BDN - Brandywine Realty: Why This 13.4% Dividend Yield From Office Is A Buy
2024-04-29 06:15:48 ET
Summary
- Brandywine Realty Trust is trading at a low 4.7x multiple to FFO due to concerns about rising office vacancy rates and a high Fed funds rate.
- BDN currently offers a 13.4% dividend yield that's 150% covered by the low end of 2024 FFO guidance.
- An April bond issue of $400 million has eliminated its 2024 debt maturity and materially increased the depth of its balance sheet.
Brandywine Realty Trust ( BDN ) is currently trading for 4.7x times its annualized fiscal 2024 first quarter funds from operations, close to its lowest ever multiple as office REITs continue to be pressured by rising office vacancy rates and a Fed funds rate set to stay at its 22-year high for longer. The national office vacancy rate stood at 18.2% at the end of March, up 120 basis points year-over-year. BDN's core portfolio at the end of the first quarter was 87.7% occupied and 89% leased, down from 88% occupancy and 89.6% lease rate in the prior fourth quarter. The 30 basis points dip in occupancy reflects 2023 lease expirations that weren't renewed. BDN's tenant rollover risk in 2024 is somewhat moderate, with leases that accounted for roughly 3.3% of their aggregate final annualized base rents as of the end of the first quarter and 4.4% of the occupied rentable square feet of its property portfolio set to expire through 2024....
Brandywine Realty: Why This 13.4% Dividend Yield From Office Is A Buy