Office Properties Income Trust · OTC:OPITQ
Office Properties Income Trust — Q3 2022 Earnings Presentation
30 slides from Office Properties Income Trust's earnings presentation, Nov 14, 2022
Slide 1: Investor Presentation Q3 2022
1 OFFICE PROPERTIES INCOME TRUST INVESTOR PRESENTATIONQ32022 Detroit, MI
Slide 2: Forward-looking statements
2 OFFICE PROPERTIES INCOME TRUST This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995and other securities laws. Also, whenever we use words such as “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate”, “will”, “ma
Slide 3: OPI at a Glance
3 OFFICE PROPERTIES INCOME TRUST a.Total gross assets.b.Based on annualized rental income. See Appendix herein for our definition of investment grade tenants. OPI AT A GLANCE21.2MILLION SQUARE FEET$629MillionTOTAL LIQUIDITY $4.5 BillionINVESTMENT PORTFOLIO(1)90.7%OCCUPANCY162PROPERTIES IN PORTFOLIO6
Slide 4: Recent Company Highlights
4 OFFICE PROPERTIES INCOME TRUST RECENT COMPANY HIGHLIGHTS Q32022 Year to Date Full Year 2021•Executed 1.9 million square feet of leasing activity at an 11% roll-up in rent and 9 year WALT.•Ended the third quarter at 90.7% portfolio occupancy, a 170 basis point increase over the prior year.•Complete
Slide 5: Compelling Investment Opportunity
5 OFFICE PROPERTIES INCOME TRUST 1.Based on annualized rental income. See Appendix herein for our definition of investment grade tenants. 2.A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time.COMPELLING INVESTMENT OPPOR
Slide 6: Diversified Across Strategic U.S. Markets
6 OFFICE PROPERTIES INCOME TRUST Phoenix DIVERSIFIED ACROSS STRATEGIC U.S. MARKETS Chicago11% D.C. Metro1,222% Atlanta9% Silicon Valley/Sacramento10% Dallas5%OPI Strategic Markets% Annualized Rental Income Focused on markets with strong economics and favorable long-term demand outlook. Boston4% Seat
Slide 7: Secure and Stable Income
7 OFFICE PROPERTIES INCOME TRUST SECURE AND STABLE INCOME U.S. Government 19.2%Other Government 8.6%Government Contractors 6.5%Real Estate & Financing 16.9%Technology & Communications 16.4%Legal & Other Professional Services 11.4%Manufacturing & Transportation 10.5%Life Science and Medical 3.2%Other
Slide 8: Growth Strategy
8 OFFICE PROPERTIES INCOME TRUST GROWTH STRATEGY 8 Positioned to advance core business strategies focused on enhancing the overall quality and geographic footprint of the portfolio. Organic Growth•Maintain high occupancy through best-in-class operations and service centered tenant relationships.•Dri
Slide 9: Proactive Asset Management and Leasing
9 OFFICE PROPERTIES INCOME TRUST 2.6M SFNew and renewal leasing Leasing Activity (SF in 000s)PROACTIVE ASSET MANAGEMENT AND LEASING Staggered Lease Expirations% Total Annualized Rental Income Expiring 9.4%Roll up in rent 8.1 yearsWALTTrailing Twelve MonthsCompleted Activity 3.2M SFincluding 1.3M SF
Slide 10: Strategic Capital Recycling
10 OFFICE PROPERTIES INCOME TRUST STRATEGIC CAPITAL RECYCLING Since 2019, OPI has sold approximately $1.5 billion of assetsand redeployed proceeds into more attractive markets. Property Acquisitions & Dispositions ($ millions) Potential BenefitsReduce the average age of our portfolio. Reshape geogra
Slide 11: Recent Portfolio Reshaping
11 OFFICE PROPERTIES INCOME TRUST Phoenix RECENT PORTFOLIO RESHAPING Investing in newer, less capital-intensive properties that improve geographic diversification, rent growth, portfolio metrics and the long-term stability of cash flows. Reducing ExposureIncreasing Exposure•Huntsville, AL•Birmingham
Slide 12: Acquisition Focus
12 OFFICE PROPERTIES INCOME TRUST ACQUISITION FOCUS Focused on acquiring office properties in markets that have strong economic fundamentals to support rent growth. Properties in strong and growing markets with characteristics to attract and retain tenants.•Strategic to tenants.•Minimum remaining le
Slide 13: Recent Acquisitions
13 OFFICE PROPERTIES INCOME TRUST RECENT ACQUISITIONS 1000 W. Fulton Street, Chicago, IL –“1K Fulton”$355.0 MillionPurchase Price 4.7%GAAP Cap Rate531,190Square Feet99.2%Percent Leased6.6 YearsWALTGoogle (73%)Primary Tenant 1224 Hammond Dr., Atlanta, GA -“Twelve24” $195.0 MillionPurchase Price 6.3%G
Slide 14: Value Creation Through Select Redevelopment
14 OFFICE PROPERTIES INCOME TRUST VALUE CREATION THROUGH SELECT REDEVELOPMENT “20 Mass”20 Massachusetts Avenue, Washington, D.C. “Unison”351, 401, 501 Elliott Ave, Seattle, WA ~$215 MillionTotal Project Cost 8% -10%Stabilized Returns54%Pre-Leased427,000Square FeetMixed UseUse Q2 2023Estimated Delive
Slide 15: Strong and Flexible Financial Health
15 OFFICE PROPERTIES INCOME TRUST STRONG AND FLEXIBLE FINANCIAL HEALTH Debt Profile Liquidity Position $615MAvailable Revolving Credit Facility $14MCash on Hand 3.9%Weighted Average Interest Rate on Debt Debt Metrics 47.7%Net Debt to Gross Book Value of Real Estate Assets Baa3Moody’s (2) BBB-S&P Glo
Slide 16: Commitment to Sustainability
16 OFFICE PROPERTIES INCOME TRUST For more information, please read The RMR Group’s 2021 Sustainability Report here ..COMMITMENT TO SUSTAINABILITY◦2022 ENERGY STAR® Partner of the Year Award (fifth consecutive year).◦2022 Gold Level Green Lease Leader.◦2021 Green Lease Leader, Silver (earned in 2015
Slide 17: Appendix
17 OFFICE PROPERTIES INCOME TRUST Appendix Colorado Springs, CO
Slide 18: RMR's Operations
18 OFFICE PROPERTIES INCOME TRUST RMR’s Operations Include: National Multi-Sector Investment Platform OFFICEINDUSTRIALGOVERNMENTMEDICAL OFFICELIFE SCIENCESENIOR LIVINGHOTELSRETAIL RMR Managed Companies 2,100 Properties Approximately$12 Billionin Annual Revenues Over$37 Billionin AUM Over600CRE Profe
Slide 19: A Winning Tradition
19 OFFICE PROPERTIES INCOME TRUST A WINNING TRADITIONEPA’S ENERGY STAR Partner of the Year 2019 -2022. 70 properties with EPA ENERGY STAR certifications60 properties with BOMAdesignations. Ranked #1 for portfolio with most designations56 properties with LEEDdesignations SUSTAINABILITYRanked Boston G
Slide 20: Relationship with RMR Provides Scale and Efficiency
20 OFFICE PROPERTIES INCOME TRUST 1.Source: S&P Global Market Intelligence. Data is for the most recently reported twelve months as of November 1, 2022.RELATIONSHIP WITH RMR PROVIDES SCALE AND EFFICIENCY Key Benefits•RMR provides all the employees; OPI has no employees.•RMR’s acquisitions team has v
Slide 21: RMR Fee Structure
21 OFFICE PROPERTIES INCOME TRUST RMR base management fee tied to OPI share price performance.• Consists of an annual fee equal to generally 50 bps multiplied by the lower of : (1) OPI’s historical cost of real estate, or (2) OPI’s total market capitalization. •There is no incentive for RMR to compl
Slide 22: Financials
22 OFFICE PROPERTIES INCOME TRUST San Jose, CAFinancials
Slide 23: Key Financial Data
23 OFFICE PROPERTIES INCOME TRUST KEY FINANCIAL DATA (dollars in thousands, except per share data)As of and for the Three Months Ended9/30/20226/30/20223/31/202212/31/20219/30/2021 Selected Balance Sheet Data: Total gross assets$4,507,422$4,578,277$4,703,791$4,737,595$4,699,286Total assets$3,968,986
Slide 24: Debt Summary
24 OFFICE PROPERTIES INCOME TRUST DEBT SUMMARY(1)1.Excludes two mortgage notes with an aggregate principal balance of $82,000 which are secured by three properties owned by twounconsolidated joint ventures in which we own 51% and 50% interests.2.Reflects the interest rate stated in, or determined pu
Slide 25: Calculation of NOI and Cash Basis NOI
25 OFFICE PROPERTIES INCOME TRUST CALCULATION OF NOI AND CASH BASIS NOI(1)1.Excludes three properties owned by two unconsolidated joint ventures in which we own 51% and 50% interests. 2.We recorded a liability for the amount by which the estimated fair value for accounting purposes exceeded the pric
Slide 26: Calculation of EBITDA, EBITDAre and Adjusted EBITDAre
26 OFFICE PROPERTIES INCOME TRUST CALCULATION OF EBITDA, EBITDAreAND ADJUSTED EBITDAre1.Acquisition and transaction related costs represent costs related to an acquisition opportunity that did not materialize.2.Amounts represent equity based compensation to our Trustees, our officers and certain oth
Slide 27: Calculation of FFO, Normalized FFO and CAD
27 OFFICE PROPERTIES INCOME TRUST CALCULATION OF FFO, NORMALIZED FFO AND CAD1.Acquisition and transaction related costs represent costs related to an acquisition opportunity that did not materialize2.Incentive fees under our business management agreement with RMR LLC are payable after the end of eac
Slide 28: Non-GAAP Financial Measures and Certain Definitions
28 OFFICE PROPERTIES INCOME TRUST NON-GAAP FINANCIAL MEASURES AND CERTAIN DEFINITIONS Non-GAAP Financial Measures We present certain “non-GAAP financial measures” within the meaning of applicable rules of the SEC, including NOI, Cash Basis NOI, EBITDA, EBITDAre, Adjusted EBITDAre, FFO, Normalized FF
Slide 29: Non-GAAP Financial Measures and Certain Definitions
29 OFFICE PROPERTIES INCOME TRUST NON-GAAP FINANCIAL MEASURES AND CERTAIN DEFINITIONS Annualized dividend yield is the annualized dividend per share paid during the period divided by the closing price of our common shares at the end of theperiod. Annualized rental income is calculated using the annu
Slide 30: Investor Presentation Q3 2022
30 OFFICE PROPERTIES INCOME TRUST INVESTOR PRESENTATIONQ32022 Washington, D.C. Two Newton Place255 Washington Street, Suite 300Newton, MA 02458OPIREIT.COM
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