v3.26.3
SEGMENT INFORMATION
 9 Months Ended
Sep. 30, 2026
Segment Reporting [Abstract]  
Segment Information
13. SEGMENT INFORMATION
As of September 30, 2026, the Company owned and managed properties within four segments: (1) Philadelphia Central Business District (“Philadelphia CBD”), (2) Pennsylvania Suburbs, (3) Austin, Texas and (4) Other. The Philadelphia CBD segment includes properties located in the City of Philadelphia, Pennsylvania. The Pennsylvania Suburbs segment includes properties in Chester, Delaware, and Montgomery counties in the Philadelphia suburbs. The Austin, Texas segment includes properties in the City of Austin, Texas. The Other segment includes properties located in Washington, D.C., Northern Virginia, Southern Maryland, Camden County, New Jersey and New Castle County, Delaware. In addition to the four segments, the corporate group is responsible for cash and investment management, development/redevelopment of certain real estate properties during the construction period, and certain other general support functions. Land held for development and construction in progress is transferred to operating properties by region upon completion of the associated construction or project.
The Company’s segments are based on the Company’s method of internal reporting, which classifies the Company's operations by geographic area. The following tables provide selected asset information and results of operations of the Company’s reportable segments (in thousands):
Real estate investments, at cost:
September 30, 2026December 31, 2025
Philadelphia CBD$1,879,959 $2,080,220 
Pennsylvania Suburbs885,553 883,218 
Austin, Texas391,374 510,030 
Total Core Segments3,156,886 3,473,468 
Other143,965 280,312 
Operating properties
$3,300,851 $3,753,780 
Corporate
Prepaid ground leases, net
$6,944 $51,399 
Right of use asset - operating leases, net$12,145 $17,806 
Construction-in-progress$82,518 $118,543 
Land held for development$80,403 $70,405 
Prepaid leasehold interests in land held for development, net$27,762 $27,762 
Net operating income:
Three Months Ended September 30,
20262025
Total revenueOperating expenses (a)Net operating incomeTotal revenueOperating expenses (a)Net operating income
Philadelphia CBD$67,321 $(27,104)$40,217 $58,250 $(21,975)$36,275 
Pennsylvania Suburbs35,017 (13,793)21,224 31,563 (9,518)22,045 
Austin, Texas9,733 (4,609)5,124 16,837 (6,542)10,295 
Other9,152 (4,279)4,873 10,091 (4,257)5,834 
Corporate4,415 (2,313)2,102 4,676 (3,117)1,559 
Operating properties$125,638 $(52,098)$73,540 $121,417 $(45,409)$76,008 
Nine Months Ended September 30,
20262025
Total revenueOperating expenses (a)Net operating incomeTotal revenueOperating expenses (a)Net operating income
Philadelphia CBD$201,008 $(80,654)$120,354 $170,321 $(62,978)$107,343 
Pennsylvania Suburbs101,727 (37,081)64,646 94,804 (29,536)65,268 
Austin, Texas37,831 (16,660)21,171 53,487 (22,094)31,393 
Other29,384 (13,620)15,764 30,609 (13,861)16,748 
Corporate11,612 (8,616)2,996 14,283 (9,887)4,396 
Operating properties$381,562 $(156,631)$224,931 $363,504 $(138,356)$225,148 
Includes property operating expenses, real estate taxes and third-party management expense.
Unconsolidated real estate ventures:
Investment in real estate ventures
Equity in income (loss) of real estate ventures
As ofThree Months Ended September 30,Nine Months Ended September 30,
September 30, 2026December 31, 20252026202520262025
Philadelphia CBD$211,624 $215,078 $(3,249)$(10,325)$(7,548)$(22,184)
Mid-Atlantic Office JV10,189 10,877 (139)(168)(581)107 
Austin, Texas67,813 71,611 (10,644)(7,510)(22,972)(20,908)
Other17,037 16,760 (125)(180)(496)(541)
Total$306,663 $314,326 $(14,157)$(18,183)$(31,597)$(43,526)
Net operating income (“NOI”) is a non-GAAP financial measure, which we define as total property revenue less property operating expenses, real estate taxes and third-party management expenses. Property operating expenses that are included in
determining NOI consist of costs that are necessary and allocable to our operating properties such as utilities, property-level salaries, repairs and maintenance, property insurance and management fees. General and administrative expenses that are not reflected in NOI primarily consist of corporate-level salaries, amortization of share awards and professional fees that are incurred as part of corporate office management. NOI presented by the Company may not be comparable to NOI reported by other companies that define NOI differently. NOI is the primary measure that is used by the Company’s management to evaluate the operating performance of the Company’s real estate assets by segment. The Company believes NOI provides useful information to investors regarding the financial condition and results of operations because it reflects only those income and expense items that are incurred at the property level. While NOI is a relevant and widely used measure of operating performance of real estate investment trusts, it does not represent cash flow from operations or net income as defined by GAAP and should not be considered as an alternative to those measures in evaluating our liquidity or operating performance. NOI does not reflect interest expenses, real estate impairment losses, depreciation and amortization costs, capital expenditures and leasing costs. The Company believes that net income (loss), as defined by GAAP, is the most appropriate earnings measure. The following is a reconciliation of consolidated net income (loss), as defined by GAAP, to consolidated NOI, (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2026202520262025
Net loss$(22,142)$(25,998)$(102,481)$(141,990)
Plus:
Interest expense39,035 32,914 121,855 97,104 
Interest expense - amortization of deferred financing costs1,322 1,336 4,054 3,763 
Depreciation and amortization45,088 43,005 142,068 131,120 
General and administrative expenses7,954 7,841 29,552 34,636 
Equity in loss of unconsolidated real estate ventures14,157 18,183 31,597 43,526 
Provision for impairment29,057 — 40,966 63,369 
Loss on early extinguishment of debt15,417 — 15,441 — 
Less:
Interest and investment income702 1,238 2,436 3,274 
Income tax provision(43)— (67)(85)
Net gain on disposition of real estate55,689 35 55,752 3,008 
Net gain on real estate venture transactions— — — 183 
Consolidated net operating income$73,540 $76,008 $224,931 $225,148