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Analysis of Operating Results and Financial Condition
For the Quarter Ended June 30, 2001
ANALYSIS OF OPERATING RESULTS AND FINANCIAL CONDITION FOR THE QUARTER ENDED JUNE 30, 2001 INDEX
Page
Fact Sheet ................................................................................................................................
1
Sources and Uses of Funds......................................................................................................
2
Funds from Operations (FFO) .................................................................................................
3–4
Gross Margins..........................................................................................................................
5
Capital Structure......................................................................................................................
6
Consolidated Balance Sheets...................................................................................................
7
Consolidated Income Statements.............................................................................................
8–9
Rentable Square Footage by Region........................................................................................
10
Portfolio Analyses ................................................................................................................... 11 – 16
PS BUSINESS PARKS, INC. SECOND QUARTER FACT SHEET
OPERATING DATA Three Months Ended 06/30/00
06/30/01
Difference
Six Months Ended 06/30/00
06/30/01
Difference
Total revenues Net income allocable to common shareholders
$ $
41,082,000 10,927,000
$ $
37,991,000 10,240,000
8.1% 6.7%
$ $
80,557,000 21,120,000
$ $
73,855,000 19,711,000
9.1% 7.1%
Net income per common share: Basic Diluted
$ $
0.48 0.48
$ $
0.44 0.44
9.1% 9.1%
$ $
0.93 0.92
$ $
0.84 0.84
10.7% 9.5%
23,356,000 23,428,000
(3.2%) (3.2%)
23,474,000 23,537,000
(2.8%) (2.8%)
Weighted average common shares outstanding: Basic Diluted
22,610,000 22,679,000
22,814,000 22,885,000
FUNDS FROM OPERATIONS Three Months Ended 06/30/00
06/30/01 FFO allocable to common shareholders Weighted average common shares outstanding - diluted FFO per common share - diluted
$ $
17,916,000 22,679,000 0.79
$ $
Difference
16,400,000 23,428,000 0.70
9.2% (3.2%) 12.9%
06/30/01 $ $
35,243,000 22,885,000 1.54
Six Months Ended 06/30/00 $ $
31,775,000 23,537,000 1.35
Difference 10.9% (2.8%) 14.1%
PROPERTY INFORMATION Three Months Ended 06/30/00
06/30/01 Net rentable square footage at period end
13,258,000
Difference
12,264,000
06/30/01
8.1%
Six Months Ended 06/30/00
13,258,000
12,264,000
Difference 8.1%
Same Park Facilities Weighted average occupancy Annualized realized rent per sq. ft. (1)
$
95.5% 12.71 $
96.5% 11.80
(1.0%) 7.7%
(1) Realized rent per square foot represents the actual revenues earned per occupied square foot. BALANCE SHEET DATA 06/30/01 Total assets Minority interest - preferred Minority interest - common Perpetual preferred stock Common shareholders' equity Total common shares outstanding at period end Book value per common share
$ $ $ $ $ $
12/31/00
991,062,000 144,750,000 162,272,000 121,000,000 500,063,000 22,475,000 22.25
$ $ $ $ $ $
Difference
930,756,000 144,750,000 161,728,000 55,000,000 509,343,000 23,045,000 22.10
6.5% 0.0% 0.3% 120.0% (1.8%) (2.5%) 0.7%
MARKET VALUE INFORMATION 06/30/01 Market value of common stock and OP units
$
Total debt Total preferred stock and OP units
833,855,000
12/31/00 $
Difference
844,577,000
(1.3%)
30,563,000
30,971,000
(1.3%)
265,750,000
199,750,000
33.0%
Total market capitalization
$
1,130,168,000
$
1,075,298,000
5.1%
Stock price
$
28.00
$
27.80
0.7%
1
$
95.9% 12.57 $
96.5% 11.60
(0.6%) 8.4%
PS BUSINESS PARKS, INC.
Sources and Uses of Funds For the Six Months Ended June 30, 2001 FY01 (YTD Actual) Sources of Funds: Funds from operations Issuance of preferred stock, net Exercise of stock options Sale of PAG common stock Change in working capital
$
Total Sources of Funds
46,380,000 64,526,000 1,331,000 6,079,000 3,833,000 122,149,000
Uses of Funds: Property acquisitions Additional acquisition/development costs Recurring capital expenditures Construction in progress Investment in marketable securities Common dividends and OP distributions Repurchase of common stock/OP units Principal payments on mortgage notes payable
(90,239,000) (186,000) (3,840,000) (7,626,000) (9,440,000) (17,452,000) (18,199,000) (408,000)
Total Uses of Funds
(147,390,000)
Net decrease in cash balance
(25,241,000)
Beginning cash balance
49,295,000
Ending cash balance
$
2
24,054,000
PS BUSINESS PARKS, INC. ANALYSIS OF FUNDS FROM OPERATIONS
Three Months Ended 06/30/01 06/30/00
Increase (Decrease)
Six Months Ended 06/30/01 06/30/00
% Change
Increase (Decrease)
% Change
Funds from operations (FFO): Net income allocable to common shareholders Less gain on investment in PAG Less gain on disposition of properties Depreciation and amortization Minority interest in income Less effects of straight line rents FFO allocable to common shareholders/unitholders
$
$
Weighted average common shares outstanding Weighted average common OP units outstanding Weighted average dilutive stock options Total pro forma fully-converted shares FFO per common share/OP unit
10,927,000 $ 9,733,000 3,543,000 (513,000) 23,690,000 $
10,240,000 $ (97,000) 8,898,000 3,199,000 (594,000) 21,646,000 $
22,610,000 7,305,000 69,000 29,984,000
23,356,000 7,336,000 72,000 30,764,000
687,000 97,000 835,000 344,000 81,000 2,044,000 (746,000) (31,000) (3,000) (780,000)
6.7% N/A (100.0%) 9.4% 10.8% (13.6%) 9.4%
$
$
(3.2%) (0.4%) (4.2%) (2.5%)
21,120,000 $ (15,000) 19,379,000 6,779,000 (883,000) 46,380,000 $
19,711,000 $ (97,000) 17,274,000 6,190,000 (1,224,000) 41,854,000 $
22,814,000 7,307,000 71,000 30,192,000
23,474,000 7,390,000 63,000 30,927,000
1,409,000 (15,000) 97,000 2,105,000 589,000 341,000 4,526,000
7.1% N/A (100.0%) 12.2% 9.5% (27.9%) 10.8%
(660,000) (83,000) 8,000 (735,000)
(2.8%) (1.1%) 12.7% (2.4%)
$
0.79
$
0.70
$
0.09
12.9%
$
1.54
$
1.35
$
0.19
14.1%
Total funds from operations Less capitalized expenditures: Maintenance capital expenditures Tenant improvements (a) Capitalized lease commissions (a) Total capitalized expenditures
$
23,690,000
$
21,646,000
$
2,044,000
9.4%
$
46,380,000
$
41,854,000
$
4,526,000
10.8%
FAD
$
21,743,000
$
19,126,000
$
2,617,000
13.7%
$
42,540,000
$
37,107,000
$
5,433,000
14.6%
FAD per common share/OP unit
$
0.73
$
0.62
$
0.11
17.7%
$
1.41
$
1.20
$
0.21
17.5%
13.7% 12.3% 15.5% 14.1%
$
Funds available for distribution (FAD):
(650,000) (709,000) (588,000) (1,947,000)
(649,000) (1,044,000) (827,000) (2,520,000)
(1,000) 335,000 239,000 573,000
0.2% (32.1%) (28.9%) (22.7%)
(1,223,000) (1,638,000) (979,000) (3,840,000)
(1,181,000) (2,074,000) (1,492,000) (4,747,000)
(42,000) 436,000 513,000 907,000
3.6% (21.0%) (34.4%) (19.1%)
Cash available for debt repayments and reinvestments: FAD
$
Distributions to common shareholders Distributions to common OP unitholders Cash available for debt repayments and reinvestments
$
(a)
21,743,000 $ (6,543,000) (2,119,000) 13,081,000 $
19,126,000 $ (5,825,000) (1,834,000) 11,467,000 $
2,617,000 (718,000) (285,000) 1,614,000
$
42,540,000 $ (13,214,000) (4,238,000) 25,088,000 $
Decrease due to a reduction in the dollar value of leases signed during the year and the implementation of an employee incentive program to control lease turnover costs
3
37,107,000 $ (11,702,000) (3,695,000) 21,710,000 $
5,433,000 (1,512,000) (543,000) 3,378,000
14.6% 12.9% 14.7% 15.6%
Diluted FFO Per Common Share/OP Unit $0.80 $0.79
$0.75 $0.75 $0.73 $0.72
$0.70 $0.70
$0.65
$0.60 Q200
Q300
Q400
4
Q101
Q201
Gross Operating Margin Percentage* (Entire Portfolio)
73.7%
73.0%
73.1% 72.9% 72.7%
72.0% 71.8%
71.0%
70.0% Q200
Q300
Q400
Q101
Q201
* Gross margin is computed by dividing property net operating income by rental income (excluding straight-line rent adjustment).
5
PS BUSINESS PARKS, INC. CAPITAL STRUCTURE Principal Maturity Dates Debt at June 30, 2001 consists of the following: 7.050% mortgage note, secured by one commercial property, due May 2006 8.190% mortgage note, secured by one commercial property, due March 2007 7.290% mortgage note, secured by one commercial property, due February 2009 7.280% mortgage note, secured by two commercial properties, due February 2003 8.000% mortgage note, secured by one commercial property, due April 2003 8.500% mortgage note, secured by one commercial property, due July 2007 8.000% mortgage note, secured by one commercial property, due April 2003 Total mortgage notes payable (1) $100 million unsecured line of credit Total debt
Total
2001
8,474,000 6,384,000 6,219,000 4,124,000 1,977,000 1,824,000 1,561,000 30,563,000
100,000 101,000 55,000 65,000 47,000 27,000 28,000 423,000
30,563,000
2.7%
9.250% Series A preferred stock (2,200,000 depositary shares outstanding) 8.875% Series B preferred operating partnership units (510,000 units outstanding) 8.750% Series C preferred operating partnership units (3,200,000 units outstanding) 9.500% Series D preferred stock (2,640,000 depositary shares outstanding) 8.875% Series X preferred operating partnership units (1,600,000 units outstanding) 8.875% Series Y preferred operating partnership units (480,000 units outstanding) Total preferred equity (2)
55,000,000 12,750,000 80,000,000 66,000,000 40,000,000 12,000,000 265,750,000
23.5%
Common stock (22,475,178 shares outstanding) Common operating partnership units (7,305,355 units outstanding) Total common equity (3)
629,305,000 (3) 204,550,000 (3) 833,855,000 73.8%
Equity at June 30, 2001 consists of the following:
Total market capitalization (1)
The weighted average interest rate and maturity was 7.56% and 4.9 years, respectively.
(2)
The weighted average dividend rate is 9.07%.
(3)
Value based on June 30, 2001 closing stock price of $28.00.
(4)
Does not include 71,000 shares related to stock options for the six months ending June 30, 2001 computed using the Treasury Stock method. These stock options are treated as common stock equivalents for purposes of calculating weighted average common shares outstanding used in computing net income and FFO per common share.
1,130,168,000
100%
6
2002 211,000 216,000 116,000 137,000 100,000 58,000 60,000 898,000
2003 226,000 235,000 125,000 3,922,000 1,830,000 63,000 1,473,000 7,874,000
2004 242,000 254,000 134,000 69,000 699,000
2005 260,000 276,000 144,000 75,000 755,000
Thereafter 7,435,000 5,302,000 5,645,000 1,532,000 19,914,000
PS BUSINESS PARKS, INC. CONSOLIDATED BALANCE SHEETS
06/30/01
Increase (Decrease)
12/31/00
% Change
(a)
See sources and uses of funds on page 2
(b)
Property acquisitions Additional acquisition/development costs Properties held for disposition Maintenance capital expenditures Tenant improvements Lease commissions
ASSETS Cash and cash equivalents
$
Marketable securities
$
8,605,000
Real estate facilities, at cost: Land Buildings and equipment
Properties held for disposition, net Land held for development Construction in progress
$
496,000 8,580,000 830,000 1,123,000 991,062,000
49,295,000
$
6,065,000
235,933,000 775,876,000 1,011,809,000 (102,375,000) 909,434,000 5,110,000 5,837,000 26,993,000 (c) 947,374,000
Accumulated depreciation
Receivables Deferred rent receivables Intangible assets, net Other assets Total assets
24,054,000
2,540,000
214,020,000 709,328,000 923,348,000 (83,841,000) 839,507,000 5,737,000 19,467,000 864,711,000
$
461,000 7,697,000 981,000 1,546,000 930,756,000
(25,241,000) (a)
21,913,000 66,548,000 88,461,000 (b) (18,534,000) 69,927,000 5,110,000 100,000 7,526,000 82,663,000
$
35,000 883,000 (151,000) (423,000) 60,306,000
-51.2% 41.9%
10.2% 9.4% 9.6% 22.1% 8.3% N/A 1.7% 38.7% 9.6%
$
$ (c)
The Company has three projects under development in: Beaverton, OR (Greystone II/III) Chantilly, VA (Lafayette) Irving, TX (Royal Tech 17)
$
$ (d)
7.6% 11.5% -15.4% -27.4% 6.5%
Accrued and other liabilities at June 30, 2001 consists of: Deferred rental revenue Accounts payable Property taxes Security deposits Other Reserves for acquisition costs
$
$
90,239,000 186,000 (5,804,000) 1,223,000 1,638,000 979,000 88,461,000
9,217,000 9,623,000 8,153,000 26,993,000
3,111,000 2,291,000 5,350,000 9,672,000 3,102,000 8,888,000 32,414,000
LIABILITIES AND SHAREHOLDERS' EQUITY
(e) Paid-in capital decreased due to the following: Accrued and other liabilities Mortgage notes payable Total liabilities
$
32,414,000 30,563,000 62,977,000
(d) $
28,964,000 30,971,000 59,935,000
Minority interest: Preferred units Common units
144,750,000 162,272,000
144,750,000 161,728,000
Shareholders' equity: Preferred stock Common stock Paid-in capital Comprehensive income Cumulative net income Cumulative distributions Total shareholders' equity
121,000,000 225,000 448,510,000 (836,000) 149,285,000 (97,121,000) 621,063,000
55,000,000 230,000 464,855,000 124,990,000 (80,732,000) 564,343,000
Total liabilities and shareholders' equity
$
3,450,000 (408,000) 3,042,000
11.9% -1.3% 5.1%
544,000
0.0% 0.3%
Repurchased shares Exercise of stock options Preferred stock issuance costs Minority interest adjustment
$
$
(f)
Represents net income for the six months ended June 30, 2001
(g) Distributions to preferred shareholders
$
991,062,000
$
930,756,000
66,000,000 (5,000) (16,345,000) (e) (836,000) 24,295,000 (f) (16,389,000) (g) 56,720,000 $
60,306,000
7
120.0% -2.2% -3.5% N/A 19.4% 20.3% 10.1% 6.5%
(17,385,000) 1,330,000 (1,474,000) 1,184,000 (16,345,000)
$
Distributions to common shareholders $
(3,175,000) (13,214,000) (16,389,000)
PS BUSINESS PARKS, INC. CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED
06/30/01 Revenues: Rental income Facility management fees from affiliates
$
Business services Interest income Dividend income
Expenses: Cost of operations Cost of facility management Cost of business services Depreciation and amortization General and administrative Interest expense
Income before disposition of real estate investments and minority interest Gain on disposition of properties
40,281,000 168,000
$
Minority interest in income - preferred units Minority interest in income - common units
36,414,000 129,000
$
% Change
3,867,000 (a) 39,000
10.6% 30.2%
76,000 553,000 4,000 41,082,000
267,000 741,000 440,000 37,991,000
(191,000) (b) (188,000) (c) (436,000) (d) 3,091,000
N/A (25.4%) (99.1%) 8.1%
10,475,000 37,000 129,000 9,733,000 992,000 (f) 157,000 (g)
10,118,000 25,000 64,000 8,898,000 981,000 370,000
357,000 (e) 12,000 65,000 835,000 11,000 (213,000)
3.5% 48.0% N/A 9.4% 1.1% (57.6%)
21,523,000
20,456,000
1,067,000
5.2%
19,559,000
17,535,000
2,024,000
11.5%
-
Income before minority interest
Increase (Decrease)
06/30/00
97,000
19,559,000
17,632,000
(3,186,000) (3,543,000)
(2,921,000) (3,199,000)
(97,000) 1,927,000 (265,000) (344,000)
N/A 10.9% 9.1% 10.8%
Net income
$
12,830,000
$
11,512,000
$
1,318,000
11.4%
Net income allocation: Allocable to preferred shareholders Allocable to common shareholders
$
$ $
1,272,000 10,240,000 11,512,000
$
$
1,903,000 10,927,000 12,830,000
631,000 687,000 1,318,000
49.6% 6.7% 11.4%
$ $
0.48 0.48
$ $
0.44 0.44
$
0.04 0.04
9.1% 9.1%
Net income per common share: Basic Diluted Weighted average common shares outstanding: Basic Diluted
$
(a) Rental income has increased due to the following: Newly acquired/developed facilities, net of dispositions "Same Park" facilities Straight line rent adjustment
$
23,356,000 23,428,000
(746,000) (h) (749,000) (h)
8
(3.2%) (3.2%)
1,869,000 2,079,000 (81,000) 3,867,000
(b) Business services include licensing fees from telecommunication service providers. (c) Interest income decreased as a result of lower interest rates (4.3% in Q201 vs 6.0% in Q200). (d) No dividend income was received from Pacific Gulf Properties Inc. ("PAG") during the three months ended June 30, 2001. (e) Cost of operations has increased due to the following: Newly acquired/developed facilities, net of dispositions "Same Park" facilities
$ $
(f) General and administrative expenses for the three months ended June 30, 2001 consists of: Professional fees Salaries General administrative costs Internal acquisition costs Abandoned projects Other
$
$
322,000 35,000 357,000
278,000 392,000 134,000 114,000 5,000 69,000 992,000
(g) Interest expense for the three months ended June 30, 2001 consists of: Mortgages Line of credit facility fee Capitalized interest
$
$ (h) Decrease relates to the repurchase of common shares.
22,610,000 22,679,000
$
581,000 62,000 (486,000) 157,000
PS BUSINESS PARKS, INC. CONSOLIDATED STATEMENTS OF INCOME FOR THE SIX MONTHS ENDED
06/30/01 Revenues: Rental income Facility management fees primarily from affiliates
$
Business services Interest income Dividend income
Expenses: Cost of operations Cost of facility management Cost of business services Depreciation and amortization General and administrative Interest expense
Income before disposition of real estate investments and minority interest Gain on investment in PAG Gain on disposition of properties Income before minority interest Minority interest in income - preferred units Minority interest in income - common units
Increase (Decrease)
06/30/00
78,674,000 329,000
$
70,467,000 252,000
$
% Change
(a)
8,207,000 (a) 77,000
11.6% 30.6%
233,000 1,313,000 8,000 80,557,000
267,000 2,011,000 858,000 73,855,000
(34,000) (b) (698,000) (c) (850,000) (d) 6,702,000
N/A (34.7%) (99.1%) 9.1%
20,846,000 73,000 313,000 19,379,000 2,120,000 (f) 394,000 (g) 43,125,000
19,670,000 50,000 64,000 17,274,000 1,864,000 744,000 39,666,000
1,176,000 (e) 23,000 249,000 2,105,000 256,000 (350,000) 3,459,000
37,432,000
34,189,000
3,243,000
15,000 -
97,000
37,447,000
34,286,000
(6,373,000) (6,779,000)
(5,841,000) (6,190,000)
15,000 (97,000) 3,161,000 (532,000) (589,000)
$ Business services include licensing fees from telecommunication service providers.
(c)
Interest income decreased as a result of lower average cash balances ($54.7M in 2001 vs. $69.9M in 2000) and interest rates (4.8% in 2001 vs. 5.8% in 2000).
6.0% 46.0% N/A 12.2% 13.7% (47.0%) 8.7%
(d)
No dividend income was received from Pacific Gulf Properties Inc. ("PAG") during the six months ended June 30, 2001.
(e)
Cost of operations have increased due to the following: Newly acquired/developed facilities, net of dispositions "Same Park" facilities
9.5%
(f)
9.2% 9.1% 9.5%
24,295,000
$
22,255,000
$
2,040,000
9.2%
Net income allocation: Allocable to preferred shareholders Allocable to common shareholders
$
$ $
2,544,000 19,711,000 22,255,000
$
$
3,175,000 21,120,000 24,295,000
$
631,000 1,409,000 2,040,000
24.8% 7.1% 9.2%
$ $
0.93 0.92
$ $
0.84 0.84
$ $
0.09 0.08
10.7% 9.5%
(660,000) (h) (652,000) (h)
(2.8%) (2.8%)
23,474,000 23,537,000
9
General and administrative expenses for the six months ended June 30, 2001 consists of: Professional fees Salaries General administrative costs Internal acquisition costs Abandoned projects Other
$
$ (g)
3,649,000 4,899,000 (341,000) 8,207,000
531,000 645,000 1,176,000
423,000 726,000 336,000 317,000 7,000 311,000 2,120,000
Interest expense for the six months ended June 30, 2001 consists of: Mortgage notes payable Line of credit facility fees Capitalized interest
$
$ (h)
22,814,000 22,885,000
$ $
N/A N/A
$
Weighted average common shares outstanding: Basic Diluted
$
(b)
Net income
Net income per common share: Basic Diluted
Rental income has increased due to the following: Newly acquired/developed facilities, net of dispositions "Same Park" facilities Straight line rent adjustment
Decrease relates to the repurchase of common shares
1,167,000 125,000 (898,000) 394,000
Rentable Square Footage by Region
September 30, 2000 (12,096,000 square feet)
December 31, 2000 (12,600,000 square feet)
797,000
797,000
1,191,000
1,191,000
3,254,000
3,548,000 S. California (28%)
S. California (27%) N. California (12%)
866,000
S. Texas (9%)
S. Texas (8%)
N. Texas (15%)
N. Texas (15%)
Virginia (13%)
Virginia (14%)
Maryland (7%)
1,612,000 1,495,000
N. California (12%)
866,000
Maryland (7%)
1,822,000
Oregon (10%)
Oregon (10%)
1,495,000
Other (7%)
1,032,000
1,849,000
1,849,000
March 31, 2001 (12,600,000 square feet)
Other (6%)
1,032,000
June 30 2001 (13,258,000 square feet) 797,000
797,000 1,191,000
1,191,000 3,548,000
3,548,000 S. California (28%) S. California (27%)
866,000
N. California (12%)
866,000
S. Texas (8%)
N. California (11%)
N. Texas (15%)
S. Texas (8%)
Virginia (14%)
N. Texas (14%) Virginia (19%)
Maryland (7%)
1,822,000 1,495,000
Maryland (6%)
2,480,000
Oregon (10%)
1,495,000
Other (6%)
Oregon (9%) Other (6%)
1,849,000
1,032,000
1,849,000
10
1,032,000
PS BUSINESS PARKS, INC. PORTFOLIO OVERVIEW
Rentable Square Footage of Properties as of June 30, 2001 Primary Markets
Industrial
Northern Virginia Los Angeles County Northern California Dallas Portland Orange County Maryland Austin San Diego County Phoenix Other
1,006,000 405,000 1,411,000
Office 589,000 88,000 64,000 187,000 161,000 29,000 234,000 331,000 1,683,000
Flex 1,891,000 770,000 1,026,000 1,475,000 1,004,000 911,000 837,000 833,000 378,000 569,000 470,000 10,164,000
Total
2,480,000 18.7% 1,864,000 14.1% 1,495,000 11.3% 1,475,000 11.1% 1,191,000 9.0% 1,072,000 8.1% 866,000 6.5% 833,000 6.3% 612,000 4.6% 569,000 4.3% 801,000 6.0% 13,258,000 100.0%
Average Occupancy Rates for the Quarter Ending June 30, 2001 Primary Markets Northern Virginia Los Angeles County Northern California Dallas Portland Orange County Maryland Austin San Diego County Phoenix Other
Industrial
Office
97.3% 100.0% 98.1%
96.4% 94.7% 97.4% 100.0% 100.0% 98.6% 82.4% 93.8%
11
Flex 98.4% 93.5% 95.5% 95.1% 98.0% 93.9% 97.7% 94.2% 99.1% 91.7% 91.6% 95.7%
%
Total 98.1% 95.5% 96.8% 95.1% 98.4% 93.9% 97.8% 94.2% 98.9% 91.7% 87.8% 95.7%
PS BUSINESS PARKS, INC. PORTFOLIO ANALYSIS
Industry Concentration as of June 30, 2001
Computer hardware, software and related service Business services Financial services Home furnishings Retail Communications Manufacturing and assembly Electronics General Contractors Government
12.6% 12.5% 7.3% 6.6% 6.5% 6.3% 4.9% 4.9% 4.5% 4.4% 70.5%
Top Ten Customers by Annual Rent as of June 30, 2001 Tenant IBM Citigroup U.S. Government Pycon, Inc. MCI Worldcom Footstar County of Santa Clara Sun Microsystems Welch Allyn Protocol, Inc. TRW System
Square Footage
Annual Rents
333,000 262,000 127,000 134,000 121,000 116,000 97,000 86,000 95,000 58,000 1,429,000
12
$
%
4,736,000 3,419,000 2,954,000 1,986,000 1,664,000 1,558,000 1,545,000 1,517,000 1,339,000 1,256,000
2.9% 2.1% 1.8% 1.2% 1.0% 1.0% 1.0% 0.9% 0.8% 0.8%
21,974,000
13.5%
PS BUSINESS PARKS, INC. PORTFOLIO ANALYSIS AS OF JUNE 30, 2001
Lease Expirations - Flex Year of Lease Expiration 2001 2002 2003 2004 2005 Thereafter
Rentable Square Footage 1,204,000 2,386,000 1,892,000 1,549,000 1,201,000 1,787,000 10,019,000
Annual Rents
$
11,669,000 25,975,000 22,521,000 18,793,000 16,743,000 23,615,000 119,316,000
% 9.8% 21.8% 18.9% 15.8% 14.0% 19.7% 100.0%
Lease Expirations - Office Year of Lease Expiration 2001 2002 2003 2004 2005 Thereafter
Rentable Square Footage 201,000 298,000 322,000 162,000 211,000 340,000 1,534,000
Annual Rents
$
3,518,000 5,309,000 6,153,000 3,372,000 4,562,000 8,579,000 31,493,000
% 11.2% 16.9% 19.5% 10.7% 14.5% 27.2% 100.0%
Lease Expirations - Industrial Year of Lease Expiration 2001 2002 2003 2004 2005 Thereafter
Rentable Square Footage 145,000 391,000 178,000 217,000 252,000 178,000 1,361,000
Annual Rents
$
802,000 1,632,000 1,002,000 1,214,000 1,577,000 1,079,000 7,306,000
% 11.0% 22.3% 13.7% 16.6% 21.6% 14.8% 100.0%
Lease Expirations - Total Year of Lease Expiration 2001 2002 2003 2004 2005 Thereafter
Rentable Square Footage 1,550,000 3,075,000 2,392,000 1,928,000 1,664,000 2,305,000 12,914,000
13
Annual Rents
$
15,989,000 32,916,000 29,676,000 23,379,000 22,882,000 33,273,000 158,115,000
% 10.1% 20.8% 18.8% 14.8% 14.5% 21.0% 100.0%
Lease Expirations (Entire Portfolio) as of June 30, 2001 ($ in millions) $50.0
$40.0 20.8%
21.0% 18.8%
$30.0
$33.3
$32.9
14.8%
$29.7
$20.0
10.1%
14.5%
$23.4
$22.9
2004
2005
$16.0
$10.0
$0.0 2001
2002
2003 14
Beyond
Lease Expirations (Large Tenant Portfolio) as of June 30, 2001 ($ in millions)
28.2%
$30.0 $29.9
18.0%
$20.0
15.8%
16.2%
15.5% $19.1
$16.7
$17.2
2002
2003
$16.4
6.3%
$10.0
$6.7
$0.0 2001
2004 15
2005
Beyond
Lease Expirations (Small Tenant Portfolio) as of June 30, 2001 ($ in millions) $30.0
$20.0 31.1%
$16.2
23.9%
17.9% $12.5
$10.0
13.4% $9.3
7.2% $7.0
6.6%
$3.7
$3.4
2005
Beyond
$0.0 2001
2002
2003
2004 16