New York REIT — Merger or Acquisition (May 2016)
52 slides from New York REIT's merger presentation, May 25, 2016
Slide 1: Disclaimer: Cautionary Note Regarding Forward-Looking Statements
D i s c l a i m e r C a u t i o n a r y N o t e R e g a r d i n g F o r w a r d - L o o k i n g S t a t e m e n t s The s ta tements i n this document tha t a re not hi storical facts may be forward -looking s tatements . These forward-looking s ta tements i nvolve s ubstantial risks a nd uncertaint
Slide 2: Disclaimer (Cont'd)
D i s c l a i m e r( C o n t ’ d ) A d d i t i o n a l I n f o r m a t i o n A b o u t t h e P r o p o s e d T r a n s a c t i o n In connection wi th the proposed tra nsaction, the Company expects to fi le wi th the SEC rel eva nt ma terials, including a definit ive proxy s tatement whi ch will be
Slide 3: Participants in Solicitation Relating to the Proposed Transaction
Participants in Solicitation Relating to the Proposed Transaction The Company, JBG and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from Company’s stockholders in respect of the matters to be submitted to the stockholders of the Co
Slide 4: Disclaimer (Cont'd): Non-GAAP Measures
Disclaimer (Contd) Non-GAAP Measures “his documentindudesinforrotin derived rom 8's Adjusts Historia Asset-Level NOI and Adjusted Historia Asset- Level NO}, Before Rent abatements, whichareNon-GAAP meas J8G'smanogerentuses theseNon-GAAP measures a8 Supplemental performance measure foritsassetsard be
Slide 5: Situation Overview
S i t u a t i o n O v e r v i e w 1 On October 1, 2015, NYRT announced its retention of the Eastdil Secured division of Wells Fargo Securities as strategic advisor to identify and evaluate potential strategic transactions at the entity or asset level Background 2 Goal The ultimate goal of the proces
Slide 6: Transaction Rationale
T r a n s a c t i o n R a t i o n a l e On May 25, 2016, NYRT entered into a combination agreement with the JBG Companies that NYRT believes fulfills the goals of the NYRT strategic alternatives process and will maximize value for the Company over the long-term 1 Gives the combined company scale whi
Slide 7: Transaction Overview
T r a n s a c t i o n O v e r v i e w 133 JBG assets contributed to NYRT (43 office, 28 multifamily, 21 retail and 41 land bank assets)(1) 319.9M shares of NYRT common stock and operating partnership (OP) units issued to JBG equity holders(2) JBG to invest $142.0M of additional equity (including ope
Slide 8: Transaction Overview (Cont'd)
T r a n s a c t i o n O v e r v i e w ( C o n t ’d ) Combined company to be internally managed Plan to hire the Advisor’s existing on-the-ground asset management and investments team Current NYRT CEO Mike Happel expected to consult during transition period Elimination of the $12M external advisor fe
Slide 9: Who is JBG?
W h o i s J B G ? FULLY-INTEGRATED REAL ESTATE INVESTMENT COMPANY WITH 50+ YEAR TRACK RECORD DC Peers( 1) JBG( 1) VNO( 2) BXP( 2) WRE FPO PGRE( 2) # OPERATING ASSETS 72 71 48 53 85 5 Premier pure-play, urban, mixed-use, vertically-integrated platform in DC Metro Area • OPERATING SF 11.3M 16.3M 9.1M
Slide 10: Proven Stewards of Capital
P r o v e n S t e w a r d s o f C a p i t a l TRACK RECORD OF OUTSIZED RISK-ADJUSTED RETURNS IN THE WASHINGTON, DC MARKET SINCE 1999 Over 250 INVESTMENTS $3.7B EQUITY RAISED 132 INVESTMENTS SOLD $1.1B EQUITY BASIS SOLD 36.6% GROSS LEVERAGED IRR 2.3x EQUITY MULTIPLE Estimated Leverage Number of Inves
Slide 11: JBG Strategy - What Makes Us Different
J B G S t r a t e g y - W h a t M a k e s U s D i f f e r e n t PURE-PLAY URBAN MIXED-USE P P P P P Concentrate investment in urban submarkets in path of growth with sustainable long -term advantages Execute “Placemaking™” strategy through dedicated mixed-use teams to generate premium asset values T
Slide 12: New York City Expansion: A Strategic and Logical Step for JBG
N e w Yo r k C i t y E x p a n s i o n a S t r a t e g i c a n d L o g i c a l S t e p f o r J B G NYC Expansion Has Been in the Works • JBG has been planning an expansion to NYC for over 2 years Near-term Opportunities • Logical extension of JBG’s urban mixed-use history and skill set • Internaliza
Slide 13: Multi-Generational Management Team With Proven Record
M u l t i - G e n e r a t i o n a l M a n a g e m e n t Te a m W i t h P r o v e n R e c o r d Years with JBG Years in Industry Management and Inside Directors Age Experience Executive Management Matthew Kelly Chief Executive Officer & Inside Director Has worked at The JBG Companies since 2004 and s
Slide 14: Well Respected Board of Directors
W e l l R e s p e c t e d B o a r d o f D i r e c t o r s Post-Closing Intent: Independent Directors Age Experience Cha i rman of North Island a nd Co-Founder of Silver La ke. Serves a s i ndependent di rector of AT&T a nd Na sdaq, I nc. a nd director of the Federa l Res erve Ba nk of New York a nd
Slide 15: Well Respected Board of Directors
Well Respected Board of Directors IndependentDirectors Age Experience Majority Chairmanet North WondandCofeunderfsiverLake Serves independent Independent tenn Hutchins cq. tectorofATRTandNasén Inc ard elector oftheFeeralReseveBarkof lead independent Decor Newtorkandos Vee Charmane the Books rettaone
Slide 16: Pro Forma Capitalization
P r o F o r m a C a p i t a l i z a t i o n As of 3/31/2016 Pro Forma $9.77 (2) $9.77 $9.77 170.7 319.9 490.6 $1,668.1M $3,125.5M $4,793.6M $1,282.3M $2,483.5M $3,765.8M (100.2) (50.6) (150.8) $1,182.1M $2,432.9M $3,615.0M $2,850.2M $5,558.4M $8,408.6M 41% 44% 43% Note: Data shown at pro rata share.
Slide 17: Combined Portfolio Highlights
C o m b i n e d P o r t f o l i o H i g h l i g h t s SCALE AND DIVERSITY TO COMPETE WITH BEST-IN-CLASS OPERATORS IN GATEWAY MARKETS 18 = + 100% SUBMARKETS (1) (2) (3) (4) (5) Excludes Viceroy Hotel. Calculation excludes assets held for redevelopment. Assumes completion of all construction and pre-d
Slide 18: Strong Combined Footprint in Two Gateway Markets
S t r o n g C o m b i n e d F o o t p r i n t i n T w o G a t e w a y M a r k e t s STRATEGICALLY LOCATED ASSETS IN THE PATH OF GROWTH NORTH ROCKVILLE 263K SF SHADY GROVE 586K SF MIDTOWN WEST 1.4M SF ROCKVILLE PIKE CORRIDOR 1.3M SF MIDTOWN EAST 81K SF MIDTOWN 43K SF GARMENT DISTRICT 268K SF TIMES SQ
Slide 19: Significantly Improves Scale and Diversity
S i g n i f i c a n t l y I m p r o v e s S c a l e a n d D i v e r s i t y SCALE AND DIVERSITY TO COMPETE WITH BEST-IN-CLASS OPERATORS IN GATEWAY MARKETS NYRT Standalone(1) 18 JBG Standalone 72 Combination(1) 90 Tota l Operating Assets Tota l Operating SF(2) 3.2M 11.3M 14.5M Opera ting Portfolio Le
Slide 20: Significantly Improves Scale
S i g n i f i c a n t l y I m p r o v e s S c a l e SCALE TO COMPETE WITH BEST-IN-CLASS OPERATORS IN GATEWAY MARKETS Total Enterprise Value $35.0B $8.4B Standalone NYRT ESRT PGRE Pro Forma JBG Combination DEI SLG BXP VNO Source: Company SEC filings. Market data as of May 24, 2016. Note: TEV defined
Slide 21: Well-Leased Office and Retail Operating Portfolio Provides Baseline Stability
W e l l - L e a s e d O f f i c e A n d R e t a i l O p e r a t i n g P o r t f o l i o P r o v i d e s B a s e l i n e S t a b i l i t y • 87% of pro forma property-level NOI during 1Q 2016 (approximately 13% from multifamily) • 93% pro forma leased with limited near term rollover • Average remaini
Slide 22: Washington, DC Growth Prospects
W a s h i n g t o n , D C G r o w t h P r o s p e c t s SUBSTANTIAL POTENTIAL GROWTH THROUGH LEASE-UP, HIGH-QUALITY DEVELOPMENT PIPELINE AND EMBEDDED INFILL LAND BANK 2 3 1 Long-term Growth Contractual Near-term Growth Signed But Not Yet Commenced Leases Embedded Growth in Operating Portfolio Pre-De
Slide 23: Washington, DC Growth Prospects (Cont'd)
W a s h i n g t o n , D C G r o w t h P r o s p e c t s ( C o n t ’ d ) SUBSTANTIAL POTENTIAL GROWTH THROUGH LEASE-UP AND HIGH-QUALITY DEVELOPMENT PIPELINE 1 • 2 3 Contractual In addition to the below, the majority of JBG’s non -GSA office and retail leases, and JBG’s largest GSA lease, contain cont
Slide 24: Well-Located Land Bank and Other Opportunities Support Long-term Growth
W e l l - L o c a t e d L a n d B a n k a n d O t h e r O p p o r t u n i t i e s S u p p o r t L o n g - t e r m G r o w t h 1 ROCKVILLE PIKE CORRIDOR $29.5M 2 standing relationships provides access to a pipeline of SILVER SPRING $32.7M 3 RESTON $98.2M TYSONS CORNER $61.9M 4 WASHINGTON, DC $96.2M R
Slide 25: Strategic Capital Business
S t r a t e g i c C a p i t a l B u s i n e s s SIGNIFICANT THIRD-PARTY MANAGEMENT BUSINESS PROVIDES STRATEGIC BENEFITS AND MEANINGFUL REVENUE OUT OF THE GATE 1 Strong institutional capital relationships provide access to private capital markets opportunistically Strategic capital business provides
Slide 26: Pro Forma Debt Summary
P r o F o r m a D e b t S u m m a r y Secured vs. Unsecured Pro Rata Total Debt Pro forma Combination NYRT The JBG Companies Balance Sheet and Financial Highlights Unsecured 13% Unsecured 38% We expect to have a credit facility of $1.0B with an accordion feature of up to $500M, the closing of which
Slide 27: Pathway Toward Target Long-term Conservative Balance Sheet
P a t h w a y To w a r d Ta r g e t L o n g - t e r m C o n s e r v a t i v e B a l a n c e S h e e t Net Debt / LQA EBITDA (~43% Net Debt / TEV) 11.0x - 12.0x 2.0x - 2.5x Adjusted: Est. Net Debt / EBITDA (At Close) (2) Asset Sales Organic Growth & Delivery of Development Pipeline (3) Target Net Deb
Slide 28: Clear Pathway Toward Target Conservative Balance Sheet
C l e a r P a t h w a y To w a r d Ta r g e t C o n s e r v a t i v e B a l a n c e S h e e t Possible Sale Viceroy Hotel NYC Retail Possible Recapitalization 23 Build-to-Core Office Build-to-Core Multifamily Select Office / Multifamily Suburban Class B Residential Suburban GSA Office Suburban Non-C
Slide 29: Platform Integration and New York City Strategy
P l a t f o r m I n t e g r a t i o n a n d N e w Yo r k C i t y S t r a t e g y WELL-DEFINED NEAR-TERM INTEGRATION PLAN AND MEDIUM-TO LONG-TERM STRATEGY IMMEDIATE (3 - 6 months) Todd Rich (JBG Partner in Investments group) will lead integration efforts and will be based in NYC office • Todd built a
Slide 30: Transaction Conclusions
T r a n s a c t i o n C o n c l u s i o n s 1 Intend to have best-in-class REIT featuring portfolio in prime high -barrier markets of New York City and Washington, DC 2 Significant management ownership and intended best -in-class corporate governance aligns stockholders with management team 3 Comple
Slide 31: Transaction Conclusions
Transaction Conclusions & JBG Reat Intend to have best-in-class REIT featuring portfolio in prime high-barrier markets of New York City and Washington, DC ignificant management ownership and intend ‘management team est-in-class corporate governance aligns stockholders with ‘Complementary portfolios
Slide 32: JBG Public Market Rationale
J B G P u b l i c M a r k e t R a t i o n a l e STRATEGIC COMBINATION POISED TO MAXIMIZE FUTURE GROWTH JBG’s Strategic Goals Have Led it to the Public REIT Format P Permanent capital base to exploit JBG’s multi-phase Placemaking™ strategy without limitations of a closed-end fund structure P P Access
Slide 33: JBG Implied Value Build-Up
J B G I m p l i e d V a l u e B u i l d - Up Share Price: (1) Total Shares to JBG: $9.77 - $12.50 319.9M Implied Equity Value: Plus: Net Debt: (2) Less: Other (Assets) / Liabilities: (3) Implied Gross Asset Value: Less: Value of Strategic Capital Business (3.0x - 7.0x Revenue) : (4) Less: Land Bank:
Slide 34: JBG Implied Value Build-Up
JBG Implied Value Build-Up “ota shares 0186: so7-sn.s0 mpi egy Value S526 53559 Pus: Met Debt 323M Less: Other ees) / Unites: (ssa) ImpiedGrss Ase Vue ssa7am- $6347 ‘OMPONENTS OF VATE Les: Vl of steteple Capital Baines (3.0 Oxon) (S17 343m) es: Land Bak 3900) mpi Gross Real state Value: S436 55.15"
Slide 35: JBG Portfolio Value Components
J B G P o r t f o l i o V a l u e C o m p o n e n t s All statistics shown as of the three months ended March 31, 2016 and at JBG’s pro rata share, except percent leased and occup ied Incrementa l Rent from Signed, Not Potentia l Incrementa l Rent from Lea s e-Up to Subma rket % (6) 1Q16 Annua lized
Slide 36: JBG Portfolio Value Components (Cont'd)
J B G P o r t f o l i o V a l u e C o m p o n e n t s ( C o n t ’d ) All statistics shown as of the three months ended March 31, 2016 and at JBG’s pro rata share Es tima ted Es t. Potentia l Dens ity (2) As s ets Va lue (1) % Office (3) % Multifa mily (3) % Reta il (3) Ref. Pa ge 10 $96.2M 3.0M SF 4
Slide 37: JBG's Best-In-Class Portfolio Across Major Asset Classes
J B G ’ s B e s t - In - C l a s s P o r t f o l i o A c r o s s M a j o r A s s e t C l a s s e s PREMIER PORTFOLIO OF DIVERSIFIED, HIGH-QUALITY ASSETS IN ATTRACTIVE SUBMARKETS Portfolio Composition by Asset Class Operating Retail 7% Construction / Pre-Development Retail 4% Total Retail 7% Multifam
Slide 38: Operating Assets - Overview
O p e r a t i n g A s s e t s - O v e r v i e w • 72 assets primarily located within urban infill and transit-oriented environments Retail 8% • Approximately 87% of operating portfolio and is located inside the Beltway and/or in Metro-served locations Most attractive submarkets of the DC metro area,
Slide 39: Operating Assets - Data
O p e r a t i n g A s s e t s - D a t a (2) Source: Exhibit 99.3 to the NYRT Current Report on Form 8-K, filed with the SEC on May 25, 2016, pages 42, 44 and 46. Note: Table shown at 100 percent share, except as noted pro rata. (1) (2) Percent leased, percent occupied and rent per square feet metric
Slide 40: Operating Assets - Additional Growth Opportunities - Future Leases
O p e r a t i n g A s s e t s - A d d i t i o n a l G r o w t h O p p o r t u n i t i e s - F u t u r e L e a s e s • 46 signed but not commenced leases totaling approximately $42.0M ($35.4M on a pro rata basis) of annualized rent, 37 of which are estimated to commence by March 31, 2017 • Office lea
Slide 41: Operating Assets - Additional Growth Opportunities - Future Leases (Cont'd)
O p e r a t i n g A s s e t s - A d d i t i o n a l G r o w t h O p p o r t u n i t i e s - F u t u r e L e a s e s ( C o n t ’d ) Retail - Signed but not Commenced Leases At JBG Share(1 ) At 100 Percent Share Estimated Lease Commencement Date Estimated Lease Expiration Date (2) Retail Asset Percent
Slide 42: Operating Assets - Additional Growth Opportunities - Lease Up
O p e r a t i n g A s s e t s - A d d i t i o n a l G r o w t h O p p o r t u n i t i e s - L e a s e U p RECENTLY ACQUIRED / DELIVERED / RENOVATED ASSETS AND EMBEDDED GROWTH ASSETS • Opportunity to lease up assets within current portfolio, with potential for $31.7M in incremental rent across office
Slide 43: Construction Assets
C o n s t r u c t i o n A s s e t s • • 1 office, 4 multifamily and 3 retail assets currently under construction Employ a strategy of pre-leasing space to anchor tenants to mitigate risk and generate demand, while leasing up high value space closer to or after delivery, when the space can be physica
Slide 44: Construction Assets - Data
C o n s t r u c t i o n A s s e t s - D a t a Source: Exhibit 99.3 to the NYRT Current Report on Form 8-K, filed with the SEC on May 25, 2016, pages 20 and 21. Note: Table shown at 100 percent share, except as noted pro rata. (1) Based on JBG management's estimates as of March 31, 2016 and includes
Slide 45: Pre-Development Assets
P r e - D e v e l o p m e n t A s s e t s Reta i l 2% • Pipeline of 12 high-quality pre-development assets that we expect to provide substantial medium and long-term growth Majority of projects have substantially completed the entitlement process, expect to be in a position to commence construction
Slide 46: Pre-Development Assets - Data
P r e - D e v e l o p m e n t A s s e t s - D a t a Source: Exhibit 99.3 to the NYRT Current Report on Form 8-K, filed with the SEC on May 25, 2016, page 22. Note: Table shown at 100 percent share, except as noted pro rata. (1) Based on JBG management's estimates as of March 31, 2016 and includes al
Slide 47: Land Bank
L a n d B a n k Source: Exhibit 99.3 to the NYRT Current Report on Form 8-K, filed with the SEC on May 25, 2016, pages 48 and 49. (1) (2) Represents J BG management's estimate of the total office and/or retail square feet and multifamily units that would need to b e redeveloped in order to access th
Slide 48: Debt Summary
D e b t S u m m a r y JBG Property Level Debt as of 3/31/2016 Current Annual Additional Debt Description Principal Balance Pro Rata Share of Principal Balance Stated Interest Rate Interest Rate Hedge (1) Asset Interest Rate Maturity Date 4747 Bethes da Avenue (2 ) Lees burg Pike Reta il (3 ) Upper R
Slide 49: Debt Summary (Cont'd)
D e b t S u m m a r y ( C o n t ’ d ) JBG Property Level Debt as of 3/31/2016 Current Annual Additional Debt Description Principal Balance Pro Rata Share of Principal Balance Stated Interest Rate Interest Rate Hedge (1) Asset Interest Rate Maturity Date The Tera no Ga lva n Notch 8, Notch 8 Reta il
Slide 50: Debt Summary (Cont'd)
D e b t S u m m a r y ( C o n t ’ d ) JBG Property Level Debt as of 3/31/2016 Current Annual Additional Debt Description Principal Balance Pro Rata Share of Principal Balance Stated Interest Rate Interest Rate Hedge (1) Asset Interest Rate Maturity Date Fa lkla nd Cha s e - North Bennington Cros s i
Slide 51: Debt Summary (Cont'd)
Debt Summary (Cont'd) Peper vel eb 3/31/2016 EUS Government err SA Anete Shows Shows 380 Fee Soo masa Sestanentare bis tie 33m Faas 3am insae Fama arene sao sa tie fice tie “anne Lat shppncerter ons om time Fee tim nas Peheinacsatea 280 Doo ska Sea Sse Suns Sot haber are US Goveromaet ene Avene Soms
Slide 52: JBG Realty Trust
& JBG Reaury Trust