Jbg Smith Properties · NYSE:JBGS
Jbg Smith Properties — Investor Presentation (March 2018)
43 slides from Jbg Smith Properties's investor presentation, Mar 19, 2018
Slide 1: JBG SMITH: Company Highlights
J B G S M I T H : C O M P A N Y H I G H L I G H T S Weighted Average Lease Term Operating Portfolio Net Debt / Annualized Adjusted 4747 Bethesda Avenue (Rendering) 3 7.1x EBITDA 2.6% Dividend Yield $7.0B Total Enterprise Value $363M Annualized 4Q17 NOI 84 Walk Score Over 98% Metro Served 5.7 Years 5
Slide 2: JBG SMITH: Investment Rationale
J B G S M I T H : I N V E S T M E N T R A T I O N A L E Aerial View of Washington, DC THE DC MARKET A PROVEN VALUE LIQUIDITY AND UNRIVALED OF HIGH-QUALITY AND IS POISED DIFFERENTIATED STRENGTH TO PROFILE BEST URBAN 4 CONCENTRATION SIGNIFICANT CREATOR WITH A HAS BOTTOMED ASSETS IN GROWTH FINANCIAL ST
Slide 3: Platform Differentiates Strategy
J B G S M I T H : P L A T F O R M D I F F E R E N T I A T E S S T R A T E G Y MAXIMIZE VALUE THROUGH INVESTMENT 5 JBG SMITH HAS EXPERTISE IN ALL 3 URBAN PRODUCT TYPES ALLOWING US TO CONCENTRATION AND MIXED-USE PLACEMAKING R E T A I L M U L T I F A M I LY O F F I C E •Track record of recognizing and
Slide 4: Disciplined and Experienced Leadership Team
J B G S M I T H : D I S C I P L I N E D A N D E X P E R I E N C E D L E A D E R S H I P T E A M The Bartlett Rooftop Arlington, VA INTERESTS ASSOCIATED WITH LONG-EQUITY COMPENSATION 6 (1) Years with JBG or Vornado/Charles E. Smith. SEASONED TEAM WITH LONG HISTORY TOGETHER 100% OF SVPs AND ABOVE HAVE
Slide 5: Concentration of High-Quality Assets in the Best Submarkets
J B G S M I T H : C O N C E N T R A T I O N O F H I G H - Q U A L I T Y A S S E T S I N T H E B E S T S U B M A R K E T S 37% Corridor 7 (1) Includes operating office, multifamily, other and under construction assets. All figures shown at share as of 12/31/17. Geographic Composition(1) (by Square Fe
Slide 6: JBG SMITH Portfolio Summary
J B G S M I T H : P O R T F O L I O S U M M A R Y 1.2M SF / 1,568 Units 0 SF / 0 Units All figures shown at share as of 12/31/17. 8 Future Development Pipeline 43 Assets 17.9M SF Estimated Development Density Operating Other 4 Assets 348K SF Near-Term Development Pipeline 0 Assets Operating Multifam
Slide 7: JBG SMITH Investor Update
J B G S S M I T H : I N V E S T O R U P D A T E 9 2101 L Street Washington, DC FOURTH QUARTER RESULTS FUTURE GROWTH CAPITAL ALLOCATION VIEW OF THE MARKET
Slide 8: Market: Executive Summary
M A R K E T : E X E C U T I V E S U M M A R Y S P E N D I N G 10 F E D E R A L R E B O U N D W A L K A B I L I T Y M A T T E R S A M E N I T Y R I C H S U B M A R K E T S O U T P E R F O R M P O C K E T SO F O F F I C E O P P O R T U N I T Y D E C L I N I N G A P A R T M E N T P I P E L I N E T H R
Slide 9: Market: Third Consecutive Year of Strong Job Growth
M A R K E T : T H I R D C O N S E C U T I V E Y E A R O F S T R O N G J O B G R O W T H Source: Bureau of Labor Statistics 11 JOBS (THOUSANDS) AVG. ANNUAL JOB GROWTH 80 6056.657.555.4 40.6 40 20 11.2 0 -20 -40 -51.0 -60 2008200920102011201220132014201520162017 43.3 10-YEAR (2008-2017) AVERAGE: 27,40
Slide 10: Market: DC Is Less Volatile Over Time
M A R K E T : D C I S L E S S V O L A T I L E O V E R T I M E R E L A T I V E T O O T H E R G A T E W A Y M A R K E T S SOURCE: JLL Research, BLS 12 % EMPLOYMENT CHANGE % EMPLOYMENT CHANGE DC MARKET IS MORE INSULATED FROM RECESSIONS 1990 RecessionTech CrashGreat Recession 0.0% -1.0% -2.0% -3.0% -4.0
Slide 11: Market: Multifamily Key Themes
M A R K E T : M U L T I F A M I L Y K E Y T H E M E S $4.5B. Source: JBGS Market Research estimates based on CoStar historical and future projection data augmented with published pipelines from local media for core DC area counties (DC, Montgomery, Prince George’s, Arlington, Alexandria, Fairfax, Fa
Slide 12: Market: Office Key Trends
M A R K E T : O F F I C E K E Y T R E N D S $51 Source: JLL class-cut historical data for Washington, DC and Arlington submarkets 14 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 20
Slide 13: Market: JBG SMITH Submarkets Outperform
M A R K E T : J B G S M I T H S U B M A R K E T S O U T P E R F O R M 12% 5% 84% 83% 80% -25% JBGS Submarkets Non-JBGS Submarkets 20% 30% 15% Source: JLL Office Data, CoStar Multifamily Data (Rental Buildings Over 50 Units, Core DC Counties, Market Rate and Market/Affordable w/<50% affordable) 15 MU
Slide 14: Market: Walkable Amenities Drive Outperformance
M A R K E T : W A L K A B L E A M E N I T I E S D R I V E O U T P E R F O R M A N C E Walk Score is a third-party measure of amenities within walking distance. Comparing these scores with rents shows that the more walkable, amenity-rich markets outperform their less walkable counterparts. $3.00 $0.5
Slide 15: Market: Bipartisan Budget Act Will Benefit DC Region
M A R K E T : 2 0 1 8 B I P A R T I S A N B U D G E T A C T W I L L B E N E F I T D C R E G I O N $1,200 $1,149 FY2019 investment priorities have headquartered in the DC area Source: CBO, DOD, CSIS 17 SF (Thousands) 74% of contractors for the Pentagon’s a presence in Crystal City 50% of contractors
Slide 16: Capital Allocation: Strong Office Sales Volume and Pricing
C A P I T A L A L L O C A T I O N : S T R O N G O F F I C E S A L E S V O L U M E A N D P R I C I N G Source: CoStar and JBG SMITH 18 Sales Volume ($Billions) Price/SF OFFICE INVESTMENT SALES >$50M, EXCLUDING LAND SALES Sales VolumeMax Price/SFWtd Avg. Price/SF $7$1,400 $6$1,200 $5$1,000 $4$800 $3$6
Slide 17: Capital Allocation: Philosophy
C A P I T A L A L L O C A T I O N : P H I L O S O P H Y (1) Includes only JBG portfolio. 19 $ THOUSANDS I N V E S T M E N T S / D I S P O S I T I O N S ( 1 ) 2000 - 20062007 - 20082009 - 20122013 - 2016 InvestmentsDispositions $1,245,622 $1,203,916 $1,057,077 $445,413 ($624,106) ($1,418,543) ($437,0
Slide 18: Capital Allocation: Dispositions - 1900 N Street
C A P I T A L A L L O C A T I O N : D I S P O S I T I O N S 1900 N Street (Rendering) 1900 N Street (Rendering) 20 (1)JBG SMITH historical cost for 1900 N Street was $69M as of Q4 2017, prior to reflecting an adjustment resulting from the formation transaction. JBG SMITH contributed the asset to the
Slide 19: Capital Allocation: Dispositions - Summit I and II
C A P I T A L A L L O C A T I O N : D I S P O S I T I O N S Summit I and II Summit I and II 21 •Entered into agreement to sell Summit I and II for an aggregate sale price of $97.15M oTwo 100% occupied office assets, totaling 290,000 SF and approximately 700,000 SF of additional density, located in R
Slide 20: Future Growth: Under Construction Properties
F U T U R E G R O W T H : U N D E R C O N S T R U C T I O N P R O P E R T I E S 19% 48% (1)Office assets were 62.1% preleased at 100% at 12/31/17. Includes JBG SMITH lease for approximately 80,200 square feet. (2)Includes standalone retail assets classified as “Other” Assets. 22 MD 13% DC 87% Estima
Slide 21: Future Growth: New Office Assets in Amenity-Rich Core Markets
F U T U R E G R O W T H : C O N C E N T R A T E N E W O F F I C E A S S E T S I N A M E N I T Y - R I C H C O R E M A R K E T S Washington, DC Arlington, VA 65.1% Preleased 73.7% Preleased All figures shown at 100% except Estimated Total Investment, which is shown at JBG SMITH share. (1)Estimated to
Slide 22: Future Growth: Under Construction Office Strategy
F U T U R E G R O W T H : U N D E R C O N S T R U C T I O N O F F I C E S T R A T E G Y View from CEB Tower View from L’Enfant Plaza Office View from 4747 Bethesda Avenue View from 1900 N Street 24 (1)Includes JBG SMITH lease for approximately 80,200 square feet at 4747 Bethesda Avenue and a joint v
Slide 23: Future Growth: New Multifamily Assets in Path of Growth Submarkets
F U T U R E G R O W T H : C O N C E N T R A T E N E W M U L T I F A M I L Y A S S E T S I N P A T H O FG R O W T H S U B M A R K E T S Washington, DC Bethesda, MD Estimated Total Investment: $155M Estimated Total Investment: $194M Washington, DC Washington, DC Estimated Total Investment: $218M Estim
Slide 24: Future Growth: NOI Bridge
2 0 2 3 ( 1 ) F U T U R E G R O W T H : N O I B R I D G E T H R O U G H DOES NOT INCLUDE NOI FROM BUILD-OUT OF 17.9M SF FUTURE DEVELOPMENT PIPELINE $525M + Q4 2017 ANNUALIZED $383M Incremental NOI from Assets Under Construction Incremental NOI from Stabilizing Operating Portfolio 7.1% Weighted Avera
Slide 25: Future Growth: Future Development Pipeline
F U T U R E G R O W T H : F U T U R E D E V E L O P M E N T P I P E L I N E Shows both owned and optioned land, SOURCE: JLL Research land comps for selected submarkets from 2010-2017 27 POTOMAC YARD JBGS Inv. JLL Comps Avg. $37/SF $61/SF CRYSTAL/PENTAGON JBGS Inv. JLL Comps Avg. $41/SF $52/SF RB COR
Slide 26: Future Growth: Crystal City
T O D A Y ( 1 ) F U T U R E G R O W T H : C R Y S T A L C I T Y DOWNTOWN DC THE PENTAGON REAGAN NATIONAL AIRPORT BLUE = JBGS CONTROL (1) Includes Crystal City and Pentagon City submarkets. 28 6.2M SF OF OPERATING OFFICE 2.4M SF OF OPERATING MULTIFAMILY Operating Multifamily 28% Operating Office 72%
Slide 27: Transformative Repositioning of Crystal City
WASHINGTON, DC N F U T U R EG R O W T H : T R A N S F O R M A T I V E R E P O S I T I O N I N G O F C R Y S T A L C I T Y 29 FUTURE DEVELOPMENT OPERATING
Slide 28: Crystal City Phase One Retail
F U T U R E G R O W T H : C R Y S T A L C I T Y P H A S E O N E R E T A I L ENTRANCE 30 P H A S E O N E R E T A I L ( 1 3 0 K S F ) N E W M E T R O E N T R A N C ET H E A T R E A N C H O RA M E N I T Y R E T A I LI M P R O V E D S T R E E TG R O C E R Y A N C H O R SECOND METRO PROGRAMMING AND ACTIV
Slide 29: Crystal City Phase Zero - Creating a Place Now
F U T U R E G R O W T H : C R Y S T A L C I T Y P H A S E Z E R O – C R E A T I N G A “ P L A C E ” N O W FESTIVE LIGHTING, OUTDOOR SEATING AREAS ACTIVATE LOBBIES WITH SEATING, ART, AND COFFEE BARS SMALL AND LARGE SCALE ART IN PUBLIC SPACES BRANDED IDENTIY THROUGHOUT PARKING AND WAYFINDING ENHANCEME
Slide 30: Q4 Update: Financial and Operating Results
Q 4 U P D A T E : F I N A N C I A L A N D O P E R A T I N G R E S U L T S 2% DC 66% 2018 2019 2020 2021 2022 2023 2024 2025 2026 32 Office Square Feet 1,50018% 1,20014% 90010% 6006% 3002% Year Average of 12% of SF through 2023 Lease Expiration Schedule MD 5% 29% VA OperatingOperating Other Multifami
Slide 31: Q4 Update: Strong Balance Sheet to Fund Future Growth
Q 4 U P D A T E : S T R O N G B A L A N C E S H E E T T O F U N D F U T U R E G R O W T H Availability 47% 16% 33 Cash 18% Term Loan 19% Revolver Availability In-Place Construction Loan Availability $1.8B of Liquidity •Primarily utilize non-recourse, asset-level financing •$2.4B of debt is mortgage
Slide 32: Q4 Update: Third-Party Asset Management & Real Estate Services Business
Q 4 U P D A T E : T H I R D - P A R T Y A S S E T M A N A G E M E N T & R E A L E S T A T E S E R V I C E S B U S I N E S S 2% 5% management fees 34 •Third-Party Management business is stable and relatively sticky •Subject to market conditions, anticipate the decline in revenues from the fund busine
Slide 33: Q4 Update: Corporate Governance Approach
Q 4 U P D A T E : C O R P O R A T E G O V E R N A N C E A P P R O A C H (1)Subject to shareholder approval. 35 ALLOW A MAJORITY OF SHAREHOLDERS TO CALL A SPECIAL MEETING ALLOW A MAJORITY OF SHAREHOLDERS TO AMEND OUR BYLAWS OPT OUT OF MUTA(1) LONG-TERM COMMITMENT TO DIVERSITY AND 50:50 MEN AND WOMEN
Slide 34: Definitions: Non-GAAP Measures
D E F I N I T I O N S Non-GAAP Measures This presentation includes non-GAAP measures. For these measures, we have provided an explanation of how these non-GAAP measures are calculated and why JBG SMITH’s management believes that the presentation of these measures provides useful information to inves
Slide 35: Definitions: Historical Cost and Estimated Investment
D E F I N I T I O N S Historical Cost, Estimated Incremental Investment, Estimated Total Investment and Estimated Total Project Cost “Historical cost” is a non-GAAP measure which includes the total historical cost incurred by JBG SMITH, on a cash basis, with respect to the development of an asset, i
Slide 36: Definitions: Same Store and Other Terms
D E F I N I T O N S Same Store “Same store” refers to the pool of assets that were in service for the entirety of both periods being compared, except for assets for which significant redevelopment, renovation, or repositioning occurred during either of the periods being compared. No JBG Assets are i
Slide 37: EBITDA and Adjusted EBITDA Reconciliation (Non-GAAP)
E B I T D A A N D A D J U S T E D E B I T D A R E C O N C I L I A T I O N ( N O N - G A A P ) Three Months Ended December 31, 2017 Six Months Ended December 31, 2017 dollars in thousands Net loss $ (16,076) $ (94,067) Depreciation and amortization expense Interest expense (1) Income tax expense (ben
Slide 38: FFO, Core FFO and FAD Reconciliation (Non-GAAP)
F F O , C O R E F F O A N D F A D R E C O N C I L I A T I O N ( N O N - G A A P ) Three Months Ended December 31, Six Months Ended December 31, in thousands, except per share data 2017 2017 Net loss attributable to common shareholders $ (14,094) $ (83,925) Net loss attributable to redeemable noncont
Slide 39: FFO, Core FFO and FAD Reconciliation (Non-GAAP)
F F O , C O R E F F O A N D F A D R E C O N C I L I A T I O N ( N O N - G A A P ) Three Months Ended December Six Months Ended December in thousands, except per share data 31, 2017 31, 2017 Core FFO attributable to the operating partnership common units Recurring capital expenditures and second gene
Slide 40: NOI Reconciliation (Non-GAAP)
N O I R E C O N C I L I A T I O N dollars in thousands ( N O N - G A A P ) Three Months Ended December 31, 2017 2016 Net income (loss) attributable to common shareholders Add: Depreciation and amortization expense General and administrative expense: Corporate and other Third-party real estate servic
Slide 41: NOI Reconciliation (Non-GAAP)
N O I R E C O N C I L I A T I O N dollars in thousands ( N O N - G A A P ) Year Ended December 31, 2017 2016 Net income (loss) attributable to common shareholders Add: Depreciation and amortization expense General and administrative expense: Corporate and other Third-party real estate services Share
Slide 42: NOI Reconciliation (Non-GAAP)
NOI RECONCILIATION (NON-GAAP) 77 a8 Net inceme oss treatable conn sarees 3 ams e107 Depecaten and arzaton exsense 6180 130 ‘General and aiiave expense ‘Cpe ane ater 31 4978 ‘Te pry ra esate sevens 1910 19088 ‘Share basedcompensan rested Fermton Transatan 251 = “amactin and ater costs ae) oars bere e
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