Brandywine Nearly Halves Its Dividend To Free Core Portfolio From Debt
Brandywine Realty Trust is slashing its dividend nearly in half in a bid to increase liquidity.
The Philadelphia-based REIT is cutting its quarterly dividend from 15 cents to 8 cents per share, which it says will allow it to hold onto $50M in additional cash. It plans to use the proceeds to help prepay a secured loan and give the REIT fully unencumbered control of its roughly 120-property portfolio.
Brandywine will prepay the $245M secured loan with a combination of cash, portions of its $600M unsecured line of credit and other proceeds, the company announced Friday. The debt currently has a February 2028 maturity date and is backed by seven of the REIT's properties
The prepayment is estimated to result in a $12M-$14M hit to Brandywine’s balance sheet that was not previously included in its 2025 earnings guidance. The diversified REIT was trading down more than 1.5% early Friday and has lost more than 20% of its value this year.
It will also increase unencumbered annual cash flow by approximately $45M, CEO Jerry Sweeney said in a statement.
“This revised dividend represents a level that we expect to maintain for the foreseeable future,” he said.
Brandywine owned 59 properties at the end of its second quarter, including offices, retail space and multifamily properties. It also had two recently completed developments and two under development that weren't included in its core portfolio at the end of the quarter.
Its total footprint spans 22M SF across Philadelphia, Washington, D.C., and Austin and had an 88.5% occupancy rate, up 140 basis points from the same time last year. Still, the company reported a net loss of $89M compared to $30M in profits during the same quarter last year.
The loss included several writedowns on office sales, including a 120K SF office in Austin that was 36% occupied and sold for under $18M, and higher concessions for the lease-up of its 341-unit Solaris House apartments in the same city, Chief Financial Officer Tom Worth said on the company’s earnings call on July 23.
The REIT’s management described 2025 as “a transitional earnings year” in April, and said they were pleased with the company’s progress in July.
“Our operating and leasing teams have established a solid operating franchise to capitalize on improving market dynamics,” Sweeney said on the earnings call, where he also said that office sector bifurcation based on asset class was persistent.
Analysts at J.P. Morgan maintained a neutral rating on the REIT in an August model update, writing that the firm had held up occupancy and rents better than other office REITs in recent years.
“Earnings should be around trough levels, but there remains wood to chop with regards to refinancing joint ventures, addressing future large move-outs (i.e., IBM), and setting a sustainable dividend that allows for optimal cash retention,” the analysts wrote.
