Office Properties Income Trust · OTC:OPITQ
Office Properties Income Trust — Investor Presentation (October 2024)
35 slides from Office Properties Income Trust's investor presentation, Oct 22, 2024
Slide 1: Office Properties Income Trust Investor Presentation September 2024
1 OFFICE PROPERTIES INCOME TRUST INVESTOR PRESENTATION September 2024 Chicago, IL
Slide 2: Forward-looking statements
2 OFFICE PROPERTIES INCOME TRUST 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”, “expect”, “an
Slide 3: OPI at a Glance
3 OFFICE PROPERTIES INCOME TRUST OPI AT A GLANCE 19.7 MILLION RENTABLE SQUARE FEET Energy Star® Partner of the Year SEVEN CONSECUTIVE YEARS $4.4 Billion INVESTMENT PORTFOLIO(2) 84.8% OCCUPANCY 147 PROPERTIES IN PORTFOLIO 61% REVENUE FROM INVESTMENT GRADE TENANTS(3) Office Properties Income Trust (Na
Slide 4: Situation Overview: Challenging Business Environment Makes Debt Refinancing Difficult
4 OFFICE PROPERTIES INCOME TRUST SITUATION OVERVIEW Challenging Business Environment Makes Debt Refinancing Difficult Seattle, WA • As of December 31, 2022, ~36% of OPI’s leased square footage was scheduled to expire by year end 2025. • Tenants representing $139 million, or over 25%, of its annualiz
Slide 5: Efforts to Manage Debt Maturities
5 OFFICE PROPERTIES INCOME TRUST EFFORTS TO MANAGE DEBT MATURITIES January February March 2023 • Completed a 5-year $300 million offering of senior secured notes at a 9% coupon. – Secured by 17 office properties with a gross book value of $619 million. • Recast revolving credit facility with a new 3
Slide 6: Unique Portfolio Challenges Compared to Most Other Office REITs
6 OFFICE PROPERTIES INCOME TRUST UNIQUE PORTFOLIO CHALLENGES COMPARED TO MOST OTHER OFFICE REITs Top MSAs % of OPI’s Annualized Rental Income OPI Occupancy Market Occupancy(2) Washington, D.C. Metro(3) 23.7% 78% 78% Atlanta 9.4% 85% 74% Chicago 9.1% 78% 74% (1) Property composition by square footage
Slide 7: Operating & Financial Metrics by Collateral Pool
7 OFFICE PROPERTIES INCOME TRUST OPERATING & FINANCIAL METRICS BY COLLATERAL POOL As of June 30, 2024 (dollars and SF in thousands) Number of Properties SF SF Expiring Through 12/31/2025 Occupancy (%) WALT by Revenue (years) Annualized Rental Income Trailing Twelve Months NOI Trailing Twelve Months
Slide 8: Currently Performing Unsecured Properties Portfolio
8 OFFICE PROPERTIES INCOME TRUST CURRENTLY PERFORMING UNSECURED PROPERTIES PORTFOLIO(1) (1) Excludes unsecured properties with currently known vacates, active dispositions, forecasted dispositions or properties that have been sold. See page 7 for further information. (2) Includes the District of Col
Slide 9: Constraints of Unsecured Debt Covenants
9 OFFICE PROPERTIES INCOME TRUST CONSTRAINTS OF UNSECURED DEBT COVENANTS As of and for the Three Months Ended 6/30/2023 9/30/2023 12/31/2023 3/31/2024 6/30/2024 Maintenance Covenant Total unencumbered assets / unsecured debt (minimum 150.0%) 206.2% 206.2% 205.9% 178.1% 237.1% Incurrence Covenants To
Slide 10: Current Planned Dispositions Overview
10 OFFICE PROPERTIES INCOME TRUST CURRENT PLANNED DISPOSITIONS OVERVIEW Dispositions Update Since 6/30/2024 Note: All information is as of or for the trailing twelve months ended June 30, 2024. • OPI continues to sell properties to increase liquidity and/or reduce the negative carrying costs of vaca
Slide 11: Appendix
11 OFFICE PROPERTIES INCOME TRUST Appendix Seattle, WA
Slide 12: The RMR Group
12 OFFICE PROPERTIES INCOME TRUST Provo, UT The RMR Group
Slide 13: Deep Bench of Experienced Real Estate Professionals
Adam Portnoy President & Chief Executive Officer Matt Jordan Executive Vice President, Chief Financial Officer & Treasurer Jennifer Clark Executive Vice President, General Counsel & Secretary John Murray Executive Vice President Chris Bilotto Executive Vice President Jacquelyn Anderson Timothy Bonan
Slide 14: OPI Is Managed by The RMR Group, an Alternative Asset Manager
14 OFFICE PROPERTIES INCOME TRUST OPI IS MANAGED BY THE RMR GROUP (NASDAQ: RMR), AN ALTERNATIVE ASSET MANAGER Approximately $41 Billion in AUM RMR Platform Approximately 2,100 Properties More than 35 Offices Nationwide National Multi-Sector Investment Platform Industrial Residential Senior Living Me
Slide 15: Relationship with RMR Provides Scale and Efficiency
15 OFFICE PROPERTIES INCOME TRUST (1) Source: S&P Global Market Intelligence. Data is for the most recently reported twelve months as of June 10, 2024. RELATIONSHIP WITH RMR PROVIDES SCALE AND EFFICIENCY Key Benefits • RMR provides all the employees; OPI has no employees. • RMR has visibility to pro
Slide 16: RMR Management Fee Structure
16 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 17: Debt Summary
17 OFFICE PROPERTIES INCOME TRUST Washington, D.C. Debt Summary
Slide 18: Debt Summary
18 OFFICE PROPERTIES INCOME TRUST Coupon Rate (1) Interest Rate (2) Principal Balance Maturity Date Due at Maturity Years to Maturity Secured Floating Rate Debt: $325,000 secured revolving credit facility 8.910% 8.910% $ 178,000 1/29/2027 $ 178,000 2.6 $100,000 secured term loan 8.910% 8.910% 100,00
Slide 19: $425 Million Secured Credit Facilities: Collateral Properties
19 OFFICE PROPERTIES INCOME TRUST $425 MILLION SECURED CREDIT FACILITIES: COLLATERAL PROPERTIES(1) Collateral Pool Statistics Number of Properties 19 Rentable Square Feet (millions) 3.6 % Investment Grade Tenants 62% Occupancy % 98% WALT by Revenue (years) 7.3 NOI $71.6M Estimated Market Value(2) $9
Slide 20: Credit Facilities Collateral Property List
20 OFFICE PROPERTIES INCOME TRUST Note: All information is as of or for the trailing twelve months ended June 30, 2024. # Address City State SF Occupancy (%) WALT by Revenue (years) Year Built/ Renovated Primary Tenant Credit Rating Annualized Rental Income ($M) NOI ($M) Gross Book Value (GBV) ($M)
Slide 21: $300 Million Senior Secured Notes Due 2029: Collateral Properties
21 OFFICE PROPERTIES INCOME TRUST $300 MILLION SENIOR SECURED NOTES DUE 2029: COLLATERAL PROPERTIES Collateral Pool Statistics Number of Properties 17 Rentable Square Feet (millions) 2.1 % Investment Grade Tenants 38% Occupancy % 98% WALT by Revenue (years) 9.5 NOI $44.4M Estimated Market Value(1) $
Slide 22: Senior Secured Notes Collateral Property List
22 OFFICE PROPERTIES INCOME TRUST # Address City State SF Occupancy (%) WALT by Revenue (years) Year Built/ Renovated Primary Tenant Credit Rating Annualized Rental Income ($M) NOI ($M) Gross Book Value (GBV) ($M) 1 915 L Street Sacramento CA 163,840 96% 5.9 1988 Investment Grade $5.8 $3.3 $50.1 2 6
Slide 23: $567 Million Senior Secured Notes Due 2029: First Lien Collateral Properties
23 OFFICE PROPERTIES INCOME TRUST $567 MILLION SENIOR SECURED NOTES DUE 2029: FIRST LIEN COLLATERAL PROPERTIES(1) Collateral Pool Statistics Number of Properties 19 Rentable Square Feet (millions) 3.2 % Investment Grade Tenants 67% Occupancy % 84% WALT by Revenue (years) 7.9(2) NOI $39.6M Estimated
Slide 24: First Lien Collateral Property List
24 OFFICE PROPERTIES INCOME TRUST Note: All information is as of or for the trailing twelve months ended June 30, 2024. (1) Weighted average lease term for the properties securing OPI's $567 million senior notes due 2029 was 5.1 years. Adjusted for a lease extension through 2037 executed in July 202
Slide 25: Financials
25 OFFICE PROPERTIES INCOME TRUST Washington, D.C. Financials
Slide 26: Key Financial Data
26 OFFICE PROPERTIES INCOME TRUST KEY FINANCIAL DATA (1) Reflects the annualized dividends paid per common share during the period as a percentage of rolling four quarter CAD per common share. (amounts in thousands, except per share data) As of and for the Three Months Ended 6/30/2024 3/31/2024 12/3
Slide 27: Calculation and Reconciliation of NOI and Cash Basis NOI
27 OFFICE PROPERTIES INCOME TRUST 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
Slide 28: Reconciliation of NOI to Same Property NOI
28 OFFICE PROPERTIES INCOME TRUST 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 Property operating expenses (47,640) (48,277) (98,827) (96,927) NOI 76,046 8
Slide 29: Calculation of EBITDA, EBITDAre and Adjusted EBITDAre
29 OFFICE PROPERTIES INCOME TRUST CALCULATION OF EBITDA, EBITDAre AND ADJUSTED EBITDAre (1) Amounts represent equity based compensation to OPI's Trustees, OPI's officers and certain other employees of RMR. (dollars in thousands) For the Three Months Ended 6/30/2024 3/31/2024 12/31/2023 9/30/2023 6/3
Slide 30: Calculation of FFO, Normalized FFO and CAD
30 OFFICE PROPERTIES INCOME TRUST CALCULATION OF FFO, NORMALIZED FFO AND CAD (1) Non-cash expenses include equity based compensation, adjustments recorded to capitalize interest expense and certain other non-cash items. (amounts in thousands, except per share data) For the Three Months Ended 6/30/20
Slide 31: Non-GAAP Financial Measures and Certain Definitions
31 OFFICE PROPERTIES INCOME TRUST 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 P
Slide 32: Non-GAAP Financial Measures and Certain Definitions
32 OFFICE PROPERTIES INCOME TRUST NON-GAAP FINANCIAL MEASURES AND CERTAIN DEFINITIONS 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
Slide 33: Contact Information
33 OFFICE PROPERTIES INCOME TRUST INVESTOR PRESENTATION September 2024 Two Newton Place 255 Washington Street, Suite 300 Newton, MA 02458 OPIREIT.COM
Slide 34: Exhibit A
EXHIBIT A ADDRESS CITY STATE GBV RE ASSETS 4344 Carmichael Road Montgomery AL $ 16,757,213 131 Clayton Street Montgomery AL 12,105,880 711 S 14th Avenue Safford AZ 9,127,396 2115 O'Nel Drive San Jose CA 24,357,911 10949 N. Mather Boulevard Rancho Cordova CA 22,400,069 47131 Bayside Parkway Fremont C
Slide 35: Exhibit B
EXHIBIT B ADDRESS CITY STATE GBV RE ASSETS 12795 West Alameda Parkway Lakewood CO $ 18,363,999 20 Massachusetts Avenue NW Washington DC 286,613,229 7125 Industrial Road Florence KY 19,886,729 251 Causeway Street Boston MA 29,391,591 100 North Washington Street Boston MA 27,607,022 126-132 North Wash
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