Jbg Smith Properties · NYSE:JBGS
Jbg Smith Properties — Investor Presentation (May 2019)
67 slides from Jbg Smith Properties's investor presentation, May 14, 2019
Slide 1: Disclosures: Forward-Looking Statements
DISCLOSURES FORWARD-LOOKING STATEMENTS Certain statements contained herein may constitute “forward-looking statements” as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are
Slide 2: Disclosures
DISCLOSURES With respect to any such third-party arrangement, we would not be in a position to exercise sole decision-making authority regarding the property, real estate venture or other entity, and may, under certain circumstances, be exposed to economic risks not present were a third party not in
Slide 3: Agenda
AGENDA HIGHLIGHTS 1 2 STRATEGY 3 2018 ACCOMPLISHMENTS STATE OF THE MARKET 4 5 GROWTH AND CAPITALIZATION 4
Slide 4: Introduction of Speakers
INTRODUCTION OF SPEAKERS Matt Kelly Chief Executive Officer David Paul Chief Operating Officer Kai Reynolds Chief Development Officer Steve Theriot Chief Financial Officer Moina Banerjee Head of Capital Markets George Xanders Co-Head of Acquisitions Evan Regan-Levine Strategic Innovation and Researc
Slide 5: Introduction of Speakers
INTRODUCTION OF SPEAKERS Matt Kelly David Paul Chief Executive Officer Chief Operating Officer Moina Banerjee George Xanders Head of Capital Markets Co-Head of Acquisitions Kai Reynolds Chief Development Officer 7 Steve Theriot Chief Financial Officer Evan Regan-Levine Strategic Innovation and Resea
Slide 6: Highlights: JBG SMITH at a Glance
HIGHLIGHTS: JBG SMITH AT A GLANCE OPERATING PORTFOLIO UNDER CONSTRUCTION FUTURE DEVELOPMENT PIPELINE COMMERCIAL SF 11.3M MULTIFAMILY UNITS 4,531 COMMERCIAL SF 927K MULTIFAMILY UNITS 1,298 COMMERCIAL SF 10.1M MULTIFAMILY SF 9.5M Q4 2018 ANNUALIZED NOI $342M WEIGHTED AVERAGE LEASE TERM 6.2 YEARS METRO
Slide 7: Highlights: JBG SMITH at a Glance
HIGHLIGHTS: JBG SMITH AT A GLANCE OPERATING PORTFOLIO COMMERCIAL SF MULTIFAMILY UNITS 11.3M 4,531 UNDER CONSTRUCTION COMMERCIAL SF 927K MULTIFAMILY UNITS 1,298 FUTURE DEVELOPMENT PIPELINE COMMERCIAL SF MULTIFAMILY SF 10.1M 9.5M Q4 2018 ANNUALIZED NOI $342M Mlustrative 1900 N Street WEIGHTED AVERAGE
Slide 8: Strategy: Summary
STRATEGY: SUMMARY SUBMARKET CONCENTRATION Invested in high growth urban submarkets in Washington, DC Metro Area HIGH-GROWTH ASSETS Own and operate high risk-adjusted return assets, with emphasis on multifamily over the longer term PROVEN DEVELOPMENT EXPERTISE Mixed-use operator with track record of
Slide 9: Strategy: Washington, DC Metro Area
STRATEGY: WASHINGTON, DC METRO AREA DC IS MORE RECESSION-RESILIENT THAN OTHER GATEWAY MARKETS, WITH FUTURE GROWTH LIKELY TO BE TURBOCHARGED BY AMAZON 1990-1992 Recession 2001-2002 Tech Crash 2008-2009 Great Recession 3.0% 2.0% 0.3% 1.0% 0.0% -1.0% -2.0% -3.0% -2.4% -4.0% -3.3% -4.0% -5.0% Source: JL
Slide 10: Strategy: Submarket Concentration
STRATEGY: SUBMARKET CONCENTRATION CONCENTRATION OF HIGH-GROWTH ASSETS IN THE BEST SUBMARKETS Bethesda MD NORTHERN VIRGINIA NATIONAL LANDING 55% RESTON 12% RB CORRIDOR 5% WASHINGTON, DC Washington, DC DC EMERGING 16% DC MATURE 5% MARYLAND BETHESDA CBD 2% OTHER MD 5% VA National Landing 80% OF PORTFOL
Slide 11: Strategy: Common Submarket Characteristics
STRATEGY: COMMON SUBMARKET CHARACTERISTICS OUTPERFORMING SUBMARKETS HAVE SHARED CHARACTERISTICS + + = WALKABLE AMENITY BASE Restaurants, theaters, TRANSIT ACCESS Metro or commuter rail access is required DIVERSITY OF OFFERINGS A balanced mix of office and residential sustains 18-hour retail environm
Slide 12: Strategy: JBG SMITH Office Submarkets
STRATEGY: JBG SMITH OFFICE SUBMARKETS RENT GROWTH AND OCCUPANCY IN OUR OFFICE SUBMARKETS OUTPERFORM OTHER SUBMARKETS 2018 ASKING RENTS RELATIVE TO MARKET 2008-2018 ASKING RENT GROWTH 2008-2018 AVERAGE OCCUPANCY 30.3% 86.5% 30.0% 87.0% 25.0% 25.0% 86.0% 20.0% 20.0% 85.0% 15.0% 14.1% 10.0% 15.0% 84.0%
Slide 13: Strategy: JBG SMITH Multifamily Submarkets
STRATEGY: JBG SMITH MULTIFAMILY SUBMARKETS RENT GROWTH AND NET ABSORPTION IN OUR MULTIFAMILY SUBMARKETS OUTPERFORM OTHER SUBMARKETS 2018 ASKING RENTS RELATIVE TO MARKET 2008-2018 ASKING RENT GROWTH 2008-2018 NET ABSORPTION AS % OF STARTING INVENTORY 20.0% 39.0% 37.6% 15.3% 70.0% 59.7% 38.0% 15.0% 37
Slide 14: Strategy: Value Creation Focus
STRATEGY: VALUE CREATION FOCUS EVERY DECISION IS EVALUATED THROUGH THE LENS OF MAXIMIZING LONG-TERM NET ASSET VALUE (NAV) PER SHARE SELL DISCIPLINE TACTICAL LEASING OPPORTUNISTIC DEVELOPMENT MONETIZATION OF FUTURE DEVELOPMENT PIPELINE 15
Slide 15: Strategy: Value Creation Focus
STRATEGY: VALUE CREATION FOCUS EVERY DECISION IS EVALUATED THROUGH THE LENS OF MAXIMIZING LONG-TERM NET ASSET VALUE (NAV) PER SHARE SELL DISCIPLINE TACTICAL LEASING OPPORTUNISTIC MONETIZATION OF DEVELOPMENT FUTURE DEVELOPMENT PIPELINE O16
Slide 16: 2018 Accomplishments: The Highlights
2018 ACCOMPLISHMENTS: THE HIGHLIGHTS CEB Tower at Central Place 1 Pursued and won Amazon HQ2 2 Strengthened balance sheet by exceeding capital allocation and recycling goals 3 Improved profile of our Commercial Operating Portfolio 4 Accelerated monetization of Under Construction assets and Future De
Slide 17: 2018 Accomplishments: Amazon HQ2 Overview
2018 ACCOMPLISHMENTS: AMAZON HQ2 OVERVIEW $4.3B OF COMMITTED THIRD-PARTY INVESTMENT IN AND AROUND NATIONAL LANDING KEY TRANSACTION TERMS Lease 537K SF of space at $35 Net Effective Rent (NER) SIGNIFICANT CONCENTRATION IN NATIONAL LANDING 6.1M SF of existing operating commercial space (71.0% of marke
Slide 18: 2018 Accomplishments: Amazon HQ2 Sites
2018 ACCOMPLISHMENTS: AMAZON HQ2 SITES AMAZON LEASE AMAZON PURCHASE 537K SF AT $35 NER 4.1M SF FOR $294M REAGAN NATIONAL AIRPORT KEY AMAZON LEASE AMAZON PURCHASE EXISTING OPERATING JBG SMITH IS DEVELOPER, PROPERTY MANAGER, AND RETAIL LEASING AGENT 19
Slide 19: Amazon HQ2 State and Local Infrastructure/Education Projects
2018 ACCOMPLISHMENTS: AMAZON HQ2 STATE AND LOCAL INFRASTRUCTURE/EDUCATION PROJECTS INFRASTRUCTURE INVESTMENT $865M EDUCATION INVESTMENT $925M REAGAN NATIONAL AIRPORT Improvements KEY AMAZON LEASE AMAZON PURCHASE INFRASTRUCTURE/EDUCATION (STATE & LOCAL FUNDED) EXISTING OPERATING 20 Route One Virginia
Slide 20: National Landing Development Opportunities
2018 ACCOMPLISHMENTS: NATIONAL LANDING DEVELOPMENT OPPORTUNITIES UNDER CONSTRUCTION ASSETS FUTURE DEVELOPMENT PIPELINE CENTRAL DISTRICT RETAIL 1770 CRYSTAL DRIVE 272K SF SF(1) 109K SF 6.9M REAGAN NATIONAL AIRPORT Improvements KEY AMAZON LEASE AMAZON PURCHASE INFRASTRUCTURE/EDUCATION (STATE & LOCAL F
Slide 21: 2018 Accomplishments: Capital Recycling
2018 ACCOMPLISHMENTS: CAPITAL RECYCLING SOLD OR RECAPITALIZED $875M(1) OF ASSETS AND GROUND LEASED 1700 M STREET 1 2 Capitalized on market conditions $875M $800 Reduced lower yielding DC office exposure 018 Goal $700 $600 3 $500 Redeployed proceeds into higher yielding development $400 $300 $200 4 S
Slide 22: Under Construction Opportunities
2018 ACCOMPLISHMENTS: UNDER CONSTRUCTION OPPORTUNITIES ALL NINE UNDER CONSTRUCTION ASSETS ARE ON SCHEDULE AND ON BUDGET, WITH GUARANTEED MAXIMUM PRICE CONTRACTS IN PLACE COMMERCIAL ASSETS 5 SQUARE FEET 927K MULTIFAMILY ASSETS 4 UNITS 1,298 COMMERCIAL PRE-LEASED (1) 80.9% ESTIMATED INCREMENTAL INVEST
Slide 23: 2018 Accomplishments: Portfolio Metrics
2018 ACCOMPLISHMENTS: PORTFOLIO METRICS YE 2017 YE 2018 COMMERCIAL 12.1M SF 11.3M SF 54 46 NUMBER OF COMMERCIAL ASSETS 7.3% 3.3% DC COMMODITY CLASS A EXPOSURE(1) 88.0% 89.6% % LEASED EXPOSURE TO DC COMMODITY CLASS A ROLLOVER THROUGH 2021 430K SF 138K SF 187K SF 484K SF TROPHY SF AVAILABLE(1) MULTIFA
Slide 24: Commercial Performance and Trends
2018 ACCOMPLISHMENTS: COMMERCIAL PERFORMANCE AND TRENDS FOCUS ON RISK MITIGATION IN DC AND POSITIONING PORTFOLIO FOR GROWTH IN NATIONAL LANDING COMMERCIAL PORTFOLIO MIX(1) Under Construction Generated $261.5M of Annualized NOI in Q4 2018 versus $290.3M in Q4 2017 YTD same store NOI increased 0.1% Q4
Slide 25: Office Leasing and Positioning Strategy
2018 ACCOMPLISHMENTS: OFFICE LEASING AND POSITIONING STRATEGY X OFFENSIVE POSTURE DEFENSIVE POSTURE O IN NATIONAL LANDING Key large tenant renewals IN WASHINGTON, DC Reduced rollover risk with blend-and-extend renewals O X • • O X O O O X Shorter term leases with mark-to-market resets and fixed rent
Slide 26: Multifamily Performance and Trends
2018 ACCOMPLISHMENTS: MULTIFAMILY PERFORMANCE AND TRENDS GREW MULTIFAMILY NOI AND MAINTAINED HIGH LEVEL OF OCCUPANCY Generated $80.3M of Annualized NOI in Q4 2018 versus $73.0M in Q4 2017 • MULTIFAMILY PORTFOLIO MIX(1) Under Construction 22% Class B 34% Maintained 93.9% occupancy with delivery of 29
Slide 27: All Asset Deliveries Ahead of Schedule and Under Budget
2018 ACCOMPLISHMENTS: ALL ASSET DELIVERIES SINCE MERGER AHEAD SCHEDULE AND UNDER BUDGET(1) OF ASSETS DELIVERED ONE QUARTER AHEAD OF SCHEDULE CEB TOWER AT CENTRAL PLACE 1221 VAN STREET USE: SUBMARKET: BUILDING SIZE: LEASED %: OWNERSHIP: COMPLETION DATE: Commercial Rosslyn 552,540 SF 93.0% 100% Q1 201
Slide 28: Under Construction Pipeline Expected to Deliver Near-Term Growth
2018 ACCOMPLISHMENTS: UNDER CONSTRUCTION PIPELINE EXPECTED TO DELIVER STRONG NEAR-TERM GROWTH WEIGHTED AVERAGE COMPLETION DATE WEIGHTED AVERAGE STABILIZATION DATE Q2 2021 Q2 2020 2019 2020 2021 Q3 Q4 Q4 Q1 Q2 Q3 Q4 Q2 Q2 L’Enfant Plaza Office-Southeast 4747 Bethesda Avenue Atlantic Plumbing C 7900 W
Slide 29: Future Development Pipeline Submarket Concentration
2018 ACCOMPLISHMENTS: FUTURE DEVELOPMENT PIPELINE SUBMARKET CONCENTRATION CONCENTRATION OF FUTURE DEVELOPMENT PIPELINE PROXIMATE TO NATIONAL LANDING Bethesda MD NORTHERN VIRGINIA NATIONAL LANDING 11.0M SF(1) RESTON 3.5M SF OTHER VA 232K SF WASHINGTON, DC DC EMERGING 3.5M SF Washington, DC MARYLAND 1
Slide 30: Progression of Future Development Pipeline
2018 ACCOMPLISHMENTS: PROGRESSION OF FUTURE DEVELOPMENT PIPELINE UNLOCKED VALUE OF FUTURE DEVELOPMENT PIPELINE THROUGH CONSTRUCTION STARTS, LAND SALES, AND FURTHERING ENTITLEMENTS STAGE OF ENTITLEMENT VALUE CREATION THROUGH MONETIZATION OF 6.0M SF(2) $447M $500.0 $400.0 $324M $300.0 $200.0 $100.0 $-
Slide 31: Advanced Entitlements on Remaining Future Development
2018 ACCOMPLISHMENTS: ADVANCED ENTITLEMENTS ON REMAINING FUTURE DEVELOPMENT OPPORTUNITIES WE OWN 6.9M SF(1) OF ESTIMATED DEVELOPMENT DENSITY NATIONAL LANDING IN REAGAN NATIONAL AIRPORT Entrance 8 5 8 1 4 2 3 Improvements FIRST TRANCHE DEVELOPMENT OPPORTUNITIES 1800 SOUTH BELL STREET LAND 500K SF 101
Slide 32: Rule Breakers: Metro Entrances
RULE BREAKERS: METRO ENTRANCES METRO ENTRANCE FACES A WALL AND IS UPHILL FROM THE MAIN STREET SECOND METRO ENTRANCE CRYSTAL DRIVE ON BEFORE AFTER 33
Slide 33: Rule Breakers: Retail Streetscape
RULE BREAKERS: RETAIL STREETSCAPE “MISSING TEETH” FILLED IN RETAIL IS ONE-SIDED WITH “MISSING TEETH” WITH RETAIL AND BUILDING ENTRANCES BEFORE AFTER 34
Slide 34: Rule Breakers: Underground Retail
RULE BREAKERS: UNDERGROUND RETAIL BETWEEN CENTRAL DISTRICT RETAIL AND 1900 CRYSTAL DRIVE, STREET INSUFFICIENT STREET RETAIL RETAIL IS EXPECTED TO DOUBLE BEFORE AFTER 35
Slide 35: Rule Breakers: Suburban Conditions
RULE BREAKERS: SUBURBAN CONDITIONS BUILDINGS FEATURE SUBURBAN SETBACKS AND LANDSCAPING, NEW DEVELOPMENTS AND ACTIVATIONS (DINING IN THE PARK) ISOLATING THEM FROM THE STREET ENGAGE STREET BEFORE AFTER 36
Slide 36: Rule Breakers: Public Spaces
RULE BREAKERS: PUBLIC SPACES PUBLIC SPACES ARE BIG, BARREN, CREATION OF MULTIPLE SMALL AND UNINVITING PUBLIC PARKS AND GREEN SPACES BEFORE AFTER 37
Slide 37: Advanced Entitlement of 1900 Crystal Drive
2018 ACCOMPLISHMENTS: ADVANCED ENTITLEMENT OF 1900 CRYSTAL DRIVE FILLS CRITICAL RETAIL AND ACTIVITY GAP ON CRYSTAL DRIVE 750 UNITS OF MULTIFAMILY IN TWO BUILDINGS 30K SQUARE FEET OF RETAIL $362M OF ESTIMATED INCREMENTAL INVESTMENT 2020 CONSTRUCTION START Illustrative 1900 Crystal Drive (Alternative
Slide 38: ESG – Environmental
2018 ACCOMPLISHMENTS: ESG – ENVIRONMENTAL ALIGNED BUSINESS PRACTICES WITH SUSTAINABLE GROWTH, RESPONSIBLE DEVELOPMENT, AND HIGH-PERFORMANCE OPERATIONS CLIMATE CHANGE IMPACT PRIORITY BOARD ESG OVERSIGHT In our first year as a GRESB par ticipant and member (2018) 2ND In Peer Group GREEN STAR Recogniti
Slide 39: ESG – Governance
2018 ACCOMPLISHMENTS: ESG – GOVERNANCE DIVERSE AND EXPERIENCED MANAGEMENT TEAM AND BOARD OF TRUSTEES BOARD OF TRUSTEES COMPANY-WIDE DIVERSITY AND INCLUSION Ethnic Diversity(1) 52% Minority 48% White Female Male 5 Gender Diversity 62% Male 38% Female 4 Operating 75% Public company experience 67% 2 Re
Slide 40: ESG - Governance
2018 ACCOMPLISHMENTS: ESG - GOVERNANCE DIVERSE AND EXPERIENCED MANAGEMENT TEAM AND BOARD OF TRUSTEES BOARD OF TRUSTEES COMPANY-WIDE DIVERSITY AND INCLUSION Ethnic Diversity” 52% Minority 48% White Qrewae vote Sse Operating 75% paren Public company experience 67% 38% Female Real estate expertise 67%
Slide 41: State of the Market: DC Economy
STATE OF THE MARKET: DC ECONOMY STRONG JOB GROWTH POST-SEQUESTRATION AND NORTHERN VIRGINIA BRAC, PARTICULARLY IN AVERAGE ANNUAL JOB GROWTH RECESSION AND RECOVERY SEQUESTRATION AND BRAC CURRENT PERIOD 80 60 40 20 0 -20 -40 -60 -80 Source: Bureau of Labor and Statistics (BLS) 44 Employment Growth (Tho
Slide 42: State of the Market: Potential Amazon Impact
STATE OF THE MARKET: POTENTIAL AMAZON IMPACT AMAZON ISN’T JUST 38,000 JOBS – IT’S A CATALYST FOR SIGNIFICANT GROWTH ESTIMATED TECH CATALYST IMPACT 5.5M SF OF TECH EXPANSIONS TO SEATTLE SINCE 2011 Normal Growth Since HQ1, these are just some of the companies that have expanded to Seattle and drive fo
Slide 43: Anticipated Amazon Follow-On Demand
STATE OF THE MARKET: ANTICIPATED AMAZON FOLLOW-ON DEMAND SEATTLE SAW TECH-DOMINATED GROWTH AROUND AMAZON POST 2010 SEATTLE NATIONAL LANDING KEY AMAZON BUILDINGS KEY JBG SMITH BUILDINGS AMAZON BUILDINGS 46
Slide 44: Potential Amazon Impact: Office Rent Growth and Occupancy
STATE OF THE MARKET: POTENTIAL AMAZON IMPACT TRANSWESTERN FORECASTS 4.0%-5.0% RENT GROWTH AND 93% OCCUPANCY FOR NATIONAL LANDING, CONSISTENT WITH ACTUAL GROWTH IN SOUTH LAKE UNION 5.0% Source: Transwestern, JLL 47 OOFcFcIuCpEanOcCy C%UPANCY OFFICE RENT GROWTH South Lake Union -0.3% South Lake Union
Slide 45: Potential Amazon Impact: Multifamily
STATE OF THE MARKET: POTENTIAL AMAZON IMPACT MULTIFAMILY NEW DEMAND CATALYST IS LIKELY TO DRIVE STRONG CLASS A APARTMENT MARKET IN NATIONAL LANDING + = which JBG SMITH Source: Amazon-Virginia MOU 48 Class A demand in excess of inventory with ability to pay replacement cost rent should lead to new de
Slide 46: DC Metro Office Market
STATE OF THE MARKET: DC METRO OFFICE MARKET OFFICE HAD A STRONG YEAR IN 2018, WITH GROWTH CONCENTRATED NORTHERN VIRGINIA IN METRO MARKET DIRECT NET ABSORPTION COMPARISON (SF) 4.2M 134K -3.9M 2009 Source: JLL 201 0 201 1 201 2 201 3 201 4 201 5 201 6 201 7 201 8 49 923K 259K 2.4M 990K 1.1M VA -690K D
Slide 47: DC Metro Office Market: Delivery Pipeline
STATE OF THE MARKET: DC METRO OFFICE MARKET DELIVERY PIPELINE EXERTING SIGNIFICANT PRESSURE ON EXISTING COMMODITY A BUILDINGS DC OFFICE PIPELINE (SF) DC OFFICE DIRECT VACANCY 20% 7.0 18% 6.0 16% 14% 5.0 12% 4.0 10% 3.0 8% 6% 2.0 4% 1.0 2% 0 0% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2
Slide 48: DC Metro Office Market: Rents
STATE OF THE MARKET: DC METRO OFFICE MARKET AS NATIONAL LANDING LEASE UP CONTINUES, RENTS ARE EXPECTED TO CLOSE THE GAP WITH, AND EVENTUALLY SURPASS, ROSSLYN DIREDCiTreAcVt EARvAerGaEgAe SAKsIkNinGgRREeNnTt (POSFFF(IOCffiE)ce) $65 $60 $60 $55 $50 $46 $45 $38 $40 $35 2007 2008 2009 2010 2011 2012 201
Slide 49: DC Metro Office Market: Investment Sales
STATE OF THE MARKET: DC METRO OFFICE MARKET INVESTMENT SALES VOLUME AND PRICING REMAIN STRONG IN CORE MARKETS, WHICH COULD EXPAND TO INCLUDE NATIONAL LANDING 2016-2018 MEDIAN OFFICE CAP RATE COMPARISON (ALL CLASSES) 7.0% 6.0% 6.0% 4.6% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Arlington Core DC Downtown Seattle
Slide 50: DC Metro Multifamily Market
STATE OF THE MARKET: DC METRO MULTIFAMILY MARKET MULTIFAMILY HOUSING COMPRISES GREATER SHARE OF TOTAL UNITS DELIVERED EVEN AS NEW HOUSING DELIVERIES REMAIN BELOW PEAK LEVELS RESIDENTIAL DELIVERIES 30,000 LOWER SHARE OF MULTIFAMILY DELIVERIES HIGHER SHARE OF MULTIFAMILY DELIVERIES 25,000 20,000 15,00
Slide 51: DC Metro Multifamily Market: Rent Growth
STATE OF THE MARKET: DC METRO MULTIFAMILY MARKET MULTIFAMILY RENT GROWTH SHOULD CONTINUE AS PIPELINE DECLINES AND A NEW DEMAND CATALYST ARRIVES MULTIFAMILY PIPELINE 3.3% CAGR 15.0K 16,000 $2.50 $2.40 14,000 $2.30 12,000 $2.20 10,000 $2.10 8,000 $2.00 $1.90 6,000 $1.80 4,000 $1.70 2,000 $1.60 0 $1.50
Slide 52: DC Metro Multifamily Market: Rent Premiums
STATE OF THE MARKET: DC METRO MULTIFAMILY MARKET IN A DEMAND-RICH MARKET, QUALITY AND VIEWS DRIVE RENT PREMIUMS WHILE PLACEMAKING AMENITIES HELP EMERGING MARKETS CLOSE THE GAP WITH MATURE MARKETS ARLINGTON COUNTY QUALITY AND VIEW PREMIUMS DC EMERGING MARKET GROWTH TRAJECTORY $3.80 $5.00 $3.70 DC MAT
Slide 53: DC Metro Multifamily Market: Cap Rates
STATE OF THE MARKET: DC METRO MULTIFAMILY MARKET ARLINGTON CLASS A MULTIFAMILY ALREADY TRADES LIKE DC, BUT AMAZON COULD MEAN FURTHER CAP RATE COMPRESSION Multifamily Cap Rate Comparison 2016-2018 MEDIAN MULTIFAMILY CAP RATE COMPARISON (CLASS A) 7.0% 6.0% 4.7% 4.6% 4.4% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0%
Slide 54: Growth and Capitalization
GROWTH AND CAPITALIZATION 57
Slide 55: Growth and Capitalization: Estimated NOI Bridge
GROWTH AND CAPITALIZATION: ESTIMATED NOI BRIDGE EXCLUDES ADDITIONAL POTENTIAL VALUE CREATION FROM MONETIZATION OF 14.8M SF(1) FUTURE DEVELOPMENT PIPELINE NOI Bridge 5.3% CAGR: -3.0% Market on Office Rents: 93.0% Occupancy: 95.0% Occupancy: NOI GROWTH IS BACK-END WEIGHTED Note: This is a hypothetical
Slide 56: Potential NAV Impact from Amazon in National Landing
GROWTH AND CAPITALIZATION: POTENTIAL NAV IMPACT FROM AMAZON IN NATIONAL LANDING ESTIMATED NAV IMPACT EXPECTED TO BE BETWEEN $5.25 AND $8.25 PER SHARE COMMERCIAL MULTIFAMILY LAND 5.50% 5.25% 4.00% 3.75% Pre - Amazon Po st - A mazo n Pre - Amazon Po st - A mazo n Pre - Amazon Po st - A mazo n + ADDITI
Slide 57: Strong Balance Sheet to Fund Future Growth
GROWTH AND CAPITALIZATION: STRONG BALANCE SHEET TO FUND FUTURE GROWTH ACCESS TO MULTIPLE SOURCES OF CAPITAL WITH $2B(1) OF EXISTING LIQUIDITY NET DEBT/ TOTAL ENTERPRISE VALUE: 20.1%(1) 1 Secured and unsecured debt Secured Debt 17.2% 2 Opportunistic capital recycling Term Loan 2.9% 3 Selective joint
Slide 58: Expected Leverage Profile and Debt Maturity Schedule
GROWTH AND CAPITALIZATION: EXPECTED Pre-O LEVERAGE PROFILE(1) Low 8x’s 9.0x 8.0x Low 7x’s Q4 2019 Q2 2020 7.0x Q2 2021 6.0x Proposed Exchange of Mets Park land into Multifamily Acquisitions Proposed Exchange of Pen Place land into Multifamily Acquisitions Estimated Completion of Nine Assets Currentl
Slide 59: Strategy: Summary
STRATEGY: SUMMARY SUBMARKET CONCENTRATION Invested in high growth urban submarkets in Washington, DC Metro Area HIGH-GROWTH ASSETS Own and operate high risk-adjusted return assets, with emphasis on multifamily over the longer term PROVEN DEVELOPMENT EXPERTISE Mixed-use operator with track record of
Slide 60: Definitions: Non-GAAP Financial Measures
DEFINITIONS NON-GAAP FINANCIAL MEASURES This release includes non-GAAP financial measures. For these measures, we have provided an explanation of how these non-GAAP measures are calculated and why JBG SMITH’s management believes that the presentation of these measures provides useful information to
Slide 61: Definitions
DEFINITIONS other similar costs to develop and stabilize the asset but excluding any financing costs, ground rent expenses and capitalized payroll costs. “Estimated total investment” means, with respect to the development of an asset, the sum of the historical cost in such asset and the estimated in
Slide 62: Definitions
DEFINITIONS However, because NOI excludes depreciation and amortization and captures neither the changes in the value of our assets that result from use or market conditions, nor the level of capital expenditures and capitalized leasing commissions necessary to maintain the operating performance of
Slide 63: Definitions: Same Store and Square Feet
DEFINITIONS SAME STORE AND NON-SAME STORE “Same store” refers to the pool of assets that were in service for the entirety of both periods being compared, except for assets for which significant redevelopment, renovation, or repositioning occurred during either of the periods being compared. No JBG A
Slide 64: EBITDA, EBITDAre and Adjusted EBITDA (Non-GAAP)
EBITDA, EBITDARE AND ADJUSTED (UNAUDITED) EBITDA (NON-GAAP) 3 Months Ended 3 Months Ended March 31, 2019 December 31, 2018 Net income Depreciation and Amortization Expense Interest Expense (1) Income Tax Expense (Benefit) Unconsolidated Real Estate Ventures Allocated Share of Above Adjustments Alloc
Slide 65: NOI Reconciliations (Non-GAAP)
NOI RECONCILIATIONS (UNAUDITED) (NON-GAAP) dollars in thousands Three Months Ended December 31, Year Ended December 31, 2018 2018 2017 2018 2017 Net income (loss) attributable to common shareholders Add: Depreciation and amortization expense General and administrative expense: Corporate and other Th
Slide 66: NOI Reconciliations (Non-GAAP)
NOI RECONCILIATIONS (NON-GAAP) (UNAUDITED) dollars in thousands [Net income (loss) attributable to commen shareholders Add: Depreciation and amortization expense General and administrative expense: ‘Three Months Ended December 51, ‘Yeor Ended December 3, 2018 27 2018 707 s mo $ (1,418) § wus (775s)
Slide 67: JBG SMITH
O JBG SMITH
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