Brandywine Realty Trust · NYSE:BDN
Brandywine Realty Trust — Q3 2022 Earnings Presentation
44 slides from Brandywine Realty Trust's earnings presentation, Oct 21, 2022
Slide 1: Supplemental Information Package Third Quarter 2022
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 02 2 TH I R D Q UA R TE R Q UA L I T Y | I N N OVAT I O N | I N T EG R I T Y | C O M M U N I T Y
Slide 2: Table of Contents
Table of Contents Page Executive Summary 1 2022 Business Plan Trend Line 3 Development Summary 7 Balance Sheet and Liquidity 13 Land Inventory 14 Property Activity 15 Net Operating Income Composition 16 Regional Property Overview 17 Leasing Activity 18 Lease Expiration Analysis 20 Top Twenty Tenants
Slide 3: Q3 2022 Executive Summary
Q3 2022 Executive Summary (unaudited in millions, except square footage and acreage) BRANDYWINE REALTY TRUST | Page 1 Quarterly Highlights Joint Venture Activity On July 14, 2022, we formed a joint venture with a global institutional investor to commence development of 3151 Market Street in Philad
Slide 4: Q3 2022 Executive Summary: Leasing Highlights
Q3 2022 Executive Summary (unaudited in thousands, except per share data and square footage) BRANDYWINE REALTY TRUST | Page 2 Leasing Highlights Q3 2022 Q2 2022 Quarter end occupancy 90.8% 89.6% Leased as of October 14, 2022 / July 19, 2022 91.8% 92.1% New leases executed in quarter (sq ft) 301,162
Slide 5: Business Plan Trend Line
Business Plan Trend Line (unaudited) BRANDYWINE REALTY TRUST | Page 3 2022 Business Plan as of Business Plan Component 10/14/2022 07/19/2022 4/19/2022 Original Speculative Revenue / SF $34.0 - $36.0 MM / 1.8M SF $34.0 - $36.0 MM / 1.8M SF $34.0 - $36.0 MM / 2.0M SF $34.0 - $36.0 MM / 2.0M SF Execute
Slide 6: Austin Marketplace: Continued Leading Growth
Austin Marketplace: Continued Leading Growth (unaudited) BRANDYWINE REALTY TRUST | Page 4 (From L to R): Uptown ATX Block A; Garza Ranch; and Four Points Highlights #1 Fastest Growing Metro (US Census Bureau) Opportunity Austin reported that 2021 was another record year of corporate #1 Best Pl
Slide 7: Philadelphia CBD Marketplace
Philadelphia CBD Marketplace (unaudited) BRANDYWINE REALTY TRUST | Page 5 Philadelphia Marketplace; Stability with Life Science Momentum Highlights $8.1 billion in venture capital deals in 2021, the 5th highest total in the US. 80 percent of all pharmaceutical and biotech companies in the U.S. h
Slide 8: Our Opportunity: Life Sciences
Our Opportunity: Life Sciences (unaudited) BRANDYWINE REALTY TRUST | Page 6 Nationally: 5.2% vacancy nationally. 17 million SF is currently under construction or 10.7% of current inventory. Despite increased supply, rents and demand remain strong. Our Markets: Philadelphia and D.C. on CBRE’s t
Slide 9: Development Summary
Development Summary (unaudited, in thousands, except square feet) BRANDYWINE REALTY TRUST | Page 7 Remaining Remaining Equity Amount equity to be equity to be Projected Completion Stabilization Total Project Debt Leased % @ Development (% owned) Location Type Square Feet Capitalization funded at fun
Slide 10: Development Activity: 3151 Market Street
Development Activity (unaudited) BRANDYWINE REALTY TRUST | Page 8 3151 Market Street Development (Real Estate Venture) Design Overview Project Description A 12-level premier development featuring 417,000 SF of customizable life science/innovation/office space. Located in the Schuylkill Yards nei
Slide 11: Development Activity: 3025 JFK Boulevard
Development Activity (unaudited) BRANDYWINE REALTY TRUST | Page 9 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 12: Development Activity: One Uptown
Development Activity (unaudited) BRANDYWINE REALTY TRUST | Page 10 One Uptown (Uptown ATX - Block A) Project Overview Project Schedule A mixed-use development featuring a 14-story office tower Joint Venture Formation: Q4 2021 comprised of one level of below-grade parking, lobby and Constructio
Slide 13: Development Activity: Austin, TX
Development Activity (unaudited) BRANDYWINE REALTY TRUST | Page 11 AUSTIN, TX Overview Uptown ATX 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 596,000 square feet for IBM. Once redeveloped,
Slide 14: Development Activity: Philadelphia, PA
Development Activity (unaudited) BRANDYWINE REALTY TRUST | Page 12 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 15: Balance Sheet Liquidity: 2022 Capital Plan
Balance Sheet Liquidity (unaudited) BRANDYWINE REALTY TRUST | Page 13 2022 Capital Plan USES Projected ($ in millions) 4Q22 $350M currently available on our line of credit including $4M in Dividends $33 letters of credit. Contributions to Joint Venture Development, net 12 Revenue Maintaining Cap E
Slide 16: Q3 2022 Land Inventory
Q3 2022 Land Inventory (unaudited) BRANDYWINE REALTY TRUST | Page 14 Estimated Development Square Feet Acres Active/Pre-Development Projects Philadelphia CBD (a) (b) 55.1 4,747,000 Pennsylvania Suburbs 25.0 660,000 Austin, Texas (c) 70.0 5,773,000 Total Active/Pre-Development Projects 150.1 11,180,0
Slide 17: Property Activity
Property Activity (unaudited, in thousands, except square footage and acreage) BRANDYWINE REALTY TRUST | Page 15 Occupancy % Location Type Event Date Square Feet/Acres Purchase/Sales Price @ Event Date 2022 PROPERTY ACTIVITY LAND ACQUISITION 631 Park Avenue King of Prussia, PA Land 01/21/2022 3.3 ac
Slide 18: YTD 2022 Net Operating Income Composition
YTD 2022 Net Operating Income Composition (unaudited) BRANDYWINE REALTY TRUST | Page 16 YTD NOI - Wholly Owned (a) YTD NOI - Including JV's Total Core Portfolio NOI: $207.5 MM Total NOI: $242.9 MM 91% of NOI from our Core Markets (b) 91% of NOI from our Core Markets (b) MAP and Mid-Atlantic
Slide 19: Regional Property Overview
Regional Property Overview (unaudited, in thousands, except square footage) BRANDYWINE REALTY TRUST | Page 17 # of Wholly Owned Square Feet % Occupied % Leased (1) Remaining Expirations Net Operating Income at 9/30/2022 Region Properties Total % of Total 2022 2023 Q3 2022 % of Total YTD 2022 % of To
Slide 20: Leasing Activity-Core Portfolio
Leasing Activity-Core Portfolio (1) (unaudited) BRANDYWINE REALTY TRUST | Page 18 Nine Months Ended Three Months Ended 09/30/2022 09/30/2021 09/30/2022 06/30/2022 03/31/2022 12/31/2021 09/30/2021 06/30/2021 Total Property Count 72 76 72 74 77 77 76 76 Total Square Feet 12,791,041 12,949,078 12,791,0
Slide 21: Leasing Activity-Core Portfolio: Rent Growth
Leasing Activity-Core Portfolio (1) (unaudited) BRANDYWINE REALTY TRUST | Page 19 Nine Months Ended Three Months Ended 09/30/2022 09/30/2021 09/30/2022 06/30/2022 03/31/2022 12/31/2021 09/30/2021 06/30/2021 New Leases/Expansions (2): Cash Rent Growth Expiring Rate $ 37.98 $ 32.62 $ 37.28 $ 38.27 $ 4
Slide 22: Lease Expiration Analysis
Lease Expiration Analysis (unaudited) BRANDYWINE REALTY TRUST | Page 20 Square Footage Annualized Rent of Expiring Leases (3) Lease Revisions (4) Remaining Acquired / Year of Lease Vacated New Remaining % of Total Expirations including % of Total Per Square Per Square Initial Expiring Sold / in Curr
Slide 23: Regional Lease Expiration Analysis
Regional Lease Expiration Analysis (1) (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 21 2022 2023 2024 2025 2026 2027 2028 Thereafter Total Philadelphia CBD Square feet expiring (Net of Acquired/Sold) 347 204 262 315 164 300 189 2,887 4,668 Net leasing activity (313) (58) 12 15 9 16 - 168
Slide 24: Top Twenty Tenants
Top Twenty Tenants (unaudited, annualized rent in thousands) BRANDYWINE REALTY TRUST | Page 22 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 25: Q3 2022 Portfolio Tenant Mix
Q3 2022 Portfolio Tenant Mix (unaudited, by square footage) BRANDYWINE REALTY TRUST | Page 23 Misc. Services - 4% Health Services - 3% Engineering & Management Transportation/Public Services - 8% Utilities - 4% Real Estate -6% Other - 2% Wholesale Trade - 3% Finance - 16% Business Services - 16% Man
Slide 26: Income Statements
Income Statements (unaudited, in thousands, except share data) BRANDYWINE REALTY TRUST | Page 24 Nine Months Ended Three Months Ended 09/30/2022 09/30/2021 09/30/2022 06/30/2022 03/31/2022 12/31/2021 09/30/2021 06/30/2021 03/31/2021 Revenue Rents $ 350,279 $ 336,878 $ 117,481 $ 116,897 $ 115,901 $ 1
Slide 27: Q3 2022 Same Store Net Operating Income
Q3 2022 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 Third Quarter Third Quarter Third Quarter Third Quarter Third Quarter Third
Slide 28: YTD 2022 Same Store Net Operating Income
YTD 2022 Same Store Net Operating Income (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 26 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 29: EBITDA and EBITDA Coverage Ratios
EBITDA and EBITDA Coverage Ratios (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 27 Nine Months Ended Three Months Ended 09/30/2022 09/30/2021 09/30/2022 06/30/2022 03/31/2022 12/31/2021 09/30/2021 06/30/2021 03/31/2021 Net income (loss) $ 24,230 $ 7,763 $ 13,478 $ 4,651 $ 6,101 $ 4,603 $
Slide 30: Funds from Operations
Funds from Operations (unaudited, in thousands, except share data) BRANDYWINE REALTY TRUST | Page 28 Nine Months Ended Three Months Ended 09/30/2022 09/30/2021 09/30/2022 06/30/2022 03/31/2022 12/31/2021 09/30/2021 06/30/2021 03/31/2021 Net income (loss) attributable to common shareholders $ 23,820
Slide 31: Cash Available for Distribution
Cash Available for Distribution (unaudited, in thousands, except share data) BRANDYWINE REALTY TRUST | Page 29 Nine Months Ended Three Months Ended 09/30/2022 09/30/2021 09/30/2022 06/30/2022 03/31/2022 12/31/2021 09/30/2021 06/30/2021 03/31/2021 Funds from operations available to common share and u
Slide 32: Balance Sheets
Balance Sheets (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 30 09/30/2022 06/30/2022 03/31/2022 12/31/2021 09/30/2021 06/30/2021 03/31/2021 Assets Real estate investments Operating properties $ 3,587,083 $ 3,545,102 $ 3,517,995 $ 3,472,602 $ 3,437,074 $ 3,392,734 $ 3,386,559 Accumulated
Slide 33: Liquidity, Leverage and Market Capitalization
Liquidity, Leverage and Market Capitalization (unaudited, in thousands, except shares and per share data) BRANDYWINE REALTY TRUST | Page 31 09/30/2022 06/30/2022 03/31/2022 12/31/2021 09/30/2021 06/30/2021 03/31/2021 High closing price of common shares $ 9.74 $ 14.15 $ 14.69 $ 14.66 $ 14.45 $ 15.00
Slide 34: Balance Sheet Information/Debt Statistics
Balance Sheet Information/Debt Statistics (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 32 09/30/2022 06/30/2022 03/31/2022 12/31/2021 09/30/2021 06/30/2021 03/31/2021 Fixed rate debt $ 1,500,000 $ 1,500,000 $ 1,500,000 $ 1,500,000 $ 1,500,000 $ 1,500,000 $ 1,500,000 Fixed rate debt (vari
Slide 35: Debt Schedules
Debt Schedules (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 33 09/30/2022 Maturity Stated Effective 09/30/2022 12/31/2021 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 36: Debt Maturities
Debt Maturities (4) (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 34 Unsecured Debt Maturity Schedule Percent of Weighted Bank Facilities Senior Notes Total By Year Debt Maturing Average Interest (5) 2022 - - - 0.0% 0.000% 2023 - 350,000 350,000 16.9% 3.865% 2024 - 350,000 350,000 16.9% 3
Slide 37: Debt Maturities
Debt Maturities (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 35 $800,000 Bank Facilities $700,000 Unsecured Notes $600,000 Balloon Payments $500,000 Scheduled Amortization $400,000 $300,000 $200,000 $100,000 $0 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Thereafter % of total 0.0%
Slide 38: Debt Covenant Compliance
Debt Covenant Compliance (unaudited, in millions) BRANDYWINE REALTY TRUST | Page 36 Revolving Credit Agreement dated July 17, 2018 and Amended and Restated Term Loan C Agreement dated December 13, 2018 Covenant Required 9/30/2022 6/30/2022 3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/2021 Fixed Cha
Slide 39: JV Property Overview
JV Property Overview (unaudited, in thousands, except square footage) BRANDYWINE REALTY TRUST | Page 37 As of September 30, 2022 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 40: JV Debt Schedule
JV Debt Schedule (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 38 09/30/2022 BDN BDN Ownership Stated Share Debt Instrument Percentage Maturity Date Rate (1) 09/30/2022 Balance of Venture Debt Office Properties Commerce Square JV 70% April 5, 2023 (2) $ 208,342 $ 145,839 MAP Venture (3) 5
Slide 41: JV Debt Summary
JV Debt Summary (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 39 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) 2022 2,158 - 2,158 758 1,400 0.
Slide 42: Q3 2022 Analyst and Company Information
Q3 2022 Analyst and Company Information BRANDYWINE REALTY TRUST | Page 40 Equity Research Coverage BofA Merrill Lynch Green Street Advisors Raymond James & Associates Camille Bonnel / Sooryuda Gangavarapu Danny Ismail Paul Puryear / Bill Crow 416-369-2140 / 646-855-1351 949-640-8780 727-567-2253 / 7
Slide 43: Q3 2022 Disclaimers and Other Information
Q3 2022 Disclaimers and Other Information BRANDYWINE REALTY TRUST | Page 41 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 44: Q3 2022 Disclaimers and Other Information (continued)
Q3 2022 Disclaimers and Other Information (continued) BRANDYWINE REALTY TRUST | Page 42 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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