Jbg Smith Properties · NYSE:JBGS
Jbg Smith Properties — Investor Presentation (June 2018)
46 slides from Jbg Smith Properties's investor presentation, Jun 4, 2018
Slide 1: Disclosures: Forward-Looking Statements
D I S C L O S U R E S 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 state
Slide 2: Company Highlights
J B G S M I T H : C O M P A N Y H I G H L I G H T S Weighted Average Lease Term Net Debt/Annualized Adjusted 4747 Bethesda Avenue (Rendering) 1 6.9x EBITDA 33.7% Net Debt/Total Enterprise Value $7.0B Total Enterprise Value $371M Annualized Q1 2018 NOI 86 Walk Score Over 98% Metro Served 5.6 Years 5.
Slide 3: Investment Rationale
J B G S M I T H : I N V E S T M E N T R A T I O N A L E Aerial View of Washington, DC A PROVEN VALUE LIQUIDITY AND UNRIVALED OF HIGH-QUALITY THE DC MARKET DIFFERENTIATED STRENGTH TO PROFILE BEST URBAN GROWTH 2 CONCENTRATION SIGNIFICANT CREATOR WITH A IS POISED FOR ASSETS IN GROWTH FINANCIAL STRATEGY
Slide 4: Platform Differentiates Strategy Through Investment Concentration
J B G S M I T H : P L A T F O R M D I F F E R E N T I A T E S S T R A T E G Y THROUGH INVESTMENT CONCENTRATION 3 JBG SMITH’S EXPERTISE IN ALL 3 URBAN PRODUCT TYPES MAXIMIZES VALUE AND MIXED-USE PLACEMAKING R E T A I L M U L T I F A M I LY O F F I C E •Track record of recognizing and capitalizing on
Slide 5: Disciplined and Experienced Leadership Team
J B G S M I T H : D I S C I P L I N E D A N D E X P E R I E N C E D L E A D E R S H I P T E A M CEB Tower at Central Place Rosslyn, VA INTERESTS ASSOCIATED WITH LONG-EQUITY COMPENSATION 4 SEASONED TEAM WITH LONG HISTORY TOGETHER 100% OF SVPs AND ABOVE HAVE PERFORMANCE-BASED GOALS AND INCENTIVES TERM
Slide 6: Concentration of High-Quality Assets in the Best Submarkets
S U B M A R K E T S (1) J B G S M I T H : C O N C E N T R A T I O N O F H I G H - Q U A L I T Y A S S E T S I N T H E B E S T 5 (1) Includes operating office and under construction assets. Excludes Crystal City Marriott Hotel. Rockville Pike Corridor, Rock Spring, and Woodbridge assets not shown. Be
Slide 7: Portfolio Composition
Portfolio Composition (18.1M SF Total) by Rentable Square Footage OPERATINGDEVELOPMENT Operating Other 2% Under Construction 13% Operating Office 50 Assets 11.8M SF Under Construction Assets 10 Assets 1.1M SF / 1,568 Units Operating Multifamily 20% Operating Multifamily 14 Assets 4,232 Units Near-Te
Slide 8: Investor Update
J B G S M I T H : I N V E S T O R U P D A T E 7 The Foundry Washington, DC FIRST QUARTER RESULTS FUTURE GROWTH CAPITAL ALLOCATION VIEW OF THE MARKET
Slide 9: Market: Executive Summary
M A R K E T : E X E C U T I V E S U M M A R Y O F F I C E S P E N D I N G 8 F E D E R A L R E B O U N D W A L K A B I L I T Y M A T T E R S A M E N I T Y R I C H S U B M A R K E T S O U T P E R F O R M P O C K E T SO F O P P O R T U N I T Y D E C L I N I N G M U L T I F A M I L Y S U P P L Y P I P E
Slide 10: Market: Third Consecutive Year of Strong Job Growth
M A R K E T : T H I R D C O N S E C U T I V E Y E A R O F S T R O N G J O B G R O W T H Source: Bureau of Labor Statistics (“BLS”), JLL Research 9 JOB GROWTH (THOUSANDS) AVERAGE ANNUAL JOB GROWTH 100 80 60 40 20 0 -20 -40 -60 -80 200720082009201020112012201320142015201620172018 YTD 20-YEAR (1999-201
Slide 11: DC Market Is More Insulated From Recessions
DC MARKET IS MORE INSULATED FROM RECESSIONS RAPID RECOVERY AFTER HEADWINDS SUBSIDE 0.0% DC Metro AreaMajor Market Average (not including DC Metro Area) 1990 RecessionTech CrashGreat Recession 4.0% Major Market Average (not including DC Metro Area)DC Metro Area -1.0% -0.3% 3.0% 2.0% -2.0% % EMPLOYMEN
Slide 12: Market: Multifamily Key Themes
M A R K E T : M U L T I F A M I L Y K E Y T H E M E S year volume and activity remained concentrated in more Source: JBGS market research estimates based on JLL historical and CoStar future projection data augmented with published pipelines from local media for core DC area counties (DC, Montgomery,
Slide 13: Market: Office Key Trends
M A R K E T : O F F I C E K E Y T R E N D S $35 Source: JLL class-cut historical data for Washington, DC and Arlington submarkets 12 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 20
Slide 14: Under Construction Office Assets Are 69% Preleased
UNDER CONSTRUCTION OFFICE ASSETS ARE 69% PRELEASED WITH 67% OF REMAINING VACANCY IN THE TOP HALF OF BUILDINGS View from CEB Tower at Central Place 61% DC MARKET TROPHY VACANCY IN BOTTOM OF BUIDINGS View from L’Enfant Plaza Office - Southeast CEB TOWER AT CENTRAL PLACE L’ENFANT PLAZA OFFICE - SOUTHEA
Slide 15: Market: JBG SMITH Submarkets Outperform
M A R K E T : J B G S M I T H S U B M A R K E T S O U T P E R F O R M 85% 5% 0% -5% 84% 81% 30% 25% 20% 15% 10% 15% 15% 10% Source: JLL Research 14 MULTIFAMILY 2018 ASKING RENTS RELATIVE TO MARKET10-YEAR ASKING RENT GROWTH10-YEAR NET ABSORPTION AS % OF STARTING 30%45%INVENTORY 25%40%45% 20%35%40% 35
Slide 16: Market: Walkable Amenities Drive Outperformance
M A R K E T : W A L K A B L E A M E N I T I E S D R I V E O U T P E R F O R M A N C E 8.0% $2.00 4.0% $0.50 Walker's Paradise (90-Very Walkable (70-Somewhat Walkable Car-Dependent (0-49) Source: Walk Score, JLL Research 15 DC Metro Multifamily Submarkets: Walkscore vs. Rent RentVacancy $3.5010.0% 9.
Slide 17: Market: Bipartisan Budget Act Should Benefit DC Region
M A R K E T : 2 0 1 8 B I P A R T I S A N B U D G E T A C T S H O U L D B E N E F I T D C R E G I O N SPENDING CAPS BY NEARLY $300B OVER 2018 AND 2019 3% $1,279 priorities have a presence in of likely contractors for the Source: Congressional Budget Office, Department Of Defense , Center for Strateg
Slide 18: Tenant Concentration and Industry Diversification
Q 1 2 0 1 8 U P D A T E : T E N A N T C O N C E N T R A T I O N A N D I N D U S T R Y D I V E R S I F I C A T I O N ANNUALIZED RENT(2) Educational Other (GSA) 22% (1) (2) (3) (4) Chart based on Operating Office and Retail annualized rent as of March 31, 2018. Percentages based on Operating Portfolio
Slide 19: Capital Allocation: Strong Office Sales Volume and Pricing
C A P I T A L A L L O C A T I O N : S T R O N G O F F I C E S A L E S V O L U M E A N D P R I C I N G $1,200 $1 Source: JLL Research 18 Sales Volume ($Billions) A N N U A L I Z E D $ 8 . 3 B Price/SF OFFICE INVESTMENT SALES >$50M, EXCLUDING LAND SALES Sales VolumeMax Price/SFWtd Avg. Price/SF $8$1,4
Slide 20: Capital Allocation: Philosophy
C A P I T A L A L L O C A T I O N : P H I L O S O P H Y (1)Includes only investments and dispositions of JBG prior to the spin-off. 19 $ THOUSANDS I N V E S T M E N T S / D I S P O S I T I O N S ( 1 ) 2000 - 20062007 - 20082009 - 20122013 - 2016 InvestmentsDispositions $1,245,622 $1,203,916 $1,057,0
Slide 21: Capital Allocation: Dispositions Update
C A P I T A L A L L O C A T I O N : D I S P O S I T I O N S U P D A T E 1900 N Street (Rendering) Bowen Building Summit I and II (1)Summit I and II, which were sold in April 2018 contributed $5.0 million of annualized NOI in Q1 2018. (2)Bowen Building, which was sold in May 2018, contributed $8.3 mi
Slide 22: Future Growth: Under Construction Assets
F U T U R E G R O W T H : U N D E R C O N S T R U C T I O N A S S E T S 55% 23% 21 MD 13% DC 87% Estimated Total Investment – Multifamily MD 22% RB Corridor DC PROPERTY TYPE OFFICE MULTIFAMILY OTHER 4 5 1 1,071,899 NA 4,105 ASSETS ESTIMATED SQUARE FEET % PRE-LEASED 69.0% NA 100% WEIGHTED AVERAGE PRE
Slide 23: Concentrate New Office Assets in Amenity-Rich Core Markets
F U T U R E G R O W T H : C O N C E N T R A T E N E W O F F I C E A S S E T S I N A M E N I T Y - R I C H C O R E M A R K E T S 4747 Bethesda Avenue 271,433 SF 287,183 SF Estimated Total Investment: $124M Washington, DC Arlington, VA 74.3% Preleased 74.6% Preleased Note: All figures shown at 100% ex
Slide 24: Concentrate New Multifamily Assets in Path of Growth Submarkets
F U T U R E G R O W T H : C O N C E N T R A T E N E W M U L T I F A M I L Y A S S E T S I N P A T H O F G R O W T H S U B M A R K E T S Washington, DC Bethesda, MD Estimated Total Investment: $155M Estimated Total Investment: $94M Washington, DC Washington, DC Estimated Total Investment: $218M Estim
Slide 25: Under Construction Assets Completion Timeline
F U T U R E G R O W T H : U N D E R C O N S T R U C T I O N A S S E T S C O M P L E T I O N T I M E L I N E Q1 2020 Q4 2020 Q2 2020 Q3 2020 Office Multifamily Estimated Total Estimated Total Office - Southeast Avenue Multifamily $401M $117M 215,185 SF 287,183 SF $2.5M UNDER BUDGET Multifamily Office
Slide 26: Future Growth: Near-Term Value Creation
F U T U R E G R O W T H : N E A R - T E R M V A L U E C R E A T I O N ~ $96M OF NOI UNDER CONSTRUCTION ASSETS ~ $37M OF NOI STABILIZATION OF OPERATING PORTFOLIO Note: This is a hypothetical presentation of potential near-term NOI from the delivery and stabilization of our under construction assets a
Slide 27: Future Growth: Future Development Pipeline
F U T U R E G R O W T H : F U T U R E D E V E L O P M E N T P I P E L I N E Source: JLL Research land comparables for selected submarkets from 2010-2017 26 POTOMAC YARD JBGS Inv. JLL Comps Avg. $37/SF $50-$60/SF CRYSTAL/PENTAGON JBGS Inv. JLL Comps Avg. $43/SF $40-$50/SF RB CORRIDOR JBGS Inv. JLL Co
Slide 28: Tenant Concentration: Crystal City
Tenant Concentration TOP 10 CRYSTAL CITY TENANTS % OF TOTAL PORTFOLIO ANNUALIZED RENT 1 U.S. Government (GSA) 14.8% 2 Lockheed Martin Corporation 2.3% 3 Public Broadcasting Service 1.0% 4 DRS Tech Inc dba Finmeccanica 0.8% 5 National Consumer Cooperative 0.7% 6 Conservation International Foundation
Slide 29: Transformative Repositioning of Crystal City
WASHINGTON, DC N F U T U R EG R O W T H : T R A N S F O R M A T I V E R E P O S I T I O N I N G O F C R Y S T A L C I T Y 28 FUTURE DEVELOPMENT OPERATING
Slide 30: Crystal City Phase One Retail
F U T U R E G R O W T H : C R Y S T A L C I T Y P H A S E O N E R E T A I L 29 P H A S E O N E R E T A I L ( 1 3 0 , 0 0 0 S F ) RENDERING N E W M E T R O E N T R A N C ET H E A T R E A N C H O R ( 4 9 K S F )A M E N I T Y R E T A I L ( 6 7 K S F )I M P R O V E D S T R E E TG R O C E R Y A N C H O R
Slide 31: Crystal City Phase Zero – Creating a Place Now
F U T U R E G R O W T H : C R Y S T A L C I T Y P H A S E Z E R O – C R E A T I N G A “ P L A C E ” N O W 30 PARKING AND WAYFINDING ENHANCEMENTS IN TEST GARAGE BRANDED IDENTIY THROUGHOUT SMALL AND LARGE SCALE ART IN PUBLIC SPACES ACTIVATE LOBBIES WITH SEATING, ART, AND COFFEE BARS •Immediately chang
Slide 32: Q1 Update: Financial and Operating Results
Q 1 2 0 1 8 U P D A T E : F I N A N C I A L A N D O P E R A T I N G R E S U L T S 4% 66% 1,300 10% 500 6% 2018 2019 2020 2021 2022 2023 2024 2025 2026 31 Office Square Feet 1,50018% 1,10014% 900 700 300 1002% DCMDVA Annual Average of 10% of SF through 2023 Lease Expiration Schedule MD DC 30% VA Oper
Slide 33: Strong Balance Sheet to Fund Future Growth
Q 1 2 0 1 8 U P D A T E : S T R O N G B A L A N C E S H E E T T O F U N D F U T U R E G R O W T H 2% 3% 66% 18% Availability 73% 32 (1)Interest rate caps in place for 17% of debt Floating Rate Debt(1) 27% Fixed Rate Debt Cash 14% Term Loan AvailabilityRevolver 52% In-Place Construction Loan Availabi
Slide 34: Third-Party Asset Management & Real Estate Services Business
Q 1 2 0 1 8 U P D A T E : T H I R D - P A R T Y A S S E T M A N A G E M E N T & R E A L E S T A T E S E R V I C E S B U S I N E S S 7% Property Management Fees Development Fees 33 •Third-Party Management business is stable and relatively sticky •Subject to market conditions, anticipate the decline i
Slide 35: Strong Corporate Governance
Q 1 2 0 1 8 U P D A T E : S T R O N G C O R P O R A T E G O V E R N A N C E 34 ALLOW A MAJORITY OF SHAREHOLDERS TO CALL A SPECIAL MEETING ALLOW A MAJORITY OF SHAREHOLDERS TO AMEND OUR BYLAWS OPTED OUT OF MUTA LONG-TERM COMMITMENT TO DIVERSITY AND 50:50 MEN AND WOMEN ON BOARD BOARD OF TRUSTEES AND MA
Slide 36: ESG: Environmental Strategy
E S G : E N V I R O N M E N T A L S T R A T E G Y disclosure of and Social through GRESB (1)LEED, Energy Star or both certified square feet in Operating Office portfolio shown at JBG SMITH share. (2)Average annual improvement of 3.4% per year since 2014. 35 Public Environmental performance 10.8M SF(
Slide 37: ESG: Washington Housing Initiative
E S G : W A S H I N G T O N H O U S I N G I N I T I A T I V E 36 •JBG SMITH and the Federal City Council will establish a non-profit (Washington Housing Conservancy) to acquire or build between 2,000 and 3,000 units of affordable workforce housing over the next 10 years •Organize and manage third-pa
Slide 38: Definitions: Non-GAAP Measures
D E F I N I T I O N S Non-GAAP Measures This investor presentation includes non-GAAP 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
Slide 39: Definitions: Historical Cost, Estimated Investment
D E F I N I T I O N S Historical Cost, Estimated Incremental Investment, Estimated Total Investment and Estimated Total Project Cost “Historical cost” is a non-GAAP measure which includes the total historical cost incurred by JBG SMITH, on a cash basis, with respect to the development of an asset, i
Slide 40: Definitions: Same Store
D E F I N I T O N S 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 Assets are i
Slide 41: EBITDA, EBITDAre and Adjusted EBITDA Reconciliation
E B I T D A , E B I T D A r e A N D A D J U S T E D E B I T D A R E C O N C I L I A T I O N ( N O N - G A A P ) Three Months Ended March 31, 2018 dollars in thousands Net loss $ (4,786) Depreciation and amortization expense 49,160 Interest expense (1) Income tax benefit 19,257 (908) Unconsolidated r
Slide 42: FFO, Core FFO and FAD Reconciliation
F F O , C O R E F F O A N D F A D R E C O N C I L I A T I O N ( N O N - G A A P ) in thousands, except per share data Three Months Ended March 31, 2018 Net loss attributable to common shareholders $ (4,190) Net loss attributable to redeemable noncontrolling interests (594) Net loss attributable to n
Slide 43: FFO, Core FFO and FAD Reconciliation (continued)
F F O , C O R E F F O A N D F A D R E C O N C I L I A T I O N ( N O N - G A A P ) Three Months Ended March 31, 2018 in thousands, except per share data Core FFO attributable to the operating partnership common units Recurring capital expenditures and second generation tenant improvements and leasing
Slide 44: NOI Reconciliation
N O I R E C O N C I L I A T I O N dollars in thousands ( N O N - G A A P ) Three Months Ended March 31, 2018 2018 2017 Net income (loss) attributable to common shareholders Add: Depreciation and amortization expense General and administrative expense: Corporate and other Third-party real estate serv
Slide 45: NOI Reconciliation (Non-GAAP)
NOI RECONCILIATION (NON-GAAP) ota trowanse “Tree Months Ended March 34,2018 tinzeme oss treaties commen sarees s (100s os Deprecistenansamortaten expense 43100 re Genera and acini expert: Carport and ter am ‘3302 ‘Thapar al eat seas 72909 498 ‘Share based compensation ate Formato Transaction eae - T
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