UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
  þ
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
 For the quarterly period ended March 31, 2009
 or
 o
    
    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
    
    001-9106 (Brandywine Realty Trust)000-24407 (Brandywine Operating Partnership, L.P.)
 
 Brandywine Realty Trust
Brandywine Operating Partnership, L.P.
  MARYLAND(Brandywine Realty Trust)
    
    23-2413352DELAWARE(Brandywine Operating Partnership L.P.)
    
    23-2862640(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)Incorporation or organization)
 555 East Lancaster AvenueRadnor, Pennsylvania
    
    19087(Address of principal executive offices)
    
    (Zip Code)
 (610) 325-5600
  Brandywine Realty Trust
    
    Yes þ No oBrandywine Operating Partnership, L.P.
    
    Yes þ No o
  Brandywine Realty Trust
    

Yes o No oBrandywine Operating Partnership, L.P.
    

Yes o No o
  Brandywine Realty Trust:
    
    Large accelerated filer þ Accelerated filer o Non-accelerated filer o Smaller reporting company oBrandywine Operating Partnership, L.P.:
    
    Large accelerated filer o Accelerated filer o Non-accelerated filer þ Smaller reporting company o
  Brandywine Realty Trust
    
    Yes o No þBrandywine Operating Partnership, L.P.
    
    Yes o No þ




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##### 



TABLE OF CONTENTS
 PageBrandywine Realty TrustPART I  FINANCIAL INFORMATIONItem 1.
    
    Financial Statements (unaudited)Consolidated Balance Sheets as of March 31, 2009 and December 31, 2008
    
    
    3Consolidated Statements of Operations for the three-month periods ended March 31,
2009 and 2008
    
    
    4Consolidated Statements of Other Comprehensive Income for the three-month periods
ended March 31, 2009 and 2008
    
    
    5Consolidated Statements of Equity for the three-month periods ended March 31, 2009
and 2008
    
    
    6Consolidated Statements of Cash Flows for the three-month periods ended March 31,
2009 and 2008
    
    
    7Notes to Unaudited Consolidated Financial Statements
    
    
    8Brandywine Operating Partnership, L.P.Item 1.
    
    Financial Statements (unaudited)Consolidated Balance Sheets as of March 31, 2009 and December 31, 2008
    
    
    36Consolidated Statements of Operations for the three-month periods ended March 31,
2009 and 2008
    
    
    37Consolidated Statements of Other Comprehensive Income for the three-month periods
ended March 31, 2009 and 2008
    
    
    38Consolidated Statements of Cash Flows for the three-month periods ended March 31,
2009 and 2008
    
    
    39Notes to Unaudited Consolidated Financial Statements
    
    
    40Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    67Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    81Item 4.
    
    Controls and Procedures
    
    
    81PART II  OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    81Item 1A.
    
    Risk Factors
    
    
    81Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    82Item 3.
    
    Defaults Upon Senior Securities
    
    
    82Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    82Item 5.
    
    Other Information
    
    
    82Item 6.
    
    Exhibits
    
    
    82Signatures
    
    
    84
  Filing Format
  2




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##### 



PART I  FINANCIAL INFORMATION
 
 Item 1.  Financial Statements
 BRANDYWINE REALTY TRUST
 
 CONSOLIDATED BALANCE SHEETS
 (unaudited, in thousands, except share and per share information)
 March 31,
    
    
    December 31,2009
    
    
    2008 (as adjusted)ASSETSReal estate investments:Rental properties
    
    $
    4,586,941
    
    
    $
    4,596,137Accumulated depreciation
    
    
    (663,843
    )
    
    
    (639,688
    )Operating real estate investments, net
    
    
    3,923,098
    
    
    
    3,956,449Construction-in-progress
    
    
    138,310
    
    
    
    122,219Land inventory
    
    
    112,902
    
    
    
    112,699Total real estate invesmtents, net
    
    
    4,174,310
    
    
    
    4,191,367Cash and cash equivalents
    
    
    4,083
    
    
    
    3,924Cash in escrow
    
    
    
    
    
    
    31,385Accounts receivable, net
    
    
    10,068
    
    
    
    11,762Accrued rent receivable, net
    
    
    85,072
    
    
    
    86,362Investment in real estate ventures, at equity
    
    
    86,090
    
    
    
    71,028Deferred costs, net
    
    
    82,935
    
    
    
    89,327Intangible assets, net
    
    
    135,415
    
    
    
    145,757Notes receivable
    
    
    49,343
    
    
    
    48,048Other assets
    
    
    60,673
    
    
    
    59,008Total assets
    
    $
    4,687,989
    
    
    $
    4,737,968LIABILITIES AND BENEFICIARIES EQUITYMortgage notes payable
    
    $
    484,320
    
    
    $
    487,525Borrowing under credit facilities
    
    
    200,000
    
    
    
    153,000Unsecured term loan
    
    
    183,000
    
    
    
    183,000Unsecured senior notes, net of discounts
    
    
    1,844,016
    
    
    
    1,917,970Accounts payable and accrued expenses
    
    
    89,094
    
    
    
    74,824Distributions payable
    
    
    11,138
    
    
    
    29,288Tenant security deposits and deferred rents
    
    
    58,973
    
    
    
    58,692Acquired below market leases, net
    
    
    44,794
    
    
    
    47,626Other liabilities
    
    
    51,064
    
    
    
    63,545Total liabilities
    
    
    2,966,399
    
    
    
    3,015,470Commitments and contingencies (Note 15)Brandywine Realty Trusts equity:Preferred Shares (shares authorized-20,000,000):7.50% Series C Preferred Shares, $0.01 par value; issued and outstanding-
2,000,000 in 2009 and 2008
    
    
    20
    
    
    
    207.375% Series D Preferred Shares, $0.01 par value; issued and outstanding-
2,300,000 in 2008 and 2008
    
    
    23
    
    
    
    23Common Shares of Brandywine Realty Trusts beneficial interest, $0.01 par value; shares
authorized 200,000,000; 88,600,253 and 88,610,053 issued in 2009 and 2008,
respectively
and 88,216,061 and 88,158,937 outstanding in 2009 and 2008, respectively
    
    
    882
    
    
    
    882Additional paid-in capital
    
    
    2,351,859
    
    
    
    2,351,428Deferred compensation payable in common stock
    
    
    5,662
    
    
    
    6,274Common shares in treasury, at cost, 384,192 and 451,116 in 2009 and 2008,
respectively
    
    
    (11,808
    )
    
    
    (14,121
    )Common shares in grantor trust, 205,045 in 2009 and 215,742 in 2008
    
    
    (5,662
    )
    
    
    (6,274
    )Cumulative earnings
    
    
    496,077
    
    
    
    498,716Accumulated other comprehensive loss
    
    
    (6,534
    )
    
    
    (17,005
    )Cumulative distributions
    
    
    (1,161,459
    )
    
    
    (1,150,406
    )Total Brandywine Realty Trusts equity
    
    
    1,669,060
    
    
    
    1,669,537Non-controlling interests
    
    
    52,530
    
    
    
    52,961Total equity
    
    
    1,721,590
    
    
    
    1,722,498Total liabilities and equity
    
    $
    4,687,989
    
    
    $
    4,737,968
  3




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##### 



BRANDYWINE REALTY TRUST
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (unaudited, in thousands, except share and per share information)
 For the three-month
periods endedMarch 31,2009
    
    
    2008 (as adjusted)Revenue:Rents
    
    $
    123,604
    
    
    $
    123,511Tenant reimbursements
    
    
    22,464
    
    
    
    19,039Termination fees
    
    
    113
    
    
    
    3,232Third party management fees, labor reimbursement and leasing
    
    
    4,764
    
    
    
    5,679Other
    
    
    923
    
    
    
    783Total revenue
    
    
    151,868
    
    
    
    152,244Operating Expenses:Property operating expenses
    
    
    45,155
    
    
    
    40,920Real estate taxes
    
    
    15,463
    
    
    
    15,565Third party management expenses
    
    
    2,115
    
    
    
    2,246Depreciation and amortization
    
    
    52,569
    
    
    
    51,304General & administrative expenses
    
    
    4,958
    
    
    
    4,912Provision for impairment on real estate
    
    
    3,700
    
    
    
    Total operating expenses
    
    
    123,960
    
    
    
    114,947Operating income
    
    
    27,908
    
    
    
    37,297Other Income (Expense):Interest income
    
    
    579
    
    
    
    203Interest expense
    
    
    (35,646
    )
    
    
    (37,043
    )Interest expense  Deferred financing costs
    
    
    (1,252
    )
    
    
    (1,508
    )Equity in income of real estate ventures
    
    
    586
    
    
    
    1,115Net loss on disposition of undepreciated real estate
    
    
    
    
    
    
    (24
    )Gain on early extinguishment of debt
    
    
    6,639
    
    
    
    2,563(Loss) income from continuing operations
    
    
    (1,186
    )
    
    
    2,603Discontinued operations:Income from discontinued operations
    
    
    119
    
    
    
    3,013Net gain on disposition of discontinued operations
    
    
    194
    
    
    
    7,981313
    
    
    
    10,994Net (loss) income
    
    
    (873
    )
    
    
    13,597Net (income) from discontinued operations attributable to non-controlling interests
    
    
    (10
    )
    
    
    (463
    )Net loss (income) from continuing operations attributable to non-controlling interests
    
    
    105
    
    
    
    (64
    )Net loss (income) attributable to non-controlling interests
    
    
    95
    
    
    
    (527
    )Net (loss) income attributable to Brandywine Realty Trust
    
    
    (778
    )
    
    
    13,070Preferred share dividends
    
    
    (1,998
    )
    
    
    (1,998
    )Amount allocated to unvested restricted shareholders
    
    
    (37
    )
    
    
    (167
    )(Loss) income available to Common Shareholders
    
    $
    (2,813
    )
    
    $
    10,905Basic earnings (loss) per Common Share:Continuing operations
    
    $
    (0.03
    )
    
    $
    0.00Discontinued operations
    
    
    0.00
    
    
    
    0.13$
    (0.03
    )
    
    $
    0.13Diluted earnings (loss) per Common Share:Continuing operations
    
    $
    (0.03
    )
    
    $
    0.00Discontinued operations
    
    
    0.00
    
    
    
    0.13$
    (0.03
    )
    
    $
    0.13Dividends declared per Common Share
    
    $
    0.10
    
    
    $
    0.44Basic weighted average shares outstanding
    
    
    88,210,384
    
    
    
    87,073,721Diluted weighted average shares outstanding
    
    
    88,210,384
    
    
    
    87,088,131Net (loss) income attributable to Brandywine Realty TrustIncome (loss) from continuing operations
    
    $
    (1,081
    )
    
    $
    2,539Income from discontinued operations
    
    
    303
    
    
    
    10,531Net (loss) income
    
    $
    (778
    )
    
    $
    13,070
  4




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##### 



BRANDYWINE REALTY TRUST
 
 CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME
 (unaudited, in thousands)
 For the three-month periodsended March 31,2009
    
    
    2008 (as adjusted)Net (loss) income
    
    $
    (873
    )
    
    $
    13,597Other comprehensive income (loss):Unrealized gain (loss) on derivative financial instruments
    
    
    10,287
    
    
    
    (4,832
    )Reclassification of realized (gains) on derivative financial
instruments to operations, net
    
    
    (20
    )
    
    
    (20
    )Unrealized gain on available-for-sale securities
    
    
    
    
    
    
    248Total other comprehensive income (loss)
    
    
    10,267
    
    
    
    (4,604
    )Comprehensive income
    
    $
    9,394
    
    
    $
    8,993Comprehensive
income (loss) attributable to non-controlling interests
    
    
    299
    
    
    
    (527
    )Comprehensive income attributable to Brandywine Realty Trust
    
    $
    9,693
    
    
    $
    8,466
  5




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##### 



BRANDYWINE
REALTY TRUST
 
 CONSOLIDATED STATEMENTS OF EQUITY
 For
the Three-Month Periods Ended March 31, 2009 and 2008(unaudited, in thousands, except number of shares)
 March 31, 2009
 Number of Rabbi
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Additional Paid-in
    
    
    
    
    
    
    
    
    
    
    AccumulatedNumber of
    
    
    Par Value of
    
    
    Number of
    
    
    Par Value of
    
    
    
    
    
    
    
    
    
    
    Trust/Deferred
    
    
    
    
    
    
    
    
    
    
    Additional Paid-in
    
    
    Capital - Deferred
    
    
    Additional Paid-in
    
    
    
    
    
    
    OtherPreferred C
    
    
    Preferred C
    
    
    Preferred D
    
    
    Preferred D
    
    
    Number of
    
    
    Number of
    
    
    Compensation
    
    
    Par Value of
    
    
    Additional Paid-in
    
    
    Capital - Treasury
    
    
    Compensation Plan
    
    
    Capital - Rabbi
    
    
    Cumulative
    
    
    Comprehensive
    
    
    Cumulative
    
    
    Non-ControllingShares
    
    
    Shares
    
    
    Shares
    
    
    Shares
    
    
    Common Shares
    
    
    Treasury Shares
    
    
    Shares
    
    
    Shares
    
    
    Capital
    
    
    Shares
    
    
    Shares
    
    
    Trust Shares
    
    
    Earnings
    
    
    Income (Loss)
    
    
    Distributions
    
    
    Interests
    
    
    TotalBALANCE, December 31, 2008
    
    
    2,000,000
    
    
    $
    20
    
    
    
    2,300,000
    
    
    $
    23
    
    
    
    88,610,053
    
    
    
    451,116
    
    
    
    215,742
    
    
    $
    882
    
    
    $
    2,351,428
    
    
    $
    (14,121
    )
    
    $
    6,274
    
    
    $
    (6,274
    )
    
    $
    498,716
    
    
    $
    (17,005
    )
    
    $
    (1,150,406
    )
    
    $
    52,961
    
    
    $
    1,722,498Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (778
    )
    
    
    
    
    
    
    
    
    
    
    (95
    )
    
    
    (873
    )Other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,471
    
    
    
    
    
    
    
    (204
    )
    
    
    10,267Vesting of Restricted Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (66,924
    )
    
    
    8,971
    
    
    
    
    
    
    
    (657
    )
    
    
    2,313
    
    
    
    56
    
    
    
    (56
    )
    
    
    (1,861
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (205
    )Restricted Stock Amortization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    737
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    737Share Issuance from Deferred Compensation Plan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,719
    )
    
    
    
    
    
    
    (19,668
    )
    
    
    
    
    
    
    (21
    )
    
    
    
    
    
    
    (668
    )
    
    
    668
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (21
    )Share Choice Plan Issuance
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,081
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (46
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (46
    )Amortize Options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    112
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    112Outperformance Plan Amortization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    306
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    306Other consolidated real estate ventures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
     
    149
   
    
    
    149Preferred Share distributions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,998
    )
    
    
    
    
    
    
    (1,998
    )Distributions declared ($0.10 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,055
    )
    
    
    (281
    )
    
    
    (9,336
    )BALANCE, March 31, 2009
    
    
    2,000,000
    
    
    $
    20
    
    
    
    2,300,000
    
    
    $
    23
    
    
    
    88,600,253
    
    
    
    384,192
    
    
    
    205,045
    
    
    $
    882
    
    
    $
    2,351,859
    
    
    $
    (11,808
    )
    
    $
    5,662
    
    
    $
    (5,662
    )
    
    $
    496,077
    
    
    $
    (6,534
    )
    
    $
    (1,161,459
    )
    
    $
    52,530
    
    
    $
    1,721,590
 March 31, 2008
 Number of Rabbi
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Additional Paid-in
    
    
    
    
    
    
    
    
    
    
    AccumulatedNumber of
    
    
    Par Value of
    
    
    Number of
    
    
    Par Value of
    
    
    
    
    
    
    
    
    
    
    Trust/Deferred
    
    
    
    
    
    
    
    
    
    
    Additional Paid-in
    
    
    Capital - Deferred
    
    
    Additional Paid-in
    
    
    
    
    
    
    OtherPreferred C
    
    
    Preferred C
    
    
    Preferred D
    
    
    Preferred D
    
    
    Number of
    
    
    Number of
    
    
    Compensation
    
    
    Par Value of
    
    
    Additional Paid-in
    
    
    Capital - Treasury
    
    
    Compensation Plan
    
    
    Capital - Rabbi
    
    
    Cumulative
    
    
    Comprehensive
    
    
    Cumulative
    
    
    Non-ControllingShares
    
    
    Shares
    
    
    Shares
    
    
    Shares
    
    
    Common Shares
    
    
    Treasury Shares
    
    
    Shares
    
    
    Shares
    
    
    Capital
    
    
    Shares
    
    
    Shares
    
    
    Trust Shares
    
    
    Earnings
    
    
    Income (Loss)
    
    
    Distributions
    
    
    Interests
    
    
    TotalBALANCE, December 31, 2007
    
    
    2,000,000
    
    
    $
    20
    
    
    
    2,300,000
    
    
    $
    23
    
    
    
    88,614,322
    
    
    
    1,599,637
    
    
    
    171,650
    
    
    $
    870
    
    
    $
    2,348,153
    
    
    $
    (53,449
    )
    
    $
    5,651
    
    
    $
    (5,651
    )
    
    $
    471,902
    
    
    $
    (1,885
    )
    
    $
    (999,654
    )
    
    $
    84,076
    
    
    $
    1,850,056Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,070
    
    
    
    
    
    
    
    
    
    
    
    527
    
    
    
    13,597Other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,604
    )
    
    
    
    
    
    
    
    
    
    
    (4,604
    )Vesting of Restricted Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (65,474
    )
    
    
    9,895
    
    
    
    2
    
    
    
    (860
    )
    
    
    2,218
    
    
    
    167
    
    
    
    (167
    )
    
    
    (1,068
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    292Restricted Stock Amortization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    505
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    505Conversion of LP units to Common Shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (118,611
    )
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    2,031
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,032
    )
    
    
    Share Cancellation/Forfeiture
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (308
    )
    
    
    
    
    
    
    (308
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10
    )
    
    
    10
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Share Issuance from Deferred Compensation Plan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,428
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (211
    )
    
    
    211
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Share Choice Plan Issuance
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,575
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (27
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (27
    )Deferred Compensation Obligation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,445
    )
    
    
    4,445
    
    
    
    
    
    
    
    
    


    228


    
    
    
    77
    
    
    
    (77
    )
    
    
    (151
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    77Outperformance Plan Amortization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    381
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    381Preferred Share distributions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,998
    )
    
    
    
    
    
    
    (1,998
    )Distributions declared ($0.44 per share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (38,473
    )
    
    
    (1,769
    )
    
    
    (40,242
    )BALANCE, March 31, 2008
    
    
    2,000,000
    
    
    $
    20
    
    
    
    2,300,000
    
    
    $
    23
    
    
    
    88,612,439
    
    
    
    1,411,107
    
    
    
    179,254
    
    
    $
    873
    
    
    $
    2,348,152
    
    
    $
    (48,972
    )
    
    $
    5,674
    
    
    $
    (5,674
    )
    
    $
    483,753
    
    
    $
    (6,489
    )
    
    $
    (1,040,125
    )
    
    $
    80,802
    
    
    $
    1,818,037
  6




---



##### 



BRANDYWINE REALTY TRUST
 
 CONSOLIDATED
STATEMENTS OF CASH FLOWS
 (unaudited, in thousands)
 Three-month periodsended March 31,2009
    
    

2008 (as adjusted)Cash flows from operating activities:Net (loss) income
    
    $
    (873
    )
    
    $
    13,597Adjustments to reconcile net (loss) income to net cash from operating activities:Depreciation
    
    
    39,403
    
    
    
    40,363Amortization:Deferred financing costs
    
    
    1,252
    
    
    
    1,509Deferred leasing costs
    
    
    4,493
    
    
    
    4,090Acquired above (below) market leases, net
    
    
    (1,741
    )
    
    
    (2,278
    )Acquired lease intangibles
    
    
    8,729
    
    
    
    11,488Deferred compensation costs
    
    
    1,021
    
    
    
    1,215Straight-line rent
    
    
    (1,912
    )
    
    
    (6,609
    )Provision for doubtful accounts
    
    
    3,234
    
    
    
    1,250Provision for impairment of real estate
    
    
    3,700
    
    
    
    Real estate venture income in excess of distributions
    
    
    (656
    )
    
    
    (544
    )Net gain on sale of interests in real estate
    
    
    (194
    )
    
    
    (7,957
    )Gain on early extinguishment of debt
    
    
    (6,639
    )
    
    
    (2,563
    )Cummulative
interest accretion on repayments of unsecured notes
    
    
    (202
    )
    
    
    (435
    )Changes in assets and liabilities:Accounts receivable
    
    
    1,376
    
    
    
    3,906Other assets
    
    
    (2,258
    )
    
    
    (2,808
    )Accounts payable and accrued expenses
    
    
    15,430
    
    
    
    20,165Tenant security deposits and deferred rents
    
    
    1,129
    
    
    
    1,032Other liabilities
    
    
    (2,525
    )
    
    
    (2,732
    )Net cash from operating activities
    
    
    62,767
    
    
    
    72,689Cash flows from investing activities:Sales of properties, net
    
    
    8,650
    
    
    
    26,172Capital expenditures
    
    
    (30,484
    )
    
    
    (38,901
    )Investment in unconsolidated real estate ventures
    
    
    (14,961
    )
    
    
    (249
    )Escrowed cash
    
    
    31,385
    
    
    
    Cash distributions from unconsolidated real estate ventures
in excess of equity in income
    
    
    555
    
    
    
    81Leasing costs
    
    
    (5,146
    )
    
    
    (3,851
    )Net cash used in investing activities
    
    
    (10,001
    )
    
    
    (16,748
    )Cash flows from financing activities:Proceeds from Credit Facility borrowings
    
    
    140,000
    
    
    
    57,000Repayments of Credit Facility borrowings
    
    
    (93,000
    )
    
    
    (49,280
    )Repayments of mortgage notes payable
    
    
    (3,205
    )
    
    
    (3,561
    )Repayments of unsecured notes
    
    
    (68,243
    )
    
    
    (21,385
    )Amortization of debt discount
    
    
    1,111
    
    
    
    1,840Debt financing costs
    
    
    18
    
    
    
    (85
    )Distributions paid to shareholders
    
    
    (28,443
    )
    
    
    (40,414
    )Distributions paid to non-controlling interests
    
    
    (845
    )
    
    
    (1,804
    )Net cash used in financing activities
    
    
    (52,607
    )
    
    
    (57,689
    )Increase (decrease) in cash and cash equivalents
    
    
    159
    
    
    
    (1,748
    )Cash and cash equivalents at beginning of period
    
    
    3,924
    
    
    
    5,600Cash and cash equivalents as of end of period
    
    $
    4,083
    
    
    $
    3,852Supplemental disclosure:Cash paid for interest, net of capitalized interest
    
    $
    13,108
    
    
    $
    18,163Supplemental disclosure of non-cash activity:Note receivable issued in a property sale transaction
    
    
    950
    
    
    
    Capital expenditures financed through accounts payable at period end
    
    
    5,899
    
    
    
    19,349
  7




---



##### 



BRANDYWINE REALTY TRUST
 
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
 THE COMPANY
     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Basis of Presentation
  Reclassifications and Revisions
  8




---



##### 



BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
 Share-Based Payment
   Use of Estimates
  Operating Properties
  Purchase Price Allocation
   9




---



##### 



BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
 Accounting for Conditional Asset Retirement Obligations
   Impairment or Disposal of Long-Lived Assets
 Accounting for the Impairment or
Disposal of Long-Lived Assets
    Revenue Recognition
 10




---



##### 



BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
  Stock-Based Compensation Plans
   Accounting for Derivative Instruments and Hedging Activities
 Accounting for Derivative Instruments and Hedging Activities Accounting for Certain Derivative Instruments and Hedging Activities
 An Amendment of SFAS 133 Fair Value
Measurements
  Fair Value Measurements
 Fair Value Measurements Application of FASB Statement No. 157
to FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair Value Measurements
for Purposes of Lease Classification or Measurement under Statement 13 Effective Date of FASB Statement No. 157
 11




---



##### 



BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
 Accounting for Leases
    Fair Value Measurements at ReportingDate Using:Quoted Prices inActive Markets for
    
    
    Significant Other
    
    
    UnobservableMarch 31,
    
    
    Identical Assets
    
    
    Observable Inputs
    
    
    InputsDescription
    
    2009
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)RecurringAssets:Available-for-Sale Securities
    
    $
    256
    
    
    $
    256
    
    
    $
    
    
    
    $
    Liabilities:Interest Rate Swaps
    
    $
    5,422
    
    
    $
    
    
    
    $
    5,422
    
    
    
    Forward Starting Interest Rate Swaps
    
    
    2,757
    
    
    
    
    
    
    
    2,757
    
    
    
    $
    8,179
    
    
    $
    
    
    
    $
    8,179
    
    
    $
    Non-RecurringReal Estate Held for Investment
    
    $
    25,500
    
    
    $
    
    
    
    $
    
    
    
    $
    25,500
  12




---



##### 



BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
  Fair Value Measurements at ReportingDate Using:Quoted Prices inActive Markets for
    
    
    Significant Other
    
    
    UnobservableDecember 31,
    
    
    Identical Assets
    
    
    Observable Inputs
    
    
    InputsDescription
    
    2008
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Assets:Available-for-Sale Securities
    
    $
    423
    
    
    $
    423
    
    
    $
    
    
    
    $
    Liabilities:Interest Rate Swaps
    
    $
    10,985
    
    
    $
    
    
    
    $
    10,985
    
    
    $
    Forward Starting Interest Rate Swaps
    
    
    7,481
    
    
    
    
    
    
    
    7,481
    
    
    
    $
    18,466
    
    
    $
    
    
    
    $
    18,466
    
    
    $
    
  
    
    Non-financial assets and liabilities initially measured at fair value in an acquisition
or business combination that are not remeasured at least annually at fair value,
    
    Long-lived assets measured at fair value due to an impairment under Statement of
Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets and
    
    Asset retirement obligations initially measured at fair value under Statement of
Financial Accounting Standards No. 143, Accounting for Asset Retirement Obligations.
 Income Taxes
   13




---



##### 



BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
  Accounting Pronouncements Adopted January 1, 2009 on a Retrospective Basis
 Accounting for
Convertible Debt Instruments That May Be Settled Upon Conversion (Including Partial Cash
Settlement)
   14




---



##### 



BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
 APB 14-1As Reported
    
    Adjustment
    
    As RevisedConstruction-in-progress
    
    $
    121,402
    
    
    $
    817
    
    
    $
    122,219Deferred costs, net
    
    
    89,866
    
    
    
    (539
    )
    
    
    89,327Unsecured bonds, net of discount
    
    
    1,930,147
    
    
    
    (12,177
    )
    
    
    1,917,970Additional paid-in capital
    
    
    2,327,617
    
    
    
    23,811
    
    
    
    2,351,428Cumulative earnings
    
    
    509,834
    
    
    
    (11,118
    )
    
    
    498,716Non-controlling interests
    
    
    53,199
    
    
    
    (238
    )
    
    
    52,961Total equity
    
    $
    1,710,043
    
    
    $
    12,455
    
    
    $
    1,722,498
 Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating
Securities
 Accounting for
Non-controlling Interests Classification and Measurement of Redeemable
Securities
 Accounting Pronouncements Adopted January 1, 2009 on a Prospective Basis
 Disclosures about Derivative Instruments and Hedging Activities Accounting for Derivative Instruments and Hedging
Activities
 Determination of the Useful Life of Intangible
Assets
 15




---



##### 



BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
  Business Combinations
 New Pronouncements
 Interim Disclosures about Fair Value of
Financial Instruments
 Recognition
and Presentation of Other-Than-Temporary Impairments
 Determining Fair Value When the Volume and Level of
Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That
are Not Orderly
 REAL ESTATE INVESTMENTS
  March 31, 2009
    
    
    December 31, 2008Land
    
    $
    694,126
    
    
    $
    695,408Building and improvements
    
    
    3,473,987
    
    
    
    3,481,289Tenant improvements
    
    
    418,828
    
    
    
    419,4404,586,941
    
    
    $
    4,596,137
 16




---



##### 



BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
 Acquisitions and Dispositions
     INVESTMENT IN UNCONSOLIDATED VENTURES
     March 31,
    
    December 31,2009
    
    2008Net property
    
    $
    549,771
    
    
    $
    553,833Other assets
    
    
    92,095
    
    
    
    94,165Other Liabilities
    
    
    38,824
    
    
    
    37,863Debt
    
    
    437,141
    
    
    
    515,832Equity
    
    
    165,901
    
    
    
    94,164Companys share of equity (Companys basis)
    
    
    86,090
    
    
    
    71,028
  17




---



##### 



BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
 Three-month periodsended March 31,2009
    
    2008Revenue
    
    $
    26,564
    
    
    $
    26,461Operating expenses
    
    
    9,566
    
    
    
    9,509Interest expense, net
    
    
    7,152
    
    
    
    7,646Depreciation and amortization
    
    
    8,822
    
    
    
    9,410Net income (loss)
    
    
    1,024
    
    
    
    (104
    )Companys share of income (Company basis)
    
    
    586
    
    
    
    1,115
  DEFERRED COSTS
  March 31, 2009Accumulated
    
    
    Deferred Costs,Total Cost
    
    
    Amortization
    
    
    netLeasing Costs
    
    $
    113,022
    
    
    $
    (42,410
    )
    
    $
    70,612Financing Costs
    
    
    24,422
    
    
    
    (12,099
    )
    
    
    12,323Total
    
    $
    137,444
    
    
    $
    (54,509
    )
    
    $
    82,935
 December 31, 2008Accumulated
    
    
    Deferred Costs,Total Cost
    
    
    Amortization
    
    
    netLeasing Costs
    
    $
    115,262
    
    
    $
    (39,528
    )
    
    $
    75,734Financing Costs
    
    
    25,170
    
    
    
    (11,577
    )
    
    
    13,593Total
    
    $
    140,432
    
    
    $
    (51,105
    )
    
    $
    89,327
 INTANGIBLE ASSETS
  18




---



##### 



BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
 March 31, 2009Accumulated
    
    
    Deferred Costs,Total Cost
    
    
    Amortization
    
    
    netIn-place lease value
    
    $
    140,659
    
    
    $
    (72,211
    )
    
    $
    68,448Tenant relationship value
    
    
    103,077
    
    
    
    (43,747
    )
    
    
    59,330Above market leases acquired
    
    
    20,371
    
    
    
    (12,734
    )
    
    
    7,637Total
    
    $
    264,107
    
    
    $
    (128,692
    )
    
    $
    135,415Below market leases acquired
    
    $
    81,390
    
    
    $
    (36,596
    )
    
    $
    44,794
 December 31, 2008Accumulated
    
    
    Deferred Costs,Total Cost
    
    
    Amortization
    
    
    netIn-place lease value
    
    $
    145,518
    
    
    $
    (71,138
    )
    
    $
    74,380Tenant relationship value
    
    
    103,485
    
    
    
    (40,835
    )
    
    
    62,650Above market leases acquired
    
    
    23,351
    
    
    
    (14,624
    )
    
    
    8,727Total
    
    $
    272,354
    
    
    $
    (126,597
    )
    
    $
    145,757Below market leases acquired
    
    $
    82,950
    
    
    $
    (35,324
    )
    
    $
    47,626
  Assets
    
    
    Liabilities2009
    
    $
    26,631
    
    
    $
    7,3892010
    
    
    30,118
    
    
    
    8,3832011
    
    
    23,145
    
    
    
    7,0722012
    
    
    17,712
    
    
    
    6,3352013
    
    
    12,724
    
    
    
    5,895Thereafter
    
    
    25,085
    
    
    
    9,720Total
    
    $
    135,415
    
    
    $
    44,794
 DEBT OBLIGATIONS
  19




---



##### 



BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
 EffectiveMarch 31
    
    
    December 31,
    
    
    Interest
    
    
    MaturityProperty / Location
    
    2009
    
    
    2008
    
    
    Rate
    
    
    DateMORTGAGE DEBT:Two Logan Square
    
    $
    68,579
    
    
    $
    68,808
    
    
    
    5.78
    %(a)
    
    Jul-09200 Commerce Drive
    
    
    5,661
    
    
    
    5,684
    
    
    
    7.12
    %(a)
    
    Jan-10Plymouth Meeting Exec.
    
    
    42,605
    
    
    
    42,785
    
    
    
    7.00
    %(a)
    
    Dec-10Four Tower Bridge
    
    
    10,325
    
    
    
    10,404
    
    
    
    6.62
    %
    
    Feb-11Arboretum I, II, III & V
    
    
    21,509
    
    
    
    21,657
    
    
    
    7.59
    %
    
    Jul-11Midlantic Drive/Lenox Drive/DCC I
    
    
    59,403
    
    
    
    59,784
    
    
    
    8.05
    %
    
    Oct-11Research Office Center
    
    
    40,599
    
    
    
    40,791
    
    
    
    5.30
    %(a)
    
    Oct-11Concord Airport Plaza
    
    
    36,368
    
    
    
    36,617
    
    
    
    5.55
    %(a)
    
    Jan-12Six Tower Bridge
    
    
    13,886
    
    
    
    14,185
    
    
    
    7.79
    %
    
    Aug-12Newtown Square/Berwyn Park/Libertyview
    
    
    60,580
    
    
    
    60,910
    
    
    
    7.25
    %
    
    May-13Coppell Associates
    
    
    3,132
    
    
    
    3,273
    
    
    
    6.89
    %
    
    Dec-13Southpoint III
    
    
    3,715
    
    
    
    3,863
    
    
    
    7.75
    %
    
    Apr-14Tysons Corner
    
    
    99,153
    
    
    
    99,529
    
    
    
    5.36
    %(a)
    
    Aug-15Coppell Associates
    
    
    16,600
    
    
    
    16,600
    
    
    
    5.75
    %
    
    Feb-16Principal balance outstanding
    
    
    482,115
    
    
    
    484,890Plus: unamortized fixed-rate debt premiums, net
    
    
    2,205
    
    
    
    2,635Total mortgage indebtedness
    
    $
    484,320
    
    
    $
    487,525UNSECURED DEBT:$275.0M 4.500% Guaranteed Notes due 2009
    
    
    152,301
    
    
    
    196,680
    
    
    
    4.62
    %
    
    Nov-09Bank Term Loan
    
    
    183,000
    
    
    
    183,000
    
    
    Libor + 0.80
    %
    
    Oct-10
(b)$300.0M 5.625% Guaranteed Notes due 2010
    
    
    251,222
    
    
    
    275,545
    
    
    
    5.61
    %
    
    Dec-10Credit Facility
    
    
    200,000
    
    
    
    153,000
    
    
    Libor + 0.725
    %
    
    Jun-11
(b)$320.7M 3.875% Guaranteed Exchangeable Notes due 2026
    
    
    275,530
    
    
    
    282,030
    
    
    
    5.50
    %
    
    Oct-11$300.0M 5.750% Guaranteed Notes due 2012
    
    
    300,000
    
    
    
    300,000
    
    
    
    5.77
    %
    
    Apr-12$250.0M 5.400% Guaranteed Notes due 2014
    
    
    250,000
    
    
    
    250,000
    
    
    
    5.53
    %
    
    Nov-14$250.0M 6.000% Guaranteed Notes due 2016
    
    
    250,000
    
    
    
    250,000
    
    
    
    5.95
    %
    
    Apr-16$300.0M 5.700% Guaranteed Notes due 2017
    
    
    300,000
    
    
    
    300,000
    
    
    
    5.75
    %
    
    May-17Indenture IA (Preferred Trust I)
    
    
    27,062
    
    
    
    27,062
    
    
    Libor + 1.25
    %
    
    Mar-35Indenture IB (Preferred Trust I)
    
    
    25,774
    
    
    
    25,774
    
    
    Libor + 1.25
    %
    
    Apr-35Indenture II (Preferred Trust II)
    
    
    25,774
    
    
    
    25,774
    
    
    Libor + 1.25
    %
    
    Jul-35Principal balance outstanding
    
    
    2,240,663
    
    
    
    2,268,865less: unamortized exchangeable debt discount
    
    
    (11,066
    )
    
    
    (12,176
    )Plus: unamortized fixed-rate debt discounts, net
    
    
    (2,581
    )
    
    
    (2,718
    )Total unsecured indebtedness
    
    $
    2,227,016
    
    
    $
    2,253,971Total Debt Obligations
    
    $
    2,711,336
    
    
    $
    2,741,496
 
 (a)
    
    Loans were assumed upon acquisition of the related property. Interest rates presented above
reflect the market rate at the time of acquisition.(b)
    
    These loans may be extended to June 29, 2012 at the Companys discretion.     20




---



##### 



BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
      2009
    
    $
    227,9842010
    
    
    491,0742011
    
    
    596,7592012
    
    
    351,0522013
    
    
    58,546Thereafter
    
    
    986,297Total principal payments
    
    
    2,711,712Net unamortized premiums/discounts
    
    
    (376
    )Outstanding indebtedness
    
    $
    2,711,336
 RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS
 Risk Management
  Risks and Uncertainties
  21




---



##### 



BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
      Use of Derivative Financial Instruments
  22




---



##### 



BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
         Hedge
    
    Hedge
    
    
    
    
    
    
    Notional Amount
    
    
    
    
    
    
    Trade
    
    
    Maturity
    
    
    Fair ValueProduct
    
    Type
    
    
    Designation
    
    
    3/31/2009
    
    
    12/31/2008
    
    
    Strike
    
    
    Date
    
    
    Date
    
    
    3/31/2009
    
    
    12/31/2008Swap
    
    Interest Rate
    
    Cash Flow(b)
    
    $
    84,700
    
    
    $
    78,000
    (a)
    
    
    4.709
    %
    
    
    9/20/07
    
    
    
    10/18/10
    
    
    $
    3,439
    
    
    $
    7,204Swap
    
    Interest Rate
    
    Cash Flow(b)
    
    
    25,000
    
    
    
    25,000
    
    
    
    4.415
    %
    
    
    10/19/07
    
    
    
    10/18/10
    
    
    
    739
    
    
    
    1,439Swap
    
    Interest Rate
    
    Cash Flow(b)
    
    
    25,000
    
    
    
    25,000
    
    
    
    3.747
    %
    
    
    11/26/07
    
    
    
    10/18/10
    
    
    
    563
    
    
    
    1,111Swap
    
    Interest Rate
    
    Cash Flow(b)
    
    
    25,000
    
    
    
    25,000
    
    
    
    3.338
    %
    
    
    9/23/07
    
    
    
    12/18/09
    
    
    
    381
    
    
    
    603Swap
    
    Interest Rate
    
    Cash Flow(b)
    
    
    25,774
    
    
    
    25,774
    
    
    
    2.975
    %
    
    
    10/16/08
    
    
    
    10/30/10
    
    
    
    300
    
    
    
    628Forward Starting Swap
    
    Interest Rate
    
    Cash Flow(c)
    
    
    25,000
    
    
    
    25,000
    
    
    
    4.770
    %
    
    
    1/4/08
    
    
    
    12/18/19
    
    
    
    1,549
    
    
    
    4,079Forward Starting Swap
    
    Interest Rate
    
    Cash Flow(c)
    
    
    25,000
    
    
    
    25,000
    
    
    
    4.423
    %
    
    
    3/19/08
    
    
    
    12/18/19
    
    
    
    1,208
    
    
    
    3,402$
    235,474
    
    
    $
    228,774
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    8,179
    
    
    $
    18,466
 
 (a)
    
    - Notional amount accreting up to $155,000 through October 8, 2010.(b)
    
    - Hedging unsecured variable rate debt.(c)
    
    - Future issuance of long-term debt with an expected forward starting date in December 2009. 23




---



##### 



BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
 Concentration of Credit Risk
  DISCONTINUED OPERATIONS
  Three-month periodsended March 31, 2009Revenue:Rents
    
    $
    206Tenant reimbursements
    
    
    16Other
    
    
    63Total revenue
    
    
    285Expenses:Property operating expenses
    
    
    91Real estate taxes
    
    
    17Depreciation and amortization
    
    
    57Total operating expenses
    
    
    165Interest income
    
    
    (1
    )Income from discontinued operations before gain on
sale of interests in real estate
    
    
    119Net gain on sale of interests in real estate
    
    
    194Income from discontinued operations
    
    
    313Income from discontinued operations attributable to non-controlling interests
    
    
    (10
    )Income from discontinued operations attributable to Brandywine Realty Trust
    
    $
    303
  24




---



##### 



BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
 Three-month periodsended March 31, 2009Revenue:Rents
    
    $
    14,355Tenant reimbursements
    
    
    577Termination fees
    
    
    25Other
    
    
    99Total revenue
    
    
    15,056Expenses:Property operating expenses
    
    
    4,661Real estate taxes
    
    
    1,400Depreciation and amortization
    
    
    4,636Total operating expenses
    
    
    10,697Interest income
    
    
    6Interest expense
    
    
    (1,352
    )Income from discontinued operations before gain on
sale of interests in real estate
    
    
    3,013Net gain on sale of interests in real estate
    
    
    7,981Income from discontinued operations
    
    
    10,994Income from discontinued operations attributable to non-controlling interests
    
    
    (463
    )Income from discontinued operations attributable to Brandywine Realty Trust
    
    $
    10,531
  NON-CONTROLLING INTERESTS IN OPERATING PARTNERSHIP AND CONSOLIDATED REAL ESTATE
VENTURES
 Operating Partnership
  Non-Controlling
Interest  Partners Share of Consolidated Real Estate Ventures
   25




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##### 



BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
 BENEFICIARIES EQUITY
 Earnings per Share (EPS)
  Three-month periods ended March 31,2009
    
    
    2008Basic
    
    
    Diluted
    
    
    Basic
    
    
    DilutedNumeratorIncome (loss) from continuing operations
    
    $
    (1,186
    )
    
    $
    (1,186
    )
    
    $
    2,603
    
    
    $
    2,603Net (loss) income attributable to non-controlling interests
    
    
    105
    
    
    
    105
    
    
    
    (64
    )
    
    
    (64
    )Amount allocable to unvested restricted shareholders
    
    
    (37
    )
    
    
    (37
    )
    
    
    (167
    )
    
    
    (167
    )Preferred share dividends
    
    
    (1,998
    )
    
    
    (1,998
    )
    
    
    (1,998
    )
    
    
    (1,998
    )Income (loss) from continuing operations available to common shareholders
    
    
    (3,116
    )
    
    
    (3,116
    )
    
    
    374
    
    
    
    374Income from discontinued operations
    
    
    313
    
    
    
    313
    
    
    
    10,994
    
    
    
    10,994Net income from discontinued operations attributable to non-controlling interests
    
    
    (10
    )
    
    
    (10
    )
    
    
    (463
    )
    
    
    (463
    )Discontinued operations attributable to common shareholders
    
    
    303
    
    
    
    303
    
    
    
    10,531
    
    
    
    10,531Net (loss) income available to common shareholders
    
    $
    (2,813
    )
    
    $
    (2,813
    )
    
    $
    10,905
    
    
    $
    10,905DenominatorWeighted-average shares outstanding
    
    
    88,210,384
    
    
    
    88,210,384
    
    
    
    87,073,721
    
    
    
    87,073,721Contingent securities/Stock based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,410Total weighted-average shares outstanding
    
    
    88,210,384
    
    
    
    88,210,384
    
    
    
    87,073,721
    
    
    
    87,088,131Earnings per Common Share:Income from continuing operations attributable to common shareholders
    
    $
    (0.03
    )
    
    $
    (0.03
    )
    
    $
    
    
    
    $
    Discontinued operations attributable to common shareholders
    
    
    
    
    
    
    
    
    
    
    0.13
    
    
    
    0.13Net (loss) income attributable to common shareholders
    
    $
    (0.03
    )
    
    $
    (0.03
    )
    
    $
    0.13
    
    
    $
    0.13
    Common and Preferred Shares
  26




---



##### 



BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
   Common Share Repurchases
    SHARE BASED AND DEFERRED COMPENSATION
 Stock Options
   Weighted
    
    
    Weighted AverageAverage
    
    
    Remaining Contractual
    
    
    Aggregate IntrinsicShares
    
    
    Exercise Price
    
    
    Term (in years)
    
    
    Value (in 000s)Outstanding at January 1, 2009
    
    
    1,754,648
    
    
    $
    20.41
    
    
    
    8.77
    
    
    $
    (30,093
    )Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited or expired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding at March 31, 2009
    
    
    1,754,648
    
    
    $
    20.41
    
    
    
    8.77
    
    
    $
    (30,093
    )Vested at March 31, 2009
    
    
    60,223
    
    
    $
    14.71
    
    
    
    1.58
    
    
    $
    (714,070
    )Exercisable at March 31, 2009
    
    
    60,223
    
    
    $
    14.71
    
    
    
    1.58
    
    
    $
    (714,070
    )
 27




---



##### 



BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
 Restricted Share Awards
   WeightedAverage GrantShares
    
    
    Date Fair valueNon-vested at January 1, 2009
    
    
    475,496
    
    
    $
    26.21Granted
    
    
    
    
    
    
    Vested
    
    
    (100,020
    )
    
    
    29.50Forfeited
    
    
    (1,734
    )
    
    
    21.09Non-vested at March 31, 2009
    
    
    373,742
    
    
    $
    19.36
 Outperformance Program
    Employee Share Purchase Plan
  28




---



##### 



BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
  Deferred Compensation
   Accounting for Deferred Compensation Arrangements Where Amounts Earned Are
Held in A Rabbi Trust and Invested,
 TAX CREDIT TRANSACTIONS
 Historic Tax Credit Transaction
   29




---



##### 



BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
    New Markets Tax Credit Transaction
      SEGMENT INFORMATION
  30




---



##### 



BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
   31




---



##### 



BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
  Metropolitan,
    
    
    New Jersey
    
    
    Richmond,
    
    
    
    
    
    
    Austin,Pennsylvania
    
    
    D.C.
    
    
    /Delaware
    
    
    Virginia
    
    
    California
    
    
    Texas
    
    
    Corporate
    
    
    TotalAs of March 31, 2009:Real estate investments, at cost:Operating properties
    
    $
    1,730,255
    
    
    $
    1,368,591
    
    
    $
    676,916
    
    
    $
    295,974
    
    
    $
    236,516
    
    
    $
    278,689
    
    
    $
    
    
    
    $
    4,586,941Construction-in-progress
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    138,310
    
    
    $
    138,310Land inventory
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    112,902
    
    
    $
    112,902As of December 31, 2008:Real estate investments, at cost:Operating properties
    
    $
    1,734,948
    
    
    $
    1,371,997
    
    
    $
    674,503
    
    
    $
    297,171
    
    
    $
    236,693
    
    
    $
    280,825
    
    
    $
    
    
    
    $
    4,596,137Construction-in-progress
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    122,219
    
    
    $
    122,219Land inventory
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    112,699
    
    
    $
    112,699For the three-months ended March 31, 2009:Total revenue
    
    $
    60,453
    
    
    $
    36,204
    
    
    $
    29,450
    
    
    $
    9,502
    
    
    $
    7,374
    
    
    $
    9,092
    
    
    $
    (207
    )
    
    $
    151,868Property operating expenses, real estate taxes and
third party management expenses
    
    
    23,551
    
    
    
    14,271
    
    
    
    14,118
    
    
    
    3,886
    
    
    
    3,334
    
    
    
    3,970
    
    
    
    (397
    )
    
    
    62,733Net operating income
    
    $
    36,902
    
    
    $
    21,933
    
    
    $
    15,332
    
    
    $
    5,616
    
    
    $
    4,040
    
    
    $
    5,122
    
    
    $
    190
    
    
    $
    89,135For the three-months ended March 31, 2008:Total revenue
    
    $
    63,642
    
    
    $
    34,963
    
    
    $
    28,591
    
    
    $
    9,227
    
    
    $
    7,329
    
    
    $
    9,064
    
    
    $
    (572
    )
    
    $
    152,244Property operating expenses, real estate taxes and
third party management expenses
    
    
    22,188
    
    
    
    12,614
    
    
    
    12,595
    
    
    
    3,026
    
    
    
    2,955
    
    
    
    4,138
    
    
    
    1,215
    
    
    
    58,731Net operating income
    
    $
    41,454
    
    
    $
    22,349
    
    
    $
    15,996
    
    
    $
    6,201
    
    
    $
    4,374
    
    
    $
    4,926
    
    
    $
    (1,787
    )
    
    $
    93,513
 32




---



##### 



BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
  Three-month periodsended March 31,2009
    
    
    2008(amounts in thousands)Consolidated net operating income
    
    $
    89,135
    
    
    $
    93,513Less:Interest expense
    
    
    (35,646
    )
    
    
    (37,043
    )Deferred financing costs
    
    
    (1,252
    )
    
    
    (1,508
    )Depreciation and amortization
    
    
    (52,569
    )
    
    
    (51,304
    )General & administrative expenses
    
    
    (4,958
    )
    
    
    (4,912
    )Provision for impairment of real estate
    
    
    (3,700
    )
    
    
    Plus:Interest income
    
    
    579
    
    
    
    203Equity in income of real estate ventures
    
    
    586
    
    
    
    1,115Net loss on sales of interests in undepreciated real estate
    
    
    
    
    
    
    (24
    )Gain on early extinguishment of debt
    
    
    6,639
    
    
    
    2,563Income (loss) from continuing operations
    
    
    (1,186
    )
    
    
    2,603Income from discontinued operations
    
    
    313
    
    
    
    10,994Net (loss) income
    
    $
    (873
    )
    
    $
    13,597
 COMMITMENTS AND CONTINGENCIES
 Legal Proceedings
  Environmental
  Ground Rent
  33




---



##### 



BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
 2009
    
    $
    1,4902010
    
    
    2,2362011
    
    
    2,3182012
    
    
    2,3182013
    
    
    2,318Thereafter
    
    
    290,274
  Other Commitments or Contingencies
     34




---



##### 



BRANDYWINE REALTY TRUST
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
  SUBSEQUENT EVENTS
   35




---



##### 



PART I  FINANCIAL INFORMATION
 
 Item 1.  Financial Statements
 BRANDYWINE OPERATING PARTNERSHIP, L.P.
 
 CONSOLIDATED BALANCE SHEETS
 (unaudited, in thousands, except unit and per unit information)
 March 31,
    
    
    December 31,2009
    
    
    2008 (as adjusted)ASSETSReal estate investments:Operating properties
    
    $
    4,586,941
    
    
    $
    4,596,137Accumulated depreciation
    
    
    (663,843
    )
    
    
    (639,688
    )Operating real estate investments, net
    
    
    3,923,098
    
    
    
    3,956,449Construction-in-progress
    
    
    138,310
    
    
    
    122,219Land inventory
    
    
    112,902
    
    
    
    112,699Total real estate invesmtents, net
    
    
    4,174,310
    
    
    
    4,191,367Cash and cash equivalents
    
    
    4,083
    
    
    
    3,924Cash in escrow
    
    
    
    
    
    
    31,385Accounts receivable, net
    
    
    10,068
    
    
    
    11,762Accrued rent receivable, net
    
    
    85,072
    
    
    
    86,362Investment in real estate ventures, at equity
    
    
    86,090
    
    
    
    71,028Deferred costs, net
    
    
    82,935
    
    
    
    89,327Intangible assets, net
    
    
    135,415
    
    
    
    145,757Notes receivable
    
    
    49,343
    
    
    
    48,048Other assets
    
    
    60,673
    
    
    
    59,008Total assets
    
    $
    4,687,989
    
    
    $
    4,737,968LIABILITIES AND EQUITYMortgage notes payable
    
    $
    484,320
    
    
    $
    487,525Borrowing under credit facilities
    
    
    200,000
    
    
    
    153,000Unsecured term loan
    
    
    183,000
    
    
    
    183,000Unsecured senior notes, net of discounts
    
    
    1,844,016
    
    
    
    1,917,970Accounts payable and accrued expenses
    
    
    89,094
    
    
    
    74,824Distributions payable
    
    
    11,138
    
    
    
    29,288Tenant security deposits and deferred rents
    
    
    58,973
    
    
    
    58,692Acquired below market leases, net
    
    
    44,794
    
    
    
    47,626Other liabilities
    
    
    51,064
    
    
    
    63,545Total liabilities
    
    
    2,966,399
    
    
    
    3,015,470Commitments and contingencies (Note 15)Redeemable limited partnership units
2,816,621 and 3,719,618 issued and outstanding in 2009 and 2008, respectively
    
    
    52,663
    
    
    
    54,166Brandywine Operating Partnerships equity:7.50% Series D Preferred Mirror Units; 2,000,000 issued and outstanding in 2008
and 2007
    
    
    47,912
    
    
    
    47,9127.375% Series E Preferred Mirror Units; 2,300,000 issued and outstanding in 2008
and 2007
    
    
    55,538
    
    
    
    55,538General Partnership Capital, 88,600,253 and 88,610,053 units issued in 2009 and
2008, respectively and 88,216,061 and 88,158,937
units outstanding in
2009 and 2008, respectively
    
    
    1,571,868
    
    
    
    1,581,887Accumulated other comprehensive loss
    
    
    (6,534
    )
    
    
    (17,005
    )Total Brandywine Operating Partnerships equity
    
    
    1,668,784
    
    
    
    1,668,332Non-controlling interest  consolidated real estate ventures
    
    
    143
    
    
    
    Total equity
    
    
    1,668,927
    
    
    
    1,668,332Total liabilities and equity
    
    $
    4,687,989
    
    
    $
    4,737,968
  36




---



##### 



BRANDYWINE
OPERATING PARTNERSHIP, L.P.
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (unaudited, in thousands, except unit and per unit information)
 For the three-month periods endedMarch 31,2009
    
    
    2008 (as adjusted)Revenue:Rents
    
    $
    123,604
    
    
    $
    123,511Tenant reimbursements
    
    
    22,464
    
    
    
    19,039Termination fees
    
    
    113
    
    
    
    3,232Third party management fees, labor reimbursement and leasing
    
    
    4,764
    
    
    
    5,679Other
    
    
    923
    
    
    
    783Total revenue
    
    
    151,868
    
    
    
    152,244Operating Expenses:Property operating expenses
    
    
    45,155
    
    
    
    40,920Real estate taxes
    
    
    15,463
    
    
    
    15,565Third party management expenses
    
    
    2,115
    
    
    
    2,246Depreciation and amortization
    
    
    52,569
    
    
    
    51,304General & administrative expenses
    
    
    4,958
    
    
    
    4,912Provision for impairment on real estate
    
    
    3,700
    
    
    
    Total operating expenses
    
    
    123,960
    
    
    
    114,947Operating income
    
    
    27,908
    
    
    
    37,297Other Income (Expense):Interest income
    
    
    579
    
    
    
    203Interest expense
    
    
    (35,646
    )
    
    
    (37,043
    )Interest expense  Deferred financing costs
    
    
    (1,252
    )
    
    
    (1,508
    )Equity in income of real estate ventures
    
    
    586
    
    
    
    1,115Net loss on disposition of undepreciated real estate
    
    
    
    
    
    
    (24
    )Gain on early extinguishment of debt
    
    
    6,639
    
    
    
    2,563Income (loss) from continuing operations
    
    
    (1,186
    )
    
    
    2,603Discontinued operations:Income from discontinued operations
    
    
    119
    
    
    
    3,013Net gain on disposition of discontinued operations
    
    
    194
    
    
    
    7,981313
    
    
    
    10,994Net (loss) income
    
    
    (873
    )
    
    
    13,597Net loss (income) allocated to non-controlling interests
    
    
    6
    
    
    
    (40
    )Net (loss) income attributable to Brandywine Operating Partnership
    
    
    (867
    )
    
    
    13,557Preferred share dividends
    
    
    (1,998
    )
    
    
    (1,998
    )Amount allocated to unvested restricted shareholders
    
    
    (37
    )
    
    
    (167
    )Income (loss) allocated to Common Partnership Units
    
    $
    (2,902
    )
    
    $
    11,392Basic earnings (loss) per Common Partnership Unit:Continuing operations
    
    $
    (0.03
    )
    
    $
    0.00Discontinued operations
    
    
    0.00
    
    
    
    0.13$
    (0.03
    )
    
    $
    0.13Diluted earnings (loss) per Common Partnership Unit:Continuing operations
    
    $
    (0.03
    )
    
    $
    0.00Discontinued operations
    
    
    0.00
    
    
    
    0.13$
    (0.03
    )
    
    $
    0.13Basic weighted average common partnership units outstanding
    
    
    91,027,005
    
    
    
    90,895,006Diluted weighted average commpn partnership units outstanding
    
    
    91,027,005
    
    
    
    90,909,416Net (loss) income attributable to Brandywine Operating PartnershipIncome (loss) from continuing operations
    
    $
    (1,186
    )
    
    $
    2,603Income from discontinued operations
    
    
    313
    
    
    
    10,994Net (loss) income
    
    $
    (873
    )
    
    $
    13,597
  37




---



##### 



BRANDYWINE
OPERATING PARTNERSHIP, L.P.
 
 CONSOLIDATED
STATEMENTS OF OTHER COMPREHENSIVE INCOME
 (unaudited, in thousands)
 For the three-month periods endedMarch 31,2009
    
    
    2008 (unadjusted)Net income
    
    $
    (873
    )
    
    $
    13,597Other comprehensive income (loss):Unrealized gain (loss) on derivative financial instruments
    
    
    10,287
    
    
    
    (4,832
    )Reclassification of realized (gains) on derivative financial
instruments to operations, net
    
    
    (20
    )
    
    
    (20
    )Unrealized gain on available-for-sale securities
    
    
    
    
    
    
    248Total other comprehensive income (loss)
    
    
    10,267
    
    
    
    (4,604
    )Comprehensive income
    
    $
    9,394
    
    
    $
    8,993Comprehensive
income (loss) attributable to non-controlling interests
    
    
    6
    
    
    
    (40
    )Comprehensive income attributable to Brandywine Operating Partnership
    
    $
    9,400
    
    
    $
    8,953
  38




---



##### 



BRANDYWINE OPERATING PARTNERSHIP L.P.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (unaudited, in thousands)
 Three-month periodsended March 31,2009
    
    
    2008 (as adjusted)Cash flows from operating activities:Net income
    
    $
    (873
    )
    
    $
    13,597Adjustments to reconcile net income to net cash from
operating activities:Depreciation
    
    
    39,403
    
    
    
    40,363Amortization:Deferred financing costs
    
    
    1,252
    
    
    
    1,509Deferred leasing costs
    
    
    4,493
    
    
    
    4,090Acquired above (below) market leases, net
    
    
    (1,741
    )
    
    
    (2,278
    )Acquired lease intangibles
    
    
    8,729
    
    
    
    11,488Deferred compensation costs
    
    
    1,021
    
    
    
    1,215Straight-line rent
    
    
    (1,912
    )
    
    
    (6,609
    )Provision for doubtful accounts
    
    
    3,234
    
    
    
    1,250Provision for impairment in real estate
    
    
    3,700
    
    
    
    Real estate venture income in excess of distributions
    
    
    (656
    )
    
    
    (544
    )Net gain on sale of interests in real estate
    
    
    (194
    )
    
    
    (7,957
    )Gain on early extinguishment of debt
    
    
    (6,639
    )
    
    
    (2,563
    )Cummulative
interest accretion on repayments of unsecured notes
    
    
    (202
    )
    
    
    (435
    )Changes in assets and liabilities:Accounts receivable
    
    
    1,376
    
    
    
    3,906Other assets
    
    
    (2,258
    )
    
    
    (2,808
    )Accounts payable and accrued expenses
    
    
    15,430
    
    
    
    20,165Tenant security deposits and deferred rents
    
    
    1,129
    
    
    
    1,032Other liabilities
    
    
    (2,525
    )
    
    
    (2,732
    )Net cash from operating activities
    
    
    62,767
    
    
    
    72,689Cash flows from investing activities:Sales of properties, net
    
    
    8,650
    
    
    
    26,172Capital expenditures
    
    
    (30,484
    )
    
    
    (38,901
    )Investment in unconsolidated real estate ventures
    
    
    (14,961
    )
    
    
    (249
    )Escrowed cash
    
    
    31,385
    
    
    
    Cash distributions from unconsolidated real estate ventures
in excess of equity in income
    
    
    555
    
    
    
    81Leasing costs
    
    
    (5,146
    )
    
    
    (3,851
    )Net cash used in investing activities
    
    
    (10,001
    )
    
    
    (16,748
    )Cash flows from financing activities:Proceeds from Credit Facility borrowings
    
    
    140,000
    
    
    
    57,000Repayments of Credit Facility borrowings
    
    
    (93,000
    )
    
    
    (49,280
    )Repayments of mortgage notes payable
    
    
    (3,205
    )
    
    
    (3,561
    )Repayments of unsecured notes
    
    
    (68,243
    )
    
    
    (21,385
    )Amortization of debt discount
    
    
    1,111
    
    
    
    1,840Debt financing costs
    
    
    18
    
    
    
    (85
    )Distributions paid to preferred and common partnership unitholders
    
    
    (29,288
    )
    
    
    (42,218
    )Net cash used in financing activities
    
    
    (52,607
    )
    
    
    (57,689
    )Increase (decrease) in cash and cash equivalents
    
    
    159
    
    
    
    (1,748
    )Cash and cash equivalents at beginning of period
    
    
    3,924
    
    
    
    5,600Cash and cash equivalents at end of period
    
    $
    4,083
    
    
    $
    3,852Supplemental disclosure:Cash paid for interest, net of capitalized interest
    
    $
    13,108
    
    
    $
    18,163Supplemental disclosure of non-cash activity:Note receivable issued in a property sale transaction
    
    
    950
    
    
    
    Capital expenditures financed through accounts payable at period end
    
    
    5,899
    
    
    
    19,349
  39




---



##### 



BRANDYWINE OPERATING PARTNERSHIP, L.P.
 
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
 ORGANIZATION AND NATURE OF OPERATIONS
   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Basis of Presentation
  Reclassifications and Revisions
 Share-Based Payment
 40




---



##### 



BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
   Principles of Consolidation
  Use of Estimates
  Operating Properties
  Purchase Price Allocation
  41




---



##### 



BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
  Accounting for Conditional Asset Retirement Obligations
   Impairment or Disposal of Long-Lived Assets
 Accounting for the Impairment or
Disposal of Long-Lived Assets
  42




---



##### 



BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
    Revenue Recognition
  Stock-Based Compensation Plans
   Accounting for Derivative Instruments and Hedging Activities
 Accounting for Derivative Instruments and Hedging Activities Accounting for Certain Derivative Instruments and Hedging Activities
 An Amendment of SFAS 133
 43




---



##### 



BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
 Fair
Value Measurements
  Fair Value Measurements
 Fair Value
Measurements Application of FASB
Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair
Value Measurements for Purposes of Lease Classification or Measurement under Statement 13 Effective Date of FASB Statement No. 157 Accounting
for Leases
    44




---



##### 



BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
 Fair Value Measurements at ReportingDate Using:Quoted Prices inActive Markets for
    
    
    Significant Other
    
    
    UnobservableMarch 31,
    
    
    Identical Assets
    
    
    Observable Inputs
    
    
    InputsDescription
    
    2009
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)RecurringAssets:Available-for-Sale Securities
    
    $
    256
    
    
    $
    256
    
    
    $
    
    
    
    $
    Liabilities:Interest Rate Swaps
    
    $
    5,422
    
    
    $
    
    
    
    $
    5,422
    
    
    $
    Forward Starting Interest Rate Swaps
    
    
    2,757
    
    
    
    
    
    
    
    2,757
    
    
    
    $
    8,179
    
    
    $
    
    
    
    $
    8,179
    
    
    $
    Non-RecurringReal Estate Held for Investment
    
    $
    25,500
    
    
    $
    
    
    
    $
    
    
    
    $
    25,500
   Fair Value Measurements at ReportingDate Using:Quoted Prices inActive Markets for
    
    
    Significant Other
    
    
    UnobservableDecember 31,
    
    
    Identical Assets
    
    
    Observable Inputs
    
    
    InputsDescription
    
    2008
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Assets:Available-for-Sale Securities
    
    $
    423
    
    
    $
    423
    
    
    $
    
    
    
    $
    Liabilities:Interest Rate Swaps
    
    $
    10,985
    
    
    $
    
    
    
    $
    10,985
    
    
    $
    Forward Starting Interest Rate Swaps
    
    
    7,481
    
    
    
    
    
    
    
    7,481
    
    
    
    $
    18,466
    
    
    $
    
    
    
    $
    18,466
    
    
    $
    
  
    
    Non-financial assets and liabilities initially measured at fair value in an acquisition
or business combination that are not re-measured at least annually at fair value,
    
    Long-lived assets measured at fair value due to an impairment under Statement of
Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assetsand
    
    Asset retirement obligations initially measured at fair value under Statement of
Financial Accounting Standards No. 143, Accounting for Asset Retirement Obligations.
 Income Taxes
  45




---



##### 



BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
    Accounting Pronouncements Adopted January 1, 2009 on a Retrospective Basis
 Accounting for
Convertible Debt Instruments That May Be Settled Upon Conversion (Including Partial Cash
Settlement)
  Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating
Securities
 46




---



##### 



BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
  Accounting for
Non-controlling Interests Classification and Measurement
of Redeemable Securities
  APB 14-1
    
    
    D-98As Reported
    
    
    Adjustment
    
    
    Adjustment
    
    
    As RevisedConstruction-in-progress
    
    $
    121,402
    
    
    $
    817
    
    
    $
    
    
    
    $
    122,219Deferred costs, net
    
    
    89,866
    
    
    
    (539
    )
    
    
    
    
    
    
    89,327Unsecured bonds, net of discount
    
    
    1,930,147
    
    
    
    (12,177
    )
    
    
    
    
    
    
    1,917,970Redeemable
limited partnership units
    
    
    21,716
    
    
    
    
    
    
    
    32,450
    
    
    
    54,166General partnership capital
    
    
    1,601,882
    
    
    
    12,455
    
    
    
    (32,450
    )
    
    
    1,581,887Total equity
    
    $
    1,688,327
    
    
    $
    12,455
    
    
    $
    (32,450
    )
    
    $
    1,668,332
 Accounting Pronouncements Adopted January 1, 2009 on a Prospective Basis
 Disclosures about Derivative Instruments and Hedging Activities
 47




---



##### 



BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
 Accounting for Derivative Instruments and Hedging Activities
 Determination of the Useful Life of Intangible
Assets
 Business Combinations
 New Pronouncements
 Interim Disclosures about Fair Value of
Financial Instruments
 Recognition
and Presentation of Other-Than-Temporary Impairments
 Determining Fair Value When the Volume and Level of
Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That
are Not Orderly
 REAL ESTATE INVESTMENTS
  48




---



##### 



BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
 March 31, 2009
    
    
    December 31, 2008Land
    
    $
    694,126
    
    
    $
    695,408Building and improvements
    
    
    3,473,987
    
    
    
    3,481,289Tenant improvements
    
    
    418,828
    
    
    
    419,440$
    4,586,941
    
    
    $
    4,596,137
 Acquisitions and Dispositions
     INVESTMENT IN UNCONSOLIDATED VENTURES
     49




---



##### 



BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
 March 31,
    
    December 31,2009
    
    2008Net property
    
    $
    549,771
    
    
    $
    553,833Other assets
    
    
    92,095
    
    
    
    94,165Other Liabilities
    
    
    38,824
    
    
    
    37,863Debt
    
    
    437,141
    
    
    
    515,832Equity
    
    
    165,901
    
    
    
    94,164Partnerships share of equity (Partnerships basis)
    
    
    86,090
    
    
    
    71,028
  Three-month periodsended March 31,2009
    
    2008Revenue
    
    $
    26,564
    
    
    $
    26,461Operating expenses
    
    
    9,566
    
    
    
    9,509Interest expense, net
    
    
    7,152
    
    
    
    7,646Depreciation and amortization
    
    
    8,822
    
    
    
    9,410Net income
    
    
    1,024
    
    
    
    (104
    )Partnerships share of income (Partnerships
basis)
    
    
    586
    
    
    
    1,115
  DEFERRED COSTS
  March 31, 2009Accumulated
    
    
    Deferred Costs,Total Cost
    
    
    Amortization
    
    
    netLeasing Costs
    
    $
    113,022
    
    
    $
    (42,410
    )
    
    $
    70,612Financing Costs
    
    
    24,422
    
    
    
    (12,099
    )
    
    
    12,323Total
    
    $
    137,444
    
    
    $
    (54,509
    )
    
    $
    82,935
 December 31, 2008Accumulated
    
    
    Deferred Costs,Total Cost
    
    
    Amortization
    
    
    netLeasing Costs
    
    $
    115,262
    
    
    $
    (39,528
    )
    
    $
    75,734Financing Costs
    
    
    25,170
    
    
    
    (11,577
    )
    
    
    13,593Total
    
    $
    140,432
    
    
    $
    (51,105
    )
    
    $
    89,327
 INTANGIBLE ASSETS
  50




---



##### 



BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
 March 31, 2009AccumulatedTotal Cost
    
    
    Amortization
    
    
    Deferred Costs, netIn-place lease value
    
    $
    140,659
    
    
    $
    (72,211
    )
    
    $
    68,448Tenant relationship value
    
    
    103,077
    
    
    
    (43,747
    )
    
    
    59,330Above market leases acquired
    
    
    20,371
    
    
    
    (12,734
    )
    
    
    7,637Total
    
    $
    264,107
    
    
    $
    (128,692
    )
    
    $
    135,415Below market leases acquired
    
    $
    81,390
    
    
    $
    (36,596
    )
    
    $
    44,794
 December 31, 2008AccumulatedTotal Cost
    
    
    Amortization
    
    
    Deferred Costs, netIn-place lease value
    
    $
    145,518
    
    
    $
    (71,138
    )
    
    $
    74,380Tenant relationship value
    
    
    103,485
    
    
    
    (40,835
    )
    
    
    62,650Above market leases acquired
    
    
    23,351
    
    
    
    (14,624
    )
    
    
    8,727Total
    
    $
    272,354
    
    
    $
    (126,597
    )
    
    $
    145,757Below market leases acquired
    
    $
    82,950
    
    
    $
    (35,324
    )
    
    $
    47,626
  Assets
    
    
    Liabilities2009
    
    $
    26,631
    
    
    $
    7,3892010
    
    
    30,118
    
    
    
    8,3832011
    
    
    23,145
    
    
    
    7,0722012
    
    
    17,712
    
    
    
    6,3352013
    
    
    12,724
    
    
    
    5,895Thereafter
    
    
    25,085
    
    
    
    9,720Total
    
    $
    135,415
    
    
    $
    44,794
 DEBT OBLIGATIONS
  51




---



##### 



BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
 EffectiveMarch 31
    
    
    December 31,
    
    
    Interest
    
    
    MaturityProperty / Location
    
    2009
    
    
    2008
    
    
    Rate
    
    
    DateMORTGAGE DEBT:Two Logan Square
    
    $
    68,579
    
    
    $
    68,808
    
    
    
    5.78%
    (a)
    
    Jul-09200 Commerce Drive
    
    
    5,661
    
    
    
    5,684
    
    
    
    7.12%
    (a)
    
    Jan-10Plymouth Meeting Exec.
    
    
    42,605
    
    
    
    42,785
    
    
    
    7.00%
    (a)
    
    Dec-10Four Tower Bridge
    
    
    10,325
    
    
    
    10,404
    
    
    
    6.62%
    
    
    Feb-11Arboretum I, II, III & V
    
    
    21,509
    
    
    
    21,657
    
    
    
    7.59%
    
    
    Jul-11Midlantic Drive/Lenox Drive/DCC I
    
    
    59,403
    
    
    
    59,784
    
    
    
    8.05%
    
    
    Oct-11Research Office Center
    
    
    40,599
    
    
    
    40,791
    
    
    
    5.30%
    (a)
    
    Oct-11Concord Airport Plaza
    
    
    36,368
    
    
    
    36,617
    
    
    
    5.55%
    (a)
    
    Jan-12Six Tower Bridge
    
    
    13,886
    
    
    
    14,185
    
    
    
    7.79%
    
    
    Aug-12Newtown Square/Berwyn Park/Libertyview
    
    
    60,580
    
    
    
    60,910
    
    
    
    7.25%
    
    
    May-13Coppell Associates
    
    
    3,132
    
    
    
    3,273
    
    
    
    6.89%
    
    
    Dec-13Southpoint III
    
    
    3,715
    
    
    
    3,863
    
    
    
    7.75%
    
    
    Apr-14Tysons Corner
    
    
    99,153
    
    
    
    99,529
    
    
    
    5.36%
    (a)
    
    Aug-15Coppell Associates
    
    
    16,600
    
    
    
    16,600
    
    
    
    5.75%
    
    
    Feb-16Principal balance outstanding
    
    
    482,115
    
    
    
    484,890Plus: unamortized fixed-rate debt premiums, net
    
    
    2,205
    
    
    
    2,635Total mortgage indebtedness
    
    $
    484,320
    
    
    $
    487,525UNSECURED DEBT:$275.0M 4.500% Guaranteed Notes due 2009
    
    
    152,301
    
    
    
    196,680
    
    
    
    4.62%
    
    
    Nov-09Bank Term Loan
    
    
    183,000
    
    
    
    183,000
    
    
    Libor + 0.80%
    
    Oct-10
    (b)$300.0M 5.625% Guaranteed Notes due 2010
    
    
    251,222
    
    
    
    275,545
    
    
    
    5.61%
    
    
    Dec-10Credit Facility
    
    
    200,000
    
    
    
    153,000
    
    
    Libor + 0.725%
    
    Jun-11
    (b)$320.7M 3.875% Guaranteed Exchangeable Notes
due 2026
    
    
    275,530
    
    
    
    282,030
    
    
    
    5.50%
    
    
    Oct-11$300.0M 5.750% Guaranteed Notes due 2012
    
    
    300,000
    
    
    
    300,000
    
    
    
    5.77%
    
    
    Apr-12$250.0M 5.400% Guaranteed Notes due 2014
    
    
    250,000
    
    
    
    250,000
    
    
    
    5.53%
    
    
    Nov-14$250.0M 6.000% Guaranteed Notes due 2016
    
    
    250,000
    
    
    
    250,000
    
    
    
    5.95%
    
    
    Apr-16$300.0M 5.700% Guaranteed Notes due 2017
    
    
    300,000
    
    
    
    300,000
    
    
    
    5.75%
    
    
    May-17Indenture IA (Preferred Trust I)
    
    
    27,062
    
    
    
    27,062
    
    
    Libor + 1.25%
    
    Mar-35Indenture IB (Preferred Trust I)
    
    
    25,774
    
    
    
    25,774
    
    
    Libor + 1.25%
    
    Apr-35Indenture II (Preferred Trust II)
    
    
    25,774
    
    
    
    25,774
    
    
    Libor + 1.25%
    
    Jul-35Principal balance outstanding
    
    
    2,240,663
    
    
    
    2,268,865less: unamortized exchangeable debt discount
    
    
    (11,066
    )
    
    
    (12,176
    )Plus: unamortized fixed-rate debt discounts, net
    
    
    (2,581
    )
    
    
    (2,718
    )Total unsecured indebtedness
    
    $
    2,227,016
    
    
    $
    2,253,971Total Debt Obligations
    
    $
    2,711,336
    
    
    $
    2,741,496
 
 (a)
    
    Loans were assumed upon acquisition of the related property. Interest rates presented above
reflect the market rate at the time of acquisition.(b)
    
    These loans may be extended to June 29, 2012 at the Partnerships discretion.     52




---



##### 



BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
      2009
    
    $
    227,9842010
    
    
    491,0742011
    
    
    596,7592012
    
    
    351,0522013
    
    
    58,546Thereafter
    
    
    986,297Total principal payments
    
    
    2,711,712Net unamortized premiums/discounts
    
    
    (376
    )Outstanding indebtedness
    
    $
    2,711,336
 RISK MANAGEMENT AND USE OF FINANCIAL INSTRUMENTS
 Risk Management
   53




---



##### 



BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
     Use of Derivative Financial Instruments
  54




---



##### 



BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
       Hedge
    
    Hedge
    
    
    
    
    
    
    
    Notional Amount
    
    
    
    
    
    
    
    
    Trade
    
    
    Maturity
    
    
    Fair ValueProduct
    
    Type
    
    Designation
    
    
    
    
    3/31/2009
    
    
    12/31/2008
    
    
    
    
    Strike
    
    
    Date
    
    
    Date
    
    
    3/31/2009
    
    
    12/31/2008Swap
    
    Interest Rate
    
    Cash Flow
    
    (b
    )
    
    $
    84,700
    
    
    $
    78,000
    
    (a
    )
    
    
    4.709
    %
    
    
    9/20/07
    
    
    
    10/18/10
    
    
    $
    3,439
    
    
    $
    7,204Swap
    
    Interest Rate
    
    Cash Flow
    
    (b
    )
    
    
    25,000
    
    
    
    25,000
    
    
    
    
    
    4.415
    %
    
    
    10/19/07
    
    
    
    10/18/10
    
    
    
    739
    
    
    
    1,439Swap
    
    Interest Rate
    
    Cash Flow
    
    (b
    )
    
    
    25,000
    
    
    
    25,000
    
    
    
    
    
    3.747
    %
    
    
    11/26/07
    
    
    
    10/18/10
    
    
    
    563
    
    
    
    1,111Swap
    
    Interest Rate
    
    Cash Flow
    
    (b
    )
    
    
    25,000
    
    
    
    25,000
    
    
    
    
    
    3.338
    %
    
    
    9/23/07
    
    
    
    12/18/09
    
    
    
    381
    
    
    
    603Swap
    
    Interest Rate
    
    Cash Flow
    
    (b
    )
    
    
    25,774
    
    
    
    25,774
    
    
    
    
    
    2.975
    %
    
    
    10/16/08
    
    
    
    10/30/10
    
    
    
    300
    
    
    
    628Forward Starting Swap
    
    Interest Rate
    
    Cash Flow
    
    (c
    )
    
    
    25,000
    
    
    
    25,000
    
    
    
    
    
    4.770
    %
    
    
    1/4/08
    
    
    
    12/18/19
    
    
    
    1,549
    
    
    
    4,079Forward Starting Swap
    
    Interest Rate
    
    Cash Flow
    
    (c
    )
    
    
    25,000
    
    
    
    25,000
    
    
    
    
    
    4.423
    %
    
    
    3/19/08
    
    
    
    12/18/19
    
    
    
    1,208
    
    
    
    3,402$
    235,474
    
    
    $
    228,774
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    8,179
    
    
    $
    18,466
 
 (a)
    
    - Notional amount accreting up to $155,000 through October 8, 2010.(b)
    
    - Hedging unsecured variable rate debt.(c)
    
    - Future issuance of long-term debt with an expected forward starting date in December 2009. Concentration of Credit Risk
  55




---



##### 



BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
  DISCONTINUED OPERATIONS
  Three-month periodended March 31, 2009Revenue:Rents
    
    $
    206Tenant reimbursements
    
    
    16Other
    
    
    63Total revenue
    
    
    285Expenses:Property operating expenses
    
    
    91Real estate taxes
    
    
    17Depreciation and amortization
    
    
    57Total operating expenses
    
    
    165Interest income
    
    
    (1
    )Income from discontinued operations before gain on
sale of interests in real estate
    
    
    119Net gain on sale of interests in real estate
    
    
    194Income from discontinued operations attributable to
Brandywine Operating Partnership
    
    $
    313
  Three-month periodended March 31, 2008Revenue:Rents
    
    $
    14,355Tenant reimbursements
    
    
    577Termination fees
    
    
    25Other
    
    
    99Total revenue
    
    
    15,056Expenses:Property operating expenses
    
    
    4,661Real estate taxes
    
    
    1,400Depreciation and amortization
    
    
    4,636Total operating expenses
    
    
    10,697Interest income
    
    
    6Interest expense
    
    
    (1,352
    )Income from discontinued operations before gain on
sale of interests in real estate
    
    
    3,013Net gain on sale of interests in real estate
    
    
    7,981Income from discontinued operations attributable to Brandywine Operating Partnership
    
    $
    10,994
 56




---



##### 



BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
  NON-CONTROLLING INTEREST  PARTNERS SHARE OF CONSOLIDATED REAL ESTATE VENTURES
   PARTNERS EQUITY
 Earnings per Common Partnership Unit
  Three-month periods ended March 31,2009
    
    
    2008Basic
    
    
    Diluted
    
    
    Basic
    
    
    DilutedNumeratorIncome (loss) from continuing operations
    
    $
    (1,186
    )
    
    $
    (1,186
    )
    
    $
    2,603
    
    
    $
    2,603Net (loss) income attributable to non-controlling interests
    
    
    6
    
    
    
    6
    
    
    
    (40
    )
    
    
    (40
    )Amount allocable to unvested restricted shareholders
    
    
    (37
    )
    
    
    (37
    )
    
    
    (167
    )
    
    
    (167
    )Preferred share dividends
    
    
    (1,998
    )
    
    
    (1,998
    )
    
    
    (1,998
    )
    
    
    (1,998
    )Income (loss) from continuing operations available to common unitholders
    
    
    (3,215
    )
    
    
    (3,215
    )
    
    
    398
    
    
    
    398Discontinued operations attributable to common unitholders
    
    
    313
    
    
    
    313
    
    
    
    10,994
    
    
    
    10,994Net (loss) income available to common unitholders
    
    $
    (2,902
    )
    
    $
    (2,902
    )
    
    $
    11,392
    
    
    $
    11,392DenominatorWeighted-average shares outstanding
    
    
    91,027,005
    
    
    
    91,027,005
    
    
    
    90,895,006
    
    
    
    90,895,006Contingent securities/Stock based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,410Total weighted-average common partnership units outstanding
    
    
    91,027,005
    
    
    
    91,027,005
    
    
    
    90,895,006
    
    
    
    90,909,416Earnings per Common Partnership Unit:Income from continuing operations attributable to common unitholders
    
    $
    (0.03
    )
    
    $
    (0.03
    )
    
    $
    
    
    
    $
    Discontinued operations attributable to common unitholders
    
    
    
    
    
    
    
    
    
    
    0.13
    
    
    
    0.13Net (loss) income attributable to common unitholders
    
    $
    (0.03
    )
    
    $
    (0.03
    )
    
    $
    0.13
    
    
    $
    0.13
  57




---



##### 



BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
  Common Partnership Unit and Preferred Mirror Units
   Common Share Repurchases
    SHARE BASED AND DEFERRED COMPENSATION
 Stock Options
   Weighted
    
    
    Weighted AverageAverage
    
    
    Remaining Contractual
    
    
    Aggregate IntrinsicShares
    
    
    Exercise Price
    
    
    Term (in years)
    
    
    Value (in 000s)Outstanding at January 1, 2009
    
    
    1,754,648
    
    
    $
    20.41
    
    
    
    8.77
    
    
    $
    (30,093
    )Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited or expired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding at March 31, 2009
    
    
    1,754,648
    
    
    $
    20.41
    
    
    
    8.77
    
    
    $
    (30,093
    )Vested at March 31, 2009
    
    
    60,223
    
    
    $
    14.71
    
    
    
    1.58
    
    
    $
    (714,070
    )Exercisable at March 31, 2009
    
    
    60,223
    
    
    $
    14.71
    
    
    
    1.58
    
    
    $
    (714,070
    )
 58




---



##### 



BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
 Restricted Share Awards
   WeightedAverage GrantShares
    
    
    Date Fair valueNon-vested at January 1, 2009
    
    
    475,496
    
    
    $
    26.21Granted
    
    
    
    
    
    
    Vested
    
    
    (100,020
    )
    
    
    29.50Forfeited
    
    
    (1,734
    )
    
    
    21.09Non-vested at March 31, 2009
    
    
    373,742
    
    
    $
    19.36
 Outperformance Program
    Employee Share Purchase Plan
 59




---



##### 



BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
  Deferred Compensation
   Accounting for Deferred Compensation Arrangements Where Amounts Earned Are
Held in A Rabbi Trust and Invested,
 TAX CREDIT TRANSACTIONS
 Historic Tax Credit Transaction
  60




---



##### 



BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
    New Markets Tax Credit Transaction
      SEGMENT INFORMATION
  61




---



##### 



BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
   62




---



##### 



BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
  Metropolitan,
    
    
    New Jersey
    
    
    Richmond,Pennsylvania
    
    
    D.C.
    
    
    /Delaware
    
    
    Virginia
    
    
    California
    
    
    Austin, Texas
    
    
    Corporate
    
    
    TotalAs of March 31, 2009:Real estate investments, at cost:Operating properties
    
    $
    1,730,255
    
    
    $
    1,368,591
    
    
    $
    676,916
    
    
    $
    295,974
    
    
    $
    236,516
    
    
    $
    278,689
    
    
    $
    
    
    
    $
    4,586,941Construction-in-progress
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    138,310
    
    
    $
    138,310Land inventory
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    112,902
    
    
    $
    112,902As of December 31, 2008:Real estate investments, at cost:Operating properties
    
    $
    1,734,948
    
    
    $
    1,371,997
    
    
    $
    674,503
    
    
    $
    297,171
    
    
    $
    236,693
    
    
    $
    280,825
    
    
    $
    
    
    
    $
    4,596,137Construction-in-progress
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    122,219
    
    
    $
    122,219Land inventory
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    112,699
    
    
    $
    112,699For the three-months ended March 31, 2009:Total revenue
    
    $
    60,453
    
    
    $
    36,204
    
    
    $
    29,450
    
    
    $
    9,502
    
    
    $
    7,374
    
    
    $
    9,092
    
    
    $
    (207
    )
    
    $
    151,868Property operating expenses, real estate taxes and
third party management expenses
    
    
    23,551
    
    
    
    14,271
    
    
    
    14,118
    
    
    
    3,886
    
    
    
    3,334
    
    
    
    3,970
    
    
    
    (397
    )
    
    
    62,733Net operating income
    
    $
    36,902
    
    
    $
    21,933
    
    
    $
    15,332
    
    
    $
    5,616
    
    
    $
    4,040
    
    
    $
    5,122
    
    
    $
    190
    
    
    $
    89,135For the three-months ended March 31, 2008:Total revenue
    
    $
    63,642
    
    
    $
    34,963
    
    
    $
    28,591
    
    
    $
    9,227
    
    
    $
    7,329
    
    
    $
    9,064
    
    
    $
    (572
    )
    
    $
    152,244Property operating expenses, real estate taxes and
third party management expenses
    
    
    22,188
    
    
    
    12,614
    
    
    
    12,595
    
    
    
    3,026
    
    
    
    2,955
    
    
    
    4,138
    
    
    
    1,215
    
    
    
    58,731Net operating income
    
    $
    41,454
    
    
    $
    22,349
    
    
    $
    15,996
    
    
    $
    6,201
    
    
    $
    4,374
    
    
    $
    4,926
    
    
    $
    (1,787
    )
    
    $
    93,513
 63




---



##### 



BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
  Three-month periodsended March 31,2009
    
    
    2008(amounts in thousands)Consolidated net operating income
    
    $
    89,135
    
    
    $
    93,513Less:Interest expense
    
    
    (35,646
    )
    
    
    (37,043
    )Deferred financing costs
    
    
    (1,252
    )
    
    
    (1,508
    )Depreciation and amortization
    
    
    (52,569
    )
    
    
    (51,304
    )General & administrative expenses
    
    
    (4,958
    )
    
    
    (4,912
    )Provision for impairment of real estate
    
    
    (3,700
    )
    
    
    Plus:Interest income
    
    
    579
    
    
    
    203Equity in income of real estate ventures
    
    
    586
    
    
    
    1,115Net loss on sales of interests in undepreciated real estate
    
    
    
    
    
    
    (24
    )Gain on early extinguishment of debt
    
    
    6,639
    
    
    
    2,563Income (loss) from continuing operations
    
    
    (1,186
    )
    
    
    2,603Income from discontinued operations
    
    
    313
    
    
    
    10,994Net (loss) income
    
    $
    (873
    )
    
    $
    13,597
 COMMITMENTS AND CONTINGENCIES
 Legal Proceedings
  Environmental
  Ground Rent
  64




---



##### 



BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
 2009
    
    $
    1,4902010
    
    
    2,2362011
    
    
    2,3182012
    
    
    2,3182013
    
    
    2,318Thereafter
    
    
    290,274
  Other Commitments or Contingencies
     65




---



##### 



BRANDYWINE OPERATING PARTNERSHIP, L.P.
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 March 31, 2009
  SUBSEQUENT EVENTS
  
 66




---



##### 



Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations
  
    
    changes in general economic conditions;
    
    changes in local real estate conditions (including changes in rental rates and the
number of properties that compete with our properties);
    
    changes in the economic conditions affecting industries in which our principal
tenants compete;
    
    the unavailability of equity and debt financing, particularly in light of the
current economic environment;
    
    our failure to lease unoccupied space in accordance with our projections;
    
    our failure to re-lease occupied space upon expiration of leases;
    
    tenant defaults and the bankruptcy of major tenants;
    
    changes in prevailing interest rates;
    
    the impact of unrealized hedging transactions;
    
    failure of acquisitions to perform as expected;
    
    unanticipated costs associated with the acquisition, integration and operation of,
our acquisitions;
    
    unanticipated costs to complete, lease-up and operate our developments and
redevelopments;
    
    impairment charges;
    
    increased costs for, or lack of availability of, adequate insurance, including for
terrorist acts;
    
    risks associated with actual or threatened terrorist attacks;
    
    demand for tenant services beyond those traditionally provided by landlords;
    
    potential liability under environmental or other laws;
    
    failure or bankruptcy of real estate venture partners;
    
    inability of real estate venture partners to fund venture obligations;
    
    failure of dispositions to close in a timely manner;
    
    failure of buyers to comport with terms of their financing agreements to us;
    
    earthquakes and other natural disasters;
    
    risks associated with federal, state and local tax audits;
    
    complex regulations relating to our status as a REIT and the adverse consequences of
our failure to qualify as a REIT; and
    
    the impact of newly adopted accounting principles on our accounting policies and on
period-to-period comparisons of financial results.
   67




---



##### 



68




---



##### 



Tenant Rollover Risk
  Tenant Credit Risk
   Development Risk
 th
        69




---



##### 



70




---



##### 



Comparison of the Three-Month Periods Ended March 31, 2009 and 2008
   71




---



##### 



Recently Completed
    
    
    Development/Redevelopment
    
    
    OtherSame Store Property Portfolio
    
    
    Properties
    
    
    Properties (a)
    
    
    (Eliminations)
    
    
    Total PortfolioIncrease/
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Increase/(dollars in thousands)
    
    2009
    
    
    2008
    
    
    (Decrease)
    
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    (Decrease)Revenue:Cash rents
    
    $
    116,313
    
    
    $
    113,049
    
    
    $
    3,264
    
    
    $
    649
    
    
    $
    58
    
    
    $
    3,370
    
    
    $
    2,845
    
    
    $
    (375
    )
    
    $
    (702
    )
    
    $
    119,957
    
    
    $
    115,250
    
    
    $
    4,707Straight-line rents
    
    
    1,637
    
    
    
    5,982
    
    
    
    (4,345
    )
    
    
    94
    
    
    
    
    
    
    
    176
    
    
    
    413
    
    
    
    
    
    
    
    
    
    
    
    1,907
    
    
    
    6,395
    
    
    
    (4,488
    )Rents  FAS 141R
    
    
    1,681
    
    
    
    1,437
    
    
    
    244
    
    
    
    
    
    
    
    
    
    
    
    59
    
    
    
    429
    
    
    
    
    
    
    
    
    
    
    
    1,740
    
    
    
    1,866
    
    
    
    (126
    )Total rents
    
    
    119,631
    
    
    
    120,468
    
    
    
    (837
    )
    
    
    743
    
    
    
    58
    
    
    
    3,605
    
    
    
    3,687
    
    
    
    (375
    )
    
    
    (702
    )
    
    
    123,604
    
    
    
    123,511
    
    
    
    93Tenant reimbursements
    
    
    21,294
    
    
    
    17,884
    
    
    
    3,410
    
    
    
    193
    
    
    
    (7
    )
    
    
    909
    
    
    
    1,071
    
    
    
    68
    
    
    
    91
    
    
    
    22,464
    
    
    
    19,039
    
    
    
    3,425Termination fees
    
    
    113
    
    
    
    3,232
    
    
    
    (3,119
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    113
    
    
    
    3,232
    
    
    
    (3,119
    )Third party management fees, labor reimbursement and leasing
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,764
    
    
    
    5,679
    
    
    
    4,764
    
    
    
    5,679
    
    
    
    (915
    )Other, excluding termination fees
    
    
    351
    
    
    
    530
    
    
    
    (179
    )
    
    
    1
    
    
    
    
    
    
    
    103
    
    
    
    3
    
    
    
    468
    
    
    
    250
    
    
    
    923
    
    
    
    783
    
    
    
    140Total revenue
    
    
    141,389
    
    
    
    142,114
    
    
    
    (725
    )
    
    
    937
    
    
    
    51
    
    
    
    4,617
    
    
    
    4,761
    
    
    
    4,925
    
    
    
    5,318
    
    
    
    151,868
    
    
    
    152,244
    
    
    
    (376
    )Property operating expenses
    
    
    41,843
    
    
    
    39,221
    
    
    
    (2,622
    )
    
    
    732
    
    
    
    (408
    )
    
    
    2,099
    
    
    
    2,191
    
    
    
    481
    
    
    
    (84
    )
    
    
    45,155
    
    
    
    40,920
    
    
    
    (4,235
    )Real estate taxes
    
    
    14,290
    
    
    
    14,593
    
    
    
    303
    
    
    
    526
    
    
    
    414
    
    
    
    460
    
    
    
    449
    
    
    
    187
    
    
    
    109
    
    
    
    15,463
    
    
    
    15,565
    
    
    
    102Third party management expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,115
    
    
    
    2,246
    
    
    
    2,115
    
    
    
    2,246
    
    
    
    131Subtotal
    
    
    85,256
    
    
    
    88,300
    
    
    
    (3,044
    )
    
    
    (321
    )
    
    
    45
    
    
    
    2,058
    
    
    
    2,121
    
    
    
    2,142
    
    
    
    3,047
    
    
    
    89,135
    
    
    
    93,513
    
    
    
    (4,378
    )General & administrative expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,958
    
    
    
    4,912
    
    
    
    4,958
    
    
    
    4,912
    
    
    
    (46
    )Depreciation and amortization
    
    
    48,335
    
    
    
    48,802
    
    
    
    467
    
    
    
    1,045
    
    
    
    19
    
    
    
    2,106
    
    
    
    1,592
    
    
    
    1,083
    
    
    
    891
    
    
    
    52,569
    
    
    
    51,304
    
    
    
    (1,265
    )Operating Income (loss)
    
    $
    36,921
    
    
    $
    39,498
    
    
    $
    (2,577
    )
    
    $
    (1,366
    )
    
    $
    26
    
    
    $
    (48
    )
    
    $
    529
    
    
    $
    (3,899
    )
    
    $
    (2,756
    )
    
    $
    31,608
    
    
    $
    37,297
    
    
    $
    (5,689
    )Number of properties
    
    
    233
    
    
    
    233
    
    
    
    
    
    
    
    4
    
    
    
    4
    
    
    
    8
    
    
    
    8
    
    
    
    
    
    
    
    
    
    
    
    245
    
    
    
    245Square feet
    
    
    23,172
    
    
    
    23,172
    
    
    
    
    
    
    
    669
    
    
    
    669
    
    
    
    2,337
    
    
    
    2,337
    
    
    
    
    
    
    
    
    
    
    
    26,178
    
    
    
    26,178Other Income (Expense):Interest income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    579
    
    
    
    203
    
    
    
    376Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (35,646
    )
    
    
    (37,043
    )
    
    
    1,397Interest expense  Deferred financing costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,252
    )
    
    
    (1,508
    )
    
    
    256Equity in income of real estate ventures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    586
    
    
    
    1,115
    
    
    
    (529
    )Net loss on disposition of undepreciated assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (24
    )
    
    
    24Provision for impairment of real estate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,700
    )
    
    
    
    
    
    
    (3,700
    )Gain on early extinguishment of debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,639
    
    
    
    2,563
    
    
    
    4,076Income (loss) from continuing operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,186
    )
    
    
    2,603
    
    
    
    (3,789
    )Income from discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    313
    
    
    
    10,994
    
    
    
    (10,681
    )Net (loss) income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (873
    )
    
    $
    13,597
    
    
    $
    (14,470
    )Earnings per common share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    ($0.03
    )
    
    $
    0.13
    
    
    $
    (0.16
    )
 
 EXPLANATORY NOTES(a)
    -
    Results include: two developments and six redevelopment properties. 72




---



##### 



Total Revenue
  1)
    
    An additional $3.3 million at the Same Store Portfolio from free rent periods
converting to cash rent subsequent to the first quarter of 2008. This free rent
conversion is the primary reason for the decrease in Total Portfolio straight-line
rental income.2)
    
    An additional $0.6 million from four properties that we completed and placed in
service subsequent to the first quarter of 2008.
   Property Operating Expenses
  Depreciation and Amortization Expense
  Provision for Impairment on Real Estate
   Interest Income/ Expense
   Gain on early extinguishment of debt
  73




---



##### 



Discontinued Operations
   Net (Loss) Income
  Earnings (loss) per Common Share
  74




---



##### 



General
  
    
    fund normal recurring expenses,
    
    fund capital expenditures, including capital and tenant improvements and leasing costs,
    
    fund repayment of certain debt instruments when they mature,
    
    fund current development and redevelopment costs, and
    
    fund distributions declared by our Board of Trustees.
     75




---



##### 



Cash Flows
   Activity
    
    2009
    
    
    2008Operating
    
    $
    62,767
    
    
    $
    72,689Investing
    
    
    (10,001
    )
    
    
    (16,748
    )Financing
    
    
    (52,607
    )
    
    
    (57,689
    )Net cash flows
    
    $
    159
    
    
    $
    (1,748
    )
    Capitalization
 Indebtedness
  76




---



##### 



March 31,
    
    
    December31,2009
    
    
    2008(dollars in thousands)Balance:Fixed rate (includes
variable swapped to
fixed)
    
    $
    2,435,200
    
    
    $
    2,505,659Variable rate  unhedged
    
    
    276,136
    
    
    
    235,836Total
    
    $
    2,711,336
    
    
    $
    2,741,495Percent of Total Debt:Fixed rate (includes
variable swapped to
fixed)
    
    
    89.8
    %
    
    
    91.4
    %Variable rate  unhedged
    
    
    10.2
    %
    
    
    8.6
    %Total
    
    
    100
    %
    
    
    100
    %Weighted-average interest rate at period end:Fixed rate (includes
variable swapped to
fixed)
    
    
    5.4
    %
    
    
    5.6
    %Variable rate  unhedged
    
    
    1.8
    %
    
    
    2.1
    %Total
    
    
    5.1
    %
    
    
    5.1
    %
     77




---



##### 



Equity
    Shelf Registration Statement
  Short- and Long-Term Liquidity
    Inflation
 78




---



##### 



Commitments and Contingencies
  Payments by Period (in thousands)Less than
    
    
    
    
    
    
    
    
    
    
    More thanTotal
    
    
    1 Year
    
    
    1-3 Years
    
    
    3-5 Years
    
    
    5 YearsMortgage notes payable (a)
    
    $
    482,115
    
    
    $
    75,682
    
    
    $
    240,200
    
    
    $
    60,954
    
    
    $
    105,279Revolving credit facility
    
    
    200,000
    
    
    
    
    
    
    
    200,000
    
    
    
    
    
    
    
    Unsecured term loan
    
    
    183,000
    
    
    
    
    
    
    
    183,000
    
    
    
    
    
    
    
    Unsecured debt (a)
    
    
    1,846,597
    
    
    
    152,301
    
    
    
    815,686
    
    
    
    250,000
    
    
    
    628,610Ground leases (b)
    
    
    300,954
    
    
    
    1,986
    
    
    
    4,554
    
    
    
    4,637
    
    
    
    289,777Interest expense
    
    
    697,775
    
    
    
    130,591
    
    
    
    221,876
    
    
    
    179,943
    
    
    
    165,365Development contracts (c)
    
    
    128,764
    
    
    
    94,219
    
    
    
    34,545
    
    
    
    
    
    
    
    Other liabilities
    
    
    4,946
    
    
    
    153
    
    
    
    
    
    
    
    
    
    
    
    4,793$
    3,844,151
    
    
    $
    454,932
    
    
    $
    1,699,861
    
    
    $
    495,534
    
    
    $
    1,193,824
 
 (a)
    
    Amounts do not include unamortized discounts and/or premiums.(b)
    
    Future minimum rental payments under the terms of all non-cancelable ground leases under
which we are
the lessee are expensed on a straight-line basis regardless of when payments are due.
Certain of the land leases provide for prepayment of rent on a present value basis using a fixed
discount rate. Further, certain of the land lease for properties (currently under development)
provide for contingent rent participation by the lessor in
certain capital transactions and net operating cash flows of the property after certain returns
are achieved by us.
Such amounts, if any will be reflected as contingent rent when incurred. The leases also provide
for payment
by us of certain operating costs relating to the land, primarely real estate taxes. The above
schedule of future
minimum rental payments does not include any contingent rent amounts nor any reimbursed expenses.(c)
    
    Represents contractual obligations for certain development projects and does not
contemplate all costs expected to be incurred for such developments    79




---



##### 



Interest Rate Risk and Sensitivity Analysis
       80




---



##### 



Item 3. Quantitative and Qualitative Disclosures about Market Risk
   
 Item 4. Controls and Procedures
 (a)
    
    Evaluation of disclosure controls and procedures.Under the supervision and with the
participation of our management, including our principal executive officer and principal
financial officer, we conducted an evaluation of our disclosure controls and procedures, as
such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of
1934, as amended (the Exchange Act) as of the end of the period covered by this quarterly
report and have concluded that the Companys disclosure controls and procedures are
effective.(b)
    
    Changes in internal controls over financial reporting.There was no change in the
Companys internal control over financial reporting that occurred during the period covered
by this quarterly report that has materially affected, or is reasonably likely to
materially affect, the Companys internal control over financial reporting.
 
 Part II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  81




---



##### 



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  TotalNumber of
    
    
    MaximumShares
    
    
    Number ofTotal
    
    
    
    
    
    
    Purchased as
    
    
    Shares that MayNumber of
    
    
    Average
    
    
    Part of Publicly
    
    
    Yet Be PurchasedShares
    
    
    Price Paid Per
    
    
    Announced Plans
    
    
    Under the PlansPurchased
    
    
    Share
    
    
    or Programs
    
    
    or Programs (a)2009:January
    
    
    25,755
    (b)
    
    $
    6.96
    
    
    
    
    
    
    
    539,200February
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    539,200March
    
    
    5,008
    (b)
    
    $
    2.52
    
    
    
    
    
    
    
    539,200Total
    
    
    30,763
    
    
    
    
    
    
    
    
 
 (a)
    
    On May 2, 2006, our Board of Trustees authorized an increase in the number of common shares that we may repurchase,
whether in open-market or privately negotiated transactions. The Board authorized us to purchase up to an aggregate of 3,500,000
common shares (inclusive of the remaining share repurchase availability under the Boards prior authorization from September 2001).
There is no expiration date on the share repurchase program.(b)
    
    Represents Common Shares cancelled by the Company upon vesting of restricted Common Shares previously awarded to Company
employees in satisfaction of tax withholding. 
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  
 Item 6. Exhibits
 (a) Exhibits
 10.1
    
    Form of Restricted Share Award (incorporated by reference to Brandywines Current
Report on Form 8-K filed on April 7, 2009)**10.2
    
    Form of Performance Unit Award Agreement (incorporated by reference to
Brandywines Current Report on Form 8-K filed on April 7, 2009)**10.3
    
    Form of Incentive Share Option Agreement (incorporated by reference to
Brandywines Current Report on Form 8-K filed on April 7, 2009)**10.4
    
    Form of Non-Qualified Share Option Agreement (incorporated by reference to
Brandywines Current Report on Form 8-K filed on April 7, 2009)**10.5
    
    2009  2011 Performance Unit Award Program (incorporated by reference to
Brandywines Current Report on Form 8-K filed on April 7, 2009)**31.1
    
    Certification of the Chief Executive Officer of Brandywine Realty Trust pursuant
to 13a-14 under the Securities Exchange Act of 193431.2
    
    Certification of the Chief Financial Officer of Brandywine Realty Trust pursuant
to 13a-14 under the Securities Exchange Act of 193431.3
    
    Certification of the Chief Executive Officer of Brandywine Realty Trust, in its
capacity as the general partner of Brandywine Operating Partnership, L.P., pursuant to
13a-14 under the Securities Exchange Act of 193431.4
    
    Certification of the Chief Financial Officer of Brandywine Realty Trust, in its
capacity as the general partner of Brandywine Operating Partnership, L.P., pursuant to
13a-14 under the Securities Exchange Act of 193432.1
    
    Certification of the Chief Executive Officer of Brandywine Realty Trust pursuant
to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 200232.2
    
    Certification of the Chief Financial Officer of Brandywine Realty Trust pursuant
to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002
 82




---



##### 



32.3
    
    Certification of the Chief Executive Officer of Brandywine Realty Trust, in its
capacity as the general partner of Brandywine Operating Partnership, L.P., pursuant to
18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
200232.4
    
    Certification of the Chief Financial Officer of Brandywine Realty Trust, in its
capacity as the general partner of Brandywine Operating Partnership, L.P., pursuant to
18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002
 
 **
    
    Management contract or compensatory plan or arrangement 83




---



##### 



SIGNATURES OF REGISTRANT
  BRANDYWINE REALTY TRUST
               
           (Registrant)Date: May 8, 2009
    
    By:
    
    /s/ Gerard H. SweeneyGerard H. Sweeney, President and Chief Executive Officer(Principal Executive Officer)Date: May 8, 2009
    
    By:
    
    /s/ Howard M. SipznerHoward M. Sipzner, Executive Vice President and Chief Financial Officer(Principal Financial Officer)Date: May 8, 2009
    
    By:
    
    /s/ Gabriel J. MainardiGabriel J. Mainardi, Vice President, Accounting & Treasurer(Principal Accounting Officer)
 84




---



##### 



SIGNATURES OF REGISTRANT
  BRANDYWINE OPERATING PARTNERSHIP, L.P. (Registrant)BRANDYWINE REALTY TRUST, as general partnerDate: May 8, 2009
    
    By:
    
    /s/ Gerard H. SweeneyGerard H. Sweeney, President and Chief Executive Officer(Principal Executive Officer)Date: May 8, 2009
    
    By:
    
    /s/ Howard M. SipznerHoward M. Sipzner, Executive Vice President and Chief Financial Officer(Principal Financial Officer)Date: May 8, 2009
    
    By:
    
    /s/ Gabriel J. MainardiGabriel J. Mainardi, Vice President, Accounting & Treasurer(Principal Accounting Officer)
 85