Office Properties Income Trust · OTC:OPITQ
Office Properties Income Trust — Investor Presentation (May 2023)
29 slides from Office Properties Income Trust's investor presentation, May 11, 2023
Slide 1: Investor Presentation May 2023
1 OFFICE PROPERTIES INCOME TRUST INVESTOR PRESENTATION MAY 2023 Tampa, FL
Slide 2: Warning Regarding Forward Looking Statements, Disclaimers and Non-GAAP Financial Measures
2 OFFICE PROPERTIES INCOME TRUST WARNING REGARDING FORWARD LOOKING STATEMENTS, DISCLAIMERS AND NON-GAAP FINANCIAL MEASURESCONT. No Offer or Solicitation This presentation shall not constitute an offer to sell or the solicitation of an offer to subscribe for or buy any securities or a solicitation of
Slide 3: Warning Regarding Forward Looking Statements, Disclaimers and Non-GAAP Financial Measures (cont.)
OFFICE PROPERTIES INCOME TRUST WARNING REGARDING FORWARD LOOKING STATEMENTS, DISCLAIMERS AND NON-GAAP FINANCIAL MEASURESCONT. No Offer or Solicitation This presentation shall not constitute an offer to sell or the solicitation of an offer to subscribe for or buy any securities or a solicitation of a
Slide 4: OPI at a Glance
4 OFFICE PROPERTIES INCOME TRUST a. Total gross assets. b. Based on annualized rental income. See Appendix herein for our definition of investment grade tenants. OPI AT A GLANCE 20.9 MILLION SQUARE FEET $528 Million TOTAL LIQUIDITY $4.6 Billion INVESTMENT PORTFOLIO(1) 90.5% OCCUPANCY 157 PROPERTIES
Slide 5: Recent Company Highlights
5 OFFICE PROPERTIES INCOME TRUST RECENT COMPANY HIGHLIGHTS First Quarter 2023 Full Year 2022 • Announced merger with Diversified Healthcare Trust. • Completed 203,000 square feet of leasing with a weighted average lease term of 6.8 years. • Increased consolidated occupancy to 90.5%, a 170- basis poi
Slide 6: Announced Merger with Diversified Healthcare Trust
6 OFFICE PROPERTIES INCOME TRUST ANNOUNCED MERGER WITH DIVERSIFIED HEALTHCARE TRUST Creating a Diversified REIT with a Broad Portfolio, Defensive Tenant Base and Strong Growth Potential. For more information, please view the merger presentation here.
Slide 7: Diversified Across Strategic U.S. Markets
7 OFFICE PROPERTIES INCOME TRUST Phoenix DIVERSIFIED ACROSS STRATEGIC U.S. MARKETS Chicago 11% D.C. Metro(1)(2) 22% Atlanta 9% Silicon Valley/ Sacramento 10% Dallas 5% OPI Strategic Markets % Annualized Rental Income Focused on markets with strong economics and favorable long-term demand outlook. Bo
Slide 8: Secure and Stable Income
8 OFFICE PROPERTIES INCOME TRUST SECURE AND STABLE INCOME U.S. Government 19.6% Other Government 8.9% Government Contractors 6.3% Real Estate & Financial 16.3% Technology & Communications 15.7% Legal & Other Professional Services 11.6% Manufacturing & Transportation 10.6% Life Sciences and Medical 3
Slide 9: Growth Strategy
9 OFFICE PROPERTIES INCOME TRUST GROWTH STRATEGY 9 Organic Growth • Maintain high occupancy through best-in-class operations and service centered tenant relationships. • Drive portfolio absorption through proactive asset management and leasing. • Focus on retention and opportunities to grow rents. C
Slide 10: Proactive Asset Management and Leasing
10 OFFICE PROPERTIES INCOME TRUST -60% -40% -20% 0% 20% 40% 60% 80% 0 500 1000 1500 2000 2500 3000 3500 2019 2020 2021 2022 2023 YTD Renewals New Leasing 2.2M SF New and renewal leasing Leasing Activity SF in 000s PROACTIVE ASSET MANAGEMENT AND LEASING Staggered Lease Expirations % Total Annualized
Slide 11: Strategic Capital Recycling
11 OFFICE PROPERTIES INCOME TRUST STRATEGIC CAPITAL RECYCLING Since 2019, OPI has sold approximately $1.5 billion of assets and redeployed proceeds into more attractive markets. Property Acquisitions & Dispositions ($ millions) Potential Benefits Reduce the average age of our portfolio. Reshape geog
Slide 12: Recent Portfolio Reshaping
12 OFFICE PROPERTIES INCOME TRUST Phoenix RECENT PORTFOLIO RESHAPING Investing in newer, less capital-intensive properties that improve geographic diversification, rent growth, portfolio metrics and the long-term stability of cash flows. Reducing Exposure Increasing Exposure • Huntsville, AL • Birmi
Slide 13: Value Creation Through Select Redevelopment
13 OFFICE PROPERTIES INCOME TRUST VALUE CREATION THROUGH SELECT REDEVELOPMENT “20 Mass” 20 Massachusetts Avenue, Washington, D.C. “Unison” 351, 401, 501 Elliott Ave, Seattle, WA ~$215 Million Total Project Cost 8% - 10% Stabilized Returns 54% Pre-Leased 427,000 Square Feet Mixed Use Use Q2 2023 Esti
Slide 14: Strong and Flexible Financial Health
14 OFFICE PROPERTIES INCOME TRUST Atlanta, GA STRONG AND FLEXIBLE FINANCIAL HEALTH Debt Profile Liquidity Position $505M Available Revolving Credit Facility $23M Cash on Hand 4.1% Weighted Average Interest Rate on Debt Debt Metrics 48.2% Net Debt to Gross Book Value of Real Estate Assets 3.1x Adjust
Slide 15: Commitment to Sustainability
15 OFFICE PROPERTIES INCOME TRUST For more information, please read The RMR Group’s 2022 Sustainability Report here. COMMITMENT TO SUSTAINABILITY CONTINUED ADVANCEMENT OF INITIATIVES • Encouraging consideration of ESG criteria in the broader context of investment and property management through inte
Slide 16: Appendix
16 OFFICE PROPERTIES INCOME TRUST Appendix Colorado Springs, CO
Slide 17: OPI Is Managed by The RMR Group
17 OFFICE PROPERTIES INCOME TRUST RMR’s Operations Include: National Multi-Sector Investment Platform OFFICE INDUSTRIAL GOVERNMENT MEDICAL OFFICE LIFE SCIENCE SENIOR LIVING HOTELS RETAIL RMR Managed Companies Nearly 2,100 Properties More than $16 Billion in Annual Revenues Over $37 Billion in AUM Ov
Slide 18: A Winning Tradition
18 OFFICE PROPERTIES INCOME TRUST A WINNING TRADITION EPA’S 2023 ENERGY STAR® Partner of the Year. 77 properties with EPA ENERGY STAR certifications 55 properties with BOMA designations. Ranked #2 for portfolio with most designations 58 properties with LEED designations SUSTAINABILITY Ranked Boston
Slide 19: Relationship with RMR Provides Scale and Efficiency
19 OFFICE PROPERTIES INCOME TRUST (1) Source: S&P Global Market Intelligence. Data is for the most recently reported twelve months as April 27, 2023. RELATIONSHIP WITH RMR PROVIDES SCALE AND EFFICIENCY Key Benefits • RMR provides all the employees; OPI has no employees. • RMR’s acquisitions team has
Slide 20: RMR Management Fee Structure
20 OFFICE PROPERTIES INCOME TRUST RMR base management fee tied to OPI share price performance. • Consists of an annual fee equal to generally 50 bps multiplied by the lower of: (1) OPI’s historical cost of real estate, or (2) OPI’s total market capitalization. • There is no incentive for RMR to comp
Slide 21: Financials
21 OFFICE PROPERTIES INCOME TRUST San Jose, CA Financials
Slide 22: Key Financial Data
22 OFFICE PROPERTIES INCOME TRUST KEY FINANCIAL DATA (dollars in thousands, except per share data) As of and for the Three Months Ended 3/31/2023 12/31/2022 9/30/2022 6/30/2022 3/31/2022 Selected Balance Sheet Data: Total gross assets $ 4,591,512 $ 4,541,435 $ 4,507,422 $ 4,578,277 $ 4,703,791 Total
Slide 23: Debt Summary
23 OFFICE PROPERTIES INCOME TRUST As of March 31, 2023: (dollars in thousands) Coupon Rate (1) Interest Rate (2) Principal Balance Maturity Date Due at Maturity Years to Maturity Unsecured Floating Rate Debt: $750,000 unsecured revolving credit facility (3) (4) 6.000% 6.000% $ 245,000 7/31/2023 $ 24
Slide 24: Calculation of NOI and Cash Basis NOI
24 OFFICE PROPERTIES INCOME TRUST CALCULATION OF NOI AND CASH BASIS NOI 1. We recorded a liability for the amount by which the estimated fair value for accounting purposes exceeded the price we paid for our former investment in The RMR Group Inc. common stock in June 2015. A portion of this liabilit
Slide 25: Calculation of EBITDA, EBITDAre and Adjusted EBITDAre
25 OFFICE PROPERTIES INCOME TRUST CALCULATION OF EBITDA, EBITDAre AND ADJUSTED EBITDAre 1. Amounts represent equity based compensation to our Trustees, our officers and certain other employees of RMR. (dollars in thousands) For the Three Months Ended 3/31/2023 12/31/2022 9/30/2022 6/30/2022 3/31/202
Slide 26: Calculation of FFO, Normalized FFO and CAD
26 OFFICE PROPERTIES INCOME TRUST CALCULATION OF FFO, NORMALIZED FFO AND CAD For the Three Months Ended 3/31/2023 12/31/2022 9/30/2022 6/30/2022 3/31/2022 Net income (loss) $ (446) $ 6,390 $ 16,964 $ (16,056) $ (13,407) Add (less): Depreciation and amortization: Consolidated properties 51,692 51,571
Slide 27: Non-GAAP Financial Measures and Certain Definitions
27 OFFICE PROPERTIES INCOME TRUST NON-GAAP FINANCIAL MEASURES AND CERTAIN DEFINITIONS Non-GAAP Financial Measures We present certain “non-GAAP financial measures” within the meaning of applicable rules of the SEC, including NOI, Cash Basis NOI, EBITDA, EBITDAre, Adjusted EBITDAre, FFO, Normalized FF
Slide 28: Non-GAAP Financial Measures and Certain Definitions
28 OFFICE PROPERTIES INCOME TRUST NON-GAAP FINANCIAL MEASURES AND CERTAIN DEFINITIONS Annualized dividend yield is the annualized dividend per share paid during the period divided by the closing price of our common shares at the end of the period. Annualized rental income is calculated using the ann
Slide 29: Contact
29 OFFICE PROPERTIES INCOME TRUST INVESTOR PRESENTATION MAY 2023 Tampa, FL Two Newton Place 255 Washington Street, Suite 300 Newton, MA 02458 OPIREIT.COM
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