
<PAGE>







                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q


(Mark One)

   x       Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
 -----     Exchange Act of 1934

           For the quarterly period ended June 30, 1996
                              or
           Transition Report Pursuant to Section 13 or 15(d) of the Securities
 -----     Exchange Act of 1934 (No Fee Required)


           For the transition period from                  to
                                          ----------------    ----------------

           Commission file number        1-9106
                                 ----------------------------------------------

                             Brandywine Realty Trust
- --------------------------------------------------------------------------------
                  (Exact name of registrant as specified in its charter)

        Maryland                                      23-2413352
- -----------------------                ---------------------------------------
(State of Organization)                (I.R.S. Employer Identification Number)


Two Greentree Centre, Suite 100, Marlton, New Jersey                08053
- -------------------------------------------------------------------------------
(Address of principal executive offices)                           (Zip Code)


          (609) 797-0200
- -------------------------------
(Registrant's telephone number)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days. Yes [ X ] No [ ]

A total of 1,916,149 Shares of Beneficial Interest were outstanding as of 
August 8, 1996.



<PAGE>
                             BRANDYWINE REALTY TRUST

                                TABLE OF CONTENTS
                                -----------------

                         PART I - FINANCIAL INFORMATION




Item I.           Financial Statements

                  Consolidated Balance Sheets as of June 30, 1996 (unaudited)
                  and December 31, 1995

                  Consolidated Statements of Operations for the three months
                  ended June 30, 1996 and June 30, 1995 (unaudited)

                  Consolidated Statements of Operations for the six months ended
                  June 30, 1996 and June 30, 1995 (unaudited)

                  Consolidated Statements of Cash Flow for the six months ended
                  June 30, 1996 and June 30, 1995 (unaudited)

                  Notes to Financial Statements

Item 2.           Management's Discussion and Analysis of Financial Condition
                  and Results of Operations



                           PART II - OTHER INFORMATION

Item 1.           Legal Proceedings

Item 2.           Changes in Securities -- Not applicable

Item 3.           Defaults Upon Senior Securities - Not applicable

Item 4.           Submission of Matters to a Vote of Security Holders -
                  Not applicable

Item 5.           Other Information

Item 6.           Exhibits and Reports on Form 8-K

                  Signatures


                                       2
<PAGE>



PART 1 - FINANCIAL INFORMATION
Item 1:  Financial Statements

                             BRANDYWINE REALTY TRUST
                           CONSOLIDATED BALANCE SHEETS
                                 (in thousands)
<TABLE>
<CAPTION>



                                                   June 30, 1996         December 31, 1995
                                                   -------------         ------------------
                                                   (Unaudited)
<S>                                                 <C>                    <C>
                  ASSETS
REAL ESTATE INVESTMENTS
     Operating properties, at adjusted cost          $  21,082              $ 21,823
     Accumulated depreciation                           (7,330)               (8,114)
                                                     ---------              --------
                                                        13,752                13,709

CASH AND CASH EQUIVALENTS                                1,643                   840
ESCROWED CASH                                              629                 1,155
DEFERRED COSTS net of accumulated amortiza-
     tion of $474 in 1996 and $507 in 1995               1,411                 1,027
ACCOUNTS RECEIVABLE AND OTHER ASSETS                       732                   374
                                                     ---------              --------
           Total assets                               $ 18,167              $ 17,105
                                                     =========             =========
   LIABILITIES AND BENEFICIARIES' EQUITY

MORTGAGE NOTE PAYABLE                                 $  8,878               $ 8,931
NOTE PAYABLE TO SHAREHOLDER                                992                    --
ACCRUED INTEREST PAYABLE                                    78                    60
TENANT SECURITY DEPOSITS AND DEFERRED
     RENTS                                                 235                   250
ACCOUNTS PAYABLE AND ACCRUED EXPENSES                      412                   427
DISTRIBUTIONS PAYABLE                                       --                    93
                                                     ---------              --------
          Total liabilities                             10,595                 9,761
                                                     ---------              --------
MINORITY INTEREST

COMMITMENTS AND CONTINGENCIES

BENEFICIARIES' EQUITY
     Shares of beneficial interest, $0.01 par value, 
         5,000,000 preferred shares
         authorized, none outstanding; 15,000,000 
         common shares authorized,
         1,916,149 and 1,856,200 shares 
         issued and outstanding at June 30,
         1996 and December 31, 1995, 
         respectively                                       19                    19
     Additional paid-in capital                         17,068                16,772
     Stock warrants                                         42                    --
     Cumulative deficit                                 (3,085)               (3,086)
     Cumulative distributions                           (6,472)               (6,361)
                                                     ---------              --------
          Total beneficiaries' equity                    7,572                 7,344
                                                     ---------              --------
          Total liabilities and beneficiaries' 
                equity                                $ 18,167              $ 17,105
                                                     =========             =========
</TABLE>

The accompanying notes and management's discussion and analysis of financial
condition and results of operations are an integral part of these statements.

                                        3
<PAGE>



                             BRANDYWINE REALTY TRUST

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995
                  (in thousands, except per share information)
                                   (unaudited)

<TABLE>
<CAPTION>



                                                               1996                  1995
                                                           ----------           -----------
<S>                                                        <C>                  <C> 
REVENUE:
   Rents and tenant reimbursements                         $      968           $       876
   Other income                                                    14                     3
                                                           ----------           -----------
         Total revenue                                            982                   879

 EXPENSES:
   Interest                                                       209                   220
   Depreciation and amortization                                  223                   517
   Utilities                                                      128                   119
   Real estate taxes                                               98                    98
   Maintenance                                                    175                   127
   Other operating expenses                                        18                    21
   Administrative expenses                                        137                   147
                                                           ----------           -----------
         Total expenses                                           988                 1,249

 INCOME (LOSS) BEFORE MINORITY INTEREST                            (6)                 (370)

 MINORITY INTEREST IN INCOME (LOSS) OF
   BRANDYWINE REALTY PARTNERS                                       3                    --
                                                           ----------           -----------
 NET INCOME (LOSS)                                         $       (9)          $      (370)
                                                           ==========           ===========
 PER SHARE DATA:
 Earnings (loss) per share of beneficial interest          $     0.00           $     (0.20)
                                                           ==========           ===========
 Weighted average number of shares outstanding
           including share equivalents                      1,906,529             1,874,295
                                                           ==========           ===========
</TABLE>


 The accompanying notes and management's discussion and analysis of financial
 condition and results of operations are an integral part of these statements.

                                        4
<PAGE>



                             BRANDYWINE REALTY TRUST

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995
                  (in thousands, except per share information)
                                   (unaudited)

<TABLE>
<CAPTION>

                                                               1996                 1995
                                                           ----------           -----------
<S>                                                       <C>                   <C>
 REVENUE: 
   Rents and tenant reimbursements                        $    1,975            $     1,783
   Other income                                                   52                     23
                                                          ----------            -----------
         Total revenue                                         2,027                  1,806

 EXPENSES:
   Interest                                                      416                    396
   Depreciation and amortization                                 465                    799
   Utilities                                                     261                    249
   Real estate taxes                                             197                    195
   Maintenance                                                   382                    264
   Other operating expenses                                       41                     49
   Administrative expenses                                       259                    294
                                                           ----------           -----------
         Total expenses                                        2,021                  2,246

 INCOME (LOSS) BEFORE MINORITY INTEREST                            6                   (440)

 MINORITY INTEREST IN INCOME (LOSS) OF
   BRANDYWINE REALTY PARTNERS                                      5                     --
                                                          ----------            -----------
 NET INCOME (LOSS)                                        $        1            $      (440)
                                                          ==========            ===========
 PER SHARE DATA:
 Earnings (loss) per share of beneficial interest         $     0.00            $     (0.23)
                                                          ==========            ===========
 Weighted average number of shares outstanding
           including share equivalents                     1,888,923              1,875,247
                                                          ==========            ===========

</TABLE>
  The accompanying notes and management's discussion and analysis of financial
  condition and results of operations are an integral part of these statements.

                                        5
<PAGE>


                             BRANDYWINE REALTY TRUST
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995
                                 (in thousands)
                                   (unaudited)

<TABLE>
<CAPTION>


                                                                           1996                1995
                                                                         -------             -------
<S>                                                                      <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME (LOSS)                                                              1             $ (440)

ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) TO
  NET CASH PROVIDED BY OPERATING ACTIVITIES:
     Minority interest in income of Brandywine Realty Partners                 5                  --
     Depreciation and amortization                                           465                 799
     Changes in assets and liabilities
        Decrease (increase) in accounts receivable                           (33)                 70
        Decrease (increase) in other assets                                  (19)               (137)
        (Decrease) increase in other liabilities                             (25)                (99)
                                                                         -------             -------
          Net cash provided by operating activities                          394                 193
                                                                         -------             -------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expenditures and leasing commissions paid                         (633)               (340)
  Decrease (increase) in escrowed cash                                       526                (553)
                                                                         -------             -------
          Net cash used in investing activities                             (107)               (893)
                                                                         -------             -------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of stock and warrants                               338                  --
  Distributions paid to shareholders                                        (204)             (2,042)
  Minority Partner distributions                                              (5)                 --
  Proceeds from note payable to shareholder                                  992                  --
  Proceeds from mortgage notes payable                                        --               9,000
  Repayment of mortgage notes payable                                        (53)             (6,916)
  Costs associated with new ventures                                        (560)                  -
  Costs associated with refinancing transaction                               --                (250)
  Tenant security deposits and other financing activities                      8                 (20)
                                                                         -------             -------
          Net cash provided by (used in) financing activities                516                (228)
                                                                         -------             -------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                             803                (928)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                             840               1,766
                                                                         -------             -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                               $ 1,643             $   838
                                                                         =======             =======
</TABLE>


  The accompanying notes and management's discussion and analysis of financial
  condition and results of operations are an integral part of these statements.

                                        6



<PAGE>


                             BRANDYWINE REALTY TRUST

                          NOTES TO FINANCIAL STATEMENTS

                                  JUNE 30, 1996


1.       ORGANIZATION AND NATURE OF OPERATIONS:
         --------------------------------------

Brandywine Realty Trust (the "Trust"), was formed on February 26, 1986 as a real
estate investment trust. On July 31, 1986, the Trust sold through an initial
public offering 1,856,200 shares of beneficial interest, the net proceeds of
which were $17,168,000. On July 31, 1986, the Trust acquired a 68% general
partner interest in Brandywine Realty Partners ("Brandywine"), at a total cost
of $16,787,000. As of June 30, 1996, the partners of Brandywine and their
percentage ownership were as follows:

                                                                  % Ownership
                                                                  -----------
   Brandywine Realty Trust,
        a Maryland real estate investment trust                       70%

   Brandywine Specified Property
        Investors Limited Partnership ("BSPI"), a
        Pennsylvania limited partnership                              30%
                                                                     ----
                                                                     100%
                                                                     ====
At June 30, 1996, the Trust's portfolio was comprised of four commercial real
estate projects (the "Specified Projects"). The Specified Projects are leased
for office purposes. As of June 30, 1996 and December 31, 1995, the overall
occupancy rate of the Specified Projects was 96% and 97%, respectively. As of
June 30, 1996, existing leases totaling 47,000 square feet or 18% of the total
square feet, were scheduled to expire during the remaining six months of 1996.

The Specified Projects are located in the greater Philadelphia, Pennsylvania and
Raleigh, North Carolina metropolitan areas. Each of these markets is
competitive, with the principal methods of competition consisting in each case
of rental rates (including rental concessions such as initial periods of free
occupancy), location, level of leasehold improvements and building amenities.
The Specified Projects compete for tenants with other properties which may have
competitive advantages.

On July 19, 1996, the Trust acquired a seven-story, 122,000 square foot office
building (the "LibertyView Building") in Cherry Hill, New Jersey. (See Note 8).

On August 2, 1996, the Trust executed (i) a Contribution Agreement dated as of
July 31, 1996 (the "Contribution Agreement") with Safeguard Scientifics, Inc.
("SSI") and The Nichols Company ("TNC") and (ii) a Share and Warrant Purchase
Agreement dated as of July 31, 1996 (the "Share Purchase Agreement") with SSI.
In addition, on August 2, 1996, a newly-formed subsidiary of the Trust entered
into employment agreements with each of Anthony A. Nichols, Sr., Gerard H.
Sweeney, Brian Belcher and John P. Gallagher. Such employment agreements provide
for annual compensation aggregating $513,000 for a two year period. Further, in
connection with these agreements, six-year warrants are to be issued for an
aggregate of 700,000 Common Shares at a per share price of $6.50. The employment
agreements become effective only upon closing of the below-referenced SSI/TNC
Transaction.

The transactions contemplated by the Contribution Agreement and the Share
Purchase Agreement (collectively, the "SSI/TNC Transaction") are subject to
customary closing conditions, including receipt of shareholder approval. The
Trust's Annual Meeting of Shareholders is scheduled to be held on August 22,
1996, at which meeting the SSI/TNC Transaction will be considered and voted on.

                                       7
<PAGE>

The SSI/TNC Transaction involves the formation by the Trust of a limited
partnership (the "Operating Partnership") in order to acquire 19 properties (the
"Initial Properties") in exchange for common shares of beneficial interest
("Common Shares"), warrants exercisable for additional Common Shares and limited
partnership interests redeemable under certain circumstances for additional
Common Shares. The acquisition will be accompanied by a consolidation of the
managements of the Trust and TNC and the expansion of the Trust's Board of
Trustees to include designees of SSI and TNC. In short, the SSI/TNC Transaction
will involve a substantial change in the business of the Trust; a substantial
increase in the number of properties indirectly owned by the Trust; and, given
the mortgage debt encumbering the Initial Properties, a substantial increase in
the Trust's indebtedness.

2.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
        -------------------------------------------

The financial statements have been prepared by the Trust without audit, pursuant
to the rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in the financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations, although
the Trust believes that the disclosures are adequate to make the information
presented not misleading. In the opinion of the Trust, all adjustments
(consisting of normal recurring adjustments) necessary to present fairly the
financial position of the Trust as of June 30, 1996, and the results of its
operations for the three and six months ended June 30, 1996 and 1995 and its
cash flows for the six months ended June 30, 1996 and 1995 have been included.
The results of operations for such interim periods are not necessarily
indicative of the results for the full year. For further information, refer to
the Trust's consolidated financial statements and footnotes thereto included in
the Annual Report on Form 10-K/A for the year ended December 31, 1995.

Principles of Consolidation
- ---------------------------

The Trust consolidates the accounts of Brandywine with the Trust and reflects
the BSPI investment as Minority Interest. All significant intercompany accounts
and transactions have been eliminated in consolidation.

Capitalization of Costs
- -----------------------

As of June 30, 1996 and December 31, 1995, the Trust had incurred $738,000 and
$357,000, respectively, in costs associated with its pursuit of potential
acquisitions of additional real estate and third party equity and debt
investments. Such costs are included in deferred costs on the Trust's balance
sheets as of June 30, 1996 and December 31, 1995. Further, in connection with
these efforts as of June 30, 1996 and December 31, 1995, the Trust had deposited
$395,000 and $95,000, respectively, with several unrelated parties. Such
deposits are included in accounts receivable and other assets on the balance
sheets as of June 30, 1996 and December 31, 1995. At June 30, 1996, $300,000 of
the total deposits represented deposits associated with the Trust's acquisition
on July 19, 1996 of the LibertyView Building (See Note 8).

During the first six months of 1996, the Trust retired fully amortized deferred
assets totaling $119,000.

Earnings (Loss) Per Share
- -------------------------

Earnings (loss) per share is calculated based upon the weighted average shares
outstanding which were 1,888,923 and 1,875,247 for the six months ended June 30,
1996 and 1995, respectively. Earnings per share for 1996 and 1995 have been
computed by considering any share equivalents applying the "treasury stock"
method and assuming that all options and warrants were exercised on date of
issue. The proceeds obtained from the exercise of any options or warrants would
be utilized to purchase outstanding shares at the average market price for the
primary earnings per share calculation and at the higher of the average market
price or the closing market price as of June 30, 1996 and June 30, 1995,
respectively, for the fully diluted earnings per share calculation. No such
options or warrants have been exercised as of June 30, 1996. If these options or
warrants had been exercised, the per share results would not be materially
different from the primary earnings per share presented.

                                       8
<PAGE>

Statements of Cash Flows
- ------------------------

For purposes of reporting cash flows, cash and cash equivalents include cash on
hand and short-term investments with original maturities of 90 days or less. At
June 30, 1996 and December 31, 1995, cash and cash equivalents totaling
$1,643,000 and $840,000, respectively included tenant escrow deposits of
$203,000 and $198,000, respectively.

Reclassifications
- -----------------

Certain 1995 amounts have been reclassified to conform to the current year
presentation.

3.      REAL ESTATE INVESTMENTS:
        ------------------------

Real estate investments are carried at the lower of adjusted cost or estimated
net realizable value. During the first six months of 1996, the Trust retired
fully depreciated assets totaling $1,167,000.

In March 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets to be Disposed of." This statement requires that long-lived
assets to be held and used by the Trust be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. In performing the review for recoverability, the Trust
should estimate the future cash flows expected to result from the use of the
asset and its eventual disposition. If the sum of the expected future cash flows
(undiscounted and without interest charges) is less than the carrying amount of
the asset, an impairment loss should be recognized. Measurement of an impairment
loss for these assets should be based on the fair market value of the asset. On
January 1, 1996, the Trust adopted this statement. There was no effect from
adopting this statement on the Trust's financial position or results of
operations.

4.      MORTGAGE NOTES PAYABLE:
        -----------------------

On April 21, 1995, the Trust refinanced its then existing mortgage loan with
proceeds of mortgage loans totaling $6,250,000 and $2,750,000, respectively, and
providing for a fixed rate of interest. The mortgage loans are
cross-collateralized by the Specified Projects. The mortgage loans are due on
April 15, 2001, and the lender has the right to call the loans at par on April
15, 1998. Monthly payments of interest and principal are due based on a 25 year
amortization schedule for the period April 21, 1995 through April 15, 1998.
After April 15, 1998, monthly payments of interest and principal are due based
on a 22 year amortization schedule. The interest rate is set at 8.75% through
April 15, 1996, 9.0% for the period from April 16, 1996 through October 15, 1996
and 9.31% for the period from October 16, 1996 through April 15, 1998.

The loan is generally nonrecourse to the Trust as to interest and principal,
except, among other factors, in the event of a sale or encumbrance of the
mortgaged premises, or in the event of fraud or willful misrepresentation in
connection with the loan.

The lender is entitled to hold escrow cash reserves for real estate taxes and
capital requirements. On April 21, 1995, an initial deposit of $1,559,000 was
made into this account. Deposits to the real estate tax escrow account are
required to be made on a monthly basis. Ongoing deposits to the capital escrow
account are required of $25,000 per month over the remainder of the term of the
loans. Amounts held in the capital escrow account may be advanced, from time to
time and subject to certain conditions, to pay for capital improvements, tenant
improvements and leasing commissions associated with the Projects and
distributions to Shareholders of the Trust. The capital escrow account held by
the lender does not constitute additional collateral for the mortgage loans. At
June 30, 1996 and December 31, 1995, the capital and real estate tax escrow
accounts totaled $629,000 and $1,155,000, respectively.

                                       9
<PAGE>


5.      ISSUANCE OF STOCK AND WARRANTS AND NOTE PAYABLE TO SHAREHOLDER:
        ---------------------------------------------------------------

On June 21, 1996, an entity (the RMO Fund") controlled by Richard M. Osborne, a
shareholder and Trustee of the Trust, made an investment in the Trust in the
aggregate amount of $1,330,000 (the "Aggregate Investment"). The Trust issued
59,949 units (each consisting of one common share of beneficial interest, par
value $0.01 per share ("Common Stock"), and one warrant exercisable for six
years for an additional share of Common Stock at an initial exercise price of
$6.50) in exchange for $338,000 of the Aggregate Investment. Of the $338,000
total equity investment, the stock warrants totaled $42,000 and were recorded
based on a $0.70 per warrant value (based on a modified Black Scholes
calculation). Of the Aggregate Investment, the balance of $992,000 was made in
the form of a loan (the "Loan") that will be subject to prepayment, under
certain circumstances, through the issuance by the Trust of additional units.
Proceeds of the investment were used by the Trust in its acquisition of the
LibertyView Building on July 19, 1996. (See Note 8.)

The Loan is unsecured and under its terms, the principal sum outstanding from
time to time will bear interest at an annual rate equal to the prime rate of
interest, and interest will be payable quarterly in arrears, provided that the
Trust will have the right to have such accrued interest added to the principal
balance of the Loan. Principal and accrued interest will be payable in full on
the third anniversary of the date of the Loan. Under certain circumstances, the
Trust will be required to repay principal plus accrued interest on the Loan by
delivering to the RMO Fund additional units at $5.63 per unit, each unit
comprised of one share of Common Stock and an additional six-year warrant
exercisable for an additional share of Common Stock with an initial exercise
price of $6.50.

6.      BENEFICIARIES' EQUITY:
        ----------------------

For the year ended December 31, 1995, the Trust declared distributions totaling
$0.55 per share. On May 1, 1996, the Trust declared a distribution of $0.06 per
share payable on May 15, 1996 to shareholders of record as of May 10, 1996.
Subsequent to June 30, 1996, on July 11, 1996, the Trust declared a distribution
of $0.06 per share payable on July 31, 1996 to shareholders of record as of July
26, 1996.

7.      STOCK OPTIONS:
        --------------

On August 8, 1994, subject to shareholder approval which was received at the
Annual Meeting of Shareholders on October 11, 1994, the Board of Trustees
adopted a stock option compensatory plan benefiting an executive officer of the
Trust covering 140,000 common shares of beneficial interest. The plan includes
options exercisable for 100,000 shares at an exercise price of $6.50. Of the
remaining 40,000 shares subject to options, options covering 20,000 shares
vested on August 8, 1995 and options covering 20,000 shares vested on August 8,
1996. The exercise price of the 40,000 options was set at $3.80. The per share
exercise price of the options covering all 140,000 shares is subject to
reduction as proceeds from the sale of, or refinancing of debt secured by, any
Specified Projects are distributed by the Trust to shareholders by an amount
equal to the amount so distributed, from time to time, on account of each share.
Accordingly, the per share exercise prices of the options have been reduced to
$4.77 and $2.07, respectively, as a result of distributions to shareholders from
proceeds of 1994 property sales and the April 21, 1995 mortgage refinancing.
During the six months ended June 30, 1996 and the year ended December 31, 1995,
there were no options exercised, canceled or expired.

On January 1, 1996, the Trust adopted Statement of Financial Accounting
Standards No. 123, "Accounting for Stock-Based Compensation", which establishes
financial accounting and reporting standards for stock-based employee
compensation plans. The statement encourages all entities to adopt a new method
of accounting to measure compensation cost of all employee stock compensation
plans based on the estimated fair value of the award at the date it is granted.
Companies are, however, allowed to continue to measure compensation cost for
those plans using the intrinsic value based method of accounting, which only
requires footnote disclosures concerning this new accounting pronouncement.
Management of the Trust has adopted the pro forma method of disclosure as
described above.
                                       10
<PAGE>

8.      SUBSEQUENT EVENT:
        -----------------

On July 19, 1996, the Trust acquired the LibertyView Building, a seven-story,
122,000 square foot office building in Cherry Hill, New Jersey, from UM Real
Estate Investment Company, LLC ("UM") for a cash price of $10.6 million, of
which $9.6 million was paid at the closing. The balance is payable to UM, in
installments, as outlined below:

                  Due Date                  Amount
                  ---------                 ------
                  July 31, 1997             $100,000
                  August 31, 1997           $100,000
                  September 31, 1997        $100,000
                  October 31, 1997          $100,000
                  November 31, 1997         $100,000
                  December 31, 1997         $500,000

The amount of the purchase price was determined through arm's-length negotiation
between the Trust and UM.

The LibertyView Building was completed in 1990 and, as of June 30, 1996, the
occupancy level was approximately 67%. A single tenant, HIP Health Plan of NJ,
an HMO provider, occupies 37,515 square feet under a lease expiring in 2007. No
other tenant occupies more than 10% of the building. Rentals of another tenant,
Shapiro and Kreisman, a law firm, comprise approximately 15.4% of the total
current base rents for the property. Other tenants in the LibertyView Building
include a regional bank, big six accounting firm and several Philadelphia-based
law firms.

The Trust financed its acquisition of the LibertyView Building through a
combination of term financing ($9,777,140), from a commercial bank (Summit Bank,
formerly known as United Jersey Bank), and proceeds from a recent investment in
the Trust by an affiliate of Richard M. Osborne, a shareholder and a Trustee of
the Trust. The acquisition portion of the bank loan ($8,480,000) bears interest
at a fixed rate of 8% per annum and matures on January 1, 1999. The bank loan
provides for additional funding of an amount not to exceed $1.3 million, which
will be advanced for tenant finishing and leasing commissions on currently
vacant space. The additional funding will be repayable at prime plus 1% and will
mature on January 1, 1999.

The bank loan is secured by a first mortgage on the LibertyView Building, and is
generally non-recourse to the Trust, except that the Trust guaranteed completion
of tenant improvements for any new leases, and up to $3 million of principal of
the bank loan plus the amount of principal and interest unpaid as of the date of
acceleration of the bank loan in the event of a default thereunder. The bank has
reserved the right to approve of any material change in the ownership of the
Trust, including a change resulting from the contemplated SSI/TNC Transaction,
and in the event the Bank does not approve of any such ownership change, the
loan, at the bank's option, will become repayable without penalty upon 120 days
notice. If the bank were to withhold approval of the SSI/TNC Transaction and
require repayment of its loan, the Trust would be required to seek replacement
financing and there can be no assurance that the Trust could obtain such
replacement financing or that any such replacement financing would be on terms
acceptable to the Trust. If the Trust were unable to refinance the loan, the
LibertyView Building could be transferred to the bank with a consequent loss of
income and asset value to the Trust.

The following sets forth the pro forma condensed consolidating balance sheet of
Brandywine Realty Trust as of June 30, 1996 and the pro forma condensed
consolidating statements of operations for the year ended December 31, 1995, and
the six-month period ended June 30, 1996.

The pro forma condensed consolidating financial information is presented as if
the July 19, 1996 acquisition of the LibertyView Building by the Trust had been
consummated on June 30, 1996, for balance sheet purposes and January 1, 1995 for
purposes of the statements of operations. Further, this pro forma information


                                       11
<PAGE>

presents the June 21, 1996 investment by the RMO Fund of $1,330,000 in debt and
equity securities of the Trust as if the transaction had been consummated on
January 1, 1995 for purposes of the statements of operations. This unaudited pro
forma condensed consolidating financial information should be read in
conjunction with the historical financial statements of the Trust and
LibertyView and the related notes thereto. In management's opinion, all
adjustments necessary to reflect the effects of the consummated transactions
have been made.

The pro forma condensed consolidating financial information is unaudited and is
not necessarily indicative of what the actual financial position would have been
at June 30, 1996, nor does it purport to represent the future financial position
and the results of operations of the Trust.

                                       12
<PAGE>


                             BRANDYWINE REALTY TRUST

                 PRO FORMA CONDENSED CONSOLIDATING BALANCE SHEET

                       AS OF JUNE 30, 1996 (Notes 1 and 2)

                                   (Unaudited)

                                 (in thousands)

<TABLE>
<CAPTION>
                                          Brandywine
                                         Realty Trust      Pro Forma                  
                                          Historical      Adjustments
                                         Consolidated                                     Pro Forma
                                             (A)              (B)                        Consolidated
                                         ------------     -----------                    ------------
<S>                                        <C>              <C>                           <C>
Assets:
  Real estate investments, net             $13,752          $10,600      (B)              $24,352
  Cash and cash equivalents                  1,643           (1,120)     (B)                  523
  Escrowed cash                                629               --                           629
  Deferred costs, net                        1,411              300      (B)                1,711
  Other assets                                 732             (300)     (B)                  432
                                          --------          -------                       -------

    Total assets                          $ 18,167          $ 9,480                       $27,647
                                          ========          =======                       =======
Liabilities:
  Mortgages and notes payable             $  9,870          $ 9,480      (B)              $19,350
  Other liabilities                            725            --                              725
                                          --------          -------                       -------
    Total liabilities                       10,595            9,480                        20,075
                                          --------          -------                       -------
Minority Interest                            --               --                             --
Shareholders' Equity:
  Common shares of beneficial interest          19            --                               19
  Additional paid-in capital                17,068            --                           17,068
  Stock warrants                                42            --                               42
  Accumulated equity (deficit)              (9,557)            --                           (9,557)
                                          --------          -------                       -------
    Total shareholders' equity               7,572            --                            7,572
                                          --------          -------                       -------
 Total liabilities and
 shareholders' equity                     $ 18,167         $  9,480                       $27,647
                                          ========         ========                       =======
</TABLE>

        The accompanying notes and management assumptions are an integral
                           part of these statements.

                                       13

<PAGE>


                             BRANDYWINE REALTY TRUST

            PRO FORMA CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

              FOR THE YEAR ENDED DECEMBER 31, 1995 (Notes 1 and 3)

                                   (Unaudited)

               (in thousands, except Share and per Share amounts)

<TABLE>
<CAPTION>
                                   Brandywine      Liberty
                                  Realty Trust       View
                                   Historical      Building                              
                                  Consolidated    Historical     Pro Forma               Pro Forma
                                      (A)            (B)        Adjustments            Consolidated
                                  ------------   -----------    -----------            ------------
<S>                                 <C>          <C>            <C>                     <C>
Revenue:
  Base rents and
     tenant reimbursements         $   3,583       $ 1,654         $   --               $   5,237
  Other                                   83           --              --                      83
                                   ---------       -------         ------               ---------
    Total revenue                      3,666         1,654             --                   5,320
                                   ---------       -------         ------               ---------
Operating expenses:  
  Interest                               793           --              762   (D)(F)         1,555
  Depreciation and                     
   amortization                        1,402           --              459   (C)(E)         1,861
  Other expenses                       2,290           798             --                   3,088
                                   ---------       -------         ------               ---------
    Total operating                    
     expenses                          4,485           798           1,221                  6,504
                                   ---------       -------         ------               ---------
    Income (loss) before               
     minority interest                  (819)          856          (1,221)                (1,184)
Minority interest in                       
 income (loss)                             5           --              --                       5
                                   ---------       -------         ------               ---------
    Income (loss) before           
     extraordinary items           $    (824)      $   856        $ (1,221)             $  (1,189)
                                   =========       =======        ========              =========
Earnings per share of              
 beneficial interest               $   (0.44)                                           $   (0.62)
                                   =========                                            =========
Weighted average                   
 number of shares
 outstanding including
 share equivalents                 1,874,372                        59,949   (G)        1,934,321
                                   =========                      ========              =========
</TABLE>



            The accompanying notes and management assumptions are an
                       integral part of these statements.

                                       14

<PAGE>


                             BRANDYWINE REALTY TRUST

            PRO FORMA CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

          FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 1996 (Notes 1 and 3)

                                   (Unaudited)

               (in thousands, except Share and per Share amounts)

<TABLE>
<CAPTION>
                                   Brandywine      Liberty
                                  Realty Trust       View
                                   Historical      Building                              
                                  Consolidated    Historical     Pro Forma               Pro Forma
                                      (A)            (B)        Adjustments            Consolidated
                                  ------------   -----------    -----------            ------------
<S>                                 <C>          <C>            <C>                     <C>

  Revenue:
    Base rents and
      tenant reimbursements       $   1,975       $   846          $   --                 $  2,821
    Other                                52           --               --                       52
                                  ---------       -------          -------                --------
      Total revenue                   2,027           846              --                    2,873
                                  ---------       -------          -------                --------
  Operating expenses:
    Interest                            416           --               379   (D)(F)            795
    Depreciation and                    
     amortization                       465           --               230   (C)(E)            695
    Other expenses                    1,140           368              --                    1,508
                                  ---------       -------          -------                --------
      Total operating                 
       expenses                       2,021           368              609                   2,998  
                                  ---------       -------          -------                --------
      Income (loss) before                
       minority interest                  6           478             (609)                   (125)
  Minority interest in                    
   income (loss)                          5           --               --                        5
                                  ---------       -------          -------                --------
      Income (loss) before        
       extraordinary items        $       1       $   478         $   (609)               $   (130)
                                  =========       =======         ========                ========
  Earnings per share of           
   beneficial interest            $    0.00                                               $  (0.07)
                                  =========                                               ========
  Weighted average             
   number of shares
   outstanding including
   share equivalents              1,888,923                         56,993   (G)          1,945,916
                                  =========                         ======                =========
</TABLE>

        The accompanying notes and management assumptions are an integral
                           part of these statements.

                                       15
<PAGE>


                             BRANDYWINE REALTY TRUST

                      NOTES AND MANAGEMENT'S ASSUMPTIONS TO

                   UNAUDITED PRO FORMA CONDENSED CONSOLIDATING

                              FINANCIAL INFORMATION

               (in thousands, except share and per share amounts)
               --------------------------------------------------


1.  BASIS OF PRESENTATION:
    ---------------------

Brandywine Realty Trust (the "Trust") is a Maryland real estate investment
trust. The Trust owns 4 properties as of June 30, 1996 and on July 19, 1996
acquired the LibertyView Office Building (the "LibertyView Building") from an
unrelated party. The LibertyView Building has an aggregate net leasable area of
approximately 122,000 square feet and is 63% leased as of December 31, 1995 and
67% leased as of June 30, 1996.

These pro forma financial statements should be read in conjunction with the
historical financial statements and notes thereto of the Trust and the
LibertyView Building, as previously filed. In management's opinion, all
adjustments necessary to reflect the effects of the acquisition of the
LibertyView Building by the Trust have been made.

2.  ADJUSTMENTS TO PRO FORMA CONDENSED CONSOLIDATING BALANCE SHEET:
    ---------------------------------------------------------------

    (A) Reflects the historical consolidated balance sheet of the Trust as of
         June 30, 1996.

    (B) Reflects the Trust's acquisition of the LibertyView Building as of June
        30, 1996, based upon the purchase price of $10,600,000 acquired with
        cash of $1,420,000 (net of $300,000 in related deposits as of June 30,
        1996), a mortgage note payable of $8,480,000 due in January 1999 with
        interest payable monthly at 8% and a note payable to the seller of
        $1,000,000 due in installments through December 1997 with no interest
        payable. Deferred financing costs of $300,000 related to the mortgage
        note payable have been capitalized.

3.  ADJUSTMENTS TO PRO-FORMA CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS:
    -------------------------------------------------------------------------

    (A) Reflects the historical consolidated operations of the Trust.


    (B) Reflects the historical operations of the LibertyView Building,
        excluding certain expenses such as interest, depreciation and
        amortization, professional costs, and other costs not directly related
        to the future operations of the LibertyView Building.

    (C) Reflects depreciation totaling $339,000 and $170,000, respectively, of
        the LibertyView Building using a 25-year depreciable life for the year
        ended December 31, 1995, and the six-month period ended June 30, 1996.

    (D) Reflects the increase in interest expense of $678,000 and $339,000,
        respectively, related to the mortgage note payable of the LibertyView
        Building, which has an interest rate of 8% per annum for the year ended
        December 31, 1995 and for the six-month period ended June 30, 1996.


                                       16
<PAGE>

    (E) Reflects the amortization of deferred financing costs related to the
        LibertyView Building of $120,000 and $60,000, respectively, for the year
        ended December 31, 1995 and the six-month period ended June 30, 1996.

    (F) Reflects the increase in interest expense of $84,000 related to the note
        payable to the RMO Fund (which bears interest at prime), assuming a
        prime rate of 8.25% for the year ended December 31, 1995. For the
        six-month period ended June 30, 1996, the increase in interest expense
        was $40,000.

    (G) Reflects the increase in weighted average number of shares outstanding
        related to the shares issued to the RMO Fund on June 21, 1996. The
        increase is related to the pro forma period January 1, 1995 through June
        20, 1996.

                                       17
<PAGE>


Item 2.  Management's Discussion and Analysis of Financial Condition and 
         Results of Operations
         ----------------------------------------------------------------


                              RESULTS OF OPERATIONS
                              ---------------------

The Trust's consolidated net income for the period from January 1, 1996 to June
30, 1996 was $1,000 or $0.00 per share as compared to a consolidated net loss of
($440,000) or ($0.23) per share for the period January 1, 1995 to June 30, 1995.

In comparing the first six months of 1996 to the same period for 1995, rental
revenue increased by $192,000 or 11% primarily due to improved overall occupancy
levels of the Specified Projects. Depreciation and amortization expenses for
1996 decreased by $334,000 or 42% as compared to 1995 primarily as a result of
the non-recurring write off of $254,000 in deferred loan costs associated with
the April 21, 1995 refinancing transaction. Maintenance expenses increased by
$118,000 or 45% primarily due to snow removal costs incurred during the winter
of 1996 and increased janitorial and payroll costs associated with higher
occupancy levels. Non-maintenance operating expenses remained consistent with
prior year increasing by $6,000 or 1%. Administrative expenses decreased by
$35,000 or 12% due primarily to reduced payroll and office costs.

As of June 30, 1996 and December 31, 1995, the overall occupancy level of the
Specified Projects was 96% and 97%, respectively. During the first six months of
1996, 14,000 square feet of new leases and 45,000 square feet of renewals were
obtained representing 23% of the total space in the Specified Projects. Further,
approximately 16,000 square feet or 6% of the total space in the Specified
Projects was vacated. As of June 30, 1996, approximately 47,000 square feet or
18% of the total space in the Specified Projects represents leases expiring on
or before December 31, 1996.

                              FUNDS FROM OPERATIONS
                              ---------------------


The Trust's funds from operations for the six months ended June 30, 1996 totaled
$450,000 or $0.24 per share. Management generally considers Funds from
Operations to be a useful financial performance measure of the operating
performance of an equity REIT because, together with net income and cash flows,
Funds from Operations provides investors with an additional basis to evaluate
the ability of a REIT to service debt and to fund acquisitions and other capital
expenditures. Funds from Operations does not represent net income or cash flows
from operations as defined by generally accepted accounting principles (GAAP)
and does not necessarily indicate that cash flows will be sufficient to fund
cash needs. It should not be considered as an alternative to net income as an
indicator of the Trust's operating performance or to cash flows as a measure of
liquidity. Funds from Operations does not measure whether cash flow is
sufficient to fund all of the Trust's cash needs, including principal
amortization, capital improvements and distributions to shareholders. Funds from
Operations as disclosed by other REITs may not be comparable to the Trust's
calculation of Funds from Operations. In 1996, the Trust adopted the new
definition of Funds from Operations. The new definition of Funds from Operations
is calculated as net income (loss) adjusted for depreciation expense
attributable to real property, amortization expense attributable to capitalized
leasing costs, tenant allowances and improvements, gains on sales of real estate
investments and extraordinary and non recurring items. All prior periods have
been adjusted to reflect the change to the new definition. The following table
identifies the calculation of Funds from Operations (in thousands):

                                       18
<PAGE>
<TABLE>
<CAPTION>

                                              Six months       Six months        Six months
                                                 ended            ended            ended
                                            June 30, 1996     June 30, 1995    June 30, 1995
                                                 (new)             (new)       (as previously
                                             (definition)      (definition)        reported)
                                            -------------     -------------    --------------
<S>                                            <C>              <C>              <C>   
Net income (loss)                              $   1             $ (440)         $ (440)

Add back:

    Depreciation expense attributable
      to real property                           384                451             451

    Amortization expense attributable
      to capitalized leasing costs and
      tenant allowances and improvements          65                 64              64

    Amortization expense attributable
      to capitalized loan costs                   --                 --              30

    Write off of deferred loan costs in
      connection with refinancing                 --                254             254
                                               -----             ------          ------
Funds From Operations                          $ 450             $  329          $  359
                                               =====             ======          ======
</TABLE>

                         LIQUIDITY AND CAPITAL RESOURCES
                         -------------------------------


As of June 30, 1996, the Trust's primary asset is its 70% general partner
interest in Brandywine which owns and operates the Specified Projects. The
Trust's principal source of liquidity consists of the distributions it receives
from the operation of the Specified Projects.

As of June 30, 1996, the Trust's consolidated cash balances were $1,643,000 as
compared to $840,000 as of December 31, 1995. In addition, escrowed cash
balances at June 30, 1996 and December 31, 1995 totaled $629,000 and $1,155,000,
respectively.

During the first six months of 1996, net cash provided by operating activities
totaled $394,000. Costs paid in connection with the Trust's pursuit of potential
acquisitions of additional real estate and third party equity and debt
investments totaled $560,000 for the first six months of 1996. Additionally,
during this same period, the Trust paid $204,000 in distributions to
shareholders, of which $93,000 represented distributions declared by the Trust
in 1995. Tenant improvements and leasing commissions paid during the first six
months of 1996 relative to the Specified Projects totaled $633,000. For the
first six months of 1996, the net decrease in lender escrow funds amounted to
$526,000.

Additionally, on June 21, 1996, an entity (the RMO Fund") controlled by Richard
M. Osborne, a shareholder and Trustee of the Trust, made an investment in the
Trust in the aggregate amount of $1,330,000. The Trust issued 59,949 units (each
consisting of one common share of beneficial interest, par value $0.01 per share
("Common Stock"), and one warrant exercisable for six years for an additional
share of Common Stock at an initial exercise price of $6.50) in exchange for
$338,000, and the balance of $992,000 was made in the form of a loan. Proceeds
of the investment were used by the Trust in its acquisition of a seven-story,
122,000 square foot office building (the "LibertyView Building") in Cherry Hill,
New Jersey on July 19, 1996.

                                       19
<PAGE>


On a pro forma basis, after giving effect to the acquisition of the LibertyView
Building, the Trust's consolidated cash balances as of June 30, 1996 were
$523,000 and accounts receivable totaled $294,000 as compared to accounts
payable, accrued expenses, tenant security deposits and deferred rents
aggregating $725,000. Such pro forma balances include costs incurred in
connection with the SSI/TNC Transaction (discussed below), totaling $738,000 as
of June 30, 1996. At the contemplated closing of the SSI/TNC Transaction, the
Trust, among various other events, will receive $426,000 in cash.

During 1996, the Trust declared distributions as follows:


 Declaration Date      Record Date           Payment Date      Amount per Share
 ----------------      ------------          ------------      ----------------
 May 1,1996            May 10, 1996          May 15, 1996           $ 0.06
 July 11, 1996         July 26, 1996         July 31, 1996          $ 0.06


The Trust believes that it qualifies for federal income tax purposes as a real
estate investment trust and intends to remain so qualified.


    FACTORS THAT MAY AFFECT FUTURE OPERATING RESULTS AND FINANCIAL CONDITION
    ------------------------------------------------------------------------


The Specified Projects are located in the greater Philadelphia, Pennsylvania and
Raleigh, North Carolina metropolitan areas. Each of these markets is
competitive, with the principal methods of competition consisting in each case
of rental rates (including rental concessions such as initial periods of free
occupancy), location, level of leasehold improvements and building amenities.
The Specified Projects compete for tenants with other properties which may have
competitive advantages.

The Trustees have considered, and expect to continue to consider, potential
acquisitions by the Trust of additional real estate and real estate-related
interests and potential third party equity and debt investments in the Trust. At
the current time the Trust is actively pursuing the potential acquisition of
additional real estate and evaluating third party equity and debt investments in
the Trust. The Trust's business plan contemplates a focus on office and
industrial projects in the greater Philadelphia, Pennsylvania area. However,
there can be no assurance that the Trust will make an acquisition of additional
real estate or real estate-related interests or that any such acquisitions will
produce satisfactory returns for the Trust. Similarly, there can be no assurance
that the Trust will consummate any third party equity or debt investments in the
Trust or that any investments that might be made in the Trust would enable the
Trust to generate greater returns for the Shareholders.

On March 20, 1996 the Trust entered into a letter of intent to form a limited
partnership (the "Operating Partnership") with Safeguard Scientifics, Inc.
("SSI") (NYSE-SFE), an investor in emerging growth technology companies, and
SSI's real estate affiliate, and The Nichols Company ("TNC"), a leading private
real estate development company operating in the greater Philadelphia,
Pennsylvania area, to acquire 19 properties currently owned by SSI, TNC and
their affiliates (collectively, the "SSI/TNC Transaction"). The proposed
transaction is subject to customary closing conditions, including receipt of
shareholder approval. The Trust's Annual Meeting of Shareholders is scheduled to
be held on August 22, 1996, at which meeting the SSI/TNC Transaction will be
considered and voted on. (See Item 5). The SSI/TNC Transaction will be recorded
under the purchase method of accounting. The 19 properties will be recorded at a
$75,494,000 fair market value subject to related mortgage debt assumed of
$63,281,000. The Trust will acquire certain other net assets of $784,000 of SSI
and TNC. The Trust will

                                       20
<PAGE>

issue, for a total equity value of $3,397,000, 775,000 Common Shares and a
warrant exercisable for six years for an additional 775,000 Common Shares at a
price per share of $6.50. As part of the SSI/TNC Transaction, the Trust will
receive $426,000 in cash. The Trust will also cause the Operating Partnership to
issue limited partnership units in exchange for the remaining net equity of the
19 properties and such units will be exchangeable under certain circumstances
for shares of common stock of the Trust (See Item 5).

In contemplation of, and subject to the closing of, the SSI/TNC Transaction, the
Trust has entered into 2-year employment agreements with four key executives at
an aggregate annual cash value of $513,000 together with 6-year warrants
totaling 700,000 Common Shares at a price per share of $6.50.

Upon consummation of the SSI/TNC Transaction, the Trust will own, directly or
indirectly, 24 properties in 3 states with an aggregate of 1.3 million square
feet of rentable office and industrial space. The Trust believes that the
expected consolidated revenues will provide sufficient liquidity to service the
existing indebtedness on the properties and result in positive cash flow from
operations. The Trust expects the Operating Partnership to obtain working
capital financing from SSI to assist the Operating Partnership in meeting its
current and future operating needs and to fund capital requirements for leasing
and tenant improvements. The Trust will consider other financing sources
including, debt and equity capital in the private and public markets.

On a pro forma basis, for the year ended December 31, 1995, assuming (a) the
SSI/TNC Transaction had occurred and (b) the LibertyView Building acquisition
had not occurred, the Trust would have approximately $15,010,000 in consolidated
revenues, $6,761,000 of consolidated interest expense and $6,822,000 of
consolidated other operating expenses, excluding depreciation and amortization
expense. The resulting $1,427,000 of pro forma consolidated net operating income
would be available to shareholders and limited partners in the Operating
Partnership. The pro forma consolidated financial information is unaudited and
does not purport to represent the future results of operations or cash flows of
the Trust.

On July 19, 1996, the Trust acquired the LibertyView Building, a seven-story,
122,000 square foot office building in Cherry Hill, New Jersey from an unrelated
party for a cash price of $10.6 million. The Trust financed its acquisition
through a combination of proceeds from its recent investments by the RMO Fund
aggregating approximately $1.3 million, term financing from a commercial bank,
initially funding approximately $8.5 million and seller financing totaling $1.0
million.


                                       21

<PAGE>


Part II.  Other Information

Item 1.     Legal Proceedings
            -----------------

Neither the Trust nor Brandywine is a party to any material pending legal
proceedings as of June 30, 1996 nor as of the date of this Form 10-Q.

Item 5.     Other Information
            -----------------

On August 2, 1996, the Trust executed (i) a Contribution Agreement dated as of
July 31, 1996 (the "Contribution Agreement") with Safeguard Scientifics, Inc.
("SSI") and The Nichols Company ("TNC") and (ii) a Share and Warrant Purchase
Agreement dated as of July 31, 1996 (the "Share Purchase Agreement") with SSI.
In addition, on August 2, 1996, a newly-formed subsidiary of the Trust entered
into employment agreements with each of Anthony A. Nichols, Sr., Gerard H.
Sweeney, Brian Belcher and John P. Gallagher. The employment agreements become
effective only upon closing of the below-referenced SSI/TNC Transaction.

The transactions contemplated by the Contribution Agreement and the Share
Purchase Agreement (collectively, the "SSI/TNC Transaction") are subject to
customary closing conditions, including receipt of shareholder approval. The
Trust's Annual Meeting of Shareholders is scheduled to be held on August 22,
1996, at which meeting the SSI/TNC Transaction will be considered and voted on.

The SSI/TNC Transaction involves the formation by the Trust of a limited
partnership (the "Operating Partnership") in order to acquire 19 properties (the
"Initial Properties") in exchange for common shares of beneficial interest
("Common Shares"), warrants exercisable for additional Common Shares and limited
partnership interests redeemable under certain circumstances for additional
Common Shares. The acquisition will be accompanied by a consolidation of the
managements of the Trust and TNC and the expansion of the Trust's Board of
Trustees to include designees of SSI and TNC. In short, the SSI/TNC Transaction
will involve a substantial change in the business of the Trust; a substantial
increase in the number of properties indirectly owned by the Trust; and, given
the mortgage debt encumbering the Initial Properties, a substantial increase in
the Trust's indebtedness.

            The summary below describes the principal features of the SSI/TNC
Transaction:

         o  The issuance by the Trust to SSI of 775,000 Common Shares and a
            warrant exercisable for six years for an additional 775,000 Common
            Shares at a price per share of $6.50 in exchange for $426,250 in
            cash and SSI's indirect ownership interest in eight of the Initial
            Properties (the "SSI Ownership Interest"). The SSI Ownership
            Interest consists of the entire general partnership interest in a
            limited partnership (the "Witmer Partnership") that owns such eight
            Initial Properties (the "Witmer Properties") and SSI's entire
            limited partnership interest in the Witmer Partnership.

         o  The contribution by the Trust to the capital of the Operating
            Partnership of (i) $1,000 cash and furniture, fixtures and equipment
            to be acquired by the Trust from TNC for $25,000 in exchange for the
            entire general partnership interest (which shall be comprised of
            units ("GP Units")) in the Operating Partnership (the "General
            Partnership Interest") and (ii) substantially all of the SSI
            Ownership Interest in exchange for Class B limited partnership
            interests in the Operating Partnership ("Class B Units"). The Class
            B Units will entitle the Trust to receive an annual preferential
            cumulative return in an amount equal to 9.5% of $3,937,000 (the
            "Preferential Return") and a liquidation preference over the Class A
            Units in the amount of $3,937,000 plus the amount of any accrued but
            unpaid Preferential Return. Payment by the Operating Partnership of
            the Preferential Return will be subject to restrictions contained in
            the GECC loan documents (collectively, the "GECC Loan Documents")

                                       22
<PAGE>

            relating to the loan secured by the Witmer Properties held by the
            Witmer Partnership and will be subject to reduction as and to the
            extent the Trust receives a distribution of proceeds from the sale
            of, or refinancing of debt secured by, any of the Witmer Properties.
            Following completion by the Trust of a Qualified Offering (as
            defined below), the Class B Units will automatically convert into an
            equal number of GP Units and will cease to be entitled to receive
            any further accrual of the Preferential Return or a liquidation
            preference. The term "Qualified Offering" means a public or private
            sale of equity securities generating at least $35 million of net
            proceeds to the Trust at a price per share at least equal to the per
            share book value of the Common Shares as of the end of the Trust's
            most recently completed quarter preceding the sale or at least $25
            million of net proceeds, but less than $35 million of net proceeds,
            at a price per share of at least $5.50 (subject to adjustment in the
            event of stock dividends, stock splits or reverse stock splits).

         o  The sale to the Operating Partnership (i) by TNC, SSI and certain
            other persons of (a) all of the limited partnership interests (the
            "Witmer Limited Partnership Interests") in the Witmer Partnership
            owned by TNC and the Other Owners, and (b) substantially all of the
            partnership interests of the limited partnerships that own certain
            of the Initial Properties and (ii) by SSI of fee title to six
            Initial Properties, all of the foregoing in exchange for an
            aggregate of approximately 1,515,499 Class A Units that may be
            redeemed, after completion of a Qualified Offering or on any
            Redemption Eligibility Date (as defined below), for cash or up to
            approximately 1,515,499 Common Shares (subject to increase based on
            the occurrence of certain events, including repayment of certain
            indebtedness at a discount, subject to forfeiture upon the
            occurrence of certain events, including payment of participations to
            lenders holding mortgages on certain of the Initial Properties, and
            subject to customary antidilution adjustments). The Witmer Limited
            Partnership Interests to be sold to the Operating Partnership by
            TNC, SSI and the other persons, together with the additional limited
            partnership interests in the Witmer Partnership included within the
            SSI Ownership Interest and to be contributed to the Operating
            Partnership by the Trust, will constitute all of the limited
            partnership interests in the Witmer Partnership. The term
            "Redemption Eligibility Date" means any 20 consecutive trading-day
            period, occurring after the second anniversary of the Closing Date,
            for which the average closing price of a Common Share equals or
            exceeds $5.50 (subject to adjustment to reflect stock splits, stock
            dividends and reverse stock splits). The number of Class A Units
            reflected herein as to be issued were calculated as if the SSI/TNC
            Transaction had closed on March 31, 1996. At the closing of the
            SSI/TNC Transaction, the calculation will be performed using the
            principal amount of indebtedness then outstanding and secured by
            each of the Initial Properties. Thus, the number of Class A Units
            actually issued at the closing will differ from the numbers used
            herein, although the amount of such difference is not expected to be
            material.

         o  The agreement by the Operating Partnership to acquire certain
            retained interests (the "Residual Interests") in the Initial
            Properties on or before the first day of the 37th full month
            following the Closing Date in exchange for an aggregate of
            approximately 131,854 Class A Units that may be redeemed, after
            completion of a Qualified Offering or on any Redemption Eligibility
            Date, for cash or up to approximately 131,854 Common Shares (subject
            to forfeiture upon the occurrence of certain events, including
            payment of participations to lenders holding mortgages on certain of
            the Initial properties, and subject to customary antidilution
            adjustments).

         o  The contribution to the Operating Partnership of the Trust's general
            partnership interest in BRP (the "BRP Partnership Interest") in
            exchange for an aggregate of 1,856,200 Units of Class C limited
            partnership interests ("Class C Units") in the Operating
            Partnership. 1,600,000 of these Class C Units will be issued to the

                                       23
<PAGE>

            Trust at Closing in exchange for a majority of the Trust's BRP
            Partnership Interest, and approximately one year following the
            Closing 256,200 Class C Units (or GP Units, if by such time, a
            Qualified Offering has occurred) will be issued to the Trust in
            exchange for the balance of the BRP Partnership Interest.
            Specifically, on the Closing Date, the Trust will contribute to the
            Operating Partnership a 97% profits interest and a 49% capital
            interest in BRP (thereby retaining until approximately one year
            after the Closing Date a 1% profits interest and a 21% capital
            interest in BRP). Prior to a Qualified Offering, the Class C Units
            will be specially allocated all income, gain, profits, losses and
            cash flow realized by the Operating Partnership from its ownership
            of the BRP Partnership Interest and will, upon the occurrence of a
            Qualified Offering, automatically convert into an equal number of GP
            Units. Prior to a Qualified Offering, the Class C Units will not be
            allocated any income, gain, profits, losses or cash flow relating to
            the ownership, operations or disposition of any of the Properties.
            After a Qualified Offering, the special allocation theretofore
            applicable to the Class C Units will no longer be operative.

         o  The execution by the Operating Partnership of agreements (the
            "Option Agreements") which provide the Operating Partnership an
            option to acquire from TNC and certain of the Other Owners
            substantially all of the ownership interests in the Option
            Properties in exchange for additional Class A Units that may be
            redeemed, after completion of a Qualified Offering or on any
            Redemption Eligibility Date, for cash or Common Shares. The number
            of Class A Units that would be issuable by the Operating Partnership
            upon the exercise of its option to acquire an Option Property would
            be equal to the agreed upon value of such Option Property, minus
            debt secured thereby, divided by $5.50 (subject to adjustment to
            reflect stock splits, stock dividends and reverse stock splits of or
            on Common Shares). The agreed upon value of each such Option
            Property would be based upon the annual net operating income of such
            property, as determined by the Operating Partnership and the
            applicable Owner at or prior to the option exercise. The Option
            Agreements will provide that the only condition precedent to the
            Operating Partnership's right to acquire each such Option Property
            will be the consent of the mortgage lender of such Option Property.
            As of the date hereof, no such consent has been requested, and no
            determination to seek such consent has been made. The Trust does not
            believe the acquisition of the Option Properties is probable as of
            the date hereof for the following reasons: (i) the Trust has made no
            decision to acquire any of the Option Properties; (ii) although the
            Trust, SSI and TNC have agreed upon a methodology for computing the
            purchase price for each of the Option Properties, no values have
            been agreed upon pursuant to such methodology; (iii) no lender
            consent for the transfer of any of the Option Properties has been
            requested or received; and (iv) the Trust has not conducted a due
            diligence assessment of any of the Option Properties.

         o  A commitment by SSI to loan the Operating Partnership funds for the
            benefit of the Trust to subsidize the Trust's distributions to its
            Shareholders to the extent the Trust does not receive a full
            distribution of the Preferential Return on its Class B Units,
            subject to certain limitations (the "SSI Subsidy"). In no event will
            SSI's payment obligations under the SSI Subsidy for any quarter
            exceed the aggregate amount of distributions paid or payable for
            such quarter by the Trust on the 775,000 Common Shares to be issued
            by the Trust to SSI as part of the SSI/TNC Transaction. SSI's
            obligation to provide the SSI Subsidy will terminate upon the
            earlier of the repayment of the GECC Loan (which matures on November
            30, 2000) and a Qualified Offering.

         o  A commitment by SSI to loan up to $700,000 to the Operating
            Partnership to fund its working capital requirements, subject to
            certain limitations. SSI's commitment will remain in effect until
            the earlier of: (i) January 31, 1998; (ii) a Qualified Offering;
            (iii) a refinancing by the Operating Partnership of indebtedness

                                       24
<PAGE>

            secured by one or more of the Initial Properties which results in
            net proceeds sufficient to repay amounts loaned to the Operating
            Partnership by SSI; and (iv) a liquidation of the Operating
            Partnership.

         o  A loan by SSI to the Operating Partnership of funds that will be
            used by the Operating Partnership to pay a portion of the expenses
            incurred by the Operating Partnership in connection with the SSI/TNC
            Transaction.

         o  The contribution by TNC of its management and leasing operations to
            Brandywine Realty Services Company (the "Management Company"), a
            newly-formed corporation, all of the preferred stock and five
            percent (5%) of the common stock of which will be owned by the
            Operating Partnership. The balance of the common stock of the
            Management Company will be owned by a partnership formed by officers
            of the Trust to hold such stock.

         o  The expansion of the Board of Trustees from five to seven members,
            and the election to the Board of Anthony A. Nichols, Sr., Warren V.
            Musser and Walter D'Alessio, three individuals associated with or
            designated by SSI and TNC, and the election to the Board of Charles
            P. Pizzi, an individual jointly designated by SSI, TNC and the
            Trust. Two current members of the Board (Messrs. DiLullo and Jerome)
            will not be standing for re-election.

         o  The execution by the Management Company of two-year employment
            agreements with three individuals who are currently executives of
            TNC (the "TNC Executives") and who are expected to become executive
            officers of the Trust and the issuance to such executives of
            warrants ("Executive Warrants") exercisable during the six-year
            period following the date of their issuance for an aggregate of
            360,000 Common Shares at a per share exercise price of $6.50. The
            balance of the Executive Warrants (exercisable for 40,000 Common
            Shares) will be issued to approximately 10 TNC employees who are
            expected to become employees of the Management Company. In addition,
            warrants having the same terms as the Executive Warrants and
            exercisable for 30,000 Common Shares will be awarded to John
            Adderly, a current executive of the Trust.

         o  The execution by the Management Company of a two-year employment
            agreement with Gerard H. Sweeney, the current President and Chief
            Executive Officer of the Trust, replacing Mr. Sweeney's current
            employment agreement with the Trust and providing for the issuance
            to Mr. Sweeney of warrants exercisable during the six-year period
            following their date of issuance for an aggregate of 300,000 Common
            Shares at a per share exercise price of $6.50.

         o  The taking of action by the Board of Trustees: (i) to exempt SSI,
            TNC and their affiliates from the operation of two Maryland
            "antitakeover" statutes and (ii) to exempt the current President and
            Chief Executive Officer of the Trust from the operation of one of
            such statutes.

         o  The execution by SSI of a "standstill" agreement generally requiring
            SSI to vote its Common Shares in accordance with the recommendations
            of a majority of the Board of Trustees; requiring SSI to vote its
            Common Shares in favor of the reelection to the Board of Trustees of
            Richard M. Osborne or his designee; and restricting SSI's ability to
            sell its Common Shares except under specified circumstances. The
            agreement is for a period of three years but is subject to early
            termination in the event the Trust completes a Qualified Offering.


                                       25
<PAGE>

In certain instances, actions described herein as actions to be taken by SSI may
be taken by SSI directly or by a wholly-owned subsidiary of SSI.

The SSI/TNC Transaction involves certain risks to the Trust and its
Shareholders, including the following:

         o  Continuation of Historic Losses. The Properties have, in the
            aggregate, historically operated at a significant loss. For the year
            ended December 31, 1995, the aggregate net loss before extraordinary
            items on the Initial Properties was $3,379,000 and the aggregate net
            loss on the Option Properties was approximately $1,064,000. No
            assurance can be provided that, following the consummation of the
            SSI/TNC Transaction, these losses will not continue in the future.

         o  Possible Decline in Common Share Trading Price. The SSI/TNC
            Transaction will also result in a pro forma increase in the Trust's
            net loss for the year ended December 31, 1995 from ($824,000) ($.44
            per share) to ($3.332 million) ($1.21 per share). There can be no
            assurance that, as a result of this or other factors relating to the
            SSI/TNC Transaction, the trading price of the Common Shares
            following consummation of the SSI/TNC Transaction will not be less
            than the current market price for the Common Shares.

         o  Limitation on Ability to Fund Preferential Return; Impact on Future
            Distributions. The GECC Loan Documents permit the Witmer Partnership
            to distribute to its partners a nine percent (9%) non-compounding
            return on its equity of $3,805,400 (plus draws made on a $1,500,000
            letter of credit posted by SSI as additional collateral for the GECC
            Loan), but only so long as (i) space currently occupied by a
            designated tenant in one of the Witmer Properties has been re-leased
            to such designated tenant or to another tenant on terms approved by
            GECC, (ii) the Adjusted Net Operating Income (calculated without
            regard to the revenues or expenses of the Witmer Property located in
            Lawrenceville, New Jersey and referred to herein as the
            "Lawrenceville Premises") and the Debt Service Coverage Ratio
            (calculated both inclusive of the Lawrenceville Premises and
            exclusive of the Lawrenceville Premises), as such terms are defined
            in the GECC Loan Documents, all meet certain thresholds. As of this
            date, the condition referenced in clause (i) of the preceding
            sentence has been satisfied but the conditions referenced in clause
            (ii) have not been satisfied. In the event the Witmer Partnership is
            unable to satisfy the conditions referenced in clause (ii) above,
            then, provided the condition referenced in clause (i) above has been
            satisfied, the Witmer Partnership nevertheless has a one-time right
            to distribute to its partners a 6% return on its equity. The
            Preferential Return to which the Trust would be entitled prior to a
            Qualified Offering as a result of its ownership of Class B Units
            will be dependent upon the income generated by all of the Initial
            Properties, including the Witmer Properties. There can be no
            assurance either that the Witmer Partnership will be able to make
            distributions to the Operating Partnership, or that the Operating
            Partnership will be able to pay (rather than accrue) the
            Preferential Return. Failure of the Operating Partnership to pay the
            Preferential Return may adversely affect the Trust's ability to make
            distributions on its Common Shares.

         o  Substantial Debt Obligations. As of March 31, 1996, the principal
            amount of the Trust's outstanding long-term debt was approximately
            $8.9 million (which matures in April 2001 subject to the lender's
            right to require payment in April 1998), and its ratio of long-term
            debt to total market capitalization was approximately 47%. If the
            SSI/TNC Transaction is consummated (and giving effect to the Trust's
            acquisition of the LibertyView Building on July 19, 1996 and the
            additional indebtedness incurred in connection therewith), the
            Trust's pro forma outstanding long-term debt would be approximately
            $82 million (of which approximately $5.5 million matures prior to
            1998), and the Trust's ratio of long-term debt to total market

                                       26
<PAGE>

            capitalization (based on (i) the number of Common Shares outstanding
            on March 31, 1996, (ii) an additional 1,647,353 Common Shares that
            would be outstanding if the 1,647,353 Class A Units to be issued on
            the Closing Date and within 37 months thereafter had been redeemed
            for an equal number of Common Shares, (iii) the 775,000 Common
            Shares issuable to SSI pursuant to the SSI/TNC Transaction and (iv)
            59,949 Common Shares issued to the RMO Fund in connection with its
            investment in the Trust on June 21, 1996) would be approximately
            78%. In the event the Trust is unable to refinance a portion of such
            debt through an equity offering and thereby reduce the higher
            leverage ratio, the Trust believes its ability to make additional
            acquisitions will be impaired. There can be no assurance that the
            Trust will be able to effect any such refinancing through an equity
            offering or that any equity offering which the Trust might effect
            will be on attractive terms.

         o  Inability to Pay Debt Service or Refinance Indebtedness. The
            approximately $30.7 million of mortgage indebtedness secured by the
            Witmer Properties as of March 31, 1996 and the approximately $32.6
            million of mortgage indebtedness secured by the other Initial
            Properties as of March 31, 1996 require aggregate payments of
            principal and interest of approximately $6.9 million in 1997, $12.8
            million in 1998 and $4.0 million, in 1999. For purposes of the
            foregoing sentence, interest rates in effect on March 31, 1996 have
            been assumed to remain unchanged. While the Operating Partnership's
            cash available from operations is anticipated to be sufficient to
            make the required payments on such indebtedness, there can be no
            assurance that such cash available from operations will not decrease
            as the result of tenant delinquencies, a higher than expected level
            of future vacancies, an increase in interest rates or other
            circumstances and, as a result, render the Operating Partnership
            unable to make debt service payments when due. Moreover, even if
            cash available from operations is sufficient to make regular debt
            services payments when due, there can be no assurance that the
            Operating Partnership will be able to refinance the indebtedness at
            maturity. An inability to make regular debt service payment when due
            or to refinance indebtedness when due could cause the applicable
            lender to foreclose on its mortgage, which could have a material
            adverse effect on the Trust.

         o  Multiple Properties Securing Individual Loans. The approximately
            $30.7 million mortgage indebtedness owed by the Witmer Partnership
            as of March 31, 1996 is secured by mortgages held by GECC on each of
            the Witmer Properties. These mortgages are cross-collateralized with
            one another. The approximately $6.5 million mortgage indebtedness
            owed to Fidelity Bank, N.A. as of March 31, 1996 (and referred to
            herein as "Fidelity I") is secured by a single mortgage lien
            encumbering Oaklands Corporate Center Buildings 45 and 50. The
            approximately $13.5 million mortgage indebtedness owed to New
            England Mutual Life Insurance Company ("NEMLICO") as of March 31,
            1996 (and referred to herein as "NEMLICO I") is secured by a single
            mortgage lien encumbering Meetinghouse Buildings 1, 2, 3 and 4.
            Under "cross-collateralization" provisions, the lender would be
            entitled to foreclose against any property subject to such
            provisions in order to recover obligations owed with respect to
            another one of the subject properties.

         o  Debt Financing Risks Generally. Required payments on mortgage debt
            incurred to fund a substantial portion of the cost of the Properties
            is not reduced if the economic performance of any of the Properties
            declines. If such decline occurs, the revenues of the Operating
            Partnership and the funds available for distribution to the Trust
            and its Shareholders could be adversely affected. The Operating
            Partnership will be subject to risks associated with debt financing
            generally, including the risk that its revenues will not be
            sufficient to meet required payments of principal and interest, the
            risk that indebtedness on the Properties, which in many cases will
            not have been fully amortized at maturity, will not be able to be
            refinanced or that the terms of such refinancing will not be as

                                       27
<PAGE>

            favorable as the terms of existing indebtedness, and the risk that
            necessary capital expenditures for such purposes as renovations and
            reletting space will not be able to be financed on favorable terms,
            or at all. If the Operating Partnership or its subsidiary
            partnerships are unable to meet a mortgage payment, the Property
            which is mortgaged to secure such payments could be transferred to
            the mortgagee with a consequent loss of income and asset value to
            the Operating Partnership and consequently the Trust.

         o  Insufficient Working Capital. The Initial Properties other than the
            Witmer Properties consist of 11 Properties which secure an aggregate
            of approximately $32.6 million of mortgage indebtedness as of March
            31, 1996. This amount of mortgage indebtedness will require the
            Operating Partnership to use substantially all of the cash available
            from operations generated by these Properties to service such
            indebtedness and to establish reserves for maintenance and
            improvements. Therefore, these Properties are not expected to
            generate excess funds which the Operating Partnership could use for
            general working capital purposes. In addition, the GECC Loan
            Documents restrict the ability of the Witmer Partnership holding the
            Witmer Properties to make distributions to the Operating
            Partnership. Although SSI has agreed, subject to certain conditions,
            to loan the Operating Partnership up to $700,000 for working capital
            purposes during the 18-month period following the Closing Date,
            immediately following consummation of the SSI/TNC Transaction, the
            Operating Partnership will have no other third-party source of
            funding for working capital purposes. Accordingly, unless the
            mortgage indebtedness encumbering the Initial Properties is
            refinanced, the Operating Partnership may have insufficient funds to
            meet its working capital needs, and may have insufficient funds to
            pay the full amount of the Preferential Return to the Trust. The
            Trust can make no assurances that any such refinancing will occur,
            or that the Operating Partnership will develop any additional
            sources of funding for working capital purposes.

         o  Absence of Independent Appraisals. The Trust has not obtained
            independent appraisals of the Properties being contributed to the
            Operating Partnership in connection with the SSI/TNC Transaction.
            Accordingly, there can be no assurance that the value of the Class A
            Units to be received by the Owners in exchange for their
            contribution will accurately reflect the value of the assets
            contributed by them.

         o  Potential Acceleration of Certain Indebtedness. In accordance with
            the bank loan in the approximate amount of $9.8 million that
            financed the acquisition by the Trust of the LibertyView Building,
            the bank reserved the right to approve of any material changes in
            the ownership of the Trust, including a change resulting from the
            SSI/TNC Transaction, and in the event the bank does not approve of
            any ownership change, the loan, at the bank's option, will become
            repayable without penalty upon 120 days notice. If the bank were to
            withhold approval of the SSI/TNC Transaction and require repayment
            of its loan, the Trust would be required to seek replacement
            financing and there can be no assurance that the Trust could obtain
            such replacement financing or that any such replacement financing
            would be on terms acceptable to the Trust. If the Trust were unable
            to refinance the loan, the LibertyView Building could be transferred
            to the bank with a consequent loss of income and asset value to the
            Trust.

         o  Dilution of Current Shareholders. The ownership of Shares by the
            current Shareholders (computed without regard to the issuance of
            Common Shares upon the exercise of options and warrants presently
            outstanding or the warrants to be issued as part of the SSI/TNC
            Transaction) will decline from 100% to 45.5% in the event that the
            maximum number of Class A Units issuable for the Initial Properties
            are issued and converted into Common Shares (computed (i) without
            regard to the additional Class A Units that are issuable in the
            event any of the Option Properties are acquired or in the event that
            indebtedness encumbering certain of the Properties is repaid at a
            discount or at the time the Residual Interests are acquired and (ii)

                                       28
<PAGE>

            without regard to the potential forfeiture of Class A Units at the
            time equity participations of lenders holding indebtedness
            encumbering certain of the Initial Properties is satisfied). The
            ownership of Shares by the current Shareholders will decline from
            100% to 33.5% if, in addition to the decline caused by the
            conversion of Class A Units into Shares (computed without regard to
            the issuance of Common Shares upon the exercise of options and
            warrants presently outstanding), the SSI Warrant, the Executive
            Warrants and the Warrants to be issued to Messrs. Sweeney and
            Adderly were to be exercised in full. As a result, the ability of
            the current Shareholders, as a group, to determine the outcome any
            matter submitted to a vote of the Shareholders, such as the election
            of Trustees, will be diminished substantially.

         o  Concentration of Ownership. SSI, TNC and their affiliates, certain
            of whom will be executive officers and/or trustees of the Trust,
            will own in the aggregate 3,465,499 Common Shares on a fully diluted
            basis following consummation of the SSI/TNC Transaction, assuming
            1,515,499 Class A Units are issued for the Initial Properties (which
            number has been computed (i) without regard to the additional Class
            A Units that are issuable in the event any of the Option Properties
            are acquired or in the event that indebtedness encumbering certain
            of the Properties is repaid at a discount or at the time the
            Residual Interests are acquired and (ii) without regard to the
            potential forfeiture of Class A Units at the time equity
            participations of lenders holding indebtedness encumbering certain
            of the Initial Properties is satisfied). Such fully diluted
            ownership consists of (i) the 775,000 Common Shares to be issued to
            SSI by the Trust on the Closing Date, (ii) the 1,175,000 Common
            Shares issuable upon the exercise of the SSI Warrant and the
            Executive Warrants and (iii) the Common Shares issuable in
            redemption of the Class A Units, assuming all Class A Units are
            redeemed for Common Shares. In addition, Richard M. Osborne
            beneficially owns, as of the date hereof, 658,698 Common Shares
            (including 59,949 Common Shares issuable upon exercise of warrants)
            or approximately 33.3% of the Common Shares presently outstanding.
            As a result, each of SSI, TNC and Mr. Osborne will have the ability
            to exert significant influence over the affairs of the Trust. One of
            the amendments proposed to be made to the Trust's Declaration of
            Trust at the Annual Meeting of Shareholders will, if adopted, except
            from the 4.16% ownership limitation to be established thereby each
            of SSI, TNC and Richard M. Osborne, as well as entities controlled
            by Mr. Osborne. This proposed amendment, which is being submitted
            for approval of Shareholders to protect the Trust's REIT status,
            will have the effect of further solidifying the control SSI, TNC and
            Mr. Osborne will have over the Trust.

         o  Ownership Limitation. One of the amendments proposed to be made to
            the Trust's Declaration of Trust at the Annual Meeting of
            Shareholders will, if adopted, limit any person from acquiring in
            excess of 4.16% in value of the Trust's Shares. Certain attribution
            rules will apply for purposes of determining compliance with this
            ownership limitation. This proposed amendment is being submitted for
            approval of Shareholders to protect the Trust's REIT status.
            Although the Trust is unaware of any Shareholder who will,
            immediately following consummation of the SSI/TNC Transaction, own
            in excess of such ownership limitation (other than SSI, TNC and
            Richard M. Osborne and their affiliates, each of which will be
            subject to a separate, higher ownership limitation), any Shares
            owned by any other Shareholders in excess of such ownership
            limitation will automatically be deemed to have been transferred to
            the Trust, as trustee of a special trust for the benefit of a person
            to whom the Shares may be transferred without violating the
            ownership limitation. While held in such a trust, such Shares will
            not be entitled to dividends or distributions and will not be
            entitled to vote on any matters.

         o  Liability of Trust as General Partner. As part of the SSI/TNC
            Transaction, the Trust will become the general partner in the
            Operating Partnership and will contribute substantially all of its

  
                                     29
<PAGE>

            assets to the Operating Partnership. As the general partner, the
            Trust will have unlimited liability for all the liabilities of the
            Operating Partnership other than liabilities under certain of the
            mortgage loans secured by Properties which will be non-recourse to
            the Operating Partnership.

         o  Integration of Properties and Operations. The SSI/TNC Transaction
            contemplates the acquisition of a substantial number of properties,
            personnel and business operations. Following completion of the
            SSI/TNC Transaction, the Trust will have increased the number of
            persons it employs, directly and through the Management Company,
            from 5 to approximately 22, and will have increased the number of
            properties that it owns or controls from 4 to 27. As such, the
            SSI/TNC Transaction may involve potential difficulties in
            integrating the operations of TNC with those of the Trust.
            Consequently, no assurance can be given as to the effect of the
            SSI/TNC Transaction on the Trust's business or results of
            operations.

         o  Special Allocation of Certain Debt Discounts. In the event that
            additional equity in any of the Initial Properties (other than the
            eight Witmer Properties) is refinanced at a discount, the Trust has
            agreed that 75% of the additional equity thereby created will be
            allocated to the person contributing such Property through the
            issuance of additional Class A Units.

         o  Conflicts of Interest. The Operating Partnership's ownership of the
            Properties will result in certain conflicts of interest between the
            Trust and the holders of Class A Units. Holders of Class A Units and
            the Trust may have different objectives regarding the appropriate
            pricing and timing of any sale of Properties since, prior to the
            exchange of Class A Units for Common Shares, holders of such Units
            will suffer different and more adverse tax consequences than the
            Trust upon the sale of any of the Properties. Therefore, holders of
            Class A Units, including the individuals who will constitute three
            of the Trust's seven Trustees, may be opposed to the sale of a
            Property even though such sale might otherwise be in the interest of
            the Trust. In addition, prior to a Qualified Offering, the Operating
            Partnership Agreement will restrict the ability of the Trust, as the
            Operating Partnership's general partner, to take certain actions
            without the consent of holders of at least 75% of the outstanding
            Class A Units. To the extent such holders and the Trust have
            different objectives with respect to any of these actions, such
            holders will be able to prevent the Trust from taking any such
            action. The Operating Partnership's ability to sell or refinance
            debt secured by any of the Properties will not, however, be subject
            to the approval or consent of holders of Class A Units.

         o  Tax Risks. The SSI/TNC Transaction will subject the Trust to
            additional risks that it may lose its status as a REIT.

            -  Required Distributions; Potential Requirement to Borrow. To
               obtain the favorable tax treatment associated with qualification
               as a REIT, the Trust generally will be required each year to
               distribute to its Shareholders at least 95% of its net taxable
               income. The Trust intends to make distributions to its
               Shareholders to comply with the distribution provisions of the
               Internal Revenue Code of 1986, as amended (the "Code") and to
               avoid income and other taxes. Differences in timing between the
               receipt of income and the payment of expenses in arriving at
               taxable income (of the Trust or the Operating Partnership) and
               the effect of required debt amortization payments, as well as the
               limitations imposed by the GECC Loan Documents on the Witmer
               Partnership's ability to make distributions to the Operating
               Partnership, could require the Trust, on its own behalf or
               through the Operating Partnership, to borrow funds on a
               short-term basis to meet the distribution requirements that are
               necessary to achieve the tax benefits associated with qualifying

                                       30
<PAGE>

               as a REIT. In such instances, the Trust, in order to avoid
               adverse tax consequences, might need to (i) borrow funds even if
               management believed that then prevailing market conditions
               generally were not favorable for such borrowings or that such
               borrowings would not be advisable in the absence of such tax
               considerations and/or (ii) liquidate investments on adverse
               terms.

            -  Ownership Limits. In order to maintain its qualification for
               Federal income tax purposes as a REIT, not more than 50% in value
               of the outstanding Shares of the Trust may be owned, directly or
               indirectly, by five or fewer individuals (as defined in the Code
               to include certain entities) in the last half of any taxable
               year. To ensure that the Trust will not fail to qualify as a REIT
               under this test, amendments proposed to be made to the Trust's
               Declaration of Trust will, if approved by Shareholders, limit any
               person or entity from owning in excess of a specified percentage
               in value of Shares. The Trust believes, on the basis of facts
               known to it as of the date hereof and advice from its tax
               advisors, that ownership of the Shares on the date hereof and on
               a pro forma basis giving effect to the Shares to be issued in the
               SSI/TNC Transaction, will not cause the Trust to fail to comply
               with the foregoing requirement. If the Internal Revenue Service
               ("IRS") successfully were to challenge the Trust's compliance
               with such requirement, the Trust's REIT status, and the favorable
               tax treatment relating to such status, could be lost.

            -  Consequences of Failure of the Operating Partnership (or the
               Witmer Partnership or a Title Holding Partnership) To Be Treated
               as a Partnership. The Operating Partnership, the Witmer
               Partnership and other subsidiary partnerships ("Title Holding
               Partnerships") of the Operating Partnership are intended to be
               treated as partnerships (or other pass-through entities) for
               Federal income tax purposes. If the IRS successfully were to
               challenge the tax status of the Operating Partnership, the Witmer
               Partnership or any Title Holding Partnership as a partnership (or
               other pass-through entity) for Federal income tax purposes, the
               Operating Partnership, the Witmer Partnership or the affected
               Title Holding Partnership would be taxable as a corporation. In
               such event, since the value of the Trust's ownership interest in
               the Operating Partnership would exceed, and the value of the
               Operating Partnership's ownership interest in the Witmer
               Partnership, or in any Title Holding Partnership could exceed, 5%
               of the Trust's assets, the Trust would cease to qualify as a REIT
               for Federal income tax purposes.

            -  Consequences of the Management Company Corporate Structure. A
               requirement for REIT qualification is that the value of any one
               issuer's securities held by the Trust not exceed 5% of the value
               of the Trust's total assets on certain testing dates. In
               addition, the Trust may not own more than 10% of any one issuer's
               outstanding securities (excluding securities of a qualified REIT
               subsidiary or another REIT). The Operating Partnership will own
               5% of the voting common stock and all of the preferred stock of
               the Management Company, a corporation that is taxable as a
               regular corporation. The Management Company will perform
               management, development and leasing services for the Operating
               Partnership and other real estate owned in whole or in part by
               third parties. A portion of the income earned by and taxed to the
               Management Company would be nonqualifying income if earned
               directly by the Trust. As a result of the corporate structure,
               the income will be earned by and taxed to the Management Company
               and will be received by the Trust only indirectly as dividends
               and interest that qualify under the 95% gross income test. The
               Trust believes that its indirect interest in the securities of
               the Management Company will not exceed 5% of the value of the
               Trust's total assets. In addition, the Trust will not own
               directly or indirectly more than 10% of the voting securities of
               the Management Company. If the Trust were to fail to satisfy the
               5% value requirement or the 10% voting securities test described

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<PAGE>

               above, or otherwise were to fail to qualify as a REIT, it
               generally would be subject to Federal income tax (including any
               applicable alternative minimum tax) on its taxable income at
               regular corporate rates. In addition, unless entitled to relief
               under certain statutory provisions, the Trust would be
               disqualified from treatment as a REIT for the four taxable years
               following the year during which qualification is lost. The
               additional tax would significantly reduce the Funds from
               Operations available for distributions to Shareholders.

            -  Real Estate Transfer Taxes. The transfer to the Operating
               Partnership of certain of the Initial Properties (the "Interests
               Transfer Properties") has been structured as transfers of 89% of
               the capital interests and 99% of the cash flow and profit
               interests in the limited partnerships ("Title Holding
               Partnerships") owning such Properties with the remaining
               interests (the "Residual Interests") to be acquired by the
               Operating Partnership on the first business day of the 37th month
               following the initial transfer. This transaction structure is
               intended to comply with non-binding informal advice provided by
               the Pennsylvania Department of Revenue to the effect that such
               transfers are not subject to Pennsylvania real estate transfer
               taxes. If the informal advice from the Department of Revenue were
               ultimately determined to be incorrect, or the Department of
               Revenue changes its position, the Operating Partnership could be
               required to pay real estate transfer taxes at a time when it
               might not have funds available for such purposes. Moreover, if
               the Trust desired or were required, for financing purposes or
               otherwise, to cause the Operating Partnership to acquire such
               Residual Interests prior to the first business day of the 37th
               month after such initial transfer, the Operating Partnership
               could be required to pay real estate transfer taxes. The transfer
               of six of the Initial Properties to the Operating Partnership
               will result in fee title thereto being acquired by the Operating
               Partnership and will result in an immediate real estate transfer
               tax.

         o  Possible Environmental Liability. Under various Federal, state and
            local laws, ordinances and regulations, an owner of real estate is
            liable for the costs of removal or remediation of certain hazardous
            or toxic substances on or in such property. Such laws often impose
            such liability without regard to whether the owner knew of, or was
            responsible for, the presence of such hazardous or toxic substances.
            The presence of such substances, or the failure to properly
            remediate such substances, may adversely affect the owner's ability
            to sell or rent such property or to borrow using such property as
            collateral. All of the Properties have been subjected to Phase 1 or
            similar environmental audits (which involve inspection without soil
            sampling or ground water analysis) by independent environmental
            consultants. Except as indicated below with respect to the
            Whitelands Business Park in Exton, Pennsylvania (the "Whitelands
            Property"), these environmental audit reports (all of which have
            been performed or updated within the preceding 12 months) have not
            revealed any significant environmental liability, nor is the Trust
            aware of any environmental liability with respect to the Properties
            that the Trust's management believes would have a material adverse
            effect on the Trust's business, assets or results of operations. An
            environmental assessment has identified environmental contamination
            of potential concern with respect to the Whitelands Property.
            Petroleum products, solvents and heavy metals were detected in the
            groundwater. These contaminants are believed to be associated with
            debris deposited by others in a quarry formerly located on the
            Whitelands Property. The quarry previously appeared on the
            Comprehensive Environmental Response Compensation and Liability
            Information System List, a list maintained by the United States
            Environmental Protection Agency (the "EPA") of abandoned, inactive

                                       32
<PAGE>

            or uncontrolled hazardous waste sites which may require cleanup. The
            EPA conducted a preliminary assessment in 1984 with the result that
            no further action was taken. Subsequently, the quarry was removed
            from the list. While the Trust believes it is unlikely that the
            Operating Partnership will be required to undertake remedial action
            with respect to such contamination, there can be no assurance in
            this regard. If the Operating Partnership were required to undertake
            remedial action on the Whitelands Property, it will be indemnified,
            as part of the SSI/TNC Transaction, against the cost of such
            remediation by the seller, SSI, subject to a ceiling of $2,018,000.
            The duration of SSI's indemnity agreement is five years. Were SSI
            unable to fulfill its obligations under its indemnity agreement or
            were the Operating Partnership required to undertake remedial action
            after the expiration of the five-year term of the agreement, no
            assurances can be given that the costs associated with any
            remediation would not be material to the financial condition and
            results of operations of the Operating Partnership and the Trust.
            Because the Trust does not believe that any remediation at the
            Whitelands Property is probable, no amounts have been accrued for
            any such potential liability.

            No assurance can be given that existing environmental studies with
            respect to the Properties reveal all environmental liabilities or
            that any prior owner of any such property did not create any
            material environmental condition not known to the Trust. Moreover,
            no assurance can be given that (i) future laws, ordinances or
            regulations will not impose any material environmental liability or
            (ii) the current environmental condition of the Properties will not
            be affected by tenants and occupants of the Properties, by the
            condition of properties in the vicinity of the Properties (such as
            the presence of underground storage tanks) or by third parties
            unrelated to the Trust, SSI or TNC.

         o  Limited Geographic Diversification. Each of the Initial Properties
            is located in the Greater Philadelphia Region. The Trust's strategy
            for growth is predominantly based upon expansion within this area
            and into adjacent areas through acquisitions. This limited
            geographic diversification will leave the Trust vulnerable to a
            downturn in the economy of such region.

         o  Risk of Future Vacancies. Each year a significant portion of the
            leases may expire at one or more of the Initial Properties. During
            1996, 17 leases covering approximately 99,000 square feet (or 10.31%
            of the rentable square feet of the Initial Properties) are scheduled
            to expire at the Initial Properties. During 1997, five leases
            covering approximately 75,000 square feet (or 7.81% of the rentable
            square feet of the Initial Properties) are scheduled to expire at
            the Initial Properties. If existing tenants do not renew their
            leases upon expiration, the rental space will have to be re-leased,
            and there can be no assurance that the vacated space will be
            re-leased at the rents paid under the expired leases. Replacement
            leases typically require the landlord to incur tenant improvements,
            other tenant inducements and leasing commissions, in each case which
            may be higher than for renewal leases.

         o  Financial Condition of Tenants. In the event of a default by a
            tenant under its lease at any of the Properties, the Operating
            Partnership may experience delays in enforcing its rights as lessor
            and may incur substantial costs in protecting its investment. At any
            time a tenant may seek the protection of the bankruptcy laws, which
            could result in the rejection and termination of such tenant's lease
            and thereby reduce the cash available for distribution by the
            Operating Partnership to the Trust and by the Trust to its
            Shareholders.

         o  Dependence on Key Tenants. As of March 31, 1996, 10 tenants occupied
            in excess of 30,000 square feet each at the Properties. A loss of
            any one such significant tenant could have an adverse effect on the
            Operating Partnership and the Trust.

                                       33
<PAGE>


         o  Competition; General Factors. The Trust competes with a number of
            real estate developers, operators and institutions for tenants and
            acquisition opportunities. Many of these competitors have
            significantly greater resources than the Trust. No assurances can be
            given that such competition will not adversely affect the Trust's
            revenues and funds available for distribution to Shareholders.
            Income from the Properties may also be adversely affected by the
            general economic climate, local economic conditions where the
            Properties are located, the attractiveness of the Properties to
            tenants, competition from other available space, the ability to
            provide for adequate maintenance and insurance and increased
            operating expenses. Income and real estate values may also be
            adversely affected by such factors as applicable laws, interest rate
            levels and the availability of financing. In addition, real estate
            investments are relatively illiquid and, therefore, the Operating
            Partnership's ability to vary its portfolio promptly in response to
            change in economic or other conditions will be limited.

         o  Rights of Third Parties With Respect to Certain of the Initial
            Properties. Certain of the Initial Properties are subject to, or
            burdened by, rights of third parties to either purchase such Initial
            Properties, or participate in the sale proceeds upon the transfer of
            such Initial Properties, or both. Such rights of first refusal and
            first offer may adversely affect the Operating Partnership's ability
            to sell these Properties. Such participation rights diminish the
            economic benefits that the Operating Partnership can obtain from
            ownership of such Properties.

         o  Limited Indemnities. Although SSI and TNC will make customary
            representations and warranties, on a several basis, in favor of the
            Trust and the Operating Partnership in connection with the SSI/TNC
            Transaction, in the event that the Trust or the Operating
            Partnership were to suffer a loss as a result of the inaccuracy of
            any such representations and warranties, the recourse of the Trust
            and the Operating Partnership against them will be limited to the
            Class A Units issued to them. Approximately 797,665 of the Class A
            Units to be issued to TNC will be subject to a prior pledge to
            secure obligations of TNC to GECC and therefore may be unavailable
            to secure indemnification obligations of TNC in favor of the Trust.
            Under certain circumstances, the Trust or the Operating Partnership
            could be required to make a cash payment to a third party and be
            limited, in its indemnity claim relating to such payment, to
            recovery of certain of the Class A Units.

                                       34

<PAGE>



Item 6.     Exhibits and Reports on Form 8-K
            --------------------------------

Exhibits:

         99.1     Contribution Agreement among the Trust, SSI and TNC.

         99.2     Share and Warrant Purchase Agreement between the Trust and 
                  SSI.

         99.3     Employment Agreement between Brandywine Realty Services 
                  Corporation (the "Management Company") and Anthony A. Nichols,
                  Sr.

         99.4     Employment Agreement between the Management Company and 
                  Gerard H. Sweeney.

         99.5     Employment Agreement between the Management Company and 
                  Brian Belcher.

         99.6     Employment Agreement between the Management Company and 
                  John P. Gallagher.



Reports on Form 8-K:

The Trust filed a report on Form 8-K dated June 21, 1996 regarding the
investment made on that date aggregating $1,330,000 made by an entity controlled
by Richard M. Osborne, a shareholder and Trustee of the Trust, in exchange for
debt and securities in the Trust.

The Trust filed a report on Form 8-K dated July 19, 1996 regarding the Trust's
acquisition, on that date, of a seven-story, 122,000 square foot office building
in Cherry Hill, New Jersey.


                                       35


<PAGE>







                             BRANDYWINE REALTY TRUST
                             -----------------------

                            SIGNATURES OF REGISTRANT
                            ------------------------




Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                           BRANDYWINE REALTY TRUST
                                               (Registrant)



Date:          August 9, 1996                By:     /s/ Gerard H. Sweeney
       -------------------------------           ------------------------------
                                                 Gerard H. Sweeney, President  
                                                 and Chief Executive Officer
                                                 (Principal Executive Officer)

Date:          August 9, 1996                By:    /s/ Francine M.  Haulenbeek
       -------------------------------          -------------------------------
                                                Francine M.  Haulenbeek,  
                                                Vice President - Finance
                                                and Secretary
                                                (Principal Financial and
                                                Accounting Officer)

                                       36
