Brandywine Cuts 2026 Loss Guidance After Philadelphia Sale

The Tip Desk · November 8, 2026 · 4 min read

Core FFO was $24.6 million, or $0.14 a share, as the REIT booked a $29.1 million impairment and $15.4 million of debt-extinguishment losses.

Brandywine Realty Trust (BDN) reported a net loss of $22.3 million, or $0.13 a share, for the three months ended September 30, 2026, and adjusted its 2026 loss-per-share outlook to a narrower, deeper range after a large Philadelphia sale and early debt payoffs.

The Philadelphia-based REIT, which owns an urban, town-center and transit-oriented portfolio of 107 properties and 18.0 million square feet, said the new loss-per-share guidance of $(0.64) to $(0.62) is primarily due to the loss associated with the $240 million Philadelphia sale and the third-quarter loss on early extinguishment of debt. It also restated FFO guidance as a Core FFO range of $0.54 to $0.56 a diluted share, excluding $15.4 million, or $0.09 a share, of extinguishment losses.

Core FFO was $24.6 million, or $0.14 a diluted share, versus $28.0 million, or $0.16 a diluted share, a year earlier. The company excluded the $15.4 million debt-extinguishment loss from that Core FFO figure. The third-quarter payout ratio was 57.1% on an $0.08 common-share distribution.

The quarter’s results included a $29.1 million, or $0.17 a share, non-cash impairment, net gains on real-estate dispositions of $55.7 million, or $0.32 a share, and the $15.4 million, or $0.09 a share, loss on early extinguishment of debt.

Same-store net operating income for 55 properties decreased 0.6% on an accrual basis, reversing the second-quarter increase of 0.5%, while cash NOI increased 1.7%, slowing from 1.9% in the second quarter. Same-store occupancy was 88.8% versus 89.8% a year earlier.

Rental-rate mark-to-market increased 10.8% on an accrual basis and 5.7% on a cash basis, versus a 1.5% accrual increase and a 4.2% cash decrease in the prior quarter. The company leased about 372,000 square feet and commenced occupancy on 192,000 square feet, including 73,000 square feet of renewals, 26,000 square feet of expansions and 93,000 square feet of new leases. Accrual rental-rate growth was 8.4% on renewals and 13.5% on new leasing. An additional 163,000 square feet of executed new leasing was scheduled to commence after September 30. Tenant retention was 50%, with negative net absorption of 7,000 square feet.

The core portfolio of 58 properties and 10.8 million square feet was 89.0% occupied and 90.5% leased at September 30.

Disposition activity was the quarter’s defining capital event. Brandywine completed four wholly owned office sales totaling $529.6 million of gross proceeds and $510.5 million of net cash proceeds, including a $240.0 million Philadelphia property that was 3.9% occupied at sale. It also sold Solaris, a 341-unit Austin apartment project, for $136.0 million, receiving $16.3 million of net proceeds after repaying a $76.5 million construction loan and a preferred partner.

Combined debt fell $390 million, including $140 million of 2028 and 2029 bond repurchases at a weighted-average rate of 8.67% and a $57.3 million C-PACE repayment. Net Debt/EBITDA improved to 7.6x from 9.0x in the previous quarter. The company repurchased about 4.7 million common shares at an average $3.19 a share, totaling $14.9 million, with about $1.5 million of annual dividend savings. Cash and cash equivalents were $313 million, with a $137 million balance on the $600 million unsecured revolving credit facility.

President and Chief Executive Officer Gerard H. Sweeney said the company raised the midpoint of its speculative revenue target for the second time this year to $19.5 million, 11.4% higher than the initial business plan, and that the capital-markets plan is completed with $681 million of sales versus a $305 million target. One Uptown is 97% leased.

Year-end 2026 assumptions include core occupancy of 89-90%, core leased of 90-91%, accrual rental-rate mark-to-market of 5-6%, cash mark-to-market of (2)-0%, same-store accrual NOI of (1)-1%, same-store cash NOI of 0-2%, tenant retention of 53-54%, and $545 million of property sales treated as 100% achieved. The board declared a $0.08 quarterly dividend payable October 22, 2026.