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Investing.com -- S&P Global Ratings has revised its outlook on Brandywine Realty Trust to negative from stable, while affirming the company’s ratings, citing refinancing risks and weakening credit metrics.
The rating agency noted that Brandywine’s fixed charge coverage declined to 1.7x for the trailing 12 months ending June 30, down from 2.1x in the prior year period, driven by higher interest expense from refinancings. S&P forecasts this metric to further decline to around 1.6x by year-end.
Debt leverage has also increased, with S&P Global adjusted debt to EBITDA rising to 8.3x compared to 7.9x in the prior year period. The agency expects this ratio to increase to the high 8x range by year-end due to higher debt balances.
Brandywine’s weighted-average debt maturity stands at 3.1 years, which S&P considers relatively short. Upcoming maturities include a $178 million secured loan due in July 2026, followed by a $250 million term loan in June 2027 and $450 million of unsecured notes due in November 2027.
The company’s development activities are adding pressure to its financial position. Brandywine recently commenced construction of a $59.5 million boutique hotel in Radnor, expected to be completed in the second quarter of 2026, with stabilization in 2027. This project, along with remaining development spend of approximately $140 million, will be partially funded with construction financing.
As of September 30, 2025, Brandywine’s core portfolio was 88.8% occupied and 90.4% leased, with same-store cash net operating income growing 2.1% compared to the prior year period. However, its Austin portfolio remains a weak spot with 77.7% leased occupancy and cash rental rates declining 12.5% for leases signed through the third quarter.
The Philadelphia CBD and suburban Pennsylvania portfolio, which represents 76% of NOI and is 93% leased, continues to show stability as the company benefits from being a premier landlord in this market.
S&P indicated it could lower Brandywine’s ratings if its weighted average debt maturity falls below three years on a sustained basis, if fixed-charge coverage remains below 1.7x, or if debt to EBITDA rises above 8.5x for a sustained period.
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