Welcome to the 7:30 A.M. session at Citi's 2025 Global Property CEO Conference. I'm Michael Griffin with Citi Research, and we're pleased to have with us Brandywine and CEO Jerry Sweeney. This session is for Citi clients only, and disclosures have been made available at the corporate access desk. To ask a question, you can raise your hand or go to liveqa.com and enter code GPC25 to submit questions. Jerry, I'll turn it over to you to introduce Brandywine and the team, provide any opening remarks, tell the audience the top reasons an investor should buy your stock today, and then we'll get into Q&A. Great, Michael. Thank you very much. I'm very happy to be here. I'm here with Tom Wirth, who is our Executive Vice President and Chief Financial Officer. I do have some prepared comments, so I'll walk through those, but I'll start off with the top reasons to buy our stock. First of all, the market trends are very positive. There's returning, improving return-to-office trends, coupled with a real dramatic flight to quality and historically low forecasted supply growth through 2029. We have a very high-quality, transit-oriented portfolio, and that portfolio has been outperforming our core peers over the last several years from an occupancy, mark-to-market, same-store, and capital ratio standpoint, with less than 5% rollover throughout our portfolio over the next eight quarters. We do have built-in product diversification within land that we existing own and control with all the approvals in place, and that provides for us the opportunity to do about 42% of future development as residential, 27% life science, office around 20%, and the balance 10%. The final point is we have a development pipeline that, upon stabilization, will increase our NOI between 15% and 20%. Just a couple of observations on a couple of our key business silos. From an operations standpoint, we are projecting for 2025 to be about 89%-90% leased by the end of the year, 88%-89% occupied. Our new revenue target, which we call our spec revenue for 2025, is between $27 million and $28 million, up significantly from last year, and we have that about 83% executed thus far. We're projecting cash same-store growth between 1% and 3%, GAP mark-to-market on our leasing activity between 3% and 4%, and maintaining capital ratios between 9% and 11%. A couple of other observations: we did exceed our 2024 spec revenue target, so hopefully we can do the same thing in 2025. We continue to improve our retention rate. 62% of our total deal activity in 2024 was flight to quality, and 84% in Philly CBD was flight to quality. We are definitely benefiting from that trend line. When we take a look at leasing activity in Philadelphia, there was 1 million sq ft of activity, and Brandywine captured 49% of all the office transactions. Austin leasing activity is picking up, albeit slowly, a couple quarters of positive absorption, and we are definitely seeing the continued flight to quality. The takeaways from an operating standpoint: solid, stable operating performance, limited rollover, good control over capital, and a growing pipeline of tenant prospects to our operating portfolio. We, of course, have some developments underway that are one of our key objectives is to bring those to stabilization. They are all structured in preferred equity ventures that we plan to recapitalize in the next six quarters as those projects stabilize. We have two projects underway in our Schuylkill Yards master plan development in University City. 3025 is a mixed-use project with 200,000 sq ft of office and 326 apartment units. The residential is 87% leased, and the office is 82% leased, so that will be reaching stabilization later this year. 3151, our life science project, was just completed in January. The pipeline there has grown to about 800,000 sq ft. We have one lease in negotiation and a lot of tours underway, so we're hopeful we can stabilize that in 2026. Uptown, our master plan development in Austin, Texas. The residential component there is 32% leased, just opened in late September, and we expect to stabilize that later this year. On the office, we have a 500,000 sq ft pipeline with tour activity increasing, and we anticipate stabilizing that by the end of the year as well. Just a couple quick comments on our balance sheet. We're in solid shape from a liquidity standpoint. We have no bond maturities until 2027. While we're in solid shape from a liquidity standpoint, we plan to continue to access the unsecured market and grow our unencumbered asset pool. We are operating our business on the premise that we'll have minimal or no balance on our line of credit over the next several years, and we really are working to put ourselves on a path to get back to investment-grade rating. We do have about $50 million of sales programmed in our business plan for 2025. Last year, we did close to $300 million, off an original estimate of $80 million. Our expectation will put more properties in the market for sale during the course of the year, with the expectation we'll probably be able to beat that target as the year progresses. Michael, with that, I'd be happy to open the floor for questions. Thank you for that opening, Jerry. You kind of touched on it in your prepared remarks, but we're continuing to see sentiment improve in the office sector, whether it's return-to-office mandates or companies finally looking to grow their footprint. How best can you describe that Brandywine's able to capitalize on this improving office sentiment? I think a couple ways. It starts with having the best product available in the marketplace, staffed by the best team of people. I mean, we're really a two-market company, so we're the largest landlord by far in the Philadelphia region. We have the highest quality product available. We have a great team from a property management leasing standpoint that's been extremely helpful for us in getting our renewal percentage up as well as attracting new deals. Being a landlord of choice has been very helpful. The other thing we've actually seen is a real bifurcation in the marketplace. We have actually seen, particularly in the Philadelphia region, our competitive set shrink. If you really look at Philadelphia from a macro standpoint, it's about 43 million sq ft of space in the CBD area, 101 buildings, about a 22% vacancy rate. Ten buildings in that market comprise 50% of the vacancy. We are seeing a tremendous uptick in activity for tenants wanting to move into higher quality buildings. For example, our Logan Complex, three major buildings in the CBD, were 93% leased. 1,900 were 100% leased. I think taking advantage of where we see weaker landlords not being able to provide capital for tenancies or for buildings that are older that need significant capital renovation to be competitive, we've done a very, very good job of capturing more than our market share. I mentioned during my overview comments, 547 different leases were done in Philadelphia during 2024 over a million sq ft of activity. We captured 49% of that versus a 20% market share. I think being out there with a good reputation, the best product, having a long track record of investing in our projects, we're very active and involved in the community. That gives us the ability to kind of a large network of tenants beyond just the brokerage community has been extremely helpful for us, and we're seeing the same trend line start to develop, albeit at a slower pace down in Austin, Texas. Maybe if you want to expand on the opportunity sets within your markets, why are Philadelphia and Austin, what's their competitive advantage maybe relative to other Gateway or Sunbelt markets? I think through the pandemic what you've seen is Philadelphia, which is always viewed as kind of a slow growth market, has actually performed very well at the top tier. The leasing activity, while absorption has been negative for a couple years, leasing activity has been positive, and we're capturing more than our fair share of that market demand. Philadelphia has historically been kind of an eds and meds market driven by the service sector, so that continues to provide a base of support for us. In the Pennsylvania suburbs, we've seen some influx of new companies coming into the region, and we've been able to capture that fair share of demand as well. Austin, while it's going through certainly a bit of a disequilibrium now given the drop-off in demand and the oversupply, the long-term trends are very strong. I mean, over 140 people a day moved into Austin, Texas. Austin absorbed 30,000 apartment units last year. There are still 50 companies looking to relocate either their headquarters or a significant portion of their companies to Austin, Texas. We are beginning to see the tech companies, which comprise over a third of leasing activity, start to stabilize, bring people back to the workplace. IBM has people back to the workplace, and some of the other tech companies brought people back to the workplace as well. Philadelphia, we think, has shown a capacity to outperform in tough times and to perform on par in bull times. I think the market positioning in our business is very, very important. Our controlling a significant portion of the trophy inventory in both the Philadelphia CBD, University City, and suburban markets, I think, has held us in very good stead. When you look at our occupancy stats and our mark-to-market over the last several years, the major drivers there have really been coming out of the Philadelphia marketplace. It's fair to say that both the suburbs and the CBD in Philly have probably performed better than you might have expected over the past. Actually, we've been pretty pleased with the way at least our portfolio in the CBD has performed. I mean, again, leasing demand has been muted, don't misunderstand me, but what's out there, we've been able to capture way more than our fair share of those deals. Our portfolio has been performing well. The other thing we've been able to do is actually move up net effective rents. We're getting the highest rents ever in our Logan Square properties, Commerce Square, University City, and our Radnor portfolio in the Pennsylvania suburbs. That's one of the things that we've, the TI costs on an absolute basis have increased on a per sq ft per lease year, but we've been able to keep our capital ratios in the low double digits. This year, we're projecting between 9% and 11%. The driver there isn't necessarily a decrease in leasing capital per lease year, but our ability to drive up our rents. Maybe we can switch now to the leasing pipeline and sort of what you're seeing. Can you give us a sense in terms of size? Is it a mix of new renewals? Are tenants mainly looking to expand or keep the same amount of space? Anything you can maybe add about the size of tenancies? Is it the small to medium-sized tenants or the bigger tenants starting to look for space? Anything there would be helpful. Yeah, no, Mike, and I'll segment my comments between kind of our operating portfolio and our development portfolio, if that's okay. Look, I mean, our tour levels were up 23% in the fourth quarter over the third quarter. We are well beyond pre-pandemic tour levels. Our pipeline has never been bigger on our operating portfolio. I mean, in that band, we have tenants that range from 5,000 sq ft. I guess the largest tenant in the operating portfolio pipeline is close to about 100,000 sq ft. We have it in all of our marks, whether it's downtown Philly, University City, or the Pennsylvania suburbs, significant uptick in activity. Austin, which again, I don't want to overstate it, has been fairly slow for us. I mean, this was a portfolio that for us for years was in the mid 90% lease. It's now sub 80% lease. We have some work to do in Austin, but the pipeline today in the operating portfolio is more than twice what it was this time last year. I think with Austin posting positive absorption for two consecutive quarters, the rents have remained fairly static there, which is kind of a surprise to me, quite candidly. Not a lot of downward pressure on rents, but it's been slower to recover. The pipeline has not been an issue for us. Pipeline continues to build. We are still seeing some challenges in getting tenants to execute leases. The gestation cycle for us is still fairly protracted. I'm not sure exactly what those reasons are. I'm sure there's micro and macro reasons. Our major opportunity, I think, is to accelerate the conversion of our existing pipeline on our operating portfolio. When we look at the development pipeline, which is reaching stabilization on a couple of the properties, 3025, which is 200,000 sq ft of office and the apartments, the apartments are running on pro forma, as I mentioned, 87% leased. We signed a major lease with a financial service firm in January that took that building on the office side to about a little more than 80% leased. We have a pipeline on the remaining 30,000 sq ft that's 4X that we're working our way through. The life science project that we started and just delivered back in, again, early this year, our pipeline there has grown to 800,000 sq ft. Tenants' size range is there are between somewhere around 20,000 sq ft up to about 120,000 sq ft. The mix is both public life science companies, private life science companies spun out from University of Pennsylvania or Children's Hospital, and a couple of institutional users. With our success in leasing up 3025 and having only about 30,000 sq ft of space available there, we have also opened up that pipeline for 3151, the life science building, to office users. There are a couple of larger office users that we're talking to that are now we've pivoted them from 3025 to 3151. We will see how that progresses over the next couple of quarters. Down in Austin, the pipeline for One Uptown, which is about 300,000 sq ft, the pipeline is about 500,000 sq ft. The largest tenant we're talking to there is about 160,000 sq ft, ranging down to about 15,000-20,000 sq ft. That building was just completed really in the fourth quarter of last year with all the streetscape improvements. It presents itself well. The leasing activity on the adjoining residential project is going well. We have work to do on both One Uptown and 3151. Pipeline indications are positive, but we certainly need to get those deals across the finish line. Jerry, I think earlier you mentioned that while concessions seem elevated relative to historical averages, you're still able to push face rents. You noted in your prepared remarks you have a pretty minimal lease rollover over the next few years. As those leases roll, do you see an opportunity to be able to push rents and capture some mark-to-market on those? We do. I'll say we do in select locations. You have to be a little surgical about it. We certainly have the ability, I think, to push rents significantly if I think about our suburban Pennsylvania portfolio. We have the ability, and we have been pushing rents in our Radnor and Conshohocken portfolios. In King of Prussia, we've been able to maintain rent stability still with a positive mark-to-market, but nowhere near the level that we've been able to push rents in Radnor and Conshohocken. When I take a look at CBD Philadelphia, we had a rollover of tenant in one of our Logan Square buildings last year. We've leased up substantially all of that space. The mark-to-market from a cash standpoint has been high double digits on that. We are continuing to push rents in CBD Philadelphia because, again, while the market is 20-something percent vacant, the vacancy rate in the top-tier assets is incredibly tight. There is really, given that flight to quality, given the fact that in Philadelphia, I think it was 70% of all new lease transactions were flight-to-quality deals, we definitely have the ability to push rents there. We are a price taker in Austin. We do not really have the ability to move rents there. I think there with the level of vacancy we have in a couple of the buildings, the objective is to generate the pipeline, cut the deals the best we can given market conditions, start covering our operating expenses, and create NOI growth for the future years. We had a question come in from Live QA. It kind of relates to the life science portion of your portfolio, but is there any worry about the potential change or cuts to NIH funding and how that may or may not impact your life science portfolio? Yeah, certainly I think there is that level of concern. It's another one of those macro points that just has the impact of delaying decision-making. Whether it's real or not, it's going to affect decision-making just the same way as tariffs may and all those other macro concerns. Look, I think the life science market in Philadelphia, life science right now is about 10% of our portfolio. Our game plan is to grow that to 20% over time. The market dynamic has been slow, but there is activity there. There's about 600,000 sq ft of leasing activity in the life science market in the Philadelphia region last year. We captured over 200,000 sq ft of that. There's still been about $1 billion of private financing in the life science sector. So we certainly see the recovery underway. We think it's a little bit slow. I think NIH, the funding cap there at 15%, is certainly going to impact some of the larger institutions. You take a look at, I do not want to name one institution, but the range of their indirect cost is typically between 40% and 65%. When NIH lays out a 15% marker, that certainly creates a big significant issue for some of these major academic research institutions. How that impacts the existing standalone private or public health life science companies, I am not sure. I am not sure I need to because they are not really the primary recipient of NIH grants. What does affect those life science companies, public or private, is you really have about 160 life science companies that are trading at or below cash value. I think that there's been not so much a dearth of capital coming into life science, but the pricing of that capital has been much more expensive. That has had a huge impact on the expansion plans of certainly a number of the life science companies that we've been focused on, particularly in cell and gene therapy. Maybe switching to kind of capital allocation in the tech market. You've been active more on the disposition front toward the end of last year, sold some properties. You have some in the pipeline for 2025. Are you looking and seeing any potential opportunities to pivot to offense, whether it's through acquisitions, maybe forming new joint ventures? How should we think about kind of your capital allocation plans for the year ahead? Yeah, good question. Look, our number one priority is to lease up these development projects. I mean, that's the major area of focus. That's the major revenue driver for us. That's the major strength of our major component of our balance sheet strengthening. There's no but there. That's the top priority in the company. We have the operating portfolio in amazing shape with a forward rollover. We're already talking to 27- 28 tenants to make sure we continue that low-level rollover going forward. In terms of capital allocation, allocating capital to our development projects is number one. I think we've pretty well funded that out. We do want to continue to sell properties to continue to strengthen our balance sheet. Look, the reality is pricing levels are not where they would have been several years ago. Even with what we sold in 2024, some of those pricing levels that we took were a bit painful, but they were the market reality. We do a pretty diligent exercise of looking at, we think, the net present value of various hold periods for every piece of real estate we have in terms of how long it will take to lease up, what those effective rents will be, how much capital we need to put in. Even if we do not like the number and we put that property on the marketplace, if the market hits that ask number, we will trade it. We did that last year with a suburban Philadelphia office complex. We plan on continuing to do that to essentially obviate the need for putting capital into projects that we do not think will generate great value accretion for us, continue to strengthen our balance sheet, and give us liquidity to do other things. We are certainly starting to see opportunities for us to go on the offense. There is a number of situations where there is refinancing, mezzanine financings coming due, bank loans coming due. Given our network in the two primary markets we are in, we are starting to evaluate a number of higher-yielding bridge or preferred investments in other properties. That is much secondary to getting the development projects done, making sure our balance sheet liquidity is in great position, and then we will see what we go on the offense and do. This probably relates to the dispositions, but we just had a question come in on Live QA. Can you give us a sense of what the cap rates were for your recent transactions on the disposition side and then what the buyer pool constituted? Yeah, we actually, I mean, the range of our cap rates in 2024 was between 6, the low was around 6, the high was around 10. Assume an average cap rate of 8% on what we're looking to sell this year, actually between 7-8%. The buyer pool has been primarily smaller syndicators, family offices. We've actually done a couple of user sales. We're seeing that a number of companies see an opportunity to kind of buy in their leaseholds at a fair price. For example, our biggest transaction last year was a sale of two buildings in Austin to the city of Austin who are going to make that their Public Safety Headquarters. We are beginning, though, to see a lot more focus on the office sector. Whether it's the top-tier Private Equity Firms, the Life Insurance Companies, the pension funds, we're definitely beginning to see much deeper bid pool lists. We have an asset we have on the market right now that I think we have 83 NDAs signed. The range there is from family offices to syndicators to other private developers to smaller institutions. Definitely, I think with the macro trends being much more positive looking at 2025 than 2024, there's definitely more money moving into the office sector. I think there is a real sense that the sector has bottomed from a value standpoint. There's an ascendancy of value for the higher quality office product. I think there'll still be a bit of a drag on the lower quality. I think folks are indicating if they can buy an asset today well below replacement cost, build in a structural vacancy of about 10% on their underwriting, put in the capital, they can stabilize those assets in the 9%-10% range on an unlevered basis, which generates between a 15%-17% levered IRR. We're starting to see more and more of that money move in, particularly, Michael, for deals lower than $100 million. I think the sweet spot for us in selling assets has really been kind of that $50 million range. The other aspect that's been incredibly positive is the CMBS market has been much stronger this year. I want to say this year, in 2024, heading into 2025. One of the big gating issues we had before was buyers couldn't find financing on any reasonable terms. We actually did provide some bridge financing to get some transactions done. It seems now a lot of the bid lists we're going through, buyers are bringing their own financing to the table. Now, that financing is still in the kind of 55%-65% range. We're not really seeing anything kind of in the 75% or 80% range. That debt uncertainty seems to be diminishing significantly as we look at 2025 versus 2024. I guess to that end, it's fair to assume that debt capital availability has improved and lenders are more willing to lend on office. I know it's coming off of a low base, but it seems from your comments there that there is some optimism on the debt side. More positive than it's been. I wouldn't quite go it's not quite a sunny day yet, but I think the reality is that we're seeing more and more investors, both on the debt and equity side, focus on office. I think there's a recognition that there's a true bifurcation that's happening within our sector. No different really than what's happened in a number of sectors over the years, whether it was industrial. I mean, years ago, we built 18-foot clear warehouses. They're functionally obsolete today. You take a look at the 6 billion sq ft office inventory in this country. There are probably between 1.5billion-1.75 billion sq ft that are functionally obsolete, either because locations have changed or consumer tenant preferences have changed or the cost to renovate those buildings are so significant compared to the net effective return you get that they're not economically in play. That's why one of the things that's kind of fascinating, in addition to new equity and new debt coming in to look at the office sector, you're starting to see the emergence of pretty effective public policy that's looking at how they can facilitate these office-to-residential conversions. Now, we all know most of those don't work in pencil, but the reality is with public financing, they will. There are bills pending in Congress on a bipartisan basis now that provide for essentially a historic tax credit for office-to-residential conversions that has a sliding scale of tax credits based on the component of affordable and workforce housing. A number of cities around the country are evaluating how they can provide public subsidies to facilitate those conversions. Philadelphia is looking at potentially a 20-year tax abatement for CMX-5 zoned office buildings to convert those to residential. Philadelphia has a goal of delivering about 30,000 affordable housing units over the next decade. These office conversions could be pieces of that. I think you have the convergence of a couple of positive factors. One, the demand drivers are much stronger than they were a year ago. Two, you have more capital moving into the sector. Three, there's a general recognition that some of these older office buildings are not going to be competitive and something needs to be done with them. Whether they trade at ground value less demolition costs, or there's public subsidies to convert those. We have two conversions underway in Philadelphia right now of office buildings that will be removed from the competitive set and have a positive impact on the overall vacancy in the market. Maybe just going back to your comments there on office-to-resident conversions, which remains topical. You highlighted the two opportunities you have within your own portfolio. Can you give us a sense? We're probably in the beginning stages of that, but is it a 26 or a 27 story that those projects end up getting converted, or is it more longer term than that? No, we have a couple of properties in our portfolio that we're undergoing a pretty extensive zoning and feasibility study for residential. One building, it's a small floorplate building in a central location that has been underperforming. It's actually our highest vacancy building. We're working through the zoning process there. I think we'll get our zoning done. When we get our zoning done, we'll make a decision based upon what else is going in the company, whether we sell that project to another residential developer, have them convert it, and we make a profit, or we do it ourselves. We have two building, or actually a three-building complex in Austin. We're looking at going through the rezoning there and in active discussions with neighborhood groups there. My guess is they would be more of a 2026 decision, Michael, versus a 2025. Jerry, kind of wrapping all of your comments together and taking it holistically, is it fair to assume that fundamentals have bottomed? We've hit a nadir in occupancy, and there should be an inflection point at some point in 2025? We believe so. I mean, I think we came out with some tough earnings this year based upon our development projects becoming expensive in the preferred structures. When we look at the operating platform, we certainly think that we're in a positive trend line across the board. I think we'll continue to make significant progress in our core Philadelphia marketplaces. I think the upsurge in activity in Austin will kind of, I think we bottomed out there as well. We think 2026 and 2027 will be able to post increasingly better numbers from the operating standpoint. Combine that with the development properties coming online, we certainly think we're at a nadir from an earnings standpoint as a company. We had a question come in from Live QA just on the debt side. Jerry mentioned that Brandywine is interested in tapping the unsecured market. Why is this more attractive versus secured debt? For a couple of reasons. One is it's a little more expensive for us on the unsecured side, but the flexibility it gives us given our portfolio composition is immensely more attractive from a marketing standpoint. We have such a concentration of product to the extent we have mortgages on building A, but not on building B. We move about, some years we move as much as 1 million sq ft of space between buildings. It gives us tremendous marketing and tremendous operating flexibility. I think that the larger picture for us is we do want to return back to an investment-grade rating. Having the strength of our unsecured, our unencumbered asset pool be larger is very attractive to us. Our major financing vehicle within the company is our line of credit. Certainly, the quality, size, coverage ratios in our unencumbered asset pool are a key driver there. While there is a price point difference from a kind of a mark-to-market on going in debt costs, the operating and marketing advantage that we get from being unencumbered, given our concentration in the markets that we are in, is a paramount concern to us. With that, we'll end with our two rapid-fire questions. First one, what is your expectation for net effective rent growth for the office sector overall, so not Brandywine specifically, in 2026? In 2026? 2%. Will there be more, fewer, or the same number of publicly traded office REITs a year from now? Publicly traded? Office rates. Office rates, I think there'll be less. Great. Thank you so much. Thank you all very much.