What changed in this filing

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Item 1A. Risk Factors

2026-02-23 compared with 2025-02-27 · 52 added, 22 removed, 416 unchanged (15% of the section changed)

12 unchanged sentences

The following factors, among others, may materially and adversely affect the income generated by our properties and our performance generally:

• adverse changes in international, national or local economic and demographic conditions;

• adverse changes in international, national or local economic and demographic conditions, which may result, from among other things, government policies and regulations, tariffs, market dynamics, rising interest rates, inflation, international trade disputes, government shutdowns and geopolitical conflicts;

• increased vacancies or our inability to rent space on favorable terms, including market pressures to offer tenants rent abatements, increased tenant improvement packages, early termination rights, below market rental rates or below-market renewal options;

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Disagreements with one or more third parties with whom we partner in the development of one or more of the development components may restrict our ability to act exclusively in our own interests.

In addition, failure of one or more third parties with whom we partner to fulfill obligations to us could result in delays and increased costs to us associated with finding a suitable replacement partner.

In addition, failure of one or more third parties with whom we partner to fulfill obligations to us could result in delays and increased costs to us associated with finding a

suitable replacement partner.

Increased costs could require us to revise or abandon our activities entirely with respect to one or more components of the project and, in such event, we would not recover, and would be required to write-off, costs we had capitalized in development.

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The success of such transactions is subject to a number of factors, including the risks that:

• we may not be able to obtain financing for such acquisitions on favorable terms;

• we may not be able to acquire a desired property because of competition from other potential acquirers with significant capital, and even if we are able to acquire a desired property, such potential acquirers may significantly increase the purchase price or result in other less favorable terms;

• we may not be able to obtain financing for such acquisitions on favorable terms or at all;

• acquired properties may fail to perform as expected;

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• we may not be able to efficiently integrate acquired properties, particularly portfolios of properties, into our organization and manage new properties in a way that allows us to realize anticipated cost savings and synergies.

The realization of any of the above risks could significantly and adversely affect our ability to meet our financial expectations, our financial condition, results of operations, and cash flows, our ability to make distributions to our shareholders, the market price of our common stock, and our ability to satisfy our debt service obligations.

Acquired properties may subject us to known and unknown liabilities.

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Some of these competitors may have significantly greater financial resources than we have.

Some of these competitors may be less sensitive to risks with respect to the creditworthiness of a tenant or the geographic concentration of their investments.

These entities also may have more favorable relationships and pricing with suppliers and contractors and may complete construction projects sooner and at lower costs than we are able.

Such competition may reduce the number of suitable investment opportunities available to us, may interfere with our ability to attract and retain tenants and may increase vacancies, which could result in increased supply and lower market rental rates, reducing our bargaining leverage and adversely affect our ability to improve our operating leverage.

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Moreover, our venture partners may, at any time, have business, economic or other objectives that are inconsistent with our objectives, including objectives that relate to the appropriate timing and terms of any sale or refinancing of a property.

In some instances, our venture partners may have competing interests in our markets that could create conflicts of

In some instances, our venture partners may have competing interests in our markets that could create conflicts of interest.

If the objectives of our venture partners or the lenders to our unconsolidated real estate ventures are inconsistent with our own objectives, we may not be able to act exclusively in our interests and the value of our investment in the unconsolidated real estate ventures may be affected.

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Real estate investments generally, and in particular large office and mixed use properties like those that we own, often cannot be sold quickly.

The capitalization rates at which properties may be sold could be higher than historical rates, thereby reducing our potential proceeds from sale.

The capitalization rates at which properties may be sold could be higher than historical rates, thereby

reducing our potential proceeds from sale.

Consequently, we may not be able to alter our portfolio promptly in response to changes in economic or other conditions.

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If the property taxes we pay increase, our cash flow would be adversely impacted, and our ability to pay any expected dividends to our stockholders and unitholders could be adversely affected.

The increased use of artificial intelligence (“AI ”) and automation may change the uses, space configurations and tenant requirements for certain of our properties in currently unforeseen ways.

In recent years, companies in certain industries have integrated AI and other advanced technologies, such as robotics and advanced automation of recurring tasks, into their businesses.

It is widely thought that most industries are in only the early stages of an advanced technology revolution that may have profound, and largely currently unknown, impacts on their businesses.

It is currently unknown how the ongoing adoption of such advanced technologies and automation across industries will impact the optimal space configurations and infrastructure features, and we may face new tenant requirements and requests that will require significant expenditures that may not be entirely recoverable through increased rents.

For example, the adoption of AI by our tenants may lead to infrastructure requirements that our buildings currently do not accommodate, such as increased power needs due to high-performance computing.

Infrastructure upgrades may necessitate

substantial capital expenditures and could potentially impact the environmental footprint of our building operations.

If technological developments result in a reduction or reconfiguration in space requirements by our tenants, demand by individual tenants and prospective tenants for space may decrease over time.

If we are not able to offset any reduction in demand from the foregoing developments through repurposing space, property dispositions, or other means, the realization of any of the aforementioned risks could have a material adverse impact on our business, revenues and results of operations.

Regulatory Risk Factors

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For example, many of our properties are located along the East Coast, particularly those in the central business districts of Philadelphia, Pennsylvania and Washington, D.C.

To the extent climate change causes variations in weather patterns, our markets could experience increases in storm intensity and rising sea-levels.

To the extent climate change causes variations in weather patterns, our markets could experience increases in storm intensity, severe winter weather and rising sea-levels.

Over time, these conditions could result in declining demand for office space in our buildings or our inability to operate the buildings at all.

1 unchanged sentence

While we maintain insurance coverage for flooding, we may not have adequate insurance to cover the associated costs of repair or reconstruction of sites for a major future event, lost revenue, including from new tenants that could have been added to our properties but for the event, or other costs to remediate the impact of a significant event.

We also rely on a limited number of vendors to provide key services, including, but not limited to, utilities, at certain of our properties.

If, as a result of unanticipated events, including those resulting from climate change, these vendors fail to adequately provide key services, we may experience significant interruptions in service and disruptions to business operations at our properties, incur remediation costs, and become subject to claims and damage to our reputation.

There can be no assurance that climate change will not have a material adverse effect on our properties, operations or business.

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We are dependent upon our key personnel, particularly Gerard H.

Sweeney - President and Chief Executive Officer, Thomas Wirth - Executive Vice President and Chief Financial Officer, Jeffrey DeVuono - Executive Vice President and Senior Managing Director, William Redd – Executive Vice President and Senior Managing Director and George Johnstone - Executive Vice President, Operations.

Sweeney - President and Chief Executive Officer, Thomas Wirth - Executive Vice President and Chief Financial Officer, Jeffrey DeVuono - Executive Vice President and Senior Managing Director, and William Redd – Executive Vice President and Senior Managing Director.

Among the reasons that Messrs.

Sweeney, Wirth, DeVuono, Redd and Johnstone are important to our success is that each has a favorable reputation, which attracts business and investment opportunities and assists us in negotiations with lenders, unconsolidated real estate venture partners and other investors.

Sweeney, Wirth, DeVuono and Redd are important to our success is that each has a favorable reputation, which attracts business and investment opportunities and assists us in negotiations with lenders, unconsolidated real estate venture partners and other investors.

If we lost their services, our relationships with lenders, potential tenants and industry personnel could be affected.

We are dependent on our other executive officers for strategic business direction and real estate experience.

We are currently completing a transition of our Executive Vice President – Operations.

Management transitions may create uncertainty and involve a diversion of resources and management attention, be disruptive to our daily operations or impact public or market perception, any of which could negatively impact our ability to operate effectively or execute strategies and result in a material adverse impact on our business, financial conditions and results of operations We are also dependent on our other executive officers for strategic business direction and real estate experience.

Loss of their services could adversely affect our operations.

1 unchanged sentence

Historically, we have paid quarterly distributions to our shareholders.

Our ability to make distributions in the future will depend upon:

Our ability to make distributions in the future will depend upon, among other things:

• the operational and financial performance of our properties;

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Our Board of Trustees also has the power to establish the preferences and rights of each class or series of units in the Operating Partnership, and may afford the holders in any series or class of preferred units preferences, distributions, powers and rights, voting or otherwise, senior to the rights of holders of common units.

Interest rates have increased and could continue to increase our interest costs on variable rate debt and could adversely impact our ability to refinance existing debt or sell assets on favorable terms or at all.

Rising interest rates could continue to increase our interest expense and could limit our ability to refinance existing debt when it matures.

A continued increase in interest rates would further increase our interest costs on variable rate debt and could adversely impact our ability to refinance existing debt or sell assets on favorable terms or at all.

Rising interest rates could limit our ability to refinance existing debt when it matures or significantly increase our future interest expense.

From time to time, we enter into interest rate swap agreements and other interest rate hedging contracts.

While these agreements are intended to lessen the impact of rising interest rates on us, they also expose us to the risk that the other parties to the agreements will not perform, we could incur significant costs associated with the settlement or termination of the agreements, the agreements will be unenforceable and the underlying transactions will fail to qualify as highly-effective cash flow hedges under the applicable accounting guidance.

In addition, an increase in interest rates could decrease the

amounts third parties are willing or able to pay for our assets, thereby limiting our ability to recycle capital and change our portfolio promptly in response to changes in economic or other conditions.

In addition, an increase in interest rates could decrease the amounts third parties are willing or able to pay for our assets, thereby limiting our ability to recycle capital and change our portfolio promptly in response to changes in economic or other conditions.

For more information about our interest costs on variable rate debt see Part II, Item 7.

28 unchanged sentences

In addition, our insurance policies may not recover all of our property replacement costs and lost revenue resulting from an attack.

We might not be able to pass through the increased costs associated with such increased security measures and insurance to our tenants,

which could reduce our profitability and cash flow.

We might not be able to pass through the increased costs associated with such increased security measures and insurance to our tenants, which could reduce our profitability and cash flow.

Furthermore, any terrorist attacks or armed conflicts could result in increased volatility in or damage to the United States and worldwide financial markets and economy.

1 unchanged sentence

Social, political and economic changes or instability, or other circumstances beyond our control could affect our business operations.

Our business may be adversely affected by social, political and economic instability, unrest or disruption, including legal, regulatory and policy changes by a new presidential administration in the U.S., protests, demonstrations, strikes, riots, civil disturbance, disobedience, insurrection, or social and other political unrest.

Such events may result in restrictions, curfews or other actions and give rise to significant changes in regional and global economic conditions and cycles, which may adversely affect our financial condition and operations.

Changes in federal policy, including tax policies, and at regulatory agencies occur over time through policy and personnel changes following elections, which can lead to changes involving the level of oversight and focus on certain industries and corporate entities.

Our business may be adversely affected by social, political and economic instability, unrest or disruption, including legal, regulatory and policy changes by Congress or the presidential administration in the U.S., protests, demonstrations, strikes, riots, civil disturbance, disobedience, insurrection, or social and other political unrest.

Such events have in the past, and may in the future, result in restrictions, curfews or other actions and give rise to significant changes in regional and global economic conditions and cycles, which may adversely affect our financial condition and operations.

Changes in federal policy, including tax policies, and at regulatory agencies occur over time through policy and personnel changes, particularly following elections, which can lead to changes involving the level of oversight and focus on certain industries and corporate entities.

The nature, timing, and economic and political effects of potential changes to the current legal and regulatory frameworks affecting the real estate industry remain highly uncertain.

Additionally, changes in federal policy that affect the geopolitical landscape, such as the imposition of tariffs and changes to U.S.

trade policy, have, and could in the future, lead to adverse effects on the U.S.

trade and foreign policy, have, and could in the future, lead to adverse effects on the U.S.

domestic economy and our business operations.

14 unchanged sentences

Liabilities associated with the risks that are retained by us are estimated, in part, by considering historical claims experience and actuarial assumptions.

While we carry general liability and umbrella policies to mitigate such losses on our general liability risks, our results could be materially impacted by claims and other expenses related to such insurance plans if future occurrences and claims differ from these assumptions and historical trends or if employee health-care claims which we self-insure up to a set limit per employee (and which are insured above such self-insured retention amount) exceed our expectations or historical trends.

occurrences and claims differ from these assumptions and historical trends or if employee health-care claims which we self-insure up to a set limit per employee (and which are insured above such self-insured retention amount) exceed our expectations or historical trends.

We have experienced, and may again experience, data security breach that may cause damage to our business and reputation.

In the ordinary course of our business, we maintain sensitive data, including our proprietary financial information, business information and the information of our tenants and business partners, in our data centers and on our networks.

breaches or disruptions, mainly through cyber-attack or cyber intrusion, including by computer hackers, foreign governments and cyber terrorists, have generally increased in number, intensity and sophistication.

Security breaches or disruptions, mainly through cyber-attack or cyber intrusion, including by computer hackers, foreign governments and cyber terrorists, have generally increased in number, intensity and sophistication.

Notwithstanding the security measures undertaken, our information technology has been, and may in the future be, vulnerable to attacks or breaches.

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Data breaches and/or the insolvency of such third parties and vendors may result in us incurring costs and may have other negative consequences.

Failure of the U.S.

federal government to manage its fiscal matters or to avoid a government shutdown may negatively impact the economic environment and adversely impact our results of operations.

Congressional disagreement over the federal budget and the maximum amount of debt the federal government is permitted to have outstanding (commonly referred to as the “debt ceiling”), has previously caused the U.S.

federal government to shut down for periods of time.

A failure by the U.S.

Congress to pass spending bills or address the debt ceiling at any point in the future would increase the risk of default by the U.S.

on its obligations, the risk of a lowering of the U.S.

federal government’s credit rating, and the risk of other economic dislocations.

Such a failure, or the perceived risk of such a failure, could consequently have a material adverse effect on the financial markets and economic conditions in the U.S.

and globally.

If economic conditions severely deteriorate as a result of U.S.

federal government fiscal gridlock, our operations, or those of our tenants, could be affected, which may adversely impact our financial condition and results of operations.

These risks may also impact our overall liquidity, our borrowing costs, or the market price of our common stock.

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.

What changed 10-K

Item 1A. Risk Factors