Brandywine Realty Trust · NYSE:BDN
Brandywine Realty Trust — Q2 2023 Earnings Presentation
44 slides from Brandywine Realty Trust's earnings presentation, Jul 26, 2023
Slide 1: Second Quarter Supplemental Package
| WN Wl | @ brandy win SUPPLEMENTAL PACKAGE SECOND QUARTER
Slide 2: Table of Contents
Table of Contents Page Executive Summary 1 2023 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 Tenants
Slide 3: Q2 2023 Executive Summary
Q2 2023 Executive Summary (unaudited in millions, except square footage and acreage) BRANDYWINE REALTY TRUST | Page 1 Quarterly Highlights Joint Venture Activity On June 2, 2023 we refinanced the mortgage debt for our Commerce Square Venture, through a new $220.0 million mortgage loan. The new mor
Slide 4: Q2 2023 Executive Summary: Wholly-Owned Leasing Highlights
Q2 2023 Executive Summary (unaudited in thousands, except per share data and square footage) BRANDYWINE REALTY TRUST | Page 2 Wholly-Owned Leasing Highlights Q2 2023 Q1 2023 Quarter end occupancy 89.4% 89.0% Leased as of July 19, 2023 / April 14, 2023 91.1% 90.4% New leases executed in quarter (sq f
Slide 5: Business Plan Trend Line
Business Plan Trend Line (unaudited) BRANDYWINE REALTY TRUST | Page 3 2023 Business Plan as of Business Plan Component 07/19/2023 4/14/2023 Original Speculative Revenue / SF $17.0 - $19.0 MM / 1.1M SF $17.0 - $19.0 MM / 1.1M SF $17.0 - $19.0 MM / 1.1M SF Executed / SF $16.1 MM / 787K SF $12.8 MM / 6
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 Metro (US Census Bureau and AustinTexas.gov) Opportunity Austin reported 2022 saw the creation of 14K new jobs a
Slide 7: Philadelphia CBD Marketplace
Philadelphia CBD Marketplace (unaudited) BRANDYWINE REALTY TRUST | Page 5 Philadelphia Marketplace; Stability with Life Science Momentum Highlights 5x increase in early-stage life science venture capital funding from 2018-2022. 450,000 students attend institutions in the greater Philadelphia reg
Slide 8: Our Opportunity: Life Sciences
Our Opportunity: Life Sciences (unaudited) BRANDYWINE REALTY TRUST | Page 6 • Location: Cira Centre • Size (SF): 50,000 SF • Capacity: 240 Benches • Leased: 98% • Manager: PA Biotech Nationally: Annual rent growth is strong in the life science sector, growing by double digits in 9 of the top 15 ma
Slide 9: Development Summary
Development Summary (unaudited, in thousands, except square feet) BRANDYWINE REALTY TRUST | Page 7 Remaining Remaining Amount equity to be equity to be Completion Stabilization Square Total Project Equity Debt Projected Leased % @ Development (% owned) Location Type funded at funded by funded by Dat
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: One Uptown
Development Activity (unaudited) BRANDYWINE REALTY TRUST | Page 9 One Uptown (Uptown ATX - Block A) Project Overview Project Schedule A mixed-use development featuring a 14-story office Joint Venture Formation: Q4 2021 tower comprised of one level of below-grade parking, Construction Commencem
Slide 12: Development Activity: 3025 JFK Boulevard
Development Activity (unaudited) BRANDYWINE REALTY TRUST | Page 10 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 Pennsylvania.
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 SF for IBM. Once redeveloped, the proje
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 SF development of life science, research and academic facilities, office, residential, retail and hospitality space
Slide 15: Balance Sheet Liquidity: 2023 Capital Plan
Balance Sheet Liquidity (unaudited) BRANDYWINE REALTY TRUST | Page 13 2023 Capital Plan USES Projected ($ in millions) 3Q23 - 4Q23 $600.0 million currently available on our line of credit excluding Dividends $66 $42.4M in letters of credit. Contributions to Joint Venture, net 24 Revenue Maintainin
Slide 16: Q2 2023 Land Inventory
Q2 2023 Land Inventory (unaudited) BRANDYWINE REALTY TRUST | Page 14 Estimated Development Square Feet Acres Pre-Development Projects Philadelphia CBD (a) (b) 5.1 4,147,000 Pennsylvania Suburbs 17.2 510,000 Austin, Texas (d) 64.6 5,598,000 Total Pre-Development Projects 86.9 10,255,000 (f) Repositio
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 2023 PROPERTY ACTIVITY - None 2022 PROPERTY ACTIVITY LAND ACQUISITION 631 Park Avenue King of Prus
Slide 18: YTD 2023 Net Operating Income Composition
YTD 2023 Net Operating Income Composition (unaudited) BRANDYWINE REALTY TRUST | Page 16 YTD NOI - Wholly Owned (a) YTD NOI - Including JV's Total Core Portfolio NOI: $142.2 MM Total NOI: $163.3 MM 89% of NOI from our Core Markets (b) 87% of NOI from our Core Markets (b) MAP and Other 5% Mid-
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 6/30/2023 # of Wholly Region Owned Properties Total % of Total 2023 2024 Q2 2023 % of Total YTD 2023 % of To
Slide 20: Leasing Activity-Core Portfolio
Leasing Activity-Core Portfolio (1) (unaudited) BRANDYWINE REALTY TRUST | Page 18 Six Months Ended Three Months Ended 06/30/2023 06/30/2022 06/30/2023 03/31/2023 12/31/2022 09/30/2022 06/30/2022 03/31/2022 Total Property Count 72 74 72 72 72 72 74 77 Total Square Feet 12,823,542 12,996,825 12,823,54
Slide 21: Leasing Activity-Core Portfolio (rent growth)
Leasing Activity-Core Portfolio (1) (unaudited) BRANDYWINE REALTY TRUST | Page 19 Six Months Ended Three Months Ended 06/30/2023 06/30/2022 06/30/2023 03/31/2023 12/31/2022 09/30/2022 06/30/2022 03/31/2022 New Leases/Expansions (2): Cash Rent Growth Expiring Rate $ 37.53 $ 38.66 $ 31.65 $ 44.23 $ 34
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 New Remaining % of Total Expirations including % of Total Per Square Per Square Initial Expiring Sold / in Curr
Slide 23: Regional Lease Expiration Analysis
Regional Lease Expiration Analysis (1) (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 21 2023 2024 2025 2026 2027 2028 2029 Thereafter Total Philadelphia CBD Square feet expiring (Net of Acquired/Sold) 157 282 325 172 312 223 870 2,195 4,536 Net leasing activity (60) 19 (10) 11 12 2 18 16
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
Q2 2023 Portfolio Tenant Mix (unaudited, by square footage) BRANDYWINE REALTY TRUST | Page 23 Misc. Services - 4% Engineering & Management Health Services - 3% Services - 9% Transportation/Public Utilities - 5% Banking - 5% Real Estate -6% Other - 2% Wholesale Trade - 3% Finance - 9% Manufacturing -
Slide 26: Income Statements
Income Statements (unaudited, in thousands, except share data) BRANDYWINE REALTY TRUST | Page 24 Six Months Ended Three Months Ended 06/30/2023 06/30/2022 06/30/2023 03/31/2023 12/31/2022 09/30/2022 06/30/2022 03/31/2022 Revenue Rents $ 238,981 $ 232,798 $ 118,133 $ 120,848 $ 120,572 $ 117,481 $ 116
Slide 27: Q2 2023 Same Store Net Operating Income
Q2 2023 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 Second Quarter Second Quarter Second Quarter Second Quarter Second Quarter S
Slide 28: YTD 2023 Same Store Net Operating Income
YTD 2023 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 Six Months Ended Three Months Ended 06/30/2023 06/30/2022 06/30/2023 03/31/2023 12/31/2022 09/30/2022 06/30/2022 03/31/2022 Net income (loss) $ (18,013) $ 10,752 $ (12,737) $ (5,276) $ 29,762 $ 13,478 $ 4,6
Slide 30: Funds from Operations
Funds from Operations (unaudited, in thousands, except share data) BRANDYWINE REALTY TRUST | Page 28 Six Months Ended Three Months Ended 06/30/2023 06/30/2022 06/30/2023 03/31/2023 12/31/2022 09/30/2022 06/30/2022 03/31/2022 Net income (loss) attributable to common shareholders $ (18,229) $ 10,484 $
Slide 31: Cash Available for Distribution
Cash Available for Distribution (unaudited, in thousands, except share data) BRANDYWINE REALTY TRUST | Page 29 Six Months Ended Three Months Ended 06/30/2023 06/30/2022 06/30/2023 03/31/2023 12/31/2022 09/30/2022 06/30/2022 03/31/2022 Funds from operations available to common share and unit holders
Slide 32: Balance Sheets
Balance Sheets (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 30 06/30/2023 03/31/2023 12/31/2022 09/30/2022 06/30/2022 03/31/2022 Assets Real estate investments Operating properties $ 3,597,211 $ 3,632,495 $ 3,617,240 $ 3,587,083 $ 3,545,102 $ 3,517,995 Accumulated depreciation (1,125,145
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 06/30/2023 03/31/2023 12/31/2022 09/30/2022 06/30/2022 03/31/2022 High closing price of common shares $ 4.66 $ 7.08 $ 7.16 $ 9.74 $ 14.15 $ 14.69 Low closing pric
Slide 34: Balance Sheet Information/Debt Statistics
Balance Sheet Information/Debt Statistics (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 32 06/30/2023 03/31/2023 12/31/2022 09/30/2022 06/30/2022 03/31/2022 Fixed rate debt $ 1,745,000 $ 1,745,000 $ 1,554,301 $ 1,500,000 $ 1,500,000 $ 1,500,000 Fixed rate debt (variable rate debt swapped
Slide 35: Debt Schedules
Debt Schedules (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 33 06/30/2023 Maturity Stated Effective 06/30/2023 12/31/2022 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 (6) (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 34 Unsecured Debt Secured Debt Maturity Schedule Percent of Weighted Bank Facilities Senior Notes Term Loan Total By Year Debt Maturing Average Interest (7) 2023 - - - - 0.0% 0.000% 2024 - 350,000 - 350,000 16.3% 3.781% 202
Slide 37: Debt Maturities (chart)
Debt Maturities (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 35 $800,000 Bank Facilities $700,000 $600,000 Unsecured Notes $500,000 Secured Debt $400,000 $300,000 $200,000 $100,000 $0 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 Thereafter % of total 0.0% 16.3% 3.3% 0.0% 32.7% 27.8%
Slide 38: Debt Covenant Compliance
Debt Covenant Compliance (unaudited, in millions) BRANDYWINE REALTY TRUST | Page 36 Revolving Credit Agreement dated July 17, 2018 and Second Amended and Restated Credit Agreement dated June 30, 2022 Covenant Required 6/30/2023 3/31/2023 12/31/2022 9/30/2022 6/30/2022 3/31/2022 Fixed Charge Coverage
Slide 39: JV Property Overview
JV Property Overview (unaudited, in thousands, except square footage) BRANDYWINE REALTY TRUST | Page 37 As of June 30, 2023 BDN's Share BDN Net Investment Percent BDN Operating Unconsolidated Real Initial Project @ Number of Net Operating Rentable Percent Leased Ownership Income Rentable Square Esta
Slide 40: JV Debt Schedule
JV Debt Schedule (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 38 06/30/2023 BDN BDN Ownership Stated Share Debt Instrument Percentage Maturity Date Rate (1) 06/30/2023 Balance of Venture Debt Office Properties Commerce Square JV (2) 78% June 5, 2028 7.7875% $ 220,000 $ 171,600 MAP Ventur
Slide 41: JV Debt Summary
JV Debt Summary (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 39 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 184 180,763 180,947 90,474
Slide 42: Q2 2023 Analyst and Company Information
Q2 2023 Analyst and Company Information BRANDYWINE REALTY TRUST | Page 40 Equity Research Coverage BofA Merrill Lynch Green Street Advisors Raymond James & Associates Camille Bonnel Dylan Burzinski Bill Crow 416-369-2140 949-640-8780 727-567-2594 Citigroup JP Morgan Truist Securities Michael A. Grif
Slide 43: Q2 2023 Disclaimers and Other Information
Q2 2023 Disclaimers and Other Information BRANDYWINE REALTY TRUST | Page 41 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 44: Disclaimers and Other Information (continued)
Q2 2023 Disclaimers and Other Information (continued) BRANDYWINE REALTY TRUST | Page 42 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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