UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_________________________

FORM 10-Q

_________________________

(Mark One)

þ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 ~~For the quarterly period ended September 30, 2014~~

For the quarterly period ended March 31, 2017

o☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 ~~For the transition period from to~~

For the transition period from to

Commission file number

001-9106 (Brandywine Realty Trust)

000-24407 (Brandywine Operating Partnership, L.P.)

_________________________

Brandywine Realty Trust

Brandywine Operating Partnership, L.P.

(Exact name of registrant as specified in its charter)

_________________________

MARYLAND (Brandywine Realty Trust)		23-2413352
DELAWARE (Brandywine Operating Partnership L.P.)		23-2862640
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

555 East Lancaster Avenue
Radnor, Pennsylvania		19087
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code (610) 325-5600

_________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Brandywine Realty Trust Yes þ☒ No o☐ Brandywine Operating Partnership, L.P. Yes þ☒ No o☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Brandywine Realty Trust Yes þ☒ No o☐ Brandywine Operating Partnership, L.P. Yes þ☒ No o☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, "“accelerated filer"”, ~~and "~~“smaller reporting company"”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Brandywine Realty Trust:

Large accelerated filer þ☒ Accelerated filer o☐ Non-accelerated filer o☐ Smaller reporting company o☐ Emerging growth company ☐

Brandywine Operating Partnership, L.P.:

Large accelerated filer o☐ Accelerated filer o☐ Non-accelerated filer þ☒ Smaller reporting company o☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Brandywine Realty Trust Yes o☐ No ~~þ Brandywine Operating Partnership, L.P. Yes o No þ~~☒

ABrandywine ~~total~~Operating ~~of 178~~Partnership,~~982,369~~ ~~Common Shares of Beneficial Interest, par value $0~~L.01P. ~~per~~Yes ~~share~~☐ ofNo ~~Brandywine Realty Trust, were outstanding as of October 29, 2014.~~☒

2A total of 175,327,436 Common Shares of Beneficial Interest, par value $0.01 per share of Brandywine Realty Trust, were outstanding as of April 21, 2017.

EXPLANATORY NOTE

This report combines the quarterly reports on Form 10-Q for the period ended ~~September 30~~March 31, ~~2014~~2017 of Brandywine Realty Trust (the “Parent Company”) and Brandywine Operating Partnership L.P. (the “Operating Partnership”). The Parent Company is a Maryland real estate investment trust, or REIT, that owns its assets and conducts its operations through the Operating Partnership, a Delaware limited partnership, and subsidiaries of the Operating Partnership. The Parent Company, the Operating Partnership and their consolidated subsidiaries are collectively referred to in this report as the “Company”. In addition, as used in this report, terms such as “we”, “us”, and “our” may refer to the Company, the Parent Company, or the Operating Partnership.

The Parent Company is the sole general partner of the Operating Partnership and, as of ~~September 30~~March 31, ~~2014~~2017, owned a 9899.92% interest in the Operating Partnership. The remaining 10.18% interest consists of common units of limited partnership interest issued by the Operating Partnership to third parties in exchange for contributions of properties to the Operating Partnership. As the sole general partner of the Operating Partnership, the Parent Company has full and complete authority over the Operating Partnership’s day-to-day operations and management.

Management operates the Parent Company and the Operating Partnership as one enterprise. The management of the Parent Company consists of the same members as the management of the Operating Partnership.

As general partner with control of the Operating Partnership, the Parent Company consolidates the Operating Partnership for financial reporting purposes, and the Parent Company does not have significant assets other than its investment in the Operating Partnership. Therefore, the assets and liabilities of the Parent Company and the Operating Partnership are the same on their respective financial statements. The separate discussions of the Parent Company and the Operating Partnership in this report should be read in conjunction with each other to understand the results of the Company's operations on a consolidated basis and how management operates the Company.

The Company believes that combining the quarterly reports on Form 10-Q of the Parent Company and the Operating Partnership into a single report will result in the following benefits:

•

facilitate a better understanding by the investors of the Parent Company and the Operating Partnership by enabling them to view the business as a whole in the same manner as management views and operates the business;

•

remove duplicative disclosures and provide a more straightforward presentation in light of the fact that a substantial portion of the disclosure applies to both the Parent Company and the Operating Partnership; and

•

create time and cost efficiencies through the preparation of one combined report instead of two separate reports.

There are few differences between the Parent Company and the Operating Partnership, which are reflected in the footnote disclosures in this report. The Company believes it is important to understand the differences between the Parent Company and the Operating Partnership in the context of how these entities operate as an interrelated consolidated company. The Parent Company is a REIT, whose only material asset is its ownership of partnership interests of the Operating Partnership. As a result, the Parent Company does not conduct business itself, other than acting as the sole general partner of the Operating Partnership, issuing equity from time to time and guaranteeing the debt obligations of the Operating Partnership. The Operating Partnership holds substantially all the assets of the Company and directly or indirectly holds the ownership interests in the Company’s Real Estate Ventures. The Operating Partnership conducts the operations of the Company’s business and is structured as a partnership with no publicly traded equity. Except for net proceeds from equity issuances by the Parent Company, which are contributed to the Operating Partnership in exchange for partnership units, the Operating Partnership generates the capital required by the Company’s business through the Operating Partnership’s operations, by the Operating Partnership’s incurrence of indebtedness (directly and through subsidiaries) and through the issuance of partnership units of the Operating Partnership or equity interests in subsidiaries of the Operating Partnership.

The equity and non-controlling interests in the Parent Company and the Operating Partnership’s equity are the main areas of difference between the consolidated financial statements of the Parent Company and the Operating Partnership. The common units of limited partnership interest in the Operating Partnership are accounted for as partners’ equity in the Operating Partnership’s financial statements while the common units of limited partnership interests held by parties other than the Parent Company are presented as non-controlling interests in the Parent Company’s financial statements. The differences between the Parent Company and the Operating Partnership’s equity relate to the differences in the equity issued at the Parent Company and Operating Partnership levels.

To help investors understand the significant differences between the Parent Company and the Operating Partnership, this report presents the following as separate notes or sections for each of the Parent Company and the Operating Partnership:

•

Consolidated Financial Statements; and

• Notes to the Parent Company’s and Operating Partnership’s Equity.

This report also includes separate Item 4. (Controls and Procedures) disclosures and separate Exhibit 31 and 32 certifications for each of the Parent Company and the Operating Partnership in order to establish that the Chief Executive Officer and the Chief Financial Officer of each entity have made the requisite certifications and that the Parent Company and Operating Partnership are compliant with Rule 13a-15 or Rule 15d-15 of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. § 1350.

In order to highlight the differences between the Parent Company and the Operating Partnership, the separate sections in this report for the Parent Company and the Operating Partnership specifically refer to the Parent Company and the Operating Partnership. In the sections that combine disclosures of the Parent Company and the Operating Partnership, this report refers to such disclosures as those of the Company. Although the Operating Partnership is generally the entity that directly or indirectly enters into contracts and ~~Real~~real ~~Estate~~estate ~~Ventures~~ventures and holds assets and incurs debt, reference to the Company is appropriate because the business is one enterprise and the Parent Company operates the business through the Operating Partnership.

TABLE OF CONTENTS

	~~Page~~	Page
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
Brandywine Realty Trust
Financial Statements of Brandywine Realty Trust (unaudited)
Financial Statements of Brandywine Realty Trust		6
Consolidated Balance Sheets as of September 30, 2014 and December 31, 2013	6
Consolidated Balance Sheets as of March 31, 2017 and December 31, 2016		6
Consolidated Statements of Operations for the three and nine-month periods ended September 30, 2014 and 2013	7
Consolidated Statements of Operations for the three-month periods ended March 31, 2017 and 2016		7
Consolidated Statements of Comprehensive Income for the three and nine-month periods ended September 30, 2014 and 2013	8
Consolidated Statements of Comprehensive Income for the three-month periods ended March 31, 2017 and 2016		8
Consolidated Statements of Beneficiaries’ Equity for the nine-month periods ended September 30, 2014 and 2013	9
Consolidated Statements of Beneficiaries’ Equity for the three-month periods ended March 31, 2017 and 2016		9
Consolidated Statements of Cash Flows for the nine-month periods ended September 30, 2014 and 2013	11
Consolidated Statements of Cash Flows for the three-month periods ended March 31, 2017 and 2016		11
Brandywine Operating Partnership, L.P.
Financial Statements of Brandywine Operating Partnership, L.P. (unaudited)
Financial Statements of Brandywine Operating Partnership, L.P.		12
Consolidated Balance Sheets as of September 30, 2014 and December 31, 2013	13
Consolidated Balance Sheets as of March 31, 2017 and December 31, 2016		12
Consolidated Statements of Operations for the three and nine-month periods ended September 30, 2014 and 2013	14
Consolidated Statements of Operations for the three-month periods ended March 31, 2017 and 2016		13
Consolidated Statements of Comprehensive Income for the three and nine-month periods ended September 30, 2014 and 2013	15
Consolidated Statements of Comprehensive Income for the three-month periods ended March 31, 2017 and 2016		14
Consolidated Statements of Cash Flows for the nine month periods ended September 30, 2014 and 2013	16
Consolidated Statements of Partners’ Equity for the three-month periods ended March 31, 2017 and 2016		15
Notes to Unaudited Consolidated Financial Statements	18
Consolidated Statements of Cash Flows for the three-month periods ended March 31, 2017 and 2016		17
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	43
Notes to Unaudited Consolidated Financial Statements		18
Item 3. Quantitative and Qualitative Disclosures about Market Risk	66
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		35
Item 4. Controls and Procedures	68
Item 3. Quantitative and Qualitative Disclosures about Market Risk		52
PART II — OTHER INFORMATION
Item 4. Controls and Procedures		53
Item 1. Legal Proceedings	69
PART II — OTHER INFORMATION		54
Item 1A. Risk Factors	69
Item 1. Legal Proceedings		54
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	69
Item 1A. Risk Factors		54
Item 3. Defaults Upon Senior Securities	69
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		54
Item 4. Mine Safety Disclosures	69
Item 3. Defaults Upon Senior Securities		54
Item 5. Other Information	69
Item 4. Mine Safety Disclosures		54
Item 6. Exhibits	70
Item 5. Other Information		54
Signatures	71
Item 6. Exhibits		55
Index to Exhibits	73
Signatures		57
Index to Exhibits		59

Filing Format

This combined Form 10-Q is being filed separately by Brandywine Realty Trust and Brandywine Operating Partnership, L.P.

PART I - FINANCIAL INFORMATION

Item 1. — Financial Statements

BRANDYWINE REALTY TRUST

CONSOLIDATED BALANCE SHEETS

	September 30, 2014			December 31, 2013
	(unaudited)
ASSETS
Real estate investments:
Operating properties	$	4,608,895		$	4,669,289
Accumulated depreciation	(1,053,571		)	(983,808		)
Operating real estate investments, net	3,555,324			3,685,481
Construction-in-progress	140,456			74,174
Land inventory	90,842			93,351
Total real estate investments, net	3,786,622			3,853,006
Cash and cash equivalents	671,943			263,207
Accounts receivable, net	19,825			17,389
Accrued rent receivable, net	131,211			126,295
Assets held for sale	37,647			—
Investment in real estate ventures, at equity	197,539			180,512
Deferred costs, net	122,881			122,954
Intangible assets, net	105,300			132,329
Other assets	75,383			69,403
Total assets	$	5,148,351		$	4,765,095
LIABILITIES AND BENEFICIARIES’ EQUITY
Mortgage notes payable	$	658,601		$	670,151
Unsecured term loans	200,000			450,000
Unsecured senior notes, net of discounts	1,854,779			1,475,230
Accounts payable and accrued expenses	97,022			83,693
Distributions payable	28,857			25,584
Deferred income, gains and rent	53,219			71,635
Acquired lease intangibles, net	27,388			34,444
Other liabilities	36,824			32,923
Liabilities related to assets held for sale	1,771			—
Total liabilities	2,958,461			2,843,660
Commitments and contingencies (Note 16)
Brandywine Realty Trust’s equity:
Preferred Shares (shares authorized-20,000,000):
6.90% Series E Preferred Shares, $0.01 par value; issued and outstanding- 4,000,000 in 2014 and 2013	40			40
Common Shares of Brandywine Realty Trust’s beneficial interest, $0.01 par value; shares authorized 400,000,000; 178,982,369 and 156,731,993 issued and outstanding in 2014 and 2013, respectively	1,790			1,566
Additional paid-in capital	3,310,313			2,971,596
Deferred compensation payable in common shares	6,219			5,407
Common shares in grantor trust, 384,536 in 2014 and 312,280 in 2013	(6,219		)	(5,407		)
Cumulative earnings	531,294			522,528
Accumulated other comprehensive loss	(2,658		)	(2,995		)
Cumulative distributions	(1,671,888		)	(1,592,515		)
Total Brandywine Realty Trust’s equity	2,168,891			1,900,220
Non-controlling interests	20,999			21,215
Total beneficiaries' equity	2,189,890			1,921,435
Total liabilities and beneficiaries' equity	$	5,148,351		$	4,765,095

(in thousands, except share and per share information)

	March 31,			December 31,
	2017			2016
ASSETS	(unaudited)
Real estate investments:
Operating properties	$	3,702,204		$	3,586,295
Accumulated depreciation		(864,196	)		(852,476	)
Operating real estate investments, net		2,838,008			2,733,819
Construction-in-progress		166,372			297,462
Land held for development		153,268			150,970
Total real estate investments, net		3,157,648			3,182,251
Assets held for sale, net		6,262			41,718
Cash and cash equivalents		234,654			193,919
Accounts receivable, net of allowance of $2,622 and $2,373 in 2017 and 2016, respectively		12,099			12,446
Accrued rent receivable, net of allowance of $13,703 and $13,743 in 2017 and 2016, respectively		152,819			149,624
Investment in Real Estate Ventures, equity method		264,941			281,331
Deferred costs, net		92,425			91,342
Intangible assets, net		64,222			72,478
Other assets		116,792			74,104
Total assets	$	4,101,862		$	4,099,213
LIABILITIES AND BENEFICIARIES' EQUITY
Mortgage notes payable, net	$	320,484		$	321,549
Unsecured term loans, net		248,181			248,099
Unsecured senior notes, net		1,444,006			1,443,464
Accounts payable and accrued expenses		115,079			103,404
Distributions payable		30,047			30,032
Deferred income, gains and rent		30,592			31,620
Acquired lease intangibles, net		16,604			18,119
Liabilities related to assets held for sale		387			81
Other liabilities		16,916			19,408
Total liabilities	$	2,222,296		$	2,215,776
Commitments and contingencies (See Note 14)
Brandywine Realty Trust's Equity:
Preferred Shares (shares authorized-20,000,000)
6.90% Series E Preferred Shares, $0.01 par value; issued and outstanding- 4,000,000 in 2017 and 2016		40			40
Common Shares of Brandywine Realty Trust's beneficial interest, $0.01 par value; shares authorized 400,000,000; 175,202,404 and 175,140,760 issued and outstanding in 2017 and 2016, respectively		1,752			1,752
Additional paid-in-capital		3,262,459			3,258,870
Deferred compensation payable in common shares		14,244			13,684
Common shares in grantor trust, 936,939 in 2017, 899,457 in 2016		(14,244	)		(13,684	)
Cumulative earnings		560,422			539,319
Accumulated other comprehensive loss		(457	)		(1,745	)
Cumulative distributions		(1,961,739	)		(1,931,892	)
Total Brandywine Realty Trust's equity		1,862,477			1,866,344
Non-controlling interests		17,089			17,093
Total beneficiaries' equity	$	1,879,566		$	1,883,437
Total liabilities and beneficiaries' equity	$	4,101,862		$	4,099,213

The accompanying notes are an integral part of these consolidated financial statements.

BRANDYWINE REALTY TRUST

CONSOLIDATED STATEMENTS OF OPERATIONS

	Three-month periods ended						Nine-month periods ended
	September 30,						September 30,
	2014			2013			2014			2013
Revenue:
Rents	$	120,288		$	116,382		$	363,581		$	347,054
Tenant reimbursements	20,095			20,694			64,057			60,595
Termination fees	1,418			2,040			6,970			2,946
Third party management fees, labor reimbursement and leasing	3,932			3,263			12,269			9,652
Other	825			975			2,295			3,305
Total revenue	146,558			143,354			449,172			423,552
Operating expenses:
Property operating expenses	42,675			40,639			132,612			119,421
Real estate taxes	12,869			14,167			39,167			42,639
Third party management expenses	1,687			1,317			5,133			4,105
Depreciation and amortization	52,616			50,583			157,773			149,300
General and administrative expenses	5,900			6,436			20,086			20,323
Total operating expenses	115,747			113,142			354,771			335,788
Operating income	30,811			30,212			94,401			87,764
Other income (expense):
Interest income	528			268			1,298			448
Historic tax credit transaction income	11,853			11,853			11,853			11,853
Interest expense	(31,481		)	(30,338		)	(94,837		)	(91,689		)
Amortization of deferred financing costs	(1,566		)	(1,158		)	(3,952		)	(3,502		)
Interest expense — financing obligation	(273		)	(264		)	(861		)	(693		)
Recognized hedge activity	(828		)	—			(828		)	—
Equity in income (loss) of real estate ventures	(486		)	714			(733		)	3,757
Net gain on disposition of real estate	4,698			—			4,698			—
Net gain (loss) on sale of undepreciated real estate	—			(129		)	1,184			(129		)
Net gain from remeasurement of investment in RE ventures	—			—			458			7,847
Net gain (loss) on real estate venture transactions	—			—			(417		)	3,683
Loss on early extinguishment of debt	(2,606		)	(11		)	(2,606		)	(1,127		)
Provision for impairment on assets held for sale	(1,765		)	—			(1,765		)	—
Income from continuing operations	8,885			11,147			7,893			18,212
Discontinued operations:
Income (loss) from discontinued operations	—			(43		)	18			946
Net gain (loss) on disposition of discontinued operations	(3		)	(16		)	900			3,029
Total discontinued operations	(3		)	(59		)	918			3,975
Net income	8,882			11,088			8,811			22,187
Net (income) loss from discontinued operations attributable to non-controlling interests — LP units	—			1			(10		)	(52		)
Net income attributable to non-controlling interest — partners' share of consolidated real estate ventures	(24		)	—			(12		)	—
Net income attributable to non-controlling interests — LP units	(84		)	(106		)	(35		)	(143		)
Net income attributable to non-controlling interests	(108		)	(105		)	(57		)	(195		)
Net income attributable to Brandywine Realty Trust	8,774			10,983			8,754			21,992
Distribution to Preferred Shares	(1,725		)	(1,725		)	(5,175		)	(5,175		)
Nonforfeitable dividends allocated to unvested restricted shareholders	(82		)	(85		)	(268		)	(278		)
Net income attributable to Common Shareholders of Brandywine Realty Trust	$	6,967		$	9,173		$	3,311		$	16,539
Basic income per Common Share:
Continuing operations	$	0.04		$	0.06		$	0.01		$	0.08
Discontinued operations	—			—			0.01			0.03
	$	0.04		$	0.06		$	0.02		$	0.11
Diluted income per Common Share:
Continuing operations	$	0.04		$	0.06		$	0.01		$	0.08
Discontinued operations	—			—			0.01			0.03
	$	0.04		$	0.06		$	0.02		$	0.11
Basic weighted average shares outstanding	171,606,722			156,703,348			161,866,955			151,933,441
Diluted weighted average shares outstanding	173,193,870			157,992,082			163,353,970			153,142,825
Net income attributable to Brandywine Realty Trust
Total continuing operations	$	8,777		$	11,041		$	7,846		$	18,069
Total discontinued operations	(3		)	(58		)	908			3,923
Net income	$	8,774		$	10,983		$	8,754		$	21,992

(unaudited, in thousands, except share and per share information)

	Three-month periods ended
	March 31,
	2017			2016
Revenue
Rents	$	103,332		$	110,163
Tenant reimbursements		18,535			20,054
Termination fees		1,673			294
Third party management fees, labor reimbursement and leasing		6,485			5,235
Other		895			756
Total revenue		130,920			136,502
Operating expenses
Property operating expenses		36,885			40,879
Real estate taxes		11,749			11,886
Third party management expenses		2,447			2,010
Depreciation and amortization		45,892			48,873
General and administrative expenses		9,425			9,120
Provision for impairment		2,730			7,390
Total operating expenses		109,128			120,158
Operating income		21,792			16,344
Other income (expense)
Interest income		393			320
Interest expense		(21,437	)		(23,691	)
Interest expense - amortization of deferred financing costs		(634	)		(774	)
Interest expense - financing obligation		-			(281	)
Equity in loss of Real Estate Ventures		(748	)		(403	)
Net gain on disposition of real estate		7,323			115,456
Net gain on Real Estate Venture transactions		14,582			5,929
Loss on early extinguishment of debt		-			(66,590	)
Net income		21,271			46,310
Net income attributable to non-controlling interests		(169	)		(389	)
Net income attributable to Brandywine Realty Trust		21,102			45,921
Distribution to preferred shareholders		(1,725	)		(1,725	)
Nonforfeitable dividends allocated to unvested restricted shareholders		(99	)		(105	)
Net income attributable to Common Shareholders of Brandywine Realty Trust	$	19,278		$	44,091

Basic income per Common Share:
Continuing operations	$	0.11		$	0.25

Diluted income per Common Share:
Continuing operations	$	0.11		$	0.25

Basic weighted average shares outstanding		175,176,964			174,788,945
Diluted weighted average shares outstanding		176,201,872			175,471,413

Distributions declared per Common Share	$	0.16		$	0.15

The accompanying notes are an integral part of these consolidated financial statements.

BRANDYWINE REALTY TRUST

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited, in thousands)

	Three-month periods ended						~~Nine-month periods ended~~
	September 30,						September 30,
	March 31,
	2014			2013			2014			2013
	2017			2016
Net income	$	821,~~882~~271		$	1146,~~088~~310		$	~~8,811~~		$	~~22,187~~
Other comprehensive income (loss):
Comprehensive income:
Unrealized gain (loss) on derivative financial instruments	~~4,232~~	1,014		~~(1,302~~	(9,405	)	~~967~~			~~9,978~~
Recognized hedge activity	(828		)	—			(828		)	—
Reclassification of realized losses on derivative financial instruments to operations, net (1)		286			246
Reclassification of realized losses on derivative financial instruments to operations, net (1)	76			64			196			232
Total comprehensive income (loss)		1,300			(9,159	)
Comprehensive income	~~12,362~~	22,571		~~9,850~~	37,151		~~9,146~~			~~32,397~~
Comprehensive income attributable to non-controlling interest	~~(141~~	(181	)	~~(91~~	(309	)	~~(55~~		)	~~(312~~		)
Comprehensive income attributable to Brandywine Realty Trust	$	1222,~~221~~390		$	936,~~759~~842		$	~~9,091~~		$	~~32,085~~

(1)	Amounts reclassified from comprehensive income to interest expense within the Consolidated Statements of Operations.

The accompanying notes are an integral part of these consolidated financial statements.

BRANDYWINE REALTY TRUST

CONSOLIDATED STATEMENTS OF BENEFICIARIES’ EQUITY

For the ~~nine~~three-month period ended ~~September~~March 3031, ~~2014~~ 2017

(unaudited, in thousands, except number of shares)

	Number ofPreferred Shares		Par Value ofPreferredShares			Number of CommonShares			Number of RabbiTrust/DeferredCompensationShares		Common Shares ofBrandywine RealtyTrust’s beneficialinterest			Additional Paid-inCapital				DeferredCompensationPayable inCommon Shares			Common Shares inGrantor Trust				CumulativeEarnings			Accumulated OtherComprehensiveIncome (Loss)				CumulativeDistributions				Non-ControllingInterests				Total
March 31, 2017
BALANCE, December 31, 2013	4,000,000		$	40		156,731,993			312,280		$	1,566		$	2,971,596			$	5,407		$	(5,407	)		$	522,528		$	(2,995	)		$	(1,592,515	)		$	21,215			$	1,921,435
	Number of Preferred Shares			Par Value of Preferred Shares			Number of Common Shares			Number of Rabbi Trust/Deferred Compensation Shares			Common Shares of Brandywine Realty Trust's beneficial interest				Additional Paid-in Capital			Deferred Compensation Payable in Common Shares				Common Shares in Grantor Trust			Cumulative Earnings				Accumulated Other Comprehensive Income (Loss)				Cumulative Distributions				Non-Controlling Interests				Total
Net loss																									8,754											57				8,811
BALANCE, December 31, 2016		4,000,000		$	40			175,140,760			899,457		$	1,752			$	3,258,870		$	13,684			$	(13,684	)	$	539,319			$	(1,745	)		$	(1,931,892	)		$	17,093			$	1,883,437
Comprehensive loss																												337								(2		)		335
Net income																												21,102												169				21,271
Issuance of Common Shares of Beneficial Interest						21,850,000					219			335,179																										335,398
Other comprehensive income																																1,288								12				1,300
Conversion of LP Units to Common Shares						41,734								655																						(655		)		—
Issuance of partnership interest in consolidated real estate venture																																								29				29
Equity issuance costs														~~(452~~		)		(219	)																					~~(452~~		)		(219	)
Share-based compensation activity						279,913					5			4,597											12															4,614
Bonus share issuance								6,752										110																										110
Share issuance from/to Deferred Compensation Plan						78,729			72,256					(90		)		812			(812		)																	(90		)
Share-based compensation activity								56,669			39,870							3,769										1																3,770
Adjustment to non-controlling interest														(1,172		)																				1,172				—
Share Issuance from/(to) Deferred Compensation Plan								(354	)		(2,388	)						(48	)		560				(560	)																		(48	)
Preferred Share distributions																																(5,175		)						(5,175		)
Share Choice Plan issuance								(1,423	)																																			-
Distributions declared ($0.45 per share)																																(74,198		)		(788		)		(74,986		)
Adjustment to Non-controlling Interest																		(23	)																					23				-
BALANCE, September 30, 2014	4,000,000		$	40		178,982,369			384,536		$	1,790		$	3,310,313			$	6,219		$	(6,219	)		$	531,294		$	(2,658	)		$	(1,671,888	)		$	20,999			$	2,189,890
Preferred Share distributions																																				(1,725	)							(1,725	)
Distributions declared ($0.16 per share)																																				(28,122	)			(237	)			(28,359	)
BALANCE, March 31, 2017		4,000,000		$	40			175,202,404			936,939		$	1,752			$	3,262,459		$	14,244			$	(14,244	)	$	560,422			$	(457	)		$	(1,961,739	)		$	17,089			$	1,879,566

The accompanying notes are an integral part of these consolidated financial statements.

BRANDYWINE REALTY TRUST

CONSOLIDATED STATEMENT OF BENEFICIARIES’ EQUITY

For the ~~nine~~three-month period ended ~~September 30~~March 31, ~~2013~~ 2016

(unaudited, in thousands, except number of shares)

	Number ofPreferred Shares		Par Value ofPreferredShares			Number of CommonShares			Number of RabbiTrust/DeferredCompensationShares			Common Shares ofBrandywine RealtyTrust’s beneficialinterest			Additional Paid-inCapital				DeferredCompensationPayable inCommon Shares			Common Shares inGrantor Trust				CumulativeEarnings			Accumulated OtherComprehensiveIncome (Loss)				CumulativeDistributions				Non-ControllingInterests				Total
March 31, 2016
BALANCE, December 31, 2012	4,000,000		$	40		143,538,733			290,745			$	1,434		$	2,780,194			$	5,352		$	(5,352	)		$	479,734		$	(15,918	)		$	(1,493,206	)		$	21,238			$	1,773,516
	Number of Preferred Shares			Par Value of Preferred Shares			Number of Common Shares				Number of Rabbi Trust/Deferred Compensation Shares			Common Shares of Brandywine Realty Trust's beneficial interest				Additional Paid-in Capital			Deferred Compensation Payable in Common Shares				Common Shares in Grantor Trust			Cumulative Earnings				Accumulated Other Comprehensive Loss				Cumulative Distributions				Non-Controlling Interests				Total
Net income																										21,992											195				22,187
BALANCE, December 31, 2015		4,000,000		$	40			174,688,568				745,686		$	1,747			$	3,252,622		$	11,918			$	(11,918	)	$	499,086			$	(5,192	)		$	(1,814,378	)		$	18,166			$	1,952,091
Comprehensive income																													10,093								117				10,210
Net income																													45,921												389				46,310
Issuance of Common Shares of Beneficial Interest						12,650,000						127			181,907																										182,034
Other comprehensive loss																																	(9,079	)							(80	)			(9,159	)
Equity issuance costs															(382		)																								(382		)
Issuance of partnership interest in consolidated real estate venture																																									18				18
Conversion of LP Units to Common Shares						81,998						1			1,240																						(1,241		)		—
Share-based compensation activity								210,116							2				3,296										34																3,332
Bonus share issuance						27,918									361																										361
Share Issuance from/to Deferred Compensation Plan								(8,252	)			101,321										1,237				(1,237	)																		-
Share-based compensation activity						409,979			34,117			3			8,022											9															8,034
Adjustment to Non-controlling Interest																			(10	)																					10				-
Share issuance from/to Deferred Compensation Plan						(4,838	)		(11,839	)									79			(79		)																	—
Preferred Share distributions																																					(1,725	)							(1,725	)
Adjustment to non-controlling interest															(766		)																				766				—
Distributions declared ($0.15 per share)																																					(26,347	)			(230	)			(26,577	)
Preferred Share distributions																																	(5,175		)						(5,175		)
BALANCE, March 31, 2016		4,000,000		$	40			174,890,432				847,007		$	1,749			$	3,255,908		$	13,155			$	(13,155	)	$	545,041			$	(14,271	)		$	(1,842,450	)		$	18,273			$	1,964,290
Distributions declared ($0.45 per share)																																	(68,821		)		(806		)		(69,627		)
BALANCE, September 30, 2013	4,000,000		$	40		156,703,790			313,023			$	1,565		$	2,970,576			$	5,431		$	(5,431	)		$	501,735		$	(5,825	)		$	(1,567,202	)		$	20,269			$	1,921,158

The accompanying notes are an integral part of these consolidated financial statements.

BRANDYWINE REALTY TRUST

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

	Nine-month periods ended
		Three-month periods ended March 31,
	September 30,
		2017				2016
	2014				2013
Cash flows from operating activities:
Cash flows from operating activities:
Net income		$	21,271			$	46,310
Net income	$	8,811			$	22,187
Adjustments to reconcile net income to net cash from operating activities:
Adjustments to reconcile net income (loss) to net cash from operating activities:
Depreciation and amortization			45,892				48,873
Depreciation and amortization	157,773				151,066
Amortization of deferred financing costs			634				774
Amortization of deferred financing costs	3,952				3,502
Amortization of debt discount/(premium), net			362				382
Amortization of debt discount/(premium), net	(455		)		1,112
Amortization of stock compensation costs			3,124				2,296
Amortization of stock compensation costs	3,622				5,510
Straight-line rent income			(5,895	)			(6,104	)
Shares used for employee taxes upon vesting of share awards	(1,263		)		(1,062		)
Amortization of acquired above (below) market leases, net			(1,338	)			(2,232	)
Recognized hedge activity	828				—
Straight-line ground rent expense			22				22
Straight-line rent income	(11,416		)		(16,337		)
Provision for doubtful accounts			707				215
Amortization of acquired above (below) market leases, net	(5,206		)		(5,372		)
Net gain on real estate venture transactions			(14,582	)			(5,929	)
Straight-line ground rent expense	66				1,286
Net gain on sale of interests in real estate			(7,323	)			(115,456	)
Provision for doubtful accounts	1,687				1,777
Loss on early extinguishment of debt			-				66,590
Net (gain) loss on real estate venture transactions	417				(3,683		)
Provision for impairment			2,730				7,390
Net gain on sale of interests in real estate	(5,882		)		(3,044		)
Real Estate Venture loss in excess of distributions			748				723
Net gain from remeasurement of investment in a real estate venture	(458		)		(7,847		)
Deferred financing obligation			-				(253	)
Loss on early extinguishment of debt	2,606				1,127
Changes in assets and liabilities:
Provision for impairment on assets held for sale	1,765				—
Accounts receivable			(917	)			246
Historic tax credit transaction income	(11,853		)		(11,853		)
Other assets			(10,926	)			(9,193	)
Real estate venture income in excess of distributions	659				(2,371		)
Accounts payable and accrued expenses			9,089				6,296
Deferred financing obligation	(864		)		(1,392		)
Deferred income, gains and rent			(3,333	)			(2,308	)
Changes in assets and liabilities:
Other liabilities			(6	)			552
Accounts receivable	(4,586		)		(287		)
Net cash provided by operating activities			40,259				39,194
Other assets	(10,317		)		(6,660		)
Cash flows from investing activities:
Accounts payable and accrued expenses	9,304				14,684
Proceeds from the sale of properties			74,159				704,911
Deferred income, gains and rent	(4,430		)		1,265
Proceeds from real estate venture sales			27,230				4,812
Other liabilities	(1,760		)		1,718
Capital expenditures for tenant improvements			(11,408	)			(13,949	)
Net cash from operating activities	133,000				145,326
Capital expenditures for redevelopments			(5,505	)			(6,199	)
Cash flows from investing activities:
Capital expenditures for developments			(21,156	)			(54,405	)
Acquisition of properties	(12,405		)		(20,758		)
Advances for the purchase of tenant assets, net of repayments			997				360
Sales of properties, net	81,625				145,931
Investment in unconsolidated Real Estate Ventures			(4,910	)			(14,414	)
Distribution of sales proceeds from real estate ventures	—				16,963
Deposits for real estate			268				(2,275	)
Proceeds from repayment of mortgage notes receivable	5,125				200
Escrowed cash			(32,009	)			6,991
Capital expenditures for tenant improvements	(85,698		)		(64,481		)
Cash distribution from unconsolidated Real Estate Ventures in excess of cumulative equity income			8,306				1,436
Capital expenditures for redevelopments	(10,195		)		(5,288		)
Leasing costs paid			(4,129	)			(4,716	)
Capital expenditures for developments	(48,057		)		(5,399		)
Net cash provided by investing activities			31,843				622,552
Reimbursement from real estate venture for pre-formation development costs	—				1,976
Cash flows from financing activities:
Advances for purchase of tenant assets, net of repayments	(212		)		(420		)
Repayments of mortgage notes payable			(1,215	)			(267,172	)
Investment in unconsolidated Real Estate Ventures	(16,330		)		(30,142		)
Proceeds from credit facility borrowings			-				195,000
Escrowed cash	1,076				902
Repayments of credit facility borrowings			-				(195,000	)
Cash distributions from unconsolidated Real Estate Ventures in excess of cumulative equity income	7,341				3,661
Debt financing costs paid			-				(72	)
Leasing costs	(17,018		)		(25,704		)
Proceeds from the exercise of stock options			-				826
Net cash from (used in) investing activities	(94,748		)		17,441
Shares used for employee taxes upon vesting of share awards			(129	)			(289	)
Cash flows from financing activities:
Partner contributions to consolidated real estate venture			29				18
Proceeds from Credit Facility borrowings	—				186,000
Distributions paid to shareholders			(29,815	)			(28,004	)
Repayments of Credit Facility borrowings	—				(255,000		)
Distributions to non-controlling interest			(237	)			(230	)
Repayments of mortgage notes payable	(9,994		)		(8,351		)
Net cash used in financing activities			(31,367	)			(294,923	)
Repayments of unsecured term loans	(250,828		)		—
Increase in cash and cash equivalents			40,735				366,823
Proceeds from unsecured notes	496,459				—
Cash and cash equivalents at beginning of year			193,919				56,694
Deferred financing obligation interest expense	—				697
Cash and cash equivalents at end of period		$	234,654			$	423,517
Net proceeds from issuance of common shares	335,016				181,527
Supplemental disclosure:
Repayments of unsecured notes	(120,361		)		(13,027		)
Cash paid for interest, net of capitalized interest during the three months ended March 31, 2017 and 2016 of $1,709 and $3,671, respectively		$	11,268			$	13,656
Debt financing costs	(3,630		)		(6		)
Supplemental disclosure of non-cash activity:
Dividends and distributions declared but not paid			30,047				28,278
Change in investment in real estate ventures as a result of dispositions			12,549				(1,130	)
Change in investment in real estate ventures related to non-cash disposition of property			-				(25,165	)
Change in capital expenditures financed through accounts payable at period end			1,273				4,235
Change in capital expenditures financed through retention payable at period end			(199	)			753

The accompanying notes are an integral part of these consolidated financial statements.

Exercise of stock options	709			2,240
Distributions paid to shareholders	(76,081		)	(72,061		)
Distributions to noncontrolling interest	(806		)	(818		)
Net cash from financing activities	370,484			21,201
Increase in cash and cash equivalents	408,736			183,968
Cash and cash equivalents at beginning of period	263,207			1,549
Cash and cash equivalents at end of period	$	671,943		$	185,517
Supplemental disclosure:
Cash paid for interest, net of capitalized interest during the nine months ended September 30, 2014 and 2013 of $4,466 and $2,012, respectively	$	92,196		$	76,528
Supplemental disclosure of non-cash activity:
Change in operating real estate related to a non-cash acquisition of an operating property	—			(21,649		)
Change in intangible assets, net related to non-cash acquisition of an operating property	—			(3,517		)
Change in acquired lease intangibles, net related to non-cash acquisition of an operating property	—			462
Change in investments in joint venture related to non-cash disposition of property	(5,897		)	—
Change in investments in joint venture related to non-cash acquisition of property	—			13,040
Change in operating real estate related to non-cash adjustment to land	—			(4,386		)
Change in receivable from settlement of acquisitions	619			—
Change in investments in real estate ventures related to a contribution of land	—			(6,058		)
Change in capital expenditures financed through accounts payable at period end	4,415			1,210
Change in capital expenditures financed through retention payable at period end	3,479			(736		)
Change in unfunded tenant allowance	(327		)	(811		)
Conversion of LP Units to Common Shares	655			1,241

BRANDYWINE OPERATING PARTNERSHIP, L.P.

CONSOLIDATED BALANCE SHEETS

(in thousands, except unit and per unit information)

	March 31,			December 31,
	2017			2016
ASSETS	(unaudited)
Real estate investments:
Operating properties	$	3,702,204		$	3,586,295
Accumulated depreciation		(864,196	)		(852,476	)
Operating real estate investments, net		2,838,008			2,733,819
Construction-in-progress		166,372			297,462
Land held for development		153,268			150,970
Total real estate investments, net		3,157,648			3,182,251
Assets held for sale, net		6,262			41,718
Cash and cash equivalents		234,654			193,919
Accounts receivable, net of allowance of $2,622 and $2,373 in 2017 and 2016, respectively		12,099			12,446
Accrued rent receivable, net of allowance of $13,703 and $13,743 in 2017 and 2016, respectively		152,819			149,624
Investment in Real Estate Ventures, equity method		264,941			281,331
Deferred costs, net		92,425			91,342
Intangible assets, net		64,222			72,478
Other assets		116,792			74,104
Total assets	$	4,101,862		$	4,099,213
LIABILITIES AND PARTNERS' EQUITY
Mortgage notes payable, net	$	320,484		$	321,549
Unsecured term loans, net		248,181			248,099
Unsecured senior notes, net		1,444,006			1,443,464
Accounts payable and accrued expenses		115,079			103,404
Distributions payable		30,047			30,032
Deferred income, gains and rent		30,592			31,620
Acquired lease intangibles, net		16,604			18,119
Liabilities related to assets held for sale		387			81
Other liabilities		16,916			19,408
Total liabilities	$	2,222,296		$	2,215,776
Commitments and contingencies (See Note 14)
Redeemable limited partnership units at redemption value; 1,479,799 issued and outstanding in 2017 and 2016		23,899			23,795
Brandywine Operating Partnership, L.P.'s equity:
6.90% Series E-Linked Preferred Mirror Units; issued and outstanding- 4,000,000 in 2017 and 2016		96,850			96,850
General Partnership Capital; 175,202,404 and 175,140,760 units issued and outstanding in 2017 and 2016, respectively		1,757,455			1,762,764
Accumulated other comprehensive loss		(822	)		(2,122	)
Total Brandywine Operating Partnership, L.P.'s equity		1,853,483			1,857,492
Non-controlling interest - consolidated real estate ventures		2,184			2,150
Total partners' equity	$	1,855,667		$	1,859,642
Total liabilities and partners' equity	$	4,101,862		$	4,099,213

The accompanying notes are an integral part of these consolidated financial statements.

BRANDYWINE OPERATING PARTNERSHIP, L.P.

CONSOLIDATED ~~BALANCE~~STATEMENTS ~~SHEETS~~OF OPERATIONS

(unaudited, in thousands, except unit and per unit information)

	September 30, 2014			December 31, 2013
	Three-month periods ended
	(unaudited)
	March 31,
ASSETS
	2017			2016
Real estate investments:
Revenue
Operating properties	$	4,608,895		$	4,669,289
Rents	$	103,332		$	110,163
Accumulated depreciation	(1,053,571		)	(983,808		)
Tenant reimbursements		18,535			20,054
Operating real estate investments, net	3,555,324			3,685,481
Termination fees		1,673			294
Construction-in-progress	140,456			74,174
Third party management fees, labor reimbursement and leasing		6,485			5,235
Land inventory	90,842			93,351
Other		895			756
Total real estate investments, net	3,786,622			3,853,006
Total revenue		130,920			136,502
Cash and cash equivalents	671,943			263,207
Operating expenses
Accounts receivable, net	19,825			17,389
Property operating expenses		36,885			40,879
Accrued rent receivable, net	131,211			126,295
Real estate taxes		11,749			11,886
Assets held for sale	37,647			—
Third party management expenses		2,447			2,010
Investment in real estate ventures, at equity	197,539			180,512
Depreciation and amortization		45,892			48,873
Deferred costs, net	122,881			122,954
General and administrative expenses		9,425			9,120
Intangible assets, net	105,300			132,329
Provision for impairment		2,730			7,390
Other assets	75,383			69,403
Total operating expenses		109,128			120,158
Total assets	$	5,148,351		$	4,765,095
Operating income		21,792			16,344
LIABILITIES AND PARTNERS' EQUITY
Other income (expense)
Mortgage notes payable	$	658,601		$	670,151
Interest income		393			320
Unsecured term loans	200,000			450,000
Interest expense		(21,437	)		(23,691	)
Unsecured senior notes, net of discounts	1,854,779			1,475,230
Interest expense - amortization of deferred financing costs		(634	)		(774	)
Accounts payable and accrued expenses	97,022			83,693
Interest expense - financing obligation		-			(281	)
Distributions payable	28,857			25,584
Equity in loss of Real Estate Ventures		(748	)		(403	)
Deferred income, gains and rent	53,219			71,635
Net gain on disposition of real estate		7,323			115,456
Acquired lease intangibles, net	27,388			34,444
Net gain on Real Estate Venture transactions		14,582			5,929
Other liabilities	36,824			32,923
Loss on early extinguishment of debt		-			(66,590	)
Liabilities related to assets held for sale	1,771			—
Net income		21,271			46,310
Total liabilities	2,958,461			2,843,660
Net income from continuing operations attributable to non-controlling interests - consolidated real estate ventures		(5	)		(2	)
Commitments and contingencies (Note 16)
Net income attributable to Brandywine Operating Partnership		21,266			46,308
Redeemable limited partnership units at redemption value; 1,721,905 and 1,763,739 issued and outstanding in 2014 and 2013, respectively	25,985			26,486
Distribution to preferred unitholders		(1,725	)		(1,725	)
Brandywine Operating Partnership, L.P.’s equity:
Amounts allocated to unvested restricted unitholders		(99	)		(105	)
6.90% Series E-Linked Preferred Mirror Units; issued and outstanding- 4,000,000 in 2014 and 2013	96,850			96,850
Net income attributable to Common Partnership Unitholders of Brandywine Operating Partnership, L.P.	$	19,442		$	44,478
General Partnership Capital, 178,982,369 and 156,731,993 units issued and outstanding in 2014 and 2013, respectively	2,069,031			1,800,530
Basic income per Common Partnership Unit:
Accumulated other comprehensive loss	(3,042		)	(3,377		)
Continuing operations	$	0.11		$	0.25
Total Brandywine Operating Partnership, L.P.’s equity	2,162,839			1,894,003
Diluted income per Common Partnership Unit:
Non-controlling interest - consolidated real estate ventures	1,066			946
Continuing operations	$	0.11		$	0.25
Total partners’ equity	2,163,905			1,894,949
Basic weighted average common partnership units outstanding		176,656,763			176,324,047
Total liabilities and partners’ equity	$	5,148,351		$	4,765,095
Diluted weighted average common partnership units outstanding		177,681,671			177,006,515
Distributions declared per Common Partnership Unit	$	0.16		$	0.15

The accompanying notes are an integral part of these consolidated financial statements.

BRANDYWINE OPERATING PARTNERSHIP, L.P.

CONSOLIDATED STATEMENTS OF OPERATIONS

	Three-month periods ended						Nine-month periods ended
	September 30,						September 30,
	2014			2013			2014			2013
Revenue:
Rents	$	120,288		$	116,382		$	363,581		$	347,054
Tenant reimbursements	20,095			20,694			64,057			60,595
Termination fees	1,418			2,040			6,970			2,946
Third party management fees, labor reimbursement and leasing	3,932			3,263			12,269			9,652
Other	825			975			2,295			3,305
Total revenue	146,558			143,354			449,172			423,552
Operating expenses:
Property operating expenses	42,675			40,639			132,612			119,421
Real estate taxes	12,869			14,167			39,167			42,639
Third party management expenses	1,687			1,317			5,133			4,105
Depreciation and amortization	52,616			50,583			157,773			149,300
General & administrative expenses	5,900			6,436			20,086			20,323
Total operating expenses	115,747			113,142			354,771			335,788
Operating income	30,811			30,212			94,401			87,764
Other income (expense):
Interest income	528			268			1,298			448
Historic tax credit transaction income	11,853			11,853			11,853			11,853
Interest expense	(31,481		)	(30,338		)	(94,837		)	(91,689		)
Amortization of deferred financing costs	(1,566		)	(1,158		)	(3,952		)	(3,502		)
Interest expense — financing obligation	(273		)	(264		)	(861		)	(693		)
Recognized hedge activity	(828		)	—			(828		)	—
Equity in income (loss) of real estate ventures	(486		)	714			(733		)	3,757
Net gain on disposition of real estate	4,698			—			4,698			—
Net gain (loss) on sale of undepreciated real estate	—			(129		)	1,184			(129		)
Net gain from remeasurement of investment in RE ventures	—			—			458			7,847
Net gain (loss) on real estate venture transactions	—			—			(417		)	3,683
Loss on early extinguishment of debt	(2,606		)	(11		)	(2,606		)	(1,127		)
Provision for impairment on assets held for sale	(1,765		)	—			(1,765		)	—
Income from continuing operations	8,885			11,147			7,893			18,212
Discontinued operations:
Income (loss) from discontinued operations	—			(43		)	18			946
Net gain (loss) on disposition of discontinued operations	(3		)	(16		)	900			3,029
Total discontinued operations	(3		)	(59		)	918			3,975
Net income	8,882			11,088			8,811			22,187
Net income attributable to non-controlling interests	(24		)	—			(12		)	—
Net income attributable to Brandywine Operating Partnership	8,858			11,088			8,799			22,187
Distribution to Preferred Units	(1,725		)	(1,725		)	(5,175		)	(5,175		)
Amount allocated to unvested restricted unitholders	(82		)	(85		)	(268		)	(278		)
Net income attributable to Common Partnership Unitholders of Brandywine Operating Partnership, L.P.	$	7,051		$	9,278		$	3,356		$	16,734
Basic income per Common Partnership Unit:
Continuing operations	$	0.04		$	0.06		$	0.01		$	0.08
Discontinued operations	—			—			0.01			0.03
	$	0.04		$	0.06		$	0.02		$	0.11
Diluted income per Common Partnership Unit:
Continuing operations	$	0.04		$	0.06		$	0.01		$	0.08
Discontinued operations	—			—			0.01			0.03
	$	0.04		$	0.06		$	0.02		$	0.11
Basic weighted average common partnership units outstanding	173,341,782			158,467,087			163,620,963			153,731,070
Diluted weighted average common partnership units outstanding	174,928,930			159,755,821			165,107,978			154,940,454
Net income (loss) attributable to Brandywine Operating Partnership, L.P.
Total continuing operations	$	8,861		$	11,147		$	7,881		$	18,212
Total discontinued operations	(3		)	(59		)	918			3,975
Net income	$	8,858		$	11,088		$	8,799		$	22,187

BRANDYWINE OPERATING PARTNERSHIP, L.P.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited, in thousands)

	Three-month periods ended						~~Nine-month periods ended~~
	September 30,						September 30,
	March 31,
	2014			2013			2014			2013
	2017			2016
Net income	$	821,~~882~~271		$	1146,~~088~~310		$	~~8,811~~		$	~~22,187~~
Other comprehensive income (loss):
Comprehensive income:
Unrealized gain (loss) on derivative financial instruments	~~4,232~~	1,014		~~(1,302~~	(9,405	)	~~967~~			~~9,978~~
Recognized hedge activity	(828		)	—			(828		)	—
Reclassification of realized losses on derivative financial instruments to operations, net (1)		286			246
Reclassification of realized losses on derivative financial instruments to operations, net (1)	76			64			196			232
Total comprehensive income (loss)		1,300			(9,159	)
Other comprehensive income (loss)	3,480			(1,238		)	335			10,210
Comprehensive income		22,571			37,151
Comprehensive income attributable to Brandywine Operating Partnership, L.P.	$	12,362		$	9,850		$	9,146		$	32,397
Comprehensive income attributable to non-controlling interest - consolidated real estate ventures		(5	)		(2	)
Comprehensive income attributable to Brandywine Operating Partnership, L.P.	$	22,566		$	37,149

(1)	Amounts reclassified from comprehensive income to interest expense within the Consolidated Statements of Operations.

The accompanying notes are an integral part of these consolidated financial statements.

BRANDYWINE OPERATING PARTNERSHIP, L.P.

CONSOLIDATED STATEMENTS OF PARTNERS’ EQUITY

For the three-month period ended March 31, 2017

(unaudited, in thousands, except number of units)


	Series E-Linked Preferred Mirror Units				General Partner Capital
	Units		Amount		Units			Amount			Accumulated Other Comprehensive Gain/(Loss)			Non-controlling Interest - Consolidated Real Estate Ventures		Total Partners' Equity
BALANCE, December 31, 2016		4,000,000	$	96,850		175,140,760		$	1,762,764		$	(2,122	)	$	2,150	$	1,859,642
Net income									21,266						5		21,271
Other comprehensive income												1,300					1,300
Deferred compensation obligation						(354	)		(48	)							(48	)
Issuance of LP Units									(219	)							(219	)
Issuance of partnership interest in consolidated real estate venture															29		29
Share Choice Plan issuance						(1,423	)										-
Bonus share issuance						6,752			110								110
Share-based compensation activity						56,669			3,769								3,769
Adjustment of redeemable partnership units to liquidation value at period end									(340	)							(340	)
Distributions to Preferred Mirror Units									(1,725	)							(1,725	)
Distributions to general partnership unitholders ($0.16 per unit)									(28,122	)							(28,122	)
BALANCE, March 31, 2017		4,000,000	$	96,850		175,202,404		$	1,757,455		$	(822	)	$	2,184	$	1,855,667

The accompanying notes are an integral part of these consolidated financial statements.

BRANDYWINE OPERATING PARTNERSHIP, L.P.

CONSOLIDATED STATEMENT OF PARTNERS’ EQUITY

For the three-month period ended March 31, 2016

(unaudited, in thousands, except number of units)


	Series E-Linked Preferred Mirror Units				General Partner Capital
	Units		Amount		Units			Amount			Accumulated Other Comprehensive Loss			Non-controlling Interest - Consolidated Real Estate Ventures			Total Partners' Equity
BALANCE, December 31, 2015		4,000,000	$	96,850		174,688,568		$	1,836,692		$	(5,597	)	$	2,032		$	1,929,977
Net income									46,308						2			46,310
Other comprehensive loss												(9,159	)					(9,159	)
Deferred compensation obligation						(8,252	)											-
Issuance of partnership interest in consolidated real estate venture															18			18
Share-based compensation activity						210,116			3,332									3,332
Adjustment of redeemable partnership units to liquidation value at period end									(401	)								(401	)
Adjustment to non-controlling interest												1			(1	)		-
Distributions to Preferred Mirror Units									(1,725	)								(1,725	)
Distributions to general partnership unitholders ($0.15 per unit)									(26,347	)								(26,347	)
BALANCE, March 31, 2016		4,000,000	$	96,850		174,890,432		$	1,857,859		$	(14,755	)	$	2,051		$	1,942,005

The accompanying notes are an integral part of these consolidated financial statements.

BRANDYWINE OPERATING PARTNERSHIP L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

	Nine-month periods ended
		Three-month periods ended March 31,
	September 30,
		2017				2016
	2014				2013
Cash flows from operating activities:
Cash flows from operating activities:
Net income		$	21,271			$	46,310
Net income	$	8,811			$	22,187
Adjustments to reconcile net income to net cash from operating activities:
Adjustments to reconcile net income (loss) to net cash from operating activities:
Depreciation and amortization			45,892				48,873
Depreciation and amortization	157,773				151,066
Amortization of deferred financing costs			634				774
Amortization of deferred financing costs	3,952				3,502
Amortization of debt discount/(premium), net			362				382
Amortization of debt discount/(premium), net	(455		)		1,112
Amortization of stock compensation costs			3,124				2,296
Amortization of stock compensation costs	3,622				5,510
Straight-line rent income			(5,895	)			(6,104	)
Shares used for employee taxes upon vesting of share awards	(1,263		)		(1,062		)
Amortization of acquired above (below) market leases, net			(1,338	)			(2,232	)
Recognized hedge activity	828				—
Straight-line ground rent expense			22				22
Straight-line rent income	(11,416		)		(16,337		)
Provision for doubtful accounts			707				215
Amortization of acquired above (below) market leases, net	(5,206		)		(5,372		)
Net gain on real estate venture transactions			(14,582	)			(5,929	)
Straight-line ground rent expense	66				1,286
Net gain on sale of interests in real estate			(7,323	)			(115,456	)
Provision for doubtful accounts	1,687				1,777
Loss on early extinguishment of debt			-				66,590
Net (gain) loss on real estate venture transactions	417				(3,683		)
Provision for impairment			2,730				7,390
Net gain on sale of interests in real estate	(5,882		)		(3,044		)
Real Estate Venture loss in excess of distributions			748				723
Net gain on remeasurement of investment in a real estate venture	(458		)		(7,847		)
Deferred financing obligation			-				(253	)
Historic tax credit transaction income	(11,853		)		(11,853		)
Changes in assets and liabilities:
Loss on early extinguishment of debt	2,606				1,127
Accounts receivable			(917	)			246
Provision for impairment on assets held for sale	1,765				—
Other assets			(10,926	)			(9,193	)
Real Estate venture income in excess of distributions	659				(2,371		)
Accounts payable and accrued expenses			9,089				6,296
Deferred financing obligation	(864		)		(1,392		)
Deferred income, gains and rent			(3,333	)			(2,308	)
Changes in assets and liabilities:
Other liabilities			(6	)			552
Accounts receivable	(4,586		)		(287		)
Net cash provided by operating activities			40,259				39,194
Other assets	(10,317		)		(6,660		)
Cash flows from investing activities:
Accounts payable and accrued expenses	9,304				14,684
Proceeds from the sale of properties			74,159				704,911
Deferred income, gains and rent	(4,430		)		1,265
Proceeds from real estate venture sales			27,230				4,812
Other liabilities	(1,760		)		1,718
Capital expenditures for tenant improvements			(11,408	)			(13,949	)
Net cash from operating activities	133,000				145,326
Capital expenditures for redevelopments			(5,505	)			(6,199	)
Cash flows from investing activities:
Capital expenditures for developments			(21,156	)			(54,405	)
Acquisition of properties	(12,405		)		(20,758		)
Advances for the purchase of tenant assets, net of repayments			997				360
Sales of properties, net	81,625				145,931
Investment in unconsolidated Real Estate Ventures			(4,910	)			(14,414	)
Distribution of sales proceeds from real estate venture	—				16,963
Deposits for real estate			268				(2,275	)
Proceeds from repayment of mortgage notes receivable	5,125				200
Escrowed cash			(32,009	)			6,991
Capital expenditures for tenant improvements	(85,698		)		(64,481		)
Cash distribution from unconsolidated Real Estate Ventures in excess of cumulative equity income			8,306				1,436
Capital expenditures for redevelopments	(10,195		)		(5,288		)
Leasing costs paid			(4,129	)			(4,716	)
Capital expenditures for developments	(48,057		)		(5,399		)
Net cash provided by investing activities			31,843				622,552
Reimbursement from real estate venture for pre-formation development costs	—				1,976
Cash flows from financing activities:
Advances for purchase of tenant assets, net of repayments	(212		)		(420		)
Repayments of mortgage notes payable			(1,215	)			(267,172	)
Investment in unconsolidated Real Estate Ventures	(16,330		)		(30,142		)
Proceeds from credit facility borrowings			-				195,000
Escrowed cash	1,076				902
Repayments of credit facility borrowings			-				(195,000	)
Cash distributions from unconsolidated Real Estate Ventures in excess of cumulative equity income	7,341				3,661
Debt financing costs paid			-				(72	)
Leasing costs	(17,018		)		(25,704		)
Proceeds from the exercise of stock options			-				826
Net cash from (used in) investing activities	(94,748		)		17,441
Shares used for employee taxes upon vesting of share awards			(129	)			(289	)
Cash flows from financing activities:
Partner contributions to consolidated real estate venture			29				18
Proceeds from Credit Facility borrowings	—				186,000
Distributions paid to preferred and common partnership units			(30,052	)			(28,234	)
Repayments of Credit Facility borrowings	—				(255,000		)
Net cash used in financing activities			(31,367	)			(294,923	)
Repayments of mortgage notes payable	(9,994		)		(8,351		)
Increase in cash and cash equivalents			40,735				366,823
Repayments of unsecured term loans	(250,828		)		—
Cash and cash equivalents at beginning of year			193,919				56,694
Proceeds from unsecured notes	496,459				—
Cash and cash equivalents at end of period		$	234,654			$	423,517
Deferred financing obligation interest expense	—				697
Supplemental disclosure:
Net proceeds from issuance of common units	335,016				181,527
Cash paid for interest, net of capitalized interest during the three months ended March 31, 2017 and 2016 of $1,709 and $3,671, respectively		$	11,268			$	13,656
Repayments of unsecured notes	(120,361		)		(13,027		)
Supplemental disclosure of non-cash activity:
Dividends and distributions declared but not paid			30,047				28,278
Change in investment in real estate ventures as a result of dispositions			12,549				(1,130	)
Change in investment in real estate ventures related to non-cash disposition of property			-				(25,165	)
Change in capital expenditures financed through accounts payable at period end			1,273				4,235
Change in capital expenditures financed through retention payable at period end			(199	)			753

Debt financing costs	(3,630		)	(6		)
Exercise of stock options	709			2,240
Distributions paid to preferred and common partnership unitholders	(76,887		)	(72,879		)
Net cash from (used in) financing activities	370,484			21,201
Increase (Decrease) in cash and cash equivalents	408,736			183,968
Cash and cash equivalents at beginning of period	263,207			1,549
Cash and cash equivalents at end of period	$	671,943		$	185,517
Supplemental disclosure:
Cash paid for interest, net of capitalized interest during the nine months ended September 30, 2014 and 2013 of $4,466 and $2,012, respectively	$	92,196		$	76,528
Supplemental disclosure of non-cash activity:
Change in operating real estate related to a non-cash acquisition of an operating property	—			(21,649		)
Change in intangible assets, net related to a non-cash acquisition of an operating property	—			(3,517		)
Change in acquired lease intangibles, net related to a non-cash acquisition of an operating property	—			462
Change in investments in joint venture related non-cash disposition of property	(5,897		)	—
Change in investments in joint venture related to non-cash acquisition of property	—			13,040
Change in operating real estate related to non-cash adjustment to land	—			(4,386		)
Change in receivable from settlement of acquisitions	619			—
Change in investments in real estate ventures related to a contribution of land	—			(6,058		)
Change in capital expenditures financed through accounts payable at period end	4,415			1,210
Change in capital expenditures financed through retention payable at period end	3,479			(736		)
Change in unfunded tenant allowance	(327		)	(811		)
Conversion of LP Units to Common Shares	655			1,241

The accompanying notes are an integral part of these consolidated financial statements.

BRANDYWINE REALTY TRUST AND BRANDYWINE OPERATING PARTNERSHIP, L.P.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

~~SEPTEMBER 30~~March 31, ~~2014~~ 2017

1. ORGANIZATION OF THE PARENT COMPANY AND THE OPERATING PARTNERSHIP

The Parent Company is a self-administered and self-managed real estate investment trust (“REIT”) that provides leasing, property management, development, redevelopment, acquisition and other tenant-related services for a portfolio of office, ~~industrial~~residential, retail and mixed-use properties. The Parent Company owns its assets and conducts its operations through the Operating Partnership and subsidiaries of the Operating Partnership. The Parent Company is the sole general partner of the Operating Partnership and, as of ~~September~~March 3031, ~~2014~~2017, owned a 9899.92% interest in the Operating Partnership. The Parent Company’s common shares of beneficial interest are publicly traded on the New York Stock Exchange under the ticker symbol “BDN”.

As of ~~September~~March 3031, ~~2014~~2017, the Company owned ~~205~~104 properties, ~~consisting~~that contain an aggregate of ~~169~~approximately ~~office~~16.5 ~~properties,~~million 20net ~~industrial~~rentable ~~facilities~~square feet and consist of 90 office properties, ~~five~~six mixed-use properties, one retail property (~~195~~97 ~~core~~ properties), ~~five~~collectively ~~properties~~the ~~classified~~“Core ~~as held for sale~~Properties”), three development properties, ~~one~~three redevelopment ~~property~~properties and one ~~re-entitlement~~ property classified as held for sale (collectively, the “Properties”) ~~containing an aggregate of approximately 25~~.~~4 million net rentable square feet.~~ In addition, as of ~~September 30~~March 31, ~~2014~~2017, the Company owned economic interests in 1713 unconsolidated real estate ventures ~~that~~(collectively, the “Real Estate Ventures”), seven of which own properties ~~containing~~that contain an aggregate of approximately 68.10 million net rentable square feet ~~(collectively,~~of ~~the~~office ~~“Real~~space; ~~Estate~~two ~~Ventures”)~~of which own 4. 3 acres of undeveloped parcels of land; two of which own 1.4 acres of land under active development and two of which own residential towers that contain 345 and 321 apartment units, respectively. As of ~~September~~March 3031, ~~2014~~2017, the Company also owned ~~415~~312 acres of undeveloped land, and held options to purchase approximately 5060 additional acres of undeveloped land. As of ~~September 30~~March 31, ~~2014~~2017, the total potential development that these land parcels could support, including the parcels under option, under current zoning and entitlements, ~~approximately~~amounted ~~5.7 million square feet of development inclusive of options~~ to ~~purchase~~an ~~approximately~~estimated 5012.2 ~~additional~~million ~~acres~~square ~~of undeveloped land~~feet. The Properties and the properties owned by the Real Estate Ventures are located in or near Philadelphia, Pennsylvania; Metropolitan Washington, D.C.; Southern New Jersey; Richmond, Virginia; Wilmington, Delaware; and Austin, Texas. ~~and~~In ~~Oakland~~addition to managing properties owned by the Company, ~~Concord~~as ~~and~~of ~~Carlsbad~~March 31, ~~California~~2017, the Company was managing approximately 10.2 million net rentable square feet of office and industrial properties for third parties and Real Estate Ventures.

The Company conducts its third-party real estate management services business primarily through wholly-owned management company subsidiaries. As of ~~September 30~~March 31, ~~2014~~2017, the management company subsidiaries were managing properties containing an aggregate of approximately 3326.7 million net rentable square feet, of which approximately 2516.45 million net rentable square feet related to Properties owned by the Company and approximately 810.32 million net rentable square feet related to properties owned by third parties and Real Estate Ventures.

Unless otherwise indicated, all references in this Form 10-Q to square feet represent net rentable area.

2. ~~SUMMARY~~BASIS OF ~~SIGNIFICANT ACCOUNTING POLICIES~~PRESENTATION

Basis of Presentation

The consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial statements. Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments (consisting solely of normal recurring matters) for a fair statement of the financial position of the Company as of ~~September~~March 3031, ~~2014~~2017, the results of its operations for the three ~~and nine~~-month periods ended ~~September~~March 3031, ~~2014~~2017 and ~~2013~~2016 and its cash flows for the ~~nine~~three-month periods ended ~~September~~March 3031, ~~2014~~2017 and ~~2013~~2016 have been included. The results of operations for such interim periods are not necessarily indicative of the results for a full year. These consolidated financial statements should be read in conjunction with the Parent Company’s and the Operating Partnership’s consolidated financial statements and footnotes included in their combined ~~2013~~2016 Annual Report on Form 10-K filed with the SEC on ~~February 25~~March 1, ~~2014~~2017.

The Company's Annual Report on Form 10-K for the year ended December 31, 2016 contains a discussion of our significant accounting policies under Note 2, "Summary of Significant Accounting Policies". There have been no significant changes in our significant accounting policies since December 31, 2016. Management discusses our significant accounting policies and management’s judgments and estimates with the Company's Audit Committee.

Reclassifications

~~Certain~~During ~~amounts~~the ~~have~~first ~~been~~quarter ~~reclassified~~of in2017, ~~prior~~the ~~years~~Company toadopted ~~conform~~ASU 2016-09, Improvements to ~~the~~Employee ~~current~~Share-Based ~~year~~Payment ~~presentation,~~Accounting ~~including~~(“ASU ~~the~~2016-09”), ~~reclassification~~which ofrequires ~~notes~~the ~~receivable~~Company to ~~other~~reclassify ~~assets~~employer ~~within~~tax ~~the~~payments ~~balance~~on ~~sheets~~account ~~and~~of ~~the~~employee ~~reclassification~~tax ofwithholdings ~~changes~~on inshare-based ~~escrow~~awards ~~balances~~ from operating ~~cash~~activities ~~flows~~ to ~~investing~~financing ~~cash flows in the statements of cash flows~~activities. ~~All~~ Prior ~~other reclassifications are related~~ to the ~~treatment~~issuance of ~~sold~~ASU ~~properties~~2016-09, asthere ~~discontinued~~was ~~operations~~no ~~on the statement of operations for all periods presented. See Recent Accounting Pronouncements below for revisions to the accounting~~ guidance ~~for~~on ~~discontinued operations.~~

Recent Accounting Pronouncements

In August 2014, the Financial Accounting Standards Board ("FASB") issued guidance regarding an Entity’s Ability to Continue as a Going Concern, which requires management to assess a company’s ability to continue as a going concern and to provide related footnote disclosures in certain circumstances. Before this new standard, there was minimal guidance in U.S. GAAP specific

~~to going concern. Under~~ the ~~new~~classification ~~standard,~~of ~~disclosures~~cash ~~are~~paid ~~required~~by ~~when~~an ~~conditions~~employer ~~give~~to ~~rise~~the totaxing ~~substantial~~authorities ~~doubt~~when ~~about~~directly awithholding ~~company’s~~shares ~~ability~~for totax ~~continue~~withholding aspurposes. As a ~~going~~result ~~concern~~of ~~within one year from~~ the ~~financial~~adoption, ~~statement~~a ~~issuance date~~$0.3 ~~The~~million ~~guidance~~cash isoutflow ~~effective~~has ~~for~~been ~~annual~~reclassified ~~reporting~~in ~~periods~~the ~~beginning~~March ~~after December 15~~31, 2016, ~~including~~consolidated ~~interim~~statements ~~periods~~of ~~within~~cash ~~that~~flows ~~reporting~~from ~~period,~~operating ~~with~~activities ~~early~~to ~~adoption~~financing ~~permitted~~activities. ~~The~~There ~~Company~~was ~~has~~no ~~not~~other ~~yet determined the~~ impact, iffrom ~~any, that~~ the adoption of this guidance ~~will have on its consolidated financial statements~~.

InDuring ~~May~~the ~~2014~~quarter ~~FASB~~ended ~~issued~~December ~~guidance~~31, ~~requiring~~2016, ~~revenue~~the toCompany beearly ~~recognized~~adopted inASU an2016-15, ~~amount~~“Classification ~~that~~of ~~reflects~~Certain ~~the~~Cash ~~consideration~~Receipts ~~expected~~and toCash bePayments” ~~received~~(“ASU in2016-15”), ~~exchange~~which ~~for~~clarifies ~~goods~~that ~~and~~debt ~~services. The~~prepayment ~~guidance~~costs ~~requires~~should ~~the~~be ~~disclosure~~presented ofas ~~sufficient~~financing ~~quantitative~~activities ~~and~~in ~~qualitative~~the ~~information~~statement ~~for~~of ~~financial~~cash ~~statement~~flows. ~~users~~As toa ~~understand~~result of the ~~nature~~adoption, ~~amount,~~$53.4 ~~timing~~million ~~and~~was ~~uncertainty~~reclassified ofin ~~revenue~~the ~~and~~consolidated ~~associated~~statements of cash flows ~~arising~~ from ~~contracts~~the ~~with~~operating ~~customers. The~~activities ~~guidance~~section isto ~~effective~~the ~~for~~financing ~~annual~~activities ~~reporting~~section ~~periods~~of ~~beginning~~the ~~after~~consolidated ~~December~~statements ~~15,~~of ~~2016~~cash flows, ~~including~~within ~~interim~~the ~~periods~~“Repayment ~~within~~of ~~that~~mortgage ~~reporting~~notes ~~period~~payable” caption, ~~with~~for ~~early~~the ~~adoption~~three-months ~~precluded. The~~period ~~Company~~ended ~~has~~March ~~not~~31, ~~yet~~2016. ~~determined~~There ~~the~~was ~~impact,~~no ifother ~~any,~~impact ~~that~~from the adoption of this guidance ~~will have on its consolidated financial position or results of operations~~.

InRecent ~~April~~Accounting 2014 the FASB issued revised guidance on discontinued operations and disclosures of disposals of components of an entity. The update revises the definition to include only disposals involving a strategic shift that has a major effect on the entity’s operations and financial results when the disposal asset or group meets the existing criterion for treatment as held for sale. Examples of a strategic shift include the withdrawal from a major geographic area, line of business, equity method investment or any other major parts of a business, as applicable. A component of the entity comprises operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the entity. In addition, the revised standard no longer precludes presentation as a discontinued operation if there are operations and cash flows of the component that have not been eliminated from the reporting entity’s ongoing operations, or if there is significant continuing involvement with a component after its disposal.Pronouncements

~~The~~On ~~amendments~~February ~~require~~22, ~~additional~~2017, ~~disclosures~~the ~~about~~FASB ~~discontinued~~issued ~~operations~~ASU ~~including;~~No. ~~the~~2017-05 ~~major~~(“ASU ~~classes~~2017-05) to provide guidance for recognizing gains and losses from the transfer of ~~net~~nonfinancial ~~income~~assets orand ~~loss~~in-substance ~~where~~non-financial ~~net~~assets ~~income~~in iscontracts ~~otherwise~~with ~~presented~~non-customers, ~~the~~unless ~~operating~~other ~~and~~specific ~~investing~~guidance ~~cash~~applies. ~~flows~~The standard requires a company to derecognize nonfinancial assets once it transfers control of ~~discontinued~~a ~~operations~~distinct ~~where~~nonfinancial ~~net~~asset ~~income~~or isdistinct ~~otherwise~~in ~~presented~~substance nonfinancial asset. Additionally, ~~depreciation~~when a company transfers its controlling interest in a nonfinancial asset, ~~amortization~~but retains a noncontrolling ownership interest, ~~capital~~the ~~expenditures~~company ~~and~~is ~~significant~~required ~~operating~~to ~~and~~measure ~~investing~~any non-~~cash~~controlling ~~items~~interest ofit receives or retains at fair value. The guidance requires companies to recognize a full gain or loss on the ~~discontinued~~transaction. ~~operation~~As ~~for~~a result of the ~~periods~~new guidance, the guidance specific to real estate sales in ~~which~~ASC ~~net~~360-20 ~~income~~will isbe ~~otherwise~~eliminated. ~~presented~~As ~~and~~such, ifsales ~~there~~and partial sales of real estate assets will now be subject to the same derecognition model as all other nonfinancial assets. The guidance is aeffective ~~non-controlling~~for ~~interest~~annual periods beginning after December 15, 2017, including interim periods within that reporting period. The effective date of this guidance coincides with revenue recognition guidance. The Company is in the ~~related~~process ~~allocation~~of evaluating the impact of this new guidance and on its consolidated financial statements. The Company expects to utilize the ~~parent~~modified ~~company~~retrospective approach.

~~Application~~On isJanuary ~~prospective~~5, ~~and~~2017, ~~required~~the FASB issued ASU No. 2017-01 (“ASU 2017-01”) to amend the guidance for ~~periods~~determining ~~beginning~~whether ona transaction involves the purchase or ~~after~~disposal ~~December~~of ~~15,~~a ~~2014~~business or an asset. ~~This~~The ~~update~~amendments ~~should~~clarify ~~not~~that bewhen ~~applied~~substantially toall of the fair value of the gross assets ~~classified~~acquired asor ~~held~~disposed ~~for~~of ~~sale~~is ~~before~~concentrated ~~the~~in ~~effective~~a ~~date~~single ~~even~~identifiable ifasset ~~the~~or ~~component~~a group of ansimilar ~~entity~~assets, isthe ~~disposed~~set of ~~after~~assets ~~the~~and ~~effective~~activities ~~date~~is not a business. ~~Early~~ ~~adoption~~ASU 2017-01 is ~~permitted~~effective for ~~disposals~~fiscal oryears ~~assets~~beginning ~~held~~after December 15, 2017, including interim periods within those fiscal years and early adoption is permitted for ~~sale~~transactions ~~that~~which have not been previously reported in ~~the~~ financial statements ~~previously~~that have been issued. orThe ~~available~~Company ~~for~~adopted the guidance on the issuance date effective January 2017. The Company ~~has~~expects ~~elected~~that tomost ~~early~~of ~~adopt~~its ~~this~~real ~~standard~~estate asacquisitions ofwill ~~January~~be 1,considered ~~2014.~~asset ~~All~~acquisitions ~~properties~~under ~~sold~~the ornew ~~determined~~guidance ~~held~~and ~~for~~that ~~sale~~transaction ~~prior~~costs will be capitalized to ~~January~~the 1,investment ~~2014~~basis ~~are~~which ~~classified~~is asthen ~~discontinued~~subject ~~operations~~to ~~for~~a ~~all~~purchase ~~periods~~price ~~presented~~allocation based on relative fair value.

3. REAL ESTATE INVESTMENTS

As of ~~September 30~~March 31, ~~2014~~2017 and December 31, ~~2013~~2016, the gross carrying value of the ~~Company’s~~ Properties was as follows (in thousands):

	September 30, 2014		December 31, 2013
	March 31,		December 31,
Land	$	675,109	$	680,513
	2017		2016
Building and improvements	3,419,903		3,504,060
Land	$	462,014	$	469,522
Tenant improvements	513,883		484,716
Building and improvements		2,801,495		2,683,087
	$	4,608,895	$	4,669,289
Tenant improvements		438,695		433,686
Operating properties		3,702,204		3,586,295
Assets held for sale - real estate investments (a)		5,576		73,591
Total	$	3,707,780	$	3,659,886

Acquisitions

During the nine months ended September 30, 2014, the Company recorded a $0.5 million gain on remeasurement of its investment in partnerships with Parkway Properties, Inc. On December 19, 2013, the Company increased its equity ownership interest from 25% to 99% in each of the two partnerships that own One and Two Commerce Square, two 41-story trophy-class office towers in Philadelphia, Pennsylvania. As of December 31, 2013, the Company had recorded a $1.6 million net receivable balance from its former partner. This receivable balance represented the former partner's estimated portion of the net current assets pursuant to the terms of the agreement (the "Redemption Agreement") that provided for the forgoing transaction. In accordance with settlement procedures provided for in the Redemption Agreement, the Company and Parkway finalized the purchase accounting based on facts and circumstances that existed at the date of the acquisition but that were not fully known at such time. During the nine months ended September 30, 2014, $2.1 million of consideration was received from the former partner in full settlement of the

~~aforementioned provision and~~ (a) ~~measurement~~Real ~~period~~estate ~~adjustment~~investments ~~was~~related ~~made~~ to ~~adjust~~assets ~~the fair value of the Company's previously~~ held ~~equity~~for ~~investment,~~sale ~~resulting~~above inrepresents agross ~~gain~~real onestate ~~remeasurement~~assets ofand ~~the~~does ~~Company's~~not ~~investment~~include inaccumulated ~~the~~depreciation ~~partnerships~~or ofother ~~$0.5~~assets ~~million. For~~on ~~additional information related to this transaction, see~~ the ~~audited~~balance ~~financial~~sheet ~~statements~~of ~~included in~~ the ~~Company's~~property ~~Annual~~held ~~Report~~for onsale. ~~Form~~See ~~10-K~~“Held for ~~the~~Sale” ~~fiscal~~below ~~year~~in ~~ended~~this ~~December 31,~~Note ~~2013~~3.

On February 19, 2014, the Company acquired 54.1 acres of undeveloped land known as Encino Trace in Austin, Texas for $14.0 million. The land is fully entitled with a site plan and building permits in place allowing for the development of two four-story office buildings containing approximately 320,000 net rentable square feet. The purchase price included an in-place lease, which was placed into construction in progress. As such, the Company has treated this transaction as a business combination and allocated the purchase price to the tangible and intangible assets. The Company capitalized $8.4 million in construction in progress, recorded $4.6 million in land inventory and recorded a deposit for a portion of the future development fee held in escrow of $1.0 million. The net assets were purchased using available corporate funds.

As of September 30, 2014, each of the two office buildings at Encino Trace were in development, and the Company had funded, through such date, $28.7 million, inclusive of the $14.0 million acquisition cost. During the second quarter of 2014, the Company reclassified the $4.6 million remaining in land inventory to construction in progress in connection with commencement of development of the second building. Additional project costs will be funded over the remaining construction period.

Dispositions

OnThe ~~September 30,~~Company ~~2014,~~sold the ~~Company~~following ~~sold~~eight an office ~~building~~properties containing 172,943 rentable square feet at 1880 Campus Commons Drive in Reston, Virginia commonly known as Campus Pointe for a sales price of $42.5 million resulting in a gain on sale of $4.7 million after closing and ~~other~~one ~~transaction~~mixed-use ~~related~~property ~~costs.~~during ~~The disposal of Campus Pointe does not represent a strategic shift that has a major effect on~~ the ~~Company's~~three-month ~~operations~~period ~~and~~ended ~~financial~~March ~~results. Accordingly~~31, ~~the~~2017 ~~property~~(dollars ~~remains~~in ~~classified within continuing operations for all periods presented.~~ thousands):

On April 16, 2014, the Company sold a 5.3 acre parcel of land located in Dallas, Texas for a sales price of $1.6 million resulting in a nominal gain on sale after closing and other transaction related costs. The land parcel was undeveloped as of the date of sale.

Disposition Date	Property/Portfolio Name	Location	Number of Properties	Rentable Square Feet		Sales Price		Net Proceeds on Sale		Gain/(Loss) on Sale (a)
March 30, 2017	200, 210 & 220 Lake Drive East (Woodland Falls)	Cherry Hill, NJ	3		215,465	$	19,000	$	17,771	$	(249	)	(b)
March 15, 2017	Philadelphia Marine Center (Marine Piers)	Philadelphia, PA	1		181,900		21,400		11,182		6,498		(c)
March 13, 2017	11700, 11710, 11720 & 11740 Beltsville Drive (Calverton)	Beltsville, MD	3		313,810		9,000		8,354		-		(d)
February 2, 2017	1200 & 1220 Concord Avenue (Concord Airport Plaza)	Concord, CA	2		350,256		33,100		32,010		551		(e)
Total Dispositions			9		1,061,431	$	82,500	$	69,317	$	6,800

On(a) ~~April 7,~~Gain/(Loss) 2014, the Company received $0.9 million from an escrow account that was established in connection with the sale of eight office properties containing 800,546 square feet in Lawrenceville, New Jersey, known as Princeton Pike Corporate Center. The sale of Princeton Pike Corporate Center was completed on ~~February 25,~~Sale ~~2013~~is ~~for~~net ~~an aggregate sales price~~ of ~~$121.0 million and resulted in a $5.3 million gain on sale after~~ closing and other transaction related costs. The escrow account was funded with $2.0 million at closing and was established for use by the buyer to fund certain tenant improvement projects with any unused portion to be returned to the Company. The unused amount received from the escrow account was recognized as a gain on sale during the period ended September 30, 2014. The aforementioned gain was recognized within discontinued operations which is consistent with the accounting classification of the assets that were disposed of on February 25, 2013.

On April 3, 2014, the Company contributed two 3-story, Class A office buildings, containing an aggregate of approximately 192,396 net rentable square feet known as Four Points Centre in Austin, Texas to an existing real estate venture (~~the "Austin Venture"~~b) ~~that~~During the ~~Company~~fourth ~~formed~~quarter inof ~~2013 with G&I VII Austin Office LLC~~2016, ~~an investment vehicle advised by DRA Advisors LLC ("DRA"). The Company contributed~~ the properties to the Austin Venture at an agreed upon value of $41.5 million. In conjunction with the contribution: (i) the Austin Venture obtained a $29.0 million mortgage loan; (ii) the DRA member contributed $5.9 million in net cash to the capital of the Austin Venture; and (iii) the Austin Venture distributed $34.4 million to the Company ~~and~~recognized ~~credited the Company with~~ a $57.93 million ~~capital~~impairment ~~contribution~~related to ~~the~~these ~~Austin Venture~~properties. The Company incurred a $0.2 million loss on the contribution, driven primarily by closing costs. The disposal of Four Points Centre does not represent a strategic shift that has a major effect on the Company's operations and financial results. Accordingly, the property remains classified within continuing operations for all periods presented.

(c) On March 27 15, ~~2014~~2017, the Company sold aits ~~16.8~~sublease ~~acre~~interest ~~undeveloped~~in ~~parcel~~the ofPiers ~~land~~at Penn’s Landing (the “Marine Piers”), which includes leasehold improvements containing 181,900 net rentable square feet, and a marina, located in ~~Austin~~Philadelphia, ~~Texas~~Pennsylvania for a sales price of $321.54 million, ~~resulting~~which will be paid in two installments. On the closing date, the buyer paid $12.0 million in cash. On the second purchase price installment date, the buyer will pay $9.4 million. The second purchase price installment is due on (a) January 31, 2020, in the event that the tenant at the Marine Piers does not exercise its existing option to extend the term of the sublease or (b) January 15, 2024, in the event that the tenant does exercise its current extension option to extend the term of the sublease. In accordance with ASC 360-20, Real Estate Sales, the Company determined that it is appropriate to account for the sales transaction under the cost recovery method. The Company received cash proceeds of $111.2 million, after closing costs and prorations, and the net book value of the Marine Piers was $4.7 million, resulting in a gain on sale of ~~undepreciated~~$6.5 ~~real~~million. ~~estate~~The ~~after~~remaining ~~closing~~gain ~~and~~on ~~other~~sale ~~transaction~~of ~~related~~$9.4 ~~costs~~million will be recognized on the second purchase price installment date. The ~~land~~Marine ~~parcel~~Piers was ~~undeveloped~~classified as ofmixed-use ~~the~~within ~~date~~our ofproperty ~~sale~~count.

~~Held~~(d) ~~for~~During ~~Sale~~the fourth quarter of 2016, the Company recognized a $3.0 million impairment related to these properties. During the first quarter of 2017, there was a price reduction of $1.7 million under the agreement of sale and an additional impairment of $1.7 million was recognized.

On(e) ~~October 24,~~This ~~2014,~~sale ~~the~~is ~~Company~~designated ~~sold~~as ~~its~~a ~~Valleybrooke~~like-kind ~~Office~~exchange ~~Park,~~under ~~comprised~~Section 1031 of ~~five~~the ~~properties~~Internal ~~consisting~~Revenue ofCode ~~279~~(“IRC”) and,~~934~~ ~~rentable~~as ~~square feet~~such, ~~located~~the ~~in Malvern~~proceeds, ~~Pennsylvania~~totaling ~~for a sale price of~~ $3732.90 million. Asafter ofclosing ~~September~~costs ~~30,~~and ~~2014~~prorations, ~~the~~were ~~Company~~deposited ~~categorized~~with ~~its~~a ~~Valleybooke~~Qualified ~~portfolio~~Intermediary, as ~~held~~defined ~~for~~under ~~sale~~the ~~on its consolidated balance sheet~~IRC. The ~~carrying~~proceeds ~~value~~received ofat ~~the~~closing ~~property~~were ~~exceeds~~recorded ~~the~~as ~~fair~~“Other ~~value~~assets” ~~less~~in the ~~costs of sale. As a result, the~~ Company’s ~~recognized~~consolidated anbalance ~~impairment~~sheet ~~loss~~as ~~totaling~~of ~~approximately~~March $131, 2017.8 ~~million~~During ~~during~~ the ~~three~~fourth ~~months~~quarter ~~ended~~of ~~September 30~~2016, ~~2014. The disposal of~~ the ~~Valleybrooke~~Company ~~Office~~recognized ~~Park~~a ~~does~~$11.5 ~~not~~million ~~represent~~impairment arelated ~~strategic~~to ~~shift~~these ~~that~~ properties.

In addition to the amounts in the table above, the Company recorded $0.5 million gain during the first quarter of 2017 from the receipt of additional cash from the disposition of Cira Square during 2016. For further information relating to this sale, see Note 3, “Real Estate Investments,” in the notes to the audited financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2016.

The Company sold the following land parcels during the three-month period ended March 31, 2017 (dollars in thousands):

Disposition Date	Property/Portfolio Name	Location	Number of Parcels		Acres		Sales Price		Net Proceeds on Sale		Gain on Sale
February 15, 2017	Gateway Land C	Richmond, VA		1		4.8	$	1,100	$	1,043	$	-	(a)
January 30, 2017	Garza Ranch	Austin, TX		1		1.7		3,500		3,277		-	(b)
Total Dispositions				2		6.5	$	4,600	$	4,320	$	-

(a)	During the fourth quarter of 2016, the Company recognized a nominal impairment related to this land parcel.

(b)

The Company has a continuing involvement through a completion guaranty, which requires the Company as developer to complete certain infrastructure improvements on behalf of the buyers of the land parcels. The cash received at settlement was recorded as “Deferred income, gains and rent” on the Company’s consolidated balance sheet and the Company will recognize the

~~has~~sale aonce ~~major~~the ~~effect~~infrastructure onimprovements ~~the~~are ~~Company's~~complete. ~~operations~~See ~~and~~Item ~~financial results~~2. ~~Accordingly~~, ~~the~~“Management’s ~~impairment~~Discussion ~~loss~~ and ~~operating~~Analysis ~~results~~ of ~~this~~Financial ~~property~~Condition ~~remain~~and ~~classified~~Results ~~within~~of ~~continuing~~Operations ~~operations~~– Contractual Obligations” for ~~all~~further ~~periods~~discussion ~~presented~~of the infrastructure improvements.

4The sales of the properties and land referenced above do not represent a strategic shift that has a major effect on the Company's operations and financial results. ~~INVESTMENT~~Accordingly, INthe ~~UNCONSOLIDATED~~operating ~~VENTURES~~results of these properties remain classified within continuing operations for all periods presented.

AsHeld offor September 30, 2014, the Company held ownership interests in 17 unconsolidated Real Estate Ventures, of which $197.5 million is included in assets and $1.2 million is included in other liabilities relating to the negative investment balance of one real estate venture. The Company formed or acquired interests in these ventures with unaffiliated third parties to develop or manage office properties or to acquire land in anticipation of possible development of office or residential properties. As of September 30, 2014, 11 of the Real Estate Ventures owned 58 office buildings that contain an aggregate of approximately 6.1 million net rentable square feet; two Real Estate Ventures owned 3.8 acres of undeveloped parcels of land; three Real Estate Venture owned 21.8 acres of land under development; one Real Estate Venture owned a residential tower that contains 345 apartment units and one Real Estate Venture owned a hotel property that contains 137 rooms in Conshohocken, PA.Sale

The ~~Company~~following ~~accounts~~is ~~for~~a ~~its~~summary ~~unconsolidated~~of ~~interests~~one inproperty ~~its~~classified ~~Real~~as ~~Estate~~held ~~Ventures~~for ~~using~~sale ~~the~~but ~~equity~~which ~~method.~~did ~~The~~not ~~Company’s~~meet ~~unconsolidated~~the ~~interests~~criteria ~~range from 20%~~ to ~~65%,~~be ~~subject~~classified towithin ~~specified~~discontinued ~~priority~~operations ~~allocations~~at ofMarch ~~distributable~~31, ~~cash~~2017 (in ~~certain~~thousands): ~~of the Real Estate Ventures.~~

The amounts reflected in the following tables (except for the Company’s share of equity and income) are based on the historical financial information of the individual Real Estate Ventures. The Company does not record operating losses of a Real Estate Venture in excess of its investment balance unless 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.

	Held for Sale Property Included in Continuing Operations
	March 31, 2017
	Other Segment - Retail
ASSETS HELD FOR SALE
Real estate investments:
Operating properties	$	5,576
Accumulated depreciation		(79	)
Operating real estate investments, net		5,497
Land held for development		-
Total real estate investments, net		5,497
Other assets		765
Total assets held for sale, net	$	6,262

LIABILITIES HELD FOR SALE
Other liabilities	$	387
Total liabilities held for sale	$	387

As the fair value less anticipated costs to sell exceeded the carrying value for the property included in the above table, no provision for impairment was recorded. The ~~following~~fair value measurement is abased ~~summary~~on ofpricing in the ~~financial~~purchase ~~position~~and ofsale agreement for the ~~Real~~property. ~~Estate~~As ~~Ventures~~the aspricing ofin ~~September 30,~~the ~~2014~~purchase and ~~December 31~~sale agreement is unobservable, ~~2013~~the (Company determined that the input utilized to determine fair value for the property falls within Level 3 in ~~thousands~~accordance with the fair value hierarchy established by Accounting Standards Codification (ASC): Topic 820, “Fair Value Measurements and Disclosures”.

	September 30, 2014			December 31, 2013
Net property	$	1,140,798		$	965,475
Other assets	166,020			164,152
Other liabilities	59,690			49,442
Debt	852,636			699,860
Equity	394,492			380,325
Company’s share of equity (Company’s basis) (a)	197,539		(b)	180,512

The sale of the held for sale property does not represent a strategic shift that has a major effect on the Company's operations and financial results. As a result, the operating results of the property remains classified within continuing operations for all periods presented.

~~(a) This~~Held ~~amount~~for ~~includes~~Use 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.Impairment

~~(b)~~As ~~Does~~of ~~not~~March ~~include~~31, 2017, the ~~negative~~Company ~~investment~~evaluated ~~balance~~the recoverability of ~~one~~the ~~real~~carrying ~~estate~~value ~~venture~~of ~~totaling~~its properties that triggered assessment under the undiscounted cash flow model. Based on the Company’s evaluation, it was determined that due to the reduction in the Company’s intended hold period of four properties located in the Other segment, the Company would not recover the carrying values of these properties. Accordingly, the Company recorded impairment charges on these properties of $1.0 million at March 31, 2017, reducing the aggregate carrying values of the properties from $10.2 million asto their estimated fair value of ~~September 30~~$9.2 million. The Company measured these impairments based on a discounted cash flow analysis, ~~2014~~using a hold period of 10 years and residual capitalization rates and discount rates of 9.00% and 9.25%, ~~which~~respectively. isThe ~~included~~results were comparable to indicative pricing in ~~other~~the ~~liabilities~~market. The assumptions used to determine fair value under the income approach are Level 3 inputs in accordance with the fair value hierarchy established by Accounting Standards Codification (ASC) Topic 820, “Fair Value Measurements and Disclosures.”

4. INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES

As of March 31, 2017, the Company held ownership interests in 13 unconsolidated Real Estate Ventures for an aggregate investment balance of $264.9 million. The Company formed or acquired interests in these Real Estate Ventures with unaffiliated third parties to develop or manage office, residential, and/or mixed-use properties or to acquire land in anticipation of possible development of office, residential and/or mixed-use properties. As of March 31, 2017, seven of the real estate ventures owned properties that contain an aggregate of approximately 8.0 million net rentable square feet of office space; two real estate ventures owned 4.3 acres of undeveloped parcels of land; two real estate ventures owned 1.4 acres of land under active development and two real estate ventures owned residential towers that contain 345 and 321 apartment units, respectively.

The Company ~~held~~accounts ~~interests~~for inits 17unconsolidated ~~Real~~interests ~~Estate~~in ~~Ventures containing an aggregate of approximately 6.1 million net rentable square feet as of~~ the ~~three and nine-month periods ended September 30, 2014 and 17~~ Real Estate Ventures ~~containing~~using anthe ~~aggregate~~equity ~~of approximately 6~~method.2 ~~million~~The ~~net~~Company’s ~~rentable~~unconsolidated ~~square~~interests ~~feet~~range asfrom of20% ~~the~~to ~~three and nine-month periods ended September 30~~70%, ~~2013. The~~subject ~~following~~to isspecified apriority ~~summary~~allocations of ~~results~~distributable ofcash ~~operations~~in certain of the Real Estate Ventures ~~in which the Company had interests during these periods (in thousands):~~.

	Three-month periods ended September 30,						Nine-month periods ended September 30,
	2014			2013			2014			2013
Revenue	$	37,446		$	30,684		$	106,905		$	108,500
Operating expenses	(15,433		)	(13,199		)	(44,257		)	(48,671		)
Interest expense, net	(9,245		)	(9,223		)	(26,234		)	(28,167		)
Depreciation and amortization	(13,552		)	(9,893		)	(40,423		)	(33,778		)
Net loss	(784		)	(1,631		)	(4,009		)	(2,116		)
Company’s share of income (loss) (Company’s basis)	(486		)	714			(733		)	3,757

The Company earned management fees from its Real Estate Ventures of $1.5 million in each of the three-month periods ended March 31, 2017 and 2016. The Company has outstanding accounts receivable balances from its Real Estate Ventures of $1.6 million and $1.4 million as of March 31, 2017 and December 31, 2016, respectively.

~~Austin~~The ~~Venture~~amounts -reflected in the following tables (except for the Company’s share of equity and income) are based on the financial information of the individual Real Estate Ventures. The ~~Crossings~~Company does not record operating losses of a Real Estate Venture in excess of its investment balance unless 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.

OnThe ~~July 31,~~following ~~2014,~~is ~~the~~a ~~Austin~~summary ~~Venture completed the acquisition~~ of the ~~Crossings~~financial atposition ~~Lakeline, comprised~~ of ~~two~~the ~~3-story~~Real ~~buildings~~Estate ~~containing~~Ventures ~~232,274 rentable square feet located~~ in ~~Austin,~~which TX for $48.2 million. The transaction was funded with $34.5 million of mortgage loan proceeds and $12.8 million (net of $0.9 million in purchase adjustments) of cash contributions, with $6.4 million from each of DRA and the Company~~. The~~ ~~fixed~~held ~~rate~~interests ~~mortgage~~as ~~loan was financed through a non-affiliated third party. The Austin Venture incurred approximately $0.1 million~~ of ~~transaction~~March 31, ~~costs~~2017 ~~to acquire the property. The Austin Venture expensed the acquisition costs~~ and ~~allocated the purchase price of the property~~December 31, ~~net~~2016 of(in ~~$0.6 million credit from the seller.~~thousands):

Based on the facts and circumstances of this acquisition, the consummation of the acquisition did not cause the Austin Venture to become a VIE to the Company. Accordingly, the Company continues to assess the consolidation of the Austin Venture under the voting interest model and its investment continues to be accounted for under the equity method of accounting.

	March 31, 2017		December 31, 2016
Net property	$	1,405,986	$	1,483,067
Other assets		210,032		231,972
Other liabilities		107,161		129,486
Debt, net		946,891		989,738
Equity		561,966		595,815

Company’s share of equity (Company’s basis) (a)	$	264,941	$	281,331

~~Austin~~(a) This amount includes the effect of the basis difference between the Company's historical cost basis and the basis recorded at the Real Estate Venture -level, ~~Four~~which ~~Points~~is ~~Centre~~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.

OnThe ~~April 3,~~following ~~2014,~~is ~~the~~a ~~Company~~summary ~~contributed~~of ~~two~~results ~~3-story,~~of ~~Class~~operations ~~A office buildings, containing an aggregate~~ of ~~192,396~~the ~~net~~Real ~~rentable~~Estate ~~square~~Ventures ~~feet,~~in ~~known~~which asthe ~~Four~~Company ~~Points~~held ~~Centre~~interests induring ~~Austin, Texas to~~ the ~~Austin~~three-month ~~Venture. See~~periods ~~Note~~ended 3March 31, ~~for~~2017 ~~further~~and ~~information~~2016 on(in ~~the contribution.~~thousands):

Guarantees

	Three-month periods ended March 31,
	2017			2016
Revenue	$	54,279		$	46,525
Operating expenses		(25,166	)		(26,668	)
Interest expense, net		(10,830	)		(8,989	)
Depreciation and amortization		(20,761	)		(20,160	)
Net loss (a)	$	(2,478	)	$	(9,292	)

Equity in loss of Real Estate Ventures	$	(748	)	$	(403	)

~~As of September 30, 2014, the Company had provided guarantees on behalf of certain real estate ventures, consisting of~~ (i) a ~~$24.7 million payment guarantee on the construction loan for the project being undertaken by evo at Cira; (ii~~) aThe ~~$3.2~~three-month ~~million~~period ~~payment~~ended ~~guarantee~~March on31, ~~the~~2016 ~~construction~~amount ~~loan~~includes ~~for the development project being undertaken by TB-BDN Plymouth Apartments; and (iii) a~~ $06.54 million ~~payment~~of ~~guarantee~~acquisition ondeal acosts ~~loan~~related ~~provided~~ to ~~PJP VII. In addition, during construction undertaken by Real Estate Ventures,~~ the ~~Company~~formation ~~has provided and expects to continue to provide cost overrun and completion guarantees, with rights~~ of ~~contribution among partners in~~ the ~~real~~MAP ~~estate~~Venture ~~venture,~~during as well as customary environmental indemnities and guarantees of customary exceptions to nonrecourse provisions in loan agreements. For additional information regarding these real estate ventures, see "Investments in Unconsolidated Ventures" in notes to the ~~audited financial statements included in the Company's Annual Report on Form 10~~three-Kmonth ~~for~~period ~~the fiscal year~~ ended ~~December~~ March 31, ~~2013~~2016.

5.The ~~DEFERRED~~Parc ~~COSTS~~at Plymouth Meeting Venture

AsOn January 31, 2017, the Company sold its 50% interest in TB-BDN Plymouth Apartments, L.P., a 50/50 real estate venture with Toll Brothers, at a gross sales value of ~~September 30~~$100.5 million, ~~2014~~of which the Company was allocated 50% for its interest. The venture developed and ~~December 31~~operates a 398-unit multi-family complex in Plymouth Meeting, ~~2013~~Pennsylvania encumbered by a $54.0 million construction loan. The construction loan was repaid commensurate with the sale of the Company’s 50% interest. As a result, the Company is no longer subject to a $3.2 million payment guarantee on the construction loan. The cash proceeds, after the payment of the Company’s ~~deferred~~share of the debt and closing costs, were ~~comprised~~$27.2 million. The carrying amount of the ~~following~~Company’s (investment at the time of sale was $12.6 million, resulting in ~~thousands):~~a $14.6 million gain on sale of interest in the real estate venture.

	September 30, 2014
	Total Cost		AccumulatedAmortization			Deferred Costs,net
Leasing Costs	$	159,744	$	(63,136	)	$	96,608
Financing Costs	42,265		(15,992		)	26,273
Total	$	202,009	$	(79,128	)	$	122,881

Guarantees

	December 31, 2013
	Total Cost		AccumulatedAmortization			Deferred Costs,net
Leasing Costs	$	155,885	$	(58,805	)	$	97,080
Financing Costs	40,317		(14,443		)	25,874
Total	$	196,202	$	(73,248	)	$	122,954

As of March 31, 2017, the Company’s unconsolidated real estate ventures had aggregate indebtedness to third parties of $953.8 million. These loans are generally mortgage or construction loans, most of which are non-recourse to the Company. As of March 31, 2017, the loans for which there is recourse to the Company consists of the following: (i) a $55.4 million payment guaranty on the term loan for evo at Cira; (ii) a joint and several cost overrun guaranty on the $88.9 million construction loan for the development project being undertaken by 1919 Market Street LP; and (iii) a $0.4 million payment guarantee on a loan provided to PJP VII. In addition, during construction undertaken by real estate ventures, the Company has provided and expects to continue to provide cost overrun and completion guarantees, with rights of contribution among partners or members in the real estate ventures, as well as customary environmental indemnities and guarantees of customary exceptions to nonrecourse provisions in loan agreements. For additional information regarding these real estate ventures, included their indebtedness, see Note 4, "Investment in Unconsolidated Real Estate Ventures," in the notes to the audited financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2016.

~~During each of the three and nine-month periods ended September 30, 2014, the Company capitalized internal direct leasing costs of $1.6 million and $~~5.6 ~~million,~~INTANGIBLE ~~respectively,~~ASSETS ~~and~~AND ~~$1.8 million and $5.8 million during the three and nine-month periods ended September 30, 2013 in accordance with the accounting standard for the capitalization of leasing costs.~~LIABILITIES

6.As ~~INTANGIBLE~~of ~~ASSETS~~March ~~AND~~31, ~~LIABILITIES~~2017 and December 31, 2016, the Company’s intangible assets/liabilities were comprised of the following (in thousands):

As of September 30, 2014 and December 31, 2013, the Company’s intangible assets/liabilities were comprised of the following (in thousands):

	March 31, 2017
	Total Cost		Accumulated Amortization			Intangible Assets, net
Intangible assets, net:
In-place lease value	$	114,196	$	(54,834	)	$	59,362
Tenant relationship value		13,036		(10,378	)		2,658
Above market leases acquired		4,703		(2,501	)		2,202
Total intangible assets, net	$	131,935	$	(67,713	)	$	64,222

Acquired lease intangibles, net:
Below market leases acquired	$	30,683	$	(14,079	)	$	16,604

	September 30, 2014
	December 31, 2016
	Total Cost		~~AccumulatedAmortization~~Accumulated Amortization			Intangible ~~assets/liabilities~~Assets, net
Intangible assets, net:
In-place lease value	$	~~130~~142,~~594~~889	$	(3875,~~403~~696	)	$	9267,~~191~~193
Tenant relationship value	~~35,186~~	13,074	~~(26,517~~	(10,167	)	~~8,669~~	2,907
Above market leases acquired	~~5,715~~	4,718	~~(1,275~~	(2,340	)	~~4,440~~	2,378
Total intangible assets, net	$	~~171~~160,~~495~~681	$	(6688,~~195~~203	)	$	~~105~~72,~~300~~478
Acquired lease intangibles, net:
Below market leases acquired	$	5337,~~049~~579	$	(2519,~~661~~460	)	$	2718,~~388~~119

	December 31, 2013
	Total Cost		AccumulatedAmortization			Intangible assets/liabilities, net
Intangible assets, net:
In-place lease value	$	150,782	$	(35,607	)	$	115,175
Tenant relationship value	38,692		(26,868		)	11,824
Above market leases acquired	6,673		(1,343		)	5,330
Total intangible assets, net	$	196,147	$	(63,818	)	$	132,329
Acquired lease intangibles, net:
Below market leases acquired	$	81,991	$	(47,547	)	$	34,444

As of ~~September 30~~March 31, ~~2014~~2017, the Company’s annual amortization for its intangible assets/liabilities ~~were as follows (in thousands~~, ~~and~~ assuming no prospective early lease terminations, are as follows (dollars in thousands):

	Assets		Liabilities
2014 (three months remaining)	$	5,892	$	1,378
2017 (nine months remaining)	$	11,409	$	1,809
2015	21,363		5,212
2018		11,754		2,196
2016	16,898		3,253
2019		10,536		1,885
2017	15,148		2,664
2020		8,457		1,337
2018	11,399		2,241
2021		5,971		807
Thereafter	~~34,600~~	16,095	~~12,640~~	8,570
Total	$	~~105~~64,~~300~~222	$	2716,~~388~~604

6. DEBT OBLIGATIONS

The following table sets forth information regarding the Company’s consolidated debt obligations outstanding at March 31, 2017 and December 31, 2016 (in thousands):

	March 31, 2017			December 31, 2016			Effective Interest Rate				Maturity Date
MORTGAGE DEBT:

Two Logan Square	$	85,625		$	86,012			3.98	%		May 2020
One Commerce Square		126,198			127,026			3.64	%	(a)	Apr 2023
Two Commerce Square		112,000			112,000			4.51	%	(b)	Apr 2023
Principal balance outstanding		323,823			325,038
Plus: fair market value premium (discount), net		(2,652	)		(2,761	)
Less: deferred financing costs		(687	)		(728	)
Mortgage indebtedness	$	320,484		$	321,549

UNSECURED DEBT
Seven-Year Term Loan - Swapped to fixed	$	250,000		$	250,000			3.72	%		Oct 2022
$300.0M 5.70% Guaranteed Notes due 2017		300,000			300,000			5.68	%		May 2017
$325.0M 4.95% Guaranteed Notes due 2018		325,000			325,000			5.13	%		Apr 2018
$250.0M 3.95% Guaranteed Notes due 2023		250,000			250,000			4.02	%		Feb 2023
$250.0M 4.10% Guaranteed Notes due 2024		250,000			250,000			4.33	%		Oct 2024
$250.0M 4.55% Guaranteed Notes due 2029		250,000			250,000			4.60	%		Oct 2029
Indenture IA (Preferred Trust I)		27,062			27,062			2.75	%		Mar 2035
Indenture IB (Preferred Trust I)		25,774			25,774			3.30	%		Apr 2035
Indenture II (Preferred Trust II)		25,774			25,774			3.09	%		Jul 2035
Principal balance outstanding		1,703,610			1,703,610
Plus: original issue premium (discount), net		(4,424	)		(4,678	)
Less: deferred financing costs		(6,999	)		(7,369	)
Total unsecured indebtedness	$	1,692,187		$	1,691,563
Total Debt Obligations	$	2,012,671		$	2,013,112

(a)

This loan was assumed upon acquisition of the related properties on December 19, 2013. On December 29, 2015, the Company refinanced the debt increasing the principal balance to $130.0 million and extended the term of the scheduled maturity from January 6, 2016 to April 5, 2023. The effective interest rate as of December 31, 2015 was 3.64%. A default under this loan will also constitute a default under the loan outstanding on Two Commerce Square. This loan is also secured by a lien on Two Commerce Square.

7(b) This loan was assumed upon acquisition of the related property on December 19, 2013. ~~DEBT~~The ~~OBLIGATIONS~~interest rate reflects the market rate at the time of acquisition. A default under this loan will also constitute a default under the loan outstanding on One Commerce Square. This loan is also secured by a lien on One Commerce Square.

~~The~~As ~~following~~of ~~table~~March ~~sets~~31, ~~forth~~2017 ~~information~~and ~~regarding~~December 31, 2016, the Company’s ~~consolidated~~weighted-average ~~debt~~effective ~~obligations~~interest atrates ~~September~~on its mortgage notes payable were both 4.03%. 30As of March 31, ~~2014~~2017 and December 31, ~~2013~~2016, ~~(in~~the ~~thousands):~~net carrying value of the Company’s Properties that are encumbered by mortgage indebtedness was $323.8 million and $325.0 million, respectively.

Property / Location	September 30, 2014			December 31, 2013			EffectiveInterestRate		MaturityDate
MORTGAGE DEBT:
Tysons Corner	$	89,995		$	91,395		5.36%	(a)	Aug 2015
One Commerce Square	123,691			125,089			3.68%	(a)	Jan 2016
Two Logan Square	87,982			88,583			7.57%		Apr 2016
Fairview Eleven Tower	21,373			21,630			4.25%	(b)	Jan 2017
Two Commerce Square	112,000			112,000			4.51%	(a)	Apr 2023
Cira Square (GSA Philadelphia Campus)	186,109			190,964			7.00%		Sep 2030
Cira Centre South Garage	38,362			40,101			7.12%		Sep 2030
Principal balance outstanding	659,512			669,762
Plus: fair market value premiums (discounts), net	(911		)	389
Total mortgage indebtedness	$	658,601		$	670,151
UNSECURED DEBT:
Three-Year Term Loan - Swapped to fixed	$	—		$	150,000		2.60%	(d)	Feb 2015
Four-Year Term Loan	—			100,000			LIBOR + 1.75%	(c), (d)	Feb 2016
Seven-Year Term Loan - Swapped to fixed	200,000			200,000			3.62%		Feb 2019
$250.0M 5.400% Guaranteed Notes due 2014	143,500			218,549			5.53%	(e)	Nov 2014
$250.0M 7.500% Guaranteed Notes due 2015	114,919			157,625			7.76%	(e)	May 2015
$250.0M 6.000% Guaranteed Notes due 2016	149,919			149,919			5.95%		Apr 2016
$300.0M 5.700% Guaranteed Notes due 2017	300,000			300,000			5.68%		May 2017
$325.0M 4.950% Guaranteed Notes due 2018	325,000			325,000			5.13%		Apr 2018
$250.0M 3.950% Guaranteed Notes due 2023	250,000			250,000			4.02%		Feb 2023
$250.0M 4.100% Guaranteed Notes due 2024	250,000			—			4.23%	(e)	Oct 2024
$250.0M 4.550% Guaranteed Notes due 2029	250,000			—			4.60%	(e)	Oct 2029
Indenture IA (Preferred Trust I)	27,062			27,062			2.75%		Mar 2035
Indenture IB (Preferred Trust I)	25,774			25,774			3.30%		Apr 2035
Indenture II (Preferred Trust II)	25,774			25,774			3.09%		Jul 2035
Principal balance outstanding	2,061,948			1,929,703
Plus: original issue premiums (discounts), net	(7,169		)	(4,473		)
Total unsecured indebtedness	$	2,054,779		$	1,925,230
Total Debt Obligations	$	2,713,380		$	2,595,381

On May 15, 2015, the Company closed on a new four-year unsecured revolving credit facility that provides for borrowings of up to $600.0 million. The Company had no borrowings under its unsecured revolving credit facility as of and during either of the three-month periods ended March 31, 2017 and March 31, 2016.

(a) These loans were assumed upon acquisition of the related properties. The interest rate reflects the market rate at the time of acquisition.

(b) Represents the full debt amount secured by a property owned by a consolidated real estate venture in which the Company holds a 50% interest.

(d) On September 16, 2014, the Company repaid all balances outstanding under its $150.0 million three-year term loan and its $100.0 million four-year term loan prior to the scheduled maturity dates of February 1, 2015 and February 1, 2016, respectively.

(e) On September 16, 2014, the Company closed on an underwritten offering of $250 million 4.10% Guaranteed Notes due 2024 (the "2-24 Notes") and $250.0 million 4.55% Guaranteed Notes due 2029 (the "2029 Notes"). The Company used the net proceeds, together with cash on hand, to redeem a portion of its 5.40% Guaranteed Notes due November 1, 2014 (the "2014 Notes") and its 7.50% Guaranteed Notes due May 15, 2015 (the "2015 Notes"). (See further discussion below).

During the nine-month periods ended September 30, 2014 and 2013, the Company’s weighted-average effective interest rate on its mortgage notes payable was 5.73% and 6.64%, respectively.

On September 16, 2014, the Company closed on an underwritten offering of its 2024 Notes and 2029 Notes (as defined above). The 2024 Notes were priced at 99.388% of their face amount with a yield to maturity of 4.175%, representing a spread at the time of pricing of 1.70%. The 2029 Notes were priced at 99.191% of their face amount with a yield to maturity of 4.625%, representing a spread at the time of pricing of 2.15%. The 2024 Notes and 2029 Notes have been reflected net of discount of $1.5 million and $2.0 million, respectively, in the consolidated balance sheet as of September 30, 2014.

The Company used a portion of the net proceeds from the sale of the 2024 Notes and 2029 Notes, aggregating $492.9 million after the deduction for underwriting discounts and offering expenses, to fund its repurchase, through a tender offer, of a portion of 2014 Notes and 2015 Notes (as defined above). Specifically, on September 16, 2014, the Company funded, under the tender offer, $75.1 million in respect of the 2014 Notes and $42.7 million in respect of the 2015 Notes. The Company recognized a $2.6 million loss on early extinguishment of debt related to the total repurchase.

On September 16, 2014, the Company repaid the entire $150.0 million three-year term loan and $100.0 million four-year term loan prior to their scheduled February 2015 and 2016 maturities, respectively. In connection with these repayments, the Company accelerated $0.3 million of deferred financing amortization expense and also incurred a $0.8 million charge on the termination of associated interest rate swap contracts, as reflected in the Company's consolidated statements of operations. Please refer to Footnote 9 for further information related to the termination of the interest rate swap contracts.

On September 16, 2014, the Company gave notice of redemption, in full, of the $143.5 million of 2014 Notes that remained outstanding following completion of the tender offer. The Company completed the redemption of the 2014 Notes on October 16, 2014 at a cash redemption price of 1,026.88 per $1,000 principal amount of the 2014 Notes (inclusive of accrued interest to the redemption date). Also on September 16, 2014, the Company gave notice of redemption, in full, of the $114.9 million of 2015 Notes that remained outstanding following completion of the tender offer. The Company completed the redemption of the 2015 Notes on October 16, 2014 at a cash redemption price of $1,070.24 per $1,000 principal amount of the 2015 Notes (inclusive of accrued interest to the redemption date).

The following table provides additional information on the Company’s repurchase of $117.8 million in aggregate principal amount of its outstanding unsecured notes (consisting of a portion of the 2014 Notes and 2015 Notes, as indicated above) during the nine-month period ended September 30, 2014 (in thousands):

Notes	RepurchaseAmount		Principal		Loss			Deferred FinancingAmortization
2014 5.400% Notes	$	75,531	$	75,049	$	(527	)	$	5
2015 7.500% Notes	44,593		42,706		(2,079		)	41
	$	120,124	$	117,755	$	(2,606	)	$	46

The Parent Company unconditionally guarantees the unsecured debt obligations of the Operating Partnership (or is a co-borrower with the Operating Partnership) but does not by itself incur unsecured indebtedness. The Parent Company has no material assets other than its investment in the Operating Partnership.

The Company ~~utilizes~~was ~~its~~in ~~unsecured~~compliance ~~revolving~~with ~~credit~~all ~~facility~~financial ~~(the~~covenants ~~"Credit~~as ~~Facility")~~of ~~for~~March ~~general business purposes~~31, ~~including~~2017. ~~funding~~Management ~~costs~~continuously ofmonitors ~~acquisitions,~~the ~~developments~~Company’s ~~and~~compliance ~~redevelopments~~with and ~~repayment~~anticipated ofcompliance ~~other~~with ~~debt. The scheduled maturity date of~~ the ~~Credit Facility in place at September 30, 2014 is February 1, 2016~~covenants. ~~The~~Certain ~~per~~of ~~annum variable interest rate on balances outstanding under~~ the ~~Credit~~covenants ~~Facility~~restrict ~~is LIBOR plus 1.50%. The interest rate and facility fee are subject to adjustment upon a change in~~ the Company’s ~~unsecured~~ability ~~debt~~to ~~ratings.~~obtain Asalternative sources of ~~September 30,~~capital. ~~2014,~~While the Company ~~did~~currently ~~not~~believes ~~have~~it ~~any~~will ~~outstanding~~remain ~~borrowings~~in oncompliance with its ~~Credit Facility~~covenants, ~~with $2.8 million~~ in ~~letters~~the ofevent ~~credit~~that ~~outstanding, leaving $597.2 million of unused availability under~~ the ~~Credit~~economy ~~Facility.~~deteriorates ~~During~~in ~~each of~~ the ~~three and nine-month periods ended September 30~~future, ~~2014~~the ~~and~~Company ~~2013,~~may ~~there~~not ~~were~~be noable ~~weighted-average~~to ~~interest~~remain ~~rates~~in ~~associated~~compliance with ~~the~~such ~~Credit~~covenants, ~~Facility~~in ~~because~~which ~~there~~case ~~were~~a nodefault ~~borrowings~~would ~~outstanding~~result ~~under~~absent ~~the~~a ~~Credit~~lender ~~Facility during either period~~waiver.

The Company has the option to increase the amounts available to be advanced under the Credit Facility, subject to customary conditions and limitations, by obtaining additional commitments from the current lenders and other financial institutions7. ~~The~~FAIR ~~Company~~VALUE ~~also~~OF ~~has~~FINANCIAL the option to extend by one year the maturity dates of the Credit Facility, subject to payment of an extension fee and other customary conditions and limitations. The $200.0 million seven-year term loan is subject to a prepayment penalty of 1.00% through February 1, 2015 with no penalty thereafter.INSTRUMENTS

26Financial assets and liabilities recorded on the consolidated balance sheets are categorized based on the inputs to the valuation techniques as follows:

~~The~~• ~~spread~~Level to1 ~~LIBOR~~inputs ~~for~~are ~~LIBOR-based~~quoted ~~loans~~prices ~~under~~(unadjusted) ~~the~~in ~~Credit~~active ~~Facility~~markets ~~and~~for ~~under~~identical ~~the~~assets ~~$200.0~~or ~~million~~liabilities ~~seven-year~~that ~~term loan depends on~~ the Company's ~~unsecured~~has ~~senior~~the ~~debt~~ability ~~credit~~to ~~rating. Based~~access; on• ~~the~~Level ~~Company's~~2 ~~current~~inputs ~~credit~~are ~~rating~~inputs, ~~the~~other ~~spread~~than ~~will~~quoted beprices ~~150~~included ~~basis~~in ~~points~~Level ~~under~~1, ~~the~~which ~~Credit~~are ~~Facility~~observable ~~and~~for ~~190~~the ~~basis~~asset ~~points~~or ~~under~~liability, ~~the~~either ~~seven-year~~directly ~~term~~or ~~loan~~indirectly. At ~~the~~Level ~~Company's~~2 ~~option,~~inputs ~~advances~~may ~~under~~include ~~the~~quoted ~~Credit~~prices ~~Facility~~for ~~and~~similar ~~term~~assets ~~loan~~and ~~may~~liabilities ~~also~~in ~~bear~~active ~~interest~~markets, atas awell ~~per~~as ~~annum~~inputs ~~floating~~that ~~rate~~are ~~equal~~observable tofor the ~~higher~~asset ofor ~~the~~liability ~~prime~~(other ~~rate~~than orquoted ~~the~~prices), ~~federal~~such ~~funds~~as ~~rate~~interest ~~plus~~rates, ~~0.50%~~foreign ~~per~~exchange ~~annum.~~rates, ~~The~~and ~~Credit~~yield ~~Facility~~curves ~~contains~~that aare ~~competitive~~observable ~~bid~~at ~~option~~commonly ~~that~~quoted ~~allows~~intervals; ~~banks~~and ~~that~~• Level 3 inputs are ~~part~~unobservable ofinputs for the ~~lender~~asset ~~consortium~~or toliability, ~~bid~~which is typically based on ~~loans~~an toentity’s ~~the~~own ~~Company~~assumptions, atas athere ~~reduced~~is ~~rate.~~little, if any, related market activity or information.

The Company ~~executed~~determined ~~hedging~~the ~~transactions~~fair ~~that~~values ~~fix~~disclosed below using available market information and discounted cash flow analyses as of March 31, 2017 and December 31, 2016, respectively. The discount rate used in calculating fair value is the sum of the current risk free rate and the risk premium on the ~~$200.0~~date ~~million~~of ~~seven-year~~measurement ~~term~~of ~~loan~~the atinstruments aor 3obligations.~~623%~~ ~~average~~Considerable ~~rate~~judgment ~~for~~is ~~its~~necessary ~~full~~to ~~term. All~~interpret ~~hedges~~market ~~commenced~~data onand ~~February 1,~~to ~~2012~~develop ~~and~~the related estimates of fair value. Accordingly, the ~~rates~~estimates presented are ~~inclusive~~not necessarily indicative of the ~~LIBOR~~amounts ~~spread~~that ~~based~~the Company could realize upon disposition. The use of different estimates and valuation methodologies may have a material effect on the ~~Company's~~fair ~~current~~value ~~investment~~amounts ~~grade rating~~shown. ~~See~~The ~~Note~~Company 9believes ~~for~~that ~~details~~the ofcarrying amounts reflected in the ~~interest~~consolidated ~~rate~~balance ~~swaps~~sheets ~~entered~~at ~~into~~March as31, of2017 ~~September~~and December 3031, ~~2014~~2016 approximate the fair values for cash and cash equivalents, accounts receivable, other assets (except for the note receivable disclosed below), accounts payable and accrued expenses. The following are financial instruments for which the Company’s estimates of fair value differ from the carrying amounts (in thousands):

The Credit Facility and term loan contain financial and operating covenants and restrictions. The Company was in compliance with all such restrictions and financial covenants as of September 30, 2014. In the event of a default related to the financing and operating covenants, the Company's dividend distributions are limited to the greater of 95% of funds from operations or the minimum amount necessary for the Company to maintain its status as a REIT.

	March 31, 2017				December 31, 2016
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Unsecured notes payable	$	1,365,398	$	1,381,975	$	1,364,854	$	1,372,758
Variable rate debt	$	326,789	$	307,917	$	326,709	$	307,510
Mortgage notes payable	$	320,484	$	327,144	$	321,549	$	328,853
Note receivable (a)	$	3,401	$	3,918	$	3,380	$	3,717

As(a) The inputs to originate the loan are unobservable and, as a result, are categorized as Level 3. The Company determined fair value by calculating the present value of ~~September 30~~the cash payments to be received through the maturity date of the loan. See Note 2, ~~2014~~“Summary of Significant Accounting Policies,” to the Company’s ~~aggregate~~2016 ~~scheduled~~Annual ~~principal~~Report ~~payments~~ on ~~debt~~Form ~~obligations,~~10-K ~~excluding~~for ~~amortization~~the ofyear ~~discounts~~ended ~~and~~December ~~premiums~~31, ~~were~~2016 asfor ~~follows~~further ~~(in~~information ~~thousands):~~regarding the note origination.

2014 (three months remaining)	$	261,996		(a)
2015	102,030
2016	367,703
2017	330,323
2018	336,954
Thereafter	1,322,454
Total principal payments	2,721,460
Net unamortized premiums/(discounts)	(8,080		)
Outstanding indebtedness	$	2,713,380

~~(a)~~ The ~~Company~~inputs ~~completed~~utilized to determine the ~~redemption~~fair value of the ~~5.40%~~Company’s ~~Guaranteed~~unsecured ~~Notes~~notes ~~due~~payable ~~November~~are 1,categorized ~~2014~~as ~~and~~Level 72.~~50%~~ ~~Guaranteed~~This ~~Notes~~is ~~due~~because ~~May~~the ~~15,~~Company ~~2015~~valued ~~through~~these ainstruments ~~tender~~using ~~offer~~quoted onmarket ~~October~~prices 16as of March 31, ~~2014~~2017 and December 31, 2016. For ~~See~~the ~~Note~~fair 17value -of ~~Subsequent~~the ~~Events~~Company’s unsecured notes, ~~for~~the ~~discussion~~Company ofuses ~~redemption~~a discount rate based on the indicative new issue pricing provided by lenders.

8The inputs utilized to determine the fair value of the Company’s mortgage notes payable and variable rate debt are categorized as Level 3. The ~~FAIR~~fair ~~VALUE~~value OFof ~~FINANCIAL~~the ~~INSTRUMENTS~~variable rate debt was estimated using a discounted cash flow analysis valuation on the borrowing rates currently available to the Company for loans with similar terms and maturities, as applicable. The fair value of the mortgage debt was determined by discounting the future contractual interest and principal payments by a blended market rate for loans with similar terms, maturities and loan-to-value. These inputs have been categorized as Level 3 because the Company considers the rates used in the valuation techniques to be unobservable inputs.

~~The~~For ~~Company determined~~ the ~~fair~~Company’s ~~values~~mortgage ~~disclosed~~loans, ~~below~~the ~~using~~Company ~~available~~uses ~~market~~an ~~information~~estimate ~~and~~based discounted cash flow analyses asand ofits ~~September 30,~~knowledge ~~2014~~of ~~and~~the ~~December 31,~~mortgage ~~2013, respectively~~market. The weighted average discount rate ~~used~~for ~~in calculating fair value is~~ the ~~sum~~combined ofvariable ~~the current risk free~~ rate debt and ~~the~~mortgage ~~risk~~loans ~~premium~~used onto ~~the~~calculate ~~date~~fair ofvalue ~~measurement~~as of ~~the~~March ~~instruments~~31, or2017 ~~obligations.~~and ~~Considerable~~December ~~judgment~~31, is2016 ~~necessary~~was to4.507% ~~interpret market data~~ and ~~to develop the related estimates of fair value~~4. ~~Accordingly~~353%, ~~the~~respectively. ~~estimates~~An ~~presented~~increase ~~are~~in ~~not~~the ~~necessarily~~discount ~~indicative~~rate ofused ~~the~~in ~~amounts that~~ the ~~Company~~discounted ~~could~~cash ~~realize~~flow ~~upon~~model ~~disposition.~~would ~~The~~result ~~use~~in ~~of different estimates and valuation methodologies may have~~ a ~~material~~decrease ~~effect~~to on the fair value ~~amounts~~of ~~shown.~~the ~~The~~ Company’s ~~believes~~long-term ~~that~~debt. Conversely, ~~the~~a ~~carrying~~decrease ~~amounts reflected~~ in the ~~consolidated~~discount ~~balance~~rate ~~sheets~~used atin ~~September 30, 2014 and December 31, 2013 approximate~~ the ~~fair~~discounted ~~values for~~ cash ~~and~~flow ~~cash~~model ~~equivalents,~~would ~~accounts~~result ~~receivable,~~in ~~other~~an ~~assets~~increase ~~(excluding~~to ~~notes~~the ~~receivable),~~fair ~~accounts~~value ~~payable~~of ~~and~~the ~~accrued~~Company’s ~~expenses~~long-term debt.

~~The~~Disclosure ~~following~~about ~~are~~the fair value of financial instruments ~~for~~is ~~which~~based upon pertinent information available to management as of March 31, 2017 and December 31, 2016. Although management is not aware of any factors that would significantly affect the ~~Company’s~~fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since March 31, 2017, and current estimates of fair value may differ from the ~~carrying~~ amounts ~~(in~~presented ~~thousands):~~herein.

	September 30, 2014				December 31, 2013
	CarryingAmount		FairValue		CarryingAmount		FairValue
Unsecured notes payable	$	1,776,169	$	1,848,107	$	1,396,620	$	1,471,041
Variable rate debt	$	278,610	$	257,212	$	528,610	$	526,693
Mortgage notes payable	$	658,601	$	691,022	$	670,151	$	715,244
Notes receivable	$	1,901	$	3,517	$	7,026	$	7,759

8. LIMITED PARTNERS' NON-CONTROLLING INTERESTS IN THE PARENT COMPANY

~~The~~Non-controlling ~~fair~~interests ~~value~~in of the Parent Company'’s ~~unsecured~~financial ~~notes~~statements ~~payable~~relate ~~are~~to ~~categorized~~redeemable ascommon ~~Level~~limited 2partnership ~~(as~~interests ~~provided~~in by the ~~accounting~~Operating ~~standard~~Partnership ~~for~~held ~~Fair~~by ~~Value~~parties ~~Measurements~~other ~~and~~than ~~Disclosures),~~the asParent ~~these~~Company ~~instruments~~and ~~are~~properties ~~valued~~which ~~using~~are ~~quoted~~consolidated ~~market~~but ~~prices~~not aswholly ~~of September 30, 2014 and December 31, 2013~~owned.

27Operating Partnership

The ~~fair~~aggregate book value of the ~~variable~~non-controlling ~~rate~~interests ~~debt~~associated ~~was~~with ~~estimated~~the ~~using~~redeemable acommon ~~discounted~~limited ~~cash~~partnership ~~flow~~interests ~~analysis~~in ~~valuation on~~ the ~~borrowing~~accompanying ~~rates~~consolidated ~~currently~~balance ~~available~~sheet ~~to the Company for loans with similar terms and maturities, as applicable. The fair value~~ of the ~~mortgage~~Parent ~~debt~~Company was ~~determined~~$14.9 bymillion ~~discounting~~at ~~the~~each ~~future~~of ~~contractual~~March ~~interest~~31, 2017 and ~~principal~~December ~~payments~~31, by2016, ~~a blended market rate for fully secured loans with similar terms and maturities~~respectively. ~~The~~ ~~weighted~~Under ~~average discount rate for~~ the ~~combined~~applicable ~~variable~~accounting ~~rate debt and mortgage loans as of September 30~~guidance, ~~2014~~the ~~was~~redemption ~~4.01%. The fair~~ value of ~~the~~limited ~~notes~~partnership ~~receivable~~units ~~was~~are ~~estimated~~carried ~~using~~at, ~~the~~on ~~expected~~a ~~cash~~limited ~~flows~~partner ofbasis, the ~~notes~~greater ~~receivable,~~of ~~and~~historical ~~discounting~~cost ~~those~~adjusted ~~cash~~for ~~flows using~~ the ~~market~~allocation ~~rate~~ of ~~interest~~income ~~for~~and ~~mortgage~~distributions ~~notes~~or ~~with~~fair ~~a comparable level of risk~~value. The Parent Company ~~used~~believes athat ~~discount rate of 14.66% for~~ the ~~notes~~aggregate ~~receivable~~settlement asvalue of ~~September 30,~~these ~~2014. The~~interests ~~Company~~based ~~applies~~on ~~its~~the ~~knowledge~~number of ~~the~~units ~~debt~~outstanding ~~markets~~and tothe ~~determine~~closing ~~appropriate~~price ~~discount~~of ~~rates to utilize in~~ the ~~discounted~~common ~~cash~~shares ~~flow~~on ~~models. As these inputs are unobservable,~~ the ~~Company~~balance ~~has~~sheet ~~categorized~~dates ~~the~~as ~~valuation~~ of ~~mortgage~~March ~~notes payable~~31, ~~variable~~2017 ~~rate debt~~ and ~~notes~~December 31, ~~receivable~~2016 aswas ~~Level~~approximately 3$24.0 ~~(as~~million ~~provided by the accounting standard for Fair Value Measurements~~ and ~~Disclosures)~~$24.4 million, respectively.

Disclosure about the fair value of financial instruments is based upon pertinent information available to management as of September 30, 2014 and December 31, 2013. Although management is not aware of any factors that would significantly affect the fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since September 30, 2014, and current estimates of fair value may differ from the amounts presented herein.

9. FAIR VALUE OF DERIVATIVE FINANCIAL INSTRUMENTS

The following table summarizes the terms and fair values of the Company'’s derivative financial instruments as of ~~September 30~~March 31, ~~2014~~2017 and December 31, ~~2013~~2016. The notional amounts provide an indication of the extent of the Company'’s involvement in these instruments at that time, but do not represent exposure to credit, interest rate or market risks (amounts presented in thousands and included in other assets and other liabilities on the Company’s consolidated balance sheets).

Hedge Product	Hedge Type	Designation		Notional Amount				Strike			~~Trade Date~~	Trade Date	~~Maturity Date~~	Maturity Date	~~Fair value~~	Fair value
				09/30/2014		12/31/2013									09/30/2014				12/31/2013
				3/31/2017		12/31/2016										3/31/2017				12/31/2016
Assets:
Assets
Swap	Interest Rate	Cash Flow	(a)	$	25250,~~774~~000	$	25250,~~774~~000	~~3.300~~	%3.718	%	~~December 22, 2011~~	October 8, 2015	~~January 30, 2021~~	October 8, 2022	$	68$	4,572		$	~~549~~$	3,733
Swap	Interest Rate	Cash Flow	(a)	25,774		25,774		3.090	%		January 6, 2012		October 30, 2019		23				218
Liabilities
				$	51,548	$	51,548								$	91			$	767
Swap	Interest Rate	Cash Flow	(a)		25,774		25,774		3.300	%		December 22, 2011		January 30, 2021			(169	)			(300	)
Liabilities:
Swap	Interest Rate	Cash Flow	(a)		25,774		25,774		3.090	%		January 6, 2012		October 30, 2019			(93	)			(214	)
Swap	Interest Rate	Cash Flow	(a)	$	~~200~~27,~~000~~062	$	~~200~~27,~~000~~062	~~3.623~~	%2.750	%	~~December 6-13, 2011~~	December 21, 2011	~~February 1, 2019~~	September 30, 2017	$	~~(1,243~~	)(37	)	$	~~(545~~	)(83	)
Swap	Interest Rate	Cash Flow	(a)	27,062		27,062		2.750	%		December 21, 2011		September 30, 2017		(181		)		(311		)
				$	328,610	$	328,610
Swap	Interest Rate	Cash Flow	(a), (b)	—		77,000		2.703	%		December 9-13, 2011		February 1, 2016		—				(887		)
Swap	Interest Rate	Cash Flow	(a), (b)	—		50,000		2.470	%		December 13, 2011		February 1, 2015		—				(283		)
Swap	Interest Rate	Cash Flow	(a), (b)	—		23,000		2.513	%		December 7-12, 2011		May 1, 2015		—				(162		)
				$	227,062	$	377,062								$	(1,424	)		$	(2,188	)

(a)	Hedging unsecured variable rate debt.

~~(b)~~The ~~On September 16, 2014, the~~ Company ~~repaid~~measures ~~the~~its ~~entire~~derivative ~~$150.0~~instruments ~~million~~at ~~swapped~~fair tovalue ~~fixed~~and ~~portion~~records ofthem ~~its~~gross ~~previously~~in ~~mentioned~~the ~~three-year~~consolidated ~~term~~balance ~~loan~~sheet ~~(refer~~in toother ~~Note~~assets ~~7),~~or ~~consisting~~other ~~of $150~~liabilities.0 ~~million~~Additionally, ~~interest~~the ~~rate~~Company ~~swaps~~recorded ~~maturing~~its ~~through~~share ~~February~~of 1,the ~~2016~~fair ~~(shown~~value ~~above).~~of Inderivative ~~connection~~financial ~~with~~instruments ~~the~~held ~~repayment,~~by ~~the~~its ~~Company~~unconsolidated ~~terminated~~real ~~associated~~estate ~~hedging contracts~~ventures, ~~incurring~~as aof ~~$0.8~~March ~~million~~31, ~~charge upon termination~~2017.

The Company measures its derivative instruments at fair value and records them in the balance sheet as either an asset or liability. As of September 30, 2014, two interest rate swaps held an asset position and were included in other assets on the Company's consolidated balance sheet. The remaining swaps are included in other liabilities on the Company's consolidated balance sheet.26

Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. The Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

2810. BENEFICIARIES’ EQUITY OF THE PARENT COMPANY

10. DISCONTINUED OPERATIONS

The Company had no property dispositions classified as discontinued operations during the three and nine months ended September 30, 2014. There was nominal income before gain on sales recognized during 2014 relating to properties classified into discontinued operations in prior periods and a $0.9 million gain relating to the post closing activity for the sale of the Princeton Pike Corporate Center completed in the first quarter of 2013. See Note 3 for further information.

For the three and nine-month periods ended September 30, 2013, income from discontinued operations relates to the 14 properties sold by the Company from January 1, 2013 through December 31, 2013. The following table summarizes the revenue and expense information for properties classified as discontinued operations for the three and nine-month periods ended September 30, 2013 (in thousands):

	Three-month period ended September 30, 2013			Nine-month period endedSeptember 30, 2013
Revenue:
Rents	$	96		$	4,754
Tenant reimbursements	10			355
Termination fees	—			—
Other	—			123
Total revenue	106			5,232
Expenses:
Property operating expenses	62			1,773
Real estate taxes	39			623
Depreciation and amortization	48			1,893
Total operating expenses	149			4,289
Other income:
Interest income	—			3
Income from discontinued operations before gain on sale of interests in real estate	(43		)	946
Net gain on disposition of discontinued operations	(16		)	3,029
Income from discontinued operations	$	(59	)	$	3,975

Discontinued operations have not been segregated in the consolidated statements of cash flows. Therefore, amounts for certain captions will not agree with respective data in the consolidated statements of operations.

11. LIMITED PARTNERS' NON-CONTROLLING INTERESTS IN THE PARENT COMPANY

Non-controlling interests in the Parent Company’s financial statements relate to redeemable common limited partnership interests in the Operating Partnership held by parties other than the Parent Company and properties which are consolidated but not wholly owned.

Operating Partnership

The aggregate book value of the non-controlling interests associated with the redeemable common limited partnership interests in the accompanying consolidated balance sheet of the Parent Company as of September 30, 2014 and December 31, 2013 was $19.9 million and $20.3 million, respectively. Under the applicable accounting guidance, the redemption value of limited partnership units are carried at, on a limited partner basis, the greater of historical cost adjusted for the allocation of income and distributions or fair value. The Parent Company believes that the aggregate settlement value of these interests (based on the number of units outstanding and the closing price of the common shares on the balance sheet date) was approximately $24.2 million and $24.8 million, respectively, as of September 30, 2014 and December 31, 2013.

12. BENEFICIARIES’ EQUITY OF THE PARENT COMPANY

Earnings per Share (EPS)

The following tables detail the number of shares and net income used to calculate basic and diluted earnings per share (in thousands, except share and per share amounts; results may not add due to rounding):

	Three-month periods ended September 30,
	Three-month periods ended March 31,
	2014						2013
	2017						2016
	Basic			Diluted			Basic			Diluted
Numerator
Income from continuing operations	$	821,~~885~~271		$	821,~~885~~271		$	1146,~~147~~310		$	1146,~~147~~310
Loss from continuing operations attributable to non-controlling interests	(84		)	(84		)	(106		)	(106		)
Net income from continuing operations attributable to non-controlling interests		(169	)		(169	)		(389	)		(389	)
Net income attributable to non-controlling interest — partners' share of consolidated real estate ventures	(24		)	(24		)	—			—
Nonforfeitable dividends allocated to unvested restricted shareholders		(99	)		(99	)		(105	)		(105	)
Nonforfeitable dividends allocated to unvested restricted shareholders	(82		)	(82		)	(85		)	(85		)
Preferred share dividends		(1,725	)

Filing Compare · BRANDYWINE OPERATING PARTNERSHIP, L.P.