Forest City Realty Trust — Investor Presentation (May 2018)
38 slides from Forest City Realty Trust's investor presentation, May 4, 2018
Slide 1: Investor Presentation May 2018
Exhibit 99.1 Investor Presentation May 2018
Slide 2: Disclosure Information
Disclosure Information INFORMATION RELATED TO FORWARD-LOOKING STATEMENTS Statements made in this presentation that state the Company’s or management's intentions, hopes, beliefs, expectations or predictions of the future are forward-looking statements. It is important to note that the Company's futu
Slide 3: Table of Contents
Table of Contents Section Page # 1 Our Company 1 2 Near-Term Priorities and Long-Term Strategy 5 3 Our Portfolio 7 4 Growth Opportunity - Development 13 5 Capital Structure Overview 19 6 ESG 21 A Appendix: Additional Financial Information 22
Slide 4: Value Proposition
1 Value Proposition High-quality assets concentrated in core, urban markets with strong growth profiles and operated by an experienced, proven management team • Premier assets in core, high-barrier-to-entry urban markets • Scale and focus within core markets; top 10 assets comprise ~60% of NOI(1) •
Slide 5: Guiding Principles
1 Guiding Principles Focused Placemaking Sustainable Growth Exceptional Performance • Premier national portfolio of • Operate within well-defined • Streamlined operations for high-quality office and capital allocation parameters “best-in-class” performance multifamily assets • Tailored capital struc
Slide 6: Focus on Continued Execution
1 Focus on Continued Execution Key Factors As of 2011 Today Target Apartment Office FAH Retail Core Asset Apartment Office Mixed-Use Focus Military Hotels Housing Retail Apartment Office Land Team / Arena Non-Core (1) (1) (2) Markets 82.2% NOI from 9 Markets 90.4% NOI from 9 Markets >90.0% NOI from
Slide 7: Recent Steps & Accomplishments
1 Recent Steps & Accomplishments… Management and the Board have a proven track record of achieving their stated goals and are focused on continuing successful execution of the Company’s strategy - Narrowing focus to two property types, apartment and office, from eight in 2011 - Pending disposition o
Slide 8: Near-Term Strategic Priorities
2 Near-Term Strategic Priorities Forest City has identified six key near-term strategic priorities intended to simplify & focus the portfolio, increase cash flow and drive stockholder returns Objective Near-Term Impact Reduces retail exposure, with ~92% of pro forma NOI from 1 Execute Sale of Retail
Slide 9: Long-Term Strategy
2 Long-Term Strategy Portfolio Optimization ▪ Focus investing in top tier core markets (inventory of opportunity: NYC, D.C., San Francisco and Denver) ▪ Deliver ongoing “power of place” developments into stabilized core portfolio ▪ Continue to evaluate the merit of the long-term ownership of non-cor
Slide 10: Portfolio Composition
3 Portfolio Composition(1) (2) Total Operating Portfolio Office (% of Total NOI) Office Manhattan 54% 11% Brooklyn 18% ~$286MM ~$535MM NOI Cambridge Life Science NOI 16% Retail 40 LANDSDOWNE ST | CAMBRIDGE, MA 8% Other Apartment Office 38% 5% Other Life Science 5% Apartment (% of Total NOI)(3) Core
Slide 11: Top Ten Assets
4 Top Ten Assets Pro forma for pending retail portfolio dispositions, Forest City’s portfolio is concentrated in a select number of high-quality assets with the top ten assets comprising >60% of total NOI 7 5 10 8 1 Bayside Village Stapleton 8 Spruce Street Johns Hopkins University Park Portfolio #
Slide 12: Office Segment Overview
3 Office Segment Overview 30 properties encompassing 8.1MM SF primarily located in core-urban markets ▪ 17 traditional office properties (6.1MM SF) and 13 life science properties (2.0MM SF) Top Office Assets (% of NOI) Key Office Stats New Life GLA Rent % Office York Science Other Property Location
Slide 13: Apartment Segment Overview
3 Apartment Segment Overview 72 total properties; 24,393 total leasable units (16,916 at Company share)(1) >75% of apartment NOI comes from core assets (1) Top Apartment Assets (% of NOI)(1) Key Apartment Stats Core Non-Core Rent / Unit Economic Property Location Units (2) Occupancy % Apt. NOI Rent
Slide 14: Office NOI Margins
3 Office NOI Margins Our New York and Life Science assets have adjusted property margins in line with top-quartile performing peers New York (54% of Office NOI) Life Science (36% of Office NOI) $151MM NOI $101MM NOI 4.5MM GLA 2.0MM GLA 5.7% 74.2% 2.3% 60.6% 68.5% 58.3% Margin % Less Ground Margin %
Slide 15: Apartment NOI Margins
3 Apartment NOI Margins Our apartment portfolio has adjusted property margins which are generally in line with peers operating in the respective markets Core Markets (76% of Apartment NOI)(1) Non-Core (24% of Apartment NOI)(2) $140MM NOI $44MM NOI 9,063 Units 7,853 Units 1.6% 64.1% 3.1% 4.1% 1.3% 51
Slide 16: Summary of Potential Growth
4 Summary of Potential Growth Robust growth pipeline of ~$191MM of projects currently under construction and a development pipeline of ~20MM entitled SF in core markets Near-Term Growth(1) Long-Term Growth(2) By Year Square Feet Name Location $MM(4) Office Apt. Retail Other Total Net Cost NOI Range
Slide 17: The Yards | Washington, D.C.
4 THE YARDS | Washington, D.C. The Yards is a fully entitled, 53-acre mixed-use project, located in the neighborhood of the Washington Nationals baseball park in the Capitol Riverfront District. At full build-out, the project is expected to include up to 3,000 residential units, 1.8 million square f
Slide 18: Stapleton | Denver, CO
4 STAPLETON | Denver, CO Stapleton, a 90% owned entity, represents one of the nation’s largest urban redevelopments. At full build-out of 4,700 acres or 7.5 square miles, Stapleton is planned for more than 14,000 homes and apartments, 3 million square feet of retail and 10 million square feet of off
Slide 19: Pier 70 | San Francisco, CA
4 PIER 70 | San Francisco, CA Pier 70 is a former shipyard on San Francisco’s eastern waterfront. Our master site agreement and partnership with the Port Authority of 28 acres is a mixed-use project, which is expected to include 3.2 million total square feet, consisting of 900,000 to 1.75 million sq
Slide 20: 5M | San Francisco, CA
4 5M | San Francisco, CA 5M is a fully entitled, mixed-use project in downtown San Francisco. The project is comprised of an office building of approximately 633,000 square feet and an apartment building with approximately 295 residential units. 5M would create significant new open spaces for the ne
Slide 21: Hudson Exchange | Jersey City, NJ
4 HUDSON EXCHANGE | Jersey City, NJ Hudson Exchange is a partnership with G&S Investors, the owner of an 18-acre parcel of land, three miles from downtown Manhattan in the waterfront section of Jersey City. At full build-out, the project is expected to include up to 5,400 apartment units in twelve t
Slide 22: Capital Structure Overview
5 Capital Structure Overview Capitalization(1) Capitalization (%)(1)(2) (dollars in thousands) Consolidated Company's Share Secured Debt Secured Debt $ Amt Rate $ Amt Rate Key 53.2% Fixed-rate Mortgage Debt $ 1,751.9 4.24% $ 3,246.0 4.24% Variable-rate Mortgage Debt 564.3 4.09% 658.3 4.61% Common Eq
Slide 23: Illustrative Deleveraging Plan
5 Illustrative Deleveraging Plan Leverage target of ~6.5x by year-end 2018 as the Company continues its focus on enhancing the balance sheet profile and builds equity in stabilized assets 13.1x 10.7x 9.5x 8.4x 7.4x ~6.5x YE 2011 YE 2014 YE 2015 YE 2016 YE 2017 YE 2019 Run Rate Key Drivers of KeyFurt
Slide 24: Environmental, Social, Governance
6 Environmental, Social, Governance Forest City develops and manages thriving places that address both the environmental and social needs of our core markets. Awards & Recognition th 89 MSCI percentile “A” rd rating for ESG Green Star 3 overall ESG performance consecutive year on Sustainalytics Envi
Slide 25: Appendix
Appendix THE NEW YORK TIMES BUILDING | NEW YORK, NY
Slide 26: Development Detail
A Development Detail Property Expected Cost Anticipated Project Name Type Ownership(2) Units / SF(3) Cost Incurred(MM)(3) (MM)(3) Stabilization 2017/2018 Phased Openings Axis (1) Apartment 30% 391 49.6 41.8 Q1 2019 Mint Town Center (1) Apartment 88% 399 77.4 82.7 Q2 2019 Projects Under Construction
Slide 27: The Yards - Site Plan
A The Yards - Site Plan At full build-out, The Yards is expected to include up to 3,000 residential units, 1.8MM SF of office space and approximately 500k SF of retail and dining space - 23 -
Slide 28: Summary of Retail Transaction
A Summary of Retail Transaction QIC Madison(1) Forest City Tranche One: completed 4/4/18 Atlantic Center Westfield San Francisco Centre Mall at Robinson Atlantic Terminal Ballston Quarter (redevelopment) Shops at Wiregrass Castle Center East River Plaza Westchester’s Ridge Hill Columbia Park Center
Slide 29: Retail Portfolio Focus & Simplification
A Retail Portfolio Focus & Simplification Existing Partnership Assets Future Ownership Madison JV - NY Retail University Park University Park 1 42nd Street 51.0% 14 300 Massachusetts Ave 50.0% 1 300 Massachusetts Ave ~100% 2 Atlantic Center 51.0% 15 350 Massachusetts Ave 50.0% 2 350 Massachusetts Av
Slide 30: NAV Components
A NAV Components (as of March 31, 2018) Completed Rental Properties - Operations Q1 2018 Net Stabilized Stabilized Annualized Nonrecourse (Dollars in millions) NOI (1) Adjustments (2) NOI Stabilized NOI Debt, net (3) Operations A B =A+B Office Real Estate Life Science Cambridge $ 19.2 $ 1.8 $ 21.0 $
Slide 31: NAV Components
A NAV Components (as of March 31, 2018) (Dollars in millions at company's share) Nonrecourse Development Book Value (3) Debt, net (4) Projects under construction (6) $ 144.1 $ (48.0) Projects under development $ 287.8 $ (166.6) Land inventory: Stapleton $ 51.4 $ — Commercial Outlots $ 2.4 $ — Other
Slide 32: NAV Components - Implied Cap Rate
A NAV Components - Implied Cap Rate NAV Components as of 3/31/2018 Share Price as of May 1, 2018 A $ 20.29 Shares Outstanding B 273.1 Market Capitalization A x B= C $ 5,541.2 Net Book Value of Development Pipeline $ 271.1 Net Book Value of Other Tangible Assets 1,602.0 Net Book Value of Recourse Deb
Slide 33: NAV Components - Footnotes
A NAV Components-Footnotes(as of March 31, 2018) 1) Q1 2018 Earnings Before Income Taxes reconciled to NOI for the three months ended March 31, 2018 in the Supplemental Operating Information section of the supplemental package, furnished to the SEC on form 8-K on May 3, 2018. Total NOI is reconciled
Slide 34: NAV Components - Footnotes
A NAV Components-Footnotes(as of March 31, 2018) 3) Amounts represent the company’s share of each respective balance sheet line item as of March 31, 2018 and may be calculated using the financial information contained in the Appendix of this of the supplemental package, furnished to the SEC on form
Slide 35: Definitions of non-GAAP measures
A Definitions of non-GAAP measures EBITDAre EBITDAre, a non-GAAP measure, is defined by NAREIT as net earnings (loss), excluding the following items: i) depreciation and amortization; ii) interest expense; iii) income tax expense (benefit); iv) impairment of depreciable real estate; and v) gains and
Slide 36: Definitions of non-GAAP measures
A Definitions of non-GAAP measures NOI NOI, a non-GAAP measure, reflects our share of the core operations of our rental real estate portfolio, prior to any financing activity. NOI is defined as revenues less operating expenses at our ownership within our Office, Apartments, Retail, and Development s
Slide 37: Reconciliation of non-GAAP measures
A Reconciliation of non-GAAP measures Reconciliation of Earnings (Loss) Before Income Taxes (GAAP) to Net Operating Income (non-GAAP) (in thousands) Three Months Ended Year Ended March 31, December 31, 2018 2017 Earnings (loss) before income taxes (GAAP) $ 197,278 $ 144,890 (Earnings) loss from unco
Slide 38: Reconciliation of non-GAAP measures (cont'd)
A Reconciliation of non-GAAP measures (cont’d) Three Months Ended Year Ended March 31, December 31, 2018 2017 Net earnings attributable to Forest City Realty Trust, Inc. (GAAP) $ 199,747 $ 206,030 Depreciation and amortization 70,421 313,385 Interest expense (1) 43,118 198,777 Amortization of mortga
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