Brandywine Realty Trust Announces Third Quarter 2022 Results

PHILADELPHIA, Oct. 20, 2022 (GLOBE NEWSWIRE) -- Brandywine Realty Trust (NYSE:BDN) today reported its financial and operating results for the three and nine-month periods ended September 30, 2022.

Management Comments

“During the third quarter, we made excellent progress on our 2022 business plan highlighted by achieving 100% of our speculative revenue target based on the midpoint of our guidance,” stated Gerard H. Sweeney, President and Chief Executive Officer for Brandywine Realty Trust. “We continued to experience positive mark-to-market rent increases of 16.5% and 6.9% on an accrual and cash basis.  Our portfolio experienced over 176,000 square feet of net absorption which we believe is the result of tenants currently preferring higher quality, well amenitized buildings and our average annual lease rollover through 2024 is currently 6.5%. We are excited to announce a new 100% leased build-to-suit development project in Radnor, Pa.  The project totals 145,000 square feet, will be leased to Arkema S.A., a global supplier of specialty materials and is scheduled for completion in the fourth quarter 2024. Based on the progress made on our 2022 business plan, we are maintaining our 2022 FFO range of $1.36 to $1.40 per share.”

Third Quarter Highlights

Financial Results

• Net income available to common shareholders; $13.3 million, or $0.08 per diluted share. Those results include a $8.7 million or $0.05 per share gain related to our joint venture land contribution in Austin, Texas.
• Funds from Operations (FFO); $61.8 million, or $0.36 per diluted share.

Portfolio Results

• Core Portfolio: 90.8% occupied and 91.8% leased.
• New and Renewal Leases Signed: 513,000 square feet.
• Tenant Retention Ratio: 90%.
• Rental Rate Mark-to-Market Increase: 16.5% on an accrual basis and 6.9% on a cash basis.
• Same Store Results: Increased 2.4% on an accrual basis and 2.1% on a cash basis.
  

Recent Transaction Activity

Joint Venture and Development Activity

• On October 12, 2022, we announced plans to commence the development of a fully leased 145,000 square foot build-to-suit office building located in Radnor, Pennsylvania. The building will be the North American Headquarters for Arkema S.A., a global supplier of specialty materials. Construction is scheduled to commence during the fourth quarter 2022 and completion during the fourth quarter 2024. We plan to fund the development through a combination of a construction loan, our line of credit and cash on hand.
• As previously announced, we formed a joint venture with a global institutional investor to commence development of 3151 Market Street in Philadelphia, Pennsylvania. The project cost is approximately $308 million, and the joint venture partner has agreed, subject to customary funding conditions, to fund up to approximately $55 million of the project costs in exchange for a 45% preferred equity interest in the venture. We anticipate securing a construction loan totaling approximately $185 million, representing 60% of total project costs.

Finance Activity

• On July 29, 2022, we closed on One Uptown construction loans totaling $206.7 million. Subsequent to the closing of the construction loans, we recognized gain totaling $8.7 million for the contribution of 4.7 acres of land during the third quarter of 2022.
• We had $246.0 million outstanding on our $600.0 million unsecured revolving credit facility as of September 30, 2022.
• We had $31.2 million of cash and cash equivalents on-hand as of September 30, 2022.
  

Results for the Three and Nine-Month Periods Ended September 30, 2022

Net income allocated to common shares totaled $13.3 million or $0.08 per diluted share in the third quarter of 2022 compared to a net income of $0.9 million or $0.01 per diluted share in the third quarter of 2021.

FFO available to common shares and units in the third quarter of 2022 totaled $61.8 million or $0.36 per diluted share versus $61.1 million or $0.35 per diluted share in the third quarter of 2021. Our third quarter 2022 payout ratio ($0.19 common share distribution / $0.36 FFO per diluted share) was 52.8%.

Net income allocated to common shares totaled $23.8 million or $0.14 per diluted share for the first nine months of 2022 compared to net income of $7.4 million or $0.04 per diluted share in the first nine months of 2021.  

Our FFO available to common shares and units for the first nine months of 2022 totaled $182.5 million, or $1.06 per diluted share compared to FFO available to common shares and units of $177.2 million, or $1.02 per diluted share, for the first nine months of 2021.   Our first nine months 2022 FFO payout ratio ($0.57 common share distribution / $1.06 FFO per diluted share) was 53.8%.

Operating and Leasing Activity

In the third quarter of 2022, our Net Operating Income (NOI), excluding termination revenues, bad debt expense and other income items, increased 2.4% on an accrual basis and 2.1% on a cash basis for our 71 same store properties, which were 90.7% and 90.2% occupied on September 30, 2022 and 2021, respectively.

We leased approximately 513,000 square feet and commenced occupancy on 612,000 square feet during the third quarter of 2022. The third quarter occupancy activity includes 241,000 square feet of renewals, 219,000 square feet of new leases and 152,000 square feet of tenant expansions. We have an additional 122,000 square feet of executed new leasing scheduled to commence subsequent to September 30, 2022.

We achieved a 90% tenant retention ratio in our core portfolio with net absorption of 176,000 square feet during the third quarter of 2022. Third quarter rental rate growth increased 16.5% as our renewal rental rates increased 7.2% and our new lease/expansion rental rates increased 26.3%, all on an accrual basis.

At September 30, 2022 our core portfolio of 72 properties comprising 12.8 million square feet was 90.8% occupied and we are 91.8% leased (reflecting new leases commencing after September 30, 2022) as of October 14, 2022.

Distributions

On September 13, 2022, our Board of Trustees declared a quarterly dividend distribution of $0.19 per common share that was paid on October 20, 2022 to shareholders of record as of October 6, 2022.

2022 Earnings and FFO Guidance

Based on current plans and assumptions and subject to the risks and uncertainties more fully described in our Securities and Exchange Commission filings, we are continuing our 2022 earnings per share guidance of $0.13 - $0.17 per diluted share and our 2022 FFO guidance of $1.36 - $1.40 per diluted share. This guidance is provided for informational purposes and is subject to change. The following is a reconciliation of the calculation of 2022 FFO guidance and earnings per diluted share guidance:

Guidance for 2022		Range
Earnings per diluted share allocated to common shareholders		$0.13	to	$0.17
Plus: real estate depreciation, amortization		1.28		1.28
Less: net gains on disposition of real estate		(0.05)		(0.05)
FFO per diluted share		$1.36	to	$1.40

Our 2022 FFO key assumptions include:

• Speculative Revenue Target: $34.0 - $36.0 million, as of October 14, 2022, $35.0 million achieved from a leasing plan of 1.8 million square feet, 1.7 million square feet achieved;
• Year-end Core Occupancy Range: 91-93%;
• Year-end Core Leased Range: 92-94%;
• Tenant Retention Rate Range: 58-60%;
• Rental Rate Growth (accrual): 16-18%;
• Rental Rate Growth (cash): 8-10%;
• Same Store (accrual) NOI Range: 0-2%;
• Same Store (cash) NOI Range: 0-2%;
  • Timing of occupancy and free rent on 200,000 square feet in Philadelphia CBD would equate to an increase in our range by approximately 3.0%;
• Acquisition Activity: None;
• Sales Activity: None, however we classified one asset as held-for-sale and another potential sale has a firm buyer commitment; both sales are subject to closing conditions.
• Joint Venture Activity: Acquired a 20% common equity interest in 2970 Market Street, Philadelphia, PA and closed our 50% joint venture representing a 4.7 acre development project at One Uptown in Austin, Texas.
• Development/Redevelopment Starts: Three starts. We have commenced 2340 Dulles Corner, 3151 Market Street, and 155 King of Prussia Rd (Radnor, PA).
• Financing Activity: Completed the refinance of our $600 million unsecured line of credit and our $250 million unsecured term loan;
• Share Buyback Activity: Our current projections do not include any share buyback activity.
• Annual earnings and FFO per diluted share based on 173.0 million fully diluted weighted average common shares.

About Brandywine Realty Trust

Brandywine Realty Trust (NYSE: BDN) is one of the largest, publicly traded, full-service, integrated real estate companies in the United States with a core focus in the Philadelphia, Austin and Washington, D.C. markets. Organized as a real estate investment trust (REIT), we own, develop, lease and manage an urban, town center and transit-oriented portfolio comprising 164 properties and 23.0 million square feet as of September 30, 2022. which excludes assets held for sale. Our purpose is to shape, connect and inspire the world around us through our expertise, the relationships we foster, the communities in which we live and work, and the history we build together. For more information, please visit www.brandywinerealty.com.

Conference Call and Audio Webcast

We will release our third quarter earnings after the market close on Thursday, October 20, 2022, and will hold our third quarter conference call on Friday, October 21, 2022 at 9:00 a.m. Eastern. To access the conference call by phone, please visit this link here, and you will be provided with dial in details. A live webcast of the conference call will also be available on the Investor Relations page of our website at www.brandywinerealty.com.

Looking Ahead – Fourth Quarter 2022 Conference Call

We anticipate we will release our fourth quarter 2022 earnings on Wednesday, February 1, 2023, after the market close and will host our fourth quarter 2022 conference call on Thursday, February 2, 2023 at 9:00 a.m. Eastern Time. We expect to issue a press release in advance of these events to reconfirm the dates and times and provide all related information.

Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “will,” “strategy,” “expects,” “seeks,” “believes,” “potential,” or other similar words. Because such statements involve known and unknown risks, uncertainties and contingencies, actual results may differ materially from the expectations, intentions, beliefs, plans or predictions of the future expressed or implied by such forward-looking statements. These forward-looking statements, including our 2022 guidance, are based upon the current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and not within our control. Such risks, uncertainties and contingencies include, among others: risks related to the impact of COVID-19 and other potential future outbreaks of infectious diseases on our financial condition, results of operations and cash flows and those of our tenants as well as on the economy and real estate and financial markets; reduced demand for office space and pricing pressures, including from competitors, that could limit our ability to lease space or set rents at expected levels or that could lead to declines in rent; uncertainty and volatility in capital and credit markets, including changes that reduce availability, and increase costs, of capital or that delay receipt of our planned debt financings and refinancings; the effect of inflation and interest rate fluctuations, including on the costs of our planned debt financings and refinancings; the potential loss or bankruptcy of tenants or the inability of tenants to meet their rent and other lease obligations; risks of acquisitions and dispositions, including unexpected liabilities and integration costs; delays in completing, and cost overruns incurred in connection with, our developments and redevelopments; disagreements with joint venture partners; unanticipated operating and capital costs; uninsured casualty losses and our ability to obtain adequate insurance, including coverage for terrorist acts; asset impairments; our dependence upon certain geographic markets; changes in governmental regulations, tax laws and rates and similar matters; unexpected costs of REIT qualification compliance; and costs and disruptions as the result of a cybersecurity incident or other technology disruption. The declaration and payment of future dividends (both timing and amount) is subject to the determination of our Board of Trustees, in its sole discretion, after considering various factors, including our financial condition, historical and forecast operating results, and available cash flow, as well as any applicable laws and contractual covenants and any other relevant factors. Our Board’s practice regarding declaration of dividends may be modified at any time and from time to time. Additional information on factors which could impact us and the forward-looking statements contained herein are included in our filings with the Securities and Exchange Commission, including our Form 10-K for the year ended December 31, 2021. We assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events except as required by law.

Non-GAAP Supplemental Financial Measures

We compute our financial results in accordance with generally accepted accounting principles (GAAP). Although FFO and NOI are non-GAAP financial measures, we believe that FFO and NOI calculations are helpful to shareholders and potential investors and are widely recognized measures of real estate investment trust performance. At the end of this press release, we have provided a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measure.

Funds from Operations (FFO)

We compute FFO in accordance with standards established by the National Association of Real Estate Investment Trusts (NAREIT), which may not be comparable to FFO reported by other REITs that do not compute FFO in accordance with the NAREIT definition, or that interpret the NAREIT definition differently than us. NAREIT defines FFO as net income (loss) before non-controlling interests and excluding gains (losses) on sales of depreciable operating property, impairment losses on depreciable consolidated real estate, impairment losses on investments in unconsolidated real estate ventures and extraordinary items (computed in accordance with GAAP); plus real estate related depreciation and amortization (excluding amortization of deferred financing costs), and after similar adjustments for unconsolidated joint ventures. Our calculation of FFO includes gains from sale of undepreciated real estate and other assets, considered incidental to our main business, to third parties or unconsolidated real estate ventures.   Net income, the GAAP measure that we believe to be most directly comparable to FFO, includes depreciation and amortization expenses, gains or losses on property sales, extraordinary items and non-controlling interests. To facilitate a clear understanding of our historical operating results, FFO should be examined in conjunction with net income (determined in accordance with GAAP) as presented in the financial statements included elsewhere in this release. FFO does not represent cash flow from operating activities (determined in accordance with GAAP) and should not be considered to be an alternative to net income (loss) (determined in accordance with GAAP) as an indication of our financial performance or to be an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of our liquidity, nor is it indicative of funds available for our cash needs, including our ability to make cash distributions to shareholders. We generally consider FFO and FFO per share to be useful measures for understanding and comparing our operating results because, by excluding gains and losses related to sales of previously depreciated operating real estate assets, impairment losses and real estate asset depreciation and amortization (which can differ across owners of similar assets in similar condition based on historical cost accounting and useful life estimates), FFO and FFO per share can help investors compare the operating performance of a company’s real estate across reporting periods and to the operating performance of other companies.

Net Operating Income (NOI)

NOI (accrual basis) is a financial measure equal to net income available to common shareholders, the most directly comparable GAAP financial measure, plus corporate general and administrative expense, depreciation and amortization, interest expense, non-controlling interest in the Operating Partnership and losses from early extinguishment of debt, less interest income, development and management income, gains from property dispositions, gains on sale from discontinued operations, gains on early extinguishment of debt, income from discontinued operations, income from unconsolidated joint ventures and non-controlling interest in property partnerships. In some cases we also present NOI on a cash basis, which is NOI after eliminating the effects of straight-lining of rent and deferred market intangible amortization. NOI presented by us may not be comparable to NOI reported by other REITs that define NOI differently. NOI should not be considered an alternative to net income as an indication of our performance or to cash flows as a measure of the Company's liquidity or its ability to make distributions. We believe NOI is a useful measure for evaluating the operating performance of our properties, as it excludes certain components from net income available to common shareholders in order to provide results that are more closely related to a property's results of operations. We use NOI internally to evaluate the performance of our operating segments and to make decisions about resource allocations. We concluded that NOI provides useful information to investors regarding our financial condition and results of operations, as it reflects only the income and expense items incurred at the property level, as well as the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and development activity on an unlevered basis.

Same Store Properties

In our analysis of NOI, particularly to make comparisons of NOI between periods meaningful, it is important to provide information for properties that were in-service and owned by us throughout each period presented. We refer to properties acquired or placed in-service prior to the beginning of the earliest period presented and owned by us through the end of the latest period presented as Same Store Properties. Same Store Properties therefore exclude properties placed in-service, acquired, repositioned, held for sale or in development or redevelopment after the beginning of the earliest period presented or disposed of prior to the end of the latest period presented. Accordingly, it takes at least one year and one quarter after a property is acquired for that property to be included in Same Store Properties.

Core Portfolio

Our core portfolio is comprised of our wholly-owned properties, excluding any properties currently in development, re-development or re-entitlement.

Company / Investor Contact:
Tom Wirth
EVP & CFO
610-832-7434
tom.wirth@bdnreit.com

BRANDYWINE REALTY TRUST
CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except share and per share data)

		September 30, 2022				December 31, 2021
ASSETS
Real estate investments:
Operating properties		$	3,587,083			$	3,472,602
Accumulated depreciation			(1,034,681	)			(957,450	)
Right of use asset - operating leases, net			19,826				20,313
Operating real estate investments, net			2,572,228				2,535,465
Construction-in-progress			227,231				277,237
Land held for development			74,272				114,604
Prepaid leasehold interests in land held for development, net			35,576				27,762
Total real estate investments, net			2,909,307				2,955,068
Assets held for sale, net			19,534				562
Cash and cash equivalents			31,198				27,463
Accounts receivable			11,398				11,875
Accrued rent receivable, net of allowance of $4,048 and $4,133 as of September 30, 2022 and December 31, 2021, respectively			175,908				167,210
Investment in unconsolidated real estate ventures			579,457				435,506
Deferred costs, net			95,470				86,862
Intangible assets, net			20,383				28,556
Other assets			131,532				133,094
Total assets		$	3,974,187			$	3,846,196
LIABILITIES AND BENEFICIARIES' EQUITY
Unsecured credit facility		$	246,000			$	23,000
Unsecured term loan, net			248,144				249,608
Unsecured senior notes, net			1,580,579				1,580,978
Accounts payable and accrued expenses			125,889				150,151
Distributions payable			32,805				32,765
Deferred income, gains and rent			22,913				23,849
Intangible liabilities, net			10,723				12,981
Liabilities related to assets held for sale, net			36				—
Lease liability - operating leases			23,116				22,962
Other liabilities			49,033				48,683
Total liabilities		$	2,339,238			$	2,144,977
Brandywine Realty Trust's Equity:
Common Shares of Brandywine Realty Trust's beneficial interest, $0.01 par value; shares authorized 400,000,000; 171,569,807 and 171,126,257 issued and outstanding as of September 30, 2022 and December 31, 2021, respectively			1,716				1,712
Additional paid-in-capital			3,151,177				3,146,786
Deferred compensation payable in common shares			19,601				18,491
Common shares in grantor trust, 1,179,643 and 1,169,703 issued and outstanding as of September 30, 2022 and December 31, 2021, respectively			(19,601	)			(18,491	)
Cumulative earnings			1,146,543				1,122,372
Accumulated other comprehensive income (loss)			4,525				(2,020	)
Cumulative distributions			(2,676,702	)			(2,578,583	)
Total Brandywine Realty Trust's equity			1,627,259				1,690,267
Noncontrolling interests			7,690				10,952
Total beneficiaries' equity		$	1,634,949			$	1,701,219
Total liabilities and beneficiaries' equity		$	3,974,187			$	3,846,196

BRANDYWINE REALTY TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except share and per share data)

	Three Months Ended September 30,								Nine Months Ended September 30,
		2022				2021				2022				2021
Revenue
Rents	$	117,481			$	112,159			$	350,279			$	336,878
Third party management fees, labor reimbursement and leasing		6,872				6,500				17,904				19,778
Other		1,216				1,759				8,933				4,633
Total revenue		125,569				120,418				377,116				361,289
Operating expenses
Property operating expenses		32,624				30,304				97,283				88,503
Real estate taxes		12,313				13,421				39,872				42,784
Third party management expenses		2,549				3,327				7,898				9,866
Depreciation and amortization		45,134				48,175				132,875				131,303
General and administrative expenses		7,564				7,076				25,892				22,016
Total operating expenses		100,184				102,303				303,820				294,472
Gain on sale of real estate
Net gain on disposition of real estate		8,669				—				8,813				142
Net gain on sale of undepreciated real estate		2,983				910				8,007				2,903
Total gain on sale of real estate		11,652				910				16,820				3,045
Operating income		37,037				19,025				90,116				69,862
Other income (expense):
Interest and investment income		498				4,494				1,387				7,845
Interest expense		(17,061	)			(15,190	)			(49,144	)			(46,973	)
Interest expense - amortization of deferred financing costs		(745	)			(709	)			(2,259	)			(2,127	)
Equity in loss of unconsolidated real estate ventures		(6,260	)			(6,634	)			(15,804	)			(20,798	)
Net income before income taxes		13,469				986				24,296				7,809
Income tax (provision) benefit		9				(12	)			(66	)			(46	)
Net income		13,478				974				24,230				7,763
Net income attributable to noncontrolling interests		(37	)			(7	)			(59	)			(42	)
Net income attributable to Brandywine Realty Trust		13,441				967				24,171				7,721
Nonforfeitable dividends allocated to unvested restricted shareholders		(105	)			(91	)			(351	)			(331	)
Net income attributable to Common Shareholders of Brandywine Realty Trust	$	13,336			$	876			$	23,820			$	7,390
PER SHARE DATA
Basic income per Common Share	$	0.08			$	0.01			$	0.14			$	0.04
Basic weighted average shares outstanding		171,569,807				170,907,018				171,464,936				170,794,585
Diluted income per Common Share	$	0.08			$	0.01			$	0.14			$	0.04
Diluted weighted average shares outstanding		172,152,256				172,237,194				172,435,153				172,077,950

BRANDYWINE REALTY TRUST
FUNDS FROM OPERATIONS
(unaudited, in thousands, except share and per share data)

	Three Months Ended September 30,								Nine Months Ended September 30,
		2022				2021				2022				2021
Reconciliation of Net Income to Funds from Operations:
Net income attributable to common shareholders	$	13,336			$	876			$	23,820			$	7,390
Add (deduct):
Net income attributable to noncontrolling interests - LP units		38				9				64				46
Nonforfeitable dividends allocated to unvested restricted shareholders		105				91				351				331
Net gain on disposition of real estate		(8,669	)			—				(8,813	)			(142	)
Company's share of impairment of an unconsolidated real estate venture		—				562				—				562
Depreciation and amortization:
Real property		38,095				39,824				110,888				105,652
Leasing costs including acquired intangibles		6,244				7,801				19,835				24,035
Company’s share of unconsolidated real estate ventures		12,804				12,078				37,002				39,869
Partners’ share of consolidated real estate ventures		(4	)			(5	)			(14	)			(15	)
Funds from operations	$	61,949			$	61,236			$	183,133			$	177,728
Funds from operations allocable to unvested restricted shareholders		(198	)			(175	)			(590	)			(538	)
Funds from operations available to common share and unit holders (FFO)	$	61,751			$	61,061			$	182,543			$	177,190
FFO per share - fully diluted	$	0.36			$	0.35			$	1.06			$	1.02
Weighted-average shares/units outstanding - fully diluted		172,668,723				173,061,177				172,989,918				172,993,752
Distributions paid per common share	$	0.19			$	0.19			$	0.57			$	0.57
FFO payout ratio (distributions paid per common share/FFO per diluted share)		52.8	%			54.3	%			53.8	%			55.9	%

BRANDYWINE REALTY TRUST
SAME STORE OPERATIONS – 3rd QUARTER
(unaudited and in thousands)  

Of the 78 properties owned by the Company as of September 30, 2022, a total of 71 properties ("Same Store Properties") containing an aggregate of 12.7 million net rentable square feet were owned for the entire three months ended September 30, 2022 and 2021. As of September 30, 2022, two properties were recently completed/acquired, and four properties were in development/redevelopment. Average occupancy for the Same Store Properties was 90.6% and 90.1% during the three-month periods ended September 30, 2022 and 2021, respectively. The following table sets forth revenue and expense information for the Same Store Properties:

		Three Months Ended September 30,
			2022				2021
Revenue
Rents		$	110,197			$	106,625
Other			242				278
Total revenue			110,439				106,903
Operating expenses
Property operating expenses			29,653				27,649
Real estate taxes			11,251				12,811
Net operating income		$	69,535			$	66,443
Net operating income - percentage change over prior year			4.7	%
Net operating income, excluding other items		$	68,801			$	67,186
Net operating income, excluding other items - percentage change over prior year			2.4	%
Net operating income		$	69,535			$	66,443
Straight line rents & other			(3,380	)			(3,004	)
Above/below market rent amortization			(518	)			(1,029	)
Amortization of tenant inducements			175				335
Non-cash ground rent expense			200				204
Cash - Net operating income		$	66,012			$	62,949
Cash - Net operating income - percentage change over prior year			4.9	%
Cash - Net operating income, excluding other items		$	64,532			$	63,213
Cash - Net operating income, excluding other items - percentage change over prior year			2.1	%
		Three Months Ended September 30,
			2022				2021
Net income:		$	13,478			$	974
Add/(deduct):
Interest income			(498	)			(4,494	)
Interest expense			17,061				15,190
Interest expense - amortization of deferred financing costs			745				709
Equity in loss of unconsolidated real estate ventures			6,260				6,634
Net gain on disposition of real estate			(8,669	)			—
Net gain on sale of undepreciated real estate			(2,983	)			(910	)
Depreciation and amortization			45,134				48,175
General & administrative expenses			7,564				7,076
Income tax provision (benefit)			(9	)			12
Consolidated net operating income			78,083				73,366
Less: Net operating income of non-same store properties and elimination of non-property specific operations			(8,548	)			(6,923	)
Same store net operating income		$	69,535			$	66,443

BRANDYWINE REALTY TRUST
SAME STORE OPERATIONS – NINE MONTHS
(unaudited and in thousands)  

Of the 78 properties owned by the Company as of September 30, 2022, a total of 71 properties ("Same Store Properties") containing an aggregate of 12.7 million net rentable square feet were owned for the entire nine months ended September 30, 2022 and 2021. As of September 30, 2022, two properties were recently completed/acquired, and four properties were in development/redevelopment. Average occupancy for the Same Store Properties was 89.7% and 90.3% during the nine-month periods ended September 30, 2022 and 2021, respectively. The following table sets forth revenue and expense information for the Same Store Properties:

		Nine Months Ended September 30,
			2022				2021
Revenue
Rents		$	327,946			$	323,428
Other			811				753
Total revenue			328,757				324,181
Operating expenses
Property operating expenses			86,948				82,359
Real estate taxes			37,269				38,992
Net operating income		$	204,540			$	202,830
Net operating income - percentage change over prior year			0.8	%
Net operating income, excluding other items		$	201,967			$	200,653
Net operating income, excluding other items - percentage change over prior year			0.7	%
Net operating income		$	204,540			$	202,830
Straight line rents & other			(7,617	)			(10,597	)
Above/below market rent amortization			(1,526	)			(2,949	)
Amortization of tenant inducements			544				791
Non-cash ground rent expense			605				617
Cash - Net operating income		$	196,546			$	190,692
Cash - Net operating income - percentage change over prior year			3.1	%
Cash - Net operating income, excluding other items		$	192,027			$	187,743
Cash - Net operating income, excluding other items - percentage change over prior year			2.3	%
		Nine Months Ended September 30,
			2022				2021
Net income:		$	24,230			$	7,763
Add/(deduct):
Interest income			(1,387	)			(7,845	)
Interest expense			49,144				46,973
Interest expense - amortization of deferred financing costs			2,259				2,127
Equity in loss of unconsolidated real estate ventures			15,804				20,798
Net gain on disposition of real estate			(8,813	)			(142	)
Net gain on sale of undepreciated real estate			(8,007	)			(2,903	)
Depreciation and amortization			132,875				131,303
General & administrative expenses			25,892				22,016
Income tax provision			66				46
Consolidated net operating income			232,063				220,136
Less: Net operating income of non-same store properties and elimination of non-property specific operations			(27,523	)			(17,306	)
Same store net operating income		$	204,540			$	202,830