Office Properties Income Trust · OTC:OPITQ
Office Properties Income Trust — Q2 2024 Earnings Presentation
32 slides from Office Properties Income Trust's earnings presentation, Jul 31, 2024
Slide 1: Second Quarter 2024 Financial Results and Supplemental Information
Seattle, WA Office Properties Income Trust Second Quarter 2024 Financial Results and Supplemental Information July 31, 2024
Slide 2: Table of Contents
Table of Contents QUARTERLY RESULTS Office Properties Income Trust Announces Second Quarter 2024 Financial Results ...................................................... 4 Second Quarter 2024 Highlights .................................................................................................
Slide 3: Quarterly Results
Quarterly Results RETURN TO TABLE OF CONTENTS Q2 2024 3
Slide 4: Office Properties Income Trust Announces Second Quarter 2024 Financial Results
OFFICE PROPERTIES INCOME TRUST ANNOUNCES SECOND QUARTER 2024 FINANCIAL RESULTS "During the second quarter, we made further progress Newton, MA (July 31, 2024). Office Properties Income Trust (Nasdaq: OPI) today announced its financial results for the quarter ended June 30, 2024. on addressing our de
Slide 5: Second Quarter 2024 Highlights
Second Quarter 2024 Highlights • Executed 208,000 square feet of total leases at a weighted average lease term of 4.0 years. Portfolio • Same property portfolio occupancy of 89.9% as of quarter end and a weighted average Update lease term of 6.6 years (by annualized revenue). • Subsequent to quarter
Slide 6: Financials
Financials RETURN TO TABLE OF CONTENTS Q2 2024 6
Slide 7: Key Financial Data
Key Financial Data (dollars in thousands, except per share data) As of and for the Three Months Ended As of 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 6/30/2024 Selected Income Statement Data: Capitalization: Rental income $ 123,686 $ 139,435 $ 133,773 $ 133,361 $ 133,997 Total common shares
Slide 8: Condensed Consolidated Statements of Income (Loss)
Condensed Consolidated Statements of Income (Loss) (amounts in thousands, except per share data) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Rental income $ 123,686 $ 133,997 $ 263,121 $ 266,419 Phoenix, AZ Expenses: Real estate taxes 14,727 15,901 30,436 31,234 Utility
Slide 9: Condensed Consolidated Balance Sheets
Condensed Consolidated Balance Sheets (dollars in thousands, except per share data) June 30, December 31, 2024 2023 ASSETS Real estate properties: Land $ 750,591 $ 786,310 Buildings and improvements 3,031,469 3,279,369 Total real estate properties, gross 3,782,060 4,065,679 Accumulated depreciation
Slide 10: Debt Summary
Debt Summary As of June 30, 2024 (dollars in thousands) Coupon Interest Principal Maturity Due at Years to Rate (4) Rate (5) Balance Date Maturity Maturity Secured Floating Rate Debt: $325,000 secured revolving credit facility (1) 8.910% 8.910% $ 178,000 1/29/2027 $ 178,000 2.6 (1) OPI's secured rev
Slide 11: Debt Maturity Schedule
Debt Maturity Schedule As of June 30, 2024 (dollars in thousands) $1,000,000 Secured vs. Unsecured Debt Secured $800,000 57.0% $600,000 Unsecured 43.0% $867,708 Fixed vs. Variable Rate Debt $400,000 Variable 12.0% $53,554 $499,154 $200,000 $278,000 $276,355 $140,488 $123,487 Fixed $80,784 88.0% $0 2
Slide 12: Leverage Ratios, Coverage Ratios and Public Debt Covenants
Leverage Ratios, Coverage Ratios and Public Debt Covenants As of and for the Three Months Ended 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 Leverage Ratios: Atlanta, GA Net debt / total gross assets 52.3% 56.2% 55.6% 54.9% 54.7% Net debt / gross book value of real estate assets 45.7% 50.1% 49
Slide 13: Capital Expenditures Summary
Capital Expenditures Summary (dollars and sq. ft. in thousands, except per sq. ft. data) Capital Expenditures Summary Seattle, WA For the Three Months Ended 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 Lease related costs $ 25,965 $ 16,768 $ 18,497 $ 15,677 $ 28,252 Building improvements 4,085
Slide 14: Property Dispositions
Property Dispositions Since January 1, 2024 (dollars and sq. ft. in thousands, except per sq. ft. data) Dispositions: Number of Gross Sales Price Date Sold Location Properties Sq. Ft. Gross Sales Price Per Sq. Ft. 3/21/2024 Chicago, IL 1 248 $ 38,500 $ 155.24 Indianapolis, IN RETURN TO TABLE OF CONT
Slide 15: Investment in Unconsolidated Joint Venture
Investment in Unconsolidated Joint Venture As of June 30, 2024 (dollars and sq. ft. in thousands) Unconsolidated Joint Venture: (1) OPI Number of Weighted Average Joint Venture Ownership OPI Investment Properties Location Sq. Ft. Occupancy Remaining Lease Term (2) Prosperity Metro Plaza 51% $ 17,718
Slide 16: Portfolio Information
Portfolio Information RETURN TO TABLE OF CONTENTS Q2 2024 16
Slide 17: Summary Same Property Results
Summary Same Property Results (dollars and sq. ft. in thousands) Washington, D.C. For the Three Months Ended For the Six Months Ended 6/30/2024 6/30/2023 6/30/2024 6/30/2023 Properties (end of period) 131 131 131 131 Rentable sq. ft. 17,326 17,313 17,326 17,313 Percent leased 89.9% 95.3% 89.9% 95.3%
Slide 18: Occupancy and Leasing Summary
Occupancy and Leasing Summary (dollars and sq. ft. in thousands, except per sq. ft. data) As of and for the Six Months As of and for the Three Months Ended Ended 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 6/30/2024 Properties (end of period) 151 151 152 154 155 151 Rentable sq. ft. 20,293 20
Slide 19: Tenant Diversity and Credit Characteristics
Tenant Diversity and Credit Characteristics As of June 30, 2024 Percentage of Total Annualized Rental Income Tenant Industry Tenant Credit Characteristics Other: 2.3% Energy Services: Non-Investment Hospitality: 1.8% Grade Life Sciences 2.4% 5.1% and Medical: 3.1% Government Contractors: 7.4% US Gov
Slide 20: Tenants Representing 1% or More of Total Annualized Rental Income
Tenants Representing 1% or More of Total Annualized Rental Income As of June 30, 2024 (dollars and sq. ft. in thousands) % of Total % of Leased Annualized Annualized Tenant Credit Rating Sq. Ft. Sq. Ft. Rental Income Rental Income 1 U.S. Government Investment Grade 3,277 19.3% $ 93,349 19.3% 2 Alpha
Slide 21: Lease Expiration Schedule
Lease Expiration Schedule As of June 30, 2024 (dollars and sq. ft. in thousands) Cumulative Cumulative % of Total % of Total % of Total % of Total Number of Leased Square Leased Leased Annualized Annualized Annualized Leases Feet Square Feet Square Feet Rental Income Rental Income Rental Income Year
Slide 22: Appendix
Appendix RETURN TO TABLE OF CONTENTS Q2 2024 22
Slide 23: Company Profile and Research Coverage
Company Profile and Research Coverage The Company: Equity Research Coverage OPI is included in 150 market indices and comprises more than 1% of the following indices as of June 30, 2024: Bloomberg US Micro Cap Real Estate Price B. Riley Securities, Inc. Morgan Stanley Return Index (BMICR), BI North
Slide 24: Governance Information
Governance Information Board of Trustees Donna D. Fraiche Barbara D. Gilmore John L. Harrington Independent Trustee Independent Trustee Independent Trustee William A. Lamkin Elena B. Poptodorova Jeffrey P. Somers Independent Trustee Lead Independent Trustee Independent Trustee Mark A. Talley Jennife
Slide 25: Calculation and Reconciliation of NOI and Cash Basis NOI
Calculation and Reconciliation of NOI and Cash Basis NOI (dollars in thousands) For the Three Months Ended For the Six Months Ended 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 6/30/2024 6/30/2023 Calculation of NOI and Cash Basis NOI: Rental income $ 123,686 $ 139,435 $ 133,773 $ 133,361 $ 13
Slide 26: Reconciliation and Calculation of Same Property NOI and Same Property Cash Basis NOI
Reconciliation and Calculation of Same Property NOI and Same Property Cash Basis NOI (dollars in thousands) For the Three Months Ended For the Six Months Ended 6/30/2024 6/30/2023 6/30/2024 6/30/2023 Reconciliation of NOI to Same Property NOI: Rental income $ 123,686 $ 133,997 $ 263,121 $ 266,419 Pr
Slide 27: Operating Metrics by Collateral Pool
Operating Metrics by Collateral Pool As of June 30, 2024 (dollars and sq. ft. in thousands) Sq. Ft. Trailing Expiring Weighted Trailing Twelve Unspent Through Average Annualized Twelve Months Leasing Gross Book Number of December 31, Remaining Rental Months Cash Basis Related Value of Real Propertie
Slide 28: Calculation of EBITDA, EBITDAre and Adjusted EBITDAre
Calculation of EBITDA, EBITDAre and Adjusted EBITDAre (dollars in thousands) For the Three Months Ended For the Six Months Ended 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 6/30/2024 6/30/2023 Net income (loss) $ 76,171 $ (5,184) $ (37,151) $ (19,593) $ (12,242) $ 70,987 $ (12,688) Add (less)
Slide 29: Calculation of FFO, Normalized FFO and CAD
Calculation of FFO, Normalized FFO and CAD (amounts in thousands, except per share data) For the Three Months Ended For the Six Months Ended 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/30/2023 6/30/2024 6/30/2023 Net income (loss) $ 76,171 $ (5,184) $ (37,151) $ (19,593) $ (12,242) $ 70,987 $ (12,688
Slide 30: Non-GAAP Financial Measures and Certain Definitions
Non-GAAP Financial Measures and Certain Definitions Non-GAAP Financial Measures OPI presents certain “non-GAAP financial measures” within the meaning of the applicable rules of the Securities and Exchange Commission, or the SEC, including NOI, Cash Basis NOI, Same Property NOI, Same Property Cash Ba
Slide 31: Non-GAAP Financial Measures and Certain Definitions (Continued)
Non-GAAP Financial Measures and Certain Definitions (Continued) Adjusted total assets and total unencumbered assets include the original cost of real estate assets calculated in accordance with GAAP before impairment writedowns, if any, and exclude depreciation and amortization, accounts receivable
Slide 32: Warning Concerning Forward-Looking Statements
Warning Concerning Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws that are subject to risks and uncertainties. These statements may include words such as “believe”,
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