PHILADELPHIA, PA — Brandywine Realty Trust (NYSE: BDN) raised its 2026 property-sales target to $305 million and plans to direct most proceeds toward debt reduction after reporting a narrower second-quarter loss but lower funds from operations.
The Philadelphia-based office landlord posted a net loss attributable to common shareholders of $31.7 million, or 18 cents per share, for the quarter ended June 30. That compared with a loss of $89 million, or 51 cents per share, a year earlier, when results included $63.4 million of impairment charges tied to Austin properties.
Funds from operations attributable to common shareholders and units fell to $23.6 million, or 13 cents per diluted share, from $26.1 million, or 15 cents per share, in the prior-year quarter.
Brandywine narrowed its full-year FFO forecast to 53 cents to 57 cents per diluted share from a previous range of 52 cents to 58 cents.
The company also revised its projected 2026 loss to 41 cents to 45 cents per share, compared with an earlier forecast of 70 cents to 76 cents. Brandywine attributed the adjustment primarily to expected gains from property sales.
The real estate investment trust has completed $208 million of asset sales and increased its full-year disposition target from $290 million. Management expects the remaining planned sales to close later in the third quarter.
Brandywine sold a 46%-occupied Conshohocken office property for $15.5 million in May.
After the quarter ended, it sold a fully occupied King of Prussia office property for $41.5 million and an Austin office property for $151 million. The transactions are expected to generate third-quarter gains of approximately $13.6 million and $36.3 million, respectively.
“We plan to use most of the proceeds from these asset sales to lower our outstanding debt and, to a smaller extent, repurchase our common stock,” President and Chief Executive Officer Gerard H. Sweeney stated.
The company expects to spend between $120 million and $140 million on common-stock and bond repurchases, primarily during the third and fourth quarters, depending on the completion of planned asset sales.
Brandywine had no outstanding balance on its $600 million unsecured credit facility following the recent dispositions, compared with $149 million outstanding as of June 30. The company currently holds about $35 million in cash.
In June, Brandywine closed a $90 million secured term loan on Avira, the residential component of its 3025 JFK development in Philadelphia.
The seven-year loan carries a fixed interest rate of 5.81% after a swap and, together with borrowings from the company’s credit facility, funded repayment of a $178 million construction loan that was scheduled to mature in July.
Brandywine’s 57-property core portfolio totaled 10.8 million square feet and was 89.1% occupied at the end of the quarter. It was 90.6% leased as of July 15, including leases scheduled to begin after June 30.
The company signed leases covering 254,000 square feet in its wholly owned portfolio during the quarter, including 111,000 square feet of new leases, 74,000 square feet of expansions and 60,000 square feet of renewals.
Tenant retention reached 85% during the quarter, prompting Brandywine to raise the midpoint of its full-year retention forecast by 10%. The company now expects an annual retention rate of 51% to 53%.
Same-store net operating income increased 0.5% on an accrual basis and 1.9% on a cash basis. Rental rates rose 1.5% on an accrual basis but declined 4.2% on a cash basis.
For the first six months of 2026, Brandywine recorded a net loss of $80.6 million, or 46 cents per share, compared with a loss of $116.4 million, or 67 cents per share, a year earlier.
First-half FFO declined to $43.6 million, or 24 cents per diluted share, from $50.8 million, or 28 cents per share.
Brandywine paid a quarterly dividend of 8 cents per common share on July 22 to shareholders of record as of July 8.
More information is available at www.brandywinerealty.com.
Support the local news that supports Chester County. MyChesCo delivers reliable, fact-based reporting and essential community resources—free for everyone. If you value that, click here to become a patron today.