Brandywine Realty Trust : Announces Fourth Quarter, Full Year 2019 Results and Maintains 2020 Guidance

Company / Investor Contact:

Tom Wirth

EVP & CFO

[e-mail]

Brandywine Realty Trust Announces Fourth Quarter, Full Year 2019 Results

and Maintains 2020 Guidance

Philadelphia, PA, January 29, 2020 - Brandywine Realty Trust (NYSE:BDN) today reported its financial and operating results for the three and twelve-month periods ended December 31, 2019.

Management Comments

"We completed 2019 accomplishing many of our business key plan objectives," stated Jerry Sweeney, President and Chief Executive Officer of Brandywine Realty Trust. "Our markets continue to improve which allowed us to achieve our 2019 speculative revenue target and generate strong rental rate growth throughout the year. Turning to 2020, we have already achieved 73% of our speculative revenue target and our 2020 business plan anticipates continued strong rental rate growth throughout our portfolio. In addition to strong market fundamentals, we continue to look for development opportunities and have two planned starts for 2020 that will accelerate our growth over the next several years. Based on the fourth quarter activity and our outlook for 2020, we are maintaining our current FFO guidance range of $1.41 to $1.51."

Fourth Quarter 2019 Highlights

Financial Results

• Net income allocated to common shareholders; $16.7 million, or $0.09 per diluted share.
• Funds from Operations (FFO); $67.0 million, or $0.38 per diluted share.

Fourth Quarter Portfolio Results

• Core Portfolio: 93.0% occupied and 95.5% leased.
• New and renewal leases signed: 567,000 square feet.
• Tenant Retention Ratio: 41% in fourth quarter and 66% for 2019.
• Rental Rate Mark-to-Market: 10.0% on a GAAP basis and 3.1% on a cash basis.

Transaction Activity

Dispositions

• On October 29, 2019, the PJP Ventures, three real estate ventures, in which we own a 25%-30% interest, each sold their sole operating office properties totaling 204,000 square feet in Charlottesville, VA at a gross sales price of $51.0 million. We received net cash proceeds of $9.1 million after closing costs and related debt payoffs. Our share of the gain on the real estate venture transaction and loss on the early extinguishment of debt were $8.0 million and $0.3 million, respectively.
• • 1 -

Finance Activity

• As previously announced, on October 3, 2019, we priced a $200.0 million underwritten public offering consisting of $100.0 million of our 4.100% guaranteed notes due 2024 (the "2024 Notes") and $100.0 million of our 4.550% guaranteed notes due 2029 (the "2029 Notes" and, together with the 2024 Notes, the "Notes").
  The net proceeds of the offering, after deducting underwriting discounts and estimated transaction expenses related to this offering and excluding accrued interest paid by the purchasers of the 2024 Notes and the 2029 Notes, were approximately $214.3 million. We used the net proceeds of the offering to reduce outstanding borrowings under our unsecured revolving credit facility and general corporate purposes.
• We have no outstanding balance on our $600.0 million unsecured revolving credit facility as of December 31, 2019.
• We have $90.5 million of cash and cash equivalents as of December 31, 2019.

Results for the Three and Twelve-Month Periods Ended December 31, 2019

Net income allocated to common shares totaled $16.7 million, or $0.09 per diluted share, in the fourth quarter of 2019 compared to net income of $120.8 million or $0.67 per diluted share in the fourth quarter of 2018. Our fourth quarter 2018 results include net gains on the sale of real estate totaling $107.9 million, or $0.60 per diluted share, a gain on promoted interest totaling $28.3 million, or $0.16 per diluted share and provisions for impairment on real estate totaling ($14.8) million, or ($0.08) per diluted share.

FFO available to common shares and units in the fourth quarter of 2019 totaled $67.0 million or $0.38 per diluted share versus $64.2 million or $0.36 per diluted share in the fourth quarter of 2018. Our fourth quarter 2019 FFO payout ratio ($0.19 common share distribution / $0.38 FFO per diluted share) was 50.0%.

Net income allocated to common shares totaled $33.9 million or $0.19 per diluted share for twelve months of 2019 compared to net income of $134.1 million or $0.75 per diluted share in the twelve months of 2018. Our 2018 results include net gains on the sale of real estate totaling $145.2 million, or $0.81 per diluted share and a gain on promoted interest totaling $28.3 million, or $0.16 per share and provisions for impairment on real estate totaling ($71.7) million, or ($0.40) per diluted share.

Our FFO available to common shares and units for the twelve months ended 2019 totaled $253.3 million, or $1.43 per diluted share, compared to our FFO available to common shares and units for the twelve months of 2018, which totaled $247.6 million, or $1.37 per diluted share. Our 2019 FFO payout ratio ($0.76 common share distribution / $1.43 FFO per diluted share) was 53.1%.

Operating and Leasing Activity

In the fourth quarter of 2019, our Net Operating Income (NOI) excluding termination revenues, write-off of prior straight-line rent receivables and other income items increased 1.9% on a GAAP basis and increased 0.6% on a cash basis for our 74 same store properties, which were 93.0% and 93.3% occupied on December 31, 2019 and 2018, respectively.

We leased approximately 567,000 square feet and commenced occupancy on 315,000 square feet during the fourth quarter of 2019. The fourth quarter occupancy activity includes 104,000 square feet of renewals, 159,000 square feet of new leases and 52,000 square feet of tenant expansions. We have an additional 410,000 square feet of executed new leasing scheduled to commence subsequent to December 31, 2019.

- 2 -

We experienced a 41% tenant retention ratio in our core portfolio with net negative absorption of (71,000) square feet during the fourth quarter of 2019. Fourth quarter rental rate growth increased 10.0% as our renewal rental rates increased 10.2% and our new lease/expansion rental rates increased 9.6%, all on a GAAP basis.

At December 31, 2019, our core portfolio of 90 properties comprising 16.1 million square feet was 93.0% occupied and we are now 95.5% leased (reflecting new leases commencing after December 31, 2019).

Distributions

On December 11, 2019, our Board of Trustees declared a quarterly dividend distribution of $0.19 per common share that was paid on January 22, 2020 to shareholders of record as of January 8, 2020.

2020 Earnings and FFO Guidance

Based on current plans and assumptions and subject to the risks and uncertainties more fully described in our Securities and Exchange Commission filings, we are revising our 2020 net income guidance from $0.24 to $0.34 per diluted share to $0.26 to $0.36 per diluted share and our 2020 FFO guidance of $1.41 - $1.51 per diluted share remains unchanged. 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	....... $0.26	to	$0.36
Plus: real estate depreciation, amortization ..............................................	1.15		1.15
FFO per diluted share ...........................................................................	$ 1.41	to	$ 1.51

Our 2020 FFO key assumptions include:

• Core Occupancy improving to a range of 94-95% by year-end 2020 and 95-96% leased;
• 17-19%GAAP increase in overall lease rates;
• 8-10%cash increase in overall lease rates;
• 2-4%increase in 2020 same store GAAP NOI;
• 0-2%increase in 2020 same store cash NOI
• • Excluding 1676 International Drive, 2.5% to 4.5% increase in cash NOI;
• Speculative Revenue Target: $31.0 million, 73% achieved;
• Acquisition Activity: $20.0 million (250 King of Prussia Road, Radnor, PA)
• Disposition Activity: none;
• Two development starts; and
• Annual earnings and FFO per diluted share based on 179.0 million fully diluted weighted average common shares.

- 3 -

About Brandywine Realty Trust

Brandywine Realty Trust (NYSE: BDN) is one of the largest, publicly traded, full-service, integrated real estate companies in the United States with a core focus in the Philadelphia, Austin and Washington, D.C. markets. Organized as a real estate investment trust (REIT), we own, develop, lease and manage an urban, town center and transit-oriented portfolio comprising 173 properties and 24.3 million square feet as of December 31, 2019, which excludes assets held for sale. Our purpose is to shape, connect and inspire the world around us through our expertise, the relationships we foster, the communities in which we live and work, and the history we build together. For more information, please visit www.brandywinerealty.com.

Conference Call and Audio Webcast

We will release our fourth quarter earnings after the market close on Wednesday, January 29, 2020, and will hold our fourth quarter conference call on Thursday, January 30, 2020 at 9:00 a.m. Eastern Time. The conference call can be accessed by dialing 1-833-818-6810 and providing conference ID: 9186939. Beginning two hours after the conference call, a taped replay of the call can be accessed through Friday, February 14, 2020, by calling 1-855-859-2056 and entering access code 9186939. The conference call can also be accessed via a webcast on our website at www.brandywinerealty.com.

Looking Ahead - First Quarter 2020 Conference Call

We anticipate we will release our first quarter 2020 earnings on Wednesday, April 22, 2020, after the market close and will host our first quarter 2020 conference call on Thursday, April 23, 2020 at 9:00 a.m. Eastern Time. We expect to issue a press release in advance of these events to reconfirm the dates and times and provide all related information.

Forward-Looking Statements

Estimates of future earnings per share, FFO per share, common share dividend distributions 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 our and our affiliates' actual results, performance, achievements or transactions 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: our 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, equity or other financing; risks of acquisitions, dispositions and developments, including the cost of construction delays and cost overruns; unanticipated operating and capital costs; our 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 our tenants operate. The declaration and payment of future dividends (both timing and amount) is subject to the determination of our Board of Trustees, in its sole discretion, after considering various factors, including the Company's financial condition, historical and forecast operating results, and available cash flow, as well as any applicable laws and contractual covenants and any other relevant factors. The Company's practice regarding payment of dividends may be modified at any time and from time to time. Additional information on factors which could impact us and the forward-looking statements contained herein are included in our filings with the Securities and Exchange Commission, including our Form 10-K for the year ended December 31, 2018. We assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events except as required by law.

Non-GAAP Supplemental Financial Measures

We compute our financial results in accordance with generally accepted accounting principles (GAAP). Although FFO and NOI are non-GAAP financial measures, we believe that FFO and NOI calculations are helpful to shareholders and potential investors and are widely recognized measures of real estate investment trust

- 4 -

performance. At the end of this press release, we have provided a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measure.

Funds from Operations (FFO)

We compute 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 us. NAREIT defines FFO as net income (loss) before non-controlling interests and excluding gains (losses) on sales of depreciable operating property, impairment losses on depreciable consolidated real estate, impairment losses on investments in unconsolidated real estate ventures and extraordinary items (computed in accordance with GAAP); plus real estate related depreciation and amortization (excluding amortization of deferred financing costs), and after similar adjustments for unconsolidated joint ventures. Net income, the GAAP measure that we believe to be most directly comparable to FFO, includes depreciation and amortization expenses, gains or losses on property sales, extraordinary items and non-controlling interests. To facilitate a clear understanding of our 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 flow from operating activities (determined 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 our financial performance or to be an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of our liquidity, nor is it indicative of funds available for our cash needs, including our ability to make cash distributions to shareholders.

Net Operating Income (NOI)

NOI is a financial measure equal to net income available to common shareholders, the most directly comparable GAAP financial measure, plus corporate general and administrative expense, depreciation and amortization, interest expense, non-controlling interest in the Operating Partnership and losses from early extinguishment of debt, less interest income, development and management income, gains from property dispositions, gains on sale from discontinued operations, gains on early extinguishment of debt, income from discontinued operations, income from unconsolidated joint ventures and non-controlling interest in property partnerships. In some cases we also present NOI on a cash basis, which is NOI after eliminating the effects of straight-lining of rent and deferred market intangible amortization. NOI presented by us may not be comparable to NOI reported by other REITs that define NOI differently. NOI should not be considered an alternative to net income as an indication of our performance or to cash flows as a measure of the Company's liquidity or its ability to make distributions. NOI is a useful measure for evaluating the operating performance of our properties, as it excludes certain components from net income available to common shareholders in order to provide results that are more closely related to a property's results of operations. NOI is used internally to evaluate the performance of our operating segments and to make decisions about resource allocations. We concluded that NOI provides useful information to investors regarding our financial condition and results of operations, as it reflects only the income and expense items incurred at the property level, as well as the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition and development activity on an unlevered basis.

Core Portfolio

Our core portfolio is comprised of our wholly-owned properties, excluding any properties currently in development, re-development or re-entitlement.

- 5 -

BRANDYWINE REALTY TRUST

CONSOLIDATED BALANCE SHEETS

(unaudited and in thousands)

						December 31, 2019			December 31, 2018
	ASSETS
		Real estate investments:
			Operating properties		$	4,006,459			$	3,958,712
		Accumulated depreciation			(973,318)			(885,407)
			Right of use asset - operating leases, net			21,656				-
			Operating real estate investments, net			3,054,797				3,073,305
			Construction-in-progress			177,243				150,263
		Land held for development			96,124				86,401
			Prepaid leasehold interests in land held for development, net			39,592				39,999
			Total real estate investments, net			3,367,756				3,349,968
			Assets held for sale, net			7,349				11,599
		Cash and cash equivalents			90,499				22,842
			Accounts receivable, net of allowance of $284 and $1,653 as of December 31, 2019 and December 31,			16,363				16,394
			2018, respectively
		Accrued rent receivable, net of allowance of $7,691 and $11,266 as of December 31, 2019 and			174,144				165,243
		December 31, 2018, respectively
			Investment in Real Estate Ventures			120,294				169,100
		Deferred costs, net			95,560				91,075
			Intangible assets, net			84,851				131,348
		Other assets			115,678				119,407
			Total assets		$	4,072,494			$	4,076,976
LIABILITIES AND BENEFICIARIES' EQUITY
			Mortgage notes payable, net		$	313,812			$	320,869
		Unsecured credit facility			-			92,500
			Unsecured term loan, net			248,561				248,042
		Unsecured senior notes, net			1,582,045				1,366,635
			Accounts payable and accrued expenses			109,872				125,696
		Distributions payable			33,815				33,632
			Deferred income, gains and rent			35,284				28,293
		Acquired lease intangibles, net			22,263				31,783
			Lease liability - operating leases			22,554				-
		Other liabilities			15,985				18,498
			Total liabilities		$	2,384,191			$	2,265,948
	Brandywine Realty Trust's Equity:
		Common Shares of Brandywine Realty Trust's beneficial interest, $0.01 par value; shares authorized
		400,000,000; 176,480,095 and 176,873,324 issued and outstanding as of December 31, 2019 and
		December 31, 2018, respectively			1,766				1,770
	Additional paid-in-capital			3,192,158				3,200,312
		Deferred compensation payable in common shares			16,216				14,021
	Common shares in grantor trust, 1,105,542 and 977,120 issued and outstanding as of December 31, 2019			(16,216)			(14,021)
	and December 31, 2018, respectively
		Cumulative earnings			804,556				775,625
	Accumulated other comprehensive income			(2,370)			5,029
		Cumulative distributions			(2,318,233)				(2,183,909)
			Total Brandywine Realty Trust's equity			1,677,877				1,798,827
		Noncontrolling interests			10,426				12,201
			Total beneficiaries' equity			1,688,303				1,811,028
		Total liabilities and beneficiaries' equity		$	4,072,494			$	4,076,976

- 6 -

BRANDYWINE REALTY TRUST

CONSOLIDATED STATEMENTS OF OPERATIONS

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

				Three Months Ended December 31,			Year Ended December 31,
				2019				2018				2019				2018
Revenue
	Rents		$	139,552			$	132,723			$	554,665			$	515,044
	Third party management fees, labor reimbursement and leasing		5,585				5,026				19,626				22,557
	Other			1,902				1,454				6,126				6,744
	Total revenue		147,039				139,203				580,417				544,345
	Operating expenses
	Property operating expenses		37,819				39,739				154,361				154,848
	Real estate taxes			15,118				14,069				62,237				51,341
	Third party management expenses		2,213				2,305				9,248				11,910
	Depreciation and amortization			51,267				44,369				210,005				176,000
	General and administrative expenses		6,939				5,593				32,156				27,802
	Provision for impairment			-				14,842				-				71,707
	Total operating expenses		113,356				120,917				468,007				493,608
	Gain on sale of real estate
	Net gain on disposition of real estate		-			2,967				356				2,932
	Net gain on sale of undepreciated real estate			519				181				2,020				3,040
	Total gain on sale of real estate		519				3,148				2,376				5,972
	Operating income			34,202				21,434				114,786				56,709
Other income (expense):
	Interest income			682				2,139				2,318				4,703
	Interest expense		(20,239)			(20,108)			(81,512)			(78,199)
	Interest expense - amortization of deferred financing costs			(742)				(626)				(2,768)				(2,498)
	Equity in loss of Real Estate Ventures		(5,108)			(14,049)			(9,922)			(15,231)
	Net gain on real estate venture transactions			8,045				104,970				11,639				142,233
	Gain on promoted interest in unconsolidated real estate venture		-			28,283				-			28,283
	Loss on early extinguishment of debt			-				(105)				-				(105)
Net income before income taxes		16,840				121,938				34,541				135,895
	Income tax (provision) benefit			34				(265)				(12)				(423)
Net income		16,874				121,673				34,529				135,472
	Net income attributable to noncontrolling interests			(107)				(792)				(262)				(954)
Net income attributable to Brandywine Realty Trust		16,767				120,881				34,267				134,518
	Nonforfeitable dividends allocated to unvested restricted shareholders			(91)				(89)				(396)				(369)
Net income attributable to Common Shareholders of Brandywine Realty
Trust	$	16,676		$	120,792		$	33,871		$	134,149
	PER SHARE DATA
Basic income per Common Share	$	0.09		$	0.68		$	0.19		$	0.75
	Basic weighted average shares outstanding			176,330,079				178,530,890				176,132,941				178,519,748
Diluted income per Common Share	$	0.09		$	0.67		$	0.19		$	0.75
	Diluted weighted average shares outstanding			176,836,658				179,300,321				176,686,813				179,641,492

- 7 -

BRANDYWINE REALTY TRUST

FUNDS FROM OPERATIONS

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

			Three Months Ended December 31,			Year Ended December 31,
			2019				2018				2019				2018
Reconciliation of Net Income to Funds from Operations:
	Net income attributable to common shareholders	$	16,676			$	120,792			$	33,871			$	134,149
Add (deduct):
	Net income attributable to noncontrolling interests - LP units		96				783				193				899
	Nonforfeitable dividends allocated to unvested restricted shareholders		91				89				396				369
	Net gain on real estate venture transactions		(8,045)				(104,970)				(10,363)				(142,233)
	Net gain on disposition of real estate		-			(2,967)			(356)			(2,932)
	Gain on promoted interest in unconsolidated real estate venture		-				(28,283)				-				(28,283)
	Provision for impairment		-			14,842				-			71,707
	Other than temporary impairment of equity method investment		-				4,076				-				4,076
	Company's share of impairment of an unconsolidated real estate		2,832				10,416				2,832				10,416
	venture
	Depreciation and amortization:
	Real property		36,767				33,681				149,600				139,202
	Leasing costs including acquired intangibles		14,015				10,283				58,493				35,215
	Company's share of unconsolidated real estate ventures		4,842				5,717				19,657				25,947
	Partners' share of consolidated real estate ventures		(58)				(52)				(226)				(218)
Funds from operations	$	67,216		$	64,407		$	254,097		$	248,314
	Funds from operations allocable to unvested restricted shareholders		(183)				(169)				(750)				(697)
Funds from operations available to common share and unit holders	$	67,033		$	64,238		$	253,347		$	247,617
(FFO)
	FFO per share - fully diluted	$	0.38			$	0.36			$	1.43			$	1.37
Weighted-average shares/units outstanding - fully diluted		177,818,284				180,620,723				177,668,804				181,081,114
	Distributions paid per common share	$	0.19			$	0.18			$	0.76			$	0.72
FFO payout ratio (distributions paid per common share/FFO per diluted		50.0%			50.0%			53.1%			52.6%
share)

- 8 -

BRANDYWINE REALTY TRUST

SAME STORE OPERATIONS - 4th QUARTER

(unaudited and in thousands)

Of the 95 properties owned by the Company as of December 31, 2019, a total of 74 properties ("Same Store Properties") containing an aggregate of 14.0 million net rentable square feet were owned for the entire three months ended December 31, 2019 and 2018. As of December 31, 2019, 16 properties were recently completed/acquired, and five properties were in development/redevelopment. Average occupancy for the Same Store Properties was 92.5% and 93.2% during the three-month periods ended December 31, 2019 and 2018, respectively. The following table sets forth revenue and expense information for the Same Store Properties:

						Three Months Ended December 31,
						2019			2018
Revenue
		Rents			$	113,014		$	112,561
		Other		701			418
		Total revenue				113,715			112,979
Operating expenses
		Property operating expenses				32,267			33,567
		Real estate taxes		11,301			11,195
		Net operating income			$	70,147		$	68,217
	Net operating income - percentage change over prior year		2.8%
		Net operating income, excluding net termination fees & other			$	68,940		$	67,666
	Net operating income, excluding net termination fees & other - percentage change over prior year		1.9%
	Net operating income			$	70,147		$	68,217
		Straight line rents & other		(1,879)			(1,285)
		Above/below market rent amortization				(335)			(366)
		Amortization of tenant inducements		225			226
		Non-cash ground rent				211			41
	Cash - Net operating income	$	68,369		$	66,833
		Cash - Net operating income - percentage change over prior year				2.3%
	Cash - Net operating income, excluding net termination fees & other	$	66,619		$	66,220
		Cash - Net operating income, excluding net termination fees & other - percentage change over prior
		year				0.6%
						Three Months Ended December 31,
						2019			2018
Net income:	$	16,874		$	121,673
	Add/(deduct):
		Interest income		(682)			(2,139)
		Interest expense				20,239			20,108
		Interest expense - amortization of deferred financing costs		742			626
		Equity in loss of Real Estate Ventures				5,108			14,049
		Net gain on real estate venture transactions		(8,045)			(104,970)
		Net gain on disposition of real estate				-			(2,967)
		Net gain on sale of undepreciated real estate		(519)			(181)
		Gain on promoted interest in unconsolidated real estate venture				-			(28,283)
		Loss on early extinguishment of debt		-		105
		Depreciation and amortization				51,267			44,369
		General & administrative expenses		6,939			5,593
		Income tax provision (benefit)				(34)			265
		Provision for impairment		-		14,842
		Consolidated net operating income				91,889			83,090
Less: Net operating income of non-same store properties and elimination of non-property specific operations		(21,742)			(14,873)
		Same store net operating income			$	70,147		$	68,217

- 9 -

BRANDYWINE REALTY TRUST

SAME STORE OPERATIONS - TWELVE MONTHS

(unaudited and in thousands)

Of the 95 properties owned by the Company as of December 31, 2019, a total of 73 properties ("Same Store Properties") containing an aggregate of 13.9 million net rentable square feet were owned for the entire twelve months ended December 31, 2019 and 2018. As of December 31, 2019, 17 properties were recently completed/acquired, and five properties were in development/redevelopment. Average occupancy for the Same Store Properties was 92.5% during 2019 and 92.9% during 2018. The following table sets forth revenue and expense information for the Same Store Properties:

				Year Ended December 31,
				2019					2018
Revenue
	Rents		$	443,212				$	442,671
	Other		1,824					1,648
	Total revenue			445,036					444,319
Operating expenses
	Property operating expenses			126,732					128,467
	Real estate taxes		45,166					41,816
	Net operating income		$	273,138				$	274,036
Net operating income - percentage change over prior year		(0.3)%
	Net operating income, excluding other items		$	269,357				$	270,625
Net operating income, excluding other items - percentage change over prior year		(0.5)%
Net operating income		$	273,138				$	274,036
	Straight line rents & other		(5,253)				(10,050)
	Above/below market rent amortization			(1,406)					(1,654)
	Amortization of tenant inducements		897					968
	Non-cash ground rent			850					165
Cash - Net operating income	$	268,226				$	263,465
	Cash - Net operating income - percentage change over prior year			1.8		%
Cash - Net operating income, excluding other items	$	263,216		$	259,329
	Cash - Net operating income, excluding other items - percentage change over prior year			1.5		%
				Year Ended December 31,
				2019					2018
Net income:	$	34,529		$	135,472
Add/(deduct):
	Interest income		(2,318)				(4,703)
	Interest expense			81,512					78,199
	Interest expense - amortization of deferred financing costs		2,768					2,498
	Equity in loss of Real Estate Ventures			9,922					15,231
	Net gain on real estate venture transactions		(11,639)				(142,233)
	Net gain on disposition of real estate			(356)					(2,932)
	Net gain on sale of undepreciated real estate		(2,020)				(3,040)
	Gain on promoted interest in unconsolidated real estate venture			-					(28,283)
	Loss on early extinguishment of debt		-				105
	Depreciation and amortization			210,005					176,000
	General & administrative expenses		32,156					27,802
	Income tax provision			12					423
	Provision for impairment		-				71,707
	Consolidated net operating income			354,571					326,246
Less: Net operating income of non-same store properties and elimination of non-property specific operations		(81,433)				(52,210)
	Same store net operating income		$	273,138				$	274,036

- 10 -