Investor Presentaiton
OFFICE PROPERTIES
INCOME
TRUST
2019 Accomplishments(1)
Asset Sales to Reduce Leverage
$848.9 million of property sales completed in FY 2019.
$104.7 million of RMR common shares sold, with a 261%
net ROE.
Improved Balance Sheet
Reduced leverage from 7.5x to 6.2x net debt / EBITDA,
within our target range of 6.0-6.5x. (2)
No significant debt maturities until 2022.
Managing Capex
Eliminating more than $170 million of capital costs over
the next five years through property sales.
Strong Leasing Activity
Entered into more than 2.1 million sq. ft. of new and
renewal leases through 3Q19 with a weighted average roll
up in rent of 5.5% and a weighted average lease term of
9.1 years.
Well Covered Dividend
Low 38% FFO payout versus peer average of 61%.
High yield of 7.2% versus peer average of 4.6%.
Market Leading Sustainability Initiatives
Named 2019 ENERGY STAR® Partner of the Year as well as
a Silver-level 2019 Green Lease Leader.
New technologies resulted in energy reduction of 6 million
kilowatt hours and expense savings of $800,000 YTD.
2020 Outlook and Goals
Transition to Strategic Capital Recycling
An additional $86.2 million of property sales have sold
or are under agreement and expected to close in 1Q20.
Principal focus is to create long term dividend growth
through the acquisition of core properties that generate
higher cash flow after capital costs than the properties
we sell.
Expected recycling of between $100 million to $300
million annually.
Maintain Target Leverage
➤ Projected at approximately 6.0x after remaining asset
sales close.
Leasing to Drive Internal Growth
Robust leasing pipeline of 2.1 million sq. ft. of space,
including 336,000 sq. ft. that would absorb vacant space.
Continued focus on tenant retention.
Value Creation Through Select Repositioning / Development
Reduce Energy Consumption
Opportunity to expand upon the 25% of OPI's portfolio
that currently uses real time energy monitoring and data
analysis to drive operating efficiency.
Additional 2.2 million sq. ft. anticipated for 2020.
1)
As of 9/30/2019 unless otherwise stated.
2)
Based on net debt to annualized Adjusted EBITDAre ratio. Net debt is total debt less cash. See Appendix for the calculation of Adjusted EBITDAre and a reconciliation of net income (loss) determined in
accordance with GAAP to that amount.
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