Peakstone Realty Trust · NYSE:PKST
Peakstone Realty Trust — Q1 2023 Earnings Presentation
61 slides from Peakstone Realty Trust's earnings presentation, May 9, 2023
Slide 1: Supplemental Information First Quarter 2023
Supplemental Information First Quarter 2023
Slide 2: Table of Contents
2 Table of Contents Page Company Highlights 4 Financial Information 8 Debt & Capitalization 19 Leasing Activity & Asset Management 25 Components of Net Asset Value 28 Property Information 30 Portfolio Characteristics 35 Notes & Definitions 55
Slide 3: Company Highlights
Company Highlights
Slide 4: High-Quality Portfolio of Office & Industrial Properties Net-Leased to Creditworthy Tenants
4 High-Quality Portfolio of Office & Industrial Properties Net-Leased to a Diversified Pool of Creditworthy Tenants2 78 Properties 19.0M Square Feet 24 States 95.3%1 Leased 23%/58%/19%1 Industrial/ Office/Other 6.9 Years1 WALT 61.5%1 Investment Grade 1.9% Avg. Annual Rent Escalations 1 Based on annu
Slide 5: Portfolio Summary by Segment
5 (Unaudited, USD in thousands) Number of Properties Economic Occupancy Total Rentable Square Feet WALT (years) Annualized Base Rent Investment Grade Credit by Segment5 Industrial1 19 100.0 % 9,001,800 6.8 $ 48,339 58.7 % Office2 38 98.2 6,184,400 8.2 124,329 67.3 TOTAL / WEIGHTED AVERAGE INDUSTRIAL
Slide 6: First Quarter Highlights
6 Consolidated Leverage $500.5 million36.3% Net Debt + Preferred / Total Gross Real Estate (consol.) $0.37 / $0.68 FFO/AFFO Per Share/Unit2 7.1x Net Debt + Preferred / Normalized EBITDAre (consol.) Total Revenues $67.0 million Same Store Cash NOI Liquidity3 1 Calculated based on weighted average num
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 35,999,325. 2 Calculated based on weighted average number of common shares outstanding - basic and diluted of 35,999,325 and weighted average number of OP Units outstanding of 3,537,654 for a total of
Slide 9: Revenues, NOI and Cash NOI by Segment
9 For the Quarter Ended (Unaudited, USD in thousands) 3/31/20231 12/31/20222 9/30/20222 6/30/20222 3/31/20222 REVENUES BY SEGMENT Industrial $ 14,594 $ 15,945 $ 15,095 $ 14,807 $ 15,500 Office 39,189 45,643 72,128 93,494 85,846 Industrial and Office Total 53,783 61,588 87,223 108,301 101,346 Other 1
Slide 10: Consolidated Statements of Operations
10 For the Quarter Ended (Unaudited, USD in thousands, except per share metrics) 3/31/2023 12/31/2022 9/30/2022 6/30/2022 3/31/2022 REVENUES Rental income $ 66,973 $ 75,893 $ 101,330 $ 123,073 $ 116,189 EXPENSES Property operating expense 7,110 9,357 13,716 14,335 15,043 Property tax expense 5,822 6
Slide 11: Consolidated Balance Sheets - Assets
11 As of (Unaudited, USD in thousands) 3/31/2023 12/31/2022 9/30/2022 6/30/2022 3/31/2022 ASSETS Cash and cash equivalents $ 368,210 $ 233,180 $ 75,838 $ 202,655 $ 184,209 Restricted cash 1,999 4,764 12,045 19,638 19,094 Real estate Land 316,341 327,408 380,998 573,306 584,291 Building and improveme
Slide 12: Consolidated Balance Sheets - Liabilities and Equity
12 As of (Unaudited, USD in thousands) 3/31/2023 12/31/2022 9/30/2022 6/30/2022 3/31/2022 LIABILITIES AND EQUITY Debt, net $ 1,461,584 $ 1,485,402 $ 1,486,783 $ 2,529,228 $ 2,531,067 Restricted reserves 627 627 7,150 8,417 8,465 Interest rate swap liability — — — — 4,926 Distributions payable 5,164
Slide 13: NOI and Cash NOI Reconciliation by Segment
13 For the Quarter Ended For the Quarter Ended 3/31/2023 3/31/2022 (Unaudited, USD in thousands) Industrial Office Industrial and Office Total Other Total Portfolio Industrial Office Industrial and Other Total Other Total Portfolio Revenue $ 14,594 $ 39,189 $ 53,783 $ 13,190 $ 66,973 $ 15,500 $ 85,8
Slide 14: Same Store Cash NOI
14 1 The decrease in same store quarter-to-date Cash NOI of $2.5 million is primarily due to a $2.2 million rent concession related to a lease renewal. For the Quarter Ended (Unaudited, USD in thousands) 3/31/2023 3/31/2022 CASH NOI ALLOCATION � Industrial $ 12,394 $ 13,112 Office 29,396 64,709 Indu
Slide 15: Reconciliation of Net Income to FFO and AFFO
15 For the Quarter Ended (Unaudited, USD in thousands, except per share metrics) 3/31/2023 12/31/2022 9/30/2022 6/30/2022 3/31/2022 Reconciliation of Net Income to Funds From Operations (FFO) and Adjusted Funds From Operations (AFFO) GAAP NET (LOSS) INCOME $ 9,017 $ (248,142) $ (119,373) $ (76,599)
Slide 16: Reconciliation of Net Income to EBITDAre
16 For the Quarter Ended (Unaudited, USD in thousands) 3/31/2023 12/31/2022 9/30/2022 6/30/2022 3/31/2022 Reconciliation of Net income (loss) to EBITDAre Net (loss) income $ 9,017 $ (248,142) $ (119,373) $ (76,599) $ 2,730 Interest 17,014 16,501 24,283 22,366 21,666 Depreciation and amortization 31,
Slide 17: Capital Expenditures
17 For the Quarter Ended (Unaudited, USD in thousands) 3/31/2023 % of NOI1 12/31/2022 % of NOI1 9/30/2022 % of NOI1 6/30/2022 % of NOI1 3/31/2022 % of NOI1 Maintenance Capital Expenditures by segment: Industrial $ 83 0.2 % $ 358 0.6 % $ — — % $ — — % $ — — % Office — — 776 1.3 409 0.6 882 0.9 1,082
Slide 18: Debt & Capitalization
Debt & Capitalization
Slide 19: Capitalization and Debt Summary
19 1 Excludes the impact of fixed-rate swaps. 2 As of 9/28/22, the Secured Overnight Financing Rate ("SOFR" or "SOF rate") replaced LIBOR as the applicable reference rate for our variable rate debt. The amounts listed in this section are inclusive of the 4.80% SOF rate effective as of 3/31/23, plus
Slide 20: Net Debt and Debt Ratios
20 1 Unconsolidated Net debt is presented separately since PKST has no obligation to contribute capital to the unconsolidated joint venture and has no guarantee requirement related to the debt of the unconsolidated joint venture. 2 All Series A Preferred Shares were redeemed subsequent to quarter-en
Slide 21: Debt Composition
21 As of (Unaudited, USD in thousands) 3/31/2023 12/31/2022 9/30/2022 6/30/2022 3/31/2022 SECURED FIXED-RATE DEBT Mortgage borrowings on wholly-owned portfolio $ 518,930 $ 539,803 $ 541,689 $ 1,013,410 $ 1,015,816 Total Secured Fixed-Rate Debt 518,930 539,803 541,689 1,013,410 1,015,816 UNSECURED FL
Slide 22: Secured Debt Detail
22 (Unaudited, USD in thousands) SECURED DEBT Collateral Contractual Interest Rate Maturity Date Outstanding Balance INDUSTRIAL AND OFFICE Samsonite Mortgage Loan 6.08% 9/1/2023 $ 17,708 Pepsi Bottling Ventures Mortgage Loan 3.69% 10/1/2024 17,738 BOA II Loan 1 4.32% 5/1/2028 250,000 Total Industria
Slide 23: Debt Maturity Schedule
23 1 Represents the Samsonite mortgage loan. | 2 Represents the Highway 94 mortgage loan. | 3 Represents the Pepsi Bottling Ventures mortgage loan. | 4 Represents the AIG II mortgage loan. | 5 Represents the 2025 Term Loan. | 6 Represents the 2026 Term Loan. | 7 Represents the Revolving Line of Cred
Slide 24: Leasing Activity & Asset Management
Leasing Activity & Asset Management
Slide 25: Leasing Activity - Executed Leases
25 NEW AND RENEWAL LEASES Tenant / Property Location New Lease Start Date New Lease Expiration Date Term (Yrs) Square Feet Leasing Commissions $/ SF Tenant Improvement $/SF Starting Net Rent/ SF Prior Net Rent/SF Net Rent Change From Prior Lease OFFICE LEASING NEW LEASES GMH Capital Partners Phoenix
Slide 26: Portfolio Square Footage and Occupancy Changes
26 1 Occupancy changes reflect leasing activity commencing during the quarter. 2 Expiring square footage includes square footage for tenants who have signed renewal leases. 3 Retention rate: Renewal leases divided by expiring square footage. For the Quarter-Ended 3/31/2023 12/31/2022 9/30/2022 6/30/
Slide 27: Components of Net Asset Value
Components of Net Asset Value
Slide 28: Components of Net Asset Value
28 (Unaudited, USD in thousands) Annualized Base Rent Balance Sheet Components (cont'd) ABR Percentage of ABR LIABILITIES Industrial � � � Revolving credit facility and term loans2 $ 950,000 Investment grade1 $ 28,379 13.3 % Mortgages payable2 519,000 � Sub-investment grade1 15,096 7.1 Accrued tenan
Slide 29: Property Information
Property Information
Slide 30: Property Information - Industrial
30 USD in thousands, except annualized base rent / SF metrics Segment Property/Tenant Name Address Property Market Property State Building Square Feet Tenancy Type % Leased2 Property Sub Type Year Built/ Renovated1 Property WALT % of Total ABR3 1 Industrial RH 825 Rogers Road Stockton/Modesto CA 1,5
Slide 31: Property Information - Office
31 USD in thousands, except annualized base rent / SF metrics Segment Property / Tenant Name Address Property Market Property State Building Square Feet Tenancy Type Leased %2 Property Sub Type Year Built/ Renovated1 Property WALT3 % of Total ABR3 20 Office Southern Company 3525 & 3535 Colonnade Par
Slide 32: Property Information - Office (continued)
32 USD in thousands, except annualized base rent / SF metrics Segment Property/Tenant Name Address Property Market Property State Building Square Feet Tenancy Type % Leased2 Property Sub Type Year Built/ Renovated1 Property WALT3 % of Total ABR3 41 Office Occidental Petroleum 501 North Division Stre
Slide 33: Property Information - Other
33 USD in thousands, except annualized base rent / SF metrics Segment Property / Tenant Name Address Property Market Property State Building Square Feet Tenancy Type % Leased2 Property Sub- Type Year Built/ Renovated1 Property WALT3 % of Total ABR3 58 Other Wyndham Hotels & Resorts 22 Sylvan Way Nor
Slide 34: Portfolio Characteristics
Portfolio Characteristics
Slide 35: Lease Escalations by Segment
35 1 Weighted average rental increase is based on the remaining term of each lease as of March 31, 2023. Excludes leases with remaining term less than one year. Lease Escalation Frequency % Annualized Base Rent Wtd. Avg. Annual Growth Rate 1 Annually 86.5% 2.1% Every 5 Years 10.8 0.6 Other Frequenci
Slide 36: Top Tenants - Consolidated
36 Top 10 Tenants Tenant/Major Tenant Rating1 % of Annualized Base Rent2 WALT (years) 1 Keurig Dr. Pepper BBB 5.4% 6.6 2 Wood Group3 HY44 4.8 6.4 3 Southern Company Services BBB+ 4.3 21.0 4 LPL Holdings Baa35 4.0 13.6 5 Amazon3 AA 4.0 8.3 6 Freeport McMoRan Baa25 3.7 4.1 7 Maxar Technologies B+ 3.5
Slide 37: Top Tenants - Industrial and Office
37 Top 10 Tenants Tenant/Major Tenant Rating1 % of Annualized Base Rent2 WALT (years) 1 Keurig Dr. Pepper BBB 6.7% 6.6 2 Southern Company Services BBB+ 5.3 21.0 3 LPL Holdings Baa33 5.0 13.6 4 Amazon AA 4.9 8.3 5 Freeport McMoRan Baa23 4.6 4.1 6 Maxar Technologies B+ 4.4 7.3 7 RH HY24 4.3 7.4 8 McKe
Slide 38: Top Tenants - Industrial
38 Top 10 Tenants Tenant/Major Tenant Rating1 % of Annualized Base Rent2 WALT (years) 1 Amazon AA 17.5% 8.3 2 RH HY23 15.2 7.4 3 3M Company A14 10.1 3.6 4 Samsonite Ba24 8.5 1.7 5 Shaw Industries AA 6.9 10.0 6 PepsiCo A+ 6.6 5.3 7 Amcor BBB 5.5 9.6 8 Huntington Ingalls BBB- 5.3 4.8 9 Pepsi Bottling
Slide 39: Top Tenants - Office
39 Top 10 Tenants Tenant/Major Tenant Rating1 % of Annualized Base Rent2 WALT (years) 1 Keurig Dr. Pepper BBB 9.3% 6.6 2 Southern Company Services BBB+ 7.4 21.0 3 LPL Baa3 3 6.9 13.6 4 Freeport McMoRan Baa2 3 6.3 4.1 5 Maxar Technologies B+ 6.1 7.3 6 McKesson BBB+ 4.9 5.5 7 Wyndham Hotels & Resorts
Slide 40: Industry Concentration: Consolidated
40 Industry Concentration: Consolidated As of March 31, 2023,�2021 Top 10 Industries Top 20 Sub-Industries Industry % of Annualized Base Rent1 Sub-Industry % of Annualized Base Rent1 1 Capital Goods 16.1 % 1 Aerospace & Defense 10.8 % 2 Consumer Services 10.0 2 Soft Drinks 7.8 3 Materials 9.3 3 Oil
Slide 41: Industry Concentration: Industrial and Office
41 Industry Concentration: Industrial and Office As of March 31, 2023,�2021 Top 10 Industries Top 20 Sub-Industries Industry % of Annualized Base Rent1 Sub-Industry % of Annualized Base Rent1 1 Capital Goods 14.9 % 1 Aerospace & Defense 10.6 % 2 Materials 11.5 2 Soft Drinks 9.6 3 Food, Beverage & To
Slide 42: Industry Concentration: Industrial
42 Industry Concentration: Industrial As of March 31, 20232021 Top 8 Industries Top 14 Sub-Industries Industry % of Annualized Base Rent1 Sub-Industry % of Annualized Base Rent1 1 Capital Goods 22.8 % 1 Internet & Direct Marketing 17.5 % 2 E-Commerce 17.5 2 Homefurnishing Retail 15.2 3 Consumer Dura
Slide 43: Industry Concentration: Office
43 Industry Concentration: Office As of March 31, 2023 2021 Top 10 Industries Top 20 Sub-Industries Industry % of Annualized Base Rent1 Sub-Industry % of Annualized Base Rent1 1 Materials 12.7 % 1 Aerospace & Defense 11.8 % 2 Capital Goods 11.8 2 Soft Drinks 9.3 3 Health Care Equipment & Services 11
Slide 44: Market Concentration: Consolidated
44 Geographic Distribution (% of Annualized Base Rent1) Market Concentration: Consolidated As of March 31, 2023 (USD in thousands) Top 10 Markets (% of Annualized Base Rent) Markets Annualized Base Rent % of Annualized Base Rent1 1 Phoenix $ 22,144 10.4 % 2 Northern New Jersey 19,210 9.0 3 Boston 16
Slide 45: Market Concentration: Industrial and Office
45 Geographic Distribution (% of Annualized Base Rent1) Market Concentration: Industrial and Office As of March 31, 2023 (USD in thousands) Top 10 Markets (% of Annualized Base Rent) Markets Annualized Base Rent % of Annualized Base Rent1 1 Phoenix $ 19,420 11.2 % 2 Boston 16,834 9.7 3 Denver 10,523
Slide 46: Market Concentration: Industrial
46 Geographic Distribution (% of Annualized Base Rent1) Market Concentration: Industrial As of March 31, 2023 (USD in thousands) Top 10 Markets (% of Annualized Base Rent) Markets Annualized Base Rent % of Annualized Base Rent1 1 Chicago $ 8,719 18.0 % 2 Columbus 7,557 15.6 3 Stockton/Modesto 7,340
Slide 47: Market Concentration: Office
47 Geographic Distribution (% of Annualized Base Rent1) Market Concentration: Office As of March 31, 2023 (USD in thousands) Top 10 Markets (% of Annualized Base Rent) Markets Annualized Base Rent % of Annualized Base Rent1 1 Phoenix $ 19,420 15.6 % 2 Boston 16,834 13.5 3 Denver 10,523 8.5 4 Birming
Slide 48: Lease Expirations: Consolidated
48 Lease Expirations: Consolidated As of March 31, 2023 (USD in thousands) Lease Maturity Schedule (by Annualized Base Rent) 1 Based on annualized base rent for wholly-owned portfolio. 2 Excludes approximately 2K of SF related to cafes. $4,422 $24,296 $9,254 $12,723 $14,179 $19,275 $34,020 $25,932 $
Slide 49: Lease Expirations: Industrial and Office
49 Lease Expirations: Industrial and Office As of March 31, 2023 (USD in thousands) Lease Maturity Schedule (by Annualized Base Rent) $2,312 $5,076 $4,587 $10,031 $14,179 $16,262 $26,755 $24,502 $19,494 $12,923 $36,547 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 >2032 Expiring Leases Year Indu
Slide 50: Lease Expirations: Industrial
50 Lease Expirations: Industrial As of March 31, 2023 (USD in thousands) Lease Maturity Schedule (by Annualized Base Rent) $— $4,094 $1,358 $4,902 $— $8,534 $1,482 $7,340 $8,451 $4,555 $7,623 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 >2032 Expiring Leases Year Leases Approx. Square Feet Annu
Slide 51: Lease Expirations: Office
51 Lease Expirations: Office As of March 31, 2023 (USD in thousands) Lease Maturity Schedule (by Annualized Base Rent) $2,312 $982 $3,229 $5,129 $14,179 $7,728 $25,273 $17,162 $11,043 $8,368 $28,924 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 >2032 Expiring Leases Year Leases Approx. Square Fe
Slide 52: Lease Expirations: Other
52 Lease Expirations: Other As of March 31, 2023 (USD in thousands) Lease Maturity Schedule (by Annualized Base Rent1) $2,110 $19,220 $4,667 $2,692 $— $3,013 $7,265 $1,430 $— $— $293 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 >2032 Expiring Leases Year Total Approx. Square Feet Annualized Bas
Slide 53: Market Concentrations: Other
53 Geographic Distribution (% of Annualized Base Rent1) Market Concentrations: Other As of March 31, 2023 (USD in thousands) Top 10 Markets (% of Annualized Base Rent) Markets Annualized Base Rent % of Annualized Base Rent1 1 Northern New Jersey $ 9,277 22.8 % 2 Houston 8,235 20.2 3 Charlotte 3,495
Slide 54: Notes & Definitions
Notes & Definitions
Slide 55: Notes & Definitions
55 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 March 31, 2023, unless otherwise specified, multiplied by 12 months. For
Slide 56: Notes & Definitions (continued) - FFO and AFFO
56 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 operating
Slide 57: Notes & Definitions (continued) - FFO and AFFO
57 Notes & Definitions (continued) FFO and AFFO - cont. Management believes that AFFO is a beneficial indicator of its ongoing portfolio performance and ability to sustain its current distribution level. More specifically, AFFO isolates the financial results of the Company's operations. AFFO, howeve
Slide 58: Notes & Definitions (continued) - NOI, Cash NOI, Same Store Cash NOI
58 Notes & Definitions (continued) Net Operating Income (NOI), Cash NOI, and Same Store Cash NOI NOI is a non-GAAP measure which includes the revenue and expense directly attributable to our real estate properties. NOI is calculated as total revenue from real estate operations less property expenses
Slide 59: Notes & Definitions - Normalized EBITDAre
59 Notes & Definitions Normalized EBITDAre We use Normalized EBITDAre as 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 nonroutine items
Slide 60: Notes & Definitions (continued)
60 Notes & Definitions (continued) Operating Margin NOI/Revenue. Per Share Per share data represents basic and diluted shares and reflects the impact of the Company's one-for-nine reverse share split. Pro Rata Pro rata represents the Company's share of the unconsolidated joint venture. Same Store Sa
Slide 61: Disclaimer on Forward-Looking Statements
61 Disclaimer Disclaimer on Forward-Looking Statements This document contains statements that constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (
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