UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934	

 	For the quarterly period ended March 31, 2004	
 	or	
 	Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 	

 	For the transition period from ____________ to ___________	
Commission file number 1-9106
Brandywine Realty Trust	
	
(Exact name of registrant as specified in its charter)	

Maryland	 	 	23-2413352	 	
	 	 		 	
(State or other jurisdiction of
incorporation or organization)	 	 	(I.R.S. Employer Identification No.)	 	

401 Plymouth Road, Plymouth Meeting, Pennsylvania	 	 	19462	 	
	 	 		 	
(Address of principal executive offices)	 	 	(Zip Code)	 	

(610) 325-5600	 	
	 	
(Registrant's telephone number)	 	
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months or for such shorter period that the registrant was required to file such reports and (2) has been subject to such filing requirements for the past 90 days. Yes      No 
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes       No 
A total of 45,665,934 Common Shares of Beneficial Interest, par value $.01 per share, were outstanding as of May 10, 2004.

BRANDYWINE REALTY TRUST
TABLE OF CONTENTS
PART I – FINANCIAL INFORMATION
 	 	 	 	 	 	Page	 	
 	 	 	 	 	 		 	
Item 1.	 	 	Financial Statements (unaudited)	 	 	 	 	
 	 	 	 	 	 	 	 	
 	 	 	Condensed Consolidated Balance Sheets as of March 31, 2004 and December 31, 2003	 	 	3	 	
 	 	 	 	 	 	 	 	
 	 	 	Condensed Consolidated Statements of Operations for the three-month periods ended March 31, 2004 and March 31, 2003	 	 	4	 	
 	 	 	 	 	 	 	 	
 	 	 	Condensed Consolidated Statements of Cash Flows for the three-month periods ended March 31, 2004 and March 31, 2003	 	 	5	 	
 	 	 	 	 	 	 	 	
 	 	 	Notes to Condensed Consolidated Financial Statements	 	 	6	 	
 	 	 	 	 	 	 	 	
Item 2.	 	 	Management’s Discussion and Analysis of Financial Condition and Results of Operations	 	 	19	 	
 	 	 	 	 	 	 	 	
Item 3.	 	 	Quantitative and Qualitative Disclosures about Market Risk	 	 	25	 	
 	 	 	 	 	 	 	 	
Item 4.	 	 	Controls and Procedures	 	 	25	 	
 	 	 	 	 	 	 	 	
 	 	 	PART II – OTHER INFORMATION	 	 	 	 	
 	 	 	 	 	 	 	 	
Item 1. 	 	 	Legal Proceedings	 	 	25	 	
 	 	 	 	 	 	 	 	
Item 2.	 	 	Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities	 	 	26	 	
 	 	 	 	 	 	 	 	
Item 6.	 	 	Exhibits and Reports on Form 8-K	 	 	26	 	
 	 	 	 	 	 	 	 	
 	 	 	Signatures	 	 	27	 	
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PART I – FINANCIAL INFORMATION
Item 1. – Financial Statements
BRANDYWINE REALTY TRUST
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share information)
 	 	 	March 31,
2004	 	 	December 31,
2003	 	
 	 			 			 	
 	 	 	 (unaudited)	 	 	 	 	
ASSETS	 	 	 	 	 	 	 	
Real estate investments:	 	 	 	 	 	 	 	
Operating properties	 	$	1,907,836 	 	$	1,869,744 	 	
Accumulated depreciation	 	 	      (286,682	)	 	      (268,091	)	
 	 			 			 	
 	 	 	     1,621,154 	 	 	     1,601,653 	 	
Construction-in-progress	 	 	     48,300 	 	 	     29,787 	 	
Land held for development	 	 	      58,086 	 	 	      63,915 	 	
 	 			 			 	
 	 	 	      1,727,540 	 	 	      1,695,355 	 	

Cash and cash equivalents	 	 	      7,557 	 	 	      8,552 	 	
Escrowed cash	 	 	      15,500 	 	 	      14,388 	 	
Accounts receivable, net	 	 	      6,019 	 	 	      5,206 	 	
Accrued rent receivable, net	 	 	      28,886 	 	 	      26,652 	 	
Marketable securities	 	 	      377 	 	 	      12,052 	 	
Assets held for sale	 	 	     —	 	 	      5,317 	 	
Investment in unconsolidated Real Estate Ventures	 	 	      13,282 	 	 	      15,853 	 	
Deferred costs, net	 	 	      27,509 	 	 	      27,269 	 	
Other assets	 	 	      40,915 	 	 	      45,132 	 	
 	 			 			 	
Total assets	 	$	1,867,585 	 	$	1,855,776 	 	
 	 			 			 	
LIABILITIES AND BENEFICIARIES' EQUITY	 	 	 	 	 	 	 	
Mortgage notes payable	 	$	452,049 	 	$	462,659 	 	
Borrowings under Credit Facility	 	 	      265,000 	 	 	      305,000 	 	
Unsecured term loan	 	 	      100,000 	 	 	      100,000 	 	
Accounts payable and accrued expenses	 	 	      24,658 	 	 	      30,290 	 	
Distributions payable	 	 	      23,014 	 	 	      20,947 	 	
Tenant security deposits and deferred rents 	 	 	      17,940 	 	 	      16,123 	 	
Other liabilities	 	 	      4,250 	 	 	      15,360 	 	
Liabilities related to assets held for sale	 	 	     —	 	 	      52 	 	
 	 			 			 	
Total liabilities	 	 	      886,911 	 	 	      950,431 	 	
Minority interest	 	 	      36,526 	 	 	      134,357 	 	
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 2004 and 2003	 	 	      8 	 	 	      8 	 	
7.50% Series C Preferred Shares, $0.01 par value;	 	 	 	 	 	 	 	
issued and outstanding-2,000,000	 	 	 	 	 	 	 	
in 2004 and 2003	 	 	      20 	 	 	      20 	 	
7.375% Series D Preferred Shares, $0.01 par value;	 	 	 	 	 	 	 	
issued and outstanding-2,300,000 in 2004	 	 	 	 	 	 	 	
and no shares issued and outstanding in 2003	 	 	      23 	 	 	     —	 	
Common Shares of Beneficial Interest, $0.01 par value; 	 	 	 	 	 	 	 	
shares authorized-100,000,000; issued and outstanding-	 	 	 	 	 	 	 	
45,663,743 in 2004 and 41,040,710 in 2003	 	 	      455 	 	 	      410 	 	
Additional paid-in capital	 	 	      1,114,897 	 	 	      936,730 	 	
Share warrants	 	 	      401 	 	 	      401 	 	
Cumulative earnings	 	 	      321,753 	 	 	      309,343 	 	
Accumulated other comprehensive loss	 	 	      (1,881	)	 	      (2,158	)	
Cumulative distributions	 	 	      (491,528	)	 	      (473,766	)	
 	 			 			 	
Total beneficiaries' equity	 	 	      944,148 	 	 	      770,988 	 	
 	 			 			 	
Total liabilities and beneficiaries' equity	 	$	1,867,585 	 	$	1,855,776 	 	
 	 			 			 	
The accompanying notes are an integral part of these condensed consolidated financial statements.
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BRANDYWINE REALTY TRUST
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited and in thousands, except per share information)
 	 	 	Three-Month Periods
Ended March 31,	 	
 	 			 	
 	 	 	2004	 	 	2003	 	
 	 			 			 	
Revenue:	 	 	 	 	 	 	 	
Rents	 	$	63,763 	 	$	63,921 	 	
Tenant reimbursements	 	 	8,060 	 	 	8,593 	 	
Other	 	 	2,037 	 	 	2,727 	 	
 	 			 			 	
Total revenue	 	 	73,860 	 	 	75,241 	 	
 	 	 	 	 	 	 	 	
Expenses:	 	 	 	 	 	 	 	
Property operating expenses	 	 	22,333 	 	 	21,335 	 	
Real estate taxes	 	 	6,948 	 	 	6,560 	 	
Interest	 	 	12,104 	 	 	15,306 	 	
Depreciation and amortization	 	 	15,906 	 	 	14,698 	 	
Administrative expenses	 	 	3,489 	 	 	3,514 	 	
 	 			 			 	
Total operating expenses	 	 	60,780 	 	 	61,413 	 	
 	 	 	 	 	 	 	 	
Income from continuing operations before equity in income of unconsolidated 	 	 	 	 	 	 	 	
Real Estate Ventures, net gain on sales of interests in real estate and 	 	 	 	 	 	 	 	
minority interest	 	 	13,080 	 	 	13,828 	 	
Equity in income of unconsolidated Real Estate Ventures	 	 	234 	 	 	158 	 	
 	 			 			 	
Income from continuing operations before gain on sale of interests	 	 	 	 	 	 	 	
in real estate and minority interest 	 	 	13,314 	 	 	13,986 	 	
Gain on sale of interests in real estate	 	 	—	 	 	1,152 	 	
Minority interest attributable to continuing operations	 	 	(1,254	)	 	(2,315	)	
 	 			 			 	
Income from continuing operations 	 	 	12,060 	 	 	12,823 	 	
Discontinued operations:	 	 	 	 	 	 	 	
Income from discontinued operations	 	 	201 	 	 	588 	 	
Gains on disposition of discontinued operations	 	 	204 	 	 	561 	 	
Minority interest	 	 	(15	)	 	(55	)	
 	 			 			 	
Income from discontinued operations	 	 	390 	 	 	1,094 	 	
 	 			 			 	
Net income 	 	 	12,450 	 	 	13,917 	 	
Income allocated to Preferred Shares	 	 	(2,018	)	 	(2,976	)	
Preferred Unit redemption gain	 	 	4,500 	 	 	—	 	
 	 			 			 	
Income allocated to Common Shares	 	$	14,932 	 	$	10,941 	 	

Basic earnings per Common Share:	 	 	 	 	 	 	 	
Continuing operations	 	$	0.33 	 	$	0.27 	 	
Discontinued operations	 	 	0.01 	 	 	0.03 	 	
 	 			 			 	
 	 	$	0.34 	 	$	0.30 	 	

Diluted earnings per Common Share:	 	 	 	 	 	 	 	
Continuing operations	 	$	0.33 	 	$	0.27 	 	
Discontinued operations	 	 	0.01 	 	 	0.03 	 	
 	 			 			 	
 	 	$	0.34 	 	$	0.30 	 	
 	 			 			 	
The accompanying notes are an integral part of these condensed consolidated financial statements.
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BRANDYWINE REALTY TRUST
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited and in thousands)
 	 	 	Three-Month Period Ended
March 31,	 	
 	 			 	
 	 	 	2004	 	 	2003	 	
 	 			 			 	
Cash flows from operating activities:	 	 	 	 	 	 	 	
Net income	 	$	12,450 	 	$	13,917 	 	
Adjustments to reconcile net income to net cash from	 	 	 	 	 	 	 	
operating activities:	 	 	 	 	 	 	 	
Depreciation 	 	 	13,987 	 	 	13,388 	 	
Amortization:	 	 	 	 	 	 	 	
Deferred financing costs	 	 	483 	 	 	495 	 	
Deferred leasing costs	 	 	1,920 	 	 	1,640 	 	
Deferred compensation costs	 	 	553 	 	 	812 	 	
Straight-line rent	 	 	(1,925	)	 	(1,484	)	
Provision for doubtful accounts	 	 	430 	 	 	—	 	
Net gain on sale of interests in real estate	 	 	(204	)	 	(1,713	)	
Minority interest	 	 	1,269 	 	 	—	 	
Changes in assets and liabilities:	 	 	 	 	 	 	 	
Accounts receivable	 	 	(959	)	 	(807	)	
Other assets	 	 	6,982 	 	 	2,496 	 	
Accounts payable and accrued expenses	 	 	(5,302	)	 	(3,570	)	
Tenant security deposits and deferred rents	 	 	1,808 	 	 	609 	 	
Other liabilities	 	 	1,576 	 	 	(444	)	
 	 			 			 	
Net cash from operating activites	 	 	33,068 	 	 	25,339 	 	
 	 	 	 	 	 	 	 	
Cash flows from investing activities:	 	 	 	 	 	 	 	
Dispositions of properties	 	 	2,012 	 	 	3,247 	 	
Capital expenditures	 	 	(18,379	)	 	(7,123	)	
Investment in unconsolidated Real Estate Ventures	 	 	(77	)	 	(75	)	
Escrowed cash	 	 	(859	)	 	(1,155	)	
Cash distributions from unconsolidated Real Estate Ventures	 	 	 	 	 	 	 	
in excess of equity in income	 	 	261 	 	 	6 	 	
Increase in cash due to consolidation of variable interest	 	 	 	 	 	 	 	
entities	 	 	426 	 	 	—	 	
Leasing costs	 	 	(2,026	)	 	(1,501	)	
 	 			 			 	
Net cash from investing activities	 	 	(18,642	)	 	(6,601	)	
 	 	 	 	 	 	 	 	
Cash flows from financing activites:	 	 	 	 	 	 	 	
Proceeds from notes payable, Credit Facility	 	 	130,000 	 	 	—	 	
Repayments of notes payable, Credit Facility	 	 	(170,000	)	 	(12,000	)	
Repayments of mortgage notes payable	 	 	(37,204	)	 	(6,132	)	
Debt financing costs	 	 	—	 	 	(48	)	
Repayments on employee stock loans	 	 	1 	 	 	—	 	
Exercise of stock options	 	 	1,200 	 	 	—	 	
Proceeds from issuance of shares, net	 	 	175,377 	 	 	—	 	
Repurchases of Common Shares and minority interest units	 	 	(93,835	)	 	—	 	
Distributions paid to shareholders	 	 	(18,513	)	 	(18,632	)	
Distributions to minority interest holders 	 	 	(2,447	)	 	(184	)	
 	 			 			 	
Net cash from financing activities	 	 	(15,421	)	 	(36,996	)	
 	 			 			 	
Decrease in cash and cash equivalents	 	 	(995	)	 	(18,258	)	
Cash and cash equivalents at beginning of period	 	 	8,552 	 	 	26,801 	 	
 	 			 			 	
Cash and cash equivalents at end of period	 	$	7,557 	 	$	8,543 	 	
 	 			 			 	
The accompanying notes are an integral part of these condensed consolidated financial statements.
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BRANDYWINE REALTY TRUST
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2004
1.      THE COMPANY
Brandywine Realty 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 March 31, 2004, the Company’s portfolio included 207 office properties, 24 industrial properties and one mixed-use property (collectively, the “Properties”) that contained an aggregate of 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 March 31, 2004, the Company also held ownership interests in ten real estate ventures (the “Real Estate Ventures”) formed with third parties to develop commercial properties.
The Company owns its assets and conducts its operations through Brandywine Operating Partnership, L.P. (the “Operating Partnership”). The Company is the sole general partner of the Operating Partnership and, as of March 31, 2004, was entitled to approximately 96.3% of the Operating Partnership’s distributions exclusive of distributions received by the Company on account of its preferred units in the Operating Partnership that mirror, and were issued in exchange for the proceeds from, the Company’s three outstanding series of preferred shares of beneficial interest. The Operating Partnership owns a 95% interest in Brandywine Realty Services Corporation (the “Management Company”), a taxable REIT subsidiary that, as of March 31, 2004, was performing management and leasing services for 41 properties owned by third-parties.
As of March 31, 2004, minority interest was comprised of Class A Units of limited partnership interest (“Class A Units”). The Operating Partnership issued these Units to persons that contributed assets to the Operating Partnership. The Operating Partnership is obligated to redeem each Class A Unit, at the request of the holder, for cash or one Common Share, at the option of the Company. Income allocated to minority interest includes the pro rata share of net income of the Operating Partnership allocated to the Class A Units held by third parties. As of March 31, 2004, 1,737,203 Class A Units were outstanding and held by third party investors. In addition, as of March 31, 2004, minority interest included the 5% interest in the Management Company that is owned by a partnership comprised of two Company executives and the interests of third parties in two of the Real Estate Ventures. As of December 31, 2003, minority interest also included Class B Units of Limited Partnership Interests which were redeemed by the Company in 2004.
2.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The condensed consolidated financial statements have been prepared by the Company without audit except as to the balance sheet as of December 31, 2003, which has been prepared from audited data, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the included disclosures are adequate to make the information presented not misleading. In the opinion of management, all adjustments (consisting solely of normal recurring matters) necessary to fairly present the financial position of the Company as of March 31, 2004, the results of its operations for the three-month period ended March 31, 2004 and 2003, and its cash flows for the three-month period ended March 31, 2004 and 2003 have been included. The results of operations for such interim periods are not necessarily indicative of the results for a full year. For further information, refer to the Company’s consolidated financial statements and footnotes included in the Annual Report on Form 10-K for the year ended December 31, 2003. Certain prior period amounts have been reclassified to conform with the current period presentation.
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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 4 for the Company’s treatment of its interest in unconsolidated Real Estate Ventures. All significant intercompany accounts and transactions have been eliminated.
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. 
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). 
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. The Company capitalized direct construction costs totaling $548,000 for the three-month period ended March 31, 2004, and $468,000 for the three-month period ended March 31, 2003. The Company capitalized interest totaling $396,000 for the three-month period ended March 31, 2004 and $343,000 for the three-month period ended March 31, 2003 related to development of certain Properties and land holdings.
Impairment of Long-Lived Assets
In accordance with Statement of Financial Accounting Standards 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 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.
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No impairment losses were recorded for the three-month period ended March 31, 2004.
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.
Investments in Unconsolidated Real Estate Ventures
The Company currently accounts for its investments in unconsolidated Real Estate Ventures under the equity method of accounting as certain Real Estate Ventures are either not variable interest entities or the Company is not considered the primary beneficiary. 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 the value of the investment, as estimated by management, is less than the carrying value of the investment. To the extent impairment has occurred, the loss is measured as the excess of the carrying amount of the investment over the value of the investment.
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 term of the respective lease. Lease terms generally range from one to 15 years. Management re-evaluates the deferred leasing costs for potential impairment as economic and market conditions change. Internal direct leasing costs deferred totaled $1.0 million for the three-month period ended March 31, 2004, and $951,000 for the three-month period ended March 31, 2003.
Costs incurred in obtaining long-term financing are amortized and charged to interest expense over the terms of the related debt agreements. This approach approximates the effective interest rate method. 
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, lease origination costs, in-place lease values and tenant relationship values, would be charged to expense.
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. The straight-line basis 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 $1.9 million for the three-month period ended March 31, 2004 and approximately $1.5 million for the three-month period ended March 31, 2003. Tenant receivables and accrued rent receivables are carried net of the allowances for doubtful accounts of $4.2 million as of March 31, 2004 and $4.0 million as of December 31, 2003. The allowance is based on management’s evaluation of the collectability of receivables, taking into account tenant specific considerations as well as the overall tenant credit portfolio. 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.
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): 
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 	 	 	Three-month period
ended March 31,	 	
 	 			 	
 	 	 	2004	 	 	2003	 	
 	 			 			 	
Net income available to Common Shares, as reported	 	$	4,932 	 	$	10,572 	 	
Add: Stock based compensation expense included in reported net income	 	 	553 	 	 	683 	 	
 	 	 	 	 	 	 	 	
Deduct: Total stock based compensation expense determined under 	 	 	 	 	 	 	 	
fair value recognition method for all awards	 	 	(665	)	 	(796	)	
 	 			 			 	
Pro forma net income available to Common Shares	 	$	14,820 	 	$	10,459 	 	
 	 			 			 	
Earnings per Common Share	 	 	 	 	 	 	 	
Basic – as reported	 	$	0.34 	 	$	0.30 	 	
 	 			 			 	
Basic – pro forma	 	$	0.34 	 	$	0.30 	 	

Diluted – as reported	 	$	0.34 	 	$	0.30 	 	
 	 			 			 	
Diluted – pro forma	 	$	0.33 	 	$	0.30 	 	
 	 			 			 	
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 three-month period ended March 31, 2004, 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. 
Income Taxes
The Company has elected to be treated as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”). In order to maintain its qualification as a REIT, among other things, the Company is required to distribute at least 90% of its REIT taxable income to its shareholders and meet certain tests regarding the nature of its income and assets. As a REIT, the Company is not subject to federal income tax with respect to that portion of its income which meets certain criteria and is distributed annually to the shareholders. Accordingly, no provision for federal income taxes is included in the accompanying consolidated financial statements. The Company plans to continue to operate so that it meets the requirements for taxation as a REIT. Many of these requirements, however, are highly technical and complex. If the Company were to fail to meet these requirements, the Company would be subject to federal income tax. The Company is subject to certain state and local taxes. Provision for such taxes has been included in general and administrative expenses in the Company’s consolidated statement of operations.
Recently Issued Accounting Standards
In January 2003, FASB issued FASB Interpretation No. 46, Consolidation of Variable Interest Entities (“FIN 46”), an interpretation of Accounting Research Bulletin (ARB) 51. FIN 46 provides guidance on identifying entities for which control is achieved through means other than through voting rights, variable interest entities (“VIE’s”), and how to determine when and which business enterprises should consolidate the VIE. The consolidation provisions of FIN 46 were effective immediately for variable interests in VIE’s created after January 31, 2003. In December 2003, FASB revised Interpretation FIN No. 46, which adopted several Financial Statement Positions (“FSP’s”) and provided transitional guidance for relationships with VIE’s that are special purpose entities (“SPEs”) versus non-SPE’s. The Company has no SPE’s. The Company implemented the revised guidance to previously existing non-SPE relationships as of March 31, 2004. In connection with the full adoption, the Company concluded that two previously unconsolidated Real Estate Ventures (Four Tower Bridge Associates and Six Tower Bridge Associates) are VIE’s and that the Company is the primary beneficiary. As a consequence, effective on March 31, 2004, these investments have been consolidated on the Company’s balance sheet, with the assets and liabilities of these two Real Estate Ventures reflected as part of the Company’s financial statements and the joint venture partner’s interest reflected as a minority interest. There was no cumulative effect gain or loss upon adoption. 
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With respect to the Company’s remaining investments in unconsolidated Real Estate Ventures, the Company has concluded that these investments are not VIE’s or that the Company is not the primary beneficiary based on the terms the arrangements. Accordingly, the Company will continue to reflect these arrangements using the equity method. The terms of these arrangements are described in Note 4 and the Company’s maximum exposure to loss as a result of its involvement with such potential VIE is also described in Note 4.
3.      ACQUISITIONS AND DISPOSITIONS OF REAL ESTATE INVESTMENTS
2004
During the three-month period ended March 31, 2004, the Company sold one office property containing 37,000 net rentable square feet and one industrial property containing 45,000 net rentable square feet for an aggregate of $6.1 million, realizing a net gain of $.2 million.
2003
During the first quarter of 2003, the company sold three units of one office property containing 28,000 net rentable square feet and one parcel of land containing 3.1 acres for an aggregate of $3.8 million, realizing a net gain of $1.7 million. 
4.      INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES
As of March 31, 2004, the Company had an aggregate investment of approximately $13.3 million in eight unconsolidated Real Estate Ventures (net of returns of investment). 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. Seven of the unconsolidated Real Estate Ventures own eight office buildings that contain an aggregate of approximately 1.6 million net rentable square feet and one unconsolidated Real Estate Venture developed a hotel property that contains 137 rooms. 
The Company accounts for its non-controlling interests in its unconsolidated Real Estate Ventures using the equity method. Non-controlling ownership interests range from 6% to 50%, subject to specified priority allocations in certain of the Real Estate Ventures. The Company’s investments, initially recorded at cost, are subsequently adjusted for the Company’s net equity in the Real Estate Ventures’ income or loss and cash contributions and distributions. 
The following is a summary of the financial position of the unconsolidated Real Estate Ventures as of March 31, 2004 and December 31, 2003 (in thousands):
 	 	 	March 31,
2004	 	 	December 31,
2003	 	

Net property	 	$	292,239 	 	$	322,196 	 	
Other assets	 	 	33,301 	 	 	29,982 	 	
Liabilities 	 	 	26,681 	 	 	27,900 	 	
Debt	 	 	204,497 	 	 	231,401 	 	
Equity	 	 	94,363 	 	 	92,877 	 	
Company’s share of equity	 	 	13,282 	 	 	15,853 	 	
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The following is a summary of results of operations of the unconsolidated Real Estate Ventures for the three-month periods ended March 31, 2004 and 2003 (in thousands):
 	 	 	Three-month period ended March 31, 	 	
 	 			 	
 	 	 	2004	 	 	2003	 	

Revenue	 	$	10,281 	 	$	6,513 	 	
Operating expenses	 	 	4,515 	 	 	4,198 	 	
Interest expense, net	 	 	2,898 	 	 	1,750 	 	
Depreciation and amortization	 	 	2,190 	 	 	1,212 	 	
Net (loss) income	 	 	678 	 	 	(647	)	
Company’s share of income	 	 	234 	 	 	158 	 	
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The following is a summary of the financial position as of March 31, 2004 and the results of operations for the three-month period ended March 31, 2004 for each of the unconsolidated Real Estate Ventures:
 	 	 	1000
Chesterbrook
Boulevard
Partnership	 	 	Two Tower
Bridge
Associates	 	 	Five 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	 	$	30,768 	 	$	12,344 	 	$	38,525 	 	$	56,878 	 	$	15,087 	 	$	5,601 	 	$	6,652 	 	$	126,384 	 	$	292,239 	 	
Other Assets	 	 	     3,096 	 	 	      1,151 	 	 	      3,893 	 	 	      7,667 	 	 	      698 	 	 	      689 	 	 	      746 	 	 	      15,362 	 	 	      33,301 	 	
 	 			 			 			 			 			 			 			 			 			 	
Total Assets	 	$	33,864 	 	$	13,495 	 	$	42,417 	 	$	64,545 	 	$	15,785 	 	$	6,290 	 	$	7,399 	 	$	141,747 	 	$	325,540 	 	

Liabilities and Equity	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other Liabilities 	 	$	257 	 	$	665 	 	$	1,095 	 	$	586 	 	$	210 	 	$	129 	 	$	54 	 	$	23,684 	 	$	26,681 	 	
Debt	 	 	     27,777 	 	 	      10,483 	 	 	      30,600 	 	 	      38,185 	 	 	      11,507 	 	 	      5,715 	 	 	      5,730 	 	 	      74,500 	 	 	      204,497 	 	
 	 			 			 			 			 			 			 			 			 			 	
Total Liabilities	 	 	      28,034 	 	 	      11,148 	 	 	      31,695 	 	 	      38,771 	 	 	      11,718 	 	 	      5,844 	 	 	      5,784 	 	 	      98,184 	 	 	      231,178 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Equity	 	 	      5,829 	 	 	      2,347 	 	 	      10,722 	 	 	      25,774 	 	 	      4,067 	 	 	      446 	 	 	      1,615 	 	 	      43,562 	 	 	      94,363 	 	
 	 			 			 			 			 			 			 			 			 			 	
Total Liabilities and Equity	 	$	33,864 	 	$	13,495 	 	$	42,417 	 	$	64,545 	 	$	15,785 	 	$	6,290 	 	$	7,399 	 	$	141,747 	 	$	325,540 	 	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Revenues	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Revenues	 	$	1,257 	 	$	509 	 	$	1,486 	 	$	511 	 	$	942 	 	$	278 	 	$	217 	 	$	2,686 	 	$	7,886 	 	
Tenant reimbursements
   and other	 	 	      107 	 	 	      96 	 	 	      128 	 	 	      39 	 	 	     —	 	 	      4 	 	 	      71 	 	 	      1,949 	 	 	      2,395 	 	
 	 			 			 			 			 			 			 			 			 			 	
Total Revenue	 	 	      1,364 	 	 	      606 	 	 	      1,614 	 	 	      551 	 	 	      942 	 	 	      282 	 	 	      288 	 	 	      4,635 	 	 	      10,281 	 	

Operating Expenses	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Property Operating Expenses	 	 	      278 	 	 	      172 	 	 	      457 	 	 	      404 	 	 	      593 	 	 	      101 	 	 	      110 	 	 	      1,618 	 	 	      3,733 	 	
Real Estate Taxes	 	 	      52 	 	 	      41 	 	 	      98 	 	 	      60 	 	 	      36 	 	 	      14 	 	 	      15 	 	 	      466 	 	 	      782 	 	
Depreciation and
   Amortization	 	 	      224 	 	 	      92 	 	 	      501 	 	 	      392 	 	 	      178 	 	 	      44 	 	 	      52 	 	 	      707 	 	 	      2,190 	 	
Interest	 	 	      640 	 	 	      144 	 	 	      521 	 	 	      355 	 	 	      248 	 	 	      91 	 	 	      41 	 	 	      859 	 	 	      2,898 	 	
Administrative Expenses	 	 	     —	 	 	     —	 	 	     —	 	 	     —	 	 	     —	 	 	     —	 	 	     —	 	 	     —	 	 	     —	 	
 	 			 			 			 			 			 			 			 			 			 	
Total Operating Expenses	 	 	      1,194 	 	 	      449 	 	 	      1,578 	 	 	      1,210 	 	 	      1,055 	 	 	      250 	 	 	      219 	 	 	      3,649 	 	 	      9,604 	 	
 	 			 			 			 			 			 			 			 			 			 	
Net Income	 	$	170 	 	$	157 	 	$	36 	 	$	(659	)	$	(113	)	$	32 	 	$	70 	 	$	985 	 	$	678 	 	
 	 			 			 			 			 			 			 			 			 			 	
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As of March 31, 2004, the aggregate maturities of non-recourse debt of unconsolidated Real Estate Ventures payable to third-parties was as follows (in thousands):
2004	 	$	1,059 	 	
2005	 	 	45,068 	 	
2006	 	 	1,349 	 	
2007	 	 	11,900 	 	
2008 and thereafter	 	 	145,121 	 	
 	 			 	
 	 	$	204,497 	 	
 	 			 	
As of March 31, 2004, the Company had guaranteed repayment of approximately $1.2 million of loans for the unconsolidated 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 the Real Estate Ventures.
5.      INDEBTEDNESS
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 (30-day LIBOR was 1.09% at March 31, 2004) plus 1.4% 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 March 31, 2004, the Company had $265 million of borrowings and $10.7 million of letters of credit outstanding under the Credit Facility, leaving $224.3 million of unused availability. 
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 (1.65% as of March 31, 2004), based on the Company’s leverage ratio. The average interest rate on the Company’s term loan was 2.76% per annum for the three-month period ended March 31, 2004.
As of March 31, 2004, the Company had $452.0 million of mortgage notes payable, secured by 89 of the Properties and certain land holdings. Fixed rate mortgages, totaling $427.3 million, require payments of principal and/or interest (or imputed interest) at rates ranging from 6.62% to 9.25% per annum and mature on dates from November 2004 through July 2027. Variable rate mortgages, totaling $24.7 million, require payments of principal and/or interest at rates ranging from 30-day LIBOR plus .76% to 1.75% per annum or 75% of prime (prime rate was 4.00% at March 31, 2004) and mature on dates from March 2007 through July 2027. The weighted-average interest rate on the Company’s mortgages was 7.33% per annum for the three-month period ended March 31, 2004 and 7.10% per annum for the three-month period ended March 31, 2003.
During the three-month period ended March 31, 2004 and 2003, the Company paid interest (net of capitalized interest) totaling $10.9 million in 2004 and $14.7 million in 2003.
6.      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, occupancy levels, 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.
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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 March 31, 2004 (in thousands). 
Hedge Product	 	 	Hedge Type	 	 	Notional
Amount	 	 	Strike	 	 	Maturity	 	 	Fair
Value	 	
	 	 		 			 			 			 			 	
Cap	 	 	Cash flow	 	$	28,000 	 	 	8.700	%	 	7/12/2004	 	$	—	 	
Swap	 	 	Cash flow	 	 	100,000 	 	 	4.230	%	 	6/29/2004	 	 	(988	)	
Swap	 	 	Cash flow	 	 	50,000 	 	 	4.215	%	 	6/29/2004	 	 	(491	)	
Swap	 	 	Cash flow	 	 	25,000 	 	 	4.215	%	 	6/29/2004	 	 	(246	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 			 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	(1,725	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 			 	
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 March 31, 2004, 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 Facility, including the effect of cash flow hedges, was 4.64% per annum for the three-month period ended March 31, 2004 and 4.60% per annum for the three-month period ended March 31, 2003. 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 March 31, 2004 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 March 31, 2004, 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 the three- month period ended March 31, 2004 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. 
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 5% or more of the Company’s rents during the three-month period ended March 31, 2004 and 2003. See Note 10 for geographic segment information.
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7.      DISCONTINUED OPERATIONS
For the three-month period ended March 31, 2004 and 2003, income from discontinued operations relates to 55 properties containing 2.8 million net rentable square feet that the Company sold between January 1, 2002 and March 31, 2004. There were no properties designated as held-for-sale as of March 31, 2004. 
The following table summarizes revenue and expense information for the 55 properties sold since January 1, 2002 (in thousands):
 	 	 	Three-month period
ended March 31,	 	
 	 			 	
 	 	 	2004	 	 	2003	 	
 	 			 			 	
Revenue:	 	 	 	 	 	 	 	
Rents	 	$	110 	 	$	1,704 	 	
Tenant reimbursements	 	 	166 	 	 	190 	 	
Other	 	 	17 	 	 	11 	 	
 	 			 			 	
Total revenue	 	 	293 	 	 	1,905 	 	
 	 	 	 	 	 	 	 	
Expenses:	 	 	 	 	 	 	 	
Property operating expenses	 	 	66 	 	 	712 	 	
Real estate taxes	 	 	25 	 	 	275 	 	
Depreciation and amortization	 	 	1 	 	 	330 	 	
 	 			 			 	
Total operating expenses	 	 	92 	 	 	1,317 	 	
 	 	 	 	 	 	 	 	
Income from discontinued operations before net gain on sale 	 	 	 	 	 	 	 	
of interests in real estate and minority interest	 	 	201 	 	 	588 	 	
Net gain on sales of interest in real estate	 	 	204 	 	 	561 	 	
Minority interest 	 	 	(15	)	 	(55	)	
 	 			 			 	
Income from discontinued operations 	 	$	390 	 	$	1,094 	 	
 	 			 			 	
Discontinued operations have not been segregated in the condensed consolidated statements of cash flows. Therefore, amounts for certain captions will not agree with respective data in the condensed consolidated statements of operations.
8.      BENEFICIARIES EQUITY
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 approximately $69.3 million. 
In February 2004, the Operating Partnership redeemed all of its outstanding Series B Preferred Units (the “Series B Preferred Units”) for an aggregate price of $93.0 million, together with accrued but unpaid distributions from January 1, 2004. The Series B Preferred Units had an aggregate stated value of $97.5 million and accrued distributions at 7.25% per annum. The Company recorded a gain of $4.5 million related to the redemption. 
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.
On March 25, 2004, the Company declared a distribution of $0.44 per Common Share, totaling $20.2 million, which was paid on April 15, 2004 to shareholders of record as of April 6, 2004. The Operating Partnership simultaneously declared a $0.44 per unit cash distribution to holders of Class A Units totaling $.8 million.
On March 25, 2004, the Company declared distributions to holders of its Series A Preferred Shares, Series C Preferred Shares and Series D Preferred Shares, which are currently entitled to a cumulative preferential return of 7.25%, 7.50% and 7.375%, respectively. Distributions paid on April 15, 2004 to holders of Series A Preferred Shares, Series C Preferred Shares and Series D Preferred Shares totaled $.7 million, $.9 million and $.4 million, respectively.
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As of March 31, 2004, the Company’s only remaining convertible preferred shares outstanding were $37.5 million of its 7.25% Series A Cumulative Convertible Preferred Shares (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 7.25% distribution rate 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 each Series A Preferred Share may be redeemed, at the Company’s option, at its stated value.
9.      COMPREHENSIVE INCOME
Comprehensive income represents net income, plus the results of certain non-shareholders’ equity changes not reflected in the Condensed Consolidated Statements of Operations. The components of comprehensive income are as follows (in thousands): 
 	 	 	Three-month period
Ended March 31,	 	
 	 			 			 	
 	 	 	2004	 	 	2003	 	
 	 			 			 	
Net income	 	$	12,450 	 	$	13,917 	 	
Other comprehensive income (loss):	 	 	 	 	 	 	 	
Reclassification adjustment for gains reclassified	 	 	 	 	 	 	 	
into operations	 	 	(233	)	 	—	 	
Reclassification adjustments for losses reclassified 	 	 	 	 	 	 	 	
into operations	 	 	1,378 	 	 	1,255 	 	
Unrealized derivative loss on cash flow hedges	 	 	(76	)	 	(746	)	
Unrealized gain (loss) on available-for-sale securities	 	 	(792	)	 	(32	)	
 	 			 			 	
Comprehensive income	 	$	12,727 	 	$	14,394 	 	
 	 			 			 	
10.      SEGMENT INFORMATION
The Company currently manages its portfolio within three segments: (1) Pennsylvania, (2) New Jersey (including New York in 2003 periods) and (3) Virginia. Corporate is responsible for cash and investment management and certain other general support functions.
Segment information for the three-month period ended March 31, 2004 and 2003 is as follows (in thousands):
 	 	 	Pennsylvania	 	 	New Jersey	 	 	Virginia	 	 	Corporate	 	 	Total	 	
 	 			 			 			 			 			 	
As of March 31, 2004:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Real estate investments, at cost	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating properties	 	$	1,183,546 	 	$	509,322 	 	$	214,968 	 	$	—	 	$	1,907,836 	 	
Construction-in-progress	 	 	42,243 	 	 	5,001 	 	 	1,056 	 	 	—	 	 	48,300 	 	
Land held for development	 	 	35,199 	 	 	13,969 	 	 	8,918 	 	 	—	 	 	58,086 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
As of December 31, 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, at cost	 	 	 	 	 	3,649 	 	 	1,668 	 	 	—	 	 	5,317 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
For three months ended March 31, 2004:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total revenue	 	$	43,100 	 	$	23,636 	 	$	6,662 	 	$	462 	 	$	73,860 	 	
Property operating expenses	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
and real estate taxes	 	 	16,992 	 	 	9,548 	 	 	2,741 	 	 	—	 	 	29,281 	 	
 	 			 			 			 			 			 	
Net operating income	 	$	26,108 	 	$	14,088 	 	$	3,921 	 	$	462 	 	$	44,579 	 	
 	 			 			 			 			 			 	
For three months ended March 31, 2003:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total revenue	 	$	45,662 	 	$	22,253 	 	$	6,833 	 	$	493 	 	$	75,241 	 	
Property operating expenses	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
and real estate taxes	 	 	16,538 	 	 	8,785 	 	 	2,572 	 	 	—	 	 	27,895 	 	
 	 			 			 			 			 			 	
Net operating income	 	$	29,124 	 	$	13,468 	 	$	4,261 	 	$	493 	 	$	47,346 	 	
 	 			 			 			 			 			 	
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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 (in thousands):
 	 	 	Three-month period
ended March 31,	 	
 	 			 	
 	 	 	2004	 	 	2003	 	
 	 			 			 	
Consolidated net operating income	 	$	44,579 	 	$	47,346 	 	
Less:	 	 	 	 	 	 	 	
Interest expense	 	 	12,104	 	 	15,306 	 	
Depreciation and amortization	 	 	15,906 	 	 	14,698 	 	
Administrative expenses	 	 	3,489 	 	 	3,514 	 	
Minority interest attributable to continuing 	 	 	 	 	 	 	 	
operations	 	 	1,254 	 	 	2,315 	 	
Plus:	 	 	 	 	 	 	 	
Equity in income of real estate ventures	 	 	234 	 	 	158 	 	
Net gains on sales of interests in real estate	 	 	—	 	 	1,152 	 	
 	 			 			 	
Consolidated income from continuing operations	 	$	12,060 	 	$	12,823 	 	
 	 			 			 	
11.      EARNINGS PER COMMON SHARE
The following table details the number of shares and net income used to calculate basic and diluted earnings per share (in thousands, except share and per share amounts):
 	 	 	Three-month period ended March 31, 	 	
 	 			 	
 	 	 	2004	 	 	2003	 	
 	 			 			 	
 	 	 	Basic	 	 	Diluted	 	 	Basic	 	 	Diluted	 	
 	 			 			 			 			 	
Income from continuing operations	 	$	12,060 	 	$	12,060 	 	$	12,823 	 	$	12,823 	 	
Income from discontinued operations	 	 	390 	 	 	390 	 	 	1,094 	 	 	1,094 	 	
Preferred Share redemption gain	 	 	4,500 	 	 	4,500 	 	 	—	 	 	—	 	
Income allocated to Preferred Shares	 	 	(2,018	)	 	(2,018	)	 	(2,976	)	 	(2,976	)	
 	 			 			 			 			 	
 	 	 	14,932 	 	 	14,932 	 	 	10,941 	 	 	10,941 	 	
Preferred Share discount amortization	 	 	—	 	 	—	 	 	(369	)	 	(369	)	
 	 			 			 			 			 	
Net income available to common shareholders	 	$	14,932 	 	$	14,932 	 	$	10,572 	 	$	10,572 	 	
 	 			 			 			 			 	
Weighted-average shares outstanding	 	 	44,036,842 	 	 	44,036,842 	 	 	35,300,142 	 	 	35,300,142 	 	
Options and warrants	 	 	—	 	 	287,208 	 	 	—	 	 	69,741 	 	
 	 			 			 			 			 	
Total weighted-average shares outstanding	 	 	44,036,842 	 	 	44,324,050 	 	 	35,300,142 	 	 	35,369,883 	 	

Earnings per Common Share:	 	 	 	 	 	 	 	 	 	 	 	 	 	
Continuing operations	 	$	0.33 	 	$	0.33 	 	$	0.27 	 	$	0.27 	 	
Discontinued operations	 	 	0.01 	 	 	0.01 	 	 	0.03 	 	 	0.03 	 	
 	 			 			 			 			 	
 	 	$	0.34 	 	$	0.34 	 	$	0.30 	 	$	0.30 	 	
 	 			 			 			 			 	
Securities (including Series A Preferred Shares and Series B Preferred Shares of the Company, and Series B Preferred Units and Class A Units of the Operating Partnership) totaling 3,076,489 for the three-month period ended March 31, 2004 and 11,256,776 for the three-month period ended March 31, 2003 were excluded from the earnings per share computations above as their effect would have been antidilutive. All of the Series B Preferred Shares were redeemed, or were converted into Common Shares, in December 2003 and are no longer outstanding. All of the Series B Preferred Units were redeemed by the Operating Partnership in February 2004 and are no longer outstanding.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with the financial statements and notes thereto appearing elsewhere herein. This Form 10-Q 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 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. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events. Factors that could cause actual results to differ materially from 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 the Company's principal tenants compete, the Company’s failure to lease unoccupied space in accordance with the Company’s projections, the failure of the Company 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 the Company’s acquisitions, 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 the Company’s status as a REIT and to the Company’s acquisition, disposition and development activities, the adverse consequences of the Company’s failure to qualify as a REIT and the other risks identified in the Company’s Annual Report on Form 10-K for the year ended December 31, 2003.
OVERVIEW
The Company currently manages its portfolio within three segments: (1) Pennsylvania, (2) New Jersey and (3) Virginia. As of March 31, 2004, the Company’s portfolio consisted of 207 office properties, 24 industrial facilities and one mixed-use property that contain an aggregate of approximately 15.7 million net rentable square feet. As of March 31, 2004, the Company held ownership interests in ten Real Estate Ventures.
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 (90.0% at March 31, 2004). 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 are incurring higher capital costs and leasing commissions to achieve targeted tenancies. 
As the Company seeks to increase revenues, 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 totaling approximately 9.5% of the net rentable square feet of the Properties as of March 31, 2004 expire without penalty through the end of 2004. In addition, leases totaling approximately 16.8% of the net rentable square feet of the Properties as of March 31, 2004 are scheduled to expire without penalty in 2005. 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 three-month period ended March 31, 2004 was 76.4%. If the Company is unable to renew leases for a substantial portion of the space under expiring leases, or promptly relet this space at anticipated rental rates, the Company’s cash flow could be adversely impacted. 
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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 allowances were $4.2 million or 11.0% of total receivables (including accrued rent receivable) as of March 31, 2004 compared to $4.0 million or 11.2% of total receivables (including accrued rent receivable) as of December 31, 2003. 
Development Risk:
As of March 31, 2004, the Company had in development four office properties and had in redevelopment three office properties. These seven properties aggregate 1.1 million square feet. The total cost of these projects is estimated to be $213.6 million of which $28.9 million had been incurred as of March 31, 2004. As of March 31, 2004, these projects were approximately 54% leased. One of these development properties is Cira Centre, a planned 28-story office tower to be located adjacent to Amtrak’s 30th Street Station in the University City District of Philadelphia. The total cost of this project is estimated to be $177.6 million and the Company expects to complete the project in the fourth quarter of 2005. As of March 31, 2004, this project was approximately 62% leased. 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 March 31, 2004, the Company owned approximately 410 acres of undeveloped land and held options to purchase approximately 61 additional acres. Risks associated with development include construction cost overruns, construction delays, insufficient occupancy rates and inability to obtain necessary zoning, land-use, building, occupancy and other required governmental approvals. If one or more of the Company’s assumptions regarding the successful efforts of development and leasing are incorrect, the resulting adjustments could impact earnings.
RECENT ACTIVITY
The Company sold or disposed of the following properties during the three-month period ended March 31, 2004:
Sale
Date	 	 	Property/Portfolio Name	 	 	Location	 	 	# of
Bldgs. 	 	 	Rentable
Square Feet 	 	 	Sales/Disposition
Price	 	
	 	 		 	 		 	 		 	 		 	 		 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(in 000's)	 	
Mar-04	 	 	2201 Dabney Road	 	 	Richmond, VA 	 	 	1 	 	 	45,000 	 	$	2,100 	 	
Mar-04	 	 	1255 Broad Street	 	 	Bloomfield, NJ 	 	 	1 	 	 	37,478 	 	 	3,960 	 	
 	 	 	 	 	 	 	 	 		 	 		 			 	
 	 	 	Total Properties Sold	 	 	 	 	 	2 	 	 	82,478 	 	$	6,060 	 	
 	 	 	 	 	 	 	 	 		 	 		 			 	
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses the Company’s condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. 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 revenue and expenses during the reporting period. Management bases its estimates and assumptions on historical experience and current economic conditions. On an on-going basis, management evaluates its estimates and assumptions including those related to revenue, impairment of long-lived assets, allowance for doubtful accounts, deferred costs, contingencies and litigation. Actual results may differ from those estimates and assumptions. 
The Company’s Annual Report on Form 10-K for the year ended December 31, 2003 contains a discussion of the Company’s critical accounting policies. See also Note 2 in the Company’s unaudited condensed consolidated financial statements for the three-month period ended March 31, 2004 as set forth herein. Management discusses the Company’s critical accounting policies and estimates with the Company’s Audit Committee.
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RESULTS OF OPERATIONS
Comparison of the Three Months Ended March 31, 2004 and March 31, 2003 
 	 	 	 	 	 	 	 	 	Three-month period ended 
March 31,	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 		 	 	Dollar
Change	 	 	Percent
Change	 	
 	 	 	 	 	 	 	 	 	2004	 	 	2003	 	 		 	 		 	
 	 	 	 	 	 	 	 			 			 			 	 		 	
 	 	 	 	 	 	 	 	 	(amounts in thousands) 	 	 	 	 	
Revenue:	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	Rents	 	$	63,763 	 	$	63,921 	 	$	(158	)	 	-0.2	%	
 	 	 	Tenant reimbursements	 	 	8,060 	 	 	8,593 	 	 	(533	)	 	-6.2	%	
 	 	 	Other	 	 	2,037 	 	 	2,727 	 	 	(690	)	 	-25.3	%	
 	 	 	 	 			 			 			 	 	 	 	
 	 	 	 	 	 	Total revenue	 	 	73,860 	 	 	75,241 	 	 	(1,381	)	 	-1.8	%	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating Expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	Property operating expenses	 	 	22,333 	 	 	21,335 	 	 	998 	 	 	4.7	%	
 	 	 	Real estate taxes	 	 	6,948 	 	 	6,560 	 	 	388 	 	 	5.9	%	
 	 	 	Interest	 	 	12,104 	 	 	15,306 	 	 	(3,202	)	 	-20.9	%	
 	 	 	Depreciation and amortization	 	 	15,906 	 	 	14,698 	 	 	1,208 	 	 	8.2	%	
 	 	 	Administrative expenses	 	 	3,489 	 	 	3,514 	 	 	(25	)	 	-0.7	%	
 	 	 	 	 			 			 			 	 	 	 	
 	 	 	 	 	 	Total operating expenses	 	 	60,780 	 	 	61,413 	 	 	(633	)	 	-1.0	%	

Income from continuing operations before equity in 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	income of unconsolidated Real Estate Ventures, 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	net gain on sales and minority interest	 	 	13,080 	 	 	13,828 	 	 	(748	)	 	-5.4	%	
Equity in income of unconsolidated Real Estate Ventures	 	 	234 	 	 	158 	 	 	76 	 	 	48.1	%	
 	 			 			 			 	 	 	 	
Income from continuing operations before net gain 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	on sales and minority interest 	 	 	13,314 	 	 	13,986 	 	 	(672	)	 	-4.8	%	
Gain on sale of interests in real estate	 	 	—	 	 	1,152 	 	 	(1,152	)	 	-100.0	%	
Minority interest 	 	 	(1,254	)	 	(2,315	)	 	1,061 	 	 	45.8	%	
 	 			 			 			 	 	 	 	
Income from continuing operations 	 	 	12,060 	 	 	12,823 	 	 	(763	)	 	-6.0	%	
Income from discontinued operations (including gains on	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	dispositions), net of minority interest	 	 	390 	 	 	1,094 	 	 	(704	)	 	-64.4	%	
 	 	 	 	 			 			 			 	 	 	 	
 	 	 	Net income 	 	$	12,450 	 	$	13,917 	 	$	(1,467	)	 	-10.5	%	
 	 	 	 	 			 			 			 	 	 	 	
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Of the 232 Properties owned by the Company as of March 31, 2004, a total of 222 Properties containing an aggregate of 14.9 million net rentable square feet (“Same Store Properties”) were owned for the entire three-month periods ended March 31, 2004 and 2003. 
Revenue decreased to $73.9 million for the three-month period ended March 31, 2004 as compared to $75.2 million for the comparable period in 2003, primarily due to decreased other revenue in 2004. The straight-line rent adjustment, which reflects the difference between rents accrued in accordance with generally accepted accounting principles and rents billed, increased revenues over contract rents by $1.9 million for the three-month period ended March 31, 2004 and $1.5 million for the comparable period in 2003. Other revenue includes lease termination fees, leasing commissions, third-party management fees and interest income. Other revenue decreased to $2.0 million for the three-month period ended March 31, 2004 as compared to $2.7 million for the comparable period in 2003 primarily due to decreased bankruptcy settlement proceeds and termination fees received during 2004. Revenue for Same Store Properties increased to $68.5 million for the three months ended March 31, 2004 as compared to $68.1 million for the comparable period in 2003. This increase was the result of increased occupancy in 2004 as compared to 2003. Average occupancy for the Same Store Properties for the three months ended March 31, 2004 increased to 90.6% from 89.8% for the comparable period in 2003. 
Property operating expenses increased to $22.3 million for the three-month period ended March 31, 2004 as compared to $21.3 million for the comparable period in 2003, primarily due to increased repairs and maintenance expense and bad debt provision in 2004 as compared to 2003. Property operating expenses for the Same Store Properties increased to $22.5 million for the three months ended March 31, 2004 as compared to $21.9 million for the comparable period in 2003 as a result of increased repairs and maintenance expense in 2004.
Real estate taxes increased to $6.9 million for the three-month period ended March 31, 2004 as compared to $6.6 million for the comparable period in 2003, primarily due to higher tax rates and property assessments. Real estate taxes for the Same Store Properties increased to $6.4 million for the three months ended March 31, 2004 as compared to $5.9 million for the comparable period in 2003 as a result of higher tax rates and property assessments in 2004.
Interest expense decreased to $12.1 million for the three-month period ended March 31, 2004 as compared to $15.3 million for the comparable period in 2003, primarily due to decreased average borrowings offset slightly by increased interest rates. Average outstanding debt balances for the three months ended March 31, 2004 were $842.4 million as compared to approximately $995.7 million for the comparable period in 2003. The Company’s weighted-average interest rate after giving effect to hedging activities on unsecured credit facility increased to 4.64% per annum for the three months ended March 31, 2004 from 4.60% per annum for the comparable period in 2003. The weighted-average interest rate on mortgage notes payable increased to 7.33% per annum for the three months ended March 31, 2004 from 7.10% per annum for the comparable period in 2003.
Depreciation expense increased to $13.6 million for the three-month period ended March 31, 2004 as compared to $13.1 million for the comparable period in 2003 primarily due to additional depreciation recorded from increased tenant improvements during 2004. Amortization expense, related to deferred leasing costs, increased to $2.3 million for the three-month period ended March 31, 2004 as compared to $1.6 million for the comparable period in 2003, primarily due to increased leasing activity.
Administrative expenses were $3.5 million for the three-month periods ended March 31, 2004 and 2003.
Equity in income of Real Estate Ventures was $.2 million for the three-month periods ended March 31, 2004 and 2003. 
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 decreased to $1.3 million for the three-month period ended March 31, 2004 as compared to $2.3 million for the comparable period in 2003 and the Company’s ownership in the Operating Partnership increased to 96.2% in 2004 compared to 95.2% in 2003. This change reflects the Company’s contribution to the Operating Partnership of proceeds from the Company’s issuances of Common Shares and Preferred Shares in 2003 and 2004 and the Operating Partnership’s redemption of its Series B Preferred Units in February 2004.
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Discontinued operations decreased to $.4 million for the three-month period ended March 31, 2004 as compared to $1.1 million for the comparable period in 2003 primarily due to the decreased net gain on sales of real estate investments of in 2004 as compared to 2003. During the three-month period ended March 31, 2004, the Company sold two properties containing 82,000 net rentable square feet for $6.1 million, realizing a gain of $.2 million. During the three-month period ended March 31, 2003, the Company sold three units of one office property containing 28,000 net rentable square feet for $2.6 million, realizing a gain of $.6 million
LIQUIDITY AND CAPITAL RESOURCES
Cash Flows
During the three-month period ended March 31, 2004, the Company generated $33.1 million in cash flow from operating activities. Other sources of cash flow for the three-month period consisted of: (i) $175.4 million in net proceeds from share issuances, (ii) $130.0 million of proceeds from draws on the Credit Facility, (iii) $2.0 million of proceeds from sales of properties, (iv) $1.2 million of proceeds from exercise of stock options and (v) $.7 million of cash distributions from Real Estate Ventures. During the three-month period ended March 31, 2004, cash out-flows consisted of: (i) $170.0 million of Credit Facility repayments, (ii) $93.8 million of repurchases of Series B Preferred Units and Class A Units, (iii) $37.2 million of mortgage note repayments, (iv) $21.0 million of distributions to shareholders and minority interest holders, (v) $18.4 million to fund development and capital expenditures, (vi) $2.0 million of leasing costs, (vii) $.9 million of escrowed cash and (vii) $.1 million of additional investment in Real Estate Ventures.
During the three-month period ended March 31, 2003, the Company generated $25.3 million in cash flow from operating activities. Other sources of cash flow for the three-month period consisted of $3.2 million of proceeds from sales of properties. During the three-month period ended March 31, 2003, cash out-flows consisted of: (i) $18.6 million of distributions to shareholders, (ii) $12.0 million of Credit Facility repayments, (iii) $7.1 million to fund development and capital expenditures, (iv) $6.1 million of mortgage note repayments, (v) $1.5 million of leasing costs, (vi) $1.2 million of escrowed cash, (vii) $.2 million of distributions to minority interest holders in excess of income allocated and (viii) $.1 million of additional investment in Real Estate Ventures.
Capitalization
As of March 31, 2004, the Company had approximately $817.0 million of debt outstanding, consisting of $265.0 million of borrowings under the Credit Facility, $100.0 million under the Term Loan and $452.0 million of mortgage notes payable. The mortgage notes payable consists of $427.3 million of fixed rate loans and $24.7 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 through June 30, 2004. The mortgage loans mature between November 2004 and July 2027. As of March 31, 2004, the Company also had $10.7 million of letters of credit outstanding under the Credit Facility and $224.3 million of unused availability under the Credit Facility. For the three-month period ended March 31, 2004, the weighted-average interest rate under the Company’s Credit Facility and the related swap agreements was 4.64% per annum, the average interest rate for the Term Loan was 2.76% per annum and the weighted-average interest rate for borrowings under mortgage notes payable and the related cap agreements was 7.33% per annum.
The following table outlines the timing of payment requirements related to the Company’s commitments as of March 31, 2004:
 	 	 	Payments by Period (in thousands)	 	
 	 	 		 	
 	 	 	Total	 	 	2004	 	 	2005 – 2006	 	 	2007 – 2008	 	 	2009 and
Beyond	 	
 	 			 			 			 			 			 	
Mortgage notes payable:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
     Fixed rate	 	$	427,275 	 	$	8,946 	 	$	25,674 	 	$	41,321 	 	$	351,334 	 	
     Variable rate	 	 	24,774 	 	 	131 	 	 	407 	 	 	552 	 	 	23,684 	 	
 	 			 			 			 			 			 	
 	 	 	452,049 	 	 	9,077 	 	 	26,081 	 	 	41,873 	 	 	375,018 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Revolving credit facility	 	 	265,000 	 	 	265,000 	 	 	—	 	 	—	 	 	—	 	
Term loan	 	 	100,000 	 	 	—	 	 	100,000 	 	 	—	 	 	—	 	
Other liabilities	 	 	1,350 	 	 	602 	 	 	748 	 	 	—	 	 	—	 	
 	 			 			 			 			 			 	
 	 	$	818,399 	 	$	274,679 	 	$	126,829 	 	$	41,873 	 	$	375,018 	 	
 	 			 			 			 			 			 	
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The Company intends to refinance its mortgage notes payable as they become due primarily through the use of unsecured debt or equity. The Company expects to renegotiate its Credit Facility and Term Loan prior to maturity or extend their terms.
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 approximately $69.3 million. 
In February 2004, the Operating Partnership redeemed all of its outstanding Series B Preferred Units for an aggregate price of $93.0 million, together with accrued but unpaid distributions from January 1, 2004. The Series B Preferred Units had an aggregate stated value of $97.5 million and accrued distributions at 7.25% per annum. The Company recorded a gain of $4.5 million related to the redemption. 
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.
As of March 31, 2004, the Company’s debt-to-market capitalization ratio was 35.4%. As a general policy, the Company intends, but is not obligated, to adhere to a policy of maintaining a 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 March 31, 2004, 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 Common Shares were repurchased during the three-month periods ended March 31, 2004 and 2003 under the share repurchase program. No time limit has been placed on the duration of the share repurchase program. 
Short- and Long-Term Liquidity
The Company believes that its cash flow from operations is adequate to fund its short-term liquidity requirements. Cash flow from operations is generated primarily from rental revenues and operating expense reimbursements from tenants and management services income from providing services to third parties. The Company intends to use these funds to meet 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 qualification under the Internal Revenue Code.
On March 25, 2004, the Company declared a distribution of $0.44 per Common Share, totaling $20.2 million, which was paid on April 15, 2004 to shareholders of record as of April 6, 2004. The Operating Partnership simultaneously declared a $0.44 per unit cash distribution to holders of Class A Units totaling $.8 million.
On March 25, 2004, the Company declared distributions to holders of Series A Preferred Shares, Series C Preferred Shares and Series D Preferred Shares, which are currently entitled to a preferential return of 7.25%, 7.50% and 7.375%, respectively. Distributions paid on April 15, 2004 to holders of Series A Preferred Shares, Series C Preferred Shares and Series D Preferred Shares totaled $.7 million, $.9 million and $.4 million, respectively.
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 cash from operations, borrowings under its Credit Facility, other long-term secured and unsecured indebtedness, the issuance of equity securities and the proceeds from the disposition of selected assets.
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Inflation
A majority of the Company’s leases provide for separate 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.
Item 3.     Quantitative and Qualitative Disclosures about Market Risk
Market risk is the exposure to loss resulting from changes in interest rates, commodity prices and equity prices. In pursuing its business plan, the primary market risk to which the Company is exposed is interest rate risk. Changes in the general level of interest rates prevailing in the financial markets may affect the spread between the Company’s yield on invested assets and cost of funds and, in turn, the Company’s ability to make distributions or payments to its shareholders. While the Company has not experienced any significant credit losses, in the event of a significant rising interest rate environment and/or economic downturn, defaults could increase and result in losses to the Company which adversely affect its operating results and liquidity. 
There have been no material changes in Quantitative and Qualitative disclosures in 2004 from the disclosures included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2003. Reference is made to Item 7 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2003 and the caption “Liquidity and Capital Resources” under Item 2 of this Quarterly Report on Form 10-Q.
Item 4.     Controls and Procedures
The Company’s Chief Executive Officer and its 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 quarterly 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 II.     OTHER INFORMATION
Item 1.      Legal Proceedings
Reference is made to Item 3 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2003 involving pending litigation in the State of New Jersey. On April 26, 2004, the Appellate Division affirmed the Chancery Division’s summary judgment ruling in our favor on all counts. Plaintiff has 20 days from April 26, 2004 to file a petition with the Supreme Court of New Jersey seeking certification for review of the Appellate Division’s decision. Whether the Supreme Court of New Jersey grants certification and allows plaintiff’s further appeal is discretionary, not automatic. As of May 7, 2004, no petition has been filed by plaintiff.
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Item 2.      Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities
The following table summarizes the share repurchases during the three-month periods ended March 31, 2004:
	 	 	Issuer Purchases of Equity Securities	 	 	 	 	
 	 	 	Total
Number of
Shares
Purchased (A)	 	 	Average
Price Paid Per
Share	 	 	Total
Number of
Shares
Purchased as
Part of Publicly
Announced Plans
or Programs	 	 	Maximum
Number of
Shares that May
Yet Be Purchased
Under the Plans
or Programs	 	
 	 			 			 			 			 	
2004:	 	 	 	 	 	 	 	 	 	 	 	 	 	
January	 	 	42,165 	 	$	26.77 	 	 	—	 	 	762,000 	 	
February	 	 	—	 	$	—	 	 	—	 	 	762,000 	 	
March	 	 	—	 	$	—	 	 	—	 	 	762,000 	 	
 	 			 			 			 			 	
     Total	 	 	42,165 	 	$	26.77 	 	 	—	 	 	762,000 	 	
 	 			 			 			 			 	
(A)     Represent Common Shares cancelled by the Company upon vesting of restricted Common Shares
previously awarded to Company employees, in satisfaction of tax withholding obligations.
Item 6.      Exhibits and Reports on Form 8-K
(a)     Exhibits
10.1     	 	 	Executive Deferred Compensation Plan	 	
10.2     	 	 	2004 Restricted Share Award to Gerard H. Sweeney	 	
10.3     	 	 	Form of 2004 Restricted Share Award to executive officers (other than the President and Chief Executive Officer)	 	
10.4     	 	 	Amended and Restated Agreement dated March 25, 2004 with Anthony A. Nichols, Sr.	 	
31.1     	 	 	Certification Pursuant to 13a-14 of the Securities Exchange Act of 1934	 	
31.2	 	 	Certification Pursuant to 13a-14 of the Securities Exchange Act of 1934	 	
32.1	 	 	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	 	
32.2	 	 	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	 	
(b)     Reports on Form 8-K:
During the three months ended March 31, 2004 and through May 10, 2004, the Company filed or furnished the following:
(i)     	Current Report on Form 8-K filed January 7, 2004 (reporting under Items 5 and 7).	
(ii)     	Current Report on Form 8-K filed February 3, 2004 (reporting under Items 5 and 7).	
(iii)     	Current Report on Form 8-K filed February 5, 2004 (reporting under Items 5 and 7).	
(iv)     	Current Report on Form 8-K furnished February 12, 2004 (reporting under Items 7 and 12).	
(v)     	Current Report on Form 8-K filed February 27, 2004 (reporting under Items 5 and 7).	
(vi)     	Current Report on Form 8-K furnished April 23, 2004 (reporting under Items 7 and 12).	
(vii)     	Current Report on Form 8-K furnished April 28, 2004 (reporting under Items 7 and 12).	
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BRANDYWINE REALTY TRUST
SIGNATURES OF REGISTRANT
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
BRANDYWINE REALTY TRUST
(Registrant)
 	BRANDYWINE REALTY TRUST	
 	(Registrant)	
 	 	
Date: May 10, 2004	By: /s/ Gerard H. Sweeney	
 		
 	Gerard H. Sweeney, President and Chief Executive Officer
(Principal Executive Officer)	

 	 	
Date: May 10, 2004	By: /s/ Christopher P. Marr	
 		
 	Christopher P. Marr, Senior Vice President and Chief Financial Officer
(Principal Financial Officer)	

 	 	
Date: May 10, 2004	By: /s/ Timothy M. Martin	
 		
 	Timothy M. Martin, Vice President-Finance and Chief Accounting Officer
(Principal Accounting Officer)	
27

                                                                    Exhibit 10.1

                             BRANDYWINE REALTY TRUST

                      EXECUTIVE DEFERRED COMPENSATION PLAN

                            EFFECTIVE OCTOBER 1, 2000

                  AMENDED AND RESTATED EFFECTIVE MARCH 25, 2004

                                    ARTICLE 1
                                     PURPOSE

                  In recognition of the services provided by certain key
employees, the Board of Trustees of Brandywine Realty Trust previously adopted
the Brandywine Realty Trust Executive Deferred Compensation Plan to make
additional retirement benefits and increased financial security available on a
tax-favored basis to those individuals. The Plan is hereby amended and restated,
effective March 25, 2004.

                                       2

                                    ARTICLE 2
                                   DEFINITIONS

                  "Additional Company Contributions" are contributions credited
to the Participant's Retirement Distribution Account by the Company pursuant to
Section 4.6.

                  "Affiliate" means: (a) any firm, partnership, or corporation
that directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with Brandywine Realty Trust; (b) any
other organization similarly related to Brandywine Realty Trust that is
designated as such by the Board; and (c) any other entity 50% or more of the
economic interests in which are owned, directly or indirectly, by Brandywine
Realty Trust.

                  "Beneficiary" means the person or persons designated as such
in accordance with Section 12.4.

                  "Board" means the Board of Trustees of Brandywine Realty
Trust.

                  "Board Remuneration" means for any Trustee, for any Plan Year,
the annual retainer and Board meeting fees; provided that committee fees and
informal Board discussion fees shall not be "Board Remuneration;" provided
further that such remuneration shall not be eligible for Matching Contributions,
Profit Sharing Contributions, Supplemental Profit Sharing Contributions or
Additional Company Contributions.

                  "Change of Control" means:

                  (a)      the acquisition in one or more transactions by any
                           "Person" (as the term person is used for purposes of
                           Sections 13(d) or 14(d) of the Securities Exchange
                           Act of 1934, as amended (the "Exchange Act")) of
                           "Beneficial ownership" (within the meaning of Rule
                           13d-3 promulgated under the Exchange Act) of
                           twenty-five percent (25%) or more of the combined
                           voting power of Brandywine Realty Trust's then
                           outstanding voting securities (the "Voting
                           Securities"), provided that for purposes of this
                           clause (a) Voting Securities acquired directly from
                           Brandywine Realty Trust by any Person shall be
                           excluded from the determination of such Person's
                           Beneficial ownership of Voting Securities (but such
                           Voting Securities shall be included in the
                           calculation of the total number of Voting Securities
                           then outstanding); or

                                       3

                  (b)      approval by shareholders of Brandywine Realty Trust
                           of:

                           (i)      a merger, reorganization or consolidation
                                    involving Brandywine Realty Trust if the
                                    shareholders of Brandywine Realty Trust
                                    immediately before such merger,
                                    reorganization or consolidation do not or
                                    will not own directly or indirectly
                                    immediately following such merger,
                                    reorganization or consolidation, more than
                                    fifty percent (50%) of the combined voting
                                    power of the outstanding voting securities
                                    of the company resulting from or surviving
                                    such merger, reorganization or consolidation
                                    in substantially the same proportion as
                                    their ownership of the Voting Securities
                                    outstanding immediately before such merger,
                                    reorganization or consolidation;

                           (ii)     a complete liquidation or dissolution of
                                    Brandywine Realty Trust; or

                           (iii)    an agreement for the sale or other
                                    disposition of all or substantially all of
                                    the assets of Brandywine Realty Trust; or

                  (c)      acceptance by shareholders of Brandywine Realty Trust
                           of shares in a share exchange if the shareholders of
                           Brandywine Realty Trust immediately before such share
                           exchange do not or will not own directly or
                           indirectly immediately following such share exchange
                           more than fifty percent (50%) of the combined voting
                           power of the outstanding voting securities of the
                           entity resulting from or surviving such share
                           exchange in substantially the same proportion as
                           their ownership of the Voting Securities outstanding
                           immediately before such share exchange.

                  "Code" means the Internal Revenue Code of 1986, as amended.

                  "Committee" means the Brandywine Realty Trust Plan Committee,
which shall consist of at least one person, the member(s) of which shall be
designated from time to time by the President and Chief Executive Officer of
Brandywine Realty Trust and which may include the President and Chief Executive
Officer.

                  "Company" means Brandywine Realty Trust and each such
subsidiary, division or Affiliate identified in Appendix A as may from time to
time participate in the Plan by or pursuant to authorization of the Board and
the board of directors of such subsidiary, division or Affiliate.

                  "Compensation" means, for any Eligible Employee, for any Plan
Year, the Participant's total taxable income received from the Company with
respect to such Plan Year, including, but not limited to, base earnings, regular
bonuses, commissions and overtime, plus pre-tax contributions and elective
contributions that are not includible in gross income under section 125,
402(a)(8) or 402(h) of the Code, and excluding income recognized in connection
with stock-related options and payments, reimbursements and other expense
allowances, fringe benefits (cash and noncash), moving expenses, deferred
compensation and welfare benefits, as determined pursuant to guidelines
established and revised by the Plan Administrator from time to time and
communicated to Eligible Employees.

                                       4

                  "Compensation Deferral" means that portion of Compensation or
Board Remuneration as to which a Participant has made an annual election to
defer receipt until the date specified under the In-Service Distribution Option,
the Retirement Distribution Option, or the Deferred Board Remuneration Option,
as applicable.

                  "Compensation Limit" means the compensation limit of section
401(a)(17) of the Code, as in effect on the first day of the Plan Year.

                  "Deferred Board Remuneration Account" means the Account
maintained for a Participant to which Compensation Deferrals are credited
pursuant to the Deferred Board Remuneration Option.

                  "Deferred Board Remuneration Option" means the Distribution
Option pursuant to which benefits are payable in accordance with Section 7.3.

                  "Disability" means a disability of an Employee or Trustee
which renders such Employee or Trustee unable to perform the full extent of his
duties and responsibilities by reason of his illness or incapacity which would
entitle that Employee or Trustee to receive Social Security Disability Income
under the Social Security Act, as amended, and the regulations promulgated
thereunder.

                  "Disabled" means having a Disability. The determination of
whether a Participant is Disabled shall be made by the Plan Administrator, whose
determination shall be conclusive; provided that,

                  (a) if a Participant is bound by the terms of an employment
agreement between the Participant and the Employer, whether the Participant is
"Disabled" for purposes of the Plan shall be determined in accordance with the
procedures set forth in said employment agreement, if such procedures are
therein provided; and

                  (b) a Participant bound by such an employment agreement shall
not be determined to be Disabled under the Plan any earlier than he would be
determined to be disabled under his employment agreement.

                  "Distribution Option" means the three distribution options
which are available under the Plan, consisting of the Retirement Distribution
Option, the In-Service Distribution Option, and the Deferred Board Remuneration
Option.

                  "Distribution Option Account(s)" means, with respect to a
Participant, the Retirement Distribution Account, the In-Service Distribution
Account and/or the Deferred Board Remuneration Account established on the books
of account of the Company, pursuant to Section 5.1.

                  "Distribution Option Period" means, in general, a period for
which an Eligible Employee elects, in the Enrollment Agreement, the time and
manner of payment of amounts credited to the Eligible Employee's In-Service
Distribution Account for such period. The first Distribution Option Period with
respect to: (a) deferrals of Compensation classified as base salary shall apply
to base salary deferrals credited from October 1, 2000 to December 31, 2005; and
(b) deferrals of Compensation credited as bonus shall apply to bonus deferrals
credited from January 1, 2001 to December 31, 2006. Thereafter, a new
Distribution Option Period will begin every five years.

                                       5

                  "Earnings Crediting Options" means the deemed investment
options selected by the Participant from time to time pursuant to which deemed
earnings are credited to the Participant's Distribution Option Accounts.

                  "Effective Date" means October 1, 2000.

                  "Eligible Employee" means an Employee who is a member of a
group of selected management and/or highly compensated Employees of the Company
and who is designated by the Plan Administrator as eligible to participate in
the Plan.

                  "Employee" means any individual employed by the Company on a
regular, full-time basis (in accordance with the personnel policies and
practices of the Company), including citizens of the United States employed
outside of their home country and resident aliens employed in the United States;
provided, however, that to qualify as an "Employee" for purposes of the Plan,
the individual must be a member of a group of "key management or other highly
compensated employees" within the meaning of Sections 201, 301 and 401 of the
Employee Retirement Income Security Act of 1974, as amended; provided further,
that individuals who are not on an employee payroll of the Company or who have
entered into an agreement with the Company which excludes them from
participation in the Plan shall not be eligible to participate in the Plan.

                  "Employer" means Brandywine Realty Trust and its Affiliates.

                  "Employer Stock Fund" means a hypothetical investment fund
consisting entirely of Shares.

                  "Enrollment Agreement" means the authorization form which an
Eligible Employee or Trustee files with the Plan Administrator to participate in
the Plan.

                  "Excess Bonus" means that portion of a Compensation Deferral
as defined in Section 4.6.

                  "In-Service Distribution Account" means the Account maintained
for a Participant for each Distribution Option Period to which Compensation
Deferrals are credited pursuant to the In-Service Distribution Option.

                  "In-Service Distribution Option" means the Distribution Option
pursuant to which benefits are payable in accordance with Section 7.2.

                  "Matching Contributions" are contributions credited to the
Participant's Retirement Distribution Account by the Company pursuant to Section
4.3.

                                       6

                  "Participant" means an Eligible Employee or Trustee who has
filed a completed and executed Enrollment Agreement with the Plan Administrator
or its designee and is participating in the Plan in accordance with the
provisions of Article 4. In the event of the death or incompetency of a
Participant, the term shall mean his personal representative or guardian. An
individual shall remain a Participant until that individual has received full
distribution of any amount credited to the Participant's Distribution Option
Account(s).

                  "Plan" means the Brandywine Realty Trust Executive Deferred
Compensation Plan, as amended from time to time.

                  "Plan Administrator" means the Committee.

                  "Plan Year" means the 12-month period beginning on each
January 1 and ending on the following December 31; provided that the initial
Plan Year shall commence on October 1, 2000 and end on December 31, 2000.

                  "Profit Sharing Contributions" are contributions credited to
the Participant's Retirement Distribution Account by the Company, based on a
percentage, as determined each year by the Company, of the Participant's
Compensation in excess of the Compensation Limit. To the extent that a
contribution is not deemed to be a Profit Sharing Contribution, it will be
considered Compensation classified as a bonus for purposes of the Plan.

                  "Retirement" means the termination of the Participant's
Service with the Employer (for reasons other than death) at or after age 55.

                  "Retirement Distribution Account" means the Account maintained
for a Participant to which Compensation Deferrals, Matching Contributions,
Additional Company Contributions, Profit Sharing Contributions, and Supplemental
Profit Sharing Contributions are credited pursuant to the Retirement
Distribution Option.

                  "Retirement Distribution Option" means the Distribution Option
pursuant to which benefits are payable in accordance with Section 7.1.

                  "Service" means the period of time during which an employment
relationship exists between an Employee and the Company, including any period
during which the Employee is on an approved leave of absence, whether paid or
unpaid. "Service" also includes employment with an Affiliate if an Employee
transfers directly between the Company and the Affiliate.

                  "Share" means a common share of beneficial interest, $.01 par
value per share, of Brandywine Realty Trust.

                  "Supplemental Profit Sharing Contributions" are contributions
credited to the Retirement Distribution Account of certain Participants by the
Company pursuant to Section 4.5.

                                       7

                  "Termination Date" means the date of termination of a
Participant's Service with the Employer, determined without reference to any
compensation continuing arrangement or severance benefit arrangement that may be
applicable.

                  "Trustee" means a member of the Board who receives
remuneration payable for services as a member of the Board.

                                       8

                                    ARTICLE 3
                    ADMINISTRATION OF THE PLAN AND DISCRETION

                  3.1. The Committee, as Plan Administrator, shall have full
power and authority to interpret the Plan, to prescribe, amend and rescind any
rules, forms and procedures as it deems necessary or appropriate for the proper
administration of the Plan and to make any other determinations and to take any
other such actions as it deems necessary or advisable in carrying out its duties
under the Plan. All action taken by the Plan Administrator arising out of, or in
connection with, the administration of the Plan or any rules adopted thereunder,
shall, in each case, lie within its sole discretion, and shall be final,
conclusive and binding upon the Company, the Board, all Employees and Trustees,
all Beneficiaries and all persons and entities having an interest therein. The
Committee, may, however, delegate to any person or entity any of its powers or
duties under the Plan. To the extent of any such delegation, the delegate shall
become the Plan Administrator responsible for administration of the Plan, and
references to the Plan Administrator shall apply instead to the delegate. Any
action by the Committee assigning any of its responsibilities to specific
persons who are all trustees, officers, or employees of the Company shall not
constitute delegation of the Committee's responsibility but rather shall be
treated as the manner in which the Committee has determined internally to
discharge such responsibility.

                  3.2. The Plan Administrator shall serve without compensation
for its services unless otherwise determined by the Board. All expenses of
administering the Plan shall be paid by the Company.

                  3.3. The Company shall indemnify and hold harmless the Plan
Administrator from any and all claims, losses, damages, expenses (including
counsel fees) and liability (including any amounts paid in settlement of any
claim or any other matter with the consent of the Board) arising from any act or
omission of such member, except when the same is due to gross negligence or
willful misconduct.

                  3.4. Any decisions, actions or interpretations to be made
under the Plan by the Company, the Board or the Plan Administrator shall be made
in its respective sole discretion, not as a fiduciary and need not be uniformly
applied to similarly situated individuals and shall be final, binding and
conclusive on all persons interested in the Plan.

                                       9

                                    ARTICLE 4
                                  PARTICIPATION

                  4.1. Election to Participate.

                           (a) Timing of Election to Participate. Any Eligible
Employee or Trustee may enroll in the Plan effective as of the first day of a
Plan Year by filing a completed and fully executed Enrollment Agreement with the
Plan Administrator by a date set by the Plan Administrator.

                                    (i) Base Salary/Board Remuneration. With
respect to the deferral of Compensation that is classified by the Company as
base salary or the deferral of Board Remuneration, an executed Enrollment
Agreement must be filed by December 31 of the Plan Year preceding the Plan Year
in which such base salary or Board Remuneration is to be earned, or such earlier
time as may be established by the Plan Administrator.

                                    (ii) Bonus.

                                            (A) With respect to the deferral of
Compensation that is classified by the Company as bonus, an executed Enrollment
Agreement must be filed by December 31 of the Plan Year preceding the Plan Year
in which such bonus is earned, or such earlier time as may be established by the
Plan Administrator.

                                            (B) The Board may, as a condition of
a bonus award, require that it be deferred under the Plan and may prescribe
vesting and investment provisions with respect to such award, and may establish
separate deadlines by which Enrollment Agreements may be filed with respect to
such an award.

                                    (iii) Initial Short Plan Years.

                                            (A) For the short Plan Year
commencing on October 1, 2000, an executed Enrollment Agreement must be
submitted by September 29, 2000 and shall be effective for (A) base salary
earned in payroll periods on and after October 1, 2000 and (B) bonuses earned in
2000 and payable in January 2001, and bonuses earned in 2001 and payable in
January 2002.

                                            (B) Trustees were not eligible to
participate in the Plan until March 25, 2004. In order to participate for the
remainder of the Plan Year that commenced on January 1, 2004, Trustees must
submit an executed Enrollment Agreement by April 24, 2004. This Enrollment
Agreement will be effective for Board Remuneration otherwise payable to a
Trustee after April 24, 2004.

                                    (iv) Revocation of Election. Once each Plan
Year, a Participant may cancel his deferral election with respect to all
Compensation and Board Remuneration, other than Compensation that is classified
by the Company as bonus, provided that such cancellation is communicated to the
Company in writing and shall be effective for all base salary and Board
Remuneration earned for the remainder of the Plan Year. Elections with respect
to bonuses are irrevocable.

                                       10

                           (b) Amount of Deferral. Pursuant to said Enrollment
Agreement, the Eligible Employee or Trustee shall irrevocably elect the
percentages by which (as a result of payroll deduction) an amount equal to any
whole percentage of the Participant's Compensation or Board Remuneration will be
deferred. Up to 85 percent of base salary, 100 percent of bonus and 100% of
Board Remuneration may be deferred; provided however, that deferrals will be
made after required non-deferrable payroll tax deductions and any deductions
elected by the Participant (including, but not limited to, deductions for
payment of health insurance premiums). The Plan Administrator may establish
minimum amounts that may be deferred under this Section 4.1 and may change such
standards from time to time. Any such limit shall be communicated by the Plan
Administrator to the Participants prior to the commencement of a Plan Year.

                           (c) Accounts to Which Amounts Credited. Pursuant to
said Enrollment Agreement, the Eligible Employee shall elect the Distribution
Option Accounts to which such amounts will be credited, and shall provide such
other information as the Plan Administrator shall require. Board Remuneration
will only be credited to the Deferred Board Remuneration Account.

                           (d) Form of Distribution from Accounts. The first
Enrollment Agreement filed by an Eligible Employee during any Distribution
Option Period must also set forth the Participant's election as to the time and
manner of distribution from the In-Service Distribution Account and of amounts
credited for that Distribution Option Period. The first Enrollment Agreement
filed by an Eligible Employee must set forth the time and manner of distribution
with respect to amounts credited to the Retirement Distribution Account. The
first Enrollment Agreement filed by a Trustee must set forth the manner of
distribution with respect to amounts credited to the Deferred Board Remuneration
Account.

                  4.2. Filing of Elections by New Eligible Employees and New
Trustees.

                           (a) New Eligible Employees. The Plan Administrator
may, in its discretion, permit an Employee who first becomes an Eligible
Employee after the beginning of a Plan Year to enroll in the Plan for that Plan
Year by filing a completed and fully executed Enrollment Agreement, in
accordance with Section 4.1, as soon as practicable following the date the
Employee becomes an Eligible Employee but, in any event, not later than 30 days
after such date. Notwithstanding the foregoing, however, any election by an
Eligible Employee to defer Compensation pursuant to this section 4.2 shall apply
only to such amounts as are earned by the Eligible Employee after the date on
which such Enrollment Agreement is filed.

                           (b) New Trustees. A Trustee whose election as a
member of the Board first becomes effective in a Plan Year may enroll in the
Plan for that Plan Year by filing a completed and fully executed Enrollment
Agreement, in accordance with Section 4.1, as soon as practicable following the
effective date of such Trustee's election but, in any event, not later than 30
days after the effective date of such election. Notwithstanding the foregoing,
however, any election by a Trustee to defer Board Remuneration pursuant to this
Section 4.2 shall apply only to such Board Remuneration earned by the Trustee
after the date on which such Enrollment Agreement is filed.

                                       11

                  4.3. Matching Contributions. The amount of Matching
Contributions credited to a Participant's Retirement Distribution Account shall
be equal to the matching contributions which would have been made on behalf of
the Participant under the Brandywine Realty Trust 401(k) Profit Sharing Plan but
for statutory limitations. Generally, the Matching Contribution shall be equal
to the "matching percentage" (30%, as of the Effective Date) set forth in the
Brandywine Realty Trust 401(k) Profit Sharing Plan, multiplied by a specified
percentage (10%, as of the Effective Date) of the Participant's Compensation in
excess of the Compensation Limit that is deferred under Section 4.1 or 4.2(a),
as applicable.

                  If: (a) the dollar amount of the matching contributions under
the Brandywine Realty Trust 401(k) Profit Sharing Plan for the Plan Year was
limited due to the application of the provisions of Section 401(m) of the Code;
(b) the percentage of the Participant's Compensation that could be deferred
under the Brandywine Realty Trust 401(k) Profit Sharing Plan was limited to an
amount less than 10% (or such other percentage that may become effective after
the Effective Date) because of other Code limitations; or (c) to the extent that
a Participant's compensation for purposes of the Brandywine Realty Trust 401(k)
Profit Sharing Plan is reduced to an amount that is below the Compensation Limit
in any Plan Year by reason of deferrals made under this Plan (regardless of
whether, prior to reduction, it was in excess of such limitation), an additional
Matching Contribution shall be contributed under the Plan equal to the amount of
matching contributions that would have been made to the Brandywine Realty Trust
401(k) Profit Sharing Plan but for such limitations, but only if and to the
extent the Participant has deferred additional amounts of Compensation to the
Plan at least equal to the amount that would have been required to have been
deferred under the Brandywine Realty Trust 401(k) Profit Sharing Plan in order
to support such additional matching contributions in the absence of such
limitations.

                  4.4. Profit Sharing Contributions. The Company shall credit to
each Participant's Retirement Distribution Account a Profit Sharing
Contribution. Profit Sharing Contributions will be credited as frequently as
determined by the Plan Administrator.

                  4.5. Supplemental Profit Sharing Contributions. To the extent
that a Participant's compensation for purposes of the Brandywine Realty Trust
401(k) Profit Sharing Plan is reduced to an amount that is below the
Compensation Limit in any Plan Year by reason of deferrals made under this Plan
(regardless of whether, prior to reduction, it was in excess of such
limitation), a Supplemental Profit Sharing Contribution will be credited to the
Retirement Distribution Account of such Participant, at least annually, equal to
the specified profit sharing percentage for the applicable Plan Year, multiplied
by the excess, if any, of (a) the lesser of (i) the Participant's Compensation
or (ii) the Compensation Limit over (b) the amount of the Participant's
compensation that is taken into account under the Brandywine Realty Trust 401(k)
Profit Sharing Plan.

                                       12

                  4.6. Additional Company Contributions.

                           (a) If, pursuant to Section 4.1 or 4.2, a Participant
(other than a Participant who is a Trustee) elects to defer receipt of 25% of
his annual bonus (if any) and deems that such deferral be invested in the
Employer Stock Fund, then, with respect to any part of such bonus in excess of
25% that is deferred and invested in the Employer Stock Fund ("Excess Bonus"),
an Additional Company Contribution equal to a specified percentage (15% as of
the Effective Date) of the Excess Bonus shall be contributed to such
Participant's Retirement Distribution Account and deemed invested in the
Employer Stock Fund.

                           (b) The Excess Bonus and associated Additional
Company Contribution shall not be subject to Participant investment direction
for two years from the date of crediting. If, prior to the expiration of two
years from the date on which the Excess Bonus and Additional Company
Contribution are credited, (1) the Participant directs that all or a portion of
the Excess Bonus or the associated Additional Company Contribution be deemed
invested in an Earnings Crediting Option other than the Employer Stock Fund or
(2) the Participant receives a distribution pursuant to Article 10 or Article
11, any portion of which consists of all or a portion of such Excess Bonus or
Additional Company Contribution, then the Participant shall forfeit all of such
Additional Company Contribution; provided, with respect to a distribution
pursuant to Article 11, that any forfeiture will take place prior to the
determination of the Article 11 forfeiture penalty.

                                       13

                                    ARTICLE 5
                          DISTRIBUTION OPTION ACCOUNTS

                  5.1. Distribution Option Accounts. The Plan Administrator
shall establish and maintain separate Distribution Option Accounts with respect
to a Participant for each Distribution Option Period. A Participant's
Distribution Option Accounts shall consist of the Retirement Distribution
Account, one or more In-Service Distribution Accounts and/or a Deferred Board
Remuneration Account, as applicable. The amount of Compensation and Board
Remuneration deferred pursuant to Section 4.1 or Section 4.2 shall be credited
by the Company to the Participant's Distribution Option Accounts, in accordance
with the Distribution Option irrevocably elected by the Participant in the
Enrollment Agreement, as soon as reasonably practicable following the close of
the payroll period, bonus payment date, or, in the case of Trustees, the
regularly scheduled payment date, for which the deferred Compensation or Board
Remuneration would otherwise be payable, as determined by the Plan Administrator
in its sole discretion. Any amount once taken into account as Compensation or
Board Remuneration for purposes of this Plan shall not be taken into account
thereafter. Matching Contributions, Additional Company Contributions, Profit
Sharing Contributions, and Supplemental Profit Sharing Contributions, when
credited, as determined by the Plan Administrator in its sole discretion, are
credited only to the Retirement Distribution Account. The Participant's
Distribution Option Accounts shall be reduced by the amount of payments made by
the Company to the Participant or the Participant's Beneficiary pursuant to this
Plan.

                  5.2. Earnings on Distribution Option Accounts.

                           (a) General. A Participant's Distribution Option
Accounts shall be credited with earnings in accordance with the Earnings
Crediting Options elected by the Participant from time to time. Participants may
allocate their Retirement Distribution Account, each of their In-Service
Distribution Accounts and/or their Deferred Board Remuneration Account among the
Earnings Crediting Options available under the Plan only in whole percentages of
not less than five percent.

                           (b) Investment Options. The deemed rate of return,
positive or negative, credited under each Earnings Crediting Option is based
upon the actual investment performance of (i) the Employer Stock Fund, (ii) the
corresponding investment portfolios of the EQ Advisers Trust, open-end
investment management companies under the Investment Company Act of 1940, as
amended from time to time, or (iii) such other investment fund(s) as the Company
may designate from time to time, and shall equal the total return of such
investment fund net of asset based charges, including, without limitation, money
management fees, fund expenses and mortality and expense risk insurance contract
charges. The Company reserves the right, on a prospective basis, to add or
delete Earnings Crediting Options.

                  5.3. Earnings Crediting Options. Notwithstanding that the
rates of return credited to Participants' Distribution Option Accounts under the
Earnings Crediting Options are based upon the actual performance of the
investment options specified in Section 5.2, or such other investment funds as
the Company may designate, the Company shall not be obligated to invest any
Compensation or Board Remuneration deferred by Participants under this Plan,
Matching Contributions, Additional Company Contributions, Profit Sharing
Contributions, Supplemental Profit Sharing Contributions, or any other amounts,
in such portfolios or in any other investment funds.

                                       14

                  5.4. Changes in Earnings Crediting Options. A Participant may
change the Earnings Crediting Options to which his Distribution Option Accounts
are deemed to be allocated subject to such rules as may be determined by the
Plan Administrator, provided that except as the Plan Administrator may otherwise
determine in light of legal restrictions on changes, the frequency of permitted
changes shall not be less than four times per Plan Year. Each such change may
include (a) reallocation of the Participant's existing Accounts in whole
percentages of not less than five percent, and/or (b) change in investment
allocation of amounts to be credited to the Participant's Accounts in the
future, as the Participant may elect. The effect of a Participant's change in
Earnings Crediting Options shall be reflected in the Participant's Accounts as
soon as reasonably practicable following the Plan Administrator's receipt of
notice of such change, as determined by the Plan Administrator in its sole
discretion.

                  5.5. Valuation of Accounts. Except as otherwise provided in
Section 5.7, the value of a Participant's Distribution Option Accounts as of any
date shall equal the amounts theretofore credited to such Accounts, including
any earnings (positive or negative) deemed to be earned on such Accounts in
accordance with Section 5.2 and Section 5.4 through the day preceding such date,
less the amounts theretofore deducted from such Accounts.

                  5.6. Statement of Accounts. The Plan Administrator shall
provide to each Participant, not less frequently than quarterly, a statement in
such form as the Plan Administrator deems desirable for setting forth the
balance standing to the credit of each Participant in each of his Distribution
Option Accounts.

                  5.7. Distributions from Accounts. Any distribution made to or
on behalf of a Participant from one or more of his Distribution Option Accounts
in an amount which is less than the entire balance of any such Account shall be
made pro rata from each of the Earnings Crediting Options to which such Account
is then allocated. For purposes of any provision of the Plan relating to
distribution of benefits to Participants or Beneficiaries, the value of a
Participant's Distribution Option Accounts shall be determined as of a date as
soon as reasonably practicable preceding the distribution date, as determined by
the Plan Administrator in its sole discretion. In the case of any benefit
payable in the form of a cash lump sum, the value of a Participant's
Distribution Option Accounts, as determined pursuant to this Section 5.7, shall
be distributed. In the case of any benefit payable in the form of annual
installments, as of any payment date, the amount of each installment payment
shall be determined as the quotient of (a) the value of the Participant's
Distribution Option Account subject to distribution, as determined pursuant to
this Section 5.7, divided by (b) the number of remaining annual installments
immediately preceding the payment date.

                                       15

                                    ARTICLE 6
                              DISTRIBUTION OPTIONS

                  6.1. Election of Distribution Option. In the first completed
and fully executed Enrollment Agreement filed with the Plan Administrator for
each Distribution Option Period, a Participant shall elect the time and manner
of payment in accordance with Section 4.1(d). Annually, the Participant shall
allocate his or her deferrals between the Distribution Options in increments of
ten percent; provided that, deferrals of Board Remuneration shall automatically
be allocated to the Deferred Board Remuneration Account.

                  6.2. Retirement Distribution Option. Subject to Section 7.1,
distribution of the Participant's Retirement Distribution Account, if any, shall
commence upon (a) the Participant's Retirement or (b) the Participant's
attainment of age 65, as elected by the Participant in the Enrollment Agreement
pursuant to which such Retirement Distribution Account was established or
otherwise as permitted under Section 7.1(a).

                  6.3. In-Service Distribution Option. Subject to Section 7.2,
the Participant's In-Service Distribution Account for any Distribution Option
Period shall be distributed commencing in the year elected by the Participant in
the Enrollment Agreement pursuant to which such In-Service Distribution Account
was established. Notwithstanding the foregoing, a Participant shall not be
entitled to allocate any deferrals to an In-Service Distribution Account for the
two Plan Years preceding the Plan Year which includes the date on which such
Account is to be distributed and such additional deferrals shall instead be
allocated to the Retirement Distribution Account.

                  6.4. Deferred Board Remuneration Option. Subject to Section
7.3, distribution of the Participant's Deferred Board Remuneration Account, if
any, shall commence following the Participant's termination of service as a
Trustee.

                                       16

                                    ARTICLE 7
                            BENEFITS TO PARTICIPANTS

                  7.1. Benefits Under the Retirement Distribution Option.
Benefits under the Retirement Distribution Option shall be paid to a Participant
as follows:

                           (a) Benefits Upon Retirement.

                                    (i) General. In the case of a Participant
whose Service with the Employer terminates on account of his Retirement, the
Participant's Retirement Distribution Account shall be distributed in one of the
following methods, as elected by the Participant in writing either in the
Enrollment Agreement or in a separate election made in accordance with Section
7.1(b): (x) in a lump sum; (y) in annual installments over 5, 10, 15 or 20
years; or (z) by any other formula that is mathematically derived and is
acceptable to the Plan Administrator.

                                    (ii) Payment of Lump Sums. Any lump-sum
benefit payable in accordance with this paragraph shall be paid in, but not
later than January 31 of, the Plan Year following the Plan Year in which the
Participant's Retirement occurs, or, if later, attainment of age 65 as elected
by the Participant in accordance with this Section 7.1 or Section 6.2.

                                    (iii) Payment of Annual Installments. Annual
installment payments, if any, shall commence in, but not later than January 31
of, the Plan Year following the Plan Year in which the Participant's Retirement
occurs, or, if later, as soon as reasonably practicable following the
Participant's attainment of age 65, as elected by the Participant in accordance
with this Section 7.1 or Section 6.2.

                           (b) Changes in Forms of Distribution. A Participant
may change the election regarding the manner of payment of the Participant's
Retirement Distribution Account by filing a revised Enrollment Agreement by the
earlier of (i) December 31 of the calendar year preceding the calendar year in
which the Participant's distribution date falls or (ii) the date six months
before such distribution date; provided that no election shall operate to
accelerate either the first or last payment date of the Retirement Distribution
Account.

                           (c) Changes in Timing of Distribution. A Participant
may change the election regarding the timing of the distribution to defer the
date on which the distribution should commence by filing a revised Enrollment
Agreement by the earlier of (i) December 31 of the calendar year preceding the
calendar year in which the Participant's distribution otherwise would have
commenced or (ii) the date six months before such previously elected
commencement date.

                           (d) Benefits Upon Termination of Employment. In the
case of a Participant whose Service with the Employer terminates prior to the
earliest date on which the Participant is eligible for Retirement, other than on
account of becoming Disabled or by reason of death, the Participant's Retirement
Distribution Account shall be distributed (i) in a lump sum in, but not later
than February 28 of, the Plan Year following the Plan Year that includes the
Participant's Termination Date, (ii) beginning as soon as reasonably practicable
following the Participant's attainment of age 65, or (iii) beginning as soon as
reasonably practicable following the Participant's attainment of age 55, all as
irrevocably elected by the Participant in the Enrollment Agreement pursuant to
which such Retirement Distribution Account was established; provided, however,
that the Company may override Participant's election and cause a distribution
under clause (i) notwithstanding any other election by the Participant.

                                       17

                           (e) Forfeiture. If a Participant terminates Service,
other than due to Retirement, Disability or death, prior to being credited with
five (5) years of service, as determined pursuant to the terms of the Brandywine
Realty Trust 401(k) Profit Sharing Plan, all or a portion of the Participant's
Retirement Distribution Account attributable to Matching Contributions shall be
forfeited, as follows:

                           Termination Prior to
                           Completion of Year                 Portion Forfeited
                           ------------------                 -----------------
                           1                                  100%
                           2                                  80%
                           3                                  60%
                           4                                  40%
                           5                                  20%

                  7.2. Benefits Under the In-Service Distribution Option.
Benefits under the In-Service Distribution Option shall be paid to a Participant
as follows:

                           (a) In-Service Distributions. In the case of a
Participant who continues in Service with the Employer, the Participant's
In-Service Distribution Account for any Distribution Option Period shall be paid
to the Participant commencing in, but not later than January 31 of, the Plan
Year irrevocably elected by the Participant in the Enrollment Agreement pursuant
to which such In-Service Distribution Account was established, which may be no
earlier than the third Plan Year following the end of the last Plan Year in the
Distribution Option Period in which deferrals are to be credited to the
In-Service Distribution Account for that Distribution Option Period, in one lump
sum or in annual installments payable over 2, 3, 4, or 5 years.

                                    (i) Any lump-sum benefit payable in
accordance with this paragraph shall be paid in, but not later than January 31
of, the Plan Year elected by the Participant in accordance with Section 6.3.

                                    (ii) Annual installment payments, if any,
shall commence in, but not later than January 31 of, the Plan Year elected by
the Participant in accordance with Section 6.3.

                           (b) Benefits Upon Termination of Employment. In the
case of a Participant whose Service with the Employer terminates prior to the
date on which the Participant's In-Service Distribution Account would otherwise
be distributed, other than on account of becoming Disabled or by reason of
death, such In-Service Distribution Account shall be distributed (i) in a lump
sum in, but not later than February 28, of the year following the Participant's
Termination Date, (ii) in annual installments commencing on the date such
In-Service Distribution Account would otherwise have been distributed, or (iii)
in a lump sum on the date such In-Service Distribution Account would otherwise
have been distributed, all as irrevocably elected by the Participant in the
Enrollment Agreement pursuant to which such In-Service Distribution Account was
established; provided, however, that the Company may override a Participant's
election and cause a distribution under clause (i) notwithstanding any other
election by the Participant.

                                       18

         7.3. Benefits Under the Deferred Board Remuneration Option. Benefits
under the Deferred Board Remuneration Option shall be paid to a Participant
following his termination of service as a Trustee. The Deferred Board
Remuneration Account shall be distributed in one of the following methods, as
elected by the Participant in writing in the Enrollment Agreement: (x) in a lump
sum; (y) in annual installments over 5, 10, 15 or 20 years; or (z) by any other
formula that is mathematically derived and is acceptable to the Plan
Administrator. Payments shall be made or commence in, but not later than January
31 of, the calendar year following the calendar year in which the Participant's
service as a Trustee terminates, or the date that is 6 months plus one day after
such Participant's termination of service as a Trustee, if later. A Participant
may change the election regarding the manner of payment of the Participant's
Deferred Board Remuneration Account by filing a revised Enrollment Agreement by
the earlier of (i) December 31 of the calendar year preceding the calendar year
in which the Participant's distribution date falls or (ii) the date six months
before such distribution date; provided that no election shall operate to
accelerate either the first or last payment date of the Deferred Board
Remuneration Account.

                                       19

                                    ARTICLE 8
                                   DISABILITY

                  8.1. In the event a Participant becomes Disabled, the
Participant's right to make any further deferrals under this Plan shall
terminate as of the date the Participant terminates due to Disability. The
Participant's Distribution Option Accounts shall continue to be credited with
earnings in accordance with Section 5.2 until such Accounts are fully
distributed. For purposes of this Plan, a Disabled Participant will not be
treated as having terminated Service. The Participant's Retirement Distribution
Account, if any, shall be distributed to the Participant in accordance with
Section 7.1(a), provided, however, that distribution of the Participant's
Retirement Distribution Accounts, if any, shall commence not later than January
31 of the Plan Year immediately following the later of (a) the Plan Year in
which the Participant first becomes eligible for Retirement, or (b) the Plan
Year in which the Participant first terminated due to Disability. The
Participant's In-Service Distribution Accounts, if any, will be distributed to
the Participant in accordance with Section 7.2(a) without regard to the fact
that the Participant became Disabled. The Participant's Deferred Board
Remuneration Account , if any, shall be distributed in accordance with Section
7.3.

                                       20

                                    ARTICLE 9
                                SURVIVOR BENEFITS

                  9.1. Death of Participant Prior to the Commencement of
Benefits. In the event of a Participant's death prior to the commencement of
benefits in accordance with Article 7, benefits shall be paid to the
Participant's Beneficiary, as determined under Section 12.4, pursuant to
Sections 9.2, 9.3 or 9.4, whichever is applicable, in lieu of any benefits
otherwise payable under the Plan to or on behalf of such Participant.

                  9.2. Survivor Benefits Under the Retirement Distribution
Option. In the case of a Participant with respect to whom the Company has
established a Retirement Distribution Account, and who dies prior to the
commencement of benefits under such Retirement Distribution Account pursuant to
Section 7.1, distribution of such Retirement Distribution Account shall be made
in the manner and at such time as elected by the Participant in the Enrollment
Agreement pursuant to which such Retirement Distribution Account was established
or as may have been changed by the Participant.

                  9.3. Survivor Benefits Under the In-Service Distribution
Option. In the case of a Participant with respect to whom the Company has
established one or more In-Service Distribution Accounts, and who dies prior to
the date on which such In-Service Distribution Accounts are to be paid pursuant
to Section 7.2, distribution of such In-Service Distribution Accounts shall be
made at such time and in such form as irrevocably elected by the Participant in
the Enrollment Agreement pursuant to which such In-Service Distribution Accounts
were established.

                  9.4. Survivor Benefits Under the Deferred Board Remuneration
Option. In the case of a Participant with respect to whom the Company has
established a Deferred Board Remuneration Account, and who dies prior to the
commencement of benefits under such Deferred Board Remuneration Account pursuant
to Section 7.3, distribution of such Deferred Board Remuneration Account shall
be made in the manner elected by the Participant in the Enrollment Agreement
pursuant to which such Deferred Board Remuneration Account was established or as
may have been changed by the Participant. Payments shall be made or commence in,
but not later than January 31 of, the calendar year following the calendar year
in which the Participant dies, or the date that is 6 months plus one day after
such Participant's death, if later.

                  9.5. Death of Participant After Benefits Have Commenced. In
the event a Participant who dies after annual installment benefits payable under
Sections 7.1, 7.2, and/or 7.3 from the Participant's Retirement Distribution
Account, In-Service Distribution Account and/or Deferred Board Remuneration
Account has commenced, but before the entire balance of such Accounts has been
paid, any remaining annual installments shall continue to be paid to the
Participant's Beneficiary, subject to Section 11.3, at such times and in such
amounts as they would have been paid to the Participant had he survived.

                                       21

                                   ARTICLE 10
                                EMERGENCY BENEFIT

                  10.1. In the event that the Plan Administrator, upon written
request of a Participant, determines, in its sole discretion, that the
Participant has suffered an unforeseeable financial emergency, the Company shall
pay to the Participant from his Distribution Option Account, as soon as
practicable following such determination, an amount necessary to meet the
emergency, after deduction of any and all taxes as may be required pursuant to
Section 12.10 (the "Emergency Benefit"). For purposes of this Plan, an
unforeseeable financial emergency is an unexpected need for cash arising from an
illness, casualty loss, sudden financial reversal, or other such unforeseeable
occurrence. Cash needs arising from foreseeable events such as the purchase of a
house or education expenses for children shall not be considered to be the
result of an unforeseeable financial emergency. Emergency Benefits shall be paid
first from the Participant's In-Service Distribution Accounts, if any, to the
extent the balance of one or more of such In-Service Distribution Accounts is
sufficient to meet the emergency, in the order in which such Accounts would
otherwise be distributed to the Participant. If the distribution exhausts the
In-Service Distribution Accounts, the Retirement Distribution Account and
Deferred Board Remuneration Account may be accessed. With respect to that
portion of any Distribution Option Account which is distributed to a Participant
as an Emergency Benefit in accordance with this Article 10, no further benefit
shall be payable to the Participant under this Plan. Notwithstanding anything in
this Plan to the contrary, a Participant who receives an Emergency Benefit in
any Plan Year shall not be entitled to make any further deferrals for the
remainder of such Plan Year. It is intended that the Plan Administrator's
determination as to whether a Participant has suffered an "unforeseeable
financial emergency" shall be made consistent with the requirements under
section 457(d) of the Code.

                                       22

                                   ARTICLE 11
                            ACCELERATED DISTRIBUTION

                  11.1. Availability of Withdrawal Prior to Retirement. Upon the
Participant's written election, the Participant may elect to withdraw all or a
portion of the Participant's Distribution Option Account at any time prior to
the time such Distribution Option Account otherwise becomes payable under the
Plan, provided the conditions specified in Section 11.3, Section 11.4. and
Section 11.5 are satisfied.

                  11.2. Acceleration of Periodic Distributions. Upon the
Participant's written election, the Participant or Participant's Beneficiary who
is receiving annual installment payments under the Plan may elect to have all or
a percentage of the remaining annual installments distributed in the form of an
immediately payable lump sum, provided the condition specified in Section 11.3
is satisfied.

                  11.3. Forfeiture Penalty. In the event of a withdrawal
pursuant to Section 11.1, or an accelerated distribution pursuant to Section
11.2, the Participant shall forfeit from his Distribution Option Account from
which the withdrawal is made an amount equal to 10% of the amount of the
withdrawal or accelerated distribution, as the case may be. The forfeited amount
shall be deducted from the applicable Distribution Option Account prior to
giving effect to the withdrawal or acceleration. The Participant and the
Participant's Beneficiary shall not have any right or claim to the forfeited
amount and the Company shall have no obligation whatsoever to the Participant,
the Participant's Beneficiary or any other person with regard to the forfeited
amount.

                  11.4. Minimum Withdrawal. In no event shall the amount
withdrawn in accordance with Section 11.1 be less than 25% of the amount
credited to the Participant's Distribution Option Account immediately prior to
the withdrawal.

                  11.5. Suspension from Deferrals. In the event of a withdrawal
pursuant to Section 11.1, a Participant who is otherwise eligible to make
deferrals under Article 4 shall be prohibited from making any deferrals with
respect to the Plan Year immediately following the Plan Year during which the
withdrawal was made, and any election previously made by the Participant with
respect to deferrals for the Plan Year of the withdrawal shall be void and of no
effect with respect to subsequent deferrals for such Plan Year.

                                       23

                                   ARTICLE 12
                                  MISCELLANEOUS

                  12.1. Amendment and Termination. The Plan may be amended,
suspended, discontinued or terminated at any time by the Plan Administrator;
provided, however, that no such amendment, suspension, discontinuance or
termination shall reduce or in any manner adversely affect the rights of any
Participant with respect to benefits that are payable or may become payable
under the Plan based upon the balance of the Participant's Accounts as of the
effective date of such amendment, suspension, discontinuance or termination.

                  12.2. Change of Control.

                           (a) Notwithstanding Section 12.1, in the event of a
Change of Control, Brandywine Realty Trust, or its successor, shall have the
discretion, with respect to amounts standing to the credit of Participants'
Distribution Option Accounts, to modify and/or completely override Participants'
elections regarding the timing and/or form of distribution from such
Distribution Option Accounts, including providing for a complete or partial
distribution of all amounts due such Participants in the form of immediate lump
sum payments.

                           (b) In the event of a Change of Control in which
Shares are converted into cash or equity, amounts deemed invested in the
Employer Stock Fund as of such Change of Control shall be deemed to be converted
in the same manner as Shares; provided if holders of Shares are given a choice
between forms of consideration, the amounts deemed invested in the Employer
Stock Fund as of such Change of Control shall be deemed converted into that form
of consideration chosen by the majority of the holders of Shares.

                  12.3. Claims Procedure.

                           (a) Claim. A person who believes that he is being
denied a benefit to which he is entitled under the Plan (hereinafter referred to
as a "Claimant") may file a written request for such benefit with the Plan
Administrator, setting forth the claim.

                           (b) Claim Decision. Upon receipt of a claim, the Plan
Administrator shall advise the Claimant within ninety (90) days of receipt of
the claim whether the claim is denied. If special circumstances require more
than ninety (90) days for processing, the Claimant will be notified in writing
within ninety (90) days of filing the claim that the Plan Administrator requires
up to an additional ninety (90) days to reply. The notice will explain what
special circumstances make an extension necessary and indicate the date a final
decision is expected to be made.

                  If the Claimant does not receive a written denial notice or
notice of an extension within ninety (90) days, the Claimant may consider the
claim denied and may then request a review of denial of the claim, as described
below.

                                       24

                  If the claim is denied in whole or in part, the Claimant shall
be provided a written opinion, using language calculated to be understood by the
Claimant, setting forth:

                                    (i) The specific reason or reasons for such
denial;

                                    (ii) The specific reference to pertinent
provisions of this Plan on which such denial is based;

                                    (iii) A description of any additional
material or information necessary for the Claimant to perfect his claim and an
explanation why such material or such information is necessary;

                                    (iv) Appropriate information as to the steps
to be taken if the Claimant wishes to submit the claim for review; and

                                    (v) The time limits for requesting a review
under subsection (c) and for review under subsection (d) hereof.

                           (c) Request for Review. Within sixty (60) days after
the receipt by the Claimant of the written opinion described above, the Claimant
may request in writing that the Plan Administrator review its determination. The
Claimant or his duly authorized representative may, but need not, review the
pertinent documents and submit issues and comments in writing for consideration
by the Plan Administrator. If the Claimant does not request a review of the
initial determination within such sixty (60) day period, the Claimant shall be
barred and estopped from challenging the determination.

                           (d) Review of Decision. Within sixty (60) days after
the Plan Administrator's receipt of a request for review, it will review the
initial determination. After considering all materials presented by the
Claimant, the Plan Administrator will render a written opinion, written in a
manner calculated to be understood by the Claimant, setting forth the specific
reasons for the decision and containing specific references to the pertinent
provisions of this Agreement on which the decision is based. If special
circumstances require that the sixty (60) day time period be extended, the Plan
Administrator will so notify the Claimant and will render the decision as soon
as possible, but no later than one hundred twenty (120) days after receipt of
the request for review.

                  12.4. Designation of Benefit. Each Participant may designate a
Beneficiary or Beneficiaries (which Beneficiary may be an entity other than a
natural person) to receive any payments which may be made following the
Participant's death. Such designation may be changed or canceled at any time
without the consent of any such Beneficiary. Any such designation, change or
cancellation must be made in a form approved by the Plan Administrator and shall
not be effective until received by the Plan Administrator, or its designee. If
no Beneficiary has been named, or the designated Beneficiary or Beneficiaries
shall have predeceased the Participant, the Beneficiary shall be the
Participant's estate. If a Participant designates more than one Beneficiary, the
interests of such Beneficiaries shall be paid in equal shares, unless the
Participant has specifically designated otherwise.

                                       25

                  12.5. Limitation of Participant's Right. Nothing in this Plan
shall be construed as conferring upon any Participant any right to continue in
Service or to continue to serve as a Trustee, nor shall it interfere with the
rights of the Company to terminate the employment of any Participant and/or to
take any personnel action affecting any Participant without regard to the effect
which such action may have upon such Participant as a recipient or prospective
recipient of benefits under the Plan. Any amounts payable hereunder shall not be
deemed salary or other compensation to a Participant for the purposes of
computing benefits to which the Participant may be entitled under any other
arrangement established by the Employer for the benefit of its employees.

                  12.6. No Limitation on Company Actions. Nothing contained in
the Plan shall be construed to prevent the Company from taking any action which
is deemed by it to be appropriate or in its best interest. No Participant,
Beneficiary, or other person shall have any claim against the Company as a
result of such action.

                  12.7. Obligations to Company. If a Participant becomes
entitled to a distribution of benefits under the Plan, and if at such time the
Participant has outstanding any debt, obligation, or other liability
representing an amount owing to the Employer, then the Employer may offset such
amount owed to it against the amount of benefits otherwise distributable. Such
determination shall be made by the Plan Administrator.

                  12.8. Nonalienation of Benefits. Except as expressly provided
herein, no Participant or Beneficiary shall have the power or right to transfer
(otherwise than by will or the laws of descent and distribution), alienate, or
otherwise encumber the Participant's or Beneficiary's interest under the Plan.
The Company's obligations under this Plan are not assignable or transferable,
except to (a) any corporation or partnership which acquires all or substantially
all of the Company's assets or (b) any corporation or partnership into which the
Company may be merged or consolidated. A Participant's or Beneficiary's interest
under the Plan is not assignable or transferable pursuant to a domestic
relations order. The provisions of the Plan shall inure to the benefit of each
Participant and the Participant's Beneficiaries, heirs, executors,
administrators or successors in interest.

                  12.9. Protective Provisions. Each Participant shall cooperate
with the Company by furnishing any and all information requested by the Company
in order to facilitate the payment of benefits hereunder, taking such physical
examinations as the Company may deem necessary and taking such other relevant
action as may be requested by the Company. If a Participant refuses to
cooperate, the Company shall have no further obligation to the Participant under
the Plan, other than payment to such Participant of the then current balance of
the Participant's Distribution Option Accounts in accordance with his prior
elections.

                  12.10. Taxes. The Company may make such provisions and take
such action as it may deem appropriate for the withholding of any taxes which
the Company is required by any law or regulation of any governmental authority,
whether Federal, state or local, to withhold in connection with any benefits
under the Plan, including, but not limited to, the withholding of appropriate
sums from any amount otherwise payable to the Participant (or his Beneficiary).
Each Participant, however, shall be responsible for the payment of all
individual tax liabilities relating to any such benefits.

                                       26

                  12.11. Unfunded Status of Plan. The Plan is an "unfunded" plan
for tax and Employee Retirement Income Security Act purposes. This means that
the value of a Participant's Distribution Option Accounts is based on the value
assigned to a hypothetical bookkeeping account, which is invested in
hypothetical shares of investments funds available under the Plan. As the nature
of the investment fund which forms the "index" or "meter" for the valuation of
the bookkeeping account changes, the valuation of the bookkeeping account
changes as well. The amount owed to a Participant is based on the value assigned
to the bookkeeping account. Brandywine Realty Trust may decide to use a "rabbi
trust" to anticipate its potential Plan liabilities, and it may attempt to have
Plan investments mirror the hypothetical investments deemed credited to the
bookkeeping accounts. However, the liability to pay the benefits is Brandywine
Realty Trusts', and the assets of the rabbi trust are potentially available to
satisfy the claims of non-participant creditors of Brandywine Realty Trust.

                  12.12. Severability. If any provision of this Plan is held
unenforceable, the remainder of the Plan shall continue in full force and effect
without regard to such unenforceable provision and shall be applied as though
the unenforceable provision were not contained in the Plan.

                  12.13. Governing Law. The Plan shall be construed in
accordance with and governed by the laws of the Commonwealth of Pennsylvania,
without reference to the principles of conflict of laws.

                  12.14. Headings. Headings are inserted in this Plan for
convenience of reference only and are to be ignored in the construction of the
provisions of the Plan.

                  12.15. Gender, Singular and Plural. All pronouns and any
variations thereof shall be deemed to refer to the masculine, feminine, or
neuter, as the identity of the person or persons may require. As the context may
require, the singular may read as the plural and the plural as the singular.

                  12.16. Notice. Any notice or filing required or permitted to
be given to the Plan Administrator under the Plan shall be sufficient if in
writing and hand delivered, or sent by registered or certified mail, to
Brandywine Realty Trust, 401 Plymouth Road, Suite 500, Plymouth Meeting, PA
19462, Attention: Chief Accounting Officer, or to such other entity as the Plan
Administrator may designate from time to time. Such notice shall be deemed given
as to the date of delivery, or, if delivery is made by mail, as of the date
shown on the postmark on the receipt for registration or certification.

                                       27

                                   APPENDIX A

Participating Companies as of October 1, 2000:

Brandywine Realty Services Corporation

                                       28

                                                                    Exhibit 10.2

                             BRANDYWINE REALTY TRUST
                             RESTRICTED SHARE AWARD

                  This is a Restricted Share Award dated as of March 11, 2004,
from Brandywine Realty Trust, a Maryland real estate investment trust (the
"Company") to Gerard H. Sweeney ("Grantee"). Terms used herein as defined terms
and not defined herein have the meanings assigned to them in the Brandywine
Realty Trust 1997 Long-Term Incentive Plan, as amended from time to time (the
"Plan").

         1. Definitions. As used herein:

                  (a) "Award" means the award of Restricted Shares hereby
granted.

                  (b) "Board" means the Board of Trustees of the Company, as
constituted from time to time.

                  (c) "Cause" means "Cause" as defined in the Employment
Agreement or the Plan.

                  (d) "Change of Control" means "Change of Control" as defined
in the Plan.

                  (e) "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor thereto.

                  (f) "Committee" means the Committee appointed by the Board in
accordance with Section 2 of the Plan, if one is appointed and in existence at
the time of reference. If no Committee has been appointed pursuant to Section 2,
or if such a Committee is not in existence at the time of reference, "Committee"
means the Board.

                  (g) "Date of Grant" means March 11, 2004, the date on which
the Company awarded the Restricted Shares.

                  (h) "Disability" means "Disability" as defined in the Plan.

                  (i) "Employer" means the Company or the Subsidiary for which
Grantee is performing services on the applicable Vesting Date.

                  (j) "Employment Agreement" means the Amended and Restated
Employment Agreement between Grantee and the Company, dated as of May 7, 2002,
or any subsequent employment agreement between Grantee and the Company as in
effect at the time of determination.

                  (k) "Fair Market Value" means "Fair Market Value" as defined
in the Plan.

                  (l) "Resignation for Good Reason" means "Resignation for Good
Reason" as defined in the Employment Agreement.

                  (m) "Restricted Period" means, with respect to each Restricted
Share, the period beginning on the Date of Grant and ending on the applicable
Vesting Date for such Restricted Share.

                  (n) "Restricted Shares" means the 28,203 Shares which are
subject to vesting and forfeiture in accordance with the terms of this Award.

                  (o) "Rule 16b-3" means Rule 16b-3 promulgated under the 1934
Act, as in effect from time to time.

                  (p) "Share" means a common share of beneficial interest, $.01
par value per share, of the Company, subject to substitution or adjustment as
provided in Section 3(c) of the Plan.

                  (q) "Subsidiary" means, with respect to the Company, a
subsidiary company, whether now or hereafter existing, as defined in section
424(f) of the Code, and any other entity 50% or more of the economic interests
in which are owned, directly or indirectly, by the Company.

                  (r) "Vesting Date" means the date on which the restrictions
imposed under Paragraph 3 on a Restricted Share lapse, as provided in Paragraph
4.

         2. Grant of Restricted Shares. Subject to the terms and conditions set
forth herein and in the Plan, the Company hereby grants to Grantee the
Restricted Shares. Grantee shall pay to the Company $.01 per Restricted Share
granted to him.

         3. Restrictions on Restricted Share. Subject to the terms and
conditions set forth herein and in the Plan, prior to the Vesting Date in
respect of Restricted Shares, Grantee shall not be permitted to sell, transfer,
pledge or assign such Restricted Shares except to a limited partnership in which
Grantee is the sole general partner and which limited partnership agrees to hold
such Restricted Shares subject to all of the restrictions contained herein,
including the forfeiture provisions. Share certificates evidencing Restricted
Shares shall be held in custody by the Company until the restrictions thereon
have lapsed. Concurrently herewith, Grantee shall deliver to the Company a share
power, endorsed in blank, relating to the Restricted Shares covered by the
Award. During the Restricted Period, share certificates evidencing Restricted
Shares shall bear a legend in substantially the following form:

                  THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES
                  REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS
                  (INCLUDING FORFEITURE) OF THE BRANDYWINE REALTY TRUST 1997
                  LONG-TERM INCENTIVE PLAN, AS AMENDED, AND AN AGREEMENT ENTERED
                  INTO BETWEEN THE REGISTERED OWNER AND BRANDYWINE REALTY TRUST.
                  COPIES OF SUCH PLAN AND AGREEMENT ARE ON FILE IN THE PRINCIPAL
                  OFFICES OF BRANDYWINE REALTY TRUST AND WILL BE MADE AVAILABLE
                  TO ANY SHAREHOLDER WITHOUT CHARGE UPON REQUEST TO THE
                  SECRETARY OF THE COMPANY.

                                       2

         4. Lapse of Restrictions for Restricted Shares.

                  (a) Subject to the terms and conditions set forth herein and
in the Plan, the restrictions set forth in Paragraph 3 on each Restricted Share
that has not been forfeited as provided in Paragraph 5 shall lapse on the
applicable Vesting Date in respect of such Restricted Share, provided that
either (i) on the Vesting Date, Grantee is, and has from the Date of Grant
continuously been, an employee of the Company or a Subsidiary during the
Restricted Period, or (ii) Grantee's termination of employment before the
Vesting Date occurred because of Grantee's death or Disability.

                  (b) Subject to Paragraph 4(a), a Vesting Date for Restricted
Shares subject to the Award shall occur in accordance with the following
schedule:

                      (i)   One-fifth of the Restricted Shares will vest on
                            January 1, 2005;

                      (ii)  An additional one-fifth of the Restricted Shares
                            will vest on January 1, 2006;

                      (iii) An additional one-fifth of the Restricted Shares
                            will vest on January 1, 2007;

                      (iv)  An additional one-fifth of the Restricted Shares
                            will vest on January 1, 2008; and

                      (v)   An additional one-fifth of the Restricted Shares
                            will vest on January 1, 2009.

                  (c) Notwithstanding Paragraph 4(b), a Vesting Date for all
Restricted Shares shall occur upon the occurrence of any of the following
events, and the Restricted Shares, to the extent not previously vested, shall
thereupon vest in full:

                      (i)   A Change of Control, provided that (A) as of the
                            date of the Change of Control, Grantee is, and has
                            from the Date of Grant continuously been, an
                            employee of the Company or a Subsidiary or (B)
                            Grantee's termination of employment before the date
                            of the Change of Control occurred because of
                            Grantee's death or Disability;

                      (ii)  The purchase of any common share of beneficial
                            interest of the Company pursuant to a tender or
                            exchange offer other than an offer by the Company,
                            provided that (A) as of the date of such purchase,
                            Grantee is, and has from the Date of Grant,
                            continuously been, an employee of Company or a
                            Subsidiary or (B) Grantee's termination of
                            employment before the date of such purchase occurred
                            because of Grantee's death or Disability;

                                       3

                      (iii) Termination of the Grantee's employment by the
                            Employer without Cause; or

                      (iv)  The Grantee's resignation from the Employer if such
                            resignation is a Resignation for Good Reason.

         5. Forfeiture of Restricted Shares.

                  (a) Subject to the terms and conditions set forth herein, if
Grantee terminates employment with the Company and all Subsidiaries prior to the
Vesting Date for a Restricted Share for reasons other than as described in
Paragraph 4(c)(iii) or (iv) Grantee shall forfeit any such Restricted Share
which has not vested as of such termination of employment, provided that Grantee
shall not, on account of such termination, forfeit Restricted Shares which have
not vested as of Grantee's termination of employment with the Employer because
of death or Disability. Upon a forfeiture of the Restricted Shares as provided
in this Paragraph 5, the Restricted Shares shall be deemed canceled.

                  (b) The provisions of this Paragraph 5 shall not apply to
Restricted Shares as to which the restrictions of Paragraph 3 have lapsed.

         6. Rights of Grantee. During the Restricted Period, with respect to the
Restricted Shares, Grantee shall have all of the rights of a shareholder of the
Company, including the right to vote the Restricted Shares and the right to
receive any distributions or dividends payable on Shares.

         7. Notices. Any notice to the Company under this Award shall be made
to:

                                  Brandywine Realty Trust
                                  401 Plymouth Road
                                  Suite 500
                                  Plymouth Meeting, PA 19462
                                  Attention:  Chief Financial Officer

or such other address as may be provided to Grantee by written notice. Any
notice to Grantee under this Award shall be made to Grantee at the address
listed in the Company's personnel files. All notices under this Award shall be
deemed to have been given when hand-delivered, telecopied or delivered by first
class mail, postage prepaid, and shall be irrevocable once given.

         8. Securities Laws. The Committee may from time to time impose any
conditions on the Restricted Shares as it deems necessary or advisable to ensure
that the Plan satisfies the conditions of Rule 16b-3, and that Shares are issued
and resold in compliance with the Securities Act of 1933, as amended.

                                       4

         9. Delivery of Shares. Upon a Vesting Date, the Company shall notify
Grantee (or Grantee's legal representatives, estate or heirs, in the event of
Grantee's death before a Vesting Date) that the restrictions on the Restricted
Shares have lapsed. Within ten (10) business days of a Vesting Date, the Company
shall, without payment from Grantee for the Restricted Shares, deliver to
Grantee a certificate for the Restricted Shares without any legend or
restrictions, except for such restrictions as may be imposed by the Committee,
in its sole judgment, under Paragraph 8, provided that no certificates for
Shares will be delivered to Grantee until appropriate arrangements have been
made with Employer for the withholding of any taxes which may be due with
respect to such Shares. The Company is authorized to withhold from any cash
remuneration then or thereafter payable to Grantee an amount sufficient to cover
required tax withholdings and is further authorized to cancel a number of Shares
for which the restrictions have lapsed having an aggregate Fair Market Value
equal to the required tax withholdings. The Company may condition delivery of
certificates for Shares upon the prior receipt from Grantee of any undertakings
which it may determine are required to assure that the certificates are being
issued in compliance with federal and state securities laws. The right to
payment of any fractional Shares shall be satisfied in cash, measured by the
product of the fractional amount times the fair market value of a Share on the
Vesting Date, as determined by the Committee.

         10. Award Not to Affect Employment. The Award granted hereunder shall
not confer upon Grantee any right to continue in the employment of the Company
or any Subsidiary.

         11. Miscellaneous.

             (a) The address for Grantee to which notice, demands and other
communications are to be given or delivered under or by reason of the provisions
hereof shall be the Grantee's address as reflected in the Company's personnel
records.

             (b) This Award and all questions relating to its validity,
interpretation, performance and enforcement shall be governed by and construed
in accordance with the laws of Pennsylvania.

                                BRANDYWINE REALTY TRUST

                                BY: ________________________________

                                TITLE:______________________________

                                       5

                                                                    Exhibit 10.3

                             BRANDYWINE REALTY TRUST
                             RESTRICTED SHARE AWARD

                  This is a Restricted Share Award dated as of March 11, 2004,
from Brandywine Realty Trust, a Maryland real estate investment trust (the
"Company") to _________ ("Grantee"). Terms used herein as defined terms and not
defined herein have the meanings assigned to them in the Brandywine Realty Trust
1997 Long-Term Incentive Plan, as amended from time to time (the "Plan").

         1. Definitions. As used herein:

                  (a) "Award" means the award of Restricted Shares hereby
granted.

                  (b) "Board" means the Board of Trustees of the Company, as
constituted from time to time.

                  (c) "Cause" means "Cause" as defined in the Plan.

                  (d) "Change of Control" means "Change of Control" as defined
in the Plan.

                  (e) "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor thereto.

                  (f) "Committee" means the Committee appointed by the Board in
accordance with Section 2 of the Plan, if one is appointed and in existence at
the time of reference. If no Committee has been appointed pursuant to Section 2,
or if such a Committee is not in existence at the time of reference, "Committee"
means the Board.

                  (g) "Date of Grant" means March 11, 2004, the date on which
the Company awarded the Restricted Shares.

                  (h) "Disability" means "Disability" as defined in the Plan.

                  (i) "Employer" means the Company or the Subsidiary for which
Grantee is performing services on the applicable Vesting Date.

                  (j) "Fair Market Value" means "Fair Market Value" as defined
in the Plan.

                  (k) "Restricted Period" means, with respect to each Restricted
Share, the period beginning on the Date of Grant and ending on the applicable
Vesting Date for such Restricted Share.

                  (l) "Restricted Shares" means the ____ Shares which are
subject to vesting and forfeiture in accordance with the terms of this Award.

                  (m) "Rule 16b-3" means Rule 16b-3 promulgated under the 1934
Act, as in effect from time to time.

                  (n) "Share" means a common share of beneficial interest, $.01
par value per share, of the Company, subject to substitution or adjustment as
provided in Section 3(c) of the Plan.

                  (o) "Subsidiary" means, with respect to the Company, a
subsidiary company, whether now or hereafter existing, as defined in section
424(f) of the Code, and any other entity 50% or more of the economic interests
in which are owned, directly or indirectly, by the Company.

                  (p) "Vesting Date" means the date on which the restrictions
imposed under Paragraph 3 on a Restricted Share lapse, as provided in Paragraph
4.

         2. Grant of Restricted Shares. Subject to the terms and conditions set
forth herein and in the Plan, the Company hereby grants to Grantee the
Restricted Shares. Grantee shall pay to the Company $.01 per Restricted Share
granted to him.

         3. Restrictions on Restricted Share. Subject to the terms and
conditions set forth herein and in the Plan, prior to the Vesting Date in
respect of Restricted Shares, Grantee shall not be permitted to sell, transfer,
pledge or assign such Restricted Shares. Share certificates evidencing
Restricted Shares shall be held in custody by the Company until the restrictions
thereon have lapsed. Concurrently herewith, Grantee shall deliver to the Company
a share power, endorsed in blank, relating to the Restricted Shares covered by
the Award. During the Restricted Period, share certificates evidencing
Restricted Shares shall bear a legend in substantially the following form:

                  THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES
                  REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS
                  (INCLUDING FORFEITURE) OF THE BRANDYWINE REALTY TRUST 1997
                  LONG-TERM INCENTIVE PLAN, AS AMENDED, AND AN AGREEMENT ENTERED
                  INTO BETWEEN THE REGISTERED OWNER AND BRANDYWINE REALTY TRUST.
                  COPIES OF SUCH PLAN AND AGREEMENT ARE ON FILE IN THE PRINCIPAL
                  OFFICES OF BRANDYWINE REALTY TRUST AND WILL BE MADE AVAILABLE
                  TO ANY SHAREHOLDER WITHOUT CHARGE UPON REQUEST TO THE
                  SECRETARY OF THE COMPANY.

         4. Lapse of Restrictions for Restricted Shares.

                  (a) Subject to the terms and conditions set forth herein and
in the Plan, the restrictions set forth in Paragraph 3 on each Restricted Share
that has not been forfeited as provided in Paragraph 5 shall lapse on the
applicable Vesting Date in respect of such Restricted Share, provided that
either (i) on the Vesting Date, Grantee is, and has from the Date of Grant
continuously been, an employee of the Company or a Subsidiary during the
Restricted Period, or (ii) Grantee's termination of employment before the
Vesting Date occurred because of Grantee's death or Disability.

                                       2

                  (b) Subject to Paragraph 4(a), a Vesting Date for Restricted
Shares subject to the Award shall occur in accordance with the following
schedule:

                      (i)   One-fifth of the Restricted Shares will vest on
                            January 1, 2005;

                      (ii)  An additional one-fifth of the Restricted Shares
                            will vest on January 1, 2006;

                      (iii) An additional one-fifth of the Restricted Shares
                            will vest on January 1, 2007;

                      (iv)  An additional one-fifth of the Restricted Shares
                            will vest on January 1, 2008; and

                      (v)   An additional one-fifth of the Restricted Shares
                            will vest on January 1, 2009.

                  (c) Notwithstanding Paragraph 4(b), a Vesting Date for all
Restricted Shares shall occur upon the occurrence of a Change of Control, and
the Restricted Shares, to the extent not previously vested, shall thereupon vest
in full, provided that (i) as of the date of the Change of Control, Grantee is,
and has from the Date of Grant continuously been, an employee of the Company or
a Subsidiary or (ii) Grantee's termination of employment before the date of the
Change of Control occurred because of Grantee's death or Disability.

         5. Forfeiture of Restricted Shares.

                  (a) Subject to the terms and conditions set forth herein, if
Grantee terminates employment with the Company and all Subsidiaries prior to the
Vesting Date for a Restricted Share for reasons other than death or Disability,
Grantee shall forfeit any such Restricted Share which has not vested as of such
termination of employment. Grantee shall not forfeit Restricted Shares which
have not vested as of Grantee's termination of employment with the Employer
because of death or Disability. Upon a forfeiture of the Restricted Shares as
provided in this Paragraph 5, the Restricted Shares shall be deemed canceled.

                  (b) The provisions of this Paragraph 5 shall not apply to
Restricted Shares as to which the restrictions of Paragraph 3 have lapsed.

         6. Rights of Grantee. During the Restricted Period, with respect to the
Restricted Shares, Grantee shall have all of the rights of a shareholder of the
Company, including the right to vote the Restricted Shares and the right to
receive any distributions or dividends payable on Shares.

                                       3

         7. Notices. Any notice to the Company under this Award shall be made
to:

                                   Brandywine Realty Trust
                                   401 Plymouth Road
                                   Suite 500
                                   Plymouth Meeting, PA 19462
                                   Attention:  Chief Financial Officer

or such other address as may be provided to Grantee by written notice. Any
notice to Grantee under this Award shall be made to Grantee at the address
listed in the Company's personnel files. All notices under this Award shall be
deemed to have been given when hand-delivered, telecopied or delivered by first
class mail, postage prepaid, and shall be irrevocable once given.

         8. Securities Laws. The Committee may from time to time impose any
conditions on the Restricted Shares as it deems necessary or advisable to ensure
that the Plan satisfies the conditions of Rule 16b-3, and that Shares are issued
and resold in compliance with the Securities Act of 1933, as amended.

         9. Delivery of Shares. Upon a Vesting Date, the Company shall notify
Grantee (or Grantee's legal representatives, estate or heirs, in the event of
Grantee's death before a Vesting Date) that the restrictions on the Restricted
Shares have lapsed. Within ten (10) business days of a Vesting Date, the Company
shall, without payment from Grantee for the Restricted Shares, deliver to
Grantee a certificate for the Restricted Shares without any legend or
restrictions, except for such restrictions as may be imposed by the Committee,
in its sole judgment, under Paragraph 8, provided that no certificates for
Shares will be delivered to Grantee until appropriate arrangements have been
made with Employer for the withholding of any taxes which may be due with
respect to such Shares. The Company is authorized to withhold from any cash
remuneration then or thereafter payable to Grantee an amount sufficient to cover
required tax withholdings and is further authorized to cancel a number of Shares
for which the restrictions have lapsed having an aggregate Fair Market Value
equal to the required tax withholdings. The Company may condition delivery of
certificates for Shares upon the prior receipt from Grantee of any undertakings
which it may determine are required to assure that the certificates are being
issued in compliance with federal and state securities laws. The right to
payment of any fractional Shares shall be satisfied in cash, measured by the
product of the fractional amount times the fair market value of a Share on the
Vesting Date, as determined by the Committee.

         10. Award Not to Affect Employment. The Award granted hereunder shall
not confer upon Grantee any right to continue in the employment of the Company
or any Subsidiary.

         11. Miscellaneous.

                  (a) The address for Grantee to which notice, demands and other
communications are to be given or delivered under or by reason of the provisions
hereof shall be the Grantee's address as reflected in the Company's personnel
records.

                                       4

                  (b) This Award and all questions relating to its validity,
interpretation, performance and enforcement shall be governed by and construed
in accordance with the laws of Pennsylvania.

                                BRANDYWINE REALTY TRUST

                                BY: ________________________________

                                TITLE:  President and Chief Executive Officer

                                       5

                                                                    EXHIBIT 10.4

                         AMENDED AND RESTATED AGREEMENT

                  This Amended and Restated Agreement (this "Agreement") is
effective as of March 25, 2004 (the "Effective Date") by and between Anthony A.
Nichols, Sr. ("Nichols") and Brandywine Realty Trust, a Maryland real estate
investment trust (the "Company").

                  WHEREAS, Nichols and the Company entered into an Agreement
effective as of December 31, 2001 (the "2001 Agreement");

                  WHEREAS, Nichols and the Company desire to amend and restate
in its entirety the 2001 Agreement as of the Effective Date;

                  NOW, THEREFORE, in consideration of the mutual agreements
contained herein, and intending to be legally bound hereby, the parties hereto
agree as follows:

         1. Engagement. The Company hereby engages Nichols as an employee, and
Nichols hereby accepts such engagement by the Company, for the period and upon
the terms and conditions contained in this Agreement.

         2. Duties.

                  (a) During the Term (as defined below), Nichols shall be
available to the Company's President and Chief Executive Officer and Board of
Trustees (the "Board of Trustees") to provide consultation and advice for
special research projects, business development initiatives and strategic
planning as and to the extent requested by, and subject to the direction of, the
President and Chief Executive Officer and Board of Trustees. In addition, during
the Term, as and to the extent requested by and subject to the direction of, the
President and Chief Executive Officer and Board of Trustees, Nichols shall
represent the Company in regional business, community and charity functions. In
the performance of his responsibilities for the Company and its Subsidiaries (as
defined below), Nichols shall not have the authority to bind the Company or its
Subsidiaries to agreements or arrangements and shall not execute documents in
the name of the Company or its Subsidiaries.

                  (b) Subject to applicable law, the Company agrees to use
commercially reasonable efforts during the Term to cause Nichols to be nominated
for election to the Board of Trustees at each annual meeting of shareholders of
the Company during the Term. At the Effective Date, Nichols shall cease to hold
the position of Chairman of the Board of Trustees and may thereafter be referred
to as "Chairman Emeritus." Upon the request of a majority of the Trustees,
Nichols shall serve as a member of the Executive Committee of the Board of
Trustees subject, however, to the continuing authority of the Board of Trustees
to terminate Nichols' membership on the Executive Committee. In his capacity as
a Trustee, Nichols shall carry out his responsibilities in a manner consistent
with applicable law.

                  (c) Nichols shall, upon the request and subject to the
direction of the President and Chief Executive Officer, serve as a director or
officer of, or perform such other duties and services as may be requested for
and with respect to, any of the Company's Subsidiaries. Unless such compensation
is also provided to other inside (employee) directors specifically on account of
their service as directors, Nichols shall not be entitled to receive additional
compensation on account of his services as a director or officer of any
Subsidiary of the Company for which he is requested to serve as a director or
officer. As used in this Agreement, the terms "Subsidiary" and "Subsidiaries"
shall mean, with respect to any entity, any corporation, partnership, limited
liability company or other business entity in which the subject entity has the
power (whether by contract, through securities ownership, or otherwise and
whether directly or indirectly through control of one or more intermediate
Subsidiaries) to elect a majority of board of directors or other governing body,
including, in the case of a partnership, a majority of the board of directors or
other governing body of the general partner.

                  (d) The Company shall provide to Nichols during the Term an
office and secretarial support at the Company's then current headquarters, which
office shall be of reasonably comparable size and quality as Nichols' office as
of the Effective Date and which secretarial support shall be of reasonably
comparable quality and character as Nichols' secretarial support as of the
Effective Date.

         3. Term. The term of Nichols' employment with the Company pursuant to
this Agreement shall extend through, but not after, 5:00 p.m. on December 31,
2006 or such earlier date as Nichols' employment shall terminate as provided
herein (the "Term"), and upon the expiration or termination of the Term, unless
the parties agree otherwise in writing, Nichols shall cease to be employed by
the Company and its Subsidiaries in any capacity.

         4. Payments.

                  (a) The Company's agreement to pay Nichols aggregate annual
payments of $360,996, as provided in Section 4 of the 2001 Agreement, shall
terminate at December 31, 2004, and the Company shall have no obligation to make
any payments to or for the benefit of Nichols for any period after December 31,
2004 except as and to the extent expressly provided in other sections of this
Agreement.

                  (b) From and after the Effective Date and until the expiration
or termination of the Term, Nichols shall be entitled to receive compensation on
account of his services on the Board of Trustees, including any committee of the
Board of Trustees to which he may be appointed, in the same amount as the
Company pays non-employee trustees for service on the Board and on those
committees, if any, to which Nichols may be appointed; provided that in the
event that the Company adopts a plan that limits eligibility to non-employee
Trustees and makes payments into such plan for non-employee Trustees, the
Company shall make a payment to Nichols (in lieu of any contribution into such
plan on his behalf) in an amount that represents the cash equivalent of the
amount that the Company pays into such plan for a non-employee Trustee.

         5. Options. Pursuant to an award dated January 2, 1998, as amended as
of January 6, 1999 (the "1998 Award"), Nichols received an option (the "Option")
exercisable for 678,958 common shares of beneficial interest ("Common Shares")
of the Company. At the Effective Date, the Option is exercisable for 678,958
Common Shares. Nothing in this Agreement shall affect the terms and conditions
of the 1998 Award, which shall continue in force as in effect immediately before
the execution and delivery of this Agreement, giving effect to the modifications
thereto pursuant to Section 5(a) of the 2001 Agreement.

                                       2

         6. Fringe Benefits. During the Term and as long as they are kept in
force by the Company, Nichols shall be entitled to participate in and receive
the benefits of any retirement plan, health or other employee benefit plan made
generally available to officers of the Company. In addition, during the Term,
Nichols shall be entitled to receive: (a) up to $15,000 per year for financial
planning services and tax advice and (b) in addition to reimbursement for
expenses provided for in Section 7, up to $20,000 per year for expenses actually
incurred in connection with marketing and community participation services
provided by Nichols for the benefit of the Company.

         7. Expenses. The Company shall reimburse Nichols for any reasonable,
ordinary and necessary business expenses incurred by Nichols in the performance
of Nichols' duties hereunder upon receipt of vouchers therefor and in accordance
with the Company's regular reimbursement procedures and practices in effect from
time to time with respect to senior officers of the Company. In addition, the
Company shall pay (or reimburse) Nichols' reasonable expenses (including, but
not limited to, reasonable attorneys' fees) incurred in connection with
negotiation of this Agreement.

         8. Disability. If the Board of Trustees determines in good faith by a
vote of a majority of its members (other than Nichols) that Nichols is unable to
perform his duties hereunder due to partial or total disability or incapacity
resulting from a mental or physical illness or injury or any similar cause for a
period of one hundred and twenty (120) consecutive days or for a cumulative
period of one hundred and eighty (180) days during any twelve (12) month period,
the Company shall have the right to terminate Nichols' employment at any time
thereafter.

         9. Death. Nichols' employment shall terminate at the time of his death.

         10. Change In Control. If Nichols' employment hereunder is terminated
prior to December 31, 2004 by the Company without Cause, and Nichols must pay an
excise tax under Section 4999 in connection with any transaction involving the
Company, he shall be paid the Gross-Up Payment described in Section 18(d) and
18(g) of the Prior Agreement (as defined in the 2001 Agreement).

         11. Termination for Cause. The Company may discharge Nichols at any
time for Cause. Cause shall mean: (i) habitual intoxication; (ii) drug
addiction; (iii) theft, misappropriation or embezzlement of the Company's funds;
(iv) conviction of a felony; or (v) Nichols' material breach of his obligations
under this Agreement.

         12. Termination Without Cause. The Board of Trustees, in its sole
discretion, may terminate Nichols' employment hereunder without Cause and for
any reason or no reason upon 30 days' prior written notice to Nichols at any
time. In the event that Nichols' resigns his employment hereunder with the
Company for "Good Reason" such resignation shall be deemed to be a termination
of Nichols' employment hereunder without Cause, with the same consequences to
Nichols as a termination of his employment hereunder without Cause. "Good
Reason" shall mean (i) a material breach by the Company of this Agreement, (ii)
a Change of Control (as defined in the subsection (B) of Section 5(a) of the
2001 Agreement), or (iii) the removal of Mr. Nichols from the Board other than
for Cause.

                                       3

         13. Payments Upon or After Termination.

                  (a) Voluntary Resignation; Termination for Cause. If Nichols'
employment hereunder is terminated before the expiration of the Term because of
Nichols' voluntary resignation or because of the Company's termination of
Nichols' employment for Cause, the Company and its Subsidiaries shall have no
obligation or liability hereunder after the date of termination to pay or
provide salary, fringe benefits, or any other form of compensation hereunder.

                  (b) Termination of Because of Death. If Nichols' employment
hereunder terminates as a result of Nichols' death before the expiration of the
Term, the Company shall pay Nichols' legal representatives any accrued but
unpaid amounts as of the date of termination but otherwise the Company and its
Subsidiaries shall have no obligation or liability hereunder after the date of
termination to pay or provide salary, fringe benefits, or any other form of
compensation hereunder; provided that if such termination occurs on or before
December 31, 2004, the Company or a Subsidiary shall pay Nichols' legal
representatives an amount, within 60 days of termination, equal to $1,053,000.

                  (c) Termination of Because of Disability. If Nichols'
employment hereunder is terminated by the Company for disability before the
expiration of the Term, the Company shall pay Nichols any accrued but unpaid
amounts as of the date of termination but otherwise the Company and its
Subsidiaries shall have no obligation or liability hereunder after the date of
termination to pay or provide salary, fringe benefits, or any other form of
compensation hereunder; provided that if such termination occurs on or before
December 31, 2004, the Company or a Subsidiary shall pay Nichols' legal
representatives an amount, within 60 days of termination, equal to $1,053,000.

                  (d) Termination by Company Without Cause. If Nichols'
employment hereunder is terminated by the Company without Cause, the Company
shall pay Nichols any accrued but unpaid amounts as of the date of termination
but otherwise the Company and its Subsidiaries shall have no obligation or
liability hereunder after the date of termination to pay or provide salary,
fringe benefits, or any other form of compensation hereunder other than (i) as
provided in Section 14 and (ii) to pay to Nichols the amounts Nichols would have
received pursuant to Section 4(b) as and when he would have received such
payments under Section 4(b) but for such termination; provided that if such
termination occurs on or before December 31, 2004, the Company or a Subsidiary
shall pay Nichols an amount, within 60 days of termination, equal to $1,053,000
and in such event the Company shall have no obligation to make the payments
provided for in the foregoing clause (ii).

                  (e) Coordination of Payments; Withholdings. In the event that
Nichols is employed by a Subsidiary of the Company at the time of termination of
employment, any amounts payable to Nichols pursuant to this Section 13 shall be
reduced by the amounts paid to Nichols by any such Subsidiary. Any payments made
to Nichols hereunder shall be subject to all required federal and state
withholdings applicable to employees.

                                       4

         14. Termination of Responsibility. Upon the payment of the amounts
payable under this Section 14, neither the Company nor any of its Subsidiaries
shall have any further obligations hereunder to Nichols (or to his estate,
heirs, beneficiaries, or legal representatives, as appropriate, or otherwise) to
pay or provide any salary, compensation, or fringe benefits; provided, however,
that any accrued obligations under employee benefit plans of the Company
("Company Benefit Plans") respecting Nichols shall be payable pursuant to the
terms of such Company Benefit Plans; provided, however, that if Nichols'
employment hereunder is terminated by the Company without Cause or upon the
expiration of the Term, the Company shall, at its own expense, and through
December 31, 2010, provide Nichols with health insurance and life insurance
benefits substantially similar to those to which Nichols was entitled
immediately prior to the date of termination.

         15. Representations. Nichols represents to the Company that (a) other
than as provided in this Agreement and in the 1998 Award, there are no other
agreements or understandings with the Company to which Nichols is a party
relating to employment, benefits or retirement, (b) there are no restrictions,
agreements or understandings whatsoever to which Nichols is a party which would
prevent or make unlawful his execution and delivery of this Agreement or his
employment hereunder, (c) his execution and delivery of this Agreement and his
employment hereunder shall not constitute a breach of any contract, agreement or
understanding, oral or written, to which he is a party or by which he is bound,
and (d) he is free and able to execute and deliver this Agreement and to
continue in the employment of the Company.

         16. Miscellaneous.

                  (a) Insurance. Executive will be covered by D&O insurance as a
trustee of the Company in a manner consistent with Company policy, and
Executive's insurance coverage in his capacity as an employee of the Company
will be on terms no less favorable than the coverage provided senior executives
of the Company, in each case including coverage as to events occurring during
his period of service as a trustee or employee respectively even if the
underlying claim is brought after Executive has ceased performing services for
the Company.

                  (b) Controlling Law. This Agreement, and all questions
relating to its validity, interpretation, performance and enforcement, shall be
governed by and construed in accordance with the laws of the Commonwealth of
Pennsylvania.

                  (c) Notices. All notices, requests, demands and other
communications required or permitted under this Agreement shall be in writing
and shall be deemed to have been duly given, made and received when delivered in
person against receipt, or when sent by United States registered or certified
mail, return receipt requested, postage prepaid, addressed as set forth below:

                                       5

                             (i) If to Nichols:

                             Anthony A. Nichols, Sr.
                             1125 Cymry Drive
                             Newtown Square, PA 19073

                             (ii) If to the Company:

                             Brandywine Realty Trust
                             401 Plymouth Road
                             Suite 500
                             Plymouth Meeting, PA 19462
                             Attention: General Counsel

                  Any party may alter the address to which communications or
copies are to be sent by giving notice of such change of address in conformity
with the provisions of this paragraph for the giving of notice.

                  (d) Binding Nature of Agreement. This Agreement shall be
binding upon and inure to the benefit of the Company and its successors and
assigns and shall be binding upon Nichols, his heirs and legal representatives.

                  (e) Execution in Counterparts. This Agreement may be executed
in any number of counterparts, each of which shall be deemed to be an original
as against any party who executes the same, and all of which shall constitute
one and the same instrument. This Agreement shall become binding when one or
more counterparts hereof, individually or taken together, shall bear the
signatures of each of the parties reflected hereon as the signatories.

                  (f) Provisions Separable. The provisions of this Agreement are
independent of and separable from each other, and no provision shall be affected
or rendered invalid or unenforceable by virtue of the fact that for any reason
any other or others of them may be invalid or unenforceable in whole or in part.

                  (g) Entire Agreement. This Agreement amends and restates in
its entirety the 2001 Agreement and contains the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior and contemporaneous agreements and
understandings, inducements or conditions, express or implied, oral or written,
except as herein contained, or as provided in the 1998 Award. The express terms
hereof control and supersede any course of performance and/or usage of the trade
inconsistent with any of the terms hereof. This Agreement may not be modified or
amended other than by an agreement in writing.

                  (h) Section and Paragraph Headings. The section and paragraph
headings in this Agreement are for convenience only; they form no part of this
Agreement and shall not affect its interpretation.

                  (i) Assignability. This Agreement is not assignable by
Nichols. It is assignable by the Company only (i) to any Subsidiary of the
Company so long as the Company agrees to guarantee such Subsidiary's obligations
hereunder (and in such event the Company's guaranty would continue
notwithstanding any subsequent transaction pursuant to which any such Subsidiary
ceased to be a Subsidiary of the Company, whether as a result of its sale or
otherwise) or (ii) to an entity which is a successor in interest to the Company
or which acquires all or substantially all of its assets, whether by merger,
consolidation or other form of business combination.

                                       6

                  (j) Liability of Trustees, etc. No recourse shall be had for
any obligation of the Company hereunder, or for any claim based thereon or
otherwise in respect thereof, against any past, present or future trustee,
shareholder, officer or employee of the Company, whether by virtue of any
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise, all such liability being expressly waived and released by each party
hereto.

                                       7

                  IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed and delivered effective for all purposes as of the Effective Date.

                         BRANDYWINE REALTY TRUST

                         By:
                                  --------------------------------------------
                         Title:   President and Chief Executive Officer

                         NICHOLS

                         -----------------------------------------------------
                         Anthony A. Nichols, Sr.

                                       8

                                                                    Exhibit 31.1

                            SECTION 302 CERTIFICATION

I, Gerard H. Sweeney, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Brandywine Realty
     Trust:

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material fact or omit to state a material fact necessary to make the
     statements made, in light of the circumstances under which such statements
     were made, not misleading with respect to the period covered in this
     report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The registrant's other certifying officer(s) and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15(d)-15(e)) for the registrant and
     have:

      a.  Designed such disclosure controls and procedures, or caused such
          disclosure controls and procedures to be designed under our
          supervision, to ensure that material information relating to the
          registrant, including its consolidated subsidiaries, is made known to
          us by other within those entities, particularly during the period in
          which this report is being prepared;

      b.  Evaluated the effectiveness of the registrant's disclosure controls
          and procedures and presented in this report our conclusions about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

      c.  Disclosed in this report any change in the registrant's internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal quarter (the registrant's fourth fiscal quarter in
          the case of an annual report) that has materially affected, or is
          reasonably likely to materially affect, the registrant's internal
          control over financial reporting; and

5.   The registrant's other certifying officer(s) and I have disclosed, based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors (or persons performing the equivalent functions):

      a.  All significant deficiencies and material weaknesses in the design or
          operation of internal control over financial reporting which are
          reasonably likely to adversely affect the registrant's ability to
          record, process, summarize and report financial information; and

      b.  Any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          control over financial reporting.

 Date: May 10, 2004                        /s/ Gerard H. Sweeney
       ------------------------            -----------------------------------
                                           Gerard H. Sweeney
                                           President and Chief Executive Officer

Exhibit 31.2
                            SECTION 302 CERTIFICATION

I, Christopher P. Marr, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Brandywine Realty
     Trust:

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material fact or omit to state a material fact necessary to make the
     statements made, in light of the circumstances under which such statements
     were made, not misleading with respect to the period covered in this
     report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The registrant's other certifying officer(s) and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15(d)-15(e)) for the registrant and
     have:

      a.  Designed such disclosure controls and procedures, or caused such
          disclosure controls and procedures to be designed under our
          supervision, to ensure that material information relating to the
          registrant, including its consolidated subsidiaries, is made known to
          us by other within those entities, particularly during the period in
          which this report is being prepared;

      b.  Evaluated the effectiveness of the registrant's disclosure controls
          and procedures and presented in this report our conclusions about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

      c.  Disclosed in this report any change in the registrant's internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal quarter (the registrant's fourth fiscal quarter in
          the case of an annual report) that has materially affected, or is
          reasonably likely to materially affect, the registrant's internal
          control over financial reporting; and

5.   The registrant's other certifying officer(s) and I have disclosed, based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors (or persons performing the equivalent functions):

      a.  All significant deficiencies and material weaknesses in the design or
          operation of internal control over financial reporting which are
          reasonably likely to adversely affect the registrant's ability to
          record, process, summarize and report financial information; and

      b.  Any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          control over financial reporting.

Date: May 10, 2004                    /s/ Christopher P. Marr
      ------------------------        -----------------------------------
                                      Christopher P. Marr
                                      Vice President and Chief Financial Officer

                                                                    Exhibit 32.1

                         RULE 13(a)-14(b) CERTIFICATION
                                   PURSUANT TO
                                              18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                 SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002*

      In connection with the Quarterly Report of Brandywine Realty Trust (the
"Company") on Form 10-Q for the quarter ended March 31, 2004 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Gerard
H. Sweeney, President and Chief Executive Officer of the Company, certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:

  1.     The Report fully complies with the requirements of Section 13(a) or
         15(d), as applicable, of the Securities Exchange Act of 1934; and

  2.     The information contained in the Report fairly presents, in all
         material respects, the financial condition and result of operations of
         the Company.

/s/ Gerard H. Sweeney
- -------------------------
Gerard H. Sweeney
President and Chief Executive Officer
Date: May 10, 2004

* A signed original of this written statement required by Section 906 has been
provided to Brandywine Realty Trust and will be retained by Brandywine Realty
Trust and furnished to the Securities and Exchange Commission or its staff upon
request.

                                                                    Exhibit 32.2

                         RULE 13(a)-14(b) CERTIFICATION
                                   PURSUANT TO
                                              18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                 SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002*

      In connection with the Quarterly Report of Brandywine Realty Trust (the
"Company") on Form 10-Q for the quarter ended March 31, 2004 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I,
Christopher P. Marr, Senior Vice President and Chief Financial Officer of the
Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that:

  1.     The Report fully complies with the requirements of Section 13(a) or
         15(d), as applicable, of the Securities Exchange Act of 1934; and

  2.     The information contained in the Report fairly presents, in all
         material respects, the financial condition and result of operations of
         the Company.

/s/ Christopher P. Marr
- -------------------------
Christopher P. Marr
Senior Vice President and Chief Financial Officer
Date: May 10, 2004

* A signed original of this written statement required by Section 906 has been
provided to Brandywine Realty Trust and will be retained by Brandywine Realty
Trust and furnished to the Securities and Exchange Commission or its staff upon
request.