PS Business Parks
Annual Report 2022

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
ý ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2022
OR
¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission file number 001-10709
PS BUSINESS PARKS, INC.
(Exact Name of Registrant as Specified in Its Charter)
Maryland
95-4300881
(State or Other Jurisdiction of
Incorporation or Organization)
(I.R.S. Employer
Identification No.)
345 Park Avenue, New York, New York
10154
(Address of Principal Executive Offices)
(Zip Code)
Registrant’s telephone number, including area code:(212) 583-5000
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ý
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ý No ☐ (See Explanatory Note)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ý    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the
definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
ý
Non-accelerated filer
¨
Accelerated filer
¨
Smaller reporting company
¨
Emerging growth company
¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided pursuant to Section 13(a) of the Exchange Act.  ¨
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section
404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ý
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to
previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive
officers during the relevant recovery period pursuant to § 240.10D-1(b).
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  ý
Based on the closing price of PS Business Parks, Inc.’s common stock on June 30, 2022, the aggregate market value of the voting common equity held by non-affiliates of PS Business Parks, Inc.
was $3,765,569,354.
There is currently no established public trading market in which PS Business Parks, Inc.’s common shares are traded, and all common shares are held by affiliates of PS Business Parks, Inc. The
number of common shares outstanding as of February 27, 2023 was 100.
Documents Incorporated by Reference
None.

Table of Contents
PART I
3
Item 1.
Business
3
Item 1A.
Risk Factors
7
Item 2.
Properties
21
Item 3.
Legal Proceedings
21
Item 4.
Mine Safety Disclosures
21
PART II
22
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
22
Item 6.
Reserved
22
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
22
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
28
Item 8.
Financial Statements and Supplementary Data
28
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
28
Item 9A.
Controls and Procedures
28
Item 9B.
Other Information
29
Item 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
29
PART III
29
Item 10.
Directors, Executive Officers and Corporate Governance
29
Item 11.
Executive Compensation
32
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
32
Item 13.
Certain Relationships and Related Transactions, and Director Independence
32
Item 14.
Principal Accounting Fees and Services
34
PART IV
35
Item 15.
Exhibits and Financial Statement Schedule
35
Item 16.
Form 10-K Summary
80
SIGNATURES
81
1

Explanatory Note
On January 3, 2023, PS Business Parks, Inc. (“PSB” or the “Company”) filed a Form 25 with the Securities and Exchange Commission (the “Commission”) to delist the
Company’s (i) Depositary Shares each representing 1/1,000 of a Share of 5.250% Cumulative Preferred Stock, Series X of the Company (“Series X Preferred Shares”), (ii)
Depositary Shares each representing 1/1,000 of a Share of 5.200% Cumulative Preferred Stock, Series Y of the Company (“Series Y Preferred Shares”) and (iii) Depositary
Shares each representing 1/1,000 of a Share of 4.875% Cumulative Preferred Stock, Series Z of the Company (“Series Z Preferred Shares” and, collectively with the Series X
Preferred Shares and the Series Y Preferred Shares, the “Preferred Shares”). On January 13, 2023, the Preferred Shares ceased trading on the New York Stock Exchange and
PSB filed a certification and notification of termination of registration under Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), on Form
15 with the Commission. The filing of the Form 15 immediately suspended PSB’s filing obligations under Section 12(g) of the Exchange Act. However, because PSB had
Securities Act registration statements that were deemed to have been declared effective upon the filing of its Annual Report on Form 10-K for the fiscal year ended December
31, 2021, its reporting obligations under Section 15(d) became operative upon the suspension of its Section 12(g) reporting obligations with respect to fiscal year 2022.
As a result of the foregoing, we are filing this Annual Report on Form 10-K for the fiscal year ended December 31, 2022 to satisfy our remaining reporting obligation under
Section 15(d) for fiscal year 2022. We do not expect that we will be required to file current or periodic reports with the SEC following the filing of this Form 10-K.
2

PART I
(dollars in thousands, except share data)
Item 1. Business
Forward-Looking Statements
Forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, are made throughout this Annual Report on Form 10-K. For this
purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words
“may,” “believes,” “anticipates,” “plans,” “expects,” “seeks,” “estimates,” “intends” and similar expressions are intended to identify forward-looking statements. There are a
number of important factors that could cause the results of the Company to differ materially from those indicated by such forward-looking statements, including but not limited
to the following:
•
our significant exposure to real estate risk;
•
changes in general economic and business conditions, including as a result of the economic fallout of the COVID-19 pandemic;
•
risks related to our property acquisition strategies and operations;
•
new or changing government regulations and legal challenges;
•
information technology failures and data security breaches;
•
ceasing to maintain our status as a real estate investment trust (a “REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”);
•
changes in tax laws;
•
our dependence on external sources of capital to grow our Company;
•
risks related to our significant indebtedness; and
•
our dependence on, and relationship with, Blackstone and its affiliates, which may have interests that conflict with ours.
This list of risks is not exhaustive. Additional information regarding risk factors that may affect us is discussed under the heading “Part I, Item 1A. Risk Factors. In light of the
significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any
other person that our objectives and plans will be achieved. Moreover, we assume no obligation to update these forward-looking statements to reflect actual results, changes in
assumptions or changes in other factors affecting such forward-looking statements, except as required by law.
The Company
The Company is a real estate investment trust (“REIT”) that owns, operates, acquires and develops commercial properties, primarily multi-tenant industrial, industrial-flex and
low-rise suburban office space. As of December 31, 2022, the Company owned 471 buildings and one land parcel in six states representing 20,656,858 of our gross leasable
area (“GLA”).
Recent Company Developments
Merger
On July 20, 2022 (the “Acquisition Date”), pursuant to the terms and subject to the conditions set forth in an Agreement and Plan of Merger, dated as of April 24, 2022 (the
“Merger Agreement”), a merger (the “Merger”) was completed between PSB and a direct subsidiary of Sequoia Parent LP, a Delaware limited partnership (“Parent”), with the
Company surviving. As a result of the Merger, the Company became a subsidiary of Parent and certain of its affiliates, and PS Business Parks, L.P (the “Partnership”) remained
a subsidiary of the Company. The Parent is an affiliate of Blackstone Real Estate Partners IX, L.P., which is an affiliate of Blackstone Inc. (“Blackstone”). The common stock of
the Company is wholly owned by the Parent and certain of its affiliates
3

and is not publicly traded. The Preferred Shares of the Company were publicly listed until January 13, 2023. Refer to Note 2 — Summary of Significant Accounting Policies
for additional information on basis of presentation.
PSB and its subsidiaries, including the Partnership and its consolidated joint ventures, are collectively referred to as the “Company,” “we,” “us,” or “our.”
Public Storage Operating Partnership Interests
Pursuant to the terms and conditions of the Merger Agreement, upon the Closing each partnership unit of the Partnership (a “Partnership Unit”) that was issued and outstanding
prior to the effective time of the Merger (the “Partnership Merger Effective Time”) (other than units held by the Company, Parent, or any of their respective wholly owned
subsidiaries) was automatically cancelled and converted into the right to receive an amount in cash equal to $182.25 (the “Per Company Share Merger Consideration”), less any
applicable withholding taxes, which represented $187.50 per share of Common Stock as reduced by a $5.25 per share cash dividend paid in connection with the Closing (the
“Closing Cash Dividend”) in accordance with the terms of the Merger Agreement. At the Partnership Merger Effective Time, each Partnership Unit owned by the Company or
any of its subsidiaries immediately prior to the Partnership Merger Effective Time remained outstanding as a Partnership Unit of the Partnership held by the Company or the
relevant subsidiary.
As a result of the completion of the Merger, an aggregate of approximately 21% of the Partnership’s issued and outstanding limited partnership interests were directly owned by
Parent and certain of its affiliates (other than the Company) (the “Parent Partners”). Pursuant to a Distribution and Contribution Agreement, immediately following the
completion of the Merger, the Partnership redeemed all of such limited partnership units in exchange for the distribution (the “Redemption and Distribution”) to the Parent
Partners of certain subsidiaries of the Partnership which held assets comprised of 58 properties located in California, Washington and Virginia (the “Non-Core Portfolio”). As a
result of the Redemption and Distribution, the Company (directly or indirectly) owns 100% of the Partnership.
Dispositions
We continuously evaluate opportunities with respect to our portfolio and may from time to time sell individual real estate facilities and land parcels or groups of facilities and
land parcels based on market conditions, fit with our existing portfolio, evaluation of long-term potential returns of markets or product types, or other reasons. The size of such
sales may be significant to us.
The timing of any potential future dispositions or strategic venture transactions will depend on market conditions and other factors, including but not limited to our capital
needs, the availability of financing for potential buyers and our ability to defer some or all of the taxable gains on the sales. We cannot assure that we will dispose of any
additional properties, enter into any additional strategic ventures, or that we will be able to identify and complete the acquisition of a suitable replacement property to effect a
Section 1031 Exchange or be able to use other tax deferred structures in connection with our strategy.
Developments
We believe that a portion of our long-term future growth will continue to come from the completion of our in-process development and redevelopment projects and, subject to
market conditions, executing on future potential development or redevelopment projects on existing sites. In addition to ground-up development, we expect to redevelop
existing assets in our portfolio and target acquisitions where our development expertise can add value to the asset and Company cash flow growth with a focus on in-fill
submarkets of key U.S. distribution markets.
Tax and Corporate Structure
For all periods presented herein, we have elected REIT status under the Code. For each taxable year in which we qualify for taxation as a REIT, we generally will not be subject
to U.S. federal corporate income tax on our “REIT taxable income” (generally, taxable income subject to specified adjustments, including a deduction for dividends paid and
excluding our net capital gain) that is distributed to our stockholders. This, along with the nature of the operations of its operating properties, resulted in no provision for federal
income taxes at the Company level. In addition, the Partnership generally is not liable for federal income taxes as the partners recognize their allocable share of income or loss
in their tax returns; therefore, no provision
4

for federal income taxes has been made at the Partnership level. We believe we have met these requirements in all periods presented herein.
The Company has elected taxable REIT subsidiary (“TRS”) status for certain of its corporate subsidiaries and, as a result, these entities will incur both federal and state income
taxes on any taxable income of such entities after consideration of any net operating losses.
Executive Officers of PS Business Parks, Inc.
Name
Age
Office
Luke Petherbridge
43
Chief Executive Officer and Secretary
Matthew L. Ostrower
52
Chief Financial Officer, Vice President and Treasurer
Nicholas Pell
45
President and Chief Investment Officer
Luke Petherbridge has served as our Chief Executive Officer and Secretary since July 2022. Mr. Petherbridge has been Link Logistics’ Chief Executive Officer since September
2020, responsible for Link Logistics’ overall strategic direction with a particular focus on driving profitability and building a winning corporate culture. Mr. Petherbridge has
over 15 years of financial and global real estate management experience, most recently serving as the chief executive officer of Shopcore from May 2016 to September 2020
and LivCor properties from July 2019 to September 2020. Mr. Petherbridge previously held the positions of chief financial officer and treasurer of DDR Corporation from
December 2011 to May 2016, one of the largest owners of shopping centers in the United States. While at DDR, Mr. Petherbridge served in various roles and held
responsibilities including capital raising activities, balance sheet management, lender relations and execution of various corporate-level transactions. Before DDR,
Mr. Petherbridge served as chief executive officer and a director of shopping center owner EDT Retail Trust (formerly Macquarie DDR Trust) from April 2008 to September
2010 and as director of transactions with Rubicon Asset Management from June 2003 to April 2008, where he oversaw approximately $5 billion of transactions across real
estate and real estate structured finance markets in the United States, Europe and Japan. Mr. Petherbridge received a Bachelor of Commerce degree from Macquarie University.
Mr. Petherbridge is a trustee and member of the Executive Board for the International Council of Shopping Centers (ICSC), and he also serves as a board member of World
Business Chicago, Chicago’s public-private economic development agency. In addition, Mr. Petherbridge is co-founder and chairman of CoreGiving, an organization that seeks
to fight childhood hunger and food insecurity.
Matthew L. Ostrower has served as our Chief Financial Officer, Vice President and Treasurer since July 2022. Mr. Ostrower is Link Logistics’ Chief Financial Officer,
responsible for all aspects of corporate finance, including treasury, cash management, financial planning and analysis, accounting and tax. Prior to joining Link Logistics in
2019, Mr. Ostrower served as Chief Financial Officer of various REITs, including SITE Centers, which invests in shopping centers; Retail Value Inc., among the largest owners
and managers of value-oriented retail real estate in the U.S.; and Equity One, an owner of coastal shopping centers, which merged with Regency Centers in 2015. Mr. Ostrower
has also held the positions of managing director and associate director of Research at Morgan Stanley and served as a member of the Board of Directors of Ramco-Gershenson
Properties Trust, a publicly traded retail REIT, from 2010 to 2015. Mr. Ostrower received a Bachelor of Arts degree in American History from Tufts University and a dual
Master of Science degree in Real Estate and City Planning from Massachusetts Institute of Technology.
Nicholas Pell has served as our President since July 2022. Mr. Pell is Link Logistics’ President and Chief Investment Officer, responsible for portfolio management, including
all capital deployment and disposition activities with a focus on ensuring the Company has the best portfolio to service the needs of its customers. Prior to joining Link
Logistics in 2019, Mr. Pell served as chief investment officer at Gramercy Property Trust from 2016 to 2018, an investor in and asset manager of industrial and office real
estate. Mr. Pell played an integral role on the leadership team that grew the Company from an enterprise value of approximately $200 million to over 80 million square feet of
real estate before it was acquired by Blackstone in 2018. Mr. Pell has also served as a director in the Investment Department at W. P. Carey & Co., as a director of Business
Development at Sony Pictures Entertainment and as an analyst at J.P. Morgan & Co. Mr. Pell is a National Association of Industrial and Office Properties and Urban Land
Institute member and he also serves on the board of the Newport Festivals Foundation, which produces both the Newport Folk and Newport Jazz Festivals. Mr. Pell received a
Bachelor of Arts degree in Economics from Duke University and a Master of Business Administration degree from Harvard Business School.
Competition
Our properties compete for tenants with comparable properties located in our markets primarily on the basis of location, rental rate, services provided and the design and
condition of improvements. Competition in the market areas we operate in is significant
5

and has from time to time negatively impacted occupancy levels and rental rates of, and increased the operating expenses of, certain of our properties. The demand for space in
our markets is impacted by general economic conditions, which can affect the local competition for tenants. Sublease space and unleased developments have from time to time
created competition among operators in certain markets in which the Company operates.
Objectives and Strategies
Our primary objective is to grow stockholder value in a risk appropriate and stable manner by maximizing net cash flow generated by our existing properties.
We seek to maximize net cash flow of our existing properties by optimizing occupancy levels and rental rates, while investing strategically in capital expenditures that generate
appropriate risk adjusted returns. Below are the primary elements of our strategy:
Concentration in favorable markets: We believe that our properties generally are located in markets that have favorable characteristics such as above average population, job,
and income growth, as well as high education levels. In addition, we believe our properties are generally in markets with higher than average barriers to entry that are close to
critical infrastructure, middle to high income housing or universities and have easy access to major transportation arteries. We believe that these characteristics contribute to
property operating cash flow stability and growth.
Standard build outs and finishes: We generally seek to configure our leasable space with standard build outs and finishes that meet the needs of a wide variety of tenants,
minimizing the need for specialized and costly tenant improvements and enabling space to be “move-in ready” quickly upon vacancy. We believe this makes our space more
attractive to potential tenants, allows tenants to move in quickly and seamlessly, and reduces the cost of capital improvements, relative to real estate operators that offer
specialized finishes or build outs. Also, such flexibility facilitates our ability to offer diverse sizes and configurations to meet potential customer’s needs, as well as to change
space sizes for existing customers when their needs change.
Large, Diverse Parks: Our properties are generally concentrated in large complexes of diverse buildings, with a variety of available space sizes and configurations that we can
offer to tenants. We believe that this allows us to attract a greater number of potential tenants to our parks and minimizes the loss of existing customers when their space
requirements change.
Smaller tenants and diverse tenant base with shorter-term leases: By concentrating on smaller spaces, we seek to reach a large number of smaller tenants in the market. We
believe this focus gives us a competitive edge as most institutional owners focus primarily on large users. Small users perceive more incremental value from the level of
customer service that we offer. We also believe having smaller tenants improves our diversity of tenants across industries, which improves the stability of our cash flows. In
addition, our lease term tends to be short, which we believe allows us to quickly capture increases in market rents in our high-growth markets.
Superior Service to Customers: We seek to provide a superior level of service to our customers in order to maintain occupancy and increase rental rates, as well as minimize
customer turnover. We believe that Link’s property management teams are comprised of the most experienced and effective real estate professionals in our markets. The
Company has extensive experience in acquiring properties managed by others and thereafter improving customer satisfaction, occupancy levels, retention rates and rental
income by implementing established customer service programs.
Redevelop existing real estate facilities: Certain of our existing properties were developed in or near areas that have been undergoing gentrification with an influx of residential
development, and, as a result, certain buildings in our properties may have higher and better uses. We will seek to identify potential candidates for redevelopment within our
portfolio, and where appropriate will leverage the expertise and scale of existing operators and developers should we pursue redevelopment of any of our properties.
Insurance
The Company believes that its properties are adequately insured. Facilities operated by the Company are covered by comprehensive insurance, including fire, earthquake, wind
damage and liability coverage from carriers, subject to customary deductibles.
6

Compliance with Government Regulations
We are subject to various laws, ordinances, and regulations, including various federal, state, and local regulations that apply generally to the ownership of real property and the
operation of such properties. These include various laws and government regulations concerning environmental matters, labor matters and employee safety and health matters.
Refer to Item 1A, “Risk Factors” below for a discussion of certain risks related to such government regulations, including risks related to compliance with (i) the Americans
with Disabilities Act and with related regulations, (ii) laws and regulations adopted in response to the COVID-19 pandemic and similar public health emergencies, government,
(iii) federal or state privacy laws, including the California Consumer Privacy Act (“CCPA”), (iv) environmental remediation requirements, and (v) laws and regulations relating
to real property ownership, including property taxes and zoning changes or violations. Except for regulations discussed therein, we are not aware of any government regulations
that have resulted or that we expect will result in compliance costs that had or will have a material effect on our capital expenditures, earnings, or competitive position.
Human Capital
We have no employees. We have entered into a Master Services Agreement with Link Logistics Real Estate Holdco LLC (together with its subsidiaries, “Link”), a portfolio
company owned by Blackstone-advised investment vehicles, to provide, as applicable, corporate support services (including, without limitation, accounting, legal, tax, treasury,
valuation services, information technology and data management), loan management, management services, operational services, property management services, and
transaction support services to the Company.
Website Disclosure
Our website address is www.psbusinessparks.com. We make available free of charge through our Internet website our annual report on Form 10-K, quarterly reports on Form
10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended,
as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Information contained on our website is not incorporated by reference
in this report.
Item 1A. Risk Factors
In addition to the other information in our Annual Report on From 10-K, you should consider the risks described below that we believed may be material to investors evaluating
the Company. This section contains forward-looking statements, and in considering these statements, you should refer to the qualifications and limitation on our forward-
looking statements that are described in Item 1. “Business - Forward -Looking Statements.”
Risks Related to Our Business
We have significant exposure to real estate risk.
Since our business consists primarily of acquiring, developing, and operating real estate, we are subject to risks related to the ownership and operation of real estate that can
adversely impact our business and financial condition. Certain significant costs, such as mortgage payments, real estate taxes, insurance, and maintenance, generally are not
reduced even when a property’s rental income is reduced. In addition, environmental and tax laws, interest rate levels, the availability of financing and other factors may affect
real estate values and property income. Furthermore, the supply of commercial space fluctuates with market conditions.
Since we derive substantially all our income from real estate operations, we are subject to the following general risks of acquiring and owning real estate related assets that
could result in reduced revenues, increased expenses, increased capital expenditures, or increased borrowings, which could negatively impact our operating results and, cash
flow available for distribution or reinvestment:
•
changes in the national, state, and local economic climate and real estate conditions, such as oversupply or reduced demand for commercial real estate space and
changes in market rental rates;
•
how prospective tenants perceive the attractiveness, convenience, and safety of our properties;
•
difficulties in consummating and financing acquisitions and developments on advantageous terms and the failure of acquisitions and developments to perform as
expected;
•
our ability to provide adequate management, maintenance, and insurance;
7

•
natural disasters, such as earthquakes, fires, hurricanes, and floods, which could exceed the aggregate limits of our insurance coverage;
•
the consequences of changes in climate, including severe weather events, and the steps taken to prevent climate change, could result in increased capital expenditures
and expenses;
•
the expense of periodically renovating, repairing, and re-letting spaces;
•
the impact of environmental protection laws;
•
compliance with federal, state, and local laws and regulations;
•
increasing operating and maintenance costs, including property taxes, insurance, and utilities, if these increased costs cannot be passed through to customers;
•
the result of a future California statewide ballot initiative (or similar legislative or regulatory actions) that could remove the property tax protections of Proposition 13
with respect to our California real estate and result in substantial increases in our California property tax bills;
•
adverse changes in tax, real estate and zoning (particularly the rezoning of areas where our properties are located) laws and regulations;
•
increasing competition from other commercial properties in our market;
•
tenant defaults and bankruptcies;
•
tenants’ right to sublease space; and
•
concentration of properties leased to non-rated private companies with uncertain financial strength.
There is significant competition among commercial property operators: Other commercial properties compete with our properties for tenants. Some of the competing properties
may be newer and better located than our properties. Competition in the market areas in which many of our properties are located is significant and has affected our occupancy
levels, rental rates, and operating expenses. We also expect that new properties will be built in our markets.
We may encounter significant delays and expense in re-letting vacant space, or we may not be able to re-let space at existing rates, in each case resulting in losses of income:
When leases expire, we may incur expenses in retrofitting space and we may not be able to re-lease the space on the same terms. Certain leases provide customers with the right
to terminate early if they pay a fee. If we are unable to re-lease space promptly, if the terms are significantly less favorable than anticipated or if the costs are higher, our
operating results and cash available for distribution or reinvestment could be negatively impacted.
Tenant defaults and bankruptcies may reduce our cash flow and distributions: We may have difficulty collecting from customers in default, particularly if they declare
bankruptcy. Since many of our customers are non-rated private companies, this risk may be enhanced. There is inherent uncertainty in a customer’s ability to continue paying
rent if they are in bankruptcy. This could negatively affect our operating results and cash available for distribution or reinvestment.
Natural disasters or terrorist attacks could cause damage to our facilities that is not covered by insurance, and could increase costs, reduce revenues, and otherwise impair our
operating results: While we maintain insurance coverage for the losses caused by earthquakes, fire, or hurricanes, we could suffer uninsured losses or losses in excess of our
insurance policy limits for such occurrences. In the event of an earthquake, fire, hurricane, or other natural disaster, we would remain liable on any mortgage debt or other
unsatisfied obligations related to that property. In addition, we may not have sufficient insurance coverage for losses caused by a terrorist attack, or such insurance may not be
available or cost-effective. Significant natural disasters, terrorist attacks, threats of future terrorist attacks, or resulting wider armed conflict could have negative impacts on the
U.S. economy, reducing demand for our rental space and impairing our operating results, even if our specific losses were covered. This could negatively affect our operating
results and cash available for distribution or reinvestment.
Consequences of climate change, including severe weather events, and the steps taken to prevent climate change, could result in increased capital expenditures, increased
expenses, and reduced revenues: Direct and indirect impacts of climate change, such as increased destructive weather events, floods, fires, and droughts could result in
significant damage to our facilities, increase our costs, including our property insurance costs, or reduce demand for our facilities. Governmental, political, and societal pressure
could (i) require costly changes to future newly developed facilities, or require retrofitting of our existing facilities, to reduce carbon emissions through multiple avenues
including changes to insulation, space configuration, lighting, heating, and air
8

conditioning, and (ii) increase energy costs as a result of switching to less carbon-intensive, but more expensive, sources of energy to operate our facilities.
The illiquidity of our real estate investments may prevent us from adjusting our portfolio to respond to market changes: There may be delays and difficulties in selling real
estate. Therefore, we cannot easily change our portfolio when economic conditions change. In addition, when we sell properties at significant gains upon sale, it can increase
our distribution requirements, thus making it difficult to retain and reinvest the sales proceeds. Also, REIT tax laws may impose negative consequences if we sell properties
held for less than two years.
We may be adversely affected by changes in laws and regulations: Increases in income and service taxes may reduce our cash flow and ability to make expected distributions to
our stockholders. Additionally, any changes in the tax law applicable to REITs may adversely affect taxation of us and/or our stockholders. Our properties are also subject to
various federal, state, and local regulatory requirements, such as state and local fire and safety codes, that may be changed in ways that require significant costs to maintain
compliance. Our properties are subject to state and local zoning requirements. We are and in the future we may be subject to government initiatives to change the zoning
requirements in places where our properties are located, and if such efforts are successful, the value of impacted properties may be materially reduced. There is no assurance
that we will be compensated for economic losses in these cases.
We may incur significant environmental remediation costs: As an owner and operator of real properties, under various federal, state, and local environmental laws, we are
required to clean up spills or other releases of hazardous or toxic substances on or from our properties. Certain environmental laws impose liability whether or not the owner or
buyer knew of, or was responsible for, the presence of the hazardous or toxic substances. In some cases, liability may not be limited to the value of the property. The presence
of these substances, or the failure to properly remediate any resulting contamination, whether from environmental or microbial issues, also may adversely affect our ability to
sell, lease, operate, or encumber our facilities.
We have conducted preliminary environmental assessments of most of our properties (and conduct these assessments in connection with property acquisitions) to evaluate the
environmental condition of, and potential environmental liabilities associated with, our properties. These assessments generally consist of an investigation of environmental
conditions at the property (including soil or groundwater sampling or analysis if appropriate), as well as a review of available information regarding the site and publicly
available data regarding conditions at other sites in the vicinity. In connection with these property assessments, our operations and recent property acquisitions, we have become
aware that prior operations or activities at some properties or from nearby locations have or may have resulted in contamination to the soil or groundwater at these properties. In
circumstances where our environmental assessments disclose potential or actual contamination, we may attempt to obtain indemnifications and, in appropriate circumstances,
we obtain limited environmental insurance in connection with the properties acquired, but we cannot assure you that such protections will be sufficient to cover actual future
liabilities nor that our assessments have identified all such risks. Although we cannot provide any assurance, based on the preliminary environmental assessments, we are not
aware of any environmental contamination of our facilities material to our overall business, financial condition, or results of operations.
There has been an increasing number of claims and litigation against owners and managers of rental properties relating to moisture infiltration, which can result in mold or
other property damage. When we receive a complaint concerning moisture infiltration, condensation, or mold problems and/or become aware that an air quality concern exists,
we implement corrective measures in accordance with guidelines and protocols we have developed with the assistance of outside experts. We seek to work proactively with our
customers to resolve moisture infiltration and mold-related issues, subject to our contractual limitations on liability for such claims. However, we can give no assurance that
material legal claims relating to moisture infiltration and the presence of, or exposure to, mold will not arise in the future.
Any such environmental remediation costs or issues, including any potential ongoing impacts on rent or operating expenses, could negatively impact our operating results and
cash flow available for distribution or reinvestment.
Operating costs, including property taxes, could increase: We could be subject to increases in insurance premiums, property or other taxes, repair and maintenance costs,
corporate support services, utility costs, management fees, and other operating expenses due to numerous factors such as inflation, labor shortages, commodity and energy price
increases, weather, changes to governmental safety and real estate use limitations, as well as other governmental actions. Our property tax expense generally depends upon the
assessed value of our real estate facilities as determined by assessors and government agencies, and accordingly could be subject to substantial increases if such agencies
changed their valuation approaches or opinions or if new laws are enacted, especially if new approaches are adopted or laws are enacted that result in increased property tax
assessments in states or municipalities where we have a high concentration of facilities.
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We have exposure to increased property tax in California: Due to the impact of Proposition 13, which generally limits increases in assessed values to 2% per year, the assessed
value and resulting property tax we pay is significantly less than it would be if the properties were assessed at current values. Our property tax expense could increase
substantially, which would adversely affect our cash flow from operations and net income.
We must comply with the Americans with Disabilities Act, fire and safety regulations and zoning requirements, which can require significant expenditures: All of our properties
must comply with the Americans with Disabilities Act and with related regulations (the “ADA”). The ADA has separate compliance requirements for “public accommodations”
and “commercial facilities,” but generally requires that buildings be made accessible to persons with disabilities. Various state laws impose similar requirements. A failure to
comply with the ADA or similar state laws could lead to government imposed fines on us and/or litigation, which could also involve an award of damages to individuals
affected by the non-compliance. In addition, we must operate our properties in compliance with numerous local fire and safety regulations, building codes, zoning requirements
and other land use regulations, all of which are subject to change and could become more costly to comply with in the future. The cost of compliance with these requirements
can be substantial, and could reduce cash otherwise available for distribution to stockholders. Failure to comply with these requirements could also affect the marketability and
rentability of our real estate facilities.
We incur liability from customer claims: From time to time we have to make monetary settlements or defend actions or arbitration to resolve customer-related claims and
disputes. Settling any such liabilities could negatively impact our earnings and cash available for distribution to stockholders, and could also adversely affect our ability to sell,
lease, operate, or encumber affected facilities.
Our development of real estate can subject us to certain risks: We are engaged in significant real estate development. Development or redevelopment of facilities are subject to
a number of risks, including construction delays, complications in obtaining necessary zoning, occupancy and other governmental permits, cost overruns, failures of our
development partners, financing risks, and the possible inability to meet expected occupancy and rent levels. As a result of these risks, our development projects may be worth
less or may generate less revenue than we believed at the time of development. Any of the foregoing risks could negatively impact our operating results and cash flow available
for distribution or reinvestment. In addition, we may be unable to successfully integrate and effectively manage the properties we develop, which could adversely affect our
results of operations.
We are subject to risks from the COVID-19 pandemic and we may in the future be subject to risks from other public health crises.
Beginning in 2020, the COVID-19 pandemic has spread globally, including to every state in the United States, adversely affecting public health and economic activity. Our
business is subject to risks from the COVID-19 pandemic, including, among others:
•
illness or death of Link personnel or customers, negative impacts to the economic environment and to our customers which could reduce the demand for commercial
property space or reduce our ability to collect rent, or potential regulatory action to close certain of our facilities that were determined not to be an “essential business”
or for other reasons, limit our ability to complete development and redevelopment projects;
•
risk that future waves of infection, including those resulting from new variants, or from additional pandemics, could result in new or reinstituted government
restrictions or requirements;
•
risk that the economic effects of the COVID-19 pandemic could reduce consumer confidence and result in an elevated level of move-outs of our long-term customers,
resulting in a reduction in rental income due to occupancy reductions and increased “rent roll down” due to new customers having lower rental rates than departing
customers;
•
potential changes in customer behavior, such as the continued social acceptance, desirability and perceived economic benefits of work-from-home arrangements,
resulting from the COVID-19 pandemic, which could materially and negatively impact the future demand for office space, resulting in slower overall leasing and an
adverse impact to our operations and the valuation of our investments; and
•
risk of negative impacts on the cost and availability of debt and equity capital as a result of the COVID-19 pandemic, which could have a material impact upon our
capital and growth plans.
We believe that the degree to which the COVID-19 pandemic adversely impacts our business, operating results, cash flows and/or financial condition will be driven primarily
by the duration, spread and severity of the pandemic itself, the speed and effectiveness of vaccine and treatment developments and distribution, including against variants,
public adoption rates of vaccines, including booster shots, the duration of indirect economic impacts such as recession, dislocation in capital markets, and job loss, and potential
longer term changes in consumer behavior, all of which are uncertain and difficult to predict. Although a number of
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vaccines for COVID-19 are currently available to the general public in the United States and in many countries around the world, it will take time for the distribution of
vaccines to materially affect the spread of COVID-19 and the ultimate effectiveness of the vaccination effort is subject to significant uncertainty. The length and severity of the
pandemic may be worsened to the extent that a significant portion of the population, in the United States and globally, is reluctant to be vaccinated, fails to complete required
multi-step vaccination protocol or is unable to become vaccinated due to shortages in vaccine supply or suspensions in the distribution of vaccines due to safety concerns or
other issues. The length of the pandemic is also dependent upon the degree to which more contagious variants of the virus continue to spread, particularly among areas of the
country in which overall full vaccination rates are relatively low, and overall rates of new COVID-19 cases continue to rise. Further, new and worsening outbreaks of COVID-
19 in other countries may impact global vaccine supplies and lead to the emergence of new variants of the virus which are more contagious, more deadly or against which
currently available vaccines are less effective. As a result, we are not able at this time to estimate the effect of these factors on our business, but the adverse impact on our
business, results of operations, financial condition and cash flows could be material. Future pandemics or public health crises could have similar impacts.
Economic conditions can adversely affect our business, financial condition, growth, and access to capital.
Economic conditions in the areas we operate, capital markets, global economic conditions, and other events or factors could adversely affect rental demand for our real estate,
our ability to grow our business and acquire new facilities, to access capital, as well as the value of our real estate. Such conditions, which could negatively impact our
operating results and cash flow available for distribution or reinvestment, include the following:
Commercial credit markets: Our results of operations are sensitive to volatility in the credit markets. From time to time, the commercial real estate debt markets experience
volatility as a result of numerous factors, including changing underwriting standards by lenders and credit rating agencies. This may result in lenders increasing the cost for debt
financing, which could affect the economic viability of any acquisition or development activities we may undertake or otherwise increase our costs of borrowing. Conversely, to
the extent that debt becomes cheaper or underwriting terms become more favorable, it could increase the overall amount of capital being invested in real estate, allowing more
competitors to bid for facilities that we may wish to acquire, reducing the potential yield from acquisitions or preventing us from acquiring assets we might otherwise wish to
acquire.
Capital markets: Our ability to access sources of capital can be adversely affected by challenging market conditions, making various sources of capital less attractive or not
feasible. We believe that we have sufficient working capital and our retained cash flow from operations to continue to operate our business as usual and meet our current
obligations. However, if we were unable to borrow at reasonable rates, that could limit the earnings growth that might otherwise result from the acquisition and development of
real estate facilities.
Asset valuations: Market volatility makes the valuation of our properties difficult. There may be significant uncertainty in the valuation, or in the stability of the value, of our
properties, which could result in a substantial decrease in the value of our properties. As a result, we may not be able to recover the carrying amount of our properties, which
may require us to recognize an impairment charge in earnings.
Potential negative impacts upon demand for our space and customers’ ability to pay: We believe that our current and prospective customers are susceptible to global and local
economic conditions as well as the impact of capital markets, asset valuations, and commercial credit markets, which could result in an impairment of our customers’ existing
business operations or curtail plans for growth. Such impairment could reduce demand for our rental space, or make it difficult for customers to fulfill their obligations to us
under their leases.
We are subject to laws and governmental regulations and actions that affect our operating results and financial condition.
Our business is subject to regulation under a wide variety of U.S. federal, state and local laws, regulations and policies including those applicable to our status as a REIT, as
well as applicable local, state, and national labor laws. Although we have policies and procedures designed to comply with applicable laws and regulations, failure to comply
with the various laws and regulations may result in civil and criminal liability, fines and penalties, and increased costs of compliance and could also affect the marketability of
our real estate facilities.
In response to current economic conditions or the current political environment or otherwise, laws and regulations could be implemented or changed in ways that adversely
affect our operating results and financial condition, such as legislation that could otherwise increase operating costs. Such changes could also adversely affect the operations of
our customers, which could affect the price and demand for our space as well as our customers’ ability to pay their rent. For example, certain states within the United States
have passed laws that require companies to meet specific requirements regarding the handling of personal data. We collect internal and customer data for a variety of important
business purposes. We could be exposed to fines, penalties,
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restrictions, litigation, reputational harm or other expenses, or other adverse effects on our business, due to failure to protect personal data and other sensitive information or
failure to maintain compliance with the various data collection and privacy laws or other applicable data security standards.
In addition, certain U.S. states and the federal government have enacted additional laws and regulations to protect consumers against identity theft. These laws and similar laws
in other jurisdictions have increased the costs of doing business, and failure on our part to implement appropriate safeguards or to detect and provide prompt notice of
unauthorized access as required by some of these laws could subject us to potential claims for damages and other remedies. If we were required to pay any significant amounts
in satisfaction of claims under these laws, or if we were forced to cease our business operations for any length of time as a result of our inability to comply fully with any such
law, our business, operating results and financial condition could be adversely affected.
We rely on technology in our operations and failures, inadequacies or interruptions to our service could harm our business.
The execution of our business strategy is heavily dependent on the use of technologies and systems, including the Internet, to access, store, transmit, deliver, and manage
information and processes. We rely extensively on third-party vendors to retain data, process transactions, and provide other systems services. The failure, damage, or
interruption of these systems, including as a result of power outages, computer and telecommunications failures, hackers, computer worms, viruses and other destructive or
disruptive security breaches, natural disasters, terrorist attacks, and other catastrophic events could significantly and have a material adverse effect on our business.
If our confidential information is compromised or corrupted, including as a result of a cybersecurity breach, our reputation and business relationships could be damaged,
which could adversely affect our financial condition and operating results.
In the ordinary course of our business we acquire and store sensitive data, including personally identifiable information of our prospective and current customers and our
employees. The secure processing and maintenance of this information is critical to our operations and business strategy. Although we believe we have taken commercially
reasonable steps to protect the security of our confidential information, information security risks have generally increased in recent years due to the rise in modern
technologies and the increased sophistication and activities of perpetrators of cyberattacks. Despite our security measures, we have experienced security breaches due to
cyberattacks and additional breaches could occur in the future. In these cases, our information technology and infrastructure could be vulnerable and our customers’ or
employees’ confidential information could be compromised or misappropriated. Any such breach could result in serious and harmful consequences for us or our customers.
Our confidential information may also be compromised due to programming or human error or malfeasance. We must continually evaluate and adapt our systems and processes
to address the evolving threat landscape, and therefore there is no guarantee that they will be adequate to safeguard against all data security breaches or misuses of data. In
addition, as the regulatory environment related to information security, data collection and use, and privacy becomes increasingly rigorous, with new and changing
requirements applicable to our business from multiple regulatory agencies at the local, state, federal, or international level, compliance with those requirement could also result
in additional costs, or we could fail to comply with those requirements due to several reasons such as not being aware of them.
Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information,
regulatory penalties, disruption to our operations and the services we provide to customers or damage our reputation, any of which could adversely affect our results of
operations, reputation, and competitive position. In addition, our customers could lose confidence in our ability to protect their personal information, which could cause them to
discontinue leasing our facilities. Such events could lead to lost future revenues and adversely affect our results of operations and could result in remedial and other costs, fines,
or lawsuits, which could be in excess of any available insurance that we have procured.
Risks Related to Our Ownership, Organization and Structure
We would incur adverse tax consequences if we cease to qualify as a REIT and we would have to pay substantial U.S. federal corporate income taxes.
REITs are subject to a range of complex organizational and operational requirements. A qualifying REIT does not generally incur U.S. federal corporate income tax on its
“REIT taxable income” (generally, taxable income subject to specified adjustments,
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including a deduction for dividends paid and excluding net capital gain) that it distributes to its stockholders. We believe we have qualified as a REIT in all periods presented
herein.
However, there can be no assurance that we qualify or will continue to qualify as a REIT, because of the highly technical nature of the REIT rules, the ongoing importance of
factual determinations, the possibility of unidentified issues in prior periods, or changes in our circumstances, as well as share ownership limits in our articles of incorporation
that do not necessarily ensure that our stockholder base is sufficiently diverse for us to qualify as a REIT. For any year we cease to qualify as a REIT, unless certain relief
provisions apply (the granting of such relief could nonetheless result in significant excise or penalty taxes), we would not be allowed a deduction for dividends paid, we would
be subject to U.S. federal corporate income tax on our taxable income, and generally we would not be allowed to elect REIT status until the fifth year after such a
disqualification. Any taxes, interest, and penalties incurred would reduce our cash available for distributions to stockholders. However, for years in which we ceased to qualify
as a REIT, we would not be subject to REIT rules that require us to distribute substantially all of our taxable income to our stockholders.
Even if we qualify as a REIT, we may face other tax liabilities that reduce our cash flow.
Even if we qualify for taxation as a REIT, we may be subject to certain U.S. federal, state, and local taxes, including payroll taxes, taxes on any undistributed income, taxes on
income from some activities conducted as a result of a foreclosure, a 100% excise tax on any transactions with a Taxable REIT Subsidiary (“TRS”) that are not conducted on an
arm’s-length basis, and state or local income, franchise, property, and transfer taxes. Moreover, if we have net income from the sale of properties that are “dealer” properties (a
“prohibited transaction” under the Code), that income will be subject to a 100% penalty tax. In addition, our TRSs will be subject to U.S. federal, state, and local corporate
income taxes on their net taxable income, if any. Any of these taxes would reduce our cash available for distributions to stockholders.
We may need to borrow funds to meet our REIT distribution requirements.
As a REIT, we are required to distribute at least 90% of our “REIT taxable income” (determined before the deduction for dividends paid and excluding net capital gains) to our
stockholders each year. Our income consists primarily of our share of our OP’s income. We intend to make sufficient distributions to qualify as a REIT and otherwise avoid
corporate tax. However, differences in timing between income and expenses and the need to make nondeductible expenditures such as capital improvements and principal
payments on debt could force us to borrow funds to make necessary stockholder distributions. Future dividend levels are not determinable at this time.
Changes in tax laws could negatively impact us.
The United States Treasury Department and Congress frequently review U.S. federal income tax legislation, regulations, and other guidance. We cannot predict whether, when
or to what extent new U.S. federal tax laws, regulations, interpretations, or rulings will be adopted. Any legislative action may prospectively or retroactively modify our tax
treatment and, therefore, may adversely affect taxation of us or our stockholders.
We depend on external sources of capital to grow our Company.
As a REIT, we are required to distribute at least 90% of our “REIT taxable income” (determined before the deduction for dividends paid and excluding net capital gains) to our
stockholders each year. Because of this distribution requirement, we may not be able to fund future capital needs, including any necessary building and tenant improvements,
from operating cash flow. Consequently, we may need to rely on third-party sources of capital to fund our capital needs. We may not be able to obtain the financing on
favorable terms or at all. Access to third-party sources of capital depends, in part, on general market conditions, the market’s perception of our growth potential, our current and
expected future earnings, and our cash flow. If we cannot obtain capital from third-party sources, we may not be able to acquire properties when strategic opportunities exist,
satisfy any debt service obligations, or make cash distributions to stockholders.
Risks Related to Our Preferred Stock
Holders of depositary shares, each representing 1/1,000 of a share of our outstanding preferred stock, have dividend, liquidation and other rights that are senior to the
rights of the holders of shares of our common stock.
Holders of our shares of preferred stock are entitled to cumulative dividends before any dividends may be declared or set aside on our common stock. Upon liquidation, before
any payment is made to holders of our common stock, shares of our preferred stock
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are entitled to receive a liquidation preference of $25,000 per share (or $25.00 per depositary share) plus any accrued and unpaid distributions before any payment is made to
the common stockholders. These preferences may limit the amount received by our common stockholders for ongoing distributions or upon liquidation. In addition, our
preferred stockholders have the right to elect two additional directors to our Board whenever dividends are in arrears in an aggregate amount equivalent to six or more quarterly
dividends, whether or not consecutive.
Preferred Stockholders are subject to certain risks.
Holders of our preferred stock have preference rights over our common stockholders with respect to liquidation and distributions, which give them some assurance of continued
payment of their stated dividend rate, and receipt of their principal upon liquidation of the Company or redemption of their securities. However, holders of our preferred stock
should consider the following risks:
•
The Company has in the past, and could in the future, issue or assume additional debt. Preferred stockholders would be subordinated to the interest and principal
payments of such debt, which would increase the risk that there would not be sufficient funds to pay distributions or liquidation amounts to the preferred stockholders.
•
The Company has in the past, and could in the future, issue additional preferred stock that, while pari passu to the existing preferred stock, increases the risk that there
would not be sufficient funds to pay distributions to the preferred stockholders.
•
If the Company were to lose its REIT status or no longer elect REIT status, it would no longer be required to distribute its taxable income to maintain REIT status. If,
in such a circumstance, the Company ceased paying dividends, unpaid distributions to the preferred stockholders would continue to accumulate. The preferred
stockholders would have the ability to elect two additional members to serve on our Board until the arrearage was cured. The preferred stockholders would not receive
any compensation (such as interest) for the delay in the receipt of distributions, and it is possible that the arrearage could accumulate indefinitely.
Following the completion of the Tender Offer (as defined below), the Company delisted the Preferred Securities. As a result, preferred stockholders will not have the same
protections afforded to stockholders of companies that are subject to NYSE requirements.
Following the completion of the Tender Offer, the Company delisted the Preferred Securities. Accordingly, preferred stockholders will not have the same protections afforded to
stockholders of companies that are subject to the listing rules and corporate governance requirements of the NYSE.
We have delisted the Preferred Stock from the NYSE and deregistered the Preferred Stock under the Exchange Act, which could negatively affect the liquidity and trading
prices of our Preferred Stock and will result in less disclosure about the Company.
We have delisted the Preferred Stock from the NYSE and deregistered the Preferred Stock under the Exchange Act. By delisting and deregistering, our obligation to file reports
with the SEC (including periodic reports, proxy statements, and tender offer statements) has been suspended and we expect the liquidity of the Preferred Stock to be impaired.
Although the Preferred Stock may be quoted on OTC Pink Market, we can provide no assurance that trading in the Preferred Stock will continue in the OTC Pink Market or in
any other forum. Following the completion of the deregistration process, we ceased to be subject to the provisions of the Sarbanes-Oxley Act or the liability provisions of the
Exchange Act. In addition, we are no longer required to meet the reporting requirements set forth under the Exchange Act.
Risks Related to Our Indebtedness
Our significant amount of debt may subject us to increased risk of loss and could adversely affect our results of operations and financial condition.
We currently have a significant amount of outstanding indebtedness, including the Mortgage Loans incurred in connection with the Merger, and, subject to market conditions
and availability, we may incur a significant amount of additional debt. The type and percentage of leverage we employ will vary depending on our available capital, our ability
to obtain and access financing arrangements with lenders or other debt financing sources, the type of assets we are funding, whether the financing is recourse or non-recourse,
debt restrictions contained in those financing arrangements and the lenders’ and rating agencies’ estimate of the stability of our investment portfolio’s cash flow. We may
significantly increase the amount of leverage we utilize at any time. In
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addition, we may leverage individual assets at substantially higher levels. Incurring substantial debt could subject us to many risks that, if realized, would materially and
adversely affect us, including the risk that:
•
our cash flow from operations may be insufficient to make required payments of principal of and interest on our debt or we may fail to comply with covenants
contained in our debt agreements, which is likely to result in (i) acceleration of such debt (and any other debt containing a cross-default or cross-acceleration
provision) in accordance with the terms and conditions of our financing arrangements, which we then may be unable to repay from internal funds or to refinance on
favorable terms, or at all, (ii) our inability to borrow undrawn amounts under our financing arrangements, even if we are current in payments on borrowings under
those arrangements, which would result in a decrease in our liquidity, and/or (iii) the loss of some or all of our collateral assets to foreclosure or sale;
•
our debt may increase our vulnerability to adverse economic and industry conditions with no assurance that investment yields will increase in an amount sufficient to
offset the higher financing costs;
•
we may be required to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing funds available for operations, future
business opportunities, stockholder distributions or other purposes; and
•
we may not be able to refinance any debt that matures prior to the maturity (or realization) of an underlying investment it was used to finance on favorable terms or at
all.
There can be no assurance that our leverage strategy will be successful, and such strategy may subject us to increased risk of loss, harm our liquidity and could adversely affect
our results of operations and financial condition.
Our secured debt agreements governing the Mortgage Loans impose, and additional lending facilities may impose, restrictive covenants, which may restrict our flexibility
to determine our operating policies and investment strategy.
The documents that govern our Mortgage Loans contain, and additional lending may contain, customary affirmative and negative covenants, including financial covenants
applicable to us that may restrict our flexibility to determine our operating policies and investment strategy. In particular, these agreements may require us to maintain specified
minimum levels of capacity under our credit facilities and cash. As a result, we may not be able to leverage our assets as fully as we would otherwise choose, which could
reduce our return on assets. If we are unable to meet these collateral obligations, our financial condition and prospects could deteriorate significantly. If we fail to meet or
satisfy any of these covenants beyond any applicable notice and/or cure periods pursuant to the terms of our financing arrangements, we may be in default under these
agreements, and our lenders could elect to declare outstanding amounts due and payable, terminate their commitments, require the posting of additional collateral and enforce
their interests against existing collateral. We may also be subject to cross-default and acceleration rights in our other debt arrangements. Further, this could also make it difficult
for us to satisfy the distribution requirements necessary to maintain our qualification as a REIT for U.S. federal income tax purposes.
Risks Related to Our Organization and Structure
We are controlled by Blackstone and its interests may conflict with ours or yours in the future.
Following the Merger, affiliates of Blackstone beneficially own all outstanding shares of our common stock. Accordingly, Blackstone has significant influence with respect to
our management, business plans and policies, including the election and removal of our officers and directors. Blackstone and its affiliates engage in a broad spectrum of
activities, including investments in real estate generally. In the ordinary course of their business activities, Blackstone and its affiliates may engage in activities where their
interests conflict with our interests or those of our stockholders. Blackstone also may pursue acquisition opportunities that may be complementary to our business, and, as a
result, those acquisition opportunities may not be available to us. In addition, Blackstone may have an interest in pursuing acquisitions, divestitures and other transactions that,
in its judgment, could enhance its investment, even though such transactions might involve risks to stockholders.
Risks Related to Conflicts of Interest
Various potential and actual conflicts of interest will arise, and these conflicts may not be identified or resolved in a manner favorable to us.
Blackstone has conflicts of interest, or conflicting loyalties, as a result of the numerous activities and relationships of Blackstone and its affiliates, partners, members,
shareholders, officers, directors and employees, some of which are described herein. However, not all potential, apparent and actual conflicts of interest are included herein, and
additional conflicts of interest could arise as a result of new activities, transactions or relationships commenced in the future. If any matter arises that we and our
15

affiliates determine in our good faith judgment constitutes an actual and material conflict of interest, we and our affiliates will take such actions as we determine appropriate to
mitigate the conflict. There can be no assurance that our board of directors or Blackstone will identify or resolve all conflicts of interest in a manner that is favorable to us.
We depend on Link and its personnel for our success. We may not find a suitable replacement for Link if our Master Services Agreement is terminated, or if key personnel
cease to be employed by Link or Blackstone otherwise become unavailable to us.
Pursuant to a Master Services Agreement (the “Services Agreement”), we have engaged Link, a portfolio company owned by Blackstone-advised investment vehicles, to
provide, as applicable, corporate support services (including, without limitation, accounting, legal, tax, treasury, valuation services, information technology and data
management), loan management, management services, operational services, property management and transaction support services (the “Services”). Pursuant to the Services
Agreement, the Company pays Link for such services on a break-even or cost-reimbursement basis as determined in accordance with the terms of the Services Agreement.
Pursuant to the Services Agreement, Link Logistics Real Estate Management LLC, a subsidiary of Link, has been engaged by certain of our subsidiaries to perform
management services with respect to our properties.
Accordingly, our success depends to a significant extent upon the efforts, experience, diligence, skill, and network of business contacts of the officers and key personnel of Link
and its affiliates, as well as the persons and firms Link retains to provide services on our behalf. We can offer no assurance that Link will continue to provide such Services or
that we will continue to have access to Link’s officers and key personnel. The current term of the Services Agreement extends to December 31, 2023 and may be renewed for
additional one-year terms thereafter; provided, however, that the Services Agreement may be terminated at any time upon prior written notice by either Link or the Company. If
the Services Agreement is terminated and no suitable replacement is found to manage us, we may not be able to execute our business plan. Furthermore, we may incur certain
costs in connection with a termination of the Services Agreement.
The personnel of Link are not required to dedicate a specific portion of their time to the management of our business.
Neither Link nor any other Blackstone affiliate is obligated to dedicate any specific personnel exclusively to us, nor are they or their personnel obligated to dedicate any
specific portion of their time to the management of our business. In addition, pursuant to the terms of the Services Agreement, Link retains, for and on our behalf and at our
expense, the services of certain other persons and firms as Link deems necessary or advisable in connection with managing our operations. Certain of these providers currently
include affiliates of Blackstone and its portfolio companies and may include additional affiliates in the future. As a result, we cannot provide any assurances regarding the
amount of time Link or its affiliates will dedicate to the management of our business and Link may have conflicts in allocating its time, resources and services among our
business and any other investment vehicles and accounts Link (or its personnel) may manage and expenses allocable to us may increase where third parties are retained to
provide services to us. Each of our officers is also an employee of Link or another Blackstone affiliate, who has now or may be expected to have significant responsibilities for
other investment vehicles currently managed by Blackstone and its affiliates. Consequently, we may not receive the level of support and assistance that we otherwise might
receive if we were internally managed. Link and its affiliates are not restricted from entering into other advisory relationships or from engaging in other business activities.
We and the Blackstone Vehicles have and in the future will likely compete with or enter into transactions with existing and future private and public investment vehicles
established and/or managed by Blackstone or its affiliates, which may present various conflicts of interest that restrict our ability to pursue certain investment opportunities
or take other actions that are beneficial to our business and/or result in decisions that are not in the best interests of our stockholders.
We are subject to conflicts of interest arising out of our relationship with Blackstone, including Link and its affiliates. Certain Blackstone employees serve on our board of
directors. In addition, our chief executive officer, chief financial officer and president are also employees of Link, a Blackstone affiliate. If any matter arises that Blackstone
determines in its good faith judgment constitutes an actual and material conflict of interest, Blackstone and relevant affiliates will take the actions they determine appropriate to
mitigate the conflict. There is no guarantee that the policies and procedures adopted by us, or the policies and procedures adopted by Link, Blackstone and their affiliates, will
enable us to identify, adequately address or mitigate these conflicts of interest in a way that is favorable to us. Some examples of conflicts of interest that may arise by virtue of
our relationship with Link and Blackstone include:
•
Broad and Wide-Ranging Activities. Link, Blackstone and their affiliates engage in a broad spectrum of activities, including a broad range of activities relating to
investments in the real estate industry, and have invested or committed billions of dollars in capital through various investment funds, managed accounts and other
vehicles affiliated with Blackstone. In the ordinary course of their business activities, Link, Blackstone and their affiliates may engage in
16

activities where the interests of certain divisions of Blackstone and its affiliates, including Link, or the interests of their clients may conflict with the interests of our
stockholders. Certain of these divisions and entities affiliated with Link have or may have an investment strategy similar to our investment strategy and therefore will
likely compete with us.
•
Blackstone’s Policies and Procedures. Specified policies and procedures implemented by Blackstone and its affiliates, including Link, to mitigate potential conflicts of
interest and address certain regulatory requirements and contractual restrictions may reduce the advantages across Blackstone’s and its affiliates’ various businesses
that Blackstone expects to draw on for purposes of pursuing attractive investment opportunities. Because Blackstone has many different businesses, it is subject to a
number of actual and potential conflicts of interest, greater regulatory oversight and more legal and contractual restrictions than that to which it would otherwise be
subject if it had just one line of business. In addressing these conflicts and regulatory, legal and contractual requirements across its various businesses, Blackstone has
implemented certain policies and procedures (e.g., information walls) that may reduce the benefits that Blackstone could otherwise expect to utilize for Link for
purposes of identifying and managing our real estate investments. For example, Blackstone may come into possession of material non-public information with respect
to companies that are clients of Blackstone or its affiliates, in which Link may be considering making an investment. As a consequence, that information, which could
be of benefit to Link, might become restricted to those other businesses and otherwise be unavailable to Link, and could also restrict Link’s activities. Additionally, the
terms of confidentiality or other agreements with or related to companies in which any investment vehicle of Blackstone has or has considered making an investment
or which is otherwise a client of Blackstone and its affiliates may restrict or otherwise limit the ability of Blackstone or its affiliates, including Link, to engage in
businesses or activities competitive with such companies.
•
Assignment and Sharing or Limitation of Rights. We may in the future invest alongside other Blackstone Vehicles and in connection therewith have and may, for legal,
tax, regulatory or other reasons which may be unrelated to us, share with or assign to such other Blackstone Vehicles certain of our rights, in whole or in part, or to
limit our rights, including certain control- and/or foreclosure-related rights with respect to such shared investments and/or otherwise agree to implement certain
procedures to mitigate conflicts of interest which typically involve maintaining a noncontrolling interest in any such investment and a forbearance of our rights,
including certain non-economic rights (including following the vote of other third party lenders generally or otherwise being recused with respect to certain decisions,
including with respect to both normal course ongoing matters (such as consent rights with respect to loan modifications in intercreditor agreements) and also defaults,
foreclosures, workouts, restructurings and/or exit opportunities), subject to certain limitations. While it is expected that our participation in connection with any such
investments and transactions would be negotiated by third parties on market prices, such investments and transactions will give rise to potential or actual conflicts of
interest. We cannot make assurances that any such conflict will be resolved in our favor. To the extent we hold an interest in a loan or security that is different
(including with respect to their relative seniority) than those held by such other Blackstone Vehicles (and vice versa), Link and its affiliates may be presented and/or
may have limited or no rights with respect to decisions when the interests of the funds/vehicles are in conflict. Such sharing or assignment of rights could make it more
difficult for us to protect our interests and could give rise to a conflict (which may be exacerbated in the case of financial distress) and could result in another
Blackstone Vehicle exercising such rights in a way adverse to us.
•
Entering into Financing Transactions with Other Blackstone Vehicles. In connection with the closing of the Merger, in lieu of distributing all of the proceeds from the
Mortgage Loans to fund the consideration for the Merger, certain amounts were loaned to the Parent Partners (the “Parent Partners Loans”). The Parent Partners Loans
are evidenced by promissory notes, bear interest at 4.16253% per annum and mature in July 2027. The aggregate principal amount of the Parent Partners Loans is
$1,285,575. We may from time to time engage in further financing transactions with Blackstone Vehicles. We and/or Blackstone may face conflicts of interest in
connection with any borrowings or disputes related to such financing agreement(s) which may adversely impact us.
•
Pursuit of Differing Strategies. At times, the investment professionals employed by Link or its affiliates and other investment vehicles affiliated with Link and/or
Blackstone may determine that an investment opportunity may be appropriate for only some of the accounts, clients, entities, funds and/or investment vehicles for
which he or she exercises investment responsibility, or may decide that certain of the accounts, clients, entities, funds and/or investment vehicles should take differing
positions with respect to a particular investment. In these cases, the investment professionals may place separate transactions for one or more accounts, clients, entities,
funds and/or investment vehicles which may affect the market price of an investment or the execution of the transaction, or both, to the detriment or benefit of one or
more other accounts, clients, entities, funds and/or investment vehicles.
17

•
Underwriting, Advisory and Other Relationships. As part of its regular business, Blackstone provides a broad range of underwriting, investment banking, placement
agent services and other services. In connection with selling investments by way of a public offering, a Blackstone broker-dealer may act as the managing underwriter
or a member of the underwriting syndicate on a firm commitment basis and purchase securities on that basis. Blackstone may retain any commissions, remuneration,
or other profits and receive compensation from such underwriting activities, which have the potential to create conflicts of interest. Blackstone may also participate in
underwriting syndicates from time to time with respect to us or portfolio companies/entities of Blackstone Vehicles, or may otherwise be involved in the private
placement of debt or equity securities issued by us or such portfolio companies/entities, or otherwise in arranging financings with respect thereto or advising on such
transactions. Subject to applicable law, Blackstone may receive underwriting fees, placement commissions, or other compensation with respect to such activities,
which will not be shared with us or our stockholders.
In the regular course of its investment banking business, Blackstone represents potential purchasers, sellers and other involved parties, including corporations, financial buyers,
management, shareholders and institutions, with respect to assets that are suitable for investment by us. In such case, Blackstone’s client would typically require Blackstone to
act exclusively on its behalf, thereby precluding us from acquiring such assets. Blackstone is under no obligation to decline any such engagement to make the investment
opportunity available to us.
Blackstone has long-term relationships with a significant number of corporations and their senior management. In determining whether to invest in a particular transaction on
our behalf, Link may consider those relationships, which may result in certain transactions that Link will not undertake on our behalf in view of such relationships.
•
Service Providers. Certain of our service providers, or their affiliates (including accountants, administrators, lenders, brokers, attorneys, consultants, title agents, loan
servicing and administration providers, property managers and investment banking or commercial banking firms) also provide goods or services to or have business,
personal or other relationships with Blackstone. For example, Blackstone may hold equity or other investments in companies or businesses in the real estate related
information technology and other industries that may provide products or services to or otherwise contract with us or other Blackstone Vehicles. In connection with
any such investment, Blackstone or other Blackstone Vehicles (or their respective portfolio companies/entities) may make referrals or introductions to other portfolio
companies/entities in an effort, in part, to increase the customer base of such companies or businesses, and therefore the value of the investment, or because such
referrals or introductions may result in financial incentives (including additional equity ownership) and/or milestones benefiting the referring or introducing party that
are tied or related to participation by portfolio companies/entities. We will not share in any fees, economics or equity accruing to Blackstone or such other Blackstone
Vehicles as a result of these relationships. In addition, we may enter into agreements regarding group procurement (such as a group purchasing organization), benefits
management, purchase of title and/or other insurance policies (which will from time to time be pooled and discounted due to scale) from a third party or a Blackstone
affiliate, and other similar operational, administrative, or management related initiatives that result in commissions, discounts or similar payments to Blackstone or its
affiliates (including personnel), including related to a portion of the savings achieved. Such service providers may be sources of investment opportunities or co-
investors or commercial counterparties. Such relationships may influence Link in deciding whether to select such service provider. In certain circumstances, service
providers, or their affiliates, may charge different rates (including below-market rates or at no cost) or have different arrangements for services provided to Blackstone
or its affiliates as compared to services provided to us, which in certain circumstances may result in more favorable rates or arrangements than those payable by us.
In addition, certain advisors and service providers (including law firms) may temporarily provide their personnel to Blackstone, us or other Blackstone Vehicles or their
portfolio companies pursuant to various arrangements including at cost or at no cost. While often we and such other Blackstone-advised funds and their portfolio companies are
the beneficiaries of these types of arrangements, Blackstone is from time to time a beneficiary of these arrangements as well, including in circumstances where the advisor or
service provider also provides services to us in the ordinary course. Such personnel may provide services in respect of multiple matters, including in respect of matters related
to Blackstone, its affiliates and/or portfolio companies and any costs of such personnel may be allocated accordingly.
For example, Lexington National Land Services, or LNLS, is a Blackstone affiliate that (i) acts as a title agent in facilitating and issuing title insurance, (ii) provides title
support services for title insurance underwriters and (iii) acts as escrow agent in connection with investments by us, other Blackstone Vehicles and their portfolio entities,
affiliates and related parties, and third parties, including, from time to time, our borrowers. In exchange for such services LNLS earns fees which would have otherwise been
paid to third parties. If LNLS is involved in a transaction in which we participate, Blackstone will benchmark the relevant
18

costs to the extent market data is available except when LNLS is providing such services in a state where the insurance premium or escrow fee, as applicable, is regulated by
the state or when LNLS is part of a syndicate of title insurance companies where the insurance premium is negotiated by other title insurance underwriters or their agents.
Gryphon Mutual Captive Insurance, or Gryphon, is a captive insurance company owned by funds and accounts managed by Blackstone. A Blackstone affiliate provides
oversight and management services to the captive and receives fees based on a percentage of premiums retained by it. The fees and expenses of the captive, including fees paid
to its manager, are borne by its participants (including Blackstone-managed funds and accounts) pro rata based on estimates of insurance premiums that would have been
payable for each party’s respective properties, as benchmarked by third parties, and will be paid by each participant annually. Participants pool their risk through Gryphon, with
a $50 million shared deductible, resulting in lower expenses than insurance procured through brokers and other traditional means. We reimburse the pro rata amount of costs
and expenses incurred by Blackstone-advised funds arising out of the indirect participation (through such funds) by the Company of risk pooling through Gryphon.
•
Material, Non-Public Information. We, directly or through Blackstone, Link or certain of their respective affiliates may come into possession of material non-public
information. Disclosure of such information to the personnel responsible for management of our business may be on a need-to-know basis only, and we may not be
free to act upon any such information. Therefore, we and/or Link may not have access to material non-public information in the possession of Blackstone which might
be relevant to an investment decision to be made by Link on our behalf, and Link may initiate a transaction or purchase or sell an investment which, if such
information had been known to it, may not have been undertaken. Due to these restrictions, Link may not be able to initiate a transaction on our behalf that it otherwise
might have initiated and may not be able to purchase or sell an investment that it otherwise might have purchased or sold, which could negatively affect our operations.
•
Possible Future Activities. Link and its affiliates may expand the range of services that they provide over time. Link and its affiliates will generally not be restricted in
the scope of its business or in the performance of any such services (whether now offered or undertaken in the future) even if such activities could give rise to conflicts
of interest, and whether or not such conflicts are described herein. Link, Blackstone and their affiliates continue to develop relationships with a significant number of
companies, financial sponsors and their senior managers, including relationships with clients who may hold or may have held investments similar to those intended to
be made by us. These clients may themselves represent appropriate investment opportunities for us or may compete with us for investment opportunities. In addition,
Blackstone may enter into one or more strategic relationships in certain regions or with respect to certain types of investments that, although intended to provide
greater opportunities for us, may require us to share such opportunities or otherwise limit the amount of an opportunity we can otherwise take.
•
Transactions with Blackstone Vehicles. From time to time, we may enter into purchase and sale transactions with Blackstone Vehicles. Such transactions will be
conducted in accordance with, our internal corporate policies and applicable laws and regulations.
•
Family Relationships. Certain personnel and other professionals of Blackstone have family members or relatives that are actively involved in the industries and sectors
in which we invest and/or have business, personal, financial or other relationships with companies in the real estate industry, which gives rise to potential or actual
conflicts of interest. For example, such family members or relatives might be officers, directors, personnel or owners of companies or assets which are actual or
potential investments of us or our other counterparties. Moreover, in certain instances, we may transact with companies that are owned by such family members or
relatives or in respect of which such family members or relatives have other involvement. In most such circumstances, we will not be precluded from undertaking any
of these investment activities or transactions. To the extent Blackstone determines appropriate, it may put in place conflict mitigation strategies with respect to a
particular circumstance, such as internal information barriers or recusal, disclosure or other steps determined appropriate by Blackstone or Link.
19

Link’s liability is limited under our Services Agreement and we have agreed to indemnify Link against certain liabilities.
Under the terms of the Services Agreement, Link and its affiliates are not liable to us for any acts or omissions performed in accordance with and pursuant to the Services
Agreement, except by reason of (i) any acts of Link or of any its direct and indirect partners, stockholders, members, employees, agents, officers, directors, successors and
assigns (collectively, the “Link Related Parties”) beyond the scope of its authority under the Services Agreement, (ii) any material breach by Link under the Services
Agreement, and (iii) any fraudulent or grossly negligent act or omission or any act or omission that constitutes willful misconduct of Link or the Link Related Parties. We have
agreed to indemnify Link and its affiliates with respect to all expenses, losses, damages, liabilities, demands, charges and claims arising from acts or omissions of Link within
the scope of the Services Agreement other than for (i) any acts of Link or the Link Related Parties beyond the scope of its authority under the Services Agreement, (ii) any
material breach by Link under the Services Agreement, and (iii) any fraudulent or grossly negligent act or omission or any act or omission that constitutes willful misconduct of
Link or the Link Related Parties. As a result, we could experience poor performance or losses for which Link would not be liable.
Item 1B. Unresolved Staff Comments
None.
20

Item 2. Properties
As of December 31, 2022, we owned 471 buildings and one land parcel in a geographically diverse portfolio of 20,656,858 gross leasable square feet of commercial real estate
which consists of 6,900,881 square feet of business park space, 12,351,476 square feet of industrial-flex space, 1,061,870 square feet of low-rise suburban office space, and
342,631 square feet of specialty space.
The following table reflects the geographical diversification of the 471 buildings and one land parcel owned by the Company as of December 31, 2022, the type of gross
leasable square footage throughout 2022 (except as set forth below, all of the properties are held fee simple):
Leasable Square Footage
Region
Number of Buildings
Business Park
Industrial
Office
Specialty
Total
California
216 
2,910,577 
5,810,658 
340,214 
— 
9,061,449 
Texas
137 
2,923,457 
2,077,578 
— 
— 
5,001,035 
Florida
74 
455,383 
3,411,046 
— 
— 
3,866,429 
Washington
28 
270,165 
1,052,194 
— 
— 
1,322,359 
Maryland
15 
341,299 
— 
721,656 
— 
1,062,955 
Virginia
1 
— 
— 
— 
342,631 
342,631 
Total
471 
6,900,881 
12,351,476 
1,061,870 
342,631 
20,656,858 
____________________________
The Company has a 95.0% interest in a joint venture that owns Highgate at The Mile, a 395-unit multifamily apartment complex located in Tysons, Virginia (“The Mile”).
The Company owns two properties comprising 231,000 square feet that are subject to ground leases in Irving, Texas. These leases expire in 2029 and 2030.
We currently anticipate that each of our properties will continue to be used for its current purpose. However, we will from time to time evaluate our properties from a highest
and best use perspective, and may identify higher and better uses for our real estate. We renovate our properties in connection with the re-leasing of space to customers and
expect to fund the costs of such renovations generally from rental income.
Competition exists in each of the market areas in which our properties are located, and we have risks that customers could default on leases and declare bankruptcy. We believe
these risks are mitigated in part through the Company’s geographic diversity and our diverse customer base.
Please refer to Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations for portfolio information with respect to lease expirations
and operating result.
Item 3. Legal Proceedings
We are not involved in any material litigation nor, to our knowledge, is any material litigation threatened against us. We are party to a variety of legal proceedings arising in the
ordinary course of business.
Item 4. Mine Safety Disclosures
Not Applicable.
1
2
1 
2 
21

PART II
(dollars in thousands, except share data)
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information and Holders
Our common stock is not listed on a securities exchange. The number of holders of record of our common stock as of February 23, 2023 was three.
Unregistered Sale of Equity Securities and Use of Proceeds
None.
Issuer Purchases of Equity Securities
Period
Total Number of
Shares Purchased
Average Price Paid per
Share
Total Number of Shares Purchased
as Part of Publicly Announced
Plans or Programs
Approximate Dollar Value of Shares that May
Yet Be Purchased Under the Program (Dollars
in Thousands)
Oct. 1 – Oct. 31, 2022
— 
$
— 
— 
$
— 
Nov. 1 – Nov. 30, 2022
— 
$
— 
— 
$
— 
Dec. 1 – Dec. 31, 2022
21,439,277 
$
14.87 
21,439,277 
$
— 
____________________________
 On November 22, 2022, the Company commenced offers to purchase for cash any and all outstanding Series X Preferred Shares, at $15.29 per share, Series Y Preferred Shares, at $15.33 per
share, and Series Z Preferred Shares, at $14.34 per share. The Company accepted for purchase 5,953,898 Series X Preferred Shares, 5,756,691 Series Y Preferred Shares and 9,728,688 Series Z
Preferred Shares. The offers were completed on December 23, 2022 and the Preferred Shares purchased were cancelled by the Company.
Item 6. Reserved
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of the results of operations and financial condition should be read in conjunction with the selected financial data and the Company’s
consolidated financial statements and notes thereto included in this Form 10-K. Our consolidated financial statements have been prepared in accordance with U.S. generally
accepted accounting principles (“GAAP.”) The preparation of these financial statements in conformity with GAAP requires us to make estimates, judgments, and assumptions
that affect the reported amounts of assets, liabilities, revenues, and expenses. We base these estimates, judgments, and assumptions on historical experience, current trends, and
various other factors that we believe to be reasonable under the circumstances.
We continually evaluate the estimates, judgments, and assumptions we use to prepare our consolidated financial statements. Changes in estimates, judgments, or assumptions
could affect our financial position and our results of operations, which are used by our stockholders, potential investors, industry analysts, and lenders in their evaluation of our
performance.
Critical Accounting Estimates
Our critical accounting estimates are defined as accounting estimates or assumptions made in accordance with GAAP, which involve a significant level of estimation
uncertainty or subjectivity and have had or are reasonably likely to have a material impact on our financial condition or results of operations. Our significant accounting
policies, which utilize these critical accounting estimates, are described in Note 2 — Summary of Significant Accounting Policies to our consolidated financial statements under
Item 15 in this annual report on Form 10-K. Our critical accounting estimates are described below.
Accounting for Business Combinations: The Merger was accounted for as a business combination because substantially all of the fair value of the gross assets acquired was
not concentrated in a single identifiable asset or group of similar identifiable assets. The Parent elected to apply pushdown accounting. Accordingly, the purchase price of the
Merger has been allocated to the Company’s assets and liabilities based upon their estimated fair values at the Acquisition Date in accordance with Accounting Standards
Codification (“ASC”) 805, Business Combinations.
1
1
1
22

Such estimates, which are determined with the assistance of third-party valuation specialists where appropriate, are based upon many assumptions and judgments, including,
but not limited to:
•
market rates of return and capitalization rates on real estate and intangible assets;
•
building and material cost levels;
•
estimated market rent levels;
•
future revenue growth rates;
•
future cash flows from the real estate and the existing customer base; and
•
comparisons of the acquired underlying land parcels to recent land transactions.
There was one business combination that occurred during the periods presented which was the Merger. For additional information on this transaction refer to Note 1 —
Description of Business and Note 2 — Summary of Significant Accounting Policies.
Executive Summary
Business Overview
The Company is a REIT that owns, operates, acquires and develops commercial properties, primarily multi-tenant industrial, industrial-flex, and low rise-suburban office space.
As of December 31, 2022, the Company owned 471 buildings and one land parcel in six states representing 20,656,858 gross leasable square feet. As of December 31, 2022,
our largest markets included California, Texas, Florida, Washington, Maryland, and Virginia. We have and intend to continue to allocate capital to these and other key
population and distribution markets in the U.S. which we believe will maximize risk-adjusted growth for our portfolio cash flows.
The operating results of our real estate facilities are substantially influenced by demand for rental space within our properties and our markets, which impacts occupancy, rental
rates, and capital expenditure requirements. We strive to maintain high occupancy levels while increasing rental rates and investing in capital expenditures when market
conditions indicate favorable return on investment, although the Company may decrease rental rates in markets where conditions require. Management’s initiatives and
strategies with respect to our existing real estate facilities, which include incentivizing Link personnel to maximize the return on investment for each lease transaction and
provide a superior level of service to our customers.
As a result of the Merger and the application of pushdown accounting, the periods presented are not necessarily comparable.
Completed Merger Transaction: Refer to Note 1 — Description of Business to our consolidated financial statements under Item 15 in this annual report on Form 10-K, for
information regarding the merger agreement the Company entered into on April 24, 2022 (the merger described therein, the “Merger”).
Dispositions: We continually evaluate opportunities with respect to our portfolio and may from time to time sell individual real estate facilities and land parcels or groups of
facilities and land parcels based on market conditions, fit with our existing portfolio, evaluation of long-term potential returns of markets or product types, or other reasons. The
size of such sales may be significant to us. Refer to Note 3 — Investments in Real Estate to our consolidated financial statements under Item 15 in this annual report on Form
10-K for a discussion of our recently completed dispositions.
23

Developments:
The following table presents the Company’s development pipeline at December 31, 2022:
Number of Projects
Estimated Square
Feet
Estimated Project Cost
Estimated Stabilization/In
Service Date
Development/redevelopment under construction
3 
472,825 
$
199,147 
1Q23 - 4Q23
____________________________
 Estimated project cost includes the initial purchase price allocation. See Note 3 — Investments in Real Estate to our Consolidated Financial Statements under Item 15 in this annual report on
Form 10-K.
 Estimated stabilization/in service date is typically defined as the earlier of 12 months post completion or 90% occupancy.
Refer to Note 3 — Investments in Real Estate to our consolidated financial statements under Item 15 in this annual report on Form 10-K for a discussion of our recently
completed developments.
Factors that Affect Our Results of Operations and Financial Condition
Our results of operations and financial condition are affected by numerous factors, many of which are beyond our control. See Part I. Item 1A. “Risk Factors” in this Annual
Report on Form 10-K, for more information regarding factors that could materially adversely affect our results of operations and financial condition. Key factors that impact
our results of operations and financial condition include rental rates and occupancy levels, rollover, acquisitions, dispositions, and development. Sensitivity to many of these
factors has been heightened as a result of the ongoing and numerous adverse impacts of COVID-19.
Impact of Inflation: Inflation has significantly increased recently and a continued increase in inflation could adversely impact our future results, including as a result of adverse
impacts to our tenants and to the economy generally. The Company continues to seek ways to mitigate its potential impact. A substantial portion of the Company’s leases
require customers to pay operating expenses, including real estate taxes, utilities, and insurance, as well as increases in common area expenses, which should partially reduce
the Company’s exposure to inflation.
Customer Concentrations: We seek to minimize the risk of industry or customer concentrations. No significant tenant concentrations existed as of December 31, 2022.
1
2
1
2
24

Results of Operations
Comparison of the period from July 20, 2022 through December 31, 2022 (Successor) and the period from January 1, 2022 through July 19, 2022 (Predecessor) compared
to the year ended December 31, 2021
Successor
Predecessor
Period from July 20, 2022
through December 31, 2022
Period from January 1, 2022
through July 19, 2022
Year Ended December
31, 2021
Revenue:
Rental revenue
$
174,225 
$
246,175 
$
439,154 
Total revenue
$
174,225 
$
246,175 
$
439,154 
Revenue: Rental revenue decreased by $18,754 or 4.3%, for the year ended December 31, 2022, including the successor and predecessor periods, as compared to the year
ended December 31, 2021 primarily due to the distribution of the Company’s interest in 58 properties included in the Non-Core Portfolio (refer to Note 1 — Description of
Business to our Consolidated Financial Statements under Item 15 in this Annual Report on Form 10-K).
Successor
Predecessor
Period from July 20, 2022
through December 31, 2022
Period from January 1, 2022
through July 19, 2022
Year Ended December
31, 2021
Expenses:
Property expenses
$
39,956 
$
74,848 
$
130,941 
Depreciation and amortization
225,472 
50,557 
93,486 
General and administrative
7,578 
19,079 
19,327 
Merger costs
33,255 
100,952 
— 
Total expenses
$
306,261 
$
245,436 
$
243,754 
Other income (expense):
Gain on sale of real estate, net
$
— 
$
157,022 
$
359,875 
Interest expense
(43,189)
(615)
(728)
Other income
235 
2,044 
2,085 
Total other income (expense)
$
(42,954)
$
158,451 
$
361,232 
Expenses: Total expenses increased by $307,943, or 126.3%, for the year ended December 31, 2022, including the successor and predecessor periods, as compared to the year
ended December 31, 2021, primarily due to the following:
Depreciation and amortization increased by $182,543 for the year ended December 31, 2022, including the successor and predecessor periods, as compared to the year ended
December 31, 2021, primarily due to the step-up in basis of the real estate assets acquired and intangibles assumed in connection with the Merger (refer to Note 2 — Summary
of Significant Accounting Policies to our Consolidated Financial Statements under Item 15 in this Annual Report on Form 10-K).
General and administrative expenses increased by $7,330 for the year ended December 31, 2022, including the successor and predecessor periods, as compared to the year
ended December 31, 2021, primarily due to a one-time cash payment of $6,734 to the former CEO in the first quarter of 2022, which consisted of a $6,643 cash payment for
RSUs (refer to Note 11 — Incentive Compensation to our Consolidated Financial Statements under Item 15 in this Annual Report on Form 10-K), and a $91 cash payment for
COBRA coverage reimbursement in accordance with his separation agreement.
Merger costs of $134,207 during the year ended December 31, 2022 are comprised primarily of legal and other professional fees incurred in connection with the Merger
discussed herein. These increases in expenses were partially offset by a decrease in property expenses of $16,137 for the year ended December 31, 2022, including the
successor and predecessor periods, as compared to the year ended December 31, 2021, primarily due to the distribution of the Company’s interest in 58 properties included in
the Non-Core Portfolio (refer to Note 1 — Description of Business to our Consolidated Financial Statements under Item 15 in this Annual Report on Form 10-K).
25

Other Income (Expense): Total other income (expense) for the year ended December 31, 2022, including the successor and predecessor periods, was $115,497 as compared to
total other income (expense) of $361,232 for the year ended December 31, 2021, primarily due to the following:
Gain on sale of real estate, net for the year ended December 31, 2022, including the successor and predecessor periods, was $157,022, which was related to the sale of 40
buildings excluding assets distributed as part of the Merger for no gain or loss. Refer to Note 1 for additional details. Gain on sale of real estate, net for the year ended
December 31, 2021 was $359,875, which was related to the sale of 22 buildings. Refer to Note 3 — Investments in Real Estate to our Consolidated Financial Statements under
Item 15 in this Annual Report on Form 10-K for more information regarding our dispositions.
Interest expense increased $43,076 for the year ended December 31, 2022, including the successor and predecessor periods, as compared to the year ended December 31, 2021.
There was (i) an increase in interest expense on our outstanding debt of $107,055, (ii) a $7,332 realized loss during the current year period due to changes in fair value on our
interest rate derivatives, and (iii) amortization of financing costs of $11,042 during the current year period. This was partially offset by an unrealized gain on interest rate swaps
of $83,607 in connection with the interest rate contracts entered into during the current year period (refer to Note 6 — Derivative Financial Instruments to our Consolidated
Financial Statements under Item 15 in this Annual Report on Form 10-K). Subsequent to the Merger, we obtained two mortgage loans and terminated the unsecured revolving
line of credit (refer to Note 5 — Debt to our Consolidated Financial Statements under Item 15 in this Annual Report on Form 10-K).
Liquidity and Capital Resources
This section should be read in conjunction with our Consolidated Statements of Cash Flows; and Note 5 — Debt, Note 6 — Derivative Financial Instruments, and Note 13 —
Commitments and Contingencies to our Consolidated Financial Statements under Item 15 in this Annual Report on Form 10-K for additional details on the major components
of our historical liquidity and capital resources. The discussion below sets forth the factors which we expect will affect our future liquidity and capital resources or which may
vary substantially from historical levels.
Cash Requirements:
Contractual Commitments: Our significant short-term liquidity requirements over the next 12 months following December 31, 2022 includes:
•
Interest expense: payment of interest expense on outstanding indebtedness, including approximately $296,280 due within the next 12 months;
•
Development costs: funding development costs for three ongoing projects, including $17,570 scheduled to be funded within the next 12 months;
•
Funding capital expenditures for tenant improvements and leasing commissions of $3,106;
•
Ground lease obligations: Our contractual payment requirements under various operating leases as of December 31, 2022 are approximately $199 for 2023 and $1,173
thereafter;
•
Preferred stock dividends: We paid $38,346 to preferred stockholders during the year ended ended December 31, 2022, including successor and predecessor periods.
Dividends on preferred equity are paid when and if declared by our Board of Directors (the "Board") and accumulate if not paid (refer to Note 10 — Stockholders'
Equity to our Consolidated Financial Statements under Item 15 in this Annual Report on Form 10-K), and
•
other normal recurring operating and capital expenses.
We intend to satisfy our short-term liquidity requirements through our existing cash and cash equivalents, which totaled $51,608 as of December 31, 2022, and cash flow from
operating activities. We may also satisfy our liquidity needs by:
•
proceeds from dispositions of properties and/or land parcels, and
•
our ability to obtain new financings, draw on existing financings, and exercise our option to extend the maturity dates on existing financings.
Our long-term liquidity needs consist primarily of funds necessary to pay for non-recurring capital expenditures for our properties, development or redevelopment activities,
principal and interest payments on our indebtedness, and payment of distributions and dividends to our equity investors. We may satisfy our long-term liquidity needs through
our cash flow from operations, long-term secured and unsecured borrowings, the issuance of debt and equity securities, property and/or land parcel dispositions, cash
contributions from our Parent, our option to draw on available shared capacity on our existing loans or through repayment of the Parent Partner Loans.
26

Redemption of Preferred Stock: Shares of preferred stock (other than our Series A Preferred Stock) are redeemable by the Company five years after issuance or in order to
preserve its status as a REIT, but shares of preferred stock are never redeemable at the option of the holder. Shares of Series A Preferred Stock with a coupon rate of 12.00%,
are redeemable at any time or from time to time, for cash at a redemption price equal to $4,000 per share plus an amount equal to all accrued and unpaid dividends thereon to
and including the date fixed for redemption.
Future redemptions of preferred stock will depend upon many factors, including available cash and our cost of capital. Refer to Note 10 — Stockholders' Equity to our
Consolidated Financial Statements under Item 15 in this Annual Report on Form 10-K for more information on our preferred stock.
On November 22, 2022, the Company commenced offers (the “Offers”) to purchase for cash any and all outstanding Series X Preferred Shares, at $15.29 per share, Series Y
Preferred Shares, at $15.33 per share, and Series Z Preferred Shares, at $14.34 per share. The Company accepted for purchase 5,953,898 Series X Preferred Shares, 5,756,691
Series Y Preferred Shares and 9,728,688 Series Z Preferred Shares. The offers were completed on December 23, 2022 and the Preferred Shares purchased were cancelled by the
Company.
On November 2, 2022, the board of directors of the Company (the “Board of Directors”) authorized a quarterly dividend on each series of the Company’s preferred stock
underlying the Preferred Shares payable on December 31, 2022 (the “December Dividend”) to holders of record of such underlying preferred stock at the close of business on
December 15, 2022 for distribution to the holders of the Preferred Shares. All holders of the Preferred Shares at the close of business on the December 15, 2022 record date
received the December Dividend for the applicable series of Preferred Shares regardless of whether they participated in the Offers since the December 15, 2022 record date
occurred prior to the consummation of the Offers.
As market conditions warrant, we and our majority equity holders, Blackstone and its affiliates, may from time to time seek to repurchase the remaining outstanding Preferred
Shares in open market or privately negotiated purchases, by tender offer or otherwise or to redeem our preferred stock pursuant to the terms of their respective governing
documents. The size of such repurchases may be material and may impact the liquidity and trading price of such preferred stock.
Requirement to Pay Distributions: Our election to be taxed as a REIT, as defined by the Code, applies to all periods presented herein. As a REIT, we do not incur U.S. federal
corporate income tax on our “REIT taxable income” that is distributed each year (for this purpose, certain distributions paid in a subsequent year may be considered), and we
continue to meet certain organizational and operational requirements. We believe we have met these requirements in all periods presented herein.
We paid REIT qualifying distributions of $359,804 ($38,346 to preferred stockholders and $321,458 to common stockholders) during the year ended December 31, 2022.
Our consistent, long-term dividend policy has been to set dividend distribution amounts based on our taxable income. Future quarterly distributions with respect to common
stock will continue to be determined based upon our REIT distribution requirements and, along with distributions to preferred stockholders, we expect will be funded with cash
provided by operating activities.
27

Item 7A. Quantitative and Qualitative Disclosures About Market Risk
We may be exposed to interest rate changes primarily as a result of long-term debt used to maintain liquidity and fund capital expenditures and expansion of our real estate
investment portfolio and operations. Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flows and to lower our
overall borrowing costs. To achieve our objectives, we borrow primarily at fixed rates or variable rates with the lowest margins available.
With regard to variable rate financing, we assess interest rate cash flow risk by continually identifying and monitoring changes in interest rate exposures that may adversely
impact expected future cash flows and by evaluating hedging opportunities. We maintain risk management control systems to monitor interest rate cash flow risk attributable to
both our outstanding and forecasted debt obligations as well as our potential offsetting hedge positions. The risk management control systems involve the use of analytical
techniques, including cash flow sensitivity analysis, to estimate the expected impact of changes in interest rates on our future cash flows.
We may use additional derivative financial instruments to hedge exposures to changes in interest rates on loans secured by our properties or unsecured debt obligations. To the
extent we do we are exposed to market and credit risk. Market risk is the adverse effect on the value of the financial instrument that result a change in interest rates. The market
risk associated with interest-rate contracts is managed by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken. Credit
risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value derivative contract is positive, the counterparty owes us, which
creates credit risk to us. We will minimize the credit risk in derivative instruments by entering into transactions with high-quality counterparties.
As of December 31, 2022, we had $3,904,395 of outstanding floating rate debt, of which $3,592,215 is subject to interest rate cap and swap agreements, which effectively
limits the interest rate risk. Our variable-rate borrowings bear interest at one month SOFR plus an applicable spread. If market rates of interest on our variable rate debt
increased by 1%, the increase in annual interest expense on our variable rate debt would decrease future earnings and cash flows by $3,122. This estimate considers the impact
of our interest rate swap agreements and is calculated utilizing the interest rates on our debt at December 31, 2022.
Item 8. Financial Statements and Supplementary Data
The financial statements and supplementary data are included under Item 15 of this Report and are incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A.  Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Company maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) that are designed to ensure that information required to be disclosed in the Company’s reports under the Exchange Act is recorded, processed, summarized
and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management,
including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. Any controls and procedures, no
matter how well designed and operated, can provide only reasonable assurance of achieving the desired controls objectives. Our management has evaluated, under the
supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures as of
December 31, 2022. Based upon that evaluation, our Chief Executive Officer and Chief Financial officer have concluded that, as of December 31, 2022, our disclosure controls
and procedures were effective to accomplish their objectives as the reasonable assurance level.
Management’s Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our
consolidated financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those
policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and
28

fairly reflect the transactions and dispositions of the assets of the Company, (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of
consolidated financial statements in accordance with U.S. generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance
with authorizations of our management and directors, and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or
disposition of our assets that could have a material effect on the consolidated financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements in our consolidated financial statements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
Under the supervision and with the participation of our management, including our Chief Executive Officer and the Chief Financial Officer, we conducted an evaluation of the
effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in
Internal Control-Integrated Framework (2013). Based on its evaluation, our management concluded that our internal control over financial reporting was effective as of the end
of the fiscal year covered by this Annual Report on Form 10-K.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended December 31, 2022 that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.
Item 9B. Other Information
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
PART III
(dollars in thousands, except share data)
Item 10. Directors, Executive Officers and Corporate Governance
The following sets forth the names, ages and certain biographical information of our non-executive directors as of February 28, 2023:
Timothy J. Beaudin, 64, was the Chairman of the Board of P3 Logistics Parks, a long-term owner, developer and manager of European logistics properties from 2018 until
2019, and Chief Executive Officer of P3 Logistics Parks from 2019 to 2021. Before that Mr. Beaudin was the President and Chief Executive Officer of IndCor Properties from
2011 until 2015, was with Apartment Investment and Management Company (“Aimco”) from 2005 to 2010, departing as Chief Operating Officer and was Executive Vice
President of Catellus Development. Mr. Beaudin has also worked for multiple companies, such as KPMG and CBRE, in various financial services roles. He previously served
as an advisor to each of Link and LivCor, both of which are wholly-owned by Blackstone-managed real estate funds. Mr. Beaudin earned his B.A. in Economics and Business
from Westmont College.
29

Justin Brown, 39, is a Managing Director in Blackstone’s Real Estate Group. Mr. Brown is involved in the asset management of Blackstone’s Life Science platform BioMed
Realty and fund management of BPP Life Sciences. Before joining Blackstone in November 2021, Mr. Brown worked in Green Street’s Advisory Group from July 2013 until
October 2021, which provides strategic and capital markets advisory services to commercial real estate companies and served on the board of LatAm Logistic Properties. Mr.
Brown began his career at Prudential Real Estate Investors where he focused on asset management and dispositions. Mr. Brown received a B.B.A with a focus on Real Estate
from University of Wisconsin and an MBA in Finance from Stern School of Business at New York University.
Andrea Drasites, 40, is a Managing Director in Blackstone’s Real Estate Group, and she is involved in the asset management of U.S. retail and gaming investments, including
ShopCore and Edens, and retail projects inside of the Cosmopolitan of Las Vegas and other Blackstone assets. Since joining Blackstone in 2012, Ms. Drasites has been involved
with several notable transactions including the IPO of Brixmor (formerly Centro), Edens, Excel Trust and RioCan. Prior to joining Blackstone, Ms. Drasites worked at Equity
One, Inc., a publicly traded shopping center REIT, where she was responsible for asset management as well as acquisitions and dispositions across the U.S. Prior to Equity One,
Inc., Ms. Drasites also worked for Woolbright Development, a shopping center owner and developer based in Boca Raton, Florida. She is an active member of the Urban Land
Institute, International Council of Shopping Centers and is a Founding Member of the annual Rally Against Lupus fundraiser in New York and is actively involved in the
Alliance for Lupus Research. Ms. Drasites is a member of the University of Florida’s Real Estate Advisory Board. Ms. Drasites received a BA in International Business from
Rollins College and an MBA from the University of Florida.
Ernest M. Freedman, 52, has served as Executive Vice President and Chief Financial Officer of Invitation Homes since October 2015. Mr. Freedman previously served as
Executive Vice President and Chief Financial Officer of Aimco from 2009 to 2015. Mr. Freedman joined Aimco in 2007 as Senior Vice President of Financial Planning and
Analysis and served as Senior Vice President of Finance from February 2009 to November 2009, where he was responsible for financial planning, tax, accounting and related
areas. From 2004 to 2007, Mr. Freedman served as Chief Financial Officer of HEI Hotels and Resorts. From 2000 to 2004, Mr. Freedman was at GE Real Estate in a number of
capacities, including operations controller and finance manager for investments and acquisitions. From 1993 to 2000, Mr. Freedman was with Ernst & Young, LLP, including
one year as a senior manager in the real estate practice. He is a member of the board of directors of CA Student Living, a student housing developer and investment
management company, where he serves as the Chair of the Audit Committee and a member of the Compensation Committee. Mr. Freedman earned a Bachelor’s Degree from
the University of Virginia. Mr. Freedman is a certified public accountant.
Ryan Ingle, 37, is a Managing Director in Blackstone’s Real Estate Group. Since joining Blackstone in 2010, Mr. Ingle has been involved in analyzing and managing real estate
investments across several property sectors. Mr. Ingle currently leads asset management for Blackstone’s U.S. industrial portfolio which spans more than 400 million square
feet. Mr. Ingle has been involved in other notable investments including BioMed, IndCor, Motel 6, La Quinta and Extended Stay. Before joining Blackstone, Mr. Ingle worked
in Citi’s real estate investment banking group. Mr. Ingle received a BS in Finance and a BA in Spanish from the University of Kansas where he graduated with highest
distinction and was a member of Phi Beta Kappa.
David Levine, 34, is Co-Head of Americas Acquisitions for Blackstone Real Estate. Since joining Blackstone in 2010, Mr. Levine has been involved in more than $100 billion
of real estate investments across several property sectors and has worked on various transactions, including the acquisition of Gramercy Property Trust, Pure Industrial, WPT
Industrial REIT, BioMed Realty and the creation and growth of Blackstone’s 450+ million square foot industrial platform, Link Logistics. He also serves on the board of
Reading Partners New York. Mr. Levine graduated from Northwestern University, where he received a BA in Economics.
Samantha Wallack, 47, is a Partner and Real Estate Practice Co-Chair at Blank Rome LLP, a national law firm that provides a full range of legal and advocacy services. Ms.
Wallack was appointed Real Estate Practice Co-Chair in January 2020, and under her leadership the group currently represents a multi-billion dollar annual portfolio of client
transactions. She oversees a national team of more than sixty real estate attorneys throughout the firm’s thirteen offices who provide legal counsel to public companies, private
equity funds, developers, REITs, family businesses, insurance companies, and realty advisers. Ms. Wallack joined Blank Rome in 2000 and was named partner in 2009. She
was the firm’s first female real estate partner and became the firm’s first female Real Estate Practice Co-Chair in 2020. She is a member of Blank Rome’s Diversity & Inclusion
Committee, former Co-Chair of Blank Rome’s Women’s Forum, a founding member of the firm’s Women Who Lead initiative and serves as pro bono counsel for 1-866-Our
Vote and NYAGRA (New York Association for Gender Rights Advocacy). Ms. Wallack holds a BA from the University of Wisconsin and a JD, cum laude, from Benjamin N.
Cardozo School of Law.
Director Independence
Our board of directors has affirmatively determined that each of Messrs. Freedman and Beaudin and Ms. Wallack qualify as independent directors under NYSE listing
standards.
30

Background and Experience of Directors
When considering whether directors and nominees have the experience, qualifications, attributes or skills, taken as a whole, to enable our board of directors to satisfy its
oversight responsibilities effectively in light of our business and structure, the board of directors focuses primarily on each person’s background and experience as reflected in
the information discussed in each of the directors’ individual biographies set forth above.
Audit Committee
Our board of directors has established an audit committee that operates under a written charter, which is available on our website under
https://ir.psbusinessparks.com/corporate-governance/governance-documents. The composition and responsibilities of the audit committee are described below.
Our audit committee consists of Messrs. Freedman and Beaudin and Ms. Wallack, with Mr. Freedman serving as chairman. Each member of the audit committee has sufficient
knowledge in financial and auditing matters to serve on the audit committee. In addition, Messrs. Freedman and Beaudin qualify as “audit committee financial experts” under
the SEC rules. Our audit committee is responsible for, among other things:
•
selecting and hiring our independent auditors, and approving the audit and non-audit services to be performed by our independent auditors;
•
assisting the board of directors in evaluating the qualifications, performance and independence of our independent auditors;
•
assisting the board of directors in monitoring the quality and integrity of our financial statements and our accounting and financial reporting;
•
assisting the board of directors in monitoring our compliance with legal and regulatory requirements; and
•
assessing the effectiveness of the Company’s risk management processes, particularly with respect to financial risk exposure reviewing the adequacy and effectiveness of
our internal control over financial reporting processes.
Each member of the Audit Committee has been affirmatively determined by our board of directors to qualify as an independent director under the NYSE listing standards and
the independence standards of Rule 10A-3 of the Exchange Act.
Compensation Committee Interlocks and Insider Participation
None of our executive officers serves as a member of the board of directors or compensation committee (or other committee performing equivalent functions) of any entity that
has one or more executive officers serving on our board of directors or compensation committee.
Code of Ethics
We have a Code of Conduct that applies to all of our officers, directors and employees (if any), including our principal executive officer, principal financial officer, principal
accounting officer and controller, or persons performing similar functions, which is posted on our website. Our Code of Conduct is a “code of ethics,” as defined in Item 406(b)
of Regulation S-K. The information contained on, or accessible from, our website is not part of this report by reference or otherwise.
The executive officers of PS Business Parks, Inc are currently comprised of the following three individuals:
Executive Officers of PS Business Parks, Inc.
Name
Age
Office
Luke Petherbridge
43
Chief Executive Officer and Secretary
Matthew L. Ostrower
52
Chief Financial Officer, Vice President and Treasurer
Nicholas Pell
45
President and Chief Investment Officer
Refer to “Business Overview—Executive Officers of PS Business Parks, Inc.” above for biographical information regarding the Company’s executive officers.
31

Item 11. Executive Compensation
We do not have any employees. All of our executive officers are employees of an affiliate of Blackstone and do not receive compensation from us or from any of our
subsidiaries for serving as our executive officers. Accordingly, we do not have employment agreements with our executive officers, we do not provide pension or retirement
benefits, perquisites or other personal benefits to our executive officers and we do not have arrangements to make payments to our executive officers upon their termination or
in the event of a change in control of the Company.
Additionally, our executive officers are not required to dedicate a specific amount of time to us. Accordingly, we cannot identify the portion of the compensation awarded to our
executive officers that relates solely to their services to us, as our executive officers are not compensated specifically for such services.
Because our executive officers do not receive compensation from us or from any of our subsidiaries and because we cannot identify the portion of the compensation awarded to
our executive officers that relates solely to their services to us, we do not provide executive compensation disclosure pursuant to Item 402 of Regulation S-K.
Director Compensation
Director Compensation for 2022
Following the Merger, the Board approved payment of an annual retainer for each of our independent directors of $150. Freedman and Beaudin and Ms. Wallack received a
retainer of $75 representing the pro rata portion of their annual retainer based on their service during the year. Our non-independent directors do not receive additional
compensation for their service as a director.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Our Parent and certain of its affiliates own 100% of our issued and outstanding common stock, the Company’s voting securities. None of our executive officers or directors
beneficially owns any equity securities of the Company.
Item 13. Certain Relationships and Related Transactions, and Director Independence
Master Services Agreement
On July 20, 2022, the Company entered into a Master Services Agreement with Link Logistics Real Estate Holdco LLC (together with its subsidiaries, “Link”), a portfolio
company owned by Blackstone-advised investment vehicles, to provide, as applicable, corporate support services (including, without limitation, accounting, legal, tax, treasury,
valuation services, information technology and data management), loan management, management services, operational services, property management services, and
transaction support services to the Company. During the period from July 20, 2022 through December 31, 2022, we paid Link total fees of $25,366 pursuant to the terms of the
Master Services Agreement. The current term of the Master Services Agreement extends to December 31, 2023, and may be renewed for additional one-year terms thereafter;
provided, however, that the Master Services Agreement may be terminated at any time upon prior written notice by either Link or the Company.
32

Parent Partners Loans
In connection with the closing of the Merger, in lieu of distributing all of the proceeds from the Mortgage Loans to fund the consideration for the Merger, certain amounts were
loaned to the Parent Partners (the “Parent Partners Loans”). The Parent Partners Loans are evidenced by promissory notes, bear interest at 4.16% per annum and mature in July
2027. The aggregate principal amount of the Parent Partners Loans is $1,285,575, and is recorded within Accumulated earnings (deficit) on the Consolidated Balance Sheets.
The amount of interest due to the Company as of December 31, 2022 related to the Parent Partner Loans is $1,275.
Other
Gryphon Mutual Insurance Company (“GMUC”), an affiliate of the Company, is a captive insurance company that began providing insurance coverage to the Company in July
2022. During the period from July 20, 2022 through December 31, 2022, the Company incurred $2,314 for insurance premiums recognized in Property operating expenses in
the Consolidated Statements of Operations. The fees paid are in place of insurance premiums and fees that would otherwise be paid to third party insurance companies, and are
equivalent or less than the rate third-party insurance companies would charge for such services. There were $— amounts payable to GMUC as of December 31, 2022.
Simply Storage Management, LLC (“Simply Storage”), an affiliate of the Company, is a management company that began providing management services to the Company in
October 2022. During the period from July 20, 2022 through December 31, 2022, the Company incurred $19 for management fees recognized in the line item Property
operating expenses in the Consolidated Statements of Operations.
In October 2022, the Brentford Joint Venture entered into an agreement to receive proceeds of a $110,000 borrowing obtained under a revolving credit facility. Refer to Note 5
— Debt for additional details.
33

Item 14. Principal Accountant Fees and Services
In July 2022, following the Merger, the Audit Committee of the Board approved the dismissal of Ernst & Young LLP (“EY”) as the Company’s independent registered public
accounting firm. In July 2022, the Audit Committee approved the appointment of Deloitte & Touche LLP (“Deloitte”) as the Company’s new independent registered public
accounting firm.
The following table presents the aggregate fees billed for professional services rendered by Deloitte for the fiscal year December 31, 2022:
Year Ended December 31, 2022
Fee Category
Audit Fees
$
635 
Audit-Related Fees
— 
Tax Fees
— 
All Other fees
— 
Total fees
$
635 
Audit fees. Audit fees represent fees for professional services provided in connection with the audit of the Company’s annual financial statements and internal control over
financial reporting, review of the quarterly financial statements included in the Company’s quarterly reports on Form 10-Q, and services in connection with the Company’s
registration statements.
Audit-related fees. These are fees for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements.
Such services including accounting consultations, internal control reviews, audits in connection with acquisitions, attest services related to financial reporting that are not
required by statute or regulation and required agreed-upon procedure engagements.
Tax fees. This category relates to general tax services.
Audit Committee Pre-Approval Policies and Procedures. Our policy is that all audit and non-audit services provided by the independent registered public accounting firm must
be pre-approved by the Audit Committee. The authority to grant pre-approvals of services may be delegated to one or more of the audit committee’s members, but the decision
must be reported to the full audit committee at its next scheduled meeting. All of such services and fees were pre-approved during the fiscal year ended December 31, 2022.
34

PART IV
Item 15. Exhibits and Financial Statement Schedule
The following documents are filed as a part of this report:
(a) Financial Statements and Schedule:
1. Financial Statements:
The following Consolidated Financial Statements, together with the Reports of Independent Registered Public Accounting Firm are listed below:
Reports of Independent Registered Public Accounting Firm (PCAOB ID No. 34)
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 42)
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
2. Financial Statement Schedule:
Schedule III — Real Estate and Accumulated Depreciation
All other schedules have been omitted since the required information is presented in the Consolidated Financial Statements and the related notes or is not applicable.
(b) Exhibits: The Exhibits required by Item 601 of Regulation S-K are listed in the Index to the Exhibits on pages 79 of this report, which is incorporated herein by reference.
35

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the stockholders and the Board of Directors of PS Business Parks, Inc.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of PS Business Parks, Inc. (the “Company”) as of December 31, 2022, based on criteria established in Internal
Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company
maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control — Integrated
Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as
of December 31, 2022 (successor) and for the periods from July 20,2022 through December 31, 2022 (successor) and January 1, 2022 through July 19, 2022 (predecessor) of
the Company and our report dated February 28, 2023, expressed an unqualified opinion on those financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over
financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the
Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with
respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over
financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk,
and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those
policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;
and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material
effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to
future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures
may deteriorate.
/s/Deloitte & Touche LLP
New York, NY
February 28, 2023
36

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the stockholders and the Board of Directors of PS Business Parks, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of PS Business Parks, Inc. (the "Company") as of December 31, 2022 (successor), the related consolidated
statements of operations, equity, and cash flows for the periods from July 20, 2022 through December 31, 2022 (successor) and January 1, 2022 through July 19, 2022
(predecessor), and the related notes and Schedule III (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material
respects, the financial position of the Company as of December 31, 2022, and the results of its operations and its cash flows for the periods from July 20, 2022 through
December 31, 2022 (successor) and January 1, 2022 through July 19, 2022 (predecessor), in conformity with accounting principles generally accepted in the United States of
America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over
financial reporting as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission and our report dated February 28, 2023, expressed an unqualified opinion on the Company's internal control over financial
reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our
audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material
misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test
basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates
made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be
communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,
subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are
not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Valuation of Net Tangible and Intangible Assets Acquired and Liabilities Assumed in Connection with Business Combination – Refer to Note 2 to the financial
statements
Critical Audit Matter Description
The Company, PS Business Parks Inc., was acquired (“The Merger”) on July 19, 2022. The Merger was accounted for as a business combination in accordance with Accounting
Standards Codification (“ASC”) 805, Business Combinations. The total purchase price was allocated to the net tangible and intangible assets acquired and liabilities assumed in
connection with the Merger based on their estimated fair values at the time of the transaction, and the purchase price was pushed down to the Company’s financial statements.
When using the push-down basis of accounting, the acquired company’s separate financial statements reflect the new accounting basis recorded by the acquiring company, and
the assets acquired, and liabilities assumed are recorded at fair value through adjustments to additional paid in capital at the acquisition date.
The determination of the fair value of the net tangible and intangible assets acquired and liabilities assumed in connection with a business combination requires management to
make significant estimates related to assumptions such as future cash flows, discount rates, costs during hypothetical lease-up periods, projected rental revenue, and current
market interest rates. Performing audit procedures to evaluate the reasonableness of these assumptions required a higher degree of auditor judgment and an increased extent of
effort, including the need to involve our fair value specialists.
37

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to accounting treatment of the push down accounting related to the Business Combination included the following, among others:
•
We evaluated management’s assessment of the business combination conclusions.
•
We tested the effectiveness of controls over the push-down accounting, including management’s controls over the identification of real estate assets, and the valuation
methodology for estimating the fair value of assets acquired and liabilities assumed.
•
With the assistance of our fair value specialists, we evaluated the reasonableness of the (1) valuation methodology, (2) current market data, (3) cost to replace certain
assets, and (4) assumptions used in the discounted cash flows, including testing the mathematical accuracy of the calculation, and developing a range of independent
estimates and comparing our estimates to those used by management.
•
We assessed the reasonableness of management’s projections of cash flows by comparing the assumptions used in the projections to external market sources, historical
data, and results from other areas of the audit.
•
We evaluated whether the financial statement presentation and footnote disclosures are appropriate
/s/Deloitte & Touche LLP
New York, NY
February 28, 2023
We have served as the Company's auditor since 2022.
38

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the stockholders and the Board of Directors of PS Business Parks, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheet of PS Business Parks, Inc. (the Company) as of December 31, 2021, and the related consolidated statements of
operations, equity and cash flows for each of the two years in the period ended December 31, 2021, and the related notes (collectively referred to as the “consolidated financial
statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2021, and the
results of its operations and its cash flows for each of the two years in the period ended December 31, 2021, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our
audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material
misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test
basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates
made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be
communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,
subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a
whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it
relates.
Purchase price accounting
Description of the Matter
As described in Note 3 to the consolidated financial statements, the Company completed two acquisitions during
2021 for consideration of approximately $149 million. As explained in Note 3 to the consolidated financial
statements, the transactions were accounted for as asset acquisitions, and as such, are recorded at the price to
acquire the real estate property, including acquisition costs. The purchase price is allocated to land, building, and
acquired lease intangible assets and/or liabilities based upon the relative fair value of the acquired tangible and
intangible lease assets and liabilities. The relative fair value of the acquired tangible and intangible lease assets
and liabilities were determined by the Company and its valuation specialist utilizing available market
information.
Auditing the Company’s accounting for its acquisitions was complex due to the significant estimation required by
management in determining the fair values of the acquired land, building, and intangible lease assets and
liabilities. The significant estimation was primarily due to the judgmental nature of the inputs to the valuation
models used to measure the fair value of the tangible and intangible lease assets and liabilities as well as the
sensitivity of the respective fair values to the significant underlying assumptions. The Company utilized the sales
comparison approach to measure the fair value of the acquired land and a combination of the discounted cash
flow and replacement costs methods to measure the fair value of the remaining acquired tangible and intangible
assets and liabilities. The more significant assumptions utilized included revenue growth rates, discount rates,
market rental rates, and capitalization rates. These significant assumptions are forward-looking and could be
affected by future economic and market conditions.
39

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
How We Addressed the Matter in Our Audit
We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over
management’s accounting for acquired real estate properties, including controls over the Company’s review of the
assumptions underlying the purchase price allocation, the cash flow projections, and the accuracy of the
underlying data used. For example, we tested controls over the determination of the fair value of the land,
building and intangible lease assets and liabilities, including the controls over the review of the valuation models
and the underlying assumptions used to develop such estimates.
For each of the Company’s real estate property acquisitions, we read the purchase and sale agreements, and
evaluated whether the Company had appropriately determined whether the transaction was a business
combination or asset acquisition. We also evaluated the significant assumptions and methods used in developing
the fair value estimates of the tangible assets and intangible lease assets acquired and liabilities assumed. To test
the estimated fair value of the land, building and intangible lease assets and liabilities, we performed audit
procedures that included, among other procedures, evaluating the Company’s use of the income approach and
testing the significant assumptions used in the discounted cash flow model, and testing the completeness and
accuracy of the underlying data supporting the significant assumptions and estimates. For example, we agreed the
contractual rents used in the determination of the in-place and above/below market lease intangible assets and
liabilities to tenant leases and market information. We also involved our valuation specialists to assist in the
assessment of the methodology utilized by the Company, performed procedures to corroborate the reasonableness
of the significant assumptions utilized in the developing the fair value estimates, and performed corroborative
calculations to assess the reasonableness of the acquired building asset. For example, our valuation specialists (i)
used independently identified data sources to evaluate the appropriateness of management’s selected comparable
land sales, (ii) recalculated the asset values and performed comparative calculations assuming a combination of
some or all of management’s assumptions and our independently verified assumptions, and (iii) obtained market
specific information for the revenue growth rates, discount rates, market rental rates, and capitalization rates to
corroborate the market information utilized by the Company.
/s/ Ernst & Young LLP
We served as the Company’s auditor from 1997 to 2022.
Los Angeles, California
February 22, 2022
40

PART IV. FINANCIAL INFORMATION
Item 15. Exhibit and Financial Statement Schedules (Item 15(a)(1) and Item 15(a)(2))
PS Business Parks, Inc.
Consolidated Balance Sheets
(in thousands - except share data)
Successor
Predecessor
December 31, 2022
December 31, 2021
ASSETS
Assets:
Investments in real estate, net
$
5,556,795 
$
2,005,868 
Assets held for sale
— 
33,609 
Cash and cash equivalents
51,608 
27,074 
Restricted cash
636 
1,088 
Tenant and other receivables
14,888 
39,202 
Prepaid expenses and other assets
380,469 
16,381 
Due from affiliates
666 
— 
Total assets
$
6,005,062 
$
2,123,222 
LIABILITIES AND EQUITY
Liabilities:
Debt, net
$
3,865,553 
$
32,000 
Accounts payable, accrued expenses and other liabilities
300,691 
97,080 
Due to affiliates
4,266 
71 
Total liabilities
4,170,510 
129,151 
Commitments and contingencies (Note 13)
Equity:
Preferred stock, $0.01 par value, 50,000,000 shares authorized, 8,886 and 30,200 shares issued and
outstanding as of December 31, 2022 and December 31, 2021, respectively
164,352 
755,000 
Common stock, $0.01 par value, 200,000,000 shares authorized, 100 shares issued and outstanding as of
December 31, 2022; 100,000,000 shares authorized, 27,589,807 shares issued and outstanding as of
December 31, 2021
— 
275 
Paid-in capital
3,174,135 
752,444 
Accumulated earnings (deficit)
(1,515,405)
226,737 
Total PS Business Parks, Inc.'s stockholders' equity
1,823,082 
1,734,456 
Noncontrolling interest
11,470 
259,615 
Total equity
1,834,552 
1,994,071 
Total liabilities and equity
$
6,005,062 
$
2,123,222 
____________________________
Refer to Note 2 — Summary of Significant Accounting Policies for details related to variable interest entities (“VIEs”).
The accompanying notes are an integral part of these Consolidated Financial Statements.
1
1
1 
41

PS Business Parks, Inc.
Consolidated Statements of Operations
(in thousands – except share data)
Successor
Predecessor
Period from July 20,
2022 through December
31, 2022
Period from
January 1, 2022
through July 19,
2022
Year Ended
December 31, 2021
Year Ended
December 31, 2020
Revenue:
Rental revenue
$
174,225 
$
246,175 
$
439,154 
$
415,635 
Total revenue
174,225 
246,175 
439,154 
415,635 
Expenses:
Property expenses
39,956 
74,848 
130,941 
125,951 
Depreciation and amortization
225,472 
50,557 
93,486 
96,314 
General and administrative
7,578 
19,079 
19,327 
14,612 
Merger costs
33,255 
100,952 
— 
— 
Total expenses
306,261 
245,436 
243,754 
236,877 
Other income (expense):
Gain on sale of real estate, net
— 
157,022 
359,875 
27,273 
Interest expense
(43,189)
(615)
(728)
(548)
Other income
235 
2,044 
2,085 
1,222 
Total other income (expense)
(42,954)
158,451 
361,232 
27,947 
Income (loss) before income tax
(174,990)
159,190 
556,632 
206,705 
Income tax provision
(28)
— 
(3,603)
— 
Net income (loss)
(175,018)
159,190 
553,029 
206,705 
Net (income) loss attributable to noncontrolling interests
294 
(29,224)
(104,270)
(33,158)
Net income (loss) attributable to the Company
(174,724)
129,966 
448,759 
173,547 
Allocation to preferred stockholders
(19,186)
(19,160)
(46,624)
(48,186)
Preferred securities redemption (Note 10)
76,459 
— 
(6,434)
— 
Allocation to restricted stock unit holders
— 
(1,011)
(2,613)
(716)
Net income (loss) attributable to common stockholders
$
(117,451)
$
109,795 
$
393,088 
$
124,645 
Earnings (loss) per common share – basic and diluted:
Net income attributable to common stockholders - basic
$
3.98 
$
14.28 
$
4.54 
Net income attributable to common stockholders - diluted
$
3.96 
$
14.22 
$
4.52 
Weighted average common shares outstanding - basic
27,619,484 
27,533,845 
27,474,920 
Weighted average common shares outstanding - diluted
27,708,617 
27,635,588 
27,563,417 
The accompanying notes are an integral part of these Consolidated Financial Statements.
42

PS Business Parks, Inc.
Consolidated Statements of Equity
(in thousands – except share data)
Successor
Period from July 20, 2022 through December 31,
2022
Preferred Stock
Common Stock
Paid-in
Capital
Accumulated
Earnings (Deficit)
Total PS Business
Parks, Inc.'s
Stockholders' Equity
Noncontrolling
Interest
Total Equity
Shares
Amount
Shares
Amount
Balance at July 20, 2022 - pre-merger
—  $
— 
—  $
— 
$
—  $
—  $
—  $
—  $
— 
Total Blackstone purchase and contribution
— 
— 
— 
— 
2,847,170 
— 
2,847,170 
— 
2,847,170 
Redemption of common shares
— 
— 
(27,631,499)
(276)
(756,431)
(4,279,134)
(5,035,841)
— 
(5,035,841)
Application of purchase accounting
30,200 
563,026 
27,631,499 
276 
756,431 
4,279,134 
5,598,867 
1,308,704 
6,907,571 
Distribution of assets
— 
— 
— 
— 
— 
— 
— 
(1,295,217)
(1,295,217)
Parent Partners Loans receivable
— 
— 
— 
— 
— 
(1,285,575)
(1,285,575)
— 
(1,285,575)
Balance at July 20, 2022 - post-merger
30,200 
563,026 
— 
— 
2,847,170 
(1,285,575)
2,124,621 
13,487 
2,138,108 
Issuance of stock, net of costs
125 
500 
100 
— 
— 
— 
500 
— 
500 
Redemption of preferred stock and related
contribution
(21,439)
(399,174)
— 
— 
322,607 
76,459 
(108)
— 
(108)
Blackstone contribution
— 
— 
— 
— 
4,358 
— 
4,358 
— 
4,358 
Noncontrolling interests - contribution
— 
— 
— 
— 
— 
— 
— 
289 
289 
Distributions
Preferred stock
— 
— 
— 
— 
— 
(19,186)
(19,186)
— 
(19,186)
Blackstone
— 
— 
— 
— 
— 
(112,379)
(112,379)
— 
(112,379)
Noncontrolling interest
— 
— 
— 
— 
— 
— 
— 
(2,012)
(2,012)
Net income (loss)
— 
— 
— 
— 
— 
(174,724)
(174,724)
(294)
(175,018)
Balance at December 31, 2022
8,886  $ 164,352 
100  $
— 
$ 3,174,135  $
(1,515,405) $
1,823,082  $
11,470  $ 1,834,552 
Predecessor
Period from January 1, 2022 through July 19,
2022
Preferred Stock
Common Stock
Paid-in
Capital
Accumulated
Earnings
(Deficit)
Total PS Business
Parks, Inc.'s
Stockholders' Equity
Noncontrolling
Interest
Total Equity
Shares
Amount
Shares
Amount
Balance at December 31, 2021
30,200  $ 755,000 
27,589,807 
$
275 
$ 752,444  $
226,737  $
1,734,456  $
259,615 
$ 1,994,071 
Issuance cost
— 
— 
— 
— 
176 
— 
176 
— 
176 
Issuance of common stock in connection with
share-based compensation
— 
— 
41,692 
1 
2,101 
— 
2,102 
— 
2,102 
Stock compensation, net
— 
— 
— 
— 
3,028 
— 
3,028 
— 
3,028 
Cash paid for taxes in lieu of stock upon
vesting of restricted stock units
— 
— 
— 
— 
(1,318)
— 
(1,318)
— 
(1,318)
Capital contribution from noncontrolling
interests—joint venture
— 
— 
— 
— 
— 
— 
— 
492 
492 
Distributions
Preferred stock
— 
— 
— 
— 
— 
(19,160)
(19,160)
— 
(19,160)
Common stock ($7.57 per share)
— 
— 
— 
— 
— 
(209,079)
(209,079)
— 
(209,079)
Noncontrolling interests
— 
— 
— 
— 
— 
— 
— 
(55,358)
(55,358)
Net income (loss)
— 
— 
— 
— 
— 
129,966 
129,966 
29,224 
159,190 
Balance at July 19, 2022¹
30,200  $ 755,000 
27,631,499 
$
276 
$ 756,431  $
128,464  $
1,640,171  $
233,973 
$ 1,874,144 
__________________________
¹ This balance was reset as part of purchase accounting. Refer to Note 2 — Summary of Significant Accounting Policies for additional details.
The accompanying notes are an integral part of these Consolidated Financial Statements.
43

PS Business Parks, Inc.
Consolidated Statements of Equity
(in thousands – except share data)
Predecessor
Year Ended December 31, 2021
Preferred Stock
Common Stock
Paid-in
Capital
Accumulated
Earnings
(Deficit)
Total PS Business
Parks, Inc.'s
Stockholders' Equity
Noncontrolling
Interest
Total Equity
Shares
Amount
Shares
Amount
Balance at December 31, 2020
37,790  $ 944,750 
27,488,547 
$
274 
$ 738,022  $
73,631  $
1,756,677  $
218,963 
$ 1,975,640 
Redemption of preferred stock, net of
issuance costs
(7,590)
(189,750)
— 
— 
6,434 
(6,434)
(189,750)
(189,750)
Issuance of common stock in connection
with share-based compensation
— 
— 
101,260 
1 
5,011 
— 
5,012 
— 
5,012 
Stock compensation, net
— 
— 
— 
— 
7,022 
— 
7,022 
— 
7,022 
Cash paid for taxes in lieu of stock upon
vesting of restricted stock units
— 
— 
— 
— 
(3,940)
— 
(3,940)
— 
(3,940)
Capital contribution from noncontrolling
interests—joint venture
— 
— 
— 
— 
— 
— 
— 
746 
746 
Issuance costs
— 
— 
— 
— 
(105)
— 
(105)
— 
(105)
Distributions
Preferred stock
— 
— 
— 
— 
— 
(46,624)
(46,624)
— 
(46,624)
Common stock ($8.80 per share)
— 
— 
— 
— 
— 
(242,595)
(242,595)
— 
(242,595)
Noncontrolling interests
— 
— 
— 
— 
— 
— 
— 
(64,364)
(64,364)
Net income (loss)
— 
— 
— 
— 
— 
448,759 
448,759 
104,270 
553,029 
Balance at December 31, 2021
30,200  $ 755,000 
27,589,807 
$
275 
$ 752,444  $
226,737  $
1,734,456  $
259,615 
$ 1,994,071 
Predecessor
Year Ended December 31, 2020
Preferred Stock
Common Stock
Paid-in
Capital
Accumulated
Earnings
(Deficit)
Total PS Business
Parks, Inc.'s
Stockholders' Equity
Noncontrolling
Interest
Total Equity
Shares
Amount
Shares
Amount
Balance at December 31, 2019
37,790  $ 944,750 
27,440,953 
$
274 
$ 736,986  $
63,666 
$
1,745,676  $
216,135 
$ 1,961,811 
Issuance of common stock in connection
with share-based compensation
— 
— 
47,594 
— 
258 
— 
258 
— 
258 
Stock compensation, net
— 
— 
— 
— 
4,994 
— 
4,994 
— 
4,994 
Cash paid for taxes in lieu of stock upon
vesting of restricted stock units
— 
— 
— 
— 
(4,216)
— 
(4,216)
— 
(4,216)
Capital contribution from noncontrolling
interests—joint venture
— 
— 
— 
— 
— 
— 
— 
493 
493 
Distributions
Preferred stock
— 
— 
— 
— 
— 
(48,186)
(48,186)
— 
(48,186)
Common stock ($4.20 per share)
— 
— 
— 
— 
— 
(115,396)
(115,396)
— 
(115,396)
Noncontrolling interests
— 
— 
— 
— 
— 
— 
— 
(30,823)
(30,823)
Net income (loss)
— 
— 
— 
— 
— 
173,547 
173,547 
33,158 
206,705 
Balance at December 31, 2020
37,790  $ 944,750 
27,488,547 
$
274 
$ 738,022  $
73,631 
$
1,756,677  $
218,963 
$ 1,975,640 
The accompanying notes are an integral part of these Consolidated Financial Statements.
44

PS Business Parks, Inc.
Consolidated Statements of Cash Flows
(in thousands)
Successor
Predecessor
Period from July 20, 2022
through December 31, 2022
Period from January
1, 2022 through July
19, 2022
Year Ended
December 31, 2021
Year Ended
December 31, 2020
Operating activities:
Net income (loss)
$
(175,018)
$
159,190 
$
553,029 
$
206,705 
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization
225,472 
50,557 
93,486 
96,314 
Gain on interest rate derivatives
(76,275)
— 
— 
— 
Straight-line rents and amortization of above and below market leases
(26,178)
(2,276)
(2,800)
(4,713)
Amortization of deferred financing costs
11,042 
488 
725 
548 
Incentive compensation expense
— 
3,335 
8,495 
5,648 
Gain on sale of real estate, net
— 
(157,022)
(359,875)
(27,273)
(Increase) decrease in tenant and other receivables, lease right-of-use assets, net, prepaid expenses
and other assets, and due from affiliates
(1,734)
3,020 
(971)
1,156 
Increase (decrease) in accounts payable, accrued expenses and other liabilities, lease liabilities, and
due to affiliates
(7,091)
59,096 
10,148 
(1,410)
Net cash provided by (used in) operating activities
(49,782)
116,388 
302,237 
276,975 
Investing activities:
Acquisitions of real estate
— 
— 
(147,702)
(60,019)
Proceeds from sales of investments in real estate
— 
236,230 
400,955 
40,674 
Capital expenditures
(36,228)
(57,964)
(83,887)
(52,474)
Net cash provided by (used in) investing activities
(36,228)
178,266 
169,366 
(71,819)
Financing activities:
Proceeds from debt
3,866,828 
20,000 
32,000 
— 
Repayments on debt
(1,535)
(52,000)
— 
— 
Payment of deferred financing costs
(10,782)
(198)
(2,494)
(335)
Proceeds from issuance of preferred stock
500 
— 
— 
— 
Exercise of stock options
— 
2,101 
5,012 
258 
Payment of issuance costs
— 
176 
(105)
— 
Cash paid for taxes in lieu of shares upon vesting of restricted stock units
— 
(1,318)
(3,940)
(4,216)
Cash paid to restricted stock unit holders
— 
(328)
(1,498)
(654)
Contributions from noncontrolling interests
257 
492 
746 
493 
Distributions to noncontrolling interests
(1,980)
(55,358)
(64,364)
(30,823)
Distribution to preferred stockholders
(19,186)
(19,160)
(46,624)
(48,186)
Distribution to common stockholders
(112,379)
(209,079)
(242,595)
(115,396)
Redemption of preferred stock
(322,715)
— 
(189,750)
— 
Blackstone contributions
3,174,135 
— 
— 
— 
Redemption of common shares and related costs
(5,141,856)
— 
— 
— 
Parent Partners Loans
(1,285,575)
— 
— 
— 
Derivative premium paid
(32,758)
— 
— 
— 
Derivative premium received
25,300 
— 
— 
— 
Net cash provided by (used in) financing activities
138,254 
(314,672)
(513,612)
(198,859)
Net increase (decrease) in Cash and cash equivalents and restricted cash
52,244 
(20,018)
(42,009)
6,297 
Cash and cash equivalents and restricted cash - beginning of period
— 
28,162 
70,171 
63,874 
Cash and cash equivalents and restricted cash - end of period
$
52,244 
$
8,144 
$
28,162 
$
70,171 
____________________________
Refer to Note 14 — Supplemental Cash Flow Disclosures for information on noncash investing and financing activities and other information.
The accompanying notes are an integral part of these Consolidated Financial Statements.
45

PS Business Parks, Inc.
Notes to the Consolidated Financial Statements
(dollars in thousands, except share data)
Note 1. Description of Business
Organization
PS Business Parks, Inc. (“PSB” or the “Company”), a Maryland corporation, was organized in 1990. Effective May 19, 2021, following approval by its common and preferred
stockholders, PSB reincorporated from the state of California to the state of Maryland.
On July 20, 2022 (the “Acquisition Date”), pursuant to the terms and subject to the conditions set forth in an Agreement and Plan of Merger, dated as of April 24, 2022 (the
“Merger Agreement”), a merger (the “Merger”) was completed between PSB and a direct subsidiary of Sequoia Parent LP, a Delaware limited partnership (“Parent”), with the
Company surviving. As a result of the Merger, the Company became a subsidiary of Parent and certain of its affiliates, and PS Business Parks, L.P (the “Partnership”) remained
a subsidiary of the Company. The Parent is an affiliate of Blackstone Real Estate Partners IX, L.P., which is an affiliate of Blackstone Inc. (“Blackstone”). The common stock of
the Company is wholly owned by the Parent and certain of its affiliates and is not publicly traded. The depositary shares representing the preferred stock of the Company are
publicly traded. Refer to Note 2 — Summary of Significant Accounting Policies for additional information on basis of presentation.
PSB and its subsidiaries, including the Partnership and its consolidated joint ventures, are collectively referred to as the “Company,” “we,” “us,” or “our.”
Public Storage Operating Partnership Interests
Pursuant to the terms and conditions of the Merger Agreement, upon the Closing each partnership unit of the Partnership (a “Partnership Unit”) that was issued and outstanding
prior to the effective time of the Merger (the “Partnership Merger Effective Time”) (other than units held by the Company, Parent, or any of their respective wholly owned
subsidiaries) was automatically cancelled and converted into the right to receive an amount in cash equal to $182.25 (the “Per Company Share Merger Consideration”), less any
applicable withholding taxes, which represented $187.50 per share of Common Stock as reduced by a $5.25 per share cash dividend paid in connection with the Closing (the
“Closing Cash Dividend”) in accordance with the terms of the Merger Agreement. At the Partnership Merger Effective Time, each Partnership Unit owned by the Company or
any of its subsidiaries immediately prior to the Partnership Merger Effective Time remained outstanding as a Partnership Unit of the Partnership held by the Company or the
relevant subsidiary.
As a result of the completion of the Merger, an aggregate of approximately 21% of the Partnership’s issued and outstanding limited partnership interests were directly owned by
Parent and certain of its affiliates (other than the Company) (the “Parent Partners”). Pursuant to a Distribution and Contribution Agreement, immediately following the
completion of the Merger, the Partnership redeemed all of such limited partnership units in exchange for the distribution (the “Redemption and Distribution”) to the Parent
Partners of certain subsidiaries of the Partnership which held assets comprised of 58 properties located in California, Washington and Virginia (the “Non-Core Portfolio”). As a
result of the Redemption and Distribution, the Company (directly or indirectly) owns 100% of the Partnership. Total consideration for the exchange was $1,295,217, which
represents the fair values as determined between us and our Parent Partners, a related party, on the transaction date. No gain or loss was recognized in connection with this
transaction. We accounted for this transaction as a non-cash equity distribution in the Consolidated Financial Statements.
Description of business
The Company is a real estate investment trust (“REIT”) that owns, operates, acquires and develops commercial properties, primarily multi-tenant industrial, industrial-flex and
low-rise suburban office space. As of December 31, 2022 and December 31, 2021, the Company owned 471 buildings and one land parcel in six states with 20,656,858 gross
leasable square feet and 666 buildings in six states with 27,716,719 gross leasable square feet, respectively.
References herein to the number of properties, buildings, apartment units or square footage are unaudited and outside the scope of the Company’s independent registered public
accounting firm’s review of the Company’s consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United
States).
46

Note 2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying Consolidated Financial Statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”) as established by the
Financial Accounting Standards Board (“FASB”) including modifications issued under Accounting Standards Updates (“ASUs”). In the opinion of management, all
adjustments (consisting of normal and recurring adjustments) necessary for a fair presentation have been included.
The Merger was accounted for as a business combination in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations. The total purchase price
was allocated to the net tangible and intangible assets acquired and liabilities assumed in connection with the Merger based on their estimated fair values at the time of the
transaction and the purchase price was pushed down to the Company’s Financial Statements. When using the push-down basis of accounting, the acquired Company’s separate
Financial Statements reflect the new accounting basis recorded by the acquiring company, and the assets acquired, and liabilities assumed are recorded at fair value through
adjustments to additional paid in capital at the acquisition date.
As a result of the business combination, the period ended on or prior to July 19, 2022, for which the Consolidated Statements of Operations, Equity and Cash Flows are
presented, is reported as the “Predecessor” period. The period from July 20, 2022 through December 31, 2022, for which the Company’s Consolidated Balance sheet,
Statements of Operations, Equity and Cash Flows are presented, is reported as the “Successor” period.
Costs related to the Merger have been expensed as incurred and classified within Merger costs in the Consolidated Statements of Operations, totaling $33,255 and $100,952 for
the period from July 20, 2022 through December 31, 2022 and the period from January 1, 2022 through July 19, 2022, respectively. The Company engaged a third-party
valuation firm to assist in determination of the fair values of tangible and intangible assets acquired.
Upon acquisition of a rental property that is accounted for as a business combination, the Company allocates the purchase price, of each acquired property based upon the fair
value of the individual assets acquired and liabilities assumed, which generally include tangible assets, consisting of land, building, building improvements, tenant
improvements, and identified intangible assets and liabilities, generally consisting of above-and below-market leases, in-place leases, and origination costs associated with in-
place leases. In estimating the fair value of tangible and intangible assets and liabilities acquired, the Company considers information obtained about the property during its due
diligence and marketing and leasing activities, and utilizes appropriate discount and capitalization rates, estimates of replacement costs net of depreciation, and available market
information. The values of above-and below-market leases are recorded to Prepaid expenses and other assets and Accounts payable, accrued expenses and other liabilities,
respectively, in the Consolidated Balance Sheets and are amortized as either a decrease (in the case of above-market leases) or an increase (in the case of below-market leases)
to rental revenue over the remaining term of the associated tenant lease. The values associated with in-place leases are recorded in Prepaid expenses and other assets in the
Consolidated Balance Sheets and are amortized to depreciation and amortization expense over the remaining lease term.
In a business combination, the initial allocation of the purchase price is considered preliminary and may change upon final determination of the fair values of the assets
acquired and liabilities assumed. The final determination must occur within one year of the acquisition date.
The Company performs the following procedures for properties it acquires:
•
Estimate the value of the property “as if vacant” as of the acquisition date;
•
Calculate the value and associated life of above and below market leases on a tenant-by-tenant basis. The difference between the contractual rental rates and the
Company’s estimate of market rental rates is measured over a period equal to the remaining term of the leases (using a discount rate which reflects the risks associated
with the leases acquired);
•
Estimate the fair value of land acquired based upon relevant adjusted land sales comparable;
•
Estimate the fair value of the tenant improvements, legal expenses and leasing commissions incurred to obtain the leases and calculate the associated useful life for
each;
•
Estimate the intangible value of the in-place leases and their associated useful lives on a tenant-by-tenant basis;
•
Estimate the carrying values of other assets and liabilities approximate fair value due to their short term nature and credit risk;
•
Identify the fair value of assets to be sold within one year, and
47

•
Allocate the purchase consideration of each acquired property based upon the fair value of the individual assets acquired and liabilities assumed.
The following table is a summary of the fair value of assets acquired less liabilities assumed of the Company recognized in connection with the Merger:
July 20, 2022
Building
$
3,336,409 
Site improvements
177,159 
Land
1,921,093 
Tenant improvements
72,886 
Development in progress
150,977 
In-place lease intangibles
242,551 
Above market lease assets
7,888 
Below market lease liabilities
(172,109)
Other assets
146,194 
Acquired noncontrolling interest at fair value
(13,481)
Acquired preferred shares at fair value
(563,026)
Net assets acquired
$
5,306,541 
Funded by:
Total Blackstone contribution, net of parent partner loan distributed
$
(1,561,595)
Debt issued
(3,744,946)
Total consideration and merger contributions
$
(5,306,541)
____________________________
¹ Includes $143,111 of working capital contributed by our Parent.
During the period ended December 31, 2022, the Company finalized the purchase price allocation of the Merger. The finalized purchase price allocation is based on third-party
appraisals and additional information about facts and circumstances that existed at the Merger date.
Reclassifications
As a result of the Merger discussed in Note 1 — Description of Business and the election to apply pushdown accounting, the Company also aligned its accounting policies with
that of the Parent. Accordingly, certain prior year amounts in the consolidated financial statements have been reclassified to conform to the current year presentation. As of
December 31, 2021, the reclassifications represent changes to aggregation and presentation of financial information and resulted in zero changes to total assets and zero
changes to total liabilities. For the years ended December 31, 2021 and December 31, 2020, it resulted in $451 and $12 changes to total revenue, $315 and $524 changes in
total expenses, and $3,467 and $512 changes in total other income (expense), respectively. There was no change to net income as historically reported.
Principles of Consolidation
The Company’s policy is to consolidate all entities in which it owns more than 50% of the outstanding voting interest unless it does not control the entity. It is also the
Company’s policy to consolidate any variable interest entity (“VIE”) for which the Company is the primary beneficiary, as defined by GAAP. The Company is deemed to be the
primary beneficiary when it has (i) the power to direct the activities that most significantly impact the economic performance of the entity, and (ii) the obligation (or right) to
absorb losses (or receive benefits) of the entity that could potentially be significant.
Investments in entities in which the Company does not control but which it has the ability to exercise significant influence over operating and financial policies are presented
under the equity method. Investments in entities that the Company does not control and over which it does not exercise significant influence are carried at the lower of cost or
fair value, as appropriate. The Company’s ability to correctly assess control over an entity affects the presentation of these investments in the Consolidated
1
48

Financial Statements. The portions of consolidated entities not owned by the Company are presented as noncontrolling interests as of and during the periods presented. All
intercompany transactions and balances have been eliminated.
Use of Estimates
The preparation of the Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenue and
expenses during the reporting period. Significant estimates, judgments and assumptions are required in a number of areas, including, but not limited to, evaluating the
impairment of long-lived assets and investments, allocating the purchase price of acquired properties, determining the fair value of debt and incentive compensation. These
estimates, judgments and assumptions are based on historical experience and various other factors that the Company believes to be reasonable under the circumstances. Actual
results may differ from those estimates.
Investments in Real Estate
Property and improvements, including interest and other costs capitalized during construction and development, are included in Investments in real estate, net and are stated at
cost. Property and improvements, excluding land, are depreciated over their estimated useful lives using the straight-line method. The estimated useful lives by asset category
are as follows:
Estimated useful life
Buildings
10-40 years
Building equipment and fixtures
5-10 years
Land and building improvements
10-15 years
Tenant improvements
Shorter of the asset's useful life or the noncancelable term of lease
Expenditures for ordinary repairs and maintenance are expensed as incurred. Renovations and improvements, which improve or extend the useful life of the assets, are
capitalized.
Capitalization of Costs
During the land development and construction periods of qualifying projects, the Company capitalizes interest costs, insurance, real estate taxes and general and administrative
costs of the personnel performing the development, renovation and rehabilitation if such costs are incremental and identifiable to a specific activity to ready the asset for its
intended use. The Company capitalizes transaction costs related to the acquisition of land for future development and operating properties that qualify as asset acquisitions. The
Company capitalizes incremental costs incurred to successfully originate a lease that result directly from obtaining a lease and would also not have been incurred if the lease
had not been obtained. In assessing the amount of direct and indirect costs to be capitalized, allocations are made based on estimates of the actual amount of time spent in each
activity. The Company does not capitalize any costs attributable to downtime or to unsuccessful projects.
Acquisition of Real Estate
In accordance with the guidance for business combinations, the Company determines whether a transaction or other event is a business combination, which requires that the
assets acquired and liabilities assumed constitute a business. If the assets acquired are not a business, the Company would account for the transaction or other event as an asset
acquisition. The Company’s acquisitions of investment properties are typically accounted for as asset acquisitions, as substantially all of the fair value of the gross assets
acquired is typically concentrated in a single identifiable asset or a group of similar identifiable assets. When acquisitions are treated as asset acquisitions, the related
transaction costs are capitalized.
Disposition of Real Estate
The Company assesses whether a property is considered held for sale based on the criteria in ASC 360 Property, Plant, and Equipment (“ASC 360”). The Company generally
classifies certain properties and related assets and liabilities as held for sale when the sale of an asset has been duly approved by management, a legally enforceable contract has
been executed and the buyer’s due diligence period, if any, has expired and a non-refundable deposit has been received. If a property is considered held for sale, a provision for
loss is recognized if the fair value of the property less the estimated cost to sell is less than its carrying amount. Depreciation and amortization expense cease once a property is
considered held for sale. As of December 31, 2022 and December 31, 2021, zero and 12 properties were classified as held for sale, respectively.
49

The Company’s sales of real estate are generally considered to be sales to non-customers, requiring the Company to identify each distinct non-financial asset promised to the
buyer. The Company determines whether the buyer obtains control of the non-financial assets, achieved through the transfer of the risks and rewards of ownership of the non-
financial assets.
The Company recognizes gains on the disposition of real estate when the recognition criteria have been met, generally at the time the risks and rewards and title have
transferred, and we no longer have substantial continuing involvement with the real estate sold. The Company recognizes gains or losses from the disposition of real estate
when known as Gain (loss) on sale of real estate, net in the Consolidated Statement of Operations.
Impairment of Long-Lived Assets
The Company periodically assesses whether there are any indicators that the value of its real estate may be impaired. When impairment indicators exist, the Company’s
properties are evaluated for impairment. A property’s value is considered impaired if the sum of expected future cash flows (on an undiscounted basis) over the anticipated
holding period is less than the property’s carrying value. Upon determination that an impairment exists, properties are reduced to their fair value.
The evaluation of future cash flows is highly subjective and is based in part on the Company’s assumptions regarding future occupancy, rental rates, capital requirements, and
holding periods. These assumptions could differ materially from actual results in future periods. Should circumstances change, and the Company shortens the expected holding
period for an asset or group of assets, an impairment loss may be recognized, and such loss could be material. During the periods presented, no impairment was recognized in
the Consolidated Financial Statements.
Impairment of Real Estate Assets Classified as Held for Sale
A property is classified as held for sale when all of the accounting criteria for a plan of sale have been met. Upon classification as held for sale, the Company recognizes an
impairment charge, if necessary, to lower the carrying amount of the real estate asset to its estimated fair value less cost to sell. The determination of fair value can involve
significant judgments and assumptions. The Company develops key assumptions based on the contractual sales price. If this information is not available, the Company uses
estimated replacement costs or estimated cash flow projections that utilize estimated discount and capitalization rates. These estimates are subject to uncertainty and therefore
require significant judgment by the Company. The Company reviews all assets held for sale each reporting period to determine whether the existing carrying amounts are fully
recoverable in comparison to their estimated fair values less costs to sell.
Deferred Leasing Costs
Deferred leasing costs consist primarily of costs incurred to execute new and renewal tenant leases, primarily costs paid to third parties. Deferred leasing costs are amortized on
a straight-line basis over the terms of the respective leases. The amortization of deferred leasing costs is included in the line item Depreciation and amortization in the
Consolidated Statement of Operations.
Deferred Financing Costs
The Company defers fees and direct costs incurred to obtain financing, which is reflected as a component of Debt, net within the accompanying Consolidated Balance Sheets.
Deferred financing costs are amortized to interest expense using the effective rate method, which approximates the effective interest method, over the term of the debt to which
they apply. Unamortized deferred financing costs are charged to interest expense when the related financing is repaid prior to its scheduled maturity date.
Revenue Recognition
The Company leases its operating properties to customers under agreements that are classified as operating leases. Rental revenue primarily consists of base rent arising from
tenant leases and tenant reimbursements of property operating expenses related to common area maintenance, real estate taxes, and other recoverable costs included in lease
agreements.
The Company begins to recognize revenue for leases that are assumed upon the acquisition of the related property or when a tenant takes possession of the leased space for a
new lease.
If a lease provides for tenant reimbursement of building operating expenses, the Company recognizes revenue associated with the recovery of those building operating expenses
as those expenses are incurred.
50

The Company records rental revenue on a straight-line basis as it is earned during the lease term. Certain leases provide for tenant occupancy during periods for which no rent
is due or where minimum rent payments change during the lease term. Accordingly, a receivable is recorded representing the difference between the straight-line rent and the
rent that is contractually due from the tenant over the contractual lease term. These amounts are classified as Tenant and other receivables in the Consolidated Balance Sheets.
When a property is acquired, the terms of existing leases are considered to commence as of the acquisition date for purposes of this calculation. As a result of the election of
pushdown accounting for the Merger, the Acquisition Date was used as commencement date for purposes of active leases that existed as of that date.
Noncontrolling Interests
Noncontrolling interests represent the share of consolidated entities owned by third parties. The Company recognizes each noncontrolling holder’s respective share of the
estimated fair value of the net assets at the date of formation or acquisition. Noncontrolling interests are subsequently adjusted for the noncontrolling holder’s share of
additional contributions, distributions and their share of the net earnings or losses of each respective consolidated entity. The Company allocates net income or loss to
noncontrolling interests based on the weighted average ownership interest during the period. The net income or loss that is not attributable to the Company is reflected in the
line item Net (income) loss attributable to noncontrolling interests within the Consolidated Statements of Operations. As of the Acquisition Date, noncontrolling interest was
stepped up to fair value as a result of pushdown accounting.
Tenant and Other Receivables
The Company provides for potentially uncollectible accounts on tenant and other receivables based on analysis of the risk of loss on specific accounts. The analysis places
particular emphasis on past due accounts and considers information such as the nature and age of the receivable, the payment history of the tenant or other debtor, the financial
condition of the tenant and the Company’s assessment of its ability to meet its lease obligations, the basis for any disputes, and the status of related lease negotiations.
The Company’s determination of the adequacy of its allowances for tenant receivables includes a binary assessment of whether or not the amounts due under a tenant’s lease
agreement are probable of collection. For such amounts that are deemed probable of collection, revenue continues to be recorded on a straight-line basis over the lease term. For
such amounts that are deemed not probable of collection, revenue is recorded as the lesser of (i) the amount which would be recognized on a straight-line basis or (ii) cash that
has been received from the tenant, with any tenant and deferred rent receivable balances charged as a direct write-off against rental income in the period of the change in the
collectability determination.
Cash and Cash Equivalents
Cash and cash equivalents represent cash held in banks, cash on hand, and liquid investments with maturities at date of purchase of three months or less.
Restricted Cash
Restricted cash primarily consists of reserves for certain capital improvements, leasing, interest and real estate tax and insurance payments as required by certain debt
obligations.
Income and Other Taxes
The Company has elected to be taxed as a REIT. This, along with the nature of the operations of its operating properties, resulted in no provision for federal income taxes at the
Company level. In addition, the Partnership generally is not liable for federal income taxes as the partners recognize their allocable share of income or loss in their tax returns;
therefore no provision for federal income taxes has been made at the Partnership level. The Company generally only incurs certain state and local income, excise and franchise
taxes. The Company has elected taxable REIT subsidiary (“TRS”) status for certain of its corporate subsidiaries and, as a result, these entities will incur both federal and state
income taxes on any taxable income of such entities after consideration of any net operating losses.
51

The Company accounts for deferred income taxes using the asset and liability method and recognizes deferred tax assets and liabilities for the expected future tax consequences
of events that have been included in the Company’s Consolidated Financial Statements or tax returns. Under this method, the Company determines deferred tax assets and
liabilities based on the differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are
expected to reverse. Any increase or decrease in the deferred tax liability that results from a change in circumstances, and that causes management to change its judgment about
expected future tax consequences of events, is included in the tax provision when such changes occur. Deferred income taxes also reflect the impact of operating loss and tax
credit carryforwards. A valuation allowance is provided if the Company believes it is more likely than not that all or some portion of the deferred tax asset will not be realized.
Any increase or decrease in the valuation allowance that results from a change in circumstances, and that causes management to change its judgment about the realizability of
the related deferred tax asset, is included in the tax provision when such changes occur.
The Company recognizes the tax benefit from an uncertain tax position claimed or expected to be claimed on a tax return only if it is more likely than not that the tax position
will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the Consolidated Financial Statements from
such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company recognizes interest
and penalties, if applicable, related to uncertain tax positions as part of income tax benefit or expense.
Derivatives and Hedging Activities
The Company buys or sells derivative financial instruments to limit exposure to changes in interest rates on variable rate debt. The Company does not use derivative
instruments for speculative or trading purposes. None of the Company’s interest rate caps or swaps are currently or have been designated as hedges for accounting purposes.
The Company’s derivative financial instruments are recorded at fair value and are recorded in the line items Prepaid expenses and other assets and Accounts payable, accrued
expenses and other liabilities in the Consolidated Balance Sheets.
Changes in the fair value of our derivative financial instruments are marked to market through earnings each quarter and are reflected in Interest expense in the Consolidated
Statements of Operations.
Notional principal amounts are used to express the volume of these transactions, but the cash requirements and amounts subject to credit risk are substantially less. Parties to
interest rate cap or swap agreements are subject to market risk for changes in interest rates and credit risk in the event of nonperformance by the counterparty. The Company
does not require any collateral under these agreements but deals only with highly rated institutional counterparties and expects that they will meet their obligations.
Fair Value Measurements
Various inputs are used in determining the fair value of derivative instruments presented in the Consolidated Financial Statements. The Company classifies the inputs as
follows:
Level 1—Quoted unadjusted prices for identical instruments in active markets to which the Company has access at the date of measurement.
Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations
in which all significant inputs and significant value drivers are observable in active markets. Level 2 inputs are those in markets for which there are few transactions, the prices
are not current, little public information exists or instances where prices vary substantially over time or among brokered market makers.
Level 3—Model derived valuations in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are those inputs that reflect the
Company’s own assumptions that market participants would use to price the asset or liability based on the best available information.
Fair Value Measurements on a Recurring Basis. The Company estimates the fair value of its financial instruments using available market information and valuation
methodologies management believes to be appropriate for these purposes. In connection with the Merger, the preferred stocks were valued using quoted market prices in active
markets (Level 1).
The fair value of the Company’s derivatives was determined by management, based on valuation information prepared by an independent third party. Their fair value model
incorporates credit risk and changes in credit risk to determine a credit valuation adjustment. This model is based on the applicable forward curve as a reflection of the market’s
current expectation of payments discounted at market factors. The Company classifies these valuations within the Level 2 fair value hierarchy.
52

Under interest rate cap agreements, the Company makes initial premium payments to the counterparties in exchange for the right to receive payments from them if interest rates
exceed specified levels during the agreement period. Notional principal amounts are used to express the volume of these transactions, but the cash requirements and amounts
subject to credit risk are substantially less. Parties to interest rate cap agreements are subject to market risk for changes in interest rates and credit risk in the event of
nonperformance by the counterparty. The Company does not require any collateral under these agreements but deals only with highly-rated institutional counterparties and
expects that they will meet their obligations.
The Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy. Although the credit valuation
adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its
counterparties, the Company assesses the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined
that the credit valuation adjustments are not significant to the overall valuation of its derivatives.
Fair Value Measurements on a Nonrecurring Basis. Assets measured at fair value on a nonrecurring basis generally consist of real estate assets and investments in
unconsolidated equity investments that were subject to impairment charges related to the Company’s change of intent to sell the investments and through its recoverability
analysis. The Company estimates fair value based on expected sales prices in the market (Level 2) or by applying the income approach methodology using a discounted cash
flow analysis (Level 3).
Acquired lease intangible assets: The Company estimated the fair value of its above-market and below-market in-place leases based on the present value (using a discount rate
that reflects the risk associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s
estimate of fair market lease rates for the corresponding in-place leases, measured over the remaining non-cancelable term of the leases. Any below-market renewal options are
also considered in the in-place lease values. This valuation methodology is based on Level 3 inputs in the fair value hierarchy.
In-place lease liabilities: The Company estimated the fair value of its in-place leases using independent and internal sources, which are methods similar to those used by
independent appraisers. Factors we consider in our analysis include an estimate of costs to execute similar leases including tenant improvements, leasing commissions and
foregone costs and rent received during the estimated lease-up period as if the space was vacant. This valuation methodology is based on Level 3 inputs in the fair value
hierarchy.
Fair Value of Financial Instruments. The Company estimates the fair value of its debt, net by discounting the future cash flows using rates and borrowing spreads currently
available to the Company (Level 3).
Segment Reporting
Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the chief operating decision
maker (“CODM”) in deciding how to allocate resources and in assessing performance. Under the provision of ASC 280, Segment Reporting, we have determined that we have
one reportable segment, which includes the acquisition, leasing, and ownership of logistics properties. There is an immaterial amount of non logistics properties that do not
meet the quantitative thresholds necessary to require reporting as a separate segment. The Company’s CODM assesses, measures, and reviews the operating financial results at
the consolidated level for the entire portfolio. Our CODM is the Chief Executive Officer.
53

Variable Interest Entities
The Company has equity interests in certain entities that primarily own and operate properties or hold land for development. The Company consolidates those entities that are
considered to be VIEs where the Company is the primary beneficiary. The Company (i) evaluates the sufficiency of the total equity investment at risk, (ii) reviews the voting
rights and decision- making authority of the equity investment holders as a group and whether there are limited partners (or similar owning entities) that lack substantive
participating or kick out rights, guaranteed returns, protection against losses, or capping of residual returns within the group and (iii) establishes whether activities within the
entities are on behalf of an investor with disproportionately few voting rights in making this VIE determination.
To the extent that the Company owns interests in a VIE and (i) has the power to direct the activities that most significantly impact the economic performance of the VIE and (ii)
has the obligation or rights to absorb losses or receive benefits that could potentially be significant to the VIE, then the Company would be determined to be the primary
beneficiary and would consolidate the VIE. At each reporting period, the Company re-assesses the conclusions as to which, if any, party within the VIE is considered the
primary beneficiary.
The Company has a 98.2% interest in Brentford at The Mile, a planned 411-unit multifamily apartment complex (the “Brentford Joint Venture”). An unrelated real estate
development company (the “JV Partner”) holds the remaining 1.8% interest. Based on management’s analysis of the joint venture and certain related agreements, the Company
determined Brentford Joint Venture is a VIE because (a) Brentford Joint Venture does not have sufficient equity at risk to finance its activities without additional subordinated
financial support from other parties, and (b) there are no substantive kick-out rights. The Company has also concluded it has control over the Brentford Joint Venture as it (a) is
the managing member of the Brentford Joint Venture, (b) has designated decision making power to direct the activities that most significantly affect the economic performance
of the Brentford Joint Venture, and (c) has a 98.2% economic interest in the investment. Thus, we determined that we are the primary beneficiary of Brentford Joint Venture.
The assets of the Brentford Joint Venture may only be used to settle obligations of the Brentford Joint Venture and the creditors of the Brentford Joint Venture have no recourse
to the general credit of the Company.
The following table presents a summary of financial data of the consolidated VIE included in the Company’s Consolidated Balance Sheets:
Successor
Predecessor
December 31, 2022
December 31, 2021
Investment
State
Company %
Interest
Total Assets
Total Liabilities
Total Assets
Total Liabilities
Brentford Joint Venture
VA
98.2 % $
162,695 
$
119,139 
$
76,206 
$
7,421 
Recent Accounting Pronouncements
The Company evaluated recently issued accounting standards or pronouncements and determined such standards or pronouncements are either not relevant to the Company or
not expected to have a material effect on the Company’s Consolidated Financial Statements.
Note 3. Investments in Real Estate
The following comprise the Company’s real estate investments:
Successor
Predecessor
December 31, 2022
December 31, 2021
Buildings and improvements
$
3,592,688 
$
2,341,257 
Land
1,921,093 
763,961 
Development in progress
181,230 
— 
Land held for development
— 
78,991 
Investments in real estate
5,695,011 
3,184,209 
Accumulated depreciation
(138,216)
(1,178,341)
Investments in real estate, net
$
5,556,795 
$
2,005,868 
54

Depreciation expense of investments in real estate was $141,027, $48,884, $90,176, and $93,265 for the period from July 20, 2022 through December 31, 2022, the period from
January 1, 2022 through July 19, 2022, the year ended December 31, 2021, and the year ended December 31, 2020, respectively.
We have a 95.0% interest in a joint venture that owns Highgate at The Mile, a 395-unit multifamily apartment complex located in Tysons, Virginia (“The Mile”). The remaining
5.0% interest in the joint venture is held by the JV Partner. We consolidate the joint venture that owns The Mile and as such, the consolidated real estate assets and activities
related to this joint venture are included in the table above. Refer to Note 2 — Summary of Significant Accounting Policies for VIE determination.
Acquisitions
The following table summarizes the Company’s acquisition activity:
Successor
Predecessor
Period from July 20,
2022 through December
31, 2022
Period from
January 1, 2022
through July 19,
2022
Year Ended
December 31, 2021
Year Ended
December 31, 2020
Operating properties acquired
— 
— 
8 
2 
Square feet
— 
— 
859,000 
320,000 
Total purchase price
$
— 
$
— 
$
148,868 
$
60,095 
The purchase price of the above acquisition, including the associated transaction costs, was allocated to the assets acquired and liabilities assumed based on their relative fair
values as of the acquisition date, and are summarized below:
Successor
Predecessor
2022 Acquisitions
2022 Acquisitions
2021 Acquisitions
2020 Acquisitions
Building
$
— 
$
— 
$
111,412 
$
24,868 
Site improvements
— 
— 
8,670 
1,075 
Land
— 
— 
22,591 
30,261 
Tenant improvements
— 
— 
3,629 
1,225 
Other
— 
— 
1,400 
2,590 
Allocated purchase price
$
— 
$
— 
$
147,702 
$
60,019 
Transaction costs of $—, $—, $370, and $446 were capitalized and included within the allocated purchase price for the period from July 20, 2022 through December 31, 2022,
the period from January 1, 2022 through July 19, 2022, the year ended December 31, 2021, and the year ended December 31, 2020, respectively.
55

Dispositions
The following table summarizes the Company’s dispositions:
Successor
Predecessor
Period from July 20,
2022 through December
31, 2022
Period from
January 1, 2022
through July 19,
2022
Year Ended
December 31, 2021
Year Ended
December 31, 2020
Number of buildings
168 
40 
22 
3 
Number of land parcels
— 
1 
— 
— 
Net proceeds
$
1,295,217 
$
236,362 
$
400,993 
$
40,711 
Gain on sale of real estate, net
$
— 
$
157,022 
$
359,875 
$
27,273 
____________________________
¹ For the Successor period from July 20, 2022 through December 31, 2022, the Non-Core Portfolio disposition was a non-cash transaction. For additional information, refer to Note 1 —
Description of Business and Note 14 — Supplemental Cash Flow Disclosures.
Development
The Company completed the construction and placed into service the following buildings:
Successor
Predecessor
Period from July 20,
2022 through December
31, 2022
Period from
January 1, 2022
through July 19,
2022
Year Ended
December 31, 2021
Year Ended
December 31, 2020
Buildings placed into service
— 
— 
1 
— 
Square feet
— 
— 
83,000 
— 
Total costs incurred
$
— 
$
— 
$
8,062 
$
— 
____________________________
¹ Total costs incurred represent the Company’s cumulative spend on development activity relating to the properties placed into service in the above periods, including any allocation of purchase
price resulting from acquisition of properties under development.
Assets and Liabilities Held for Sale
In the normal course of business, the Company identifies non-strategic assets for sale. The Company separately classifies properties held for sale in its Consolidated Financial
Statements. Real estate investments to be disposed of are reported at the lower of carrying amount or estimated fair value, less costs to sell. Once an asset is classified as held
for sale, depreciation and amortization expense is no longer recorded. Once a liability is classified as held for sale, amortization of below market leases is no longer recorded.
The following table is a summary of the assets and liabilities of the Company’s zero and 12 properties classified as held for sale as of December 31, 2022 and December 31,
2021, respectively:
Successor
Predecessor
December 31, 2022
December 31, 2021
Assets:
Investments in real estate, net
$
— 
$
33,607 
Prepaid expenses and other assets
— 
2 
Total assets held for sale
$
— 
$
33,609 
1
1
56

Note 4. Lease-Related Intangibles
The following is a summary of the Company’s intangible assets and liabilities as of December 31, 2022:
Successor
December 31, 2022
Intangible assets:
Lease-related intangibles, net:
In-place leases, net of accumulated amortization of $70,178
$
221,660 
Above market lease assets, net of accumulated amortization of $1,177
6,711
Total lease-related intangible assets, net
$
228,371 
Intangible liabilities:
Below market lease liabilities, net:
Below market lease liabilities, net of accumulated amortization of $21,376
$
149,883 
Total lease-related intangible liabilities, net
$
149,883 
________________________
 Included in Prepaid expenses and other assets in the Consolidated Balance Sheets.
 Included in Accounts payable, accrued expenses and other liabilities in the Consolidated Balance Sheets.
The following table summarizes the amortization of in-place leases:
Successor
Period from July 20, 2022
through December 31, 2022
In-place leases
$
84,405 
The following table summarizes the impact on revenue of the acquired above market leases and below market leases:
Successor
Period from July 20, 2022
through December 31, 2022
Above market leases
$
(1,177)
Below market leases
$
22,226 
The following table provides the weighted-average amortization period as of December 31, 2022 for intangible assets and liabilities and the projected amortization expense for
the next five years:
Weighted-average
amortization period
(years)
2023
2024
2025
2026
2027
Thereafter
In-place leases
2.6
$
107,651 
$
54,204 
$
27,290 
$
15,679 
$
7,212 
$
9,624 
Total to be included in depreciation and amortization expense
$
107,651 
$
54,204 
$
27,290 
$
15,679 
$
7,212 
$
9,624 
Above-market lease assets
3.3
$
2,576 
$
1,739 
$
1,083 
$
620 
$
288 
$
405 
Below-market lease liabilities
4.2
(45,803)
(33,630)
(22,013)
(14,710)
(11,812)
(21,915)
Total to be included in rental revenue
$
(43,227)
$
(31,891)
$
(20,930)
$
(14,090)
$
(11,524)
$
(21,510)
1
2
1
2
57

Note 5. Debt
Mortgage loans
In connection with the completion of the Merger, certain indirect subsidiaries of the Partnership and certain subsidiaries of Blackstone Real Estate Partners IX, L.P within the
Non-Core Portfolio (collectively, the “Loan A Mortgage Borrowers”) obtained a $2,733,620 mortgage loan (the “Loan A Mortgage Loan”) on July 20, 2022 from Bank of
America, N.A., Citi Real Estate Funding Inc., Barclays Capital Real Estate Inc., Morgan Stanley Bank, N.A., and Societe Generale Financial Corporation (together with its
successors and assigns, the “Loan A Lenders”), and certain other indirect subsidiaries of the Partnership and certain subsidiaries of Blackstone Real Estate Partners IX, L.P
within the Non-Core Portfolio (collectively, the “Loan B Mortgage Borrowers” and, together with the Loan A Mortgage Borrowers, the “Mortgage Borrowers”) obtained a
$1,960,000 mortgage loan with an additional $96,000 future funding option (the “Loan B Mortgage Loan” and, together with the Loan A Mortgage Loan, the “Mortgage
Loans”) on July 20, 2022 from Citibank, N.A., as administrative agent and the other lenders party thereto (together with the Loan B Lenders, the “Lenders”). On August 5,
2022, the Loan A Mortgage Loan was securitized as evidenced by that certain Offering Circular by BX Trust 2022-PSB, as the issuing entity, Bank of America Merrill Lynch
Large Loan, Inc., as depositor, and Bank of America, National Association, Barclays Capital Real Estate Inc., Citi Real Estate Funding Inc., Morgan Stanley Mortgage Capital
Holdings LLC and Societe Generale Financial Corporation, as mortgage loan sellers.
The Loan A Mortgage Loan is secured by first-priority, cross-collateralized mortgage liens on certain of the Company’s properties located in California, Florida, Maryland,
Texas, Washington and Virginia, as well as other properties comprising the Non-Core Portfolio that are owned by affiliated entities outside of the Company (the Non-Core
Affiliates”), all related personal property, reserves, a pledge of all income received by the Loan A Mortgage Borrowers with respect to such properties and a security interest in
a cash management account. The Loan B Mortgage Loan is secured by first-priority, cross-collateralized mortgage liens on certain of the Company’s properties located in
California, Florida, Texas, Washington and Virginia, as well as other properties comprising the Non-Core Portfolio that are owned by the Non-Core Affiliates, all related
personal property, reserves, a pledge of all income received by the Loan B Mortgage Borrowers with respect to such properties and a security interest in a cash management
account.
The Company and the Non-Core Affiliates are jointly and severally liable for the debt but are allocated debt and related interest based on allocated loan amounts. The Company
recorded the interest and principal obligation of its portion of the Mortgage Loans on its Consolidated Balance Sheets. The Company does not expect to pay interest and
principal on the portion of the Mortgage Loans allocated to the Non-Core Affiliates and therefore have not recorded any liability related to their share of the debt. Principal
balances relating to the Company’s allocated amount of these loans are further outlined in the table below. Transaction costs related to loan issuances have been capitalized,
deducted from the loan liabilities, and are amortized over the life of each respective loan. The Company used the proceeds from the Mortgage Loans, among other things, to (i)
fund the consideration for the Merger, (ii) pay for certain costs and expenses relating to (a) the transactions in connection with the Merger and incurred in connection with the
closing of the Mortgage Loans, and (b) the operation of the properties (including, without limitation, carrying costs with respect to the properties and funding working capital
requirements of the properties), (iii) establish reserves, including certain reserves required to be established under the terms of the Mortgage Loans, and (iv) other general
corporate purposes. General corporate purposes may include, but are not limited to, the repayment of other debt and selective development, redevelopment, or acquisition of
properties.
The Mortgage Loans are scheduled to mature on August 9, 2024, with an option for the Mortgage Borrowers to extend the initial term for three one-year extension terms,
subject to certain conditions.
In October 2022, the Brentford Joint Venture entered into an agreement to receive proceeds of a $110,000 borrowing obtained under a revolving credit facility established for
investment vehicles of Blackstone Real Estate Partners IX L.P., an affiliate, and certain parallel funds thereof, at an interest rate equal to secured overnight financing rate
(“SOFR”) plus 2.25%, The loan is collateralized by the real estate assets owned by the Brentford Joint Venture (and is cross-collateralized with other multifamily assets owned
by other investment vehicles of Blackstone Real Estate Partners IX L.P. and certain of its parallel funds joined to such facility) and has a maturity date of November 2024,
though it may be prepaid earlier. Subsequent to closing, the Brentford Joint Venture distributed the proceeds of the loan to the JV partner on a pro rata basis.
The Company’s debt includes various representations and warranties, as well as a series of financial and other covenants that the Company has to comply with in order to
borrow under them. The Company was in compliance with all representations and warranties, as well the covenants under the various debt facilities as of December 31, 2022
and December 31, 2021, as required and applicable.
58

The following table is a summary of the Company’s debt arrangements:
Outstanding Balance at
Interest Rate at
December 31, 2022¹
Maturity Date at
December 31, 2022²
Successor
Predecessor
December 31, 2022
December 31, 2021
Debt, variable
Floating rate mortgages
$
3,904,395 
$
— 
6.57% -8.33%
August 2024 - November
2024
Unsecured revolving line of credit
— 
32,000 
N/A
N/A
Unamortized debt issuance costs, net
(8,438)
— 
Unamortized discounts, net
(30,404)
— 
Total debt, net / Weighted average interest rate
$
3,865,553 
$
32,000 
7.59%
____________________________
 All rates presented reflect a blended SOFR for a 30 day period as stipulated by our debt agreements.
 At the Company’s option, the maturity for certain debt may be extended by one or multiple years, subject to certain restrictions.
 Interest rate based on one-month SOFR plus an applicable margin ranging from 2.25% to 3.99% based on amended agreements post closing. The Company uses derivative financial instruments
to limit the exposure to changes in interest rates on variable rate debt as further discussed in
Note 6 — Derivative Financial Instruments.
 As of December 31, 2021 the aggregate borrowing capacity on the line of credit was $400,000, and bore interest at a rate equal to London Inter-bank offered rate plus 0.70%. The line of credit
was terminated upon the completion of the Merger.
 The weighted average interest rate calculation does not include the amortization of debt issuance costs or debt discounts incurred in obtaining debt.
Scheduled principal payments due on our debt for 2023 and for each year through the period ended December 31, 2027, and thereafter were as follows at December 31, 2022:
Years ending December 31:
Principal¹
2023
$
— 
2024
3,904,395 
2025
— 
2026
— 
2027
— 
Thereafter
— 
Total debt
$
3,904,395 
____________________________
 Debt payment reflects repayment dates, when applicable, pursuant to related loan agreement. These dates do not reflect the extension of periods that are at the Company’s election, subject to
certain conditions.
3
4
5
1
2
3
4
5
1
59

Note 6. Derivative Financial Instruments
The Company uses derivative financial instruments to manage interest rate risk on its floating rate debt.
In connection with the mortgages obtained on the date of the Merger, as further described in Note 5 — Debt, the Company entered into interest rate derivative contracts to limit
its exposure of interest rate risk. The following is a summary of the Company’s derivative financial instruments:
Successor
Number of
Instruments
Balance at December 31, 2022
Notional Amounts
Asset
Liability
Strike
Maturity Date
Undesignated derivatives:
Interest rate caps - purchased
2
$
54,121 
$
— 
$
3,592,215 
3.85 %
August 2024
Interest rate cap - sold
1
— 
54,121 
$
3,592,215 
3.85 %
August 2024
Interest rate swap - purchased
1
83,607 
— 
$
3,592,215 
3.10 %
August 2024
Total fair value of derivatives
$
137,728 
$
54,121 
____________________________
 Included in Prepaid expenses and other assets in the Consolidated Balance Sheets.
 Included in Accounts payable, accrued expenses and other liabilities in the Consolidated Balance Sheets.
During the period from July 20, 2022 through December 31, 2022, the Company recognized a net gain on interest rate derivatives of $76,275. Gains and losses on interest rate
derivatives are recorded in the line item Interest expense in the Consolidated Statements of Operations.
There were no derivative instruments as of December 31, 2021 or for the period from January 1, 2022 through July 19, 2022.
Note 7. Fair Value Measurements
The Company did not have any transfers within the fair value hierarchy during the periods presented. The Company’s Level 3 inputs are model-derived valuations in which one
or more significant inputs or significant value drivers are unobservable. Unobservable inputs are those inputs that reflect the Company’s own assumptions that market
participants would use to price the asset or liability based on the best available information. In evaluating the fair value information, judgment is required to interpret the market
data used to develop the estimates. The estimates of fair value may not be indicative of the amounts that could be realized in a current market exchange. Accordingly, the use of
different market assumptions and/or different valuation techniques could result in materially different fair value estimates.
The carrying amounts of cash and cash equivalents, restricted cash, tenant and other receivables, prepaid expenses and other assets, accounts payable, accrued expenses and
other liabilities reasonably approximates fair value, in management’s judgment, because of their short-term nature.
1
2
1
2
60

Fair Value Measurements of Financial Instruments
The following table displays the carrying values and fair values of the Company’s financial instruments:
Successor
Predecessor
December 31, 2022
December 31, 2021
Carrying Value
Fair Value
Carrying Value
Fair Value
Financial assets:
Interest rate derivative assets
Level 2
$
137,728 
$
137,728 
$
— 
$
— 
Financial liabilities:
Interest rate derivative liability
Level 2
$
54,121 
$
54,121 
$
— 
$
— 
Debt, net
Level 3
$
3,865,553 
$
3,876,294 
$
32,000 
$
32,000 
____________________________
 Included within Prepaid expenses and other assets on the Consolidated Balance Sheets.
 The fair value of the Company’s derivatives were determined by management, based on valuation information prepared by an independent third party. This model incorporates credit risk and
changes in credit risk to determine a credit valuation adjustment. This model is based on the applicable forward SOFR curve as a reflection of the market’s current expectation of payments
discounted at market factors.
 Included within Accounts payable, accrued expenses and other liabilities on the Consolidated Balance Sheets.
 The carrying values of the debt are shown net of deferred financing costs of $38,842 and $— as of December 31, 2022 and December 31, 2021, respectively. The Company estimates the fair
value of its debt, net by discounting the future cash flows using rates and borrowing spreads currently available to the Company.
Fair Value Measurements on a Nonrecurring Basis
Assets measured at fair value on a nonrecurring basis generally consist of real estate acquired, investments in unconsolidated joint ventures, and assets the Company expects to
sell that were subject to impairment charges in connection with the Company’s change of intent to sell the investments and through its recoverability analysis. Refer to Note 2
— Summary of Significant Accounting Policies for more information regarding the fair value measurement of the assets acquired and liabilities assumed in connection with the
Merger. The Company estimates fair value based on expected sales prices in the market (Level 2) or by applying the income approach methodology using a discounted cash
flow analysis (Level 3). During the periods presented, the Company did not record any impairment losses.
Note 8. Lease Agreements
The Company’s rental revenue primarily consists of rent earned from operating leases at the Company’s real estate properties. Leases generally include both a fixed base rent
and variable component. The variable component of the leases primarily consists of the reimbursement of operating expenses such as real estate taxes, insurance, management
fees, and common area maintenance costs. Leases are generally shorter term and may contain extension and termination options at the lessee’s election.
The following table details the components of operating lease income from leases in which the Company is the lessor:
Successor
Predecessor
Period from July 20, 2022
through December 31,
2022
Period from January 1, 2022
through July 19, 2022
Year Ended December
31, 2021
Year Ended December
31, 2020
Fixed lease payments
$
133,435 
$
184,011 
$
331,179 
$
316,808 
Variable lease payments
40,790 
62,164 
107,975 
98,827 
Rental revenue
$
174,225 
$
246,175 
$
439,154 
$
415,635 
1, 2
2, 3
4
1
2
3
4
61

The following table presents the future minimum rents the Company expects to receive for their properties for each year through the period ended December 31, 2027, and
thereafter:
2023
$
204,806 
2024
154,568 
2025
103,645 
2026
69,247 
2027
38,567 
Thereafter
50,578 
Total
$
621,411 
No significant tenant concentrations existed at December 31, 2022.
Note 9. Related Party Transactions
Master Services Agreement
On July 20, 2022, the Company entered into a Master Services Agreement with Link Logistics Real Estate Holdco LLC (together with its subsidiaries, “Link”), a portfolio
company owned by Blackstone-advised investment vehicles, to provide, as applicable, corporate support services (including, without limitation, accounting, legal, tax, treasury,
valuation services, information technology and data management), loan management, management services, operational services, property management services, and
transaction support services to the Company. During the period from July 20, 2022 through December 31, 2022, total fees of $5,446, were recognized in the line item General
and administrative in the Consolidated Statements of Operations. During the period from July 20, 2022 through December 31, 2022, total fees of $4,132 were recognized in the
line item Property operating expenses in the Consolidated Statements of Operations. As of December 31, 2022, the Company had $4,267 due to Link recorded in the line item
Due to affiliates in the Consolidated Balance Sheets and $666 due from Link recorded in the line item Due from affiliates in the Consolidated Balance Sheets. The current term
of the Master Services Agreement extends to December 31, 2023, and may be renewed for additional one-year terms thereafter; provided, however, that the Master Services
Agreement may be terminated at any time upon prior written notice by either Link or the Company.
During the period from July 20, 2022 through December 31, 2022, the Company incurred expenses in connection with the Merger totaling $15,788, for services rendered by
Link. Such expenses are recorded in the line item Merger costs in the Consolidated Statements of Operations.
Parent Partners Loans
In connection with the closing of the Merger, in lieu of distributing all of the proceeds from the Mortgage Loans to fund the consideration for the Merger, certain amounts were
loaned to the Parent Partners (the “Parent Partners Loans”). The Parent Partners Loans are evidenced by promissory notes, bear interest at 4.16% per annum and mature in July
2027. The aggregate principal amount of the Parent Partners Loans is $1,285,575, and is recorded within Accumulated earnings (deficit) on the Consolidated Balance Sheets.
The amount of interest due to the Company as of December 31, 2022 related to the Parent Partner Loans is $1,275.
62

Other
Gryphon Mutual Insurance Company (“GMUC”), an affiliate of the Company, is a captive insurance company that began providing insurance coverage to the Company in July
2022. During the period from July 20, 2022 through December 31, 2022, the Company incurred $2,314 for insurance premiums recognized in Property operating expenses in
the Consolidated Statements of Operations. The fees paid are in place of insurance premiums and fees that would otherwise be paid to third party insurance companies, and are
equivalent or less than the rate third-party insurance companies would charge for such services. There were $— amounts payable to GMUC as of December 31, 2022.
Simply Storage Management, LLC (“Simply Storage”), an affiliate of the Company, is a management company that began providing management services to the Company in
October 2022. During the period from July 20, 2022 through December 31, 2022, the Company incurred $19 for management fees recognized in the line item Property
operating expenses in the Consolidated Statements of Operations.
In October 2022, the Brentford Joint Venture entered into an agreement with Blackstone Real Estate Partners IX, L.P, an affiliate, to borrow $110,000. Refer to Note 5 — Debt
for additional details.
Note 10. Stockholders' Equity
Preferred stock
On July 21, 2022, the Company issued 125 shares of preferred stock, par value $0.01 per share, designated as the 12% Series A Redeemable Preferred Stock (the “Series A
Preferred Stock”), for an aggregate cash amount of $500. The issuance of the Series A Preferred Stock was made in a private placement in reliance on Section 4(a)(2) of the
Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
As of December 31, 2022 and December 31, 2021, the Company had the following series of preferred stock outstanding:
Predecessor
Successor
Series
Issuance Date
Earliest Potential
Redemption Date
Dividend Rate
Shares outstanding as of
December 31, 2021
Activity
Shares Outstanding as of
December 31, 2022
Series X
September 2017
September 2022
5.250 %
9,200 
(5,953)
3,247 
Series Y
December 2017
December 2022
5.200 %
8,000 
(5,757)
2,243 
Series Z
November 2019
November 2024
4.875 %
13,000 
(9,729)
3,271 
Series A
July 2022
N/A
12.000 %
— 
125 
125 
Total
30,200 
(21,314)
8,886 
____________________________
 Refer to Note 15 — Subsequent Events.
 The Company, at its option, may redeem shares of the Series A Preferred Stock, by resolutions of the Board, in whole or in part, at any time or from time to time, for cash at a redemption price
equal to $4,000 per share plus an amount equal to all accrued and unpaid dividends thereon to and including the date fixed for redemption. The redemption is within the Company’s control, and
thus the preferred equity arrangements are classified as permanent equity in the Consolidated Financial Statements. The preferred stock was issued in 2022 and therefore the balance as of
December 31, 2021 was $—.
On November 22, 2022, the Company commenced offers (the “Offers”) to purchase for cash any and all outstanding Series X Preferred Shares, at $15.29 per share, Series Y
Preferred Shares, at $15.33 per share, and Series Z Preferred Shares, at $14.34 per share. The Company accepted for purchase 5,953,898 Series X Preferred Shares, 5,756,691
Series Y Preferred Shares and 9,728,688 Series Z Preferred Shares (the shares repurchased being Depository shares each representing 1/1000 of a Share of the respective
Preferred Share counts included in the above table detailing preferred stock activity). The offers were completed on December 23, 2022 and the Preferred Shares purchased
were cancelled by the Company. As a result of the Preferred Shares repurchase, we recorded a gain of $76,459, recorded in the line item Preferred securities redemption in the
Consolidated Statements of Operations, representing the Preferred Shares carrying value of $399,174 less the Preferred Shares offer price of $318,795 and transaction costs of
$3,920.
On November 2, 2022, the board of directors of the Company (the “Board of Directors”) authorized a quarterly dividend on each series of the Company’s preferred stock
underlying the Preferred Shares payable on December 31, 2022 (the “December Dividend”) to holders of record of such underlying preferred stock at the close of business on
December 15, 2022 for distribution to the holders of the Preferred Shares. All holders of the Preferred Shares at the close of business on the December 15, 2022
1
1
1
2
2
1
2
63

record date received the December Dividend for the applicable series of Preferred Shares regardless of whether they participated in the Offers since the December 15, 2022
record date occurred prior to the consummation of the Offers.
As market conditions warrant, we and our majority equity holders, Blackstone and its affiliates, may from time to time seek to repurchase the remaining outstanding Preferred
Shares in open market or privately negotiated purchases, by tender offer or otherwise or to redeem our preferred stock pursuant to the terms of their respective governing
documents. The size of such repurchases may be material and may impact the liquidity and trading price of such preferred stock.
The Company paid $19,186, $19,160, $46,624, and $48,186 in distributions to its preferred stockholders for the period from July 20, 2022 through December 31, 2022, the
period from January 1, 2022 through July 19, 2022, the year ended December 31, 2021, and the year ended December 31, 2020, respectively.
The holders of the Company’s preferred stock have general preference rights with respect to liquidation, quarterly distributions and any accumulated unpaid distributions.
Holders of the Company’s preferred stock will not be entitled to vote on most matters, except under certain conditions. In the event of a cumulative arrearage equal to six
quarterly dividends, the holders of the Company’s preferred stock will have the right to elect two additional members to serve on the Company’s Board of Directors (the
“Board”) until all events of default have been cured. At December 31, 2022, there were no dividends in arrears.
Except under certain conditions relating to the Company’s qualification as a REIT, the Company’s preferred stock is not redeemable prior to the redemption dates noted above.
On or after the respective redemption dates, the respective series of preferred stock will be redeemable, at the option of the Company, in whole or in part, at $25.00 per
depositary share, plus any accrued and unpaid dividends. The redemption is within the Company’s control, and thus the preferred equity arrangements are classified as
permanent equity in the Consolidated Financial Statements.
Pursuant to the terms and conditions of the Merger Agreement, at the effective time of the Merger (the “Company Merger Effective Time”), each share of the 5.250% Series X
Cumulative Preferred Stock of the Company, par value $0.01 per share, 5.200% Series Y Cumulative Preferred Stock of the Company, par value $0.01 per share, and 4.875%
Series Z Cumulative Preferred Stock of the Company, par value $0.01 per share (collectively, the “Existing Preferred Stock”), issued and outstanding immediately prior to the
Company Merger Effective Time and each depositary share issued pursuant to the deposit agreements for the Existing Preferred Stock, representing one-thousandth of one
share of Existing Preferred Stock issued and outstanding immediately prior to the Company Merger Effective Time, was unaffected by the Merger and remained outstanding in
accordance with their respective terms.
Common stock and units
The following table summarizes the Company’s distributions to common stockholders and common unit holders:
Successor
Predecessor
Period from July 20,
2022 through December
31, 2022
Period from
January 1, 2022
through July 19,
2022
Year Ended
December 31, 2021
Year Ended
December 31, 2020
Distributions to common stockholders
$
112,379 
$
209,079 
$
242,595 
$
115,396 
Distributions to common unit holders
$
— 
$
55,358 
$
64,364 
$
30,823 
Pursuant to the terms and conditions of the Merger Agreement, at Company Merger Effective Time, each share of common stock of the Company, par value $0.01 per share
(“Common Stock”), issued and outstanding immediately prior to the Company Merger Effective Time was automatically converted into the right to receive an amount in cash
equal to $182.25 per share, without interest and less any applicable withholding taxes, representing $187.50 per share of Common Stock as reduced by the $5.25 per share
Closing Cash Dividend.
64

The following table summarizes the Company’s distribution taxability to preferred stockholders and common stockholders (unaudited):
Successor
Predecessor
Period from July 20, 2022
through December 31,
2022
Period from January 1,
2022 through July 19,
2022
Year Ended December 31,
2021
Year Ended December 31,
2020
Common
Portion of distributions classified as ordinary income
28.1 %
33.2 %
35.0 %
100.0 %
Portion of distributions classified as long-term capital gain
income
— %
55.4 %
65.0 %
— %
Portion of distributions classified as nondividend distributions
71.9 %
11.4 %
— %
— %
Preferred - Series X, Y, Z
Portion of distributions classified as ordinary income
47.8 %
47.8 %
35.0 %
100.0 %
Portion of distributions classified as long-term capital gain
income
52.2 %
52.2 %
65.0 %
— %
Preferred - Series A
Portion of distributions classified as ordinary income
100.0 %
— %
— %
— %
Note 11. Incentive Compensation
Prior to the Merger, under various share-based compensation plans, PSB granted non-qualified options to purchase the Company’s common stock at a price not less than fair
value on the date of grant, as well as RSUs, to certain directors, officers and key employees.
Prior to the Merger, we amortized the fair value of awards starting at the beginning of the service period as compensation expense. For awards that are earned solely upon the
passage of time and continued service, the entire cost of the award was amortized on a straight-line basis over the service period. For awards with performance conditions, the
individual cost of each vesting was amortized separately over each individual service period (the “accelerated attribution” method). We accounted for forfeitures of share-based
payments as they occurred by reversing previously amortized share-based compensation expense with respect to unvested grants that were forfeited in the period the employee
terminates employment.
Pursuant to the terms and conditions of the Merger Agreement, at or immediately prior to, as applicable, the Company Merger Effective Time, each 2022 Equity Incentive Plan
award approved under the Company’s 2022 Equity Incentive Plan Awards Program was cancelled in exchange for a specific cash payment, less any applicable withholding
taxes.
In connection with the separation agreement with our former President and Chief Executive Officer (“CEO”), who stepped down from his positions with the Company for
health reasons effective March 23, 2022, the Company paid a lump sum payment of $6,643 in exchange for 41,186 restricted stock units owned by the former CEO, which
represents the market value of the Company common stock underlying such units as of March 18, 2022.
In connection with the appointment of our President and Chief Executive Officer (“CEO”) effective April 5, 2021, the Company granted a one-time RSU sign-on award with a
grant date fair value of $3,695 and a retention RSU award with a grant date fair value of $2,889. These RSUs were set to vest ratably over five years.
Prior to the Merger, effective September 1, 2020, Maria Hawthorne retired from her role as President and CEO and continued to serve as a director of the Company until July
2022. Due to Ms. Hawthorne’s continued service as a director of the Company, her unvested stock options and restricted stock units continued to vest on their original vesting
schedule in accordance with the Company’s 2012 Equity and Performance-Based Incentive Compensation Plan and related award agreements. For financial reporting purposes,
the end of the service periods for these stock option and restricted stock unit grants have changed from the various respective vesting dates to September 1, 2020, the date of her
retirement as President and CEO. Accordingly, all remaining stock compensation expense for Ms. Hawthorne, which totaled $1,738, was amortized, and included in general and
administrative expense during the year ended December 31, 2020.
65

Stock Options
Pursuant to the terms and conditions of the Merger Agreement, at or immediately prior to, as applicable, the Company Merger Effective Time, each stock option to purchase
shares of Common Stock (each, a “Company Option”) outstanding immediately prior to the Company Merger Effective Time was automatically cancelled in exchange for a
cash payment in an amount in cash equal to (1) the number of shares of Common Stock subject to the Company Option immediately prior to the Company Merger Effective
Time multiplied by (2) the excess of the Per Company Share Merger Consideration over the per share exercise price applicable to the Company Option, less any applicable
withholding taxes.
Stock options expire 10.0 years after the grant date and the exercise price is equal to the closing trading price of our common stock on the grant date. Stock option holders
cannot require the Company to settle their award in cash. We use the Black-Scholes option valuation model to estimate the fair value of our stock options on the date of grant.
Successor
Predecessor
Period from July 20, 2022
through December 31,
2022
Period from
January 1, 2022
through July 19,
2022
Year Ended
December 31, 2021
Year Ended
December 31, 2020
Stock option expense for the year
$
—
$
229
$
712
$
412
Aggregate exercise date intrinsic value of options exercised during the year
$
—
$
2,311
$
4,559
$
305
Average assumptions used in valuing options with the Black-Scholes method:
Expected life of options in years, based upon historical experience
0
0
5
5
Risk-free interest rate
— %
— %
0.8 %
0.4 %
Expected volatility, based upon historical volatility
— %
— %
15.4 %
22.3 %
Expected dividend yield
— %
— %
2.6 %
3.3 %
Average estimated value of options granted during the year
$
—
$
—
$
14.40
$
15.27
We declared a one-time special cash dividend of $4.60 per share (the “Special Cash Dividend”) along with the fourth quarter regular dividend of $1.05 per share for the three
months ended December 31, 2021. The Special Cash Dividend was declared to distribute a portion of the excess income attributable to gains on sales from asset dispositions
during the year ended December 31, 2021.
As of December 31, 2022, there was zero unamortized compensation expense related to stock options expected to be recognized over a weighted average period of 0.0 years.
Included in 2021 compensation expense related to stock options was $102 of expense resulting from modifications made to outstanding stock options because of the Special
Cash Dividend paid during the year ended December 31, 2021.
In connection with the Special Cash Dividend, the number of options and exercise prices of all outstanding options were adjusted pursuant to the anti-dilution provisions of the
applicable plans so that the option holders would be neither advantaged nor disadvantaged because of the Special Cash Dividend.
Cash received from 27,403 options exercised during the period from January 1, 2022 through July 19, 2022 was $2,101. Cash received from 55,546 stock options exercised
during the year ended December 31, 2021 was $5,012. Cash received from 4,136 stock options exercised during the year ended December 31, 2020 was $258.
66

Information with respect to stock options during 2022, 2021, and 2020 is as follows:
Options
Number of Options
Weighted Average Exercise
Price
Weighted Average
Remaining Contract Life
Aggregate Intrinsic
Value
Outstanding at December 31, 2019 - Predecessor
157,830 
$
104.92 
Granted
18,000 
$
127.22 
Exercised
(4,136)
$
(62.69)
Forfeited
— 
$
— 
Outstanding at December 31, 2020 - Predecessor
171,694 
$
108.29 
Granted
38,000 
$
162.63 
Exercised
(55,546)
$
90.24 
Forfeited
— 
$
— 
Special cash dividend adjustment
5,422 
$
124.13 
Outstanding at December 31, 2021 - Predecessor
159,570 
$
123.87 
Granted
— 
$
— 
Exercised
(27,403)
$
76.76 
Forfeited
(132,167)
$
133.64 
Outstanding at July 19, 2022 - Predecessor
— 
$
— 
Granted
— 
$
— 
Exercised
— 
$
— 
Forfeited
— 
$
— 
Outstanding at December 31, 2022 - Successor
— 
$
— 
0.00 $
— 
Exercisable at December 31, 2022 - Successor
— 
$
— 
0.00 $
— 
____________________________
In accordance with the applicable equity award plan documents, the number and exercise price of outstanding options have been adjusted because of the Special Cash Dividend so that the option
holder maintains their economic position with respect to the stockholders.
Restricted Stock Units
RSUs granted prior to 2016 are subject to a six-year vesting, with 20% vesting after year two, and 20% vesting after each of the next four years. RSUs granted during and
subsequent to 2016 are subject to a five-year vesting at the rate of 20% per year or a three-year vesting at the rate of one-third per year. Grantees receive dividends for each
outstanding RSU equal to the per share dividend received by common stockholders, which are recorded in paid-in capital. We expense any dividends previously paid upon
forfeiture of the related RSU. Upon vesting, the grantee receives shares of common stock equal to the number of vested RSUs, less shares of common stock withheld in
exchange for tax withholdings made by the Company to satisfy the grantee’s statutory tax liabilities arising from the vesting. The fair value of our RSUs is determined based
upon the applicable closing trading price of our common stock on the date of grant.
In March 2020, the Compensation Committee of the Board approved an annual performance-based equity incentive program (“Annual Equity Incentive Program”) under the
Company’s 2012 Equity and Performance-Based Incentive Compensation Plan. Under the program, certain employees will be eligible on an annual basis to receive RSUs based
on the Company’s achievement of pre-established targets for (i) growth in net asset value per share, and (ii) stockholder value creation, each as computed pursuant to the terms
of the Annual Equity Incentive Program. In the event the pre-established targets are achieved, eligible employees will receive the target award, except that the Compensation
Committee of the Board may adjust the actual award to 75%-125% of the target award based on the its assessment of whether certain strategic and operational goals were
accomplished in the performance period. RSUs awarded under the Annual Equity Incentive Program for the 2021 performance year will be awarded on or around March 1,
2022 and will vest in five equal installments, with the first installment vesting on the award date. RSU holders will earn dividend equivalent rights during the vesting period.
1
1 
67

In connection with the Annual Equity Incentive Program for the 2021 performance year, targets for 2021 were achieved at the threshold total return level. As such, subsequent
to December 31, 2021, 25,140 restricted stock units were awarded with a March 1, 2021 grant date fair value of $3,617.
Pursuant to the terms and conditions of the Merger Agreement, at or immediately prior to, as applicable, the Company Merger Effective Time, each Company RSU award of
restricted stock units covering shares of Common Stock granted under a Company equity plan and each award of deferred stock units governed under the Company’s retirement
plan for non-employee directors that were outstanding immediately prior to the Company Merger Effective Time was cancelled in exchange for a cash payment in an amount in
cash equal to (1) the number of shares of Common Stock subject to the Company RSU Award immediately prior to the Company Merger Effective Time multiplied by (2) the
Per Company Share Merger Consideration, less any applicable withholding taxes.
In addition, each Company RSU Award and vested Company Deferred Stock Unit Award (as of July 19, 2022) was additionally entitled, pursuant to the terms of each award, to
a dividend equivalent payment in respect of the Pro Rata Dividend. Each holder of a Company RSU Award, Company Deferred Stock Unit Award and/or Company Option
received an aggregate payment with respect to such award inclusive of the aggregate Closing Cash Dividend that such holder would have received had such Company RSU
Award or Company Deferred Stock Unit Award been settled in Company Common Stock or Company Option been exercised, in each case, immediately prior to the close of
business on July 19, 2022.
Information with respect to RSUs during 2022, 2021, and 2020 is as follows:
Restricted Stock Units
Number of RSUs
Weighted Average Grant Date Fair
Value
Nonvested at December 31, 2019 - Predecessor
150,848 
$
15,425 
Granted
46,036 
5,562 
Vested
(73,256)
(6,991)
Forfeited
(2,120)
(290)
Nonvested at December 31, 2020 - Predecessor
121,508 
13,706 
Granted
76,266 
11,948 
Vested
(61,243)
(6,255)
Forfeited
(17,940)
(2,107)
Nonvested at December 31, 2021 - Predecessor
118,591 
17,292 
Granted
38,151 
5,807 
Vested
(22,209)
(3,003)
Forfeited
(134,533)
(20,096)
Nonvested at July 19, 2022 - Predecessor
— 
— 
Granted
— 
— 
Vested
— 
— 
Forfeited
— 
— 
Nonvested at December 31, 2022 - Successor
— 
$
— 
Of the 38,151 RSUs the Company granted during the period from January 1, 2022 through July 19, 2022, 2,874 were granted to our former Chief Financial Officer, 1,877 were
granted to our former Chief Accounting Officer and 23,263 RSUs in aggregate to our former Divisional Vice Presidents.
As of December 31, 2022, there was zero unamortized compensation expense related to RSUs expected to be recognized over a weighted average period of zero years.
68

Successor
Predecessor
Period from July 20, 2022
through December 31, 2022
Period from January 1, 2022
through July 19, 2022
Year Ended
December 31, 2021
Year Ended
December 31, 2020
Restricted stock unit expense
$
— 
$
3,106 
$
6,685 
$
4,475 
Shares of common stock issued upon vesting
— 
12,528 
35,714 
43,458 
Fair value of vested common stock on vesting date
$
— 
$
3,704 
$
9,474 
$
10,350 
Cash paid for taxes in lieu of shares of common stock withheld upon
vesting of RSUs
$
— 
$
1,318 
$
3,940 
$
4,216 
For the predecessor period, under the Retirement Plan for Non-Employee Directors (the “Director Retirement Plan”), the Company granted 1,000 shares of common stock for
each year served as a director up to a maximum of 10,000 shares issued upon retirement.
For the predecessor period from July 20, 2022 through December 31, 2022, period from July 1, 2022 through July 19, 2022, the year ended December 31, 2021, and the year
ended December 31, 2020, we recorded $—, $583, $1,098, and $761, respectively, in compensation expense related to the Director Retirement Plan shares.
In April 2021, we issued 10,000 shares of common stock to a director upon retirement with an aggregate fair value of $1,635. Compensation expense for these shares was
previously recognized. No director retirement shares were issued during the period from July 20, 2022 through December 31, 2022, the period from January 1, 2022 through
July 19, 2022, and the year ended December 31, 2020.
Note 12. Earnings per Share
The Company presents both basic and diluted earnings per share (“EPS”). Basic earnings per share is based on the weighted average number of shares of common shares
outstanding during the period. Diluted earnings per share is based on the weighted average number of shares outstanding combined with the incremental weighted average
effect from all outstanding potentially dilutive instruments.
The computation of our basic and diluted earnings per share and unit were as follows:
Successor
Predecessor
Period from July 20,
2022 through December
31, 2022
Period from
January 1, 2022
through July 19,
2022
Year Ended
December 31, 2021
Year Ended
December 31, 2020
Net earnings (loss) attributable to common shareholders – basic
$
(175,018)
$
159,190 
$
553,029 
$
206,705 
Adjusted net earnings (loss) attributable to common shareholders – diluted
$
(117,451)
$
109,795 
$
393,088 
$
124,645 
Weighted average common shares outstanding – basic
27,619,484 
27,533,845 
27,474,920 
Incremental weighted average effect of equity awards
89,133 
101,743 
88,497 
Weighted average common shares outstanding – diluted
27,708,617 
27,635,588 
27,563,417 
Net earnings per share attributable to common shareholders:
Basic
$
3.98 
$
14.28 
$
4.54 
Diluted
$
3.96 
$
14.22 
$
4.52 
Note 13. Commitments and Contingencies
Funding Commitments — In conjunction with the terms of the leases with certain of our tenants, the Company has commitments for tenant improvements and leasing
commissions of $3,106 on our real estate properties owned at December 31, 2022.
69

Concentration of Credit Risk —The Company maintains its cash, cash equivalents and restricted cash at various high-quality financial institutions. The consolidated account
balances at each institution typically exceed Federal Deposit Insurance Corporation (“FDIC”) insurance coverage, and as a result, there is a concentration of credit risk related
to amounts on deposit in excess of FDIC insurance coverage. The Company believes this risk is not significant.
Environmental — As an owner of real estate, the Company is subject to various environmental laws of federal, state, and local governments. Compliance with existing
environmental laws has not had a material impact on the Company’s consolidated financial condition and results of operations. The Company has obtained various
environmental insurance policies to mitigate its exposure to environmental obligations. The Company cannot predict the impact of unforeseen environmental contingencies or
new or changed laws or regulations on its properties, properties that have been sold, or properties that may be acquired in the future.
Litigation — The Company is party to a variety of legal proceedings arising in the ordinary course of business. All of these matters, taken together, did not have a material
impact on the consolidated financial condition, results of operations, or of the Company.
Off-Balance Sheet Liabilities — The Company may be required under capital commitments or may choose to make additional capital contributions to certain of its
unconsolidated entities, representing its proportionate ownership interest, should additional capital contributions be necessary to fund development or acquisition costs,
repayment of debt or operational shortfalls.
Note 14. Supplemental Cash Flow Disclosures
The following table represents supplemental cash flow disclosures:
Successor
Predecessor
Period from July 20,
2022 through December
31, 2022
Period from
January 1, 2022
through July 19,
2022
Year Ended
December 31, 2021
Year Ended
December 31, 2020
Reconciliation to the Consolidated Balance Sheets
Cash and cash equivalents
$
51,608 
$
7,056 
$
27,074 
$
69,083 
Restricted cash
636 
1,088 
1,088 
1,088 
Total cash and cash equivalents and restricted cash
$
52,244 
$
8,144 
$
28,162 
$
70,171 
Supplemental disclosures of cash flow information:
Interest paid
$
95,078 
$
58 
$
— 
$
— 
Interest capitalized
$
1,893 
$
— 
$
— 
$
— 
Income taxes paid
$
28 
$
— 
$
— 
$
— 
Cash paid for operating lease liabilities
$
50 
$
— 
$
— 
$
— 
Supplemental disclosures of non-cash activities:
Accrued but not yet paid development and capital expenditures
$
(3,194)
$
(3,160)
$
(5,746)
$
(1,698)
Redemption of preferred shares
$
76,459 
$
— 
$
(6,434)
$
— 
Pushdown accounting opening balance sheet
$
5,306,541 
$
— 
$
— 
$
— 
Distribution of Non-Core Portfolio
$
1,295,217 
$
— 
$
— 
$
— 
In connection with the Merger, the Company applied pushdown accounting and the non-cash activity represents the fair value of assets acquired less liabilities assumed to
reflect the acquisition in accordance with ASC 805. Refer to Note 2 — Summary of Significant Accounting Policies for additional details.
70

Note 15. Subsequent Events
Management has evaluated events occurring subsequent to December 31, 2022. On January 3, 2023, the Company filed a Form 25 with the Commission to delist the Preferred
Shares. On January 13, 2023, the Preferred Shares ceased trading on the New York Stock Exchange and the Company filed a certification and notification of termination of
registration under Section 12(g) of the Exchange Act, on Form 15 with the Commission. The filing of the Form 15 immediately suspended the Company’s filing obligations
under Section 12(g) of the Exchange Act. No additional material subsequent events have occurred since December 31, 2022 that require recognition or disclosure in the
Company’s Consolidated Financial Statements.
71

PS Business Parks, Inc.
Schedule III — Real Estate and Accumulated Depreciation
As of December 31, 2022
(in thousands)
Initial Cost
Costs
Capitalized
Subsequent to
Acquisition, net
of Write-offs
Gross Carrying Amount at December 31, 2022
Property Address
Building
Count
Location (City,
State)
Encumbrances
Land
Building and
Improvements
Building and
Improvements
Land
Building and
Improvements
Total
Accumulated
Depreciation
Date Acquired/
Date of
Construction
Operating Properties
12112 Technology Blvd
1 
Austin, TX
 (d)
$
2,319 
$
5,702 
$
— 
$
2,319 
$
5,702 
$
8,021 
$
(306)
2022
12212 Technology Blvd
1 
Austin, TX
 (d)
2,919 
7,232 
— 
2,919 
7,232 
10,151 
(387)
2022
1807 Braker Ln
1 
Austin, TX
 (d)
4,069 
11,906 
369 
4,069 
12,275 
16,344 
(501)
2022
11209 Metric Blvd
1 
Austin, TX
 (d)
18,018 
8,540 
2 
18,018 
8,542 
26,560 
(383)
2022
12301 Technology Blvd
1 
Austin, TX
 (d)
1,256 
5,395 
— 
1,256 
5,395 
6,651 
(203)
2022
12303 Technology Blvd
1 
Austin, TX
 (d)
4,032 
13,758 
(16)
4,032 
13,742 
17,774 
(689)
2022
5555 N Lamar Blvd
7 
Austin, TX
 (d)
27,765 
13,709 
65 
27,765 
13,774 
41,539 
(959)
2022
4210 S. Industrial Dr
1 
Austin, TX
 (d)
2,590 
6,900 
50 
2,590 
6,950 
9,540 
(331)
2022
9120 Burnet Rd
1 
Austin, TX
 (d)
2,920 
3,304 
— 
2,920 
3,304 
6,224 
(94)
2022
9233 Waterford Centre Blvd
1 
Austin, TX
 (d)
1,683 
2,548 
4 
1,683 
2,552 
4,235 
(77)
2022
9229 Waterford Centre Blvd
1 
Austin, TX
 (d)
2,477 
11,045 
1 
2,477 
11,046 
13,523 
(332)
2022
12100 Technology Blvd
1 
Austin, TX
 (d)
1,958 
4,352 
— 
1,958 
4,352 
6,310 
(187)
2022
5555 N Lamar Blvd - Bldg.
B
2 
Austin, TX
 (d)
13,647 
7,457 
3 
13,647 
7,460 
21,107 
(403)
2022
3800 Drossett
1 
Austin, TX
 (d)
3,178 
12,032 
(3)
3,178 
12,029 
15,207 
(469)
2022
3900 Drossett
1 
Austin, TX
 (d)
1,405 
7,366 
— 
1,405 
7,366 
8,771 
(298)
2022
12201 Technology Blvd
1 
Austin, TX
 (d)
3,409 
12,114 
— 
3,409 
12,114 
15,523 
(634)
2022
2500 McHale Ct
1 
Austin, TX
 (d)
25,949 
4,148 
23 
25,949 
4,171 
30,120 
(136)
2022
12317 Technology Blvd
1 
Austin, TX
 (d)
10,164 
46,725 
(28)
10,164 
46,697 
56,861 
(2,118)
2022
2600 McHale Ct
1 
Austin, TX
 (d)
13,380 
5,138 
13 
13,380 
5,151 
18,531 
(235)
2022
2601 McHale Ct
1 
Austin, TX
 (d)
15,547 
1,777 
(102)
15,547 
1,675 
17,222 
(97)
2022
10505 Boyer Blvd
1 
Austin, TX
 (d)
2,014 
7,714 
6 
2,014 
7,720 
9,734 
(291)
2022
2020 Rutland Dr
1 
Austin, TX
 (d)
938 
14,090 
25 
938 
14,115 
15,053 
(550)
2022
2013 Centimeter Circle
1 
Austin, TX
 (d)
1,840 
9,938 
1 
1,840 
9,939 
11,779 
(389)
2022
2112 Rutland Dr
1 
Austin, TX
 (d)
2,143 
14,053 
21 
2,143 
14,074 
16,217 
(558)
2022
2105 Denton Dr
1 
Austin, TX
 (d)
1,068 
5,019 
— 
1,068 
5,019 
6,087 
(236)
2022
2111 Braker Ln
1 
Austin, TX
 (d)
2,835 
11,744 
74 
2,835 
11,818 
14,653 
(551)
2022
11110 Metric Blvd
1 
Austin, TX
 (d)
1,849 
6,972 
48 
1,849 
7,020 
8,869 
(331)
2022
2157-2191 Woodward St
1 
Austin, TX
 (d)
2,353 
10,776 
10 
2,353 
10,786 
13,139 
(322)
2022
4175 Freidrich Ln
1 
Austin, TX
 (d)
2,205 
11,028 
7 
2,205 
11,035 
13,240 
(332)
2022
4115 Freidrich Ln
1 
Austin, TX
 (d)
1,811 
5,585 
136 
1,811 
5,721 
7,532 
(178)
2022
4150 Freidrich Ln
1 
Austin, TX
 (d)
2,515 
10,771 
7 
2,515 
10,778 
13,293 
(304)
2022
72

PS Business Parks, Inc.
Schedule III — Real Estate and Accumulated Depreciation
As of December 31, 2022
(in thousands)
Initial Cost
Costs
Capitalized
Subsequent to
Acquisition,
net of Write-
offs
Gross Carrying Amount at December 31, 2022
Property Address
Building
Count
Location (City,
State)
Encumbrances
Land
Building and
Improvements
Building and
Improvements
Land
Building and
Improvements
Total
Accumulated
Depreciation
Date Acquired/
Date of
Construction
4020 S. Industrial Dr
1 
Austin, TX
 (d)
2,487 
8,700 
21 
2,487 
8,721 
11,208 
(226)
2022
6500 Virginia Manor Rd
5 
Beltsville, MD
 (d)
11,318 
28,880 
76 
11,318 
28,956 
40,274 
(912)
2022
10018 Spanish Isles
Boulevard
4 
Boca Raton, FL
 (d)
5,143 
30,460 
45 
5,143 
30,505 
35,648 
(1,041)
2022
10018 Spanish Isles
Boulevard
1 
Boca Raton, FL
 (d)
4,212 
1,148 
1 
4,212 
1,149 
5,361 
(45)
2022
6700 8th St
8 
Buena Park, CA
 (d)
43,216 
74,204 
111 
43,216 
74,315 
117,531 
(3,393)
2022
1313 Valwood Pkwy
2 
Carrollton, TX
 (d)
2,858 
8,211 
137 
2,858 
8,348 
11,206 
(427)
2022
1420 Valwood Pkwy Bldg. 1
2 
Carrollton, TX
 (d)
1,091 
3,242 
40 
1,091 
3,282 
4,373 
(156)
2022
1840 Hutton Dr
1 
Carrollton, TX
 (d)
966 
2,963 
79 
966 
3,042 
4,008 
(145)
2022
2081 Hutton Dr Bldg. 1
3 
Carrollton, TX
 (d)
1,471 
3,584 
(20)
1,471 
3,564 
5,035 
(208)
2022
1505 Luna Rd Bldg. 1
1 
Carrollton, TX
 (d)
902 
2,229 
1 
902 
2,230 
3,132 
(139)
2022
1505 Luna Rd Bldg. 2
1 
Carrollton, TX
 (d)
435 
891 
— 
435 
891 
1,326 
(25)
2022
1420 Valwood Pkwy Bldg. 2
1 
Carrollton, TX
 (d)
1,375 
6,311 
11 
1,375 
6,322 
7,697 
(192)
2022
20620 S. Leapwood Ave
5 
Carson, CA
 (d)
13,224 
8,040 
23 
13,224 
8,063 
21,287 
(410)
2022
14020 Bolsa Ln
11 
Cerritos, CA
 (d)
51,629 
63,569 
512 
51,629 
64,081 
115,710 
(2,925)
2022
125 Mason Circle
10 
Concord, CA
 (d)
28,615 
22,986 
578 
28,615 
23,564 
52,179 
(1,158)
2022
1880 Crown Dr
5 
Dallas, TX
 (d)
2,187 
8,966 
5 
2,187 
8,971 
11,158 
(450)
2022
2270 Springlake Rd
2 
Dallas, TX
 (d)
1,111 
6,521 
43 
1,111 
6,564 
7,675 
(291)
2022
1315-1401 Royal Ln
2 
Dallas, TX
 (d)
— 
8,366 
133 
— 
8,499 
8,499 
(540)
2022
1025 Royal Ln
1 
Dallas, TX
 (d)
— 
2,908 
9 
— 
2,917 
2,917 
(96)
2022
14934 Webb Chapel Rd
7 
Dallas, TX
 (d)
2,875 
15,112 
42 
2,875 
15,154 
18,029 
(517)
2022
12801 North Stemmons
Fwy - Bldg 7
6 
Dallas, TX
 (d)
2,857 
17,968 
14 
2,857 
17,982 
20,839 
(606)
2022
2901-2949 Bayview Dr
2 
Fremont, CA
 (d)
16,058 
21,724 
57 
16,058 
21,781 
37,839 
(644)
2022
41444-41458 Christy St
4 
Fremont, CA
 (d)
42,988 
45,375 
58 
42,988 
45,433 
88,421 
(1,575)
2022
45101-45169 Industrial Dr
1 
Fremont, CA
 (d)
25,304 
42,795 
— 
25,304 
42,795 
68,099 
(960)
2022
1720 Northwest Hwy - 1720
3 
Garland, TX
 (d)
694 
1,795 
(13)
694 
1,782 
2,476 
(99)
2022
755 Port America Place
2 
Grapevine, TX
 (d)
2,600 
18,279 
25 
2,600 
18,304 
20,904 
(384)
2022
755 Port America Place
2 
Grapevine, TX
 (d)
1,525 
14,699 
36 
1,525 
14,735 
16,260 
(354)
2022
755 Port America Place
3 
Grapevine, TX
 (d)
3,253 
29,570 
78 
3,253 
29,648 
32,901 
(763)
2022
755 Port America Place
2 
Grapevine, TX
 (d)
2,083 
13,063 
4 
2,083 
13,067 
15,150 
(325)
2022
755 Port America Place
2 
Grapevine, TX
 (d)
1,276 
11,479 
66 
1,276 
11,545 
12,821 
(293)
2022
755 Port America Place
2 
Grapevine, TX
 (d)
1,825 
10,421 
(3)
1,825 
10,418 
12,243 
(268)
2022
755 Port America Place
2 
Grapevine, TX
 (d)
2,117 
10,072 
2 
2,117 
10,074 
12,191 
(256)
2022
3832 Bay Center Pl
4 
Hayward, CA
 (d)
18,992 
17,321 
27 
18,992 
17,348 
36,340 
(680)
2022
73

PS Business Parks, Inc.
Schedule III — Real Estate and Accumulated Depreciation
As of December 31, 2022
(in thousands)
Initial Cost
Costs
Capitalized
Subsequent to
Acquisition,
net of Write-
offs
Gross Carrying Amount at December 31, 2022
Property Address
Building
Count
Location (City,
State)
Encumbrances
Land
Building and
Improvements
Building and
Improvements
Land
Building and
Improvements
Total
Accumulated
Depreciation
Date Acquired/
Date of
Construction
25531-25565 Whitesell St
2 
Hayward, CA
 (d)
16,097 
16,585 
152 
16,097 
16,737 
32,834 
(625)
2022
3875 Bay Center Pl
1 
Hayward, CA
 (d)
7,520 
13,326 
— 
7,520 
13,326 
20,846 
(601)
2022
21001-21005 Cabot Blvd
1 
Hayward, CA
 (d)
21,821 
45,129 
1 
21,821 
45,130 
66,951 
(2,036)
2022
26235-26269 Research Rd
1 
Hayward, CA
 (d)
10,584 
12,856 
37 
10,584 
12,893 
23,477 
(402)
2022
1495-1497 Zephyr Ave
8 
Hayward, CA
 (d)
65,373 
132,823 
138 
65,373 
132,961 
198,334 
(6,016)
2022
30750 Wiegman Rd
1 
Hayward, CA
 (d)
47,193 
78,858 
— 
47,193 
78,858 
126,051 
(2,304)
2022
2283/2289 Industrial Pkwy
West
13 
Hayward, CA
 (d)
43,725 
72,507 
16 
43,725 
72,523 
116,248 
(3,347)
2022
26250-26260 Eden Landing
Rd
5 
Hayward, CA
 (d)
19,213 
17,395 
145 
19,213 
17,540 
36,753 
(831)
2022
25005-25013 Viking St
16 
Hayward, CA
 (d)
35,477 
30,633 
497 
35,477 
31,130 
66,607 
(1,083)
2022
1236-1288 San Luis Obispo
Ave
3 
Hayward, CA
 (d)
22,152 
15,296 
15 
22,152 
15,311 
37,463 
(620)
2022
8480 Esters
1 
Irving, TX
 (d)
1,073 
13,402 
— 
1,073 
13,402 
14,475 
(214)
2022
8300 Esters Blvd
4 
Irving, TX
 (d)
6,575 
24,172 
(14)
6,575 
24,158 
30,733 
(752)
2022
7815 S. 208th St
4 
Kent, WA
 (d)
16,876 
100,083 
71 
16,876 
100,154 
117,030 
(4,577)
2022
20651 84th Ave South
4 
Kent, WA
 (d)
20,415 
99,115 
129 
20,415 
99,244 
119,659 
(4,504)
2022
22600-A Lambert St
16 
Lake Forest,
CA
 (d)
43,056 
50,895 
180 
43,056 
51,075 
94,131 
(2,470)
2022
7915 Jones Branch Drive
1 
McLean, VA
 (d)
19,802 
111,652 
(115)
19,802 
111,537 
131,339 
(1,266)
2022
15330 LBL Fwy
4 
Mesquite, TX
 (d)
1,873 
2,417 
192 
1,873 
2,609 
4,482 
(134)
2022
1400-1422 1444-1466 NW
82nd Ave
2 
Miami, FL
 (d)
11,718 
47,663 
25 
11,718 
47,688 
59,406 
(2,291)
2022
2273-2999 NW 82nd Ave
3 
Miami, FL
 (d)
17,887 
65,352 
(21)
17,887 
65,331 
83,218 
(2,081)
2022
8181 NW 14th St
1 
Miami, FL
 (d)
1,215 
1,007 
23 
1,215 
1,030 
2,245 
(37)
2022
8000 NW 25th St
1 
Miami, FL
 (d)
6,058 
9,294 
(58)
6,058 
9,236 
15,294 
(300)
2022
1300-1314 NW 78th Ave
4 
Miami, FL
 (d)
14,191 
60,616 
(35)
14,191 
60,581 
74,772 
(2,854)
2022
7950-7966 NW 14th St
4 
Miami, FL
 (d)
15,947 
51,199 
(57)
15,947 
51,142 
67,089 
(2,402)
2022
1552-1598 NW 82nd Ave
4 
Miami, FL
 (d)
15,027 
59,340 
100 
15,027 
59,440 
74,467 
(2,847)
2022
1501-1573 NW 82nd Ave
2 
Miami, FL
 (d)
19,966 
50,223 
52 
19,966 
50,275 
70,241 
(2,448)
2022
1700-1744 NW 82nd Ave
3 
Miami, FL
 (d)
13,794 
60,906 
24 
13,794 
60,930 
74,724 
(2,913)
2022
8236-8320 NW 14th St
2 
Miami, FL
 (d)
10,058 
48,031 
(8)
10,058 
48,023 
58,081 
(1,711)
2022
1900-1998 NW 82nd Ave
2 
Miami, FL
 (d)
12,899 
46,100 
298 
12,899 
46,398 
59,297 
(1,464)
2022
2001-2063 NW 79th Ave
3 
Miami, FL
 (d)
23,229 
82,949 
122 
23,229 
83,071 
106,300 
(2,694)
2022
1901-1927 NW 79th Ave
1 
Miami, FL
 (d)
4,891 
20,513 
10 
4,891 
20,523 
25,414 
(371)
2022
1751-1789 NW 79th Ave
1 
Miami, FL
 (d)
7,164 
27,679 
25 
7,164 
27,704 
34,868 
(1,284)
2022
1410 NW 79th Ave
3 
Miami, FL
 (d)
6,919 
22,739 
5 
6,919 
22,744 
29,663 
(1,099)
2022
1501-1579 NW 79th Ave
3 
Miami, FL
 (d)
15,257 
58,046 
67 
15,257 
58,113 
73,370 
(2,778)
2022
74

PS Business Parks, Inc.
Schedule III — Real Estate and Accumulated Depreciation
As of December 31, 2022
(in thousands)
Initial Cost
Costs
Capitalized
Subsequent to
Acquisition,
net of Write-
offs
Gross Carrying Amount at December 31, 2022
Property Address
Building
Count
Location (City,
State)
Encumbrances
Land
Building and
Improvements
Building and
Improvements
Land
Building and
Improvements
Total
Accumulated
Depreciation
Date Acquired/
Date of
Construction
1701-1739 NW 79th Ave
2 
Miami, FL
 (d)
8,300 
35,422 
127 
8,300 
35,549 
43,849 
(1,686)
2022
8200-8234 NW 14th St
1 
Miami, FL
 (d)
3,966 
13,075 
(36)
3,966 
13,039 
17,005 
(460)
2022
1425-1435 NW 79th Ave
4 
Miami, FL
 (d)
3,658 
11,033 
(4)
3,658 
11,029 
14,687 
(531)
2022
8100 NW 82nd Ave
1 
Miami, FL
 (d)
5,752 
16,896 
2 
5,752 
16,898 
22,650 
(417)
2022
7850 NW 25th St
1 
Miami, FL
 (d)
10,631 
16,170 
3 
10,631 
16,173 
26,804 
(335)
2022
2323 NW 82nd Ave
1 
Miami, FL
 (d)
7,204 
29,081 
(9)
7,204 
29,072 
36,276 
(1,844)
2022
1151-1181 Cadillac Ct
1 
Milpitas, CA
 (d)
5,626 
6,783 
2 
5,626 
6,785 
12,411 
(195)
2022
1123-1141 Cadillac Ct
1 
Milpitas, CA
 (d)
5,436 
4,700 
— 
5,436 
4,700 
10,136 
(133)
2022
901-931 Cadillac Ct
1 
Milpitas, CA
 (d)
15,798 
19,976 
2 
15,798 
19,978 
35,776 
(492)
2022
1850-1870 Milmont Dr
4 
Milpitas, CA
 (d)
36,198 
18,522 
77 
36,198 
18,599 
54,797 
(626)
2022
1021-1101 Cadillac Ct
1 
Milpitas, CA
 (d)
11,337 
21,379 
2 
11,337 
21,381 
32,718 
(504)
2022
2530 Corporate Pl
6 
Monterey Park,
CA
 (d)
31,301 
18,873 
32 
31,301 
18,905 
50,206 
(662)
2022
7303 Edgewater Dr
3 
Oakland, CA
 (d)
21,368 
39,266 
99 
21,368 
39,365 
60,733 
(1,793)
2022
1111 Jupiter Road
5 
Plano, TX
 (d)
2,888 
17,999 
69 
2,888 
18,068 
20,956 
(485)
2022
2553 Summit Ave
5 
Plano, TX
 (d)
3,893 
16,933 
(26)
3,893 
16,907 
20,800 
(428)
2022
4002-4014 148th Ave NE
9 
Redmond, WA
 (d)
33,460 
28,528 
141 
33,460 
28,669 
62,129 
(976)
2022
2501-2525 152nd Ave NE
3 
Redmond, WA
 (d)
25,512 
13,124 
103 
25,512 
13,227 
38,739 
(681)
2022
2425-2495 152nd Ave NE
1 
Redmond, WA
 (d)
12,947 
3,746 
5 
12,947 
3,751 
16,698 
(133)
2022
2407-2409 152nd Ave NE
1 
Redmond, WA
 (d)
7,764 
1,448 
3 
7,764 
1,451 
9,215 
(75)
2022
2675-2691 151st Pl NE
6 
Redmond, WA
 (d)
41,555 
19,421 
23 
41,555 
19,444 
60,999 
(677)
2022
1202 East Arapaho Dr
3 
Richardson, TX
 (d)
1,451 
4,916 
26 
1,451 
4,942 
6,393 
(311)
2022
801-899 Presidential Dr
1 
Richardson, TX
 (d)
530 
1,619 
3 
530 
1,622 
2,152 
(112)
2022
750 Presidential Dr
1 
Richardson, TX
 (d)
816 
2,114 
— 
816 
2,114 
2,930 
(100)
2022
700 Glenville Dr
2 
Richardson, TX
 (d)
614 
2,323 
— 
614 
2,323 
2,937 
(127)
2022
1300 East Arapaho Bldg.
100
3 
Richardson, TX
 (d)
1,129 
5,281 
(4)
1,129 
5,277 
6,406 
(193)
2022
860 Presidential Dr
1 
Richardson, TX
 (d)
422 
1,337 
— 
422 
1,337 
1,759 
(54)
2022
1231 Columbia Dr
3 
Richardson, TX
 (d)
1,455 
4,886 
3 
1,455 
4,889 
6,344 
(194)
2022
1303 Columbia Dr
4 
Richardson, TX
 (d)
1,688 
5,880 
14 
1,688 
5,894 
7,582 
(204)
2022
1231-1251 American Pkwy
1 
Richardson, TX
 (d)
410 
1,508 
(1)
410 
1,507 
1,917 
(68)
2022
100-1100 Business Pkwy -
1000
8 
Richardson, TX
 (d)
2,463 
7,056 
36 
2,463 
7,092 
9,555 
(251)
2022
9201 Corporate Blvd
1 
Rockville, MD
 (d)
3,735 
3,662 
72 
3,735 
3,734 
7,469 
(321)
2022
9210 Corporate Blvd
1 
Rockville, MD
 (d)
2,861 
9,166 
47 
2,861 
9,213 
12,074 
(565)
2022
9231 Corporate Blvd
1 
Rockville, MD
 (d)
3,767 
9,386 
30 
3,767 
9,416 
13,183 
(600)
2022
75

PS Business Parks, Inc.
Schedule III — Real Estate and Accumulated Depreciation
As of December 31, 2022
(in thousands)
Initial Cost
Costs
Capitalized
Subsequent to
Acquisition,
net of Write-
offs
Gross Carrying Amount at December 31, 2022
Property Address
Building
Count
Location (City,
State)
Encumbrances
Land
Building and
Improvements
Building and
Improvements
Land
Building and
Improvements
Total
Accumulated
Depreciation
Date Acquired/
Date of
Construction
11820 Parklawn Dr
1 
Rockville, MD
 (d)
939 
3,121 
26 
939 
3,147 
4,086 
(143)
2022
11821 Parklawn Dr
1 
Rockville, MD
 (d)
742 
568 
(29)
742 
539 
1,281 
(50)
2022
11900 Parklawn Dr
1 
Rockville, MD
 (d)
911 
1,369 
(1)
911 
1,368 
2,279 
(77)
2022
9200 Corporate Blvd
1 
Rockville, MD
 (d)
5,220 
6,243 
(14)
5,220 
6,229 
11,449 
(566)
2022
9211 Corporate Blvd
1 
Rockville, MD
 (d)
3,845 
7,658 
(92)
3,845 
7,566 
11,411 
(458)
2022
11800 - 11836 Coakley
Circle
2 
Rockville, MD
 (d)
1,621 
10,806 
32 
1,621 
10,838 
12,459 
(522)
2022
1710 Little Orchard
1 
San Jose, CA
 (d)
18,490 
58,334 
8 
18,490 
58,342 
76,832 
(1,679)
2022
2023-2035 O'Toole Ave
4 
San Jose, CA
 (d)
18,007 
26,248 
270 
18,007 
26,518 
44,525 
(1,257)
2022
1510-1518 Montague
Expressway
6 
San Jose, CA
 (d)
33,092 
78,859 
65 
33,092 
78,924 
112,016 
(3,579)
2022
1650 Las Plumas Ave
3 
San Jose, CA
 (d)
22,067 
42,760 
74 
22,067 
42,834 
64,901 
(1,337)
2022
1721 Rogers Ave
3 
San Jose, CA
 (d)
7,140 
11,989 
7 
7,140 
11,996 
19,136 
(573)
2022
828-848 Charcot Ave
8 
San Jose, CA
 (d)
19,491 
14,643 
23 
19,491 
14,666 
34,157 
(483)
2022
1431-1437 Doolittle Dr
4 
San Leandro,
CA
 (d)
12,212 
17,583 
10 
12,212 
17,593 
29,805 
(821)
2022
1650 S. Amphlett Blvd
8 
San Mateo, CA
 (d)
89,912 
23,124 
74 
89,912 
23,198 
113,110 
(969)
2022
1670 S. Amphlett Blvd
1 
San Mateo, CA
 (d)
1,412 
111 
(9)
1,412 
102 
1,514 
(14)
2022
3301 Leonard Ct
3 
Santa Clara, CA
 (d)
24,327 
58,785 
(295)
24,327 
58,490 
82,817 
(2,466)
2022
1025-1035 Walsh Ave
4 
Santa Clara, CA
 (d)
33,236 
99,459 
— 
33,236 
99,459 
132,695 
(1,997)
2022
2300-2308 Walsh Ave
11 
Santa Clara, CA
 (d)
37,957 
45,324 
20 
37,957 
45,344 
83,301 
(1,330)
2022
1811-11831 E. Florence Ave
1 
Santa Fe
Springs, CA
 (d)
42,654 
52,964 
4 
42,654 
52,968 
95,622 
(1,228)
2022
10510 Hathaway Dr
9 
Santa Fe
Springs, CA
 (d)
36,209 
43,110 
9 
36,209 
43,119 
79,328 
(1,077)
2022
2225 E 28th St
6 
Signal Hill, CA
 (d)
11,768 
7,222 
9 
11,768 
7,231 
18,999 
(364)
2022
2501 E 28th St
6 
Signal Hill, CA
 (d)
16,742 
11,886 
55 
16,742 
11,941 
28,683 
(603)
2022
1310-1320 Kifer Rd
4 
Sunnyvale, CA
 (d)
25,282 
90,035 
98 
25,282 
90,133 
115,415 
(4,065)
2022
2421 W. 205th St
5 
Torrance, CA
 (d)
45,348 
6,039 
63 
45,348 
6,102 
51,450 
(366)
2022
3111 Fortune Way
1 
Wellington, FL
 (d)
1,621 
2,589 
2 
1,621 
2,591 
4,212 
(86)
2022
3111 Fortune Way
8 
Wellington, FL
 (d)
15,101 
32,710 
45 
15,101 
32,755 
47,856 
(849)
2022
3111 Fortune Way
3 
Wellington, FL
 (d)
3,487 
6,818 
(1)
3,487 
6,817 
10,304 
(152)
2022
3111 Fortune Way
1 
Wellington, FL
 (d)
432 
796 
— 
432 
796 
1,228 
(12)
2022
3111 Fortune Way
2 
Wellington, FL
 (d)
440 
2,007 
— 
440 
2,007 
2,447 
(76)
2022
3111 Fortune Way
5 
Wellington, FL
 (d)
1,548 
2,301 
1 
1,548 
2,302 
3,850 
(44)
2022
76

PS Business Parks, Inc.
Schedule III — Real Estate and Accumulated Depreciation
As of December 31, 2022
(in thousands)
Initial Cost
Costs
Capitalized
Subsequent to
Acquisition,
net of Write-
offs
Gross Carrying Amount at December 31, 2022
Property Address
Building
Count
Location
(City, State)
Encumbrances
Land
Building and
Improvements
Building and
Improvements
Land
Building and
Improvements
Total
Accumulated
Depreciation
Date Acquired/
Date of
Construction
Development
10018 Spanish Isles
Boulevard
— 
Boca Raton, FL
206 
3,351 
1,044 
206 
4,395 
4,601 
— 
2022
84th Ave South
— 
Kent, WA
1,716 
10,688 
6,657 
1,716 
17,345 
19,061 
— 
2022
7920 Maitland Drive
— 
McLean, VA
20,558 
114,458 
22,552 
20,558 
137,010 
157,568 
— 
2022
Land Parcels
Gude Dr. E & Crabb
Branch Way
— 
Rockville, MD
 (d)
1,917 
— 
2 
1,917 
2 
1,919 
— 
2022
Total
$ 1,943,573 
$
3,714,958 
$
36,480 
$ 1,943,573 
$
3,751,438 
$
5,695,011 
$
(138,216)
77

PS Business Parks, Inc.
Schedule III — Real Estate and Accumulated Depreciation
As of December 31, 2022
(in thousands)
Schedule III - Footnotes
(a) The following table summarizes the activity of the Company’s real estate asset for the years ended December 31:
Successor
Predecessor
Period from July 20,
2022 through December
31, 2022
Period from
January 1, 2022
through July 19,
2022
Year Ended
December 31, 2021
Year Ended
December 31, 2020
Balance at beginning of period
$
— 
$
3,184,209 
$
3,163,787 
$
3,079,583 
Acquisitions of and improvements to properties and development activity
5,697,822 
72,190 
220,978 
89,143 
Reclassifications to held for sale
— 
89,889 
(89,889)
23,045 
Dispositions, write-offs and other
(2,811)
(205,214)
(110,667)
(27,984)
Balance at end of year
$
5,695,011 
$
3,141,074 
$
3,184,209 
$
3,163,787 
(b) The following table summarizes the activity of the Company’s accumulated depreciation for the years ended December 31:
Successor
Predecessor
Period from July 20,
2022 through December
31, 2022
Period from
January 1, 2022
through July 19,
2022
Year Ended
December 31, 2021
Year Ended
December 31, 2020
Balance at beginning of period
$
— 
$
(1,178,341)
$
(1,229,035)
$
(1,159,703)
Depreciation expense
(141,027)
(48,884)
(90,176)
(93,265)
Dispositions, write-offs and other
2,811 
114,894 
84,586 
35,476 
Reclassifications to held for sale
— 
(56,284)
56,284 
(11,543)
Balance at end of year
$
(138,216)
$
(1,168,615)
$
(1,178,341)
$
(1,229,035)
(c) Depreciation is computed based upon the following estimated lives (in years):
Buildings
10-40 years
Building equipment and fixtures
5-10 years
Land and building improvements
10-15 years
Tenant improvements
Shorter of the asset's useful life or the noncancelable term of lease
(d) Properties with an aggregate undepreciated cost of $5,511,120 secure $3,865,553 of mortgage notes. Refer to Note 5 — Debt to the Consolidated Financial Statements for
more information related to our mortgage debt.
(e) At December 31, 2022, the aggregate cost of land, buildings, and equipment for federal income tax purposes was $1,762,333 (unaudited).
78

Exhibits
Exhibit Number
Exhibit Description
2.1
Distribution and Contribution Agreement, dated as of July 20, 2022, between PS Business Parks, Inc., PS Business Parks, L.P., Sequoia Parent LP,
Sequoia Parent 2 LP, Sequoia Parent 3 LP, and B9 Sequoia NC Parent LLC (incorporated by reference to Exhibit 2.1 to the Company’s Current
Report on Form 8-K filed on July 22, 2022).
2.2
Agreement and Plan of Merger, dated as of April 24, 2022, by and among PS Business Parks, Inc., PS Business Parks, L.P., Sequoia Parent LP,
Sequoia Merger Sub I LLC and Sequoia Merger Sub II LLC (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-
K filed on April 5, 2022).
3.1
Amended and Restated Charter of PS Business Parks, Inc., dated July 20, 2022 (incorporated by reference to Exhibit 3.1 of the Registrant’s Current
Report on Form 8-K filed on July 22, 2022).
3.2
Amended and Restated Bylaws of PS Business Parks, Inc., dated July 20, 2022 (incorporated by reference to Exhibit 3.2 to the Company’s Current
Report on Form 8-K filed on July 22, 2022).
3.3
Articles Supplementary designating shares of the Company’s 12% Series A Redeemable Preferred Stock (incorporated by reference to Exhibit 3.3 to
the Company’s Current Report on Form 8-K filed on July 22, 2022).
4.1
Deposit Agreement Relating to 5.25% Cumulative Preferred Stock, Series X of PS Business Parks, Inc. dated as of September 12, 2017
(incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on September 13, 2017).
4.2
Deposit Agreement Relating to 5.20% Cumulative Preferred Stock, Series Y of PS Business Parks, Inc. dated as of November 30, 2017
(incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on December 1, 2017).
4.3
Deposit Agreement Relating to 4.875% Cumulative Preferred Stock, Series Z of PS Business Parks, Inc. dated as of October 24, 2019 (incorporated
by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on October 25, 2019).
10.1
Loan Agreement, dated as of July 20, 2022, among Bank of America, N.A., Citi Real Estate Funding Inc., Barclays Capital Real Estate Inc., Morgan
Stanley Bank, N.A., and Societe Generale Financial Corporation, collectively as the lenders, and the borrower entities identified on Exhibit A
attached thereto, as the borrowers (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K filed on July 22, 2022).
10.2
Loan Agreement, dated as of July 20, 2022, by and among Citibank, N.A. (as administrative agent and co-lender), Bank of America, N.A., Morgan
Stanley Bank, N.A., Barclays Bank PLC and Societe Generale Financial Corporation, collectively as the lenders, and the borrower entities identified
on Exhibit A attached thereto, as the borrowers (incorporated by reference to Exhibit 10.2 of the Registrant’s Current Report on Form 8-K filed on
July 22, 2022).
10.3
Master Services Agreement, dated as of July 20, 2022, by and among PS Business Parks, L.P. and Link Logistics Real Estate Holdco LLC
(incorporated by reference to Exhibit 10.3 of the Registrant’s Current Report on Form 8-K filed on July 22, 2022).
10.4
Form of Promissory Note (incorporated by reference to Exhibit 10.4 of the Registrant’s Current Report on Form 8-K filed on July 22, 2022).
10.5†
Confidential Separation Agreement and General Release, effective March 23, 2022, between the Company and Dan “Mac” Chandler, III
(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on March 23, 2022).
10.6
Support Agreement, dated as of April 24, 2022, by and between Sequoia Parent LP, PS Business Parks, Inc. and Public Storage (incorporated by
reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on April 25, 2022).
21*
List of Subsidiaries.
31.1*
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.
31.2*
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.
32.1**
18 U.S.C. § 1350 Certification of Chief Executive Officer and Chief Financial Officer.
101.INS*
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within
the Inline XBRL document.
79

101.SCH*
Inline XBRL Taxonomy Extension Schema Document
101.CAL*
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*
Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF*
Inline XBRL Taxonomy Definition Linkbase Document
104*
Cover Page Interactive Data File (formatted as inline XBRL and with applicable taxonomy extension information contained in Exhibits 101.*)
____________________________
* Filed herewith.
** Furnished herewith.
† Denotes management contract or compensatory plan agreement or arrangement.
The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the
agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements
or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were
made or at any other time.
Item 16. Form 10-K Summary
None.
80

SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
PS BUSINESS PARKS, INC.
February 28, 2023
By:
/s/ Luke Petherbridge
Luke Petherbridge
Chief Executive Officer and Secretary
(Principal Executive Officer)
February 28, 2023
By:
/s/ Matthew L. Ostrower
Matthew L. Ostrower
Chief Financial Officer, Vice President and Treasurer
(Principal Financial and Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities
and on the dates indicated.
Date
Title
Signature
February 28, 2023
Chief Executive Officer and Secretary
/s/ Luke Petherbridge
Luke Petherbridge
February 28, 2023
Chief Financial Officer, Vice President and Treasurer
(Principal Financial and Accounting Officer)
/s/ Matthew L. Ostrower
Matthew L. Ostrower
February 28, 2023
Director
/s/ Timothy J. Beaudin
Timothy J. Beaudin
February 28, 2023
Director
/s/ Justin Brown
Justin Brown
February 28, 2023
Director
/s/ Andrea Drasites
Andrea Drasites
February 28, 2023
Director
/s/ Ernest M. Freedman
Ernest M. Freedman
February 28, 2023
Director
/s/ Ryan Ingle
Ryan Ingle
February 28, 2023
Director
/s/ David Levine
David Levine
February 28, 2023
Director
/s/ Samantha Wallack
Samantha Wallack
81

Exhibit 21
List of Subsidiaries
The following sets forth the subsidiaries of the Registrant and their respective states of incorporation or organization:
Name
State
B9 Sequoia TRS LLC
Delaware
PS Business Parks, L.P.
California
B9 Sequoia C Holdco LLC
Delaware
B9 Sequoia 1 Mezz C LLC
Delaware
B9 Sequoia 3 Mezz C LLC
Delaware
B9 Sequoia 5 Mezz C LLC
Delaware
B9 Sequoia 1 Mezz B LLC
Delaware
B9 Sequoia 3 Mezz B LLC
Delaware
B9 Sequoia 5 Mezz B LLC
Delaware
B9 Sequoia 1 Mezz A LLC
Delaware
B9 Sequoia 3 Mezz A LLC
Delaware
B9 Sequoia 5 Mezz A LLC
Delaware
B9 Sequoia 1 CA GP LLC
Delaware
B9 Sequoia 3 CA GP LLC
Delaware
B9 Sequoia 1 TX Member GP LLC
Delaware
B9 Sequoia 1 TX GP LLC
Delaware
B9 Sequoia 3 TX Member GP LLC
Delaware
B9 Sequoia 3 TX GP LLC
Delaware
B9 Sequoia 5 TX Member GP LLC
Delaware
B9 Sequoia Royal Lane Owner GP LLC
Delaware
B9 Sequoia Carson Center Owner LP
Delaware
B9 Sequoia Las Plumas Owner LP
Delaware
B9 Sequoia Canada Center Owner LP
Delaware
B9 Sequoia Parkway Center Owner LP
Delaware
B9 Sequoia Santa Clara Tech Park Owner LP
Delaware
B9 Sequoia Rogers Owner LP
Delaware
B9 Sequoia Bay Center Owner LP
Delaware
B9 Sequoia Concord Owner LP
Delaware
B9 Sequoia Diablo Owner LP
Delaware
B9 Sequoia Wiegman Owner LP
Delaware
B9 Sequoia Charcot Owner LP
Delaware
B9 Sequoia Cadillac Owner LP
Delaware
B9 Sequoia Bayshore Owner LP
Delaware
B9 Sequoia Hathaway Owner LP
Delaware
 B9 Sequoia Torrance Owner LP
Delaware
B9 Sequoia Monterey Owner LP
Delaware
B9 Sequoia Buena Park Owner LP
Delaware
B9 Sequoia Cerritos Industrial Owner LP
Delaware
B9 Sequoia Santa Clara Owner LP
Delaware
B9 Sequoia Signal Hill 3 Owner LP
Delaware
B9 Sequoia Christopher Owner LLC
Delaware
B9 Sequoia Ammendale LLC
Delaware

Name
State
B9 Sequoia Parklawn Owner LLC
Delaware
B9 Sequoia Grove Owner LLC
Delaware
B9 Sequoia Bren Mar Owner LLC
Delaware
B9 Sequoia Alban Road Owner LLC
Delaware
B9 Sequoia Gude Owner LLC
Delaware
B9 Sequoia 212 Owner LLC
Delaware
B9 Sequoia Overlake Owner LLC
Delaware
B9 Sequoia 1 TX Member LP
Delaware
B9 Sequoia Mopac Owner LP
Delaware
B9 Sequoia McNeil Owner LP
Delaware
B9 Sequoia Springlake Owner LP
Delaware
B9 Sequoia Northway Plaza Owner LP
Delaware
B9 Sequoia Freeport Industrial Owner LP
Delaware
B9 Sequoia Waterford Owner LP
Delaware
B9 Sequoia Rutland Owner LP
Delaware
B9 Sequoia Freeport Business Owner LP
Delaware
B9 Sequoia Westwood Owner LP
Delaware
B9 Sequoia Arapaho Owner LP
Delaware
B9 Sequoia Valwood Owner LP
Delaware
B9 Sequoia La Prada Owner LP
Delaware
B9 Sequoia Eastgate Owner LP
Delaware
B9 Sequoia Richardson Owner LP
Delaware
B9 Sequoia The Summit Owner LP
Delaware
B9 Sequoia 3 TX Member LP
Delaware
B9 Sequoia Braker Owner LP
Delaware
B9 Sequoia Southpark Owner LP
Delaware
B9 Sequoia McKalla Owner LP
Delaware
B9 Sequoia Port America Owner LP
Delaware
B9 Sequoia Jupiter Owner LP
Delaware
B9 Sequoia Ben White Owner LP
Delaware
B9 Sequoia Lamar Owner LP
Delaware
B9 Sequoia 5 TX Member LP
Delaware
B9 Sequoia Royal Lane Owner LP
Delaware
American Office Park Properties, TPGP, Inc.
California
AOPP Acquisition Corp. Two
California
PSB Amherst Investors, LLC
Delaware
Amherst JV LLC
Delaware
Amherst Property LLC
Delaware
PSB Amherst, LLC
Delaware
PSB Amherst Finance LLC
Delaware
B9 Sequoia Freeport Business Owner LP
Delaware
Tenant Advantage, Inc.
California
PSBP QRS, Inc.
California
Hernmore Corporation
Maryland
PSBP Springing Member LLC
Delaware

Name
State
PSBP Westwood GP, LLC
Delaware
PSB Brentford, LLC
Delaware
Brentford JV, LLC
Delaware
Brentford Property, LLC
Delaware
The Mile, LLC
Delaware
B9 Sequoia Christopher Owner LLC
Delaware
B9 Sequoia Alban Road Owner LLC
Delaware
B9 Sequoia Bren Mar Owner LLC
Delaware
REVX-098, LLC
Delaware
Arapaho Investors, LLC
Delaware
PSB Bayshore LLC
Delaware
PS Rose Canyon LLC
Delaware
PSB Shady Grove LLC
Maryland
PSB San Tomas BC, LLC
California
PSB Hathaway I & II, LLC
Delaware
PSB Walnut BP, LLC
California
PSB Northpointe D L.L.C.
Virginia
PSB Pickett IP, LLC
Virginia
PS Metro Park LLC
Maryland
PSBP Industrial, L.L.C.
Delaware
PSB MICC 2323, LLC
Delaware
PSB Wellington Commerce Park II, LLC
Delaware
PSB Wellington Commerce Park I, LLC
Delaware
PSB Wellington Commerce Park III, LLC
Delaware
PSB Boca Commerce Park LLC
Delaware
PSB Northern California Industrial Portfolio LLC
Delaware

Exhibit 31.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Luke Petherbridge, certify that:
1.
I have reviewed this annual report on Form 10-K of PS Business Parks, Inc. for the fiscal year ended December 31, 2022;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition,
results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that
material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during
the period in which this report is being prepared;
b.
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;
c.
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter
(the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s
internal control over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors
and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to
adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial
reporting.
/s/ Luke Petherbridge
Name:
Luke Petherbridge
Title:
Chief Executive Officer
Dated: February 28, 2023

Exhibit 31.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Matthew L. Ostrower, certify that:
1.
I have reviewed this annual report on Form 10-K of PS Business Parks, Inc. for the fiscal year ended December 31, 2022;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition,
results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures, (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that
material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during
the period in which this report is being prepared;
b.
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;
c.
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter
(the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s
internal control over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors
and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to
adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial
reporting.
/s/ Matthew L. Ostrower
Name:
Matthew L. Ostrower
Title:
Chief Financial Officer
Dated: February 28, 2023

Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the annual report on Form 10-K of PS Business Parks, Inc. (“the Company”) for the fiscal year ending December 31, 2022 as filed with the Securities and
Exchange Commission on the date hereof (the “Report”), Luke Petherbridge, as Chief Executive Officer of the Company, and Matthew L. Ostrower, as Chief Financial Officer
of the Company, each hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to their knowledge:
1.
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ Luke Petherbridge
Luke Petherbridge
Chief Executive Officer
Dated: February 28, 2023
/s/ Matthew L. Ostrower
Matthew L. Ostrower
Chief Financial Officer
Dated: February 28, 2023