Peakstone Realty Trust · NYSE:PKST
Peakstone Realty Trust — Q1 2024 Earnings Presentation
63 slides from Peakstone Realty Trust's earnings presentation, May 7, 2024
Slide 1: Supplemental Information First Quarter 2024
Supplemental Information First Quarter 2024
Slide 2: Table of Contents
2 Table of Contents Page Company Highlights 4 Financial Information 8 Debt & Capitalization 21 Leasing Activity & Asset Management 26 Components of Net Asset Value 29 Property Information 31 Portfolio Characteristics 36 Notes & Definitions 56
Slide 3: Disclaimer on Forward-Looking Statements
3 Disclaimer Disclaimer on Forward-Looking Statements This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange
Slide 4: Company Highlights
Company Highlights
Slide 5: High-Quality Portfolio of Office & Industrial Properties
5 High-Quality Portfolio of Office & Industrial Properties Net-Leased to a Diversified Pool of Creditworthy Tenants4 67 Properties 16.6M Square Feet 22 States 96.3%3 Leased 27%/60%/13%1 Industrial/ Office/Other 6.8 Years1 WALT 64.6%1,2 Investment Grade 2.0%1 Avg. Annual Rent Escalations 1 Weighted a
Slide 6: Portfolio Summary by Segment
6 (Unaudited, USD in thousands) Number of Properties Economic Occupancy1 Total Rentable Square Feet WALT (years)2 Annualized Base Rent Investment Grade by Segment3 Industrial4 19 100.0 % 9,001,800 6.5 $ 49,291 73.7 % Office5 34 97.2 5,418,700 7.6 110,588 66.0 TOTAL / WEIGHTED AVERAGE INDUSTRIAL AND
Slide 7: Quarter Highlights
7 Consolidated Leverage $595.9 million38.2% Net Debt / Total Gross Real Estate $0.54/$0.70 FFO/AFFO Per Share/Unit2 6.2x Net Debt / Normalized EBITDAre (consol.)4 Total Revenue $59.2 million Same Store Cash NOI3 Liquidity5 1 Calculated based on weighted average number of common shares outstanding -
Slide 8: Financial Information
4» | Peakstone Financial Information
Slide 9: Selected Financial Data
9 1 Calculated based on weighted average number of common shares outstanding - basic and diluted of 36,309,019. 2 Calculated based on weighted average number of common shares outstanding - basic and diluted of 36,309,019 and weighted average number of OP Units outstanding of 3,218,826 for a total of
Slide 10: Revenue, NOI and Cash NOI by Segment
10 For the Quarter Ended (Unaudited, USD in thousands) 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023 REVENUE BY SEGMENT Industrial $ 14,833 $ 14,796 $ 13,934 $ 13,981 $ 14,594 Office 32,999 34,525 34,022 34,999 39,189 Industrial and Office Total 47,832 49,321 47,956 48,980 53,783 Other 11,395 1
Slide 11: Consolidated Statements of Operations
11 For the Quarter Ended (Unaudited, USD in thousands, except per share metrics) 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023 REVENUES Rental income $ 59,227 $ 63,058 $ 61,713 $ 62,540 $ 66,973 EXPENSES Property operating expense 6,679 7,232 7,829 6,919 7,110 Property tax expense 4,510 5,079 5
Slide 12: Consolidated Balance Sheets - Assets
12 As of (Unaudited, USD in thousands) 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023 ASSETS Cash and cash equivalents $ 436,251 $ 391,802 $ 364,446 $ 360,626 $ 368,210 Restricted cash1 11,213 9,208 5,651 3,042 1,999 Real estate Land 227,138 231,175 244,369 245,872 316,341 Building and improveme
Slide 13: Consolidated Balance Sheets - Liabilities and Equity
13 As of (Unaudited, USD in thousands) 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023 LIABILITIES AND EQUITY Debt, net $ 1,416,433 $ 1,435,923 $ 1,442,003 $ 1,460,536 $ 1,461,584 Distributions payable 8,422 8,344 8,296 8,295 5,164 Due to related parties 573 573 706 1,043 876 Intangible liabiliti
Slide 14: Reconciliation of Net Income to NOI
14 For the Quarter Ended (Unaudited, USD in thousands) 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023 Net income (loss) $ 5,470 $ (21,767) $ (139,948) $ (452,403) $ 9,017 General and administrative 9,680 11,551 1 9,653 12,030 1 9,728 Corporate operating expenses to related parties 166 178 257 34
Slide 15: Cash NOI Reconciliation by Segment
15 For the Quarter Ended For the Quarter Ended 3/31/2024 3/31/2023 (Unaudited, USD in thousands) Industrial Office Total Industrial and Office Other Total Portfolio Industrial Office Total Industrial and Office Other Total Portfolio Revenue $ 14,833 $ 32,999 $ 47,832 $ 11,395 $ 59,227 $ 14,594 $ 39,
Slide 16: Cash NOI and Same Store Cash NOI
16 For the Quarter Ended (Unaudited, USD in thousands) 3/31/2024 3/31/2023 CASH NOI ALLOCATION � Industrial $ 11,817 $ 12,394 Office 27,504 29,396 Industrial and Office Total $ 39,321 $ 41,790 � Other 8,009 8,226 TOTAL CASH NOI $ 47,330 $ 50,016 SAME STORE CASH NOI ADJUSTMENTS � Recently disposed pr
Slide 17: Reconciliation of Net Income to FFO and AFFO
17 For the Quarter Ended (Unaudited, USD in thousands, except per share metrics) 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023 Reconciliation of Net Income (Loss) to Funds From Operations (FFO) and Adjusted Funds From Operations (AFFO) NET INCOME (LOSS) $ 5,470 $ (21,767) $ (139,948) $ (452,403
Slide 18: Reconciliation of Net Income to EBITDAre
18 For the Quarter Ended (Unaudited, USD in thousands) 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023 Reconciliation of Net income (loss) to EBITDAre Net income (loss) $ 5,470 $ (21,767) $ (139,948) $ (452,403) $ 9,017 Interest expense 16,148 16,415 16,126 16,068 17,014 Depreciation and amortiza
Slide 19: Unconsolidated Office Joint Venture Financial Information
19 For the Quarter Ended1 (Unaudited, USD in thousands) 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023 Total revenues $ 50,206 $ 49,598 $ 50,889 $ 49,917 $ 44,789 Expenses: Operating expenses (19,458) (18,167) (16,838) (16,611) (15,822) General and administrative (1,126) (1,856) (1,699) (2,174)
Slide 20: Capital Expenditures
20 For the Quarter Ended (Unaudited, USD in thousands) 3/31/2024 % of NOI1 12/31/2023 % of NOI1 9/30/2023 % of NOI1 6/30/2023 % of NOI1 3/31/2023 % of NOI1 Maintenance Capital Expenditures by segment: Industrial $ 89 0.2 % $ 651 1.3 % $ 30 0.1 % $ 505 1.0 % $ — — % Office — — — — — — — — — — Total I
Slide 21: Debt & Capitalization
Debt & Capitalization
Slide 22: Capitalization and Liquidity
22 1The Contractual Rate for the Company's unsecured debt excludes the impact of fixed-rate swaps and uses the applicable Secured Overnight Financing Rate ("SOFR" or SOF rate"). Inclusive of a five day look-back per the credit facility agreement, the rates were 5.31% (SOFR), plus spreads of 1.25% (T
Slide 23: Consolidated Debt Summary
23 As of (Unaudited, USD in thousands) 3/31/2024 12/31/2023 9/30/2023 6/30/2023 3/31/2023 SECURED FIXED-RATE DEBT Mortgage borrowings on wholly-owned portfolio $ 471,083 $ 491,545 $ 498,224 $ 517,146 $ 518,930 Total Secured Fixed-Rate Debt 471,083 491,545 498,224 517,146 518,930 UNSECURED FLOATING-R
Slide 24: Secured Debt Detail
24 (Unaudited, USD in thousands) SECURED DEBT Collateral Contractual Interest Rate Maturity Date Outstanding Balance INDUSTRIAL AND OFFICE Pepsi Bottling Ventures Mortgage Loan 3.69% 10/1/2024 $ 17,338 BOA II Loan 1 4.32% 5/1/2028 250,000 Total Industrial and Office 267,338 OTHER AIG Loan II 2 4.15%
Slide 25: Debt Maturity Schedule
25 1 Represents the Pepsi Bottling Ventures mortgage loan. | 2 Represents the AIG II loan. | 3 Represents the 2025 Term Loan. | 4 Represents the Revolving Loan. As of March 31, 2024, the Revolving Loan had a maturity date of June 30, 2024 with one extension option to January 31, 2026. On May 2, 2024
Slide 26: Leasing Activity & Asset Management
Leasing Activity & Asset Management
Slide 27: New and Renewal Leases
27 NEW AND RENEWAL LEASES Cash Rent GAAP Rent Tenant / Property Segment Property Type Location New Lease Start Date New Lease Expiration Date Term (Yrs) Square Feet Leasing Commissions $/SF Tenant Improvement $/SF Starting Rent/SF Prior Rent/ SF Rent Change Starting Rent/SF Prior Rent/SF Rent Change
Slide 28: Portfolio Square Footage and Occupancy Changes
28 1 Occupancy changes reflect leases with commencements during the quarter. 2 Expiring with renewal square footage includes expirations accelerated due to early renewal. 3 Retention is Renewal leases divided by Total expirations. 4 During the first quarter, a previously executed, 15-year, 100,200-s
Slide 29: Components of Net Asset Value
Components of Net Asset Value
Slide 30: Components of Net Asset Value
30 (Unaudited, USD in thousands) Annualized Base Rent Balance Sheet Components (cont'd) ABR Percentage of ABR LIABILITIES Industrial � � Revolving loan and term loans2 $ 950,000 Investment grade1 $ 36,342 19.6 % Mortgages payable2 471,083 � Sub-investment grade1 7,970 4.3 Distributions payable 8,422
Slide 31: Property Information
Property Information
Slide 32: Property List
32 USD in thousands, except Annualized Base Rent / SF metrics Segment Property/Tenant Name Address Property Market Property State Building Square Feet Tenancy Type % Leased1 Property Sub Type Year Built/ Renovated2 3 Property WALT3 % of Total ABR3 1 Industrial RH 825 Rogers Road Stockton/Modesto CA
Slide 33: Property List (continued)
33 USD in thousands, except Annualized Base Rent / SF metrics Segment Property / Tenant Name Address Property Market Property State Building Square Feet Tenancy Type % Leased1 Property Sub Type Year Built/ Renovated2 3 Property WALT3 % of Total ABR3 20 Office Southern Company 3525 & 3535 Colonnade P
Slide 34: Property List (continued)
34 USD in thousands, except Annualized Base Rent / SF metrics Segment Property/Tenant Name Address Property Market Property State Building Square Feet Tenancy Type % Leased1 Property Sub Type Year Built/ Renovated2 3 Property WALT3 % of Total ABR3 39 Office Occidental Petroleum 501 North Division St
Slide 35: Property List (continued)
35 Property List (continued) As of March 31, 2024 USD in thousands, except Annualized Base Rent / SF metrics Segment Property / Tenant Name Address Property Market Property State Building Square Feet Tenancy Type % Leased1 Property Sub-Type Year Built/ Renovated2 3 Property WALT3 % of Total ABR3 54
Slide 36: Portfolio Characteristics
Portfolio Characteristics
Slide 37: Lease Escalations
37 1 Weighted average rental increase is based on the remaining term of each lease as of March 31, 2024. Excludes leases with remaining term less than one year. 2 Based on % of ABR for Industrial and Office segments. Lease Escalations - Consolidated % of ABR Wtd. Avg. Annual Growth Rate 1 Annually 8
Slide 38: Tenant Concentration: Consolidated
38 Top 10 Tenants Tenant/Major Tenant Rating1 % of ABR2 WALT (years)3 1 Keurig Dr. Pepper Baa14 6.2% 5.6 2 Southern Company BBB+ 5.1 20.0 3 LPL BBB- 4.7 12.6 4 Amazon5 AA 4.6 7.3 5 Freeport McMoRan Baa14 4.2 3.1 6 Maxar Technologies HY56 4.2 6.3 7 RH IG106 4.0 6.4 8 Wyndham Hotels & Resorts BB- 4.0
Slide 39: Tenant Concentration: Industrial and Office
39 Top 10 Tenants Tenant/Major Tenant Rating1 % of ABR2 WALT (years)3 1 Keurig Dr. Pepper Baa14 7.2% 5.6 2 Southern Company BBB+ 5.9 20.0 3 LPL BBB- 5.4 12.6 4 Amazon5 AA 5.4 7.3 5 Freeport McMoRan Baa14 4.9 3.1 6 Maxar Technologies HY56 4.8 6.3 7 RH IG106 4.7 6.4 8 McKesson A36 3.9 4.5 9 Travel & L
Slide 40: Tenant Concentration: Industrial
40 Top 10 Tenants Tenant/Major Tenant Rating1 % of ABR2 WALT (years)3 1 Amazon4 AA 17.4% 7.3 2 RH IG105 15.2 6.4 3 3M Company A36 10.1 2.6 4 Samsonite BB 8.6 5.7 5 Shaw Industries, Inc. AA 6.8 9.0 6 Pepsi A+ 6.7 4.3 7 Amcor Rigid Plastics USA BBB 5.5 8.6 8 Huntington Ingalls BBB- 5.3 3.8 9 Pepsi Bot
Slide 41: Tenant Concentration: Office
41 Top 10 Tenants Tenant/Major Tenant Rating1 % of ABR2 WALT (years)3 1 Keurig Dr. Pepper Baa14 10.4% 5.6 2 Southern Company BBB+ 8.5 20.0 3 LPL BBB- 7.9 12.6 4 Freeport McMoRan Baa1 4 7.1 3.1 5 Maxar Technologies HY55 7.0 6.3 6 McKesson A34 5.6 4.5 7 Travel & Leisure, Co. BB- 5.3 5.4 8 IGT BB+ 4.7
Slide 42: Industry Concentration: Consolidated
42 Industry Concentration: Consolidated As of March 31, 2024 Top 10 Industries Top 20 Sub-Industries Industry % of ABR1 Sub-Industry % of ABR1 1 Capital Goods 16.0 % 1 Aerospace & Defense 11.4 % 2 Consumer Services 11.7 2 Soft Drinks 9.0 3 Materials 9.3 3 Hotels, Resorts & Cruise Lines 7.1 4 Food, B
Slide 43: Industry Concentration: Industrial and Office
43 Industry Concentration: Industrial and Office As of March 31, 2024 Top 10 Industries Top 20 Sub-Industries Industry % of ABR1 Sub-Industry % of ABR1 1 Capital Goods 14.9 % 1 Soft Drinks 10.5 % 2 Materials 10.8 2 Aerospace & Defense 10.2 3 Food, Beverage & Tobacco 10.5 3 Health Care Services 6.1 4
Slide 44: Industry Concentration: Industrial
44 Industry Concentration: Industrial As of March 31, 20242021 Top 8 Industries Top 14 Sub-Industries Industry % of ABR1 Sub-Industry % of ABR1 1 Capital Goods 22.9 % 1 Internet & Direct Marketing Retail 17.4 % 2 E-Commerce 17.4 2 Homefurnishing Retail 15.2 3 Consumer Durables & Apparel 15.3 3 Soft
Slide 45: Industry Concentration: Office
45 Industry Concentration: Office As of March 31, 2024 2021 Top 10 Industries Top 20 Sub-Industries Industry % of ABR1 Sub-Industry % of ABR1 1 Materials 11.8 % 1 Aerospace & Defense 11.4 % 2 Capital Goods 11.4 2 Soft Drinks 10.4 3 Food, Beverage & Tobacco 10.4 3 Health Care Services 8.9 4 Utilities
Slide 46: Market Concentration: Consolidated
46 Geographic Distribution (% of ABR1) Market Concentration: Consolidated As of March 31, 2024 (USD in thousands) Top 10 Markets (% of ABR)1 Markets ABR % of ABR1 1 Phoenix $ 23,414 12.6 % 2 Northern New Jersey 19,591 10.5 3 Denver 14,255 7.7 4 Boston 12,449 6.7 5 Charlotte 12,275 6.6 6 Birmingham 9
Slide 47: Market Concentration: Industrial and Office
47 Geographic Distribution (% of ABR1) Market Concentration: Industrial and Office As of March 31, 2024 (USD in thousands) Top 10 Markets (% of ABR)1 Markets ABR % of ABR1 1 Phoenix $ 20,110 12.6 % 2 Boston 12,449 7.8 3 Denver 10,800 6.8 4 Northern New Jersey 10,127 6.3 5 Birmingham 9,409 5.9 6 Chic
Slide 48: Market Concentration: Industrial
48 Geographic Distribution (% of ABR1) Market Concentration: Industrial As of March 31, 2024 (USD in thousands) Top 10 Markets (% of ABR)1 Markets ABR % of ABR1 1 Chicago $ 8,901 18.1 % 2 Columbus 7,685 15.6 3 Stockton/Modesto 7,487 15.2 4 Jacksonville 4,217 8.6 5 Savannah 3,335 6.8 6 Tampa 3,286 6.
Slide 49: Market Concentration: Office
49 Geographic Distribution (% of ABR1) Market Concentration: Office As of March 31, 2024 (USD in thousands) Top 10 Markets (% of ABR)1 Markets ABR % of ABR1 1 Phoenix $ 20,110 18.2 % 2 Boston 12,449 11.3 3 Denver 10,800 9.8 4 Birmingham 9,409 8.5 5 Northern New Jersey 9,003 8.1 6 Charlotte 8,701 7.9
Slide 50: Market Concentrations: Other
50 Geographic Distribution (% of ABR1) Market Concentrations: Other As of March 31, 2024 (USD in thousands) Top 10 Markets (% of ABR)1 Markets ABR % of ABR1 1 Northern New Jersey $ 9,464 36.5 % 2 Charlotte 3,574 13.8 3 Denver 3,455 13.3 4 Phoenix 3,304 12.7 5 Las Vegas 2,490 9.6 6 Cincinnati/Dayton
Slide 51: Lease Expirations: Consolidated
51 Lease Expirations: Consolidated As of March 31, 2024 (USD in thousands) Lease Maturity Schedule (by ABR) 1 Based on ABR for wholly-owned portfolio. $5,667 $7,685 $7,690 $14,349 $18,925 $41,844 $27,019 $16,076 $11,468 $8,637 $26,434 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 >2033 Expiring
Slide 52: Lease Expirations: Industrial and Office
52 Lease Expirations: Industrial and Office As of March 31, 2024 (USD in thousands) Lease Maturity Schedule (by ABR) $1,002 $3,337 $7,690 $14,349 $15,526 $31,305 $25,125 $16,076 $10,700 $8,335 $26,434 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 >2033 Expiring Leases Year Industrial Office Appr
Slide 53: Lease Expirations: Industrial
53 Lease Expirations: Industrial As of March 31, 2024 (USD in thousands) Lease Maturity Schedule (by ABR) $— $1,382 $5,000 $— $7,617 $5,736 $7,487 $8,590 $4,647 $5,964 $2,868 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 >2033 Expiring Leases Year Leases Approx. Square Feet ABR % of ABR1 2024 —
Slide 54: Lease Expirations: Office
54 Lease Expirations: Office As of March 31, 2024 (USD in thousands) Lease Maturity Schedule (by ABR) $1,002 $1,955 $2,690 $14,349 $7,909 $25,569 $17,638 $7,486 $6,053 $2,371 $23,566 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 >2033 Expiring Leases Year Leases Approx. Square Feet ABR % of ABR1
Slide 55: Lease Expirations: Other
55 Lease Expirations: Other As of March 31, 2024 (USD in thousands) Lease Maturity Schedule (by ABR1) $4,665 $4,348 $— $— $3,399 $10,539 $1,894 $— $768 $302 $— 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 >2033 Expiring Leases Year Total Approx. Square Feet ABR % of ABR1 2024 3 254,000 $ 4,665
Slide 56: Notes & Definitions
Notes & Definitions
Slide 57: Notes & Definitions
57 Notes & Definitions ABR (Annualized Base Rent) “Annualized Base Rent” or “ABR” means the contractual base rent excluding abatement periods and deducting base year operating expenses for gross and modified gross leases as of March 31, 2024, unless otherwise specified, multiplied by 12 months. For
Slide 58: Notes & Definitions (continued): FFO and AFFO
58 Notes & Definitions (continued) Funds from Operations ("FFO") and Adjusted Funds from Operations ("AFFO") "FFO" and "AFFO" are non-GAAP financial measures that we believe are useful to investors because they are widely accepted industry measures used by analysts and investors to compare the opera
Slide 59: Notes & Definitions (continued): FFO and AFFO
59 Notes & Definitions (continued) FFO and AFFO - cont. By providing FFO and AFFO, we present information that assists investors in aligning their analysis with management’s analysis of long-term operating activities. FFO and AFFO have been revised to include amounts available to both common shareho
Slide 60: Notes & Definitions (continued): NOI, Cash NOI, Same Store Cash NOI
60 Notes & Definitions (continued) Net Operating Income (NOI), Cash NOI, and Same Store Cash NOI “NOI” is a non-GAAP financial measure calculated as net (loss) income, the most directly comparable financial measure calculated and presented in accordance with GAAP, excluding equity in earnings of our
Slide 61: Notes & Definitions (continued): NOI to Cash NOI Reconciliation
61 Notes & Definitions (continued) The table below represents a reconciliation of NOI to Cash NOI for the interim periods presented in the "Selected Financial Data" on page 10. For the Quarter Ended 12/31/2023 9/30/2023 6/30/2023 (Unaudited, USD in thousands) Industrial Office Other Total Portfolio
Slide 62: Notes & Definitions: Normalized EBITDAre
62 Notes & Definitions Normalized EBITDAre “Normalized EBITDAre” is a non-GAAP supplemental performance measure to evaluate the operating performance of the Company. Normalized EBITDAre, as defined by the Company, represents EBITDAre(as defined by NAREIT), modified to exclude items such as acquisiti
Slide 63: Notes & Definitions (continued)
63 Notes & Definitions (continued) Operating Margin "Operating Margin" is NOI/Revenue. Per Share "Per Share" data represents basic and diluted shares and reflects the impact of the Company's one-for-nine reverse share split. Per Share/Unit "Per Share/Unit" data represents basic and diluted shares, i
Peakstone Realty Trust — Q1 2024 Earnings Presentation on 6ix