Brandywine Realty Trust Announces Third Quarter 2006 Earnings

Brandywine Realty Trust (NYSE: BDN) announced today that funds from operations (FFO) was $63.7 million or $0.67 per diluted share for the third quarter of 2006 compared to $36.2 million or $0.62 per share for the third quarter of 2005. FFO represents a non-generally accepted accounting principle (GAAP) financial measure. A table reconciling FFO to net income, the GAAP measure that the Company believes to be most directly comparable, is within the consolidated financial statements included in this release.

Diluted earnings (loss) per share (EPS) was $(0.02) for the third quarter of 2006 as compared to $0.24 for the third quarter of 2005. Net income was $0.6 million for the third quarter as compared to $15.8 million for the third quarter of 2005. A significant contribution to the change in net income in the third quarter of 2006 as compared to the third quarter of 2005 is the $40.0 million increase in depreciation and amortization expense. This increase is primarily the result of the depreciation/amortization of the tangible and intangible assets acquired in connection with the January 5, 2006 Prentiss transaction.

Brandywine President and Chief Executive Officer, Gerard H. Sweeney, commented, "Operating results for the quarter reflect continued improvement in overall market conditions. Our leasing, development and integration plans all remain on target. Our capital recycling program is ahead of schedule and we are in an excellent position to continue the successful execution of our business plan."

Brandywine Realty Trust Summary Portfolio Performance

--  FFO payout ratio was 65.2% for the quarter
--  Quarterly rental rates on renewals grew 0.3% on a straight-line basis
--  Quarterly retention rate was 73.4%
--  Portfolio was 91.3% occupied and 93.2% leased as of September 30, 2006
--  Leases expired or were terminated for approximately 1,138,000 square
    feet during the quarter
--  Leases were renewed for approximately 835,000 square feet during the
--  New leases were signed for approximately 225,000 square feet during
    the quarter
--  Acquired properties during the quarter totaled approximately 443,000
    square feet for an aggregate purchase price of approximately $133.2 million
--  Sold properties during the quarter totaled approximately 823,000
    square feet for an aggregate sale price of approximately $126.1 million


On September 18, 2006, the Board of Trustees declared a regular quarterly dividend distribution of $0.44 per common share that was paid October 16, 2006 to shareholders of record as of October 5, 2006. The Board also declared a dividend for the third quarter of $0.46875 per 7.50% Series C Cumulative Redeemable Preferred Share and $0.460938 per 7.375% Series D Cumulative Redeemable Preferred Share that was paid on October 16, 2006 to holders of record of the Series C and Series D Preferred Shares as of September 30, 2006.

Sale of Exchangeable Guaranteed Notes and Repurchase of $60 Million Common Shares

On October 4, 2006, the Company's operating partnership issued $300 million aggregate principal amount of exchangeable guaranteed notes due October 15, 2026 with a coupon of 3.875%. On October 16, 2006, the Company's operating partnership issued an additional $45 million aggregate principal amount of notes to cover over-allotments.

The Company used the net proceeds from the sale of the notes to repurchase approximately $60 million of outstanding Brandywine common shares (1,829,000 common shares at a price of $32.80 per share); to repay approximately $180 million under the Company's revolving credit facility; and to invest the balance in short term securities pending redemption of the Operating Partnership's $300 million Floating Rate Guaranteed Notes due 2009 on January 2, 2007.

The notes will be exchangeable for cash and Brandywine common shares at an initial exchange rate of 25.4065 common shares per $1,000 principal amount of notes (equivalent to an initial exchange price of approximately $39.36 per common share). The initial exchange price represents a 20% premium to the last reported sales price for the common shares on the New York Stock Exchange on September 28, 2006. The exchange value will be based on the exchange rate and the then trading price of the common shares. The initial exchange rate is subject to adjustment in certain circumstances.

The repurchase of 1,829,000 common shares with a portion of the proceeds of the notes did not reduce the number of common shares that may be repurchased under the Company's Board-approved share repurchase program. As of September 30, 2006, the Company may purchase an additional 2,319,800 shares under the plan. Repurchases may be made from time to time in the open market or in privately negotiated transactions, subject to market conditions and compliance with legal requirements. The share repurchase program does not contain any time limitation and does not obligate the Company to repurchase any shares. The Company may discontinue the program at any time.

2006 Financial Outlook

Our financial outlook for the remainder of 2006 is predicated upon operating metrics consistent with our previous guidance. In addition to these operating metrics, our 2006 financial outlook is predicated upon the following development and acquisition/disposition assumptions:

--  Completion of the previously announced development and re-development
--  Impact of year-to-date dispositions totaling $385 million
--  Impact of year-to-date acquisitions (in addition to the Prentiss
    acquisition) totaling $167 million
--  Net dispositions of approximately $125-175 million during the fourth
    quarter of 2006

Based on these key assumptions, we are introducing fourth quarter 2006 guidance and expect FFO per share to be $0.64 to $0.66 and EPS to be $(0.06) to $(0.04). These estimates may be positively or negatively impacted primarily by the timing and terms of property acquisitions, property dispositions, property leases, and actual operating expenses and interest rates as compared to those used in our forecast.

2007 Financial Outlook

As of the date of this release, we expect our full year 2007 EPS to be $(0.18) to $(0.09) and FFO per share to be $2.55 to $2.65. Our projections are based on several key and variable assumptions and estimates, including the following:

Operating Portfolio Results

The Company's operating portfolio consists of two primary components: (1) the Same-Store portfolio, which represents properties that were owned throughout 2006 that are anticipated to be owned throughout 2007 (these properties represent 70.5% of total square footage owned and 62.0% of projected 2007 net operating income from the operating portfolio); and (2) the acquired Prentiss portfolio which represents the properties acquired in January 2006 that are anticipated to be owned throughout 2007 (these properties represent 29.5% of total square footage owned and 38.0% of projected 2007 net operating income from the operating portfolio). The Company's projections are based on achieving the following percentage changes from currently projected 2006 results:

                                                % change 2006 - 2007
                                          Same-Store     Acquired Prentiss
                                           Portfolio         Portfolio
                                           ---------         ---------

GAAP rent and reimbursements (Excluding
 termination fees)                        0.5% - 1.5%         3.0% - 4.0%

Expenses                                  5.0% - 5.5%         6.5% - 7.5%

NOI                                    (2.0%) - (1.0%)        0.5% - 1.5%

Occupancy                                   0% - 1.0%         0.5% - 1.5%

The Company's projections for operating portfolio activity are based upon competitive market conditions including: pressure on market rents; increased operating expenses particularly in labor, real estate taxes and energy costs; and lease terminations, settlements, and other similar items consistent with historical levels.

Acquisitions, Dispositions, Development

Forecasting the timing and dollar amount of potential acquisitions and dispositions is challenging and these two variables have a high degree of sensitivity on forecasted results. While the acquisition market remains aggressively priced, we intend to use the financial capacity we created to take advantage of select opportunities. The 2007 outlook assumes:

--  $150-$200 million of acquisitions per quarter in 2007 at projected
    yields ranging from 6.0% to 8.5%
--  Full year impact of $385 million of year to date 2006 dispositions
--  Full year impact of $125-$175 million of projected fourth quarter 2006
--  Full year impact of an additional $125-$175 million of dispositions

The Company's outlook assumes the completion of all development projects identified in its supplemental disclosure as of September 30, 2006.

Forward-Looking Statements

Estimates of future earnings per share and FFO per share and certain other statements in this release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.

Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance, achievements or transactions of the Company and its affiliates to be materially different from any future results, performance, achievements or transactions expressed or implied by such forward-looking statements. Such risks, uncertainties and other factors relate to, among others: the Company's ability to lease vacant space and to renew or relet space under expiring leases at expected levels, competition with other real estate companies for tenants, the potential loss or bankruptcy of major tenants, interest rate levels, the availability of debt and equity financing, competition for real estate acquisitions and risks of acquisitions, dispositions and developments, including the cost of construction delays and cost overruns, unanticipated operating and capital costs, the Company's ability to obtain adequate insurance, including coverage for terrorist acts, dependence upon certain geographic markets, and general and local economic and real estate conditions, including the extent and duration of adverse changes that affect the industries in which the Company's tenants compete.

Additional information on factors which could impact the Company and the forward-looking statements contained herein are included in the Company's filings with the Securities and Exchange Commission, including the Company's Annual Report for the year ended December 31, 2005. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events except as required by law.


Funds from Operations (FFO)

FFO is a widely recognized measure of REIT performance. Although FFO is a non-GAAP financial measure, the Company believes that information regarding FFO is helpful to shareholders and potential investors. The Company computes 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 the Company. NAREIT defines FFO as net income (loss) before minority interest of unit holders (preferred and common) and excluding gains (losses) on sales of depreciable operating property and extraordinary items (computed in accordance with GAAP); plus real estate related depreciation and amortization (excluding amortization of deferred financing costs), and after adjustment for unconsolidated joint ventures. The GAAP measure that the Company believes to be most directly comparable to FFO, net income, includes depreciation and amortization expenses, gains or losses on property sales and minority interest. In computing FFO, the Company eliminates substantially all of these items because, in the Company's view, they are not indicative of the results from the Company's property operations. To facilitate a clear understanding of the Company's 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 generated from operating activities 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 the Company's financial performance or to be an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of the Company's liquidity, nor is it indicative of funds available for the Company's cash needs, including its ability to make cash distributions to shareholders.

Cash Available for Distribution (CAD)

Cash available for distribution, CAD, is a non-GAAP financial measure that is not intended to represent cash flow for the period and is not indicative of cash flow provided by operating activities as determined under GAAP. CAD is presented solely as a supplemental disclosure with respect to liquidity because the Company believes it provides useful information regarding the Company's ability to fund its dividends. Because all companies do not calculate CAD the same way, the presentation of CAD may not be comparable to similarly titled measures of other companies.

Third Quarter Earnings Call and Supplemental Information Package

The Company will be hosting a conference call on Friday, October 27, 2006 at 11:00 a.m. EDT. The conference call can be accessed by calling 1-800-683-1525, reference conference ID #7941296. After the conference, a taped replay of the call can be accessed 24 hours a day through Friday, November 10, 2006 by calling 1-877-519-4471 -- access code 7941296. In addition, the conference call can be accessed via a webcast located on the Company's website at

The Company has prepared a Supplemental Information package that includes financial results and operational statistics to support the announcement of third quarter earnings. The Supplemental Information package is available through the Company's website at

The Supplemental Information package can be found in the "Investor Relations - Financial Reports" section of the web page.

About Brandywine Realty Trust

Brandywine Realty Trust (NYSE: BDN), with headquarters in Radnor, PA, is one of the largest full-service, completely integrated real estate companies in the United States. Organized as a real estate investment trust (REIT), Brandywine owns, manages or has ownership interest in office and industrial properties aggregating 45 million square feet.

For more information, visit Brandywine's website at

                          BRANDYWINE REALTY TRUST

                        CONSOLIDATED BALANCE SHEETS

                        (unaudited, in thousands)

                                                 September 30, December 31,

                                                     2006         2005

                                                  -----------  -----------


Real estate investments:

   Operating properties                           $ 4,871,978  $ 2,560,061

   Accumulated depreciation                          (499,141)    (390,333)

                                                  -----------  -----------

                                                    4,372,837    2,169,728

      Construction-in-progress                        309,783      273,240

      Land held for development                       118,181       98,518

                                                  -----------  -----------

                                                    4,800,801    2,541,486

Cash and cash equivalents                              16,538        7,174

Escrowed cash                                          20,153       18,498

Accounts receivable, net                               23,400       12,874

Accrued rent receivable, net                           67,283       47,034

Investment in marketable securities                   187,162            -

Investment in real estate ventures                     78,288       13,331

Deferred costs, net                                    65,378       37,602

Intangible assets, net                                325,119       78,097

Other assets                                           67,500       49,649

                                                  -----------  -----------

      Total assets                                $ 5,651,622  $ 2,805,745

                                                  ===========  ===========


Mortgage notes payable                            $   892,935  $   494,777

Secured note payable                                  181,759            -

Borrowings under credit facilities                    249,998       90,000

Unsecured senior notes, net of discounts            1,863,188      936,607

Accounts payable and accrued expenses                 124,814       52,635

Distributions payable                                  43,752       28,880

Tenant security deposits and deferred rents            57,799       20,953

Acquired lease intangibles, net                       107,122       34,704

Other liabilities                                      14,927        4,466

                                                  -----------  -----------

      Total liabilities                             3,536,294    1,663,022

Minority interest                                     145,832       37,859


Beneficiaries' equity:

   Preferred shares - Series C                             20           20

   Preferred shares - Series D                             23           23

   Common shares                                          901          562

   Additional paid-in capital                       2,368,460    1,369,913

   Cumulative earnings                                399,647      413,282

   Accumulated other comprehensive (income) loss        1,038       (3,169)

   Cumulative distributions                          (800,593)    (675,767)

                                                  -----------  -----------

      Total beneficiaries' equity                   1,969,496    1,104,864

                                                  -----------  -----------

                                                    2,115,328    1,142,723

                                                  -----------  -----------

      Total liabilities and beneficiaries' equity $ 5,651,622  $ 2,805,745

                                                  ===========  ===========

                          BRANDYWINE REALTY TRUST


        (unaudited, in thousands, except share and per share data)

                              Three Months Ended      Nine Months Ended

                            ----------------------  ----------------------

                            September   September   September   September

                                30,         30,         30,         30,

                               2006        2005        2006        2005

                            ----------  ----------  ----------  ----------


   Rents                    $  149,374  $   80,288  $  437,913  $  241,207

   Tenant reimbursements        23,802      11,710      58,203      34,716

   Other                         8,418       3,029      17,456      11,813

                            ----------  ----------  ----------  ----------

      Total revenue            181,594      95,027     513,572     287,736

Operating Expenses

   Property operating

    expenses                    53,465      26,664     149,828      83,679

   Real estate taxes            18,220       9,744      51,203      28,763

   Depreciation and

    amortization                68,277      28,230     199,275      83,983

   Administrative expenses       6,490       4,486      22,704      13,616

                            ----------  ----------  ----------  ----------

      Total operating

       expenses                146,452      69,124     423,010     210,041

                            ----------  ----------  ----------  ----------

Operating income                35,142      25,903      90,562      77,695

Other income (expense)

   Interest income               2,479         304       7,702         966

   Interest expense            (45,402)    (17,762)   (128,869)    (53,366)

   Equity in income of real

    estate ventures                370         746       1,798       2,297

   Net gain on sale of

    interests in real

    estate                           -       4,640       2,608       4,640

   Gain on termination of

    purchase contract            3,147           -       3,147           -

Income (loss) before

 minority interest              (4,264)     13,831     (23,052)     32,232

Minority interest -

 partners' share of

 consolidated real estate

 ventures                          279           -         560           -

Minority interest

 attributable to continuing

 operations - LP units             276        (442)      1,267      (1,121)

                            ----------  ----------  ----------  ----------

Income (loss) from

 continuing operations          (3,709)     13,389     (21,225)     31,111

Discontinued operations:

   Income from discontinued

    operations                   1,150         294       5,018         941

   Net gain on disposition

    of discontinued

    operations                   5,188       2,196       5,188           -

   Minority interest -

    partners' share of

    consolidated real

    estate venture              (1,857)          -      (2,239)      2,196

   Minority interest

    attributable to

    discontinued operations

    - LP units                    (208)        (84)       (376)       (108)

                            ----------  ----------  ----------  ----------

                                 4,273       2,406       7,591       3,029

                            ----------  ----------  ----------  ----------

Net income (loss)                  564      15,795     (13,634)     34,140

Income allocated to

 Preferred Shares               (1,998)     (1,998)     (5,994)     (5,994)

                            ----------  ----------  ----------  ----------

Income (loss) allocated to

 Common Shares              $   (1,434) $   13,797  $  (19,628) $   28,146

                            ==========  ==========  ==========  ==========


Basic income (loss) per

 Common Share               $    (0.02) $     0.25  $    (0.22) $     0.51

                            ==========  ==========  ==========  ==========

Basic weighted-average

 shares outstanding         90,042,270  56,071,973  89,963,541  55,734,114

Diluted income (loss) per

 Common Share               $    (0.02) $     0.24  $    (0.22) $     0.50

                            ==========  ==========  ==========  ==========

Diluted weighted-average

 shares outstanding         90,042,270  56,372,013  90,327,288  55,968,657

                          BRANDYWINE REALTY TRUST


        (unaudited, in thousands, except share and per share data)

                                                     Three Months Ended


                                                    9/30/06      9/30/05

                                                  -----------  -----------

Reconciliation of Net Income to Funds from

 Operations (FFO):

Net income (loss)                                 $       564  $    15,795

Add (deduct):

   Minority interest attributable to continuing

    operations - LP units                                (276)         442

   Net gains on sale of interests in real estate            -       (4,640)

   Minority interest attributable to discontinued

    operations - LP units                                 208           84

   Net gains on disposition of discontinued

    operations                                         (5,188)      (2,196)

   Minority Interest - partners' share of net

    gain on sale                                        1,757            -

                                                  -----------  -----------

Income (loss) before net gains on sale of

 interests in real estate and minority interest        (2,935)       9,485



Press Contact:
Amy Biemiller
Director of Communications
Brandywine Realty Trust

Investor Contact:
Gerard H. Sweeney
Timothy M. Martin
Brandywine Realty Trust

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