Brandywine Realty Trust · NYSE:BDN
Brandywine Realty Trust — Q1 2021 Earnings Presentation
42 slides from Brandywine Realty Trust's earnings presentation, Apr 22, 2021
Slide 1: Supplemental Information Package First Quarter 2021
S U P P L E M E N TA L I N F O R M AT I O N PAC K AG E 2 021 F I R S T Q UA R TE R Y N U IT O O E V TY I M G AT Y T O I IN N L IT IN UA M R N Q C
Slide 2: Table of Contents
Table of Contents Page Executive Summary 1 2021 Business Plan Trend Line 3 Development Activity 8 Balance Sheet and Liquidity 12 Land Inventory 13 Property Activity 14 Net Operating Income Composition 15 Regional Property Overview 16 Leasing Activity 17 Lease Expiration Analysis 19 Top Twenty Tenant
Slide 3: Q1 2021 Executive Summary
Q1 2021 Executive Summary (unaudited in millions, except square footage and acreage) BRANDYWINE REALTY TRUST | Page 1 Transaction Highlights Cira Centre| 730,000 SF | Philadelphia, PA 3025 JFK Rendering | 570,000 SF | Philadelphia, PA Bulletin Building| 283,000 SF | Philadelphia, PA Joint Venture Ac
Slide 4: Q1 2021 Executive Summary
Q1 2021 Executive Summary (unaudited in thousands, except per share data and square footage) BRANDYWINE REALTY TRUST | Page 2 Leasing Highlights Q1 2021 Q4 2020 Quarter end occupancy 90.3% 91.9% Leased as of April 19, 2021 / January 23, 2021 92.5% 93.0% Leases executed in quarter (sq ft) 493,251 371
Slide 5: Business Plan Trend Line
Business Plan Trend Line (unaudited) BRANDYWINE REALTY TRUST | Page 3 2021 Business Plan as of Business Plan Component 4/19/2021 Original Speculative Revenue $18.0 - $22.0 MM $18.0 - $22.0 MM Executed $18.1 MM $14.7 MM Projected Tenant Retention (SF) 51-53% 51-53% Same Store NOI Increase • GAAP 0.0%
Slide 6: Rent Collections and Tenant Rent Relief
BRANDYWINE REALTY TRUST | Page 4 Rent Collections and Tenant Rent Relief Strong levels of rent collections during the Tenant Rent Relief Highlights: COVID-19 pandemic: Exclusively rent deferrals; no rent Co-working Tenants: Approximately 2.0% forgiveness or abatements unless of rental income
Slide 7: Austin Marketplace: Continued Leading Growth
Austin Marketplace: Continued Leading Growth (unaudited) BRANDYWINE REALTY TRUST | Page 5 (From L to R): Broadmoor Block A; Garza Ranch; and Four Points Highlights #1 Fastest Growing Metro (US Census Bureau) The Austin office market has significant construction activity within the BDN Peer Group
Slide 8: Philadelphia Marketplace; Stability with Life Science Momentum
Philadelphia CBD Marketplace (unaudited) BRANDYWINE REALTY TRUST | Page 6 Philadelphia Marketplace; Stability with Life Science Momentum Highlights Philadelphia area Life Science companies reeled in nearly $3B year to date as reported Philadelphia ranks No. 3 in the U.S. for the amount of fundin
Slide 9: Development Summary
Development Summary (unaudited, in thousands, except square feet) BRANDYWINE REALTY TRUST | Page 7 Equity Amount Remaining to be Completion Stabilization Total Project Debt Projected Leased % @ April Development (% owned) Location Type Square Feet Capitalization funded at funded at Date Date Costs (
Slide 10: Development Activity: 3025 JFK Boulevard
Development Activity (unaudited) BRANDYWINE REALTY TRUST | Page 8 3025 JFK Boulevard Development (55/45 Real Estate Venture) Project Description Design Overview Located in the Schuylkill Yards Neighborhood of Philadelphia, A 29-level premier mixed-use development featuring 200,000 SF of Pennsylv
Slide 11: Development Activity: Austin, TX
Development Activity (unaudited) BRANDYWINE REALTY TRUST | Page 9 AUSTIN, TX Overview Broadmoor is a mixed-use, 66 acre transit-oriented community with an extraordinary existing amenity base at the nearby Domain. The campus is home to approximately 840,000 square feet for IBM. Once redeveloped, th
Slide 12: Our Opportunity: Life Sciences
BRANDYWINE REALTY TRUST | Page 10 Our Opportunity: Life Sciences Nationally: While life science employment was down by just 1.3% in July from peak in March, it was 1% higher than a year ago. Biotech R&D employment is strong, up by 4.9% from a year ago. Total commercial lab space has grown by 12%
Slide 13: Development Activity: Philadelphia, PA
Development Activity (unaudited) BRANDYWINE REALTY TRUST | Page 11 PHILADELPHIA, PA Overview Brandywine is the master developer of Schuylkill Yards, a multi-phase 14 acre/5.1 million square foot development of life science, research and academic facilities, office, residential, retail and hospital
Slide 14: Balance Sheet & Liquidity
BRANDYWINE REALTY TRUST | Page 12 Balance Sheet & Liquidity USES Projected ($ in M) 2Q21-4Q21 $587M currently available on our line of credit. Dividends $98 Contributions to Joint Venture Development 20 $468M projected availability at 12/31/21 Revenue Maintaining Cap Ex 30 Revenue Creating Cap Ex
Slide 15: Q1 2021 Land Inventory
Q1 2021 Land Inventory (unaudited) BRANDYWINE REALTY TRUST | Page 13 Estimated Development Square Feet Acres Active/Pre-Development Projects Philadelphia CBD (a) (b) 56.3 5,375,000 Pennsylvania Suburbs 21.7 535,000 Metropolitan Washington, D.C. 0.8 245,000 Austin, Texas (c) 74.7 6,425,000 Total Acti
Slide 16: Property Activity
Property Activity (unaudited, in thousands, except square footage and acreage) BRANDYWINE REALTY TRUST | Page 14 Square Occupancy % Location Type Event Date Sales Price Feet/Acres @ Event Date 2020 PROPERTY ACTIVITY OFFICE ACQUISITION 250 King of Prussia Road Radnor, PA Office Building 11/30/2020 16
Slide 17: YTD 2021 Net Operating Income Composition
YTD 2021 Net Operating Income Composition (unaudited) BRANDYWINE REALTY TRUST | Page 15 YTD NOI - Wholly Owned (a) YTD NOI - Including JV's Total Core Portfolio NOI: $70 MM Total NOI: $80.5 MM 92.0% of NOI from our Core Markets (b) 90.0% of NOI from our Core Markets (b) MAP and Other 1% Othe
Slide 18: Regional Property Overview
Regional Property Overview (unaudited, in thousands, except square footage) BRANDYWINE REALTY TRUST | Page 16 # of Wholly Square Feet % Occupied % Leased (1) Remaining Expirations Net Operating Income at 3/31/2021 Owned Region Properties Total % of Total 2021 2022 Q1 2021 % of Total Philadelphia CBD
Slide 19: Leasing Activity-Core Portfolio
Leasing Activity-Core Portfolio (1) (unaudited) BRANDYWINE REALTY TRUST | Page 17 Three Months Ended 03/31/2021 12/31/2020 09/30/2020 06/30/2020 03/31/2020 Total Property Count 76 78 89 88 89 Total Square Feet 12,949,078 13,412,591 14,421,473 14,365,532 15,978,965 Occupancy %: 90.3% 91.9% 91.0% 90.7
Slide 20: Leasing Activity-Core Portfolio
Leasing Activity-Core Portfolio (1) (unaudited) BRANDYWINE REALTY TRUST | Page 18 Three Months Ended 03/31/2021 12/31/2020 09/30/2020 06/30/2020 03/31/2020 New Leases/Expansions (2): Cash Rent Growth Expiring Rate $ 35.85 $ 37.30 $ 39.14 $ 30.65 $ 34.78 New Rate $ 37.25 $ 41.34 $ 44.40 $ 35.15 $ 39.
Slide 21: Lease Expiration Analysis
Lease Expiration Analysis (unaudited) BRANDYWINE REALTY TRUST | Page 19 Square Footage Annualized Rent of Expiring Leases (3) Acquired / Year of Lease Lease Revisions (4) Vacated Remaining % of Total Per Square Per Square Initial Expiring Sold / in New Leases Current Final Expiration Leases Expiring
Slide 22: Regional Lease Expiration Analysis
Regional Lease Expiration Analysis (1) (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 20 2021 2022 2023 2024 2025 2026 2027 Thereafter Total Philadelphia CBD Square feet expiring (Net of Acquired/Sold) 241 601 134 223 197 151 281 2,797 4,625 Net leasing activity (32) (208) - 62 115 - 5 20
Slide 23: Top Twenty Tenants
Top Twenty Tenants (unaudited, annualized rent in thousands) BRANDYWINE REALTY TRUST | Page 21 Weighted Average % of Total Annualized Rent % of Total Remaining Lease Term Top Twenty Tenants Annualized Rent (1) Annualized Rent (1) per Square Foot (1) Square Feet Occupied Square Feet (months) (2) IBM,
Slide 24: Q1 2021 Portfolio Tenant Mix
Q1 2021 Portfolio Tenant Mix (by square footage) BRANDYWINE REALTY TRUST | Page 22 Misc. Services - 5% Health Services - 2% Engineering & Transportation/Public Management Utilities - 4% Services - 10% Real Estate - 5% Other - 2% Wholesale Trade - 3% Finance - 16% Business Services - Manufacturing -
Slide 25: Income Statements
Income Statements (unaudited, in thousands, except share data) BRANDYWINE REALTY TRUST | Page 23 Three Months Ended 03/31/2021 12/31/2020 09/30/2020 06/30/2020 03/31/2020 Revenue Rents $ 113,484 $ 120,843 $ 121,277 $ 132,180 $ 139,204 Third party mgt. fees, labor reimbursement and leasing 6,651 5,24
Slide 26: Q1 2021 Same Store Net Operating Income
Q1 2021 Same Store Net Operating Income (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 24 Recently Development/ Completed/ Redevelopment Other/ Same Store Portfolio Acquired (1) (2) Eliminations (3) All Properties First Quarter First Quarter First Quarter First Quarter First Quarter First
Slide 27: EBITDA and EBITDA Coverage Ratios
EBITDA and EBITDA Coverage Ratios (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 25 Three Months Ended 03/31/2021 12/31/2020 09/30/2020 06/30/2020 03/31/2020 Net income (loss) $ 6,964 $ 19,086 $ 276,133 $ 4,020 $ 8,087 Add (deduct): Net (gain) loss on disposition of real estate (74) (14,97
Slide 28: Funds from Operations
Funds from Operations (unaudited, in thousands, except share data) BRANDYWINE REALTY TRUST | Page 26 Three Months Ended 03/31/2021 12/31/2020 09/30/2020 06/30/2020 03/31/2020 Net income (loss) attributable to common shareholders $ 6,775 $ 18,895 $ 274,428 $ 3,903 $ 7,891 Add (deduct): Net income (lo
Slide 29: Cash Available for Distribution
Cash Available for Distribution (unaudited, in thousands, except share data) BRANDYWINE REALTY TRUST | Page 27 Three Months Ended 03/31/2021 12/31/2020 09/30/2020 06/30/2020 03/31/2020 Funds from operations available to common share and unit holders $ 60,218 $ 61,434 $ 60,017 $ 57,653 $ 61,390 Add (
Slide 30: Balance Sheets
Balance Sheets (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 28 03/31/2021 12/31/2020 09/30/2020 06/30/2020 03/31/2020 Assets Real estate investments Operating properties $ 3,386,559 $ 3,474,109 $ 3,715,765 $ 3,650,521 $ 4,004,118 Accumulated depreciation (900,167) (896,561) (980,664) (95
Slide 31: Liquidity, Leverage and Market Capitalization
Liquidity, Leverage and Market Capitalization (unaudited, in thousands, except shares and per share data) BRANDYWINE REALTY TRUST | Page 29 03/31/2021 12/31/2020 09/30/2020 06/30/2020 03/31/2020 High closing price of common shares $ 13.92 $ 12.27 $ 11.75 $ 12.20 $ 16.24 Low closing price of common s
Slide 32: Balance Sheet Information/Debt Statistics
Balance Sheet Information/Debt Statistics (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 30 03/31/2021 12/31/2020 09/30/2020 06/30/2020 03/31/2020 Fixed rate debt $ 1,500,000 $ 1,500,000 $ 1,588,888 $ 1,811,528 $ 1,813,492 Fixed rate debt (variable rate debt swapped to fixed rate) 250,000
Slide 33: Debt Schedules
Debt Schedules (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 31 03/31/2021 Maturity Stated Effective 03/31/2021 12/31/2020 Debt Instrument Percent of total Date Rate (1) Rate (1) Balance Balance indebtedness Unsecured senior notes payable $350 MM Notes due 2023 February 15, 2023 3.950% 3.
Slide 34: Debt Maturities
Debt Maturities (4) (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 32 Unsecured Debt Maturity Schedule Percent of Weighted Bank Facilities Senior Notes Total By Year Debt Maturing Average Interest (5) 2021 - - - 0.0% 0.000% 2022 263,000 - 263,000 14.3% 2.840% 2023 - 350,000 350,000 19.0% 3
Slide 35: Debt Maturities
Debt Maturities (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 33 $600,000 Bank Facilities Unsecured Notes $500,000 Balloon Payments $400,000 Scheduled Amortization $300,000 $200,000 $100,000 $0 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Thereafter % of total 0.0% 14.3% 19.0% 19.0%
Slide 36: Debt Covenant Compliance
Debt Covenant Compliance (unaudited, in millions) BRANDYWINE REALTY TRUST | Page 34 Revolving Credit Agreement dated July 17, 2018 and Amended and Restated Term Loan C Agreement dated December 13, 2018 Covenant Required 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 Fixed Charge Coverage Ratio >
Slide 37: JV Property Overview
JV Property Overview (unaudited, in thousands, except square footage) BRANDYWINE REALTY TRUST | Page 35 As of March 31, 2021 BDN's Share BDN Net Operating BDN Unconsolidated Real Initial Project Investment @ Number of Income (Loss) Rentable Percent Percent Ownership Net Operating Rentable Estate Ven
Slide 38: JV Debt Schedule
JV Debt Schedule (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 36 BDN Ownership Stated 03/31/2021 BDN Share Debt Instrument Percentage Maturity Date Rate (1) 03/31/2021 Balance of Venture Debt Office Properties Commerce Square JV 70% April 5, 2023 (2) $ 217,664 $ 152,365 Mid-Atlantic Offi
Slide 39: JV Debt Summary
JV Debt Summary (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 37 Secured Debt Maturity Percent of Weighted Average Scheduled Balloon Partners' Schedule Total BDN Share BDN Share Interest Rate of Amortization Payments Share By Year Maturing Maturing Debt (a) 2021 5,333 142,260 147,593 72,8
Slide 40: Q1 2021 Analyst and Company Information
Q1 2021 Analyst and Company Information BRANDYWINE REALTY TRUST | Page 38 Equity Research Coverage Argus Research D.A. Davidson & Co. JP Morgan Raymond James & Associates Angus Kelleher Barry Oxford Anthony Paolone Paul Puryear / Bill Crow 203-548-9892 212-240-9871 212-622-6682 727-567-2253 / 727-56
Slide 41: Q1 2021 Disclaimers and Other Information
Q1 2021 Disclaimers and Other Information BRANDYWINE REALTY TRUST | Page 39 Non-GAAP Measures We believe that the measures defined below that are not determined in accordance with generally accepted accounting principles (“GAAP”) are helpful to investors in measuring our performance and comparing it
Slide 42: Q1 2021 Disclaimers and Other Information (continued)
Q1 2021 Disclaimers and Other Information (continued) BRANDYWINE REALTY TRUST | Page 40 Net Operating Income (NOI) (continued) NOI is a useful measure for evaluating the operating performance of our properties, as it excludes certain components from net income available to common shareholders in ord
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