Peakstone Realty Trust · NYSE:PKST
Peakstone Realty Trust — Q4 2022 Earnings Presentation
61 slides from Peakstone Realty Trust's earnings presentation, Mar 24, 2023
Slide 1: Supplemental Information Fourth Quarter 2022
Supplemental Information Fourth Quarter 2022
Slide 2: Table of Contents
Table of Contents Page Company Highlights 4 Financial Information 9 Debt & Capitalization 21 Leasing Activity & Asset Management 26 NAV Component Summary 29 Property Information 31 Portfolio Characteristics 36 Notes & Definitions 56 2
Slide 3: Company Highlights
Company Highlights
Slide 4: High-Quality Portfolio of Office & Industrial Properties
High-Quality Portfolio of Office & Industrial Properties Net-Leased to a Diversified Pool of Creditworthy Tenants6 $4.5B Enterprise Value 81 Properties 19.9M Square Feet 24 States 23%/59%/18% Industrial/Office/ Other1 95.5% Leased 7.1 Years WALT2 61.5% Investment Grade3 BBB- Avg. Credit Rating4 2.0%
Slide 5: Portfolio summary by segment
(Unaudited, USD in thousands) Number of Properties Economic Occupancy Total Rentable Square Feet WALT (years) Annualized Base Rents Investment Grade Credit (% of Annualized Base Rents)4 Industrial1 21 100.0 % 9,650,000 6.7 $ 52,553 53.8 % Office2 39 98.3 6,452,400 8.5 131,387 69.1 TOTAL / WEIGHTED A
Slide 6: Fourth quarter highlights
Leverage3 4 Leasing Activity 39.2% Net Debt (Pro Rata Share) to Enterprise Value $0.75 AFFO Per Share1, 3 ~100% Rent Collections $75.9 million Total Revenues3 Liquidity2, 3 The Company signed one new lease totaling 98,000 square feet and one early seven year lease renewal for 226,000 square feet. 94
Slide 7: Subsequent Events Highlights
Subsequent Events Highlights Subsequent to Year-Ended December 31, 2022 (Unaudited) 4 On January 6, 2023, the Company sold one property located in Irvine, California for a total proceeds of approximately $40.0 million, less closing costs and other credits, and recorded a gain of approximately $18.7
Slide 8: Financial Information
Financial Information
Slide 9: Selected Financial Data
1 Includes shares of common stock and limited partnership units. 2 Includes approximately 9K of square feet occupied by building amenities (e.g., health clubs and management offices). 3 Includes impact of the Company's one-for-nine reverse stock split. 10 Selected Financial Data (Unaudited, USD in t
Slide 10: Selected Financial Data (continued)
Selected Financial Data (continued) (Unaudited, USD in thousands, except per share metrics) 12/31/20221 9/30/20222 For the Quarter Ended 6/30/20222 3/31/20222 12/31/20211 REVENUES BY SEGMENT Industrial $ 15,945 $ 15,095 $ 14,807 $ 15,500 $ 14,997 Office 45,643 72,128 93,494 85,846 88,307 Industrial
Slide 11: Consolidated Statements of Operations
Operating income (28,706) 13,817 (48,634) 27,178 24,777 OTHER INCOME (EXPENSES) Interest expense (16,501) (24,283) (22,366) (21,666) (21,425) Other income (loss), net (181) 89 (54) 101 1,289 Extinguishment of debt — (13,249) — — Net loss from investment in unconsolidated entities (9,993) — — — — Los
Slide 12: Consolidated Balance Sheet
Consolidated Balance Sheet (Unaudited, USD in thousands) 12/31/2022 9/30/2022 As of 6/30/2022 3/31/2022 12/31/2021 ASSETS Cash and cash equivalents $ 233,180 $ 75,838 $ 202,655 $ 184,209 $ 168,618 Restricted cash 4,764 12,045 19,638 19,094 17,522 Real estate Land 327,408 380,998 573,306 584,291 584,
Slide 13: Consolidated Balance Sheet (continued)
Consolidated Balance Sheet (continued) (Unaudited, USD in thousands) 12/31/2022 9/30/2022 As of 6/30/2022 3/31/2022 12/31/2021 LIABILITIES AND EQUITY Debt, net $ 1,485,402 $ 1,486,783 $ 2,529,228 $ 2,531,067 $ 2,532,377 Restricted reserves 627 7,150 8,417 8,465 8,644 Interest rate swap liability — —
Slide 14: NOI and Cash NOI, Quarter
For the Quarter Ended 12/31/2022 For the Quarter Ended 12/31/2021 (Unaudited, USD in thousands) Industrial Office Industrial and Office Total Other Total Portfolio Industrial Office Industrial and Other Total Other Total Portfolio Revenue $ 15,945 $ 45,643 $ 61,588 $ 14,305 $ 75,893 Operating Proper
Slide 15: NOI and Cash NOI, Year
For the Year Ended 12/31/2022 For the Year Ended 12/31/2021 (Unaudited, USD in thousands) Industrial Office Industrial and Office Total Other Total Portfolio Industrial Office Industrial and Office Total Other Total Portfolio Revenue $ 61,347 $ 297,110 $ 358,457 $ 58,028 $ 416,485 Operating Property
Slide 16: Non-GAAP Financial Measures (continued)
1 The decrease in same store quarter-to-date Cash NOI of $5.7 million is primarily driven by a $3.2 million decrease in cash termination income quarter over quarter. Non-GAAP Financial Measures (continued) For the Quarter Ended For the Year Ended (Unaudited, USD in thousands) 12/31/2022 12/31/2021 1
Slide 17: FFO and AFFO reconciliation
FFO $ (119,478) $ 29,561 $ 59,027 $ 55,681 $ 58,687 Distribution to redeemable preferred shareholders (2,515) (2,516) (2,516) (2,516) (2,516) FFO attributable to common stockholders and limited partners $ (121,993) $ 27,045 $ 56,511 $ 53,165 $ 56,171 Reconciliation of FFO to AFFO: FFO attributable t
Slide 18: EBITDA, EBITDAre, Normalized EBITDAre & Adjusted EBITDA
Non-GAAP Financial Measures (continued) EBITDA, EBITDAre, Normalized EBITDAre & Adjusted EBITDA (per the credit facility) (Unaudited, USD in thousands) 12/31/2022 9/30/2022 For the Quarter Ended 6/30/2022 3/31/2022 12/31/2021 Reconciliation of Net (loss) income to EBITDAre Net (loss) income $ (248,1
Slide 19: Capital Expenditures Summary (Cash Basis)
Industrial $ 358 0.6 % $ — — % $ — — % $ — — % $ 52 0.1 % Office 776 1.3 409 0.6 882 0.9 1,082 1.2 1,230 1.4 Total Industrial and Office $ 1,134 1.9 % $ 409 0.6 % $ 882 0.9 % $ 1,082 1.2 % $ 1,282 1.5 % Other 12 — 2 — — — 1 — 450 0.4 Total Maintenance Capital Expenditures $ 1,147 1.9 % $ 411 0.6 % $
Slide 20: Debt & Capitalization
REALTY TRUST Debt & Capitalization
Slide 21: Debt and capitalization summary
1 Excludes the impact of fixed-rate swaps. | 2 Represents the SOF rate as of 12/31/22, plus spread of 1.40% (Term Loans) or 1.45% and 0.1% index. (Revolver Loan). The SOF rate as of December 31, 2022 (effective date) was 4.30%, which is included in the rates. As of 9/28/22, the Secured Overnight Fin
Slide 22: Debt summary
12/31/2022 9/30/2022 As of 6/30/2022 3/31/2022 12/31/2021 (Unaudited, USD in thousands) SECURED FIXED-RATE DEBT Mortgage borrowings on wholly owned portfolio $ 539,803 $ 541,689 $ 1,013,410 $ 1,015,816 $ 1,018,015 Total Secured Fixed-Rate Debt 539,803 541,689 1,013,410 1,015,816 1,018,015 UNSECURED
Slide 23: Secured debt detail
(Unaudited, USD in thousands) Collateral SECURED DEBT Interest Rate Maturity Date Outstanding Balance INDUSTRIAL AND OFFICE HealthSpring4 4.18% 4/6/2023 $ 19,107 Samsonite 6.08% 9/1/2023 17,998 Pepsi Bottling Ventures Loan 3.69% 10/1/2024 17,836 BOA/KeyBank Loan 1 4.32% 5/1/2028 250,000 Total Indust
Slide 24: Debt Maturity Schedule
$37,105 $— $430,576 $522,328 $99,794 2023 2024 2025 2026 2027 2028 2029 (Unaudited, USD in thousands) Statistics (Including Effect of Swaps) Fixed Floating Total Amount $1,289,803 $200,000 $1,489,803 Percentage of Total Debt 87% 13% 100% W.A. Term Remaining (Yrs) 3.1 3.0 3.1 W.A. Interest Rate (%) 4
Slide 25: Leasing Activity & Asset Management
Leasing Activity & Asset Management
Slide 26: New and Renewal Leases
NEW LEASES 530 Great Circle Road Nashville, TN 1/1/2024 12/31/2038 — 2 98,352 $ 21.59 $ 76.97 $ 21.50 $ 18.22 18 % New leases total / weighted average — 98,352 $ 21.59 $ 76.97 $ 21.50 $ 18.22 18 % RENEWAL LEASES Wood Group Houston, TX 1/1/2027 12/31/2033 7.0 226,287 $ 10.39 $ 40.00 $ 26.50 $ 26.55 —
Slide 27: Portfolio square footage and occupancy changes
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. 26 For the Quarter-Ended 12/31/2022 9/30/2022 6/30/2022 3/31/
Slide 28: NAV Component Summary
Ay) Peakstone NAV Component Summary
Slide 29: NAV Balance Sheet Components
29 Annualized Base Rents Balance Sheet Components (cont'd) ABR Percentage of Leased Square Feet LIABILITIES Industrial Revolving credit facility and term loans1 $ 950,000 Investment grade $ 28,253 27.0 % Mortgages payable1 540,000 WHOLLY OWNED PORTFOLIO $ 223,942 95.5 % Balance Sheet Components Real
Slide 30: Property Information
REALTY TRUST Property Information
Slide 31: Property list: Industrial
3 Industrial 3M 1650 Macom Drive Chicago IL 978,100 Single Tenant 100.0 % Warehouse 2016 3.8 2.2 % 4 Industrial Samsonite 10480 Yeager Road Jacksonville FL 817,700 Single Tenant 100.0 % Warehouse 2008 1.9 1.8 % 5 Industrial Shaw Industries 445 Northport Parkway Savannah GA 1,001,500 Single Tenant 10
Slide 32: Property list: Office
23 Office Keurig Dr. Pepper (53 South Avenue) 53 South Avenue Boston MA 280,600 Single Tenant 100.0 % Office 2014 6.9 3.9% 24 Office Freeport McMoRan 333 N. Central Ave Phoenix AZ 249,000 Single Tenant 99.0 % Office 2010 4.4 3.5% 25 Office Amazon 13820 Sunrise Valley Drive Herndon VA 269,900 Single
Slide 33: Property list: Office (continued)
45 Office Avnet (Phoenix) 2211 S 47th Street Phoenix AZ 176,400 Single Tenant 100.0 % Office 1997 3.7 1.0 % 46 Office PPG 400 Bertha Lamme Drive Pittsburgh PA 118,000 Single Tenant 100.0 % Office 2010 8.0 1.0 % 47 Office MISO 720 City Center Drive Indianapolis IN 133,400 Single Tenant 100.0 % Office
Slide 34: Property list: Other
Address Property Market Property State Building Square Feet Tenancy Type % Leased 2 Property Sub- Type Renovated Year Built/ 1 3 WALT Property 3 % of Total ABR 61 Other Wyndham Hotels & Resorts 22 Sylvan Way Northern New Jersey NJ 249,400 Single Tenant 100.0 % Office 2009 6.7 3.2 % 62 Other Wood Gro
Slide 35: Portfolio Characteristics
Portfolio Characteristics
Slide 36: Lease Escalation Frequency
1 Weighted average rental increase is based on the remaining term of each lease as of December 31, 2022. Excludes leases with remaining term less than one year. Lease Escalation Frequency Annually % Annualized Base Rents 86.3% Growth Rate 1 2.1% Every 5 Years 10.2 0.6 Other Frequencies 2.0 4.1 No Es
Slide 37: Tenant Concentration: Consolidated
Tenant/Major Tenant Rating1 Top 10 Tenants % of Annualized Base Rents2 WALT (years) 1 Amazon3 AA 7.3% 8.9 2 Keurig Dr. Pepper BBB 5.1 6.9 3 Wood Group USA4 HY65 4.5 6.6 4 Southern Company Services BBB+ 4.0 21.2 5 LPL Baa36 3.8 13.8 6 Freeport McMoRan Baa26 3.5 4.4 7 Maxar Technologies B+ 3.4 7.5 8 R
Slide 38: Tenant Concentration: Industrial and Office
Tenant/Major Tenant Rating1 Top 10 Tenants % of Annualized Base Rents2 WALT (years) 1 Amazon AA 8.9% 8.9 2 Keurig Dr. Pepper BBB 6.2 5.3 3 Southern Company BBB+ 4.9 21.2 4 LPL Baa34 4.6 13.8 5 Freeport McMoran Baa24 4.3 4.4 6 Maxar Technologies B+ 4.1 7.5 7 RH Ba34 4.0 7.7 8 McKesson BBB+ 3.2 5.8 9
Slide 39: Tenant Concentration: Industrial
Tenant/Major Tenant Rating1 Top 10 Tenants % of Annualized Base Rents2 WALT (years) 1 Amazon AA 16.1% 8.6 2 RH Ba34 14.0 7.7 3 3M Company A+ 9.3 3.8 4 Samsonite Ba24 7.7 1.9 5 Shaw Industries AA 6.3 10.3 6 PepsiCo A+ 6.0 5.6 7 Amcor BBB 5.1 9.8 8 Huntington Ingalls BBB- 4.8 5.0 9 Fox Head6 BB 4.2 5.
Slide 40: Tenant Concentration: Office
Tenant/Major Tenant Rating1 Top 10 Tenants % of Annualized Base Rents2 WALT (years) 1 Keurig Dr. Pepper BBB 8.7% 6.9 2 Southern Company Services BBB+ 6.9 21.2 3 LPL Baa33 6.5 13.8 4 Freeport McMoRan Baa23 6.0 4.4 5 Amazon AA 6.0 9.3 6 Maxar Technologies B+ 5.7 7.5 7 McKesson BBB+ 4.5 5.7 8 Wyndham H
Slide 41: Industry Concentration: Consolidated
Industry Concentration: Consolidated As of December 31, 2022 36 Industry Top 10 Industries % of Annualized Base Rents1 Top 20 Sub-Industries Sub-Industry % of Annualized Base Rents1 1 Capital Goods 15.3 % 1 Aerospace & Defense 10.3 % 2 Consumer Services 9.5 2 Soft Drinks 7.3 3 Materials 8.8 3 Intern
Slide 42: Industry Concentration: Industrial and Office
Industry Concentration: Industrial and Office As of December 31, 2022 2 Materials 10.8 3 Food, Beverage & Tobacco 8.9 4 E-Commerce 8.9 5 Health Care Equipment & Services 7.5 6 Consumer Durables & Apparel 6.4 7 Utilities 6.0 8 Consumer Services 5.9 9 Commercial & Professional Services 5.2 10 Retailin
Slide 43: Industry Concentration: Industrial
Industry Concentration: Industrial As of December 31, 2022 2 Capital Goods 20.9 3 E-Commerce 16.1 4 Retailing 14.0 5 Food, Beverage & Tobacco 9.6 6 Materials 7.9 7 Automobiles & Components 5.0 8 Commercial & Professional Services 4.1 Top 8 total 100.0 % All others — % 36 2 Homefurnishing Retail 14.0
Slide 44: Industry Concentration: Office
Industry Concentration: Office As of December 31, 2022 2 Capital Goods 11.1 3 Health Care Equipment & Services 10.5 4 Food, Beverage & Tobacco 8.7 5 Utilities 8.4 6 Consumer Services 8.2 7 Diversified Financials 6.6 8 E-Commerce 6.0 9 Energy 6.0 10 Commercial & Professional Services 5.6 Top 10 total
Slide 45: Market Concentration: Consolidated
Geographic Distribution (% of Annualized Base Rents1) Market Concentration: Consolidated As of December 31, 2022 (USD in thousands) Top 10 Markets (% of Annualized Base Rents) Markets Annualized Base Rents % of Annualized Base Rents1 1 Phoenix $ 22,069 9.9 % 2 Northern New Jersey 18,862 8.4 3 Boston
Slide 46: Market Concentration: Industrial and Office
Geographic Distribution (% of Annualized Base Rents1) Market Concentration: Industrial and Office As of December 31, 2022 (USD in thousands) Top 10 Markets (% of Annualized Base Rents) Markets Annualized Base Rents % of Annualized Base Rents1 1 Phoenix $ 19,345 10.5 % 2 Boston 16,673 9.1 3 Denver 10
Slide 47: Market Concentration: Industrial
Geographic Distribution (% of Annualized Base Rents1) Market Concentration: Industrial As of December 31, 2022 (USD in thousands) Markets Top 10 Markets (% of Annualized Base Rents) Annualized Base Rents % of Annualized Base Rents1 1 Chicago $ 8,764 17.0 % 2 Columbus 7,557 14.0 3 Stockton/Modesto 7,
Slide 48: Market Concentration: Office
Geographic Distribution (% of Annualized Base Rents1) Market Concentration: Office As of December 31, 2022 (USD in thousands) Top 10 Markets (% of Annualized Base Rents) Markets Annualized Base Rents % of Annualized Base Rents1 1 Phoenix $ 19,345 15.0 % 2 Boston 16,673 13.0 3 Denver 10,436 8.0 4 Bir
Slide 49: Lease Expirations: Consolidated
Lease Expirations: Consolidated As of December 31, 2022 (USD in thousands) 1 Based on annualized base rents for wholly owned portfolio. 2 Vacant square footage includes three properties. $24,003 $9,242 $12,567 $14,179 $20,990 $33,887 $25,786 $19,322 $6,583 2023 2024 2025 2026 2027 2028 2029 2030 203
Slide 50: Lease Expirations: Industrial and Office
Lease Expirations: Industrial and Office As of December 31, 2022 (USD in thousands) Lease Maturity Schedule (by Annualized Base Rents) $4,473 $5,036 $4,583 $9,974 2023 2024 2025 2026 2027 2028 2029 2030 2031 >2032 1 Based on annualized base rents for the industrial and office segments. 50 $14,179 $1
Slide 51: Lease Expirations: Industrial
Lease Expirations: Industrial As of December 31, 2022 (USD in thousands) Lease Maturity Schedule (by Annualized Base Rents) $2,161 51 $4,054 $1,354 $4,902 $— $10,613 $1,482 $7,340 $8,451 $12,196 2025 2026 2027 2028 2029 2030 2031 >2032 Expiring Leases Year Leases Approx. Square Feet Annualized Base
Slide 52: Lease Expirations: Office
Lease Expirations: Office As of December 31, 2022 (USD in thousands) Lease Maturity Schedule (by Annualized Base Rents) $2,312 52 $982 $3,229 $5,072 $14,179 $7,653 $25,140 $17,064 $10,871 $44,885 2025 2026 2027 2028 2029 2030 2031 >2032 Expiring Leases Year Leases Approx. Square Feet Annualized Base
Slide 53: Portfolio Concentrations: Other
Portfolio Concentrations: Other As of December 31, 2022 (USD in thousands) Lease Maturity Schedule (by Annualized Base Rents1) $18,967 $4,659 $2,593 $— $2,724 $7,265 $1,382 $— $302 2026 2027 2028 2029 2030 2031 >2032 2024 9 1,481,700 18,967 47.4 2025 3 564,700 4,659 11.6 2026 1 110,300 2,593 6.5 202
Slide 54: Portfolio Concentrations: Other (continued)
Geographic Distribution (% of Annualized Base Rents1) Portfolio Concentrations: Other (continued) As of December 31, 2022 (USD in thousands) Top 10 Markets (% of Annualized Base Rents) Markets Annualized Base Rents % of Annualized Base Rents1 1 Northern New Jersey $ 8,949 22.4 % 2 Houston 8,049 20.1
Slide 55: Notes & Definitions
Notes & Definitions
Slide 56: Notes & Definitions
Notes & Definitions ABR (Annualized Base Rents) 56 “Annualized base rents” or “ABR” means the contractual base rent before abatements and deducting base year operating expenses for gross and modified gross leases as of December 31, 2022, unless otherwise specified, multiplied by 12 months. For prope
Slide 57: Notes & Definitions (continued): FFO and AFFO
Notes & Definitions (continued) 56 Funds from Operations ("FFO") and Adjusted Funds from Operations ("AFFO") Our reported results are presented in accordance with GAAP. We also disclose FFO and AFFO both of which are non-GAAP financial measures. We believe these two non-GAAP financial measures are u
Slide 58: Notes & Definitions (continued): FFO and AFFO
Notes & Definitions (continued) Funds from Operations ("FFO") and Adjusted Funds from Operations ("AFFO") - cont. 56 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 th
Slide 59: Notes & Definitions (continued): NOI
Notes & Definitions (continued) Store Cash NOI Net Operating Income (NOI), Cash NOI, and Same 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, w
Slide 60: Notes & Definitions (continued)
Notes & Definitions (continued) Operating Margin 56 NOI/Revenue. Real Estate Net Book Value Real Estate Net Book Value represents total real estate and intangible assets, net of accumulated depreciation and amortization and intangible liabilities. Same Store Same store portfolio includes properties
Slide 61: Disclaimer on Forward-Looking Statements
Disclaimer 56 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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