Peakstone Realty Trust · NYSE:PKST
Peakstone Realty Trust — Q2 2023 Earnings Presentation
64 slides from Peakstone Realty Trust's earnings presentation, Aug 8, 2023
Slide 1: Supplemental Information Second Quarter 2023
Supplemental Information Second Quarter 2023
Slide 2: Table of Contents
2 Table of Contents Page Company Highlights 5 Financial Information 8 Debt & Capitalization 23 Leasing Activity & Asset Management 29 Components of Net Asset Value 31 Property Information 33 Portfolio Characteristics 38 Notes & Definitions 58
Slide 3: Disclaimer on Forward-Looking Statements
3 Disclaimer Disclaimer on 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 “Securities Act”), and Section 21E of the Securities Exchange
Slide 4: Company Highlights
Company Highlights
Slide 5: High-Quality Portfolio of Office & Industrial Properties Net-Leased to Creditworthy Tenants
5 High-Quality Portfolio of Office & Industrial Properties Net-Leased to a Diversified Pool of Creditworthy Tenants4 73 Properties 18.2M Square Feet 24 States 96.0%3 Leased 24%/56%/20%1 Industrial/ Office/Other 6.5 Years1 WALT 63.5%1,2 Investment Grade 2.0% Avg. Annual Rent Escalations 1 Weighted av
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 6.6 $ 48,358 73.9 % Office5 35 97.0 5,684,400 7.9 112,304 64.9 TOTAL / WEIGHTED AVERAGE INDUSTRIAL AND
Slide 7: Second Quarter 2023 Highlights
7 Consolidated Leverage $394.6 million40.8% Net Debt + Preferred / Total Gross Real Estate (consol.) $(0.27) / $0.73 FFO/AFFO Per Share/Unit2 6.6x Net Debt + Preferred / Normalized EBITDAre (consol.)4 Total Revenues $62.5 million Same Store Cash NOI3 Liquidity5 1 Calculated based on weighted average
Slide 8: Financial Information
4» | Peakstone Financial Information
Slide 9: Financial Summary
9 1 Calculated based on weighted average number of common shares outstanding - basic and diluted of 35,922,706. 2 Calculated based on weighted average number of common shares outstanding - basic and diluted of 35,922,706 and weighted average number of OP Units outstanding of 3,528,666 for a total of
Slide 10: Revenues, NOI and Cash NOI by Segment
10 For the Quarter Ended (Unaudited, USD in thousands) 6/30/2023 3/31/2023 12/31/2022 9/30/2022 6/30/2022 REVENUES BY SEGMENT Industrial $ 13,981 $ 14,594 $ 15,945 $ 15,095 $ 14,807 Office 34,999 39,189 45,643 72,128 93,494 Industrial and Office Total 48,980 53,783 61,588 87,223 108,301 Other 13,560
Slide 11: Consolidated Statements of Operations
11 For the Quarter Ended (Unaudited, USD in thousands, except per share metrics) 6/30/2023 3/31/2023 12/31/2022 9/30/2022 6/30/2022 REVENUES Rental income $ 62,540 $ 66,973 $ 75,893 $ 101,330 $ 123,073 EXPENSES Property operating expense 6,919 7,110 9,357 13,716 14,335 Property tax expense 5,545 5,8
Slide 12: Consolidated Balance Sheets - Assets
12 As of (Unaudited, USD in thousands) 6/30/2023 3/31/2023 12/31/2022 9/30/2022 6/30/2022 ASSETS Cash and cash equivalents $ 360,626 $ 368,210 $ 233,180 $ 75,838 $ 202,655 Restricted cash 3,042 1,999 4,764 12,045 19,638 Real estate Land 245,872 316,341 327,408 380,998 573,306 Building and improvemen
Slide 13: Consolidated Balance Sheets - Liabilities and Equity
13 As of (Unaudited, USD in thousands) 6/30/2023 3/31/2023 12/31/2022 9/30/2022 6/30/2022 LIABILITIES AND EQUITY Debt, net $ 1,460,536 $ 1,461,584 $ 1,485,402 $ 1,486,783 $ 2,529,228 Restricted reserves 627 627 627 7,150 8,417 Distributions payable 8,295 5,164 12,402 12,111 12,078 Due to related par
Slide 14: Reconciliation of Net Income to Total NOI - Quarterly
14 For the Quarter Ended 6/30/2023 3/31/2023 12/31/2022 9/30/2022 6/30/2022 (Unaudited, USD in thousands) Net (loss) income $ (452,403) $ 9,017 $ (248,142) $ (119,373) $ (76,599) General and administrative 12,030 9,728 11,532 9,521 8,750 Corporate operating expenses to related parties 341 378 284 14
Slide 15: Reconciliation of Net Income to Total NOI - Six Months
15 For the Six Months Ended 6/30/2023 6/30/2022 (Unaudited, USD in thousands) Net (loss) income $ (443,384) $ (73,869) General and administrative 21,758 17,942 Corporate operating expenses to related parties 718 926 Real estate impairment provision 397,373 75,557 Depreciation and amortization 61,827
Slide 16: NOI and Cash NOI Reconciliation by Segment - Quarter
16 For the Quarter Ended For the Quarter Ended 6/30/2023 6/30/2022 (Unaudited, USD in thousands) Industrial Office Industrial and Office Total Other Total Portfolio Industrial Office Industrial and OfficeTotal Other Total Portfolio Revenue $ 13,981 34,999 $ 48,980 $ 13,560 $ 62,540 $ 14,807 $ 93,494
Slide 17: NOI and Cash NOI Reconciliation by Segment - Six Months
17 For the Six Months Ended For the Six Months Ended 6/30/2023 6/30/2022 (Unaudited, USD in thousands) Industrial Office Industrial and Office Total Other Total Portfolio Industrial Office Industrial and Office Total Other Total Portfolio Revenue $ 28,575 $ 74,188 $ 102,763 $ 26,750 $ 129,513 $ 30,3
Slide 18: Same Store Cash NOI
18 1 For both the three and six months ended June 30, 2023, the decrease in same store Cash NOI is primarily due to $8.2 million decrease in termination income received in connection with certain tenants exercising early lease termination rights and offset by a net increase in cash rent for the rema
Slide 19: Reconciliation of Net Income to FFO and AFFO
19 For the Quarter Ended (Unaudited, USD in thousands, except per share metrics) 6/30/2023 3/31/2023 12/31/2022 9/30/2022 6/30/2022 Reconciliation of Net Income to Funds From Operations (FFO) and Adjusted Funds From Operations (AFFO) GAAP NET (LOSS) INCOME $ (452,403) $ 9,017 $ (248,142) $ (119,373)
Slide 20: Reconciliation of Net Income to EBITDAre
20 For the Quarter Ended (Unaudited, USD in thousands) 6/30/2023 3/31/2023 12/31/2022 9/30/2022 6/30/2022 Reconciliation of Net income (loss) to EBITDAre Net (loss) income $ (452,403) $ 9,017 $ (248,142) $ (119,373) $ (76,599) Interest 16,068 17,014 16,501 24,283 22,366 Depreciation and amortization
Slide 21: Unconsolidated Office Joint Venture - Condensed Financial Information
21 For the Quarter Ended (Unaudited, USD in thousands) 6/30/2023 1 3/31/20231 12/31/20221 9/30/2022 6/30/2022 Total revenues $ 49,917 $ 44,789 $ 16,500 $ — $ — Expenses: Operating expenses (16,611) (15,822) (5,550) — — General and administrative (2,174) (1,481) (500) — — Depreciation and amortizatio
Slide 22: Capital Expenditures
22 For the Quarter Ended (Unaudited, USD in thousands) 6/30/2023 % of NOI1 3/31/2023 % of NOI1 12/31/2022 % of NOI1 9/30/2022 % of NOI1 6/30/2022 % of NOI1 Maintenance Capital Expenditures by segment: Industrial $ 513 1.0 % $ 83 0.2 % $ 358 0.6 % $ — — % $ — — % Office — — — — 776 1.3 409 0.6 882 0.
Slide 23: Debt & Capitalization
Debt & Capitalization
Slide 24: Debt Summary
24 1 Excludes the impact of fixed-rate swaps. 2 As of 9/28/22, the Secured Overnight Financing Rate ("SOFR" or "SOF rate") replaced LIBOR as the applicable reference rate for our variable rate debt. The amounts listed in this section use the applicable SOF rate (inclusive of a five day look-back per
Slide 25: Capitalization and Net Debt
25 1 Unconsolidated Net debt is presented separately since PKST has no obligation to contribute capital to the unconsolidated joint venture and has no guarantee requirement related to the debt of the unconsolidated joint venture. 2 On April 10, 2023, the Company redeemed all issued and outstanding p
Slide 26: Consolidated Debt Summary
26 As of (Unaudited, USD in thousands) 6/30/2023 3/31/2023 12/31/2022 9/30/2022 6/30/2022 SECURED FIXED-RATE DEBT Mortgage borrowings on wholly-owned portfolio $ 517,146 $ 518,930 $ 539,803 $ 541,689 $ 1,013,410 Total Secured Fixed-Rate Debt 517,146 518,930 539,803 541,689 1,013,410 UNSECURED FLOATI
Slide 27: Secured Debt Detail
27 (Unaudited, USD in thousands) SECURED DEBT Collateral Contractual Interest Rate Maturity Date Outstanding Balance INDUSTRIAL AND OFFICE Samsonite Mortgage Loan 6.08% 9/1/2023 $ 17,414 Pepsi Bottling Ventures Mortgage Loan 3.69% 10/1/2024 17,640 BOA II Loan 1 4.32% 5/1/2028 250,000 Total Industria
Slide 28: Debt Maturity Schedule
28 1 Represents the Samsonite mortgage loan. | 2 Represents the Highway 94 mortgage loan. | 3 Represents the Pepsi Bottling Ventures mortgage loan. | 4 Represents the AIG II mortgage loan. | 5 Represents the 2025 Term Loan. | 6 Represents the 2026 Term Loan. | 7 Represents the Revolving Line of Cred
Slide 29: Leasing Activity & Asset Management
Leasing Activity & Asset Management
Slide 30: Leasing Activity
30 1 Occupancy changes reflect leases with commencements during the quarter. 2 Expiring square footage includes square footage for tenants who have expiring leases but have signed renewal leases. 3 Retention rate: Renewal leases divided by expiring square footage. For the Quarter Ended 6/30/2023 3/3
Slide 31: Components of Net Asset Value
Components of Net Asset Value
Slide 32: Components of Net Asset Value
32 (Unaudited, USD in thousands) Annualized Base Rent Balance Sheet Components (cont'd) ABR Percentage of ABR LIABILITIES Industrial � � � Revolving credit facility and term loans2 $ 950,000 Investment grade1 $ 35,738 17.7 % Mortgages payable2 517,000 � Sub-investment grade1 7,756 3.8 Accrued tenant
Slide 33: Property Information
Property Information
Slide 34: Property List
34 USD in thousands, except Annualized Base Rent / SF metrics Segment Property/Tenant Name Address Property Market Property State Building Square Feet Tenancy Type % Leased2 Property Sub Type Year Built/ Renovated1 Property WALT3 % of Total ABR3 1 Industrial RH 825 Rogers Road Stockton/Modesto CA 1,
Slide 35: Property List (continued)
35 USD in thousands, except Annualized Base Rent / SF metrics Segment Property / Tenant Name Address Property Market Property State Building Square Feet Tenancy Type Leased %2 Property Sub Type Year Built/ Renovated1 Property WALT3 % of Total ABR3 20 Office Southern Company 3525 Colonnade Parkway Bi
Slide 36: Property List (continued)
36 USD in thousands, except Annualized Base Rent / SF metrics Segment Property/Tenant Name Address Property Market Property State Building Square Feet Tenancy Type % Leased2 Property Sub Type Year Built/ Renovated1 Property WALT3 % of Total ABR3 39 Office Occidental Petroleum 501 North Division Stre
Slide 37: Property List (continued)
37 Property List (continued) As of June 30, 2023 (1) Year shown is either the year built or year substantially renovated. (2) Total calculated as a weighted average based on rentable square feet. (3) Total calculated as a weighted average based on ABR. (4) Lease restricts certain disclosures. USD in
Slide 38: Portfolio Characteristics
Portfolio Characteristics
Slide 39: Lease Escalations
39 1 Weighted average rental increase is based on the remaining term of each lease as of June 30, 2023. Excludes leases with remaining term less than one year. Lease Escalation Frequency % Annualized Base Rent Wtd. Avg. Annual Growth Rate 1 Annually 85.5% 2.1% Every 5 Years 11.6 0.6 Other Frequencie
Slide 40: Top Tenants: Consolidated
40 Top 10 Tenants Tenant/Major Tenant Rating1 % of Annualized Base Rent2 WALT (years)3 1 Keurig Dr. Pepper Baa14 5.7% 6.4 2 Southern Company Services BBB+ 4.6 20.7 3 LPL Holdings BBB- 4.2 13.3 4 Amazon5 AA 4.2 8.1 5 Freeport McMoRan Baa24 3.9 3.9 6 Maxar Technologies B+ 3.7 7.0 7 RH IG106 3.6 7.2 8
Slide 41: Top Tenants: Industrial and Office
41 Top 10 Tenants Tenant/Major Tenant Rating1 % of Annualized Base Rent2 WALT (years)3 1 Keurig Dr. Pepper Baa14 7.2% 6.4 2 Southern Company Services BBB+ 5.7 20.7 3 LPL Holdings BBB- 5.3 13.3 4 Amazon5 AA 5.3 8.1 5 Freeport McMoRan Baa24 4.9 3.9 6 Maxar Technologies B+ 4.7 7.0 7 RH IG106 4.6 7.2 8
Slide 42: Top Tenants: Industrial
42 Top 10 Tenants Tenant/Major Tenant Rating1 % of Annualized Base Rent2 WALT (years)3 1 Amazon4 AA 17.5% 8.1 2 RH IG10 5 15.2 7.2 3 3M Company A2 6 10.1 3.3 4 Samsonite BB 8.5 1.4 5 Shaw Industries AA 6.9 9.8 6 PepsiCo A+ 6.6 5.1 7 Amcor BBB 5.5 9.3 8 Huntington Ingalls BBB- 5.3 4.5 9 Pepsi Bottlin
Slide 43: Top Tenants: Office
43 Top 10 Tenants Tenant/Major Tenant Rating1 % of Annualized Base Rent2 WALT (years)3 1 Keurig Dr. Pepper Baa14 10.3% 6.4 2 Southern Company Services BBB+ 8.2 20.7 3 LPL Holdings BBB- 7.6 13.3 4 Freeport McMoRan Baa2 4 7.0 3.9 5 Maxar Technologies B+ 6.7 7.0 6 McKesson A- 5.5 5.3 7 Travel & Leisure
Slide 44: Industry Concentration: Consolidated
44 Industry Concentration: Consolidated As of June 30, 2023,�2021 Top 10 Industries Top 20 Sub-Industries Industry % of Annualized Base Rent1 Sub-Industry % of Annualized Base Rent1 1 Capital Goods 15.9 % 1 Aerospace & Defense 10.3 % 2 Consumer Services 10.6 2 Soft Drinks 8.2 3 Materials 9.9 3 Hotel
Slide 45: Industry Concentration: Industrial and Office
45 Industry Concentration: Industrial and Office As of June 30, 2023,�2021 Top 10 Industries Top 20 Sub-Industries Industry % of Annualized Base Rent1 Sub-Industry % of Annualized Base Rent1 1 Capital Goods 14.5 % 1 Soft Drinks 10.4 % 2 Materials 12.4 2 Aerospace & Defense 9.9 3 Food, Beverage & Tob
Slide 46: Industry Concentration: Industrial
46 Industry Concentration: Industrial As of June 30, 20232021 Top 8 Industries Top 14 Sub-Industries Industry % of Annualized Base Rent1 Sub-Industry % of Annualized Base Rent1 1 Capital Goods 22.8 % 1 Internet & Direct Marketing 17.5 % 2 E-Commerce 17.5 2 Homefurnishing Retail 15.2 3 Consumer Durab
Slide 47: Industry Concentration: Office
47 Industry Concentration: Office As of June 30, 2023 2021 Top 10 Industries Top 20 Sub-Industries Industry % of Annualized Base Rent1 Sub-Industry % of Annualized Base Rent1 1 Materials 14.1 % 1 Aerospace & Defense 10.9 % 2 Capital Goods 10.9 2 Soft Drinks 10.3 3 Health Care Equipment & Services 10
Slide 48: Geographic Distribution: Consolidated
48 Geographic Distribution (% of Annualized Base Rent1) Market Concentration: Consolidated As of June 30, 2023 (USD in thousands) Top 10 Markets (% of Annualized Base Rent) Markets Annualized Base Rent % of Annualized Base Rent1 1 Phoenix $ 22,591 11.2 % 2 Northern New Jersey 19,231 9.5 3 Denver 13,
Slide 49: Geographic Distribution: Industrial and Office
49 Geographic Distribution (% of Annualized Base Rent1) Market Concentration: Industrial and Office As of June 30, 2023 (USD in thousands) Top 10 Markets (% of Annualized Base Rent) Markets Annualized Base Rent % of Annualized Base Rent1 1 Phoenix $ 19,545 12.2 % 2 Boston 12,425 7.7 3 Denver 10,523
Slide 50: Geographic Distribution: Industrial
50 Geographic Distribution (% of Annualized Base Rent1) Market Concentration: Industrial As of June 30, 2023 (USD in thousands) Top 10 Markets (% of Annualized Base Rent) Markets Annualized Base Rent % of Annualized Base Rent1 1 Chicago $ 8,719 18.0 % 2 Columbus 7,557 15.6 3 Stockton/Modesto 7,340 1
Slide 51: Geographic Distribution: Office
51 Geographic Distribution (% of Annualized Base Rent1) Market Concentration: Office As of June 30, 2023 (USD in thousands) Top 10 Markets (% of Annualized Base Rent) Markets Annualized Base Rent % of Annualized Base Rent1 1 Phoenix $ 19,545 17.4 % 2 Boston 12,425 11.1 3 Denver 10,523 9.4 4 Birmingh
Slide 52: Lease Expirations: Consolidated
52 Lease Expirations: Consolidated As of June 30, 2023 (USD in thousands) Lease Maturity Schedule (by Annualized Base Rent) 1 Based on Annualized Base Rent for wholly-owned portfolio. 2 Excludes approximately 2K of SF related to cafes. $2,110 $24,313 $9,444 $12,723 $14,179 $19,636 $34,095 $25,936 $1
Slide 53: Lease Expirations: Industrial and Office
53 Lease Expirations: Industrial and Office As of June 30, 2023 (USD in thousands) Lease Maturity Schedule (by Annualized Base Rent) $— $5,076 $4,684 $10,031 $14,179 $16,293 $26,830 $24,502 $17,545 $10,519 $31,003 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 >2032 Expiring Leases Year Industria
Slide 54: Lease Expirations: Industrial
54 Lease Expirations: Industrial As of June 30, 2023 (USD in thousands) Lease Maturity Schedule (by Annualized Base Rent) $— $4,094 $1,377 $4,902 $— $8,534 $1,482 $7,340 $8,451 $4,555 $7,623 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 >2032 Expiring Leases Year Leases Approx. Square Feet Annua
Slide 55: Lease Expirations: Office
55 Lease Expirations: Office As of June 30, 2023 (USD in thousands) Lease Maturity Schedule (by Annualized Base Rent) $— $982 $3,307 $5,129 $14,179 $7,759 $25,348 $17,162 $9,094 $5,964 $23,380 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 >2032 Expiring Leases Year Leases Approx. Square Feet Ann
Slide 56: Lease Expirations: Other
56 Lease Expirations: Other As of June 30, 2023 (USD in thousands) Lease Maturity Schedule (by Annualized Base Rent1) $2,110 $19,237 $4,760 $2,692 $— $3,343 $7,265 $1,434 $— $— $302 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 >2032 Expiring Leases Year Total Approx. Square Feet Annualized Base
Slide 57: Geographic Distribution: Other
57 Geographic Distribution (% of Annualized Base Rent1) Market Concentrations: Other As of June 30, 2023 (USD in thousands) Top 10 Markets (% of Annualized Base Rent) Markets Annualized Base Rent % of Annualized Base Rent1 1 Northern New Jersey $ 9,298 22.6 % 2 Houston 8,233 20.0 3 Charlotte 3,565 8
Slide 58: Notes & Definitions
Notes & Definitions
Slide 59: Notes & Definitions
59 Notes & Definitions ABR (Annualized Base Rent) “Annualized Base Rent” or “ABR” means the contractual base rent excluding abatement periods and deducting base year operating expenses for gross and modified gross leases as of June 30, 2023, unless otherwise specified, multiplied by 12 months. For p
Slide 60: Notes & Definitions (continued): FFO and AFFO
60 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 61: Notes & Definitions (continued): FFO and AFFO
61 Notes & Definitions (continued) FFO and AFFO - cont. Management believes that AFFO is a beneficial indicator of its ongoing portfolio performance and ability to sustain its current distribution level. More specifically, AFFO isolates the financial results of the Company's operations. AFFO, howeve
Slide 62: Notes & Definitions (continued): NOI, Cash NOI, Same Store
62 Notes & Definitions (continued) Net Operating Income (NOI), Cash NOI, and Same Store Cash NOI “NOI” is a non-GAAP measure calculated as net (loss) income, the most directly comparable financial measure calculated and presented in accordance with GAAP, excluding equity in the earnings of our uncon
Slide 63: Notes & Definitions: Normalized EBITDAre
63 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 64: Notes & Definitions (continued)
64 Notes & Definitions (continued) Operating Margin "Operating Margin" is NOI/Revenue. Per Share "Per Share" data represents basic and diluted shares and reflects the impact of the Company's one-for-nine reverse share split. Pro Rata "Pro rata" represents the Company's share of the unconsolidated jo
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