Good morning. My name is Felicia, and I will be your conference operator today. At this time, I would like to welcome everyone to the Brandywine Realty Trust First Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator Instructions) Thank you. I would now like to turn the conference over to Mr. Jerry Sweeney, President and CEO. Mr. Sweeney, please begin.

Felicia, thank you very much. Good morning, everyone and thank you all for participating in our first quarter earnings call. On today’s call with me are George Johnstone, our Senior Vice President of Operations; Gabe Mainardi, our Vice President and Chief Accounting Officer; Howard Sipzner, our Executive Vice President and Chief Financial Officer; and Tom Wirth, our Executive Vice President of Portfolio Management and Investments. Prior to beginning, I would like to remind everyone that certain information discussed during our call may constitute forward-looking statements within the meaning of the federal securities laws. Although we believe the estimates reflected in these statements are based on reasonable assumptions we cannot give assurance that the anticipated results will be achieved. For further information on factors that could impact our anticipated results, please reference our press release as well as our most recent annual and quarterly reports filed with the SEC. So, to start off our prepared comments, as is our normal practice, I will provide an overview on three key business plan components; of operations, balance sheet and investments as well as provide some color on recent transactional activity. George and Howard will then discuss our operating and financial results, and certainly Gabe and Tom are here to answer any questions on their areas. We have had a very active and productive first quarter. Operational performance was strong and the 2013 plan is on target. Our recent equity offering strengthened our balance sheet and created financial capacity, and our investment objectives are also very much on track. Macroeconomic concerns remained at the forefront of tenant decision-making processes, but during the quarter, we continue to benefit from an ongoing flight-to-quality landlords and product. In looking at specific operating performance benchmarks, we had a strong leasing quarter activity through the portfolio average 268,000 square…

Thank you, Jerry. From an overall standpoint we continue to see recovery occurring in our markets. All of our markets experienced higher levels of year-over-year leasing activity and absorption for the quarter was up in all markets with the exception of Northern Virginia. We are outperforming market vacancy in all of the Northern Virginia where trailed the market by 100 basis points, but even there we have closed that gap by 1100 basis points since this time last year. Turning to our portfolio specifically, we continue to see good levels of leasing activity from space inspections to pipeline, to lease executions. In terms of lease executions during the quarter we signed 860,000 square feet of leases including 350,000 square feet of new and expansion leases and 510,000 square feet of renewals. Tenant decision making remains relatively unchanged as leases executed in the first quarter averaged 96 days from initial inquiry to lease execution as compared to 94 days in the fourth quarter of 2012 and 98 days in the third quarter of 2012. Lease commencements totaled 692,000 square feet including 262,000 square feet of new leases, 373,000 square feet of renewal leases and 570,000 square feet of tenant expansions. During the quarter we also had 322,000 square feet of tenants move out upon expiration and 122,000 square feet of early terminations. Most notably our percentage leased has increased 50 basis points from year end to 90.8%. We have 729,000 square feet of executed leases on space that was vacant at quarter end. We are encouraged by the lease levels we have achieved in Richmond at 90.3%, New Jersey, Delaware at 88.3% and Metro DC at 85.5%. We have maintained all of our original business plan operating metrics and remain confident in our ability to execute. We have achieved $37.4 million…

Thank you, George, and thank you Jerry. For the first quarter of 2013, core FFO totaled $51.7 million, or $0.35 per diluted share. And we beat the $0.34 analyst consensus by $0.01. Our FFO payout ratio is 42.9% on the $0.15 distribution we paid in January 2013. Core FFO provides a better sense of our FFO run-rate by eliminating transactional and capital market activities as noted in our supplemental package on page 14. Notably, for the first quarter of 2013, core FFO is essentially the same as NAREIT FFO. I would like to make a couple of additional observations regarding our first quarter results. Our first quarter FFO is very high quality with termination revenue, other income, management fees, interest income, and aggregate JV activity totaling just $6.3 million gross, or $4.9 million net after associated expenses in line with our 2013 expectation for these categories. Our first quarter NOI and EBITDA margins at 60.2% and 64.2% respectively remain at or near their highest levels for these metrics, all the way back to early 2009. Same-store NOI growth rates for the first quarter were 3.4% on a GAAP basis and 6.3% on a cash basis, both excluding termination fees and other income items. We have now had seven consecutive positive quarters for the GAAP metric and four for the cash metric and are maintaining our 2013 targets for same-store NOI growth at 3% to 5% GAAP and 4% to 6% cash. First quarter interest expense of $30.9 million was down $2.3 million versus the fourth quarter and down $3.2 million versus the first quarter a year ago, both reflecting the impact of our late fourth quarter 2012 capital market and liability management activities. And with $13.3 million of revenue maintaining or recurring capital expenditures in the first quarter, we achieved…

Thank you, Howard. That really wraps up our prepared comments. Look as we view, we are very pleased with first quarter results. We certainly have more work to do for the balance of the year and certainly are planning ahead for 2014 and ‘15. But we believe that the success we’ve had in the past will continue as we look at our business plan execution for the balance of 2013 and as George and Howard touched on to may committed to meeting all of our operational goals as well as our balance sheet management and investment as well as this continued shift to urban and town center markets. With that we would be delighted to open up the floor for questions. As we always do, we ask that in the interest of the time you limit yourself to one question and a follow-up. Felicia?

(Operator Instructions) And your first question comes from the line of Brendan Maiorana with Wells Fargo Advisors.

Thanks. Good morning.

Good morning.

So, Jerry and Tom the assets on market Pennsylvania, New Jersey, California, Texas, can you give us a sense in sort of like broad dollars roughly how much that is. And then can you break it out between assets that you think are in just sort of broad dollar terms non-strategic, non-long-term holds versus assets that I think as you are sort of indicating with Austin that you want to maintain from a longer term presence via JV, but maybe just pricing now is compelling, if that’s what you are bringing it to market?

Brendan, it’s Jerry, good morning. The Austin portfolio is the bulk of what we have in the market in terms of dollars. And there have published reports on that in a range from the high $200 million to low $300 million range. So, we will see how that process plays its way through. And the rest of the assets are small portfolios, two or three building complexes, single building complexes in both Pennsylvania, Georgia, and Delaware. And the total aggregate value of those is probably about $100 million to $125 million. But one of the things that we always do, we typically put a number of projects in the market either based upon the high level or reverse inquires or a broad based marketing effort to really test and see where optimal pricing comes in based upon what we think the NPV and the IRR of an internal hold is on that asset. So, we are very pleased I think generally with the level of activity we are seeing across the board on our offerings. As I have mentioned in my comments, we are clearly seeing increasing capital flows into the suburban office space from both midsize and large institutions. I think that’s continuing to increase our level of encouragement on what we are seeing on some of these offerings. So, yeah every quarter we always, it’s been more assets into the marketplace. I would say that of the $100 million and $125 million that we have in Pennsylvania, New Jersey and California they are nearly non-core assets, and three were looking for straight disposition.

Yeah I mean so do you think that as we have sort of talked in the past about the non-core portion of the portfolio, do you think that you accelerate the dispositions of those over the next several quarters because there is more capital interest and if that’s the case, you have got a lot of cash, you are expecting to end the year with $185 million to $190 million of cash, what were the opportunities for reinvestment?

Okay, Tom and I will talk to it. Tom I will take the first for me. Look I think in terms of on the dispositions side, we have made the decision of being fairly pragmatic and patient on liquidating what we deem to be non-core holdings. We have continually touched the market on small to larger size portfolios in terms of testing the market for price acceptance. I think the great thing we have seen in the last couple of quarters and really accelerated in the first quarter of this year is an increasing number of capital sources coming to the market, continued expectation of a benign rate environment with significant reemergence of the CMBS market, which is a higher loan to value and effectively priced. And more importantly, we are seeing more visibility on the leasing activity front, at an asset level. So, the combination of continued progress on the operating front, with those capital flows I think really does present a pretty good opportunity for us to continue to move more of these profits in the market to test where we think things may become – more pricing may come out. So, our goal for this year is pretty well set in the 221, that doesn’t mean that we will not exceed that, but we are reluctant to give specific targets beyond that only because to a great degree our ability to achieve a higher sales target is not necessarily a functional of how much we put in the market, but what we get back in the terms of acceptable pricing. But I do think that the convergence of all those factors does create a pretty positive landscape for us to be moving more of these non-core holdings into the market sooner rather than later. And then Tom maybe you can give some color on where we are seeing some acquisition opportunities.

Sure, Brendan as we look at the markets, looking at the Philadelphia CVD, it’s been a slow but steady market. There has been several transactions brought to market recently and there has been a couple recently closed at good pricing, so we see some opportunities there. The Philadelphia suburbs have improved. Office properties have been brought to the market. We feel the market is still slow, but it’s recovering and it’s probably a little better or more buoyant than last year. As we look at Metro DC that’s one of the areas we do see a little more activity beginning of the year we said it was very slow on our last call and that not much was coming to market. Since that time, there has been an increased number of buildings on the markets and developments have also come to the market. And inside the beltway is pretty much where we are seeing activity. And again two recent sales have been announced inside the beltway at some very strong pricing. So, with that we would expect in addition to what we are seeing from the market now, we expect to see some more acquisitions come to market as we look out. We continued to see that pricing well on a sort of a – we look at it on an IRR basis but on the cap rate basis and on an IRR basis pricing is strong. I think we have seen more conservative outlook on rate growth in the DC area. So, pricing on a relative basis is probably less than where it was last year. As rent projections have come in we continue to look investments with all states we have targeted some very keen submarkets that we are looking and we are beginning to see some activity…

Great and thank you.

Your next question comes from the line of George Auerbach with ISI Group.

Great, thanks. Good morning guys. Jerry how many square footage leasing for the year? Do you think renewals are well ahead of schedule, the new leasing sort of spread 50-50 what’s been executed and what’s remaining. Can you maybe give us some color on which markets should have left in the two be executed newly leasing?

Sure George, we are leased for about 200,000 square feet of 997,000 square feet, anticipated to come out of our Metro DC region. We got just shy of 100,000 square feet kind of coming out of New Jersey, Delaware. And then really the majority of its still contemplated to come out of both Pennsylvania suburbs and some additional square footage in Philadelphia CBD. So, again I think we feel confident based on the pipeline that even though we are only at kind of 50% mark on square footage, but there is still enough pipeline there to convert our conversion rates of consistently kind of been in that 40% range. And we do think that there is actually maybe some opportunities for some regions to pick up for others if need be.

Great, that’s helpful and just a follow-up. How shall I read this table, the targeted revenue for the year is $44 million and the targeted square footage of leasing is 3.5 million, that’s about $12 a foot is that sort of increment revenue that you are hoping to pick up per a foot or is that total revenue figure?

I mean it’s all based on I mean the square footage is the total square footage though the revenue contribution obviously is dependent on what month it commences, so 10,000 square feet commencing in December is only going to generate one month of income through that.

Thanks, George it’s a pro rata of revenue stream based upon the timing of actual occupancy not in average rental rate achieved on the tenancy.

Yeah I mean I think the pages in the supplemental that are more indicative of the rents we are currently getting would be more on page 25 of the supplemental and then for the leases that are already in the portfolio you will do get a sense of that on pages 26 and 27.

Okay. Thank you.

You’re welcome. Thank you.

Your next question comes from the line of Rich Anderson with BMO Capital Markets.

Good morning everyone. So, may be if our like just over, under what could happen for the rest of the year? Is this the reasonable outcome, where you maybe you beat the disposition number of $82 million for the rest of the year meaning that maybe a little bit more dilutive, but you beat also on the same-store basis, because you had a good quarter this year, and the net of it is no impact of the prevailing guidance, do you think that, that’s maybe a reasonable way that this year could unfold for you?

Well, Rich, it’s Howard. I think you laid out two possible scenarios, but I think the third ingredient there is that if we exceed the disposition target, there is a reasonable expectation that we will put some of that money to work in properties that Tom spoke of earlier. So, we think more about that disposition figure as a net number, it maybe reflective of no acquisitions, and there maybe a higher level of dispositions and some level of underlying acquisition. So, think about it as a net number and you don’t generally expect it to then jump one way or the other.

Okay, that’s very helpful. Thanks. And then on the Austin discussion point, can you just kind of frame your thought process there a little bit better for me, you are looking at a joint venture scenario with what you have and yet you are also in the market potentially looking for assets to buy. So, what is it about, is it asset specific issue that you want to monetize, and yet you like the market? Can you just kind of frame the strategy a little bit more clearly Austin for me?

Sure, be happy to. It’s always a challenge when the fresh reports get out and they are not entirely on point, and they dovetail with the market, but here are our thoughts on Austin. It’s clearly a solid market and a very strong performer for us, that is great demand drivers and that is one of the top job growth markets in the country. We have been excellent on the ground team that has worked diligently and produced great results through a real cyclical downturn over the last four years. We are in a number one ownership position in that marketplace in terms of square footage in the suburban marketplace. It’s also a very cyclical market as evidenced by its performance over the last 15 years. Rents have increased dramatically in the last 12 to 18 months clearly been a strong performer. Lot of that growth is still coming out of the shift east on the technology sector, which is always very cyclical, but we think Austin has a lot to offer. And our performance there, I think reflects our ability to accomplish results through both our product quality and our management team. The market ownership standpoint though is extraordinarily fragmented. I mean, after Thomas Properties dominant position downtown, our position on the suburban counties, the next largest institution is or the next largest onerous institution that controls much less than half of our stake. So, after that the ownership is incredibly fragmented. As we have been bidding on properties and certainly as evidenced by our acquisition late last year of two buildings at Lantana, it’s become very clear that values have accelerated dramatically. Cap rates have compressed. The bid list for a lot of assets was amazingly institutional driven. Lot of large institutions looking to get a foothold in…

I guess, it is done the other side also a buyer in the market, I mean, how are you finding deals that pencil for you on the other side of the table?

Well, look I mean certainly we have looked at everything that has come on the marketplace. And I think one of the drivers of our decision to add the market on our portfolio was influenced by what we are seeing on the buy side that as I indicated cap rate compressions have been fairly dramatic in the last several quarters. Rental rates continue to rise. Rental rates in some submarkets are approaching replacement cost rents. So, in looking at where pricing has gone some of the demand drivers in the market, the bid list on properties, it all kind of created the picture where we thought it was worthwhile to test the market on what the portfolio premium, if any we could achieve on our asset base.

Okay. And then if I could just one quick one was that retention of 52 expected and also was the negative net absorption expected for the quarter?

Yes, we knew we started rolling out.

Okay.

So, those numbers were exactly in line with our plan.

Okay, that’s right. Okay, thank you.

And our next question comes from the Josh Attie with Citi.

Thanks. Good morning. Just to follow-up on Brendan’s question on use of capital, when you think about your $200 million of cash and also the money that you could get coming in from asset sales, do you think there is a greater probability that you used that to tender for some higher coupon bonds early or are you more inclined to put that money to work through acquisition?

Well, look, I mean, we are keeping all of our options right now, between Tom’s efforts and Howard’s effort, they are spending a lot of time accessing their various points in the market whether it’s on the debt side or the acquisition side. And my guess is we will probably do a combination of both things. I mean, we do have the objective of continued strength in the balance sheet. Clearly, the current rate environment today and our experience in the fourth quarter on tendering for bonds is that it’s a good strategy, but as rates have continued to compress asset spreads. It gets to be an increasingly tough mathematical exercise. So, we have several avenues. One is to simply retain the cash and use that to deploy into direct acquisitions. We can pay down some of the bank term loans or pieces thereof. We could look at make holes on near-term bonds or tender for bonds. And certainly as the acquisition pipeline continues to build, that will be a key element in our thinking as well.

Okay, thanks. And how should we think about the progression of occupancy over the remainder of the year, you ended the quarter little under 88%, so yes, 200 basis points of growth the next three quarter. It sounds like you have a lot of leases of having commenced, but you probably also have some vacates, what should we expect in terms of the progression of those commencements in occupancy growth over the next three quarters? Is it going to be relatively even or are there loans we should be aware of?

Yeah, I think then in the – what we have outlined before is we would expect a lot of that actual occupancy growth to occur in the second half of the year. I think as we are looking at the run rate now, Josh, we have the things we are focused on it feels very good the first quarter is this increasing spread between our leasing and our occupancy levels. And really our leasing targets really are paramount, that’s what creates the forward momentum on all the operating metrics. But we would expect that next quarter occupancy will be very much in the same range where we are now to the accelerating beyond that in the third and fourth quarter. And certainly we’re very happy where we stand today at 90.8% lease with a big pipeline of deals, a lot of those deals were forward commencements.

And then also when you look at the leasing pipeline it sounds like the spread should get better because the spread – cash spread guidance is 4 to 6, you were 3.5 in the first quarter so, should we expect that the spreads are also going to improve the next few quarters.

Yeah, look – I think they will continue to kind to be within that bandwidth some quarters, I think just depending on the timing of the deal, the market of the deal, but I think overall again another reason why we held both the same store NOI growth and the mark-to-market target is everything is progressing as expected.

Okay, thanks. And then just lastly, could you – could you may be tell us the cap rate on the Delaware office sale?

Yeah, I think the cap rate on the Delaware office sale is about $140 of square foot. The cap rate is we almost look as almost an irrelevant consideration only from this standpoint. The tenant had occupied pretty much the entire complex had near-term lease expirations. So far, it’s really a binary outcome. The rental rate they were paying was well above existing market by a significant factor. So, I think how we are touched on the income that we will lose is part of the sale. But I think from our standpoint being a 20% owner and we contribute this profit to a venture a number of years ago when harvest to the great amount of value with that point and our venture with Macquarie went through two other success of partners and I think our partners felt that now was a good time to sell as opposed to facing that binary outcome. We are good partners and we felt that was a sage decision and we went up selling at the tenant that really had an objective of only in the real-estate as opposed to leasing it.

Okay. And I mean could you tell us just you’re recognizing that the current income would go down. Can you tell us just what the cap rate was on the current level of income?

It was in the low double-digits.

Okay, okay, thank you very much.

And your next question comes from the line of Jordan Sadler with KeyBanc.

Thanks, good morning. Just wanted to dig in a little bit on the acquisition front to may be heard a little bit about the nature of sort of what would be targeting in terms of acquisitions. Would it be most of much of the investment we are seeing so far has been opportunistic or development oriented? Should we expect to see more of that or are they also core type opportunities.

Great question. The – and again (indiscernible) see I think when we look at the existing pipeline today, it’s really it’s a combination of those two times and I think the – we do like value add acquisitions where we can bring some leasing and some construction and marketing skills to there. We do think they create the best value per square foot and that’s growth opportunities particularly where they augment existing strong submarket position. So, we are essentially buying these properties preventing other competitor providing expansion of relocation opportunities for our existing tenant base and both the building that we acquire and our existing stock and creating a better platform for us very similar we do with 660 Germantown Pike and what we’ve done with we are plan to do with the 1900 markets we are building in Philadelphia. So, that’s a key piece of what we are looking at. The second element really is going to when we look at our expansion into the overall inside the Beltway DC marketplace that’s really a venture with all state the target levels there tend to be more core, core plus versus true value add to the extent that we saw real value add opportunities we certainly pursue those, to the extent to how they made good lines to our existing portfolio and provide a good forward growth. But in DC that the primary focus has been on core and core plus, those are the New Jersey market, the Delaware market we really view those as more net selling positions over the next several years for a variety reasons including what we think the inherent demand drivers are. And we shift down to Austin we have looked at both land acquisitions there, value add acquisitions as well as core and core plus. So, it’s across the board there because the objective there is given our existing market platform and our objective to expand that, we are looking at various submarkets to see how we can augment our existing tenant flow.

What do you think cap rates look like for core, core plus in the Beltway DC area if there is?

Well, I mean cap rate again it depends on the building and where it is in its process. I think we look more of it on an IRR basis. And as we look at those core, core plus we are trying to look it could be IRRs as we look at a projected basis over five year hold or more we are seeing the IRRs in the mid-7s going into the mid-8s for the products we are looking at and inside the beltway those are kind of our targeted return. So, while cap rate is something important we do look for yield and we will be assessing that as we look we really are an IRR driven reviewer on the properties.

And on the other, what do you see in Austin, similar?

Austin is a little higher I would say the cap rates going in have been pretty good, they have been pretty aggressive. But I think same thing you can see IRRs kind of in the maybe a little higher maybe 8 to 9 again it depends on the property in which market is. I think those are a little dichotomy in some of those markets, especially in the Northwest, you can see those being a little higher, because in Bay Area where if there is going to be growth in building you may see that. So, I think there is a little bit of a higher cap rate or IRR look at the Northwest, but just slightly higher.

Last one quickly would just be on liability management Howard just kind of curious we have seen you take down I think seller rates some of the redemption some of the notes in the past opportunistically to maybe take term when it’s good to take term maybe to sort of expand on sort of your thoughts on where we are in the cycle now and how you may look at the capital is in that?

Sure, Jordan definitely some near term notes that we are focused on ‘14s, ’15s, ’16s are all in the window so to speak. On a number of those the remaining holders are hold to maturity accounts, so really the only way to get some of that debt back might be may call is that’s quite expensive. We also have a small portion of swapped bank term loans and some floating rate bank term loans those are much more flexible. And as we assess the different possibilities we as Jerry said we could nothing because letting interest rates write for the time being has been the right strategy and we are relatively insulated from rising rates. We could just use some cash to do a variety of activities amongst those different baskets. And I guess the third scenario is we take our cash and we use that with perhaps new issuance to do it even bigger clean up. But again that comes back to the question of where you think rates are going and is it advantageous to go into the market early from an issuance standpoint. And these are all great choices to have.

What’s your bias I mean it seems to me in the past that you have kind of thought that it’s good to take term, now a little bit and I am just kind of curious what your thought process is on that now let it write is more of a view you guys are espousing?

Look, it’s a three headed coin equally balanced, so depending which way it lands does really know tremendously compelling outcome there unless you start to get a little creative with your future rate assumptions. The one other wildcard in all of this is it’s no secret that our all of our financial and operating management has been towards getting a ratings upgrade moving from BAA3, BBB minus to the next level up to have even better cheaper access to capital. So, as we think about the possible timing of that activity given our recent equity raise and the portfolio improvement that factors into our thinking a little bit as well because the issuances we will be doing will be governed by that rating so that’s a qualitative aspect of the strategy that we try to integrate as well.

Okay, it’s helpful, thanks guys.

Your next question comes from the line of Michael Knott with Green Street Advisors.

I’m here with Michael. Now that you found your share price high enough to issue equity, does that cause the capital signal start to change your stand towards being a net seller and may be – make you want to be more aggressive acquisitions was.

It looks great, a great question, the – but I think the driving predicates for us to remained the same. I think when we look at our disposition program. It was really driven by a couple of drivers, one was that we are in this process and I think doing fairly well in terms of really a significant upgrade of the portfolio and a big shift to the portfolio to what we think we’ll be much higher growth assets going forward. The best evidence to that I think we talked about in the last call was the shift of 30% of our revenues, a number of years ago, New Jersey down to about 5%. So, there is the strategic real-estate fundamental predicate that really continues to drive our disposition plans. The second driver that was obviously, which I still remained convinced, there are best source of capital is to internally recycle that capital and our best source of proceeds even with the stock pricing moving in the right direction, our best source of proceeds I’m convinced remains selling out of slower growth assets or assets we don’t fit our long-term strategic or tactical plans and using that capital to recycle into higher growth assets. We’re seeing an emergence of some build to suit opportunities. We have as some good developments underway. We’ve acquired some good value-added acquisition that thing much better value add strategy for us to achieve our goals of really being a permitting town center, urban focused company in our marketplaces.

Okay, thanks. And sort of a related question here is suburban fairly Pennsylvania portfolio is now about 50% Crescent market from 50% non-Crescent in terms of square footage of the call it $3 million square feet outside the Crescent markets today, can you peg how much of that is non-core at this point.

Well, the next biggest submarket outside the Crescent market is in the King of Prussia northern 202 corner, which is that the bulk of what’s outside the Crescent markets. Anything not in those markets are clearly non-core, we have a number of those projects now in the market down to southern 202, we sold that we still have one building left there to sell. We have some properties up in Blue Bell, which review is non-core, but I think overtime you will see us move out of those markets that the market that we are continuing to tract very carefully is that King of Prussia northern 202. That market is typically been the second market to recover after the Crescent market is getting incredibly tight. We now have occupancy levels not just of anyone, but market wide in (indiscernible) Plymouth Meeting, well above 90%, you are seeing a demonstrated consistent rank growth in those markets, a number of tenants are now focusing on King of Prussia. So, we would expect to see pretty strong performance at King of Prussia over the next 4 to 8 quarters and that will determine what we think the ultimate value proposition for those markets, but right now the focus is on the Southern 202 kind of Great Valley, Blue Bell markets to liquidate our positions here over the next couple of years.

Okay, great and just last one quick housekeeping item that, do you have with the quarter retention rate would be – without being some of it.

We’re trying to capitalize that.

But no worries, we can do it, I can really understand.

Okay, great, thank you very much.

Thanks.

Your next question comes from the line of Mitch Germain with JMP.

Good morning, guys.

Good morning, Mitch.

Just starts on the dividend as you move to more of a stabilized occupancy in the portfolio.

Well, I think, we talk about some previous calls the – we like the fact that we are retaining cash today, it’s a good part of our business plan. The cad ratio this quarter was very strong, I think as Howard outlined we are expecting a pretty good cad payout ratio for the balance of ’13. I think is the board contemplates the dividend policy. We are very, very focused on making sure that we have extraordinarily good visibility on our first rollover and retention rates. So, one of the reason we obviously spend a lot of time in our ’14 and ’15 rollover is around 24 months in advance to that. We have very clear visibility on our capital run rate. So, we can with high degree of certainly project out with our cad cash flow will be. The – we set the program that we wanted to have our, cad payout ratio consistently below 80%, but frankly Mitch, the lower to better for us so, we don’t have any current plans to increase the dividend, but I’ll tell you the trend lines are very encouraging certainly the board is very focused on what those trend lines are. We reviewed every quarter with them and I do think that it is the portfolio continues to perform we need our occupancy in pre-leasing goals if capital cost continue to maintain their current run rate in the 225 to 275 range that certainly something on the radar screen over the next year or so.

And it seems like you guys are in the early innings of this co-investment vehicle that you are out marketing, is this going to be regional specific and you guys expect to maintain a minority or maybe a 50% interest, any color around that at this point?

Well, I think we would expect it to be our investment vehicle for Austin, Texas. The ownership stake we maintained will be a – surely a function of pricing and structure. I think the Allstate venture that we have is a 50-50 venture. We have defined rights Allstate is a great partner for us in terms of co-underwriting a response time in reacting to market offerings looking for those same elements in our new partner. But the actual ownership stake we keep is the promote structure, all of that is going to be a function of point of entry pricing as well as the amount of capital that the partners willing to comment.

Thanks.

You are welcome.

Your next question is a follow-up from the line of Brendan Maiorana with Wells Fargo Advisors.

Thanks. George, sorry if I missed this, but the 729,000 square feet of signed not yet commenced leases, how much of those are expected to commence in 2013?

556,000.

Okay, great. And then this is probably for Howard, but for whoever same-store was benefited this quarter from a significantly lower straight line rent adjustment, it was probably about 2250 basis points that you guys were significantly higher on same-store NOI, but as I look at the straight line adjustment last year, it went down pretty nicely in the second quarter and then continued to get lower in the third and fourth quarters? Is it going to become challenging to sort of keep same-store at the high end of guidance given that you get less benefit of cash rents currently versus last year?

Yeah, I mean, we are currently programming for 2013, so I am assuming the claims quarter-to-quarter in the straight line rents, so once you line that up with what we had in ‘12 could continue to be favorable, and candidly that’s why the same-store growth rate for the full year for cash is 100 basis points higher than for GAAP. We are going to benefit from generally speaking declining non-cash revenue. So, that’s in the plan.

So, Howard, if I sort of read your comments correctly and think about where you guys were in the quarter, you are above the high end of your range by a little bit, but above the high end of your same-store range. And if you expect that cash rents continue to get better in ‘13 do you feel like you are likely to trend at the high end of kind of the guidance range, even you kept it the same?

One can only hope but it’s too early to tell.

Right.

Maybe a lot of timing factors and last minute details on deals and just too early to tell. That’s why there is a range.

Alright, fair enough, thanks.

And your next question comes from the line of Bill Crow with Raymond James & Associates. Bill Crow - Raymond James & Associates: Good morning guys.

Good morning Bill. Bill Crow - Raymond James & Associates: Jerry, with the invest with Toll Brothers, with Campus Crest, the retail development, the complementary retail development that you announced, what is your interest level in continuing to invest outside of your core office properties within those core markets of 1 billion DC in those areas?

Okay. Bill, on the – I will take last piece first. On the retail piece, this is a piece of ground that we owned the front door to ride in your financial center. And the retail size is only – it’s just an 18,000 square foot amenity based one-storey retail building. So, that’s very sight specific and very complementary to our existing tenant base. And it was not of a sufficient scale that we felt we need to joint venture that with the development in other residential or retail development company. On the Toll and Campus Crest venture, I mean, remember the driver there was existing land holdings and us monetizing or contributing whatever term you want to apply to it to create a near-term value driver for us. So, I think one of the things that we are very mindful of is that market shift and where we thought that a piece of ground could be helped for office, but there maybe a higher and better use for it today. We do have a number of other pieces of ground where we have gone through the rezoning process and we are simply marketing those pieces of ground for outright sale because we don’t think they add a lot to our existing land holdings or exiting office tenant base. But there is clearly a movement towards mixed use communities, live work and play environments mass transit served and that’s clearly where this company is going. So, we would anticipate that as some of these larger scale opportunities present themselves that we would be in a position to venture with other high quality organizations to create value for us as we deploy existing land holdings or land holdings in close approximately to a key asset of ours. Bill Crow - Raymond James & Associates: Great second question on the total investment strategy for Austin, I am not sure how much you will say about this but this is essentially eliminates what has been much speculated upon an asset trade with parkway?

Well, I am not sure there has been a lot of speculation that’s reached our desk, but maybe another world. Look there, we had been approached over the last couple of years by a number of companies that have assets in Philadelphia who may have other operations outside of Philadelphia with the concept of a swap. We are always open to those discussions. We have done swaps in the past and they have been very effective for us. I don’t think anything is precluded under scenario. There are a number of other public companies and big private firms that own assets in some of our core growth markets that we continue to have dialogue with them on a number of fronts. But for any type of trade to work it has to work for both parties. And I think as we look at our asset base in Austin there is some tremendous growth opportunity there and we thought our best interest to create as broad base to marketing campaign as possible to get a clear indication we thought value us. Bill Crow - Raymond James & Associates: Okay. Thank you.

And your next question comes from the line of Rich Anderson with BMO Capital Markets.

Bill asked good questions so I am going to follow-up on that one. Is it possible that you are pattern in Austin could be another REIT and if so would you be willing to allow them to be more on the operating side and you on the financial side or do you want to maintain control of those assets through your co-investment strategy?

That’s another good question. The – look I think from our standpoint and I don’t mean to be quiet but please respect that we are in the marketing process. We have yet to receive bids. Our objectives are really clear, it’s to take advantage of real strong market pricing, optimize current value and create a co-investment vehicle to significantly consolidate fragmented ownership in that market. We like that market. It’s got great demand drivers. We do have a very local team. Our approach in terms of management and partnership arrangements has always been flexible has always been geared towards in the best result. Certainly that’s evidenced by what we have done with Toll Brothers or Campus Crest and Harrison Street I mean we sit down at the table and try and figure out what works best to create the best value in the most efficient manner and that often involves the division of responsibilities, different skill sets being bought to the table. So, we are completely open to what the market presents back to us, not just on Austin but in a lot of our other undertakings as well. I just think that markets are dynamic enough. No one company has all the answers. There are tremendous other talented people out there at other companies and we look forward to getting in bids on Austin and some of the other things that are on the table to see what creates the best financial picture and profitability for Brandywine.

Excellent. Thanks Jerry.

And there are no further questions at this time Mr. Sweeney are there any closing remarks?

The only closing remark is to thank everyone for their participation in the call. We look forward to continued execution during 2013 and updating you on our next call on the second quarter. Thank you very much.

Thank you. This concludes Brandywine Realty Trust first quarter earnings conference call. You may now disconnect.