Brandywine Realty Trust · NYSE:BDN
Brandywine Realty Trust — Q1 2022 Earnings Presentation
42 slides from Brandywine Realty Trust's earnings presentation, Apr 21, 2022
Slide 1: Supplemental Information Package First Quarter 2022
S U P P L E M E N TA L I N F O R M AT I O N PAC K AG E 2 0 2 2 F I R S T Q U A R T E R Y N U IT O O E V TY I M G AT Y T O I IN N L IT IN UA M R N Q C
Slide 2: Table of Contents
Table of Contents Page Executive Summary 1 2022 Business Plan Trend Line 3 Development Summary 7 Balance Sheet and Liquidity 12 Land Inventory 13 Property Activity 14 Net Operating Income Composition 15 Regional Property Overview 16 Leasing Activity 17 Lease Expiration Analysis 19 Top Twenty Tenants
Slide 3: Q1 2022 Executive Summary
Q1 2022 Executive Summary (unaudited in millions, except square footage and acreage) BRANDYWINE REALTY TRUST | Page 1 Transaction Highlights Joint Venture Activity On March 17, 2022, we formed a joint venture with institutional investors for the purpose of acquiring Cira Square for $383.0 million.
Slide 4: Q1 2022 Executive Summary: Leasing Highlights
Q1 2022 Executive Summary (unaudited in thousands, except per share data and square footage) BRANDYWINE REALTY TRUST | Page 2 Leasing Highlights Q1 2022 Q4 2021 Quarter end occupancy 89.4% 91.3% Leased as of April 19, 2022 / January 25, 2022 92.4% 93.0% New leases executed in quarter (sq ft) 286,931
Slide 5: Business Plan Trend Line
Business Plan Trend Line (unaudited) BRANDYWINE REALTY TRUST | Page 3 2022 Business Plan as of Business Plan Component 4/19/2022 Original Speculative Revenue / SF $34.0 - $36.0 MM / 2.0M SF $34.0 - $36.0 MM / 2.0M SF Executed / SF $29.4 MM / 1.4M SF $25.6 MM / 967K SF Projected Tenant Retention (SF)
Slide 6: Austin Marketplace: Continued Leading Growth
Austin Marketplace: Continued Leading Growth (unaudited) BRANDYWINE REALTY TRUST | Page 4 (From L to R): Uptown ATX Block A; Garza Ranch; and Four Points Highlights #1 Fastest Growing Metro (US Census Bureau) Austin Economic Development reported that was another record year of corporate #1 Bes
Slide 7: Philadelphia CBD Marketplace
Philadelphia CBD Marketplace (unaudited) BRANDYWINE REALTY TRUST | Page 5 Philadelphia Marketplace; Stability with Life Science Momentum Highlights $8.1 billion in venture capital deals in 2021. No county in the entire nation produces as many degrees in biomedical engineering as Philadelphia Cou
Slide 8: Our Opportunity: Life Sciences
Our Opportunity: Life Sciences (unaudited) BRANDYWINE REALTY TRUST | Page 6 Nationally: Life sciences employment in the field of cell and gene therapy projected to grow 37% per year for the next three (3) years. Total commercial lab space has grown 12% in 2021. Pipeline: 11 million SF is curre
Slide 9: Development Summary
Development Summary (unaudited, in thousands, except square feet) BRANDYWINE REALTY TRUST | Page 7 Remaining Remaining Equity Amount equity to be equity to be Projected Completion Stabilization Total Project Debt Leased % @ Development (% owned) Location Type Square Feet Capitalization funded at fun
Slide 10: Development Activity: 3025 JFK Boulevard
Development Activity (unaudited) BRANDYWINE REALTY TRUST | Page 8 3025 JFK Boulevard Development (Real Estate Venture) Project Description Design Overview Located in the Schuylkill Yards Neighborhood of Philadelphia, A 29-level premier mixed-use development featuring 200,000 SF of Pennsylvania.
Slide 11: Development Activity: One Uptown
Development Activity (unaudited) BRANDYWINE REALTY TRUST | Page 9 One Uptown (Uptown ATX - Block A) Project Overview Project Schedule A mixed-use development featuring a 14-story office tower Joint Venture Formation: Q4 2021 comprised of one level of below-grade parking, lobby and Construction
Slide 12: Development Activity: Uptown ATX, Austin
Development Activity (unaudited) BRANDYWINE REALTY TRUST | Page 10 AUSTIN, TX Overview Uptown ATX is a mixed-use, 66 acre transit-oriented community with an extraordinary existing amenity base at the nearby Domain. The campus is home to approximately 641,000 square feet for IBM. Once redeveloped,
Slide 13: Development Activity: Schuylkill Yards, Philadelphia
Development Activity (unaudited) BRANDYWINE REALTY TRUST | Page 11 PHILADELPHIA, PA Overview Brandywine is the master developer of Schuylkill Yards, a multi-phase 14 acre/5.1 million square foot development of life science, research and academic facilities, office, residential, retail and hospital
Slide 14: Balance Sheet Liquidity
Balance Sheet Liquidity (unaudited) BRANDYWINE REALTY TRUST | Page 12 2022 Capital Plan USES Projected ($ in millions) 2Q22 - 4Q22 $483M currently available on our line of credit. Dividends $100 Contributions to Joint Venture Development 10 $350M projected availability at 12/31/22 Revenue Maintai
Slide 15: Q1 2022 Land Inventory
Q1 2022 Land Inventory (unaudited) BRANDYWINE REALTY TRUST | Page 13 Estimated Development Square Feet Acres Active/Pre-Development Projects Philadelphia CBD (a) (b) 56.3 5,273,000 Pennsylvania Suburbs 25.0 660,000 Austin, Texas (c) 74.7 6,425,000 Total Active/Pre-Development Projects 156.0 12,358,0
Slide 16: Property Activity
Property Activity (unaudited, in thousands, except square footage and acreage) BRANDYWINE REALTY TRUST | Page 14 Square Occupancy % Feet/Acres @ Event Date Sales Price Location Type Event Date 2022 PROPERTY ACTIVITY LAND ACQUISITION 631 Park Avenue King of Prussia, PA Land 01/21/2022 3.3 acres $ 3,6
Slide 17: YTD 2022 Net Operating Income Composition
YTD 2022 Net Operating Income Composition (unaudited) BRANDYWINE REALTY TRUST | Page 15 YTD NOI - Wholly Owned (a) YTD NOI - Including JV's Total Core Portfolio NOI: $70.1 MM Total NOI: $80.8 MM 91% of NOI from our Core Markets (b) 91% of NOI from our Core Markets (b) MAP and Mid-Atlantic Ot
Slide 18: Regional Property Overview
Regional Property Overview (unaudited, in thousands, except square footage) BRANDYWINE REALTY TRUST | Page 16 Net Operating Income at # of Wholly Owned Square Feet % Occupied % Leased (1) Remaining Expirations 3/31/2022 Region Properties Total % of Total 2022 2023 Q1 2022 % of Total Philadelphia CBD
Slide 19: Leasing Activity-Core Portfolio
Leasing Activity-Core Portfolio (1) (unaudited) BRANDYWINE REALTY TRUST | Page 17 Three Months Ended 03/31/2022 12/31/2021 09/30/2021 06/30/2021 03/31/2021 Total Property Count 77 77 76 76 76 Total Square Feet 13,039,634 13,039,634 12,949,078 12,949,078 12,949,078 Occupancy %: 89.4% 91.3% 90.3% 90.5
Slide 20: Leasing Activity-Core Portfolio: Rent Growth
Leasing Activity-Core Portfolio (1) (unaudited) BRANDYWINE REALTY TRUST | Page 18 Three Months Ended 03/31/2022 12/31/2021 09/30/2021 06/30/2021 03/31/2021 New Leases/Expansions (2): Cash Rent Growth Expiring Rate $ 41.87 $ 37.81 $ 33.75 $ 31.56 $ 35.85 New Rate $ 43.82 $ 37.60 $ 37.27 $ 37.61 $ 37.
Slide 21: Lease Expiration Analysis
Lease Expiration Analysis (unaudited) BRANDYWINE REALTY TRUST | Page 19 Square Footage Annualized Rent of Expiring Leases (3) Lease Revisions (4) Remaining Acquired / Year of Lease Vacated New Remaining % of Total Expirations including % of Total Per Square Per Square Initial Expiring Sold / in Curr
Slide 22: Regional Lease Expiration Analysis
Regional Lease Expiration Analysis (1) (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 20 2022 2023 2024 2025 2026 2027 2028 Thereafter Total Philadelphia CBD Square feet expiring (Net of Acquired/Sold) 347 204 262 315 164 300 189 2,887 4,668 Net leasing activity (153) - - 11 - 3 - 2 (116)
Slide 23: Top Twenty Tenants
Top Twenty Tenants (unaudited, annualized rent in thousands) BRANDYWINE REALTY TRUST | Page 21 Weighted Average % of Total Annualized Rent % of Total Remaining Lease Term Top Twenty Tenants Annualized Rent (1) Annualized Rent (1) per Square Foot (1) Square Feet Occupied Square Feet (months) (2) IBM,
Slide 24: Q1 2022 Portfolio Tenant Mix
Q1 2022 Portfolio Tenant Mix (unaudited, by square footage) BRANDYWINE REALTY TRUST | Page 22 Misc. Services - 4% Health Services - 2% Engineering & Management Transportation/Public Services - 9% Utilities - 4% Real Estate - 6% Other - 2% Wholesale Trade - 3% Finance - 17% Business Services - 17% Ma
Slide 25: Income Statements
Income Statements (unaudited, in thousands, except share data) BRANDYWINE REALTY TRUST | Page 23 Three Months Ended 03/31/2022 12/31/2021 09/30/2021 06/30/2021 03/31/2021 Revenue Rents $ 115,901 $ 114,641 $ 112,159 $ 111,235 $ 113,484 Third party mgt. fees, labor reimbursement and leasing 5,108 6,66
Slide 26: Q1 2022 Same Store Net Operating Income
Q1 2022 Same Store Net Operating Income (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 24 Recently Completed/ Development/ Other/ Same Store Portfolio Acquired (1) Redevelopment (2) Eliminations (3) All Properties First Quarter First Quarter First Quarter First Quarter First Quarter First
Slide 27: EBITDA and EBITDA Coverage Ratios
EBITDA and EBITDA Coverage Ratios (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 25 Three Months Ended 03/31/2022 12/31/2021 09/30/2021 06/30/2021 03/31/2021 Net income (loss) $ 6,101 $ 4,603 $ 974 $ (175) $ 6,964 Add (deduct): Net gain on disposition of real estate - - - (68) (74) Net gai
Slide 28: Funds from Operations
Funds from Operations (unaudited, in thousands, except share data) BRANDYWINE REALTY TRUST | Page 26 Three Months Ended 03/31/2022 12/31/2021 09/30/2021 06/30/2021 03/31/2021 Net income (loss) attributable to common shareholders $ 5,945 $ 4,478 $ 876 $ (261) $ 6,775 Add (deduct): Net income (loss) a
Slide 29: Cash Available for Distribution
Cash Available for Distribution (unaudited, in thousands, except share data) BRANDYWINE REALTY TRUST | Page 27 Three Months Ended 03/31/2022 12/31/2021 09/30/2021 06/30/2021 03/31/2021 Funds from operations available to common share and unit holders $ 60,311 $ 60,449 $ 61,061 $ 55,911 $ 60,218 Add (
Slide 30: Balance Sheets
Balance Sheets (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 28 03/31/2022 12/31/2021 09/30/2021 06/30/2021 03/31/2021 Assets Real estate investments Operating properties $ 3,517,995 $ 3,472,602 $ 3,437,074 $ 3,392,734 $ 3,386,559 Accumulated depreciation (980,860) (957,450) (957,793) (92
Slide 31: Liquidity, Leverage and Market Capitalization
Liquidity, Leverage and Market Capitalization (unaudited, in thousands, except shares and per share data) BRANDYWINE REALTY TRUST | Page 29 03/31/2022 12/31/2021 09/30/2021 06/30/2021 03/31/2021 High closing price of common shares $ 14.69 $ 14.66 $ 14.45 $ 15.00 $ 13.92 Low closing price of common s
Slide 32: Balance Sheet Information/Debt Statistics
Balance Sheet Information/Debt Statistics (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 30 03/31/2022 12/31/2021 09/30/2021 06/30/2021 03/31/2021 Fixed rate debt $ 1,500,000 $ 1,500,000 $ 1,500,000 $ 1,500,000 $ 1,500,000 Fixed rate debt (variable rate debt swapped to fixed rate) 250,000
Slide 33: Debt Schedules
Debt Schedules (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 31 03/31/2022 Maturity Stated Effective 03/31/2022 12/31/2021 Debt Instrument Percent of total Date Rate (1) Rate (1) Balance Balance indebtedness Unsecured senior notes payable $350 MM Notes due 2023 February 15, 2023 3.950% 3.
Slide 34: Debt Maturities
Debt Maturities (4) (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 32 Unsecured Debt Maturity Schedule Percent of Weighted Bank Facilities Senior Notes Total By Year Debt Maturing Average Interest (5) 2022 406,000 - 406,000 20.5% 2.347% 2023 - 350,000 350,000 17.6% 3.865% 2024 - 350,000 35
Slide 35: Debt Maturities (chart)
Debt Maturities (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 33 $600,000 Bank Facilities $500,000 Unsecured Notes Balloon Payments $400,000 Scheduled Amortization $300,000 $200,000 $100,000 $0 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Thereafter % of total 20.5% 17.6% 17.6% 0.0%
Slide 36: Debt Covenant Compliance
Debt Covenant Compliance (unaudited, in millions) BRANDYWINE REALTY TRUST | Page 34 Revolving Credit Agreement dated July 17, 2018 and Amended and Restated Term Loan C Agreement dated December 13, 2018 Covenant Required 3/31/2022 12/31/2021 9/30/2021 6/30/2021 3/31/2021 Fixed Charge Coverage Ratio >
Slide 37: JV Property Overview
JV Property Overview (unaudited, in thousands, except square footage) BRANDYWINE REALTY TRUST | Page 35 As of March 31, 2022 BDN's Share BDN Net Investment Percent BDN Operating Unconsolidated Real Initial Project @ Number of Net Operating Rentable Percent Leased Ownership Income Rentable Square Est
Slide 38: JV Debt Schedule
JV Debt Schedule (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 36 03/31/2022 BDN BDN Ownership Stated Share Debt Instrument Percentage Maturity Date Rate (1) 03/31/2022 Balance of Venture Debt Office Properties Commerce Square JV 70% April 5, 2023 (2) $ 211,508 $ 148,056 Cira Square JV 20
Slide 39: JV Debt Summary
JV Debt Summary (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 37 Secured Debt Maturity Percent of Weighted Average Scheduled Balloon Partners' Schedule Total BDN Share BDN Share Interest Rate of Amortization Payments Share By Year Maturing Maturing Debt (a) 2022 6,429 - 6,429 2,260 4,169
Slide 40: Q1 2022 Analyst and Company Information
Q1 2022 Analyst and Company Information BRANDYWINE REALTY TRUST | Page 38 Equity Research Coverage BofA Merrill Lynch Green Street Advisors Raymond James & Associates James Feldman / Sooryuda Gangavarapu Danny Ismail Paul Puryear / Bill Crow 646-855-5808 / 646-855-1351 949-640-8780 727-567-2253 / 72
Slide 41: Q1 2022 Disclaimers and Other Information
Q1 2022 Disclaimers and Other Information BRANDYWINE REALTY TRUST | Page 39 Non-GAAP Measures We believe that the measures defined below that are not determined in accordance with generally accepted accounting principles (“GAAP”) are helpful to investors in measuring our performance and comparing it
Slide 42: Q1 2022 Disclaimers and Other Information (continued)
Q1 2022 Disclaimers and Other Information (continued) BRANDYWINE REALTY TRUST | Page 40 Net Operating Income (NOI) (continued) NOI is a useful measure for evaluating the operating performance of our properties, as it excludes certain components from net income available to common shareholders in ord
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