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Item 7. Management’s Discussion and Analysis

2026-02-23 compared with 2025-02-27 · 130 added, 121 removed, 436 unchanged (37% of the section changed)

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The following discussion should be read in conjunction with the Consolidated Financial Statements appearing elsewhere herein and is based primarily on our Consolidated Financial Statements for the years ended December 31, 2025, 2024 and 2023.

This report including the following discussion, contains forward-looking statements, which we intend to be covered by the safe-harbor provisions of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended.

Exchange Act of 1934, as amended.

The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “will,” “should” and similar expressions, as they relate to us, are intended to identify forward-looking statements.

Although we believe that the

expectations reflected in such forward-looking statements are based on reasonable assumptions, we can give no assurance that our expectations will be achieved.

Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, we can give no assurance that our expectations will be achieved.

These forward-looking statements are inherently uncertain, and actual results may differ from expectations.

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The Other segment includes properties in Northern Virginia, Washington, D.C., Southern Maryland, Camden County, New Jersey and New Castle County, Delaware.

In addition to the four segments, our corporate group is responsible for cash and investment management, development/redevelopment of certain properties during the construction period, and certain other general support functions.

In addition to the four segments, our corporate group is responsible for cash and investment management, development/redevelopment of certain real estate properties during the construction period, and certain other general support functions.

Our financial condition and operating performance are dependent upon the demand for office, residential, life science, parking and retail space in our markets, our leasing results, our acquisition, disposition and development/redevelopment activity, our financing activity, our cash requirements and economic and market conditions, including prevailing interest rates.

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Notwithstanding the challenging macroeconomic conditions, which have contributed to recent difficulties in asset dispositions at acceptable prices, leasing of vacant space at attractive rents and sourcing of capital for development projects at acceptable costs, as well as to impairments of assets, we believe that our portfolio of Properties and investments, and liquidity profile, will allow us to maintain stable operating performance.

In our ongoing assessment of our Properties as “quality” or “high quality”, we consider both their quantitative and qualitative attributes, including in relation to other properties within a given submarket or adjacent submarkets that compete with our portfolio for tenants.

The attributes that we consider in our assessment include the age and condition of the property, average asking rental rates, access to mass transit and highways, floorplate efficiencies, amenities within, and nearby, the property and availability of parking as well as market demographics such that bear on demand for space at our portfolio.

In our ongoing assessment of our Properties, we consider both their quantitative and qualitative attributes, including in relation to other properties within a given submarket or adjacent submarkets that compete with our portfolio for tenants.

We also believe that our portfolio and liquidity profile will enable us to raise capital, as necessary, in various forms and from different sources, including through secured or unsecured loans from banks, pension funds and life insurance companies.

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(1) Does not include properties under development, redevelopment, held for sale, or sold.

(2) Includes leasing at recently completed not-stabilized Properties.

(2) The statistics presented for periods ended prior to the three-month period ended December 31, 2025 have not been adjusted for properties sold subsequent to the periods presented.

(3) Calculated as percentage of total square feet.

(3) Calculated as a percentage of total net rentable square feet.

(4) Includes base rent plus reimbursement for operating expenses and real estate taxes.

(5) Calculated on a weighted average basis.

(6) For comparison purposes, we exclude new leases of space when the previous lease of such space ended more than 12 months from the signing date for the new leases.

(7) Average annual rent represents total initial contractual rent under the applicable leases plus contractual fixed rent increases due under the applicable leases averaged over the total terms of the applicable leases.

(6) The increases for the three months ended December 31, 2025 are primarily due to a higher percentage of new leases compared to renewals for the three months ended December 31, 2025 compared to the three months ended December 31, 2024.

The decreases for the year ended December 31, 2025 are primarily due to a lower percentage of new leases compared to renewals and more renewals with no tenant improvements for the year ended December 31, 2025 compared to the year ended December 31, 2024.

(7) For comparison purposes, we exclude new leases of space when the previous lease of such space ended more than 12 months prior to the signing date for the new leases.

(8) Average annual rent represents total initial contractual rent under the applicable leases (as impacted by free rent) plus contractual fixed rent increases due under the applicable leases averaged over the total terms (without regard to extension options) of the applicable leases.

Our actual leasing capital costs as a percentage of rents are largely a function of the composition of our leases to new tenants or renewals with existing tenants, in addition to size and timing of occupancy.

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(1) Represents Philadelphia portfolio assets located at 3000 Market Street and 3025 Market Street in Philadelphia, Pennsylvania, dedicated life science floors at Cira Centre in Philadelphia, Pennsylvania and 250 King of Prussia Road in Radnor, Pennsylvania.

(2) Represents our residential operation at 2929 Walnut Street in Philadelphia, Pennsylvania.

(2) Represents our residential operation at 2929 Walnut Street and 3025 JFK in Philadelphia, Pennsylvania.

(3) Does not include Properties under development/redevelopment.

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In seeking to increase revenue through our operating, financing, and investment activities, we also seek to minimize operating risks, including (i) tenant rollover risk, (ii) tenant credit risk and (iii) development risk.

We have compared our weighted-average in-place rental rates to our leases signed in 2024 and our current market leasing assumptions, and while the actual results will be dependent on the leases expiring in any particular period, we believe the current portfolio should generate positive rental rate increases for the remainder of fiscal 2024.

Tenant Rollover Risk

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We maintain an active dialogue with our tenants in an effort to maximize lease renewals.

If we are unable to renew leases or relet space under expiring leases, at anticipated rental rates, or if tenants terminate their leases early, our cash flow would be adversely impacted.

If we are unable to renew leases or relet space under expiring leases, at anticipated rental rates, or if our tenants terminate their leases early, our cash flow would be adversely impacted.

Tenant Credit Risk

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If economic conditions deteriorate, including as a result of inflation and high interest rates we may experience increases in past due accounts, defaults, lower occupancy and reduced effective rents.

This condition would negatively affect our future net income and cash flows and could have a material adverse effect on our financial condition.

These conditions would negatively affect our future net income and cash flows and could have a material adverse effect on our financial condition.

Development and Redevelopment Risk

Development and Redevelopment projects are subject to a variety of risks, including construction delays, construction cost overruns, building moratoriums, inability to obtain financing on favorable terms, inability to lease space at projected rates, inability to enter into construction, development and other agreements on favorable terms, and unexpected environmental and other hazards.

As of December 31, 2024, the following recently completed development project was not yet stabilized (dollars, in thousands):

Development and Redevelopment projects are subject to a variety of risks, including construction delays, construction cost overruns, building moratoriums, inability to obtain financing on favorable terms, inability to lease space at projected rates, inability to enter into construction, development, redevelopment and other agreements on favorable terms, and unexpected environmental and other hazards.

As of December 31, 2025, the following projects are in active development (dollars, in thousands):

Property/Portfolio Name Location Completion Date

Activity Type Approximate Square Footage Estimated Costs Amount Funded

Activity Type Approximate Room Count or Square Footage

Estimated Costs Amount Funded Debt Financing

165 King of Prussia Road

Redevelopment

168,294 $ 102,563 (a)

(a) Total project costs include $20.6 million of existing property basis.

As of December 31, 2024, the following active unconsolidated real estate venture development projects remain under construction in progress and we were proceeding on the following activity (dollars, in thousands):

Property/Portfolio Name Location Completion Date

Approximate Square Footage Estimated Costs (c)

Amount Funded Construction Loan Financing Our Share Remaining to be Funded Partner's Share Remaining to be Funded

3025 JFK Boulevard (64%)

Philadelphia, PA Q4 2023

(a) $ 320,111 $ 289,489 $ 186,727 $ 20,111 $ —

$59,500 $27,595 $—

3151 Market Street

Philadelphia, PA Q4 2024

441,000 $ 316,909 $ 207,733 $ 174,300 (b) $ — $ —

441,000 $316,909 $219,734 (a)

(a) In December 2025, we closed on a $80.5 million Commercial Property Assessed Clean Energy (“C-PACE”) financing for the development project at 3151 Market Street, which includes $30.0 million in future funding for new leasing.

In addition to the property listed above, we have classified one office building in Wilmington, Delaware as redevelopment, but we have yet to incur material development costs on the project.

As of December 31, 2025, the following active unconsolidated real estate venture development project remains under construction in progress and we were proceeding on the following activity (dollars, in thousands):

Property/Portfolio Name (% of BDN Ownership)

Location Completion Date

Approximate Square Footage Estimated Costs (a)

Amount Funded Construction Loan Financing Our Share Remaining to be Funded Partner's Share Remaining to be Funded

One Uptown - Office (64%)

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362,679 $ 206,400 $ 158,485 $ 121,650 $ — $ —

One Uptown - Multifamily (50%) Austin, TX Q3 2024 341 Units $ 144,029 $ 128,984 $ 85,000 $ — $ —

(a) Mixed used building with 428,000 rentable square feet consisting of 200,000 square feet of life science, 219,000 square feet of residential (326 units), and 9,000 square feet of retail.

(b) Debt financing amount represents an estimate at 55% Loan-to-Value ratio for 3151 Market Street.

(a) Estimated costs include base building costs plus projected tenant fit out costs for remaining vacancies.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses our Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP).

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the reporting periods.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the reporting periods.

Certain accounting policies are considered to be critical accounting policies, as they require management to make assumptions about matters that are highly uncertain at the time the estimate is made and changes in the accounting estimate are reasonably likely to occur from period to period.

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If we believe there is a significant possibility that we might dispose of the assets earlier, we assess the recoverability using a probability weighted analysis of the estimated undiscounted future cash flows expected to be generated from the operations and eventual disposition of the assets over the various possible holding periods.

If the recoverability assessment indicates that

the carrying value of a tested real estate investment is not recoverable from estimated undiscounted future cash flows, it is written down to its estimated fair value and an impairment is recognized.

If and when our plans change, we revise our recoverability analyses to use the cash flows expected from the operations and eventual disposition of each asset using holding periods that are consistent with our revised plans.

The company may also utilize a market valuation approach, comparing the subject property to recent comparable market transactions in a similar location.

If the recoverability assessment indicates that the carrying value of a tested real estate investment is not recoverable from estimated undiscounted future cash flows, it is written down to its estimated fair value and an impairment is recognized.

our plans change, we revise our recoverability analyses to use the cash flows expected from the operations and eventual disposition of each asset using holding periods that are consistent with our revised plans.

Real estate investment fair values are estimated based on agreements with third parties, discounted cash flows, or comparable sales.

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whether the improvements are unique to the tenant or reusable by other tenants;

whether the tenant is permitted to alter or remove the improvements without our consent or without compensating us for any

lost fair value;

whether the tenant is permitted to alter or remove the improvements without our consent or without compensating us for any lost fair value;

whether the ownership of the improvements remains with us or remains with the tenant at the end of the lease term;

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We believe that presentation of our consolidated financial information, without a breakdown by segment, will effectively present important information useful to our investors.

Net operating income (“NOI”), as presented in the comparative analysis, below is defined as total revenue less property operating expenses, real estate taxes, and third party management expenses.

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.

Net operating income (“NOI”), as presented in the comparative analysis, below is non-GAAP financial measure defined as total revenue less property operating expenses, real estate taxes, and third party management expenses.

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.

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NOI does not reflect interest expenses, real estate impairments, depreciation and amortization costs, capital expenditures, and leasing costs.

We believe that net income, as defined by GAAP, is the most appropriate earnings measure.

We believe that net income (loss), as defined by GAAP, is the most appropriate earnings measure.

See Note 18 “Segment Information,” to our Consolidated Financial Statements for a reconciliation of NOI to our consolidated net income (loss) as defined by GAAP.

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(b) “Total Portfolio,” which represents all properties owned and consolidated by us during 2025 and 2024,

(c) “Recently Completed/Acquired Properties,” which represents three properties placed into service or acquired on or subsequent to January 1, 2023,

(d) “Development/Redevelopment Properties,” which represents zero properties currently in development/redevelopment.

(c) “Recently Completed/Acquired - Not Yet Stabilized Properties,” which represents three properties (155 King of Prussia Road, 250 King of Prussia Road and 3025 JFK - office) placed into service, acquired or not yet stabilized on or subsequent to January 1, 2024,

(d) “Development/Redevelopment Properties,” which represents three properties (300 Delaware Avenue, 165 King of Prussia Road and 3151 Market Street) currently in development/redevelopment.

A property is excluded from our Same Store Property Portfolio and moved into Development/Redevelopment in the period that we determine to proceed with development/redevelopment for a future development strategy, and

(e) “2023 and 2024 Dispositions,” which represents four properties disposed of during 2023 and 2024.

(e) “2024 and 2025 Dispositions,” which represents properties disposed of during 2024 and 2025.

Comparison of Year Ended December 31, 2025 to the Year Ended December 31, 2024

Same Store Property Portfolio Recently Completed/Acquired Properties Development/Redevelopment Properties Other (Eliminations) (a) Total Portfolio

Same Store Property Portfolio Recently Completed/Acquired - Not Yet Stabilized Properties Development/Redevelopment Properties Other (Eliminations) (a) Total Portfolio

(dollars and square feet in millions except per share amounts) 2025 2024 $ Change % Change 2025 2024 2025 2024 2025 2024 2025 2024 $ Change % Change

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Net gain on disposition of real estate (9.4) (2.3) (7.1) 308.7 %

Net gain on sale of undepreciated real estate — (1.2) 1.2 (100.0) %

Net loss on sale of undepreciated real estate 0.1 — 0.1 — %

Operating income (loss) $ 125.4 $ 123.1 $ 2.3 1.9 % $ 3.4 $ (0.5) $ (1.2) $ (0.7) $ (110.2) $ (69.4) $ 26.7 $ 54.8 $ (28.1) (51.3) %

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Net gain on real estate venture transactions 0.2 56.8 (56.6) (99.6) %

Gain on early extinguishment of debt 1.0 0.2 0.8 400.0 %

Gain (loss) on early extinguishment of debt (12.3) 1.0 (13.3) (1,330.0) %

Income tax provision (0.1) — (0.1) — %

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(a) Represents certain revenues and expenses at the corporate level as well as various intercompany costs that are eliminated in consolidation, third-party management fees, provisions for impairment, and changes in the accrued rent receivable allowance.

Other/(Eliminations) also includes properties sold and properties classified as held for sale.

Other/(Eliminations) also includes properties sold, properties classified as held for sale, the parking operations of pre-development projects, the residential and retail components within University City in Philadelphia, Pennsylvania, the restaurant component of Cira Centre, the B.Labs incubator, remediation costs of insured events.

(b) Pertains to Core Properties.

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Rents from the Total Portfolio decreased $11.7 million primarily as a result of the following:

• $6.6 million decrease due to the sales of 200 North Radnor Chester Road, Radnor, PA and 8521 Leesburg Pike, Vienna, VA in the fourth quarter of 2023 and T hree Barton Skyway, Austin, TX in the third quarter of 2023;

• $9.9 million decrease due to the sale of five Class B office properties in the Plymouth Meeting Executive Center in Plymouth Meeting, PA in the third quarter of 2024;

• $2.5 million decrease due to the early termination of a single tenant occupant at a property in our Austin, Texas segment in the third quarter of 2023;

• $7.3 million increase relate Recently Completed/Acquired Properties which comprise 250 King of Prussia Road, Radnor, PA, 155 King of Prussia Road, Radnor, PA and 2340 Dulles Corner Boulevard, Herndon VA.

The remaining $5.5 million decrease in Rents is primarily due to increase vacancies across our Same Store Property Portfolio.

Depreciation and Amortization

Depreciation and amortization expense decreased primarily as a result of the following:

• $5.6 million decrease related to the reduction in the cost basis of assets as a result of the provision for impairment recorded on two properties in the Metropolitan Washington, D.C.

area within our Other segment in 2023;

• $4.0 million decrease related to accelerated depreciation on tenant improvements due to the early termination of a single tenant occupant at a property in our Austin, Texas segment in 2023;

• $2.9 million decrease related to the sales of three properties in 2023;

• $2.0 million decrease due to the sale of five Class B office properties in the Plymouth Meeting Executive Center in Plymouth Meeting, PA in the third quarter of 2024;

• $3.0 million increase due to the placement into service of our Recently Completed/Acquired Properties.

General & Administrative Expenses

General and Administrative Expenses increase is primarily as a result of increased deferred compensation expenses.

• $12.6 million decrease due to the sale of One and Two Barton Skyway, Austin, TX in the fourth quarter of 2024;

• Partially offset by $9.3 million increase related to our Recently Completed/Acquired Properties, which are comprised of 250 King of Prussia Road, Radnor, PA, 155 King of Prussia Road, Radnor, PA and the office portion of 3025 JFK Boulevard, Philadelphia, PA during 2025;

• $2.3 million increase related to the residential portion of 3025 JFK Boulevard, Philadelphia, PA, which was consolidated during the fourth quarter of 2025.

Other Revenue

Other revenue decreased primarily due to the Company recognizing $6.5 million of insurance proceeds in connection with the resolution of a legal dispute that was settled during the third quarter 2024.

Provision for Impairment

During second quarter of 2025, the Company recognized $63.4 million in aggregate impairments, comprised of (i) $34.1 million on two properties classified as held for use located in our Austin, Texas segment and (ii) $29.3 million on the sale of two office properties located in our Austin, Texas segment.

See Note 3 “Real Estate Investments.”

During the fourth quarter of 2024, we recognized a provision for impairment of $17.3 million on two office properties sold during the fourth quarter of 2024 located in our Austin, Texas segment.

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The purchase and sale agreement was terminated during the fourth quarter of 2024 and the property currently remains in our portfolio.

During the fourth quarter of 2023, we recognized a provision for impairment of $103.2 million on three properties in the Metropolitan Washington, D.C.

area within our Other segment.

These impairments resulted from the shortened hold period assumptions for the assets as a result of our plan to exit these markets.

Additionally, we recognized a provision for impairment of $12.3 million on an office property located within our Other segment, prior to sale.

During the third quarter of 2023, we recognized a provision for impairment of $11.7 million on office properties located in our Pennsylvania Suburbs segment.

The estimated fair value was based upon a pending purchase and sale agreement as of September 30, 2023 that was not completed as of December 31, 2023 due to the termination of the purchase and sale agreement.

During the second quarter of 2023, we recognized a provision for impairment of $4.5 million on an office property located in our Austin Texas, segment which met the held for sale criteria as of June 30, 2023 and was sold during the three months ended September 30, 2023.

See Note 3 “Real Estate Investments,” for further information.

Net Gain on Disposition of Real Estate

The $2.3 million gain on disposition of real estate for 2024 is due to the sale of a parking lot property in Richmond, VA for a gross sales price of $8.5 million and net cash proceeds of $8.3 million.

The $7.7 million gain on disposition of real estate for 2023 is due to the sale of a retail building located at 200 North Radnor Chester Road, Radnor, PA for a gross sales price of $14.2 million and net cash proceeds of $13.8 million.

During 2025, the Company recognized a gain of $9.4 million from installment proceeds received from the buyer of a property, located in Philadelphia, Pennsylvania, that the Company sold in March 2017.

In March 2017, the Company sold the property for a gross sales price of $21.4 million.

At the settlement, the Company received a partial payment of $12.0 million and recognized a corresponding gain on sale of $6.5 million.

The remainder of the payment of $9.4 million was deferred and was initially contingent upon termination or expiration of a lease at the property with an existing tenant.

In 2024, the deferred contingent payment obligation was changed to a fixed payment obligation.

The $9.4 million payment was received in 2025 and was recognized as a gain on disposition of real estate.

The $2.3 million gain on disposition of real estate for 2024 is due to the sale of a parking lot property in Richmond, Virginia for a gross sales price of $8.5 million and net cash proceeds of $8.3 million.

Interest Expense

Interest expense increased primarily due to our issuance of $400 million aggregate principal amount of 2029 Notes in April 2024, partially offset by the tender offer and redemption of our $350 million 4.10% Guaranteed Notes due 2024 in June 2024.

Additionally, interest expense increased during the third quarter of 2023 when Moody’s downgraded our senior unsecured credit rating from Baa3 to Ba1.

As a result of the downgrade, the interest rate on our 2028 Notes increased 25 basis points in September 2023 due to the coupon adjustment provisions within the 2028 Notes.

During the first quarter of 2024, S&P downgraded our senior unsecured credit rating from BBB- to BB+.

As a result of the downgrade, the interest rate on the 2028 Notes increased 25 basis points to 8.05% in March 2024 due to the coupon adjustment provisions within the 2028 Notes.

During the second quarter of 2024, Moody's downgraded our senior unsecured credit rating from Ba1 to Ba2.

As a result of the downgrade, the interest rate on the 2028 Notes increased 25 basis points to 8.30% in April 2024 due to the coupon adjustment provisions within the 2028 Notes.

Interest expense increased by approximately $18.7 million for the year ended December 31, 2025 compared to 2024, as detailed below.

Change in interest expense for the year ended December 31, 2025 compared to December 31, 2024 (in thousands)

Increases to interest expense due to:

An additional $150 million aggregate principal amount of 8.875% Guaranteed Notes due 2029

Issuance of $300 million aggregate principal amount of our 6.125% Guaranteed Notes due 2031

Decrease in capitalized interest on not wholly-owned properties (a)

$178 million Construction Loan acquired through 3025 JFK consolidation

Other interest expense

Total increases to interest expense

Decreases to interest expense due to:

Redemption of our $350 million 4.10% Guaranteed Notes due 2024

Repayment of the $245 million Secured Term Loan due 2028

Repayment of the $70 million One-Year Term Loan due 2025

Total decreases to interest expense

Total change in interest expense

(a) The Company ceased interest capitalization on One Uptown - Office, One Uptown - Multifamily, and 3025 JFK in 2025 as we reached the end of the capitalization period at the end of 2024.

Equity in Loss of Unconsolidated Real Estate Ventures

Equity in loss of real estate ventures increased primarily due to our recognition of an impairment charge on the properties in our Commerce Square Venture and JBG Venture.

Additionally, the increased losses from our unconsolidated real estate ventures are due to higher interest rates on the ventures’ outstanding indebtedness.

Equity in loss of real estate ventures decreased primarily due to the Company's recognition of an impairment charge on the properties in the Commerce Square Venture in the third quarter of 2024.

Additionally, the Company recognized an other than temporary impairment loss on its investment in the 4040 Wilson Venture, which was partially offset by the income at the Mid-

Atlantic Office Venture in the third quarter of 2024.

During 2025, the Company recognized impairment losses related to the consolidation of 3025 JFK Venture and 3151 Market Street Venture.

See Note 4 “Investment in Unconsolidated Real Estate Ventures” to our Consolidated Financial Statements for further information.

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See Note 4 “Investment in Unconsolidated Real Estate Ventures” to our Consolidated Financial Statements for further information.

Gain (loss) on early extinguishment of debt

The change in gain (loss) on early extinguishment of debt is related to the costs incurred as part of the payoff of the $245 million Secured Term Loan due 2028.

LIQUIDITY AND CAPITAL RESOURCES

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• current development and redevelopment costs;

• commitments to unconsolidated real estate ventures;

• commitments to unconsolidated real estate ventures and investment vehicles;

• distributions to shareholders to maintain our REIT status;

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We seek to increase cash flows from our properties by maintaining quality standards for our properties that promote high occupancy rates and permit increases in rental rates while reducing tenant turnover and controlling operating expenses.

Our revenue also includes third-party fees generated by our property management, leasing, development and construction businesses.

Our revenue also includes third-party fees generated by our property management, leasing, development/redevelopment and construction businesses.

We believe that our revenue, together with proceeds from property sales and debt financings, will continue to provide funds for our short-term liquidity needs.

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As of December 31, 2025, we were in compliance with all of our debt covenants and requirement obligations.

On January 19, 2023, we closed on a term loan secured by seven operating properties with an aggregate principal amount of $245.0 million (the “Secured Facility”).

The Secured Facility matures on February 6, 2028.

We used the net proceeds from the Secured Facility for general corporate purposes, including to reduce outstanding borrowings under our unsecured credit facility.

See Note 8 “Debt Obligations,” for further information.

On March 1, 2023, we closed on an unsecured term loan with a principal amount of $70.0 million (the “Unsecured Term Loan”).

The Unsecured Term Loan has a scheduled maturity date of February 28, 2024 with an option to extend for twelve months and bears interest at Daily Simple SOFR plus 1.75% with a 0.10% SOFR adjustment.

The Company exercised its

option to extend the Facility for an additional twelve months on January 24, 2024.

See Note 8 “Debt Obligations,” for further information.

On August 15, 2023, we entered into a construction loan agreement secured by the development project at 155 King of Prussia Road in Radnor, Pennsylvania in the aggregate principal amount of $50.0 million (the “Construction Loan”).

The Construction Loan has a scheduled maturity date of August 16, 2026 with an option to prepay at any time without a fee, premium or penalty.

The Construction Loan bears interest at SOFR plus 2.5%.

On March 1, 2023, the Company entered into an unsecured one-year term loan agreement in the aggregate principal amount of $70.0 million (the “2023 Term Loan”).

The 2023 Term Loan was scheduled to mature on February 28, 2024.

In January 2024, the Company executed its option to extend the 2023 Term Loan for an additional twelve months to February 28, 2025.

The 2023 Term Loan bore interest at Daily Simple SOFR plus 1.90% with a 0.10% SOFR adjustment per year and was interest-only (payable monthly) through the maturity date.

The Company repaid the loan in full on its maturity date of February 28, 2025.

On April 12, 2024, we completed an underwritten offering of $400.0 million aggregate principal amount of our 8.875% Guaranteed Notes due 2029 (the “2029 Notes”).

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On June 7, 2024, we redeemed the remaining $113.4 million of our 2024 Bonds at the aggregate principal amount outstanding together with accrued and unpaid interest thereon to the redemption date.

On June 27, 2025, we completed an underwritten offering and sale of $150.0 million of our 8.875% Guaranteed Notes due 2029 (the "Additional 2029 Notes").

The Additional 2029 Notes form part of the same series as our then outstanding $400 million aggregate principal amount of 8.875% Guaranteed Notes due 2029 (the "Initial 2029 Notes"), and, following the issuance and sale of the Additional 2029 Notes on June 27, 2025, $550 million aggregate principal amount of our 8.875% Guaranteed Notes due 2029 are outstanding.

The Additional 2029 Notes were priced at 106% of their face amount.

We received approximately $157 million of net proceeds from our issuance of the Additional 2029 Notes after the deduction for underwriting discounts and offering expenses.

The Additional 2029 Notes have been reflected net of premiums of $9.0 million in the consolidated balance sheets as of June 30, 2025.

On July 23, 2025, the Company repaid the $50.0 million construction loan related to 155 King of Prussia Road in Radnor, Pennsylvania in full.

On October 3, 2025, the Company completed an underwritten offering of $300.0 million aggregate principal amount of its 6.125% Guaranteed Notes due 2031 (the "2031 Notes").

The 2031 Notes were priced at 100% of their face amount.

The net proceeds from the offering, after deducting underwriting discounts and estimated transaction expenses related to this offering, totaled approximately $296.3 million.

On October 6, 2025, the Company repaid its $245.0 million Secured Loan due 2028 in full.

On October 22, 2025, the Company acquired all of its partner's preferred equity interest in the 3025 JFK Venture and consolidated the existing $178 million secured construction loan that matures in July 2026.

The interest rate is capped at 6.60% through the maturity of the loan.

On December 19, 2025, the company closed on a $50.5 million C-PACE financing on its development project at 3151 Market Street located in, Philadelphia, Pennsylvania.

The loan bears interest at 7.31% and has a maturity date of March 31, 2054.

Our outstanding 7.55% Guaranteed Notes due 2028 (the “2028 Notes”) include an interest rate adjustment provision whereby the interest rate payable on the 2028 Notes is subject to a 25 basis point adjustment if either Moody's Investors Services Inc, and its successors ("Moody's"), or S&P Global Ratings, and its successors ("S&P") downgrades (or subsequently upgrades) its rating assigned to the 2028 Notes.

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Our ability to incur additional debt is dependent upon a number of factors, including our credit ratings, the value of our unencumbered assets, our degree of leverage and borrowing restrictions imposed by our lenders.

If one or more rating

agencies were to downgrade our unsecured credit rating, our access to the unsecured debt market would be more limited and the interest rate under our unsecured credit facility and unsecured term loan would increase.

If one or more rating agencies were to downgrade our unsecured credit rating, our access to the unsecured debt market would be more limited and the interest rate under our unsecured credit facility and unsecured term loan would increase.

The Parent Company unconditionally guarantees the Operating Partnership’s unsecured debt obligations, which, as of December 31, 2025, amounted to $2,328.6 million.

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The Operating Partnership also considers net sales of selected properties and recapitalization of unconsolidated real estate ventures as additional sources of managing its liquidity.

During the year ended December 31, 2024 we completed the sales of the Plymouth Meeting Executive Center, comprised of five office properties totaling a 521,288 square feet located in Plymouth Meeting, PA for a gross sales price of $65.5 million, One and Two Barton, comprised of two office properties totaling 390,963 square feet in Austin, TX for a gross sales price of $107.6 million, 55 US Avenue, 11.0 Acres of land located in Gibbsboro, NJ for a gross sales price of $6.5 million, and Dabney Land Westwood, 11.0 Acres parking lot in Richmond VA for a gross sales price of $8.5 million.

During the year ended December 31, 2025, we completed the sales of two office properties located in the Austin, Texas segment for a total gross sales price of $72.7 million, and 23.2 acres of land located in Richmond, Virginia for a gross sales price of $4.6 million.

As of December 31, 2025, we had $32.3 million of cash and cash equivalents and $564.5 million of available borrowings under our unsecured credit facility, net of $35.5 million in letters of credit outstanding.

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Year Ended December 31,

Activity 2024 2023 (Decrease) Increase

Activity 2025 2024 Variance

Operating $ 116,701 $ 181,125 $ (64,424)

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Our Properties provide a relatively consistent stream of cash flows that provides us with the resources to fund operating expenses, debt service and quarterly dividends.

The increase in operating cash flows is primarily due to the decrease in average occupancy in 2024 compared to 2023.

The decrease in operating cash flows is primarily due to the decrease in prepaid rents in 2025 compared to 2024.

Cash is used in investing activities to fund acquisitions, development, or redevelopment projects and recurring and nonrecurring capital expenditures.

We selectively invest in new projects that we expect will enable us to take advantage of our development, leasing, financing, and property management skills and invest in existing buildings that meet our investment criteria for additional capital.

We selectively invest in new projects that we expect will enable us to take advantage of our development/redevelopment, leasing, financing, and property management skills and invest in existing buildings that meet our investment criteria for additional capital.

During the year ended December 31, 2025, when compared to the year ended December 31, 2024, the change in investing cash flows was due to the following activities (in thousands):

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Proceeds from the sale of properties (81,546)

Proceeds from note receivable 9,384

Capital distributions from unconsolidated real estate ventures (43,471)

Decrease in net cash used in investing activities $ 54,727

We generally fund our investment activity through the sale of real estate, property-level financing, credit facilities, senior unsecured notes, and construction loans.

Increase in net cash used in investing activities $ (86,097)

We generally fund our investment activity through the sale of real estate, property-level financing, unsecured and secured credit facilities, senior unsecured notes, and construction loans.

From time to time, we may issue common or preferred shares of beneficial interest, or the Operating Partnership may issue common or preferred units of limited partnership interest.

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Repayments of debt obligations (37,986)

Redemption of limited partnership units 5

Debt financing costs paid (1,289)

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Other financing activities (510)

Increase in net cash used in financing activities $ (79,083)

Increase in net cash provided by financing activities $ 88,003

Capitalization

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(dollars in thousands)

Fixed rate $ 2,123,610 $ 1,985,000

Variable rate - unhedged (b) (c)

Fixed rate (b) (c)

$ 2,385,934 $ 2,123,610

Variable rate (d)

178,014 102,734

Total $ 2,563,948 $ 2,226,344

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(c) On January 16, 2024, the Trust Preferred I - Indenture IA was swapped to a fixed rate at 5.14% for the period from March 30, 2024 to December 30, 2026 and Trust Preferred I - Indenture IB and Trust Preferred II - Indenture II were swapped to a fixed rate at 5.24% for the period from January 30, 2024 to January 30, 2027.

(d) The Company consolidated the $178 million construction loan as a result of the recapitalization of 3025 JFK joint venture during the fourth quarter of 2025.

The construction loan has a stated interest rate of SOFR + 3.6%.

On July 22, 2025, the Company entered into an interest rate cap agreement of 3% on the loan.

With the interest rate cap in-place, the maximum interest rate due is 6.60%.

Scheduled principal payments and related weighted average annual effective interest rates for our debt as of December 31, 2025 were as follows (dollars in thousands):

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2031 300,000 6.1 %

2035 78,610 5.2 %

Thereafter 57,324 7.3 %

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(ii) a secured debt leverage ratio not to exceed 40%;

(iii) a debt service

coverage ratio of greater than 1.5 to 1.0;

(iii) a debt service coverage ratio of greater than 1.5 to 1.0;

and (iv) an unencumbered asset value of not less than 150% of unsecured debt.

The Operating Partnership is in compliance with all covenants as of December 31, 2024.

The charter documents of the Parent Company and Operating Partnership do not limit the amount or form of indebtedness that the Operating Partnership may incur, and its policies on debt incurrence are solely within the discretion of the Parent Company’s Board of Trustees, subject to the financial covenants in the Credit Facility, indenture and other credit agreements.

The Operating Partnership was in compliance with all covenants as of December 31, 2025.

The charter documents of the Parent Company and Operating Partnership do not limit the amount or form of indebtedness that the Operating Partnership may incur, and its policies on debt incurrence are solely within the discretion of the Parent Company’s Board of Trustees, subject to the financial covenants in the Unsecured Credit Facility, the indenture for our unsecured notes and our other credit agreements.

In order to maintain its qualification as a REIT, the Parent Company is required to, among other things, pay dividends to its shareholders of at least 90% of its REIT taxable income.

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Substantially all our leases are structured as base year or triple net leases which provide for reimbursement billings for operating expense pass-through charges, real estate tax and insurance reimbursements on a per square-foot basis, or in some cases, annual reimbursement of operating expenses above certain per square-foot allowances.

In addition, as of December 31, 2024, approximately 96% of our leases (as a percentage of the aggregate net rentable square feet of our wholly-owned portfolio) contain annual rent escalations that are either fixed (generally ranging from 2.0% to 3.0% per lease year) or indexed based on a consumer price index or other indices.

In addition, as of December 31, 2025, approximately 97% of our leases (as a percentage of the aggregate net rentable square feet of our wholly-owned portfolio) contained annual rent escalations that are either fixed (generally ranging from 2.0% to 3.0% per lease year) or indexed based on a consumer price index or other indices.

We believe such lease provisions mitigate adverse impacts of inflation on our earnings from real estate operations.

However, recent inflation and higher interest rates have caused an increase in our borrowing costs, including on our variable rate debt, and on our operating expenses that are not subject to the lease pass-through provisions.

While we have experienced increased inflation, our Same Store Property Portfolio operating margins remained consistent at 63.1% for the twelve months ended December 31, 2024 and 2023, respectively, primarily due to the expense reimbursement provisions noted above.

We have experienced increased inflation, resulting in our Same Store Property Portfolio operating margins decreasing to 63.3% from 63.9% for the twelve months ended December 31, 2025 and 2024, respectively, primarily due to increased property operating expenses.

The expense reimbursement provisions in our leases resulted in Same Store Property Portfolio operating expense recovery rates of 52.6% and 52.1% for the twelve months ended December 31, 2025 and 2024, respectively.

Contractual Obligations

Other Contractual Obligations

We provide customary guarantees for certain development projects of our unconsolidated real estate ventures.

See Note 19 “Commitments and Contingencies, ” to our Consolidated Financial Statements for further details on payment guarantees provided on the behalf of real estate ventures.

See Note 19 “Commitments and Contingencies, ” to our Consolidated Financial Statements for further details on payment guarantees provided on behalf of our real estate ventures.

In connection with the Schuylkill Yards Project, we entered into a neighborhood engagement program and, as of December 31, 2025, had $4.2 million of future contractual obligations.

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This property is consolidated, as the borrower is a VIE and we, through our ownership of the second and third mortgages, are the primary beneficiary.

On October 21, 2020, we 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.

On October 21, 2020,

we 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.

Under the agreement, we have 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.

If we were to sell the restricted property before the expiration of the restricted period in a non-exempt transaction, we may be required to make significant payments to certain of the former owners of Two Logan Square on account of tax liabilities attributed to them.

Additionally, we will be required to pay these certain former owners an amount estimated at approximately

$0.6 million to redeem their residual interest in the fee owner of this property.

Additionally, we will be required to pay these certain former owners an amount estimated at approximately $0.6 million to redeem their residual interest in the fee owner of this property.

The $0.6 million payment is included within “Other liabilities” on the consolidated balance sheets.

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Our financial instruments consist of both fixed and variable rate debt.

As of December 31, 2024, our consolidated debt consisted of (i) unsecured notes with an outstanding principal balance of $1,550.0 million, all of which are fixed rate borrowings, (ii) variable rate debt consisting of trust preferred securities that have been swapped to fixed rates with an outstanding principal balance of $78.6 million, (iii) a $600.0 million Credit Facility with no outstanding borrowings, (iv) a secured fixed rate term loan with an outstanding principal balance of $245.0 million, (v) a construction loan for the property at 155 King of Prussia Road with an outstanding balance of $32.7 million and (v) two unsecured term loans of $250.0 million and $70.0 million.

As of December 31, 2025, our consolidated debt consisted of (i) unsecured notes with an outstanding principal balance of $2,000.0 million, all of which are fixed rate borrowings, (ii) variable rate debt consisting of trust preferred securities that have been swapped to fixed rates with an outstanding principal balance of $78.6 million, (iii) a $600.0 million Credit Facility with no outstanding borrowings, (iv) a secured C-PACE loan for the property at 3151 Market with an outstanding principal balance of $57.3 million that has a fixed interest rate, (v) a construction loan for the property at 3025 JFK with an outstanding balance of $178.0 million that has an interest rate cap and (v) one unsecured term loan of $250.0 million.

The $250.0 million unsecured term loan has been swapped to a fixed rate.

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We believe that to further understand our performance, FFO should be compared with our reported net income/(loss) attributable to common unit holders and considered in addition to cash flows in accordance with GAAP, as presented in our consolidated financial statements.

The following table presents a reconciliation of net income attributable to common unitholders to FFO for the years ended December 31, 2024 and 2023:

The following table presents a reconciliation of net loss attributable to common unitholders to FFO for the years ended December 31, 2025 and 2024:

Year Ended December 31,

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Amount allocated to unvested restricted unitholders 1,231 1,178

Net gain on real estate venture transactions (63,696) (181)

Net (gain) loss on real estate venture transactions 227 (63,696)

Net gain on disposition of real estate (9,396) (2,297)

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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 7. Management’s Discussion and Analysis