<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 8-K/A No. 1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 7, 1998
BRANDYWINE REALTY TRUST
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Maryland 1-9106 23-2413352
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
16 Campus Boulevard, Newtown Square, Pennsylvania 19073
(Address of principal executive offices)
(610) 325-5600
(Registrant's telephone number, including area code)
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statement of Business Acquired.
The combined statement of revenue and certain expenses of the First
Commercial Properties for the year ended December 31, 1997 together with
the report of Independent Public Accountants thereon are included on
pages F-11 to F-14.
The statement of revenue and certain expenses of One Christina Centre
for the year ended December 31, 1997 together with the report of
Independent Public Accountants thereon are included on pages F-15 to
F-18.
(b) Pro Forma Financial Information.
Pro forma financial information which reflects the Company's acquisition
of the First Commercial Properties and One Christina Centre as of and
for the year ended December 31, 1997 are included on pages F-1 to F-10.
(c) Exhibits.
23.1 Consent of Arthur Andersen LLP
-2-
<PAGE>
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BRANDYWINE REALTY TRUST
Date: July 28, 1998 By: /s/ GERARD H. SWEENEY
------------------------
Gerard H. Sweeney
President and Chief Executive Officer
(Principal Executive Officer)
Date: July 28, 1998 By: /s/ MARK S. KRIPKE
---------------------
Mark S. Kripke
Chief Financial Officer
(Principal Financial and Accounting
Officer)
-3-
<PAGE>
BRANDYWINE REALTY TRUST
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
<S> <C> <C>
I. UNAUDITED PRO FORMA CONDENSED CONSOLIDATING FINANCIAL INFORMATION
o Pro Forma Condensed Consolidating Balance Sheet as of December 31, 1997.............................F - 4
o Pro Forma Condensed Consolidating Statement of Operations for the
Year Ended December 31, 1997.............................................................................F - 5
o Notes and Management's Assumptions to Unaudited Pro Forma Condensed
Consolidating Financial Information......................................................................F - 6
II. FIRST COMMERCIAL PROPERTIES
o Report of Independent Public Accountants............................................................F - 11
o Combined Statement of Revenue and Certain Expenses for the Year
Ended December 31, 1997 (audited)........................................................................F - 12
o Notes to Statement of Revenue and Certain Expenses..................................................F - 13
III. ONE CHRISTINA CENTRE
o Report of Independent Public Accountants............................................................F - 15
o Combined Statement of Revenue and Certain Expenses for the Year
Ended December 31, 1997 (audited)........................................................................F - 16
o Notes to Statement of Revenue and Certain Expenses..................................................F - 17
</TABLE>
F-1
<PAGE>
BRANDYWINE REALTY TRUST
PRO FORMA CONDENSED CONSOLIDATING FINANCIAL INFORMATION
The following sets forth the pro forma condensed consolidating
balance sheet of Brandywine Realty Trust ("the Company") as of December 31,
1997 and the pro forma condensed consolidating statement of operations for the
year ended December 31, 1997.
The pro forma condensed consolidating financial information should be
read in conjunction with the historical financial statements of the Company
and those acquisitions deemed significant pursuant to the rules and
regulations of the Securities and Exchange Commission.
The unaudited pro forma condensed consolidating financial information
is presented as if the following events occurred on December 31, 1997 for
balance sheet purposes, and on January 1, 1997 for purposes of the statement
of operations:
- - The Company acquired the properties described in Note 1 to these pro forma
financial statements.
- - The Company issued 2,375,500 Common Shares at $20.625 per share, of which
175,500 shares related to the underwriter's exercise of the over-allotment
option (the "March 1997 Offering"). The net proceeds from the March 1997
Offering were contributed to the Operating Partnership in exchange for
2,375,500 GP Units.
- - The Company issued 11,500,000 Common Shares at $20.75 per share, of which
1,500,000 shares related to the underwriter's exercise of the
over-allotment option (the "July 1997 Offering"). The net proceeds from the
July 1997 Offering were contributed to the Operating Partnership in
exchange for 11,500,000 GP Units.
- - The Company issued 786,840 Common Shares at $22.31 per share (the
"September 1997 Offering"). The net proceeds from the September 1997
Offering were contributed to the Brandywine Operating Partnership, L.P.
(the "Operating Partnership") in exchange for 786,840 units of general
partnership interest ("GP Units") in the Operating Partnership.
- - The Company issued 751,269 Common Shares at $24.63 per share (the "December
1997 Offering"). The net proceeds from the December 1997 Offering were
contributed to the Operating Partnership in exchange for 751,269 GP Units.
- - The Company issued 11,000,000 Common Shares at $24.00 per share, of which
1,000,000 shares related to the underwriter's exercise of the
over-allotment option (the "January 1998 Offering"). The net proceeds from
the January 1998 Offering were contributed to the Operating Partnership in
exchange for 11,000,000 GP Units.
- - The Company issued an aggregate of 1,012,820 Common Shares at $24.06 per
share (the "February 18, 1998 Offering"). The net proceeds from the
February 18, 1998 Offering were contributed to the Operating Partnership in
exchange for 1,012,820 GP Units.
- - The Company issued an aggregate of 629,921 Common Shares at $23.81 per
share (the "February 27, 1998 Offering"). The net proceeds from the
February 27, 1998 Offering were contributed to the Operating Partnership in
exchange for 629,921 GP Units.
- - The Company issued an aggregate of 625,000 Common Shares at $24.00 per
share (the "April 1998 Offering"). The net proceeds from the April 1998
Offering were contributed to the Operating Partnership in exchange for
625,000 GP Units.
F-2
<PAGE>
The pro forma condensed consolidating financial information is
unaudited and is not necessarily indicative of what the actual financial
position would have been at December 31, 1997, nor does it purport to
represent the future financial position and the results of operations of the
Company.
F-3
<PAGE>
BRANDYWINE REALTY TRUST
PROFORMA CONDENSED CONSOLIDATING BALANCE SHEET
AS OF DECEMBER 31, 1997 (Notes 1 and 2)
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
BRANDYWINE SHARE OFFERINGS
REALTY TRUST ---------------------------- PROPERTY
HISTORICAL USE OF ACQUISITIONS PRO FORMA
CONSOLIDATED PROCEEDS (A) PROCEEDS (B) (C) CONSOLIDATED
----------- ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
ASSETS:
Real estate investments, net $ 563,557 $ -- $ -- $ 587,961 $ 1,151,518
Cash and cash equivalents 29,442 301,422 (301,422) -- 29,442
Escrowed cash 212 -- -- -- 212
Accounts receivable 3,689 -- -- -- 3,689
Due from affiliates 214 -- -- -- 214
Investment in management company 74 -- -- -- 74
Investment in unconsolidated real estate ventures 5,480 -- -- -- 5,480
Deposits 12,133 -- -- (12,133) --
Deferred costs and other assets 6,680 -- -- -- 6,680
----------- ------------ ----------- ----------- -----------
Total assets 621,481 301,422 (301,422) 575,828 1,197,309
=========== ============ =========== =========== ===========
LIABILITIES:
Mortgages and notes payable 163,964 -- (301,422) 561,658 424,200
Accrued interest 857 -- -- -- 857
Accounts payable and accrued expenses 2,377 -- -- -- 2,377
Distributions payable 8,843 -- -- -- 8,843
Tenant security deposits and deferred rents 5,535 -- -- -- 5,535
----------- ------------ ----------- ----------- -----------
Total liabilities 181,576 -- (301,422) 561,658 441,812
----------- ------------ ----------- ----------- -----------
MINORITY INTEREST 14,377 -- -- 14,170 28,547
----------- ------------ ----------- ----------- -----------
BENEFICIARIES' EQUITY:
Common shares of beneficial interest 241 132 -- -- 373
Additional paid-in capital 446,054 301,290 -- -- 747,344
Share warrants 962 -- -- -- 962
Cumulative earnings 11,753 -- -- -- 11,753
Cumulative distributions (33,482) -- -- -- (33,482)
----------- ------------ ----------- ----------- -----------
Total beneficiaries' equity 425,528 301,422 -- -- 726,950
----------- ------------ ----------- ----------- -----------
Total liabilities and beneficiaries' equity $ 621,481 $ 301,422 $ (301,422) $ 575,828 $ 1,197,309
=========== ============ =========== =========== ===========
</TABLE>
F-4
<PAGE>
BRANDYWINE REALTY TRUST
PRO FORMA CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS FOR THE
YEAR ENDED DECEMBER 31, 1997 (Notes 1 and 3)
(Unaudited)
(In thousands, except share and per share amounts)
<TABLE>
<CAPTION>
BRANDYWINE 1997 EVENTS
REALTY ---------------------- 1998
TRUST HISTORICAL PRO FORMA SHARE
HISTORICAL OPERATIONS ADJUST- OFFERINGS
CONSOLIDATED (A) MENTS (B) SUBTOTAL (E)
---------- -------- --------- -------- --------
<S> <C> <C> <C> <C> <C>
REVENUE:
Base rents $ 49,928 $ 28,640 $ 918 $ 79,486 $ -
Tenant reimbursements 9,396 3,954 - 13,350 -
Other 1,736 284 - 2,020 -
---------- -------- --------- -------- --------
Total Revenue 61,060 32,878 918 94,856 -
---------- -------- --------- -------- --------
OPERATING EXPENSES:
Interest 7,079 - 4,303 11,382 (22,607)
Depreciation and amortization 15,589 - 7,093 22,682 -
Property operating expenses 22,445 13,745 - 36,190 -
Administrative expenses 659 - - 659 -
---------- -------- --------- -------- --------
Total operating expenses 45,772 13,745 11,396 70,913 (22,607)
---------- -------- --------- -------- --------
Income (loss) before equity in income of
management company and minority interest 15,288 19,133 (10,478) 23,943 22,607
Equity in income (loss) of management company 89 - 422 (C) 511 -
---------- -------- --------- -------- --------
Income (loss) before minority interest 15,377 19,133 (10,056) 24,454 22,607
Minority interest in (income) loss (376) - (355) (D) (731) (815) (D)
---------- -------- --------- -------- --------
Net income (loss) 15,001 19,133 (10,411) 23,723 21,792
Income allocated to Preferred Shares (499) - - (499) -
---------- -------- --------- -------- --------
Income (loss) allocated to Common Shares $ 14,502 $ 19,133 $ (10,411) $ 23,224 $ 21,792
========== ======== ========= ======== ========
Diluted earnings (loss) per Common Share $ 0.95
==========
Diluted weighted average number of
shares outstanding 15,793,329
==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
1998 PROPERTY
ACQUISITIONS
---------------------
HISTORICAL PRO FORMA TOTAL
OPERATIONS ADJUST- PRO FORMA
(F) MENTS (G) CONSOLIDATED
-------- --------- ----------
<S> <C> <C> <C>
REVENUE:
Base rents $ 62,869 $ - $ 142,355
Tenant reimbursements 10,505 - 23,855
Other 905 - 2,925
-------- --------- ----------
Total Revenue 74,279 - 169,135
-------- --------- ----------
OPERATING EXPENSES:
Interest - 42,104 30,879
Depreciation and amortization - 18,815 41,497
Property operating expenses 27,729 - 63,919
Administrative expenses - - 659
-------- --------- ----------
Total operating expenses 27,729 60,919 136,954
-------- --------- ----------
Income (loss) before equity in income of
management company and minority interest 46,550 (60,919) 32,181
Equity in income (loss) of management company - 1,576 (C) 2,087
-------- --------- ----------
Income (loss) before minority interest 46,550 (59,343) 34,268
Minority interest in (income) loss - 414 (D) (1,132)
-------- --------- ----------
Net income (loss) 46,550 (58,929) 33,136
Income allocated to Preferred Shares - - (499)
-------- --------- ----------
Income (loss) allocated to Common Shares $ 46,550 $ (58,929) $ 32,637
======== ========= ==========
Diluted earnings (loss) per Common Share $ 0.87
==========
Diluted weighted average number of
shares outstanding 37,407,699
==========
</TABLE>
F-5
<PAGE>
BRANDYWINE REALTY TRUST
NOTES AND MANAGEMENT'S ASSUMPTIONS TO
UNAUDITED PRO FORMA CONDENSED CONSOLIDATING
FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
1. BASIS OF PRESENTATION:
Brandywine Realty Trust (the "Company") is a Maryland real estate
investment trust. As of May 13, 1998, the Company owned 179 properties. The
Company's interest in all of the Properties is held through Brandywine
Operating Partnership, L.P. (the "Operating Partnership"). The Company is the
sole general partner of the Operating Partnership and as of May 13, 1998, the
Company held a 97.4% interest in the Operating Partnership.
These pro forma financial statements should be read in conjunction
with the historical financial statements and notes thereto of the Company, the
Columbia Acquisition Properties, the Main Street Acquisition Properties, the
TA Properties, the Emmes Properties, the Greentree Executive Campus
Acquisition Properties, 748 & 855 Springdale Drive, the Green Hills
Properties, the Berwyn Park Properties, 500 & 501 Office Center Drive,
Metropolitan Industrial Center, Atrium 1, Bala Pointe Office Centre, the
Scarborough Properties, the GMH Properties, the RREEF Properties, Three
Christina Centre, the DKM Properties, the First Commercial Properties and One
Christina Centre. In management's opinion, all adjustments necessary to
reflect the effects of the March 1997 Offering, the July 1997 Offering, the
September 1997 Offering, the December 1997 Offering, the January 1998
Offering, the February 18, 1998 Offering, the February 27, 1998 Offering, the
April 1998 Offering, the acquisitions of the Columbia Acquisition Properties,
the Main Street Acquisition Properties, 1336 Enterprise Drive, the Greentree
Executive Campus Acquisition Properties, Five Eves Drive, Kings Manor, the TA
Properties, the Emmes Properties, 748 & 855 Springdale Drive, 1974 Sproul
Road, the Green Hills Properties, the Berwyn Park Properties, 500 & 501 Office
Center Drive, Christiana Corporate Center, Metropolitan Industrial Center,
Atrium 1, 5 & 6 Cherry Hill Executive Campus, 220 Commerce Drive, Provident
Place, the PECO Building, Bala Pointe Office Centre, the Scarborough
Properties, the GMH Properties, the RREEF Properties, Three Christina Centre,
920 Harvest Drive, Norriton Business Center, the DKM Properties, the First
Commercial Properties and One Christina Centre by the Company have been made.
2. ADJUSTMENTS TO PRO FORMA CONDENSED CONSOLIDATING BALANCE SHEET:
(A) Reflects the proceeds received from the Company's recent public
share offerings, as summarized below:
Net Common Additional
Proceeds Shares Paid In
to Company At Par Capital
--------------- ------------- ------------
January 1998 Offering $ 249,970 $ 110 $ 249,860
February 18, 1998 Offering 23,052 10 23,042
February 27, 1998 Offering 14,225 6 14,219
April 1998 Offering 14,175 6 14,169
--------------- ------------- ------------
Total $ 301,422 $ 132 $ 301,290
=============== ============= ============
F-6
<PAGE>
(B) Reflects the use of the proceeds received from the Company's
recent public share offerings, as detailed in footnote (A) above, to repay
indebtedness, as summarized below:
Use of Debt
Cash Repayments
----------- -------------
January 1998 Offering $ (249,970) $ (249,970)
February 18, 1998 Offering (23,052) (23,052)
February 27, 1998 Offering (14,225) (14,225)
April 1998 Offering (14,175) (14,175)
----------- -------------
Total $ (301,422) $ (301,422)
=========== =============
(C) Reflects the Company's recent property acquisitions as follows:
<TABLE>
<CAPTION>
Cost Consideration
-------------------------------------- --------------------------------------------------
Credit Mortgage Operating
Closing Facility Debt Partnership
Acquisition Purchase Price Costs Total Borrowings Assumption Units Deposits
----------- -------------- ----- ----- ---------- ---------- ----- --------
<S> <C> <C> <C> <C> <C> <C> <C>
GMH Portfolio $ 229,015 $ 1,665 $ 230,680 $ 218,547 $ - $ - $ 12,133
RREEF Portfolio 55,500 657 56,157 56,157 - - -
Three Christina Centre 50,600 1,062 51,662 51,662 - - -
920 Harvest Drive 12,000 164 12,164 12,164 - - -
Norriton Business Center 7,742 283 8,025 2,367 5,658 - -
DKM Portfolio 137,800 381 138,181 119,195 15,374 3,612 -
First Commercial Properties 48,500 227 48,727 38,169 - 10,558 -
One Christina Centre 41,625 740 42,365 42,365 - - -
------------------------------------- --------------------------------------------------
Total $ 582,782 $ 5,179 $ 587,961 $ 540,626 $ 21,032 $ 14,170 $ 12,133
===================================== ==================================================
</TABLE>
3. ADJUSTMENTS TO PRO FORMA CONDENSED CONSOLIDATING STATEMENT OF
OPERATIONS:
(A) Reflects the historical statements of operations of the Columbia
Acquisition Properties, the Main Street Acquisition Properties, 1336
Enterprise Drive, Kings Manor, Greentree Executive Campus, Five Eves Drive,
the TA Properties, the Emmes Properties, 748 & 855 Springdale Drive, 1974
Sproul Road, the Berwyn Park Properties, the Green Hills Properties, 500/501
Office Center Drive, Christiana Corporate Center, Metropolitan Industrial
Center, Atrium 1, 5 & 6 Cherry Hill Executive Campus, 220 Commerce Drive,
Provident Place, Bala Pointe Office Centre and the Scarborough Properties for
the year ended December 31, 1997. The operating results reflected below
include the historical results for the period January 1, 1997 through the
earlier of the respective acquisition dates or December 31, 1997. Operating
results from those dates forward are included in the historical results of the
Company.
F-7
<PAGE>
<TABLE>
<CAPTION>
Tenant Property
reimburse- operating
Acquisition / Offering Rents ments Other expenses
- ---------------------------------------- -----------------------------------------------
<S> <C> <C> <C> <C>
Columbia Acquisition Properties $ 338 $ 24 $ 25 $ 130
Main Street Acquisition Properties 542 60 - 379
1336 Enterprise Drive 78 13 - 19
Kings Manor 105 27 - 43
Greentree Executive Campus 602 17 - 272
Five Eves Drive 103 12 - 45
TA Properties 2,053 299 6 698
Emmes Properties 2,570 1,130 2 1,332
748 & 755 Springdale Drive 414 - - 99
1974 Sproul Road 354 54 - 225
Berwyn Park Properties 2,492 376 36 1,073
Green Hills Properties 4,567 - - 2,725
500/501 Office Center Drive 1,106 919 48 971
Christiana Corporate Center 615 22 45 218
Metropolitan Industrial Center 1,395 306 33 472
Atrium 1 994 34 26 573
5 & 6 Cherry Hill Executive Campus 127 - - 140
220 Commerce Drive 594 - - 186
Provident Place 644 90 7 283
Bala Pointe Office Centre 3,523 34 35 1,544
Scarborough Properties 5,424 537 21 2,318
-----------------------------------------------
Total $ 28,640 $ 3,954 $ 284 $ 13,745
===============================================
</TABLE>
(B) Reflects the Company's pro forma adjustments relative to the
acquisitions of the Columbia Acquisition Properties, the Main Street
Acquisition Properties, 1336 Enterprise Drive, Kings Manor, Greentree
Executive Campus, Five Eves Drive, the TA Properties, the Emmes Properties,
748 & 855 Springdale Drive, 1974 Sproul Road, the Berwyn Park Properties, the
Green Hills Properties, 500/501 Office Center Drive, Christiana Corporate
Center, Metropolitan Industrial Center, Atrium 1, 5 & 6 Cherry Hill Executive
Campus, 220 Commerce Drive, Provident Place, the PECO Building, Bala Pointe
Office Centre and the Scarborough Properties for the year ended December 31,
1997 and pro forma adjustments to reflect the March 1997 Offering, the July
1997 Offering, the September 1997 Offering and the December 1997 Offering for
the year ended December 31, 1997. The pro forma adjustments below reflect the
period January 1, 1997 through the earlier of the respective acquisition dates
or December 31, 1997. Operating results from those dates forward are included
in the historical results of the Company.
F-8
<PAGE>
<TABLE>
<CAPTION>
Depreciation
and
amortization
Acquisition / Offering Rents Interest (i) (ii)
- ---------------------------------------- -------------------------------------------
<S> <C> <C> <C>
Columbia Acquisition Properties $ - $ 110 $ 66
Main Street Acquisition Properties - - 109
1336 Enterprise Drive - - 21
Kings Manor - - 29
Greentree Executive Campus - 249 106
Five Eves Drive - 75 32
TA Properties - 1,241 530
Emmes Properties - 2,049 874
748 & 755 Springdale Drive - 171 73
1974 Sproul Road - - 61
Berwyn Park Properties - - 700
Green Hills Properties - 690 745
500/501 Office Center Drive - 700 340
Christiana Corporate Center - 308 132
Metropolitan Industrial Center - 926 395
Atrium 1 - 597 255
5 & 6 Cherry Hill Executive Campus - 218 93
220 Commerce Drive - 345 147
Provident Place - 411 175
PECO Building (iii) 918 652 278
Bala Pointe Office Centre - 1,891 807
Scarborough Properties - 1,957 1,125
March 1997 Offering - (91) -
July 1997 Offering - (6,905) -
September 1997 Offering - - -
December 1997 Offering - (1,291) -
----------------------------------------
Total $ 918 $ 4,303 $ 7,093
========================================
</TABLE>
<PAGE>
(i) Pro forma interest expense is presented assuming an effective rate of
7.5% on borrowings under the Company's revolving credit facility. The
adjustment for the Columbia Acquisition Properties also reflects an
effective interest rate of 9.5% on assumed debt.
(ii) Pro forma depreciation expense is presented assuming an 80% building and
20% land allocation of the purchase price and capitalized closing costs
and assumes a useful life of 25 years.
(iii)Pro forma base rents for the Peco Building are based on the lease in
place as of November 25, 1997 as historically the property was owner
occupied and was not an operating property. All property expenses are
paid directly by the tenant.
(C) Pro forma equity in income of management company is based on
management fees less incremental costs estimated to be incurred.
(D) Pro forma minority interest in income represents the incremental
pro forma earnings allocable to minority partners.
(E) Represents interest expense savings from debt repayments upon the
application of the net proceeds from the January 1998 Offering, the February
18, 1998 Offering, the February 27, 1998 Offering and the April 1998 Offering.
Interest savings
Offering (i)
- ------------------------------------------------------------
January 1998 Offering $ (18,748)
February 18, 1998 Offering (1,729)
February 28, 1998 Offering (1,067)
April 1998 Offering (1,063)
-------------------
Total $ (22,607)
===================
(i) Pro forma interest expense is presented assuming an effective rate of 7.5%
on borrowings under the Company's revolving credit facility.
F-9
<PAGE>
(F) Reflects the historical operations of the GMH Portfolio, the
RREEF Portfolio, Three Christina Centre, 920 Harvest Drive, Norriton Business
Center, the DKM Portfolio, the First Commercial Properties and One Christina
Centre for the year ended December 31, 1997.
<TABLE>
<CAPTION>
Tenant Property
reimburse- operating
Acquisition Rents ments Other expenses
- ------------------------------ --------------------------------------------------------
<S> <C> <C> <C> <C>
GMH Portfolio $ 25,049 $ 1,937 $ 174 $ 10,935
RREEF Portfolio 4,160 705 - 1,252
Three Christina Centre 4,635 2,427 22 2,830
920 Harvest Drive 1,658 63 - 724
Norriton Business Center 1,161 - - 276
DKM Portfolio 15,182 4,135 24 7,164
First Commercial Properties 6,235 719 116 2,307
One Christina Centre 4,789 519 569 2,241
--------------------------------------------------------
Total $ 62,869 $ 10,505 $ 905 $ 27,729
========================================================
</TABLE>
(G) Reflects the Company's pro forma adjustments relative to the
acquisitions of the GMH Portfolio, the RREEF Portfolio, Three Christina
Centre, 920 Harvest Drive, Norriton Business Center, the DKM Portfolio, the
First Commercial Properties and One Christina Centre for the year ended
December 31, 1997.
Depreciation and
Acquisition Interest (i) amortization (ii)
- ------------------------------ --------------------------------
GMH Portfolio $ 16,391 $ 7,382
RREEF Portfolio 4,212 1,797
Three Christina Centre 3,875 1,653
920 Harvest Drive 912 389
Norriton Business Center 658 257
DKM Portfolio 10,016 4,422
First Commercial Properties 2,863 1,559
One Christina Centre 3,177 1,356
--------------------------------
Total $ 42,104 $ 18,815
================================
(i) Pro forma interest expense is presented assuming an effective rate of 7.5%
on borrowings under the Company's revolving credit facility, and an
effective rate of 7% to 8.5% on assumed mortgage indebtedness.
(ii) Pro forma depreciation expense is presented assuming an 80% building and
20% land allocation of the purchase price and capitalized closing costs
and assumes a useful life of 25 years.
F-10
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Brandywine Realty Trust:
We have audited the combined statement of revenue and certain expenses of
First Commercial Properties, described in Note 1, for the year ended December
31, 1997. This financial statement is the responsibility of the Property's
management. Our responsibility is to express an opinion on this financial
statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statement is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statement. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
The statement of revenue and certain expenses was prepared for the purpose of
complying with the rules and regulations of the Securities and Exchange
Commission for inclusion in a current report on Form 8-K of Brandywine Realty
Trust as described in Note 1, and is not intended to be a complete
presentation of First Commercial Properties' revenue and expenses.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the revenue and certain expenses of First Commercial
Properties for the year ended December 31, 1997, in conformity with generally
accepted accounting principles.
ARTHUR ANDERSEN LLP
Philadelphia, Pa.,
April 27, 1998
F-11
<PAGE>
FIRST COMMERCIAL PROPERTIES
COMBINED STATEMENTS OF REVENUE AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1997
REVENUE:
Base rents (Note 2) $ 6,235,000
Tenant reimbursements 719,000
Other 116,000
-----------
Total revenues 7,070,000
-----------
CERTAIN EXPENSES:
Maintenance and other operating expenses 912,000
Utilities 894,000
Real estate taxes 501,000
-----------
Total certain expenses 2,307,000
REVENUE IN EXCESS OF CERTAIN EXPENSES $ 4,763,000
===========
The accompanying notes are an integral part of this financial statement.
F - 12
<PAGE>
FIRST COMMERCIAL PROPERTIES
NOTES TO COMBINED STATEMENT OF REVENUE AND CERTAIN EXPENSES
DECEMBER 31, 1997
1. BASIS OF PRESENTATION:
---------------------
The statement of revenue and certain expenses reflect the operations of First
Commercial Properties (the "Properties") located in Harrisburg, Pennsylvania.
The Properties are expected to be acquired from Brandywine Operating
Partnership, L.P. (the "Operating Partnership"), a limited partnership of
which Brandywine Realty Trust (the "Company") is the sole general partner. The
Properties consist of a portfolio of eleven office buildings with
approximately 38 tenants in May 1998. The Properties have an aggregate net
rentable area of approximately 410,000 square feet which was 96% leased as of
December 31, 1997. The net purchase price for Property is expected to be $48.5
million.
The statement of revenue and certain expenses is to be included in the
Company's current report on Form 8-K, as the above-described transaction has
been deemed significant pursuant to the rules and regulations of the
Securities and Exchange Commission. Adjusting entries have been made to
present the accompanying financial statements in accordance with generally
accepted accounting principles. The accompanying financial statements exclude
certain expenses such as interest, depreciation and amortization, professional
fees, and other costs not directly related to the future operations of
Property.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period. The
ultimate results could differ from those estimates.
2. OPERATING LEASES:
----------------
Base rents presented for the year ended December 31, 1997, include
straight-line adjustments for rental revenue increases in accordance with
generally accepted accounting principles. The aggregate rental revenue
decrease resulting from the straight-line adjustment for the year ended
December 31, 1997, was $59,000.
The following tenants account for greater than 10% of minimum rent:
Property Tenant Minimum Rent
-------- ------ ------------
300 Corporate Center Dr. IBM $2,6678,000
200 Corporate Center Dr. PA Blue Shield 975,000
F-13
<PAGE>
The Property is leased to tenants under operating leases with expiration dates
extending to the year 2003. Future minimum rentals under noncancelable
operating leases, excluding tenant reimbursements of operating expenses as of
December 31, 1997, are as follows:
1998 $ 5,465,000
1999 3,450,000
2000 976,000
2001 777,000
2002 412,000
Thereafter 537,000
-------------
Total $ 11,618,000
Certain leases also include provisions requiring tenants to reimburse First
Commercial Properties for management costs and other operating expenses up to
stipulated amounts.
3. RELATED PARTY TRANSACATION:
First Commercial Development Company, a related party, leases 3,166 square
feet of the Properties. The lease is on a month-to month basis at
approximately $4,617 per month. Rents totaling $55,405 have been included in
the statement of revenues and certain expenses.
F-14
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Brandywine Realty Trust:
We have audited the statement of revenue and certain expenses of One Christina
Centre, described in Note 1, for the year ended December 31, 1997. This
financial statement is the responsibility of the Property's management. Our
responsibility is to express an opinion on this financial statement based on
our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statement is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statement. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
The statement of revenue and certain expenses was prepared for the purpose of
complying with the rules and regulations of the Securities and Exchange
Commission for inclusion in a current report on Form 8-K of Brandywine Realty
Trust, as described in Note 1, and is not intended to be a complete
presentation of the Property's revenue and expenses.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the revenue and certain expenses of One Christina
Centre for the year ended December 31, 1997, in conformity with generally
accepted accounting principles.
ARTHUR ANDERSEN LLP
Philadelphia, Pa.,
May 1, 1998
F-15
<PAGE>
ONE CHRISTINA CENTRE
STATEMENT OF REVENUE AND CERTAIN EXPENSES (NOTE 1)
FOR THE YEAR ENDED DECEMBER 31, 1997
REVENUE:
Minimum rent (Note 2) $ 4,789,000
Tenant reimbursements 519,000
Other Income (Note 4) 569,000
------------
Total revenue 5,877,000
------------
CERTAIN EXPENSES:
Maintenance and other operating expenses 1,114,000
Utilities 738,000
Real estate taxes 389,000
------------
Total certain expenses 2,241,000
------------
REVENUE IN EXCESS OF CERTAIN EXPENSES $ 3,636,000
============
The accompanying notes are an integral part of this financial statement.
F-16
<PAGE>
ONE CHRISTINA CENTRE
NOTES TO STATEMENT OF REVENUE AND CERTAIN EXPENSES
DECEMBER 31, 1997
2. BASIS OF PRESENTATION:
---------------------
The statement of revenue and certain expenses reflect the operations of One
Christina Centre (the "Property"), located in Wilmington, Delaware. The
Property is expected to be acquired by Brandywine Realty Trust (the "Company")
from Christina Pagemill, LLC in May 1998 for a net purchase price of
approximately $41.6 million. The Property has an aggregate net rentable area
of approximately 333,000 square feet which is 95% leased as of December 31,
1997. This statement of revenue and certain expenses is to be included in the
Company's current report on Form 8-K, as the above described transaction has
been deemed significant pursuant to the rules and regulations of the
Securities and Exchange Commission.
The accounting records of the Property are maintained on an accrual basis. The
accompanying financial statements exclude certain expenses such as interest,
depreciation and amortization, professional fees, and other costs not directly
related to the future operations of the Property.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period. The
ultimate results could differ from those estimates.
2. OPERATING LEASES:
----------------
Base rents presented for the year ended December 31, 1997, include
straight-line adjustments for rental revenue increases in accordance with
generally accepted accounting principles. The aggregate rental revenue
increase resulting from the straight-line adjustment for the year ended
December 31, 1997 was $535,000.
The following tenants account for greater than 10% of minimum rent:
Beneficial Corporation $2,424,000
First USA Bank $1,070,000
The Property is leased to tenants under operating leases with expiration dates
extending to the year 2010. Future minimum rentals under noncancelable
operating leases, excluding tenant reimbursements of operating expenses as of
December 31, 1997, are as follows:
1998 $ 4,285,000
1999 3,959,000
2000 3,976,000
2001 3,953,000
2002 4,061,000
Thereafter 33,010,000
-------------
$ 53,244,000
=============
F-17
<PAGE>
Certain leases also include provisions requiring tenants to reimburse the
Property for management costs and other operating expenses up to stipulated
amounts.
3. RELATED PARTY TRANSACTIONS:
--------------------------
The Property paid management fees of $172,000 to LaSalle Partners, an
unrelated third party, based on percentages as defined in the management
agreement. These management fees are included within maintenance and other
operating expenses in the statement of revenue and certain expenses.
4. OTHER INCOME:
------------
The Property receives revenue from the operation of a parking facility that is
managed by an unrelated third party. Revenue received from the operation of
this facility totaled approximately $494,000 for the year ended December 31,
1997, and is included in other income on the statement of revenues and certain
expenses.
F-18
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of
our report dated April 27, 1998 in this Form 8-K/A No. 1 on the combined
statement of revenue and certain expenses of the First Commercial Properties
and our report dated May 1, 1998 in this Form 8-K/A No. 1 on the combined
statement of revenue and certain expenses of One Christina Centre into the
Company's previously filed Registration Statements on Forms S-3 (File No.
333-20991, File No. 333-20999, File No. 333-56237, File No. 46647 and File No.
53359) and Forms S-8 (File No. 333-14243, File No. 333-28427, and File No.
52957).
ARTHUR ANDERSEN LLP
Philadelphia, Pa.,
July 21, 1998
