INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES

12 Months Ended

Dec. 31, 2024

Equity Method Investments and Joint Ventures [Abstract]

INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES

4. INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES

As of December 31, 2024, the Company held ownership interests in ten unconsolidated real estate ventures for a net aggregate investment balance of $570.5 million. As of December 31, 2024, four of the real estate ventures owned properties (directly or through leasehold interests) that contained an aggregate of approximately 3.9 million net rentable square feet of office space; two of the real estate ventures owned 1.4 acres of land held for development; and four of the real estate ventures owned 7.5 acres of land in active development.

The Company accounts for its interests in the unconsolidated real estate ventures, which range from 20% to 84%, using the equity method. Certain of the unconsolidated real estate ventures are subject to specified priority allocations of distributable cash, including cash from operations and cash from capital events, such as sales of properties.

The Company earned management fees from the unconsolidated real estate ventures of $7.7 million, $8.1 million and $8.2 million for the years ended December 31, 2024, 2023 and 2022, respectively.

The Company earned leasing commissions from the unconsolidated real estate ventures of $2.3 million, $3.8 million and $2.5 million for the years ended December 31, 2024, 2023 and 2022, respectively.

The Company had outstanding accounts receivable balances from the unconsolidated real estate ventures of $5.0 million and $3.5 million as of December 31, 2024 and 2023, respectively.

The amounts reflected in the following tables (except for the Company’s share of equity in income) are based on the financial information of the individual unconsolidated real estate ventures. The Company records operating losses of a real estate venture in excess of its investment balance if the Company is liable for the obligations of the real estate venture or is otherwise committed to provide financial support to the real estate venture.

The Company’s investment in the unconsolidated real estate ventures as of December 31, 2024 and 2023, and the Company’s share of the unconsolidated real estate ventures’ income (loss) for the years ended December 31, 2024, 2023, and 2022 was as follows (in thousands):

	Ownership Percentage	Carrying Amount				Company's unconsolidated real estate venture Income (Loss)						Unconsolidated Real Estate Venture Debt at 100%, gross
		2024		2023		2024		2023		2022		2024		2023
Office Properties
Commerce Square Venture	84% (a)	$	179,061	$	272,216	$	(134,545)	$	(18,791)	$	(12,128)	$	220,000	$	220,000
Mid-Atlantic Office Venture	40% (a)	10,844		—		7,141		(26,448)		412		62,023		132,770
Herndon Innovation Center Metro Portfolio Venture, LLC (f)	15%	—		3,518		—		(11,854)		(536)		—		233,443
MAP Venture (b)	5%	—		(48,733)		(6,541)		(10,580)		(8,340)		—		179,842
Cira Square	20%	42,969		25,242		(1,648)		(2,474)		(985)		160,000		257,700
KB JV (e)	50%	42		—		986		—		—		—		—
Other
4040 Wilson Venture (c) (d)	50%	—		29,419		(10,618)		(2,536)		(1,211)		—		145,000
1919 Venture (g)	50%	—		—		—		—		1,392		—		—
One Uptown - Multifamily (c)	50%	29,818		32,124		(3,800)		—		—		72,197		40,270
Development Properties
3025 JFK Venture (c)	64%	61,379		62,034		(19,271)		(4,456)		(35)		173,754		152,032
JBG - 51 N Street (c)	70%	8,209		21,150		(13,397)		(435)		(382)		—		—
JBG - 1250 First Street Office (c)	70%	8,531		17,843		(9,586)		(269)		(195)		—		—
3151 Market Street Venture (c)	76%	168,925		90,645		(105)		(72)		(8)		—		—
One Uptown - Office (c)	62%	60,677		47,036		(201)		—		—		69,047		51,701
		$	570,455	$	552,494	$	(191,585)	$	(77,915)	$	(22,016)	$	757,021	$	1,412,758

(a)Ownership percentage represents the Company’s combined interest including preferred and common equity holdings. See “Commerce Square Venture” and “Mid-Atlantic Office JV” sections below for more information.

(b)Included within “Other Liabilities” on the consolidated balance sheet.

(c)This entity is a VIE.

(d)On December 20, 2024, the Company sold its interest in the 4040 Wilson Venture. See “4040 Wilson Venture” section for more information on the disposal.

(e)On December 20, 2024 KB JV sold its entire 14 industrial/flex building portfolio out of the KB JV. See "KB JV" section for more information on the disposal.

(f)As of December 31, 2024, the Company has no further investments in Herndon Innovation Center. See “Herndon Innovation Center Metro Portfolio Venture, LLC” section for more information on the divestiture.

(g)On November 30, 2022, the Company sold its interest in 1919 Venture. See “1919 Venture” sections for more information on the disposal.

The following is a summary of the financial position of the unconsolidated real estate ventures in which the Company held interests as of December 31, 2024 and December 31, 2023 (in thousands):

	December 31, 2024 (b)		December 31, 2023
Net property	$	1,641,085	$	2,339,921
Other assets	238,406		534,658
Other liabilities	107,801		443,536
Debt, net	752,325		1,407,858
Equity (a)	1,019,365		1,023,185

(a)This amount does not include the effect of the basis difference between the Company's historical cost basis and the basis recorded at the real estate venture level, which is typically amortized over the life of the related assets and liabilities. Basis differentials occur from the impairment of investments, purchases of third party interests in existing real estate ventures and upon the transfer of assets that were previously owned by the Company into a real estate venture. In addition, certain acquisition, transaction and other costs may not be reflected in the net assets at the real estate venture level.

(b)Excludes amounts related to the Herndon Innovation Center Metro Portfolio Venture, LLC and the New MAP Venture as the Company discontinued applying the equity method of accounting. The Company discontinued applying the equity method of accounting on the Herndon Innovation Center Metro Portfolio Venture, LLC after March 31, 2024 and discontinued applying the equity method of accounting on the New MAP Venture after June 30, 2024.

The following is a summary of results of operations of the unconsolidated real estate ventures in which the Company held interests during the twelve-month periods ended December 31, 2024, 2023 and 2022 (in thousands):

	Year Ended December 31,
	2024 (b)		2023		2022
Revenue	$	157,361	$	232,895	$	244,981
Operating expenses	(79,093)		(122,181)		(124,608)
Interest expense, net	(58,785)		(78,909)		(49,007)
Depreciation and amortization	(70,536)		(100,205)		(103,378)
Provision for impairment	(148,347)		—		—
Net loss	$	(199,400)	$	(68,400)	$	(32,012)
Ownership interest %	Various		Various		Various
Company's share of net loss	$	(183,141)	$	(39,637)	$	(21,594)
Other-than-temporary impairment (a)	(8,378)		(37,176)		—
Basis adjustments and other	(66)		(1,102)		(422)
Equity in loss of unconsolidated real estate ventures	$	(191,585)	$	(77,915)	$	(22,016)

(a)Represents other-than-temporary impairment on investment in unconsolidated joint venture due to a decline in fair value below the carrying value of our investments in the unconsolidated joint venture for the years ended December 31, 2024 and 2023.

(b)Excludes amounts related to the Herndon Innovation Center Metro Portfolio Venture, LLC and the New MAP Venture as the Company discontinued applying the equity method of accounting. The Company discontinued applying the equity method of accounting on the Herndon Innovation Center Metro Portfolio Venture, LLC after March 31, 2024 and the New MAP Venture after June 30, 2024.

As of December 31, 2024, the aggregate principal payments of the unconsolidated real estate ventures recourse and non-recourse debt payable to third-parties are as follows (in thousands):

2025	$	—
2026	173,754
2027	141,244
2028	220,000
2029	222,023
Thereafter	—
Total principal payments	757,021
Net deferred financing costs	(4,696)
Outstanding indebtedness	$	752,325

One Uptown Ventures

On December 1, 2021, the Company established the One Uptown Ventures, two unconsolidated real estate ventures, with affiliates of Canyon Partners Real Estate to develop “One Uptown,” a $345.6 million mixed-use project in Austin, Texas. One Uptown has been designed as a 348,000 square feet of Class-A workspace and 15,000 square feet of street-level retail space (through the “office” joint venture) and 341 apartment residences and a public park (through the “multifamily” joint venture) and a six-story parking garage to be shared by the two unconsolidated real estate ventures. At the time of formation of the ventures, the Company's partner in each venture agreed, subject to closing of the applicable construction loans, to fund approximately $64.5 million of the combined project costs in exchange for a 50% preferred equity interest in each of the two ventures, with the Company retaining a 50% common equity interest in each. Under the terms of each of the venture agreements, the venture partner had no obligation to fund any portion of the applicable project costs until the closing of the applicable construction loan. The absence of this obligation prevented Company from meeting the sale recognition criteria of ASC 606 until the applicable closings of the construction loans. On July 29, 2022, the One Uptown Ventures closed on two separate construction loans. The office venture closed on a $121.7 million construction loan which bears interest at Secured Overnight Offering Rate (“SOFR”) plus 3.00% and the multifamily venture closed on an $85.0 million construction loan, which bears interest at SOFR plus 2.45%, plus, in each case, a daily SOFR adjustment of 10 basis points. Both loans have original maturity dates in July 2026 with a one year option to extend. The Company has also provided a carry guarantee and limited payment guarantee up to 30% and 15% of the principal balances of the $121.7 million and $85 million construction loans, respectively. The Company subsequently recognized the formation of the ventures and deconsolidated the projects upon the closing of the loans.

The Company has determined that the each of the One Uptown Ventures is a VIE. As a result, the Company used the VIE model under the accounting standard for consolidation in order to determine whether to consolidate the One Uptown Ventures. Based upon each member's shared power over the activities of the One Uptown Ventures under the operating and related agreements, the One Uptown Ventures are accounted for under the equity method of accounting.

During the twelve months ended December 31, 2024, the Company contributed $11.1 million to the One Uptown - Office Venture, increasing the Company's aggregate investment balance to $60.7 million at December 31, 2024 and increasing the Company's equity ownership from 57% to 62%. The contribution was used to pay interest on the One Uptown - Office Venture construction loan and arose from higher than budgeted interest carry costs. The One Uptown - Office Venture was substantially complete in the first quarter of 2024. The Company expects to place the One Uptown - Office Venture into service in the first quarter of 2025.

During the twelve months ended December 31, 2024, the Company contributed $0.0 million to the One Uptown - Multifamily Venture. The One Uptown - Multifamily Venture was substantially complete and placed into service in the third quarter of 2024.

3151 Market Street Venture

On July 14, 2022, the Company formed an unconsolidated real estate venture, with an unaffiliated third party, to develop a life science/office building containing approximately 417,000 rentable square feet under a long-term ground lease located at 3151 Market Street in Philadelphia, Pennsylvania. The estimated project cost is approximately $317 million, and the joint

venture partner has funded approximately $49.9 million of the project costs in exchange for a 35% preferred equity interest in the venture.

The Company has determined that the 3151 Market Street Venture is VIE. As a result, the Company used the VIE model under the accounting standard for consolidation in order to determine whether to consolidate the 3151 Market Street Venture. Based upon each member's shared power over the activities of the 3151 Market Street Venture under the operating and related agreements, the 3151 Market Street Venture is accounted for under the equity method of accounting.

During the twelve months ended December 31, 2024, the Company contributed $71.2 million to the 3151 Market Street Venture, increasing the Company's aggregate investment balance to $168.9 million at December 31, 2024 and increasing the Company's equity ownership from 64% to 76%. The 3151 Market Street Venture was substantially completed in the fourth quarter of 2024. The Company expects to place the 3151 Market Street Venture into service in the fourth quarter of 2025.

Cira Square Venture

On March 17, 2022, the Company formed an unconsolidated real estate venture, Cira Square REIT, LLC (“Cira Square Venture”), for the purpose of acquiring Cira Square, an office property located at 2970 Market Street in Philadelphia, Pennsylvania containing 862,692 rentable square feet for a gross purchase price of $383.0 million. The Company owns a 20% equity interest in Cira Square Venture and provided an initial capital contribution of $28.6 million on the closing date.

Upon its formation, the Cira Square Venture obtained a $257.7 million non-recourse mortgage loan to fund a portion of the costs to acquire Cira Square. This mortgage loan bore interest at 3.50% over one-month term SOFR per annum, and matured on April 1, 2024. On April 1, 2024, the Cira Square Venture received an extension of the maturity date to July 1, 2024. On May 6, 2024, the Cira Square Venture refinanced the loan through proceeds of a new $160.0 million non-recourse mortgage loan and a capital contribution by the Company and its partner in the aggregate amount of $96.9 million (of which the Company's share was $19.4 million). The new mortgage loan bears interest at 8.817% per annum and matures in June 2029. At December 31, 2024, the Company's investment balance in the Cira Square Venture was $43.0 million.

4040 Wilson Venture

The 4040 Wilson LLC Venture (“4040 Wilson Venture”) consisted of one property containing an aggregate of 225,000 square feet of office/retail and 250 apartment units, located in the Metropolitan Washington, D.C. segment. The Company and its partner each owned a 50% interest in the 4040 Wilson Venture.

During the quarter ended September 30, 2024, our partner elected to acquire our 50% ownership interest in the 4040 Wilson Venture based on an agreed upon property value of $190.5 million. As a result, the Company recognized an other than temporary impairment loss on its investment in this unconsolidated venture of $8.4 million. The Company estimated the fair value of its impaired investment based on the completed transaction.

On December 24, 2024, we sold our 50% interest in the 4040 Wilson Venture for $95.3 million (based on the $190.5 million property value).

3025 JFK Venture

On February 2, 2021, the Company contributed its investment in a 99-year prepaid leasehold interest in a one-acre land parcel held for development at 3025 JFK Boulevard in Philadelphia, Pennsylvania to the 3025 JFK Venture. The Company's initial investment in this unconsolidated real estate venture at February 2, 2021 was $34.8 million. The real estate venture was formed to develop a 428,000 square foot mixed-use building at property under the long-term ground lease. The estimated project cost is approximately $320.1 million, and the joint venture partner has funded approximately $45.2 million of the project costs in exchange for a 45% preferred equity interest in the venture.

On July 23, 2021, the 3025 JFK Venture closed on a $186.7 million construction loan, which bears interest at 3.50% plus LIBOR (subject to a LIBOR floor of 0.25%) per annum and matures in July 2025. During the twelve months ended December 31, 2024, the Company contributed an additional $17.5 million to the 3025 JFK Venture, and as a result, the Company's common equity ownership increased to 64%. Utilizing the proceeds from the contribution, the 3025 JFK Venture entered into an interest rate cap agreement to help mitigate the interest rate volatility associated with the variable interest rate on the 3025 JFK Venture's construction loan, which is scheduled to mature in July 2025 with a one year option to extend. The interest rate cap has an initial notional value of $148.0 million which has accreted up to $187.0 million following the

projected draw schedule. The strike rate of the interest rate cap is 3.00% and the stated interest rate of the construction loan is SOFR + 3.6%. With the interest rate cap in-place, the maximum interest rate due by the 3025 JFK Venture is 6.60%.

The Company has determined that the 3025 JFK Venture is a VIE. As a result, the Company used the VIE model under the accounting standard for consolidation in order to determine whether to consolidate the 3025 JFK Venture. Based upon each member’s shared power over the activities of 3025 JFK Venture under the operating and related agreements, and the Company’s lack of control over the 3025 JFK Venture, the 3025 JFK Venture is accounted for under the equity method of accounting. The 3025 JFK Venture was substantially complete in the fourth quarter of 2023 and placed into service in the fourth quarter of 2024.

Mid-Atlantic Office JV

On December 21, 2020, the Company contributed a portfolio of twelve properties containing an aggregate of 1,128,645 square feet, nine of which are located in the Pennsylvania suburbs segment and three located in the Company's former Metropolitan Washington, D.C. segment, to the Mid-Atlantic Office JV, for a gross sales price of $192.9 million. After the transaction, the Company owned approximately 25% of the equity interest in the Mid-Atlantic Office JV through a $20.0 million preferred equity holding and approximately 15% of the equity interest through a common equity interest (representing 20% of the total common equity), for a combined approximately 40% equity interest in the venture. On the closing date, Mid-Atlantic Office JV also obtained $147.4 million of third-party debt financing secured by the twelve properties within the venture, with an initial advance of $120.8 million. As of December 31, 2023, the Company's investment in the Mid-Atlantic Office JV was zero, and we discontinued applying the equity method of accounting on these assets because, at this time, we did not have any guarantees or other obligations to support this venture.

On August 9, 2024 as part of a loan restructuring for the Mid-Atlantic Office Venture which included forgiveness of $39.8 million of the venture's debt, the Company elected to fund $4.1 million to fund a portion of a lender pay down for the venture. The Company's contribution is an equity method investment in the Mid-Atlantic Office JV and the Company recorded the contribution to Investment in unconsolidated real estate ventures on the consolidated balance sheets. The Mid-Atlantic Office Venture has liquidation rights and priorities that are different from ownership percentages. As such, equity in earnings is determined using the hypothetical liquidation book value (“HLBV”) method. Income or loss is recorded based on changes in what would be received should the entity liquidate all of its assets (as valued in accordance with GAAP) and distribute the resulting proceeds based on the terms of the respective agreements. The HLBV method is a balance sheet focused approach commonly applied to equity investments where cash distribution percentages vary at different points in time and are not directly linked to an equity holder’s ownership percentage.

Commerce Square Venture

The Commerce Square Venture consists of two entities that, together, own two office properties in Philadelphia, Pennsylvania. The properties were encumbered by existing mortgages that were set to expire on April 5, 2023 and that were, following extension, refinanced on June 2, 2023 through a $220.0 million secured loan that bears an all-in fixed interest rate of 7.79% and matures in June 2028.

In connection with the refinancing, the Company contributed $46.5 million to the Commerce Square Venture in exchange for an additional 8% equity interest in the venture.

On August 26, 2024, the Company agreed to fund and subsequently funded in November 2024, an additional $23.0 million in common equity contribution to the Commerce Square Venture, the proceeds from which were used by the Commerce Square Venture to pay down the preferred equity position of the Company’s partner in the Commerce Square Venture, thereby increasing a portion of the Company’s ownership interest in the Commerce Square Venture to 84%. In connection with the Company’s funding agreement, the Commerce Square Venture recorded impairment charges of $116.5 million during the quarter ended September 30, 2024 based on the excess of the carrying value of the properties over their estimated fair value.

Herndon Innovation Center Metro Portfolio Venture, LLC

The Herndon Innovation Center Metro Portfolio Venture, LLC (“Herndon Innovation Center”) consisted of eight properties containing an aggregate of 1,293,197 square feet, located in the Company's former Metropolitan Washington, D.C. segment. The Company and its partner owned 15% and 85% interests in the Herndon Innovation Center, respectively. The properties

held by the venture were encumbered by a $233.4 million secured mortgage loan that matured on March 29, 2024 and was nonrecourse to the Company. During 2024, the Company, its partners, and the mortgage lender have transferred their interests in the Herndon Innovation Center through a deed in lieu over a portion of the assets and a seller assisted short sale over the remaining assets. As of December 31, 2024, the Company has no further investments in Herndon Innovation Center.

MAP Venture and New MAP Venture

On June 28, 2024, the Company recapitalized one of its unconsolidated real estate ventures, referred to as the “Original MAP Venture,” in which the Company had a negative investment balance of $52.2 million as of March 31, 2024 and a 50% ownership interest. Through the recapitalization, the Original MAP Venture transferred, for $26.0 million, 14 of the 57 properties in which it held ground lease interests to a newly-formed real estate venture, referred to below as the “KB JV,” owned equally between the Company and the ground lessor of the land on which all of the 57 properties are situated. The Original MAP Venture used substantially all of the proceeds it received from the transfer of the 14 properties to pay down its non-recourse mortgage loan to $154.6 million. Through the recapitalization of the MAP Venture, the Company redeemed the entire interest of its former partner in the MAP Venture for a nominal amount and reversed the Company’s negative investment balance to zero, resulting in a one-time, non-cash gain of $53.8 million. The non-recourse mortgage loan was amended as part of the pay-down, and, as amended, has a scheduled maturity date of March 1, 2027 (subject to mandatory pay downs as properties that remain owned by the New MAP Venture are sold), bears interest at SOFR plus 2.75% and provides the lender with a 95% entitlement to residual cash from operations and capital proceeds, if any, after the mortgage loan has been repaid and after all obligations to the ground lessor and other third parties have been satisfied. Pursuant to the amended loan, the Company has agreed to fund up to $12.0 million for tenant and capital improvements pursuant to leases that the Company, on behalf of the New MAP Venture, proposes, in its discretion, to enter into at the properties owned by the New MAP Venture, which amounts, when funded, will accrue interest at 8.0% per annum. As of June 30, 2024, the Company's investment in the New MAP Venture was zero, and the Company discontinued applying the equity method of accounting on the New MAP Venture. The Company has not guaranteed any of the obligations of the New MAP Venture or otherwise committed to funding any future losses.

JBG Ventures

JBG Ventures consists of 51 N 50 Patterson, Holdings, LLC Venture (“51 N Street”) and 1250 First Street Office, LLC Venture (“1250 First Street”), with the Company owning a 70.0% equity interest in each of the two ventures and JBG/DC Manager, LLC (“JBG”) owning a 30.0% equity interest in each of the two ventures. 51 N Street owns 0.9 acres of undeveloped land and 1250 First Street, owns 0.5 acres of undeveloped land.

During the year ended December 31, 2024, the JBG Ventures recorded held in use impairments in the properties of the venture based on the excess of the carrying value of the properties over their estimated fair value. Brandywine's share of the JBG Ventures impairment is approximately $22.2 million.

KB JV

On June 28, 2024 as discussed above under “MAP Venture,” the Company formed a new joint venture, KB JV, LLC (the "KB JV") which acquired leasehold interests in 14 properties from the MAP Venture for $26.0 million. The 14 properties owned by the KB JV consist of an aggregate of 641,819 net rentable square feet and are located in Richmond, Virginia. The Company owns a 50% equity interest in the KB JV and the portfolio assets are unencumbered by third party debt. In connection with the formation of KB JV, KB JV loaned $13.0 million to the Company to fund the purchase of the 14 properties. The loan from KB JV is classified as “Unsecured term loan, net” on the consolidated balance sheet. Upon sale of the properties, Kawa, as fee owner, and KB JV as leasehold owner, agreed to cause both the leasehold and fee interests in the portfolio to be sold.

On December 20, 2024 KB JV sold its entire 14 industrial/flex building portfolio totaling 643,000 square feet for $66.8 million, generating approximately $15.5 million of net proceeds to Brandywine for its 50% ownership interest after repayment of the $13.0 million loan from the KB JV.