REAL ESTATE INVESTMENTS (Tables)

12 Months Ended

Dec. 31, 2021

Real Estate [Abstract]

Gross Carrying Value of Operating Properties

As of December 31, 2021 and 2020, the gross carrying value of the operating properties was as follows (in thousands):

	December 31, 2021		December 31, 2020
Land	$	410,144	$	407,514
Building and improvements	2,653,492		2,665,232
Tenant improvements	408,966		401,363
Total	$	3,472,602	$	3,474,109

Capitalized Construction Costs

The following table shows the amount of compensation costs (including bonuses and benefits) capitalized for the years presented (in thousands):

	December 31,
	2021		2020		2019
Development	$	4,815	$	4,802	$	3,047
Redevelopment	1,170		543		775
Tenant Improvements	1,917		3,021		3,609
Total	$	7,902	$	8,366	$	7,431

Schedule of Acquisitions

The following table summarizes the property acquisitions during the year ended December 31, 2020 (dollars in thousands):

Property/Portfolio Name	Acquisition Date	Location	Property Type	Rentable Square Feet/Acres	Purchase Price (a)
145 King of Prussia Road	February 27, 2020	Radnor, PA	Land	7.75 acres	$	11,250
1505-11 Race Street	November 5, 2020	Philadelphia, PA	Office	119,763	$	9,700
250 King of Prussia Road (b)	November 30, 2020	Radnor, PA	Office	169,843	$	20,250

(a)Exclusive of transaction costs and price adjustments. See purchase price allocation table below for a breakout of the net purchase price for wholly owned properties.

(b)This property was placed into redevelopment and is therefore included within Construction-in-progress on the consolidated balance sheets.

Schedule of Asset Acquisition

The acquisition values have been allocated as follows (in thousands):

	1505-11 Race Street
Building, land and improvements	$	9,723
Intangible assets acquired	2,422
Below market lease liabilities assumed	(2,193)
Total unencumbered acquisition value	9,952
Amortization period of intangible assets	1.5 years
Amortization period of below market liabilities assumed	1.5 years

Summary of Properties Sold

The following table summarizes the property dispositions during the years ended December 31, 2021, 2020 and 2019 (dollars in thousands):

Property/Portfolio Name	Disposition Date	Location	Property Type	Rentable Square Feet/Acres	Sales Price		Gain/(Loss) on Sale (a)
1100 Lenox Drive	September 8, 2021	Lawrenceville, NJ	Land	5.0 acres	$	2,575	$	68
2100-2200 Lenox Drive	July 6, 2021	Lawrenceville, NJ	Land	35.2 acres	$	8,900	$	842
Mid-Atlantic Office Portfolio (b) (d)	December 21, 2020	Various	Office	1,128,645	$	192,943	$	15,164
One and Two Commerce Square (c)	July 21, 2020	Philadelphia, PA	Office	1,896,142	$	115,000	$	271,905
Keith Valley	June 15, 2020	Horsham, PA	Land	14.0 Acres	$	4,000	$	201
52 East Swedesford Road	March 19, 2020	Malvern, PA	Office	131,077	$	18,000	$	2,336
1900 Gallows Rd	September 11, 2019	Vienna, VA	Office	210,632	$	36,400	$	(367)
9 Presidential Boulevard	March 15, 2019	Bala Cynwyd, PA	Land	2.7 Acres	$	5,325	$	751

(a)Gain/(Loss) on Sale is net of closing and other transaction related costs.

(b)The Company sold a 60% equity interest in a portfolio of twelve suburban office properties containing an aggregate of 1.1 million square feet ("Mid-Atlantic Office Portfolio"), nine of which are located in the Pennsylvania suburbs and three of which are located in Maryland, to an unrelated third party for a gross sales price of $192.9 million. The transaction resulted in deconsolidation of the properties and formation of PA/MD NNN Office JV, LLC ("Mid-Atlantic Office JV"). The Company recorded its investment at fair value and recognized a gain of $15.2 million in "Net gain on disposition of real estate" on the consolidated statements of operations. See Note 4, ''Investment in Unconsolidated Real Estate Ventures," for further information.

(c)The Company sold a 30% preferred equity interest in two office buildings located in Philadelphia, Pennsylvania, to an unrelated third party for $115.0 million (the "Commerce Square Venture Transaction"), which resulted in deconsolidation of the properties and formation of Brandywine Commerce I LP and Brandywine Commerce II LP (collectively, the "Commerce Square Venture"). The transaction valued the properties at $600.0 million. The Company recorded its investment at fair value and recognized a gain of $271.9 million in "Net gain on disposition of real estate" on the consolidated statements of operations. See Note 4, ''Investment in Unconsolidated Real Estate Ventures," for further information.

(d)The sales price includes $4.1 million of variable consideration held in escrow that will be released to the Company over a six to nine month holdback period if certain tenants remain in compliance with certain payment terms of their lease agreements. The Company estimated the amount of the variable consideration that it deemed probable of collection and included such amount in the transaction price. The amount estimated as probable of collection was received during 2021. The Company will continue to evaluate the probability of collection on the remaining holdback and recognize any changes to the amount deemed probable as incremental gain on sale.