Piedmont Realty Trust, Inc. · NYSE:PDM
Piedmont Realty Trust — Piedmont Office Realty Trust — Investor Presentation (September 2009)
38 slides from Piedmont Realty Trust's investor presentation, Sep 22, 2009
Slide 1: Corporate Presentation
1 Corporate Presentation Donald A. Miller, CFA President & CEO Exhibit 99.1
Slide 2: What Piedmont Wants You To Know
What Piedmont Wants You To Know • The points made in this presentation represent the intentions of Piedmont’s management team as of the date of the presentation given. • Uncertainties in the regulatory, economic, and real estate markets may adversely affect the company’s ability to meet its objectiv
Slide 3: Company history and milestones timeline
[= Changed name - Liquidity event extension {from Wells REIT lapproved {to Piedmont - Extended for up to 3 years ‘Closed fourth and final offering ‘$4.7bn of equity raised (including DRP proceeds) ete from January 30, 2005 Advisor internalization -76 employees moved from [Acquired $4.9 bilion of Cla
Slide 4: Portfolio Characteristics
Portfolio Characteristics As of June 30, 2009 Square Feet (in thousands) 21,012 # of Properties Weighted Average Lease Term Remaining (years) 5.5 % Leased 90% % Leased – Office Building Industry Average 83% Leverage Ratio (estimated NAV basis) 35% Leverage Ratio – Publicly Traded REIT Office Average
Slide 5: Board of Directors
Board of Directors Back row from left to right: Jeff Swope (Managing Partner of Champion Partners, LTD, a nationwide real estate developer), Bill Keogler (Retired, member of board of Robinson Humphrey & chairman of Keogler, Morgan & Co., a brokerage firm), Wes Cantrell (Retired CEO, Lanier Worldwide
Slide 6: Senior Management
Senior Management Carroll A. (Bo) Reddic, IV EVP, Real Estate Operations Donald A. Miller, CFA President & CEO Robert E. Bowers CFO Raymond L. Owens EVP, Capital Markets Laura P. Moon Chief Accounting Officer
Slide 7: Property Management Offices
Property Management Offices New Hampshire W. Virginia Maine Rhode Island Connecticut Manhattan / L.I. New Jersey Delaware Maryland D.C. Massachusetts Vermont New York Pennsylvania N.Carolina Virginia Washington Oregon California Nevada Utah Arizona Idaho Montana Wyoming Colorado New Mexico Tennessee
Slide 8: Foundations of Conservative Real Estate Investment Strategy
Foundations of Conservative Real Estate Investment Strategy • High-quality properties • Real estate diversification • Lower leverage • Stable income stream
Slide 9: Representative Washington, D.C. Properties
Piedmont Office Realty Trust Representative Washington, D.C. Properties One & Two Independence Square Washington D.C. 1201 Eye Street Washington D.C. 4250 N. Fairfax Drive Arlington, VA Piedmont Pointe I & II 6720 Rockledge Drive Bethesda, MD Lockheed Martin I & II 9200 Corporate Boulevard Rockville
Slide 10: Representative NY/North East Metropolitan Properties
Piedmont Office Realty Trust Representative NY/North East Metropolitan Properties 200 & 400 Crossing Boulevard Bridgewater, NJ Nine Polito Avenue Lyndhurst, NJ 60 Broad Street New York, NY 1901 Market Street Philadelphia, PA One Brattle Square Cambridge, MA
Slide 11: Representative Chicago Properties
Piedmont Office Realty Trust Representative Chicago Properties 35 W. Wacker Drive Chicago, IL Windy Point I & II 1600 McConnor Parkway Schaumburg, IL AON Center 200 East Randolph Drive Chicago, IL Two Pierce Place Itasca, IL
Slide 12: Representative Southern Region Properties
Piedmont Office Realty Trust Representative Southern Region Properties Las Colinas Corporate Center I & II 6363 North State Hwy. 161 Irving, TX 6011 & 6021 Connection Drive Irving, TX Braker Pointe III 10801 North MoPac Expressway Austin, TX Glenridge Highlands II 5565 Glenridge Connector Atlanta, G
Slide 13: Representative California Properties
Piedmont Office Realty Trust Representative California Properties 1055 East Colorado Boulevard Pasadena, CA Nestle 800 North Brand Boulevard Glendale, CA 1901 Main Street Irvine, CA 26200 Enterprise Way Lake Forest, CA 675 Placentia Avenue Brea, CA
Slide 14: Financial Highlights
Financial Highlights (In Millions) FY2006 FY2007 FY2008 6 mo’09 Rental Income $431 $442 $455 $225 Tenant Reimbursement Other Revenues, Continuing Ops 593 622 Property Ops Expenses -198 -212 -221 -114 Net Int, Depr & Amortization -222 -230 -236 -116 Other Expenses - - 39 - - Income, Continuing Ops 11
Slide 15: Tenant Diversification (as of June 30, 2009)
Tenant Diversification (as of June 30, 2009) Tenant Base ** Various expirations ranging from March 2011 to May 2018 Rating is for parent company, Publicis Groupe SA Kirkland & Ellis is ranked by The America Lawyer’s AmLaw Rankings Winston & Strawn is ranked by The America Lawyer’s AmLaw Rankings Rat
Slide 16: Real Estate Diversification
16 Real Estate Diversification
Slide 17: Geographic Diversification
25% 19% 17% 6% 6% 5% 4% 4% 3% 2% 2% 1% 1% 1% 4% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0% 22.0% 24.0% 26.0% 28.0% 30.0% Geographic Diversification Percentage of annualized gross rental revenues (as of June 30, 2009)
Slide 18: Industry Diversification
Industry Diversification Percentage of annualized gross rental revenues (as of June 30, 2009) for all industries representing 3% or greater
Slide 19: Lease Expiration Schedule
4% 9% 16% 19% 12% 8% 7% 5% 2% 5% 13% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% 12.0% 13.0% 14.0% 15.0% 16.0% 17.0% 18.0% 19.0% 20.0% Lease Expiration Schedule Percentage of annualized gross rental revenues (as of June 30, 2009)
Slide 20: sili
sili BERMONT
Slide 21: Capital Structure/Risk Ratios
Capital Structure/Risk Ratios As of June 30, 2009 Leverage 35% Enterprise Value (1) $5.1 b Equity (1) $3.5 b Unsecured Debt $0.4 b Secured Debt $1.2 b Total Debt $1.6 b Percentage of Estimated Value of Assets Unencumbered (2) 47% Using Dec. 31, 2008’s valuation Excludes eight unconsolidated joint-ve
Slide 22: Leverage Ratios
Leverage Ratios Piedmont (Based on Dec. 31, estimated NAV of $7.40 per share) 35% Publicly Traded REIT Office Sector Average ² 51% All Publicly Traded REIT Sectors Average ² 48% Ratios Fixed Charge Coverage Ratio 4.9 Interest Expense Coverage 5.2 Ratings: Standard & Poors BBB Moody’s Baa3 Leverage R
Slide 23: Debt maturity schedule as of June 30, 2009
Debt maturity schedule as of June 30, 2009 ($ in millions) Debt Maturities $695 $45 $140 $168 $105 $250 $158 Secured debt Unsecured debt The schedule assumes one-year extensions for the $250 Million Unsecured Term Loan and for the $500 Million Unsecured Line of Credit. Based upon December 31, estima
Slide 24: Execution of Investment Strategy
24 Execution of Investment Strategy
Slide 25: Execution of Investment Strategy
Execution of Investment Strategy • Strive to produce attractive risk adjusted returns • Expense management/strong stewardship • Capitalize on (selective) strategic investment opportunities • Create an attractive liquidity event (while keeping all options open) as soon as practical
Slide 26: Houston, TX
Houston, TX 312,564 SF $45mm Purchase Price • Acquired December 2000 • Sysco Corporation leased 106,516 SF through September 2008 • Shaw Group leased 206,048 SF through December 2010 • Sysco started construction on a corporate campus in 2005 to consolidate operations • Shaw Group executed an early r
Slide 27: Atlanta, GA
Atlanta, GA 406,241 SF $84mm Purchase Price • Acquired August 2003 • Originally 76% leased to Cingular through December 2010 • AT&T acquired Cingular in 2006 and exercised termination option effective December 2008 • First Data Corp consolidating operations from Denver and Omaha • Executed lease wit
Slide 28: Chicago, IL
Chicago, IL 2,678,252 SF $465.2mm Purchase Price • Kirkland & Ellis lease for 497,800 SF expires in December 2011 • KPMG leased 260,641 SF of the Kirkland & Ellis space through August 2027 • Federal Home Loan Bank of Chicago subleased 63,402 SF through December 2013 and converts to a direct lease th
Slide 29: Performance
29 Performance
Slide 30: Distributions to Stockholders since Inception
Distributions to Stockholders since Inception to June 15, 2009 (in Millions) • Dividend Income $1,927 • Special Capital Distributions • Redemptions of Stock • Total Distributions $3,630
Slide 31: Investor Payback on Initial Capital Outlay
Investor Payback on Initial Capital Outlay Note: Analysis assumes all shares are purchased on the first day of any given Investment Year. Percentage of Initial Outlay Paid Back Through June 30, 2009 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Investment Year
Slide 32: Investor Performance Comparison
Investor Performance Comparison – 1999 and 2004 Investor 5.67% 4.08% 3.73% -3.87% -2.22% -2.24% 5.98% 5.01% -6% -4% -2% 0% 2% 4% 6% 10-Year Hold 5-Year Hold Piedmont NAREIT (Office Only) S&P 500 BC Agg Bond Index Note: Piedmont returns are net of investment management fees. 7/1/99 to 6/30/09 7/1/04
Slide 33: Valuation
33 Valuation
Slide 34: Determination of Estimated Net Asset Value
Determination of Estimated Net Asset Value • By prospectus, update valuations each year • Average cost/share = $8.38 (original cost – return of capital) • Valuation to date: September 30, 2005 $8.70 September 30, 2006 $8.93 December 31, 2007 $8.70 December 31, 2008 $7.40 • Hired outside appraisal fi
Slide 35: Strategic Considerations
35 Strategic Considerations
Slide 36: Reasons For Dividend Reduction in March '09
Reasons For Dividend Reduction in March ‘09 • Match expected cash flow production during heavier lease expiration period • Provide for capital needed for lease activity in future years • Proactively provide sufficient liquidity for future debt maturities • Enhance the stability of investment grade r
Slide 37: Expectations and Strategy
Expectations and Strategy Near Term: • Slower leasing environment for office sector • Lower occupancy and FFO for most office REIT’s • Conserve cash position to retain and attract quality tenants and pay down debt Liquidity Options: • Continue to evaluate all options (IPO, public listing, merger, sa
Slide 38: Expectations and Strategy
Expectations and Strategy Capital Structure: • Maintain low leverage strategy • Monitor debt maturities for opportunities to refinance or raise new equity Portfolio Management: • Recycle capital out of lower growth properties/markets into higher potential return office property investments • Positio
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