Brandywine Realty Trust · NYSE:BDN
Brandywine Realty Trust — Q2 2020 Earnings Presentation
48 slides from Brandywine Realty Trust's earnings presentation, Jul 23, 2020
Slide 1: Supplemental Information Package Second Quarter 2020
S U P P L E M E N TA L I N F O R M AT I O N PA C K A G E 2020 Second Q U A R T E R
Slide 2: Table of Contents
Table of Contents Page COVID-19 Update 1 Executive Summary 6 2020 Business Plan Trend Line 8 2020 Business Plan Highlights 9 Sources and Uses of Cash and Cash Equivalents 10 Regional Property Overviews 11 Net Operating Income Composition 14 Development Activity 15 Land Inventory 19 Property Activity
Slide 3: Speculative Leasing Update: Leasing & Tenant Update
Speculative Leasing Update BRANDYWINE REALTY PAGE 1 TRUST | Leasing & Tenant Update Strong levels of rent collections during the Tenant Rent Relief Highlights: COVID-19 pandemic: Exclusively rent deferrals; no rent Co-working Tenants: Approximately 2.1% forgiveness or abatements unless of re
Slide 4: Speculative Leasing Update: Leasing & Tenant Update
Speculative Leasing Update BRANDYWINE REALTY PAGE 2 TRUST | Leasing & Tenant Update 2020 Speculative Revenue: $26.0M, 99% complete Remaining to be completed: Renewal Leasing: Nine leases totaling 34,000 SF and $200K of spec revenue. New Leasing: Ten leases totaling 35,000 SF and $100K of spec
Slide 5: Tenant Outreach Efforts and Tenant Sentiment
PAGE BRANDYWINE REALTY Tenant Outreach Efforts TRUST | 3 All of our regional leasing teams have been in contact with our tenant base to gain insight into tenant sentiment and to explore near term lease extensions. Outreach made with 673 tenants or 85% of our tenant population, sentiment captured how
Slide 6: Balance Sheet & Liquidity
Balance Sheet & Liquidity BRANDYWINE REALTY PAGE 4 TRUST | Strong Liquidity Position USES 3Q-4Q $539M currently available on our line of credit. ($ in M) 2020 $500M projected availability at 12/31/20 or Dividends $65 $580M with mortgage refinancing. Mortgage Amortization 1 Well Covered Dividen
Slide 7: COVID-19 Update
PAGE COVID-19 Update BRANDYWINE REALTY 5 TRUST | We continue to monitor and In addition, we have funded Enhanced cleaning procedure and manage COVID-19 impacts, and nearly 16,000 meals to frequency with hospital grade both our crisis response and community members in-need in disinfectant busines
Slide 8: Q2 2020 Executive Summary
Q2 2020 Executive Summary (unaudited in millions, except square footage and acreage) BRANDYWINE REALTY TRUST | Page 6 Transaction Highlights 3000 Market Rendering | 64,000 SF | Philadelphia, PA Commerce Square| 1,900,000 SF Office | Philadelphia, PA Bulletin Building| 283,000 SF | Philadelphia, PA D
Slide 9: Q2 2020 Executive Summary
Q2 2020 Executive Summary (unaudited in thousands, except per share data and square footage) BRANDYWINE REALTY TRUST | Page 7 Leasing Highlights Q2 2020 Q1 2020 Quarter end occupancy 90.7% 93.3% Leased as of July 14, 2020 / April 17, 2020 93.8% 95.3% Leases executed in quarter (sq ft) 400,615 795,63
Slide 10: Business Plan Trend Line
Business Plan Trend Line (unaudited) BRANDYWINE REALTY TRUST | Page 8 2020 Business Plan as of Business Plan Component 7/14/2020 4/17/2020 10/11/2019 Speculative Revenue $26.0 MM $26.0 MM $31.0 MM Executed 99% 96% 50% Projected Tenant Retention (SF) 52% 50% 50% (3) Same Store NOI Increase • GAAP 0.0
Slide 11: 2020 Business Plan Highlights
2020 Business Plan Highlights (unaudited) BRANDYWINE REALTY TRUST | Page 9 Strong Core Fundamentals 2020 Speculative Leasing (Wholly Owned) Our 2020 business plan fundamentals reflect both the strength of our core markets and our strong Square Feet Targeted Executed Remaining position in those marke
Slide 12: Sources and Uses of Cash, Cash Equivalents and Restricted Cash
Sources and Uses of Cash, Cash Equivalents Restricted Cash (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 10 Sources and Uses of Cash Q2 2020 Q1 2020 Q4 2019 Q3 2019 Q2 2019 Q1 2019 Cash and cash equiv. and restricted cash as of Beg. of Quarter $ 53,374 $ 91,170 $ 30,521 $ 31,980 $ 14,803
Slide 13: Regional Property Overview
Regional Property Overview (unaudited, in thousands, except square footage) BRANDYWINE REALTY TRUST | Page 11 # of Wholly Square Feet % Leased Remaining Expirations Net Operating Income at 6/30/2020 Owned % Occupied (1) Region Properties Total % of Total 2020 2021 Q2 2020 % of Total YTD 2020 % of To
Slide 14: Austin Marketplace
Austin Marketplace (unaudited) BRANDYWINE REALTY TRUST | Page 12 (From L to R): Broadmoor Block A; Garza Ranch; and Four Points Highlights ULI Emerging Trends identifies Austin as #1 city to watch for 2020. Austin's diverse and counter-cyclical economy has historically provided a unique resilien
Slide 15: Philadelphia Marketplace; Upward Trajectory Continues
Philadelphia CBD Marketplace (unaudited) BRANDYWINE REALTY TRUST | Page 13 Philadelphia Marketplace; Upward Trajectory Continues Highlights Brandywine's lease for 64,000 square feet of new space at 3000 Market was the Philadelphia ranks No. 3 in the U.S. for the amount of funding it receives as
Slide 16: Q2 2020 Net Operating Income Composition
Q2 2020 Net Operating Income Composition (unaudited) BRANDYWINE REALTY TRUST | Page 14 YTD NOI - Wholly Owned (a) YTD NOI - Including JV's Total Core Portfolio NOI: $146.8 MM Total NOI: $168.4 MM (c) 89.0% of NOI from our Core Markets (b) 88.0% of NOI from our Core Markets (b) MAP Venture Ot
Slide 17: Development Summary
Development Summary (unaudited, in thousands, except square feet) BRANDYWINE REALTY TRUST | Page 15 Equity Amount Remaining to be Leased % @ Completion Stabilization Total Project Debt Projected Development (% owned) Location Type Square Feet Capitalization funded at funded at July 14, Date Date Cos
Slide 18: Development Activity: 4040 Wilson
Development Activity (unaudited) BRANDYWINE REALTY TRUST | Page 16 4040 Wilson Development (50/50 Real Estate Venture) Design Overview Project Description A 22-level premier mixed-use development featuring Located in the Ballston submarket of Arlington, Virginia 189,000 SF of office space (level
Slide 19: Development Activity: Philadelphia, PA
Development Activity (unaudited) BRANDYWINE REALTY TRUST | Page 17 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 20: Development Activity: Austin, TX
Development Activity (unaudited) BRANDYWINE REALTY TRUST | Page 18 AUSTIN, TX Overview Broadmoor 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 800,000 square feet for IBM. Once redeveloped, t
Slide 21: Q2 2020 Land Inventory
Q2 2020 Land Inventory (unaudited) BRANDYWINE REALTY TRUST | Page 19 Estimated Development Square Feet Acres Active/Pre-Development Projects Philadelphia CBD (a) (b) 57.3 5,700,000 Pennsylvania Suburbs 21.7 535,000 Metropolitan Washington, D.C. 0.8 245,000 Austin, Texas (c) 74.7 6,425,000 Total Acti
Slide 22: Property Activity
Property Activity (unaudited, in thousands, except square footage and acreage) BRANDYWINE REALTY TRUST | Page 20 Square Occupancy % Sales Price Location Type Event Date Feet/Acres @ Event Date 2020 PROPERTY ACTIVITY LAND ACQUISITION 145-155 King of Prussia Road Radnor, PA Land 02/27/2020 7.75 acres
Slide 23: Leasing Activity - Core Portfolio
Leasing Activity-Core Portfolio (1) (unaudited) BRANDYWINE REALTY TRUST | Page 21 Six Months Ended Three Months Ended 06/30/2020 06/30/2019 06/30/2020 03/31/2020 12/31/2019 09/30/2019 06/30/2019 03/31/2019 Total Property Count 88 92 88 89 90 91 92 92 Total Square Feet 14,365,532 16,379,261 14,365,53
Slide 24: Leasing Activity - Core Portfolio
Leasing Activity-Core Portfolio (1) (unaudited) BRANDYWINE REALTY TRUST | Page 22 Six Months Ended Three Months Ended 06/30/2020 06/30/2019 06/30/2020 03/31/2020 12/31/2019 09/30/2019 06/30/2019 03/31/2019 New Leases/Expansions (2): Cash Rent Growth Expiring Rate $ 34.46 $ 32.68 $ 30.65 $ 34.78 $ 29
Slide 25: Lease Expiration Analysis
Lease Expiration Analysis (unaudited) BRANDYWINE REALTY TRUST | Page 23 Square Footage Annualized Rent of Expiring Leases (3) Acquired / Year of Lease Lease Revisions (4) Vacated Remaining % of Total Per Square Per Square Initial Expiring Sold / in New Leases Current Final Expiration Leases Expiring
Slide 26: Regional Lease Expiration Analysis
Regional Lease Expiration Analysis (1) (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 24 2020 2021 2022 2023 2024 2025 2026 Thereafter Total Philadelphia CBD Square feet expiring (Net of Acquired/Sold) 115 370 506 129 227 142 123 2,800 4,412 Net leasing activity (38) (114) 86 10 (10) 38 5
Slide 27: Top Twenty Tenants
Top Twenty Tenants (unaudited, annualized rent in thousands) BRANDYWINE REALTY TRUST | Page 25 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 28: Q2 2020 Portfolio Tenant Mix
Q2 2020 Portfolio Tenant Mix (by square footage) BRANDYWINE REALTY TRUST | Page 26 Misc. Services - 5% Health Services - 3% Transportation/Public Engineering & Utilities - 4% Management Services - 10% Real Estate - 5% Other - 2% Wholesale Trade - 3% Finance - 14% Manufacturing - 9% Business Services
Slide 29: Income Statements
Income Statements (unaudited, in thousands, except share data) BRANDYWINE REALTY TRUST | Page 27 Six Months Ended Three Months Ended 06/30/2020 06/30/2019 06/30/2020 03/31/2020 12/31/2019 09/30/2019 06/30/2019 03/31/2019 Revenue Rents $ 271,384 $ 275,885 $ 132,180 $ 139,204 $ 139,552 $ 139,228 $ 137
Slide 30: Q2 2020 Same Store Net Operating Income
Q2 2020 Same Store Net Operating Income (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 28 Recently Development/ Completed/ Redevelopment Other/ Same Store Portfolio Acquired (1) (2) Eliminations (3) All Properties Second Quarter Second Quarter Second Quarter Second Quarter Second Quarter S
Slide 31: YTD 2020 Same Store Net Operating Income
YTD 2020 Same Store Net Operating Income (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 29 Recently Development/ Completed/ Redevelopment Other/ Same Store Portfolio Acquired (1) (2) Eliminations (3) All Properties Year to Date Year to Date Year to Date Year to Date Year to Date Year to Da
Slide 32: EBITDA and EBITDA Coverage Ratios
EBITDA and EBITDA Coverage Ratios (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 30 Six Months Ended Three Months Ended 06/30/2020 06/30/2019 06/30/2020 03/31/2020 12/31/2019 09/30/2019 06/30/2019 03/31/2019 Net income (loss) $ 12,107 $ 10,835 $ 4,020 $ 8,087 $ 16,874 $ 6,820 $ 6,252 $ 4,5
Slide 33: Funds from Operations
Funds from Operations (unaudited, in thousands, except share data) BRANDYWINE REALTY TRUST | Page 31 Six Months Ended Three Months Ended 06/30/2020 06/30/2019 06/30/2020 03/31/2020 12/31/2019 09/30/2019 06/30/2019 03/31/2019 Net income (loss) attributable to common shareholders $ 11,794 $ 10,516 $ 3
Slide 34: Cash Available for Distribution
Cash Available for Distribution (unaudited, in thousands, except share data) BRANDYWINE REALTY TRUST | Page 32 Six Months Ended Three Months Ended 06/30/2020 06/30/2019 06/30/2020 03/31/2020 12/31/2019 09/30/2019 06/30/2019 03/31/2019 Funds from operations available to common share and unit holders
Slide 35: Balance Sheets
Balance Sheets (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 33 06/30/2020 03/31/2020 12/31/2019 09/30/2019 06/30/2019 03/31/2019 Assets Real estate investments Operating properties $ 3,650,521 $ 4,004,118 $ 4,006,459 $ 3,995,228 $ 4,030,605 $ 4,014,260 Accumulated depreciation (957,189)
Slide 36: Liquidity, Leverage and Market Capitalization
Liquidity, Leverage and Market Capitalization (unaudited, in thousands, except shares and per share data) BRANDYWINE REALTY TRUST | Page 34 06/30/2020 03/31/2020 12/31/2019 09/30/2019 06/30/2019 03/31/2019 High closing price of common shares $ 12.20 $ 16.24 $ 15.75 $ 15.18 $ 16.13 $ 16.14 Low closin
Slide 37: Balance Sheet Information/Debt Statistics
Balance Sheet Information/Debt Statistics (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 35 06/30/2020 03/31/2020 12/31/2019 09/30/2019 06/30/2019 03/31/2019 Fixed rate debt $ 1,811,528 $ 1,813,492 $ 1,815,437 $ 1,617,363 $ 1,619,270 $ 1,621,160 Fixed rate debt (variable rate debt swapped
Slide 38: Debt Schedules
Debt Schedules (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 36 06/30/2020 Maturity Stated Effective 06/30/2020 12/31/2019 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 39: Debt Schedules
Debt Schedules (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 37 06/30/2020 Maturity Stated Effective 06/30/2020 12/31/2019 Debt Instrument Percent of total Date Rate (1) Rate (1) Balance Balance indebtedness Mortgage notes payable Two Logan Square August 1, 2020 3.980% 3.980% $ 80,226 $ 8
Slide 40: Debt Maturities
Debt Maturities (6) (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 38 Secured Debt Unsecured Debt Maturity Schedule Scheduled Balloon Percent of Weighted Bank Facilities Senior Notes Total By Year Amortization Payments Debt Maturing Average Interest (7) 2020 3,238 80,079 $ - - $ 83,317 3.8
Slide 41: Debt Maturities
Debt Maturities (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 39 $600,000 Bank Facilities $500,000 Unsecured Notes Balloon Payments $400,000 Scheduled Amortization $300,000 $200,000 $100,000 $0 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Thereafter % of total 3.8% 0.7% 14.4% 25.3% 1
Slide 42: Debt Covenant Compliance
Debt Covenant Compliance (unaudited, in millions) BRANDYWINE REALTY TRUST | Page 40 Revolving Credit Agreement dated July 17, 2018 and Amended and Restated Term Loan C Agreement dated December 13, 2018 Covenant Required 6/30/2020 3/31/2020 12/31/2019 09/30/2019 06/30/2019 03/31/2019 Fixed Charge Cov
Slide 43: JV Property Overview
JV Property Overview (unaudited, in thousands, except square footage) BRANDYWINE REALTY TRUST | Page 41 As of June 30, 2020 BDN's Share BDN Net Net Gross Asset Investment Operating BDN Operating Unconsolidated Real Project Value Value @ @ Number of Income Rentable Percent Percent Ownership Income Re
Slide 44: JV Debt Schedule
JV Debt Schedule (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 42 BDN Ownership Stated 06/30/2020 BDN Share Debt Instrument Percentage Maturity Date Rate (1) 06/30/2020 Balance of Venture Debt Office Properties Rockpoint JV (2) 15% March 29, 2024 (2) $ 207,302 $ 31,095 MAP Venture (3) 50%
Slide 45: JV Debt Summary
JV Debt Summary (unaudited, in thousands) BRANDYWINE REALTY TRUST | Page 43 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) 2020 $ - $ - $ - $ - - 0.0% 0.0
Slide 46: Q2 2020 Analyst and Company Information
Q2 2020 Analyst and Company Information BRANDYWINE REALTY TRUST | Page 44 Equity Research Coverage Argus Research D.A. Davidson & Co. JP Morgan Raymond James & Associates Jacob Kilstein Barry Oxford Anthony Paolone Paul Puryear / Bill Crow 646-747-5447 212-240-9871 212-622-6682 727-567-2253 / 727-56
Slide 47: Q2 2020 Disclaimers and Other Information
Q2 2020 Disclaimers and Other Information BRANDYWINE REALTY TRUST | Page 45 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 48: Q2 2020 Disclaimers and Other Information (continued)
Q2 2020 Disclaimers and Other Information (continued) BRANDYWINE REALTY TRUST | Page 46 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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