Brandywine Realty Trust · NYSE:BDN
Brandywine Realty Trust — Q4 2019 Earnings Presentation
45 slides from Brandywine Realty Trust's earnings presentation, Jan 30, 2020
Slide 1: Supplemental Information Package Q4 2019
S U P P L E M E N TA L I N F O R M AT I O N PA C K A G E 2019 Fourth Q U A R T E R
Slide 2: Table of Contents
Table of Contents Page Executive Summary 3 2019 Business Plan Trend Line 5 Investor Day 2018 - 2021 Forward Guidance Ranges 6 2020 Business Plan Highlights 7 Sources and Uses of Cash and Cash Equivalents 8 Regional Property Overviews 9 Net Operating Income Composition 12 Development Activity 13 Land
Slide 3: Q4 2019 Executive Summary: Transaction Highlights
Q4 2019 Executive Summary (unaudited in millions, except square footage and acreage) BRANDYWINE REALTY TRUST | Page 3 Transaction Highlights 155 King of Prussia Rd | 150,000 SF | Radnor, PA Broadmoor, Block A | 320,000 SF Office | Austin, TX 650 Park Ave Rendering | 100,000 SF | King of Prussia, PA
Slide 4: Q4 2019 Executive Summary: Leasing Highlights and Key Metrics
Q4 2019 Executive Summary (unaudited in thousands, except per share data and square footage) BRANDYWINE REALTY TRUST | Page 4 Leasing Highlights Q4 2019 Q3 2019 Quarter end occupancy 93.0% 93.2% Leased as of January 23, 2020 / October 11, 2019 95.5% 95.5% Leases executed in quarter (sq ft) 566,726 5
Slide 5: Business Plan Trend Line
Business Plan Trend Line (unaudited) BRANDYWINE REALTY TRUST | Page 5 2020 Business Plan as of 2019 Business Plan as of Business Plan Component 1/23/2020 10/11/2019 Final Original Speculative Revenue $31.0 MM $31.0 MM $32.5 MM $31.0 MM Executed 73% 50% 100% 65% Projected Tenant Retention (SF) 50% 50
Slide 6: Investor Day 2018-2021 Forward Guidance Ranges
Investor Day (May 2017) 2018 - 2021 Forward Guidance Ranges (unaudited) BRANDYWINE REALTY TRUST | Page 6 2018 - 2021 2019 Actual 2020 Business Plan Operations ■ Leased 95 - 96% 95.5% 95 - 96% ■ Annual Same Store Cash NOI Growth 2 - 5% 1.5% 0 - 2% Excluding 1676 International Drive 2 - 5% 2.7% 2.5 -
Slide 7: 2020 Business Plan Highlights
2020 Business Plan Highlights (unaudited) BRANDYWINE REALTY TRUST | Page 7 Strong Core Fundamentals 2020 Speculative Leasing (Wholly Owned) Our 2020 business plan fundamentals reflect both the strength of our core markets and our strong Square Feet Targeted Executed Remaining position in those marke
Slide 8: Sources and Uses of Cash, Cash Equivalents and Restricted Cash
Sources and Uses of Cash, Cash Equivalents Restricted Cash (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 8 Sources and Uses of Cash Q4 2019 Q3 2019 Q2 2019 Q1 2019 Q4 2018 Q3 2018 Q2 2018 Q1 2018 Cash and cash equiv. and restricted cash as of Beg. of Quarter $ 30,521 $ 31,980 $ 14,803 $ 2
Slide 9: Regional Property Overview
Regional Property Overview (unaudited, in thousands, except square footage) BRANDYWINE REALTY TRUST | Page 9 # of Wholly Square Feet Remaining Expirations Net Operating Income at 12/31/2019 Owned % Occupied % Leased (1) Region Properties Total % of Total 2020 2021 Q4 2019 % of Total YTD 2019 % of To
Slide 10: Austin Marketplace
Austin Marketplace (unaudited) BRANDYWINE REALTY TRUST | Page 10 (From L to R): Broadmoor Block A; Garza Ranch; and Four Points Highlights ULI Emerging Trends identifies Austin as #1 city to watch for 2020. Google has signed a new lease for over 750K SF in the Austin CBD. Inc. Magazine named A
Slide 11: Philadelphia CBD Marketplace
Philadelphia CBD Marketplace (unaudited) BRANDYWINE REALTY TRUST | Page 11 Philadelphia Marketplace; Upward Trajectory Accelerates Highlights Vacancies in Philadelphia CBD are holding near 10%, with rent gains continuing to The growing Life Sciences sector represents over 800 companies and 56,00
Slide 12: Net Operating Income Composition
Q4 2019 Net Operating Income Composition (unaudited) BRANDYWINE REALTY TRUST | Page 12 YTD NOI - Wholly Owned (a) YTD NOI - Including JV's Total Core Portfolio NOI: $326.9 MM Total NOI: $347.0 MM 89.0% of NOI from our Core Markets (b) 87.0% of NOI from our Core Markets (b) MAP Venture Other
Slide 13: Development Summary
Development Summary (unaudited, in thousands, except square feet) BRANDYWINE REALTY TRUST | Page 13 Equity Amount Remaining to be Leased % @ Completion Stabilization Total Project Debt Projected Development (% owned) Location Type Square Feet Capitalization funded at funded at January 23, Date Date
Slide 14: Development Activity: 4040 Wilson
Development Activity (unaudited) BRANDYWINE REALTY TRUST | Page 14 4040 Wilson Development (50/50 Real Estate Venture) Design Overview Project Description A 22-level premier mixed-use development featuring Located in the Ballston submarket of Arlington, Virginia 189,000 SF of office space (level
Slide 15: Development Activity: Schuylkill Yards, Philadelphia
Development Activity (unaudited) BRANDYWINE REALTY TRUST | Page 15 PHILADELPHIA, PA OVERVIEW Brandywine is the master developer of Schuylkill Yards, a multi-phase 14 acre/5.1 million square foot development of office, residential, life science, research and academic facilities, retail and hospital
Slide 16: Development Activity: Broadmoor, Austin
Development Activity (unaudited) BRANDYWINE REALTY TRUST | Page 16 AUSTIN, TX OVERVIEW Broadmoor 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 800,000 square feet for IBM. Once redeveloped, t
Slide 17: Land Inventory
Q4 2019 Land Inventory (unaudited) BRANDYWINE REALTY TRUST | Page 17 Estimated Development Square Feet Acres Active/Pre-Development Projects Philadelphia CBD (a) (b) 57.3 5,700,000 Pennsylvania Suburbs 13.9 385,000 Metropolitan Washington, D.C. 0.8 245,000 Austin, Texas (c) 74.7 6,425,000 Total Acti
Slide 18: Property Activity 2019
Property Activity (unaudited, in thousands, except square footage and acreage) BRANDYWINE REALTY TRUST | Page 18 Square Occupancy % Sales Price Location Type Event Date Feet/Acres @ Event Date 2019 PROPERTY ACTIVITY OFFICE DISPOSITION 1900 Gallows Road Vienna, VA Office Building 09/11/2019 210,632 $
Slide 19: Property Activity 2018
Property Activity (unaudited, in thousands, except square footage and acreage) BRANDYWINE REALTY TRUST | Page 19 Square Occupancy % Event Date Purchase/Sales Price @ Event Date Location Type Feet/Acres/Units 2018 PROPERTY ACTIVITY OFFICE ACQUISITION Quarry Lake II Austin, TX Office Building 12/19/20
Slide 20: Leasing Activity-Core Portfolio
Leasing Activity-Core Portfolio (1) (unaudited) BRANDYWINE REALTY TRUST | Page 20 Twelve Months Ended Three Months Ended 12/31/2019 12/31/2018 12/31/2019 09/30/2019 06/30/2019 03/31/2019 12/31/2018 09/30/2018 06/30/2018 03/31/2018 Total Property Count 90 93 90 91 92 92 93 78 86 88 Total Square Feet
Slide 21: Leasing Activity-Core Portfolio: Rent Growth
Leasing Activity-Core Portfolio (1) (unaudited) BRANDYWINE REALTY TRUST | Page 21 Twelve Months Ended Three Months Ended 12/31/2019 12/31/2018 12/31/2019 09/30/2019 06/30/2019 03/31/2019 12/31/2018 09/30/2018 06/30/2018 03/31/2018 New Leases/Expansions (2): Cash Rent Growth Expiring Rate $ 31.96 $ 3
Slide 22: Lease Expiration Analysis
Lease Expiration Analysis (unaudited) BRANDYWINE REALTY TRUST | Page 22 Square Footage Annualized Rent of Expiring Leases (3) Acquired / Year of Lease Lease Revisions (4) Vacated Remaining % of Total Per Square Per Square Initial Expiring Sold / in New Leases Current Final Expiration Leases Expiring
Slide 23: Regional Lease Expiration Analysis
Regional Lease Expiration Analysis (1) (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 23 2019 2020 2021 2022 2023 2024 2025 Thereafter Total Philadelphia CBD Square feet expiring (Net of Acquired/Sold) 327 395 496 741 238 711 194 2,881 5,983 Net leasing activity (327) (98) 143 (78) (19) (2
Slide 24: Top Twenty Tenants
Top Twenty Tenants (unaudited, annualized rent in thousands) BRANDYWINE REALTY TRUST | Page 24 % of Total Annualized Rent % of Total Top Twenty Tenants Annualized Rent (1) Annualized Rent (1) per Square Foot (1) Square Feet Occupied Square Feet IBM, Inc. $ 23,993 4.8% $ 28.57 839,652 5.6% Comcast Co
Slide 25: Portfolio Tenant Mix
Q4 2019 Portfolio Tenant Mix (by square footage) BRANDYWINE REALTY TRUST | Page 25 Misc. Services - 5% Health Services - 3% Transportation/Public Utilities - 3% Engineering & Management Services - 11% Real Estate - 5% Other - 3% Wholesale Trade - 3% Finance - 14% Manufacturing - 8% Business Services
Slide 26: Income Statements
Income Statements (unaudited, in thousands, except share data) BRANDYWINE REALTY TRUST | Page 26 Twelve Months Ended Three Months Ended 12/31/2019 12/31/2018 12/31/2019 09/30/2019 06/30/2019 03/31/2019 12/31/2018 09/30/2018 06/30/2018 03/31/2018 Revenue Rents (a) $ 554,665 $ 515,044 $ 139,552 $ 139,
Slide 27: Q4 2019 Same Store Net Operating Income
Q4 2019 Same Store Net Operating Income (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 27 Development/ Recently Completed/ Redevelopment Other/ Same Store Portfolio Acquired (1) (2) Eliminations (3) All Properties Fourth Quarter Fourth Quarter Fourth Quarter Fourth Quarter Fourth Quarter F
Slide 28: YTD 2019 Same Store Net Operating Income
YTD 2019 Same Store Net Operating Income (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 28 Development/ Recently Completed/ Redevelopment Other/ Same Store Portfolio Acquired (1) (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 29 Twelve Months Ended Three Months Ended 12/31/2019 12/31/2018 12/31/2019 09/30/2019 06/30/2019 03/31/2019 12/31/2018 09/30/2018 06/30/2018 03/31/2018 Net income (loss) $ 34,529 $ 135,472 $ 16,874 $ 6,820 $ 6
Slide 30: Funds from Operations
Funds from Operations (unaudited, in thousands, except share data) BRANDYWINE REALTY TRUST | Page 30 Twelve Months Ended Three Months Ended 12/31/2019 12/31/2018 12/31/2019 09/30/2019 06/30/2019 03/31/2019 12/31/2018 09/30/2018 06/30/2018 03/31/2018 Net income (loss) attributable to common sharehold
Slide 31: Cash Available for Distribution
Cash Available for Distribution (unaudited, in thousands, except share data) BRANDYWINE REALTY TRUST | Page 31 Twelve Months Ended Three Months Ended 12/31/2019 12/31/2018 12/31/2019 09/30/2019 06/30/2019 03/31/2019 12/31/2018 09/30/2018 06/30/2018 03/31/2018 Funds from operations available to commo
Slide 32: Balance Sheets
Balance Sheets (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 32 12/31/2019 09/30/2019 06/30/2019 03/31/2019 12/31/2018 09/30/2018 06/30/2018 03/31/2018 Assets Real estate investments Operating properties $ 4,006,459 $ 3,995,228 $ 4,030,605 $ 4,014,260 $ 3,951,719 $ 3,427,468 $ 3,863,067 $
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 33 12/31/2019 09/30/2019 06/30/2019 03/31/2019 12/31/2018 09/30/2018 06/30/2018 03/31/2018 High closing price of common shares $ 15.75 $ 15.18 $ 16.13 $ 16.14 $ 15
Slide 34: Balance Sheet Information/Debt Statistics
Balance Sheet Information/Debt Statistics (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 34 12/31/2019 09/30/2019 06/30/2019 03/31/2019 12/31/2018 09/30/2018 06/30/2018 03/31/2018 Fixed rate debt $ 1,815,437 $ 1,617,363 $ 1,619,270 $ 1,621,160 $ 1,623,032 $ 1,624,886 $ 1,626,721 $ 1,628,54
Slide 35: Debt Schedules: Unsecured Notes
Debt Schedules (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 35 12/31/2019 Maturity Stated Effective 12/31/2019 12/31/2018 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 Schedules: Mortgage Notes
Debt Schedules (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 36 12/31/2019 Maturity Stated Effective 12/31/2019 12/31/2018 Debt Instrument Percent of total Date Rate (1) Rate (1) Balance Balance indebtedness Mortgage notes payable Two Logan Square May 1, 2020 3.980% 3.980% $ 81,103 $ 82,8
Slide 37: Debt Maturities
Debt Maturities (6) (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 37 Secured Debt Unsecured Debt Maturity Schedule Scheduled Balloon Percent of Weighted Bank Facilities Senior Notes Total By Year Amortization Payments Debt Maturing Average Interest (7) 2020 6,705 80,521 $ - - $ 87,226 4.1
Slide 38: Debt Maturities Chart
Debt Maturities (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 38 $600,000 Bank Facilities $500,000 Unsecured Notes Balloon Payments $400,000 Scheduled Amortization $300,000 $200,000 $100,000 $0 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Thereafter % of total 4.1% 0.7% 12.0% 26.0% 1
Slide 39: Debt Covenant Compliance
Debt Covenant Compliance (unaudited, in millions) BRANDYWINE REALTY TRUST | Page 39 Revolving Credit Agreement dated July 17, 2018 and Amended and Restated Term Loan C Agreement dated December 13, 2018 Covenant Required 12/31/2019 09/30/2019 06/30/2019 03/31/2019 12/31/2018 9/30/2018 6/30/2018 03/31
Slide 40: JV Property Overview
JV Property Overview (unaudited, in thousands, except square footage) BRANDYWINE REALTY TRUST | Page 40 0 As of December 31, 2019 BDN's Share BDN Net Net Gross Asset Investment Operating BDN Operating Unconsolidated Real Project Value Value @ @ Number of Income Rentable Percent Percent Ownership Inc
Slide 41: JV Debt Schedule
JV Debt Schedule (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 41 BDN Ownership Stated 12/31/2019 BDN Share Debt Instrument Percentage Maturity Date Rate (1) 12/31/2019 Balance of Venture Debt Office Properties Rockpoint JV (2) 15% March 29, 2024 (2) $ 207,302 $ 31,095 MAP Venture (3) 50%
Slide 42: JV Debt Summary
JV Debt Summary (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 42 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) 2020 $ - $ - $ - $ - - 0.0% 0.0
Slide 43: Analyst and Company Information
Q4 2019 Analyst and Company Information BRANDYWINE REALTY TRUST | Page 43 Equity Research Coverage Argus Research D.A. Davidson & Co. JP Morgan Stifel Nicolaus & Company, Inc. Jacob Kilstein Barry Oxford Anthony Paolone John Guinee / Aaron Wolf 646-747-5447 212-240-9871 212-622-6682 443-224-1307 / 4
Slide 44: Disclaimers and Other Information
Q4 2019 Disclaimers and Other Information BRANDYWINE REALTY TRUST | Page 44 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 45: Disclaimers and Other Information (continued)
Q4 2019 Disclaimers and Other Information (continued) BRANDYWINE REALTY TRUST | Page 45 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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