Form 8-K PS BUSINESS PARKS, INC./ For: May 02

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Company Information

PS Business Parks, Inc. (NYSE:PSB), a S&P MidCap 400 company, is a REIT that acquires, develops, owns, and operates commercial properties, predominantly multi-tenant industrial, industrial-flex, and low-rise suburban office space. Located primarily in major coastal markets, PS Business Parks’ 96 properties serve approximately 4,900 tenants in 27.0 million square feet of space as of March 31, 2022. The portfolio also includes 800 residential units (including units in-process).

Additional Information and Where to Find It

In connection with the proposed transaction, the Company will file relevant materials with the U.S. Securities and Exchange Commission (the “SEC”), including the Company’s proxy statement on Schedule 14A (the “Proxy Statement”). This press release is not a substitute for the Proxy Statement or any other document that the Company may file with the SEC or send to its stockholders in connection with the proposed transactions. BEFORE MAKING ANY VOTING DECISION, STOCKHOLDERS OF THE COMPANY ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE PROXY STATEMENT, WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders will be able to obtain the documents (when available) free of charge at the SEC’s website, http://www.sec.gov. In addition, the documents (when available) may be obtained free of charge by accessing the Investor Relations section of the Company’s website at https://ir.psbusinessparks.com or by contacting the Company’s Investor Relations by email at info@psbusinessparks.com.

Participants in the Solicitation

The Company and its directors and executive officers may be deemed to be participants in the solicitation of proxies from the holders of Company common stock in respect of the proposed transaction. Information about the directors and executive officers of the Company is set forth in the proxy statement for the Company’s 2022 annual meeting of stockholders, which was filed with the SEC on March 25, 2022, in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, which was filed with the SEC on February 22, 2022 and in other documents filed by the Company with the SEC. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the Proxy Statement and other relevant materials to be filed with the SEC in respect of the proposed transaction when they become available. Investors should read the Proxy Statement carefully when it becomes available before making any voting or investment decisions.

Forward-Looking Statements

When used within this press release, the words “may,” “believes,” “anticipates,” “plans,” “expects,” “seeks,” “estimates,” “intends,” and similar expressions are intended to identify “forward-looking statements.” Such forward-looking statements involve known and unknown risks, uncertainties, and other factors, which may cause the actual results and performance of the Company to be materially different from those expressed or implied in the forward-looking statements, including but not limited to: (i) the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement; (ii) the failure to obtain the approval of PSB’s stockholders of the proposed transaction or the failure to satisfy any of the other conditions to the completion of the proposed transaction; (iii) stockholder litigation in connection with the proposed transaction, which may affect the timing or occurrence of the proposed transaction or result in significant costs of defense, indemnification and liability; (iv) the effect of the announcement of the proposed transaction on the ability of PSB to retain and hire key personnel and maintain relationships with its tenants, vendors and others with whom it does business, or on its operating results and businesses generally; (v) risks associated with the disruption of management’s attention from ongoing business operations due to the proposed transaction; (vi) the ability to meet expectations regarding the timing and completion of the proposed transaction; (vii) significant transaction costs, fees, expenses and charges; (viii) the duration and severity of the coronavirus (“COVID-19”) pandemic and its impact on our business and our customers; (ix) changes in general economic and business conditions, including as a result of the economic fallout of the COVID-19 pandemic; (x) potential regulatory actions to close our facilities or limit our ability to evict delinquent customers; (xi) decreases in rental rates or increases in vacancy rates/failure to renew or replace expiring leases; (xii) tenant defaults; (xiii) the effect of the recent credit and financial market conditions; (xiv) our failure to maintain our status as a real estate investment trust (a “REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”); (xv) the economic health of our customers; (xvi) the health of our officers and directors; (xvii) increases in operating costs; (xviii) casualties to our properties not covered by insurance; (xix) the availability and cost of capital; (xx) increases in interest rates and its effect on our stock price; (xxi) security breaches, including ransomware, or a failure of our networks, systems or technology which could adversely impact our operations or our business, customer and employee relationships or result in fraudulent payments; (xxii) the impact of inflation; and (xxiii) other factors discussed in the Company’s SEC reports, including quarterly reports on Form 10-Q, reports on Form 8-K, and annual reports on Form 10-K.

Additional information about PS Business Parks, Inc., including more financial analysis of the first quarter operating results, is available on the Company’s website at psbusinessparks.com.


Contact:
Investor Relations:
Adeel Khan
(818) 244-8080, Ext 8975

Definitions/Discussion of Non-GAAP Financial Measures

Cash NOI – We utilize cash NOI to evaluate the cash flow performance of our business parks. Cash NOI represents NOI adjusted to exclude non-cash items included in rental income and non-cash expenses. The non-cash rental income includes amortization of deferred rent receivable (net of write-offs), in-place lease intangible, tenant improvement reimbursements, and lease incentives. The non-cash expense is equal to stock compensation expense for employees whose compensation expense is recorded in GAAP cost of operations in the amount of $0.5 million for each of the three months ended March 31, 2022 and 2021. We believe that cash NOI assists investors in analyzing cash flow performance of our business parks.

Cash NOI Margin – Cash NOI margin is computed by dividing Cash NOI by Cash Rental Income.

Cash Rental Income – Cash rental income represents rental income, excluding non-cash rental income, specifically amortization of deferred rent receivable (net of write-offs), in-place lease intangible, tenant improvement reimbursements, and lease incentives.

Cash Rental Income per Occupied Square Feet – Computed by dividing Cash rental income for the period by weighted average occupied square feet. Cash rental income per occupied square feet for the three month period shown is annualized.

Core Funds from Operations (Core FFO) – We calculate Core FFO by adjusting FFO, as defined below, excluding the impact of (i) charges related to the redemption of preferred stock and (ii) other nonrecurring income or expense items as appropriate. Management believes that Core FFO is a useful supplemental measure as it provides a more meaningful and consistent comparison of operating performance and allows investors to more easily compare the Company’s operating results. Because certain of these adjustments have a real economic impact on our financial condition and results from operations, the utility of Core FFO as a measure of our performance is limited. Other REITs may not calculate Core FFO in a consistent manner. Accordingly, our Core FFO may not be comparable to other REITs’ Core FFO. Core FFO should be considered only as a supplement to net income computed in accordance with GAAP as a measure of our performance.

Cost of Operations under Cash NOI – Cash cost of operations represents cost of operations, excluding non-cash stock compensation expense for employees whose compensation expense is recorded in cost of operations in the amount of $0.5 million, for each of the three months ended March 31, 2022 and 2021, which can vary significantly period to period based upon the performance of the Company.

Funds Available for Distribution (FAD) – FAD is a non-GAAP measure that represents FFO adjusted to (a) deduct recurring capital improvements that maintains the condition of our real estate, tenant improvements and lease commissions and (b) remove certain non-cash rental income or expenses such as amortization of deferred rent receivable and non-cash stock compensation expense, and (c) charges related to the redemption of preferred stock. We believe our presentation of FAD assists investors and analysts in analyzing and comparing our operating and financial performance between reporting periods. FAD is not a substitute for GAAP net cash flow in evaluating our liquidity or ability to pay dividends, because they exclude investing and financing activities presented on our statements of cash flows.

Funds from Operations (FFO) – We calculate FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts (“NAREIT”). FFO represents net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from sales of depreciable operating property, gains (or losses) from sales of assets incidental to our business, impairment losses of depreciable operating property or assets incidental to our business, real estate related depreciation and amortization (excluding amortization of deferred financing costs and amortization of above/below-market lease intangibles) and after adjustments for unconsolidated joint ventures. Management uses FFO as a supplemental performance measure because, in excluding real estate related depreciation and amortization, gains and losses from property dispositions, other than temporary impairments of unconsolidated real estate entities, and impairment on our investment in real estate, it provides a performance measure that, when compared year over year, captures trends in occupancy rates, rental rates and operating costs. We also believe that, as a widely recognized measure of performance used by other REITs, FFO may be used by investors as a basis to compare our operating performance with that of other REITs. However, because FFO excludes depreciation and amortization and captures neither the changes in the value of our properties that result from use or market conditions nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of our properties, all of which have real economic effects and could materially impact our results from operations, the utility of FFO as a measure of our performance is limited. Other equity REITs may not calculate or interpret FFO in accordance with the NAREIT definition as we do, and, accordingly, our FFO may not be comparable to such other REITs’ FFO. FFO should not be used as a measure of our liquidity and is not indicative of funds available for our cash needs, including our ability to pay dividends. FFO should be considered only as a supplement to net income computed in accordance with GAAP as a measure of our performance. A reconciliation of net income, the nearest GAAP equivalent, to FFO is under the additional financial data section.

Net Operating Income (NOI) – We utilize NOI, a non-GAAP financial measure, to evaluate the operating performance of our business parks. We define NOI as rental income less cost of operations. We believe NOI assists investors in analyzing the performance and value of our business parks by excluding (i) corporate overhead (i.e. general and administrative expenses) because it does not relate to the results of our business parks and (ii) depreciation and amortization expense because it does not accurately reflect changes in the fair value of our business parks.

NOI Margin – NOI margin is computed by dividing NOI by rental income.

Revenue Per Occupied Square Foot – Computed by dividing rental income for the period by weighted average occupied for the same period. Revenue per occupied square foot for the three month period shown is annualized.

Same Park – The Company believes that evaluation of the Same Park portfolio, defined as all properties owned and operated as of March 31, 2022 that were acquired prior to January 1, 2020, provides an informative view of how the Company’s portfolio has performed over comparable periods. As of March 31, 2022, the Same Park portfolio consisted of 25.7 million square feet, or 95.3% of the Company’s 27.0 million total square feet, excluding the Company’s 95.0% interest in a 395-unit multifamily property.

Additional financial data is attached.

PS BUSINESS PARKS, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)


	March 31, 2022		December 31, 2021
	(unaudited)
ASSETS

Cash and cash equivalents	$	104,204	$	27,074

Real estate facilities, at cost
Land	865,214		867,345
Buildings and improvements	2,244,104		2,239,137
	3,109,318		3,106,482
Accumulated depreciation	(1,197,811)		(1,178,397)
	1,911,507		1,928,085
Properties held for sale, net	—		33,609
Land and building held for development, net	97,212		78,990
	2,008,719		2,040,684
Rent receivable	2,988		1,621
Deferred rent receivable	37,484		37,581
Other assets	13,176		16,262
Total assets	$	2,166,571	$	2,123,222

LIABILITIES AND EQUITY

Accrued and other liabilities	$	95,509	$	97,151
Credit facility	20,000		32,000
Total liabilities	115,509		129,151
Commitments and contingencies
Equity
PS Business Parks, Inc.’s stockholders’ equity
Preferred stock, $0.01 par value, 50,000,000 shares authorized, 30,200 shares issued and outstanding at March 31, 2022 and December 31, 2021	755,000		755,000
Common stock, $0.01 par value, 100,000,000 shares authorized, 27,627,443 and 27,589,807 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively	276		275
Paid-in capital	754,387		752,444
Accumulated earnings	270,243		226,737
Total PS Business Parks, Inc.’s stockholders’ equity	1,779,906		1,734,456
Noncontrolling interests	271,156		259,615
Total equity	2,051,062		1,994,071
Total liabilities and equity	$	2,166,571	$	2,123,222

PS BUSINESS PARKS, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited, in thousands)


	Three Months Ended March 31,
	2022		2021

Rental income	$	112,840	$	108,047

Expenses
Cost of operations	34,114		33,218
Depreciation and amortization	23,132		22,985
General and administrative	11,324		4,382
Total operating expenses	68,570		60,585


Interest and other income	246		256
Interest and other expense	(330)		(211)
Gain on sale of real estate facilities	56,959		—
Net income	101,145		47,507
Allocation to noncontrolling interests	(19,049)		(7,411)
Net income allocable to PS Business Parks, Inc.	82,096		40,096
Allocation to preferred stockholders based upon distributions	(9,580)		(12,046)



Allocation to restricted stock unit holders	(523)		(164)
Net income allocable to common stockholders	$	71,993	$	27,886

Net income per share of common stock
Basic	$	2.61	$	1.01
Diluted	$	2.60	$	1.01

Weighted average common stock outstanding
Basic	27,607		27,495
Diluted	27,691		27,594

PS BUSINESS PARKS, INC.

Computation of FFO, Core FFO, and FAD

(Unaudited and in thousands, except per share amounts)


	Three Months Ended March 31,
	2022			2021

Net income allocable to common stockholders	$	71,993		$	27,886
Adjustments
Gain on sale of real estate facilities	(56,959)			—
Depreciation and amortization	23,132			22,985
Net income allocable to noncontrolling interests	19,049			7,411
Net income allocable to restricted stock unit holders	523			164
FFO allocated to joint venture partner	(23)			(27)
FFO allocable to diluted common stock and units (1)	57,715			58,419
CEO cash payment for RSUs net of reversal of stock compensation	6,108			—




Core FFO allocable to diluted common stock and units (1)	$	63,823		$	58,419

FAD
FFO allocable to diluted common stock and units (1)	$	57,715		$	58,419
Adjustments:
Recurring capital improvements	(2,010)			(565)
Tenant improvements	(3,027)			(2,422)
Capitalized lease commissions	(1,304)			(1,784)
Total recurring capital expenditures for assets sold or held for sale	(8)			(634)

Cash paid for taxes in lieu of stock upon vesting of restricted stock units	(931)			(3,197)

Non-cash rental income (1)	(1,157)			(1,307)
Non-cash stock compensation expense	940			1,780
FAD allocable to diluted common stock and units (1)	50,218			50,290





Distributions to common stockholders, noncontrolling interests, and restricted stock unit holders	$	(36,892)		$	(36,724)
Distribution payout ratio	(73.5)		%	(73.0)		%

Reconciliation of Earnings per share to FFO per share
Net income per common stock—diluted	$	2.60		$	1.01
Gain on sale of real estate facilities	(1.63)			—
Depreciation and amortization expense	0.66			0.66
Net income allocated to restricted stock unit holders	0.02			—
FFO per share (1)	$	1.65		$	1.67
CEO cash payment for RSUs net of reversal of stock compensation	0.17			—


Core FFO per share	$	1.82		$	1.67

Weighted average outstanding
Common stock	27,607			27,495
Operating partnership units	7,305			7,305
Restricted stock units	45			47
Common stock equivalents	84			99
Total diluted common stock and units	35,041			34,946

(1) Defined in Definitions/Non-GAAP Discussion.

PS BUSINESS PARKS, INC.

Reconciliation of Selected Non-GAAP Measures to Analogous GAAP Measures

(Unaudited, In thousands)


	Three Months Ended March 31,
	2022		2021		$ Change		% Change
Rental income
Same Park	$	105,014	$	98,012	$	7,002	7.1	%
Non-Same Park	3,348		1,246		2,102		168.7	%
Multifamily	2,369		2,327		42		1.8	%
Assets sold or held for sale (2)	2,109		6,462		(4,353)		(67.4)	%
Total rental income	112,840		108,047		4,793		4.4	%


Cost of Operations (1)
Same Park	30,900		29,175		1,725		5.9	%
Non-Same Park	1,060		422		638		151.2	%
Multifamily	1,224		1,067		157		14.7	%
Assets sold or held for sale (2)	930		2,554		(1,624)		(63.6)	%
Total cost of operations	34,114		33,218		896		2.7	%
Stock compensation expense (3)	(536)		(456)		(80)		17.5	%
Total cost of operations excluding stock compensation expense	33,578		32,762		816		2.5	%

NOI (4)
Same Park	74,114		68,837		5,277		7.7	%
Non-Same Park	2,288		824		1,464		177.7	%
Multifamily	1,145		1,260		(115)		(9.1)	%
Assets sold or held for sale (2)	1,179		3,908		(2,729)		(69.8)	%

Depreciation and amortization expense	(23,132)		(22,985)		(147)		0.6	%
General and administrative expense	(11,324)		(4,382)		(6,942)		158.4	%
Interest and other income	246		256		(10)		(3.9)	%
Interest and other expense	(330)		(211)		(119)		56.4	%
Gain on sale of real estate facilities	56,959		—		56,959		100.0	%
Net income	$	101,145	$	47,507	$	53,638	112.9	%

(1)Defined in Definitions/Non-GAAP Discussion.

(2)As of March 31, 2022 and 2021, included in the respective periods are assets sold in 2022 and 2021:

•a 702,000 square foot industrial-flex business park located in Irving, Texas, sold in March 2022.

(3)Stock compensation expense, as shown here, represents stock compensation expense for employees whose compensation expense is recorded in cost of operations. Note that stock compensation expense attributable to the executive management team (including divisional vice presidents) and other corporate employees is recorded within general and administrative expense.

(4)NOI represents rental income less Cost of Operations.

Exhibit 99.2


			Table of Contents


Section			Page
Corporate Data:
Additional Information			3
Investor Company Summary			4
Company Overview			5
Financial and Portfolio Highlights and Capitalization Data			6
Consolidated Financial Results:
Consolidated Balance Sheets			7
Consolidated Statements of Operations			8
Non-GAAP FFO, Core FFO and Funds Available for Distribution (FAD) Reconciliations			10
Net Operating Income (NOI) and Cash NOI			13
Same Park Cash NOI by Region and Type			14
Capitalization Summary			15
Analysis of Capital Expenditures			16
Portfolio Data:
Portfolio Summary			17
Portfolio Overview by Markets and Product Type			18
Quarter-to-Date Production Statistics			20
Lease Expirations by Type			21
Industry Concentration and Top Ten Customers			22
Properties under Development			23
Appendices and Definitions:
Appendix A - Balance Sheet Variance explanations			24
Appendix B - P&L Flux			25
Appendix C - Cost of Operations			26
Appendix D - Lease Expirations by Market			27



Definitions and Non-GAAP Disclosures			29

First Quarter 2022 Supplemental Financial Reporting Package 2


			Additional Information

Additional Information and Where to Find It

In connection with the proposed transaction, the Company will file relevant materials with the U.S. Securities and Exchange Commission (the “SEC”), including the Company’s proxy statement on Schedule 14A (the “Proxy Statement”). This document is not a substitute for the Proxy Statement or any other document that the Company may file with the SEC or send to its stockholders in connection with the proposed transactions. BEFORE MAKING ANY VOTING DECISION, STOCKHOLDERS OF THE COMPANY ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE PROXY STATEMENT, WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders will be able to obtain the documents (when available) free of charge at the SEC’s website, http://www.sec.gov. In addition, the documents (when available) may be obtained free of charge by accessing the Investor Relations section of the Company’s website at https://ir.psbusinessparks.com or by contacting the Company’s Investor Relations by email at info@psbusinessparks.com.

Participants in the Solicitation

Forward-Looking Statements

When used within this supplemental information package, the words “may,” “believes,” “anticipates,” “plans,” “expects,” “seeks,” “estimates,” “intends,” and similar expressions are intended to identify “forward-looking statements.” Such forward-looking statements involve known and unknown risks, uncertainties, and other factors, which may cause the actual results and performance of the Company to be materially different from those expressed or implied in the forward-looking statements, including but not limited to: (i) the duration and severity of the COVID-19 pandemic and its impact on our business and our customers; (ii) changes in general economic and business conditions, including as a result of the economic fallout of the COVID-19 pandemic; (iii) potential regulatory actions to close our facilities or limit our ability to evict delinquent customers; (iv) decreases in rental rates or increases in vacancy rates/failure to renew or replace expiring leases; (v) tenant defaults; (vi) the effect of the recent credit and financial market conditions; (vii) our failure to maintain our status as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”); (viii) the economic health of our customers; (ix) the health of our officers and directors; (x) increases in operating costs; (xi) casualties to our properties not covered by insurance; (xii) the availability and cost of capital; (xiii) increases in interest rates and its effect on our stock price; (xiv) security breaches, including ransomware, or a failure of our networks, systems or technology which could adversely impact our operations or our business, customer and employee relationships or result in fraudulent payments; (xv) the impact of inflation; and (xvi) other factors discussed in the Company’s SEC reports, including quarterly reports on Form 10-Q, reports on Form 8-K, and annual reports on Form 10-K.

First Quarter 2022 Supplemental Financial Reporting Package 3


			Investor Company Summary


Executive Management Team

Stephen W. Wilson						President and Chief Executive Officer
Maria R. Hawthorne						Interim Chief Operating Officer
Adeel Khan						Chief Financial Officer and Corporate Secretary
Trenton Groves						SVP, Chief Accounting Officer
Board of Directors

Ronald L. Havner, Jr.						Chairman of the Board
Stephen W. Wilson						Director, President and Chief Executive Officer
Maria R. Hawthorne						Director, Interim Chief Operating Officer
Jennifer Holden Dunbar						Director
M. Christian Mitchell						Director
Irene H. Oh						Director
Kristy M. Pipes						Director
Gary E. Pruitt						Director
Robert S. Rollo						Director
Joseph D. Russell, Jr.						Director
Peter Schultz						Director


Investor Relations Information
Adeel Khan
T: 818.244.8080, Ext. 8975
akhan@psbusinessparks.com


Equity Research Coverage
FIRM	ANALYST	PHONE	EMAIL
Citi	Manny Korchman	212-816-1382	emmanuel.korchman@citi.com
Green Street Advisors	Vince Tibone	949-640-8780	vtibone@greenstreetadvisors.com
JP Morgan	Anthony Paolone	212-622-6682	anthony.paolone@jpmorgan.com
KeyBanc	Craig Mailman	917-368-2316	cmailman@key.com
Wells Fargo	Blaine Heck	443-263-6529	blaine.heck@wellsfargo.com

PS Business Parks, Inc. is followed by the analysts listed above. Please note that any opinions, estimates or forecasts regarding PS Business Parks, Inc.'s performance made by these analysts are theirs alone and do not represent opinions, forecasts or predictions of PS Business Parks, Inc. or its management. PS Business Parks, Inc. does not by its reference above or distribution imply its endorsement of or concurrence with such information, conclusions or recommendations.

First Quarter 2022 Supplemental Financial Reporting Package 4


			Company Overview As Of March 31, 2022


Company Overview
Total # of Properties						96

Total Square Feet						27,010,000



Total Occupancy (Period End)						95.5%

Same Park Occupancy (Period End)						95.9%

Same Park YTD GAAP NOI growth						7.7%

Same Park YTD Cash NOI growth						8.6%

(S&P/Moody's) (2) (3)						BBB+, BBB-/Baa2 (under review)

Net Debt to Total Combined Market Capitalization						n/a

Net Debt and Preferred Equity to Total Combined Market Capitalization						11.4%

Net Debt to Adjusted EBITDAre						2.8x

Multifamily
Average rent per unit						$2,123

Weighted average occupancy						95.0%

Period end occupancy						96.9%

Percent leased						97.0%

Economic Occupancy						89.9%

(2) S&P downgraded PSB to 'BBB+' and subsequently downgraded PSB's preferred stock to 'BBB-'. S&P placed all their ratings on PSB, including our 'BBB+' issuer credit rating, on CreditWatch with negative implications. The CreditWatch placement reflects that S&P could lower their ratings upon closing of the transaction, based on the pro forma capital structure and their view of the acquirer's aggressive financial policy. S&P no longer view PSB as being moderately strategic to Public Storage. Public Storage, which holds approximately 41% common equity interest in PSB, has agreed to Blackstone's acquisition bid. S&P previously considered PSB to be moderately strategic to Public Storage and, as such, S&P believed that Public Storage would provide support to PSB under a stress scenario. As a result, S&P applied a one-notch improvement to their standalone rating on PSB. The transaction changes S&P's view, such that they no longer expect Public Storage to support PSB under a hypothetical stress scenario. As a result, S&P downgraded PSB by one notch to 'BBB+'. S&P also lowered their ratings on PSB's preferred stock by one notch to 'BBB-', two notches below its issuer credit rating, in line with S&P's criteria.

(3) Moody’s Investors Service (“Moody’s”) has placed on review for downgrade the ratings of PS Business Parks, Inc. (PSB), including its Baa2 preferred stock rating and the (P)Baa1 senior unsecured shelf rating of its main operating subsidiary, PS Business Parks, L.P. The review for downgrade follows the announcement that the REIT, which owns a portfolio primarily comprised of multi-tenant industrial and flex properties, has entered into a definitive agreement by which affiliates of Blackstone Real Estate will acquire all of PSB’s outstanding shares in a transaction valued at about $7.6 billion. The review for downgrade reflects the likelihood that PSB’s credit profile will deteriorate under Blackstone’s ownership, with the potential for meaningfully higher leverage and secured debt levels that could result in a multi-notch downgrade of the REIT’s ratings, including crossing over to non-investment grade territory, upon transaction close.

First Quarter 2022 Supplemental Financial Reporting Package 5


			Financial and Portfolio Highlights and Capitalization Data (unaudited, in thousands except share and per share data and portfolio statistics)


	Three Months Ended
	March 31, 2022			December 31, 2021			September 31, 2021			June 30, 2021			March 31, 2021
Financial Results:
Rental income	$	112,840		$	110,844		$	110,448		$	109,364		$	108,047
Net income	$	101,145		$	357,009		$	78,463		$	70,050		$	47,507
Net Operating Income (NOI) (1)	$	78,726		$	78,106		$	77,357		$	77,515		$	74,829
Cash NOI (1)	$	78,105		$	77,641		$	77,332		$	77,813		$	73,978
Core FFO (1)	$	63,823		$	63,485		$	60,328		$	61,816		$	58,419
Core FFO per common stock - diluted (1)	$	1.82		$	1.81		$	1.72		$	1.77		$	1.67
EBITDAre	$	67,601		$	74,224		$	72,599		$	73,503		$	70,624
Dividend declared per share of common stock	$	1.05		$	1.05		$	1.05		$	1.05		$	1.05
Portfolio Statistics:
Total square footage at period end (2)	27,010,000			27,010,000			26,869,000			26,151,000			26,151,000
Weighted average occupancy	95.5		%	95.5		%	94.7		%	93.8		%	93.2		%
Period end Occupancy	95.5		%	95.9		%	95.5		%	94.5		%	93.6		%
Rent Change - GAAP	23.4		%	16.4		%	15.4		%	10.7		%	16.4		%
Rent Change - Cash	10.7		%	6.1		%	5.0		%	3.1		%	6.4		%
Same Park Performance:
Same Park weighted average occupancy	96.0		%	95.8		%	94.9		%	94.0		%	93.3		%
Same Park income per occupied square foot	$16.84			$16.60			$16.62			$16.40			$16.10
Same Park GAAP NOI growth (1) (3)	7.7		%	8.9		%	10.0		%	11.4		%	0.7		%
Same Park Cash NOI growth (1) (3)	8.6		%	8.1		%	12.7		%	16.2		%	0.5		%
Capitalization:
Total shares and units issued and outstanding at period end (4)	34,932,798			34,895,162			34,851,508			34,846,819			34,822,294
Total equity market capitalization	$	5,871,505		$	6,426,642		$	5,462,625		$	5,160,177		$	5,382,830
Series W, X, Y and Z Preferred Stock (5)	$	755,000		$	755,000		$	944,750		$	944,750		$	944,750
Total consolidated debt	$	20,000		$	32,000		$	—		$	—		$	—
Unrestricted cash (6)	$	(20,000)		$	(27,074)		n/a			n/a			n/a
Total combined market capitalization (net debt plus equity)	$	6,626,505		$	7,186,568		$	6,407,375		$	6,104,927		$	6,327,580
Ratios:
Net debt & preferred equity to total combined market capitalization	11.4		%	10.6		%	14.1		%	13.8		%	14.0		%
Net debt to total combined market capitalization (6)	0.0		%	0.1		%	n/a			n/a			n/a
Ratio of EBITDAre to fixed charges and preferred distributions (7)	6.9x			6.9x			5.9x			6.0x			5.8x
Net debt and preferred equity to EBITDAre (8)	2.8x			2.6x			3.1x			2.8x			3.1x

(1)For definition/discussion of non-GAAP financial measures and reconciliations to their nearest GAAP equivalents, see the definitions section & reconciliation section beginning on page 29 and page 10 of this report, respectively.

(2)Excludes assets sold.

(3)Represents the quarter over quarter percentage change in NOI and Cash NOI for the Same Park Portfolio.

(4)Total shares and units issued and outstanding at period end is comprised of common stock and common operating partnership units.

(5)Series W Preferred Stock redeemed in November 2021.

(6)Unrestricted cash balance is $104.2 million as of March 31, 2022 Cash used for net debt calculation is $20.0 million or the current outstanding debt balance.

(7)For each period shown, ratio of total fixed charges to EBITDAre is calculated using the respective quarter’s annualized fixed charges divided by the respective quarter’s annualized EBITDAre.

(8)For each period shown, ratio of debt and preferred equity to EBITDAre is calculated using total net debt and preferred equity reported during the quarter divided by the respective quarter’s annualized EBITDAre.

First Quarter 2022 Supplemental Financial Reporting Package 6


			Consolidated Balance Sheets (unaudited, in thousands)


	March 31, 2022		December 31, 2021

ASSETS

Cash and cash equivalents	$	104,204	$	27,074	(a)

Real estate facilities, at cost
Land	865,214		867,345
Buildings and improvements	2,244,104		2,239,137
	3,109,318		3,106,482
Accumulated depreciation	(1,197,811)		(1,178,397)
	1,911,507		1,928,085		(b)
Properties held for sale, net	—		33,609
Land and building held for development, net	97,212		78,990
	2,008,719		2,040,684
Rent receivable	2,988		1,621
Deferred rent receivable	37,484		37,581		(c)
Other assets	13,176		16,262
Total assets	$	2,166,571	$	2,123,222	(d)

LIABILITIES AND EQUITY

Accrued and other liabilities	$	95,509	$	97,151	(e)
Credit facility	20,000		32,000
Total liabilities	115,509		129,151

Equity
PS Business Parks, Inc.’s stockholders’ equity
Preferred stock	755,000		755,000
Common stock	276		275
Paid-in capital	754,387		752,444		(f)
Accumulated earnings	270,243		226,737		(g)
Total PS Business Parks, Inc.’s stockholders’ equity	1,779,906		1,734,456
Noncontrolling interests	271,156		259,615
Total equity	2,051,062		1,994,071
Total liabilities and equity	$	2,166,571	$	2,123,222

See Appendix A for additional detail related to the tickmarks shown in the table above.

First Quarter 2022 Supplemental Financial Reporting Package 7


			Consolidated Statements of Operations, Quarterly Results (unaudited and in thousands, except per share amounts)


	Three Months Ended
	March 31, 2022		December 31, 2021		September 30, 2021		June 30, 2021		March 31, 2021

Rental income	$	112,840	$	110,844	$	110,448	$	109,364	$	108,047

Expenses:
Cost of operations	34,114		32,738		33,091		31,849		33,218
Depreciation and amortization	23,132		24,130		23,857		22,514		22,985
General and administrative (1)	11,324		4,728		5,148		4,799		4,382
Total operating expenses	68,570		61,596		62,096		59,162		60,585


Interest and other income	246		946		411		923		256
Interest and other expense (2)	(330)		(3,943)		(224)		(268)		(211)
Gain on sale of real estate facilities	56,959		310,758		29,924		19,193		—
Net income	101,145		357,009		78,463		70,050		47,507
Allocation to noncontrolling interests	(19,049)		(70,915)		(13,850)		(12,094)		(7,411)
Net income allocable to PS Business Parks, Inc.	82,096		286,094		64,613		57,956		40,096
Allocation to preferred stockholders	(9,580)		(10,485)		(12,046)		(12,047)		(12,046)


Preferred securities redemption charge	—		(6,434)		—		—		—
Allocation to restricted stock unit holders	(523)		(1,785)		(350)		(314)		(164)
Net income allocable to common stockholders	$	71,993	$	267,390	$	52,217	$	45,595	$	27,886

Net income per share of common stock
Basic	$	2.61	$	9.70	$	1.90	$	1.66	$	1.01
Diluted	$	2.60	$	9.66	$	1.89	$	1.65	$	1.01

Weighted average common stock outstanding
Basic	27,607		27,565		27,543		27,531		27,495
Diluted	27,691		27,671		27,635		27,632		27,594

(1)General and administrative expense in Q1 22 includes the impact of a one-time cash payment of $6.7 million for RSUs to the former CEO less a $0.6 million reversal of stock compensation expense.

(2)Other expense includes $3.6 million related to state tax provision for the Three Months Ended December 31, 2021.

First Quarter 2022 Supplemental Financial Reporting Package 8


			Consolidated Statements of Operations and EBITDAre, Quarterly Results (unaudited and in thousands, except per share amounts)


	Three Months Ended March 31,
	2022		2021

Rental income	$	112,840	$	108,047	(a)

Expenses
Cost of operations	34,114		33,218		(b)
Depreciation and amortization	23,132		22,985
General and administrative	11,324		4,382		(c)
Total operating expenses	68,570		60,585


Interest and other income	246		256		(d)
Interest and other expense	(330)		(211)		(e)
Gain on sale of real estate facilities	56,959		—
Net income	101,145		47,507
Allocation to noncontrolling interests	(19,049)		(7,411)
Net income allocable to PS Business Parks, Inc.	82,096		40,096
Allocation to preferred stockholders	(9,580)		(12,046)



Allocation to restricted stock unit holders	(523)		(164)
Net income allocable to common stockholders	$	71,993	$	27,886

Net income per share of common stock
Basic	$	2.61	$	1.01
Diluted	$	2.60	$	1.01

Weighted average common stock outstanding
Basic	27,607		27,495
Diluted	27,691		27,594

EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION FOR REAL ESTATE (EBITDAre) (1)
	Three Months Ended March 31,
	2022		2021			$ Change
Net income	$	101,145	$	47,507		$	53,638
Net interest (income) expense	283		132			151
Depreciation and amortization	23,132		22,985			147
Gain on sale of real estate facilities and development rights	(56,959)		—			(56,959)

EBITDAre	$	67,601	$	70,624		$	(3,023)

See Appendix B for additional detail related to the tickmarks shown in the table above.

(1) Refer to Page 29, Definitions and Non-GAAP Disclosures, for the definitions of EBITDAre.

First Quarter 2022 Supplemental Financial Reporting Package 9


			Non-GAAP FFO, Core FFO and FAD Reconciliations (unaudited and in thousands, except per share amounts)


	Three Months Ended
	March 31, 2022			December 31, 2021			September 30, 2021			June 30, 2021			March 31, 2021

Net income allocable to common stockholders	$	71,993		$	267,390		$	52,217		$	45,595		$	27,886
Adjustments
Gain on sale of real estate facilities	(56,959)			(310,758)			(29,924)			(19,193)			—
Depreciation and amortization	23,132			24,130			23,857			22,514			22,985
Net income allocable to noncontrolling interests	19,049			70,915			13,850			12,094			7,411
Net income allocable to restricted stock unit holders	523			1,785			350			314			164
FFO allocated to joint venture partner	(23)			(11)			(22)			(18)			(27)
FFO allocable to diluted common stock and units (1)	57,715			53,451			60,328			61,306			58,419
CEO cash payment for RSUs net of reversal of stock compensation	6,108			—			—			—			—
Preferred securities redemption charge	—			6,434			—			—			—
Income tax expense	—			3,600			—			—			—
Maryland reincorporation costs	—			—			—			510			—

Core FFO allocable to diluted common stock and units (1)	$	63,823		$	63,485		$	60,328		$	61,816		$	58,419


FAD
FFO allocable to diluted common stock and units (1)	$	57,715		$	53,451		$	60,328		$	61,306		$	58,419
Adjustments:
Recurring capital improvements	(2,010)			(3,233)			(3,837)			(3,701)			(565)
Tenant improvements	(3,027)			(3,462)			(3,876)			(3,918)			(2,422)
Capitalized lease commissions	(1,304)			(3,274)			(1,995)			(1,439)			(1,784)
Total recurring capital expenditures for assets sold or held for sale	(8)			(117)			(471)			(394)			(634)
Total multifamily capital expenditures	—			(6)			—			(7)			—
Cash paid for taxes in lieu of stock upon vesting of restricted stock units	(931)			(260)			(478)			(5)			(3,197)
Preferred securities redemption charge	—			6,434			—			—			—
Non-cash rental income (2)	(1,157)			(857)			(453)			(183)			(1,307)
Non-cash stock compensation expense	940			2,073			2,341			2,301			1,780
FAD allocable to diluted common stock and units (1)	$	50,218		$	50,749		$	51,559		$	53,960		$	50,290

Non-recurring property renovations (1)	(1,511)			(1,686)			(176)			(432)			(411)
Investment in multifamily development	(12,455)			(12,903)			(13,516)			(7,539)			(9,485)
Investment in industrial development	(3,796)			(1,223)			(165)			(93)			(1,123)

Total non-recurring capital expenditures	$	(17,762)		$	(15,812)		$	(13,857)		$	(8,064)		$	(11,019)
Free cash available after non-recurring capital expenditures	$	32,456		$	34,937		$	37,702		$	45,896		$	39,271





Total Distributions	$	(36,892)		$	(36,833)		$	(36,793)		$	(36,813)		$	(36,724)
Retained cash (1)	$	(4,436)		$	(1,896)		$	909		$	9,083		$	2,547

Weighted average outstanding
Common stock	27,607			27,565			27,543			27,531			27,495
Operating partnership units	7,305			7,305			7,305			7,305			7,305
Restricted stock units	45			46			33			32			47
Common stock equivalents	84			106			92			101			99
Total diluted common stock and units	35,041			35,022			34,973			34,969			34,946

FFO per share	$	1.65		$	1.53		$	1.72		$	1.75		$	1.67
Core FFO per share	$	1.82		$	1.81		$	1.72		$	1.77		$	1.67
FAD distribution payout ratio (3) (4)	73.5		%	72.6		%	71.4		%	68.2		%	73.0		%

First Quarter 2022 Supplemental Financial Reporting Package 10


			Non-GAAP FFO, Core FFO and FAD Reconciliations (cont'd) (unaudited and in thousands, except per share amounts)


	Three Months Ended March 31,
	2022		2021

Net income allocable to common stockholders	$	71,993	$	27,886
Adjustments
Gain on sale of real estate facilities	(56,959)		—
Depreciation and amortization	23,132		22,985
Net income allocable to noncontrolling interests	19,049		7,411
Net income allocable to restricted stock unit holders	523		164
FFO allocated to joint venture partner	(23)		(27)
FFO allocable to diluted common stock and units (1)	57,715		58,419
CEO cash payment for RSUs net of reversal of stock compensation	6,108		—




Core FFO allocable to diluted common stock and units (1)	$	63,823	$	58,419

FAD
FFO allocable to diluted common stock and units (1)	$	57,715	$	58,419
Adjustments:
Recurring capital improvements	(2,010)		(565)
Tenant improvements	(3,027)		(2,422)
Capitalized lease commissions	(1,304)		(1,784)
Total recurring capital expenditures for assets sold or held for sale	(8)		(634)

Cash paid for taxes in lieu of stock upon vesting of restricted stock units	(931)		(3,197)

Non-cash rental income (2)	(1,157)		(1,307)
Non-cash stock compensation expense	940		1,780
FAD allocable to diluted common stock and units (1)	$	50,218	$	50,290
Non-recurring capital expenditures
Non-recurring property renovations (1)	(1,511)		(411)
Investment in multifamily development	(12,455)		(9,485)
Investment in industrial development	(3,796)		(1,123)

Total non-recurring capital expenditures	$	(17,762)	$	(11,019)
Free cash available after non-recurring capital expenditures	$	32,456	$	39,271
Distributions
Distributions to common stockholders	$	(29,010)	$	(28,872)
Distributions to noncontrolling interests - common units	(7,671)		(7,671)
Distributions to restricted stock unit holders	(188)		(164)
Distributions to noncontrolling interests - joint venture	(23)		(17)
Total Distributions	(36,892)		(36,724)
Retained cash (1)	(4,436)		2,547

First Quarter 2022 Supplemental Financial Reporting Package 11


			Non-GAAP FFO, Core FFO and FAD Reconciliations (cont'd) (unaudited and in thousands, except per share amounts)



	Three Months Ended March 31,
	2022			2021
Weighted average outstanding
Common stock	27,607			27,495
Operating partnership units	7,305			7,305
Restricted stock units	45			47
Common stock equivalents	84			99
Total diluted common stock and units	35,041			34,946

FFO per share	$	1.65		$	1.67
Core FFO per share	$	1.82		$	1.67
FAD distribution payout ratio (3) (4)	73.5		%	73.0		%


(1)			Refer to page 29, Definitions and Non-GAAP Disclosures, for the definition of FFO, Core FFO, FAD, Non-Recurring Property Renovations and Retained Cash.
(2)			Non-cash rental income includes amortization of deferred rent receivable (net of write-offs), in-place lease intangible, tenant improvement reimbursements, and lease incentives.

(3)			FAD distribution payout ratio is equal to total distributions to common stockholders, unit holders, restricted stock unit holders and our joint venture partner divided by FAD during the same reporting period.
(4)			For the three months ended December 31, 2021, the FAD distribution ratio excludes of $4.60 special dividend distributions to common stockholders, noncontrolling interest, and restricted stock unit holders.

First Quarter 2022 Supplemental Financial Reporting Package 12


			NOI and Cash NOI (unaudited, in thousands)


	NET OPERATING INCOME						CASH NET OPERATING INCOME (2)
	Three Months Ended March 31,					Three Months Ended March 31,
	2022		2021		% Change		2022		2021		% Change
Rental income
Same Park (1) (3) (4) (5)	$	105,014	$	98,012	7.1%		$	104,096	$	96,638	7.7%
Non-Same Park (1)	3,348		1,246		168.7%		3,074		1,270		142.0%
Multifamily	2,369		2,327		1.8%		2,369		2,327		1.8%
Assets sold or held for sale	2,109		6,462		(67.4)%		2,144		6,505		(67.0)%
Total rental income	112,840		108,047		4.4%		111,683		106,740		4.6%
Cost of operations (1) (6)
Same Park (1)	30,900		29,175		5.9%		30,404		28,754		5.7%
Non-Same Park (1)	1,060		422		151.2%		1,035		417		148.2%
Multifamily	1,224		1,067		14.7%		1,224		1,067		14.7%
Assets sold or held for sale	930		2,554		(63.6)%		915		2,524		(63.7)%
Total cost of operations	34,114		33,218		2.7%		33,578		32,762		2.5%
Net operating income
Same Park (1)	74,114		68,837		7.7%		73,692		67,884		8.6%
Non-Same Park (1)	2,288		824		177.7%		2,039		853		139.0%
Multifamily	1,145		1,260		(9.1)%		1,145		1,260		(9.1)%
Assets sold or held for sale	1,179		3,908		(69.8)%		1,229		3,981		(69.1)%
Total net operating income	$	78,726	$	74,829	5.2%		$	78,105	$	73,978	5.6%

(1)Refer to page 29, Definition and Non-GAAP Disclosures, for the definitions of Same Park, Non-Same Park, and Cash Rental Income. See Appendix C for Same Park Cost of Operations table.

(2)Cash NOI excludes $0.5 million stock based compensation for the three months ended March 31, 2022 and 2021, respectively.

(3)Same Park rental income and Cash Rental Income include lease buyout income of $0.2 million and $0.4 million for the three months ended March 31, 2022 and 2021, respectively.

(4)Same Park rental income is presented net of (a) accounts receivable write-offs (recoveries) of $0.1 million and $0.0 million for the three months ended March 31, 2022 and 2021, respectively, and (b) deferred rent receivable write-offs of $0.0 million and $0.1 million for the three months ended March 31, 2022 and 2021, respectively.

(5)Same Park Cash Rental Income is presented net of (a) accounts receivable write-offs (recoveries) of $0.1 million and $0.0 million for the three months ended March 31, 2022 and 2021, respectively, and (b) rent deferrals and abatements $0.0 million and $0.3 million for the three months ended March 31, 2022 and 2021, respectively.

(6)Refer to Appendix B for a reconciliation of Cash Rental Income to rental income and Cost of Operations to Cost of Operations under Cash NOI as reported on our GAAP statements of income.

First Quarter 2022 Supplemental Financial Reporting Package 13


			Same Park Cash NOI by Region and Type (1) (in thousands)


	Three Months Ended
	March 31, 2022												March 31, 2021												Period Change by Product Type			Total
	Industrial			Flex			Office			Total			Industrial			Flex			Office			Total			Industrial	Flex	Office	% Change
























Cash NOI (1)
Northern California	$	20,195		$	2,156		$	1,540		$	23,891		$	17,448		$	1,982		$	1,863		$	21,293		15.7%	8.8%	(17.3)%	12.2%
Southern California	9,220			2,404			119			11,743			7,750			2,372			117			10,239			19.0%	1.3%	1.7%	14.7%
Dallas	2,277			1,377			n/a			3,654			1,963			1,160			n/a			3,123			16.0%	18.7%	n/a	17.0%
Austin	1,494			3,835			n/a			5,329			1,406			4,012			n/a			5,418			6.3%	(4.4)%	n/a	(1.6)%
Northern Virginia	3,771			3,562			5,199			12,532			3,416			3,631			5,398			12,445			10.4%	(1.9)%	(3.7)%	0.7%
South Florida	9,197			444			8			9,649			8,233			347			22			8,602			11.7%	28.0%	(63.6)%	12.2%
Seattle	2,436			1,283			74			3,793			2,219			1,344			65			3,628			9.8%	(4.5)%	13.8%	4.5%
Suburban Maryland	830			n/a			2,271			3,101			788			n/a			2,348			3,136			5.3%	n/a	(3.3)%	(1.1)%


Total	$	49,420		$	15,061		$	9,211		$	73,692		$	43,223		$	14,848		$	9,813		$	67,884		14.3%	1.4%	(6.1)%	8.6%
Percentage by Product Type	67.1		%	20.4		%	12.5		%	100.0		%	63.7		%	21.9		%	14.4		%	100.0		%

(1)Refer to page 29, Definitions and Non-GAAP Disclosures, for the definitions of Same Park and Cash NOI.

First Quarter 2022 Supplemental Financial Reporting Package 14


			Capitalization Summary (unaudited and in thousands, except share and per share data)


	As of March 31, 2022				As of December 31, 2021
	Total		% Total Market Capitalization	Wtd Avg Rate	Total		% Total Market Capitalization	Wtd Avg Rate
Common Stock:
Common stock, $0.01 par value, 100,000,000 shares authorized, 27,627,443 and 27,589,807 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively	$	4,643,621	70.1%		$	5,081,215	70.7%
Common operating partnership units (7,305,355 units outstanding as of March 31, 2022 and December 31, 2021, respectively) (1)	1,227,884		18.5%		1,345,427		18.7%
Total common equity and operating partnership units (1)	$	5,871,505	88.6%		$	6,426,642	89.4%


Preferred Equity:
5.250% Series X preferred stock (9,200,000 depository shares outstanding) callable 9/21/22	230,000		3.5%		230,000		3.2%
5.200% Series Y preferred stock (8,000,000 depository shares outstanding) callable 12/7/22	200,000		3.0%		200,000		2.8%
4.875% Series Z preferred stock (13,000,000 depository shares outstanding) callable 11/4/24	325,000		4.9%		325,000		4.5%

Total preferred equity	$	755,000	11.4%	5.08%	$	755,000	10.5%	5.08%








Unsecured Debt:



Credit facility borrowing ($400.0 million at LIBOR + 0.70%)	$	20,000	0.3%	0.82%	32,000		0.4%	0.80%

Unrestricted cash (2)	(20,000)		(0.3)%		(27,074)		(0.4)%
Net debt	$	—	0.0%		$4,926		0.1%


Total net debt and preferred equity	$	755,000	11.4%	4.97%	$759,926		10.6%	4.90%




Total implied market capitalization	$	6,626,505	100.0%		$7,186,568		100.0%



Interest expense and related expenses (annualized) (3) (4)	$	1,144			$	1,000
Preferred distributions (annualized) (5)	38,320				41,940
Total fixed charges and preferred distributions (annualized)	$	39,464			$	42,940







Ratio of EBITDAre to fixed charges and preferred distributions (6)	6.9x				6.9x
Ratio of net debt and preferred equity to EBITDAre (7)	2.8x				2.6x

(1)Total common equity is calculated as the total number of common stock and operating partnership units outstanding multiplied by the Company’s closing share price at the end of each respective period. Closing share prices on

March 31, 2022 and December 31, 2021 were $168.08 and $184.17, respectively.

(2)Unrestricted cash balance is $104.2 million as of March 31, 2022. Cash used for net debt calculation is $20 million matching the debt balance as of March 31, 2022.

(3)Interest expense and related expenses includes facility fees associated with our unsecured credit facility.

(4)We annualized Interest expense and related charges for the three months ended March 31, 2022, in the amount of $286,000.

(5)We annualized preferred distributions for the three months ended March 31, 2022, in the amount of $9.6 million.

(6)For each period shown, ratio of total fixed charges to EBITDAre is calculated using the respective quarter’s annualized fixed charges divided by the respective quarter’s annualized EBITDAre.

(7)For each period shown, ratio of debt and preferred equity to EBITDAre is calculated using total net debt and preferred equity reported during the quarter divided by the respective quarter’s annualized EBITDAre.

First Quarter 2022 Supplemental Financial Reporting Package 15


			Analysis of Capital Expenditures (unaudited and in thousands, except per square foot data)


	Three Months Ended March 31,
	2022		2021
Commercial Recurring Capital Expenditures (1)
Same Park
Capital improvements	$	1,979	$	559
Tenant improvements	2,328		2,373
Lease commissions	1,065		1,755
Total Same Park Recurring Capital Expenditures	$	5,372	$	4,687
Same Park Recurring Capital Expenditures as a percentage of Cash NOI	7.3%		6.9%


Non-Same Park
Capital improvements	31		6
Tenant improvements	699		49
Lease commissions	239		29
Total Non-Same Park Recurring Capital Expenditures	969		84
Non-Same Park Recurring Capital Expenditures as a percentage of Cash NOI	47.5%		9.8%


Total Recurring Capital Expenditures	6,341		4,771
Total Recurring Capital Expenditures as a percentage of Cash NOI	8.4%		6.9%


Assets sold or held for sale Recurring Capital Expenditures	8		634
Total commercial Recurring Capital Expenditures	6,349		5,405
Total Commercial Recurring Capital Expenditures as a percentage of Cash NOI	8.2%		7.4%


Non-recurring Property Renovations (1)	1,511		411
Total capital expenditures (excluding multifamily)	7,860		5,816

Total capital expenditures	$	7,860	$	5,816

Development costs (2)	$	16,251	$	10,608

(1)Refer to page 29, Definitions and Non-GAAP Disclosures, for the definitions of Recurring Capital Expenditures and Non-recurring Property Renovations.

(2)Development costs for the three months ended March 31, 2022 comprises Brentford ($9.6M), 212 Industrial Park ($3.3M), and Boca ($1.2M). See Developments page. We also have additional entitlement related costs for certain projects which comprise Colma Creek ($1.7M), Charlton ($0.3M), Overlake <($0.1M), and The Mile <($0.1M).

First Quarter 2022 Supplemental Financial Reporting Package 16


			Portfolio Summary (unaudited)


PROPERTY INFORMATION
	Three Months Ended March 31,
	2022			2021			% Change
Total Portfolio (1)
Total square footage at period end	27,010,000			26,151,000			3.3	%
Weighted average occupancy	95.5		%	93.2		%	2.3	%
Period end occupancy	95.5		%	93.6		%	1.9	%
Cash rental income per occupied square foot (2) (3)	$	16.61		$	16.11		3.1	%
Industrial	$	14.66		$	13.84		5.9	%
Flex	$	20.21		$	19.87		1.7	%
Office	$	24.88		$	25.05		(0.7)	%







Same Park Portfolio (2)
Total square footage at period end	25,749,000			25,749,000			—
Weighted average occupancy	96.0		%	93.3		%	2.7	%
Period end occupancy	95.9		%	93.8		%	2.1	%
Cash rental income per occupied square foot (2) (4)	$	16.84		$	16.10		4.6	%
Industrial	$	14.87		$	13.79		7.8	%
Flex	$	20.21		$	19.87		1.7	%
Office	$	24.88		$	25.05		(0.7)	%







Non-Same Park Portfolio (2)
Total square footage at period end	1,261,000			402,000			213.7	%
Weighted average occupancy	86.4		%	86.7		%	(0.3)	%
Period end occupancy	86.3		%	77.8		%	8.5	%
Cash rental income per occupied square foot (2) (5)	$	11.25		$	16.83		(33.2)	%
Industrial	$	11.25		$	16.83		(33.2)	%









Multifamily Portfolio
Number of units	395			395			—
Weighted average occupancy	95.0		%	94.2		%	0.8	%
Period end occupancy	96.9		%	93.6		%	3.3	%
Average rent per unit (6)	$	2,123		$	2,021		5.0	%

(1)Operating metrics for our multifamily asset are excluded from total portfolio operating metrics.

(2)Refer to page 29, Definitions and Non-GAAP Disclosures, for the definitions of Revenue per Occupied Square Foot, Same Park and Non-Same Park.

(3)Included in the calculation of Total Park revenue per occupied square foot is (a) lease buyout income of $0.3 million and $0.4 million for the three months ended March 31, 2022 and 2021, respectively, (b) accounts receivable write-offs (recoveries) of $0.1 million and $0.0 million for the three months ended March 31, 2022 and 2021, respectively, and (c) deferred rent receivable write-offs of $0.0 million and $0.1 million for the three months ended March 31, 2022 and 2021, respectively.

(4)Included in the calculation of Same Park revenue per occupied square foot is (a) lease buyout income of $0.2 million and $0.4 million for the three months ended March 31, 2022 and 2021, respectively, (b) accounts receivable write-offs (recoveries) of $0.1 million and $0.0 million for the three months ended March 31, 2022 and 2021, and (c) deferred rent receivable write-offs of $0.0 million and $0.1 million for the three months ended March 31, 2022 and 2021, respectively.

(5)Included in the calculation of Non-Same Park revenue per occupied square foot is (a) lease buyout income of $0.0 for both of the three months ended March 31, 2022 and 2021, (b) accounts receivable write-offs of $0.0 million and $0.0 for the three months ended March 31, 2022 and 2021, respectively, and (c) deferred rent receivable write-offs of $0.0 million for both of the three months ended March 31, 2022 and 2021.

(6)Average rent per unit is defined as the total potential monthly rental revenue (actual rent for occupied apartment units plus market rent for vacant apartment units) divided by the total number of rentable apartment units.

First Quarter 2022 Supplemental Financial Reporting Package 17


			Total Portfolio Overview by Markets and Product Type (unaudited, in thousands)


Square Footage of Properties by Product Type as of March 31, 2022
Markets	Industrial		Flex		Office		Total		% of Total
Northern California	6,391		593		340		7,324		27.1	%
Southern California	2,989		582		31		3,602		13.3	%
Dallas	2,242		793		n/a		3,035		11.3	%
Austin	755		1,208		n/a		1,963		7.3	%
Northern Virginia	1,810		1,242		1,726		4,778		17.7	%
South Florida	3,728		126		12		3,866		14.3	%
Seattle	1,052		270		28		1,350		5.0	%
Suburban Maryland	341		n/a		751		1,092		4.0	%
Total	19,308		4,814		2,888		27,010		100.0	%
Percentage by Product Type	71.5	%	17.8	%	10.7	%	100.0	%



















Weighted Average Occupancy Rates by Product Type for the Three Months Ended March 31, 2022
Markets	Industrial	Flex	Office	Total
Northern California	99.2%	95.1%	71.1%	97.6%
Southern California	98.3%	95.0%	93.0%	97.8%
Dallas	94.9%	92.5%	n/a	94.3%
Austin	99.8%	90.7%	n/a	94.2%
Northern Virginia	91.2%	95.8%	87.2%	91.0%
South Florida	98.0%	97.0%	100.0%	98.0%
Seattle	97.5%	90.6%	65.0%	95.4%
Suburban Maryland	100.0%	n/a	88.6%	92.1%
Percentage by Product Type	97.5%	93.5%	85.6%	95.5%

First Quarter 2022 Supplemental Financial Reporting Package 18


			Same Park Overview by Markets and Product Type (unaudited, in thousands)


Square Footage of Same Park Properties by Product Type as of March 31, 2022
Markets	Industrial		Flex		Office		Total		% of Total
Northern California	6,391		593		340		7,324		28.5	%
Southern California	2,916		582		31		3,529		13.7	%
Dallas	1,300		793		n/a		2,093		8.1	%
Austin	755		1,208		n/a		1,963		7.6	%
Northern Virginia	1,564		1,242		1,726		4,532		17.6	%
South Florida	3,728		126		12		3,866		15.0	%
Seattle	1,052		270		28		1,350		5.3	%
Suburban Maryland	341		n/a		751		1,092		4.2	%
Total	18,047		4,814		2,888		25,749		100.0	%
Percentage by Product Type	70.1	%	18.7	%	11.2	%	100.0	%



















Same Park Weighted Average Occupancy Rates by Product Type for the Three Months Ended March 31, 2022
Markets	Industrial	Flex	Office	Total
Northern California	99.2%	95.1%	71.1%	97.6%
Southern California	98.4%	95.0%	93.0%	97.8%
Dallas	93.1%	92.5%	n/a	92.9%
Austin	99.8%	90.7%	n/a	94.2%
Northern Virginia	99.1%	95.8%	87.2%	93.7%
South Florida	98.0%	97.0%	100.0%	98.0%
Seattle	97.5%	90.6%	65.0%	95.4%
Suburban Maryland	100.0%	n/a	88.6%	92.1%
Percentage by Product Type	98.3%	93.5%	85.6%	96.0%

First Quarter 2022 Supplemental Financial Reporting Package 19


			Q1 2022 Production Statistics (unaudited)


	Total Portfolio Activity (1)
Industrial	Leasing Volume	Customer Retention	Transaction Costs per Executed Foot		Transaction Costs as a % of Rents (2)	Cash Rental Rate Change (2)	GAAP Rent Change (2)
Northern California	226,000	81.0%	$	2.01	3.7%	14.5%	29.6%
Southern California	247,000	81.3%	1.94		4.3%	12.1%	23.4%
Dallas	158,000	52.3%	3.20		9.4%	14.0%	21.1%
Austin	28,000	0.0%	3.19		7.3%	19.9%	47.7%
Northern Virginia	192,000	97.4%	4.54		7.6%	6.7%	17.9%
South Florida	299,000	66.2%	1.36		2.7%	25.1%	51.0%
Seattle	45,000	71.9%	1.80		3.1%	18.4%	37.7%
Suburban Maryland	9,000	100.0%	1.09		3.3%	-1.6%	0.5%
Industrial Totals by Market	1,204,000	74.1%	$	2.41	4.9%	15.4%	30.9%

Flex
Northern California	43,000	91.5%	$	0.75	2.5%	6.4%	13.1%
Southern California	44,000	81.1%	4.88		7.6%	8.0%	20.4%
Dallas	51,000	79.0%	2.46		8.9%	7.8%	18.9%
Austin	108,000	90.3%	7.28		10.2%	5.1%	16.8%
Northern Virginia	34,000	53.0%	3.74		9.9%	-0.9%	0.4%
South Florida	6,000	58.5%	2.10		3.0%	16.6%	34.1%
Seattle	32,000	51.1%	2.80		6.5%	7.7%	16.8%
Flex Totals by Market	318,000	75.4%	$	4.36	8.5%	5.9%	15.6%

Office
Northern California	19,000	91.7%	$	0.04	0.1%	-6.6%	-5.8%
Southern California	1,000	30.9%	—		—	1.0%	9.0%
Northern Virginia	85,000	69.1%	9.97		16.8%	-8.4%	1.1%

Seattle	1,000	100.0%	—		—	6.2%	15.3%
Suburban Maryland	22,000	76.2%	8.15		23.8%	-1.3%	4.0%
Office Totals by Market	128,000	72.3%	$	8.00	15.1%	-6.8%	-0.1%

Company Totals by Type	1,650,000	74.2%	$	3.22	6.4%	10.7%	23.4%

(1)Average lease term for leases executed during the quarter-ended March 31, 2022 was 3.5 years.

(2)Refer to page 29, Definitions and Non-GAAP Disclosures, for the definitions of Transaction Costs as a Percentage of Rents, Cash Rental Rate Change, and GAAP Rent Change.

First Quarter 2022 Supplemental Financial Reporting Package 20


			Lease Expirations by Type (unaudited, in thousands)


Lease Expirations - Total Portfolio
Year of Lease Expiration	Leased Square Footage	Annualized Rental Income (1)		% Total		% of Total Annualized Rental Income
2022	4,227	$	74,554	16.2	%	16.2	%
2023	6,169	105,479		22.9	%	22.9	%
2024	5,159	92,695		20.1	%	20.1	%
2025	3,931	71,604		15.5	%	15.5	%
2026	2,508	45,027		9.7	%	9.7	%
Thereafter	3,851	71,996		15.6	%	15.6	%
Total	25,845	$	461,355	100.0	%	100.0	%













Lease Expirations - Industrial
Year of Lease Expiration	Leased Square Footage	Annualized Rental Income (1)		% of Industrial		% of Total Annualized Rental Income
2022	2,808	$	41,965	14.1	%	9.1	%
2023	4,401	65,477		22.0	%	14.2	%
2024	3,634	58,191		19.6	%	12.6	%
2025	2,869	44,807		15.1	%	9.7	%
2026	1,859	29,555		9.9	%	6.4	%
Thereafter	3,289	57,073		19.3	%	12.4	%
Total	18,860	$	297,068	100.0	%	64.4	%
























Lease Expirations - Flex
Year of Lease Expiration	Leased Square Footage	Annualized Rental Income (1)		% of Flex		% of Total Annualized Rental Income
2022	911	$	19,977	20.6	%	4.4	%
2023	1,095	22,350		23.1	%	4.9	%
2024	1,014	21,106		21.8	%	4.6	%
2025	716	16,175		16.7	%	3.5	%
2026	366	7,544		7.8	%	1.6	%
Thereafter	399	9,708		10.0	%	2.1	%
Total	4,501	$	96,860	100.0	%	21.1	%



































Lease Expirations - Office
Year of Lease Expiration	Leased Square Footage	Annualized Rental Income (1)		% of Office		% of Total Annualized Rental Income
2022	508	$	12,612	18.6	%	2.7	%
2023	673	17,652		26.2	%	3.8	%
2024	511	13,398		19.9	%	2.9	%
2025	346	10,622		15.8	%	2.3	%
2026	283	7,928		11.8	%	1.7	%
Thereafter	163	5,215		7.7	%	1.1	%
Total	2,484	$	67,427	100.0	%	14.5	%

(1)Annualized rental income represents annualized outgoing rents inclusive of related estimated expense recoveries. Actual rental income amounts may vary depending upon re-leasing of expiring spaces.

First Quarter 2022 Supplemental Financial Reporting Package 21


			Industry Concentration and Top Ten Customers (unaudited and dollars in thousands)

(1)Industry concentration is categorized based on customers’ Standard Industrial Classification Code.

(2)For leases expiring within one year, annualized rental income includes only the income to be received under the existing lease from January 1, 2022 through the respective date of expiration.

First Quarter 2022 Supplemental Financial Reporting Package 22


			Industrial and Multifamily Development Projects (unaudited, in thousands, except SF, No of Apt Homes, and Avg. Rent Per Home)

Industrial


Property Name	Location		New Bldg. SF (1)	Construction Start	Construction Complete (2)	Estimated Stabilization (2)		Land Cost (3)		Project Cost		Total Investment		Estimated Stabilized Cash NOI		Estimated Stabilized Cash Yield

Under Construction
Boca	Boca Raton, FL		17,235	4Q21	4Q22	4Q23		$	616	$	4,200	$	4,816	$	290	6.0%
212 Industrial Park	Kent, WA		83,152	4Q21	4Q22	3Q23		1,515		16,000		17,515		956		5.5%
Total/Wgt. Avg. Under Construction		100,387				$	2,131	$	20,200	$	22,331	$	1,246	5.6%

______________________

1 New Bldg. SF relates to new development SF (Parking lot building..etc.), New Building SF not included in Portfolio SF as of March 31, 2022.

2 Refer to page 29, Definition and Non-GAAP Disclosures, for the definition of Stabilization.

3 Land cost - Proration of the historical land basis for the overall project.

MultiFamily


Development Name	Location	No. of Apt. Homes	Net Rentable SF (1)	Construction Start	Construction Complete (2)	Initial Occupancy.(2)	Estimated Stabilization (3)	Land Cost (4)		Project Cost		Total Investment		Avg. Rent Per Home		Estimated Stabilized Cash NOI (3)	Estimated Stabilized Cash Yield (3)

Under Construction
Brentford	McLean, VA	411	372,215	3Q20	1Q23	3Q22	1Q25	$	18.495	$	110,000	$	128,500	$	2,543	TBD	TBD
Total/Wtd. Avg. Under Construction		411	372,215					$	18.495	$	110,000	$	128,500	$	2,543	TBD	TBD

1 Net Rentable SF not included in Portfolio SF as of March 31, 2022.

2 Refer to page 29, Definition and Non-GAAP Disclosures, for the definition of Stabilization.

3 Construction is completed in stages. Initial Occupancy may begin as each stage is completed. Estimated stabilized cash NOI will be presented when initial occupancy is at 50%.

4 Market value of contributed parcel of land at the start of construction/project approval.

First Quarter 2022 Supplemental Financial Reporting Package 23


			Appendix A - Select Consolidated Balance Sheets Variance Detail (unaudited and dollars in thousands)







(a)	Change in cash and cash equivalents
	Beginning cash balance at December 31, 2021					$	27,074
	Net cash provided by operating activities					66,555
	Net cash provided by investing activities					67,796
	Net cash used in financing activities					(57,221)
	Ending cash balance at March 31, 2022					$	104,204

(b)	Change in real estate facilities, at cost
	Beginning balance at December 31, 2021					$	1,928,085

	Recurring capital improvements					2,015
	Tenant improvements, gross					3,035
	Capitalized lease commissions					1,307
	Nonrecurring capital improvements					1,511
	Depreciation and amortization of real estate facilities					(22,308)
	Transfer to land and building held for development, net					(2,131)
	Transfer to properties held for sale, net					(7)
	Ending balance at March 31, 2022					$	1,911,507







						Increase
(c)	Change in rent receivable	March 31, 2022		December 31, 2021		(Decrease)
	Non-government customers	$	2,381	$	1,186	$	1,195
	U.S. Government customers	607		435		172

		$	2,988	$	1,621	$	1,367

						Increase
(d)	Change in other assets	March 31, 2022		December 31, 2021		(Decrease)
	Lease intangible assets, net	$	7,558	$	8,555	$	(997)

	Prepaid property taxes and insurance	1,769		3,439		(1,670)

	Other	3,849		4,268		(419)
		$	13,176	$	16,262	$	(3,086)

						Increase
(e)	Change in accrued and other liabilities	March 31, 2022		December 31, 2021		(Decrease)
	Customer security deposits	$	42,944	$	42,027	$	917
	Accrued property taxes	12,683		13,289		(606)
	Customer prepaid rent	12,569		14,232		(1,663)

	Lease intangible liabilities, net	5,687		6,330		(643)

	Accrued tax liability	3,600		3,600		—
	Other	18,026		17,673		353
		$	95,509	$	97,151	$	(1,642)

(f)	Change in paid-in capital
	Beginning paid-in capital at December 31, 2021					$	752,444




	Exercise of stock options					2,101
	Stock compensation expense, net					773

	Cash paid for taxes in lieu of stock upon vesting of restricted stock units					(931)



	Ending paid-in capital at March 31, 2022					$	754,387


(g)	Change in accumulated earnings
	Beginning accumulated earnings at December 31, 2021					$	226,737
	Net income					82,096

	Distributions to preferred stockholders					(9,580)
	Distributions to common stockholders					(29,010)
	Ending accumulated earnings at March 31, 2022					$	270,243

First Quarter 2022 Supplemental Financial Reporting Package 24


			Appendix B - Consolidated Statements of Operations, Quarter-to-Date (unaudited and in thousands, except per share amounts)


		Three Months Ended March 31,				Increase (Decrease)
		2022		2021
(a)	Rental income:
	Same Park (1) (2)	$	104,096	$	96,638	$	7,458
	Same Park non-cash rental income (1) (3)	918		1,374		(456)
	Non-Same Park (1) (2)	3,074		1,270		1,804
	Non-Same Park non-cash rental income (1) (3)	274		(24)		298
	Multifamily	2,369		2,327		42


	Rental income from assets sold or held for sale (4)	2,109		6,462		(4,353)
		$	112,840	$	108,047	$	4,793


(b)	Cost of operations:
	Same Park (1)	$	30,404	$	28,754	1,650
	Same Park non-cash expense (1) (5)	496		421		75
	Non-Same Park (1)	1,035		417		618
	Non-Same Park non-cash expense (1) (5)	25		5		20
	Multifamily	1,224		1,067		157

	Operating expenses from assets sold or held for sale (4)	930		2,554		(1,624)
		$	34,114	$	33,218	$	896


(c)	General and administrative expenses:
	Compensation expense (6)	$	9,286	$	1,643	$	7,643



	Stock compensation expense (7)	404		1,324		(920)

	Professional fees and other	1,634		1,415		219
		$	11,324	$	4,382	$	6,942








(d)	Interest and other income:
	Management fee income	$	57	$	68	$	(11)
	Interest income	3		4		(1)
	Other income	186		184		2
		$	246	$	256	$	(10)


(e)	Interest and other expense:
	Interest expense and credit facility fee (8)	$	(140)	$	(58)	$	(82)
	Amortization of credit facility origination costs	(146)		(78)		(68)
	Other expense	(44)		(75)		31
		$	(330)	$	(211)	$	(119)

(1)Refer to page 29, Definitions and Non-GAAP Disclosures, for the definitions of Same Park, Non-Same Park, Non-cash rental income, Assets Sold in 2022 and Assets Sold 2021.

(2)Same Park Cash Rental Income is presented net of (a) accounts receivable write-offs (recoveries) of $0.1 million and $0.0 million for the three months ended March 31, 2022 and 2021, respectively, and (b) rent deferrals and abatements $0.0 million and $0.3 million for the three months ended March 31, 2022 and 2021, respectively. Non-Same Park rental income is presented net of (a) accounts receivable write-offs and (b) rent deferrals and abatements of $0.0 million for each of the three months ended March 31, 2022 and 2021.

(3)Same Park non-cash rental income is presented net of deferred rent receivable write-offs of $0.0 and $0.1 million for the three months ended March 31, 2022 and 2021, respectively. Non-Same Park non-cash rental income is presented net of deferred rent receivable write-offs of $0.0 million for each of the three months ended March 31, 2022 and 2021.

(4)Amounts shown for the three months ended March 31, 2022 and 2021 include operating results attributable the Assets Sold in 2022 and Assets Sold in 2021.

(5)Non-cash expense represents stock compensation expense attributable to employees whose compensation expense is recorded in costs of operations.

(6)Compensation expense includes a one-time cash payment of $6.7 million to the former CEO in accordance with his separation agreement.

(7)Stock compensation expense includes $0.6 million related to the reversal of stock compensation for the unvested former CEO shares net of dividend forfeiture expense.

(8)Interest expense was $0.03 million and $0 for the three months ended March 31, 2022 and 2021, respectively.

First Quarter 2022 Supplemental Financial Reporting Package 25


			Appendix C - Same Park Cost of Operations (unaudited, in thousands)


	Three Months Ended March 31,
	2022		2021		% Change
Cost of operations
Property taxes	$	11,788	$	11,197	5.3%
Utilities	4,637		4,417		5.0%
Repairs and maintenance	5,679		5,244		8.3%
Compensation	5,168		4,559		13.4%
Snow removal	846		1,002		(15.6)%
Property insurance	1,268		1,167		8.7%
Other expenses	1,514		1,589		(4.7)%
Total Cash Cost of Operations	30,900		29,175		5.9%
Less: Non-cash stock based compensation in operating costs	(496)		(421)		17.8%
Total Cash Cost of Operations	$	30,404	$	28,754	5.7%

First Quarter 2022 Supplemental Financial Reporting Package 26


			Appendix D - Lease Expiration by Market (unaudited, in thousands)


Lease Expirations - Northern California
Year of Lease Expiration	Leased Square Footage	Annualized Rental Income (1)		% of No. CA		% of Total Annualized Rental Income
2022	800	$	16,688	12.4	%	3.6	%
2023	1,409	27,123		20.2	%	5.9	%
2024	1,317	24,575		18.3	%	5.3	%
2025	954	16,098		12.0	%	3.5	%
2026	992	18,631		13.9	%	4.0	%
Thereafter	1,664	31,225		23.2	%	6.8	%
Total	7,136	$	134,340	100.0	%	29.1	%













Lease Expirations - Southern California
Year of Lease Expiration	Leased Square Footage	Annualized Rental Income (1)		% of So. CA		% of Total Annualized Rental Income
2022	670	$	13,206	18.9	%	2.9	%
2023	885	17,265		24.7	%	3.8	%
2024	740	15,656		22.4	%	3.4	%
2025	499	9,938		14.2	%	2.2	%
2026	179	3,465		5.0	%	0.7	%
Thereafter	557	10,339		14.8	%	2.2	%
Total	3,530	$	69,869	100.0	%	15.2	%
























Lease Expirations - Dallas
Year of Lease Expiration	Leased Square Footage	Annualized Rental Income (1)		% of Dallas		% of Total Annualized Rental Income
2022	586	$	7,063	20.9	%	1.5	%
2023	818	9,266		27.4	%	2.0	%
2024	550	6,760		20.0	%	1.5	%
2025	337	4,069		12.1	%	0.9	%
2026	405	4,511		13.4	%	1.0	%
Thereafter	155	2,085		6.2	%	0.5	%
Total	2,851	$	33,754	100.0	%	7.4	%



































Lease Expirations - Austin
Year of Lease Expiration	Leased Square Footage	Annualized Rental Income (1)		% of Austin		% of Total Annualized Rental Income
2022	240	$	5,241	13.6	%	1.2	%
2023	305	6,128		15.9	%	1.3	%
2024	396	8,880		23.0	%	1.9	%
2025	457	9,899		25.6	%	2.0	%
2026	120	2,934		7.6	%	0.6	%
Thereafter	341	5,527		14.3	%	1.2	%
Total	1,859	$	38,609	100.0	%	8.2	%

(1)Annualized rental income represents annualized outgoing rents inclusive of related estimated expense recoveries. Actual rental income amounts may vary depending upon re-leasing of expiring spaces.

First Quarter 2022 Supplemental Financial Reporting Package 27


			Appendix D - Lease Expiration by Market (unaudited, in thousands)















































Lease Expirations - Northern Virginia
Year of Lease Expiration	Leased Square Footage	Annualized Rental Income (1)		% of No. VA		% of Total Annualized Rental Income

2022	838	$	16,299	18.7	%	3.5	%
2023	876	16,573		19.0	%	3.6	%
2024	770	14,821		17.0	%	3.2	%
2025	856	18,311		21.0	%	4.0	%
2026	353	7,428		8.5	%	1.6	%
Thereafter	652	13,813		15.8	%	3.0	%
Total	4,345	$	87,245	100.0	%	18.9	%


























































Lease Expirations - South Florida
Year of Lease Expiration	Leased Square Footage	Annualized Rental Income (1)		% of So. FL		% of Total Annualized Rental Income

2022	758	$	9,404	17.4	%	2.0	%
2023	1,102	14,891		27.6	%	3.2	%
2024	958	13,866		25.7	%	3.0	%
2025	525	7,574		14.0	%	1.6	%
2026	249	3,997		7.4	%	0.9	%
Thereafter	236	4,228		7.9	%	0.9	%
Total	3,828	$	53,960	100.0	%	11.6	%





































































Lease Expirations - Suburban Maryland
Year of Lease Expiration	Leased Square Footage	Annualized Rental Income (1)		% of Sub. MD		% of Total Annualized Rental Income

2022	176	$	3,257	15.1	%	0.7	%
2023	313	6,814		31.6	%	1.5	%
2024	156	3,514		16.3	%	0.8	%
2025	137	2,642		12.2	%	0.6	%
2026	95	2,383		11.1	%	0.5	%
Thereafter	132	2,954		13.7	%	0.6	%
Total	1,009	$	21,564	100.0	%	4.7	%
















































































Lease Expirations - Seattle
Year of Lease Expiration	Leased Square Footage	Annualized Rental Income (1)		% of Seattle		% of Total Annualized Rental Income

2022	159	$	3,396	15.4	%	0.8	%
2023	461	7,419		33.7	%	1.6	%
2024	272	4,623		21.0	%	1.0	%
2025	166	3,073		14.0	%	0.7	%
2026	115	1,678		7.6	%	0.4	%
Thereafter	114	1,825		8.3	%	0.4	%
Total	1,287	$	22,014	100.0	%	4.9	%

(1)Annualized rental income represents annualized outgoing rents inclusive of related estimated expense recoveries. Actual rental income amounts may vary depending upon re-leasing of expiring spaces.

First Quarter 2022 Supplemental Financial Reporting Package 28


			Definitions and Non-GAAP Disclosures

Provided within this supplemental information package are measures not defined in accordance with U.S. generally accepted accounting principles (“GAAP”). We believe our presentation of these non-GAAP measures assists investors and analysts in analyzing and comparing our operating and financial performance between reporting periods. These non-GAAP measures discussed below are not substitutes of other measures of financial performance presented in accordance with GAAP. In addition, other real estate investment trusts (“REITs”) may compute these measures differently, so comparisons among REITs may not be helpful.

Assets sold or held for sale – Assets sold or held for sale represents

Assets Sold in 2022:

•702,000 square foot industrial-flex business park located in Irving, Texas – Sold in March 2022

Assets Sold in 2021:

•70,000 square foot industrial-flex building located in Irving, Texas – Sold in December 2021

•53,000 square foot industrial building located in Beltsville, Maryland – Sold in December 2021

•371,000 square foot industrial-flex business park located in San Diego, California – Sold in October 2021

•22,000 square foot industrial-flex building located in Irving, Texas – Sold in September 2021

•244,000 square foot office business park located in Herndon, Virginia – Sold in July 2021

•198,000 square foot office-oriented flex business park located in Chantilly, Virginia – Sold in June 2021

Cash NOI – We utilize cash NOI to evaluate the cash flow performance of our business parks. Cash NOI represents NOI adjusted to exclude non-cash items included in rental income and non-cash expenses. The non-cash rental income includes amortization of deferred rent receivable (net of write-offs), in-place lease intangible, tenant improvement reimbursements, and lease incentives. The non-cash expense is equal to stock compensation expense for employees whose compensation expense is recorded in GAAP cost of operations in the amount of $0.5 million.for each of the three months ended March 31, 2022 and 2021. We believe that cash NOI assists investors in analyzing cash flow performance of our business parks.

Cash Rental Income per Occupied Square Feet – Computed by dividing cash rental income for the period by weighted average occupied square feet. Cash rental income per occupied square feet for the three month period shown is annualized.

Cash Rental Rate Change – Cash rental rate change percentages are computed by taking the percentage difference between outgoing rents (including estimated expense recoveries) and incoming rents (including estimated expense recoveries) for leases executed during the period. Leases executed on spaces vacant for more than the preceding twelve months have been excluded.

First Quarter 2022 Supplemental Financial Reporting Package 29


			Definitions and Non-GAAP Disclosures

Earnings before Interest, Taxes, Depreciation and Amortization for Real Estate (“EBITDAre”) – EBITDAre is defined by the National Association of Real Estate Investment Trusts (“NAREIT”) and is often utilized to evaluate the performance of real estate companies. EBITDAre is calculated as GAAP net income before interest, depreciation and amortization and adjusted to exclude gains or losses from sales of depreciable real estate assets and impairment charges on real estate assets. We believe our presentation of EBITDAre assists investors and analysts in evaluating the operating performance of our business activities, including the impact of general and administrative expenses, and without the impact from gains or losses from sales of depreciable real estate assets.

Free Cash Available after Fixed Charges – Free cash available after fixed charges represents FAD less dividends and distributions.

GAAP Rent Growth – Average net effective rent growth represents the weighted average percentage change in net effective rents for leases executed during a period compared against the prior leases for the same units. Net effective rent represents average rental payments for the term of a lease on a straight-line basis, against the ending lease rates on prior leases for the same units, excluding operating expense reimbursements.

First Quarter 2022 Supplemental Financial Reporting Package 30


			Definitions and Non-GAAP Disclosures

Non-Recurring Property Renovations – Non-recurring property renovations represents renovations that substantially enhance the value and useful life of a property, including capitalized costs associated with repositioning of acquired assets.

Non-Same Park – Non-Same Park includes assets acquired on or subsequent to January 1, 2020.

Recurring Capital Expenditures – Recurring capital expenditures are capitalized costs necessary to continue to operate the property at its current economic value. Capital improvements in excess of $2,000 with a useful life greater than 24 months are capitalized. Lease transaction costs (i.e. tenant improvements and leasing commissions) of $1,000 or more for leases with terms greater than 12 months are capitalized. All leasing costs, including first generation tenant improvements and leasing commissions, are included in recurring capital expenditures.

Retained Cash – Retained cash represents free cash available after fixed charges less non-recurring property renovations and funds used for development and redevelopment.

Transaction Costs as a Percentage of Rents – Transaction costs as a percentage of rents are computed by taking the total transaction costs divided by the total rents (including estimated expense recoveries) over the term of the lease.

First Quarter 2022 Supplemental Financial Reporting Package 31

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News Release PS Business Parks, Inc. 701 Western Avenue Glendale, CA 91201-2349 psbusinessparks.com


	Three Months Ended March 31, 2022
Product type	Leasing volume	Cash rental rate growth		GAAP rental rate growth
Industrial	1,204,000	15.4	%	30.9	%
Industrial-flex	318,000	5.9	%	15.6	%
Office	128,000	(6.8)	%	(0.1)	%
Total	1,650,000	10.7	%	23.4	%