![]() |
![]() | Table of Contents |
Section | Page | ||||
Corporate Data: | |||||
Consolidated Financial Results: | |||||
Portfolio Data: | |||||
Industry Concentration and Top Ten Customers | |||||
Appendices and Definitions: | |||||
![]() | Additional Information |
![]() | Investor Company Summary |
Executive Management Team | ||||||||
Stephen W. Wilson | President and Chief Executive Officer | |||||||
Maria R. Hawthorne | Interim Chief Operating Officer | |||||||
Adeel Khan | Chief Financial Officer and Corporate Secretary | |||||||
Trenton Groves | SVP, Chief Accounting Officer | |||||||
Board of Directors | ||||||||
Ronald L. Havner, Jr. | Chairman of the Board | |||||||
Stephen W. Wilson | Director, President and Chief Executive Officer | |||||||
Maria R. Hawthorne | Director, Interim Chief Operating Officer | |||||||
Jennifer Holden Dunbar | Director | |||||||
M. Christian Mitchell | Director | |||||||
Irene H. Oh | Director | |||||||
Kristy M. Pipes | Director | |||||||
Gary E. Pruitt | Director | |||||||
Robert S. Rollo | Director | |||||||
Joseph D. Russell, Jr. | Director | |||||||
Peter Schultz | Director |
Investor Relations Information | ||
Adeel Khan | ||
T: 818.244.8080, Ext. 8975 | ||
akhan@psbusinessparks.com |
Equity Research Coverage | |||||||||||
FIRM | ANALYST | PHONE | |||||||||
Citi | Manny Korchman | 212-816-1382 | emmanuel.korchman@citi.com | ||||||||
Green Street Advisors | Vince Tibone | 949-640-8780 | vtibone@greenstreetadvisors.com | ||||||||
JP Morgan | Anthony Paolone | 212-622-6682 | anthony.paolone@jpmorgan.com | ||||||||
KeyBanc | Craig Mailman | 917-368-2316 | cmailman@key.com | ||||||||
Wells Fargo | Blaine Heck | 443-263-6529 | blaine.heck@wellsfargo.com |
![]() | Company Overview As Of March 31, 2022 |
Company Overview | ||||||||
Total # of Properties | 96 | |||||||
Total Square Feet | 27,010,000 | |||||||
Total Occupancy (Period End) | 95.5% | |||||||
Same Park Occupancy (Period End) | 95.9% | |||||||
Same Park YTD GAAP NOI growth | 7.7% | |||||||
Same Park YTD Cash NOI growth | 8.6% | |||||||
(S&P/Moody's) (2) (3) | BBB+, BBB-/Baa2 (under review) | |||||||
Net Debt to Total Combined Market Capitalization | n/a | |||||||
Net Debt and Preferred Equity to Total Combined Market Capitalization | 11.4% | |||||||
Net Debt to Adjusted EBITDAre | 2.8x | |||||||
Multifamily | ||||||||
Average rent per unit | $2,123 | |||||||
Weighted average occupancy | 95.0% | |||||||
Period end occupancy | 96.9% | |||||||
Percent leased | 97.0% | |||||||
Economic Occupancy | 89.9% | |||||||
(2) S&P downgraded PSB to 'BBB+' and subsequently downgraded PSB's preferred stock to 'BBB-'. S&P placed all their ratings on PSB, including our 'BBB+' issuer credit rating, on CreditWatch with negative implications. The CreditWatch placement reflects that S&P could lower their ratings upon closing of the transaction, based on the pro forma capital structure and their view of the acquirer's aggressive financial policy. S&P no longer view PSB as being moderately strategic to Public Storage. Public Storage, which holds approximately 41% common equity interest in PSB, has agreed to Blackstone's acquisition bid. S&P previously considered PSB to be moderately strategic to Public Storage and, as such, S&P believed that Public Storage would provide support to PSB under a stress scenario. As a result, S&P applied a one-notch improvement to their standalone rating on PSB. The transaction changes S&P's view, such that they no longer expect Public Storage to support PSB under a hypothetical stress scenario. As a result, S&P downgraded PSB by one notch to 'BBB+'. S&P also lowered their ratings on PSB's preferred stock by one notch to 'BBB-', two notches below its issuer credit rating, in line with S&P's criteria. | ||||||||||||||
(3) Moody’s Investors Service (“Moody’s”) has placed on review for downgrade the ratings of PS Business Parks, Inc. (PSB), including its Baa2 preferred stock rating and the (P)Baa1 senior unsecured shelf rating of its main operating subsidiary, PS Business Parks, L.P. The review for downgrade follows the announcement that the REIT, which owns a portfolio primarily comprised of multi-tenant industrial and flex properties, has entered into a definitive agreement by which affiliates of Blackstone Real Estate will acquire all of PSB’s outstanding shares in a transaction valued at about $7.6 billion. The review for downgrade reflects the likelihood that PSB’s credit profile will deteriorate under Blackstone’s ownership, with the potential for meaningfully higher leverage and secured debt levels that could result in a multi-notch downgrade of the REIT’s ratings, including crossing over to non-investment grade territory, upon transaction close. |
![]() | Financial and Portfolio Highlights and Capitalization Data (unaudited, in thousands except share and per share data and portfolio statistics) |
Three Months Ended | |||||||||||||||||||||||||||||
March 31, 2022 | December 31, 2021 | September 31, 2021 | June 30, 2021 | March 31, 2021 | |||||||||||||||||||||||||
Financial Results: | |||||||||||||||||||||||||||||
Rental income | $ | 112,840 | $ | 110,844 | $ | 110,448 | $ | 109,364 | $ | 108,047 | |||||||||||||||||||
Net income | $ | 101,145 | $ | 357,009 | $ | 78,463 | $ | 70,050 | $ | 47,507 | |||||||||||||||||||
Net Operating Income (NOI) (1) | $ | 78,726 | $ | 78,106 | $ | 77,357 | $ | 77,515 | $ | 74,829 | |||||||||||||||||||
Cash NOI (1) | $ | 78,105 | $ | 77,641 | $ | 77,332 | $ | 77,813 | $ | 73,978 | |||||||||||||||||||
Core FFO (1) | $ | 63,823 | $ | 63,485 | $ | 60,328 | $ | 61,816 | $ | 58,419 | |||||||||||||||||||
Core FFO per common stock - diluted (1) | $ | 1.82 | $ | 1.81 | $ | 1.72 | $ | 1.77 | $ | 1.67 | |||||||||||||||||||
EBITDAre | $ | 67,601 | $ | 74,224 | $ | 72,599 | $ | 73,503 | $ | 70,624 | |||||||||||||||||||
Dividend declared per share of common stock | $ | 1.05 | $ | 1.05 | $ | 1.05 | $ | 1.05 | $ | 1.05 | |||||||||||||||||||
Portfolio Statistics: | |||||||||||||||||||||||||||||
Total square footage at period end (2) | 27,010,000 | 27,010,000 | 26,869,000 | 26,151,000 | 26,151,000 | ||||||||||||||||||||||||
Weighted average occupancy | 95.5 | % | 95.5 | % | 94.7 | % | 93.8 | % | 93.2 | % | |||||||||||||||||||
Period end Occupancy | 95.5 | % | 95.9 | % | 95.5 | % | 94.5 | % | 93.6 | % | |||||||||||||||||||
Rent Change - GAAP | 23.4 | % | 16.4 | % | 15.4 | % | 10.7 | % | 16.4 | % | |||||||||||||||||||
Rent Change - Cash | 10.7 | % | 6.1 | % | 5.0 | % | 3.1 | % | 6.4 | % | |||||||||||||||||||
Same Park Performance: | |||||||||||||||||||||||||||||
Same Park weighted average occupancy | 96.0 | % | 95.8 | % | 94.9 | % | 94.0 | % | 93.3 | % | |||||||||||||||||||
Same Park income per occupied square foot | $16.84 | $16.60 | $16.62 | $16.40 | $16.10 | ||||||||||||||||||||||||
Same Park GAAP NOI growth (1) (3) | 7.7 | % | 8.9 | % | 10.0 | % | 11.4 | % | 0.7 | % | |||||||||||||||||||
Same Park Cash NOI growth (1) (3) | 8.6 | % | 8.1 | % | 12.7 | % | 16.2 | % | 0.5 | % | |||||||||||||||||||
Capitalization: | |||||||||||||||||||||||||||||
Total shares and units issued and outstanding at period end (4) | 34,932,798 | 34,895,162 | 34,851,508 | 34,846,819 | 34,822,294 | ||||||||||||||||||||||||
Total equity market capitalization | $ | 5,871,505 | $ | 6,426,642 | $ | 5,462,625 | $ | 5,160,177 | $ | 5,382,830 | |||||||||||||||||||
Series W, X, Y and Z Preferred Stock (5) | $ | 755,000 | $ | 755,000 | $ | 944,750 | $ | 944,750 | $ | 944,750 | |||||||||||||||||||
Total consolidated debt | $ | 20,000 | $ | 32,000 | $ | — | $ | — | $ | — | |||||||||||||||||||
Unrestricted cash (6) | $ | (20,000) | $ | (27,074) | n/a | n/a | n/a | ||||||||||||||||||||||
Total combined market capitalization (net debt plus equity) | $ | 6,626,505 | $ | 7,186,568 | $ | 6,407,375 | $ | 6,104,927 | $ | 6,327,580 | |||||||||||||||||||
Ratios: | |||||||||||||||||||||||||||||
Net debt & preferred equity to total combined market capitalization | 11.4 | % | 10.6 | % | 14.1 | % | 13.8 | % | 14.0 | % | |||||||||||||||||||
Net debt to total combined market capitalization (6) | 0.0 | % | 0.1 | % | n/a | n/a | n/a | ||||||||||||||||||||||
Ratio of EBITDAre to fixed charges and preferred distributions (7) | 6.9x | 6.9x | 5.9x | 6.0x | 5.8x | ||||||||||||||||||||||||
Net debt and preferred equity to EBITDAre (8) | 2.8x | 2.6x | 3.1x | 2.8x | 3.1x |
![]() | Consolidated Balance Sheets (unaudited, in thousands) |
March 31, 2022 | December 31, 2021 | |||||||||||||
ASSETS | ||||||||||||||
Cash and cash equivalents | $ | 104,204 | $ | 27,074 | (a) | |||||||||
Real estate facilities, at cost | ||||||||||||||
Land | 865,214 | 867,345 | ||||||||||||
Buildings and improvements | 2,244,104 | 2,239,137 | ||||||||||||
3,109,318 | 3,106,482 | |||||||||||||
Accumulated depreciation | (1,197,811) | (1,178,397) | ||||||||||||
1,911,507 | 1,928,085 | (b) | ||||||||||||
Properties held for sale, net | — | 33,609 | ||||||||||||
Land and building held for development, net | 97,212 | 78,990 | ||||||||||||
2,008,719 | 2,040,684 | |||||||||||||
Rent receivable | 2,988 | 1,621 | ||||||||||||
Deferred rent receivable | 37,484 | 37,581 | (c) | |||||||||||
Other assets | 13,176 | 16,262 | ||||||||||||
Total assets | $ | 2,166,571 | $ | 2,123,222 | (d) | |||||||||
LIABILITIES AND EQUITY | ||||||||||||||
Accrued and other liabilities | $ | 95,509 | $ | 97,151 | (e) | |||||||||
Credit facility | 20,000 | 32,000 | ||||||||||||
Total liabilities | 115,509 | 129,151 | ||||||||||||
Equity | ||||||||||||||
PS Business Parks, Inc.’s stockholders’ equity | ||||||||||||||
Preferred stock | 755,000 | 755,000 | ||||||||||||
Common stock | 276 | 275 | ||||||||||||
Paid-in capital | 754,387 | 752,444 | (f) | |||||||||||
Accumulated earnings | 270,243 | 226,737 | (g) | |||||||||||
Total PS Business Parks, Inc.’s stockholders’ equity | 1,779,906 | 1,734,456 | ||||||||||||
Noncontrolling interests | 271,156 | 259,615 | ||||||||||||
Total equity | 2,051,062 | 1,994,071 | ||||||||||||
Total liabilities and equity | $ | 2,166,571 | $ | 2,123,222 |
![]() | Consolidated Statements of Operations, Quarterly Results (unaudited and in thousands, except per share amounts) |
Three Months Ended | |||||||||||||||||||||||||||||
March 31, 2022 | December 31, 2021 | September 30, 2021 | June 30, 2021 | March 31, 2021 | |||||||||||||||||||||||||
Rental income | $ | 112,840 | $ | 110,844 | $ | 110,448 | $ | 109,364 | $ | 108,047 | |||||||||||||||||||
Expenses: | |||||||||||||||||||||||||||||
Cost of operations | 34,114 | 32,738 | 33,091 | 31,849 | 33,218 | ||||||||||||||||||||||||
Depreciation and amortization | 23,132 | 24,130 | 23,857 | 22,514 | 22,985 | ||||||||||||||||||||||||
General and administrative (1) | 11,324 | 4,728 | 5,148 | 4,799 | 4,382 | ||||||||||||||||||||||||
Total operating expenses | 68,570 | 61,596 | 62,096 | 59,162 | 60,585 | ||||||||||||||||||||||||
Interest and other income | 246 | 946 | 411 | 923 | 256 | ||||||||||||||||||||||||
Interest and other expense (2) | (330) | (3,943) | (224) | (268) | (211) | ||||||||||||||||||||||||
Gain on sale of real estate facilities | 56,959 | 310,758 | 29,924 | 19,193 | — | ||||||||||||||||||||||||
Net income | 101,145 | 357,009 | 78,463 | 70,050 | 47,507 | ||||||||||||||||||||||||
Allocation to noncontrolling interests | (19,049) | (70,915) | (13,850) | (12,094) | (7,411) | ||||||||||||||||||||||||
Net income allocable to PS Business Parks, Inc. | 82,096 | 286,094 | 64,613 | 57,956 | 40,096 | ||||||||||||||||||||||||
Allocation to preferred stockholders | (9,580) | (10,485) | (12,046) | (12,047) | (12,046) | ||||||||||||||||||||||||
Preferred securities redemption charge | — | (6,434) | — | — | — | ||||||||||||||||||||||||
Allocation to restricted stock unit holders | (523) | (1,785) | (350) | (314) | (164) | ||||||||||||||||||||||||
Net income allocable to common stockholders | $ | 71,993 | $ | 267,390 | $ | 52,217 | $ | 45,595 | $ | 27,886 | |||||||||||||||||||
Net income per share of common stock | |||||||||||||||||||||||||||||
Basic | $ | 2.61 | $ | 9.70 | $ | 1.90 | $ | 1.66 | $ | 1.01 | |||||||||||||||||||
Diluted | $ | 2.60 | $ | 9.66 | $ | 1.89 | $ | 1.65 | $ | 1.01 | |||||||||||||||||||
Weighted average common stock outstanding | |||||||||||||||||||||||||||||
Basic | 27,607 | 27,565 | 27,543 | 27,531 | 27,495 | ||||||||||||||||||||||||
Diluted | 27,691 | 27,671 | 27,635 | 27,632 | 27,594 |
![]() | Consolidated Statements of Operations and EBITDAre, Quarterly Results (unaudited and in thousands, except per share amounts) |
Three Months Ended March 31, | |||||||||||||||||
2022 | 2021 | ||||||||||||||||
Rental income | $ | 112,840 | $ | 108,047 | (a) | ||||||||||||
Expenses | |||||||||||||||||
Cost of operations | 34,114 | 33,218 | (b) | ||||||||||||||
Depreciation and amortization | 23,132 | 22,985 | |||||||||||||||
General and administrative | 11,324 | 4,382 | (c) | ||||||||||||||
Total operating expenses | 68,570 | 60,585 | |||||||||||||||
Interest and other income | 246 | 256 | (d) | ||||||||||||||
Interest and other expense | (330) | (211) | (e) | ||||||||||||||
Gain on sale of real estate facilities | 56,959 | — | |||||||||||||||
Net income | 101,145 | 47,507 | |||||||||||||||
Allocation to noncontrolling interests | (19,049) | (7,411) | |||||||||||||||
Net income allocable to PS Business Parks, Inc. | 82,096 | 40,096 | |||||||||||||||
Allocation to preferred stockholders | (9,580) | (12,046) | |||||||||||||||
Allocation to restricted stock unit holders | (523) | (164) | |||||||||||||||
Net income allocable to common stockholders | $ | 71,993 | $ | 27,886 | |||||||||||||
Net income per share of common stock | |||||||||||||||||
Basic | $ | 2.61 | $ | 1.01 | |||||||||||||
Diluted | $ | 2.60 | $ | 1.01 | |||||||||||||
Weighted average common stock outstanding | |||||||||||||||||
Basic | 27,607 | 27,495 | |||||||||||||||
Diluted | 27,691 | 27,594 | |||||||||||||||
EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION FOR REAL ESTATE (EBITDAre) (1) | |||||||||||||||||
Three Months Ended March 31, | |||||||||||||||||
2022 | 2021 | $ Change | |||||||||||||||
Net income | $ | 101,145 | $ | 47,507 | $ | 53,638 | |||||||||||
Net interest (income) expense | 283 | 132 | 151 | ||||||||||||||
Depreciation and amortization | 23,132 | 22,985 | 147 | ||||||||||||||
Gain on sale of real estate facilities and development rights | (56,959) | — | (56,959) | ||||||||||||||
EBITDAre | $ | 67,601 | $ | 70,624 | $ | (3,023) |
![]() | Non-GAAP FFO, Core FFO and FAD Reconciliations (unaudited and in thousands, except per share amounts) |
Three Months Ended | |||||||||||||||||||||||||||||
March 31, 2022 | December 31, 2021 | September 30, 2021 | June 30, 2021 | March 31, 2021 | |||||||||||||||||||||||||
Net income allocable to common stockholders | $ | 71,993 | $ | 267,390 | $ | 52,217 | $ | 45,595 | $ | 27,886 | |||||||||||||||||||
Adjustments | |||||||||||||||||||||||||||||
Gain on sale of real estate facilities | (56,959) | (310,758) | (29,924) | (19,193) | — | ||||||||||||||||||||||||
Depreciation and amortization | 23,132 | 24,130 | 23,857 | 22,514 | 22,985 | ||||||||||||||||||||||||
Net income allocable to noncontrolling interests | 19,049 | 70,915 | 13,850 | 12,094 | 7,411 | ||||||||||||||||||||||||
Net income allocable to restricted stock unit holders | 523 | 1,785 | 350 | 314 | 164 | ||||||||||||||||||||||||
FFO allocated to joint venture partner | (23) | (11) | (22) | (18) | (27) | ||||||||||||||||||||||||
FFO allocable to diluted common stock and units (1) | 57,715 | 53,451 | 60,328 | 61,306 | 58,419 | ||||||||||||||||||||||||
CEO cash payment for RSUs net of reversal of stock compensation | 6,108 | — | — | — | — | ||||||||||||||||||||||||
Preferred securities redemption charge | — | 6,434 | — | — | — | ||||||||||||||||||||||||
Income tax expense | — | 3,600 | — | — | — | ||||||||||||||||||||||||
Maryland reincorporation costs | — | — | — | 510 | — | ||||||||||||||||||||||||
Core FFO allocable to diluted common stock and units (1) | $ | 63,823 | $ | 63,485 | $ | 60,328 | $ | 61,816 | $ | 58,419 | |||||||||||||||||||
FAD | |||||||||||||||||||||||||||||
FFO allocable to diluted common stock and units (1) | $ | 57,715 | $ | 53,451 | $ | 60,328 | $ | 61,306 | $ | 58,419 | |||||||||||||||||||
Adjustments: | |||||||||||||||||||||||||||||
Recurring capital improvements | (2,010) | (3,233) | (3,837) | (3,701) | (565) | ||||||||||||||||||||||||
Tenant improvements | (3,027) | (3,462) | (3,876) | (3,918) | (2,422) | ||||||||||||||||||||||||
Capitalized lease commissions | (1,304) | (3,274) | (1,995) | (1,439) | (1,784) | ||||||||||||||||||||||||
Total recurring capital expenditures for assets sold or held for sale | (8) | (117) | (471) | (394) | (634) | ||||||||||||||||||||||||
Total multifamily capital expenditures | — | (6) | — | (7) | — | ||||||||||||||||||||||||
Cash paid for taxes in lieu of stock upon vesting of restricted stock units | (931) | (260) | (478) | (5) | (3,197) | ||||||||||||||||||||||||
Preferred securities redemption charge | — | 6,434 | — | — | — | ||||||||||||||||||||||||
Non-cash rental income (2) | (1,157) | (857) | (453) | (183) | (1,307) | ||||||||||||||||||||||||
Non-cash stock compensation expense | 940 | 2,073 | 2,341 | 2,301 | 1,780 | ||||||||||||||||||||||||
FAD allocable to diluted common stock and units (1) | $ | 50,218 | $ | 50,749 | $ | 51,559 | $ | 53,960 | $ | 50,290 | |||||||||||||||||||
Non-recurring property renovations (1) | (1,511) | (1,686) | (176) | (432) | (411) | ||||||||||||||||||||||||
Investment in multifamily development | (12,455) | (12,903) | (13,516) | (7,539) | (9,485) | ||||||||||||||||||||||||
Investment in industrial development | (3,796) | (1,223) | (165) | (93) | (1,123) | ||||||||||||||||||||||||
Total non-recurring capital expenditures | $ | (17,762) | $ | (15,812) | $ | (13,857) | $ | (8,064) | $ | (11,019) | |||||||||||||||||||
Free cash available after non-recurring capital expenditures | $ | 32,456 | $ | 34,937 | $ | 37,702 | $ | 45,896 | $ | 39,271 | |||||||||||||||||||
Total Distributions | $ | (36,892) | $ | (36,833) | $ | (36,793) | $ | (36,813) | $ | (36,724) | |||||||||||||||||||
Retained cash (1) | $ | (4,436) | $ | (1,896) | $ | 909 | $ | 9,083 | $ | 2,547 | |||||||||||||||||||
Weighted average outstanding | |||||||||||||||||||||||||||||
Common stock | 27,607 | 27,565 | 27,543 | 27,531 | 27,495 | ||||||||||||||||||||||||
Operating partnership units | 7,305 | 7,305 | 7,305 | 7,305 | 7,305 | ||||||||||||||||||||||||
Restricted stock units | 45 | 46 | 33 | 32 | 47 | ||||||||||||||||||||||||
Common stock equivalents | 84 | 106 | 92 | 101 | 99 | ||||||||||||||||||||||||
Total diluted common stock and units | 35,041 | 35,022 | 34,973 | 34,969 | 34,946 | ||||||||||||||||||||||||
FFO per share | $ | 1.65 | $ | 1.53 | $ | 1.72 | $ | 1.75 | $ | 1.67 | |||||||||||||||||||
Core FFO per share | $ | 1.82 | $ | 1.81 | $ | 1.72 | $ | 1.77 | $ | 1.67 | |||||||||||||||||||
FAD distribution payout ratio (3) (4) | 73.5 | % | 72.6 | % | 71.4 | % | 68.2 | % | 73.0 | % | |||||||||||||||||||
![]() | Non-GAAP FFO, Core FFO and FAD Reconciliations (cont'd) (unaudited and in thousands, except per share amounts) |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Net income allocable to common stockholders | $ | 71,993 | $ | 27,886 | |||||||
Adjustments | |||||||||||
Gain on sale of real estate facilities | (56,959) | — | |||||||||
Depreciation and amortization | 23,132 | 22,985 | |||||||||
Net income allocable to noncontrolling interests | 19,049 | 7,411 | |||||||||
Net income allocable to restricted stock unit holders | 523 | 164 | |||||||||
FFO allocated to joint venture partner | (23) | (27) | |||||||||
FFO allocable to diluted common stock and units (1) | 57,715 | 58,419 | |||||||||
CEO cash payment for RSUs net of reversal of stock compensation | 6,108 | — | |||||||||
Core FFO allocable to diluted common stock and units (1) | $ | 63,823 | $ | 58,419 | |||||||
FAD | |||||||||||
FFO allocable to diluted common stock and units (1) | $ | 57,715 | $ | 58,419 | |||||||
Adjustments: | |||||||||||
Recurring capital improvements | (2,010) | (565) | |||||||||
Tenant improvements | (3,027) | (2,422) | |||||||||
Capitalized lease commissions | (1,304) | (1,784) | |||||||||
Total recurring capital expenditures for assets sold or held for sale | (8) | (634) | |||||||||
Cash paid for taxes in lieu of stock upon vesting of restricted stock units | (931) | (3,197) | |||||||||
Non-cash rental income (2) | (1,157) | (1,307) | |||||||||
Non-cash stock compensation expense | 940 | 1,780 | |||||||||
FAD allocable to diluted common stock and units (1) | $ | 50,218 | $ | 50,290 | |||||||
Non-recurring capital expenditures | |||||||||||
Non-recurring property renovations (1) | (1,511) | (411) | |||||||||
Investment in multifamily development | (12,455) | (9,485) | |||||||||
Investment in industrial development | (3,796) | (1,123) | |||||||||
Total non-recurring capital expenditures | $ | (17,762) | $ | (11,019) | |||||||
Free cash available after non-recurring capital expenditures | $ | 32,456 | $ | 39,271 | |||||||
Distributions | |||||||||||
Distributions to common stockholders | $ | (29,010) | $ | (28,872) | |||||||
Distributions to noncontrolling interests - common units | (7,671) | (7,671) | |||||||||
Distributions to restricted stock unit holders | (188) | (164) | |||||||||
Distributions to noncontrolling interests - joint venture | (23) | (17) | |||||||||
Total Distributions | (36,892) | (36,724) | |||||||||
Retained cash (1) | (4,436) | 2,547 |
![]() | Non-GAAP FFO, Core FFO and FAD Reconciliations (cont'd) (unaudited and in thousands, except per share amounts) |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Weighted average outstanding | |||||||||||
Common stock | 27,607 | 27,495 | |||||||||
Operating partnership units | 7,305 | 7,305 | |||||||||
Restricted stock units | 45 | 47 | |||||||||
Common stock equivalents | 84 | 99 | |||||||||
Total diluted common stock and units | 35,041 | 34,946 | |||||||||
FFO per share | $ | 1.65 | $ | 1.67 | |||||||
Core FFO per share | $ | 1.82 | $ | 1.67 | |||||||
FAD distribution payout ratio (3) (4) | 73.5 | % | 73.0 | % |
(1) | Refer to page 29, Definitions and Non-GAAP Disclosures, for the definition of FFO, Core FFO, FAD, Non-Recurring Property Renovations and Retained Cash. | ||||
(2) | Non-cash rental income includes amortization of deferred rent receivable (net of write-offs), in-place lease intangible, tenant improvement reimbursements, and lease incentives. | ||||
(3) | FAD distribution payout ratio is equal to total distributions to common stockholders, unit holders, restricted stock unit holders and our joint venture partner divided by FAD during the same reporting period. | ||||
(4) | For the three months ended December 31, 2021, the FAD distribution ratio excludes of $4.60 special dividend distributions to common stockholders, noncontrolling interest, and restricted stock unit holders. |
![]() | NOI and Cash NOI (unaudited, in thousands) |
NET OPERATING INCOME | CASH NET OPERATING INCOME (2) | |||||||||||||||||||||||||||||||||||||
Three Months Ended March 31, | Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||||
2022 | 2021 | % Change | 2022 | 2021 | % Change | |||||||||||||||||||||||||||||||||
Rental income | ||||||||||||||||||||||||||||||||||||||
Same Park (1) (3) (4) (5) | $ | 105,014 | $ | 98,012 | 7.1% | $ | 104,096 | $ | 96,638 | 7.7% | ||||||||||||||||||||||||||||
Non-Same Park (1) | 3,348 | 1,246 | 168.7% | 3,074 | 1,270 | 142.0% | ||||||||||||||||||||||||||||||||
Multifamily | 2,369 | 2,327 | 1.8% | 2,369 | 2,327 | 1.8% | ||||||||||||||||||||||||||||||||
Assets sold or held for sale | 2,109 | 6,462 | (67.4)% | 2,144 | 6,505 | (67.0)% | ||||||||||||||||||||||||||||||||
Total rental income | 112,840 | 108,047 | 4.4% | 111,683 | 106,740 | 4.6% | ||||||||||||||||||||||||||||||||
Cost of operations (1) (6) | ||||||||||||||||||||||||||||||||||||||
Same Park (1) | 30,900 | 29,175 | 5.9% | 30,404 | 28,754 | 5.7% | ||||||||||||||||||||||||||||||||
Non-Same Park (1) | 1,060 | 422 | 151.2% | 1,035 | 417 | 148.2% | ||||||||||||||||||||||||||||||||
Multifamily | 1,224 | 1,067 | 14.7% | 1,224 | 1,067 | 14.7% | ||||||||||||||||||||||||||||||||
Assets sold or held for sale | 930 | 2,554 | (63.6)% | 915 | 2,524 | (63.7)% | ||||||||||||||||||||||||||||||||
Total cost of operations | 34,114 | 33,218 | 2.7% | 33,578 | 32,762 | 2.5% | ||||||||||||||||||||||||||||||||
Net operating income | ||||||||||||||||||||||||||||||||||||||
Same Park (1) | 74,114 | 68,837 | 7.7% | 73,692 | 67,884 | 8.6% | ||||||||||||||||||||||||||||||||
Non-Same Park (1) | 2,288 | 824 | 177.7% | 2,039 | 853 | 139.0% | ||||||||||||||||||||||||||||||||
Multifamily | 1,145 | 1,260 | (9.1)% | 1,145 | 1,260 | (9.1)% | ||||||||||||||||||||||||||||||||
Assets sold or held for sale | 1,179 | 3,908 | (69.8)% | 1,229 | 3,981 | (69.1)% | ||||||||||||||||||||||||||||||||
Total net operating income | $ | 78,726 | $ | 74,829 | 5.2% | $ | 78,105 | $ | 73,978 | 5.6% |
![]() | Same Park Cash NOI by Region and Type (1) (in thousands) |
Three Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
March 31, 2022 | March 31, 2021 | Period Change by Product Type | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Industrial | Flex | Office | Total | Industrial | Flex | Office | Total | Industrial | Flex | Office | % Change | |||||||||||||||||||||||||||||||||||||||||||||||||||
Cash NOI (1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Northern California | $ | 20,195 | $ | 2,156 | $ | 1,540 | $ | 23,891 | $ | 17,448 | $ | 1,982 | $ | 1,863 | $ | 21,293 | 15.7% | 8.8% | (17.3)% | 12.2% | ||||||||||||||||||||||||||||||||||||||||||
Southern California | 9,220 | 2,404 | 119 | 11,743 | 7,750 | 2,372 | 117 | 10,239 | 19.0% | 1.3% | 1.7% | 14.7% | ||||||||||||||||||||||||||||||||||||||||||||||||||
Dallas | 2,277 | 1,377 | n/a | 3,654 | 1,963 | 1,160 | n/a | 3,123 | 16.0% | 18.7% | n/a | 17.0% | ||||||||||||||||||||||||||||||||||||||||||||||||||
Austin | 1,494 | 3,835 | n/a | 5,329 | 1,406 | 4,012 | n/a | 5,418 | 6.3% | (4.4)% | n/a | (1.6)% | ||||||||||||||||||||||||||||||||||||||||||||||||||
Northern Virginia | 3,771 | 3,562 | 5,199 | 12,532 | 3,416 | 3,631 | 5,398 | 12,445 | 10.4% | (1.9)% | (3.7)% | 0.7% | ||||||||||||||||||||||||||||||||||||||||||||||||||
South Florida | 9,197 | 444 | 8 | 9,649 | 8,233 | 347 | 22 | 8,602 | 11.7% | 28.0% | (63.6)% | 12.2% | ||||||||||||||||||||||||||||||||||||||||||||||||||
Seattle | 2,436 | 1,283 | 74 | 3,793 | 2,219 | 1,344 | 65 | 3,628 | 9.8% | (4.5)% | 13.8% | 4.5% | ||||||||||||||||||||||||||||||||||||||||||||||||||
Suburban Maryland | 830 | n/a | 2,271 | 3,101 | 788 | n/a | 2,348 | 3,136 | 5.3% | n/a | (3.3)% | (1.1)% | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 49,420 | $ | 15,061 | $ | 9,211 | $ | 73,692 | $ | 43,223 | $ | 14,848 | $ | 9,813 | $ | 67,884 | 14.3% | 1.4% | (6.1)% | 8.6% | ||||||||||||||||||||||||||||||||||||||||||
Percentage by Product Type | 67.1 | % | 20.4 | % | 12.5 | % | 100.0 | % | 63.7 | % | 21.9 | % | 14.4 | % | 100.0 | % |
![]() | Capitalization Summary (unaudited and in thousands, except share and per share data) |
As of March 31, 2022 | As of December 31, 2021 | ||||||||||||||||||||||||||||||||||
Total | % Total Market Capitalization | Wtd Avg Rate | Total | % Total Market Capitalization | Wtd Avg Rate | ||||||||||||||||||||||||||||||
Common Stock: | |||||||||||||||||||||||||||||||||||
Common stock, $0.01 par value, 100,000,000 shares authorized, 27,627,443 and 27,589,807 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively | $ | 4,643,621 | 70.1% | $ | 5,081,215 | 70.7% | |||||||||||||||||||||||||||||
Common operating partnership units (7,305,355 units outstanding as of March 31, 2022 and December 31, 2021, respectively) (1) | 1,227,884 | 18.5% | 1,345,427 | 18.7% | |||||||||||||||||||||||||||||||
Total common equity and operating partnership units (1) | $ | 5,871,505 | 88.6% | $ | 6,426,642 | 89.4% | |||||||||||||||||||||||||||||
Preferred Equity: | |||||||||||||||||||||||||||||||||||
5.250% Series X preferred stock (9,200,000 depository shares outstanding) callable 9/21/22 | 230,000 | 3.5% | 230,000 | 3.2% | |||||||||||||||||||||||||||||||
5.200% Series Y preferred stock (8,000,000 depository shares outstanding) callable 12/7/22 | 200,000 | 3.0% | 200,000 | 2.8% | |||||||||||||||||||||||||||||||
4.875% Series Z preferred stock (13,000,000 depository shares outstanding) callable 11/4/24 | 325,000 | 4.9% | 325,000 | 4.5% | |||||||||||||||||||||||||||||||
Total preferred equity | $ | 755,000 | 11.4% | 5.08% | $ | 755,000 | 10.5% | 5.08% | |||||||||||||||||||||||||||
Unsecured Debt: | |||||||||||||||||||||||||||||||||||
Credit facility borrowing ($400.0 million at LIBOR + 0.70%) | $ | 20,000 | 0.3% | 0.82% | 32,000 | 0.4% | 0.80% | ||||||||||||||||||||||||||||
Unrestricted cash (2) | (20,000) | (0.3)% | (27,074) | (0.4)% | |||||||||||||||||||||||||||||||
Net debt | $ | — | 0.0% | $4,926 | 0.1% | ||||||||||||||||||||||||||||||
Total net debt and preferred equity | $ | 755,000 | 11.4% | 4.97% | $759,926 | 10.6% | 4.90% | ||||||||||||||||||||||||||||
Total implied market capitalization | $ | 6,626,505 | 100.0% | $7,186,568 | 100.0% | ||||||||||||||||||||||||||||||
Interest expense and related expenses (annualized) (3) (4) | $ | 1,144 | $ | 1,000 | |||||||||||||||||||||||||||||||
Preferred distributions (annualized) (5) | 38,320 | 41,940 | |||||||||||||||||||||||||||||||||
Total fixed charges and preferred distributions (annualized) | $ | 39,464 | $ | 42,940 | |||||||||||||||||||||||||||||||
Ratio of EBITDAre to fixed charges and preferred distributions (6) | 6.9x | 6.9x | |||||||||||||||||||||||||||||||||
Ratio of net debt and preferred equity to EBITDAre (7) | 2.8x | 2.6x |
![]() | Analysis of Capital Expenditures (unaudited and in thousands, except per square foot data) |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
Commercial Recurring Capital Expenditures (1) | |||||||||||
Same Park | |||||||||||
Capital improvements | $ | 1,979 | $ | 559 | |||||||
Tenant improvements | 2,328 | 2,373 | |||||||||
Lease commissions | 1,065 | 1,755 | |||||||||
Total Same Park Recurring Capital Expenditures | $ | 5,372 | $ | 4,687 | |||||||
Same Park Recurring Capital Expenditures as a percentage of Cash NOI | 7.3% | 6.9% | |||||||||
Non-Same Park | |||||||||||
Capital improvements | 31 | 6 | |||||||||
Tenant improvements | 699 | 49 | |||||||||
Lease commissions | 239 | 29 | |||||||||
Total Non-Same Park Recurring Capital Expenditures | 969 | 84 | |||||||||
Non-Same Park Recurring Capital Expenditures as a percentage of Cash NOI | 47.5% | 9.8% | |||||||||
Total Recurring Capital Expenditures | 6,341 | 4,771 | |||||||||
Total Recurring Capital Expenditures as a percentage of Cash NOI | 8.4% | 6.9% | |||||||||
Assets sold or held for sale Recurring Capital Expenditures | 8 | 634 | |||||||||
Total commercial Recurring Capital Expenditures | 6,349 | 5,405 | |||||||||
Total Commercial Recurring Capital Expenditures as a percentage of Cash NOI | 8.2% | 7.4% | |||||||||
Non-recurring Property Renovations (1) | 1,511 | 411 | |||||||||
Total capital expenditures (excluding multifamily) | 7,860 | 5,816 | |||||||||
Total capital expenditures | $ | 7,860 | $ | 5,816 | |||||||
Development costs (2) | $ | 16,251 | $ | 10,608 |
![]() | Portfolio Summary (unaudited) |
PROPERTY INFORMATION | |||||||||||||||||
Three Months Ended March 31, | |||||||||||||||||
2022 | 2021 | % Change | |||||||||||||||
Total Portfolio (1) | |||||||||||||||||
Total square footage at period end | 27,010,000 | 26,151,000 | 3.3 | % | |||||||||||||
Weighted average occupancy | 95.5 | % | 93.2 | % | 2.3 | % | |||||||||||
Period end occupancy | 95.5 | % | 93.6 | % | 1.9 | % | |||||||||||
Cash rental income per occupied square foot (2) (3) | $ | 16.61 | $ | 16.11 | 3.1 | % | |||||||||||
Industrial | $ | 14.66 | $ | 13.84 | 5.9 | % | |||||||||||
Flex | $ | 20.21 | $ | 19.87 | 1.7 | % | |||||||||||
Office | $ | 24.88 | $ | 25.05 | (0.7) | % | |||||||||||
Same Park Portfolio (2) | |||||||||||||||||
Total square footage at period end | 25,749,000 | 25,749,000 | — | ||||||||||||||
Weighted average occupancy | 96.0 | % | 93.3 | % | 2.7 | % | |||||||||||
Period end occupancy | 95.9 | % | 93.8 | % | 2.1 | % | |||||||||||
Cash rental income per occupied square foot (2) (4) | $ | 16.84 | $ | 16.10 | 4.6 | % | |||||||||||
Industrial | $ | 14.87 | $ | 13.79 | 7.8 | % | |||||||||||
Flex | $ | 20.21 | $ | 19.87 | 1.7 | % | |||||||||||
Office | $ | 24.88 | $ | 25.05 | (0.7) | % | |||||||||||
Non-Same Park Portfolio (2) | |||||||||||||||||
Total square footage at period end | 1,261,000 | 402,000 | 213.7 | % | |||||||||||||
Weighted average occupancy | 86.4 | % | 86.7 | % | (0.3) | % | |||||||||||
Period end occupancy | 86.3 | % | 77.8 | % | 8.5 | % | |||||||||||
Cash rental income per occupied square foot (2) (5) | $ | 11.25 | $ | 16.83 | (33.2) | % | |||||||||||
Industrial | $ | 11.25 | $ | 16.83 | (33.2) | % | |||||||||||
Multifamily Portfolio | |||||||||||||||||
Number of units | 395 | 395 | — | ||||||||||||||
Weighted average occupancy | 95.0 | % | 94.2 | % | 0.8 | % | |||||||||||
Period end occupancy | 96.9 | % | 93.6 | % | 3.3 | % | |||||||||||
Average rent per unit (6) | $ | 2,123 | $ | 2,021 | 5.0 | % |
![]() | Total Portfolio Overview by Markets and Product Type (unaudited, in thousands) |
Square Footage of Properties by Product Type as of March 31, 2022 | |||||||||||||||||||||||||||||
Markets | Industrial | Flex | Office | Total | % of Total | ||||||||||||||||||||||||
Northern California | 6,391 | 593 | 340 | 7,324 | 27.1 | % | |||||||||||||||||||||||
Southern California | 2,989 | 582 | 31 | 3,602 | 13.3 | % | |||||||||||||||||||||||
Dallas | 2,242 | 793 | n/a | 3,035 | 11.3 | % | |||||||||||||||||||||||
Austin | 755 | 1,208 | n/a | 1,963 | 7.3 | % | |||||||||||||||||||||||
Northern Virginia | 1,810 | 1,242 | 1,726 | 4,778 | 17.7 | % | |||||||||||||||||||||||
South Florida | 3,728 | 126 | 12 | 3,866 | 14.3 | % | |||||||||||||||||||||||
Seattle | 1,052 | 270 | 28 | 1,350 | 5.0 | % | |||||||||||||||||||||||
Suburban Maryland | 341 | n/a | 751 | 1,092 | 4.0 | % | |||||||||||||||||||||||
Total | 19,308 | 4,814 | 2,888 | 27,010 | 100.0 | % | |||||||||||||||||||||||
Percentage by Product Type | 71.5 | % | 17.8 | % | 10.7 | % | 100.0 | % |
Weighted Average Occupancy Rates by Product Type for the Three Months Ended March 31, 2022 | |||||||||||||||||||||||
Markets | Industrial | Flex | Office | Total | |||||||||||||||||||
Northern California | 99.2% | 95.1% | 71.1% | 97.6% | |||||||||||||||||||
Southern California | 98.3% | 95.0% | 93.0% | 97.8% | |||||||||||||||||||
Dallas | 94.9% | 92.5% | n/a | 94.3% | |||||||||||||||||||
Austin | 99.8% | 90.7% | n/a | 94.2% | |||||||||||||||||||
Northern Virginia | 91.2% | 95.8% | 87.2% | 91.0% | |||||||||||||||||||
South Florida | 98.0% | 97.0% | 100.0% | 98.0% | |||||||||||||||||||
Seattle | 97.5% | 90.6% | 65.0% | 95.4% | |||||||||||||||||||
Suburban Maryland | 100.0% | n/a | 88.6% | 92.1% | |||||||||||||||||||
Percentage by Product Type | 97.5% | 93.5% | 85.6% | 95.5% |
![]() | Same Park Overview by Markets and Product Type (unaudited, in thousands) |
Square Footage of Same Park Properties by Product Type as of March 31, 2022 | |||||||||||||||||||||||||||||
Markets | Industrial | Flex | Office | Total | % of Total | ||||||||||||||||||||||||
Northern California | 6,391 | 593 | 340 | 7,324 | 28.5 | % | |||||||||||||||||||||||
Southern California | 2,916 | 582 | 31 | 3,529 | 13.7 | % | |||||||||||||||||||||||
Dallas | 1,300 | 793 | n/a | 2,093 | 8.1 | % | |||||||||||||||||||||||
Austin | 755 | 1,208 | n/a | 1,963 | 7.6 | % | |||||||||||||||||||||||
Northern Virginia | 1,564 | 1,242 | 1,726 | 4,532 | 17.6 | % | |||||||||||||||||||||||
South Florida | 3,728 | 126 | 12 | 3,866 | 15.0 | % | |||||||||||||||||||||||
Seattle | 1,052 | 270 | 28 | 1,350 | 5.3 | % | |||||||||||||||||||||||
Suburban Maryland | 341 | n/a | 751 | 1,092 | 4.2 | % | |||||||||||||||||||||||
Total | 18,047 | 4,814 | 2,888 | 25,749 | 100.0 | % | |||||||||||||||||||||||
Percentage by Product Type | 70.1 | % | 18.7 | % | 11.2 | % | 100.0 | % |
Same Park Weighted Average Occupancy Rates by Product Type for the Three Months Ended March 31, 2022 | |||||||||||||||||||||||
Markets | Industrial | Flex | Office | Total | |||||||||||||||||||
Northern California | 99.2% | 95.1% | 71.1% | 97.6% | |||||||||||||||||||
Southern California | 98.4% | 95.0% | 93.0% | 97.8% | |||||||||||||||||||
Dallas | 93.1% | 92.5% | n/a | 92.9% | |||||||||||||||||||
Austin | 99.8% | 90.7% | n/a | 94.2% | |||||||||||||||||||
Northern Virginia | 99.1% | 95.8% | 87.2% | 93.7% | |||||||||||||||||||
South Florida | 98.0% | 97.0% | 100.0% | 98.0% | |||||||||||||||||||
Seattle | 97.5% | 90.6% | 65.0% | 95.4% | |||||||||||||||||||
Suburban Maryland | 100.0% | n/a | 88.6% | 92.1% | |||||||||||||||||||
Percentage by Product Type | 98.3% | 93.5% | 85.6% | 96.0% |
![]() | Q1 2022 Production Statistics (unaudited) |
Total Portfolio Activity (1) | |||||||||||||||||||||||||||||||||||
Industrial | Leasing Volume | Customer Retention | Transaction Costs per Executed Foot | Transaction Costs as a % of Rents (2) | Cash Rental Rate Change (2) | GAAP Rent Change (2) | |||||||||||||||||||||||||||||
Northern California | 226,000 | 81.0% | $ | 2.01 | 3.7% | 14.5% | 29.6% | ||||||||||||||||||||||||||||
Southern California | 247,000 | 81.3% | 1.94 | 4.3% | 12.1% | 23.4% | |||||||||||||||||||||||||||||
Dallas | 158,000 | 52.3% | 3.20 | 9.4% | 14.0% | 21.1% | |||||||||||||||||||||||||||||
Austin | 28,000 | 0.0% | 3.19 | 7.3% | 19.9% | 47.7% | |||||||||||||||||||||||||||||
Northern Virginia | 192,000 | 97.4% | 4.54 | 7.6% | 6.7% | 17.9% | |||||||||||||||||||||||||||||
South Florida | 299,000 | 66.2% | 1.36 | 2.7% | 25.1% |