Piedmont Realty Trust, Inc. · NYSE:PDM
Piedmont Realty Trust — Piedmont Office Realty Trust — NAREIT REIT Week 2014
25 slides from Piedmont Realty Trust's conference presentation, Jun 3, 2014
Slide 1: Piedmont Office Realty Trust, June 2014
© 2014 Piedmont Office Realty Trust, Inc. June 2014 500 West Monroe 800 N. Brand Boulevard 1201 Eye Street 60 Broad Street Glenridge Highlands II Chicago Los Angeles Washington D.C. New York Atlanta
Slide 2: Company description and forward-looking statements
Piedmont Office Realty Trust, Inc. (NYSE: PDM) is a fully-integrated and self-managed real estate investment trust (REIT) specializing in the ownership and management of high-quality Class A office buildings located primarily in nine of the largest U.S. office markets, including Atlanta, Boston, Chi
Slide 3: A Leading National Office Property Company
A Leading National Office Property Company 2 High-quality properties predominantly located in the largest U.S. office markets Substantial cash flow growth as contractual leases commence rent Acquisitions and development in strategic submarkets Balance sheet management to maintain financial flexibili
Slide 4: Portfolio Summary
Portfolio Summary 3 AON Center US Bancorp Center Two Pierce Place Arlington Gateway 225 & 235 Presidential Way Chicago Minneapolis Washington D.C. Chicago Boston 75 high-quality properties 21MM rentable square feet 86.7% leased 87% of ALR from nine major U.S. markets 63% CBD and Urban Infill $5.7Bn
Slide 5: High-Quality Properties and Tenants
4 1901 Main Street Los Angeles One Lincoln Park Dallas One Brattle Square Boston High-Quality Properties and Tenants
Slide 6: Class-A Properties in the Top U.S. Office Markets
Chicago Boston New York Metro Washington D.C. Dallas Notes: (1) Based on acquisition value and anticipated costs to reach stabilization. (2) Based on expected hard and soft construction costs and anticipated costs to reach stabilization. (3) Based on gross book value of properties. Atlanta 5 Class-A
Slide 7: High Credit-Quality Customer Base
High Credit-Quality Customer Base (Logos / Expirations for Tenants greater than 1% of ALR (1)) Other 17% Investment Grade Rated 55% BB / B Rated 10% Nationally Recognized Firms 18% Various (2) 2014 / ’23 / ‘24 2028 2019 2033 2021 2018 2022 2027 2024 2020 2017 2016 2018 2019 2017 2022 2019 2018 2021
Slide 8: Substantial NOI Growth
Substantial NOI Growth 7 Two Independence Square Washington D.C. 200 & 400 Bridgewater Crossing New York Metro 1901 Market Street Philadelphia
Slide 9: Leasing activity and occupancy
~ $75MM Notes: (1) Represents peak square feet during the period. (2) Square feet committed in leasing transactions from January 1, 2010 through March 31, 2014. (3) Inclusive of all leasing: consolidated, industrial and unconsolidated joint ventures. (4) Economic occupancy is defined as total leased
Slide 10: Lease expirations
3.3 4.5 5.6 11.3 10.3 11.4 6.9 5.8 40.9 0 10 20 30 40 50 2014 2015 2016 2017 2018 2019 2020 2021 Thereafter (%) Notes: (1) Annualized rental income associated with newly executed leases for currently occupied space is incorporated herein only at the expiration date for the current lease. Annualized
Slide 11: High-quality Opportunities to Generate Organic Growth
High-quality Opportunities to Generate Organic Growth 10 Portfolio vacancy concentrated in five high-quality, well-located properties with strong amenity bases— leasing current vacancy generates up to $40MM of NOI(2); Remaining 70 properties average 92% leased 3100 Clarendon 4250 N. Fairfax One Inde
Slide 12: Meaningful Same-Store NOI Growth with Low Leverage
15% 25% 35% 45% 55% 65% 4% 6% 8% 10% 12% 14% 16% 18% 20% Meaningful Same-Store NOI Growth with Low Leverage PDM BXP BDN OFC CUZ DEI HIW KRC VNO N e t D e bt / G ross Ass e t V al u e (1 ) Projected 2015 / 2016 Cumulative Same-Store NOI Growth (2) Source: Most recent available public company filings
Slide 13: Undervalued Growth in Cash Flow
8 10 12 14 16 18 20 22 16 18 20 22 24 26 28 30 32 (6%) (4%) (2%) 0% 2% 4% 6% 8% 10% 12% Undervalued Growth in Cash Flow Notes: (1) Based on reported 2013 AFFO per share and consensus 2015 estimated AFFO per share per SNL as of May 29, 2014. (2) Based on share prices as of May 29, 2014 divided by 201
Slide 14: Disciplined Investment Strategy
Disciplined Investment Strategy Windy Point I &II Chicago 6565 N. MacArthur Boulevard Dallas Crescent Ridge II Minneapolis 13
Slide 15: Capital Allocation Focused on Growth and Value Creation
$900 $700 $500 $300 $100 $100 $300 $500 $700 $900 Capital Allocation Focused on Growth and Value Creation Notes: (1) Acquisition and disposition activity since IPO in February 2010. (2) As of March 31, 2014; $37.2MM capacity remaining in current program. (3) Based on gross real estate assets. Since
Slide 16: Continue to Increase Presence in Our Target Markets
Continue to Increase Presence in Our Target Markets 15 Opportunistic Markets: More cyclical markets typically warranting shorter hold periods Minneapolis Chicago Boston New York Metro Washington D.C. Los Angeles Dallas Atlanta Houston Concentration Markets: Longer term hold with focus on value creat
Slide 17: Recycle Capital Through Strategic Dispositions
Recycle Capital Through Strategic Dispositions We continue to recycle capital, selling seventeen assets since 12/2011 totaling approximately $637MM in gross proceeds at an average GAAP NOI yield of 6.8% and exiting four non-core markets 16 A c quisi tion s Disp o sit ion s Sale of Non-Strategic Asse
Slide 18: Leasing Value-Add Portfolio
Leasing Value-Add Portfolio 5301 Maryland Way Brentwood, TN 8/12/2013 $92 1989 0% (1) 100% 400 TownPark Lake Mary, FL 11/10/2011 $136 2008 19% 49% The Medici (2) Atlanta, GA 6/7/2011 $87 2008 12% 75% 500 West Monroe Street Chicago, IL 3/31/2011 $236 1991 49% (3) 64% 1200 Enclave Pkwy (4) Houston, TX
Slide 19: Strong Balance Sheet
Strong Balance Sheet Meridian Crossings Minneapolis The Medici Atlanta Braker Pointe III Austin 18
Slide 20: Strong Leverage Profile
PDM Sector Avg Strong Leverage Profile Notes: (1) Represents total debt at book value net of cash divided by gross asset value. (2) Average last twelve month debt at book value net of cash divided by last twelve month EBITDA. (3) Calculated as most recent quarter EBITDA annualized divided by the sum
Slide 21: Debt Metrics and Maturity Profile
105 168 140 272 300 300 350 400 $0 $200 $400 $600 $800 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Debt Metrics and Maturity Profile Notes: (1) The initial maturity date of the $500 million unsecured revolving credit facility is August 19, 2016; however, there are two, six-month extension
Slide 22: Key Takeaways
21 Key Takeaways Piedmont Pointe I & II Washington D.C. Among the largest national office REITs $2.9Bn equity market capitalization (1) Class-A office properties predominantly in nine major U.S. markets Long-term relationships with a broad group of stable, high-credit quality tenants Undervalued cas
Slide 23: Appendix
Appendix 22 400 Virginia Avenue Washington D.C. 5 & 15 Wayside Road Boston 1055 East Colorado Boulevard Los Angeles
Slide 24: 2014 Guidance and SSNOI outlook
2014 – Projected Decline in SSNOI Effects of Lease Expirations and Re- leasing in Down Economic Environment • Rent Roll-downs • Contraction of Space • Downtime • Free Rent Periods 2015 – Projected Outsized Growth in SSNOI Effects of Recent Leasing Activity • Commencement of Leases • Burn Off of Free
Slide 25: Additional Representative Properties
Additional Representative Properties 24 1225 Eye Street Washington D.C. 1200 Crown Colony Drive Boston 1414 Massachusetts Avenue Boston 1430 Enclave Parkway Houston River Corporate Center Phoenix 2300 Cabot Drive Chicago 5601 Headquarters Drive Dallas Suwanee Gateway One Atlanta Copper Ridge Center