Brandywine Realty Trust (NYSE:BDN)

CAPS Rating: 4 out of 5

The Company is a self-administered and self-managed real estate investment trust active in acquiring, developing, redeveloping, leasing and managing office and industrial properties.

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Member Avatar Londamania (62.89) Submitted: 3/29/2010 3:12:18 PM : Outperform Start Price: $10.35 BDN Score: -31.87

Buy Low, Sell High...if there were no black clouds over Real Estate (and REITs) this stock would be much higher...since this REIT is in fine shape this is a classic buy low, sell high opportunity. If you wait until the back clouds over this industry have receeded - well buy bonds instead because stocks are not for you! :)

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Member Avatar Tooladdict (< 20) Submitted: 7/10/2009 9:22:51 AM : Outperform Start Price: $5.11 BDN Score: +50.74

Insider buying, Debt consolidation goals met, expanding to include new shopping mall which already has many leases signed, management seemed intelligent, insightful and prudently planning for the future on webcasts. Equity drop will return and the dividends will increase

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Member Avatar JakilaTheHun (99.93) Submitted: 6/24/2009 1:24:35 AM : Outperform Start Price: $4.73 BDN Score: +75.31

Well run commercial REIT that operates in about six different markets. Brandywine has relatively low leverage with a 63.3% Liability/Value ratio that is probably overstated a bit due to many of their older property holdings that are undervalued on the Balance Sheet when compared to their peers. There have been a substantial number of insider buys on this stock, as well. BDN's properties are not overly concentrated in bubble markets, but they do have some holdings in the DC Metro and California. From my glance through their holdings, they appear to have fairly strong asset quality.

FFOs and cash flows for BDN have been historically strong and even with a difficult operating environment, I believe they can continue to be profitable. BDN's guidance for FY '09 was FFOs between $2.04 - $2.21 per share. Even if that's a bit high, when you consider the fact that the stock is trading in the $6 - $7 range, that's not bad.

The market seems to be assuming an absolute commercial real estate apocalypse is on the horizon. Based on my analysis, BDN's property values have to fall at least 25% - 30% off their book values in order to come up with the current stock price. After discounting intangible assets, BDN's book value is $15.12 per share. When you consider the fact that many of their properties were purchased pre-2000 and have significant amounts of accumulated depreciation carried on the books (all the while, book values don't go up, but market values do over time), there's a possibility that even after significant declines in commercial RE prices, that the $15 figure is still not that off-base.

I came up with a valuation of $23 for BDN, which in some ways, seems a bit conservative. That assumes a 20% decline in property values from book values (which could be more like a 25% - 40% decline in actual market prices) and a 30% drop in revenues.

If you want to read a much more thorough analysis on BDN's property holdings, revenues, potential margin pressure, potential impairments, and valuation, check out my Seeking Alpha article on the company:

http://seekingalpha.com/article/138942-brandywine-realty-a-reit-bargain-even-with-impending-carnage

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Member Avatar JackPlompy (92.04) Submitted: 5/7/2009 12:05:32 PM : Outperform Start Price: $4.34 BDN Score: +106.15

Real Estate Company hurt soley by bad economy, should rebound nicely like it did after '91

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Member Avatar cos267 (64.53) Submitted: 4/20/2009 1:10:38 PM : Outperform Start Price: $2.15 BDN Score: +412.30

Brandywine has really made a name for itself during this time in this economic revolution.
Every company is hurting on some level, BDN is also not fully stable; however with
negative sales the company is still thriving. With a hefty p/e i am hoping there will be a
2:1 split in the near future since the stock is gaining popularity with the working fundamental foundation
of the company.

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Member Avatar TLStockPicks (93.64) Submitted: 3/31/2009 12:38:14 PM : Outperform Start Price: $2.01 BDN Score: +451.03

There's a distinct possibility that Brandywine REIT will be underwater couple year's time... it is a highly leveraged real estate fund with loan maturities creeping up on the horizon. They plan to liquidate part of their office portfolio to raise $600M in cash by the end of the year... no small task in this environment. BMO Capital downgraded Brandywine on 3/19/09, less than a month after having upgraded them to outperform, due to doubts about their dividends and a suspicion that these dividends will be paid with shares instead of cash and adding dilution.

That said, the stock price is hovering around early 90's lows, when the commercial real estate market fell into the crapper (and where it subsequently rebounded to become a major player through the late 90's until this current real estate fiasco). They were upgraded last week by S&P. And I believe that BMO's concerns over lowered dividends is incredibly short-sighted way of analyzing the REIT; they cited that management plans to backload divs towards the end of the year to gauge the minimum amount needed to be distributed to retain REIT status, and may make their distributions in stock rather than cash. Sure there's dilution but I don't mind getting diluted shares at these prices. Plus the cash management issue is vital to the long-term health of this company; it has to use this cash for deleveraging, loan management, etc. I only WISH they could suspend their dividends completely to shore up their capital reserves that they will undoubtedly need for the next couple years.

Weighing the upside of this stock and the active and smart management of the REIT vs. the risk of going underwater, I'd call this to be an outperform all day long at these prices.

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Member Avatar maltz72 (< 20) Submitted: 12/5/2008 10:12:19 AM : Outperform Start Price: $3.00 BDN Score: +224.91

reduced dividend safe...insiders buying....asset/debt ratio sound

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Member Avatar puremarble (64.56) Submitted: 4/4/2008 4:38:09 AM : Outperform Start Price: $11.99 BDN Score: -30.94

too low in valuation. with the housing market flattening by the end of the year and rental still high, gotta be a buy.

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Member Avatar morningstarboy (79.87) Submitted: 12/5/2007 12:50:35 PM : Outperform Start Price: $12.86 BDN Score: -29.18

As of close of business on 12/04/2007, this was a 5-star Morningstar stock that was trading below half of it's Morningstar fair value.

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Member Avatar qubit16 (98.30) Submitted: 12/3/2007 9:55:28 PM : Underperform Start Price: $12.98 BDN Score: +32.32

od

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Member Avatar sean00g (40.52) Submitted: 8/13/2007 12:28:43 PM : Outperform Start Price: $15.41 BDN Score: -50.71

real estate is always a good investment
well managed
dividend yield

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Member Avatar NetscribeREIT (< 20) Submitted: 3/12/2007 6:09:17 AM : Outperform Start Price: $21.36 BDN Score: -83.06

Brandywine Realty Trust is a self-administered and self-managed real estate investment trust (REIT) and is engaged in the business of owning, managing, leasing, acquiring and developing office and industrial properties located in strategic markets across the United States. The company’s portfolio comprises of 261 owned office properties, 23 industrial facilities and one mixed-use property aggregating around 28.2 million net rentable square feet.

The US office real estate industry’s fundamentals has witnessed continued recovery, thanks to factors like increase in job growth rate and economic expansion that have driven national office vacancies down to around 13% in third quarter of 2006 from a high 18% in fourth quarter of 2003. Further, a 0.9% improvement in metropolitan office area-wise employment on y-o-y basis in November 2006 is supplementing this improvement in office real estate fundamental.

Demand continues to outpace supply; while the supply being constant, it would further aggravate the demand-supply mismatch for the coming year. Rents will continue to grow in the average annual range of 5% nationally, with states like Austin, TX; New Jersey; and Honolulu leading the way and is expected to post higher rental growth than the national average. The resulting decrease in available space, combined with sale prices well in excess of replacement costs, has added pressure for new construction. The high costs of building materials and labor coupled with land costs driven higher by the housing expansion have restricted office starts. This should benefit well-established players like Brandywine to make the most out of this favorable scenario.

The company’s top-line saw a rise of 74.1% largely attributable to contributions from acquired properties. Moreover, the company was able to increase its same store properties revenues on the basis of improved occupancy and increased tenant reimbursement. The management, considering these positive outlooks expects funds from operations (FFO) for fiscal 2007 to be around $2.57-$2.65 per share, an increase of at least 3.2%. As corporate profits and confidence continue to grow the demand for office REITs should persist for years ahead. This makes the companies like Brandywine a safe bet.

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Member Avatar md3kds (< 20) Submitted: 9/17/2006 8:42:36 PM : Outperform Start Price: $20.45 BDN Score: -89.91

big and getting bigger

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