Peakstone Realty Trust · NYSE:PKST
Peakstone Realty Trust — Q2 2024 Earnings Presentation
63 slides from Peakstone Realty Trust's earnings presentation, Aug 8, 2024
Slide 1: Supplemental Information Second Quarter 2024
Supplemental Information Second Quarter 2024 1
Slide 2: Table of Contents
2 Table of Contents Page Portfolio Highlights 4 Financial Information 7 Debt & Capitalization 22 Leasing Activity & Asset Management 26 Components of Net Asset Value 29 Property Information 31 Portfolio Characteristics 36 Notes & Definitions 56
Slide 3: Cautionary Note Regarding Forward-Looking Statements
3 Cautionary Note Regarding Forward-Looking Statements Cautionary Note Regarding Forward-Looking Statements This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securi
Slide 4: Portfolio Highlights
Portfolio Highlights 4
Slide 5: High-Quality Portfolio of Industrial & Office Properties Net-Leased
5 High-Quality Portfolio of Industrial & Office Properties Net-Leased to a Diversified Pool of Creditworthy Tenants4 66 Properties 16.6M Square Feet 22 States 96.3%3 Leased 26%/60%/14%1 Industrial/Office/ Other 6.6 Years1 WALT 57.4%1,2 Investment Grade 1.9%1 Avg. Annual Rent Escalations 1 Weighted a
Slide 6: Portfolio summary by segment
6 (Unaudited, USD in thousands) Number of Properties Economic Occupancy1 Total Rentable Square Feet WALT (years)2 Annualized Base Rent Investment Grade by Segment3 Industrial4 19 100.0 % 9,001,800 6.2 $ 49,310 58.6 % Office5 34 98.7 5,418,700 7.4 112,425 60.8 TOTAL / WEIGHTED AVERAGE INDUSTRIAL AND
Slide 7: Financial Information
4» | Peakstone Financial Information
Slide 8: Selected Financial Data
8 1 Calculated based on weighted-average number of common shares outstanding - basic and diluted of 36,349,950. 2 Calculated based on weighted-average number of common shares outstanding - basic and diluted of 36,349,950 and weighted-average number of outstanding OP Units (see footnote 4 below) of 3
Slide 9: Revenue, NOI and Cash NOI by Segment
9 For the Quarter Ended (Unaudited, USD in thousands) 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 REVENUE BY SEGMENT Industrial $ 14,554 $ 14,833 $ 14,796 $ 13,934 $ 13,981 Office 32,991 32,999 34,525 34,022 34,999 Industrial and Office Total 47,545 47,832 49,321 47,956 48,980 Other 8,407 11,
Slide 10: Consolidated Statements of Operations
10 For the Quarter Ended (Unaudited, USD in thousands, except per share metrics) 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 REVENUES Rental income $ 55,952 $ 59,227 $ 63,058 $ 61,713 $ 62,540 EXPENSES Property operating expense 5,658 6,679 7,232 7,829 6,919 Property tax expense 4,513 4,510 5
Slide 11: Consolidated Balance Sheets: Assets
11 As of (Unaudited, USD in thousands) 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 ASSETS Cash and cash equivalents $ 446,800 $ 436,251 $ 391,802 $ 364,446 $ 360,626 Restricted cash1 14,496 11,213 9,208 5,651 3,042 Real estate Land 225,330 227,138 231,175 244,369 245,872 Building and improvem
Slide 12: Consolidated Balance Sheets: Liabilities and Equity
12 As of (Unaudited, USD in thousands) 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 LIABILITIES AND EQUITY Debt, net $ 1,408,517 $ 1,416,433 $ 1,435,923 $ 1,442,003 $ 1,460,536 Distributions payable 8,486 8,422 8,344 8,296 8,295 Due to related parties 573 573 573 706 1,043 Intangible liabiliti
Slide 13: Reconciliation of Net Income to Total NOI
13 For the Quarter Ended (Unaudited, USD in thousands) 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 Net (loss) income $ (4,101) $ 5,470 $ (21,767) $ (139,948) $ (452,403) General and administrative 9,116 9,680 11,551 1 9,653 12,030 1 Corporate operating expenses to related parties 169 166 178
Slide 14: Reconciliation of Net Income to Total NOI, Six Months
14 For the Six Months Ended (Unaudited, USD in thousands) 6/30/2024 6/30/2023 Net income (loss) $ 1,369 $ (443,384) General and administrative 18,796 21,758 Corporate operating expenses to related parties 336 718 Real estate impairment provision 7,881 397,373 Goodwill impairment provision 4,594 — De
Slide 15: NOI to Cash NOI Reconciliation, Quarter
15 For the Quarter Ended For the Quarter Ended 6/30/2024 6/30/2023 (Unaudited, USD in thousands) Industrial Office Total Industrial and Office Other Total Portfolio Industrial Office Total Industrial and Office Other Total Portfolio Revenue $ 14,554 $ 32,991 $ 47,545 $ 8,407 $ 55,952 $ 13,981 $ 34,9
Slide 16: NOI to Cash NOI Reconciliation, Six Months
16 For the Six Months Ended For the Six Months Ended 6/30/2024 6/30/2023 (Unaudited, USD in thousands) Industrial Office Total Industrial and Office Other Total Portfolio Industrial Office Total Industrial and Office Other Total Portfolio Revenue $ 29,387 $ 65,990 $ 95,377 $ 19,802 $ 115,179 $ 28,57
Slide 17: Cash NOI Allocation and Same Store Cash NOI
17 For the Quarter Ended For the Six Months Ended (Unaudited, USD in thousands) 6/30/2024 6/30/2023 6/30/2024 6/30/2023 CASH NOI ALLOCATION � Industrial1 $ 11,481 $ 12,117 $ 23,297 $ 24,512 Office 27,279 26,885 54,786 56,280 Industrial and Office Total $ 38,760 $ 39,002 $ 78,083 $ 80,792 � Other 5,2
Slide 18: Reconciliation of Net Income to FFO and AFFO
18 For the Quarter Ended (Unaudited, USD in thousands, except per share metrics) 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 Reconciliation of Net (Loss) Income to Funds From Operations (FFO) and Adjusted Funds From Operations (AFFO) NET (LOSS) INCOME $ (4,101) $ 5,470 $ (21,767) $ (139,948)
Slide 19: Reconciliation of Net Income to EBITDAre
19 For the Quarter Ended (Unaudited, USD in thousands) 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 Reconciliation of Net income (loss) to EBITDAre Net (loss) income $ (4,101) $ 5,470 $ (21,767) $ (139,948) $ (452,403) Interest expense 15,845 16,148 16,415 16,126 16,068 Depreciation and amorti
Slide 20: Unconsolidated Office Joint Venture Condensed Financial Information
20 For the Quarter Ended1 (Unaudited, USD in thousands) 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 Total revenues $ 43,181 $ 50,206 $ 49,598 $ 50,889 $ 49,917 Expenses: Operating expenses (17,062) (19,458) (18,167) (16,838) (16,611) General and administrative (2,169) (1,126) (1,856) (1,699)
Slide 21: Capital Expenditures
21 For the Quarter Ended (Unaudited, USD in thousands) 6/30/2024 % of NOI1 3/31/2024 % of NOI1 12/31/2023 % of NOI1 9/30/2023 % of NOI1 6/30/2023 % of NOI1 Maintenance Capital Expenditures by segment: Industrial $ — — % $ 89 0.2 % $ 651 1.3 % $ 30 0.1 % $ 505 1.0 % Office — — — — — — — — — — Total I
Slide 22: Debt & Capitalization
Debt & Capitalization 22
Slide 23: Capitalization, Liquidity and Unsecured Debt
23 Unsecured Debt Note: Subsequent to quarter-end, on July 25, 2024, the Company amended the terms of its credit facility, resulting in a $907.0 million unsecured credit facility consisting of a $547.0 million revolving credit facility maturing in July 2028, a $210.0 million term loan maturing in Ju
Slide 24: Consolidated Secured Debt Schedule
24 (Unaudited, USD in thousands) SECURED DEBT Collateral Contractual Interest Rate Maturity Date Outstanding Balance INDUSTRIAL AND OFFICE Pepsi Bottling Ventures Mortgage Loan 3.69% 10/1/2024 $ 17,236 BOA II Loan 1 4.32% 5/1/2028 250,000 Total Industrial and Office 267,236 OTHER AIG Loan II 2 4.15%
Slide 25: Debt Maturity Schedule
25 1 Excludes amounts related to deferred financing costs and net debt premiums/discounts. 2 Represents the Pepsi Bottling Ventures mortgage loan. 3 Represents the AIG II loan. 4 Represents the 2025 Term Loan. 5 Represents the Revolving Loan. As of June 30, 2024, the Revolving Loan had a maturity da
Slide 26: Leasing Activity & Asset Management
Leasing Activity & Asset Management 26
Slide 27: New and Renewal Leases
27 NEW AND RENEWAL LEASES Cash Rent GAAP Rent Tenant / Property Segment Property Type Location New Lease Start Date New Lease Expiration Date Term (Yrs) Square Feet Leasing Commissions $/SF Tenant Improvement $/SF Starting Rent/SF Prior Rent/ SF Rent Change Starting Rent/SF Prior Rent/SF Rent Change
Slide 28: Portfolio Square Footage and Occupancy Changes
28 1 Occupancy changes reflect leases with commencements during the quarter. 2 Expiring with renewal square footage includes expirations accelerated due to early renewal. 3 Retention is Renewal leases divided by Total expirations. For the Quarter Ended 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2
Slide 29: Components of Net Asset Value
Components of Net Asset Value 29
Slide 30: Balance Sheet Components and ABR
30 (Unaudited, USD in thousands) Annualized Base Rent Balance Sheet Components (cont'd) ABR Percentage of ABR LIABILITIES Industrial � � Credit facility2 $ 950,000 Investment grade1 $ 28,874 15.4 % Mortgages payable2 463,999 � Sub-investment grade1 15,457 8.3 Distributions payable 8,486 Unrated cred
Slide 31: Property Information
Property Information 31
Slide 32: Property List
32 USD in thousands, except Annualized Base Rent / SF metrics Segment Property/Tenant Name Address Property Market Property State Building Square Feet Tenancy Type % Leased1 Property Sub Type Year Built/ Renovated2 3 Property WALT3 % of Total ABR3 1 Industrial RH 825 Rogers Road Stockton/Modesto CA
Slide 33: Property List (continued)
33 USD in thousands, except Annualized Base Rent / SF metrics Segment Property / Tenant Name Address Property Market Property State Building Square Feet Tenancy Type % Leased1 Property Sub Type Year Built/ Renovated2 3 Property WALT3 % of Total ABR3 20 Office Southern Company 3525 & 3535 Colonnade P
Slide 34: Property List (continued)
34 USD in thousands, except Annualized Base Rent / SF metrics Segment Property/Tenant Name Address Property Market Property State Building Square Feet Tenancy Type % Leased1 Property Sub Type Year Built/ Renovated2 3 Property WALT3 % of Total ABR3 39 Office Occidental Petroleum 501 North Division St
Slide 35: Property List (continued)
35 Property List (continued) As of June 30, 2024 USD in thousands, except Annualized Base Rent / SF metrics Segment Property / Tenant Name Address Property Market Property State Building Square Feet Tenancy Type % Leased1 Property Sub-Type Year Built/ Renovated2 3 Property WALT3 % of Total ABR3 54 O
Slide 36: Portfolio Characteristics
Portfolio Characteristics 36
Slide 37: Lease Escalations
37 1 Weighted average rental increase is based on the remaining term of each lease as of June 30, 2024. Excludes leases with remaining term less than one year. 2 Based on % of ABR for Industrial and Office segments. Lease Escalations - Consolidated % of ABR Wtd. Avg. Annual Growth Rate 1 Annually 85
Slide 38: Tenant Concentration: Consolidated
38 Top 10 Tenants Tenant/Major Tenant Rating1 % of ABR2 WALT (years)3 1 Keurig Dr. Pepper Baa1 4 6.2% 5.4 2 Southern Company A- 5.0 19.7 3 LPL BBB- 4.7 12.3 4 Amazon6 AA 4.6 7.1 5 Freeport McMoRan Baa1 4 4.2 2.9 6 Maxar Technologies HY5 5 4.1 6.0 7 RH HY2 5 4.0 6.2 8 Wyndham Hotels & Resorts BB- 4.0
Slide 39: Tenant Concentration: Industrial and Office
39 Top 10 Tenants Tenant/Major Tenant Rating1 % of ABR2 WALT (years)3 1 Keurig Dr. Pepper Baa1 4 7.1% 5.4 2 Southern Company A- 5.8 19.7 3 LPL BBB- 5.4 12.3 4 Amazon6 AA 5.3 7.1 5 Freeport McMoRan Baa1 4 4.9 2.9 6 Maxar Technologies HY5 5 4.8 6.0 7 RH HY25 4.6 6.2 8 McKesson A34 3.9 4.3 9 Travel & L
Slide 40: Tenant Concentration: Industrial
40 Top 10 Tenants Tenant/Major Tenant Rating1 % of ABR2 WALT (years)3 1 Amazon6 AA 17.4% 7.1 2 RH HY2 4 15.2 6.2 3 3M Company A3 5 10.1 2.3 4 Samsonite BB+ 8.6 5.4 5 Shaw Industries AA 6.8 8.8 6 Pepsi A+ 6.7 4.1 7 Amcor Rigid Plastics USA BBB 5.5 8.3 8 Huntington Ingalls BBB 5.3 3.5 9 Pepsi Bottling
Slide 41: Tenant Concentration: Office
41 Top 10 Tenants Tenant/Major Tenant Rating1 % of ABR2 WALT (years)3 1 Keurig Dr. Pepper Baa1 4 10.3% 5.4 2 Southern Company A- 8.4 19.7 3 LPL BBB- 7.7 12.3 4 Freeport McMoRan Baa1 4 7.0 2.9 5 Maxar Technologies HY5 5 6.9 6.0 6 McKesson A34 5.6 4.3 7 Travel & Leisure, Co. BB- 5.3 5.2 8 IGT BB+ 4.6
Slide 42: Industry Concentration: Consolidated
42 Industry Concentration: Consolidated As of June 30, 2024 Top 10 Industries Top 20 Sub-Industries Industry % of ABR1 Sub-Industry % of ABR1 1 Capital Goods 16.0 % 1 Aerospace & Defense 11.4 % 2 Consumer Services 11.2 2 Soft Drinks 9.0 3 Materials 9.2 3 Hotels, Resorts & Cruise Lines 7.1 4 Food, Be
Slide 43: Industry Concentration: Industrial and Office
43 Industry Concentration: Industrial and Office As of June 30, 2024 Top 10 Industries Top 20 Sub-Industries Industry % of ABR1 Sub-Industry % of ABR1 1 Capital Goods 14.8 % 1 Soft Drinks 10.4 % 2 Materials 10.6 2 Aerospace & Defense 10.1 3 Food, Beverage & Tobacco 10.4 3 Health Care Services 6.1 4
Slide 44: Industry Concentration: Industrial
44 Industry Concentration: Industrial As of June 30, 20242021 Top 8 Industries Top 14 Sub-Industries Industry % of ABR1 Sub-Industry % of ABR1 1 Capital Goods 22.9 % 1 Internet & Direct Marketing Retail 17.4 % 2 E-Commerce 17.4 2 Homefurnishing Retail 15.2 3 Consumer Durables & Apparel 15.3 3 Soft D
Slide 45: Industry Concentration: Office
45 Industry Concentration: Office As of June 30, 2024 2021 Top 10 Industries Top 20 Sub-Industries Industry % of ABR1 Sub-Industry % of ABR1 1 Materials 11.6 % 1 Aerospace & Defense 11.2 % 2 Capital Goods 11.2 2 Soft Drinks 10.3 3 Food, Beverage & Tobacco 10.3 3 Health Care Services 8.8 4 Utilities
Slide 46: Market Concentration: Consolidated
46 Geographic Distribution (% of ABR1) Market Concentration: Consolidated As of June 30, 2024 (USD in thousands) Top 10 Markets (% of ABR)1 Markets ABR % of ABR1 1 Phoenix $ 23,500 12.6 % 2 Northern New Jersey 19,711 10.5 3 Denver 14,255 7.6 4 Boston 12,486 6.7 5 Charlotte 12,346 6.6 6 Birmingham 9,
Slide 47: Market Concentration: Industrial and Office
47 Geographic Distribution (% of ABR1) Market Concentration: Industrial and Office As of June 30, 2024 (USD in thousands) Top 10 Markets (% of ABR)1 Markets ABR % of ABR1 1 Phoenix $ 20,187 12.5 % 2 Boston 12,486 7.7 3 Denver 10,800 6.7 4 Northern New Jersey 10,229 6.3 5 Birmingham 9,409 5.8 6 Chica
Slide 48: Market Concentration: Industrial
48 Geographic Distribution (% of ABR1) Market Concentration: Industrial As of June 30, 2024 (USD in thousands) Top 10 Markets (% of ABR)1 Markets ABR % of ABR1 1 Chicago $ 8,901 18.1 % 2 Columbus 7,685 15.6 3 Stockton/Modesto 7,487 15.2 4 Jacksonville 4,217 8.6 5 Savannah 3,335 6.8 6 Tampa 3,286 6.7
Slide 49: Market Concentration: Office
49 Geographic Distribution (% of ABR1) Market Concentration: Office As of June 30, 2024 (USD in thousands) Top 10 Markets (% of ABR)1 Markets ABR % of ABR1 1 Phoenix $ 20,187 18.0 % 2 Boston 12,486 11.1 3 Denver 10,800 9.6 4 Birmingham 9,409 8.4 5 Northern New Jersey 9,105 8.1 6 Charlotte 8,701 7.7
Slide 50: Market Concentrations: Other
50 Geographic Distribution (% of ABR1) Market Concentrations: Other As of June 30, 2024 (USD in thousands) Top 10 Markets (% of ABR)1 Markets ABR % of ABR1 1 Northern New Jersey $ 9,482 37.5 % 2 Charlotte 3,645 14.4 3 Denver 3,455 13.7 4 Phoenix 3,313 13.1 5 Las Vegas 2,490 9.9 6 Cincinnati/Dayton 1
Slide 51: Lease Expirations: Consolidated
51 Lease Expirations: Consolidated As of June 30, 2024 (USD in thousands) Lease Maturity Schedule (by ABR1) 1 Based on ABR for wholly-owned portfolio. $5,667 $6,580 $8,909 $14,374 $18,977 $42,035 $27,210 $16,076 $12,103 $8,639 $26,434 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 >2033 Expiring
Slide 52: Lease Expirations: Industrial and Office
52 Lease Expirations: Industrial and Office As of June 30, 2024 (USD in thousands) Lease Maturity Schedule (by ABR1) $1,002 $3,356 $7,690 $14,374 $15,557 $31,496 $25,312 $16,076 $12,103 $8,335 $26,434 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 >2033 Expiring Leases Year Industrial Office Appr
Slide 53: Lease Expirations: Industrial
53 Lease Expirations: Industrial As of June 30, 2024 (USD in thousands) Lease Maturity Schedule (by ABR1) $— $1,401 $5,000 $— $7,617 $5,736 $7,487 $8,590 $4,647 $5,964 $2,868 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 >2033 Expiring Leases Year Leases Approx. Square Feet ABR % of ABR1 2024 —
Slide 54: Lease Expirations: Office
54 Lease Expirations: Office As of June 30, 2024 (USD in thousands) Lease Maturity Schedule (by ABR1) $1,002 $1,955 $2,690 $14,374 $7,940 $25,760 $17,825 $7,486 $7,456 $2,371 $23,566 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 >2033 Expiring Leases Year Leases Approx. Square Feet ABR % of ABR1
Slide 55: Lease Expirations: Other
55 Lease Expirations: Other As of June 30, 2024 (USD in thousands) Lease Maturity Schedule (by ABR1) $4,665 $3,224 $1,219 $— $3,420 $10,539 $1,898 $— $— $304 $— 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 >2033 Expiring Leases Year Total Approx. Square Feet ABR % of ABR1 2024 3 254,000 $ 4,665
Slide 56: Notes & Definitions
Notes & Definitions 5656
Slide 57: Notes & Definitions
57 Notes & Definitions ABR (Annualized Base Rent) “Annualized Base Rent” or “ABR” means the contractual base rent excluding abatement periods and deducting base year operating expenses for gross and modified gross leases as of June 30, 2024, unless otherwise specified, multiplied by 12 months. For p
Slide 58: Notes & Definitions: FFO and AFFO
58 Notes & Definitions (continued) Funds from Operations ("FFO") and Adjusted Funds from Operations ("AFFO") "FFO" and "AFFO" are non-GAAP financial measures that we believe are useful to investors because they are widely accepted industry measures used by analysts and investors to compare the opera
Slide 59: Notes & Definitions: FFO and AFFO (continued)
59 Notes & Definitions (continued) FFO and AFFO - cont. By providing FFO and AFFO, we present information that assists investors in aligning their analysis with management’s analysis of long-term operating activities. FFO and AFFO have been revised to include amounts available to both common shareho
Slide 60: Notes & Definitions: NOI, Cash NOI, Same Store Cash NOI
60 Notes & Definitions (continued) Net Operating Income (NOI), Cash NOI, and Same Store Cash NOI “NOI” is a non-GAAP financial measure calculated as net (loss) income, the most directly comparable financial measure calculated and presented in accordance with GAAP, excluding equity in earnings of our
Slide 61: Notes & Definitions: NOI to Cash NOI Reconciliation
61 Notes & Definitions (continued) The table below represents a reconciliation of NOI to Cash NOI for the interim periods presented in the "Selected Financial Data" on page 9. For the Quarter Ended 3/31/2024 12/31/2023 9/30/2023 (Unaudited, USD in thousands) Industrial Office Other Total Portfolio I
Slide 62: Notes & Definitions: Normalized EBITDAre
62 Notes & Definitions Normalized EBITDAre “Normalized EBITDAre” is a non-GAAP supplemental performance measure to evaluate the operating performance of the Company. Normalized EBITDAre, as defined by the Company, represents EBITDAre(as defined by NAREIT), modified to exclude items such as acquisiti
Slide 63: Notes & Definitions: Operating Margin and Other Terms
63 Notes & Definitions (continued) Operating Margin "Operating Margin" is NOI/Revenue. Operating Partnership "Operating Partnership" refers to our operating partnership, PKST OP, L.P., which owns directly and indirectly all of the Company's assets. OP Units "OP Units" represents outstanding common u
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