Vornado Realty Trust · NYSE:VNO
Vornado Realty Trust — SPAC Merger (June 2017)
85 slides from Vornado Realty Trust's SPAC merger presentation, Jun 12, 2017
Slide 1: North End Retail Washington, DC
North End Retail Washington, DC
Slide 2: General Disclaimer of JBG Information
General Disclaimer of JBG Information JBG Properties Inc., (together with its affiliates and managed funds, “JBG”) information included in this presentation has been provided to Vornado Realty Trust (“Vornado”) by JBG in connection with the proposed transaction. Vornado has not verified the accuracy
Slide 3: Annualized Rent and EBITDA definitions
Annualized Rent “Annualized Rent” is defined as (i) for office and other assets, or the retail component of a mixed-use asset, the in-place monthly base rent before free rent, plus tenant reimbursements as of 03/31/17, multiplied by 12 and divided by rentable square feet, with triple net leases conv
Slide 4: Asset Value / Historical Cost and NAV definitions
Asset Value / Historical Cost and Net Asset Value / Historical Cost “Asset Value/Historical Cost” represents management’s estimate of the total value of the Operating Office, Multifamily, and Other assets and the Historical Cost of the Under Construction Properties, Near Term Development Pipeline an
Slide 5: Net Debt and other definitions
Net Debt “Net Debt” is a non-GAAP financial measure that represents total pro forma indebtedness less cash and cash equivalents, which have been adjusted for expected facility draws and proceeds from secured financings less estimated transaction costs. We use net debt to review the liquidity of our
Slide 6: EBITDA and Adjusted EBITDA Reconciliation
EBITDA and Adjusted EBITDA Reconciliation For the Three Months Ended March 31, 2017 (in thousands) EBITDA Net Debt to Adjusted EBITDA Revenues: Consolidated and unconsolidated indebtedness, at share before pro forma adjustments $2,385,375 Property rentals $118,337 Tenant expense reimbursements 10,18
Slide 7: NOI Reconciliation
NOI RECONCILIATION VI Represents revenues of $28.9 million less operating expenses of $12.1 million for three months ended March 31, 2017. To eliminate management fees included in Property Operating Income. NOI Reconciliation Three Months Ended March 31, 2017 (in thousands) Three months ended March
Slide 8: NAV/Cost Reconciliation
NET ASSET VALUE / HISTORICAL COST (NAV/COST) RECONCILIATION(1) VII As of March 31, 2017 (dollars and shares in thousands, except per share amounts) Total equity per pro forma balance sheet at March 31, 2017 $3,929,082 NAV / Cost adjustment for real estate, at share Less: real estate, at depreciated
Slide 9: Transaction Overview
NAME JBG SMITH Properties EXCHANGE/TICKER NYSE/JBGS DEAL SUMMARY VNO to spin off its DC business and JBG to contribute its management company and a selected portfolio of complementary Metro-served assets DISTRIBUTION RATIO 1 JBGS common share for every 2 VNO common shares 1 JBG SMITH Properties LP c
Slide 10: JBG SMITH at a glance
12.4M Commercial SF + 4,232 Multifamily Units Operating Portfolio Over 98% Metro Served 565K Commercial SF + 464 Multifamily Units Near-Term Development Pipeline 6.3M Commercial SF + 12.0M Multifamily SF Future Development Pipeline $0.90(1) Expected Annualized Dividend 6.4x(2) Net Debt / Adjusted EB
Slide 11: Scale: Largest Pure-Play DC Metro Focused REIT
SCALE: LARGEST PURE-PLAY, DC METRO FOCUSED REIT OFFICE REITS – DC PORTFOLIOS (1) MULTIFAMILY REITS – DC PORTFOLIOS (1) DC metro area statistics based on the Washington-Arlington-Alexandria, DC-VA-MD-WV metropolitan statistical area as defined by the U.S. Office of Management and Budget. Peer statist
Slide 12: Investment Rationale – JBGS Is the Best Way to Invest in DC
INVESTMENT RATIONALE – JBGS IS THE BEST WAY TO INVEST IN DC JBGS IS A PROVEN VALUE CREATOR WITH A DIFFERENTIATED STRATEGY CONCENTRATION OF HIGH-QUALITY ASSETS IN BEST URBAN SUBMARKETS PLATFORM GROWTH BALANCE SHEET SIGNIFICANT LIQUIDITY AND FINANCIAL STRENGTH TO SUPPORT GROWTH UNRIVALED GROWTH PROFIL
Slide 13: Platform
JBGS IS A PROVEN VALUE CREATOR WITH A DIFFERENTIATED STRATEGY PLATFORM Rosslyn, Virginia
Slide 14: Platform: Leading DC Real Estate Owner and Operator
PLATFORM: LEADING DC REAL ESTATE OWNER AND OPERATOR Deep bench of mixed-use real estate expertise across office, multifamily, and retail Vertically integrated platform with track record of value creation across market cycles Size and scale to drive efficiencies Placemaking expertise maximizes value
Slide 15: Platform: Differentiated Strategy
FOCUS ON HIGH- QUALITY ASSETS IN BEST METRO-SERVED SUBMARKETS LEVERAGE DEEP BENCH OF DEVELOPMENT, INVESTMENT AND OPERATING EXPERTISE ACROSS ASSET CLASSES PLATFORM: DIFFERENTIATED STRATEGY MAXIMIZE VALUE THROUGH INVESTMENT CONCENTRATION AND MIXED-USE PLACEMAKING JBGS HAS A PROVEN TRACK RECORD OF RECO
Slide 16: Platform: Mixed-Use Competitive Advantages
PLATFORM: MIXED-USE COMPETITIVE ADVANTAGES ACQUISITION OPPORTUNITIES AGILITY DOWNSIDE PROTECTION AMENITIES, AMENITIES, AMENITIES MIXED-USE = TOTAL FLEXIBILITY Improved access to wide array of use types Identify value not perceived by single-use players Greater flexibility in zoning process Ability t
Slide 17: Mixed-Use Competitive Advantages – RTC-West Case Study
PLATFORM: MIXED-USE COMPETITIVE ADVANTAGES – RTC-WEST CASE STUDY 8 LOFT OFFICE RESTON TOWN CENTER RETAIL PH. II UNDER CONSTRUCTION: RETAIL Rendering FUTURE DEVELOPMENT: MULTIFAMILY Rendering FUTURE DEVELOPMENT: OFFICE (2 BUILDINGS) ACQUISITION OPPORTUNITIES – BETTER ACCESS AND VALUE MULTI PH. II Ren
Slide 18: Mixed-Use Competitive Advantages – 77H Case Study
9 PLATFORM: MIXED-USE COMPETITIVE ADVANTAGES – 77H CASE STUDY AGILITY – UNLOCK HIGHER VALUE THROUGH CYCLES BEFORE: UNDER-UTILIZED LAND BEFORE: UNREALIZED OFFICE STRATEGY AFTER: MEETING MULTIFAMILY DEMAND AFTER: MIXED-USE DEVELOPMENT
Slide 19: Mixed-Use Competitive Advantages – Sky House Case Study
10 PLATFORM: MIXED-USE COMPETITIVE ADVANTAGES – SKY HOUSE CASE STUDY DOWNSIDE PROTECTION – ADAPTIVE REUSE TURNS PROBLEMS INTO OPPORTUNITIES BEFORE: VACANT OFFICE BUILDINGS IN-PROGRESS: ADAPTIVE RE-USE OF STRUCTURE AFTER: NEW MULTIFAMILY
Slide 20: Best-in-class operator with history of value creation
Proven track record over multiple market cycles Rigorous research-based capital allocation approach Identification of path of growth opportunities Adherence to replacement cost discipline Focus on risk mitigation Access to a variety of capital sources Strong track record of effective capital recycli
Slide 21: Platform: Demonstrated Capital Allocation Discipline
PLATFORM: DEMONSTRATED CAPITAL ALLOCATION DISCIPLINE NET BUYER NET BUYER NET SELLER BALANCED 1900 N Street Washington, DC (EQUITY VALUE) (1) Includes only JBG portfolio. Rendering Rendering 12 $1,057,077 $445,413 $1,203,916 $1,245,622 ($624,106) ($1,418,543) ($437,049) ($1,224,825) 2000 - 2006 2007
Slide 22: One of the most seasoned teams in the DC market
Name and Title Age Years with JBGS(1) W. Matt Kelly Chief Executive Officer and Trustee 44 12 Robert Stewart Executive Vice Chairman and Trustee 55 29 David Paul President & Chief Operating Officer 54 9 Stephen Theriot Chief Financial Officer 57 4 James Iker Chief Investment Officer 44 14 Brian Coul
Slide 23: Platform: The Management Team
PLATFORM: THE MANAGEMENT TEAM David Paul Chief Operating Officer Steve Theriot Chief Financial Officer Steven Museles Chief Legal Officer James Iker Chief Investment Officer Matt Kelly Chief Executive Officer EXECUTIVE MANAGEMENT Andrew Vanhorn Development Ed Chaglassian Investments Tony Greenberg D
Slide 24: Board of Trustees
Name and Title Age Experience/Current Position Steven Roth Chairman 75 Chairman of the Board of Trustees of Vornado and CEO of Vornado Robert Stewart Executive Vice Chairman 54 Served as a Managing Partner at JBG W. Matt Kelly CEO / Trustee 44 Served as a Managing Partner at JBG Scott Estes Independ
Slide 25: Portfolio
PORTFOLIO 800 North Glebe Road Arlington, VA CONCENTRATION OF HIGH-QUALITY ASSETS IN BEST URBAN SUBMARKETS
Slide 26: Portfolio: Summary
17 PORTFOLIO: SUMMARY The Foundry Building Washington, DC Portfolio Composition (by Rentable Square Footage) All figures shown at share as of 03/31/17. Operating Office Operating Multifamily 50 Assets 12.1M SF 14 Assets 4,232 Units Operating Other 4 Assets 348K SF Near-Term Development Pipeline Unde
Slide 27: Concentration of High-Quality Assets in the Best Submarkets
PORTFOLIO: CONCENTRATION OF HIGH-QUALITY ASSETS IN THE BEST SUBMARKETS 18 JBG SMITH ASSETS RESTON OUTSIDE THE BELTWAY INSIDE THE BELTWAY BETHESDA RB CORRIDOR CRYSTAL/PENTAGON CITY DOWNTOWN DC NOTE: Rockville Pike Corridor, Rock Spring, and Woodbridge assets not shown. Planned Potomac Yard Metro Stat
Slide 28: Portfolio: Summary – Geographic Composition
North End Retail Washington, DC 19 PORTFOLIO: SUMMARY Geographic Composition (by Rentable Square Footage) All figures shown at share as of 03/31/17. + 18.3M SF Future Development Pipeline Crystal City 38% DC 27% Pentagon City 11% RB Corridor 8% Reston 8% Bethesda CBD 4% Other 4%
Slide 29: Our Submarkets Have Significantly Outperformed the Market
PORTFOLIO: OUR SUBMARKETS HAVE SIGNIFICANTLY OUTPERFORMED THE MARKET 1Q17 ASKING RENTS RELATIVE TO MARKET 10-YEAR ASKING RENT GROWTH 10-YEAR AVERAGE OCCUPANCY 10-YEAR NET ABSORPTION AS % OF STARTING INVENTORY 10-YEAR ASKING RENT GROWTH 1Q17 ASKING RENTS RELATIVE TO MARKET OFFICE MULTIFAMILY SOURCE:
Slide 30: Portfolio: Office Properties
PORTFOLIO: OFFICE PROPERTIES(1) 800 N. Glebe Road • RB Corridor, VA 1600 K Street • Washington, DC The Foundry • Washington, DC RTC-West • Reston Town Center, VA 1501 K Street • Washington, DC 1233 20th Street • Washington, DC 2345 Crystal Drive • Crystal City, VA 2101 L Street • Washington, DC The
Slide 31: Portfolio: Operating Office Assets
Operating Office Portfolio Composition 1Q17 Office NOI by Submarket All figures shown at share as of 03/31/17. Weighted by pro rata share of square footage. Figures include all office and retail leases, including retail space associated with multifamily asset and other assets, % calculated as annual
Slide 32: Portfolio: Multifamily Properties
PORTFOLIO: MULTIFAMILY PROPERTIES(1) The Bartlett • Pentagon City, Virginia Galvan • Rockville, Maryland 220 20th Street • Crystal City, Virginia WestEnd25• Washington, DC The Terano • Rockville, Maryland Falkland Chase • Silver Spring, Maryland (1) Represents a sampling of JBG SMITH multifamily pro
Slide 33: Portfolio: Operating Multifamily Assets
All figures shown at share as of 03/31/17. Excludes one recently delivered multifamily asset, The Bartlett, with 699 units at share. Resident data is based on tenant-reported information for leases signed in the last 12 months. Data reflects DC metro area portfolios based on public disclosure. Walk
Slide 34: Growth
West Half + 1221 Van Washington, DC GROWTH UNRIVALED GROWTH PROFILE
Slide 35: Portfolio: Summary
26 PORTFOLIO: SUMMARY The Foundry Building Washington, DC Portfolio Composition (by Rentable Square Footage) All figures shown at share as of 03/31/17. Operating Office Operating Multifamily 50 Assets 12.1M SF 14 Assets 4,232 Units Operating Other 4 Assets 348K SF Near-Term Development Pipeline Unde
Slide 36: Growth: Under Construction Office/Other Properties
GROWTH: UNDER CONSTRUCTION OFFICE/OTHER PROPERTIES(1) CEB Tower at Central Place Arlington, VA (RB Corridor) Estimated Completion: 2Q18 529,997 SF Office (67% Preleased) L’Enfant Plaza Office - Southeast Washington, DC (Southwest) Estimated Completion: 3Q19 214,257 SF Office (57% Preleased) RTC – We
Slide 37: Growth: Under Construction Multifamily Properties
GROWTH: UNDER CONSTRUCTION MULTIFAMILY PROPERTIES(1) Under construction properties are renderings shown as of 03/31/17. Atlantic Plumbing C - North Washington, DC (U Street/Shaw) Estimated Completion: 4Q19 161 Units Multifamily Atlantic Plumbing C - South Washington, DC (U Street/Shaw) Estimated Com
Slide 38: Growth: Under Construction Properties
GROWTH: UNDER CONSTRUCTION PROPERTIES OFFICE MULTIFAMILY ASSETS 3 5 PRO RATA COMMERCIAL SF 674,998 NA PRELEASED % 64.3% NA PRO RATA MF UNITS NA 985 ESTIMATED TOTAL INVESTMENT(1)(2) $423M $444M ESTIMATED INCREMENTAL INVESTMENT(2) $208M $310M WEIGHTED AVERAGE PROJECTED NOI YIELD ON TOTAL INVESTMENT(2)
Slide 39: Growth: Near-Term Development Properties
GROWTH: NEAR-TERM DEVELOPMENT PROPERTIES(1) Near-term development properties are renderings. Tenant executed letter of intent to prelease on 03/23/17. Stonebridge at Potomac Town Center – Phase II Woodbridge, VA (Prince William County) 65,342 SF Retail (63% Preleased) 965 Florida Avenue Washington,
Slide 40: Growth: Near-Term Development Pipeline
GROWTH: NEAR-TERM DEVELOPMENT PIPELINE Composition OFFICE/OTHER(1) MULTIFAMILY ASSETS 3 2 PRO RATA COMMERCIAL SF 565,150 NA PRO RATA MF UNITS NA 464 ESTIMATED TOTAL INVESTMENT(2) $368M $206M ESTIMATED INCREMENTAL INVESTMENT(2) $275M $198M WEIGHTED AVERAGE PROJECTED NOI YIELD ON TOTAL INVESTMENT(2) 7
Slide 41: Growth: Future Development Pipeline
GROWTH: FUTURE DEVELOPMENT PIPELINE Portfolio Composition OWNED OPTIONED TOTAL NUMBER OF ASSETS 38 6 44 PRO RATA ESTIMATED POTENTIAL DENSITY (SF) 16.0M 2.3M 18.3M HISTORICAL COST(1) $532M $19M $551M INCREMENTAL INVESTMENT TO ACQUIRE AND OTHER COSTS(2) $115M $112M $226M ESTIMATED TOTAL LAND INVESTMEN
Slide 42: Growth: Crystal City
THE PENTAGON REAGAN NATIONAL AIRPORT DOWNTOWN DC BLUE = JBGS CONTROL 33 GROWTH: CRYSTAL CITY
Slide 43: Crystal City Is a Unique, Large-Scale Opportunity
Crystal City’s commercial district is comparable in scale to some of the best urban neighborhoods in the country, each with a distinct retail heart These neighborhoods have more balanced residential to office ratios than Crystal City High occupancy and credit income in the office space deferred the
Slide 44: Growth: Placemaking Crystal City
GROWTH: PLACEMAKING CRYSTAL CITY MULTIFAMILY OFFICE RETAIL THEATER ANCHOR GROCERY ANCHOR NEW METRO STATION PUBLIC PLAZA TODAY DIVERSITY OF OFFERINGS PUBLIC SPACE WITH HUMAN SCALE WALKABILITY WITH TRANSIT ACCESS PROGRAMMING AND ACTIVATION STRATEGIC ANCHORS AND AMENITIES Rendering 35
Slide 45: Placemaking Creates Enormous Value
JBGS amenitized projects deliver: 9.6% rent growth Bethesda Row completed: 8.6% rent growth New amenities added: 12.0% rent growth GROWTH: PLACEMAKING CREATES ENORMOUS VALUE Natural amenity growth 14th Street in Logan Circle Bethesda Row completed in mid-2008 (Federal Realty Investment Trust ) SOURC
Slide 46: Placemaking Creates Enormous Value
GROWTH: PLACEMAKING CREATES ENORMOUS VALUE SOURCE: JLL Research + Amenities + Amenities + Amenities + Amenities 37 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 BETHESDA: SUBURBAN VS. DOWNTOWN (DIRECT VACANCY %) Suburban
Slide 47: Transformative Repositioning of Crystal City
GROWTH: TRANSFORMATIVE REPOSITIONING OF CRYSTAL CITY(1) 38 PHASE I ~$350M 1770 CRYSTAL 1800 S. BELL 2121 RETAIL SQUARE BLOCK RETAIL +650 New MF Units +120K SF New Retail PHASE II PHASE III PHASE IV CRYSTAL CITY TODAY $ TBD 1900 CRYSTAL +1000 New MF Units +50K SF New Retail $ TBD 223 23rd STREET +100
Slide 48: Growth: 6-Year Potential NOI Bridge
This is a hypothetical presentation of Potential Near-Term NOI and is dependent on numerous assumptions, which may not be accurate. Actual future NOI may differ materially from this hypothetical Potential Future NOI. Please see the forward looking statements disclaimer and definitions at the beginni
Slide 49: Growth: Components of Value
40 GROWTH: COMPONENTS OF VALUE Under Construction Third Party Business Future Development Operating Portfolio Near-Term Development Operating Portfolio Third Party Business NAV/COST OF: POTENTIAL NAV WITH NEAR-TERM VALUE CREATION AT HISTORICAL COST + = + + $5.0B OF POTENTIAL FUTURE VALUE CREATION FR
Slide 50: Balance Sheet
BALANCE SHEET SIGNIFICANT LIQUIDITY AND FINANCIAL STRENGTH TO SUPPORT GROWTH Rendering of CEB Tower at Central Place Arlington, VA
Slide 51: Balance Sheet: Liquidity and Financial Strength
Annualized Adjusted EBITDA for the three months ended 03/31/17. Net debt does not include a short term $44M note receivable related to JBG’s contribution of a note in lieu of 7770 Norfolk, a previously Included Asset, which is under contract to sell to JBG’s joint venture partner and expected to clo
Slide 52: Balance Sheet: Well Laddered Debt Maturity Profile
BALANCE SHEET: WELL LADDERED DEBT MATURITY PROFILE(1) ($ in millions) Debt balances shown at pro rata share as of 03/31/17. For floating rate loans, LIBOR is assumed to be 0.98%. Weighted average maturity as of 03/31/17. Includes $280 million of floating rate debt that has been swapped to fixed with
Slide 53: Balance Sheet: Capacity for Growth
Cyclical periods of peak development activity may result in temporarily higher leverage Approximately $1.0B of remaining construction, near-term development costs, and lease-up costs can be fully funded through cash on hand, in place secured construction loans, and in place bank facilities; however
Slide 54: Balance Sheet: Run Rate G&A Analysis
BALANCE SHEET: RUN RATE G&A ANALYSIS 45 Non cash compensation expense related to the amortization of the fair value of the portion of common limited partnership units transferred to the partners of JBG Operating Partners in connection with their contribution of the JBG management company, which vest
Slide 55: Market
MARKET View from the Bowen Building Washington, DC THE DC MARKET HAS BOTTOMED AND IS POISED FOR GROWTH
Slide 56: DC Market: Strong Foundation for Growth
DC MARKET: STRONG FOUNDATION FOR GROWTH(1) SOURCE: JLL Research (1) “Gateway Market” refers to Boston, New York, San Francisco, Los Angeles but excludes DC. HIGHEST HOUSEHOLD INCOMES STRONGEST POPULATION GROWTH BEST-EDUCATED WORKFORCE LARGEST PERCENTAGE OF MILLENNIALS 47 $54,149 $73,464 $93,489 Unit
Slide 57: DC Market: Strong Foundation for Growth
DC MARKET: STRONG FOUNDATION FOR GROWTH SOURCE: BLS, JLL Research Q1 2017 job growth and absorption shown year-over-year as of 03/31/17. 48 (1) MARKET HEADWINDS Federal Budget Uncertainty Federal Sequester Tenant Rightsizing MARKET RECOVERY -6 -4 -2 0 2 4 6 8 -60 -40 -20 0 20 40 60 80 2007 2008 2009
Slide 58: DC Market: Less Volatile Relative to Other Gateway Markets
DC MARKET: DC IS LESS VOLATILE OVER TIME RELATIVE TO OTHER GATEWAY MARKETS SOURCE: JLL Research, BLS MARKET HEADWINDS 49 -5.0% -4.0% -3.0% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 % EMPLOYMENT CHANGE RAPID RECOVERY AFTER HEADWINDS SUBSIDE DC Metro United Stat
Slide 59: Office Market: Metro-Proximate Buildings Perform Better
OFFICE MARKET: METRO-PROXIMATE, AMENITY-SERVED BUILDINGS PERFORM SIGNIFICANTLY BETTER SOURCE: JLL Research 50 6 5 - 5 11 12 1 -6 -4 -2 0 2 4 6 8 10 12 14 2001-2005 2006-2010 2011-Q1 2017 MILLIONS OF SQUARE FEET OFFICE NET ABSORPTION OFF METRO VS. ON METRO (0.5 MILE RADIUS) Off Metro On Metro $25.09
Slide 60: Office Market: Alignment of Congress and Presidency
OFFICE MARKET: ALIGNMENT OF CONGRESS + PRESIDENCY = NET ABSORPTION SOURCE: JLL Research 6 YEARS 10 YEARS The Warner Washington, DC 2000-2016 51 (6) 35 -10 -5 0 5 10 15 20 25 30 35 40 MILLIONS OF SQUARE FEET NET ABSORPTION IN DC METRO AREA DURING PERIODS OF POLITICAL ALIGNMENT AND DIVISION Divided Al
Slide 61: Office Market: Federal Contract Spending Is Rebounding
STIMULUS YEARS OFFICE MARKET: DC REGION FEDERAL CONTRACT SPENDING IS REBOUNDING SOURCE: JLL Research, fedspending.org Lockheed Martin Fighter Demonstration Center 2121 Crystal Drive Arlington, VA SEQUESTER IMPLEMENTED 52 FEDERAL GOVERNMENT PROCUREMENT CONTRACTS TO DC METRO AREA 60 62 64 66 68 70 72
Slide 62: Office Market: Vacancy and Growth Potential
OFFICE MARKET: VACANCY + GROWTH POTENTIAL DC CLASS B VACANCIES ARE TRENDING DOWNWARD SPREAD BETWEEN TROPHY, CLASS A, AND CLASS B RENTS HAS WIDENED AS DC CLASS B RENTS RISE, ARLINGTON CLASS B IS POISED FOR GROWTH SOURCE: JLL Research $38/FS $50/FS 53 $25 $30 $35 $40 $45 $50 $55 2000 2001 2002 2003 20
Slide 63: Office Market: Pipeline Below Historical Levels
OFFICE MARKET: EVEN WITH NEW STARTS,PIPELINE IS BELOW HISTORICAL LEVELS SOURCE: JLL Research 1700 M Street Washington, DC Rendering 54 - 1 2 3 4 5 6 7 8 9 10 2001-2005 2006-2010 2011-2015 2016-2020E MILLIONS OF SF AVERAGE OFFICE DELIVERIES PER YEAR
Slide 64: Multifamily Market: Population Has Consistently Grown
MULTIFAMILY MARKET: POPULATION HAS CONSISTENTLY GROWN: PARTICULARLY IN URBAN AREAS SOURCE: US Census Bureau DC METRO AREA DISTRICT OF COLUMBIA 0.6% CAGR DISTRICT OF COLUMBIA 0.5% 2006-2009 CAGR CAGR 2.0% 2010-2016 CAGR PRE-RECESSION POST-RECESSION 55 582 588 588 592 605 620 635 649 659 670 681 520 5
Slide 65: Multifamily Market: Rent Growth and Record Absorption
MULTIFAMILY MARKET: RENT GROWTH AND RECORD ABSORPTION, DESPITE SUPPLY GROWTH SOURCE: JLL Research, CoStar WestEnd 25 Washington, DC 3.5% CAGR 2004-2017 56 $1.50 $1.60 $1.70 $1.80 $1.90 $2.00 $2.10 $2.20 $2.30 $2.40 $2.50 0 2,000 4,000 6,000 8,000 10,000 12,000 PSF ASKING RENTS UNITS DELIVERED/ABSORB
Slide 66: Multifamily Market: Metro-Proximate Buildings Driving Absorption
MULTIFAMILY MARKET: METRO-PROXIMATE, AMENITY-SERVED BUILDINGS DRIVING ABSORPTION SOURCE: JLL Research, CoStar; 0.5 Miles of Metro considered “On Metro” 55.8% ON METRO INVENTORY 48.3% ON METRO INVENTORY 43.3% ON METRO INVENTORY 57 6,005 7,224 11,347 7,383 11,684 25,524 0 5,000 10,000 15,000 20,000 25
Slide 67: Multifamily Market: Shrinking Pipeline Will Likely Drive Rent Growth
MULTIFAMILY MARKET: SHRINKING PIPELINE WILL LIKELY DRIVE RENT GROWTH SOURCE: JLL Research, US Census Bureau, NOTE: Single-family pipeline is estimated for 2017-2019 based on average of 2014-2016 Census permits, condo and multifamily based on actuals (under construction) Estimated 58 0.0% 1.0% 2.0% 3
Slide 68: Multifamily Market: DC Is the Most Affordable Gateway Market
MULTIFAMILY MARKET: DC IS THE MOST AFFORDABLE OF ANY GATEWAY MARKET SOURCE: JLL Research, CoStar, ESRI RiverHouse Apartments Arlington, VA The Gale Eckington Washington, DC 59 21% 30% 37% 37% 43% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% DC Metro Area Boston Los Angeles San Francisco New York Averag
Slide 69: Investment Rationale – JBGS Is the Best Way to Invest in DC
INVESTMENT RATIONALE – JBGS IS THE BEST WAY TO INVEST IN DC JBGS IS A PROVEN VALUE CREATOR WITH A DIFFERENTIATED STRATEGY CONCENTRATION OF HIGH-QUALITY ASSETS IN BEST URBAN SUBMARKETS PLATFORM GROWTH BALANCE SHEET SIGNIFICANT LIQUIDITY AND FINANCIAL STRENGTH TO SUPPORT GROWTH UNRIVALED GROWTH PROFIL
Slide 70: Appendix
7200 Wisconsin Bethesda, MD APPENDIX
Slide 71: JBG SMITH Programs and Initiatives
JBG SMITH PROGRAMS AND INITIATIVES INCLUDE: JBG SMITH MANAGEMENT TEAM EXPERIENCE INCLUDES: JBG SMITH PORTFOLIO INCLUDES (AT SHARE): SUSTAINABILITY ACHIEVEMENTS AND INITIATIVES Sustainable operations of 8.8M SF certified under LEED EB: O&M 8.6M SF of LEED Certified Assets 7.9M SF of ENERGY STAR Certi
Slide 72: Development Adjusted Net Debt to Adjusted EBITDA
DEVELOPMENT ADJUSTED NET DEBT TO ADJUSTED EBITDA Annualized Adjusted EBITDA for the three months ended 03/31/17. Net debt does not include a short term $44M note receivable related to JBG’s contribution of a note in lieu of 7770 Norfolk, a previously Included Asset, which is under contract to sell t
Slide 73: Components of Value
COMPONENTS OF VALUE(1) See page II for definitions. “Historical Cost” means the total historical cost incurred by the predecessors of JBG SMITH (JBG and Vornado) with respect to the development of an asset, including any acquisition costs, hard costs, soft costs, tenant improvements, leasing costs a
Slide 74: Balance Sheet
BALANCE SHEET(1) See page II for definitions. Other tangible assets excludes cash and cash equivalents. Other tangible liabilities excludes debt. Reflects Management's estimate of funding on the anticipated term loans and revolving credit facility at transaction close. Reflects (i) the cash contribu
Slide 75: Share Count Summary
SHARE COUNT SUMMARY(1) (1) See page II for definitions. 67 JBG SMITH Fully Diluted Shares Calculation: VNO Fully Diluted Shares Outstanding 201,131 Special Dividend of JBG SMITH Shares (2:1) to VNO Investors 100,565 Equity Contribution of VNO Assets 73.0% JBG SMITH Fully Diluted Shares Outstanding 1
Slide 76: Operating Assets
OPERATING ASSETS(1) 68 $ in thousands, at JBG SMITH Share Plus: Lease Up Pro Forma Plus: Signed of Recently Annualized 1Q17 Annualized Leases Not Delivered Adjusted Market Market % Occupied NOI NOI Commenced Assets(2) NOI Cap Rate(7) Value Office: DC 90.7% $17,757 $71,028 $2,765 -- $73,793 5.00% $1,
Slide 77: Under Construction
UNDER CONSTRUCTION(1) See page II for definitions. “Historical Cost” means the total historical cost incurred by the predecessors of JBG SMITH (JBG and Vornado) with respect to the development of an asset, including any acquisition costs, hard costs, soft costs, tenant improvements, leasing costs an
Slide 78: Near-Term Development Pipeline
NEAR-TERM DEVELOPMENT PIPELINE(1) See page II for definitions. “Historical Cost” means the total historical cost incurred by the predecessors of JBG SMITH (JBG and Vornado) with respect to the development of an asset, including any acquisition costs, hard costs, soft costs, tenant improvements, leas
Slide 79: Future Development Pipeline
FUTURE DEVELOPMENT PIPELINE(1) See page II for definitions. Represents management's estimate of the total office and/or retail square feet and multifamily units that would need to be redeveloped in order to access the estimated potential density, which had estimated Cash NOI of $6,731 for the quarte
Slide 80: Third-Party Asset Management and Real Estate Services Business
THIRD-PARTY ASSET MANAGEMENT AND REAL ESTATE SERVICES BUSINESS(1) See page II for definitions. Following the closing of the transaction, JBG does not intend to raise any future investment funds, and current funds will be managed and liquidated over time. JBGS expects to continue to earn fees from th
Slide 81: Walkscore Methodology
WALKSCORE METHODOLOGY 50 - 69 90 - 100 25 - 49 0 - 24 70 - 89 SOURCE: Walkscore.com Walker’s Paradise Daily errands do not require a car Very Walkable Most errands can be accomplished on foot Somewhat Walkable Some errands can be accomplished on foot Car-Dependent Most errands require a car Car-Depe
Slide 82: Understanding Our Financial Reporting
UNDERSTANDING OUR FINANCIAL REPORTING FFO Calculated in accordance with NAREIT’s definition, adjusting Net Income/(Loss) for: Real estate-related depreciation and amortization Adjustments for one-time extraordinary items, including but not limited to: Gains/(losses) from asset sales, expenses associ
Slide 83: Atlantic Plumbing Public Art Project Washington, DC
Atlantic Plumbing Public Art Project Washington, DC
Slide 84: [LOGO]
[LOGO]
Slide 85: Slide 85