Piedmont Realty Trust, Inc. · NYSE:PDM
Piedmont Realty Trust — Piedmont Office Realty Trust — Investor Presentation (September 2018)
19 slides from Piedmont Realty Trust's investor presentation, September 2018
Slide 1: Investor Presentation September 2018
INVESTOR PRESENTATION SEPTEMBER 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 6/30/2018 PORTFOLIO OVERVIEW 2 AS OF 6/30/2018 Ticker (NYSE) PDM Square Feet (millions) 16.2 Market Cap as of 8/31/2018 (billions) $2.5 Number of In-Service Properties 53 Three-Year Total Return (8/31/15-8/31/18) 36.3% % Leased 90.6% Gross Assets (billions)
Slide 4: Who is Piedmont?
Who is Piedmont? DIVERSIFIED PORTFOLIO PATHS TO GROWTH DISCIPLINED CAPITAL ALLOCATOR ARLINGTON GATEWAY Arlington, VA PROACTIVE OPERATIONAL MANAGEMENT FINANCIAL STRENGTH AND FLEXIBILITY SUPERIOR RISK / REWARD PROPOSITION ONE BRATTLE SQUARE Cambridge, MA 3
Slide 5: 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 6: Diversified Portfolio: Markets Offer Attractive 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, Q2 2018 CoStar Office Statistics, Q2 2018 3.0% 10 Year Historical Average 2.5% National Average 1.6% 2.0% 1.5% PDM Average*
Slide 7: Paths to Growth: Organic NOI Growth Potential
Paths to Growth ORGANIC NOI GROWTH POTENTIAL Capitalizing on Future Expirations (% of ALR 5) As of 6/30/2018 12.0% SunTrust, 1.0% Wendy's/Arbys, 1.2% 10.0% 8.0% NY State, 5.2% NY City, 2.2% Nestle, 2.2% 6.0% 4.0% 4.6% 5.3% 2.0% 3.7% 1.8% 0.0% 6 2018 2019 2020 2021 3100 CLARENDON BOULEVARD Estimated
Slide 8: Paths to Growth: Selective Development
Paths to Growth SELECTIVE DEVELOPMENT TO EXPAND LARGE-SCALE POSITIONS AS OF 6/30/2018 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
Slide 9: Disciplined Capital Allocator
Disciplined Capital Allocator Acquisition Strategy Non-Core Strategic • Recycle non-core/mature assets into accretive and Dispositions Acquisitions value-enhancing acquisitions STRATEGIC • Synergistic with current assets 6.1% 7.4% Avg GAAP Yield Avg GAAP Yield INVESTMENTS • Discounted to replacement
Slide 10: Dallas Case Study: Seizing Opportunities
Disciplined Capital Allocator SEIZING OPPORTUNITIES - CONCENTRATED CAPITAL DEPLOYMENT IN SELECT MARKETS Burlington (Boston), MA Dallas, TX Northwest Atlanta, GA Orlando/Lake Mary, FL DALLAS CASE STUDY - CREATING VALUE IN A STRATEGIC MARKET Recognizing the Opportunity Results: Strong NOI Growth and V
Slide 11: Disciplined Capital Allocator: Stock Repurchases
Disciplined Capital Allocator PIEDMONT HAS CREATED VALUE THROUGH THE OPPORTUNISTIC MEASURING THE IMPACT OF RECENT CAPITAL ALLOCATION ACQUISITION OF ~$813M OF ITS STOCK NAV Impact Scenarios: Q4 17 through Q2 18 Activity Calculated using different assumed starting NAVs per share and otherwise publicly
Slide 12: Proactive Operational Management: US Bank, Minneapolis
Proactive Operational Management Opportunity: Delivering Unique Environments US BANK, MINNEAPOLIS Fitness Center Overlooking Downtown Built 2000, acquired May 2003 Iconic asset in Minneapolis CBD Planned Scope of Work 31st fl • Full conversion of 31st floor (previously housed mechanical systems) to
Slide 13: Proactive Operational Management: SunTrust Center, Orlando
Proactive Operational Management Opportunity: Delivering Unique Environments SUNTRUST CENTER, ORLANDO Balcony Overlooking Park Built 1988, acquired November 2015 Pin corner location at Orange and Church Street Planned Scope of Work • Planned lobby conversion including the addition of downtown’s firs
Slide 14: Proactive Operational Management: Operational Excellence
Proactive Operational Management Real Estate is a Local Business… CHICAGO- Midwest Region Chicago and Minneapolis 7 buildings 3.3 million SF Operational NEW YORK- Northeast Region EXCELLENCE New York and Boston 13 buildings 3.4 million SF Piedmont maintains five WASHINGTON- Mid-Atlantic Region regio
Slide 15: Financial Strength and Flexibility
Financial Strength and Flexibility Laddered Debt Maturity Schedule $400,000 $350,000 $300,000 $250,000 $238,000 $160,000 $30,195 2018 2019 2020 2021 2022 2023 2024 2025 Revolver 14 Term Loan 5 Wall 1901 Market Bonds Bonds Term Loan Debt Profile Secured Encumbered NOI 11% 9% Floating Rate 20% Unencum
Slide 16: Superior Risk / Reward Proposition
Superior Risk / Reward Proposition Growing Income Risk-Adjusted Returns Why you should consider • ~$20 million of NOI currently under • One of the highest Sharpe ratios in the abatement or not yet commenced office sector Piedmont… • Average lease term of 6.7 years • Diversified markets- not vulnerab
Slide 17: Superior Risk / Reward Proposition: Attractive Risk-Adjusted Returns
Superior Risk / Reward Proposition Attractive Risk-Adjusted Returns Piedmont IPO through July 31, 2018 Sharpe Ratio 15 Annual Standard Deviation Annualized Total Return 0.57 9.5% 0.51 21.1% 9.2% 17.6% 16.4% 0.34 7.1% BLOOMBERG OFFICE PIEDMONT COMPETITIVE SET BLOOMBERG PIEDMONT COMPETITIVE SET BLOOMB
Slide 18: Outlook
Outlook 2018 Guidance • Anticipated Core FFO of $1.69 to $1.75 per share • Despite the sale of over $750 million (net) of assets since the beginning of 2017, the mid-point of our guidance range represents a decrease of only $0.03 per share • For the remainder of 2018, anticipate net neutral to modes
Slide 19: Appendix - Footnotes
Appendix - Footnotes 1 For the purposes of the calculation, we annualize the quarter’s Core EBITDA and use the average daily balance of debt outstanding during the period, less cash and cash equivalents and escrow deposits and restricted cash as of the end of the quarter. 2 Statistical information p
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