BDN - Earnings call transcript Q4 2018 | Brandywine Realty Trust

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Operator

Good day, ladies and gentlemen and welcome to the Fourth Quarter 2018 Earnings Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, President and CEO, Mr. begin. may you Sweeney, Jerry

Jerry Sweeney

and Johnstone, Dimitri, thank you earnings everyone thank are Good On Dan of Palazzo, Vice Officer; within call our law. very Wirth, Federal participating in much. may forward-looking statements George and today for President meaning our Chief of and Securities during me VP Chief XXXX information call morning, Prior Officer. Vice discussed our Accounting the President the Financial to Tom today's Operations; Executive and with beginning, certain constitute you Executive fourth call. quarter

in Although, we results believe statements on estimates give the reflected reasonable cannot assumptions, anticipated assurance that these we based achieved. be will are

well on For annual anticipated could recent please we as and factors quarterly our reports as with impact our that further the SEC. that most reference information results, filed release, our press

more little streamlined We bit this taken of have quarter. a a approach

resulted spaces activity, XXXX will was our over retention, levels, closed So same-store also our for short achieved accelerated synopsis Tom, QX summarize this focus positive available however, cash including GAAP momentum results primarily and We activity note, business and target XXXX X% will ending George, XXXX. which Tom the year over and very our XXXX overview, primarily our due tenant and XX% QX any an year-end of capital rates. questions. growth plan then at Dan, did our strong. our come strong our targets, a morning On other occupancy building provide our and spec by revenue, year I in After leased leasing up slower XX.X% will financial a little being leased. up ratios, We exceeded but be to on below occupancy of in comments a metrics We of for on many the mark-to-market, plan. our and

and capital a dollars a with our with swap effect XX% positive to to strong DC revenue The mark-to-market from We from capital Austin in negative ratio and revenue mark-to-market Virginia. increased Northern our XX% this market also completed a to of market X% several and previously XX%. reduced moved baseline contribution It revenue and announced and a transactions ratio. also Austin contribution capital

our also the Silver value selling JV through continued We cap a liquidation rate. Spring of Square Allstate X.X% $XXX in Station cash at million at

We square-foot building portfolio, acquired for million a also a objective asset cap cash That us for from excellent complement Austin XX%. increasing a upside our perfect and Lake, revenue XXX,XXX a few years to continue reflects Austin about mark-to-market at rate. $XX.X Northwest in to our Quarry X% is contribution provides our to

through touch none of Tom these our on, XXXX will numbers. acquisitions to As the Austin will benefits of flow same-store

of share capacity purchases our $XX.XX price repurchase new fourth million the an XXX,XXX and by quarter, $XX million per shares fully X.X Board to share expended reinitiated the remaining which shares, average on to plan, million During plan additional an January did purchase use approved for $XXX a share. we $XX during repurchase The bringing purchasing aggregate at million. we also

also We deployment capital continue of do for partnership of use redeemed to programs. We units repurchase part our opportunistically million operating cash. $X as program plan this to

performance announced supported and dividend also improved growth. increase by We X.X% portfolio cash a strong flow

Austin our of North the Six Gulph in of Road and development sale the Subaru delivery and On with Broadmoor our leased the we Facility. Training fully the year closed front, XXX

Turning to XXXX.

activity, strong, provide and the leasing Philadelphia a pipeline to supple color markets off with building and some both we to say, and markets. Pages greater on are additional on did our levels. Austin XX, In We Suffice start. remain great good XX it

absorption. of and out Rental including note, square clearly very XXX,XXX as X.X negotiation. primarily and hub. Samsung X.X spec in leasing science Austin stands the increased the Philadelphia of two well financial and growth million advanced in market transportation-centric in also stages life as city XXXX, X.X% Oracle employment XXXX pipeline X.X% tenants our care traction emerging target today feet sector. jobs square benefit with rents expansions, an during life acceleration square fields. with and continued feet with our almost life at and The and health of and up services Philadelphia the Google, a raised emerging rates million year city X.X most over Apple, the to XXXX, over and science revenue closed XX,XXX last also continues end driven added X.X%, on from feet, reflecting of corporative have to in notably Austin closed million We feet by strong years, new science as by square

our plan. at Looking

including Our deals is the levels the across metrics operating XXXX remain XX% of about of our square Radnor, where spec than pipeline other board, we and and revenue, revenue in square targeted of stronger XXX,XXX the feet. activity in in announced almost versus spec have plan increased level Overall, October. feet completed of other our pipeline the increase is all as is XXX,XXX absorption same our

Corner. of the note our is we're particular at high item XXXX International project level that Drive Another in activity of seeing Tysons

to reconfiguration announced, lobby, the improving and as $XX previously including restrooms, space re-imagine entire building as the lot we're systems, amenities, of outdoor a building, million well road the network. access investing from As mechanical completely to

current That stands the vacation of feet. XXX,XXX All of by over deals existing the to third square work with at feet the well completed quarter. of will about end the and XXX,XXX tenant square leave at that us of already substantially will be our pipeline lease,

renovation are that confident story. very and creating with successful how another So value-add has are well of we plan been really delighted received

make to continue We pipeline. development progress in excellent our

of square-foot downtown in over included in XXX,XXX,XXX project our are a was As XXX prelease deck. we building XXX the parking press Colorado closing in car on Austin, office a a release,

XXX,XXX square feet. aggregating More deals almost importantly, have extremely an of strong we pipeline

planning execution, the days. that our this XX it next pipeline to of the and project in given So and in depth start confidence we're its

Our process could and development on completing development by Four those progressing Points, be leasing of pre-leasing projects project to in year-end Schuylkill achievement are Yards, activities well. all start position a the and XXXX. each and two design at Garza, Radnor or one We're giving

Just given the Yards. We in did the at quick Schuylkill XX. on an a update supple update size, its pricing page disclosure continues work and excellent Design pace. on

Schuylkill feet Yards remain we today real extremely square have hundred estate or stands our or XXXX federal We upsurge has uses. a investment not be sources those have which or gain next feet to market several a encouraging. real of million currently thousand excellent either to from retail designing Schuylkill position memory, variety units. five discussions seen significant of and with do To and as the a including and Equity is life activity over have four generated marketing conditions also quarters, over The campaign start office refresh position capital any goal our zone, projects in federal everyone's capital again standpoint, to both qualified as built in plan. of through site, the a a Schuylkill XXX,XXX Yards sales favorable assuming interest square-foot advantages. in the over at for to to residential acquisitions do of in market On a one Broadmoor, and plus a We course square both From into looking opportunity on investments X.X Yards subject for science deferral XXX is capital pipeline sourcing site quarters. four can next start plan an well we're financing our conditions. that real-estate

additional generate capital We harvest are and our and the accelerate on sale growth however, of exploring profit, return assets flow trajectory. liquidity, some really cash to invested

earnings positive, flow to would bottom and As we this XXXX, or line growth. in deployment we of neutral expect did any cash would accelerate type be

remain all overview wrap-up, shape. confident goals. is provide our the development Tom? very will the to our our XXXX inventory pipeline. our an of our depth So of in plan leasing financial existing business pipeline encouraged both now by meeting We're Tom growing of of on and results. We excellent

Tom Wirth

Thank Jerry. you,

and FFO totaled $X.XX $XX.X Our net or million diluted share. per or totaled million $X.XX share our fourth income diluted quarter per $XXX.X

observations X.X quarter coverage fourth and as on our to general a improvement compared XX% results, improve continue charge our to were respectively, fixed of as interest metrics XXXX. the fourth XXXX X.X Some metrics balance about and both ratios sheet quarter

fourth Our debt quarter net to to X.X. EBITDA improved

no on quarter Our impact were million our quarter. had shares the material since the shares repurchase purchased of X.X earnings later in

some speculative that of achieve tenants occupancy is While timing our of anticipate the our and tenants allowed XXXX. variance which represents holdover remaining to to XX.X% the That due of revenue our portfolio through were in occupancy leasing midpoint taking range. year-end us we below target, primarily

our totaling million primarily Virginia about income higher our the Austin's totaling of our million about Looking first $X.X is balance to -- properties Road JV of at The acquisition acquisition quarter and Austin's million Gulph and total will at $XX $X.X for property-level the will quarter approximately increase XXX fourth the be offset XXXX year, Four incrementally guidance completion from Northern and than due and number. coming developments. Points North partially the by

and due lower X.X increase of joint joint will contribution FFO for The ground accounting to the expense. standard. the non-cash unconsolidated rent our $X.X to million increase from sale the will incremental and primarily interest totaled Square fourth Our our $X.X joint policy in of and capitalization Austin increase due due G&A ventures years, to the increase with new prior G&A. is venture. venture primarily the compared timing from Nova to to consistent to as number, the asset new compensation deferred Recognition quarter quarter is Station million below X.X. The first also

Our million still and total should $XX income will million. for year positive should $XX.X Training $XX to Capitalized we million about to interest between and National $X expense million tax and and full million $XX for about did development provisions related net lose XX.X%. $X.X $XX billion to Center. $X.X leasing million. and continue the other interest Term management Subaru being $XXX,XXX $XX be will and quarter million fixed-rate for the the fees interest approximate year. a will in to with will Net annualized to the and million million Land G&A $X approximate Interest income approximate increase will of should come quarter.

any our share and but average we remain repurchase, to lower the will On opportunistic. our activity weighted the recent reflect buyback, count share numbers don't additional XXX.X

we the a a loan XX of with to points. recast by in interest allowed maturity basis loan term the with effective of rate side, us interest no December changes C, date. financing the new the recast loan five-year closed the our lower loan On term The to that -- in

receiving the Although anticipate first XXXX financing venture that and the approximately net of $XX closing quarter proceeds. Virginia of we during joint financing, million

internal of we capitalized leasing cost accounting or and representing highlighted initial issued ground in new our guidelines. expense reduction standard, the change charge guidance straight we X.X in lining $X.XX increase the rent amount had a an we due a Regarding and in a to

impacting revenue revenue maintaining, $XX joint of We on $XXX current non-cash the plan concluded increase of also yet Based ground land. $X.X on approximately on the for had ventures. a includes joint negatively ventures. know and $XX Radnor million date million, we increase we our ground of expense our treatment million that the XXXX, have the lease of will of our spend, income of that and representing a for ground Since rent determined expense creating accounting development, to $XX from about that lease million acquisition capital million not

X.X our the net development of development about that based on that of million a We -- X.X debt-to-EBITDA year. vary will and scoped and and balance $XXX during will to the activities being be line the credit at Our between maintain will scope project ratio variable the year-end.

in low In addition, debt the XX% remain range. range -- our net JV XX will to

back coverage We I the to fixed by Jerry. our will to our around be over X.X charge and year turn ratio it now improving interest to continue anticipate to X.X XXXX.

Jerry Sweeney

With interest question open that, Dimitri? floor we and up delighted ask yourself to one do, follow-up. always in and we're for as of the time a any thanks. Tom, limit questions to the we you

Operator

first from Manny Korchman question our Citi. And Instructions] [Operator with comes

You may proceed.

Manny Korchman

Good morning, everyone.

Jerry Sweeney

Manny. morning, Good

Manny Korchman

the Let market. with me start XXXX

how but asset, your share just thoughts you of given I'm the share did Maybe You asset acquire value assets? you can your considered And asset? guys it in not that the Philadelphia. did Philly that for value to why sure translates the buy also not market then to you as your

Jerry Sweeney

vacancy. you, hear barely don't that we with to it's think could stable When a looked at I I not I Manny, fairly of project, lot but Yes. XXXX. relate

building from and as yesterday So thought trade events the low our perspective, and foot. square cap would at a out, strong we a price very very per rate proved

its when of real the high asset as asset, per watermark do. happy low marketing city of but part as given more core they lot that great being phase, there through value add building really our of didn't very view really money and it. platform to a lot ago did a well our we to see stability that for investment So, think direct lease-up to was as we think look some took I'm on a else We a buying high-quality that stabilizing into owned value that thoughtful that that an as in someone team and it cap a do could properties the of to interest if a competitive a property did out-of-town much a of years pound core a our job Equity from setting leasing of They and through creating it's do job downside higher to whole present their several a great that did us. price moving not rate. I standpoint, pricing was and basis a CommonWealth

that think investment our validates I thesis.

of is, that that basis the is CBD momentum at and the price so We great given rent blocks trophy for foot being know is investment So tighten. particularly for it acceleration, space this think create continues fact that all us. market few very benchmark in $XXX market, you Our bought will to a is the a gross, there's the available a think about in as the we square additional large

setting city for great And happy the core work a Equity it's that perspective, the is CommonWealth moved for with value with the of market in CommonWealth balance our and a benchmark to good We a from and it of trade portfolio. think did. we're pretty pricing benchmark leasing acquisition welcome the the Equity great it congratulate pricing add buyers our a So, Philadelphia. from to new the

Manny Korchman

hear me Thanks, can now. you guys Jerry. I hope better

Jerry Sweeney

can. We Yes.

Manny Korchman

the you for rent. question on ground A

ground impacts The correct, rent you that there amount clear. two Just change are or need adjustment so be that rent, lease doesn't we to the ground standard of it can accounting made the and we adjustments is make?

Jerry Sweeney

non-cash rent it's a No. adjustment. – straight straight-line It's a ground

So the length just same. It's will change. to paying ground and be calculation of cash be rent we are to the continue that will the going

Manny Korchman

Got it. Thanks guys.

Jerry Sweeney

Manny you, Thank

Operator

question Merrill from next comes with our America Feldman And Jamie of Lynch. Bank

You may proceed.

Jamie Feldman

you. Thank Great. Good morning.

Jerry Sweeney

Jamie. morning, Good

Jamie Feldman

and fourth give I what about it's just happened? for clear. Can the and want spec you detail to more more miss quarter make talk the exactly the year sure revenue just on

George Johnstone

of to in that Sure. of November, two We QX. QX $XXX,XXX take of of getting tenancy GAAP on over target. then, revenue we Jamie, in XX,XXX million from that and spec closer a to within square And the And feet this move revenue instead place revenue, commence had of spaces – leakage is complete of we George. roughly I'll some commencement that the beginning interim up recognition about with going just months so jump $X.X occupancy GAAP of we later our was little that. thought another were not square or take quarter, and in substantially those had dates slippage in the albeit caused some X. in didn't fact into the XXX,XXX and ended commenced projected feet November, to were full late

already they that fully was impact our So our that XXXX, part were were all commence plan. tenancies previously business in today slide. the revenue of expected cause they XXXX the XXXX $XXX,XXX and None our are has spec those of plan. business target. of really were XXXX to any Since of part not of And on not

Jamie Feldman

helpful. Okay. That's

the nothing's out changed fell of terms bed in? So of coming pipeline no in and leases

George Johnstone

No, no.

Jamie Feldman

talk And then I leasing then, more the but potential can And XXX,XXX guess were those know assume other why leases, are said tenants a would more you you comfort pipeline to that on of the at also I looking go move? the little about feet square Austin, tenant? XXX, you Okay. turning XX% you right. for All I Can give us spec would think you projects. good to just be if

George Johnstone

square what as I that Jamie. when XXX,XXX really use feet. of bona about just XX And of that feet at going of look of really square and the a to that days of feet. we're that. that project these pipeline building, drive-bys. There's mean, their start think to clear as delivery think need of will we from lot lease project are we they meet XX,XXX believe , for number, a XXX,XXX fide I pipeline pipeline of behind to one know for and frames have Sure, there be prospects just deals, building existing this that I given we [indiscernible] prospects why working in in be we’re deals that – when lot been I taking we're time smaller construction given lot catalysts of activity of the structures. shadow think range the they the XX,XXX say, start a the on to We announcing We size these is not a we to

we're we to So mold as of period and a significantly by kind the of days to advance that XX anchor execution additional during encouraged dealing to tenant through well. lease XX our next ability prospects the final also time of a number in with incredibly the remain

these side market that our fact given variability looking are the did, no pricing is at, QX size down, the the we'll early of which expectation, got that that -- read project the cost to time now the XXXX of real frankly the QX construction the tenants the deliver of to everything a is given the the we've equation building fully locked the I'm at go. So targeted good feet, of square of QX. is sorry tenants. for kind occupancy year-end size And We'll number that of XXX,XXX feel start late

Jamie Feldman

versus think your and you deliveries do competitive just timing how the project? about and of pipeline Okay

Jerry Sweeney

we're good shape. in I think

of board there's number we've – I have have that not that a on the certainly, projects and think started. started offset yet drawing some

are close starting. to We very

we incredibly that, downtown. I of are on-site The advantages it fact think think the location provides strong for us. here, parking floor plate size fair real in the amount competitive it's a CBD

Jamie Feldman

you. Thank Okay.

Jerry Sweeney

Thanks, Jamie.

Operator

next Sun Trust. question Lewis And our from comes with Michael

proceed. may You

Michael Lewis

going tenant articles update you late close for something Good morning. starting kind hear were Jerry, didn't Metroplex you -- an December you. you some might there Thank when and interest the project through there? looking I what's early to about went out to be I give on of you news in talk tenant there. think Could development were there the just that some November on

Jerry Sweeney

Sure, is Meetings of months of the in actually Metroplex we is Michael. outside firm Plymouth brought why a was Philadelphia. core on the couple -- to last we've Yes an very reason The launch marketing campaign. a project of a in about markets one it sub press there in broad-based lot brokerage

[ph] large of marketing the of JOL XXX,XXX team the amplified It's our was efforts fairly arrangement, building So, of into get some feet. part square in-house truly over marketplace. a the

So, is a there is that preliminary we would need pricing marketing designed, locked down. roll significant building That feel has though as launched. process pre-lease to The we forward.

to X% to an standpoint what rate X.X% and get So, between we know be we rental from a need yield.

traveled So and number of Turnpike, long-term we'll the Blue the space starting the see Pennsylvania Pennsylvania The to busiest, brings in heavily Pennsylvania, inverts what think Route. tenants the the Northeast larger extension a evaluate at the There suburbs. to project I Commonwealth sits the is in forth. almost market intersection locations of

it's or a in Radnor building as the than But for look a we design looking down larger it or size given our provide asset in So We Michael, get Points certainly we're tremendous these it's of come Four at to Garza, feel some scale a and it now, at different we'll that something right really it. opportunity Austin, a does way. looking Texas. investment, branding capital its building. confident But companies at

we behind deals need with to prelease quantifiable it. a there significant a So, very have pipeline of

Michael Lewis

in Obviously a about your has that Got general more conference a their you you impact share helpful. any fund look got was keep it And point, the and another on impact -- stock the earnings thoughts do have last assuming point talk of wasn't question, That's to my capacity When around pullback, Have about you the your you the better the for that second before color think call, kind the bit. start going around it leverage, you. could repurchases. a attractive. now have about leverage? stock worrying kind more $XX.XX, it to you at as had do I'm to maybe of other Do entry neutral? rebounded repurchase little you that ways program? Just you to of little

Jerry Sweeney

It liquidity a to for activity us. the underlying Even a why implied we with we’re year the tag on this and kind though Look, great sort real think too And the fortunate opportunity. a I We some transaction. it's we generate because as versus on at maintaining we're on yields moving estate that assets strong sheet attractive quickly it's I you very question, focused balance from down rate REIT some pretty the challenging at development the close we no-risk fourth quarter our it’s happy and repurchase together slide decision, team our X.X I of when cap and because did the well. of market Tom perspective, it. down Yeah, we compared to office always very know became that's the will and look the times. additional pull saw were continue of given a the an think very us just slope investment

in focused areas. can there value relates we're context board plan pipeline, that approved development becomes and balance how create think other the in portfolio, in while we that the share will investment event management our market any larger an piece out I But us for and our why that to does maintaining But certainly value that and running make deployment team a that's in intrinsic that the landscape. growth our key should the strong currency, So we is capital a a the pull keep change again that sheet. cost be certainly repurchase investment what to our that of of of may that viewed on very attractive public back the strategy saying has asset the be their to

Michael Lewis

Thank you. right. All

Operator

And our Stifel. Guinee from comes next question John with

You may proceed.

John Guinee

Thank you. Great.

Jerry Sweeney

morning, John. Good

John Guinee

Morning.

guys focus couple of a have You strong big development projects.

that land be Can pretty most have to positions. do I costs things; up. appear a two, you talk hard these basis; pound going in in office and if or about at your think high-quality build cost basis any may you going at same in then low But be two talk the land a one, of that to you time Broadmoor all building what's you about Schuylkill value per basis? on a

Jerry Sweeney

Yeah, have a do sure, basis in very John. We we believe inventory. our attractive land existing

in lays foot. exact of an the it know base investment than of think a page, but -- square I less don't average kind I $XX the at sub

we is per that think our one, the density a in square by $X foot we when land lot a to puts create at of road have high of driven able roughly basis still infrastructure very is factor foot. current investment things; given the XX% a market value. basis network, achieve frankly cost rezoning at below basis two Now Broadmoor the a Even were our we to land we

have over go embedded pulled together was with match So schedule we that. a land the to XX university, we to our extensions the Yards years, arrangement value can so well actually had extensions we with out provides transaction we uprolling with can Brandywine milestone the a there. The Schuylkill that option lot that but with have with of takedowns

or And our some as our against us other some very in excess being protection of downside expansion parks in gives building of close one that by partials a it for lot or then two proximity become are opportunities So land. tenants. existing know you exaggerated Carolina sites

the a answers a on to from equates and really and of that these that costs to I your of owner's range all lock taking a really development through the down exercises we're budgets projects really land all question of GMP. we challenge. side. way pricing Construction kind mean ourselves insulate hopefully to So are -- CDs

design looking current square building Look it pricing knowledge Yards XXX glass when foot concrete Long full of on a steel we on seeing and the consideration forward. a we'll going and through storefront things at call Kurt to fenestration ceiling. But sheep at a has or is have -- six bit between rock think real a square plans both been even Schuylkill the depending the a maybe $XXX upward is we're a we things So move higher. clearly were like and foot $XXX I little accelerator about at premium,

So we're lock our in know why We for high which get to trying have. definitely of a to we rents need is what required we construction increase cost exactly ask all seeing we models. down really are to the returns

much So it's points, think your squeeze very so point. created real I some questions is on

John Guinee

Great, thank you.

Operator

with next Daniel Ismail Green our And Street comes question Advisors. from

may You proceed.

Daniel Ismail

XX Maddison? and as the developments Good the you as more morning guys. acquisition land Can give a bit little with color on Radnor the well

Jerry Sweeney

sure. we to made It client. life I our in university our think important for October great relationship grows Radnor. is on establishes further in sciences here is Philadelphia our domination the market it straightforward is what we're really Austin. And to seeing to deal and which The really again Daniel. ground very announcement avenue very really continue us through I in mean which million rolled growth outpatient hand until likely numbers construction It's first this and medical mean facility. always the and of the $XXX manager with Hannah. square-foot in XXXXXX They've project. viable finance the of we're us. Penn expands guess advanced our of all for But all development will Hello first Yes the back been excellent a business that our Penn team serve it a as in an connection transaction quarter. I a own supporting we will the

We Subaru similar the transaction the to in have simply very processes. design and where be development developer construction New will Jersey the we oversaw we fee with

And building there later development can pre-release were process XXX-room to XXX,XXX purchase both of hopefully nice up on the year this a design is about $XX third game end a pre-leasing line square-foot currently a is side other site XXX,XXX adjoining transaction, do to the an hotel The tenant be of part a pieces: the building. design medical the project. that also site companies able a year We're to move across wrapped facility, by is two street on. a this new and square-foot pool that we'll talking of part office the pieces forward. Penn As essentially up is are they the That One underway a development million is hotel very and that and plan that the would be that from now. on pipeline finally, hotel building in that

We agreement around a it square-foot through late have a for And building $XX playing would being of that either buy Is that We're closing forward new first that now. or going in XXX,XXX entered into XXXX. us quarter opportunity we Brandywine tear-down be for a analysis early anticipate or product. to that But to renovation create will a second million. out? for

Daniel Ismail

That's Yes. to Maybe Austin. helpful. switching

you then more role some Can in frame little below-market color building. under-market the acquisition lease a rents on the rents are? the mentioned the On And how on property? the you provide just

Jerry Sweeney

property. trail Broadmoor, that property market got role place rollover to that XX,XXX our building a with in we are as rents average we've layers of It's in north The portfolio. with part The rents has XXXX. in a community in a rolling The around existing in today outdoor this close the a XX. of It's in bought. rollover I of mean overall Austin just schedule the years, perfectly couple sure. tremendously are XX where lakefront. a well-appointed Yes, about proximity master-planned short-term to

aggregation still So very we in blended management a thought frankly, risk standpoint. we're well tenant in Austin. And from it business the in

may think value us We good growth tenancy think, controlling that their they access building, couple a on term some for loan the sense of to good location they a we have opportunities has tenants. and seemed So of additional lot us. a gave to in to make

Daniel Ismail

Got it. Thanks.

Jerry Sweeney

you. Thank

Operator

next our question from comes Green Evercore. And with Jason

proceed. may You

please your If you've placed telephone on line. mute, unmute

Jason Green

Good morning.

market about future circle your how you thinking portfolio? additional assets Lake, on in to that an have understanding Just wanted for opportunities acquiring Quarry that you're in back versus development in

Jerry Sweeney

build to we versus what I Look, have I buy. clear numbers the market in that are Yes. mean, is that the bias think, really

our the in that But that that Four you look developments. six other it was take build a feet think of we at interesting market, land I and to we is if at an at million can Garza page sites have great bulk this -- development while shows our package, we decided Broadmoor, our that move opportunity on. square supplemental a in Points

So on can be achieve where development. we on heavier will existing is will capital given allocation emphasis pricing think for side, versus the think spread to the the I the be development we on -- acquisitions

Jason Green

with an And certain residential square piece take to piece office to Got comes that unit it. inclined talked more piece office first? preference a -- Broadmoor, about those to a both is about circling residential. And or then XXX,XXX for there for or you've and planning Is either feet an you're which about back to there assets? structure

Jerry Sweeney

with front, clearly question. the on process. a one we both so pre-lease size to great thoughtful pod we're it, that I Yes, design sizable running think building very creating first, mean, building. development retail launch there's a do would of being that of preference in be terms we a and office kind through I looking a don't real we're which in to concurrently the for

start the overall important Broadmoor we market's to place, we sense residential very as Look, strong. think very of about build rollout. So strategically the that's that

location. people moving You a have into a that's XXX great day a Austin,

continue of long-term on dialogue certainly, which, lot officials of CapMetro we partnership public a very a while nascent evolution, at line, public/private a and with that stage potential. think train its creating for active We has

running So brings. concurrently, market both we're I think what the we'll see and

Jason Green

it. Got Thank you.

Jerry Sweeney

welcome. You’re

Operator

Manny a Korchman from And Citi. we follow-up with have question

You proceed. may

Michael Bilerman

How Michael Hey, It's you? are Jerry. Bilerman.

Jerry Sweeney

Good.

Michael Bilerman

ask becoming CBD, just with of have wonder grid development leverage-neutral CBD lot of platform, two, whether some and a holdings to basis. your that exiting markets. generating stock where this So a a -- in point, I to to additional in repurchase incremental or as is you the of at marketing number want have whether significant on of larger and what a capital out terms asset generate EQC portfolio, interest Jerry, to you'd interest, you joint other at refocusing take in incremental venture particularly either wanted very fund you ventures to to the continue or advantage up the done sales, of formidable potential and joint cleaning of pretty about just a job

Jerry Sweeney

answer is simple yes. the Michael,

I think point we're very this pleased price with on XXXX.

just how where those our but as the we CBD can either we recycle plan at have And that certainly, platform some We get the call development to embedded look at this in think a through capital pipeline, tremendously number gains this in would more or expansion to share not given the couple table we about of harvest at how on as underway, certainly, we Philadelphia thoughts suburbs, incumbent our to of the in we're really fund next built-in Philadelphia quarters. that markets Pennsylvania in a looking well. the point, for have other to the we processes keep portfolio. expect into clarity upon repurchase But publicly us value some today, think it's of development we're

Michael Bilerman

to I that there's more particularly sales? today you're nothing would comments color us bit scope the you scope sounds what Joint considering? that be I sort how And what activity, any it venture would of transaction go? in willing would of there's give whether you're and And your from sort certainly be be of guess, size of guidance for and these large little a contemplating, outright sales? about things recognize

Jerry Sweeney

on. assuming they I some have And million XXX areas targeted time transaction. think some mean, pricing cost, we of given then, the the that plus in suburban foot joint spending square venture from I degree. determining will I salary a of to a See, $XXX standpoint, we are XXX downtown kind have to about million be look, that think we're that assets $XXX fairly and roughly that assets large we've to size of the Either

but to for of So, the incremental for how deploy obviously you tremendous in size capital. which liquidity company, generate I us don't would some we range a amount downtown, other the creates of want give buildings that opportunities by terms and scope their a

Michael Bilerman

sales? sales venture thinking or joint outright are you But

Jerry Sweeney

Are you talking about Downtown Philadelphia or?

Michael Bilerman

Well, either, I mean, I guess, downtown but you've suburbs. brought up

Jerry Sweeney

interesting structure. through the different an venture tremendous invested structure, look XX% capital a return -- transaction, XX% on we process promote through threw the a stake. did because million $XX The because rate we when that go return, value. It's on joint our thought Rockpoint, We're generating Yes. ownership we with we the to at generated different did with structure, it's our capital of promoted DRA a internal

as tenants in So, we're property markets and we of well. know and to to, stay talk joint doing us about at like the all ventures, not opposed to a the we because so the folks selling lot assets to

So, I joint preclude more wouldn't venture.

saying, very the exposure on way think, we that process are I been venture. our mindful of to under joint we've reducing

ventures, -- business XX% in venture, have those dollars when and the stake to So in positions. we reduced year an our have down invested equal at ownership take joint we dramatically, own we've that's of outlined as to used we we plan a in going to look type absolute whereas XX% down the multiple

Michael Bilerman

Jerry. Thanks,

Jerry Sweeney

You are welcome. you. Thank

Operator

Lynch. And follow-up of question from Bank we have Jamie with Feldman a America Merrill

You may proceed.

Jamie Feldman

just medical do business potential new I science you're in your deal either this about or that growing life with How in Great. Penn ramp get want you on the doing. office more up to line? thoughts think medical

Jerry Sweeney

got a provide then them on science And healthcare pathway of some standpoints. relationship for partners, from technical life one, life think perspective, I clear knowledge which both Yards, number example, co-developer who helping educational adviser we've has with with a tremendous field. From, in door have the their good and we great grow bought we've Well, institutions, a some Longfellow Schuylkill the into foot science businesses. with the

really a we in I be we Merck growing life science think do given think in rapidly Austin. the market think, what that year Philadelphia, announcement last will So with

and accelerated to six, what Austin and ranked number Washington, that a level, Austin on we're the had seems Philadelphia D.C. around more we we I have in time something there good be the of of tech that spend about being to couple mean, think reports and I over on. wind was as well. market a I think a growth that view next lines, add-on our talked -- three, scale country to growing low ground at came that that it's years. will a you talent with science think fairly as out was seeing the life lot number up from more We CBRE core arena while business

James Feldman

do personnel, for to your Okay, platform you that change anything to and think add or do you marketability business? need

A –Jerry Sweeney

need we think be Specific, to probably I add we some additional for to think, able there'll resources are certainly, grow sure. I -- if opportunities. at

James Feldman

Great. Okay. Thank you.

Jerry Sweeney

Thanks, James.

Operator

with Craig with KeyBanc question And Markets. Capital we Mailman have follow-up a

proceed. You may

Jerry Sweeney

Craig?

Operator

your would of I gentlemen, CEO, you, President Q&A portion Sweeney. Thank call. today's ladies to Mr. now and like call turn back our to the and over this concludes Jerry

sir. proceed, may You

Jerry Sweeney

updating and on you you, the your participating following we earnings We next morning. activities much. thank on of appreciate this those XXXX business and execution to look for call. our and on forward very Thank Dimitri, continued you thank plan all our call company, on you excellent our

Operator

Ladies all Everyone, day. and great does gentlemen, This and you conclude thank you for have may disconnect. conference. a the attending today's program,

Brandywine Realty Trust (BDN) 31 Jan 192018 Q4 Earnings call transcript