 PHILADELPHIA, July 22, 2020 GLOBE NEWSWIRE -- Brandywine Realty Trust NYSE:BDN today announced the closing of a joint venture on One and Two Commerce Square, located in Philadelphia, PA and reported its financial and operating results for the three and six-month periods ended June 30, 2020. Management CommentsAs our economy slowly begins to open and people return to the workplace, we are continually monitoring the pandemic and its impact on the health and safety of our employees, tenants, and other stakeholders, while executing our business plan strategy, stated Gerard H. Sweeney, President and Chief Executive Officer for Brandywine Realty Trust. Our operating and financial platform remains strong and secure, we have a well-covered dividend and excellent liquidity with approximately 584 million of liquidity as of June 30, 2020, comprised of 45 million in cash and 539 million of availability under our unsecured line of credit. Regarding our 2020 business plan, we are making excellent progress, including being 99 complete with speculative revenue and mark-to-market rents achieving strong increases of 10.3 and 19.4 on a cash and accrual basis, respectively. Turning to the capital markets, we are delighted to welcome a high-quality institutional partner at Commerce Square. This transaction creates a valuable partnership with one of the worlds top real estate investors, marking their first direct office investment in downtown Philadelphia. This investment reaffirms the positive investor sentiment surrounding Philadelphia, especially among international audiences, and demonstrates the strength of Brandywines reputation as a best-in-class operating partner. The transaction also positions Commerce Square for continued growth, while generating 100 million of additional liquidity to accelerate the execution of our business plan. After an active second quarter, we are narrowing our current 2020 FFO guidance range from 1.37-1.45 to 1.38-1.44.Second Quarter HighlightsFinancial Results Net income to common shareholders: 3.9 million, or 0.02 per share. Funds from Operations FFO: 57.7 million, or 0.34 per share.Portfolio Results excluding Commerce Square Core Portfolio: 90.7 occupied and 93.8 leased. New and Renewal Leases Signed: 401,000 square feet Rental Rate Mark-to-Market: Increased 19.4 10.3 on accrualcash basis Same Store Net Operating Income: 0.1 on an accrual basis and 0.9 on a cash basis Tenant Retention Ratio: 372020 Business Plan Revisions Same Store Net Operating Income accrual: 0-2 as compared to previous 1-3. The change is primarily due to reduced parking income within our Philadelphia CBD operations. Same Store Net Operating Income cash: 2-0 as compared to previous 1-1. The change is primarily due to reduced parking income within our Philadelphia CBD operations. Capital as of Lease Revenue: 11-12 as compared to previous 12-13.COVID-19 UpdateWe continue to monitor events related to COVID-19 and are taking steps to mitigate the potential impact and risks to Brandywine. While the duration and economic impact of the COVID-19 pandemic remains unknown, as of the date of this press release, we believe that the impact of COVID-19 has been reflected in our updated 2020 business plan and earnings estimates. We will continue to assess the ongoing effects of the pandemic to our business plan, our tenants and earnings estimates.The following is a summary of our second quarter and July consolidated cash base rent collections as of July 20, 2020: 99.6 of total cash-based rent has been received from our tenants during the second quarter 2020. We have granted rent relief requests primarily to our co-working and retail tenants, totaling approximately 1.0 of annualized billings. The relief requests have substantially all been in the form of rent deferrals that are primarily being repaid in 2020 and 2021. For July, approximately 98 of total cash-based rent has been received from our tenants which reflects 99 collection rate from our office tenants.Recent Transaction ActivityJoint Venture Activity One and Two Commerce, Philadelphia, PA We announced today the closing of a 600 million joint venture for One and Two Commerce Square, selling a 30 preferred equity interest to a global institutional investor for 115 million. As part of this transaction, both Brandywine and the investor have each committed to investing an additional 20 million of preferred equity in the property. The transaction is subject to the existing 222 million mortgage, and we have raised approximately 100 million in net cash proceeds as part of the transaction. Brandywine will continue in its role as Property Manager and Leasing Agent for the properties. We will record a gain on the transaction during the third quarter that we estimate to be in excess of 270 million subject to final closing settlements. The Commerce Square complex is an entire city block fronting Market Street between 20th 21st Streets in Center City, Philadelphia, and consists of two 40-story, identical, Trophy Class office towers, totaling 1.9 million square feet, along with a 519-space underground parking garage, and a stunning central courtyard of 30,000 square feet. The towers were designed by renowned architects, IM Pei Partners, and have individual floorplates between 15K and 34K SF to accommodate a variety of flexible, modern workspaces, while providing unobstructed panoramic views.2020 Finance Capital Markets Activity We have 61.0 million outstanding on our 600.0 million unsecured revolving credit facility as of June 30, 2020. We have 44.8 million of cash and cash equivalents on-hand as of June 30, 2020.Results for the Three and Six Month Periods Ended June 30, 2020Net income allocated to common shares totaled 3.9 million or 0.02 per diluted share in the second quarter of 2020 compared to net income of 6.1 million or 0.03 per diluted share in the second quarter of 2019.FFO available to common shares and units totaled 57.7 million or 0.34 per diluted share in the second quarter of 2020 as compared to 62.2 million, or 0.35 per diluted share for the second quarter of 2019. Our results for 2019 results include a gain on the sale of land totaling 1.5 million. Our second quarter 2020 payout ratio 0.19 common share distribution 0.34 FFO per diluted share was 55.9. Net income allocated to common shares totaled 11.8 million or 0.07 per diluted share in the first six months of 2020 compared to net income of 10.5 million or 0.06 per diluted share in the first six months of 2019.Our FFO available to common shares and units for the first six months of 2020 totaled 119.0 million or 0.68 per diluted share versus 122.3 million, or 0.69 per diluted share in the first six months of 2019.Operating and Leasing ActivityIn the second quarter of 2020, our Net Operating Income NOI excluding termination revenues and other income items decreased 0.1 on an accrual basis and decreased 0.9 on a cash basis for our 87 same store properties, which were 90.6 and 93.0 occupied on June 30, 2020 and 2019, respectively.We leased approximately 401,000 square feet and commenced occupancy on 237,000 square feet during the second quarter of 2020. The second quarter occupancy activity includes 195,000 square feet of renewals, 32,000 square feet of new leases and 10,000 square feet of tenant expansions. We have an additional 456,000 square feet of executed new leasing scheduled to commence subsequent to June 30, 2020.Our second quarter tenant retention ratio was 37 in our core portfolio with net negative absorption of 315,000 square feet during the second quarter of 2020. Second quarter rental rate growth increased 19.4 as our renewal rental rates increased 18.9 and our new leaseexpansion rental rates increased 29.8, all on an accrual basis.Following the Commerce Square joint venture, our core portfolio now totals 88 properties comprising 14.4 million square feet. As of June 30, 2020, our core portfolio was 90.7 occupied and we are currently 93.8 leased reflecting new leases commencing after June 30, 2020.DistributionsOn May 20, 2020, our Board of Trustees declared a quarterly dividend distribution of 0.19 per common share that is payable on July 22, 2020 to shareholders of record as of July 8, 2020.2020 Earnings and FFO GuidanceBased on current plans and assumptions and subject to the risks and uncertainties more fully described in our Securities and Exchange Commission filings, we are adjusting our 2020 net income guidance of 0.16 - 0.24 to 1.73 - 1.81 per diluted share and our 2020 FFO guidance of 1.37 - 1.45 to 1.38 - 1.44 per diluted share. This guidance is provided for informational purposes and is subject to change. The following is a reconciliation of the calculation of 2020 FFO and earnings per diluted share:Guidance for 2020 Range Earnings per diluted share allocated to common shareholders 1.73 to 1.81 Plus: real estate depreciation, amortization1.20 1.20 Less: gain on remeasurement of real estate1.55 1.57 FFO per diluted share 1.38 to 1.44 Our 2020 FFO key assumptions include: Year-end Core Occupancy Range: 92-93; Year-end Core Leased Range: 94-95; Rental Rate Mark-to-Market accrual: 17-19; Rental Rate Mark-to-Market cash: 8-10; Same Store accrual NOI Range: 0-2; Same Store cash NOI Range: 2-0; Speculative Revenue Target: 26.0 million, 99 achieved; Tenant Retention Rate: 52; 0.19 per share quarterly dividend; Property Acquisition Activity: 250 King of Prussia Road, Radnor, Pennsylvania scheduled during the second half of 2020; Property Sales Activity: 18. 