Company Update March 2018 PS Business Parks Overview Public Since - - PowerPoint PPT Presentation

Company Update March 2018

2

PS Business Parks Overview

Public Since 1998: Consistently Outperforms the S&P 500 and RMZ Fortress Balance Sheet: A- Corporate Rating from Standard & Poor’s Strong Same Park NOI Growth of 5.7% for 2017 98 Business Parks of Infill Real Estate in Gateway Markets 83% of the Portfolio is Light Industrial/Flex Product That is Functional and Multi-Tenant Strong, Tenured Management Team (NAV Focused)

Driving Shareholder Value

3

Average Annual Total Shareholder Return Consistent Outperformance

17.9% 12.8% 13.0% 12.8% 9.8% 7.8% 11.1% 9.1% 15.8% 8.5% 9.9% 7.2%

0.0% 4.0% 8.0% 12.0% 16.0% 20.0% 5 Year 10 Year 15 Year 20 Year

PSB NAREIT S&P 500

Source: IPREO December 31, 2017

4

$0.5 $1.1 $2.0 $2.8 $3.1 $4.0 $5.1 $5.4

$- $1.0 $2.0 $3.0 $4.0 $5.0 $6.0

Billions

Driving Growth!

2017: $5.4 Billion

Enterprise Value

5

31% Industrial 52% Flex 17% Office

Three Product Types Six States

28.0 Million Square Feet 98 Business Parks 661 Buildings 4,900 Tenants

Gateway Markets

6

PSB Product 4,900 Customers: Small Business America

Flex 52% Office 17% Industrial 31%

14.5 Million Sq. Ft Accessible Parking Dock High and At-Grade Doors Easily Reconfigured Buildings Small User Focus 8.8 Million Sq. Ft Multi-Tenanted Convenient Loading Dock and Grade-Level Doors Ceiling Heights of 18 Feet and Higher Larger Average User Size 4.7 Million Sq. Ft In-fill Suburban Locations Divisible Floor Plates Multi-Product Parks Re-usable Tenant Spaces

7

Stable and Diversified Customer Base

As of December 31, 2017

Percentage of Total Rent by Sector

Top 10 Tenants – Percent of Annualized Rental Income U.S. Government (various locations): 4.5% Keeco, LLC: 0.9% Lockheed Martin Corporation (various locations): 0.9% Kaiser Permanente: 0.9% Luminex Corporation: 0.8% KZ Kitchen Cabinet: 0.6% CEVA Logistics U.S., Inc.: 0.5% Applied Materials, Inc.: 0.5% Inova Health Care Services: 0.5% Investorplace Media, LLC: 0.5%

Diverse Customer Base

Business Services, 18.3% Other, 12.6% Warehouse, Distribution, Transportation and Logistics, 11.8% Health Services, 9.9% Computer Hardware Software & Releated Services, 9.9% Government, 7.1% Retail, Food and Automotive, 7.1% Engineering and Construction, 7.2 % Insurance and Financial Service, 4.0% Electronics, 3.1% Home Furnishings, 2.6% Aerospace/Defense Products and Services, 2.8% Communications, 2.0% Educational Services, 1.6%

8

Historical Occupancy & Rent Trends Driving Occupancy and Rent Growth

91.1% 92.1% 92.0% 92.9% 93.5% 94.1% 94.4%

• 8.3%
• 6.2%
• 0.4%

0.5% 4.4% 5.3% 5.2%

• 10.0%
• 8.0%
• 6.0%
• 4.0%
• 2.0%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 88.0% 89.0% 90.0% 91.0% 92.0% 93.0% 94.0% 95.0% 96.0% 2011 2012 2013 2014 2015 2016 2017 Rent Change on Executed Leases (Cash Basis) Same Park Occupancy

9

2.9%

• 3.6%
• 3.0%
• 2.9%

0.0% 1.2% 2.6% 3.2% 4.0% 4.6% 2.6%

• 4.6%
• 3.7%
• 4.5%

0.7% 1.4% 2.2% 4.2% 5.0% 5.7%

• 6%
• 4%
• 2%

0% 2% 4% 6% 8%

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Revenue NOI

Historical Same Park NOI Trend Rent Growth and Occupancy Drive Strong Performance

10

Same Park Recurring Capital as % of NOI Office Leasing in 2017

5% 10% 15% 20% 25% 2012 2013 2014 2015 2016 2017 20.6% 19.4% 17.2% 14.1% 11.6% 14.3%

11

Balance Sheet Primed for Growth Unparalleled Balance Sheet

As of December 31, 2017, excluding Series T redeemed January 3, 2018

Preferred Equity 18.2% Common Equity 81.8%

Highlights

No Pending Debt Maturities Low Leverage/Strong Ratios Debt & Pref. to EBITDA 4.0x Fixed Charge Coverage Ratio 4.9x Investment Grade Ratings S & P A- (Corporate) BBB (Preferred Equity) Moody’s Baa2 (Preferred Equity)

$5.3 Billion Market Cap

As of December 31, 2017

12

Investment Strategy Disciplined Acquisitions

Functional Assets in Infill Locations – First and Last Mile Business Park Concentrations Multi-Tenant Buildings in Multi-Building Parks Gateway Markets: Deep and Vibrant Strong Demographics and High Volume Distribution Points Value Add Opportunities/Redevelopment Below Replacement Cost Analysis

13

Energy Efficiency and Environmental Initiatives

LEED or Energy Star certification on new development and re-development buildings We reduce heating and air-conditioning expenses by tightly controlling temperatures in vacant suites (50 degrees in winter/80 degrees in summer) and by replacing older equipment with energy efficient systems. Installation of reflective “green roofs” as we re-roof or develop new buildings. These roofs can reduce overall building energy consumption by up to 40% by minimizing winter heat loss and summer heat gain. Water consumption is reduced through conservation plumbing devices and planting native-landscape species. Our office properties have implemented paper recycling practices and we utilize trash compactors to reduce landfills. Ongoing conversion to LED lighting at our parks

Positive Impact

14

Social and Governance

Diversity in Our Workplace of 158 Employees: Gender and Race 38% of our workforce is listed as non-white with 28% in a supervisory role Women make up 56% of our workforce with 38% in a supervisory role Affirmative Action Plan Employer President and CEO is a woman and diverse Generational Inclusion and Diversity of Our Workforce 33% Millennials

• 40%

41% Gen X

• 38%

26% Boomer

• 22%

Diversity and Independence of Board of Directors 67% Independent 33% Women 56% Under the Age of 60

Diverse at all Levels

15

Multi-Family Development Tysons, VA

16

Tysons, VA Multi-Family Development Opened June 2017

17

Highgate at The Mile

395 Units Average Unit Size 833 sq. ft. Market Rates $2.50 to $2.75 per sq. ft. PSB Holds 95% Interest in JV with Kettler Total Project Costs ±$116 Million (Incl. Land) PSB’s Cash Commitment to Development is ±$85Million 58.5% Occupancy 12/17

18

Highgate Interior

19

The Mile, Tysons, VA

Potential Future Development Site

751,000 SF to 3.5 Million SF

20

Safe Harbor Disclosure

This document may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements include, but are not limited to, statements related to the Company’s expectations regarding the performance of its business, its financial results, its liquidity and capital resources and other non-historical statements. You can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable

• words. Such forward-looking statements are subject to various risks and uncertainties, including those

described under the section entitled “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, as such factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in the Company’s filings with the

• SEC. The Company undertakes no obligation to publicly update or review any forward-looking statement,

whether as a result of new information, future developments or otherwise, except as required by law.