BDN
Brandywine Realty Trust
$2.70
Real Estate Investment Trust
85%
P/FFO × Office REIT Multiple
Strong
·
Conviction
Undervalued
Trading 66.0% below fair value
You pay
$2.70
Bear
$6.25
Fair
$7.94
Bull
$9.63
Bear
$6.25
+131.5%
$0.68 FFO × 10x
Fair
$7.94
+194.0%
$0.68 FFO × 13x
Bull
$9.63
+256.5%
$0.68 FFO × 16x
Adjust Assumptions
13.0x
$
Key Value Driver
FFO/share ($0.68) × office P/FFO multiple
Implied Market Multiple
4.0x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (24 analysts)
$3.00
Divergence from AlphaVal
165%
Summary
At $0.68 FFO/share with a 13x office REIT multiple, the base-case value is $7.94 per share. Dividend yield: 11.9%. DDM cross-check: $5.96.
Warnings
Standard profit figures are misleading for real estate companies — large non-cash accounting charges make profits look artificially low. Dividend yield and funds from operations are better measures.
Dividend yield of 11.9% is unusually high — make sure the company generates enough cash to keep paying it.
Wall Street's average price target is $3.00 (from 24 analysts). Our estimate is 165% above the consensus -- consider that gap carefully.
Key Risks
- P/E and EV/EBITDA are structurally wrong for REITs — use P/FFO and NAV
- Interest rate sensitivity: REIT multiples compress when rates rise
- FFO approximation (NI + D&A) may include gains on property sales — verify