Brandywine Realty Trust · NYSE:BDN
Brandywine Realty Trust — Q2 2021 Earnings Presentation
42 slides from Brandywine Realty Trust's earnings presentation, Jul 27, 2021
Slide 1: Supplemental Information Package Second 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 S ECO N 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 11 Land Inventory 12 Property Activity 13 Net Operating Income Composition 14 Regional Property Overview 15 Leasing Activity 16 Lease Expiration Analysis 18 Top Twenty Tenant
Slide 3: Q2 2021 Executive Summary: Transaction Highlights
Q2 2021 Executive Summary (unaudited in millions, except square footage and acreage) BRANDYWINE REALTY TRUST | Page 1 Transaction Highlights Life Science In March 2021, we entered into an agreement with Pennsylvania Biotechnology Center to create B.Labs, a Life Science incubator at Cira Centre dir
Slide 4: Q2 2021 Executive Summary: Leasing and Key Metrics
Q2 2021 Executive Summary (unaudited in thousands, except per share data and square footage) BRANDYWINE REALTY TRUST | Page 2 Leasing Highlights Q2 2021 Q1 2021 Quarter end occupancy 90.5% 90.3% Leased as of July 20, 2021 / April 19, 2021 92.5% 92.5% New leases executed in quarter (sq ft) 245,178 20
Slide 5: Business Plan Trend Line
Business Plan Trend Line (unaudited) BRANDYWINE REALTY TRUST | Page 3 2021 Business Plan as of Business Plan Component 7/20/2021 4/19/2021 Original Speculative Revenue $20.0 - $21.0 MM $18.0 - $22.0 MM $18.0 - $22.0 MM Executed $20.1 MM $18.1 MM $14.7 MM Projected Tenant Retention (SF) 51-53% 51-53%
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) The Austin office market has significant construction activity within the BDN Peer Group
Slide 7: Philadelphia Marketplace; Stability with Life Science Momentum
Philadelphia CBD Marketplace (unaudited) BRANDYWINE REALTY TRUST | Page 5 Philadelphia Marketplace; Stability with Life Science Momentum Highlights Philadelphia area Life Science companies reeled in nearly $3B year to date as reported Philadelphia ranks No. 3 in the U.S. for the amount of fundin
Slide 8: Development Summary
Development Summary (unaudited, in thousands, except square feet) BRANDYWINE REALTY TRUST | Page 6 Remaining Total Equity Amount Completion Stabilization Debt equity to be Projected Leased % @ Development (% owned) Location Type Square Feet Project Capitalization funded at Date Date Financing funded
Slide 9: Development Activity: 3025 JFK Boulevard
Development Activity (unaudited) BRANDYWINE REALTY TRUST | Page 7 3025 JFK Boulevard Development (Real Estate Venture) Project Description Design Overview Located in the Schuylkill Yards Neighborhood of Philadelphia, A 29-level premier mixed-use development featuring 200,000 SF of Pennsylvania l
Slide 10: Development Activity: Austin, TX
Development Activity (unaudited) BRANDYWINE REALTY TRUST | Page 8 AUSTIN, TX Overview Broadmoor is a mixed-use, 66 acre transit-oriented community with an extraordinary existing amenity base at the nearby Domain. The campus is home to approximately 840,000 square feet for IBM. Once redeveloped, th
Slide 11: Our Opportunity: Life Sciences
BRANDYWINE REALTY TRUST | Page 9 Our Opportunity: Life Sciences Nationally: Life sciences employment reached a record high in March 2021 with 16% total job growth since 2017, surpassing the technology sector. Total commercial lab space has grown by 12% this year to 95 million SF. Another 11 mill
Slide 12: Development Activity: Philadelphia, PA
Development Activity (unaudited) BRANDYWINE REALTY TRUST | Page 10 PHILADELPHIA, PA Overview Brandywine is the master developer of Schuylkill Yards, a multi-phase 14 acre/5.1 million square foot development of life science, research and academic facilities, office, residential, retail and hospital
Slide 13: Balance Sheet & Liquidity
BRANDYWINE REALTY TRUST | Page 11 Balance Sheet & Liquidity USES Projected ($ in M) 3Q21-4Q21 $542M currently available on our line of credit. Dividends $66 Contributions to Joint Venture Development 9 $460M projected availability at 12/31/21 Revenue Maintaining Cap Ex 20 Revenue Creating Cap Ex
Slide 14: Q2 2021 Land Inventory
Q2 2021 Land Inventory (unaudited) BRANDYWINE REALTY TRUST | Page 12 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 15: Property Activity
Property Activity (unaudited, in thousands, except square footage and acreage) BRANDYWINE REALTY TRUST | Page 13 Square Occupancy % Feet/Acres Sales Price @ Event Date Location Type Event Date 2020 PROPERTY ACTIVITY OFFICE ACQUISITION 250 King of Prussia Road Radnor, PA Office Building 11/30/2020 16
Slide 16: YTD 2021 Net Operating Income Composition
YTD 2021 Net Operating Income Composition (unaudited) BRANDYWINE REALTY TRUST | Page 14 YTD NOI - Wholly Owned (a) YTD NOI - Including JV's Total Core Portfolio NOI: $138.4 MM Total NOI: $159.8 MM 91.0% of NOI from our Core Markets (b) 90.0% of NOI from our Core Markets (b) MAP and Other 2%
Slide 17: Regional Property Overview
Regional Property Overview (unaudited, in thousands, except square footage) BRANDYWINE REALTY TRUST | Page 15 Square Feet % Occupied % Leased (1) Remaining Expirations Net Operating Income at 6/30/2021 # of Wholly Region Owned Properties Total % of Total 2021 2022 Q2 2021 % of Total YTD 2021 % of To
Slide 18: Leasing Activity-Core Portfolio
Leasing Activity-Core Portfolio (1) (unaudited) BRANDYWINE REALTY TRUST | Page 16 Six Months Ended Three Months Ended 06/30/2021 06/30/2020 06/30/2021 03/31/2021 12/31/2020 09/30/2020 06/30/2020 03/31/2020 Total Property Count 76 88 76 76 78 89 88 89 Total Square Feet 12,949,078 14,365,532 12,949,07
Slide 19: Leasing Activity-Core Portfolio (continued)
Leasing Activity-Core Portfolio (1) (unaudited) BRANDYWINE REALTY TRUST | Page 17 Six Months Ended Three Months Ended 06/30/2021 06/30/2020 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 $ 32.01 $ 32.68 $ 31.56 $ 35.85 $ 37
Slide 20: Lease Expiration Analysis
Lease Expiration Analysis (unaudited) BRANDYWINE REALTY TRUST | Page 18 Square Footage Annualized Rent of Expiring Leases (3) Acquired / Year of Lease Initial Lease Revisions (4) Vacated New Remaining % of Total Per Square Per Square Sold / in Current Final Expiration Expiring Out In Leases Leases E
Slide 21: Regional Lease Expiration Analysis
Regional Lease Expiration Analysis (1) (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 19 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 (81) (263) 65 35 114 13 8 5
Slide 22: Top Twenty Tenants
Top Twenty Tenants (unaudited, annualized rent in thousands) BRANDYWINE REALTY TRUST | Page 20 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 23: Q2 2021 Portfolio Tenant Mix
Q2 2021 Portfolio Tenant Mix (by square footage) BRANDYWINE REALTY TRUST | Page 21 Misc. Services - 5% Health Services - 2% Engineering & Transportation/Public Management Utilities - 4% Services - 10% Real Estate - 5% Other - 2% Wholesale Trade - 3% Finance - 17% Business Services - 18% Manufacturin
Slide 24: Income Statements
Income Statements (unaudited, in thousands, except share data) BRANDYWINE REALTY TRUST | Page 22 Six Months Ended Three Months Ended 06/30/2021 06/30/2020 06/30/2021 03/31/2021 12/31/2020 09/30/2020 06/30/2020 03/31/2020 Revenue Rents $ 224,719 $ 271,384 $ 111,235 $ 113,484 $ 120,843 $ 121,277 $ 132
Slide 25: Q2 2021 Same Store Net Operating Income
Q2 2021 Same Store Net Operating Income (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 23 Recently Development/ Completed/ Redevelopment Other/ Same Store Portfolio Acquired (1) (2) Eliminations (3) All Properties Second Quarter Second Quarter Second Quarter Second Quarter Second Quarter S
Slide 26: YTD 2021 Same Store Net Operating Income
YTD 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 Year to Date Year to Date Year to Date Year to Date Year to Date Year to Da
Slide 27: EBITDA and EBITDA Coverage Ratios
EBITDA and EBITDA Coverage Ratios (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 25 Six Months Ended Three Months Ended 06/30/2021 06/30/2020 06/30/2021 03/31/2021 12/31/2020 09/30/2020 06/30/2020 03/31/2020 Net income (loss) $ 6,789 $ 12,107 $ (175) $ 6,964 $ 19,086 $ 276,133 $ 4,020 $ 8,
Slide 28: Funds from Operations
Funds from Operations (unaudited, in thousands, except share data) BRANDYWINE REALTY TRUST | Page 26 Six Months Ended Three Months Ended 06/30/2021 06/30/2020 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 $ 6,514 $ 11,794 $ (2
Slide 29: Cash Available for Distribution
Cash Available for Distribution (unaudited, in thousands, except share data) BRANDYWINE REALTY TRUST | Page 27 Six Months Ended Three Months Ended 06/30/2021 06/30/2020 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 unit holders
Slide 30: Balance Sheets
Balance Sheets (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 28 06/30/2021 03/31/2021 12/31/2020 09/30/2020 06/30/2020 03/31/2020 Assets Real estate investments Operating properties $ 3,392,734 $ 3,386,559 $ 3,474,109 $ 3,715,765 $ 3,650,521 $ 4,004,118 Accumulated depreciation (928,245)
Slide 31: Liquidity, Leverage and Market Capitalization
Liquidity, Leverage and Market Capitalization (unaudited, in thousands, except shares and per share data) BRANDYWINE REALTY TRUST | Page 29 06/30/2021 03/31/2021 12/31/2020 09/30/2020 06/30/2020 03/31/2020 High closing price of common shares $ 15.00 $ 13.92 $ 12.27 $ 11.75 $ 12.20 $ 16.24 Low closin
Slide 32: Balance Sheet Information/Debt Statistics
Balance Sheet Information/Debt Statistics (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 30 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 $ 1,588,888 $ 1,811,528 $ 1,813,492 Fixed rate debt (variable rate debt swapped
Slide 33: Debt Schedules
Debt Schedules (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 31 06/30/2021 Maturity Stated Effective 06/30/2021 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 34: Debt Maturities
Debt Maturities (4) (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 32 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 308,000 - 308,000 16.3% 2.553% 2023 - 350,000 350,000 18.6% 3
Slide 35: Debt Maturities (chart)
Debt Maturities (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 33 $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% 16.3% 18.6% 18.6%
Slide 36: Debt Covenant Compliance
Debt Covenant Compliance (unaudited, in millions) BRANDYWINE REALTY TRUST | Page 34 Revolving Credit Agreement dated July 17, 2018 and Amended and Restated Term Loan C Agreement dated December 13, 2018 Covenant Required 6/30/2021 3/31/2021 12/31/2020 9/30/2020 6/30/2020 3/31/2020 Fixed Charge Covera
Slide 37: JV Property Overview
JV Property Overview (unaudited, in thousands, except square footage) BRANDYWINE REALTY TRUST | Page 35 As of June 30, 2021 BDN's Share BDN Number BDN Net Initial Investment of Percent Ownershi Operating Unconsolidated Real Project @ Propertie Net Operating Rentable Percent Leased p Income Rentable
Slide 38: JV Debt Schedule
JV Debt Schedule (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 36 06/30/2021 BDN BDN Ownership Stated Share Debt Instrument Percentage Maturity Date Rate (1) 06/30/2021 Balance of Venture Debt Office Properties Commerce Square JV 70% April 5, 2023 (2) $ 216,147 $ 151,303 Mid-Atlantic Offi
Slide 39: JV Debt Summary
JV Debt Summary (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 37 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 3,815 142,261 146,076 72,4
Slide 40: Q2 2021 Analyst and Company Information
Q2 2021 Analyst and Company Information BRANDYWINE REALTY TRUST | Page 38 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 41: Q2 2021 Disclaimers and Other Information
Q2 2021 Disclaimers and Other Information BRANDYWINE REALTY TRUST | Page 39 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 42: Q2 2021 Disclaimers and Other Information (continued)
Q2 2021 Disclaimers and Other Information (continued) BRANDYWINE REALTY TRUST | Page 40 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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