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

Company Update March 2018

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 2

Average Annual Total Shareholder Return PSB NAREIT S&P 500 20.0% 17.9% 15.8% 16.0% 13.0% 12.8% 12.8% 12.0% 11.1% 9.8% 9.9% 9.1% 8.5% 7.8% 8.0% 7.2% 4.0% 0.0% 5 Year 10 Year 15 Year 20 Year Source: IPREO December 31, 2017 Consistent Outperformance 3

Enterprise Value 2017: $5.4 Billion $6.0 $5.4 $5.1 $5.0 $4.0 $4.0 $3.1 Billions $2.8 $3.0 $2.0 $2.0 $1.1 $0.5 $1.0 $- Driving Growth! 4

Gateway Markets Six States Three Product Types 17% Office 31% Industrial 52% Flex 28.0 Million Square Feet 98 Business Parks 661 Buildings 4,900 Tenants 5

PSB Product Flex 52% Industrial 31% Office 17% 14.5 Million Sq. Ft 8.8 Million Sq. Ft 4.7 Million Sq. Ft Accessible Parking Multi-Tenanted In-fill Suburban Locations Dock High and At-Grade Doors Convenient Loading Dock and Divisible Floor Plates Grade-Level Doors Easily Reconfigured Buildings Multi-Product Parks Ceiling Heights of 18 Feet and Small User Focus Higher Re-usable Tenant Spaces Larger Average User Size 4,900 Customers: Small Business America 6

Diverse Customer Base Percentage of Total Rent by Sector Insurance and Government, Retail, Food and Engineering and Top 10 Tenants – Percent of Annualized Financial 7.1% Automotive, 7.1% Construction, 7.2 % Service, 4.0% Rental Income Electronics, 3.1% Computer Hardware U.S. Government Software & Releated (various locations): 4.5% Services, Home Furnishings, 9.9% Health Services, 2.6% Keeco, LLC: 0.9% 9.9% Aerospace/Defense Products and Services, Lockheed Martin Corporation 2.8% (various locations): 0.9% Communications, 2.0% Kaiser Permanente: 0.9% Luminex Corporation: 0.8% KZ Kitchen Cabinet: 0.6% Educational Services, CEVA Logistics U.S., Inc.: 0.5% 1.6% Warehouse, Applied Materials, Inc.: 0.5% Distribution, Transportation and Inova Health Care Services: 0.5% Business Services, Logistics, 11.8% Other, 18.3% Investorplace Media, LLC: 0.5% 12.6% As of December 31, 2017 Stable and Diversified Customer Base 7

Historical Occupancy & Rent Trends 96.0% 10.0% 8.0% 95.0% Rent Change on Executed Leases (Cash Basis) 94.4% 94.1% 6.0% 93.5% 94.0% 5.3% 5.2% 4.0% Same Park Occupancy 4.4% 92.9% 93.0% 2.0% 92.1% 92.0% 92.0% 0.0% 0.5% 91.1% -2.0% -0.4% 91.0% -4.0% 90.0% -6.0% 89.0% -6.2% -8.0% -8.3% 88.0% -10.0% 2011 2012 2013 2014 2015 2016 2017 Driving Occupancy and Rent Growth 8

Historical Same Park NOI Trend Revenue NOI 8% 6% 5.7% 5.0% 4.2% 4.6% 4% 2.9% 4.0% 2.6% 3.2% 2% 1.4% 2.6% 0.7% 2.2% 1.2% 0% 0.0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 -2% -3.0% -2.9% -3.6% -4% -3.7% -4.6% -4.5% -6% Rent Growth and Occupancy Drive Strong Performance 9

Same Park Recurring Capital as % of NOI 25% 20.6% 19.4% 20% 17.2% 15% 14.1% 14.3% 11.6% 10% 5% 2012 2013 2014 2015 2016 2017 Office Leasing in 2017 10

Unparalleled Balance Sheet Common Preferred Highlights Equity Equity 81.8% 18.2% No Pending Debt Maturities Low Leverage/Strong Ratios Debt & Pref. to EBITDA 4.0x Fixed Charge Coverage Ratio 4.9x Investment Grade Ratings $5.3 Billion Market Cap S & P A- (Corporate) BBB (Preferred Equity) Moody’s Baa2 (Preferred Equity) As of December 31, 2017 As of December 31, 2017, excluding Series T redeemed January 3, 2018 Balance Sheet Primed for Growth 11

Investment Strategy 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 Disciplined Acquisitions 12

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 13

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 14

Multi-Family Development Tysons, VA 15

Tysons, VA Multi-Family Development Opened June 2017 16

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 17

Highgate Interior 18

The Mile, Tysons, VA Potential Future Development Site 751,000 SF to 3.5 Million SF 19

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. 20