Brandywine Realty Trust · NYSE:BDN
Brandywine Realty Trust — Q3 2021 Earnings Presentation
43 slides from Brandywine Realty Trust's earnings presentation, Oct 26, 2021
Slide 1: Supplemental Information Package Third Quarter 2021
S U P P L E M E N TA L I N F O R M AT I O N PAC K AG E 2 021 TH I R D Q UA R TE R Y N U IT O O E V TY I M G AT Y T O I IN N L IT IN UA M R N Q C
Slide 2: Table of Contents
Table of Contents Page Executive Summary 1 2021 Business Plan Trend Line 3 Development Activity 7 Balance Sheet and Liquidity 12 Land Inventory 13 Property Activity 14 Net Operating Income Composition 15 Regional Property Overview 16 Leasing Activity 17 Lease Expiration Analysis 19 Top Twenty Tenant
Slide 3: Q3 2021 Executive Summary: Transaction Highlights
Q3 2021 Executive Summary (unaudited in millions, except square footage and acreage) BRANDYWINE REALTY TRUST | Page 1 Transaction Highlights Dispositions On July 6, 2021, we completed the sale of two land parcels at 2100 & 2200 Lenox Drive in Lawrenceville, New Jersey for a gross sales price of $8
Slide 4: Q3 2021 Executive Summary: Leasing and Operating Metrics
Q3 2021 Executive Summary (unaudited in thousands, except per share data and square footage) BRANDYWINE REALTY TRUST | Page 2 Leasing Highlights Q3 2021 Q2 2021 Quarter end occupancy 90.3% 90.5% Leased as of October 22, 2021 / July 20, 2021 92.7% 92.5% New leases executed in quarter (sq ft) 388,271
Slide 5: Business Plan Trend Line
Business Plan Trend Line (unaudited) BRANDYWINE REALTY TRUST | Page 3 2021 Business Plan as of Business Plan Component 10/22/2021 7/20/2021 4/19/2021 Original Speculative Revenue $21.0 MM $20.0 - $21.0 MM $18.0 - $22.0 MM $18.0 - $22.0 MM Executed $20.9 MM $20.1 MM $18.1 MM $14.7 MM Projected Tenant
Slide 6: Austin Marketplace: Continued Leading Growth
Austin Marketplace: Continued Leading Growth (unaudited) BRANDYWINE REALTY TRUST | Page 4 (From L to R): Broadmoor Block A; Garza Ranch; and Four Points Highlights #1 Fastest Growing Metro (US Census Bureau) Austin Economic Development reported that 2020 was a record year of corporate #1 Best
Slide 7: Philadelphia CBD Marketplace
Philadelphia CBD Marketplace (unaudited) BRANDYWINE REALTY TRUST | Page 5 Philadelphia Marketplace; Stability with Life Science Momentum Highlights $10 billion in venture capital invested in the last 5 years. Life science rents in Philadelphia have increased by 35% since the middle of last year.
Slide 8: Development Summary
Development Summary (unaudited, in thousands, except square feet) BRANDYWINE REALTY TRUST | Page 6 Remaining Equity Amount Completion Stabilization Total Project Debt equity to be Projected Leased % @ Development (% owned) Location Type Square Feet Capitalization funded at Date Date Costs (a) Financ
Slide 9: Development Activity: 3025 JFK Boulevard
Development Activity (unaudited) BRANDYWINE REALTY TRUST | Page 7 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 10: Development Activity: Broadmoor Block A
Development Activity (unaudited) BRANDYWINE REALTY TRUST | Page 8 Broadmoor 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 Commencement: Q4 2021 lob
Slide 11: Development Activity: Austin, TX Broadmoor
Development Activity (unaudited) BRANDYWINE REALTY TRUST | Page 9 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 840,000 square feet for IBM. Once redeveloped, th
Slide 12: Our Opportunity: Life Sciences
Our Opportunity: Life Sciences (unaudited) BRANDYWINE REALTY TRUST | Page 10 Nationally: Life sciences employment reached a record high in March 2021 with 16% total job growth since 2017, surpassing the technology sector. Total commercial lab space has grown 12% in 2021. Pipeline: 11 million S
Slide 13: Development Activity: Schuylkill Yards, Philadelphia
Development Activity (unaudited) BRANDYWINE REALTY TRUST | Page 11 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 14: Balance Sheet Liquidity
Balance Sheet Liquidity (unaudited) BRANDYWINE REALTY TRUST | Page 12 USES Projected ($ in M) 4Q21 $600M currently available on our line of credit. Dividends $33 Contributions to Joint Venture Development 5 $558M projected availability at 12/31/21 Revenue Maintaining Cap Ex 15 Revenue Creating Ca
Slide 15: Q3 2021 Land Inventory
Q3 2021 Land Inventory (unaudited) BRANDYWINE REALTY TRUST | Page 13 Estimated Development Square Feet Acres Active/Pre-Development Projects Philadelphia CBD (a) (b) 56.3 5,273,000 Pennsylvania Suburbs 21.7 535,000 Austin, Texas (c) 74.7 6,425,000 Total Active/Pre-Development Projects 152.7 12,233,0
Slide 16: Property Activity
Property Activity (unaudited, in thousands, except square footage and acreage) BRANDYWINE REALTY TRUST | Page 14 Square Occupancy % Feet/Acres Sales Price @ Event Date Location Type Event Date 2021 PROPERTY ACTIVITY LAND DISPOSITION 1100 Lenox Drive Lawrenceville, NJ Land 09/08/2021 5.0 acres $ 2,57
Slide 17: YTD 2021 Net Operating Income Composition
YTD 2021 Net Operating Income Composition (unaudited) BRANDYWINE REALTY TRUST | Page 15 YTD NOI - Wholly Owned (a) YTD NOI - Including JV's Total Core Portfolio NOI: $205.9 MM Total NOI: $237.7 MM 92.0% of NOI from our Core Markets (b) 90.0% of NOI from our Core Markets (b) MAP and Other 2%
Slide 18: Regional Property Overview
Regional Property Overview (unaudited, in thousands, except square footage) BRANDYWINE REALTY TRUST | Page 16 Square Feet % Occupied % Leased (1) Remaining Expirations Net Operating Income at 9/30/2021 # of Wholly Region Owned Properties Total % of Total 2021 2022 Q3 2021 % of Total YTD 2021 % of To
Slide 19: Leasing Activity-Core Portfolio
Leasing Activity-Core Portfolio (1) (unaudited) BRANDYWINE REALTY TRUST | Page 17 Nine Months Ended Three Months Ended 09/30/2021 09/30/2020 09/30/2021 06/30/2021 03/31/2021 12/31/2020 09/30/2020 06/30/2020 03/31/2020 Total Property Count 76 89 76 76 76 78 89 88 89 Total Square Feet 12,949,078 14,42
Slide 20: Leasing Activity-Core Portfolio (rent growth)
Leasing Activity-Core Portfolio (1) (unaudited) BRANDYWINE REALTY TRUST | Page 18 Nine Months Ended Three Months Ended 09/30/2021 09/30/2020 09/30/2021 06/30/2021 03/31/2021 12/31/2020 09/30/2020 06/30/2020 03/31/2020 New Leases/Expansions (2): Cash Rent Growth Expiring Rate $ 32.62 $ 37.71 $ 33.75
Slide 21: Lease Expiration Analysis
Lease Expiration Analysis (unaudited) BRANDYWINE REALTY TRUST | Page 19 Square Footage Annualized Rent of Expiring Leases (3) Lease Revisions (4) Remaining Acquired / Year of Lease Initial Vacated New Remaining % of Total Expirations including % of Total Per Square Per Square Sold / in Current Final
Slide 22: Regional Lease Expiration Analysis
Regional Lease Expiration Analysis (1) (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 20 2021 2022 2023 2024 2025 2026 2027 Thereafter Total Philadelphia CBD Square feet expiring (Net of Acquired/Sold) 241 601 134 223 197 151 281 2,797 4,625 Net leasing activity (179) (259) 65 37 116 13 16
Slide 23: Top Twenty Tenants
Top Twenty Tenants (unaudited, annualized rent in thousands) BRANDYWINE REALTY TRUST | Page 21 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 24: Q3 2021 Portfolio Tenant Mix
Q3 2021 Portfolio Tenant Mix (unaudited, by square footage) BRANDYWINE REALTY TRUST | Page 22 Misc. Services - 4% Health Services - 2% Engineering & Transportation/Public Management Utilities - 4% Services - 10% Real Estate - 5% Other - 2% Finance - 17% Wholesale Trade - 3% Business Services - Manuf
Slide 25: Income Statements
Income Statements (unaudited, in thousands, except share data) BRANDYWINE REALTY TRUST | Page 23 Nine Months Ended Three Months Ended 09/30/2021 09/30/2020 09/30/2021 06/30/2021 03/31/2021 12/31/2020 09/30/2020 06/30/2020 03/31/2020 Revenue Rents $ 336,878 $ 392,661 $ 112,159 $ 111,235 $ 113,484 $ 1
Slide 26: Q3 2021 Same Store Net Operating Income
Q3 2021 Same Store Net Operating Income (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 24 Recently Development/ Completed/ Redevelopment Other/ Same Store Portfolio Acquired (1) (2) Eliminations (3) All Properties Third Quarter Third Quarter Third Quarter Third Quarter Third Quarter Third
Slide 27: YTD 2021 Same Store Net Operating Income
YTD 2021 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 Year to Date Year to Date Year to Date Year to Date Year to Date Year to Da
Slide 28: EBITDA and EBITDA Coverage Ratios
EBITDA and EBITDA Coverage Ratios (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 26 Nine Months Ended Three Months Ended 09/30/2021 09/30/2020 09/30/2021 06/30/2021 03/31/2021 12/31/2020 09/30/2020 06/30/2020 03/31/2020 Net income (loss) $ 7,763 $ 288,240 $ 974 $ (175) $ 6,964 $ 19,086 $ 2
Slide 29: Funds from Operations
Funds from Operations (unaudited, in thousands, except share data) BRANDYWINE REALTY TRUST | Page 27 Nine Months Ended Three Months Ended 09/30/2021 09/30/2020 09/30/2021 06/30/2021 03/31/2021 12/31/2020 09/30/2020 06/30/2020 03/31/2020 Net income (loss) attributable to common shareholders $ 7,390 $
Slide 30: Cash Available for Distribution
Cash Available for Distribution (unaudited, in thousands, except share data) BRANDYWINE REALTY TRUST | Page 28 Nine Months Ended Three Months Ended 09/30/2021 09/30/2020 09/30/2021 06/30/2021 03/31/2021 12/31/2020 09/30/2020 06/30/2020 03/31/2020 Funds from operations available to common share and u
Slide 31: Balance Sheets
Balance Sheets (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 29 09/30/2021 06/30/2021 03/31/2021 12/31/2020 09/30/2020 06/30/2020 03/31/2020 Assets Real estate investments Operating properties $ 3,437,074 $ 3,392,734 $ 3,386,559 $ 3,474,109 $ 3,715,765 $ 3,650,521 $ 4,004,118 Accumulated
Slide 32: Liquidity, Leverage and Market Capitalization
Liquidity, Leverage and Market Capitalization (unaudited, in thousands, except shares and per share data) BRANDYWINE REALTY TRUST | Page 30 09/30/2021 06/30/2021 03/31/2021 12/31/2020 09/30/2020 06/30/2020 03/31/2020 High closing price of common shares $ 14.45 $ 15.00 $ 13.92 $ 12.27 $ 11.75 $ 12.20
Slide 33: Balance Sheet Information/Debt Statistics
Balance Sheet Information/Debt Statistics (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 31 09/30/2021 06/30/2021 03/31/2021 12/31/2020 09/30/2020 06/30/2020 03/31/2020 Fixed rate debt $ 1,500,000 $ 1,500,000 $ 1,500,000 $ 1,500,000 $ 1,588,888 $ 1,811,528 $ 1,813,492 Fixed rate debt (vari
Slide 34: Debt Schedules
Debt Schedules (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 32 09/30/2021 Maturity Stated Effective 09/30/2021 12/31/2020 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 35: Debt Maturities
Debt Maturities (4) (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 33 Unsecured Debt Maturity Schedule Percent of Weighted Bank Facilities Senior Notes Total By Year Debt Maturing Average Interest (5) 2021 - - - 0.0% 0.000% 2022 250,000 - 250,000 13.7% 2.868% 2023 - 350,000 350,000 19.1% 3
Slide 36: Debt Maturities (chart)
Debt Maturities (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 34 $600,000 Bank Facilities Unsecured Notes $500,000 Balloon Payments $400,000 Scheduled Amortization $300,000 $200,000 $100,000 $0 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Thereafter % of total 0.0% 13.7% 19.1% 19.1%
Slide 37: Debt Covenant Compliance
Debt Covenant Compliance (unaudited, in millions) BRANDYWINE REALTY TRUST | Page 35 Revolving Credit Agreement dated July 17, 2018 and Amended and Restated Term Loan C Agreement dated December 13, 2018 Covenant Required 9/30/2021 6/30/2021 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 Fixed Cha
Slide 38: JV Property Overview
JV Property Overview (unaudited, in thousands, except square footage) BRANDYWINE REALTY TRUST | Page 36 As of September 30, 2021 BDN's Share BDN Net Investment Percent BDN Operating Unconsolidated Real Initial Project @ Number of Net Operating Rentable Percent Leased Ownership Income Rentable Square
Slide 39: JV Debt Schedule
JV Debt Schedule (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 37 09/30/2021 BDN BDN Ownership Stated Share Debt Instrument Percentage Maturity Date Rate (1) 09/30/2021 Balance of Venture Debt Office Properties Commerce Square JV 70% April 5, 2023 (2) $ 214,615 $ 150,231 Mid-Atlantic Offi
Slide 40: JV Debt Summary
JV Debt Summary (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 38 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) 2021 2,099 142,405 144,504 71,9
Slide 41: Q3 2021 Analyst and Company Information
Q3 2021 Analyst and Company Information BRANDYWINE REALTY TRUST | Page 39 Equity Research Coverage BofA Merrill Lynch Green Street Advisors Raymond James & Associates James Feldman / Elvis Rodriguez Danny Ismail Paul Puryear / Bill Crow 646-855-5808 / 646-855-1589 949-640-8780 727-567-2253 / 727-567
Slide 42: Q3 2021 Disclaimers and Other Information
Q3 2021 Disclaimers and Other Information BRANDYWINE REALTY TRUST | Page 40 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 43: Q3 2021 Disclaimers and Other Information (continued)
Q3 2021 Disclaimers and Other Information (continued) BRANDYWINE REALTY TRUST | Page 41 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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