23 unchanged sentences
Other Information
+Added: On February 22, 2022, the Compensation Committee (the “Compensation Committee”) of our Board of Directors approved the restatement of our change in control severance agreements with George, D.
+Added: Johnstone, our Executive Vice President of Operations, and William D.
+Added: Redd, our Executive Vice President and Senior Managing Director for the Austin and Metro DC Regions.
+Added: The restated change in control severance agreements (the “Restated Agreements”) each provide that if a change of control (a “ CIC ”) occurs and the executive’s employment ceases due to a termination by us without cause or a resignation by the executive with good reason, in either case within two years following the CIC, we will pay the executive two times (the “Severance Multiplier”) the sum of (1) the executive’s annual base salary in effect at the time of the CIC, plus (2) the greater of (A) the annual bonus most recently paid to the executive prior to the CIC, or (B) the executive’s target bonus for the year in which the CIC occurs.
+Added: In addition, the executive will then also be entitled to continued group health coverage for 18 months and continued group term life insurance coverage for two years.
+Added: The Restated Agreements are substantially identical to the executives’ prior change in control severance agreements, except the Restated Agreements:
+Added: (i) increase the Severance Multiplier from 1.75 to 2.0;
+Added: (ii) reduce the period of continued group health coverage from 24 months to 18 months (the maximum period of continuation coverage generally available under COBRA upon termination of employment);
+Added: (iii) condition the receipt of payments and benefits under the agreement on the executive’s execution of a release of claims;
+Added: (iv) limit transaction-related payments to each executive to the maximum amount that would not be subject to an excise tax under Section 4999 of the Internal Revenue Code, if such limit would increase the executive’s net after-tax proceeds.
+Added: The foregoing description of the Restated Agreements is qualified in its entirety by reference to the Form of Change in Control Agreement filed as Exhibit 10.28 to this Annual Report on Form 10-K and incorporated herein by reference.
+Added: Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Directors, Executive Officers and Corporate Governance
13 unchanged sentences
Index to Financial Statements and Schedules
−Removed: Report of Independent Registered Public Accounting Firm (Brandywine Realty Trust)
−Removed: Report of Independent Registered Public Accounting Firm (Brandywine Operating Partnership, L.P.)
+Added: Report of Independent Registered Public Accounting Firm (Brandywine Realty Trust) ( PCAOB ID No.
+Added: Report of Independent Registered Public Accounting Firm (Brandywine Operating Partnership, L.P.) (PCAOB ID No.
Financial Statements of Brandywine Realty Trust
83 unchanged sentences
1 to Amended and Restated 1997 Long-Term Incentive Plan** (previously filed as an exhibit to Brandywine Realty Trust’s Form 10-Q for the quarter ended March 31, 2018 and incorporated herein by reference)
−Removed: 10.9 Brandywine Realty Trust Second Amended and Restated Executive Deferred Compensation Plan (as Amended and Restated, Effective January 1, 2021)** (filed herewith)
+Added: 10.9 Brandywine Realty Trust Second Amended and Restated Executive Deferred Compensation Plan (as Amended and Restated, Effective January 1, 2021)** (previously filed as an exhibit to Brandywine Realty Trust’s Form 10-K for the year ended December 31, 2020 and incorporated herein by reference)
10.10 2007 Non-Qualified Employee Share Purchase Plan** (previously filed as an exhibit to Brandywine Realty Trust’s Form 10-Q for the quarter ended March 31, 2007 and incorporated herein by reference)
−Removed: 10.11 Form of Amended and Restated Change of Control Agreement with Executive Officers** (previously filed as an exhibit to Brandywine Realty Trust’s Form 8-K filed on February 4, 2010 and incorporated herein by reference)
+Added: 10.11 Form of Change in Control Agreement with Executive Officers (Wirth and DeVuono)** (previously filed as an exhibit to Brandywine Realty Trust’s Form 8-K filed on February 4, 2010 and incorporated herein by reference)
10.12 Forms of Incentive Share Option Agreement (March 2011) for Executive Officers** (previously filed as an exhibit to Brandywine Realty Trust’s Form 8-K filed on March 8, 2011 and incorporated herein by reference)
11 unchanged sentences
10.24 Form of Restricted Common Share Rights Award (with outperformance feature)** (previously filed as an exhibit to Brandywine Realty Trust’s Form 8-K filed on March 11, 2020 and incorporated herein by reference)
+Added: 10.25 Form of 2021-2023 Performance Unit Award Agreement (previously filed as an exhibit to Brandywine Realty Trust’s Form 8-K filed on March 10, 2021 and incorporated herein by reference).**
+Added: 10.26 2021-2023 Performance Share Unit Program (previously filed as an exhibit to Brandywine Realty Trust’s Form 8-K filed on March 10, 2021 and incorporated herein by reference).**
+Added: 10.27 Form of Restricted Common Share Rights Award (previously filed as an exhibit to Brandywine Realty Trust’s Form 8-K filed on March 10, 2021 and incorporated herein by reference).**
+Added: 10.28 Form of Change in Control Agreement with Executive Officers (Johnstone, Neuman and Redd)** (filed herewith)
14.1 Code of Business Conduct and Ethics, as amended on December 6, 2016 (previously filed as an exhibit to Brandywine Realty Trust’s Form 8-K filed on December 9, 2016 and incorporated herein by reference)
15 unchanged sentences
Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith)
−Removed: 99.1 Material Federal Income Tax Considerations (filed herewith)
+Added: 99.1 Material Federal Income Tax Considerations (previously filed as an exhibit to Brandywine Realty Trust’s Form 10-Q for the quarter ended September 30, 2021 and incorporated herein by reference)
101.1 The following materials from the Annual Reports on Form 10-K of Brandywine Realty Trust and Brandywine Operating Partnership, L.P.
22 unchanged sentences
Daniel Palazzo
−Removed: /s/ Wyche Fowler Trustee February 24, 2021
+Added: /s/ Reginald DesRoches
+Added: Trustee February 24, 2022
+Added: Reginald DesRoches
Diggs Trustee February 24, 2022
22 unchanged sentences
Daniel Palazzo
−Removed: /s/ Wyche Fowler Trustee February 24, 2021
+Added: /s/ Reginald DesRoches
+Added: Trustee February 24, 2022
+Added: Reginald DesRoches
/s/ James Diggs Trustee February 24, 2022
46 unchanged sentences
This in turn led to a high degree of auditor judgment and subjectivity in applying procedures and evaluating audit evidence related to (i) the estimated undiscounted future cash flows expected to be generated by the real estate investments and (ii) the identification of any indicators that the value of the Company’s investments in unconsolidated real estate ventures may be other than temporarily impaired.
−Removed: In addition, there was significant audit effort in evaluating (i) the significant assumptions relating to the estimated undiscounted future cash flows expected to be generated by the real estate investments, related to market rental rates, capitalization rates, and recent sales data for comparable real estate investments, and (ii) any indicators that the value of the Company’s investments in unconsolidated real estate ventures may be other than temporarily impaired.
+Added: In addition, there was significant audit effort in evaluating (i) the significant assumptions relating to the estimated undiscounted future cash flows expected to be generated by the real estate investments, related to market rental rates and capitalization rates, and (ii) any indicators that the value of the Company’s investments in unconsolidated real estate ventures may be other than temporarily impaired.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.
1 unchanged sentence
These procedures also included, among others, testing management’s process for (i) developing the estimated undiscounted future cash flows expected to be generated by the real estate investments, including the evaluation of the reasonableness of significant assumptions, the appropriateness of methods, the reasonableness of the model outputs and testing the completeness and accuracy of data provided by management, and (ii) identifying any indicators that the value of the Company’s investments in unconsolidated real estate ventures may be other than temporarily impaired.
−Removed: Evaluating the reasonableness of significant assumptions relating to the estimated undiscounted future cash flows expected to be generated by the real estate investments, related to market rental rates, capitalization rates, and recent sales data for comparable real estate investments, involved considering past performance of the asset and whether the assumptions were consistent with evidence obtained in other areas of the audit.
+Added: Evaluating the reasonableness of significant assumptions relating to the estimated undiscounted future cash flows expected to be generated by the real estate investments, related to market rental rates and capitalization rates, involved considering past performance of the asset and whether the assumptions were consistent with evidence obtained in other areas of the audit.
Evaluating management’s assessment of indications of other than temporary impairment in investments in unconsolidated real estate ventures involved considering whether any market economic conditions, past performance of the asset, or evidence obtained in other areas of the audit may be indicative of other than temporary impairment.
32 unchanged sentences
Critical Audit Matters
−Removed: The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.
+Added: The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or
+Added: disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.
The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
10 unchanged sentences
This in turn led to a high degree of auditor judgment and subjectivity in applying procedures and evaluating audit evidence related to (i) the estimated undiscounted future cash flows expected to be generated by the real estate investments and (ii) the identification of any indicators that the value of the Partnership’s investments in unconsolidated real estate ventures may be other than temporarily impaired.
−Removed: In addition, there was significant audit effort in evaluating (i) the significant assumptions relating to the estimated undiscounted future cash flows expected to be generated by the real estate investments, related to market rental rates, capitalization rates, and recent sales data for comparable real estate investments, and (ii) any indicators that the value of the Partnership’s investments in unconsolidated real estate ventures may be other than temporarily impaired.
+Added: In addition, there was significant audit effort in evaluating (i) the significant assumptions relating to the estimated undiscounted future cash flows expected to be generated by the real estate investments, related to market rental rates and capitalization rates, and (ii) any indicators that the value of the Partnership’s investments in unconsolidated real estate ventures may be other than temporarily impaired.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.
1 unchanged sentence
These procedures also included, among others, testing management’s process for (i) developing the estimated undiscounted future cash flows expected to be generated by the real estate investments, including the evaluation of the reasonableness of significant assumptions, the appropriateness of methods, the reasonableness of the model outputs and testing the completeness and accuracy of data provided by management, and (ii) identifying any indicators that the value of the Partnership’s investments in unconsolidated real estate ventures may be other than temporarily impaired.
−Removed: Evaluating the reasonableness of significant assumptions relating to the estimated undiscounted future cash flows expected to be generated by the real estate investments, related to market rental rates, capitalization rates, and recent sales data for comparable real estate investments, involved considering past performance of the asset and whether the assumptions were consistent with evidence obtained in other areas of the audit.
+Added: Evaluating the reasonableness of significant assumptions relating to the estimated undiscounted future cash flows expected to be generated by the real estate investments, related to market rental rates and capitalization rates, involved considering past performance of the asset and whether the assumptions were consistent with evidence obtained in other areas of the audit.
Evaluating management’s assessment of indications of other than temporary impairment in investments in unconsolidated real estate ventures involved considering whether any market economic conditions, past performance of the asset, or evidence obtained in other areas of the audit may be indicative of other than temporary impairment.
18 unchanged sentences
Cash and cash equivalents 27,463 46,344
−Removed: Accounts receivable, net of allowance of $ 0 and $ 284 as of December 31, 2020 and December 31, 2019, respectively
−Removed: 13,536 16,363
+Added: Accounts receivable 11,875 13,536
Accrued rent receivable, net of allowance of $ 4,133 and $ 5,086 as of December 31, 2021 and December 31, 2020, respectively
167,210 155,372
−Removed: Investment in Real Estate Ventures, equity method 401,327 120,294
+Added: Investment in unconsolidated real estate ventures 435,506 401,327
Deferred costs, net 86,862 84,856
3 unchanged sentences
LIABILITIES AND BENEFICIARIES' EQUITY
−Removed: Mortgage notes payable, net $ — $ 313,812
+Added: Unsecured credit facility $ 23,000 $ —
Unsecured term loan, net 249,608 249,084
15 unchanged sentences
Common shares in grantor trust, 1,169,703 and 1,160,494 issued and outstanding as of December 31, 2021 and December 31, 2020, respectively
+Added: ( 18,491 ) ( 17,516 )
Cumulative earnings 1,122,372 1,110,083
21 unchanged sentences
General and administrative expenses 30,153 30,288 32,156
−Removed: Provision for impairment — — 71,707
Total operating expenses 396,569 424,027 468,007
5 unchanged sentences
Other income (expense):
−Removed: Interest income 1,939 2,318 4,703
+Added: Interest and investment income 8,295 1,939 2,318
Interest expense ( 62,617 ) ( 73,911 ) ( 81,512 )
Interest expense - amortization of deferred financing costs ( 2,836 ) ( 2,904 ) ( 2,768 )
−Removed: Equity in loss of Real Estate Ventures ( 18,584 ) ( 9,922 ) ( 15,231 )
+Added: Equity in loss of unconsolidated real estate ventures ( 26,697 ) ( 18,584 ) ( 9,922 )
Net gain on real estate venture transactions 2,973 75 11,639
−Removed: Gain on promoted interest in unconsolidated real estate venture — — 28,283
−Removed: Loss on early extinguishment of debt — — ( 105 )
Net income before income taxes 12,413 307,102 34,541
31 unchanged sentences
BALANCE, December 31, 2018 176,873,324 977,120 $ 1,770 $ 3,200,312 $ 14,021 $ ( 14,021 ) $ 775,625 $ 5,029 $ ( 2,183,909 ) $ 12,201 $ 1,811,028
+Added: Cumulative effect of accounting change ( 5,336 ) ( 5,336 )
Net income 34,267 262 34,529
−Removed: Other comprehensive income 2,630 39 2,669
−Removed: Issuance of Common Shares of Beneficial Interest 23,311 416 416
+Added: Other comprehensive loss ( 7,399 ) ( 41 ) ( 7,440 )
Repurchase and retirement of Common Shares of Beneficial Interest ( 1,337,169 ) ( 13 ) ( 17,268 ) ( 17,281 )
Issuance of partnership interest in consolidated real estate ventures 27 27
−Removed: Distributions from consolidated real estate ventures ( 94 ) ( 94 )
+Added: Purchase of partnership interest in consolidated real estate venture ( 983 ) ( 1,197 ) ( 2,180 )
Redemption of LP Units 1,245 16 ( 16 ) —
1 unchanged sentence
Share Issuance from/(to) Deferred Compensation Plan 97,485 87,080 2,195 ( 2,195 ) —
−Removed: Share Choice Plan issuance ( 1,285 ) —
Reallocation of Noncontrolling interest 63 ( 63 ) —
Distributions declared ($ 0.76 per share)
+Added: ( 134,324 ) ( 747 ) ( 135,071 )
BALANCE, December 31, 2019 176,480,095 1,105,542 $ 1,766 $ 3,192,158 $ 16,216 $ ( 16,216 ) $ 804,556 $ ( 2,370 ) $ ( 2,318,233 ) $ 10,426 $ 1,688,303
−Removed: Cumulative effect of accounting change ( 5,336 ) ( 5,336 )
Net income 305,527 1,799 307,326
1 unchanged sentence
Repurchase and retirement of Common Shares of Beneficial Interest ( 6,248,483 ) ( 62 ) ( 59,937 ) ( 59,999 )
−Removed: Issuance of partnership interest in consolidated real estate ventures 27 27
−Removed: Purchase of partnership interest in consolidated real estate venture ( 983 ) ( 1,197 ) ( 2,180 )
−Removed: Redemption of LP Units 1,245 16 ( 16 ) —
+Added: Sale of partnership interest in consolidated real estate venture ( 1,017 ) ( 1,017 )
+Added: Distributions from consolidated real estate ventures ( 22 ) ( 22 )
Share-based compensation activity 309,096 50,967 3 6,233 6,236
2 unchanged sentences
Distributions declared ($ 0.76 per share)
+Added: ( 130,005 ) ( 748 ) ( 130,753 )
BALANCE, December 31, 2020 170,572,964 1,160,494 $ 1,707 $ 3,138,152 $ 17,516 $ ( 17,516 ) $ 1,110,083 $ ( 7,561 ) $ ( 2,448,238 ) $ 10,505 $ 1,804,648
Net income 12,289 77 12,366
−Removed: Other comprehensive loss ( 5,191 ) ( 29 ) ( 5,220 )
−Removed: Repurchase and retirement of Common Shares of Beneficial Interest ( 6,248,483 ) ( 62 ) ( 59,937 ) ( 59,999 )
−Removed: Sale of partnership interest in consolidated real estate venture ( 1,017 ) ( 1,017 )
−Removed: Distributions from consolidated real estate ventures ( 22 ) ( 22 )
+Added: Other comprehensive income 5,541 28 5,569
+Added: Issuance of Common Shares of Beneficial Interest 226,695 3 3,049 3,052
+Added: Issuance of partnership interest in consolidated real estate ventures 2,765 2,765
+Added: Redemption of LP Units ( 2,334 ) ( 2,334 )
Share-based compensation activity 344,656 70,645 2 6,352 6,354
2 unchanged sentences
Distributions declared $ 0.76 per share)
+Added: ( 130,345 ) ( 658 ) ( 131,003 )
BALANCE, December 31, 2021 171,126,257 1,169,703 $ 1,712 $ 3,146,786 $ 18,491 $ ( 18,491 ) $ 1,122,372 $ ( 2,020 ) $ ( 2,578,583 ) $ 10,952 $ 1,701,219
17 unchanged sentences
Net gain on real estate venture transactions ( 2,973 ) ( 75 ) ( 11,639 )
−Removed: Gain on promoted interest in unconsolidated real estate venture — — ( 28,283 )
Net gain on sale of interests in real estate ( 3,045 ) ( 289,662 ) ( 2,376 )
−Removed: Loss on early extinguishment of debt — — 105
−Removed: Provision for impairment — — 71,707
−Removed: Other than temporary impairment — — 4,076
−Removed: Loss from Real Estate Ventures, net of distributions 18,584 10,242 12,871
+Added: Loss from unconsolidated real estate ventures, net of distributions 26,697 18,584 10,242
Income tax provision (benefit) 47 ( 224 ) 12
11 unchanged sentences
Proceeds from real estate venture sales — — 9,730
+Added: Proceeds from insurance 1,250 — —
+Added: Proceeds from note receivable 50,000 — —
Issuance of note receivable — ( 50,000 ) —
−Removed: Issuance of mortgage note receivable — — ( 175,172 )
Proceeds from repayment of mortgage notes receivable — — 3,341
−Removed: Proceeds from repayment of a capital lease — — 181
Capital expenditures for tenant improvements ( 56,830 ) ( 73,166 ) ( 67,258 )
4 unchanged sentences
Deposits for real estate ( 2,550 ) — ( 4,181 )
−Removed: Escrowed cash — — 5,694
−Removed: Capital distributions from Real Estate Ventures 9,001 35,906 6,526
+Added: Capital distributions from unconsolidated real estate ventures 27,028 9,001 35,906
Leasing costs paid ( 19,852 ) ( 17,394 ) ( 15,485 )
6 unchanged sentences
Debt financing costs paid — — ( 1,965 )
−Removed: Proceeds from the exercise of stock options 47 3,771 —
−Removed: Proceeds from the issuance of common shares — — 416
+Added: Exercise of stock options, net ( 63 ) 47 3,771
Shares used for employee taxes upon vesting of share awards ( 1,762 ) ( 1,346 ) ( 1,554 )
Partner contributions to consolidated real estate venture 2,765 — 27
−Removed: Partner distributions from consolidated real estate venture — — ( 94 )
Repurchase and retirement of common shares — ( 60,000 ) ( 17,282 )
17 unchanged sentences
Cash paid for interest, net of capitalized interest during the years ended December 31, 2021, 2020 and 2019 of $ 8,689 , $ 4,650 and $ 2,246 respectively
+Added: $ 72,391 $ 79,498 $ 66,508
Cash paid for income taxes 785 688 1,385
1 unchanged sentence
Dividends and distributions declared but not paid 32,765 32,706 33,815
−Removed: Change in construction-in-progress related to non-cash disposition of land — — 27,231
−Removed: Change in deferred income, gains and rent to the non-cash disposition of land — — ( 29,780 )
−Removed: Change in investment in real estate ventures as a result of dispositions — 1,806 14,169
−Removed: Change in Notes receivable as a result of a noncash acquisition of an operating property — — 130,742
−Removed: Change in real estate ventures as a result of other than temporary impairment — — ( 4,076 )
−Removed: Change in operating real estate related to a non-cash acquisition of an operating property — — ( 20,653 )
−Removed: Change in intangible assets, net related to non-cash acquisition of an operating property — — ( 3,144 )
−Removed: Change in acquired lease intangibles, net related to non-cash acquisition of an operating property — — 182
−Removed: Change in investments in joint venture related to non-cash acquisition of property — — ( 16,832 )
−Removed: Change in mortgage notes payable related to acquisition of an operating property — — 9,940
+Added: Change in investment in real estate ventures as a result of deconsolidation 32,761 — 1,806
Change in operating real estate from deconsolidation of operating properties ( 30,073 ) 427,710 —
1 unchanged sentence
Change in mortgage notes payable from deconsolidation of operating properties — ( 220,271 ) —
−Removed: Change in capital expenditures financed through accounts payable at period end ( 9,949 ) ( 10,618 ) 8,784
Change in other assets as a result of deconsolidation of operating properties ( 2,688 ) 1,471 —
+Added: Change in capital expenditures financed through accounts payable at period end 22,744 ( 9,949 ) ( 10,618 )
Change in capital expenditures financed through retention payable at period end ( 613 ) 284 ( 946 )
15 unchanged sentences
Cash and cash equivalents 27,463 46,344
−Removed: Accounts receivable, net of allowance of $ 0 and $ 284 as of December 31, 2020 and December 31, 2019, respectively
−Removed: 13,536 16,363
+Added: Accounts receivable 11,875 13,536
Accrued rent receivable, net of allowance of $ 4,133 and $ 5,086 as of December 31, 2021 and December 31, 2020, respectively
167,210 155,372
−Removed: Investment in Real Estate Ventures, equity method 401,327 120,294
+Added: Investment in unconsolidated real estate ventures 435,506 401,327
Deferred costs, net 86,862 84,856
3 unchanged sentences
LIABILITIES AND PARTNERS' EQUITY
−Removed: Mortgage notes payable, net $ — $ 313,812
+Added: Unsecured credit facility $ 23,000 $ —
Unsecured term loan, net 249,608 249,084
9 unchanged sentences
Redeemable limited partnership units at redemption value;
−Removed: 981,634 issued and outstanding as of December 31, 2020 and December 31, 2019 11,566 15,388
+Added: 823,983 and 981,634 issued and outstanding as of December 31, 2021 and December 31, 2020, respectively
+Added: 11,140 11,566
Brandywine Operating Partnership, L.P.'s equity:
1 unchanged sentence
171,126,257 and 170,572,964 units issued and outstanding as of December 31, 2021 and December 31, 2020, respectively
+Added: 1,689,611 1,800,945
Accumulated other comprehensive loss ( 2,366 ) ( 7,935 )
19 unchanged sentences
General and administrative expenses 30,153 30,288 32,156
−Removed: Provision for impairment — — 71,707
Total operating expenses 396,569 424,027 468,007
5 unchanged sentences
Other income (expense):
−Removed: Interest income 1,939 2,318 4,703
+Added: Interest and investment income 8,295 1,939 2,318
Interest expense ( 62,617 ) ( 73,911 ) ( 81,512 )
Interest expense - amortization of deferred financing costs ( 2,836 ) ( 2,904 ) ( 2,768 )
−Removed: Equity in loss of Real Estate Ventures ( 18,584 ) ( 9,922 ) ( 15,231 )
+Added: Equity in loss of unconsolidated real estate ventures ( 26,697 ) ( 18,584 ) ( 9,922 )
Net gain on real estate venture transactions 2,973 75 11,639
−Removed: Gain on promoted interest in unconsolidated real estate venture — — 28,283
−Removed: Loss on early extinguishment of debt — — ( 105 )
Net income before income taxes 12,413 307,102 34,541
1 unchanged sentence
Net income 12,366 307,326 34,529
−Removed: Net income attributable to noncontrolling interests - consolidated real estate ventures ( 20 ) ( 69 ) ( 55 )
+Added: Net (income) loss attributable to noncontrolling interests - consolidated real estate ventures 3 ( 20 ) ( 69 )
Net income attributable to Brandywine Operating Partnership 12,369 307,306 34,460
18 unchanged sentences
Comprehensive income 17,935 302,106 27,089
−Removed: Comprehensive income attributable to noncontrolling interest - consolidated real estate ventures ( 20 ) ( 69 ) ( 55 )
+Added: Comprehensive (income) loss attributable to noncontrolling interest - consolidated real estate ventures 3 ( 20 ) ( 69 )
Comprehensive income attributable to Brandywine Operating Partnership $ 17,938 $ 302,086 $ 27,020
8 unchanged sentences
BALANCE, December 31, 2018 176,873,324 $ 1,791,591 $ 4,725 $ 2,192 $ 1,798,508
−Removed: Net income 135,417 55 135,472
−Removed: Other comprehensive income 2,669 2,669
−Removed: Deferred compensation obligation 99,189 ( 111 ) ( 111 )
−Removed: Issuance of LP Units 23,311 416 416
−Removed: Repurchase and retirement of LP units ( 1,729,278 ) ( 21,858 ) ( 21,858 )
−Removed: Issuance of partnership interest in consolidated real estate venture 16 16
−Removed: Distributions from consolidated real estate venture ( 94 ) ( 94 )
−Removed: Share Choice Plan issuance ( 1,285 ) —
−Removed: Redemption value of limited partnership units 6,363 6,363
−Removed: Share-based compensation activity 196,151 5,848 5,848
−Removed: Distributions declared to general partnership unitholders ($0.73 per unit) ( 130,168 ) ( 130,168 )
−Removed: BALANCE, December 31, 2018 176,873,324 $ 1,791,591 $ 4,725 $ 2,192 $ 1,798,508
Cumulative effect of accounting change ( 5,336 ) ( 5,336 )
9 unchanged sentences
Distributions declared to general partnership unitholders ($ 0.76 per unit)
+Added: ( 134,324 ) ( 134,324 )
BALANCE, December 31, 2019 176,480,095 $ 1,674,539 $ ( 2,715 ) $ 1,091 $ 1,672,915
8 unchanged sentences
Distributions declared to general partnership unitholders $ 0.76 per unit)
+Added: ( 130,005 ) ( 130,005 )
BALANCE, December 31, 2020 170,572,964 $ 1,800,945 $ ( 7,935 ) $ 72 $ 1,793,082
+Added: Net income 12,369 ( 3 ) 12,366
+Added: Other comprehensive income 5,569 5,569
+Added: Deferred compensation obligation ( 18,058 ) ( 198 ) ( 198 )
+Added: Issuance of LP Units 226,695 3,052 3,052
+Added: Repurchase and retirement of LP units ( 2,334 ) ( 2,334 )
+Added: Issuance of partnership interest in consolidated real estate ventures 2,765 2,765
+Added: Share-based compensation activity 344,656 6,354 6,354
+Added: Adjustment of redeemable partnership units to liquidation value at period end ( 232 ) ( 232 )
+Added: Distributions declared to general partnership unitholders ($ 0.76 per unit)
+Added: ( 130,345 ) ( 130,345 )
+Added: BALANCE, December 31, 2021 171,126,257 $ 1,689,611 $ ( 2,366 ) $ 2,834 $ 1,690,079
The accompanying notes are an integral part of these consolidated financial statements.
16 unchanged sentences
Net gain on real estate venture transactions ( 2,973 ) ( 75 ) ( 11,639 )
−Removed: Gain on promoted interest in unconsolidated real estate venture — — ( 28,283 )
Net gain on sale of interests in real estate ( 3,045 ) ( 289,662 ) ( 2,376 )
−Removed: Loss on early extinguishment of debt — — 105
−Removed: Provision for impairment — — 71,707
−Removed: Other than temporary impairment — — 4,076
−Removed: Loss from Real Estate Ventures, net of distributions 18,584 10,242 12,871
+Added: Loss from unconsolidated real estate ventures, net of distributions 26,697 18,584 10,242
Income tax provision (benefit) 47 ( 224 ) 12
11 unchanged sentences
Proceeds from real estate venture sales — — 9,730
+Added: Proceeds from insurance 1,250 — —
+Added: Proceeds from note receivable 50,000 — —
Issuance of note receivable — ( 50,000 ) —
−Removed: Issuance of mortgage note receivable — — ( 175,172 )
Proceeds from repayment of mortgage notes receivable — — 3,341
−Removed: Proceeds from repayment of a capital lease — — 181
Capital expenditures for tenant improvements ( 56,830 ) ( 73,166 ) ( 67,258 )
4 unchanged sentences
Deposits for real estate ( 2,550 ) — ( 4,181 )
−Removed: Escrowed cash — — 5,694
−Removed: Capital distributions from Real Estate Ventures 9,001 35,906 6,526
+Added: Capital distributions from unconsolidated real estate ventures 27,028 9,001 35,906
Leasing costs paid ( 19,852 ) ( 17,394 ) ( 15,485 )
6 unchanged sentences
Debt financing costs paid — — ( 1,965 )
−Removed: Proceeds from the exercise of stock options 47 3,771 —
−Removed: Proceeds from the issuance of common units — — 416
+Added: Exercise of stock options, net ( 63 ) 47 3,771
Shares used for employee taxes upon vesting of share awards ( 1,762 ) ( 1,346 ) ( 1,554 )
Partner contributions to consolidated real estate venture 2,765 — 27
−Removed: Partner distributions from consolidated real estate venture — — ( 94 )
−Removed: Repurchase and retirement of common shares ( 60,000 ) ( 17,282 ) ( 21,841 )
+Added: Repurchase and retirement of common units — ( 60,000 ) ( 17,282 )
Redemption of limited partnership units ( 2,334 ) — —
15 unchanged sentences
Cash paid for interest, net of capitalized interest during the years ended December 31, 2021, 2020 and 2019 of $ 8,689 , $ 4,650 and $ 2,246 respectively
+Added: $ 72,391 $ 79,498 $ 66,508
Cash paid for income taxes 785 688 1,385
1 unchanged sentence
Dividends and distributions declared but not paid 32,765 32,706 33,815
−Removed: Change in construction-in-progress related to non-cash disposition of land — — 27,231
−Removed: Change in deferred income, gains and rent to the non-cash disposition of land — — ( 29,780 )
−Removed: Change in investment in real estate ventures as a result of dispositions — 1,806 14,169
−Removed: Change in Notes receivable as a result of a noncash acquisition of an operating property — — 130,742
−Removed: Change in real estate ventures as a result of other than temporary impairment — — ( 4,076 )
−Removed: Change in operating real estate related to a non-cash acquisition of an operating property — — ( 20,653 )
−Removed: Change in intangible assets, net related to non-cash acquisition of an operating property — — ( 3,144 )
−Removed: Change in acquired lease intangibles, net related to non-cash acquisition of an operating property — — 182
−Removed: Change in investments in joint venture related to non-cash acquisition of property — — ( 16,832 )
−Removed: Change in mortgage notes payable related to acquisition of an operating property — — 9,940
+Added: Change in investment in real estate ventures as a result of deconsolidation 32,761 — 1,806
Change in operating real estate from deconsolidation of operating properties ( 30,073 ) 427,710 —
1 unchanged sentence
Change in mortgage notes payable from deconsolidation of operating properties — ( 220,271 ) —
−Removed: Change in capital expenditures financed through accounts payable at period end ( 9,949 ) ( 10,618 ) 8,784
Change in other assets as a result of deconsolidation of operating properties ( 2,688 ) 1,471 —
+Added: Change in capital expenditures financed through accounts payable at period end 22,744 ( 9,949 ) ( 10,618 )
Change in capital expenditures financed through retention payable at period end ( 613 ) 284 ( 946 )
18 unchanged sentences
In addition to the Properties, as of December 31, 2021, the Company owned 176.1 acres of land held for development, of which 10.0 acres were held for sale.
−Removed: The Company also held leasehold interests in two land parcels totaling 1.8 acres, each acquired through prepaid 99-year ground leases, and held options to purchase approximately 55.5 additional acres of undeveloped land.
−Removed: As of December 31, 2020, the total potential development that this inventory of land could support under current zoning and entitlements, including the parcels under option, amounted to an estimated 14.2 million square feet, of which 0.2 million square feet relates to 35.2 acres held for sale.
−Removed: As of December 31, 2020, the Company also owned economic interests in nine unconsolidated real estate ventures (collectively, the “Real Estate Ventures”) (see Note 4, ''Investment in Unconsolidated Real Estate Ventures ” for further information).
−Removed: The Properties and the properties owned by the Real Estate Ventures are located in or near Philadelphia, Pennsylvania;
+Added: The Company also held a leasehold interest in one land parcel totaling 0.8 acres, acquired through a prepaid 99-year ground lease, and held options to purchase approximately 55.5 additional acres of undeveloped land.
+Added: As of December 31, 2021, the total potential development that this inventory of land could support under current zoning and entitlements, including the parcels under option, amounted to an estimated 13.4 million square feet, of which 0.1 million square feet relates to the 10.0 acres held for sale.
+Added: As of December 31, 2021, the Company also owned economic interests in nine unconsolidated real estate ventures (see Note 4, ''Investment in Unconsolidated Real Estate Ventures ” for further information).
+Added: The Properties and the properties owned by the unconsolidated real estate ventures are primarily located in or near Philadelphia, Pennsylvania;
Austin, Texas;
8 unchanged sentences
(“BPM”), Brandywine Brokerage Services, LLC (“BBS”), and BDN GC Services LLC ("BGCS").
−Removed: BRSCO, BMI and BPI are each a taxable REIT subsidiary.
+Added: Each of BRSCO, BMI and BPI is a taxable REIT subsidiary.
BBS, BBL, BPM, and BGCS are tax disregarded entities wholly owned by the taxable REIT subsidiary entities.
As of December 31, 2021, the Operating Partnership owned, directly and indirectly, 100 % of each of BRSCO, BMI, BPI, BBL, BPM, BBS, and BGCS.
−Removed: As of December 31, 2020, the Management Company subsidiaries were managing properties containing an aggregate of approximately 24.7 million net rentable square feet, of which approximately 13.9 million net rentable square feet related to Properties owned by the Company and approximately 10.8 million net rentable square feet related to properties owned by third parties and Real Estate Ventures.
+Added: As of December 31, 2021, the Management Company subsidiaries were managing properties containing an aggregate of approximately 23.1 million net rentable square feet, of which approximately 13.7 million net rentable square feet related to Properties owned by the Company and approximately 9.4 million net rentable square feet related to properties owned by third parties and unconsolidated real estate ventures.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
+Added: Change in Depreciable Lives of Real Estate Investments
+Added: In accordance with its policy, the Company reviews the estimated useful lives of its real estate investments on an ongoing basis.
+Added: T he estimated useful lives of seven operating properties in Austin, Texas were modified to reflect the estimated periods during which these assets will remain in service pursuant to the Company's Uptown ATX master development plans.
+Added: The estimated useful lives of these properties were decreased from approximately 35 years to approximately 12 years coinciding with the remaining terms of in-place leases.
+Added: The effect of this change in estimate was a $ 9.8 million increase in depreciation expense during the year ended December 31, 2021.
Principles of Consolidation
27 unchanged sentences
The Company generally expects that acquisitions of real estate or in-substance real estate will not meet the definition of business and therefore are accounted for as asset acquisitions, unless specifically noted otherwise.
−Removed: accounting model for asset acquisitions is similar to the accounting model for business combinations except that the acquisition consideration (including acquisition costs) is allocated to the individual assets acquired and liabilities assumed on a relative fair value basis.
+Added: The accounting model for asset acquisitions is similar to the accounting model for business combinations except that the acquisition consideration (including acquisition costs) is allocated to the individual assets acquired and liabilities assumed on a relative fair value basis.
As a result, asset acquisitions do not result in recognition of goodwill or a bargain purchase gain.
23 unchanged sentences
Construction-in-Progress
−Removed: Project costs directly associated with the development and construction of a real estate project are capitalized as construction-in-progress.
+Added: Project costs directly associated with the development or redevelopment and construction of a real estate project are capitalized as construction-in-progress.
Construction-in-progress also includes costs related to ongoing tenant improvement projects.
−Removed: In addition, interest, real estate taxes, and other expenses that are directly associated with the Company’s development activities are capitalized until the property is placed in service.
+Added: In addition, interest, real estate taxes, and other expenses that are directly associated with the Company’s development or redevelopment activities are capitalized beginning when activities necessary to ready the asset for its intended use are in progress and capital expenditures have been made and ending when the property is placed in service.
Interest expense is capitalized using the Company’s weighted average interest rate.
7 unchanged sentences
The base IBR is estimated utilizing observable mortgage and corporate bond rates, which are then adjusted to account for considerations related to the Company’s credit rating and the lease term to select an incremental borrowing rate for each lease.
−Removed: The right of use assets and lease liabilities are presented as “Right of use asset - operating leases, net” and “Lease liability - operating leases”, respectively, on the consolidated balance sheet as of December 31, 2020.
+Added: The right of use assets and lease liabilities are presented as “Right of use asset - operating leases, net” and “Lease liability - operating leases”, respectively, on the consolidated balance sheet as of December 31, 2021 and 2020, respectively.
The lease liabilities and right of use assets are amortized on a straight-line basis over the lease term with the corresponding expense classified in “Property operating expenses” on the consolidated statements of operations.
11 unchanged sentences
The estimates consider assumptions, including but not limited to market rental rates, capitalization rates, and recent sales data for comparable real estate investments.
−Removed: Future cash flows are discounted when determining fair value of an asset.
+Added: Future cash flows are discounted when
+Added: determining fair value of an asset.
Most of these assumptions are influenced by our direct experience with the real estate investments and their markets as well as market data obtained from real estate leasing and brokerage firms.
23 unchanged sentences
Included in current tenant receivables are tenant reimbursements which are comprised of amounts recoverable from tenants for common area maintenance expenses and certain other recoverable expenses that are recognized as revenue in the period in which the related expenses are incurred.
−Removed: Tenant receivables and accrued rent receivables are carried net of the allowances for doubtful accounts.
+Added: Accrued rent receivables are carried net of the allowances for doubtful accounts.
The allowance for doubtful accounts is an estimate based on the Company's experience of the probability of future events confirming a loss and represents the estimated probable losses.
−Removed: For tenant receivables, the allowance is calculated by applying a range of loss percentages to receivable aging categories.
−Removed: For accrued rent receivables, the allowance is generally calculated by assigning risk factors by industry which are primarily based on the Company's historical collection and charge-off experience adjusted for current market conditions, which requires management's judgment.
+Added: The allowance is generally calculated by assigning risk factors by industry which are primarily based on the Company's historical collection and charge-off experience adjusted for current market conditions, which requires management's judgment.
Investments in Unconsolidated Real Estate Ventures
Under the equity method, investments in real estate ventures are recorded initially at cost and subsequently adjusted for equity in earnings, contributions, distributions, and impairments.
+Added: The Company generally allocates income and losses from the unconsolidated real estate ventures based on the venture's distribution priorities, which may be different from its stated ownership percentage.
For real estate ventures that are constructing assets to commence planned principal operations, the Company capitalizes interest expense to the extent that it is recoverable using the Company’s weighted average interest rate of consolidated debt and its investment balance as a basis.
19 unchanged sentences
Deferred Financing Costs
−Removed: Costs incurred in connection with debt financing are capitalized as a direct deduction from the carrying value of the debt, except for costs capitalized related to the Company’s revolving credit facility, which are capitalized within the “Deferred costs, net” caption on the accompanying consolidated balance sheets.
+Added: Costs incurred in connection with debt financing are capitalized as a direct deduction from the carrying value of the debt, except for costs capitalized related to the Company’s unsecured credit facility, which are capitalized within the “Deferred costs, net” caption on the accompanying consolidated balance sheets.
Deferred financing costs are charged to interest expense over the terms of the related debt agreements.
6 unchanged sentences
Generally, leases with tenants are accounted for as operating leases.
−Removed: As of December 31, 2020 and 2019, the Company does not have any leases classified as direct-financing or sales-type leases.
The operating leases have various expiration dates.
−Removed: Fixed lease payments under tenant leases are recognized on a straight-line basis over the term of the related lease.
+Added: As of December 31, 2021 and 2020, the Company did not have any leases classified as direct-financing or sales-type leases.
+Added: Fixed lease payments under tenant leases, determined to be collectible, are recognized on a straight-line basis over the term of the related lease.
The cumulative difference between lease revenue recognized under the straight-line method and contractual lease payments are recorded as “Accrued rent receivable” on the consolidated balance sheets.
4 unchanged sentences
The Company’s lease revenue is impacted by the Company’s determination of whether improvements to the property, whether made by the Company or by the tenant, are landlord assets.
−Removed: The determination of whether an improvement is a
−Removed: landlord asset requires judgment.
+Added: The determination of whether an improvement is a landlord asset requires judgment.
In making this judgment, the Company’s primary consideration is whether an improvement would be utilizable by another tenant upon the then-existing tenant vacating the improved space.
4 unchanged sentences
The Company considers all relevant factors that create an economic incentive for the lessee and uses judgment to determine if those factors, considered together, signify that the lessee is reasonably certain to exercise the option.
−Removed: For leases where a tenant executes a lease termination, termination fees are recognized over the modified term of the lease as rental income.
+Added: For leases where a tenant executes a lease termination, termination fees are generally recognized over the modified term of the lease as rental income.
Additionally, any deferred rents receivable are accelerated over the modified lease term.
9 unchanged sentences
Third party management fees, labor reimbursement, and leasing
−Removed: The Company performs property management services for third-party property owners of real estate that consist of:
+Added: The Company performs property management services for its managed real estate ventures and third-party property owners of real estate that consist of:
(i) providing leasing services, (ii) property inspections, (iii) repairs and maintenance monitoring, and (iv) financial and accounting oversight.
8 unchanged sentences
The Company acts as the principal construction company for the real estate ventures and records gross revenue as it provides construction services based on the quantifiable construction outputs.
−Removed: In applying the cost based output method of revenue recognition, the Company uses the actual costs incurred relative to the total estimated costs to determine its progress towards contract completion and to calculate the corresponding gross revenue
−Removed: and gross profit to recognize.
+Added: In applying the cost based output method of revenue recognition, the Company uses the actual costs incurred relative to the total estimated costs to determine its progress towards contract completion and to calculate the corresponding gross revenue and gross profit to recognize.
For any costs that do not contribute to satisfying the Company’s performance obligations, it excludes such costs from its output methods of revenue recognition as the amounts are not reflective of transferring control of the outputs to the customer.
24 unchanged sentences
Total revenue $ 232,028 $ 141,613 $ 102,982 $ 40,223 $ 13,469 $ 4,537 $ 534,852
+Added: The following is a summary of revenue earned by the Company’s reportable segments (see Note 19, ''Segment Information,” for further information) during the year ended December 31, 2019 (in thousands):
+Added: Philadelphia CBD Pennsylvania Suburbs Austin, Texas Metropolitan Washington, D.C.
+Added: Other Corporate (a) Total
+Added: Fixed rent $ 178,481 $ 125,969 $ 62,232 $ 39,420 $ 7,834 $ ( 2,412 ) $ 411,524
+Added: Variable rent 58,580 14,282 34,748 4,029 3,080 ( 495 ) 114,224
+Added: Total lease revenue 237,061 140,251 96,980 43,449 10,914 ( 2,907 ) 525,748
+Added: Amortization of deferred market rents 3,745 ( 12 ) 4,638 — 486 — 8,857
+Added: Daily parking & hotel flexible stay 18,665 174 165 824 232 — 20,060
+Added: Total rents 259,471 140,413 101,783 44,273 11,632 ( 2,907 ) 554,665
+Added: Third party management fees, labor reimbursement and leasing 876 43 1,956 6,922 2,915 6,914 19,626
+Added: Other income 3,422 628 418 303 11 1,344 6,126
+Added: Total revenue $ 263,769 $ 141,084 $ 104,157 $ 51,498 $ 14,558 $ 5,351 $ 580,417
(a) Corporate includes intercompany eliminations necessary to reconcile to consolidated Company totals.
5 unchanged sentences
The Parent Company intends to continue to operate in a manner that allows it to meet the requirements for taxation as a REIT.
−Removed: If the Parent Company fails to qualify as a REIT in any taxable year, it will be subject to federal and state (as applicable) income taxes and may not be able to qualify as a REIT for the four subsequent tax years.
+Added: If the Parent Company fails to qualify as a REIT in any taxable year, it will be subject to federal and state (as applicable) income taxes and may not be able to qualify as a REIT for the four tax years following the year in which it first failed to qualify.
The Parent Company is subject to certain local income taxes.
13 unchanged sentences
For any year beginning on or after January 1, 2017, the Operating Partnership can be assessed with federal income tax in the course of an audit by the IRS.
−Removed: Under the new partnership audit rules included in the Bipartisan Budget Act of 2015, the Operating Partnership has the option to make a push-out election and allocate the partnership adjustments to all the former partners for the tax year under audit.
+Added: Under the partnership audit rules included in the Bipartisan Budget Act of 2015, the Operating Partnership has the option to make a push-out election and allocate the partnership adjustments to all the former partners for the tax year under audit.
The tax basis of the Operating Partnership’s assets was $ 3.1 billion and $ 2.9 billion for the years ended December 31, 2021 and December 31, 2020, respectively.
31 unchanged sentences
The accounting standard defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.
−Removed: It also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair
+Added: It also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.
The standard describes three levels of inputs that may be used to measure fair value.
10 unchanged sentences
Risks and Uncertainties - COVID-19
−Removed: Currently, one of the most significant risks and uncertainties the Company faces is the potential adverse effect of the ongoing global COVID-19 pandemic, which has significantly slowed global economic activity, caused significant volatility in financial markets, and resulted in unprecedented job losses, causing many to fear an imminent global recession.
+Added: Currently, one of the most significant risks and uncertainties the Company faces is the potential adverse effect of the ongoing global COVID-19 pandemic, which has significantly slowed global economic activity and caused significant volatility in financial markets, causing many to fear a global recession.
The responses of many countries, including the U.S., have included mandatory quarantines, restrictions on business activities, including construction activities, restrictions on group gatherings, restrictions on travel and mandatory closures.
−Removed: These actions are creating disruption in the global economy and supply chains and adversely impacting many industries, including owners and developers of real estate.
+Added: These actions have disrupted the global economy and supply chains and adversely impacted many industries, including owners and developers of real estate.
Moreover, there is significant uncertainty around the breadth and duration of business disruptions related to the COVID-19 pandemic, as well as its impact on the U.S.
1 unchanged sentence
Demand for space at the Company's properties is dependent on a variety of macroeconomic factors, such as employment levels, interest rates, changes in stock market valuations, rent levels and availability of competing space.
−Removed: The extent to which the COVID-19 pandemic impacts the Company's results will depend on future developments, many of which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19, future action plans, and vaccination efforts.
+Added: The extent to which the COVID-19 pandemic impacts the Company's results will depend on
+Added: future developments, many of which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19, future action plans, and vaccination efforts.
The COVID-19 pandemic has caused continued negative economic impacts, market volatility, and business disruption, which could negatively impact the Company's tenants’ ability to pay rent, the Company's ability to lease vacant space, and the Company's ability to complete development and redevelopment projects.
1 unchanged sentence
Recent Accounting Pronouncements
−Removed: In May 2020, the SEC adopted amendments to requirements for companies relating to significant acquisitions and dispositions of businesses as well as amendments to the significance tests in the ‘significant subsidiary’ definition.
−Removed: Additionally, significant modifications were made to the requirements related to the presentation of pro forma financial information.
−Removed: The amendments are effective on January 1, 2021, with voluntary compliance permitted in advance of the effective date.
−Removed: The Company has elected to early adopt the amendments as of September 30, 2020.
−Removed: On April 10, 2020, the FASB issued a Staff Q&A to respond to some frequently asked questions about accounting for lease concessions related to the effects of the COVID-19 pandemic.
−Removed: Consequently, for concessions related to the effects of the COVID-19 pandemic, an entity will not have to analyze each contract to determine whether enforceable rights and obligations for concessions exist in the contract and can elect to apply or not apply the lease modification guidance to those contracts.
−Removed: Entities may make the elections for any lessor-provided concession related to the effects of the COVID-19 pandemic (e.g., deferrals of lease payments, cash payments made to the lessee, reduced future lease payments) as long as the concession does not result in a substantial increase in the rights of the lessor or the obligations of the lessee.
−Removed: The Company has elected to account for lease concessions as though the enforceable rights and obligations for the concessions existed in the
−Removed: original lease.
−Removed: To date, the impact of lease concessions granted has not had a material effect on the Company's financial statements.
−Removed: The Company continues to evaluate the impact of lease concessions and the appropriate accounting for those concessions.
In March 2020, the FASB issued ASU 2020-04 Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting.
3 unchanged sentences
The Company continues to evaluate the impact of the guidance and may apply elections as applicable as additional changes in the market occur.
−Removed: In June 2016, the FASB issued ASU No.
−Removed: 2016-13, Financial Instruments Credit Losses (Topic 326), which changes how entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income.
−Removed: The guidance replaces the current incurred loss model with an expected loss approach, resulting in more timely recognition of such losses.
−Removed: In November 2018, the FASB released ASU 2018-19, Codification Improvements to Topic 326, Financial Instrument - Credit Losses, which clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20.
−Removed: The guidance was effective for the Company as of January 1, 2020.
−Removed: The Company adopted ASU 2016-13 effective January 1, 2020 and it did not have a material impact on the consolidated financial statements.
REAL ESTATE INVESTMENTS
6 unchanged sentences
Construction-in-Progress
−Removed: Internal direct construction costs totaling $ 8.4 million in 2020, $ 7.4 million in 2019, and $ 7.0 million in 2018 and interest totaling $ 4.6 million in 2020, $ 3.2 million in 2019, and $ 3.6 million in 2018 were capitalized related to the development of certain properties and land holdings.
+Added: Internal direct construction costs totaling $ 7.9 million in 2021, $ 8.4 million in 2020, and $ 7.4 million in 2019 and interest totaling $ 7.0 million in 2021, $ 4.6 million in 2020, and $ 3.2 million in 2019 were capitalized related to the development, redevelopment and construction of tenant improvements of certain properties and land holdings.
During the years ended December 31, 2021, 2020 and 2019, the Company’s internal direct construction costs are comprised entirely of capitalized salaries.
6 unchanged sentences
2021 Acquisitions
+Added: During the year ended December 31, 2021, the Company did not acquire any properties from a third party.
+Added: 2020 Acquisitions
The following table summarizes the property acquisitions during the year ended December 31, 2020 (dollars in thousands):
17 unchanged sentences
During the year ended December 31, 2019, the Company did not acquire any properties from a third party.
−Removed: 2018 Acquisitions
−Removed: On December 19, 2018, the Company acquired an office property containing 120,559 rentable square feet located at 4516 Seton Center Parkway in Austin, Texas, known as Quarry Lake II, for a gross purchase price of $ 39.5 million.
−Removed: On December 11, 2018, the Company acquired from DRA Advisors (“DRA”), its 50 % ownership interest in the G&I Austin Office LLC real estate venture (the "Austin Venture”) for an aggregate purchase price of $ 535.1 million.
−Removed: The Austin Venture owned twelve office properties (“the Austin Venture Portfolio”) containing an aggregate 1,570,123 square feet located in Austin, Texas.
−Removed: As a result of the acquisition, the Company acquired complete ownership of the Austin Venture Portfolio.
−Removed: The aggregate purchase price reflects the sum of:
−Removed: (i) the amount of such investment plus (ii) a $ 103.8 million non-cash accounting remeasurement gain related to the Company’s original investment in the Austin Venture Portfolio, reflected in the “Net gain on real estate venture transactions” in the consolidated statements of operations plus (iii) $ 28.3 million on account of the value of the Company’s promoted interest in the Austin Venture plus (iv) $ 14.6 million on account of the carrying amount of the Company’s original investment in the Austin Venture Portfolio.
−Removed: At settlement, the Company assumed $ 115.5 million of mortgage debt and received a credit at settlement of $ 130.7 million for a note receivable provided to the Austin Venture on November 1, 2018.
−Removed: This note receivable was used to repay one of Austin Venture’s mortgage loans prior to the December 11, 2018 acquisition date.
−Removed: The Company also obtained working capital of $ 24.9 million.
−Removed: Subsequent to receiving cash proceeds for its promoted interest in the Austin Venture and recognizing a remeasurement gain, the Company funded the acquisition with an aggregate cash payment of $ 117.3 million.
−Removed: Additionally, the assumed mortgage debt of $ 115.5 million was repaid at settlement.
−Removed: Both cash payments were funded through borrowings under the Company’s unsecured credit facility.
−Removed: The Company recognized a $ 28.3 million gain on its promoted interest in the Austin Venture, reflected in the caption “Gain on promoted interest in unconsolidated real estate venture” in the consolidated statements of operations.
−Removed: The gain on promoted
−Removed: interest was based off of the returns earned over the duration of the Austin Venture and the returns were determined based on operating results and real estate valuation of the venture.
−Removed: The Company previously accounted for its 50 % non-controlling interest in the Austin Venture under the equity method of accounting.
−Removed: As a result of the Company’s acquisition of DRA’s 50 % ownership interest in the Austin Venture, the Company obtained control of Austin Venture and the Company’s existing investment balance was remeasured based on the fair value of the underlying properties acquired and the existing distribution provisions under the relevant partnership agreement, including the Company’s entitlement to a distribution on account of its promoted interest.
−Removed: On June 29, 2018, the Company acquired, through a 99-year ground lease, the leasehold interest in a one -acre land parcel, located at 3025 JFK Boulevard, in Philadelphia, Pennsylvania.
−Removed: The Company prepaid $ 15.0 million of ground lease rent and, in accordance with ASC 840, capitalized $ 0.3 million of costs related to entering the lease.
−Removed: Additionally, the ground lease required the Company to pay $ 5.6 million for a leasehold valuation credit, which can be applied to increase the density of the projects subject to the Schuylkill Yards Project master development agreement.
−Removed: Of this credit, $ 2.4 million will be applied to the development of 3001-3003 and 3025 JFK Boulevard if the Company constructs a minimum of 1.2 million square feet of floor area ratio (“FAR”) on these land parcels.
−Removed: The remaining credit of $ 3.2 million can be used for development in excess of 1.2 million FAR at 3001-3003 and 3025 JFK Boulevard or toward future ground lease takedowns at the Schuylkill Yards Development Site.
−Removed: This $ 3.2 million credit is reimbursed if the master development agreement is terminated by the landowner.
−Removed: Based on the Company’s evaluation under ASC 840, the ground lease is classified as an operating lease.
−Removed: The ground lease and credit are included in the “Prepaid leasehold interests in land held for development, net” and “Other assets” captions, respectively, in the consolidated balance sheets.
−Removed: On March 22, 2018, the Company acquired, through a 99-year ground lease, the leasehold interest in a one -acre land parcel, located at 3001-3003 JFK Boulevard, in Philadelphia, Pennsylvania.
−Removed: The Company prepaid $ 24.6 million of ground lease rent and capitalized $ 0.3 million of costs related to entering the lease.
−Removed: The ground lease is classified as an operating lease and included in the “Prepaid leasehold interests in land held for development, net,” caption in the consolidated balance sheets.
−Removed: On January 5, 2018, the Company acquired, from its then partner in each of the Four Tower Bridge real estate venture and the Seven Tower Bridge real estate venture, the partner’s 35 % ownership interest in the Four Tower Bridge real estate venture in exchange for the Company's 20 % ownership interest in the Seven Tower Bridge real estate venture.
−Removed: As a result of this non-monetary exchange, the Company acquired 100 % of the Four Tower Bridge real estate venture, which owns an office property containing 86,021 square feet, in Conshohocken, Pennsylvania, encumbered with $ 9.7 million in debt.
−Removed: The Company previously accounted for its noncontrolling interest in Four Tower Bridge using the equity method.
−Removed: As a result of the exchange transaction, the Company obtained control of the Four Tower Bridge property.
−Removed: The Company’s acquisition of the 35 % ownership interest in Four Tower Bridge from its former partner resulted in the consolidation of the property.
−Removed: The unencumbered acquisition value of $ 23.6 million was determined under the comparative sales approach, which utilized observable transactions within the Conshohocken submarket.
−Removed: The acquisition values have been allocated as follows (in thousands):
−Removed: Quarry Lake II Austin Venture Portfolio Four Tower Bridge
−Removed: Acquisition Date 12/19/2018 12/11/2018 1/5/2018
−Removed: Building, land and improvements $ 35,120 $ 457,390 $ 20,734
−Removed: Intangible assets acquired 5,809 76,925 3,144
−Removed: Below market lease liabilities assumed ( 1,524 ) ( 13,769 ) ( 182 )
−Removed: Deferred gain (a) — 14,594 —
−Removed: Total unencumbered acquisition value $ 39,405 $ 535,140 $ 23,696
−Removed: Mortgage debt assumed - at fair value (b) — — ( 9,940 )
−Removed: Total encumbered acquisition value $ 39,405 $ 535,140 $ 13,756
−Removed: Total unencumbered acquisition value 39,405 535,140 23,696
−Removed: Mortgage debt assumed - at fair value (b) — — ( 9,940 )
−Removed: Mortgage debt repaid at settlement (c) — ( 115,461 ) —
−Removed: Investment in unconsolidated real estate ventures — ( 14,594 ) ( 3,502 )
−Removed: Gain on promoted interest in unconsolidated real estate venture — ( 28,283 ) —
−Removed: Gain on real estate venture transactions — ( 103,847 ) ( 11,633 )
−Removed: Purchase price reduction for note receivable (d) — ( 130,742 ) —
−Removed: Net working capital assumed ( 368 ) ( 24,865 ) 1,379
−Removed: Total cash payment at settlement $ 39,037 $ 117,348 $ —
−Removed: Weighted average amortization period of intangible assets 0 5.5 years 4.1 years
−Removed: Weighted average amortization period of below market liabilities assumed 3.0 years 4.6 years 4.8 years
−Removed: (a) Represents a deferred gain recognized at settlement, which resulted in a reduction of the acquisition value.
−Removed: (b) The outstanding principal balance on mortgage debt for Four Tower Bridge, assumed on January 5, 2018, was $ 9.7 million.
−Removed: (c) On December 11, 2018, the Company assumed $ 115.5 million of mortgage debt which was repaid in full at settlement.
−Removed: (d) Represents a note receivable due from the DRA Austin Venture that represents a purchase price reduction.
−Removed: Quarry Lake II contributed approximately $ 0.1 million of revenue and $ 0.1 million of net income, included in the Company’s consolidated statements of operations, for the twelve-month period ended December 31, 2018.
−Removed: Austin Venture Portfolio contributed approximately $ 3.4 million of revenue and $ 1.3 million of net loss, included in the Company’s consolidated statements of operations, for the twelve-month period ended December 31, 2018.
−Removed: Four Tower Bridge contributed approximately $ 2.8 million of revenue and $ 0.3 million of net income, included in the Company’s consolidated statements of operations, for the twelve-month period ended December 31, 2018.
−Removed: The unaudited pro forma information below summarizes the Company’s combined results of operations for the years ended December 31, 2018 and December 31, 2017, respectively, as though the acquisition of the Austin Venture Portfolio was completed on January 1, 2017.
−Removed: The supplemental pro forma operating data is not necessarily indicative of what the actual results of operations would have been assuming the transaction had been completed as set forth above, nor do they purport to represent the Company’s results of operations for future periods (in thousands).
−Removed: Pro forma revenue $ 602,713 $ 582,244
−Removed: Pro forma net income 134,142 115,475
−Removed: Pro forma net income available to common shareholders 134,142 115,475
The following table summarizes the property dispositions during the years ended December 31, 2021, 2020 and 2019 (dollars in thousands):
Property/Portfolio Name Disposition Date Location Property Type Rentable Square Feet/Acres Sales Price Gain/(Loss) on Sale (a)
−Removed: Mid-Atlantic Office Portfolio (b) (g) December 21, 2020 Various Office 1,128,645 $ 192,943 $ 15,164
+Added: 1100 Lenox Drive September 8, 2021 Lawrenceville, NJ Land 5.0 acres $ 2,575 $ 68
+Added: 2100-2200 Lenox Drive July 6, 2021 Lawrenceville, NJ Land 35.2 acres $ 8,900 $ 842
+Added: Mid-Atlantic Office Portfolio (b) (d) December 21, 2020 Various Office 1,128,645 $ 192,943 $ 15,164
One and Two Commerce Square (c) July 21, 2020 Philadelphia, PA Office 1,896,142 $ 115,000 $ 271,905
5 unchanged sentences
$ 5,325 $ 751
−Removed: Subaru National Training Center (d) December 21, 2018 Camden, NJ Mixed-use 83,000 $ 45,300 $ 2,570
−Removed: Rockpoint Portfolio (e) December 20, 2018 Herndon, VA Office 1,293,197 $ 312,000 $ 397
−Removed: 20 East Clementon Road June 21, 2018 Gibbsboro, NJ Office 38,260 $ 2,000 $ ( 35 )
−Removed: Garza Ranch - Office (f) March 16, 2018 Austin, TX Land 6.6 acres
−Removed: $ 14,571 $ 1,515
−Removed: Westpark Land January 10, 2018 Durham, NC Land 13.1 acres
(a) Gain/(Loss) on Sale is net of closing and other transaction related costs.
7 unchanged sentences
See Note 4, ''Investment in Unconsolidated Real Estate Ventures," for further information.
−Removed: (d) During the third quarter of 2018, the tenant, Subaru, exercised its purchase option for the Subaru National Training Center Development.
−Removed: The lease with Subaru was classified as a direct finance lease within "Other assets" on the consolidated balance sheets.
−Removed: In connection with the lease, the Company recognized $ 1.6 million in interest income during the twelve months ended December 31, 2018, in accordance with accounting guidance for direct finance leases under ASC 840.
−Removed: (e) For information related to this transaction, see the “Herndon Innovation Center Metro Portfolio Venture, LLC” section in Note 4, “Investment in Unconsolidated Real Estate Ventures.”
−Removed: (f) The Company had continuing involvement in this property through a completion guaranty, which required the Company, as developer, to complete certain infrastructure improvements on behalf of the buyers of the land parcel.
−Removed: The Company recorded the cash received at settlement as “Deferred income, gains and rent” on the consolidated balance sheet.
−Removed: The Company subsequently recognized the land sale and the $ 3.0 million gain on sale during the twelve months ended December 31, 2018 upon substantial completion of the infrastructure improvements and transfer of control to the buyer.
−Removed: (g) The sales price includes $ 4.1 million of variable consideration held in escrow that will be released to the Company over a six to nine month holdback period if certain tenants remain in compliance with certain payment terms of their lease agreements.
+Added: (d) The sales price includes $ 4.1 million of variable consideration held in escrow that will be released to the Company over a six to nine month holdback period if certain tenants remain in compliance with certain payment terms of their lease agreements.
The Company estimated the amount of the variable consideration that it deemed probable of collection and included such amount in the transaction price.
−Removed: The Company will continue to evaluate the probability of collection and recognize any changes to the amount deemed probable as incremental gain on sale.
+Added: The amount estimated as probable of collection was received during 2021.
+Added: The Company will continue to evaluate the probability of collection on the remaining holdback and recognize any changes to the amount deemed probable as incremental gain on sale.
+Added: In addition, on February 2, 2021, the Company contributed its investment in a 99-year prepaid leasehold interest in a one -acre land parcel held for development at 3025 JFK Boulevard in Philadelphia, Pennsylvania to a newly formed joint venture with an unaffiliated third party.
+Added: The project is part of the Schuylkill Yards master development.
+Added: The Company's investment in the project was valued at $ 34.8 million and the transaction resulted in deconsolidation of the property and conversion of Brandywine Opportunity Fund, L.P.
+Added: (formerly a wholly-owned subsidiary of the Operating Partnership) to a real estate venture ("3025 JFK Venture").
+Added: The Company recorded its investment at fair value and recognized a gain of $ 2.0 million in "Net gain on sale of undepreciated real estate" on the consolidated statements of operations.
+Added: See Note 4, "Investment in Unconsolidated Real Estate Ventures," for further information.
During the year ended December 31, 2019, the Company also recorded a $ 1.0 million gain related to contingent consideration received related to a land sale that closed in a prior period in the Other segment.
1 unchanged sentence
segment resulting in $ 0.7 million of additional gain on sale.
+Added: One Uptown Venture
+Added: On December 1, 2021, the Company entered into two joint venture agreements with affiliates of Canyon Partners Real Estate to commence development of One Uptown, a $ 328.4 million mixed-used project in Austin, Texas.
+Added: One Uptown has been designed to deliver 348,000 square feet of Class-A workspace and 15,000 square feet of street-level retail (through the "office" joint venture) and 341 apartment residences and a public park (through the "multifamily" joint venture) and a six-story parking garage to be shared by the two joint ventures.
+Added: The Company's partner in each of the two joint ventures has agreed, subject to customary funding conditions, including closing of the applicable construction loan, to fund approximately $ 57.5 million of the combined project costs in exchange for a 50 % preferred equity interest in each of the two joint ventures, with the Company retaining a 50 % common equity interest in each.
+Added: The Company is in the process of securing a construction loan for each of the two joint ventures that would total approximately $ 213.4 million, representing 65 % of the combined project costs.
+Added: Under the terms of each of the joint venture agreements, the joint venture partner has no obligation to fund any portion of the applicable project costs until the closing of the applicable construction loan.
+Added: This right prevents the Company from meeting the sale recognition criteria of ASC 606 until the applicable closings of the construction loans.
Held for Use Impairment
1 unchanged sentence
Based on the analysis, no impairments were identified during the twelve months ended December 31, 2021, 2020, and 2019.
−Removed: As of December 31, 2018, the Company evaluated the recoverability of the carrying values of certain properties that triggered an assessment under the undiscounted cash flow model.
−Removed: Based on its evaluation, the Company determined it would not
−Removed: recover the carrying value of one property in its Other segment, 1900 Gallows Road, located in Vienna, Virginia, due to a reduction in the intended hold period.
−Removed: Accordingly, the Company recorded an impairment of $ 14.8 million at December 31, 2018, reflected in the results for the twelve months ended December 31, 2018, which reduced the carrying value of the property from $ 52.8 million to its estimated fair value of $ 38.0 million.
−Removed: The Company measured this impairment based on a discounted cash flow analysis, using a hold period of ten years and a residual capitalization rate and discount rate of 7.5 % and 9.5 %, respectively.
−Removed: The result was comparable to indicative pricing in the market.
Held for Sale
−Removed: As of both December 31, 2020 and 2019, the Company determined that the sale of two parcels of land within the Other segment totaling 35.2 acres was probable and classified these properties as held for sale.
−Removed: As such, $ 7.3 million was classified as “Assets held for sale, net” on the consolidated balance sheets as of December 31, 2020 and 2019.
−Removed: As of December 31, 2020 and 2019, the fair value less the anticipated costs of sale of the properties exceeded the carrying values.
−Removed: The fair value of the properties is based on the pricing in the purchase and sale agreement.
−Removed: Held for Sale Impairment
−Removed: During the year ended December 31, 2018, the Company determined that the sale of eight office properties, known as the Rockpoint Portfolio, containing 1,293,197 rentable square feet, in the Metropolitan Washington, D.C.
−Removed: segment, was probable and classified these properties as held for sale and, as a result, recognized an impairment of $ 56.9 million.
−Removed: The Company measured this impairment based on a discounted cash flow analysis, using a hold period of ten years and residual capitalization rates and discount rates of 7.47 % and 8.60 %, respectively.
−Removed: The results were comparable to indicative pricing in the market.
−Removed: The Rockpoint Portfolio was sold during the fourth quarter of 2018.
−Removed: See the “Dispositions” section above for further information relating to this sale.
+Added: As of December 31, 2021, the Company determined that the sale of two adjacent parcels of land within the Other segment totaling 10.0 acres was probable and classified these properties as held for sale.
+Added: As such, $ 0.6 million was classified as “Assets held for sale, net” on the consolidated balance sheets.
+Added: The Company closed on the sale of the two parcels of land on January 20, 2022 for an aggregate sales price of $ 1.6 million.
INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES
−Removed: As of December 31, 2020, the Company held ownership interests in nine unconsolidated real estate ventures for an aggregate investment balance of $ 389.8 million, which includes a negative investment balance in one unconsolidated real estate venture of $ 11.5 million, reflected within 'Other liabilities' on the consolidated balance sheets.
−Removed: The Company formed or acquired interests in the 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.
−Removed: As of December 31, 2020, five of the real estate ventures owned properties that contained an aggregate of approximately 8.4 million net rentable square feet of office space;
+Added: As of December 31, 2021, the Company held ownership interests in nine unconsolidated real estate ventures for a net aggregate investment balance of $ 411.1 million, which includes a negative investment balance in one unconsolidated real estate venture of $ 24.4 million, reflected within "Other liabilities" on the consolidated balance sheets.
+Added: As of December 31, 2021, four of the real estate ventures owned properties that contained an aggregate of approximately 8.2 million net rentable
+Added: square feet of office space;
two real estate ventures owned 1.4 acres of land held for development;
one real estate venture owned 1.0 acres of land in active development;
−Removed: and one real estate venture owned a residential tower that contains 321 apartment units.
−Removed: The Company accounts for its interests in the Real Estate Ventures, which range from 15 % to 70 %, using the equity method.
−Removed: Certain of the Real Estate Ventures are subject to specified priority allocations of distributable cash.
−Removed: The Company earned management fees from the Real Estate Ventures of $ 4.7 million, $ 4.3 million and $ 6.3 million for the years ended December 31, 2020, 2019 and 2018, respectively.
−Removed: The Company earned leasing commission income from the Real Estate Ventures of $ 1.1 million, $ 1.7 million and $ 2.5 million for the years ended December 31, 2020, 2019 and 2018, respectively.
−Removed: The Company has outstanding accounts receivable balances from the Real Estate Ventures of $ 1.2 million and $ 0.8 million as of December 31, 2020 and 2019, respectively.
−Removed: The amounts reflected in the following tables (except for the Company’s share of equity in income) are based on the historical financial information of the individual real estate ventures.
+Added: one real estate venture owned a mixed used tower comprised of 250 apartment units and 0.2 million net rentable square feet of office/retail space;
+Added: and one real estate venture owned a residential tower that contained 321 apartment units.
+Added: The Company accounts for its interests in the unconsolidated real estate ventures, which range from 15 % to 70 %, using the equity method.
+Added: Certain of the unconsolidated real estate ventures are subject to specified priority allocations of distributable cash.
+Added: The Company earned management fees from the unconsolidated real estate ventures of $ 8.1 million, $ 4.7 million and $ 4.3 million for the years ended December 31, 2021, 2020 and 2019, respectively.
+Added: The Company earned leasing commissions from the unconsolidated real estate ventures of $ 3.8 million, $ 1.1 million and $ 1.7 million for the years ended December 31, 2021, 2020 and 2019, respectively.
+Added: The Company had outstanding accounts receivable balances from the unconsolidated real estate ventures of $ 2.5 million and $ 1.2 million as of December 31, 2021 and 2020, respectively.
+Added: The amounts reflected in the following tables (except for the Company’s share of equity in income) are based on the financial information of the individual unconsolidated real estate ventures.
The Company records operating losses of a real estate venture in excess of its investment balance if the Company is liable for the obligations of the real estate venture or is otherwise committed to provide financial support to the real estate venture.
−Removed: The Company’s investment in the Real Estate Ventures as of December 31, 2020 and 2019, and the Company’s share of the Real Estate Ventures’ income (loss) for the years ended December 31, 2020 and 2019 was as follows (in thousands):
−Removed: Ownership Percentage Carrying Amount Company's Share of Real Estate Venture Income (Loss) Real Estate Venture Debt at 100%, gross
+Added: The Company’s investment in the unconsolidated real estate ventures as of December 31, 2021 and 2020, and the Company’s share of the unconsolidated real estate ventures’ income (loss) for the years ended December 31, 2021 and 2020 was as follows (in thousands):
+Added: Ownership Percentage Carrying Amount Company's Share of unconsolidated real estate venture Income (Loss) Unconsolidated Real Estate Venture Debt at 100%, gross
2021 2020 2021 2020 2019 2021 2020
10 unchanged sentences
PJP II 30 % (b)
+Added: — — — — 81 — —
PJP VI 25 % (b)
— — — — ( 185 ) — —
+Added: 4040 Wilson Venture (c) 50 % 31,059 34,454 ( 2,258 ) ( 2,162 ) ( 368 ) 145,000 141,857
1919 Venture 50 % 13,791 15,434 427 59 328 88,860 88,860
Development Properties
−Removed: 4040 Wilson Venture (c) 50 % 34,454 37,002 ( 2,162 ) ( 368 ) 141,857 114,845
+Added: 3025 JFK Venture 55 % 56,370 — ( 118 ) — — — —
JBG - 51 N Street (c) 70 % 21,213 21,237 ( 402 ) ( 457 ) ( 313 ) — —
6 unchanged sentences
(c) This entity is a VIE.
−Removed: The following is a summary of the financial position of the Real Estate Ventures as of December 31, 2020 and December 31, 2019 (in thousands):
+Added: The following is a summary of the financial position of the unconsolidated real estate ventures in which the Company held interests as of December 31, 2021 and December 31, 2020 (in thousands):
December 31, 2021 December 31, 2020
5 unchanged sentences
(a) This amount does not include the effect of the basis difference between the Company's historical cost basis and the basis recorded at the real estate venture level, which is typically amortized over the life of the related assets and liabilities.
−Removed: 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
−Removed: Company into a real estate venture.
+Added: 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.
−Removed: The following is a summary of results of operations of the Real Estate Ventures in which the Company had interests during the twelve-month periods ended December 31, 2020, 2019 and 2018 (in thousands):
+Added: The following is a summary of results of operations of the unconsolidated real estate ventures in which the Company held interests during the twelve-month periods ended December 31, 2021, 2020 and 2019 (in thousands):
Year Ended December 31,
5 unchanged sentences
Provision for impairment ( 1,393 ) — ( 5,664 )
−Removed: Loss on extinguishment of debt — ( 1,231 ) ( 1,385 )
+Added: Loss on early extinguishment of debt — — ( 1,231 )
Net loss $ ( 31,590 ) $ ( 29,002 ) $ ( 21,560 )
1 unchanged sentence
Company's share of net loss $ ( 25,972 ) $ ( 18,540 ) $ ( 9,865 )
−Removed: Other-than-temporary impairment — — ( 4,076 )
Basis adjustments and other ( 725 ) ( 44 ) ( 57 )
−Removed: Equity in loss of Real Estate Ventures $ ( 18,584 ) $ ( 9,922 ) $ ( 15,231 )
−Removed: As of December 31, 2020, the aggregate principal payments of the Real Estate Ventures recourse and non-recourse debt payable to third-parties are as follows (in thousands):
−Removed: 2021 $ 148,693
+Added: Equity in loss of unconsolidated real estate ventures $ ( 26,697 ) $ ( 18,584 ) $ ( 9,922 )
+Added: As of December 31, 2021, the aggregate principal payments of the unconsolidated real estate ventures recourse and non-recourse debt payable to third-parties are as follows (in thousands):
Total principal payments 961,509
2 unchanged sentences
Outstanding indebtedness $ 956,668
+Added: 4040 Wilson Venture
+Added: The 4040 Wilson LLC Venture (“4040 Wilson”) consists of one property containing an aggregate of 225,000 square feet of office/retail and 250 apartment units, located in the Metropolitan Washington, D.C.
+Added: The Company and its partner each own a 50 % interest in 4040 Wilson.
+Added: The residential component and office/retail portion of 4040 Wilson were substantially complete and placed into service during the first quarter of 2020 and the first quarter of 2021, respectively.
+Added: During the fourth quarter of 2021, 4040 Wilson refinanced the $ 150.0 million secured construction loan into a $ 155.0 million mortgage loan secured by the property.
+Added: The interest rate on this loan is 1.8 % over term SOFR and matures in December 2026.
+Added: Brandywine - AI Venture
+Added: During the year ended December 31, 2021, Brandywine - AI Venture, recorded a $ 1.4 million held for sale impairment charge related to 3141 Fairview Park Drive.
+Added: The Company’s share of the impairment charge was $ 0.7 million, which is reflected in “Equity in loss of Real Estate Ventures” in the consolidated statements of operations for the year ended December 31, 2021.
+Added: The impairment was measured based on an executed sale agreement with a third-party.
+Added: The Company determined that its investment in the real estate venture is not impaired as the Company's share of the distributable cash is in excess of the Company's basis in the real estate venture.
+Added: On November 9, 2021, BDN AI Venture sold 3141 Fairview Park Drive, the last remaining office property, totaling 183,618 rentable square feet in Falls Church, Virginia, at an aggregate sales price of $ 27.6 million.
+Added: The Company received cash proceeds of $ 12.6 million after closing costs.
+Added: The Company recorded an $ 3.0 million gain within the caption "Net gain on real estate venture transactions" within its consolidated statements of operations for the year ended December 31, 2021 upon liquidation of the venture.
+Added: During 2019, BDN - AI Venture recorded a $ 5.6 million held for use impairment charge related to 3141 Fairview Park Drive.
+Added: The Company’s share of the impairment charge was $ 2.8 million which is reflected in “Equity in loss of unconsolidated real estate ventures” in the consolidated statements of operations for the year ended December 31, 2019.
+Added: The impairment was measured based on an appraisal of the property performed by a third party.
+Added: The Company determined that its investment in the real estate venture was not impaired as the Company's share of the distributable cash was in excess of the Company's basis in the real estate venture.
+Added: During 2019, BDN - AI Venture transferred an office building located in Falls Church, Virginia containing 180,659 rentable square feet to the mortgage lender in full satisfaction of the lender’s outstanding $ 26.0 million mortgage loan.
+Added: The mortgage loan was nonrecourse to the Company.
+Added: The Company recognized its $ 2.2 million share of the gain on debt forgiveness in "Net gain on real estate venture transactions" in the consolidated statements of operations for the year ended December 31, 2019.
+Added: 3025 JFK Venture
+Added: On February 2, 2021, the Company contributed its investment in a 99-year prepaid leasehold interest in a one -acre land parcel held for development at 3025 JFK Boulevard in Philadelphia, Pennsylvania to the 3025 JFK Venture.
+Added: The Company's initial investment in this real estate venture at February 2, 2021 was $ 34.8 million.
+Added: The real estate venture was formed to develop a 570,000 square foot mixed-use building at property under the long-term ground lease.
+Added: The estimated project cost is approximately $ 287.3 million, and the joint venture partner has agreed, subject to customary funding conditions, to fund up to approximately $ 45.2 million of the project costs in exchange for a 45 % preferred equity interest in the venture and the Company will retain a 55 % preferred equity interest.
+Added: On July 23, 2021, the 3025 JFK Venture closed on a $ 186.7 million construction loan, which bears interest at 3.50 % plus LIBOR (subject to a LIBOR floor of 0.25 %) per annum and matures in July 2025.
+Added: In addition to its $ 34.8 million credit for contribution of the leasehold interest at 3025 JFK Venture, the Company has funded $ 20.5 million of project costs as of December 31, 2021.
+Added: The remaining project costs will be funded by the joint venture partner and the construction loan.
+Added: The Company has determined that the 3025 JFK Venture is a variable interest entity ("VIE").
+Added: As a result, the Company used the VIE model under the accounting standard for consolidation in order to determine whether to consolidate the 3025 JFK Venture.
+Added: Based upon each member’s shared power over the activities of 3025 JFK Venture under the operating and related agreements, and the Company’s lack of control over the development and construction phases of the project, 3025 JFK Venture is accounted for under the equity method of accounting.
Mid-Atlantic Office JV
2 unchanged sentences
On the closing date, Mid-Atlantic Office JV also obtained $ 147.4 million of third-party debt financing secured by the twelve properties within the venture, with an initial advance of $ 120.8 million.
+Added: During the fourth quarter 2021, the Mid-Atlantic Office JV borrowed an additional
+Added: $ 2.2 million.
+Added: The remaining funds available under the loan are $ 24.4 million.
The loan bears interest at LIBOR + 3.15 % capped at a total maximum interest rate of 5.6 % and matures on January 9, 2024.
−Removed: Based on the facts and circumstances at the formation of the Mid-Atlantic Office JV, the Company determined that the venture is not a VIE in accordance with the accounting standard for the consolidation of VIEs.
−Removed: As a result, the Company used the voting interest model under the accounting standard for consolidation in order to determine whether to consolidate the Mid-Atlantic Office JV.
−Removed: Based upon each member's substantive participating rights over the activities of the Mid-Atlantic Office JV under the operating and related agreements of the Mid-Atlantic Office JV, it is not consolidated by the Company, and is accounted for under the equity method of accounting.
−Removed: As a result, the Company measured its equity interest at fair value based on the fair value of the Mid-Atlantic Office JV properties and the distribution provisions of the real estate venture
−Removed: Since the Company retains a non-controlling interest in the Mid-Atlantic Office JV and there are no other facts and circumstances that preclude the consummation of a sale, the contribution qualifies as a sale of a nonfinancial asset under the relevant guidance.
Commerce Square Venture
−Removed: On July 21, 2020, the Company sold a 30 % preferred equity interest in the entities that own One Commerce Square and Two Commerce Square.
+Added: On July 21, 2020, the Company sold a 30 % preferred equity interest in the entities that own One Commerce Square and Two Commerce Square, two office properties containing 1,896,142 square feet in Philadelphia, Pennsylvania.
After the transaction, the Company owns approximately 32 % of the equity interest in Commerce Square Venture through preferred equity interest holdings and approximately 38 % of the equity interest in Commerce Square Venture as the sole common equity holder, for a combined approximately 70 % equity interest in the venture.
−Removed: The properties held by the venture remain encumbered by the existing mortgages, which had a $ 222.1 million principal balance outstanding on the transaction date.
−Removed: Based on the facts and circumstances at the formation of the Commerce Square Venture, the Company determined that the venture is not a VIE.
−Removed: As a result, the Company used the voting interest model under the accounting standard for consolidation in order to determine whether to consolidate the Commerce Square Venture.
−Removed: Based upon each member's substantive participating rights over the activities of the Commerce Square Venture under the operating and related agreements of the Commerce Square Venture, the Company does not have a controlling interest in the properties as the third party investor holds substantive participating rights in the properties.
−Removed: Therefore, the Company deconsolidated the properties and the venture is accounted for under the equity method of accounting.
−Removed: As a result, the Company measured its equity interest at fair value based on the fair value of the Commerce Square Venture properties and the distribution provisions of the real estate venture agreement.
−Removed: Since the Company retains a non-controlling interest in the Commerce Square Venture and there are no other facts and circumstances that preclude sale recognition, the contribution qualifies as the sale of a nonfinancial asset under the relevant guidance.
−Removed: Under the conventional approach of accounting for equity method investments, an investor applies its percentage ownership interest to the venture’s net income or loss to determine the investor’s share of the earnings or losses of the venture.
−Removed: This approach is inappropriate if the venture’s capital structure gives different rights and priorities to its investors.
−Removed: Therefore, the Company follows the hypothetical liquidation at book value (“HLBV”) method in determining its share of the Commerce Square Venture’s earnings or losses for the reporting period as this method better reflects the Company’s claim on the venture’s book value at the end of each reporting period.
−Removed: Earnings for this equity method investment are recognized in accordance with the real estate venture agreement and, where applicable, based upon the allocation of the investment’s net assets at book value as if the investment was hypothetically liquidated at the end of each reporting period.
+Added: The properties held by the venture remain encumbered by the existing mortgages.
On October 29, 2019, PJP II, PJP VII and PJP VI, three real estate ventures in which the Company owned a 25 %- 30 % interest, each sold its sole operating office property, totaling 204,347 rentable square feet in Charlottesville, Virginia, at an aggregate sales price of $ 51.0 million.
2 unchanged sentences
Herndon Innovation Center Metro Portfolio Venture, LLC
−Removed: On December 20, 2018, the Company contributed a portfolio of eight properties containing an aggregate of 1,293,197 square feet, located in its Metropolitan Washington, D.C.
−Removed: segment, to a newly-formed joint venture, known as the Herndon Innovation Center Metro Portfolio Venture, LLC (“Herndon Innovation Center”), for a gross sales price of $ 312.0 million.
+Added: The Herndon Innovation Center Metro Portfolio Venture, LLC (“Herndon Innovation Center”) consists of eight properties containing an aggregate of 1,293,197 square feet, located in the Metropolitan Washington, D.C.
The Company and its partner own 15 % and 85 % interests in the Herndon Innovation Center, respectively.
−Removed: The Herndon Innovation Center funded the acquisition with $ 265.2 million of cash, which was distributed to the Company at closing.
−Removed: After funding its share of closing costs and working capital contributions of $ 2.2 million and $ 0.6 million, respectively, the Company received $ 262.4 million of cash proceeds at settlement and was given a $ 47.7 million capital credit for its share of the fair value of the Herndon Innovation Center.
−Removed: The Company recorded an impairment charge of $ 56.9 million for the Herndon Innovation Center during the third quarter of 2018.
−Removed: The Company recorded a $ 0.4 million gain on sale, which represents an adjustment to estimated closing costs used to determine the impairment charge in the third quarter of 2018.
−Removed: As part of the transaction, the Company’s subsidiary management company executed an agreement with the Herndon Innovation Center to provide property management and leasing services to the Herndon Innovation Center.
On March 29, 2019, Herndon Innovation Center obtained $ 134.1 million of third-party debt financing, secured by four properties within the venture, with an initial advance of $ 113.1 million.
6 unchanged sentences
On April 12, 2019, the Company received $ 13.8 million for its share of the cash proceeds from the financing.
−Removed: Austin Venture
−Removed: The Austin Venture owned twelve office properties containing an aggregate 1,570,123 square feet located in Austin, Texas.
−Removed: On October 16, 2013, the Company contributed a portfolio of seven office properties containing an aggregate of 1,398,826 rentable square feet located in Austin, Texas (the “Austin Properties”) to a newly-formed joint venture with G&I VII Austin Office LLC (“DRA”).
−Removed: DRA and the Company agreed to an aggregate gross sales price of $ 330.0 million subject to an obligation on the Company’s part to fund the first $ 5.2 million of post-closing capital expenditures, of which $ 0.8 million was funded by the Company during 2013 and the remaining $ 4.4 million was funded by the Company during the twelve months ended December 31, 2014.
−Removed: DRA owned a 50 % interest in the Austin Venture and the Company owned a 50 % interest in the Austin Venture, subject to the Company’s right to receive up to an additional 10 % of distributions.
−Removed: The Company measured its equity interest at fair value based on the fair value of the Austin Properties and the distribution provisions of the real estate venture agreement.
−Removed: Since the Company retained a noncontrolling interest in the Austin Properties and there were no other facts and circumstances that precluded the consummation of a sale, the contribution qualified as a partial sale of real estate under the relevant guidance for sales of real estate.
−Removed: On December 11, 2018, the Company acquired DRA’s 50 % ownership interest in the Austin Venture for an aggregate purchase price of $ 535.1 million.
−Removed: On the sale date, the Austin Venture owned twelve office properties containing an aggregate 1,570,123 square feet, located in Austin, Texas.
−Removed: See Note 3, ''Real Estate Investments," for further information.
−Removed: Brandywine - AI Venture
−Removed: As of December 31, 2020 Brandywine - AI Venture (BDN - AI Venture) consists of one office property located in Metropolitan D.C.
−Removed: segment located at 3141 Fairview Park Drive.
−Removed: During 2019, BDN AI Venture recorded a $ 5.6 million held for use impairment charge related to 3141 Fairview Park Drive.
−Removed: The Company’s share of the impairment charge was $ 2.8 million which is reflected in “Equity in loss of Real Estate Ventures” in the consolidated statements of operations for the year ended December 31, 2019.
−Removed: During 2019, BDN - AI Venture transferred an office building located in Falls Church, Virginia containing 180,659 rentable square feet to the mortgage lender in full satisfaction of the lender’s outstanding $ 26.0 million mortgage loan.
−Removed: The mortgage loan was nonrecourse to the Company.
−Removed: The Company recognized its $ 2.2 million share of the gain on debt forgiveness in "Net gain on real estate venture transactions" in the consolidated statements of operations for the year ended December 31, 2019.
−Removed: During 2018, BDN - AI Venture sold three office properties containing 510,202 rentable square feet located in Silver Spring, MD (“Station Square”) for a gross sales price of $ 107.0 million.
−Removed: At the time of sale, the properties were encumbered by a mortgage of $ 66.5 million, which was repaid in full at closing, resulting in a debt prepayment penalty of $ 0.7 million.
−Removed: After mortgage payoff and closing costs, BDN - AI Venture received cash proceeds of $ 34.8 million, of which, the Company received $ 17.4 million and recognized a $ 1.5 million gain on the sale.
−Removed: Additionally, in 2018, BDN - AI Venture recorded a $ 20.8 million held for use impairment charge related to 3141 Fairview Park Drive and 3130 Fairview Park Drive, the two then-remaining properties held by the venture.
−Removed: The Company’s share of the impairment charge was $ 10.4 million which was recognized in “Equity in loss of Real Estate Ventures” in the consolidated statements of operations for the year ended December 31, 2018.
−Removed: Based on the Company’s evaluation of the fair value of its investment in BDN - AI Venture subsequent to the disposition of Station Square, the Company determined that a persistent weak demand for office space and intense competition for tenants at the two remaining properties had reduced the fair value of the investment below the carrying value.
−Removed: As a result, the Company recorded an other than temporary impairment
−Removed: of $ 4.1 million which was recognized in “Equity in Loss of Real Estate Ventures” in the consolidated statements of operations for the year ended December 31, 2018.
−Removed: The Company measured this impairment based on a discounted cash flow analysis, using a hold period of 10 years, a residual capitalization rate of 8.0 % and discount rates ranging from 9.0 % to 9.5 %.
The MAP Venture owns 58 office properties that contain an aggregate of 3,924,783 square feet located in the Pennsylvania Suburbs, New Jersey/Delaware, Metropolitan Washington, D.C.
and Richmond, Virginia ("MAP Venture").
−Removed: The MAP Venture was formed as a limited liability company in which the Company has been designated as the Managing Member.
−Removed: In addition, through an affiliate, the Company provides property management services at the Buildings on behalf of the MAP Venture for a market based management fee.
The MAP Venture leases the land parcels under the 58 office properties through a ground lease that extends through February 2115.
−Removed: Annual payments by the MAP Venture, as tenant under the ground leases, initially total $ 11.9 million and increase 2.5 % annually through November 2025.
+Added: Annual payments by the MAP Venture, as tenant under the ground lease, initially total $ 11.9 million and increase 2.5 % annually through November 2025.
Thereafter, annual rental payments increase by 2.5 % or CPI at the discretion of the lessor.
−Removed: Upon adoption of Topic 842, Leases, on January 1, 2019, the MAP Venture determined that the carrying amount of the right of use asset was greater than the fair value of the underlying right of use asset.
−Removed: The fair value of the underlying right of use asset was determined using the purchase price paid by a third-party to acquire the ground lease.
−Removed: As a result, MAP Venture recorded a $ 9.2 million cumulative effect of accounting change adjustment simultaneously with the recording of the right of use asset to reduce the value of the right of use asset to its estimated fair value.
−Removed: The Company recorded its $ 4.6 million proportionate share of the cumulative effect of accounting change adjustment through "Cumulative earnings” on its consolidated balance sheets.
−Removed: On August 1, 2018, MAP Venture refinanced its $ 180.8 million third party debt financing, secured by the buildings of MAP Venture and maturing February 9, 2019, with $ 185.0 million third party debt financing, also secured by the buildings, bearing interest at LIBOR + 2.45 % and maturing on August 1, 2023.
−Removed: The interest rate is swapped to a fixed rate of 2.66% through the maturity date.
1919 Venture owns a 29 -story, 455,000 square foot mixed-use tower consisting of 321 luxury apartments, 24,000 square feet of commercial space and a 215 -car structured parking facility.
−Removed: See to Note 5, "Investment in Unconsolidated Real Estate Ventures" for additional information regarding the related-party note receivable with 1919 Venture.
−Removed: Four Tower Bridge Acquisition
−Removed: During 2018, the Company acquired, from its then partner in each of the Four Tower Bridge real estate venture and the Seven Tower Bridge real estate venture, the partner’s remaining 35 % ownership interest in the Four Tower Bridge real estate venture in exchange for the Company's 20 % ownership interest in the Seven Tower Bridge real estate venture.
−Removed: The Four Tower Bridge real estate venture owned an office property containing 86,021 square feet in Conshohocken, Pennsylvania encumbered with $ 9.7 million in debt.
−Removed: The Company previously accounted for its noncontrolling interest in Four Tower Bridge using the equity method.
−Removed: As a result of the exchange transaction, the Company obtained control of the Four Tower Bridge property and recognized a gain of $ 11.6 million.
−Removed: For further information regarding the accounting of the transaction, see Note 3, ''Real Estate Investments .
−Removed: evo at Cira Centre South Venture
−Removed: On January 10, 2018, evo at Cira, a real estate venture in which the Company held a 50 % interest, sold its sole asset, a 345 -unit student housing tower, at a gross sales value of $ 197.5 million.
−Removed: The student housing tower, located in Philadelphia, Pennsylvania, was encumbered by a secured loan with a principal balance of $ 110.9 million at the time of sale, which was repaid in full from the sale proceeds.
−Removed: The Company’s share of net cash proceeds from the sale, after debt repayment and closing costs, was $ 43.0 million.
−Removed: As the Company’s investment basis was $ 17.3 million, a gain of $ 25.7 million was recorded within the “Net gain on real estate venture transactions’ caption in the consolidated statements of operations.
+Added: See Note 5, ''Debt and Preferred Equity Investments" for additional information regarding the related-party note receivable with 1919 Venture.
JBG Ventures consists of 51 N 50 Patterson, Holdings, LLC Venture ("51 N Street") and 1250 First Street Office, LLC Venture ("1250 First Street"), with the Company owning a 70.0 % equity interest and JBG/DC Manager, LLC ("JBG") owning a 30.0 % equity interest in each of the two ventures.
51 N Street owns 0.9 acres of undeveloped land and 1250 First Street, owns 0.5 acres of undeveloped land.
−Removed: Based on the facts and circumstances at the formation of each of the two ventures with JBG, the Company determined that each venture is a VIE in accordance with the accounting standard for the consolidation of VIEs.
−Removed: As a result, the Company used the variable interest model under the accounting standard for consolidation in order to determine whether to consolidate the JBG Ventures.
−Removed: JBG is the managing member of the ventures, and pursuant to the operating and related agreements, major decisions require the approval of both members.
−Removed: Based upon each member's shared power over the activities of each of the two ventures, which most significantly impact the economics of the ventures, neither venture is consolidated by the Company.
−Removed: Both ventures are accounted for under the equity method of accounting.
−Removed: 4040 Wilson Venture
−Removed: On July 31, 2013, the Company formed 4040 Wilson LLC Venture (“4040 Wilson”) a joint venture between the Company and Ashton Park Associates LLC (“Ashton Park”), an unaffiliated third party.
−Removed: Each of the Company and Ashton Park owns a 50 % interest in 4040 Wilson.
−Removed: 4040 Wilson is developing a 427,500 square foot mixed-use building representing the final phase of the eight building, mixed-use, Liberty Center complex located in the Ballston submarket of Arlington, Virginia.
−Removed: The project is being constructed on a 1.3 -acre land parcel contributed by Ashton Park to 4040 Wilson at an agreed upon value of $ 36.0 million.
−Removed: During the fourth quarter of 2017, 4040 Wilson achieved pre-leasing levels that enabled the venture to obtain a secured construction loan with a total borrowing capacity of $ 150.0 million for the remainder of the project costs.
−Removed: As of December 31, 2020, $ 141.9 million had been advanced under the construction loan and development of the building is in progress.
−Removed: Based upon the facts and circumstances at the formation of 4040 Wilson, the Company determined that 4040 Wilson is a VIE in accordance with the accounting standard for the consolidation of VIEs.
−Removed: As a result, the Company used the variable interest model under the accounting standard for consolidation in order to determine whether to consolidate 4040 Wilson.
−Removed: Based upon each member’s shared power over the activities of 4040 Wilson under the operating and related agreements, and the Company’s lack of control over the development and construction phases of the project, 4040 Wilson is accounted for under the equity method of accounting.
DEBT AND PREFERRED EQUITY INVESTMENTS
−Removed: As of December 31, 2020, the Company held one debt investment and one preferred equity investment in entities owning real estate assets.
−Removed: The Company accounts for these mandatorily redeemable investments as notes receivable, which are included within “Other assets” on the consolidated balance sheets.
−Removed: As of December 31, 2020, all debt and preferred equity investments were performing in accordance with their respective terms and remain on accrual status.
Austin Preferred Equity Investment
−Removed: On December 31, 2020, the Company invested $ 50.0 million through a preferred equity interest in a single-purpose entity that owns two stabilized office buildings located in Austin, Texas.
−Removed: The preferred equity interest acquired by the Company accrues a 9.0 % annual return, compounded and paid monthly.
−Removed: The investment is required to be redeemed no later than December 31, 2023 (subject to a one-year extension option).
+Added: On December 31, 2020, the Company invested $ 50.0 million in exchange for a preferred equity interest in a single-purpose entity that owned two stabilized office buildings located in Austin, Texas.
+Added: The Company accounted for this mandatorily redeemable investment as a note receivable, which was included within "Other assets" on the consolidated balance sheets.The preferred equity interest accrued a 9.0 % annual return, compounded and paid monthly.
+Added: The investment was required to be redeemed no later than December 31, 2023 (subject to a one-year extension option).
+Added: On September 3, 2021, the $ 50.0 million investment was redeemed prior to maturity.
+Added: As a result, the Company recognized an incremental $ 2.8 million of income on early redemption related to its accelerated minimum return and exit fees paid in cash on the redemption date during the three months ended September 30, 2021, which is included in "Interest and investment income" on the consolidated statements of operations.
1919 Venture Note Receivable
−Removed: During 2018, the Company and the other equity partner in 1919 Venture each provided a $ 44.4 million mortgage loan to 1919 Venture and, as a result, the Company recorded a related-party note receivable from 1919 Venture of $ 44.4 million.
+Added: During 2018, each of the Company and the other equity partner in 1919 Venture, an unconsolidated real estate venture, provided a $ 44.4 million mortgage loan to 1919 Venture and, as a result, the Company recorded a $ 44.4 million related-party note receivable from 1919 Venture.
The loan bears interest at a fixed 4.0 % per annum interest rate with a scheduled maturity on June 25, 2023.
−Removed: 1919 Venture used the proceeds from the loans to repay the venture’s then outstanding $ 88.8 million construction loan.
+Added: 1919 Venture used the proceeds from the loans to repay its then outstanding $ 88.8 million construction loan.
See Note 4, ''Investment in Unconsolidated Real Estate Ventures” for further information regarding 1919 Venture.
+Added: As of December 31, 2021, the debt investment was performing in accordance with its terms and remains on accrual status.
Lessor Accounting
The Company leases properties to tenants under operating leases with various expiration dates.
−Removed: Scheduled minimum lease payments on noncancellable leases at December 31, 2020 are as follows (in thousands):
−Removed: Year Minimum Rent
+Added: Future contractual lease payments under operating leases at December 31, 2021 are as follows (in thousands):
2022 $ 328,553
23 unchanged sentences
Such amounts, if any, will be reflected as contingent rent when incurred.
−Removed: The ground leases also provide for payment by the Company of certain operating costs relating to the land, primarily real estate
+Added: The ground leases also provide for payment by the Company of certain operating costs relating to the land, primarily real estate taxes.
The above schedule of future minimum rental payments does not include any contingent rent amounts or any reimbursed expenses.
4 unchanged sentences
Leasing costs $ 143,895 $ ( 57,445 ) $ 86,450
−Removed: Financing costs - Revolving Credit Facility 6,299 ( 4,994 ) 1,305
+Added: Financing costs - Unsecured Credit Facility 6,299 ( 5,887 ) 412
Total $ 150,194 $ ( 63,332 ) $ 86,862
2 unchanged sentences
Leasing costs $ 139,207 $ ( 55,656 ) $ 83,551
−Removed: Financing costs - Revolving Credit Facility 6,299 ( 4,101 ) 2,198
+Added: Financing costs - Unsecured Credit Facility 6,299 ( 4,994 ) 1,305
Total $ 145,506 $ ( 60,650 ) $ 84,856
During the years ended December 31, 2021, 2020 and 2019, the Company capitalized internal direct leasing costs of $ 2.1 million, $ 1.6 million, and $ 1.7 million, respectively.
−Removed: INTANGIBLE ASSETS
−Removed: As of December 31, 2020 and 2019, the Company’s intangible assets were comprised of the following (in thousands):
+Added: INTANGIBLE ASSETS AND LIABILITIES
+Added: As of December 31, 2021 and 2020, the Company’s intangible assets/liabilities were comprised of the following (in thousands):
December 31, 2021
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For the years ended December 31, 2021, 2020, and 2019, the Company accelerated the amortization of intangible assets by approximately $ 3.6 million, $ 0.3 million, and $ 4.5 million, respectively, as a result of tenant move-outs prior to the end of the associated lease term.
−Removed: For the years ended December 31, 2020 and 2019 the Company accelerated the amortization of approximately $ 0.1 million and $ 2.2 million of intangible liabilities as a result of tenant move-outs.
−Removed: For the year ended December 31, 2018 the Company accelerated the amortization of a no minal amount of intangible liabilities as a result of tenant move-outs.
−Removed: As of December 31, 2020, the Company’s annual amortization for its intangible assets/liabilities, assuming no early lease terminations, are as follows (dollars in thousands):
+Added: For the years ended December 31, 2021, 2020, and 2019 the Company accelerated the amortization of approximately $ 0.6 million, $ 0.1 million, and $ 2.2 million of intangible liabilities as a result of tenant move-outs.
+Added: As of December 31, 2021, the Company’s annual amortization for its intangible assets/liabilities, assuming no prospective early lease terminations, was as follows (dollars in thousands):
Assets Liabilities
7 unchanged sentences
DEBT OBLIGATIONS
−Removed: The following table sets forth information regarding the Company’s consolidated debt obligations outstanding at December 31, 2020 and 2019 (in thousands):
+Added: The following table sets forth information regarding the Company’s consolidated debt obligations outstanding as of December 31, 2021 and 2020 (in thousands):
December 31, 2021 December 31, 2020 Effective
Interest Rate Maturity
−Removed: MORTGAGE DEBT:
−Removed: Two Logan Square (a) $ — $ 81,103 3.98 % October 2020
−Removed: Four Tower Bridge (b) — 9,291 4.50 % February 2021
−Removed: One Commerce Square (c) — 116,571 3.64 % April 2023
−Removed: Two Commerce Square (c) — 108,472 4.51 % April 2023
−Removed: Principal balance outstanding — 315,437
−Removed: fair market value premium (discount), net — ( 1,383 )
−Removed: deferred financing costs — ( 242 )
−Removed: Mortgage indebtedness $ — $ 313,812
UNSECURED DEBT
1 unchanged sentence
$ 23,000 $ — LIBOR + 1.10 %
+Added: July 2022 (a)
Seven -Year Term Loan - Swapped to fixed
9 unchanged sentences
Indenture IA (Preferred Trust I) 27,062 27,062 LIBOR + 1.25 %
−Removed: Indenture IB (Preferred Trust I) - Swapped to fixed 25,774 25,774 3.30 % April 2035
+Added: Indenture IB (Preferred Trust I)
+Added: 25,774 25,774 LIBOR + 1.25 %
Indenture II (Preferred Trust II) 25,774 25,774 LIBOR + 1.25 %
3 unchanged sentences
Total unsecured indebtedness $ 1,853,586 $ 1,830,595
−Removed: Total Debt Obligations $ 1,830,595 $ 2,144,418
−Removed: (a) On October 21, 2020, the Company acquired the $ 79.8 million remaining mortgage on this property from the lender.
−Removed: (b) On November 10, 2020, the Company repaid the remaining $ 9.1 million mortgage balance.
−Removed: (c) The properties encumbered by these mortgages were deconsolidated as a result of the Commerce Square Venture Transaction.
−Removed: See Note 3, ''Real Estate Investments," for further information.
+Added: (a) The Company has the ability to extend the term of the Unsecured Credit Facility until July 2023 through two successive six-month extension options.
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.
−Removed: On October 10, 2019, the Company completed underwriting offerings of an additional $ 100.0 million of its 4.10 % Guaranteed Notes due 2024 (the "2024 Notes") and an additional $ 100.0 million of its 4.55 % Guaranteed Notes due 2029 (the "2029 Notes").
−Removed: The additional 2024 Notes were priced at 106.315 % of their face amount and the additional 2029 Notes were priced at 110.058 % of their face amount.
−Removed: The additional 2024 Notes and additional 2029 Notes have been reflected net of premiums of $ 5.3 million and $ 8.5 million, respectively, in the consolidated balance sheet as of December 31, 2019.
−Removed: On December 13, 2018, the Company amended and restated its $ 250.0 million seven-year term loan maturing October 8, 2022.
−Removed: In connection with the terms of the amendment, the credit spread on the term loan decreased from LIBOR plus 1.80 % to LIBOR plus 1.25 %, reducing the Company’s effective interest rate by 0.55 %.
−Removed: Through a series of interest rate swaps, the $ 250.0 million outstanding balance of the term loan has a fixed interest rate of 2.87 %.
On July 17, 2018, the Company amended and restated its revolving credit agreement (as amended and restated, the “Unsecured Credit Facility”).
5 unchanged sentences
and (v) removed the covenant requiring the Company to maintain a minimum net worth.
−Removed: connection with the amendments, the Company capitalized $ 2.7 million in financing costs, which will be amortized through the July 15, 2022 maturity date.
+Added: In connection with the amendments, the Company capitalized $ 2.7 million in financing costs, which will be amortized through the July 15, 2022 maturity date.
At the Company's option, loans outstanding under the Unsecured Credit Facility will bear interest at a rate per annum equal to (1) LIBOR plus between 0.775 % and 1.45 %, based on the Company's credit rating, or (2) a base rate equal to the greatest of (a) the Administrative Agent's prime rate, (b) the Federal Funds rate plus 0.5 % or (c) LIBOR for a one month period plus 1.00 %, in each case, plus a margin ranging from 0.0 % to 0.45 % based on the Company's credit rating.
9 unchanged sentences
In addition, the Unsecured Credit Facility restricts payments of dividends and distributions on shares in excess of 95 % of the Company's funds from operations (FFO) except to the extent necessary to enable the Company to continue to qualify as a REIT for Federal income tax purposes.
−Removed: The Company had no borrowings under the Unsecured Credit Facility as of December 31, 2020 and 2019.
−Removed: During the twelve months ended December 31, 2020, the weighted-average interest rate on Unsecured Credit Facility borrowings was 1.48 % resulting in $ 0.5 million of interest expense.
−Removed: During the twelve months ended December 31, 2019, the weighted-average interest rate on Unsecured Credit Facility borrowings was 3.52 % resulting in $ 4.4 million of interest expense.
−Removed: The Company was in compliance with all financial covenants as of December 31, 2020 and 2019.
−Removed: Management continuously monitors the Company’s compliance with and anticipated compliance with the covenants.
+Added: The Company had $ 23.0 million of borrowings under the Unsecured Credit Facility as of December 31, 2021.
+Added: During the twelve months ended December 31, 2021, the weighted-average interest rate on Unsecured Credit Facility borrowings was
+Added: 1.21 % resulting in $ 0.4 million of interest expense.
+Added: During the twelve months ended December 31, 2020 weighted-average interest rate on Unsecured Credit Facility borrowings was 1.48 % resulting in $ 0.5 million of interest expense.
+Added: The Company was in compliance with all financial covenants as of December 31, 2021.
Certain of the covenants restrict the Company’s ability to obtain alternative sources of capital.
−Removed: While the Company currently believes it will remain in compliance with its covenants, in the event that the economy deteriorates in the future, the Company may not be able to remain in compliance with such covenants, in which case a default would result absent a lender waiver.
−Removed: As of December 31, 2020, the Company’s aggregate scheduled principal payments of debt obligations are as follows (in thousands):
+Added: As of December 31, 2021, the aggregate scheduled principal payments on the Company's debt obligations were as follows (in thousands):
+Added: 2022 $ 273,000
Thereafter 878,610
8 unchanged sentences
Accordingly, the estimates presented are not necessarily indicative of the amounts that the Company could realize upon disposition.
−Removed: The use of different estimation methodologies may have a material effect on the estimated fair value amounts shown.
−Removed: The Company believes that the carrying amounts reflected in the consolidated balance sheets at December 31, 2020 and 2019 approximate the fair values
−Removed: for cash and cash equivalents, accounts receivable, other assets, accounts payable and accrued expenses because they are short-term in duration.
+Added: The use of different estimates and valuation methodologies may have a material effect on the fair value amounts shown.
+Added: The Company believes that the carrying amounts reflected in the consolidated balance sheets at December 31, 2021 and 2020 approximate the fair values for cash and cash equivalents, accounts receivable, other assets and liabilities, accounts payable and accrued expenses because they are short-term in duration.
The following are financial instruments for which the Company’s estimates of fair value differ from the carrying amounts (in thousands):
3 unchanged sentences
Variable rate debt $ 351,218 $ 344,754 $ 327,694 $ 308,838
−Removed: Mortgage notes payable $ — $ — $ 313,812 $ 317,031
−Removed: Notes receivable $ 94,430 $ 97,372 $ 44,430 $ 43,322
−Removed: (a) The carrying amounts presented in the table above are net of deferred financing costs of $ 7.2 million and $ 8.7 million for unsecured notes payable, $ 0.9 million and $ 1.4 million for variable rate debt and $ 0.0 million and $ 0.2 million for mortgage notes payable as of December 31, 2020 and December 31, 2019, respectively.
−Removed: On June 26, 2018, the Company provided a $ 44.4 million mortgage loan to 1919 Venture, an unconsolidated real estate venture in which the Company holds a 50 % ownership interest, and recorded a note receivable of $ 44.4 million.
−Removed: For additional information regarding the transaction, see Note 4, ''Investment in Unconsolidated Real Estate Ventures.”
+Added: Notes receivable (b)
+Added: $ 44,430 $ 45,230 $ 94,430 $ 97,372
+Added: (a) Net of deferred financing costs of $ 5.8 million and $ 7.2 million for unsecured notes payable, $ 0.4 million and $ 0.9 million for variable rate debt as of December 31, 2021 and December 31, 2020, respectively.
+Added: (b) For further detail, refer to Note 5, ''Debt and Preferred Equity Investments.”
The Company used quoted market prices as of December 31, 2021 and December 31, 2020 to value the unsecured notes payable and, as such, categorized them as Level 2.
−Removed: The inputs utilized to determine the fair value of the Company’s mortgage notes payable and variable rate debt are categorized as Level 3.
+Added: The inputs utilized to determine the fair value of the Company’s variable rate debt are categorized as Level 3.
The fair value of the variable rate debt was determined using a discounted cash flow model that considered borrowing rates available to the Company for loans with similar terms and characteristics.
−Removed: The fair value of the mortgage notes payable was determined using a discounted cash flow model that considered the contractual interest and principal payments discounted at a blended market rate for loans with similar terms, maturities and loan-to-value.
−Removed: These inputs have been categorized as Level 3 because the Company considers the rates used in the valuation techniques to be unobservable.
The inputs utilized to determine fair value of the Company's notes receivable are unobservable and, as such, were categorized as Level 3.
27 unchanged sentences
Swap Interest Rate Cash Flow (a) $ 250,000 $ 250,000 2.868 % October 8, 2015 October 8, 2022 $ ( 2,461 ) $ ( 6,627 )
−Removed: Swap Interest Rate Cash Flow (a) 25,774 25,774 3.300 % December 22, 2011 January 30, 2021 ( 120 ) ( 94 )
+Added: Swap Interest Rate Cash Flow (b) — 25,774 3.300 % December 22, 2011 January 30, 2021 — ( 120 )
$ 250,000 $ 275,774
(a) Hedging unsecured variable rate debt.
−Removed: The Company measures its derivative instruments at fair value and records them in the “Other assets” and (“Other liabilities”) captions on the Company’s consolidated balance sheets.
+Added: (b) On January 30, 2021, the interest rate hedge contract for this swap expired.
+Added: The Company measures its derivative instruments at fair value and records them in “Other assets” and (“Other liabilities”) on the Company’s consolidated balance sheets.
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.
1 unchanged sentence
As a result, the Company has determined that the inputs utilized to determine the fair value of derivative instruments are classified in Level 2 of the fair value hierarchy.
−Removed: Disclosure about the fair value of derivative instruments is based upon pertinent information available to management as of December 31, 2020 and December 31, 2019.
−Removed: 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 December 31, 2020.
−Removed: Current estimates of fair value may differ from the amounts presented herein.
Concentration of Credit Risk
−Removed: Concentrations of credit risk arise for the Company when multiple tenants of the Company are engaged in similar business activities, or are located in the same geographic region, or have similar economic features that impact in a similar manner
−Removed: their ability to meet contractual obligations, including those to the Company.
+Added: Concentrations of credit risk arise for the Company when multiple tenants of the Company are engaged in similar business activities, or are located in the same geographic region, or have similar economic features that impact in a similar manner their ability to meet contractual obligations, including those to the Company.
The Company regularly monitors its tenant base to assess potential concentrations of credit risk.
4 unchanged sentences
Operating Partnership
−Removed: The aggregate book value of the noncontrolling interests associated with the redeemable common limited partnership interests that were consolidated in the accompanying consolidated balance sheet of the Parent Company as of December 31, 2020 and December 31, 2019, was $ 10.5 million and $ 9.3 million, respectively.
+Added: The aggregate book value of the noncontrolling interests associated with the redeemable common limited partnership interests in the accompanying consolidated balance sheet of the Parent Company was $ 8.2 million and $ 10.5 million as of December 31, 2021 and December 31, 2020, respectively.
Under the applicable accounting guidance, the redemption value of limited partnership units are carried at fair value.
−Removed: 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 $ 11.7 million and $ 15.5 million, respectively, as of December 31, 2020 and December 31, 2019.
+Added: The Parent Company believes that the aggregate settlement value of these interests (based on the number of units outstanding and the average closing price of the common shares during the last five business days of the quarter) was approximately $ 11.1 million and $ 11.7 million as of December 31, 2021 and December 31, 2020, respectively.
BENEFICIARIES' EQUITY OF THE PARENT COMPANY
16 unchanged sentences
The effect of these securities is anti-dilutive for periods that the Parent Company incurs a net loss from continuing operations available to common shareholders and therefore is excluded from the dilutive earnings per share calculation in such periods.
−Removed: Redeemable common limited partnership units, totaling 981,634 as of December 31, 2020 and 2019 and 982,871 as of December 31, 2018, respectively, were excluded from the diluted earnings per share computations because they are not dilutive.
+Added: Redeemable common limited partnership units totaling 823,983 at December 31, 2021, 981,634 at December 31, 2020 and 981,634 at December 31, 2019, respectively, were excluded from the diluted earnings per share computations because they are not dilutive.
Unvested restricted shares are considered participating securities which require the use of the two-class method for the computation of basic and diluted earnings per share.
−Removed: For the years ended December 31, 2020, 2019 and 2018, earnings representing nonforfeitable dividends were allocated to the unvested restricted shares issued to the Company’s executives and other employees under the Company's shareholder-approved long-term incentive plan.
+Added: For the years ended December 31, 2021, 2020 and 2019, earnings representing nonforfeitable dividends as noted in the table above were allocated to the unvested restricted shares issued to the Company’s executives and other employees under the Company's shareholder-approved long-term incentive plan.
Common and Preferred Shares
On December 7, 2021, the Parent Company declared a distribution of $ 0.19 per common share, totaling $ 32.8 million, which was paid on January 19, 2022 to shareholders of record as of January 5, 2022.
+Added: During the year ended December 31, 2021, the Company issued 226,695 common shares in a private placement to an unaffiliated third party in exchange for the third party's 1 % residual ownership interest in One and Two Commerce Square, an unconsolidated joint venture.
Of the 20,000,000 preferred shares authorized, none were outstanding as of December 31, 2021 or December 31, 2020.
1 unchanged sentence
The Parent Company maintains a common share repurchase program under which the Board of Trustees has authorized the Parent Company to repurchase common shares.
−Removed: On January 3, 2019, the Board of Trustees replenished this program by authorizing the Parent Company to repurchase up to $ 150 million common shares under the program from and after January 3, 2019.
−Removed: During the year ended December 31, 2020 the Company repurchased and retired 6,248,483 common shares at an average price of $ 9.60 per share, totaling $ 60.0 million.
+Added: On January 3, 2019, the Board of Trustees authorized the repurchase of up to $ 150.0 million common shares from and after January 3, 2019.
+Added: During the year ended December 31, 2021, the Company did
+Added: no t repurchase any common shares.
During the year ended December 31, 2020, the Company repurchased and retired 6,248,483 common shares at an average price of $ 9.60 per share, totaling $ 60.0 million.
During the year ended December 31, 2019, the Company repurchased and retired 1,337,169 common shares at an average price of $ 12.92 per share, totaling $ 17.3 million.
−Removed: The Company expects to fund any additional share repurchases with a combination of available cash balances and availability under its unsecured revolving credit facility.
−Removed: The timing and amounts of any repurchases will depend on a variety of factors, including market conditions, regulatory requirements, share prices, capital availability and other factors as determined by the Company’s management team.
−Removed: The repurchase program does not require the purchase of any minimum number of shares and may be suspended or discontinued at any time without notice.
−Removed: In connection with the Parent Company’s common share repurchase program, one common unit of the Operating Partnership is retired for each common share repurchased.
−Removed: During the year ended December 31, 2020 the Company repurchased and retired 6,248,483 common units at an average price of $ 9.60 per unit, totaling $ 60.0 million.
−Removed: During the year ended December 31, 2019, the Company repurchased and retired 1,337,169 common units at an average price of $ 12.92 per unit, totaling $ 17.3 million.
−Removed: During the year ended December 31, 2018, the Company repurchased and retired 1,729,278 units at an average price of $ 12.64 per unit totaling $ 21.9 million.
−Removed: During the year ended December 31, 2017 there were no repurchases under the program.
−Removed: The Company expects to fund any additional unit repurchases with a combination of available cash balances and availability under its unsecured revolving credit facility.
−Removed: The timing and amounts of any purchases will depend on a variety of factors, including market conditions, regulatory requirements, unit prices, capital availability and other factors as determined by the Company’s management team.
−Removed: The repurchase program does not require the purchase of any minimum number of units and may be suspended or discontinued at any time without notice.
−Removed: The common shares repurchased were retired and, as a result, were accounted for in accordance with Maryland law, which does not contemplate treasury stock.
−Removed: The repurchases were recorded as a reduction of common shares (at $ 0.01 par value per unit) and a decrease to General Partnership Capital.
−Removed: Continuous Offering Program
+Added: Former Continuous Offering Program
On January 10, 2017, the Parent Company entered into a continuous offering program (the “Offering Program”), that permitted the Parent Company to sell up to an aggregate of 16,000,000 common shares in at-the-market offerings.
There was no activity under the Offering Program during 2020 and 2019.
−Removed: During 2018, the Parent Company issued 23,311 common shares under the Offering Program at a weighted average price per share of $ 18.04 , receiving net cash proceeds of $ 0.4 million.
At December 31, 2021, no common shares remained available for issuance under the Offering Program, which terminated on January 10, 2020.
7 unchanged sentences
Net income $ 12,366 $ 12,366 $ 307,326 $ 307,326 $ 34,529 $ 34,529
−Removed: Net income attributable to noncontrolling interests ( 20 ) ( 20 ) ( 69 ) ( 69 ) ( 55 ) ( 55 )
+Added: Net (income) loss attributable to noncontrolling interests 3 3 ( 20 ) ( 20 ) ( 69 ) ( 69 )
Nonforfeitable dividends allocated to unvested restricted unitholders ( 421 ) ( 421 ) ( 410 ) ( 410 ) ( 396 ) ( 396 )
21 unchanged sentences
(i) Class A Limited Partnership Interest which are held by both the Parent Company and outside third parties and (ii) General Partnership Interests which are held solely by the Parent Company (collectively, the Class A Limited Partnership Interest, and General Partnership Interests are referred to as “Common Partnership Units”).
−Removed: The holders of the Common Partnership Units are
−Removed: entitled to share in cash distributions from, and in profits and losses of, the Operating Partnership, in proportion to their respective percentage interests, subject to preferential distributions on the preferred mirror units and the preferred units.
+Added: The holders of the Common Partnership Units are entitled to share in cash distributions from, and in profits and losses of, the Operating Partnership, in proportion to their respective percentage interests, subject to preferential distributions on the preferred mirror units and the preferred units.
The Common Partnership Units held by the Parent Company (comprised of both General Partnership Units and Class A Limited Partnership Units) are presented as partner’s equity in the consolidated financial statements.
1 unchanged sentence
Because the form of settlement of these redemption rights are not within the control of the Operating Partnership, these Common Partnership Units have been excluded from partner’s equity and are presented as redeemable limited partnership units measured at the potential cash redemption value as of the end of the periods presented based on the closing market price of the Parent Company’s common shares at December 31, 2021, 2020 and 2019, which was $ 13.42 , $ 11.91 and $ 15.75 , respectively.
−Removed: Class A Units of 981,634 as of December 31, 2020 and 2019 and 982,871 as of December 31, 2018, respectively, were outstanding and owned by outside limited partners of the Operating Partnership.
−Removed: On December 8, 2020, the Operating Partnership declared a distribution of $ 0.19 per common unit, totaling $ 32.7 million, which was paid on January 20, 2021 to unitholders of record as of January 6, 2021.
+Added: Class A Units of 823,983 as of December 31, 2021, 981,634 as of December 31, 2020, and 981,634 as of December 31, 2019, respectively, were outstanding and owned by outside limited partners of the Operating Partnership.
+Added: On December 7, 2021, the Operating Partnership declared a distribution of $ 0.19 per common partnership unit, totaling $ 32.8 million, which was paid on January 19, 2022 to unitholders of record as of January 5, 2022.
+Added: During the year ended December 31, 2021, the Operating Partnership issued 226,695 common partnership units to the Parent Company in exchange for a 1 % residual ownership interest in One and Two Commerce Square, an unconsolidated joint venture, which was acquired from an unaffiliated third party in exchange for an equal number of common shares of the Parent Company.
Common Unit Repurchases
In connection with the Parent Company’s common share repurchase program, one common unit of the Operating Partnership is retired for each common share repurchased.
−Removed: On January 3, 2019, the Board of Trustees replenished this program by authorizing the Parent Company to repurchase of up to $ 150.0 million common shares under the program from and after January 3, 2019.
+Added: During the year ended December 31, 2021, the Company did not repurchase any units.
During the year ended December 31, 2020 the Company repurchased and retired 6,248,483 common units at an average price of $ 9.60 per unit, totaling $ 60.0 million.
During the year ended December 31, 2019, the Company Repurchased 1,337,169 common units at an average price of $ 12.92 per unit, totaling $ 17.3 million.
−Removed: During the year ended December 31, 2018, the Company repurchased and retired 1,729,278 common units at an average price of $ 12.64 per unit, totaling $ 21.9 million.
−Removed: The Company expects to fund any additional unit repurchases with a combination of available cash balances and availability under its unsecured revolving credit facility.
−Removed: The timing and amounts of any purchases will depend on a variety of factors, including market conditions, regulatory requirements, unit prices, capital availability and other factors as determined by the Company’s management team.
−Removed: The repurchase program does not require the purchase of any minimum number of units and may be suspended or discontinued at any time without notice.
The common units repurchased were retired and, as a result, were accounted for in accordance with Maryland law, which does not contemplate treasury stock.
The repurchases were recorded as a reduction of common units (at $ 0.01 par value per unit) and a decrease to General Partnership Capital.
−Removed: Continuous Offering Program
+Added: Former Continuous Offering Program
On January 10, 2017, the Parent Company entered into a continuous offering program (the “Offering Program”), which permitted it to sell up to an aggregate of 16,000,000 common units in at-the-market offerings.
1 unchanged sentence
There was no activity under the Offering Program during 2020 and 2019.
−Removed: During 2018, the Parent Company issued 23,311 common units under the Offering Program at a weighted average price per unit of $ 18.04 , receiving net cash proceeds of $ 0.4 million.
As of December 31, 2021, no common shares remained available for issuance under the Offering Program, which terminated on January 10, 2020.
SHARE BASED COMPENSATION, 401(K) PLAN AND DEFERRED COMPENSATION
−Removed: Stock Options
−Removed: On December 31, 2020, options exercisable for 300,046 common shares were outstanding under the Parent Company’s shareholder approved equity incentive plan (referred to as the “Equity Incentive Plan”).
−Removed: During the years ended December 31, 2020, 2019 and 2018, the Company did not recognize any compensation expense related to unvested options.
−Removed: During the years ended December 31, 2020, 2019 and 2018, the Company did not capitalize any compensation expense related to stock options as part of the Company’s review of employee salaries eligible for capitalization.
−Removed: Options outstanding as of December 31, 2020 and changes during the year-ended December 31, 2020 were as follows:
−Removed: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands)
−Removed: Outstanding at January 1, 2020 334,561 $ 11.88 1.0
−Removed: Exercised ( 34,515 ) $ 11.62 $ 10.1
−Removed: Outstanding at December 31, 2020 300,046 $ 11.91 0.1 $ 81.1
−Removed: Vested/Exercisable at December 31, 2020 300,046 $ 11.91 0.1 $ 81.1
The Company sponsors a 401(k) defined contribution plan for its employees.
4 unchanged sentences
Restricted Share Rights Awards
−Removed: As of December 31, 2020, 488,735 restricted share rights ("Restricted Share Rights") were outstanding under the Equity Incentive Plan.
+Added: As of December 31, 2021, 474,978 restricted share rights ("Restricted Share Rights") were outstanding under the Company's long term equity incentive plan.
These Restricted Share Rights vest over one to three years from the initial grant dates.
The remaining compensation expense to be recognized with respect to these awards at December 31, 2021 was $ 1.8 million and is expected to be recognized over a weighted average remaining vesting period of 1.9 years.
−Removed: For the years ended December 31, 2020, 2019, and 2018, the amortization related to outstanding Restricted Share Rights was $ 4.3 million (of which $ 0.4 million was capitalized), $ 3.9 million (of which $ 0.3 million was capitalized), and $ 3.6 million (of which $ 0.6 million was capitalized), respectively.
+Added: During the years ended December 31, 2021, 2020, and 2019, the amortization related to outstanding Restricted Share Rights was $ 4.1 million (of which $ 0.5 million was capitalized), $ 4.3 million (of which $ 0.4 million was capitalized), and $ 3.9 million (of which $ 0.3 million was capitalized), respectively.
Compensation expense related to outstanding Restricted Share Rights is included in general and administrative expense.
6 unchanged sentences
Non-vested at December 31, 2021 474,978 $ 13.51
−Removed: On March 5, 2020, the Compensation Committee of the Parent Company’s Board of Trustees awarded to officers of the Company an aggregate of 183,758 Restricted Share Rights, which generally vest over three years from the grant date.
+Added: On March 4, 2021, the Compensation Committee of the Parent Company’s Board of Trustees awarded to officers of the Company an aggregate of 252,278 Restricted Share Rights, which vest over three years from the grant date.
Each Restricted Share Right entitles the holder to one common share upon settlement.
3 unchanged sentences
In addition, vesting would also accelerate if the Parent Company were to undergo a change of control and, on or before the first anniversary of the change of control, the recipient’s employment were to cease due to a termination without cause or resignation with good reason.
−Removed: The Restricted Share Rights granted in 2020 and 2019 to certain senior executives include an “outperformance feature” whereby additional shares may be earned, up to 200 % of the shares subject to the basic award, based on the Company’s achievement of targets for same-store net operating cash income growth and investment/development activity provided certain operating and balance sheet metrics are also achieved during the three-year period ending December 31, 2022 and December 31, 2021 for the 2019 and 2020 awards, respectively.
−Removed: Half of any additional shares earned will vest based on continued service through each of January 1, 2023 and January 1, 2024 for the 2020 award and January 1, 2022 and January 1, 2023 for the 2019 award, provided that this additional service requirement will be waived in the event of a death, disability or qualifying retirement.
−Removed: In addition to the basic award, up to 316,306 shares and 233,890 shares may be awarded under the outperformance feature for the 2020 award and 2019 award, respectively.
−Removed: As of December 31, 2020, the Company has no t recognized any compensation expense related to the outperformance feature for the 2020 awards and has recognized $ 0.2 million related to the outperformance feature for the 2019 award.
−Removed: The Company will continue to evaluate progress towards achievement of the performance metrics on a quarterly basis and recognize compensation expense for these awards should it be determined that achievement of these metrics is probable.
−Removed: In addition, on March 5, 2020, the Compensation Committee awarded non-officer employees an aggregate of 40,920 Restricted Share Rights that vest in three equal installments on April 15, 2020, 2021, and 2022.
+Added: The Restricted Share Rights granted in 2021, 2020, and 2019 to certain senior executives include an “outperformance feature” whereby additional shares may be earned, up to 200 % of the shares subject to the basic award, based on the Company’s achievement of earnings-based targets and development, or investment, based targets during a three-year performance period with an additional two years to fully vest.
+Added: In addition to the basic award, up to an aggregate of 388,840 , 316,236 , and 228,858 shares may be awarded under the outperformance feature for the 2021, 2020, and 2019 awards, respectively, to those senior officers whose Restricted Share Rights awards include the "outperformance feature." As of December 31, 2021, the Company has not recognized any compensation expense related to the outperformance feature for the 2019-2021 awards.
+Added: The Company will continue to evaluate progression towards achievement of the performance metrics on a quarterly basis and recognize compensation expense for the outperformance feature of these awards should it be determined that achievement of these metrics is probable.
+Added: In addition, on February 23, 2021, the Compensation Committee awarded non-officer employees an aggregate of 49,267 Restricted Share Rights that generally vest in three equal annual installments.
Vesting of these awards is subject to acceleration upon death, disability or termination without cause within one year following a change of control.
9 unchanged sentences
Non-vested at January 1, 2021 206,069 319,600 — 525,669
−Removed: Units Granted — — 319,600 319,600
+Added: Granted — — 380,957 380,957
+Added: Units Cancelled ( 3,837 ) ( 5,545 ) ( 6,796 ) ( 16,178 )
Non-vested at December 31, 2021 202,232 314,055 374,161 890,448
1 unchanged sentence
Measurement Period End Date 12/31/2021 12/31/2022 12/31/2023
−Removed: Units Granted 209,193 213,728 319,600
+Added: Granted 213,728 319,600 380,957
Fair Value of Units on Grant Date (in thousands) $ 4,627 $ 5,389 $ 6,389
1 unchanged sentence
The fair values of each award are being amortized over the three year performance period.
−Removed: During the performance period, dividend equivalents are credited as additional RPSU's, subject to the same terms and conditions as the original RPSU's.
−Removed: The performance period will be abbreviated and the delivery of earned shares will be accelerated in the event of a change in control or if the recipient of the award were to die, become disabled or retire in a qualifying retirement prior to the end of the otherwise applicable three year performance period;
−Removed: provided that, in the case of qualifying retirement for the March 5, 2020 grant, the number of shares deliverable will be pro-rated based on the portion of the performance period actually worked before retirement.
−Removed: In accordance with the accounting standard for share-based compensation, the Company amortizes stock-based compensation costs for the February 2019 and 2018 grants through the qualifying retirement date for those executives who meet the conditions for qualifying retirement during the scheduled vesting period.
+Added: During the performance period, dividend equivalents are credited as additional RPSUs, subject to the same terms and conditions as the original RPSUs.
+Added: The performance period will be abbreviated and the determination and delivery of earned shares will be accelerated in the event of a change in control or if the recipient of the award were to die, become disabled or retire in a qualifying retirement prior to the end of the otherwise applicable three year performance period;
+Added: provided that, in the case of qualifying retirement for the March, 2021 and 2020 grants, the number of shares deliverable will be pro-rated based on the portion of the performance period actually worked before retirement.
+Added: In accordance with the accounting standard for share-based compensation, the Company amortizes stock-based compensation costs for the February 2019 grant through the qualifying retirement date for those executives who meet the conditions for qualifying retirement during the scheduled vesting period.
For the year ended December 31, 2021, the Company recognized amortization of the 2021, 2020 and 2019 RPSU awards of $ 4.3 million, of which $ 0.5 million was capitalized consistent with the Company’s policies for capitalizing eligible portions of employee compensation.
−Removed: For the year ended December 31, 2019, amortization for the 2019, 2018 and 2017 RPSU awards
−Removed: was $ 4.2 million, of which $ 0.6 million was capitalized consistent with the Company’s policies for capitalizing eligible portions of employee compensation.
For the year ended December 31, 2020, amortization for the 2020, 2019 and 2018 RPSU awards was $ 3.0 million, of which $ 0.4 million was capitalized consistent with the Company’s policies for capitalizing eligible portions of employee compensation.
−Removed: The remaining compensation expense to be recognized with respect to the non-vested RPSU's at December 31, 2020 was approximately $ 4.5 million and is expected to be recognized over a weighted average remaining vesting period o f 1.5 years.
−Removed: The Company issued 121,897 common shares on February 1, 2020 in settlement of RPSUs that had been awarded on March 1, 2017 (with a three-year measurement period ended December 31, 2019).
+Added: For the year ended December 31, 2019, amortization for the 2019, 2018, and 2017 RPSU awards was $ 4.2 million, of which $ 0.6 million was capitalized consistent with the Company’s policies for capitalizing eligible portions of employee compensation.
+Added: The remaining compensation expense to be recognized with respect to the non-vested RPSUs at December 31, 2021 was approximately $ 6.3 million and is expected to be recognized over a weighted average remaining vesting period o f 1.5 years.
+Added: The Company issued 82,513 common shares on February 1, 2021 in settlement of RPSUs that had been awarded on February 28, 2018 (with a three-year measurement period ended December 31, 2020).
Holders of these RPSUs also received a cash dividend of $ 0.19 per share for these common shares on January 20, 2021.
22 unchanged sentences
In accordance with the accounting standard for deferred compensation arrangements where amounts earned are held in a rabbi trust and invested, the deferred compensation obligation associated with the Company’s common shares is classified as a component of shareholder’s equity and the related shares are treated as shares to be issued and are included in total shares outstanding.
−Removed: At December 31, 2020 and 2019, 1.2 million and 1.1 million of such shares were included in total shares outstanding, respectively.
+Added: At both December 31, 2021 and 2020, 1.2 million of such shares were included in total shares outstanding, respectively.
Subsequent changes in the fair value of the common shares are not reflected in operations or shareholders’ equity of the Company.
20 unchanged sentences
Valuation allowances are provided if, based upon the weight of the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
−Removed: As of December 31, 2020 there were no deferred tax assets included within “Other assets” in the consolidated balance sheets.
−Removed: As of December 31, 2019, there were nominal deferred tax assets included within “Other assets” in the consolidated balance sheets.
+Added: As of December 31, 2021 and 2020 there were no deferred tax assets included within “Other assets” in the consolidated balance sheets.
The Company had no accruals for tax uncertainties as of December 31, 2021 and December 31, 2020.
+Added: For the year ended December 31, 2021, there was no deferred income tax expense and nominal current income tax expense.
For the year ended December 31, 2020, there was no deferred income tax expense and $ 0.2 million of current income tax benefit.
For the year ended December 31, 2019, there was $ 0.1 million of deferred income tax expense and $ 0.1 million of current income tax benefit.
−Removed: For the year ended December 31, 2018, there was $ 0.3 million of deferred income tax expense and $ 0.1 million of current income tax expense.
These amounts are included in “Income tax (provision) benefit” in the consolidated statements of operations.
30 unchanged sentences
SEGMENT INFORMATION
−Removed: During the year ended December 31, 2020, the Company owned and managed its portfolio within five segments:
−Removed: (1) Philadelphia Central Business District (Philadelphia CBD), (2) Pennsylvania Suburbs, (3) Austin, Texas (4) Metropolitan Washington, D.C., and (5) Other.
+Added: As of December 31, 2021, the Company owns and manages properties within five segments:
+Added: (1) Philadelphia Central Business District ("Philadelphia CBD"), (2) Pennsylvania Suburbs, (3) Austin, Texas (4) Metropolitan Washington, D.C.
+Added: and (5) Other.
The Philadelphia CBD segment includes properties located in the City of Philadelphia, Pennsylvania.
3 unchanged sentences
segment includes properties in the District of Columbia, Northern Virginia and Southern Maryland.
−Removed: The Other segment includes properties located in Camden County, New Jersey and properties in New Castle County, Delaware.
+Added: The Other segment includes properties located in Camden County, New Jersey and New Castle County, Delaware.
In addition to the five segments, the corporate group is responsible for cash and investment management, development of certain real estate properties during the construction period, and certain other general support functions.
Land held for development and construction in progress is transferred to operating properties by region upon completion of the associated construction or project.
−Removed: The following tables provide selected asset information as of December 31, 2020 and 2019 and results of operations of the Company’s reportable segments for the years ended December 31, 2020, 2019 and 2018 (in thousands):
+Added: The following tables provide selected asset information and results of operations of the Company’s reportable segments (in thousands):
Real estate investments, at cost:
14 unchanged sentences
2021 2020 2019
−Removed: Total revenue Operating expenses (a) Net operating income (loss) Total revenue Operating expenses (a) Net operating income (loss) Total revenue Operating expenses (a) Net operating income (loss)
+Added: Total revenue Operating expenses (a) Net operating income Total revenue Operating expenses (a) Net operating income (loss) Total revenue Operating expenses (a) Net operating income (loss)
Philadelphia CBD $ 207,858 $ ( 73,695 ) $ 134,163 $ 232,028 $ ( 82,505 ) $ 149,523 $ 263,769 $ ( 100,219 ) $ 163,550
10 unchanged sentences
Investment in real estate ventures, at equity Equity in income (loss) of real estate venture
−Removed: As of Years ended December 31,
+Added: As of Year ended December 31,
December 31, 2021 December 31, 2020 2021 2020 2019
5 unchanged sentences
Other — — — — 86
−Removed: Austin, Texas — — — — 1,687
Total $ 411,110 $ 389,811 $ ( 26,697 ) $ ( 18,584 ) $ ( 9,922 )
Net operating income (“NOI”) is a non-GAAP financial measure, which we define as total revenue less property operating expenses, real estate taxes, and third party management expenses.
−Removed: Property operating expenses that are included in determining NOI consist of costs that are necessary and allocable to our operating properties such as utilities, property-level salaries, repairs and maintenance, property insurance, management fees, and bad debt expense.
+Added: Property operating expenses that are included in determining NOI consist of costs that are necessary and allocable to our operating properties such as utilities, property-level salaries, repairs and maintenance, property insurance and management fees.
General and administrative expenses that are not reflected in NOI primarily consist of corporate-level salaries, amortization of share awards and professional fees that are incurred as part of corporate office management.
NOI presented by the Company may not be comparable to NOI reported by other companies that define NOI differently.
−Removed: NOI is the measure that is used by the Company to evaluate the operating performance of its real estate assets by segment.
−Removed: The Company believes NOI provides useful
−Removed: information to investors regarding the financial condition and results of operations because it reflects only those income and expense items that are incurred at the property level.
+Added: NOI is the primary measure that is used by the Company's management to evaluate the operating performance of the Company's real estate assets by segment.
+Added: The Company believes NOI provides useful information to investors regarding the financial condition and results of operations because it reflects only those
+Added: income and expense items that are incurred at the property level.
While NOI is a relevant and widely used measure of operating performance of real estate investment trusts, it does not represent cash flow from operations or net income as defined by GAAP and should not be considered as an alternative to those measures in evaluating our liquidity or operating performance.
9 unchanged sentences
General and administrative expenses 30,153 30,288 32,156
−Removed: Equity in loss of Real Estate Ventures 18,584 9,922 15,231
−Removed: Provision for impairment — — 71,707
−Removed: Loss on early extinguishment of debt — — 105
−Removed: Interest income 1,939 2,318 4,703
+Added: Equity in loss of unconsolidated real estate ventures 26,697 18,584 9,922
+Added: Interest and investment income 8,295 1,939 2,318
Income tax (provision) benefit ( 47 ) 224 ( 12 )
2 unchanged sentences
Net gain on real estate venture transactions 2,973 75 11,639
−Removed: Gain on promoted interest in unconsolidated real estate venture — — 28,283
Consolidated net operating income $ 298,508 $ 329,396 $ 354,571
15 unchanged sentences
The fair value of this contingent consideration was determined using a probability weighted discounted cash flow model based on the period until development was originally expected to commence.
−Removed: The significant inputs to the discounted cash flow model were the discount rate and weighted probability scenarios.
+Added: The significant inputs to the discounted
+Added: cash flow model were the discount rate and weighted probability scenarios.
As the inputs were unobservable, the Company determined the inputs used to value this liability fall within Level 3 for fair value reporting.
Debt Guarantees
−Removed: As of December 31, 2020, the Real Estate Ventures had aggregate indebtedness of $ 963.2 million.
−Removed: These loans are generally mortgage or construction loans, most of which are non-recourse to the Company, except for customary recourse carve-outs.
−Removed: As of December 31, 2020, the $ 150.0 million construction loan obtained by 4040 Wilson, for which the Company has guaranteed payment up to $ 41.3 million, is recourse to the Company.
−Removed: In addition, during construction undertaken by real estate ventures, including 4040 Wilson, 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.
+Added: As of December 31, 2021, the Company's unconsolidated real estate ventures had aggregate indebtedness of $ 961.5 million.
+Added: These loans are generally mortgage or construction loans, most of which are nonrecourse to the Company, except for customary recourse carve-outs.
+Added: In addition, during construction undertaken by the unconsolidated real estate ventures, including the 3025 JFK Venture, the Company has provided, and expects to continue to provide, cost overrun and completion guarantees, as well as customary environmental indemnities and guarantees of customary exceptions to nonrecourse provisions in loan agreements.
+Added: In the agreement with its partner in the 3025 JFK Venture, the Company agreed to provide cost overrun and completion guaranties for the project under development.
+Added: With respect to the construction loan obtained by 3025 JFK Venture on July 23, 2021, the Company has also provided a carry guarantee and limited payment guarantee up to 25 % of the principal balance of the $ 186.7 million construction loan.
+Added: Impact of Natural Disasters and Casualty
+Added: The Company carries liability insurance to mitigate its exposure to certain losses, including those relating to property damage.
+Added: The Company records the estimated amount of expected insurance proceeds for property damage and other losses incurred as an asset (typically a receivable from the insurer) and income up to the amount of the losses incurred when receipt of insurance proceeds is deemed probable.
+Added: Any amount of insurance recovery in excess of the amount of the losses is considered a gain contingency and is not recorded until the proceeds are received.
+Added: In February 2021, one of the Company's properties in Austin, Texas sustained damage from the winter storms and resulting power grid failures.
+Added: As a result of the damage, during the year ended December 31, 2021, the Company recorded a fixed asset write-off totaling $ 1.2 million.
+Added: During the year ended December 31, 2021, the Company has recorded an estimated $ 7.2 million of restoration costs, of which $ 1.9 million is included in Accounts payable and accrued expenses on the consolidated balance sheets as of December 31, 2021.
+Added: The Company has also sustained business interruption loss of $ 3.9 million related to unpaid rent, which is also fully covered under the insurance policy.
+Added: During the year ended December 31, 2021, the Company has received $ 15.3 million of insurance proceeds, resulting in full recovery of the costs incurred to date.
+Added: The $ 3.0 million of insurance proceeds received in excess of the fixed asset write-off, total business interruption, and total estimated restoration cost during the year ended December 31, 2021 is included in Other income on the consolidated statement of operations.
Other Commitments or Contingencies
+Added: Under the terms of each of the One Uptown joint venture agreements, the joint venture partner is not required to fund project costs until the closing of the applicable construction loans.
+Added: In the event that the Company does not close on the applicable construction loan for each of the joint ventures by June 30, 2022, the joint venture partner could elect to assign its interest in the project to the Company and have no obligation to fund the project costs.
+Added: In addition, the Company has provided cost overrun and completion guarantees, as well as customary environmental indemnities, for each of the One Uptown joint ventures.
+Added: See Note 3, ''Real Estate Investments” for further information regarding the One Uptown joint ventures.
In connection with the Schuylkill Yards Project, the Company entered into a neighborhood engagement program and, as of December 31, 2021, had $ 7.0 million of future fixed contractual obligations.
−Removed: The Company is also committed to make additional contributions under the program.
−Removed: As of December 31, 2020, the Company estimates that, as of December 31, 2020, these additional contributions, which are not fixed under the terms of agreement, will be $ 2.6 million.
−Removed: In connection with the formation of the Commerce Square Venture, the Company has committed to investing an additional $ 20.0 million of preferred equity in the properties on a pari passu basis with its joint venture partner.
+Added: The Company also committed to fund additional contributions under the program.
+Added: As of December 31, 2021, the Company estimates that these additional contributions, which are not fixed under the terms of agreement, will be $ 2.4 million.
+Added: In connection with the formation of the Commerce Square Venture, the Company has committed to investing an additional $ 20.0 million of preferred equity in the properties on a pari passu basis with its joint venture partner of which $ 2.1 million has been contributed by the Company as of December 31, 2021.
As part of the Company’s September 2004 acquisition of a portfolio of properties from The Rubenstein Company (which the Company refers to as the “TRC acquisition”), the Company acquired its interest in Two Logan Square, a 708,844 square foot office building in Philadelphia, Pennsylvania primarily through its ownership of a second and third mortgage secured by this property.
This property is consolidated, as the borrower is a variable interest entity and the Company, through its ownership of the second and third mortgages, is the primary beneficiary.
−Removed: On October 21, 2020, the Company also acquired the $ 79.8 million first mortgage on the property from the third-party mortgage lender pursuant to an agreement with certain of the former owners.
+Added: On October 21, 2020, the Company also acquired the
+Added: $ 79.8 million first mortgage on the property from the third-party mortgage lender pursuant to an agreement with certain of the former owners.
Under the agreement, the Company has agreed to not take title to Two Logan until the earlier of June 2026 or the occurrence of certain events related to the ownership interests of certain former owners.
2 unchanged sentences
The $ 0.6 million payment is included within "Other liabilities" on the consolidated balance sheets.
−Removed: Similarly, as part of the 2013 acquisition of substantially all of the equity interests in the partnerships that own One and Two Commerce Square, the Company agreed, for the benefit of affiliates of the holder of the 1 % residual ownership interest in these properties, to not sell these two properties in certain taxable transactions prior to October 20, 2021 without the holder’s consent.
−Removed: The Commerce Square Venture Transaction did not violate such covenant.
−Removed: As part of the Company’s acquisition of properties from time to time in tax-deferred transactions, the Company has agreed to provide certain of the prior owners of the acquired properties the right to guarantee Company indebtedness.
−Removed: If the Company were to seek to repay the indebtedness guaranteed by the prior owner before the expiration of the applicable agreement, the Company would be required to provide the prior owner an opportunity to guaranty qualifying replacement debt.
−Removed: These debt maintenance agreements may limit the Company’s ability to refinance indebtedness on terms favorable to the Company.
−Removed: As part of its 2013 acquisition of substantially all of the equity interests in the partnerships that own One and Two Commerce Square, the Company agreed, for the benefit of affiliates of the holder of the 1 % residual ownership interest in these
−Removed: properties, to maintain qualifying mortgage debt through October 20, 2021, in the amounts of not less than $ 125.0 million on One Commerce Square and $ 100.0 million on Two Commerce Square.
−Removed: Similarly, the Company agreed with other contributors of assets that obligate it to maintain debt available for them to guaranty.
The Company invests in its properties and regularly incurs capital expenditures in the ordinary course of business to maintain the properties.
2 unchanged sentences
These contracts typically provide for cancellation with insignificant or no cancellation penalties.
−Removed: SUBSEQUENT EVENTS
−Removed: On February 2, 2021, the Company formed a joint venture with an unaffiliated third party to develop a 570,000 square foot mixed-use building at property under a long-term ground lease of 3025 JFK Boulevard, Philadelphia, Pennsylvania, also known as "Schuylkill Yards West." The estimated project cost is approximately $ 287 million, and the joint venture partner has agreed, subject to customary funding conditions, to fund up to approximately $ 58 million of the project costs in exchange for a 45 % preferred equity interest in the venture.
−Removed: We have agreed to provide a completion guaranty in connection with the development of the project.
Brandywine Realty Trust and Brandywine Operating Partnership, L.P.
18 unchanged sentences
426 West Lancaster Avenue Devon PA 1,689 6,756 9,400 1,686 16,159 17,845 1,614 1990 1998 (c)
−Removed: 52 Swedesford Square East Whiteland Twp.
−Removed: PA 4,241 16,579 ( 20,820 ) — — — — 1988 1998 (c)
640 Freedom Business Center (d) King Of Prussia PA 1,015 20,098 4,252 360 25,005 25,365 15,445 1991 1998 (c)
50 unchanged sentences
1505-11 Race Street Philadelphia PA 3,662 6,061 8 3,670 6,061 9,731 177 1922 2020 (c)
+Added: 3000 Market Street (e) Philadelphia PA 18,924 13,080 16,264 18,924 29,344 48,268 504 1937 2017 (c)
The Bulletin Building (3025 Market Street) (e) Philadelphia PA — 24,377 43,599 — 67,976 67,976 7,928 1953 2017 (c)
3001-3003 JFK Boulevard (f) Philadelphia PA — — 111 — 111 111 24 N/A 2018 N/A
−Removed: 3025 JFK Boulevard (f) Philadelphia PA — — — — — — — N/A 2018 N/A
METROPOLITAN WASHINGTON, D.C.
6600 Rockledge Drive Bethesda MD — 37,421 9,956 — 47,377 47,377 17,816 1981 2006 (c)
−Removed: 2340 Dulles Corner Boulevard Herndon VA 16,345 65,379 524 16,129 66,119 82,248 23,858 1987 2006 (c)
1676 International Drive McLean VA 18,437 97,538 25,740 18,785 122,930 141,715 31,083 1999 2006 (c)
1 unchanged sentence
8521 Leesburg Pike Vienna VA 4,316 30,885 6,575 4,397 37,379 41,776 14,332 1984 2006 (c)
+Added: 401-405 Colorado Street (g) Austin TX — 47,132 — — 47,132 47,132 491 2021 N/A (c)
11501 Burnet Road - Building 1 Austin TX 3,755 22,702 4 3,755 22,706 26,461 6,062 1991 2015 (c)
59 unchanged sentences
(e) Reflects original construction date.
−Removed: Significant improvements were made to The Bulletin Building in 2012.
+Added: Significant improvements were made to 3000 Market Street in 1988 and to The Bulletin Building in 2012.
(f) Represent leasehold interests in land parcels acquired through prepaid 99-year ground leases.
1 unchanged sentence
Building and improvements represent costs related to parking operations.
+Added: (g) 401-405 Colorado Street partially placed into service in 2021.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.