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Analysis of Operating Results and Financial Condition March 31, 2005
ANALYSIS OF OPERATING RESULTS AND FINANCIAL CONDITION FOR THE THREE MONTHS ENDED MARCH 31, 2005 INDEX
Page
Fact Sheet ................................................................................................................................
1
Sources and Uses of Funds......................................................................................................
2
Funds from Operations (FFO) .................................................................................................
3-4
Capital Structure......................................................................................................................
5
Consolidated Balance Sheets...................................................................................................
6-7
Consolidated Income Statements ............................................................................................
8-9
Gross Margins .........................................................................................................................
10
Capital Expenditure Analysis ..................................................................................................
11
Rentable Square Footage by Region .......................................................................................
12
Portfolio Analyses ................................................................................................................... 13 - 24
PS BUSINESS PARKS, INC. FIRST QUARTER FACT SHEET (in thousands, except per share amounts)
OPERATING DATA FOR THE THREE MONTHS ENDED 03/31/05 03/31/04 Difference Total operating revenues Net income allocable to common shareholders
$ $
55,886 7,324
$ $
53,765 4,158
3.9% 76.1%
Net income per common share - diluted: Continuing operations Discontinued operations Net income per common share - diluted
$ $ $
0.23 0.10 0.33
$ $ $
0.17 0.02 0.19
35.3% 400.0% 73.7%
Weighted average common shares outstanding - Basic
21,852
21,613
1.1%
Weighted average common shares outstanding - Diluted
22,012 7,305 29,317
21,778 7,305 29,083
1.1% 0.0% 0.8%
Weighted average common OP units outstanding Total pro forma fully-converted shares
FUNDS FROM OPERATIONS FOR THE THREE MONTHS ENDED 03/31/05 03/31/04 Difference FFO allocable to common shareholders before adjustments EITF Topic D-42 FFO allocable to common shareholders
$
$
$
25,881 25,881
FFO per common share and units - before adjustments FFO per common share and units - as reported
$ $
0.88 0.88
$ $
$
25,580 (2,133) 23,447 0.88 0.81
1.2% (100.0%) 10.4% 0.0% 8.6%
PROPERTY INFORMATION FOR THE THREE MONTHS ENDED 03/31/05 03/31/04 Difference Total Owned Portfolio (excluding discontinued operations) Net rentable square footage at period end Weighted average occupancy Annualized realized rent per sq. ft. (1) REVPAR (2)
$ $
17,849 90.8% 13.47 $ 12.23 $
17,684 88.6% 13.52 11.98
0.9% 2.5% (0.4%) 2.1%
$ $
17,684 90.8% 13.42 $ 12.19 $
17,684 88.6% 13.52 11.98
0.0% 2.5% (0.7%) 1.8%
Same Park Facilities Net rentable square footage Weighted average occupancy Annualized realized rent per sq. ft. (1) REVPAR (2)
(1) Represents the actual revenues earned per occupied square foot. (2) Represents the actual revenues earned per total square foot. BALANCE SHEET DATA 03/31/05 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
$ $ $ $ $ $
1,365,528 127,750 169,728 510,850 508,609 21,891 23.23
12/31/04 $ $ $ $ $ $
1,363,829 127,750 169,295 510,850 506,114 21,840 23.17
Difference 0.1% 0.0% 0.3% 0.0% 0.5% 0.2% 0.3%
MARKET VALUE INFORMATION 03/31/05 Market value of common stock and common OP units
$
Total debt Total preferred stock and preferred OP units
1,176,624
12/31/04 $
Difference
1,314,441
(10.5%)
11,265
11,367
(0.9%)
638,600
638,600
0.0%
Total market capitalization
$
1,826,489
$
1,964,408
(7.0%)
Stock price at the end of the period
$
40.30
$
45.10
(10.6%)
1
PS BUSINESS PARKS, INC.
Sources and Uses of Funds (in thousands)
FOR THE QUARTER ENDED March 31, 2005 Sources of Funds: Funds from operations, before EITF Topic D-42 Proceeds from disposition of real estate Exercise of stock options
$
Total Sources of Funds
25,881 15,267 1,246 42,394
Uses of Funds: Property rennovations Land Held for Development Recurring capital expenditures Common dividends and OP distributions Principal payments on mortgage notes payable Change in working capital
(1,082) (123) (8,423) (8,461) (102) (2,230)
Total Uses of Funds
(20,421)
Net increase in cash balance
21,973
Beginning cash balance
39,688
Ending cash balance
$
2
61,661
PS BUSINESS PARKS, INC. ANALYSIS OF FUNDS FROM OPERATIONS (in thousands except per share amounts)
Three Months Ended 03/31/05 03/31/04
Increase (Decrease)
% Change
Funds from operations (FFO): Net income allocable to common shareholders, before effect of EITF Topic D-42 Adjustments: (Gain) loss on disposition of real estate Depreciation and amortization Minority interest in income - common units 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 Fully diluted FFO per common share/OP unit
7,324
$
4,158
(2,914) 19,016 2,455 25,881 $
17,884 1,405 23,447
21,852 7,305 160 29,317
21,613 7,305 165 29,083
$
3,166
76.1%
$
2,914 1,132 1,050 2,434
100.0% 6.3% 74.7% 10.4%
239 0 (5) 234
1.1% 0.0% (3.0%) 0.8%
$
0.88
$
0.81
$
0.07
8.6%
Funds from operations Adjustments: Maintenance capital expenditures Tenant improvements Lease commissions Straight-line rent Stock compensation expense In-place rents adjustment (SFAS 141) Redemption amount over carrying amount related to preferred equity called for redemption
$
25,881
$
23,447
$
2,434
10.4%
FAD
$
16,519
$
20,170
FAD per common share/OP unit
$
0.56
$
0.69
FAD
$
Distributions to common shareholders Distributions to common OP unitholders Cash available for debt repayments and reinvestments
$
16,519 $ (6,342) (2,119) 8,058 $
Funds available for distribution (FAD):
(339) (6,447) (1,554) (1,188) 127 39
(880) (2,826) (1,413) (652) 322 39
(541) 3,621 141 536 (195) -
(61.5%) 128.1% 10.0% 82.2% (60.5%) 0.0%
-
2,133
(2,133)
(100.0%)
$
(3,651)
(18.1%)
$
(0.13)
(18.8%)
20,170 $ (6,278) (2,119) 11,773 $
(3,651) 64 (3,715)
(18.1%) 1.0% 0.0% (31.6%)
Cash available for debt repayments and reinvestments:
FAD payout ratio
51.2%
3
41.6%
(23.1%)
Diluted FFO Per Common Share/OP Unit $0.95
$0.91
$0.90
$0.89
$0.89 $0.88
$0.90 $0.85
$0.87
$0.88
$0.86
$0.85 $0.80 $0.75 $0.70 $0.65 $0.60 Q103*
Q203
Q303
Q403
Q104*
Q204
Q304*
Q404
* Excludes effects of ETIF Topic D-42 costs and impairment charges.
4
Q105
PS BUSINESS PARKS, INC. CAPITAL STRUCTURE (in thousands)
Total
As of March 31, 2005 % of Total Market WTD Average Capitalization Rate
As of December 31, 2004 % of Total Market WTD Average Total Capitalization Rate
Long-Term Debt: 8.190% mortgage note, secured by one commercial property, due March 2007 7.290% mortgage note, secured by one commercial property, due February 2009 Total mortgage notes payable (1)
$
5,511 5,754 11,265
Short-Term Debt: $100 million unsecured line of credit Total Short-Term Debt
1%
-
Total debt
7.73%
5,578 5,789 11,367
-
-
7.73%
11,367
-
11,265
8.875% Series Y preferred operating partnership units (480,000 units outstanding) callable 7/12/05 9.500% Series D preferred stock (2,634,000 depositary shares outstanding) callable 5/10/06 9.250% Series E preferred operating partnership units (2,120,000 units outstanding) callable 9/21/06 8.750% Series F preferred stock (2,000,000 units outstanding) callable 1/28/07 7.950% Series G preferred operating partnership units (800,000 units outstanding) callable 10/30/07 7.000% Series H preferred stock (8,200,000 units outstanding) callable 1/30/09 6.875% Series I preferred stock (3,000,000 units outstanding) callable 4/21/09 7.500% Series J preferred operating partnership units (1,710,000 units outstanding) callable 5/27/09 7.950% Series K preferred stock (2,300,000 units outstanding) callable 6/30/09 7.600% Series L preferred stock (2,300,000 units outstanding) callable 8/31/09
1%
12,000 65,850 53,000 50,000 20,000 205,000 75,000 42,750 57,500 57,500
-
7.73%
1%
7.73%
12,000 65,850 53,000 50,000 20,000 205,000 75,000 42,750 57,500 57,500
638,600
35%
7.80%
638,600
33%
7.80%
Total debt and preferred equity
649,865
36%
7.80%
649,967
33%
7.80%
984,969 329,472 1,314,441
67%
1,964,408
100%
Total market capitalization
$
882,218 294,406 1,176,624
$ 64%
1,826,489
100%
$
Principal Maturity Dates are represented by the following chart: Principal Maturity Dates 2005
Park East I & II $ Park East III $
(2)
1%
Total preferred equity
Common stock (21,891,272 and 21,839,667 shares outstanding in March 31, 2005 and December 31, 2004 respectively) Common operating partnership units (7,305,355 units outstanding as of March 31, 2005 and December 31, 2004 ) Total common equity (2)
(1)
$
2006
209 109 318
Closing stock price was $40.30 and $45.10 as of March 31, 2005 and December 31, 2004, respectively.
5
$ $
2007
300 155 455
$ $
5,002 167 5,169
2008
$ $
179 179
2009
$ $
5,144 5,144
PS BUSINESS PARKS, INC. CONSOLIDATED BALANCE SHEETS (in thousands)
03/31/05
12/31/04
Increase (Decrease)
% Change
ASSETS Cash and cash equivalents
$
Real estate facilities, at cost: Land Buildings and equipment
$
382,908 1,197,006 1,579,914 (314,470) 1,265,444 6,128 10,163 1,281,735
Accumulated depreciation Properties held for disposition, net Land held for development
Rent receivable Deferred rent receivables Other assets Total assets
61,661
39,688
$
382,908 1,187,584 1,570,492 (295,415) 1,275,077 16,876 11,583 1,303,536
21,973
9,422 9,422 19,055 (9,633) (10,748) (1,420) (21,801)
3,041 16,533 2,558 $ 1,365,528
2,079 15,470 3,056 $ 1,363,829
$
$
$
$
(a)
(b)
(c) (d)
962 1,063 (498) 1,699
(e)
(1,127) (102) (1,229)
(g)
(f)
55.4%
0.0% 0.8% 0.6% 6.5% (0.8%) (63.7%) (12.3%) (1.7%) 46.3% 6.9% (16.3%) 0.1%
LIABILITIES AND SHAREHOLDERS' EQUITY Accrued and other liabilities Mortgage notes payable Total liabilities
37,326 11,265 48,591
Minority interests: Preferred units Common units Shareholders' equity: Preferred stock Common stock Paid-in capital Cumulative net income Cumulative distributions Total shareholders' equity Total liabilities and shareholders' equity
38,453 11,367 49,820
127,750 169,728
127,750 169,295
510,850 219 421,863 360,622 (274,095) 1,019,459
510,850 218 420,351 343,529 (257,984) 1,016,964
$ 1,365,528
6
$ 1,363,829
433
0.0% 0.3%
-
0.0% 0.5% 0.4% 5.0% 6.2% 0.2%
1 1,512 17,093 16,111 2,495 $
(2.9%) (0.9%) (2.5%)
1,699
(h) (i)
0.1%
PS BUSINESS PARKS, INC. CONSOLIDATED BALANCE SHEETS VARIANCE EXPLANATIONS
(a) See sources and uses of funds on page 2 (b) Change in real estate facilities, at cost: Property renovations Maintenance capital expenditures Tenant improvements Lease commissions
$
$ (c) Change in discontinued operations, net: Miami Retail
$
MICC - Center 17 (Cape Cod)
$ (d) Change in land held for sale: Cornell Oaks Land Sold
$
Improvements on Land
$ (e) Rent receivable consists of the following: U.S. Government Tenants Other Allowance for bad debt
(f)
03/31/05 $ 1,472 2,119 (550) $ 3,041
Change in other assets: Due on rental properties sold Prepaid Insurance Amortization of prepaid costs Stock option exercise funds deposited after 3/31/05. Other
(h) Change in paid-in capital: Beginning paid-in capital Exercise of stock options Stock option amortization Restricted stock amortization Change in minority interest, common Ending paid in capital
(i)
12/31/04 $ 6,778 3,906 3,109 15,220 5,051 4,389 $ 38,453
(1,543) 123 (1,420)
12/31/04 1,132 1,497 (550) $ 2,079
$
03/31/05 $ 7,442 91 4,749 15,431 4,920 4,693 $37,326
10,192 556 10,748
$
$
(g) Accrued and other liabilities consists of: Prepaid Rent Accounts payable Property taxes Security deposits Reserves for acquisition costs Other
1,082 339 6,447 1,554 9,422
(227) (633) (31) 442 (49) (498)
Change $
664 (3,815) 1,640 211 (131) 304
$
(1,127)
$ 420,351 1,245 92 272 (97) $ 421,863
Change in cumulative distributions: Distributions to preferred shareholders Distributions to common shareholders
$
(9,769) (6,342) $ (16,111)
7
PS BUSINESS PARKS, INC. CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED (in thousands, except per share amounts)
03/31/05 Revenues: Rental income Facility management fees primarily from affiliates Total operating revenues
$
55,741 145 55,886
Expenses: Property operations Depreciation and amortization General and administrative Total operating expenses
$
16,388 19,016 1,438 36,842
Other income and expenses: Interest and other income Interest expense Total other income and expenses
Increase (Decrease)
03/31/04
398 (282) 116
53,610 155 53,765
$
2,131 (a) (10) 2,121
4.0% (6.5%) 3.9%
16,116 17,404 1,091 34,611
272 (b) 1,612 347 (c) 2,231
1.7% 9.3% 31.8% 6.4%
27 (1,266) (1,239)
371 (984) (d) (1,355)
1374.1% (77.7%) (109.4%)
Income from continuing operations before minority interests
19,160
17,915
1,245
Minority interests in continuing operations: Minority interest in income - preferred units Distributions paid to preferred unit holders Redemption of preferred operating partnership units Minority interest in income - common units Total minority interests in continuing operations
(2,691) (1,682) (4,373)
(4,810) (267) (1,267) (6,344)
(2,119) (267) 415 (1,971)
Income from continuing operations
14,787
11,571
3,216
165 2,914
550 -
(773) 2,306
(138) 412
Discontinued operations: Income from discontinued operations Gain on disposition of real estate Minority interest in earnings attributable to discontinued operations - common units Income from discontinued operations Net Income Net Income allocable to preferred shareholders Preferred distributions Preferred distributions paid Redemption of preferred stock Total preferred distributions
% Change
17,093
11,983
9,769 9,769
5,959 1,866 7,825
6.9%
(44.1%) (100.0%) 32.8% (31.1%) 27.8%
(385) (e) 2,914
(70.0%) 100.0%
635 1,894
460.0% 459.8%
5,110
42.6%
3,810 (f) (1,866) 1,944
63.9% (100.0%) 24.8%
Net Income allocable to common shareholders
$
7,324
$
4,158
$
3,166
76.1%
Net income per common share - basic: Continuing operations Discontinued operations Net income
$ $ $
0.23 0.11 0.34
$ $ $
0.17 0.02 0.19
$ $ $
0.06 0.09 0.15
35.3% 450.0% 78.9%
Net income per common share - diluted Continuing operations Discontinued operations Net income
$ $ $
0.23 0.10 0.33
$ $ $
0.17 0.02 0.19
$ $ $
0.06 0.08 0.14
35.3% 400.0% 73.7%
Weighted average common shares outstanding: Basic Diluted
21,852 22,012
8
21,613 21,778
239 (g) 234
1.1% 1.1%
PS BUSINESS PARKS, INC. CONSOLIDATED STATEMENT OF INCOME VARIANCE EXPLANATIONS
(a) Rental income has increased due to the following: Same Park facilities Acquisitions Straight-line rent
$
$ (b) Cost of operations have increased due to the following: Same Park facilities Acquisitions
$ $
907 688 536 2,131
(32) 304 272
(c) General and administrative expenses for the three months ended: March 31, 2005 562 283 119 170 78 226 $ 1,438
Salaries Bonus Expense Stock option and stock compensation expense Professional fees Investor services Other
$
March 31, 2004 392 183 143 78 50 245 $ 1,091 $
(d) Interest expense for the three months ended: Mortgage notes payable Facilities fees & other charges Line of Credit interest (Wells Fargo) Interest Rate Swap Charges Term Loan Interest (Fleet)
$
March 31, 2005 219 63 -
$
-
-
Affiliated Loan (PSI
-
$
282
March 31, 2004 366 63 262 239 189 147
$
1,266
(e) Net operating income from discontinued operations for the three months ended: March 31, 2005 March 31, 2004 252 $ 1,610 (87) (580) (480) $ 165 $ 550
Rental revenue Operating expenses Debt extinguishment costs Depreciation expense
$
(f) Increase relates to issuance of additional preferred stock . (g) Net increase relates to stock option exercises and vesting of restricted stock units.
9
Gross Operating Margin Percentage * (Same Park) 75.0% 73.4%
74.0% 73.0% 72.0%
72.0%
72.8% 71.9%
71.7%
71.8%
72.4%
70.6%
71.0%
70.1%
70.0% 69.0% 68.0% 67.0% 66.0% 65.0% Q103 Q203 Q303 Q403 Q104 Q204 Q304 Q404 Q105 * Gross margin is computed by dividing property net operating income by rental income (excluding straight-line rent adjustment) for operating assets owned in period disclosed .
10
PS BUSINESS PARKS, INC. Analysis of Capital Expenditures (in thousands)
Recurring capital expenditures (1)
Three Months Ended March 31, 2005 Costs
Cost per Weighted Average Square Foot
Maintenance capital expenditures (2)
$339
$0.02
Tenant improvements
6,447
$0.36
Leasing commissions
1,554
$0.09
$8,340
$0.47
Total recurring capital expenditures Non-recurring capital expenditures Property renovations
$1,082
Total non-recurring capital expenditures
$1,082
(1)
The company defines "recurring capital expenditures" as those capitalized costs necessary to continue to operate the property at its current economic value. Costs in excess of $1,000 for tenant improvements and $2,000 for maintenance capital expenditures with a useful life greater than 24 months for tenant improvements and maintenance capital expenditures are capitalized. It excludes deferred maintenance and leasing costs committed to by previous owners for acquired properties, renovations that substantially enhance the value of a property and first generation leasing costs on development properties. Lease-up costs on acquired properties are included in recurring capital expenditures. Repairs and maintenance were $3.5 million or approximately $0.20 per weighted average square foot for the three months ended March 31, 2005 compared to $3.7 million or $0.21 per square foot during the three months ended March 31, 2004.
(2)
Major costs include roofing, HVAC replacement, parking lot replacement and other major repairs that extend the life of the respective component of the building.
11
Total Owned Rentable Square Footage by Region *
December 31, 2004 (17,988 square feet, in thousands)
March 31, 2005 (17,849 square feet, in thousands)
S. California (20%)
S. California (20%) N. California (8%) S. Texas (7%) N. Texas (9%) Virginia (16%) Maryland (7%) Oregon (11%) Florida (18%) Arizona (4%)
N. California (8%) S. Texas (6%) N. Texas (9%) Virginia (16%) Maryland (7%) Oregon (11%) Florida (19%) Arizona (4%)
679
679 3,663
3,331
3,663
3,191
1,497
1,497
1,939
1,938
1,163
1,162 1,242
1,242
1,690
1,689
2,786
2,786
* Square footage excludes discontinued operations. 12
Change in Same Park Revenue before Straight Line Rent * 5.0% 3.0%
1.7% 0.3%
1.0% -1.0%
0.8%
0.4% -0.8%
-1.8%
-1.6%
-3.0%
-2.9%
-3.1%
-5.0% Q103
Q203
Q303
Q403
Q104
Q204
Q304
Q404
Q105
* Percentage represents the change from the same period in the prior year based on the defined Same Park assets for each period disclosed.
13
Change in Same Park NOI before Straight Line Rent * 2.5%
3.0% 0.9%
1.0% -1.0% -0.5%
-0.3% -0.4% -3.1%
-3.0% -3.1%
-5.0% -4.9%
-7.0% Q103
-5.7%
Q203
Q303
Q403
Q104
Q204
Q304
Q404
Q105
* Percentage represents the change from the same period in the prior year based on the defined Same Park assets for each period disclosed.
14
PS BUSINESS PARKS, INC. OWNED PORTFOLIO ANALYSIS (in thousands) Industry Concentration as of March 31, 2005 % of Total Rents 12.4% 12.0% 9.9% 9.5% 9.1% 8.4% 6.2% 4.6% 4.4% 4.0% 80.5%
Computer hardware, software and related services Business services Government Contractors Financial services Warehouse, transportation, logistics Retail Home funishings Electronics Communications
Top Ten Customers by Total Annual Revenues as of March 31, 2005 Tenant U.S. Government Citigroup Intel County of Santa Clara IBM Axcelis Technologies Wells Fargo AARP Welch Allen Protocol, Inc TRW Systems
Square Footage
Total Annual Revenues
%
463 262 214 97 180 89 102 102 91 58
$
10,206 3,805 3,679 2,951 2,676 1,656 1,571 1,398 1,357 1,319
4.6% 1.7% 1.7% 1.3% 1.2% 0.7% 0.7% 0.6% 0.6% 0.6%
1,658
$
30,618
13.7%
15
PS BUSINESS PARKS, INC. TOTAL OWNED PORTFOLIO OVERVIEW (in thousands) Rentable Square Footage of Properties as of March 31, 2005 Primary Markets Miami Northern Virginia Portland Dallas Orange County Los Angeles County Northern California Maryland Austin Phoenix San Diego County Houston
Industrial
Office
2,556 231 712 407 3,906
12 572 346 704 31 430 720 131 2,946
Flex 623 2,215 1,592 1,459 911 770 660 522 788 679 535 243 10,997
Total 3,191 2,787 1,938 1,690 1,615 1,513 1,497 1,242 788 679 535 374 17,849
% 17.9% 15.6% 10.9% 9.5% 9.0% 8.5% 8.4% 7.0% 4.4% 3.8% 2.9% 2.1% 100.0%
Average Occupancy Rates by Product Type for the Quarter Ending March 31, 2005 Primary Markets Miami Northern Virginia Portland Dallas Orange County Los Angeles County Northern California Maryland Austin Phoenix San Diego County Houston
Industrial
Office
90.4% 100.0% 95.5% 100.0% 92.9%
100.0% 95.0% 71.3% 90.9% 90.6% 90.9% 95.5% 78.7% 90.0%
Flex 95.3% 95.4% 82.4% 82.1% 98.0% 95.1% 93.7% 90.4% 80.2% 93.3% 96.1% 88.6% 90.3%
Total 91.4% 95.3% 80.4% 84.6% 94.9% 95.2% 94.6% 93.3% 80.2% 93.3% 96.1% 85.1% 90.8%
Weighted Average Occupancy Rates by Portfolio Type for the Quarter Ending March 31, 2005 Primary Markets Miami Northern Virginia Portland Dallas Orange County Los Angeles County Northern California Maryland Austin Phoenix San Diego County Houston
Large Tenant
Small Tenant
90.8% 95.6% 80.0% 85.7% 95.8% 95.5% 94.7% 93.6% 78.9% 90.0%
95.6% 94.8% 82.7% 79.3% 94.1% 94.9% 94.6% 81.5% 84.2% 93.3% 96.1% 85.1% 92.3%
Total 91.4% 95.3% 80.4% 84.6% 94.9% 95.2% 94.6% 93.3% 80.2% 93.3% 96.1% 85.1% 90.8%
Note: Includes all properties reported in continuing operations as of March 31, 2005. The Company's "large tenant" portfolio consists of properties with average leases greater than or equal to 5,000 square feet while the "small tenant" portfolio consists of properties with average leases less than 5,000 square feet.
16
PS BUSINESS PARKS, INC. SAME PARK PORTFOLIO OVERVIEW (in thousands) Rentable Square Footage of Properties as of March 31, 2005 Primary Markets Miami Northern Virginia Portland Dallas Orange County Los Angeles County Northern California Maryland Austin Phoenix San Diego County Houston
Industrial
Office
2,556 231 712 407 3,906
12 406 347 704 31 430 721 131 2,782
Flex
Total
623 2,215 1,592 1,458 911 770 660 522 788 679 535 243 10,996
3,191 2,621 1,939 1,689 1,615 1,513 1,497 1,243 788 679 535 374 17,684
% 18.0% 14.8% 11.0% 9.6% 9.1% 8.6% 8.5% 7.0% 4.5% 3.8% 3.0% 2.1% 100.0%
Average Occupancy Rates by Product Type for the Quarter Ending March 31, 2005 Primary Markets Miami Northern Virginia Portland Dallas Orange County Los Angeles County Northern California Maryland Austin Phoenix San Diego County Houston
Industrial
Office
90.4% 100.0% 95.5% 100.0% 92.9%
100.0% 96.3% 71.3% 90.9% 90.6% 90.9% 95.5% 78.7% 89.9%
Flex
Total
95.3% 95.4% 82.4% 82.1% 98.0% 95.1% 93.7% 90.4% 80.2% 93.3% 96.1% 88.6% 90.3%
91.4% 95.5% 80.4% 84.6% 94.9% 95.2% 94.6% 93.3% 80.2% 93.3% 96.1% 85.1% 90.8%
Weighted Average Occupancy Rates by Portfolio Type for the Quarter Ending March 31, 2005 Primary Markets Miami Northern Virginia Portland Dallas Orange County Los Angeles County Northern California Maryland Austin Phoenix San Diego County Houston
Large Tenant
Small Tenant
90.8% 95.6% 80.0% 85.7% 95.8% 95.5% 94.7% 93.6% 78.9% 90.0%
95.6% 95.4% 82.7% 79.3% 94.1% 94.9% 94.6% 81.5% 84.2% 93.3% 96.1% 85.1% 92.3%
Total 91.4% 95.5% 80.4% 84.6% 94.9% 95.2% 94.6% 93.3% 80.2% 93.3% 96.1% 85.1% 90.8%
Note: Includes all properties included in continuing operations owned since January 1, 2004. The Company's "large tenant" portfolio consists of properties with average leases greater than or equal to 5,000 square feet while the "small tenant" portfolio consists of properties with average leases less than 5,000 square feet.
17
Same Park Weighted Average Occupancy 96.0% 95.0% 94.0% 92.7%
93.0%
92.4%
92.9% 92.6%
92.0% 90.4%
91.0%
90.5%
90.5%
90.8%
Q304
Q404
Q105
90.0%
90.0% 89.0% Q103
Q203
Q303
Q403
Q104
Q204
Percentage represents the change from the same period in the prior year based on the defined Same Park assets for each period disclosed.
18
Total Owned Portfolio Weighted Average Occupancy * 97.0% 96.0% 95.0% 94.0% 93.0% 92.0% 91.0% 90.0% 89.0% 88.0% 87.0%
92.6%
92.2% 91.8%
91.9% 90.8% 89.6% 88.7%
88.2% 87.9%
Q103
Q203
Q303
Q403
Q104
Q204
Q304
Q404
Q105
* Represents weighted average occupancy for operating assets owned in period disclosed.
19
PS BUSINESS PARKS, INC. Owned Portfolio Lease Expirations as of March 31, 2005 (in thousands) Lease Expirations - Flex Year of Lease Expiration 2005 2006 2007 2008 2009 Thereafter
Rentable Square Footage 1,815 2,252 1,759 1,328 1,070 1,913 10,137
Annual Rents $
21,148 28,555 21,095 19,212 11,714 26,456 128,180
$
% 16.5% 22.3% 16.5% 15.0% 9.1% 20.6% 100.0%
% of Company Annual rents 10.0% 13.5% 10.0% 9.1% 5.5% 12.6% 60.7%
Lease Expirations - Office Year of Lease Expiration 2005 2006 2007 2008 2009 Thereafter
Rentable Square Footage 548 540 418 385 259 509 2,659
Annual Rents $
11,841 11,453 8,739 9,033 5,171 12,894 59,131
$
% 20.0% 19.4% 14.8% 15.3% 8.7% 21.8% 100.0%
% of Company Annual rents 5.6% 5.4% 4.1% 4.3% 2.4% 6.2% 28.0%
Lease Expirations - Industrial Year of Lease Expiration 2005 2006 2007 2008 2009 Thereafter
Rentable Square Footage 653 900 819 473 318 497 3,660
Annual Rents $
4,306 5,684 5,351 3,433 1,948 3,147 23,869
$
% 18.0% 23.8% 22.4% 14.4% 8.2% 13.2% 100.0%
% of Company Annual rents 2.0% 2.7% 2.5% 1.6% 0.9% 1.6% 11.3%
Lease Expirations - Total Year of Lease Expiration 2005 2006 2007 2008 2009 Thereafter
Rentable Square Footage 3,016 3,692 2,996 2,186 1,647 2,919 16,456
Annual Rents $
$
20
37,295 45,692 35,185 31,678 18,833 42,497 211,180
% 17.7% 21.6% 16.7% 15.0% 8.9% 20.1% 100.0%
% of Company Annual rents 17.7% 21.6% 16.7% 15.0% 8.9% 20.1% 100.0%
PS BUSINESS PARKS, INC. Owned Portfolio Lease Expirations as of March 31, 2005 (in thousands) Southern California Year of Lease Expiration 2005 2006 2007 2008 2009 Thereafter
Rentable Square Footage 744 1,108 674 398 295 275 3,494
Annual Rents $
%
10,468 13,586 9,432 6,672 4,412 4,812 49,382
$
21.2% 27.5% 19.1% 13.5% 8.9% 9.8% 100.0%
% of Company Annual rents 5.0% 6.4% 4.5% 3.2% 2.1% 2.2% 23.4%
Northern California Year of Lease Expiration 2005 2006 2007 2008 2009 Thereafter
Rentable Square Footage 203 314 343 227 120 232 1,439
Annual Rents $
%
2,489 3,576 3,211 4,915 1,202 2,486 17,879
$
13.9% 20.0% 18.0% 27.5% 6.7% 13.9% 100.0%
% of Company Annual rents 1.2% 1.7% 1.5% 2.3% 0.6% 1.2% 8.5%
Southern Texas Year of Lease Expiration 2005 2006 2007 2008 2009 Thereafter
Rentable Square Footage 247 177 142 127 192 103 988
Annual Rents $
% 2,191 1,844 1,347 1,116 1,304 1,090 8,892
$
24.6% 20.7% 15.1% 12.6% 14.7% 12.3% 100.0%
% of Company Annual rents 0.9% 0.9% 0.6% 0.5% 0.6% 0.5% 4.0%
Northern Texas Year of Lease Expiration 2005 2006 2007 2008 2009 Thereafter
Rentable Square Footage 198 243 150 124 186 571 1,472
Annual Rents $
$
21
1,913 2,991 1,117 1,329 917 4,800 13,067
% 14.6% 22.9% 8.5% 10.2% 7.0% 36.8% 100.0%
% of Company Annual rents 0.9% 1.4% 0.5% 0.6% 0.4% 2.2% 6.0%
PS BUSINESS PARKS, INC. Owned Portfolio Lease Expirations as of March 31, 2005 (in thousands) Florida Year of Lease Expiration 2005 2006 2007 2008 2009 Thereafter
Rentable Square Footage 537 826 636 492 196 276 2,963
Annual Rents $
3,757 6,246 4,641 3,667 1,535 2,135 21,981
$
% 17.1% 28.4% 21.1% 16.7% 7.0% 9.7% 100.0%
% of Company Annual rents 1.8% 3.0% 2.2% 1.8% 0.7% 1.0% 10.5%
Northern Virginia Year of Lease Expiration 2005 2006 2007 2008 2009 Thereafter
Rentable Square Footage 356 481 329 425 328 758 2,677
Annual Rents $
$
4,924 8,860 4,912 7,738 4,897 13,773 45,104
% 10.9% 19.6% 10.9% 17.2% 10.9% 30.5% 100.0%
% of Company Annual rents 2.4% 4.2% 2.3% 3.7% 2.3% 6.5% 21.4%
Maryland Year of Lease Expiration 2005 2006 2007 2008 2009 Thereafter
Rentable Square Footage 265 98 223 153 152 288 1,179
Annual Rents $
$
5,804 2,496 4,711 3,206 2,074 5,881 24,172
% 24.0% 10.3% 19.5% 13.3% 8.6% 24.3% 100.0%
% of Company Annual rents 2.7% 1.2% 2.2% 1.5% 1.0% 2.8% 11.4%
Oregon Year of Lease Expiration 2005 2006 2007 2008 2009 Thereafter
Rentable Square Footage 299 289 317 191 114 391 1,601
Annual Rents $
$
22
4,051 4,458 4,015 2,512 1,796 7,099 23,931
% 16.9% 18.6% 16.8% 10.5% 7.5% 29.7% 100.0%
% of Company Annual rents 1.9% 2.1% 1.9% 1.2% 0.9% 3.4% 11.4%
PS BUSINESS PARKS, INC. Owned Portfolio Lease Expirations as of March 31, 2005 (in thousands) Arizona Year of Lease Expiration 2005 2006 2007 2008 2009 Thereafter
Rentable Square Footage 167 156 182 49 64 25 643
Annual Rents $
% 1,698 1,635 1,799 523 696 421 6,772
$
25.1% 24.1% 26.6% 7.7% 10.3% 6.2% 100.0%
% of Company Annual rents 0.9% 0.7% 1.0% 0.2% 0.3% 0.3% 3.4%
Total Year of Lease Expiration 2005 2006 2007 2008 2009 Thereafter
Rentable Square Footage 3,016 3,692 2,996 2,186 1,647 2,919 16,456
Annual Rents $
$
23
37,295 45,692 35,185 31,678 18,833 42,497 211,180
% 17.7% 21.6% 16.7% 15.0% 8.9% 20.1% 100.0%
% of Company Annual rents 17.7% 21.6% 16.7% 15.0% 8.9% 20.1% 100.0%
PS BUSINESS PARKS, INC. Owned Portfolio Lease Expirations as of March 31, 2005 (in thousands) Lease Expirations - Large Tenant Portfolio Year of Lease Expiration 2005 2006 2007 2008 2009 Thereafter Total
Rentable Square Footage 1,777 2,057 1,789 1,507 1,128 2,507 10,765
Annual Rents $
21,466 23,842 19,184 20,949 10,800 34,718 130,959
$
% 16.4% 18.2% 14.6% 16.0% 8.3% 26.5% 100.0%
% of Company Annual rents 10.2% 11.3% 9.1% 10.0% 5.1% 16.3% 62.0%
Lease Expirations - Small Tenant Portfolio Year of Lease Expiration 2005 2006 2007 2008 2009 Thereafter Total
Rentable Square Footage 1,239 1,635 1,207 679 519 412 5,691
Annual Rents $
15,829 21,850 16,001 10,729 8,033 7,779 80,221
$
% 19.7% 27.3% 19.9% 13.4% 10.0% 9.7% 100.0%
% of Company Annual rents 7.5% 10.3% 7.6% 5.1% 3.8% 3.7% 38.0%
Lease Expirations - Total Year of Lease Expiration 2005 2006 2007 2008 2009 Thereafter Total
Rentable Square Footage 3,016 3,692 2,996 2,186 1,647 2,919 16,456
Annual Rents $
$
24
37,295 45,692 35,185 31,678 18,833 42,497 211,180
% 17.7% 21.6% 16.7% 15.0% 8.9% 20.1% 100.0%
% of Company Annual rents 17.7% 21.6% 16.7% 15.0% 8.9% 20.1% 100.0%
