Brandywine Realty Trust · NYSE:BDN
Brandywine Realty Trust — Q3 2020 Earnings Presentation
47 slides from Brandywine Realty Trust's earnings presentation, Oct 22, 2020
Slide 1: Third Quarter 2020 Supplemental Information Package
S U P P L E M E N TA L I N F O R M AT I O N PA C K A G E 2020 THIRD Q U A R T E R
Slide 2: Table of Contents
Table of Contents Page COVID-19 Update 1 Executive Summary 5 2020 Business Plan Trend Line 7 Development Activity 10 Sources and Uses of Cash and Cash Equivalents 15 Regional Property Overview 16 Net Operating Income Composition 17 Land Inventory 18 Property Activity 19 Leasing Activity 20 Lease Exp
Slide 3: Leasing & Tenant Update
Speculative Leasing Update BRANDYWINE REALTY PAGE 1 TRUST | Leasing & Tenant Update Strong levels of rent collections during the COVID- Tenant Rent Relief Highlights: 19 pandemic: Co-working Tenants: Approximately 2.1% of Exclusively rent deferrals; no rent rental income. forgiveness or abat
Slide 4: Tenant Outreach Efforts
PAGE BRANDYWINE REALTY Tenant Outreach Efforts TRUST | 2 All of our regional leasing teams have been in contact with our tenant base to gain insight into tenant sentiment and to explore near term lease extensions. Tenants returning to work thus far averages approximately 15% across the portfolio; ra
Slide 5: Balance Sheet & Liquidity
Balance Sheet & Liquidity BRANDYWINE REALTY PAGE 3 TRUST | Strong Liquidity Position USES $600M currently available on our line of credit. 4Q 2020 ($ in M) $532M projected availability at 12/31/20 Dividends $33 Acquisition – Radnor, PA 20 Well Covered Dividend: $45M of 4Q20 cash flow Revenue M
Slide 6: COVID-19 Update
PAGE COVID-19 Update BRANDYWINE REALTY 4 TRUST | We continue to monitor and manage We are “doors open, lights on” Enhanced cleaning procedure and COVID-19 impacts and, as part of our throughout our entire portfolio and frequency with hospital grade long-term strategy, both our crisis continue to
Slide 7: Q3 2020 Executive Summary
Q3 2020 Executive Summary (unaudited in millions, except square footage and acreage) BRANDYWINE REALTY TRUST | Page 5 Transaction Highlights 3000 Market Rendering | 64,000 SF | Philadelphia, PA Commerce Square| 1,900,000 SF Office | Philadelphia, PA Bulletin Building| 283,000 SF | Philadelphia, PA D
Slide 8: Q3 2020 Executive Summary
Q3 2020 Executive Summary (unaudited in thousands, except per share data and square footage) BRANDYWINE REALTY TRUST | Page 6 Leasing Highlights Q3 2020 Q2 2020 Quarter end occupancy 91.0% 90.7% Leased as of October 15, 2020 / July 14, 2020 92.6% 93.8% Leases executed in quarter (sq ft) 230,552 400,
Slide 9: Business Plan Trend Line
Business Plan Trend Line (unaudited) BRANDYWINE REALTY TRUST | Page 7 2020 Business Plan as of Business Plan Component 10/15/2020 7/14/2020 4/17/2020 10/11/2019 Speculative Revenue $26.0 MM $26.0 MM $26.0 MM $31.0 MM Executed 100% 99% 96% 50% Projected Tenant Retention (SF) 51% 52% 50% 50% (3) Same
Slide 10: Austin Marketplace
Austin Marketplace (unaudited) BRANDYWINE REALTY TRUST | Page 8 (From L to R): Broadmoor Block A; Garza Ranch; and Four Points Highlights ULI Emerging Trends identifies Austin as #1 city to watch for 2020. Austin's diverse and counter-cyclical economy has historically provided a unique resilienc
Slide 11: Philadelphia Marketplace; Stability with Life Science Momentum
Philadelphia CBD Marketplace (unaudited) BRANDYWINE REALTY TRUST | Page 9 Philadelphia Marketplace; Stability with Life Science Momentum Highlights Brandywine's lease for 64,000 square feet of new space at 3000 Market was the Philadelphia ranks No. 3 in the U.S. for the amount of funding it rece
Slide 12: Development Summary
Development Summary (unaudited, in thousands, except square feet) BRANDYWINE REALTY TRUST | Page 10 Equity Amount Remaining to be Completion Stabilization Total Project Debt Projected Leased % @ Development (% owned) Location Type Square Feet Capitalization funded at funded at Date Date Costs (a) Fi
Slide 13: Development Activity: 4040 Wilson
Development Activity (unaudited) BRANDYWINE REALTY TRUST | Page 11 4040 Wilson Development (50/50 Real Estate Venture) Design Overview Project Description A 22-level premier mixed-use development featuring Located in the Ballston submarket of Arlington, Virginia 189,000 SF of office space (level
Slide 14: Development Activity: Austin, TX
Development Activity (unaudited) BRANDYWINE REALTY TRUST | Page 12 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 800,000 square feet for IBM. Once redeveloped, t
Slide 15: Our Opportunity: Life Sciences
PAGE 13 Our Opportunity: Life Sciences Nationally: While LS 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% this year to 95 million SF. Another
Slide 16: Development Activity: Philadelphia, PA
Development Activity (unaudited) BRANDYWINE REALTY TRUST | Page 14 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 17: Sources and Uses of Cash, Cash Equivalents and Restricted Cash
Sources and Uses of Cash, Cash Equivalents Restricted Cash (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 15 Sources and Uses of Cash Q3 2020 Q2 2020 Q1 2020 Q4 2019 Q3 2019 Q2 2019 Q1 2019 Cash and cash equiv. and restricted cash as of Beg. of Quarter $ 45,474 $ 53,374 $ 91,170 $ 30,521 $
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 9/30/2020 Owned Region Properties Total % of Total 2020 2021 Q3 2020 % of Total YTD 2020 % of To
Slide 19: YTD 2020 Net Operating Income Composition
YTD 2020 Net Operating Income Composition (unaudited) BRANDYWINE REALTY TRUST | Page 17 YTD NOI - Wholly Owned (a) YTD NOI - Including JV's Total Core Portfolio NOI: $219.9 MM Total NOI: $239.1 MM 90.0% of NOI from our Core Markets (b) 87.0% of NOI from our Core Markets (b) MAP Venture Other
Slide 20: Q3 2020 Land Inventory
Q3 2020 Land Inventory (unaudited) BRANDYWINE REALTY TRUST | Page 18 Estimated Development Square Feet Acres Active/Pre-Development Projects Philadelphia CBD (a) (b) 57.3 5,700,000 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 21: Property Activity
Property Activity (unaudited, in thousands, except square footage and acreage) BRANDYWINE REALTY TRUST | Page 19 Square Occupancy % Sales Price Location Type Event Date Feet/Acres @ Event Date 2020 PROPERTY ACTIVITY LAND ACQUISITION 145-155 King of Prussia Road Radnor, PA Land 02/27/2020 7.75 acres
Slide 22: Leasing Activity-Core Portfolio
Leasing Activity-Core Portfolio (1) (unaudited) BRANDYWINE REALTY TRUST | Page 20 Nine Months Ended Three Months Ended 09/30/2020 09/30/2019 09/30/2020 06/30/2020 03/31/2020 12/31/2019 09/30/2019 06/30/2019 03/31/2019 Total Property Count 89 91 89 88 89 90 91 92 92 Total Square Feet 14,421,473 16,16
Slide 23: Leasing Activity-Core Portfolio
Leasing Activity-Core Portfolio (1) (unaudited) BRANDYWINE REALTY TRUST | Page 21 Nine Months Ended Three Months Ended 09/30/2020 09/30/2019 09/30/2020 06/30/2020 03/31/2020 12/31/2019 09/30/2019 06/30/2019 03/31/2019 New Leases/Expansions (2): Cash Rent Growth Expiring Rate $ 37.71 $ 32.68 $ 39.14
Slide 24: Lease Expiration Analysis
Lease Expiration Analysis (unaudited) BRANDYWINE REALTY TRUST | Page 22 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 25: Regional Lease Expiration Analysis
Regional Lease Expiration Analysis (1) (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 23 2020 2021 2022 2023 2024 2025 2026 Thereafter Total Philadelphia CBD Square feet expiring (Net of Acquired/Sold) 115 370 506 129 227 142 123 2,800 4,412 Net leasing activity (72) (124) 116 7 (4) 39 5 4
Slide 26: Top Twenty Tenants
Top Twenty Tenants (unaudited, annualized rent in thousands) BRANDYWINE REALTY TRUST | Page 24 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 27: Q3 2020 Portfolio Tenant Mix
Q3 2020 Portfolio Tenant Mix (by square footage) BRANDYWINE REALTY TRUST | Page 25 Misc. Services - 5% Health Services - 3% Engineering & Transportation/Public Management Utilities - 4% Services - 10% Real Estate - 4% Other - 2% Finance - 14% Wholesale Trade - 3% Manufacturing - 9% Business Services
Slide 28: Income Statements
Income Statements (unaudited, in thousands, except share data) BRANDYWINE REALTY TRUST | Page 26 Nine Months Ended Three Months Ended 09/30/2020 09/30/2019 09/30/2020 06/30/2020 03/31/2020 12/31/2019 09/30/2019 06/30/2019 03/31/2019 Revenue Rents $ 392,661 $ 415,113 $ 121,277 $ 132,180 $ 139,204 $ 1
Slide 29: Q3 2020 Same Store Net Operating Income
Q3 2020 Same Store Net Operating Income (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 27 Recently Development/ Completed/ Redevelopment Other/ Same Store Portfolio Acquired (1) (2) Eliminations (3) All Properties Third Quarter Third Quarter Third Quarter Third Quarter Third Quarter Third
Slide 30: YTD 2020 Same Store Net Operating Income
YTD 2020 Same Store Net Operating Income (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 28 Recently Development/ Completed/ Redevelopment Other/ Same Store Portfolio Acquired (1) (2) Eliminations (3) All Properties Year to Date Year to Date Year to Date Year to Date Year to Date Year to Da
Slide 31: EBITDA and EBITDA Coverage Ratios
EBITDA and EBITDA Coverage Ratios (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 29 Nine Months Ended Three Months Ended 09/30/2020 09/30/2019 09/30/2020 06/30/2020 03/31/2020 12/31/2019 09/30/2019 06/30/2019 03/31/2019 Net income (loss) $ 288,240 $ 17,655 $ 276,133 $ 4,020 $ 8,087 $ 16,87
Slide 32: Funds from Operations
Funds from Operations (unaudited, in thousands, except share data) BRANDYWINE REALTY TRUST | Page 30 Nine Months Ended Three Months Ended 09/30/2020 09/30/2019 09/30/2020 06/30/2020 03/31/2020 12/31/2019 09/30/2019 06/30/2019 03/31/2019 Net income (loss) attributable to common shareholders $ 286,222
Slide 33: Cash Available for Distribution
Cash Available for Distribution (unaudited, in thousands, except share data) BRANDYWINE REALTY TRUST | Page 31 Nine Months Ended Three Months Ended 09/30/2020 09/30/2019 09/30/2020 06/30/2020 03/31/2020 12/31/2019 09/30/2019 06/30/2019 03/31/2019 Funds from operations available to common share and u
Slide 34: Balance Sheets
Balance Sheets (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 32 09/30/2020 06/30/2020 03/31/2020 12/31/2019 09/30/2019 06/30/2019 03/31/2019 Assets Real estate investments Operating properties $ 3,715,765 $ 3,650,521 $ 4,004,118 $ 4,006,459 $ 3,995,228 $ 4,030,605 $ 4,014,260 Accumulated
Slide 35: Liquidity, Leverage and Market Capitalization
Liquidity, Leverage and Market Capitalization (unaudited, in thousands, except shares and per share data) BRANDYWINE REALTY TRUST | Page 33 09/30/2020 06/30/2020 03/31/2020 12/31/2019 09/30/2019 06/30/2019 03/31/2019 High closing price of common shares $ 11.75 $ 12.20 $ 16.24 $ 15.75 $ 15.18 $ 16.13
Slide 36: Balance Sheet Information/Debt Statistics
Balance Sheet Information/Debt Statistics (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 34 09/30/2020 06/30/2020 03/31/2020 12/31/2019 09/30/2019 06/30/2019 03/31/2019 Fixed rate debt $ 1,588,888 $ 1,811,528 $ 1,813,492 $ 1,815,437 $ 1,617,363 $ 1,619,270 $ 1,621,160 Fixed rate debt (vari
Slide 37: Debt Schedules
Debt Schedules (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 35 09/30/2020 Maturity Stated Effective 09/30/2020 12/31/2019 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 38: Debt Schedules
Debt Schedules (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 36 09/30/2020 Maturity Stated Effective 09/30/2020 12/31/2019 Debt Instrument Percent of total Date Rate (1) Rate (1) Balance Balance indebtedness Mortgage notes payable Two Logan Square (9) October 21, 2020 3.980% 3.980% $ 79,7
Slide 39: Debt Maturities
Debt Maturities (7) (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 37 Secured Debt Unsecured Debt Maturity Schedule Scheduled Balloon Percent of Weighted Bank Facilities Senior Notes Total By Year Amortization Payments Debt Maturing Average Interest (8) 2020 63 79,782 $ - - $ 79,845 4.0% 3
Slide 40: Debt Maturities
Debt Maturities (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 38 $600,000 Bank Facilities $500,000 Unsecured Notes Balloon Payments $400,000 Scheduled Amortization $300,000 $200,000 $100,000 $0 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Thereafter % of total 4.0% 0.5% 13.0% 18.3% 1
Slide 41: Debt Covenant Compliance
Debt Covenant Compliance (unaudited, in millions) BRANDYWINE REALTY TRUST | Page 39 Revolving Credit Agreement dated July 17, 2018 and Amended and Restated Term Loan C Agreement dated December 13, 2018 Covenant Required 9/30/2020 6/30/2020 3/31/2020 12/31/2019 09/30/2019 06/30/2019 03/31/2019 Fixed
Slide 42: JV Property Overview
JV Property Overview (unaudited, in thousands, except square footage) BRANDYWINE REALTY TRUST | Page 40 As of September 30, 2020 BDN's Share BDN Net Operating BDN Unconsolidated Real Initial Project Investment @ Number of Income (Loss) Rentable Percent Percent Ownership Net Operating Rentable Estate
Slide 43: JV Debt Schedule
JV Debt Schedule (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 41 BDN Ownership Stated 09/30/2020 BDN Share Debt Instrument Percentage Maturity Date Rate (1) 09/30/2020 Balance of Venture Debt Office Properties Commerce Square JV 70% April 5, 2023 3.640% $ 220,657 $ 154,460 Rockpoint JV (
Slide 44: JV Debt Summary
JV Debt Summary (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 42 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) 2020 $ 1,489 $ - $ 1,489 $ 446
Slide 45: Q3 2020 Analyst and Company Information
Q3 2020 Analyst and Company Information BRANDYWINE REALTY TRUST | Page 43 Equity Research Coverage Argus Research D.A. Davidson & Co. JP Morgan Raymond James & Associates Jacob Kilstein Barry Oxford Anthony Paolone Paul Puryear / Bill Crow 646-747-5447 212-240-9871 212-622-6682 727-567-2253 / 727-56
Slide 46: Q3 2020 Disclaimers and Other Information
Q3 2020 Disclaimers and Other Information BRANDYWINE REALTY TRUST | Page 44 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 47: Q3 2020 Disclaimers and Other Information (continued)
Q3 2020 Disclaimers and Other Information (continued) BRANDYWINE REALTY TRUST | Page 45 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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