,991	 	 	3,651	 	 	14,514	 	 	349	 	 	3,651	 	 	14,863	 	 	18,514	 	 	786	 	 	1987	 	 	2002	 	 	40	 	
565 East Swedesford Road	 	 	Wayne	 	 	PA	 	 	—	 	 	1,872	 	 	7,489	 	 	5	 	 	1,872	 	 	7,494	 	 	9,366	 	 	31	 	 	1984	 	 	2003	 	 	40	 	
575 East Swedesford Road	 	 	Wayne	 	 	PA	 	 	—	 	 	2,178	 	 	8,712	 	 	6	 	 	2,178	 	 	8,718	 	 	10,896	 	 	36	 	 	1985	 	 	2003	 	 	40	 	
585 East Swedesford Road	 	 	Wayne	 	 	PA	 	 	—	 	 	1,350	 	 	5,401	 	 	3	 	 	1,350	 	 	5,404	 	 	6,754	 	 	23	 	 	1998	 	 	2003	 	 	40	 	
595 East Swedesford Road	 	 	Wayne	 	 	PA	 	 	—	 	 	2,729	 	 	10,917	 	 	7	 	 	2,729	 	 	10,924	 	 	13,653	 	 	45	 	 	1988	 	 	2003	 	 	40	 	
935 First Avenue	 	 	King of Prussia	 	 	PA	 	 	—	 	 	3,255	 	 	11,693	 	 	7	 	 	3,255	 	 	11,700	 	 	14,955	 	 	156	 	 	2001	 	 	2003	 	 	40	 	
989 Lenox Drive	 	 	Lawrenceville	 	 	NJ	 	 	—	 	 	3,701	 	 	14,802	 	 	8	 	 	3,701	 	 	14,810	 	 	18,511	 	 	—	 	 	1982	 	 	2003	 	 	40	 	
 	 	 	 	 	 	 	 		 		 		 		 		 		 		 		 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	$	456,402	 	$	345,022	 	$	1,380,642	 	$	144,080	 	$	345,022	 	$	1,524,722	 	$	1,869,744	 	$	268,091	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 		 		 		 		 		 		 		 		 	 	 	 	 	 	 	 	 	 	
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(a)	Reconciliation of Real Estate:	
 	 	
 	The following table reconciles the real estate investments from January 1, 2002 to December 31, 2003 (in thousands):	
 	 	
 	 	2003	 	2002	 	2001	 	
 	 			 			 			 	
Balance at beginning of year	 	$	1,890,009	 	$	1,893,039	 	$	1,754,895	 	
Additions:	 	 	 	 	 	 	 	 	 	 	
Acquisitions	 	 	59,149	 	 	120,627	 	 	217,212	 	
Capital expenditures	 	 	57,721	 	 	94,086	 	 	65,210	 	
Less:	 	 	 	 	 	 	 	 	 	 	
Dispositions	 	 	(135,118	)	 	(209,014	)	 	(144,278)	 	
Assets transferred to held-for-sale	 	 	(2,017	)	 	(8,729	)	 	—	 	
 	 			 			 			 	
Balance at end of year	 	$	1,869,744	 	$	1,890,009	 	$	1,893,039	 	

(b)	Reconciliation of Accumulated Depreciation:	
 	 	
 	The following table reconciles the accumulated depreciation on real estate investments from January 1, 2003 to December 31, 2003 (in thousands):	
 	 	
 	 	2003	 	2002	 	2001	 	
 	 			 			 			 	
Balance at beginning of year	 	$	245,230	 	$	230,793	 	$	179,558	 	
Additions:	 	 	 	 	 	 	 	 	 	 	
Depreciation expense – continued operations	 	 	51,191	 	 	46,190	 	 	59,348	 	
Depreciation expense – discontinued operations	 	 	695	 	 	2,511	 	 	10,147	 	
Acquisitions	 	 	—	 	 	1,175	 	 	—	 	
Less:	 	 	 	 	 	 	 	 	 	 	
Dispositions	 	 	(28,663	)	 	(34,204	)	 	(18,260)	 	
Assets transferred to held-for-sale	 	 	(362	)	 	(1,235	)	 	—	 	
 	 			 			 			 	
Balance at end of year	 	$	268,091	 	$	245,230	 	$	230,793	 	
 	 			 			 			 	
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