Peakstone Realty Trust · NYSE:PKST
Peakstone Realty Trust — Q3 2024 Earnings Presentation
62 slides from Peakstone Realty Trust's earnings presentation, Oct 30, 2024
Slide 1: Supplemental Information Third Quarter 2024
Supplemental Information Third Quarter 2024 1
Slide 2: Table of Contents
2 Table of Contents Page Portfolio Highlights 4 Financial Information 7 Debt & Capitalization 21 Leasing Activity & Asset Management 25 Components of Net Asset Value 28 Property Information 30 Portfolio Characteristics 35 Notes & Definitions 55
Slide 3: Cautionary Note Regarding Forward-Looking Statements
3 Cautionary Note Regarding Forward-Looking Statements Cautionary Note Regarding Forward-Looking Statements This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securi
Slide 4: Portfolio Highlights
Portfolio Highlights 4
Slide 5: High-Quality Portfolio of Industrial & Office Properties Net-Leased to Creditworthy Tenants
5 High-Quality Portfolio of Industrial & Office Properties Net-Leased to a Diversified Pool of Creditworthy Tenants4 62 Properties 16.2M Square Feet 22 States 95.6%3 Leased 27.5%/61.8%/10.7%1 Industrial/Office/Other 6.6 Years1 WALT 57.4%1,2 Investment Grade 1.9%1 Avg. Annual Rent Escalations 1 Weigh
Slide 6: Portfolio Summary by Segment
6 (Unaudited, USD in thousands) Number of Properties Economic Occupancy1 Total Rentable Square Feet WALT (years)2 Annualized Base Rent Investment Grade by Segment3 Industrial4 19 100.0 % 9,001,800 6.3 $ 50,017 58.0 % Office5 33 98.7 5,360,700 7.2 112,313 60.0 TOTAL / WEIGHTED AVERAGE INDUSTRIAL AND
Slide 7: Financial Information
4» | Peakstone Financial Information
Slide 8: Selected Financial Data
8 1 Calculated based on weighted-average number of common shares outstanding - basic and diluted of 36,374,407. 2 Calculated based on weighted-average number of common shares outstanding - basic and diluted of 36,374,407 and weighted-average number of outstanding OP Units of 3,211,894 for a total of
Slide 9: Revenue, NOI and Cash NOI by Segment
9 For the Quarter Ended (Unaudited, USD in thousands) 9/30/2024 6/30/2024 3/31/2023 12/31/2023 9/30/2023 REVENUE BY SEGMENT Industrial $ 14,918 $ 14,554 $ 14,833 $ 14,796 $ 13,934 Office 33,234 32,991 32,999 34,525 34,022 Industrial and Office Total 48,152 47,545 47,832 49,321 47,956 Other 6,808 8,4
Slide 10: Consolidated Statements of Operations
10 For the Quarter Ended (Unaudited, USD in thousands, except per share metrics) 9/30/2024 6/30/2024 3/31/2024 12/31/2023 9/30/2023 REVENUES Rental income $ 54,960 $ 55,952 $ 59,227 $ 63,058 $ 61,713 EXPENSES Property operating expense 6,400 5,658 6,679 7,232 7,829 Property tax expense 4,286 4,513 4
Slide 11: Consolidated Balance Sheets - Assets
11 As of (Unaudited, USD in thousands) 9/30/2024 6/30/2024 3/31/2024 12/31/2023 9/30/2023 ASSETS Cash and cash equivalents $ 241,550 $ 446,800 $ 436,251 $ 391,802 $ 364,446 Restricted cash1 25,181 14,496 11,213 9,208 5,651 Real estate Land 212,312 225,330 227,138 231,175 244,369 Building and improve
Slide 12: Consolidated Balance Sheets - Liabilities and Equity
12 As of (Unaudited, USD in thousands) 9/30/2024 6/30/2024 3/31/2024 12/31/2023 9/30/2023 LIABILITIES AND EQUITY Debt, net $ 1,168,010 $ 1,408,517 $ 1,416,433 $ 1,435,923 $ 1,442,003 Distributions payable 8,436 8,486 8,422 8,344 8,296 Interest rate swap liablity 10,255 — — — — Due to related parties
Slide 13: Reconciliation of Net Loss to Total NOI - Quarter
13 For the Quarter Ended (Unaudited, USD in thousands) 9/30/2024 6/30/2024 3/31/2024 12/31/2023 9/30/2023 Net (loss) income $ (26,549) $ (4,101) $ 5,470 $ (21,767) $ (139,948) General and administrative 9,122 9,116 9,680 11,551 1 9,653 Corporate operating expenses to related parties 141 169 166 178
Slide 14: Reconciliation of Net Loss to Total NOI - Nine Months
14 For the Nine Months Ended (Unaudited, USD in thousands) 9/30/2024 9/30/2023 Net loss $ (25,180) $ (583,332) General and administrative 27,918 31,411 Corporate operating expenses to related parties 476 975 Real estate impairment provision 50,774 397,373 Depreciation and amortization 69,155 86,830
Slide 15: NOI to Cash NOI Reconciliation - Quarter
15 For the Quarter Ended For the Quarter Ended 9/30/2024 9/30/2023 (Unaudited, USD in thousands) Industrial Office Total Industrial and Office Other Total Portfolio Industrial Office Total Industrial and Office Other Total Portfolio Revenue $ 14,918 $ 33,234 $ 48,152 $ 6,808 $ 54,960 $ 13,934 $ 34,0
Slide 16: NOI to Cash NOI Reconciliation - Nine Months
16 For the Nine Months Ended For the Nine Months Ended 9/30/2024 9/30/2023 (Unaudited, USD in thousands) Industrial Office Total Industrial and Office Other Total Portfolio Industrial Office Total Industrial and Office Other Total Portfolio Revenue $ 44,305 $ 99,224 $ 143,529 $ 26,611 $ 170,140 $ 42
Slide 17: Cash NOI Allocation and Same Store Cash NOI
17 For the Quarter Ended For the Nine Months Ended (Unaudited, USD in thousands) 9/30/2024 9/30/2023 9/30/2024 9/30/2023 CASH NOI ALLOCATION � Industrial1 $ 11,131 $ 11,901 $ 34,428 $ 36,411 Office 27,410 27,430 82,195 83,708 Industrial and Office Total $ 38,541 $ 39,331 $ 116,623 $ 120,119 � Other
Slide 18: Reconciliation of Net Income to FFO and AFFO
18 For the Quarter Ended (Unaudited, USD in thousands, except per share metrics) 9/30/2024 6/30/2024 3/31/2024 12/31/2023 9/30/2023 Reconciliation of Net (Loss) Income to Funds From Operations (FFO) and Adjusted Funds From Operations (AFFO) NET (LOSS) INCOME $ (26,549) $ (4,101) $ 5,470 $ (21,767) $
Slide 19: Reconciliation of Net Income to EBITDAre
19 For the Quarter Ended (Unaudited, USD in thousands) 9/30/2024 6/30/2024 3/31/2024 12/31/2023 9/30/2023 Reconciliation of Net income (loss) to EBITDAre Net (loss) income $ (26,549) $ (4,101) $ 5,470 $ (21,767) $ (139,948) Interest expense 14,140 15,845 16,148 16,415 16,126 Depreciation and amortiz
Slide 20: Capital Expenditures
20 For the Quarter Ended (Unaudited, USD in thousands) 9/30/2024 % of NOI1 6/30/2024 % of NOI1 3/31/2024 % of NOI1 12/31/2023 % of NOI1 9/30/2023 % of NOI1 Maintenance Capital Expenditures by segment: Industrial $ — — % $ — — % $ 89 0.2 % $ 651 1.3 % $ 30 0.1 % Office — — — — — — — — — — Total Indus
Slide 21: Debt & Capitalization
Debt & Capitalization 21
Slide 22: Capitalization, Liquidity and Debt Metrics
22 (Unaudited, USD in thousands, except for shares) Capitalization Liquidity Contractual Interest Rate1 Effective Interest Rate2 Term MAXIMUM CREDIT FACILITY CAPACITY $ 907,000 SECURED DEBT Fixed-Rate Mortgages 4.40% 4.43% 3.1 $ 433,018 Maximum Availability (per credit facility) $ 907,000 TOTAL SECU
Slide 23: Consolidated Secured Debt Schedule
23 (Unaudited, USD in thousands) SECURED DEBT Collateral Contractual Interest Rate Maturity Date Outstanding Balance INDUSTRIAL AND OFFICE BOA II Loan 1 4.32% 5/1/2028 $ 250,000 Total Industrial and Office 250,000 OTHER AIG Loan II 2 4.15% 11/1/2025 101,836 AIG Loan 3 4.96% 2/1/2029 81,182 Total Oth
Slide 24: Consolidated Debt Maturity Schedule
24 1 Excludes amounts related to deferred financing costs and net debt premiums/discounts. 2 Represents the AIG II Loan. 3 Represents the 2026 Term Loan. 4 Represents the Revolving Loan. 5 Represents the BOA II Loan. 6 Represents the 2028 Term Loan. 7 Represents the AIG loan. $141,194(1) $200,000(3)
Slide 25: Leasing Activity & Asset Management
Leasing Activity & Asset Management 25
Slide 26: Leasing Activity for the Quarter Ended September 30, 2024
26 NEW AND RENEWAL LEASES Cash Rent GAAP Rent Tenant / Property Segment Property Type Location New Lease Start Date New Lease Expiration Date Term (Yrs) Square Feet Leasing Commissions $/SF Tenant Improvement $/SF Starting Rent/SF Prior Rent/ SF Rent Change Starting Rent/SF Prior Rent/SF Rent Change
Slide 27: Portfolio Square Footage and Occupancy Changes
27 1 Occupancy changes reflect leases with commencements during the quarter. 2 Expiring with renewal square footage includes expirations accelerated due to early renewal. 3 Retention is Renewal leases divided by Total expirations. For the Quarter Ended 9/30/2024 6/30/2024 3/31/2024 12/31/2023 9/30/2
Slide 28: Components of Net Asset Value
Components of Net Asset Value 28
Slide 29: Net Asset Value Components
29 (Unaudited, USD in thousands) Annualized Base Rent Balance Sheet Components (cont'd) ABR Percentage of ABR LIABILITIES Industrial � � Credit facility2 $ 750,000 Investment grade1 $ 29,005 16.0 % Mortgages payable2 433,018 � Sub-investment grade1 14,770 8.1 % Distributions payable 8,436 Unrated cr
Slide 30: Property Information
Property Information 30
Slide 31: Property List
31 USD in thousands, except Annualized Base Rent / SF metrics Segment Property/Tenant Name Address Property Market Property State Building Square Feet Tenancy Type % Leased1 Property Sub Type Year Built/ Renovated2 3 Property WALT3 % of Total ABR3 1 Industrial RH 825 Rogers Road Stockton/Modesto CA
Slide 32: Property List (continued)
32 USD in thousands, except Annualized Base Rent / SF metrics Segment Property / Tenant Name Address Property Market Property State Building Square Feet Tenancy Type % Leased1 Property Sub Type Year Built/ Renovated2 3 Property WALT3 % of Total ABR3 20 Office Southern Company 3525 & 3535 Colonnade P
Slide 33: Property List (continued)
33 USD in thousands, except Annualized Base Rent / SF metrics Segment Property/Tenant Name Address Property Market Property State Building Square Feet Tenancy Type % Leased1 Property Sub Type Year Built/ Renovated2 3 Property WALT3 % of Total ABR3 39 Office Occidental Petroleum 501 North Division St
Slide 34: Property List (continued)
34 Property List (continued) As of September 30, 2024 USD in thousands, except Annualized Base Rent / SF metrics Segment Property / Tenant Name Address Property Market Property State Building Square Feet Tenancy Type % Leased1 Property Sub-Type Year Built/ Renovated2 3 Property WALT3 % of Total ABR3
Slide 35: Portfolio Characteristics
Portfolio Characteristics 35
Slide 36: Lease Escalations
36 1 Weighted average rental increase is based on the remaining term of each lease as of September 30, 2024. Excludes leases with remaining term less than one year. 2 Based on % of ABR for Industrial and Office segments. Lease Escalations - Consolidated % of ABR Wtd. Avg. Annual Growth Rate 1 Annual
Slide 37: Top Tenants - All Segments
37 Top 10 Tenants Tenant/Major Tenant Rating1 % of ABR2 WALT (years)3 1 Keurig Dr. Pepper Baa1 4 6.5% 5.1 2 Southern Company A- 5.2 19.5 3 LPL BBB- 4.8 12.1 4 Amazon5 AA 4.8 6.8 5 Maxar Technologies NR 6 4.4 5.8 6 Freeport McMoran Baa1 4 4.3 2.6 7 RH B1 4 4.2 5.9 8 Wyndham Hotels & Resorts BB- 4.1 4
Slide 38: Top Tenants - Industrial and Office
38 Top 10 Tenants Tenant/Major Tenant Rating1 % of ABR2 WALT (years)3 1 Keurig Dr. Pepper Baa1 4 7.3% 5.1 2 Southern Company A- 5.8 19.5 3 LPL BBB- 5.4 12.1 4 Amazon5 AA 5.3 6.8 5 Maxar Technologies NR 6 4.9 5.8 6 Freeport McMoran Baa1 4 4.8 2.6 7 RH B1 4 4.7 5.9 8 McKesson A3 4 3.9 4.0 9 Travel & L
Slide 39: Top Tenants - Industrial
39 Top 10 Tenants Tenant/Major Tenant Rating1 % of ABR2 WALT (years)3 1 Amazon6 AA 17.4% 6.8 2 RH B1 4 15.3 5.9 3 3M Company A3 4 10.0 2.1 4 Samsonite BB+ 9.0 5.2 5 Shaw Industries AA 6.7 8.5 6 Pepsi A+ 6.6 3.8 7 Amcor Rigid Plastics USA BBB 5.4 8.1 8 Huntington Ingalls BBB 5 5.2 3.3 9 Pepsi Bottlin
Slide 40: Top Tenants - Office
40 Top 10 Tenants Tenant/Major Tenant Rating1 % of ABR2 WALT (years)3 1 Keurig Dr. Pepper Baa1 4 10.6% 5.1 2 Southern Company A- 8.4 19.5 3 LPL BBB- 7.7 12.1 4 Maxar Technologies NR 6 7.0 5.8 5 Freeport McMoRan Baa1 4 7.0 2.6 6 McKesson A3 4 5.6 4.0 7 Travel & Leisure BB- 5.3 4.9 8 IGT BB+ 4.6 6.3 9
Slide 41: Industry Concentration: All Segments
41 Industry Concentration: All Segments As of September 30, 2024 Top 10 Industries Top 20 Sub-Industries Industry % of ABR1 Sub-Industry % of ABR1 1 Capital Goods 15.5 % 1 Aerospace & Defense 10.9 % 2 Consumer Services 11.1 2 Soft Drinks 9.4 3 Materials 9.5 3 Hotels, Resorts & Cruise Lines 7.4 4 Foo
Slide 42: Industry Concentration: Industrial and Office
42 Industry Concentration: Industrial and Office As of September 30, 2024 Top 10 Industries Top 20 Sub-Industries Industry % of ABR1 Sub-Industry % of ABR1 1 Capital Goods 14.9 % 1 Soft Drinks 10.6 % 2 Materials 10.6 2 Aerospace & Defense 10.2 3 Food, Beverage & Tobacco 10.6 3 Health Care Services 6
Slide 43: Industry Concentration: Industrial
43 Industry Concentration: Industrial As of September 30, 20242021 Top 8 Industries Top 14 Sub-Industries Industry % of ABR1 Sub-Industry % of ABR1 1 Capital Goods 22.7 % 1 Internet & Direct Marketing Retail 17.4 % 2 E-Commerce 17.4 2 Homefurnishing Retail 15.3 3 Consumer Durables & Apparel 15.7 3 S
Slide 44: Industry Concentration: Office
44 Industry Concentration: Office As of September 30, 2024 2021 Top 10 Industries Top 20 Sub-Industries Industry % of ABR1 Sub-Industry % of ABR1 1 Materials 11.6 % 1 Aerospace & Defense 11.4 % 2 Capital Goods 11.4 2 Soft Drinks 10.6 3 Food, Beverage & Tobacco 10.6 3 Health Care Services 8.8 4 Utili
Slide 45: Geographic Distribution and Market Concentration: All Segments
45 Geographic Distribution by State (% of ABR1) Market Concentration: All Segments As of September 30, 2024 (USD in thousands) Top 10 Markets (% of ABR)1 Markets ABR % of ABR1 1 Phoenix $ 23,605 13.0 % 2 Northern New Jersey 19,884 10.9 3 Boston 12,839 7.1 4 Charlotte 11,925 6.6 5 Denver 10,993 6.0 6
Slide 46: Market Concentration: Industrial and Office
46 Geographic Distribution (% of ABR1) Market Concentration: Industrial and Office As of September 30, 2024 (USD in thousands) Top 10 Markets (% of ABR)1 Markets ABR % of ABR1 1 Phoenix $ 20,287 12.5 % 2 Boston 12,839 7.9 3 Denver 10,993 6.8 4 Northern New Jersey 10,264 6.3 5 Birmingham 9,409 5.8 6
Slide 47: Market Concentration: Industrial
47 Geographic Distribution (% of ABR1) Market Concentration: Industrial As of September 30, 2024 (USD in thousands) Top 10 Markets (% of ABR)1 Markets ABR % of ABR1 1 Chicago $ 8,901 17.8 % 2 Columbus 7,816 15.6 3 Stockton/Modesto 7,637 15.3 4 Jacksonville 4,497 9.0 5 Savannah 3,335 6.7 6 Tampa 3,28
Slide 48: Market Concentration: Office
48 Geographic Distribution (% of ABR1) Market Concentration: Office As of September 30, 2024 (USD in thousands) Top 10 Markets (% of ABR)1 Markets ABR % of ABR1 1 Phoenix $ 20,287 18.1 % 2 Boston 12,839 11.4 3 Denver 10,993 9.8 4 Birmingham 9,409 8.4 5 Northern New Jersey 9,105 8.1 6 Charlotte 8,701
Slide 49: Market Concentrations: Other
49 Geographic Distribution (% of ABR1) Market Concentrations: Other As of September 30, 2024 (USD in thousands) Top 10 Markets (% of ABR)1 Markets ABR % of ABR1 1 Northern New Jersey $ 9,620 49.3 % 2 Phoenix 3,318 17.0 3 Charlotte 3,224 16.5 4 Las Vegas 2,123 10.9 5 Columbus 1,219 6.3 Top 5 total $
Slide 50: Lease Expirations: All Segments
50 Lease Expirations: All Segments As of September 30, 2024 (USD in thousands) Lease Maturity Schedule (by ABR1) 1 Based on ABR for the portfolio. $— $5,212 $9,423 $14,524 $19,028 $41,564 $27,132 $16,169 $12,141 $8,671 $27,970 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 >2033 Expiring Leases Y
Slide 51: Lease Expirations: Industrial and Office
51 Lease Expirations: Industrial and Office As of September 30, 2024 (USD in thousands) Lease Maturity Schedule (by ABR1) $— $1,988 $7,690 $14,524 $15,607 $32,226 $25,657 $16,169 $12,141 $8,358 $27,970 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 >2033 Expiring Leases Year Industrial Office App
Slide 52: Lease Expirations: Industrial
52 Lease Expirations: Industrial As of September 30, 2024 (USD in thousands) Lease Maturity Schedule (by ABR1) $— $— $5,000 $— $7,667 $6,054 $7,637 $8,683 $4,685 $5,987 $4,304 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 >2033 Expiring Leases Year Leases Approx. Square Feet ABR % of ABR1 2024 —
Slide 53: Lease Expirations: Office
53 Lease Expirations: Office As of September 30, 2024 (USD in thousands) Lease Maturity Schedule (by ABR1) $— $1,988 $2,690 $14,524 $7,940 $26,172 $18,020 $7,486 $7,456 $2,371 $23,666 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 >2033 Expiring Leases Year Leases Approx. Square Feet ABR % of ABR
Slide 54: Lease Expirations: Other
54 Lease Expirations: Other As of September 30, 2024 (USD in thousands) Lease Maturity Schedule (by ABR1) $— $3,224 $1,733 $— $3,421 $9,338 $1,475 $— $— $313 $— 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 >2033 Expiring Leases Year Total Approx. Square Feet ABR % of ABR1 2024 — — $ — — % 2025
Slide 55: Notes & Definitions
Notes & Definitions 55
Slide 56: Notes & Definitions
56 Notes & Definitions ABR (Annualized Base Rent) “Annualized Base Rent” or “ABR” means the contractual base rent excluding rent abatements and deducting base year operating expenses for gross and modified gross leases as of September 30, 2024, unless otherwise specified, multiplied by 12 months. Fo
Slide 57: Notes & Definitions (continued) - FFO and AFFO
57 Notes & Definitions (continued) Funds from Operations ("FFO") and Adjusted Funds from Operations ("AFFO") "FFO" and "AFFO" are non-GAAP financial measures that we believe are useful to investors because they are widely accepted industry measures used by analysts and investors to compare the opera
Slide 58: Notes & Definitions (continued) - FFO and AFFO
58 Notes & Definitions (continued) FFO and AFFO - cont. By providing FFO and AFFO, we present information that assists investors in aligning their analysis with management’s analysis of long-term operating activities. FFO and AFFO have been revised to include amounts available to both common shareho
Slide 59: Notes & Definitions (continued) - NOI, Cash NOI, Same Store Cash NOI
59 Notes & Definitions (continued) Net Operating Income (NOI), Cash NOI, and Same Store Cash NOI Net operating income (“NOI”) is a non-GAAP financial measure calculated as net (loss) income, the most directly comparable financial measure calculated and presented in accordance with GAAP, excluding ge
Slide 60: Notes & Definitions (continued) - NOI to Cash NOI Reconciliation
60 Notes & Definitions (continued) The table below represents a reconciliation of NOI to Cash NOI for the interim periods presented in the "Selected Financial Data" on slide 9. For the Quarter Ended 6/30/2024 3/31/2024 12/31/2023 (Unaudited, USD in thousands) Industrial Office Other Total Portfolio
Slide 61: Notes & Definitions - Normalized EBITDAre
61 Notes & Definitions Normalized EBITDAre “Normalized EBITDAre” is a non-GAAP supplemental performance measure to evaluate the operating performance of the Company. Normalized EBITDAre, as defined by the Company, represents EBITDAre(as defined by NAREIT), modified to exclude items such as acquisiti
Slide 62: Notes & Definitions (continued)
62 Notes & Definitions (continued) Operating Margin "Operating Margin" is NOI/Revenue. Operating Partnership "Operating Partnership" refers to our operating partnership, PKST OP, L.P., which owns directly and indirectly all of the Company's assets. OP Units "OP Units" represents outstanding common u
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