Brandywine Realty Trust · NYSE:BDN
Brandywine Realty Trust — Q4 2022 Earnings Presentation
45 slides from Brandywine Realty Trust's earnings presentation, Feb 2, 2023
Slide 1: Supplemental Information Package Fourth Quarter 2022
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 02 2 FO U R TH Q UA R TE R Q UA L I T Y | I N N OVAT I O N | I N T EG R I T Y | C O M M U N I T Y
Slide 2: Table of Contents
Table of Contents Page Executive Summary 1 2023/2022 Business Plan Trend Line 3 Development Summary 7 Balance Sheet and Liquidity 13 Land Inventory 14 Property Activity 15 Net Operating Income Composition 16 Regional Property Overview 17 Leasing Activity 18 Lease Expiration Analysis 20 Top Twenty Te
Slide 3: Q4 2022 Executive Summary: Quarterly Highlights
Q4 2022 Executive Summary (unaudited in millions, except square footage and acreage) BRANDYWINE REALTY TRUST | Page 1 Quarterly Highlights Dispositions On November 22, 2022, we completed the sale of an office building located at 200 Barr Harbor Drive, West Conshohocken, Pennsylvania containing 86,
Slide 4: Q4 2022 Executive Summary: Leasing Highlights
Q4 2022 Executive Summary (unaudited in thousands, except per share data and square footage) BRANDYWINE REALTY TRUST | Page 2 Leasing Highlights Q4 2022 Q3 2022 Quarter end occupancy 89.8% 90.8% Leased as of January 31, 2023 / October 14, 2022 91.0% 91.8% New leases executed in quarter (sq ft) 142,2
Slide 5: Business Plan Trend Line
Business Plan Trend Line (unaudited) BRANDYWINE REALTY TRUST | Page 3 2022 Business Plan as of Business Plan Component 2023 Business Plan Final 10/14/22 Original Speculative Revenue / SF $17.0 - $19.0 MM / 1.1M SF $35.7 MM / 1.8M SF $34.0 - $36.0 MM / 1.8M SF $34.0 - $36.0 MM / 2.0M SF Executed / SF
Slide 6: Austin Marketplace: Continued Leading Growth
Austin Marketplace: Continued Leading Growth (unaudited) BRANDYWINE REALTY TRUST | Page 4 (From L to R): Uptown ATX Block A; Garza Ranch; and Four Points Highlights #1 Fastest Growing Office Market (Commercial Edge 12/22) Opportunity Austin reported 2022 saw the creation of 14K new jobs after re
Slide 7: Philadelphia CBD Marketplace
Philadelphia CBD Marketplace (unaudited) BRANDYWINE REALTY TRUST | Page 5 Philadelphia Marketplace; Stability with Life Science Momentum Highlights $8.1 billion in venture capital deals in 2021, the 5th highest total in the US. 80% of all pharmaceutical and biotech companies in the U.S. have off
Slide 8: Our Opportunity: Life Sciences
Our Opportunity: Life Sciences (unaudited) BRANDYWINE REALTY TRUST | Page 6 Nationally: 5.2% vacancy nationally. 17 million SF is currently under construction or 10.7% of current inventory. Despite increased supply, rents and demand remain strong. Our Markets: Philadelphia and D.C. on CBRE’s t
Slide 9: Development Summary
Development Summary (unaudited, in thousands, except square feet) BRANDYWINE REALTY TRUST | Page 7 Remaining Remaining Equity Amount equity to be equity to be Leased % @ Completion Stabilization Square Total Project Debt Projected Development (% owned) Location Type Capitalization funded at funded b
Slide 10: Development Activity: 3151 Market Street
Development Activity (unaudited) BRANDYWINE REALTY TRUST | Page 8 3151 Market Street Development (Real Estate Venture) Design Overview Project Description A 12-level premier development featuring 417,000 SF of customizable life science/innovation/office space. Located in the Schuylkill Yards nei
Slide 11: Development Activity: 3025 JFK Boulevard
Development Activity (unaudited) BRANDYWINE REALTY TRUST | Page 9 3025 JFK Boulevard Development (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 life Pennsylva
Slide 12: Development Activity: One Uptown
Development Activity (unaudited) BRANDYWINE REALTY TRUST | Page 10 One Uptown (Uptown ATX - Block A) Project Overview Project Schedule A mixed-use development featuring a 14-story office tower Joint Venture Formation: Q4 2021 comprised of one level of below-grade parking, lobby and Constructio
Slide 13: Development Activity: Austin, TX
Development Activity (unaudited) BRANDYWINE REALTY TRUST | Page 11 AUSTIN, TX Overview Uptown ATX 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 596,000 square feet for IBM. Once redeveloped,
Slide 14: Development Activity: Philadelphia, PA
Development Activity (unaudited) BRANDYWINE REALTY TRUST | Page 12 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 15: Balance Sheet Liquidity: 2023 Capital Plan
Balance Sheet Liquidity (unaudited) BRANDYWINE REALTY TRUST | Page 13 2023 Capital Plan USES Projected ($ in millions) 2023 $505.2M currently available on our line of credit including $6.3M in Dividends $132 letters of credit. Contributions to Joint Venture, net 35 Revenue Maintaining Cap Ex 34
Slide 16: Q4 2022 Land Inventory
Q4 2022 Land Inventory (unaudited) BRANDYWINE REALTY TRUST | Page 14 Estimated Development Square Feet Acres Active/Pre-Development Projects Philadelphia CBD (a) (b) 55.1 4,747,000 Pennsylvania Suburbs 25.0 660,000 Austin, Texas (c) 70.0 5,773,000 Total Active/Pre-Development Projects 150.1 11,180,0
Slide 17: Property Activity
Property Activity (unaudited, in thousands, except square footage and acreage) BRANDYWINE REALTY TRUST | Page 15 Purchase/Sales Occupancy % Location Type Event Date Square Feet/Acres Price @ Event Date 2022 PROPERTY ACTIVITY LAND ACQUISITION 631 Park Avenue King of Prussia, PA Land 01/21/2022 3.3 ac
Slide 18: YTD 2022 Net Operating Income Composition
YTD 2022 Net Operating Income Composition (unaudited) BRANDYWINE REALTY TRUST | Page 16 YTD NOI - Wholly Owned (a) YTD NOI - Including JV's (c) Total Core Portfolio NOI: $278.1 MM Total NOI: $321.2 MM 91% of NOI from our Core Markets (b) 90% of NOI from our Core Markets (b) MAP and Other 2%
Slide 19: Regional Property Overview
Regional Property Overview (unaudited, in thousands, except square footage) BRANDYWINE REALTY TRUST | Page 17 Square Feet % Occupied % Leased (1) Remaining Expirations Net Operating Income at 12/31/2022 # of Wholly Region Owned Properties Total % of Total 2023 2024 Q4 2022 % of Total YTD 2022 % of T
Slide 20: Leasing Activity-Core Portfolio
Leasing Activity-Core Portfolio (1) (unaudited) BRANDYWINE REALTY TRUST | Page 18 Twelve Months Ended Three Months Ended 12/31/2022 12/31/2021 12/31/2022 09/30/2022 06/30/2022 03/31/2022 12/31/2021 09/30/2021 06/30/2021 03/31/2021 Total Property Count 72 77 72 72 74 77 77 76 76 76 Total Square Feet
Slide 21: Leasing Activity-Core Portfolio (rent growth)
Leasing Activity-Core Portfolio (1) (unaudited) BRANDYWINE REALTY TRUST | Page 19 Twelve Months Ended Three Months Ended 12/31/2022 12/31/2021 12/31/2022 09/30/2022 06/30/2022 03/31/2022 12/31/2021 09/30/2021 06/30/2021 03/31/2021 New Leases/Expansions (2): Cash Rent Growth Expiring Rate $ 37.81 $ 3
Slide 22: Lease Expiration Analysis
Lease Expiration Analysis (unaudited) BRANDYWINE REALTY TRUST | Page 20 Square Footage Annualized Rent of Expiring Leases (3) Lease Revisions (4) Remaining Acquired / Year of Lease Vacated Remaining % of Total Expirations including % of Total Per Square Per Square Initial Expiring Sold / in New Leas
Slide 23: Regional Lease Expiration Analysis
Regional Lease Expiration Analysis (1) (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 21 2022 2023 2024 2025 2026 2027 2028 Thereafter Total Philadelphia CBD Square feet expiring (Net of Acquired/Sold) 347 204 262 315 164 300 189 2,887 4,668 Net leasing activity (347) (47) 20 10 8 12 34 17
Slide 24: Top Twenty Tenants
Top Twenty Tenants (unaudited, annualized rent in thousands) BRANDYWINE REALTY TRUST | Page 22 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 25: Portfolio Tenant Mix
Q4 2022 Portfolio Tenant Mix (unaudited, by square footage) BRANDYWINE REALTY TRUST | Page 23 Misc. Services - 4% Health Services - 3% Engineering & Management Transportation/Public Services - 9% Utilities - 4% Real Estate -6% Other - 2% Wholesale Trade - 3% Finance - 16% Business Services - 16% Man
Slide 26: Income Statements
Income Statements (unaudited, in thousands, except share data) BRANDYWINE REALTY TRUST | Page 24 Twelve Months Ended Three Months Ended 12/31/2022 12/31/2021 12/31/2022 09/30/2022 06/30/2022 03/31/2022 12/31/2021 09/30/2021 06/30/2021 03/31/2021 Revenue Rents $ 470,851 $ 451,519 $ 120,572 $ 117,481
Slide 27: Q4 2022 Same Store Net Operating Income
Q4 2022 Same Store Net Operating Income (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 25 Recently Completed/ Development/ Other/ Same Store Portfolio Acquired (1) Redevelopment (2) Eliminations (3) All Properties Fourth Quarter Fourth Quarter Fourth Quarter Fourth Quarter Fourth Quarter F
Slide 28: YTD 2022 Same Store Net Operating Income
YTD 2022 Same Store Net Operating Income (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 26 Recently Completed/ Development/ Other/ Same Store Portfolio Acquired (1) Redevelopment (2) Eliminations (3) All Properties Year to Date Year to Date Year to Date Year to Date Year to Date Year to Da
Slide 29: EBITDA and EBITDA Coverage Ratios
EBITDA and EBITDA Coverage Ratios (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 27 Twelve Months Ended Three Months Ended 12/31/2022 12/31/2021 12/31/2022 09/30/2022 06/30/2022 03/31/2022 12/31/2021 09/30/2021 06/30/2021 03/31/2021 Net income (loss) $ 53,992 $ 12,366 $ 29,762 $ 13,478 $ 4
Slide 30: Funds from Operations
Funds from Operations (unaudited, in thousands, except share data) BRANDYWINE REALTY TRUST | Page 28 Twelve Months Ended Three Months Ended 12/31/2022 12/31/2021 12/31/2022 09/30/2022 06/30/2022 03/31/2022 12/31/2021 09/30/2021 06/30/2021 03/31/2021 Net income (loss) attributable to common sharehold
Slide 31: Cash Available for Distribution
Cash Available for Distribution (unaudited, in thousands, except share data) BRANDYWINE REALTY TRUST | Page 29 Twelve Months Ended Three Months Ended 12/31/2022 12/31/2021 12/31/2022 09/30/2022 06/30/2022 03/31/2022 12/31/2021 09/30/2021 06/30/2021 03/31/2021 Funds from operations available to commo
Slide 32: Balance Sheets
Balance Sheets (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 30 12/31/2022 09/30/2022 06/30/2022 03/31/2022 12/31/2021 09/30/2021 06/30/2021 03/31/2021 Assets Real estate investments Operating properties $ 3,617,240 $ 3,587,083 $ 3,545,102 $ 3,517,995 $ 3,472,602 $ 3,437,074 $ 3,392,734 $
Slide 33: Liquidity, Leverage and Market Capitalization
Liquidity, Leverage and Market Capitalization (unaudited, in thousands, except shares and per share data) BRANDYWINE REALTY TRUST | Page 31 12/31/2022 09/30/2022 06/30/2022 03/31/2022 12/31/2021 09/30/2021 06/30/2021 03/31/2021 High closing price of common shares $ 7.16 $ 9.74 $ 14.15 $ 14.69 $ 14.6
Slide 34: Balance Sheet Information/Debt Statistics
Balance Sheet Information/Debt Statistics (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 32 12/31/2022 09/30/2022 06/30/2022 03/31/2022 12/31/2021 09/30/2021 06/30/2021 03/31/2021 Fixed rate debt $ 1,554,301 $ 1,500,000 $ 1,500,000 $ 1,500,000 $ 1,500,000 $ 1,500,000 $ 1,500,000 $ 1,500,00
Slide 35: Debt Schedules
Debt Schedules (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 33 12/31/2022 Maturity Stated Effective 12/31/2022 12/31/2021 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 36: Debt Maturities
Debt Maturities (4) (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 34 Unsecured Debt Maturity Schedule Percent of Weighted Bank Facilities Senior Notes Total By Year Debt Maturing Average Interest (5) 2023 - 54,301 54,301 2.8% 3.865% 2024 - 350,000 350,000 17.8% 3.781% 2025 - - - 0.0% 0.00
Slide 37: Debt Maturities (chart)
Debt Maturities (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 35 $800,000 Bank Facilities $700,000 Unsecured Notes $600,000 Balloon Payments $500,000 Scheduled Amortization $400,000 $300,000 $200,000 $100,000 $0 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 Thereafter % of total 2.8%
Slide 38: Debt Maturities - Proforma
Debt Maturities - Proforma (a) (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 36 $800,000 Bank Facilities $700,000 Unsecured Notes $600,000 Balloon Payments $500,000 Scheduled Amortization $400,000 $300,000 $200,000 $100,000 $0 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 Thereafter %
Slide 39: Debt Covenant Compliance
Debt Covenant Compliance (unaudited, in millions) BRANDYWINE REALTY TRUST | Page 37 Revolving Credit Agreement dated July 17, 2018 and Amended and Restated Term Loan C Agreement dated December 13, 2018 Covenant Required 12/31/2022 9/30/2022 6/30/2022 3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/202
Slide 40: JV Property Overview
JV Property Overview (unaudited, in thousands, except square footage) BRANDYWINE REALTY TRUST | Page 38 As of December 31, 2022 BDN's Share BDN Net Investment Percent BDN Operating Unconsolidated Real Initial Project @ Number of Net Operating Rentable Percent Leased Ownership Income Rentable Square
Slide 41: JV Debt Schedule
JV Debt Schedule (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 39 12/31/2022 BDN BDN Ownership Stated Share Debt Instrument Percentage Maturity Date Rate (1) 12/31/2022 Balance of Venture Debt Office Properties Commerce Square JV 70% April 5, 2023 (2) $ 206,737 $ 144,716 MAP Venture (3) 5
Slide 42: JV Debt Summary
JV Debt Summary (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 40 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) 2023 2,910 385,879 388,789 153,
Slide 43: Q4 2022 Analyst and Company Information
Q4 2022 Analyst and Company Information BRANDYWINE REALTY TRUST | Page 41 Equity Research Coverage BofA Merrill Lynch Green Street Advisors Raymond James & Associates Camille Bonnel Dylan Burzinski Paul Puryear / Bill Crow 416-369-2140 949-640-8780 727-567-2253 / 727-567-2594 Citigroup JP Morgan Tru
Slide 44: Q4 2022 Disclaimers and Other Information
Q4 2022 Disclaimers and Other Information BRANDYWINE REALTY TRUST | Page 42 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 45: Disclaimers and Other Information (continued)
Q4 2022 Disclaimers and Other Information (continued) BRANDYWINE REALTY TRUST | Page 43 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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