NAREIT, Dallas, TX. November 2017

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1 NAREIT, Dallas, TX November 2017

2 PS Business Parks Overview Public Since 1998: Consistently Outperforms the S&P 500 and RMZ Fortress Balance Sheet Strong Same Park NOI Growth 98 Business Parks of Infill Real Estate in Gateway Markets 83% of the Portfolio is Light Industrial/Flex Product That is Functional and Multi-Tenant Strong, Tenured Management Team (NAV Focused) Driving Shareholder Value 2

3 Average Annual Total Shareholder Return 25.0% 21.9% PSB NAREIT S&P % 19.2% 16.9% 15.0% 14.2% 14.3% 13.4% 13.5% 11.0% 10.0% 9.1% 9.3% 7.5% 7.8% 9.5% 5.0% 6.0% 5.8% 0.0% 2017 YTD 3 Year 5 Year 10 Year 15 Year Source: IPREO September 30, 2017 Consistent Outperformance 3

4 PS Business Parks Highlights Year-To-Date 2017 Same Park NOI Growth of 6.3% Increased Common Dividend 13.3% to $0.85 per Quarter February 2017 Redeemed $230 Million, 6.45% Preferred Equity - January 2017 Extended Credit Facility Maturity to January 2022, Lowered Borrowing Spread & Restructured Covenants - January 2017 Series X Preferred Issuance $230 MM at 5.25% - September 2017 Partial Redemption, $220MM Series T Preferred at 6% - October 2017 Highgate Multifamily Opened in June - 55% Occupancy October

Unparalleled Balance Sheet Common Equity 82.

4% Highlights No Pending Debt Maturities Preferred

to Annualized EBITDA 3.6x Fixed Charge Coverage Ratio 5.

5 Billion Market Cap Investment Grade Ratings S & P A-

5 Unparalleled Balance Sheet Common Equity 82.4% Unsecured Credit Facility 1.4% Highlights No Pending Debt Maturities Preferred Equity 16.2% Low Leverage/Strong Ratios Debt & Pref. to Annualized EBITDA 3.6x Fixed Charge Coverage Ratio 5.0x $5.5 Billion Market Cap Investment Grade Ratings S & P A- (Corporate) BBB (Preferred Equity) Moody s Baa2 (Preferred Equity) As of October 30, 2017 As of September 30, 2017 Conservative Balance Sheet Philosophy 5

6 PSB Market Concentrations Seattle 1.4 mm sq. ft. 3 Parks Washington Metro Maryland /Virginia 6.5 mm sq. ft. 23 Parks Northern California Bay Area 7.2 mm sq. ft. 29 Parks Southern California LA/OC/San Diego 4.0 mm sq. ft. 18 Parks Texas Dallas/Austin 5.0 mm sq. ft. 22 Parks South Florida Miami/Palm Beach 3.9 mm sq. ft. 3 Parks Gateway Markets With A Decentralized Platform 6

PSB Product Flex 52% Industrial 31% Office 17% 14.5 Million Sq.

Buildings Small User Focus 8.8 Million Sq.

Heights of 18 Feet and Higher Larger Average User Size 4.7 Million Sq.

7 PSB Product Flex 52% Industrial 31% Office 17% 14.5 Million Sq. Ft Accessible Parking Dock High and At-Grade Doors Easily Reconfigured Buildings Small User Focus 8.8 Million Sq. Ft Multi-Tenanted Convenient Loading Dock and Grade-Level Doors Ceiling Heights of 18 Feet and Higher Larger Average User Size 4.7 Million Sq. Ft In-fill Suburban Locations Divisible Floor Plates Multi-Product Parks Re-usable Tenant Spaces 4,900 Customers: Small Business America 7

8 Investment Strategy Functional Assets in Infill Locations First and Last Mile Business Park Concentrations Multi-Tenant Buildings in Multi-Building Parks Gateway Markets: Deep and Vibrant Strong Demographics and High Volume Distribution Points Value Add Opportunities/Redevelopment Below Replacement Cost Analysis Value Derived by Operational Strategy and Focus 8

Diverse Customer Base Percentage of Total Rent by Sector Top 10 Tenants Percent of Annualized Rental Income U.S. Government (various locations): 4.3% Kaiser Permanente: 1.

2% Engineering and Construction, 6.9% Insurance and Financial Service, 4.4% Electronics, 3.1% Home Furnishings, 2.6% Aerospace/Defense Products and Services, 2.7% Communications, 2.

9 Diverse Customer Base Percentage of Total Rent by Sector Top 10 Tenants Percent of Annualized Rental Income U.S. Government (various locations): 4.3% Kaiser Permanente: 1.0% Lockheed Martin Corporation (various locations): 1.0% Keeco, LLC: 0.9% Health Services, 10.0% Government, 7.9% Computer Hardware Software & Releated Services, 9.8% Retail, Food and Automotive, 7.2% Engineering and Construction, 6.9% Insurance and Financial Service, 4.4% Electronics, 3.1% Home Furnishings, 2.6% Aerospace/Defense Products and Services, 2.7% Communications, 2.1% Luminex Corporation: 0.8% MAXIMUS, Inc.: 0.5% KZ Kitchen Cabinet: 0.5% Educational Services, 1.7% Investorplace Media, LLC: 0.5% Inova Health Care Services: 0.5% Quanta Computer USA: 0.4% Warehouse, Distribution, Transportation and Logistics, 10.4% Other, 12.7% Business Services, 18.5% As of September 30, 2017 Stable and Diversified Customer Base 9

10 Total Portfolio Occupancy Rent Change on Executed Leases (Cash Basis) Historical Occupancy & Rent Trends 96.0% 10.0% 94.0% 92.8% 94.0% 93.5% 8.0% 6.0% 92.0% 91.3% 4.4% 5.3% 4.3% 4.0% 2.0% 90.0% 89.2% 89.0% 89.9% 0.5% 0.0% -0.4% -2.0% 88.0% -4.0% 86.0% 84.0% -6.2% -8.3% YTD '17 Driving Occupancy and Rent Growth % -8.0% -10.0%

11 Total Recurring Capital as % of NOI 25% 20% 22.4% 21.6% 20.5% 18.6% 15% 15.6% 16.9% 10% 11.7% 14.5% Same Park 5% YTD '17 Improving Rents Combined with Lower Capital 11

12 NOI to GAV and Cost of Preferred Equity NOI to GAV Ratio NOI Less Recurring CapEx to GAV Cost of Preferred Equity 10.00% 9.7% 9.00% 8.00% 8.0% 9.0% 7.5% 7.00% 7.4% 6.00% 6.7% 5.00% 5.2% 5.5% 4.00% YTD '17 Annualized Improving Spreads Drive Free Cash 12

13 Energy Efficiency and Environmental Initiatives LEED or Energy Star certification on new development and re-development buildings We reduce heating and air-conditioning expenses by tightly controlling temperatures in vacant suites (50 degrees in winter/80 degrees in summer) and by replacing older equipment with energy efficient systems. Installation of reflective green roofs as we re-roof or develop new buildings. These roofs can reduce overall building energy consumption by up to 40% by minimizing winter heat loss and summer heat gain. Water consumption is reduced through conservation plumbing devices and planting native-landscape species. Our office properties have implemented paper recycling practices and we utilize trash compactors to reduce landfills. Ongoing conversion to LED lighting at our parks Investment and Positive Impact 13

14 Social and Governance Diversity in Our Workplace of 155 Employees: Gender and Race 41% of our workforce is listed as non-white with 30% in a supervisory role Women make up 54% of our workforce with 36% in a supervisory role Affirmative Action Plan Employer President and CEO is a woman and diverse Generational Inclusion and Diversity of Our Workforce 33% Millennials 41% Gen X 26% Boomer Diversity and Independence of Board of Directors 67% Independent 33% Women 56% Under the Age of 60 Diverse at all Levels 14

15 Multifamily Development Tysons, VA 15

16 Tysons, VA Multi-Family Development Opened June

17 Highgate at The Mile 395 Units Average Unit Size 833 sq. ft. Market Rates $2.50 to $2.75 per sq. ft. PSB Holds 95% Interest in JV with Kettler Total Project Costs ±$117 Million (Incl. Land) PSB s Cash Commitment to Development is ±$85Million 55% Occupancy 10/17 17

18 Highgate Interior 18

19 The Mile, Tysons, VA Potential Future Development Site Value Creation Opportunity 19

20 Safe Harbor Disclosure This document may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of These statements include, but are not limited to, statements related to the Company s expectations regarding the performance of its business, its financial results, its liquidity and capital resources and other non-historical statements. You can identify these forward-looking statements by the use of words such as outlook, believes, expects, potential, continues, may, will, should, seeks, approximately, projects, predicts, intends, plans, estimates, anticipates or the negative version of these words or other comparable words. Such forwardlooking statements are subject to various risks and uncertainties, including those described under the section entitled Risk Factors in the Company s Annual Report on Form 10-K for the year ended December 31, 2016, as such factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC s website at Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in the Company s filings with the SEC. The Company undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law. 20

Analysis of Operating Results and Financial Condition

Analysis of Operating Results and Financial Condition March 31, 2017 ANALYSIS OF OPERATING RESULTS AND FINANCIAL CONDITION FOR THE THREE MONTHS ENDED MARCH 31, 2017 INDEX Page Fact Sheet... 3 Funds from