Brandywine Announces Closing of the $412.5 Million Oakland, California Portfolio Sale and of a $48.8 Million Richmond, Virginia Sale: Financial News

Brandywine Announces Closing of the $412.5 Million Oakland, California Portfolio Sale and of a $48.8 Million Richmond, Virginia Sale
Wednesday October 8, 2008 2:47 pm ET

RADNOR, PA--(MARKET WIRE)--Oct 8, 2008 -- Brandywine Realty Trust (BDN - News) announced today that it has completed the previously disclosed five-property portfolio sale totaling approximately 1.7 million net rentable square feet in Oakland, California for an aggregate sales price of $412.5 million, inclusive of assumed debt. In addition, Brandywine completed the sale of Main Street Centre, a 420,575 square foot office building in Richmond, Virginia, for a sales price of $48.8 million on October 1, 2008. The net proceeds of the Richmond sale were used to pay down revolving credit indebtedness. The net proceeds of the Oakland sale will be used to pay down revolving credit indebtedness and to provide cash balances for general corporate purposes, such that, as of the close of business on October 10, 2008, Brandywine expects to have no funds drawn on its $620.0 million of existing, revolving credit facilities and to have approximately $145.0 million of cash on hand for future needs.

"The successful execution of these sales enables us to advance our business plan priorities of balance sheet strengthening and portfolio realignment," stated Gerard H. Sweeney, President and Chief Executive Officer. "As a result of these sales, we have a zero balance on our revolving credit facilities, significant interim cash balances and a meaningful reduction of our leverage."

The Oakland Portfolio Sale

The Oakland portfolio sale encompasses five office properties: 1) One Kaiser Plaza (The Ordway), 2) 1901 Harrison Street, 3) 1333 Broadway, 4) 2101 Webster Street, and 5) 2100 Franklin Street, the first four of which were 89.3% occupied as of September 30, 2008, while 2100 Franklin is an unleased, recently completed, ground-up development. The sale also includes Brandywine's condominium interest in a parking garage at 2353 Webster Street. The buyer of the portfolio is an affiliate of the CIM Group.

In conjunction with the sale, the buyer assumed three existing mortgage loans totaling $95.3 million and was granted by Brandywine a $40.0 million interest free loan secured by a first mortgage on 2100 Franklin Street and 2101 Webster Street due on August 2, 2010. Brandywine also granted the buyer a 15-year purchase option for the Two Kaiser Plaza land parcel adjacent to The Ordway and has committed to lease to the buyer 150 parking spaces on that same parcel for the benefit of The Ordway's tenants. Brandywine has allocated $2.9 million of the purchase price to imputed interest on the $40.0 million loan, and $0.5 million to the value of the purchase option.

Net of transaction costs and customary closing adjustments and reflecting the assumed debt and seller financing, Brandywine realized $269.4 million of cash proceeds at the closing from this sale. An affiliate of Brandywine will manage and lease the five properties for an initial one-year period following the closing. Brandywine will continue to operate in the northern California market as the owner of three office properties totaling 554,534 square feet and two land parcels, and as a property manager and leasing agent under a series of third-party contracts. Lazard acted as financial advisor to Brandywine for this transaction, and CB Richard Ellis assisted in the marketing efforts.

Main Street Centre Sale

Main Street Centre is a 420,575 square foot office building located at 600 East Main Street in the financial district of Richmond, Virginia that was completed in 1986. It sits two blocks from the Downtown Expressway (I-195) and one-half mile from Interstate 95, and was 91.0% occupied at September 30, 2008. Net of transaction costs and customary closing adjustments, Brandywine realized $48.1 million of cash proceeds from the $48.8 million all-cash sale. The buyer was the Department of General Services of the Commonwealth of Virginia which will use the building to house state employees as space becomes available. CB Richard Ellis of Virginia served as broker for both the seller and the buyer.

About Brandywine Realty Trust

Brandywine Realty Trust is one of the largest, publicly traded, full-service, integrated real estate companies in the United States. Organized as a real estate investment trust and operating in select markets, Brandywine owns, develops and manages a primarily Class A, suburban and urban office portfolio aggregating approximately 39.8 million square feet, including 26.5 million square feet which it owns on a consolidated basis. For more information, visit our website at www.brandywinerealty.com.

Forward-Looking Statements

Certain 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 or industry results 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, the potential loss of major tenants, interest rate levels, the availability and terms of debt and equity financing, competition with other real estate companies for tenants and acquisitions, risks of real estate acquisitions, dispositions and developments, including cost overruns and construction delays, unanticipated operating costs and the effects of general and local economic and real estate conditions. Additional information or 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. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.