Brandywine Realty Trust · NYSE:BDN
Brandywine Realty Trust — Q1 2020 Earnings Presentation
42 slides from Brandywine Realty Trust's earnings presentation, Apr 23, 2020
Slide 1: Supplemental Information Package First Quarter 2020
brandywine REALTY # TRUST SUPPLEMENTAL INFORMATION PACKAGE #BDNSTRONG 2020 FIRST QUARTER BDN NYSE
Slide 2: Table of Contents
Table of Contents Page Executive Summary 1 2020 Business Plan Trend Line 3 2020 Business Plan Highlights 4 Sources and Uses of Cash and Cash Equivalents 5 Regional Property Overviews 6 Net Operating Income Composition 9 Development Activity 10 Land Inventory 14 Property Activity 15 Leasing Activity
Slide 3: Q1 2020 Executive Summary: Transaction Highlights
Q1 2020 Executive Summary (unaudited in millions, except square footage and acreage) BRANDYWINE REALTY TRUST | Page 1 Transaction Highlights 155 King of Prussia Rd Rendering | 150,000 SF | Radnor, PA Broadmoor, Block A Rendering | 320,000 SF Office | Austin, TX 650 Park Ave Rendering | 100,000 SF |
Slide 4: Q1 2020 Executive Summary: Leasing and Operating Metrics
Q1 2020 Executive Summary (unaudited in thousands, except per share data and square footage) BRANDYWINE REALTY TRUST | Page 2 Leasing Highlights Q1 2020 Q4 2019 Quarter end occupancy 93.3% 93.0% Leased as of April 17, 2020 / January 23, 2020 95.3% 95.5% Leases executed in quarter (sq ft) 795,639 566
Slide 5: Business Plan Trend Line
Business Plan Trend Line (unaudited) BRANDYWINE REALTY TRUST | Page 3 2020 Business Plan as of Business Plan Component 4/17/2020 1/23/2020 10/11/2019 Speculative Revenue $26.0 MM $31.0 MM $31.0 MM Executed 96% 73% 50% Projected Tenant Retention (SF) 50% 50% 50% (3) Same Store NOI Increase • GAAP 1.0
Slide 6: 2020 Business Plan Highlights
2020 Business Plan Highlights (unaudited) BRANDYWINE REALTY TRUST | Page 4 Strong Core Fundamentals 2020 Speculative Leasing (Wholly Owned) Our 2020 business plan fundamentals reflect both the strength of our core markets and our strong Square Feet Targeted Executed Remaining position in those marke
Slide 7: 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 5 Sources and Uses of Cash Q1 2020 Q4 2019 Q3 2019 Q2 2019 Q1 2019 Cash and cash equiv. and restricted cash as of Beg. of Quarter $ 91,170 $ 30,521 $ 31,980 $ 14,803 $ 23,211 Cash flow
Slide 8: Regional Property Overview
Regional Property Overview (unaudited, in thousands, except square footage) BRANDYWINE REALTY TRUST | Page 6 Net Operating Income at # of Wholly Owned Square Feet % Occupied % Leased (1) Remaining Expirations 3/31/2020 Region Properties Total % of Total 2020 2021 Q1 2020 % of Total Philadelphia CBD
Slide 9: Austin Marketplace
Austin Marketplace (unaudited) BRANDYWINE REALTY TRUST | Page 7 (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. The Austin office market has robust construction activity within the BDN Peer Group at ove
Slide 10: Philadelphia Marketplace; Upward Trajectory Continues
Philadelphia CBD Marketplace (unaudited) BRANDYWINE REALTY TRUST | Page 8 Philadelphia Marketplace; Upward Trajectory Continues Highlights Vacancies in Philadelphia CBD currently holding near 10%, with rent gains outpacing Philadelphia ranks No. 3 in the U.S. for the amount of funding it receive
Slide 11: Q1 2020 Net Operating Income Composition
Q1 2020 Net Operating Income Composition (unaudited) BRANDYWINE REALTY TRUST | Page 9 YTD NOI - Wholly Owned (a) YTD NOI - Including JV's Total Core Portfolio NOI: $83.3 MM Total NOI: $87.8 MM 90.0% of NOI from our Core Markets (b) 88.0% of NOI from our Core Markets (b) MAP Venture Other 1%
Slide 12: Development Summary
Development Summary (unaudited, in thousands, except square feet) BRANDYWINE REALTY TRUST | Page 10 Equity Amount Remaining to be Leased % @ Completion Stabilization Total Project Debt Projected Development (% owned) Location Type Square Feet Capitalization funded at funded at April 17, Date Date Co
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: Schuylkill Yards, Philadelphia
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: Development Activity: Broadmoor, Austin
Development Activity (unaudited) BRANDYWINE REALTY TRUST | Page 13 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 16: Q1 2020 Land Inventory
Q1 2020 Land Inventory (unaudited) BRANDYWINE REALTY TRUST | Page 14 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 17: Property Activity
Property Activity (unaudited, in thousands, except square footage and acreage) BRANDYWINE REALTY TRUST | Page 15 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 18: Leasing Activity-Core Portfolio
Leasing Activity-Core Portfolio (1) (unaudited) BRANDYWINE REALTY TRUST | Page 16 Three Months Ended 03/31/2020 12/31/2019 09/30/2019 06/30/2019 03/31/2019 Total Property Count 89 90 91 92 92 Total Square Feet 15,978,965 16,110,042 16,168,629 16,379,261 16,379,261 Occupancy %: 93.3% 93.0% 93.2% 93.0
Slide 19: Leasing Activity-Core Portfolio: Rent Growth
Leasing Activity-Core Portfolio (1) (unaudited) BRANDYWINE REALTY TRUST | Page 17 Three Months Ended 03/31/2020 12/31/2019 09/30/2019 06/30/2019 03/31/2019 New Leases/Expansions (2): Cash Rent Growth Expiring Rate $ 34.78 $ 29.98 $ 31.96 $ 33.77 $ 32.07 New Rate $ 39.06 $ 30.99 $ 33.62 $ 36.69 $ 35.
Slide 20: Lease Expiration Analysis
Lease Expiration Analysis (unaudited) BRANDYWINE REALTY TRUST | Page 18 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 21: Regional Lease Expiration Analysis
Regional Lease Expiration Analysis (1) (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 19 2020 2021 2022 2023 2024 2025 2026 Thereafter Total Philadelphia CBD Square feet expiring (Net of Acquired/Sold) 297 639 663 219 418 235 166 3,349 5,986 Net leasing activity (22) (114) 106 3 - 26 6 46
Slide 22: Top Twenty Tenants
Top Twenty Tenants (unaudited, annualized rent in thousands) BRANDYWINE REALTY TRUST | Page 20 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 23: Q1 2020 Portfolio Tenant Mix
Q1 2020 Portfolio Tenant Mix (by square footage) BRANDYWINE REALTY TRUST | Page 21 Misc. Services - 5% Health Services - 2% Transportation/Public Engineering & Utilities - 3% Management Services - 11% Real Estate - 5% Other - 3% Wholesale Trade - 3% Finance - 14% Manufacturing - 8% Business Services
Slide 24: Income Statements
Income Statements (unaudited, in thousands, except share data) BRANDYWINE REALTY TRUST | Page 22 Three Months Ended 03/31/2020 12/31/2019 09/30/2019 06/30/2019 03/31/2019 Revenue Rents $ 139,204 $ 139,552 $ 139,228 $ 137,787 $ 138,098 Third party mgt. fees, labor reimbursement and leasing 4,954 5,58
Slide 25: Q1 2020 Same Store Net Operating Income
Q1 2020 Same Store Net Operating Income (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 23 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 26: EBITDA and EBITDA Coverage Ratios
EBITDA and EBITDA Coverage Ratios (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 24 Three Months Ended 03/31/2020 12/31/2019 09/30/2019 06/30/2019 03/31/2019 Net income (loss) $ 8,087 $ 16,874 $ 6,820 $ 6,252 $ 4,583 Add (deduct): Net (gain) loss on disposition of real estate (2,586) - (35
Slide 27: Funds from Operations
Funds from Operations (unaudited, in thousands, except share data) BRANDYWINE REALTY TRUST | Page 25 Three Months Ended 03/31/2020 12/31/2019 09/30/2019 06/30/2019 03/31/2019 Net income (loss) attributable to common shareholders $ 7,891 $ 16,676 $ 6,679 $ 6,112 $ 4,404 Add (deduct): Net income (loss
Slide 28: Cash Available for Distribution
Cash Available for Distribution (unaudited, in thousands, except share data) BRANDYWINE REALTY TRUST | Page 26 Three Months Ended 03/31/2020 12/31/2019 09/30/2019 06/30/2019 03/31/2019 Funds from operations available to common share and unit holders $ 61,390 $ 67,033 $ 64,023 $ 62,215 $ 60,076 Add (
Slide 29: Balance Sheets
Balance Sheets (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 27 03/31/2020 12/31/2019 09/30/2019 06/30/2019 03/31/2019 Assets Real estate investments Operating properties $ 4,004,118 $ 4,006,459 $ 3,995,228 $ 4,030,605 $ 4,014,260 Accumulated depreciation (992,997) (973,318) (944,994) (94
Slide 30: Liquidity, Leverage and Market Capitalization
Liquidity, Leverage and Market Capitalization (unaudited, in thousands, except shares and per share data) BRANDYWINE REALTY TRUST | Page 28 03/31/2020 12/31/2019 09/30/2019 06/30/2019 03/31/2019 High closing price of common shares $ 16.24 $ 15.75 $ 15.18 $ 16.13 $ 16.14 Low closing price of common s
Slide 31: Balance Sheet Information/Debt Statistics
Balance Sheet Information/Debt Statistics (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 29 03/31/2020 12/31/2019 09/30/2019 06/30/2019 03/31/2019 Fixed rate debt $ 1,813,492 $ 1,815,437 $ 1,617,363 $ 1,619,270 $ 1,621,160 Fixed rate debt (variable rate debt swapped to fixed rate) 275,774
Slide 32: Debt Schedules: Unsecured Notes
Debt Schedules (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 30 03/31/2020 Maturity Stated Effective 03/31/2020 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 33: Debt Schedules: Mortgage Notes Payable
Debt Schedules (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 31 03/31/2020 Maturity Stated Effective 03/31/2020 12/31/2019 Debt Instrument Percent of total Date Rate (1) Rate (1) Balance Balance indebtedness Mortgage notes payable Two Logan Square August 1, 2020 3.980% 3.980% $ 80,667 $ 8
Slide 34: Debt Maturities
Debt Maturities (6) (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 32 Secured Debt Unsecured Debt Maturity Schedule Scheduled Balloon Percent of Weighted Bank Facilities Senior Notes Total By Year Amortization Payments Debt Maturing Average Interest (7) 2020 4,760 80,521 $ - - $ 85,281 3.9
Slide 35: Debt Maturities Chart
Debt Maturities (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 33 $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 3.9% 0.7% 14.0% 25.4% 1
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 3/31/2020 12/31/2019 09/30/2019 06/30/2019 03/31/2019 Fixed Charge Coverage Rati
Slide 37: JV Property Overview
JV Property Overview (unaudited, in thousands, except square footage) BRANDYWINE REALTY TRUST | Page 35 As of March 31, 2020 BDN's Share BDN Net Net Gross Asset Investment Operating BDN Operating Unconsolidated Real Project Value Value @ @ Number of Income Rentable Percent Percent Ownership Income R
Slide 38: JV Debt Schedule
JV Debt Schedule (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 36 BDN Ownership Stated 03/31/2020 BDN Share Debt Instrument Percentage Maturity Date Rate (1) 03/31/2020 Balance of Venture Debt Office Properties Rockpoint JV (2) 15% March 29, 2024 (2) $ 207,302 $ 31,095 MAP Venture (3) 50%
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) 2020 $ - $ - $ - $ - - 0.0% 0.0
Slide 40: Q1 2020 Analyst and Company Information
Q1 2020 Analyst and Company Information BRANDYWINE REALTY TRUST | Page 38 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 41: Q1 2020 Disclaimers and Other Information
Q1 2020 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 2020 Disclaimers and Other Information (continued)
Q1 2020 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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