Slide 1: Forward-looking statements
Certain statements contained in this investor presentation constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not guarantees of perf
Slide 2: Non-GAAP Financial Measures
Non-GAAP Financial Measures II. Non-GAAP Measures This investor presentation contains certain non-GAAP financial measures, including earnings before interest, taxes, depreciation and amortization (“EBITDA”) and net operating income (“NOI”). EBITDA is earnings before interest, taxes, depreciation and
Slide 3: GAAP Reconciliation
GAAP Reconciliation Includes income from sold properties, gains on sale of real estate, impairment losses, and other adjustments. Includes interest on mezzanine debt, dividends on marketable securities, income on corporate investments and other adjustments. Reconciliation of Vornado RemainCo’s Net I
Slide 4: GAAP Reconciliation (Cont'd)
GAAP Reconciliation (Cont’d) IV. Reconciliation of Vornado RemainCo’s Total Incremental Revenue to Cash Incremental Revenue attributable to leases signed, but not yet commenced, for the three months ended December 31, 2016, and the twelve months ended December 31, 2017 and 2018
Slide 5: Next Step in Shareholder Value Creation
1 Next Step in Shareholder Value Creation Vornado to combine its Washington, DC business with The JBG Companies via a tax-free spin-merger to form a new market-leading, publicly-traded REIT named JBG SMITH Properties (NYSE: JBGS) Peerless NYC focused real estate company with premier office assets an
Slide 6: Transaction Overview
Transaction overview Deal Summary Vornado to spin off its Washington, DC business consisting of 10.1 MM SF2 of commercial real estate, 3,175 multifamily units and a future development pipeline with estimated development potential of 9.2 MM SF3 JBG simultaneously to merge its management company and a
Slide 7: Transaction Overview (Cont'd)
Transaction overview (cont’d) + = Gross Asset Value (“GAV”)¹ Pro Forma Ownership1 Operating RE / Recent Deliveries2 Under Construction2 Future Development Pipeline Asset Class Composition (by GAV1) Geographic Complexion (by GAV1) ~$6.0 BN ~$2.4 BN ~$8.4 BN 74% 26% 100% 49 Assets / 10.1 MM SF / 3,175
Slide 8: Transaction Rationale & Investor Benefits
Transaction Rationale & investor benefits Benefits to Vornado Shareholders Rationale for DC Separation Rationale for Combination with JBG The industry-leading Washington, DC operator with superior capital allocation skills Greater geographic diversification within Washington, DC and concentration in
Slide 9: Asset Selection Strategy
Asset selection strategy The best assets from JBG’s portfolio were selected to complement Vornado’s existing Washington, DC portfolio and position the combined company for outsized growth Asset Selection Rationale Excluded Assets Condominiums, townhomes, and hotels Highly levered single-tenant lease
Slide 10: Transaction Valuation / Structure
Transaction VALUATION / structure As negotiated Note: Reflects transaction value, which is an estimate of fair market value and does not reflect GAAP accounting. Transaction value and resulting ownership percentages based on negotiations between Vornado and JBG management. Final transaction value an
Slide 11: JBG SMITH management ownership and alignment
JBG SMITH Management1 will have significant ownership (expected to be 6%2) of the combined entity and will be heavily aligned with long term shareholder value creation Complete alignment of interests JBG management company consideration ($335MM) will be 50% vested at closing and subject to 3-year lo
Slide 12: Anticipated Process and Timing
8 Anticipated process and timing Transaction Timing File initial Form 10 registration statement with SEC prior to year end Target completion of transaction by second quarter 2017 Distribution Process The distribution is expected to be made on a pro rata 1:2 basis to Vornado common shareholders and V
Slide 13: Anticipated Process and Timing
ANTICIPATED PROCESS AND TIMING VORNADO @ registration statement with, SEC prior to year end ‘Target completion of transaction by second, ‘quarter 2017 tobe made on a pro rata 1:2 basis to Vornado common shareholders and Vornado Realty LP. common. unitholders as of the distribution record date Follow
Slide 14: Vornado RemainCo
vornado Remainco Following the spin-off, Vornado will be a pure-play New York City real estate company, with an irreplaceable NYC portfolio generating 88% of the Company’s pro forma EBITDA1 Own 81 properties totaling 24.0MM SF2 in New York City with blue chip tenant roster NYC office business includ
Slide 15: Select New York City Office Properties
Select new York CITY office properties 11
Slide 16: Select New York City Street Retail Properties
Select new York City street retail properties 12
Slide 17: theMART and California Street
theMART and 555 CALIFORNIA Street As of 9/30/2016; square footage (“SF”) shown at 100% share theMART (Chicago) – transformed from a showroom building to the premier creative and tech hub in the Midwest, resulting in significant earnings growth and value creation with significant upside 3,665,000 SF
Slide 18: Premier New York City Platform
Premier New York city platform NYC Peer Gross Office Rents ($ PSF) 2 NYC Trophy Office Buildings Square Feet (in MM’s) of Buildings With Signed Office Leases >$100 PSF Since 2013 3 NYC Gross Asset Value (GAV) ($ BN) 1 (Per Green Street Advisors) Notes All company information per 1Q16 public filings
Slide 19: Premier New York City Platform (Cont'd)
Premier New York city platform (Cont’d) For all companies except Vornado, represents information based upon analysis by Green Street Advisors prepared for VNO (dated August 2016); residential NOI included in Office NOI; BXP and PGRE do not breakout office/retail NOI; represents 2Q16 NOI annualized f
Slide 20: RemainCo – Consistent Track Record of Strong Growth
Remainco – consistent track record of strong growth 2006 – LTM Q3 2016 NOI CAGR3 : 9.5% Income from continuing operations (excludes sold properties and includes acquisitions from year of purchase); includes corporate G&A and excludes investment income, Vornado Capital Partners, and Hotel Pennsylvani
Slide 21: RemainCo – Leader Among Best-in-Class REITs
Remainco - LEADER AMONG BEST-in-CLASS REITs Per reports published by Green Street Advisors for all companies except Vornado RemainCo NOI (post corporate G&A) includes New York office, New York retail, ALX, 555 California Street, and theMART. Vornado RemainCo has delivered superior same-store NOI gro
Slide 22: 2012 - 2015 Same-Store NOI CAGR
2012 - 2015 Same-Store NOI CAGR*
Slide 23: JBG's Track Record of Performance (Since 1999)
JBG’s Track Record of Performance (Since 1999) JBG Overview Best-in-class real estate operator with long history of value creation through opportunistic acquisition and development in the DC metro area 19 Experience Expertise Leadership Scale Commitment Results 55+ year history focused exclusively o
Slide 24: Experienced Leadership + Significant Alignment
20 EXPERIENCED LEADERSHIP + SIGNIFICANT ALIGNMENT Name and JBG SMITH Title Age Years with JBG Years Experience Executive Management2 W. Matt Kelly Chief Executive Officer & Trustee 44 12 18 Rob Stewart Executive Vice Chairman & Trustee 54 28 30 David Paul President & Chief Operating Officer 54 9 25
Slide 25: A Compelling Investment Opportunity
JBG SMITH will be the largest real estate operator focused exclusively on the Washington, DC market We will specialize in high-quality, mixed-use (office, multifamily and retail) assets in urban infill locations that lie in the path of growth and that deliver superior long-term investment returns A
Slide 26: Largest Pure-Play DC Metro Area Focused Real Estate Company
Largest Pure-Play DC Metro Area Focused Real Estate Company (MM SF) The clear vehicle for real estate investment in the DC metro area Notes All figures include operating, construction in progress and near-term development pipeline commercial SF and units. DC metro area statistics based on the Washin
Slide 27: Portfolio Summary
Portfolio Summary2 23 Premier Assets Located in Metro-served, Urban Infill Submarkets Notes Metro-served is defined as within 0.5 miles of an existing or planned Metro station Metrics shown at pro rata share as of 9/30/2016 Commercial SF at pro rata share includes office, retail and other assets Occ
Slide 28: JBG SMITH Operating Portfolio: Substantial Embedded Growth
JBG Smith operating portfolio: Substantial Embedded Growth Existing operating portfolio of 79 assets has substantial near-term embedded growth opportunities 24 Recently delivered high-quality, mixed-use assets provide meaningful near-term NOI growth Operating portfolio contains significant embedded,
Slide 29: Construction In Progress
Construction In Progress Further NOI growth through the delivery of additional trophy mixed-use assets in key submarkets All projects are fully capitalized 25 Directly adjacent to Rosslyn Metro station 65% pre-leased to CEB, Inc. Remaining vacancy on floors 21-28, with unobstructed views of DC skyli
Slide 30: Near-Term Development Pipeline
Near-Term Development Pipeline Near-term development pipeline capitalizes on DC’s demand for high-quality multifamily and highly efficient, trophy office in Metro-served and amenity rich submarkets 26 Pipeline consists of fully entitled and designed multifamily and trophy office with the majority lo
Slide 31: Future Development Pipeline
future Development pipeline Notes All figures as of 9/30/2016 and reflect pro rata share. Estimated SF reflects latest development plans and are subject to change based on revisions and zoning approvals Includes Rockville, Woodbridge and Tysons Corner Future development opportunities to provide subs
Slide 32: Crystal City: Prime Placemaking Opportunity
CRYSTAL CITY: PRIME PLACEMAKING OPPORTUNITY Access and scale consistent with best markets in Washington, DC Needs a retail heart to unlock true potential Notes Ages calculated for all existing buildings within CoStar submarket boundaries. Ages calculated for office > 40K SF, residential > 50 units 2
Slide 33: Shaw Neighborhood: JBG Creates a Heart for the Market
29 SHAW Neighborhood: JBG CREATES A “HEART” FOR THE MARKET METRO ACCESS. MULTIPLE ANCHORS. MIX OF USES. “PLACEMAKING” 428 UNITS (OWNED) 51,500 SF RETAIL (OWNED) FUTURE DEVELOPMENT 965 FLORIDA 256 UNITS (OWNED) 19,474 SF RETAIL (OWNED) NEAR-TERM DEVELOPMENT ATLANTIC PLUMBING C ATLANTIC PLUMBING A 310
Slide 34: Strong Balance Sheet to Fund Future Growth
30 Strong balance sheet to fund future growth Well-Laddered Debt Maturity Profile ($MM)1 Notes Debt balances shown at pro rata share as of 6/30/2016 for Vornado and 3/31/2016 for JBG For floating rate loans, LIBOR is assumed to be 0.52% Weighted average maturity as of 9/30/2016 Wtd. Avg. Interest Ra
Slide 35: Washington, DC Market Poised for Growth
31 WASHINGTON, DC market POISED FOR GROWTH September 2016 trailing twelve month employment gains of 85,200 jobs (seasonally adjusted) puts job growth at the highest level in a decade and significantly above the historical average of approximately 40,000 jobs The most significant job growth came in t
Slide 36: Washington, DC Market Poised for Growth
WASHINGTON, DC MARKET POISED FOR GROWTH VAIS + September 2016 trailing twelve month employment gains of 85,200 jobs (seasonally adjusted) puts job ‘growth at the highest level in a decade and significantly above the historical average of approximately 40,000 jobs ‘The most significant job growth cam
Slide 37: Near-Term Development Pipeline
Near-Term Development Pipeline 33 Located in North End Shaw, within a five minute walk to U Street Metro and adjacent to JBGS’ Atlantic Plumbing A Third phase in JBGS’ mixed-use Atlantic Plumbing project which, at completion, will boast 628 multifamily units and 43,200 SF of retail Two boutique, Mor
Slide 38: Near-Term Development Pipeline – Representative Office Projects
Near-Term Development Pipeline Representative Office Projects 34 Located one block south of Dupont Circle in heart of DC’s Golden Triangle business district Efficient floorplate provides four sides of glass and frontage on three streets Iconic design by KPF provides dramatic 30-foot high column-free
Slide 39: JBG Smith Operating Assets
35 JBG Smith Operating Assets Note Table shown as of 9/30/2016 1. % Leased calculated on a SF basis for commercial assets and on a unit basis for multifamily assets. Retail SF embedded in multifamily assets is excluded 1 # of Total Total Pro Rata Asset Assets Type City Submarket Ownership SF Units S
Slide 40: JBG Smith Operating Assets (Cont'd)
36 JBG Smith Operating Assets (Cont’d.) Note Table shown as of 9/30/2016 1. % Leased calculated on a SF basis for commercial assets and on a unit basis for multifamily assets. Retail SF embedded in multifamily assets is excluded 1 # of Total Total Pro Rata Pro Rata Asset Assets Type City Submarket O
Slide 41: JBG Smith Construction in Progress and Near-Term Development Assets
37 JBG Smith Construction in progress and Near-Term Development Assets Note Table shown as of 9/30/2016 1. % Pre-leased calculated on a SF basis for commercial assets and on a unit basis for multifamily assets. Retail SF embedded in multifamily assets is excluded 2. Initial delivery of 14K SF of spa
Slide 42: JBG Smith Future Development Assets
38 JBG Smith future Development Assets Note Table shown as of 9/30/2016. Estimated SF reflects latest development plans and are subject to change based on revisions and zoning approvals # of Total Est. Pro Rata Est. Asset Assets City Submarket Ownership Potential Density Potential Density Future Dev
Slide 43: JBG Smith Future Development Assets
JBG SMITH FUTURE DEVELOPMENT ASSETS VORNABO Tobe stown oof 9/3/2016 Estmeted rele tet devepmen los on oe sabe hoge bse on eso ard ong ores 38