Piedmont Realty Trust, Inc. · NYSE:PDM
Piedmont Realty Trust — Piedmont Office Realty Trust — NAREIT REITweek 2018
17 slides from Piedmont Realty Trust's conference presentation, June 2018
Slide 1: NAREIT Investor Presentation
NAREIT Investor Presentation June 2018
Slide 2: Introduction
Introduction Piedmont Office Realty Trust, Inc. (also referred to herein as “Piedmont” or the “Company”) (NYSE: PDM) is an owner, manager, developer and operator of high-quality, Class A office properties in select sub-markets located primarily within eight major eastern U.S. office markets. The Com
Slide 3: Piedmont Overview
Piedmont Overview CORPORATE OVERVIEW AS OF 3/31/2018 PORTFOLIO OVERVIEW 1 AS OF 3/31/2018 Ticker (NYSE) PDM Square Feet (millions) 16.2 Market Cap as of 5/31/2018 (billions) $2.5 Number of In-Service Properties 53 Three-Year Total Return (5/29/15-5/31/18) 30.5% % Leased 91.3% Gross Assets (billions)
Slide 4: Who is Piedmont?
Who is Piedmont? PATHS TO GROWTH DISCIPLINED CAPITAL ALLOCATOR DIVERSIFIED PORTFOLIO ARLINGTON GATEWAY Arlington, VA FINANCIAL STRENGTH AND FLEXIBILITY PROACTIVE OPERATIONAL MANAGEMENT SUPERIOR RISK / REWARD PROPOSITION ONE BRATTLE SQUARE Cambridge, MA 3
Slide 5: Paths to Growth
Paths to Growth ORGANIC NOI GROWTH POTENTIAL Capitalizing on Future Expirations (% of ALR 4) As of 3/31/2018 12.0% SunTrust, 1.0% 10.0% Wendy's/Arbys, 1.2% 8.0% NY City, 2.2% NY State, 6.0% 5.2% Nestle, 2.1% 4.0% 6.4% 2.0% 4.5% 3.8% 3.4% 0.0% 5 2018 2019 2020 2021 3100 CLARENDON BOULEVARD Estimated
Slide 6: Paths to Growth: Selective Development
Paths to Growth SELECTIVE DEVELOPMENT TO EXPAND POSITIONS AS OF 3/31/2018 Strategically-Located Land Holdings for Future Development (minimum 70% pre-lease); All Land Holdings are Adjacent to Existing Core Locations 1,000,000 SF 250,000 SF 250,000 SF Lake Mary, FL Atlanta, GA Atlanta, GA Adjacent to
Slide 7: Disciplined Capital Allocator: Building Dominant Positions
Disciplined Capital Allocator BUILDING DOMINANT POSITIONS WITHIN TARGET SUBMARKETS Atlanta - Northwest Boston - 128 North GALLERIA 200, ATLANTA, GA 5 WALL STREET, BURLINGTON, MA Invested (# buildings, $MM) 6 4 bldgs, $192 million Invested (# buildings, $MM) 6 6 bldgs, $280 million Discount to Replac
Slide 8: Disciplined Capital Allocator
Disciplined Capital Allocator SINCE 2014, PIEDMONT HAS SOLD $2.2 BILLION PIEDMONT HAS CREATED VALUE THROUGH THE OF NON-CORE HOLDINGS, EXITING MULTIPLE MARKETS OPPORTUNISTIC ACQUISITION OF ~$780M OF ITS STOCK & REDUCING DEBT BY APPROXIMATELY $300M Piedmont Stock Price Since IPO 2004-2007 2008-2013 20
Slide 9: NAV Impact Scenarios
NAV Impact Scenarios Hypothetical Impact from Repurchasing Shares During Q4 2017 & Q1 2018 Calculated using different assumed starting NAVs per share and otherwise publicly available data Starting NAV (Per Share) $23.00 $24.00 $25.00 $26.00 $27.00 Value Accretion (per share) $ 0.56 $ 0.68 $ 0.79 $0.
Slide 10: Diversified Portfolio
Diversified Portfolio PORTFOLIO CONCENTRATED WITHIN EIGHT OF THE NATION’S LARGEST EASTERN MARKETS Why These Markets and Specific Submarkets: • Historical and projected rental rate growth • Barriers to entry • Heavy amenity base Atlanta Washington, DC • Proximity to transportation hubs Northwest, C
Slide 11: Diversified Portfolio: Attractive Market Fundamentals
Diversified Portfolio PIEDMONT’S MARKETS OFFER ATTRACTIVE FUNDAMENTALS AND FAVORABLE OUTLOOK LTM Employment Growth Construction as a % of Total Inventory JLL Office Outlook US, Q1 2018 CoStar Office Statistics, Q1 2018 10 Year Historical Average 3.0% National Average 1.5% 2.5% 2.0% PDM Average* 1.8%
Slide 12: Financial Strength and Flexibility
Financial Strength and Flexibility LADDERED DEBT MATURITY SCHEDULE $400,000 $350,000 $300,000 $250,000 $207,000 $160,000 $30,434 2018 2019 2020 2021 2022 2023 2024 2025 Revolver 11 Term Loan 5 Wall 1901 Market Bonds Bonds Term Loan DEBT PROFILE Secured Encumbered NOI 11% 9% Floating Rate 18% Unencum
Slide 13: Proactive Operational Management
Proactive Operational Management PIEDMONT MAINTAINS FIVE REGIONAL OFFICE LOCATIONS TO OPTIMIZE EFFICIENCY AND TENANT-CENTRIC FOCUS 85% As of 3/31/2018 83% MIDWEST REGION NORTHEAST REGION 41% • EVP Oversight Tom Prescott • EVP Oversight Brent Smith • Markets Chicago • Markets Boston Minneapolis New Y
Slide 14: Outlook
Outlook 2018 GUIDANCE • Anticipated Core FFO of $1.68 to $1.74 per share • Only $0.04 per share decrease from 2017 despite the sale of over $750 million of assets (net) since the beginning of 2017 • Anticipate net neutral capital transactions activity (dispositions, acquisitions, stock repurchases)
Slide 15: Superior Risk / Reward Proposition
Superior Risk / Reward Proposition ATTRACTIVE RISK-ADJUSTED RETURNS PIEDMONT IPO THROUGH MAY 31, 2018 Sharpe Ratio 12 Annual Standard Deviation Annualized Total Return 0.56 21.3% 9.4% 0.50 9.1% 17.8% 16.6% 0.33 7.0% BLOOMBERG OFFICE PIEDMONT COMPETITIVE SET BLOOMBERG PIEDMONT COMPETITIVE SET BLOOMBE
Slide 16: Appendix - Footnotes
Appendix - Footnotes 1 Statistical information presented throughout the document regarding the company’s portfolio of properties includes all in-service properties and excludes one out- of-service property as of March 31, 2018, unless otherwise noted. 2 For the purposes of the calculation, we annual
Slide 17: What You Should Know About Piedmont
Exhibit WHAT YOU SHOULD KNOW ABOUT PIEDMONT