Brandywine Realty Trust (NYSE:BDN) presents a good mix of value and growth as developments which have already been paid for begin to cash flow. We will briefly cover the standard bull thesis, but I think most investors are familiar with it, so I will not dawdle there. Instead, I want to focus on Brandywine’s key point of differentiation which I believe will allow it to outperform the sector.
Standard Bull Thesis
Brandywine has transformed from a suburban office REIT with mediocre assets to a CBD office REIT with trophy assets. This transformation was costly in terms of FFO as the weaker assets sell for higher cap rates than those at which the trophy assets are built or bought. Still, due to the increased stability and prestige of BDN’s new portfolio, the market has rewarded investors with a mild outperformance.
