BAML Global Real Estate BAML Global Real Estate BAML Global Real Estate BAML Global Real Estate Conference Conference Conference Conference 1 September 2019 September 2019 September 2019 September 2019
Safe Harbor Some of the information contained in this presentation includes forward looking statements. Such statements are subject to a number of risks and uncertainties which could cause actual results in the future to differ materially and adversely from those described in the forward looking statements. Investors should consult the Company’s filings with the Securities and Exchange Commission (SEC) for a description of the various risks and uncertainties which could cause such a difference before deciding whether to invest. This presentation also contains non GAAP financial measures and comparable net operating income (NOI). Reconciliation of this non GAAP financial measure to the most directly comparable GAAP measure can be found within the Company’s quarterly supplemental information package and in filings made with the SEC, which are available on the investor relations section of its website at www.washingtonprime.com. 2
Washington Prime Group: National Footprint with Local Flavor Satisfying Shoppers across Demographic Continuums Satisfying Shoppers across Demographic Continuums Satisfying Shoppers across Demographic Continuums Satisfying Shoppers across Demographic Continuums National Footprint with Local Flavor National Footprint with Local Flavor National Footprint with Local Flavor National Footprint with Local Flavor With 106 town centers throughout the US, we are as American as apple pie. Catering from the aspirant to the affluent and Middle America to metropolis, As a matter of fact, we are also as American as deep dish pizza in Chicago, WPG assets capture the socioeconomic continuum via one of the nation’s Hawaiian poke salad, vegan spring rolls in Malibu, El Paso Tex-Mex, Maryland largest retail portfolios. crab cakes, kimchi in Orange County, Memphis barbeque and a Kansas City porterhouse. In fact, the demographic constituency of WPG is a representative microcosm of the American consumer. Our 56M SF is comprised of Tier One Enclosed and Open Air venues 106 106 106 106 including Lifestyle, Factory Outlet and increasingly a hybrid format which Town Centers Town Centers Town Centers Town Centers includes a diversified mix of products, goods and services. This fluidity allows WPG to beta test across demographic, socioeconomic and geographic constituencies in order to better provide our guests with the practical and relevant as well as the frivolous and exciting whether it be 56M 56M 56M 56M Square Feet Square Feet Square Feet Square Feet fashion, food or furniture. Our well regarded national infrastructure, from Hawaii to Connecticut and everywhere in between, allows our tenant and sponsor partners to benefit from corporate operating efficacy and local management who possesses comprehensive knowledge of the specific locale within which they reside. 3 Satisfying consumers across demographic continuums
Critical Mass of Dominant Town Centers within Robust Secondary Catchments Company Snapshot Company Snapshot Company Snapshot Company Snapshot National portfolio of Enclosed and Open Air retail venues o Comprised of 106 core assets consisting of 56M SF as of JUN 30 2019 o Tier One and Open Air assets account for 93% of total NOI as a result of Noncore assets having been reduced by 21% o Diversified by product, size, geography and tenancy o Increasing mixed use component (lodging, residential, office and medical) component via adaptive reuse o Recognized as innovation leader within industry regarding events, activities and installations o Experienced leadership team incorporating financial, operational and strategic expertise o Readily available corporate resources allow for real time decision making by General Managers and local management o Current corporate credit ratings as follows: Moody’s Ba2, S&P BB and Fitch BB- o Tier One Enclosed Tier One Enclosed Tier One Enclosed Tier One Enclosed GLA GLA GLA GLA Assets Assets Assets Assets Total NOI (%) Total NOI (%) Total NOI (%) Total NOI (%) Mixed Use Percentage Mixed Use Percentage Mixed Use Percentage Mixed Use Percentage by Tenancy by Tenancy by Tenancy by Tenancy by Region by Region by Region by Region 2Q 2019 2Q 2019 2Q 2019 2Q 2019 9% 7% 50% 50% 50% 50% 9% 28% 26% 36% 40% 40% 40% 40% 34% 15% 30% 30% 30% 30% 7% 64% 65% 31% 20% 20% 20% 20% 3% 10% 10% 10% 10% 0% 0% 0% 0% Northeast West Southwest Open Air Tier One Tier Two National Local Regional Anchor >25,000 SF Southeast Midwest 4 Combining Open Air and Enclosed components results in a hybrid town center format
2Q 2019 Recap of Financial and Operating Results Reaffirming both 2019 FFO and dividend guidance of $1.20 at the midpoint and $1.00 per diluted share, respectively; o Maintaining 2020 comparable NOI growth forecast of at least 2.0%; o Leased 2.1M SF of space YTD; o Of the 2.1M SF, lifestyle tenancy accounted for 55% of new leasing volume; o Combined Enclosed and Open Air occupancy was 92.5%; o Tier One occupancy cost decreased 40 basis points to 11.7%; o Tier One Sales PSF increased 3.3% to $410; o Leasing spreads for new Tier One and Open Air transactions increased 2.9%; o The Company held 713 events, activities and installations during the quarter, with a total of 1,387 YTD; o Comparable NOI growth for Tier One and Open Air was (6.8%); o Excluding cotenancy and rental income loss impact from bankruptcies, comparable NOI was closer to flat; o Leased four more vacant department stores during the quarter; and o Including the four above, 15 of the 22 department store spaces identified for repositioning, or 68%, have been addressed. o 5 Financial flexibility provides ample liquidity to execute redevelopment
2Q 2019 Recap of Capital Raising Initiatives Closed $180M mortgage loan for Waterford Lakes with an all-in coupon of 4.86%; o Executed term sheet for $117M nonrecourse mortgage loan collateralized by four Open Air assets; o Announced $38M definitive agreement for the sale of 20 additional outparcels to Four Corners; o Announced a $99M sale leaseback for fee interest in the land at four Tier One assets; and o Anticipated excess proceeds of approximately $70M from the aforementioned transaction, as well as proceeds from the previously o executed $180M nonrecourse mortgage loan secured by Waterford Lakes Town Center, will provide the necessary liquidity to address the upcoming $250M senior unsecured note maturing April 2020. Source Source Source Source Status Status Status Status Amount Amount Amount Amount Rate Rate Rate Rate Timing Timing Timing Timing Waterford Lakes Financing Complete $180M 4.86% April 2019 Excess Proceeds from Refinancing 4 Open Air Assets Term Sheet $70M <4.0% 3Q/4Q 2019 Sale Leaseback at 4 Tier One Assets Definitive $99M 7.4% 3Q/4Q 2019 Agreement Sale of 20 Outparcels to Four Corners Executed PSA $38M 6.5% cap rate 2020 6 Financial flexibility provides ample liquidity to execute redevelopment
Robust and Diversified Leasing Progress Robust Leasing Volume and Tenant Diversification Robust Leasing Volume and Tenant Diversification Robust Leasing Volume and Tenant Diversification Robust Leasing Volume and Tenant Diversification Objective Objective Objective Objective 2019 leasing continues to be strong exhibited by a 14% year-over-year (YOY) increase totaling 2.1M SF, and the number of lease o transactions increased 10% YOY; Of the aforementioned 2.1M SF, 55% of new leasing volume was attributable to lifestyle tenancy which includes food, beverage, o entertainment, home furnishings, fitness and professional services; and The Company continues to incent its leasing and property management professionals in order to further diversify tenancy as o illustrated by 75 leases qualifying under various incentive programs during the first six months of 2019. New Renewal Renewal Total Total Square Feet Total Leasing Activity New Portfolio Square Lease Square Lease Square Change YOY YTD as of JUN 30 2019 Lease Count Size Feet Count Feet Count Feet (%) 113 668,524 415 1,478,143 528 2,146,667 14% 56.2M 7 Leasing is the litmus test for success
Recommend
More recommend
