Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT - WASHINGTON REAL ESTATE INVESTMENT TRUST | q32014earningsrelease.htm |
| 8-K - 8-K - WASHINGTON REAL ESTATE INVESTMENT TRUST | q32014earningsrelease8-k.htm |
Washington Real Estate Investment Trust | ||||||
Third Quarter 2014 | ||||||
 | ||||||
Supplemental Operating and Financial Data | ||||||
Contact: | 6110 Executive Boulevard | |||||
William T. Camp | Suite 800 | |||||
Executive Vice President and | Rockville, MD 20852 | |||||
Chief Financial Officer | (301) 984-9400 | |||||
E-mail: bcamp@writ.com | (301) 984-9610 fax | |||||
Company Background and Highlights |
Third Quarter 2014 |
Washington Real Estate Investment Trust ("Washington REIT") is a self-administered, self-managed, equity real estate investment trust investing in income-producing properties in the greater Washington, DC region. Washington REIT has a diversified portfolio with investments in office, retail, and multifamily properties and land for development.
Third Quarter 2014 highlights include:
• | Generated Core Funds from Operations (FFO) of $0.43 per fully diluted share for the quarter, a $0.02 increase over second quarter 2014 |
• | Achieved same-store Net Operating Income (NOI) growth of 7.1% over third quarter 2013 |
• | Improved overall same-store physical occupancy to 93.2% from 92.6% in the second quarter 2014 and 89.4% at the beginning of the year |
• | Executed 43 new and renewal commercial leases totaling 263,042 square feet at an average rental rate increase of 9.9% over in-place rents for new leases and an average rental rate increase of 18.7% over in-place rents for renewal leases |
• | Narrowed 2014 Core FFO guidance to $1.60 - $1.63 from $1.56 - $1.64 |
Washington REIT signed commercial leases totaling 263,042 square feet, including 48,260 square feet of new leases and 214,782 square feet of renewal leases. New leases had an average rental rate increase of 9.9% over expiring lease rates on a GAAP basis and an average lease term of 7.9 years. Commercial tenant improvement costs were $34.43 per square foot and leasing commissions and incentives were $33.92 per square foot for new leases. Renewal leases had an average rental rate increase of 18.7% over expiring lease rates on a GAAP basis and an average lease term of 5.6 years. Commercial tenant improvement costs were $2.77 per square foot and leasing commissions and incentives were $2.72 per square foot for renewal leases.
Subsequent to the third quarter, on October 1, 2014, Washington REIT announced its off-market acquisition of Spring Valley Retail Center, a 75,265 square foot retail shopping center located in northwest Washington, DC for $40.5 million. Spring Valley is Washington REIT’s fourth acquisition in 2014, representing a total cumulative investment value of approximately $300 million. The 96% leased Spring Valley Retail Center consists of five separate buildings of multi-level retail space in the 4800 block of Massachusetts Avenue located in the affluent Spring Valley neighborhood of northwest Washington, DC. The property boasts red brick construction and Colonial Revival style architecture, and is part of the local neighborhood retail hub located along Massachusetts Avenue.
As of September 30, 2014, Washington REIT owned a diversified portfolio of 54 properties totaling approximately 7 million square feet of commercial space and 2,890 residential units, and land held for development. These 54 properties consist of 25 office properties, 16 retail centers and 13 multifamily properties. Washington REIT shares are publicly traded on the New York Stock Exchange (NYSE: WRE).
Company Background and Highlights |
Third Quarter 2014 |
Net Operating Income Contribution by Sector - Third Quarter 2014
Certain statements in our earnings release and on our conference call are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially. Such risks, uncertainties and other factors include, but are not limited to, the potential for federal government budget reductions, changes in general and local economic and real estate market conditions, the timing and pricing of lease transactions, the availability and cost of capital, fluctuations in interest rates, tenants' financial conditions, levels of competition, the effect of government regulation, the impact of newly adopted accounting principles, and other risks and uncertainties detailed from time to time in our filings with the SEC, including our 2013 Form 10-K and subsequent Quarterly Reports on Form 10-Q. We assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.
Supplemental Financial and Operating Data Table of Contents | ||
September 30, 2014 | ||
Schedule | Page | |
Key Financial Data | ||
Capital Analysis | ||
Portfolio Analysis | ||
Growth and Strategy | ||
Acquisition and Disposition Summary | ||
Tenant Analysis | ||
Appendix | ||
Consolidated Statements of Operations (In thousands, except per share data) (Unaudited) | |
Three Months Ended | |||||||||||||||||||
OPERATING RESULTS | 9/30/2014 | 6/30/2014 | 3/31/2014 | 12/31/2013 | 9/30/2013 | ||||||||||||||
Real estate rental revenue | $ | 73,413 | $ | 72,254 | $ | 68,611 | $ | 66,721 | $ | 65,828 | |||||||||
Real estate expenses | (25,914 | ) | (25,528 | ) | (26,342 | ) | (23,826 | ) | (23,243 | ) | |||||||||
47,499 | 46,726 | 42,269 | 42,895 | 42,585 | |||||||||||||||
Real estate depreciation and amortization | (24,354 | ) | (24,401 | ) | (22,753 | ) | (22,412 | ) | (21,168 | ) | |||||||||
Income from real estate | 23,145 | 22,325 | 19,516 | 20,483 | 21,417 | ||||||||||||||
Interest expense | (15,087 | ) | (14,985 | ) | (14,530 | ) | (15,629 | ) | (15,930 | ) | |||||||||
Other income | 192 | 219 | 223 | 221 | 220 | ||||||||||||||
Acquisition costs | (69 | ) | (1,933 | ) | (3,045 | ) | (817 | ) | (148 | ) | |||||||||
Gain on sale of real estate | — | 570 | — | — | — | ||||||||||||||
Loss on extinguishment of debt | — | — | — | (2,737 | ) | — | |||||||||||||
General and administrative | (4,523 | ) | (4,828 | ) | (4,429 | ) | (5,818 | ) | (3,850 | ) | |||||||||
Income (loss) from continuing operations | 3,658 | 1,368 | (2,265 | ) | (4,297 | ) | 1,709 | ||||||||||||
Discontinued operations: | |||||||||||||||||||
Income from operations of properties sold or held for sale | — | — | 546 | 4,256 | 4,131 | ||||||||||||||
(Loss) gain on sale of real estate | — | (288 | ) | 106,273 | 18,949 | — | |||||||||||||
(Loss) income from discontinued operations | — | (288 | ) | 106,819 | 23,205 | 4,131 | |||||||||||||
Net income | 3,658 | 1,080 | 104,554 | 18,908 | 5,840 | ||||||||||||||
Less: Net loss from noncontrolling interests | 10 | 7 | — | — | — | ||||||||||||||
Net income attributable to the controlling interests | $ | 3,668 | $ | 1,087 | $ | 104,554 | $ | 18,908 | $ | 5,840 | |||||||||
Per Share Data: | |||||||||||||||||||
Net income | $ | 0.05 | $ | 0.02 | $ | 1.56 | $ | 0.28 | $ | 0.09 | |||||||||
Fully diluted weighted average shares outstanding | 66,790 | 66,761 | 66,701 | 66,591 | 66,561 | ||||||||||||||
Percentage of Revenues: | |||||||||||||||||||
Real estate expenses | 35.3 | % | 35.3 | % | 38.4 | % | 35.7 | % | 35.3 | % | |||||||||
General and administrative | 6.2 | % | 6.7 | % | 6.5 | % | 8.7 | % | 5.8 | % | |||||||||
Ratios: | |||||||||||||||||||
Adjusted EBITDA / Interest expense | 2.9 | x | 2.7 | x | 2.5 | x | 2.6 | x | 2.9 | x | |||||||||
Income from continuing operations/Total real estate revenue | 5.0 | % | 1.9 | % | (3.3 | )% | (6.4 | )% | 2.6 | % | |||||||||
Net income /Total real estate revenue | 5.0 | % | 1.5 | % | 152.4 | % | 28.3 | % | 8.9 | % | |||||||||
4
Medical Office Portfolio (In thousands) (Unaudited) | |
Three Months Ended | |||||||||||||||||||
Income from Medical Office Portfolio (1): | 9/30/2014 | 6/30/2014 | 3/31/2014 | 12/31/2013 | 9/30/2013 | ||||||||||||||
Real estate rental revenue | $ | — | $ | — | $ | 892 | $ | 8,651 | $ | 12,073 | |||||||||
Real estate expenses | — | — | (346 | ) | (4,184 | ) | (4,398 | ) | |||||||||||
— | — | 546 | 4,467 | 7,675 | |||||||||||||||
Real estate depreciation and amortization | — | — | — | — | (3,215 | ) | |||||||||||||
Interest expense | — | — | — | (211 | ) | (329 | ) | ||||||||||||
Income from operations of Medical Office Portfolio (1) | — | — | 546 | 4,256 | 4,131 | ||||||||||||||
(Loss) gain on sale of real estate | — | (288 | ) | 106,273 | 18,949 | — | |||||||||||||
Income from discontinued operations | $ | — | $ | (288 | ) | $ | 106,819 | $ | 23,205 | $ | 4,131 | ||||||||
As of | |||||||||||||||||||
Investment in Medical Office Portfolio (1): | 9/30/2014 | 6/30/2014 | 3/31/2014 | 12/31/2013 | 9/30/2013 | ||||||||||||||
Office | $ | — | $ | — | $ | — | $ | — | $ | 55,049 | |||||||||
Medical Office | — | — | — | 125,967 | 409,486 | ||||||||||||||
Total | — | — | — | 125,967 | 464,535 | ||||||||||||||
Less accumulated depreciation | — | — | — | (46,066 | ) | (118,378 | ) | ||||||||||||
Investment in real estate sold or held for sale, net | $ | — | $ | — | $ | — | $ | 79,901 | $ | 346,157 | |||||||||
Mortgage notes payable secured by Medical Office Portfolio (1) | $ | — | $ | — | $ | — | $ | — | $ | 23,467 | |||||||||
(1) Medical Office Portfolio: |
Office - Woodholme Center and 6565 Arlington Boulevard |
Medical Office - 2440 M Street, 15001 Shady Grove Road, 15505 Shady Grove Road, 19500 at Riverside Park (formerly Lansdowne Medical Office Building), 9707 Medical Center Drive, CentreMed I and II, 8301 Arlington Boulevard, Sterling Medical Office Building, Shady Grove Medical Village II, Alexandria Professional Center, Ashburn Farm Office Park I, II and III, Woodholme Medical Office Building, Woodburn Medical Park I and II, and Prosperity Medical Center I, II and III |
Washington REIT entered into four separate contracts with a single buyer to sell all of the held for sale properties (collectively, the "Medical Office Portfolio") for a combined sales price of $500.8 million. The first two separate sale transactions of its medical office portfolio closed on November 21 and November 22, 2013 for an aggregate sales price of $307.2 million. The second two sales transactions closed on January 21, 2014 for an aggregate sales price of $193.6 million. |
5
Consolidated Balance Sheets (In thousands) (Unaudited) | |
9/30/2014 | 6/30/2014 | 3/31/2014 | 12/31/2013 | 9/30/2013 | |||||||||||||||
Assets | |||||||||||||||||||
Land | $ | 519,859 | $ | 519,859 | $ | 472,056 | $ | 426,575 | $ | 418,008 | |||||||||
Income producing property | 1,867,752 | 1,853,982 | 1,784,850 | 1,675,652 | 1,624,617 | ||||||||||||||
2,387,611 | 2,373,841 | 2,256,906 | 2,102,227 | 2,042,625 | |||||||||||||||
Accumulated depreciation and amortization | (620,279 | ) | (600,171 | ) | (581,644 | ) | (565,342 | ) | (548,549 | ) | |||||||||
Net income producing property | 1,767,332 | 1,773,670 | 1,675,262 | 1,536,885 | 1,494,076 | ||||||||||||||
Development in progress, including land held for development | 99,500 | 83,970 | 68,963 | 61,315 | 55,580 | ||||||||||||||
Total real estate held for investment, net | 1,866,832 | 1,857,640 | 1,744,225 | 1,598,200 | 1,549,656 | ||||||||||||||
Investment in real estate held for sale, net | — | — | — | 79,901 | 346,157 | ||||||||||||||
Cash and cash equivalents | 8,571 | 23,009 | 62,080 | 130,343 | 7,923 | ||||||||||||||
Restricted cash | 9,496 | 11,369 | 107,039 | 9,189 | 7,547 | ||||||||||||||
Rents and other receivables, net of allowance for doubtful accounts | 58,135 | 55,583 | 52,736 | 48,756 | 48,619 | ||||||||||||||
Prepaid expenses and other assets | 116,345 | 112,548 | 109,092 | 105,004 | 110,116 | ||||||||||||||
Other assets related to properties sold or held for sale | — | — | — | 4,100 | 18,337 | ||||||||||||||
Total assets | $ | 2,059,379 | $ | 2,060,149 | $ | 2,075,172 | $ | 1,975,493 | $ | 2,088,355 | |||||||||
Liabilities | |||||||||||||||||||
Notes payable | $ | 747,082 | $ | 746,956 | $ | 746,830 | $ | 846,703 | $ | 846,576 | |||||||||
Mortgage notes payable | 413,330 | 406,975 | 404,359 | 294,671 | 290,838 | ||||||||||||||
Lines of credit | 5,000 | — | — | — | 85,000 | ||||||||||||||
Accounts payable and other liabilities | 64,153 | 59,719 | 56,804 | 51,742 | 57,116 | ||||||||||||||
Advance rents | 12,211 | 13,172 | 14,688 | 13,529 | 11,749 | ||||||||||||||
Tenant security deposits | 8,625 | 8,686 | 8,402 | 7,869 | 7,639 | ||||||||||||||
Liabilities related to properties sold or held for sale | — | — | — | 1,533 | 31,275 | ||||||||||||||
Total liabilities | 1,250,401 | 1,235,508 | 1,231,083 | 1,216,047 | 1,330,193 | ||||||||||||||
Equity | |||||||||||||||||||
Preferred shares; $0.01 par value; 10,000 shares authorized | — | — | — | — | — | ||||||||||||||
Shares of beneficial interest, $0.01 par value; 100,000 shares authorized | 667 | 666 | 666 | 665 | 665 | ||||||||||||||
Additional paid-in capital | 1,153,344 | 1,152,647 | 1,151,353 | 1,151,174 | 1,148,837 | ||||||||||||||
Distributions in excess of net income | (347,724 | ) | (331,373 | ) | (312,417 | ) | (396,880 | ) | (395,816 | ) | |||||||||
Total shareholders' equity | 806,287 | 821,940 | 839,602 | 754,959 | 753,686 | ||||||||||||||
Noncontrolling interests in subsidiaries | 2,691 | 2,701 | 4,487 | 4,487 | 4,476 | ||||||||||||||
Total equity | 808,978 | 824,641 | 844,089 | 759,446 | 758,162 | ||||||||||||||
Total liabilities and equity | $ | 2,059,379 | $ | 2,060,149 | $ | 2,075,172 | $ | 1,975,493 | $ | 2,088,355 | |||||||||
Total Debt / Total Market Capitalization | 0.41 | :1 | 0.40 | :1 | 0.42 | :1 | 0.42 | :1 | 0.43 | :1 | |||||||||
6
Funds from Operations (In thousands, except per share data) (Unaudited) | |
Three Months Ended | |||||||||||||||||||
9/30/2014 | 6/30/2014 | 3/31/2014 | 12/31/2013 | 9/30/2013 | |||||||||||||||
Funds from operations(1) | |||||||||||||||||||
Net income | $ | 3,668 | $ | 1,087 | $ | 104,554 | $ | 18,908 | $ | 5,840 | |||||||||
Real estate depreciation and amortization | 24,354 | 24,401 | 22,753 | 22,412 | 21,168 | ||||||||||||||
Gain on sale of real estate (classified as continuing operations) | — | (570 | ) | — | — | — | |||||||||||||
Discontinued operations: | |||||||||||||||||||
Loss (gain) on sale of real estate | — | 288 | (106,273 | ) | (18,949 | ) | — | ||||||||||||
Real estate depreciation and amortization | — | — | — | — | 3,215 | ||||||||||||||
Funds from operations (FFO) | 28,022 | 25,206 | 21,034 | 22,371 | 30,223 | ||||||||||||||
Loss on extinguishment of debt | — | — | — | 2,737 | — | ||||||||||||||
Real estate impairment | — | — | — | 92 | — | ||||||||||||||
Severance expense | 394 | 576 | 48 | 2,157 | 250 | ||||||||||||||
Acquisition costs | 69 | 1,933 | 3,045 | 817 | 148 | ||||||||||||||
Core FFO (1) | $ | 28,485 | $ | 27,715 | $ | 24,127 | $ | 28,174 | $ | 30,621 | |||||||||
Allocation to participating securities(2) | (44 | ) | (17 | ) | (295 | ) | (44 | ) | (109 | ) | |||||||||
FFO per share - basic | $ | 0.42 | $ | 0.38 | $ | 0.31 | $ | 0.34 | $ | 0.45 | |||||||||
FFO per share - fully diluted | $ | 0.42 | $ | 0.38 | $ | 0.31 | $ | 0.34 | $ | 0.45 | |||||||||
Core FFO per share - fully diluted | $ | 0.43 | $ | 0.41 | $ | 0.36 | $ | 0.42 | $ | 0.46 | |||||||||
Common dividend per share | $ | 0.30 | $ | 0.30 | $ | 0.30 | $ | 0.30 | $ | 0.30 | |||||||||
Average shares - basic | 66,738 | 66,732 | 66,701 | 66,591 | 66,410 | ||||||||||||||
Average shares - fully diluted (for FFO and FAD) | 66,790 | 66,761 | 66,750 | 66,634 | 66,561 | ||||||||||||||
(1) See "Supplemental Definitions" on page 31 of this supplemental for the definitions of FFO and Core FFO. | |||||||||||||||||||
(2) Adjustment to the numerators for FFO and Core FFO per share calculations when applying the two-class method for calculating EPS. | |||||||||||||||||||
7
Funds Available for Distribution (In thousands, except per share data) (Unaudited) | |
Three Months Ended | |||||||||||||||||||
9/30/2014 | 6/30/2014 | 3/31/2014 | 12/31/2013 | 9/30/2013 | |||||||||||||||
Funds available for distribution(1) | |||||||||||||||||||
FFO | $ | 28,022 | $ | 25,206 | $ | 21,034 | $ | 22,371 | $ | 30,223 | |||||||||
Non-cash loss on extinguishment of debt | — | — | — | 88 | — | ||||||||||||||
Tenant improvements | (4,882 | ) | (7,970 | ) | (4,899 | ) | (7,717 | ) | (3,957 | ) | |||||||||
Leasing commissions and incentives | (4,090 | ) | (3,363 | ) | (1,640 | ) | (6,083 | ) | (3,746 | ) | |||||||||
Recurring capital improvements | (1,720 | ) | (1,610 | ) | (888 | ) | (1,953 | ) | (1,917 | ) | |||||||||
Straight-line rent, net | (658 | ) | (723 | ) | (353 | ) | (353 | ) | (578 | ) | |||||||||
Non-cash fair value interest expense | 32 | 30 | 195 | 256 | 255 | ||||||||||||||
Non-real estate depreciation and amortization | 994 | 904 | 872 | 906 | 939 | ||||||||||||||
Amortization of lease intangibles, net | 704 | 677 | 239 | 219 | 129 | ||||||||||||||
Amortization and expensing of restricted share and unit compensation | 1,307 | 1,429 | 1,041 | 2,623 | 1,215 | ||||||||||||||
Real estate impairment | — | — | — | 92 | — | ||||||||||||||
Funds available for distribution (FAD) | 19,709 | 14,580 | 15,601 | 10,449 | 22,563 | ||||||||||||||
Cash loss on extinguishment of debt | — | — | — | 2,649 | — | ||||||||||||||
Non-share-based severance expense | 313 | 517 | 48 | 1,537 | — | ||||||||||||||
Acquisition costs | 69 | 1,933 | 3,045 | 817 | 148 | ||||||||||||||
Core FAD (1) | $ | 20,091 | $ | 17,030 | $ | 18,694 | $ | 15,452 | $ | 22,711 | |||||||||
Allocation to participating securities(2) | (44 | ) | (17 | ) | (295 | ) | (44 | ) | (109 | ) | |||||||||
FAD per share - basic | $ | 0.29 | $ | 0.22 | $ | 0.23 | $ | 0.16 | $ | 0.34 | |||||||||
FAD per share - fully diluted | $ | 0.29 | $ | 0.22 | $ | 0.23 | $ | 0.16 | $ | 0.34 | |||||||||
Core FAD per share - fully diluted | $ | 0.30 | $ | 0.25 | $ | 0.28 | $ | 0.23 | $ | 0.34 | |||||||||
Common dividend per share | $ | 0.30 | $ | 0.30 | $ | 0.30 | $ | 0.30 | $ | 0.30 | |||||||||
Average shares - basic | 66,738 | 66,732 | 66,701 | 66,591 | 66,410 | ||||||||||||||
Average shares - fully diluted (for FFO and FAD) | 66,790 | 66,761 | 66,750 | 66,634 | 66,561 | ||||||||||||||
(1) See "Supplemental Definitions" on page 31 of this supplemental for the definitions of FAD and Core FAD. (2) Adjustment to the numerators for FAD and Core FAD per share calculations when applying the two-class method for calculating EPS. | |||||||||||||||||||
8
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) (In thousands) (Unaudited) | |
Three Months Ended | |||||||||||||||||||
9/30/2014 | 6/30/2014 | 3/31/2014 | 12/31/2013 | 9/30/2013 | |||||||||||||||
Adjusted EBITDA (1) | |||||||||||||||||||
Net income | $ | 3,668 | $ | 1,087 | $ | 104,554 | $ | 18,908 | $ | 5,840 | |||||||||
Add: | |||||||||||||||||||
Interest expense, including discontinued operations | 15,087 | 14,985 | 14,530 | 15,840 | 16,259 | ||||||||||||||
Real estate depreciation and amortization, including discontinued operations | 24,354 | 24,401 | 22,753 | 22,412 | 24,383 | ||||||||||||||
Income tax expense | 46 | 71 | — | (25 | ) | 6 | |||||||||||||
Real estate impairment | — | — | — | 92 | — | ||||||||||||||
Non-real estate depreciation | 113 | 180 | 193 | 196 | 203 | ||||||||||||||
Less: | |||||||||||||||||||
Net gain on sale of real estate | — | (282 | ) | (106,273 | ) | (18,949 | ) | — | |||||||||||
Loss on extinguishment of debt | — | — | — | 2,737 | — | ||||||||||||||
Adjusted EBITDA | $ | 43,268 | $ | 40,442 | $ | 35,757 | $ | 41,211 | $ | 46,691 | |||||||||
(1) Adjusted EBITDA is earnings before interest expense, taxes, depreciation, amortization, gain on sale of real estate, real estate impairment, gain/loss on extinguishment of debt and gain from non-disposal activities. We consider Adjusted EBITDA to be an appropriate supplemental performance measure because it permits investors to view income from operations without the effect of depreciation, and the cost of debt or non-operating gains and losses. Adjusted EBITDA is a non-GAAP measure. | |||||||||||||||||||
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Long Term Debt Analysis ($'s in thousands) | |
9/30/2014 | 6/30/2014 | 3/31/2014 | 12/31/2013 | 9/30/2013 | |||||||||||||||
Balances Outstanding | |||||||||||||||||||
Secured (1) | |||||||||||||||||||
Conventional fixed rate | $ | 413,330 | $ | 406,975 | $ | 404,359 | $ | 294,671 | $ | 314,305 | |||||||||
Unsecured | |||||||||||||||||||
Fixed rate bonds and notes | 747,082 | 746,956 | 746,830 | 846,703 | 846,576 | ||||||||||||||
Credit facility | 5,000 | — | — | — | 85,000 | ||||||||||||||
Unsecured total | 752,082 | 746,956 | 746,830 | 846,703 | 931,576 | ||||||||||||||
Total | $ | 1,165,412 | $ | 1,153,931 | $ | 1,151,189 | $ | 1,141,374 | $ | 1,245,881 | |||||||||
Average Interest Rates | |||||||||||||||||||
Secured | |||||||||||||||||||
Conventional fixed rate | 5.3 | % | 5.3 | % | 5.4 | % | 6.1 | % | 6.1 | % | |||||||||
Unsecured | |||||||||||||||||||
Fixed rate bonds | 4.9 | % | 4.9 | % | 4.9 | % | 4.9 | % | 4.9 | % | |||||||||
Credit facilities | 1.4 | % | — | % | — | % | — | % | 1.4 | % | |||||||||
Unsecured total | 4.8 | % | 4.9 | % | 4.9 | % | 4.9 | % | 4.6 | % | |||||||||
Average | 5.0 | % | 5.0 | % | 5.0 | % | 5.2 | % | 5.0 | % | |||||||||
Note: The current balances outstanding of the secured and unsecured fixed rate bonds and notes are shown net of discounts/premiums in the amount of $4.0 million and $2.9 million, respectively.
(1) For September 30, 2013, the secured balances outstanding include mortgage notes payable which have been reclassified to 'Liabilities related to properties sold or held for sale' on the consolidated balance sheets. These mortgage notes payable, secured by Woodholme Medical Center, Ashburn Farm Office Park I, Ashburn Farm Office Park III, were repaid in November 2013. See Medical Office Portfolio Supplemental page 5 for detail by quarter.
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Long Term Debt Maturities (in thousands, except average interest rates) | |
Future Maturities of Debt | |||||||||||||||||
Year | Secured Debt | Unsecured Debt | Credit Facilities | Total Debt | Avg Interest Rate | ||||||||||||
2014 | $ | — | $ | — | $ | — | $ | — | |||||||||
2015 | — | 150,000 | 5,000 | 155,000 | 5.3% | ||||||||||||
2016 | 153,200 | — | — | 153,200 | 5.3% | ||||||||||||
2017 | 150,903 | — | — | 150,903 | 5.9% | ||||||||||||
2018 | — | — | — | — | |||||||||||||
2019 | 31,280 | — | — | 31,280 | 5.4% | ||||||||||||
2020 | — | 250,000 | — | 250,000 | 5.1% | ||||||||||||
2021 | — | — | — | — | |||||||||||||
2022 | 44,517 | 300,000 | — | 344,517 | 4.0% | ||||||||||||
2023 | — | — | — | — | |||||||||||||
2024 | — | — | — | — | |||||||||||||
Thereafter | — | 50,000 | — | 50,000 | 7.4% | ||||||||||||
Scheduled principal payments | $ | 379,900 | $ | 750,000 | $ | 5,000 | $ | 1,134,900 | 5.0% | ||||||||
Scheduled amortization payments | 29,438 | — | — | 29,438 | 4.7% | ||||||||||||
Net discounts/premiums | 3,992 | (2,918 | ) | — | 1,074 | ||||||||||||
Total maturities | $ | 413,330 | $ | 747,082 | $ | 5,000 | $ | 1,165,412 | 5.0% | ||||||||
Weighted average maturity =5.2 years
11
Debt Covenant Compliance | |
Unsecured Notes Payable | Unsecured Line of Credit #1 ($100.0 million) | Unsecured Line of Credit #2 ($400.0 million) | ||||||||||||
Quarter Ended September 30, 2014 | Covenant | Quarter Ended September 30, 2014 | Covenant | Quarter Ended September 30, 2014 | Covenant | |||||||||
% of Total Indebtedness to Total Assets(1) | 42.4 | % | ≤ 65.0% | N/A | N/A | N/A | N/A | |||||||
Ratio of Income Available for Debt Service to Annual Debt Service | 2.9 | ≥ 1.5 | N/A | N/A | N/A | N/A | ||||||||
% of Secured Indebtedness to Total Assets(1) | 15.0 | % | ≤ 40.0% | N/A | N/A | N/A | N/A | |||||||
Ratio of Total Unencumbered Assets(2) to Total Unsecured Indebtedness | 2.8 | ≥ 1.5 | N/A | N/A | N/A | N/A | ||||||||
Tangible Net Worth(3) | N/A | N/A | $872.4 million | ≥ $673.4 million | $873.7 million | ≥ $671.9 million | ||||||||
% of Total Liabilities to Gross Asset Value(5) | N/A | N/A | 52 | % | ≤ 60.0% | 52 | % | ≤ 60.0% | ||||||
% of Secured Indebtedness to Gross Asset Value(5) | N/A | N/A | 16.7 | % | ≤ 35.0% | 16.7 | % | ≤ 35.0% | ||||||
Ratio of EBITDA(4) to Fixed Charges(6) | N/A | N/A | 2.58 | ≥ 1.50 | 2.58 | ≥ 1.50 | ||||||||
Ratio of Unencumbered Pool Value(7) to Unsecured Indebtedness | N/A | N/A | 2.51 | ≥ 1.67 | 2.51 | ≥ 1.67 | ||||||||
Ratio of Unencumbered Net Operating Income to Unsecured Interest Expense | N/A | N/A | 3.57 | ≥ 2.00 | 3.57 | ≥ 2.00 | ||||||||
Ratio of Investments(8) to Gross Asset Value(5) | N/A | N/A | 5.1 | % | ≤ 15.0% | 5.1 | % | ≤ 15.0% | ||||||
(1) Total Assets is calculated by applying a capitalization rate of 7.50% to the EBITDA(4) from the last four consecutive quarters, excluding EBITDA from acquired, disposed, and non-stabilized development properties. | ||||||||||||||
(2) Total Unencumbered Assets is calculated by applying a capitalization rate of 7.50% to the EBITDA(4) from unencumbered properties from the last four consecutive quarters, excluding EBITDA from acquired, disposed, and non-stabilized development properties. | ||||||||||||||
(3) Tangible Net Worth is defined as shareholders equity less accumulated depreciation at the commitment start date plus current accumulated depreciation. | ||||||||||||||
(4) EBITDA is defined in our debt covenants as earnings before minority interests, depreciation, amortization, interest expense, income tax expense, and extraordinary and nonrecurring gains and losses. | ||||||||||||||
(5) Gross Asset Value is calculated by applying a capitalization rate to the annualized EBITDA(4) from the most recently ended quarter, excluding EBITDA from disposed properties and current quarter acquisitions. To this amount, the purchase price of current quarter acquisitions, cash and cash equivalents and development in progress is added. | ||||||||||||||
(6) Fixed Charges consist of interest expense, principal payments, ground lease payments and replacement reserve payments. | ||||||||||||||
(7) Unencumbered Pool Value is calculated by applying a capitalization rate of 7.50% to the net operating income from unencumbered properties owned for the entire quarter. To this we add the purchase price of unencumbered acquisitions during the current quarter. | ||||||||||||||
(8) Investments is defined as development in progress, including land held for development, plus budgeted development costs upon commencement of construction, if any. | ||||||||||||||
12
Capital Analysis (In thousands, except per share amounts) | |
9/30/2014 | 6/30/2014 | 3/31/2014 | 12/31/2013 | 9/30/2013 | |||||||||||||||
Market Data | |||||||||||||||||||
Shares Outstanding | 66,663 | 66,636 | 66,630 | 66,531 | 66,500 | ||||||||||||||
Market Price per Share | $ | 25.38 | $ | 25.98 | $ | 23.88 | $ | 23.36 | $ | 25.27 | |||||||||
Equity Market Capitalization | $ | 1,691,907 | $ | 1,731,203 | $ | 1,591,124 | $ | 1,554,164 | $ | 1,680,455 | |||||||||
Total Debt | $ | 1,165,412 | $ | 1,153,931 | $ | 1,151,189 | $ | 1,141,374 | $ | 1,245,881 | |||||||||
Total Market Capitalization | $ | 2,857,319 | $ | 2,885,134 | $ | 2,742,313 | $ | 2,695,538 | $ | 2,926,336 | |||||||||
Total Debt to Market Capitalization | 0.41 | :1 | 0.40 | :1 | 0.42 | :1 | 0.42 | :1 | 0.43 | :1 | |||||||||
Earnings to Fixed Charges(1) | 1.2x | 1.1x | 0.8x | 0.7x | 1.1x | ||||||||||||||
Debt Service Coverage Ratio(2) | 2.7x | 2.5x | 2.3x | 2.5x | 2.7x | ||||||||||||||
Dividend Data | |||||||||||||||||||
Total Dividends Paid | $ | 20,019 | $ | 20,042 | $ | 20,092 | $ | 19,972 | $ | 20,033 | |||||||||
Common Dividend per Share | $ | 0.30 | $ | 0.30 | $ | 0.30 | $ | 0.30 | $ | 0.30 | |||||||||
Payout Ratio (Core FFO per share basis) | 69.8 | % | 73.2 | % | 83.3 | % | 71.4 | % | 65.2 | % | |||||||||
Payout Ratio (Core FAD per share basis) | 100.0 | % | 120.0 | % | 107.1 | % | 130.4 | % | 88.2 | % | |||||||||
Payout Ratio (FAD per share basis) | 103.4 | % | 136.4 | % | 130.4 | % | 187.5 | % | 88.2 | % | |||||||||
(1) The ratio of earnings to fixed charges is computed by dividing earnings by fixed charges. For this purpose, earnings consist of income from continuing operations attributable to the controlling interests plus fixed charges, less capitalized interest. Fixed charges consist of interest expense, including amortized costs of debt issuance, plus interest costs capitalized. | |||||||||||||||||||
(2) Debt service coverage ratio is computed by dividing Adjusted EBITDA (see page 9) by interest expense and principal amortization. | |||||||||||||||||||
13
Same-Store Portfolio Net Operating Income (NOI) Growth & Rental Growth 2014 vs. 2013 | |
Three Months Ended September 30, | |||||||||||||
2014 | 2013 | % Change | Rental Rate Growth | ||||||||||
Cash Basis: | |||||||||||||
Multifamily | $ | 8,084 | $ | 7,975 | 1.4 | % | (0.8 | )% | |||||
Office | 23,517 | 21,441 | 9.7 | % | 1.2 | % | |||||||
Retail | 11,558 | 10,655 | 8.5 | % | 0.7 | % | |||||||
Overall Same-Store Portfolio (1) | $ | 43,159 | $ | 40,071 | 7.7 | % | 0.7 | % | |||||
GAAP Basis: | |||||||||||||
Multifamily | $ | 8,090 | $ | 8,098 | (0.1 | )% | (0.8 | )% | |||||
Office | 23,665 | 21,662 | 9.2 | % | 1.6 | % | |||||||
Retail | 11,621 | 10,754 | 8.1 | % | 0.8 | % | |||||||
Overall Same-Store Portfolio (1) | $ | 43,376 | $ | 40,514 | 7.1 | % | 0.9 | % | |||||
(1) Non same-store properties were: |
Acquisitions: |
Multifamily - The Paramount and Yale West |
Office - The Army Navy Club Building and 1775 Eye Street |
Redevelopment: |
Office - 7900 Westpark Drive |
Sold properties classified as continuing operations: |
Retail - 5740 Columbia Road (parcel of land at Gateway Overlook) |
Sold properties classified as discontinued operations: |
Medical Office/Office - The Medical Office Portfolio (see Supplemental Definitions on page 31 for list of properties included in the Medical Office Portfolio) |
14
Same-Store Portfolio Net Operating Income (NOI) Detail (In thousands) | |
Three Months Ended September 30, 2014 | |||||||||||||||||||
Multifamily | Office | Retail | Corporate and Other | Total | |||||||||||||||
Real estate rental revenue | |||||||||||||||||||
Same-store portfolio | $ | 13,618 | $ | 36,917 | $ | 14,825 | $ | — | $ | 65,360 | |||||||||
Non same-store - acquired and in development (1) | 2,342 | 5,711 | — | — | 8,053 | ||||||||||||||
Total | 15,960 | 42,628 | 14,825 | — | 73,413 | ||||||||||||||
Real estate expenses | |||||||||||||||||||
Same-store portfolio | 5,528 | 13,252 | 3,204 | — | 21,984 | ||||||||||||||
Non same-store - acquired and in development (1) | 1,116 | 2,814 | — | — | 3,930 | ||||||||||||||
Total | 6,644 | 16,066 | 3,204 | — | 25,914 | ||||||||||||||
Net Operating Income (NOI) | |||||||||||||||||||
Same-store portfolio | 8,090 | 23,665 | 11,621 | — | 43,376 | ||||||||||||||
Non same-store - acquired and in development (1) | 1,226 | 2,897 | — | — | 4,123 | ||||||||||||||
Total | $ | 9,316 | $ | 26,562 | $ | 11,621 | $ | — | $ | 47,499 | |||||||||
Same-store portfolio NOI GAAP basis (from above) | $ | 8,090 | $ | 23,665 | $ | 11,621 | $ | — | $ | 43,376 | |||||||||
Straight-line revenue, net for same-store properties | 3 | (423 | ) | (71 | ) | — | (491 | ) | |||||||||||
FAS 141 Min Rent | (9 | ) | 4 | (57 | ) | — | (62 | ) | |||||||||||
Amortization of lease intangibles for same-store properties | — | 271 | 65 | — | 336 | ||||||||||||||
Same-store portfolio NOI, cash basis | $ | 8,084 | $ | 23,517 | $ | 11,558 | $ | — | $ | 43,159 | |||||||||
Reconciliation of NOI to net income | |||||||||||||||||||
Total NOI | $ | 9,316 | $ | 26,562 | $ | 11,621 | $ | — | $ | 47,499 | |||||||||
Depreciation and amortization | (4,252 | ) | (16,655 | ) | (3,200 | ) | (247 | ) | (24,354 | ) | |||||||||
General and administrative | — | — | — | (4,523 | ) | (4,523 | ) | ||||||||||||
Interest expense | (2,492 | ) | (3,024 | ) | (247 | ) | (9,324 | ) | (15,087 | ) | |||||||||
Other income | — | — | — | 192 | 192 | ||||||||||||||
Acquisition costs | — | — | — | (69 | ) | (69 | ) | ||||||||||||
Gain on sale of real estate | — | — | — | — | — | ||||||||||||||
Discontinued operations: | |||||||||||||||||||
Loss on sale of real estate (1) | — | — | — | — | — | ||||||||||||||
Net income (loss) | 2,572 | 6,883 | 8,174 | (13,971 | ) | 3,658 | |||||||||||||
Net loss attributable to noncontrolling interests | — | — | — | 10 | 10 | ||||||||||||||
Net income (loss) attributable to the controlling interests | $ | 2,572 | $ | 6,883 | $ | 8,174 | $ | (13,961 | ) | $ | 3,668 | ||||||||
(1) For a list of non-same-store properties and held for sale and sold properties, see page 14 of this Supplemental. | |||||||||||||||||||
15
Same-Store Net Operating Income (NOI) Detail (In thousands) | |
Three Months Ended September 30, 2013 | |||||||||||||||||||||||
Multifamily | Office | Medical Office | Retail | Corporate and Other | Total | ||||||||||||||||||
Real estate rental revenue | |||||||||||||||||||||||
Same-store portfolio | $ | 13,617 | $ | 34,903 | $ | — | $ | 13,957 | $ | — | $ | 62,477 | |||||||||||
Non same-store - acquired and in development (1) | — | 3,318 | — | 33 | — | 3,351 | |||||||||||||||||
Total | 13,617 | 38,221 | — | 13,990 | — | 65,828 | |||||||||||||||||
Real estate expenses | |||||||||||||||||||||||
Same-store portfolio | 5,519 | 13,241 | — | 3,203 | — | 21,963 | |||||||||||||||||
Non same-store - acquired and in development (1) | — | 1,276 | — | 4 | — | 1,280 | |||||||||||||||||
Total | 5,519 | 14,517 | — | 3,207 | — | 23,243 | |||||||||||||||||
Net Operating Income (NOI) | |||||||||||||||||||||||
Same-store portfolio | 8,098 | 21,662 | — | 10,754 | — | 40,514 | |||||||||||||||||
Non same-store - acquired and in development (1) | — | 2,042 | — | 29 | — | 2,071 | |||||||||||||||||
Total | $ | 8,098 | $ | 23,704 | $ | — | $ | 10,783 | $ | — | $ | 42,585 | |||||||||||
Same-store portfolio NOI GAAP basis (from above) | $ | 8,098 | $ | 21,662 | $ | — | $ | 10,754 | $ | — | $ | 40,514 | |||||||||||
Straight-line revenue, net for same-store properties | (2 | ) | (422 | ) | — | (96 | ) | — | (520 | ) | |||||||||||||
FAS 141 Min Rent | (121 | ) | 56 | — | (68 | ) | — | (133 | ) | ||||||||||||||
Amortization of lease intangibles for same-store properties | — | 145 | — | 65 | — | 210 | |||||||||||||||||
Same-store portfolio NOI, cash basis | $ | 7,975 | $ | 21,441 | $ | — | $ | 10,655 | $ | — | $ | 40,071 | |||||||||||
Reconciliation of NOI to net income | |||||||||||||||||||||||
Total NOI | $ | 8,098 | $ | 23,704 | $ | — | $ | 10,783 | $ | — | $ | 42,585 | |||||||||||
Depreciation and amortization | (2,987 | ) | (14,556 | ) | — | (3,352 | ) | (273 | ) | (21,168 | ) | ||||||||||||
General and administrative | — | — | — | — | (3,850 | ) | (3,850 | ) | |||||||||||||||
Interest expense | (1,703 | ) | (2,582 | ) | — | (266 | ) | (11,379 | ) | (15,930 | ) | ||||||||||||
Other income | — | — | — | — | 220 | 220 | |||||||||||||||||
Acquisition costs | — | — | — | — | (148 | ) | (148 | ) | |||||||||||||||
Discontinued operations: | |||||||||||||||||||||||
Income from operations of properties sold or held for sale (1) | — | 311 | 3,820 | — | — | 4,131 | |||||||||||||||||
Net income (loss) | 3,408 | 6,877 | 3,820 | 7,165 | (15,430 | ) | 5,840 | ||||||||||||||||
Net income attributable to noncontrolling interests | — | — | — | — | — | — | |||||||||||||||||
Net income (loss) attributable to the controlling interests | $ | 3,408 | $ | 6,877 | $ | 3,820 | $ | 7,165 | $ | (15,430 | ) | $ | 5,840 | ||||||||||
(1) For a list of non-same-store properties and held for sale and sold properties, see page 14 of this Supplemental. | |||||||||||||||||||||||
16
Net Operating Income (NOI) by Region | |
Washington REIT Portfolio | Washington REIT Portfolio | |||||||||||
Maryland/Virginia/DC | Inside & Outside the Beltway | |||||||||||
Percentage of GAAP NOI | Percentage of GAAP NOI | |||||||||||
Q3 2014 | YTD 2014 | Q3 2014 | YTD 2014 | |||||||||
DC | Inside the Beltway | |||||||||||
Multifamily | 5.5 | % | 5.2 | % | Multifamily | 18.6 | % | 18.8 | % | |||
Office | 25.8 | % | 24.7 | % | Office | 36.3 | % | 35.6 | % | |||
Retail | 0.9 | % | 0.8 | % | Retail | 7.5 | % | 7.6 | % | |||
32.2 | % | 30.7 | % | 62.4 | % | 62.0 | % | |||||
Maryland | Outside the Beltway | |||||||||||
Multifamily | 2.7 | % | 2.7 | % | Multifamily | 1.0 | % | 1.0 | % | |||
Office | 11.1 | % | 10.7 | % | Office | 19.6 | % | 20.1 | % | |||
Retail | 16.9 | % | 17.0 | % | Retail | 17.0 | % | 16.9 | % | |||
30.7 | % | 30.4 | % | 37.6 | % | 38.0 | % | |||||
Virginia | ||||||||||||
Multifamily | 11.4 | % | 11.9 | % | Total Portfolio | 100.0 | % | 100.0 | % | |||
Office | 19.0 | % | 20.2 | % | ||||||||
Retail | 6.7 | % | 6.8 | % | ||||||||
37.1 | % | 38.9 | % | |||||||||
Total Portfolio | 100.0 | % | 100.0 | % | ||||||||
17
Same-Store and Overall Physical Occupancy Levels by Sector | ||||
Physical Occupancy - Same-Store Properties (1) | |||||||||||||||
Sector | 9/30/2014 | 6/30/2014 | 3/31/2014 | 12/31/2013 | 9/30/2013 | ||||||||||
Multifamily | 94.5 | % | 94.3 | % | 92.7 | % | 92.6 | % | 94.1 | % | |||||
Office | 91.8 | % | 90.6 | % | 86.9 | % | 86.6 | % | 86.6 | % | |||||
Retail | 94.4 | % | 94.2 | % | 93.6 | % | 91.3 | % | 91.4 | % | |||||
Overall Portfolio | 93.2 | % | 92.6 | % | 90.2 | % | 89.4 | % | 89.8 | % | |||||
Physical Occupancy - All Properties | |||||||||||||||
Sector | 9/30/2014 | 6/30/2014 | 3/31/2014 | 12/31/2013 | 9/30/2013 | ||||||||||
Multifamily | 94.3 | % | 93.7 | % | 92.2 | % | 92.1 | % | 94.1 | % | |||||
Office | 87.1 | % | 86.2 | % | 83.7 | % | 85.7 | % | 86.1 | % | |||||
Medical Office | — | % | — | % | — | % | 89.0 | % | 84.6 | % | |||||
Retail | 94.4 | % | 94.2 | % | 93.6 | % | 91.3 | % | 91.4 | % | |||||
Overall Portfolio | 90.7 | % | 90.1 | % | 88.4 | % | 88.8 | % | 88.7 | % | |||||
(1) Non same-store properties were: |
Acquisitions: |
Multifamily - The Paramount and Yale West |
Office - The Army Navy Club Building and 1775 Eye Street |
Redevelopment: |
Office - 7900 Westpark Drive |
Sold properties classified as continuing operations: |
Retail - 5740 Columbia Road (parcel of land at Gateway Overlook) |
Sold properties classified as discontinued operations: |
Medical Office/Office - The Medical Office Portfolio (see Supplemental Definitions on page 31 for list of properties included in the Medical Office Portfolio) |
18
Same-Store Portfolio and Overall Economic Occupancy Levels by Sector | ||||
Economic Occupancy - Same-Store Properties(1) | |||||||||||||||
Sector | 9/30/2014 | 6/30/2014 | 3/31/2014 | 12/31/2013 | 9/30/2013 | ||||||||||
Multifamily | 94.7 | % | 93.4 | % | 91.9 | % | 92.4 | % | 93.5 | % | |||||
Office | 92.5 | % | 90.4 | % | 88.2 | % | 87.3 | % | 87.5 | % | |||||
Retail | 94.9 | % | 93.9 | % | 92.9 | % | 91.9 | % | 91.5 | % | |||||
Overall Portfolio | 93.5 | % | 91.8 | % | 90.0 | % | 89.4 | % | 89.6 | % | |||||
Economic Occupancy - All Properties | |||||||||||||||
Sector | 9/30/2014 | 6/30/2014 | 3/31/2014 | 12/31/2013 | 9/30/2013 | ||||||||||
Multifamily | 94.1 | % | 92.6 | % | 91.6 | % | 92.2 | % | 93.5 | % | |||||
Office | 87.0 | % | 86.0 | % | 85.4 | % | 86.0 | % | 86.7 | % | |||||
Medical Office | — | % | — | % | 87.4 | % | 89.4 | % | 87.1 | % | |||||
Retail | 94.9 | % | 93.9 | % | 92.9 | % | 92.0 | % | 91.5 | % | |||||
Overall Portfolio | 90.0 | % | 88.9 | % | 88.2 | % | 88.6 | % | 88.7 | % | |||||
(1) Non same-store properties were: |
Acquisitions: |
Multifamily - The Paramount and Yale West |
Office - The Army Navy Club Building and 1775 Eye Street |
Redevelopment: |
Office - 7900 Westpark Drive |
Sold properties classified as continuing operations: |
Retail - 5740 Columbia Road (parcel of land at Gateway Overlook) |
Sold properties classified as discontinued operations: |
Medical Office/Office - The Medical Office Portfolio (see Supplemental Definitions on page 31 for list of properties included in the Medical Office Portfolio) |
19
Acquisition and Disposition Summary | |
September 30, 2014 | |
($ in thousands) | |
0,
Acquisition Summary | ||||||||||||||||||
Acquisition Date | # of Units | Square Feet | 9/30/2014 Leased Percentage | Investment | Mortgage Assumed | |||||||||||||
Yale West | Washington, DC | February 21, 2014 | 216 | 94 | % | $ | 73,000 | $ | 48,221 | |||||||||
The Army Navy Club Building | Washington, DC | March 26, 2014 | 108,000 | 100 | % | 79,000 | 52,640 | |||||||||||
1775 Eye Street, NW | Washington, DC | May 1, 2014 | 185,000 | 71 | % | 104,500 | N/A | |||||||||||
293,000 | $ | 256,500 | $ | 100,861 | ||||||||||||||
2012
Disposition Summary | |||||||||||||||
Disposition Date | Property Type | Square Feet | Contract Sales Price | GAAP Gain | |||||||||||
Medical Office Portfolio Transactions III & IV | January 21, 2014 | Medical Office | 427,011 | $ | 193,561 | $ | 105,985 | ||||||||
5740 Columbia Road * | May 2, 2014 | Retail | 3,000 | 1,600 | 570 | ||||||||||
430,011 | $ | 195,161 | $ | 106,555 | |||||||||||
* 5740 Columbia Road is a parcel of land with a 7-11 store that had been part of our Gateway Overlook retail property in Columbia, Maryland.
20
Development/Re-Development Summary | |
September 30, 2014 | |
($ in thousands) | |
Property and Location | Total Rentable Square Feet or # of Units | Anticipated Total Cost | Cost to Date | Draws on Construction Loan to Date | Anticipated Construction Completion Date | Leased % | ||||||
Development Summary | ||||||||||||
The Maxwell Apartments, Arlington, VA (formerly 650 N. Glebe Road) | 163 units & 2,200 square feet retail | $ | 49,904 | $ | 40,981 | $ | 21,434 | fourth quarter 2014 | N/A | |||
Re-Development Summary | ||||||||||||
7900 Westpark Drive, McLean, VA | 527,000 square feet | $ | 35,000 | $ | 16,347 | N/A | first quarter 2015 | 58.5% | ||||
21
Commercial Leasing Summary - New Leases | |
3rd Quarter 2014 | 2nd Quarter 2014 | 1st Quarter 2014 | 4th Quarter 2013 | 3rd Quarter 2013 | |||||||||||||||||||||||||||||||||||
Gross Leasing Square Footage | |||||||||||||||||||||||||||||||||||||||
Office Buildings | 37,852 | 69,367 | 43,243 | 144,675 | 147,194 | ||||||||||||||||||||||||||||||||||
Medical Office Buildings | — | — | — | 3,826 | 5,804 | ||||||||||||||||||||||||||||||||||
Retail Centers | 10,408 | 32,191 | 29,527 | 22,631 | 49,396 | ||||||||||||||||||||||||||||||||||
Total | 48,260 | 101,558 | 72,770 | 171,132 | 202,394 | ||||||||||||||||||||||||||||||||||
Weighted Average Term (yrs) | |||||||||||||||||||||||||||||||||||||||
Office Buildings | 7.4 | 5.8 | 7.3 | 7.2 | 11.1 | ||||||||||||||||||||||||||||||||||
Medical Office Buildings | 0.0 | 0.0 | 0.0 | 10.3 | 5.2 | ||||||||||||||||||||||||||||||||||
Retail Centers | 9.8 | 10.2 | 9.6 | 7.8 | 9.8 | ||||||||||||||||||||||||||||||||||
Total | 7.9 | 7.1 | 8.2 | 7.3 | 10.6 | ||||||||||||||||||||||||||||||||||
Rental Rate Increases: | GAAP | CASH | GAAP | CASH | GAAP | CASH | GAAP | CASH | GAAP | CASH | |||||||||||||||||||||||||||||
Rate on expiring leases | |||||||||||||||||||||||||||||||||||||||
Office Buildings | $ | 31.50 | $ | 32.62 | $ | 31.14 | $ | 32.00 | $ | 28.65 | $ | 30.53 | $ | 31.31 | $ | 32.29 | $ | 32.66 | $ | 33.28 | |||||||||||||||||||
Medical Office Buildings | — | — | — | — | — | — | 29.56 | 31.13 | 39.59 | 41.07 | |||||||||||||||||||||||||||||
Retail Centers | 36.96 | 37.29 | 22.59 | 23.39 | 25.27 | 25.96 | 26.23 | 26.91 | 19.86 | 20.06 | |||||||||||||||||||||||||||||
Total | $ | 32.68 | $ | 33.63 | $ | 28.24 | $ | 29.08 | $ | 27.28 | $ | 28.68 | $ | 30.42 | $ | 31.35 | $ | 29.73 | $ | 30.28 | |||||||||||||||||||
Rate on new leases | |||||||||||||||||||||||||||||||||||||||
Office Buildings | $ | 33.77 | $ | 30.68 | $ | 35.71 | $ | 33.40 | $ | 32.53 | $ | 29.86 | $ | 33.78 | $ | 31.31 | $ | 33.06 | $ | 28.74 | |||||||||||||||||||
Medical Office Buildings | — | — | — | — | — | — | 34.78 | 30.43 | 40.01 | 37.73 | |||||||||||||||||||||||||||||
Retail Centers | 43.69 | 38.76 | 22.07 | 21.36 | 30.77 | 27.66 | 27.74 | 26.04 | 23.45 | 22.02 | |||||||||||||||||||||||||||||
Total | $ | 35.91 | $ | 32.43 | $ | 30.79 | $ | 29.04 | $ | 31.81 | $ | 28.97 | $ | 32.78 | $ | 30.39 | $ | 30.91 | $ | 27.36 | |||||||||||||||||||
Percentage Increase | |||||||||||||||||||||||||||||||||||||||
Office Buildings | 7.2 | % | (5.9 | )% | 14.7 | % | 4.4 | % | 13.6 | % | (2.2 | )% | 7.9 | % | (3.0 | )% | 1.2 | % | (13.7 | )% | |||||||||||||||||||
Medical Office Buildings | — | % | — | % | — | % | — | % | — | % | — | % | 17.7 | % | (2.3 | )% | 1.1 | % | (8.1 | )% | |||||||||||||||||||
Retail Centers | 18.2 | % | 4.0 | % | (2.3 | )% | (8.7 | )% | 21.7 | % | 6.5 | % | 5.8 | % | (3.2 | )% | 18.1 | % | 9.8 | % | |||||||||||||||||||
Total | 9.9 | % | (3.6 | )% | 9.0 | % | (0.1 | )% | 16.6 | % | 1.0 | % | 7.8 | % | (3.1 | )% | 4.0 | % | (9.7 | )% | |||||||||||||||||||
Total Dollars | $ per Sq Ft | Total Dollars | $ per Sq Ft | Total Dollars | $ per Sq Ft | Total Dollars | $ per Sq Ft | Total Dollars | $ per Sq Ft | ||||||||||||||||||||||||||||||
Tenant Improvements | |||||||||||||||||||||||||||||||||||||||
Office Buildings | $ | 1,499,573 | $ | 39.62 | $ | 2,330,006 | $ | 33.59 | $ | 1,955,769 | $ | 45.23 | $ | 6,189,544 | $ | 42.78 | $ | 8,230,229 | $ | 55.91 | |||||||||||||||||||
Medical Office Buildings | — | — | — | — | — | — | 63,587 | 16.62 | 101,630 | 17.51 | |||||||||||||||||||||||||||||
Retail Centers | 162,180 | 15.58 | 1,616,068 | 50.20 | 38,923 | 1.32 | 215,340 | 9.52 | 751,184 | 15.21 | |||||||||||||||||||||||||||||
Subtotal | $ | 1,661,753 | $ | 34.43 | $ | 3,946,074 | $ | 38.86 | $ | 1,994,692 | $ | 27.41 | $ | 6,468,471 | $ | 37.80 | $ | 9,083,043 | $ | 44.88 | |||||||||||||||||||
Leasing Commissions and Incentives | |||||||||||||||||||||||||||||||||||||||
Office Buildings | $ | 1,345,301 | $ | 35.54 | $ | 1,512,211 | $ | 21.80 | $ | 1,207,798 | $ | 27.93 | $ | 4,353,688 | $ | 30.09 | $ | 6,781,162 | $ | 46.07 | |||||||||||||||||||
Medical Office Buildings | — | — | — | — | — | — | 91,665 | 23.96 | 99,930 | 17.22 | |||||||||||||||||||||||||||||
Retail Centers | 291,731 | 28.03 | 300,287 | 9.33 | 388,220 | 13.15 | 180,197 | 7.96 | 517,974 | 10.49 | |||||||||||||||||||||||||||||
Subtotal | $ | 1,637,032 | $ | 33.92 | $ | 1,812,498 | $ | 17.84 | $ | 1,596,018 | $ | 21.93 | $ | 4,625,550 | $ | 27.03 | $ | 7,399,066 | $ | 36.56 | |||||||||||||||||||
Tenant Improvements and Leasing Commissions and Incentives | |||||||||||||||||||||||||||||||||||||||
Office Buildings | $ | 2,844,874 | $ | 75.16 | $ | 3,842,217 | $ | 55.39 | $ | 3,163,567 | $ | 73.16 | $ | 10,543,232 | $ | 72.87 | $ | 15,011,391 | $ | 101.98 | |||||||||||||||||||
Medical Office Buildings | — | — | — | — | — | — | 155,252 | 40.58 | 201,560 | 34.73 | |||||||||||||||||||||||||||||
Retail Centers | 453,911 | 43.61 | 1,916,355 | 59.53 | 427,143 | 14.47 | 395,537 | 17.48 | 1,269,158 | 25.70 | |||||||||||||||||||||||||||||
Total | $ | 3,298,785 | $ | 68.35 | $ | 5,758,572 | $ | 56.70 | $ | 3,590,710 | $ | 49.34 | $ | 11,094,021 | $ | 64.83 | $ | 16,482,109 | $ | 81.44 | |||||||||||||||||||
22
Commercial Leasing Summary - Renewal Leases | |
3rd Quarter 2014 | 2nd Quarter 2014 | 1st Quarter 2014 | 4th Quarter 2013 | 3rd Quarter 2013 | |||||||||||||||||||||||||||||||||||
Gross Leasing Square Footage | |||||||||||||||||||||||||||||||||||||||
Office Buildings | 44,214 | 109,686 | 60,108 | 201,109 | 140,894 | ||||||||||||||||||||||||||||||||||
Medical Office Buildings | — | — | — | 12,232 | 24,471 | ||||||||||||||||||||||||||||||||||
Retail Centers | 170,568 | 10,645 | 27,100 | 38,995 | 112,736 | ||||||||||||||||||||||||||||||||||
Total | 214,782 | 120,331 | 87,208 | 252,336 | 278,101 | ||||||||||||||||||||||||||||||||||
Weighted Average Term (yrs) | |||||||||||||||||||||||||||||||||||||||
Office Buildings | 7.4 | 4.8 | 7.0 | 5.8 | 6.6 | ||||||||||||||||||||||||||||||||||
Medical Office Buildings | 0.0 | 0.0 | 0.0 | 7.8 | 3.0 | ||||||||||||||||||||||||||||||||||
Retail Centers | 5.1 | 4.3 | 3.3 | 4.0 | 7.3 | ||||||||||||||||||||||||||||||||||
Total | 5.6 | 4.8 | 5.8 | 5.7 | 6.5 | ||||||||||||||||||||||||||||||||||
Rental Rate Increases: | GAAP | CASH | GAAP | CASH | GAAP | CASH | GAAP | CASH | GAAP | CASH | |||||||||||||||||||||||||||||
Rate on expiring leases | |||||||||||||||||||||||||||||||||||||||
Office Buildings | $ | 32.89 | $ | 35.79 | $ | 33.89 | $ | 35.42 | $ | 32.71 | $ | 35.31 | $ | 30.12 | $ | 33.00 | $ | 38.86 | $ | 40.53 | |||||||||||||||||||
Medical Office Buildings | — | — | — | — | — | — | 32.36 | 34.47 | 27.49 | 29.14 | |||||||||||||||||||||||||||||
Retail Centers | 13.65 | 13.86 | 45.12 | 47.17 | 27.54 | 30.66 | 17.51 | 18.22 | 20.07 | 20.74 | |||||||||||||||||||||||||||||
Total | $ | 17.61 | $ | 18.37 | $ | 34.89 | $ | 36.46 | $ | 31.26 | $ | 34.05 | $ | 28.28 | $ | 30.79 | $ | 30.25 | $ | 31.50 | |||||||||||||||||||
Rate on new leases | |||||||||||||||||||||||||||||||||||||||
Office Buildings | $ | 44.95 | $ | 41.11 | $ | 36.12 | $ | 34.39 | $ | 37.02 | $ | 34.06 | $ | 35.30 | $ | 32.88 | $ | 42.04 | $ | 39.42 | |||||||||||||||||||
Medical Office Buildings | — | — | — | — | — | — | 36.28 | 33.16 | 29.48 | 28.82 | |||||||||||||||||||||||||||||
Retail Centers | 14.67 | 14.47 | 50.91 | 48.51 | 30.92 | 30.08 | 17.91 | 17.62 | 24.43 | 22.89 | |||||||||||||||||||||||||||||
Total | $ | 20.90 | $ | 19.95 | $ | 37.42 | $ | 35.64 | $ | 35.36 | $ | 33.03 | $ | 32.66 | $ | 30.53 | $ | 33.80 | $ | 31.79 | |||||||||||||||||||
Percentage Increase | |||||||||||||||||||||||||||||||||||||||
Office Buildings | 36.7 | % | 14.9 | % | 6.6 | % | (2.9 | )% | 13.2 | % | (3.6 | )% | 17.2 | % | (0.4 | )% | 8.2 | % | (2.7 | )% | |||||||||||||||||||
Medical Office Buildings | — | % | — | % | — | % | — | % | — | % | — | % | 12.1 | % | (3.8 | )% | 7.2 | % | (1.1 | )% | |||||||||||||||||||
Retail Centers | 7.4 | % | 4.4 | % | 12.8 | % | 2.8 | % | 12.3 | % | (1.9 | )% | 2.3 | % | (3.3 | )% | 21.7 | % | 10.4 | % | |||||||||||||||||||
Total | 18.7 | % | 8.6 | % | 7.3 | % | (2.3 | )% | 13.1 | % | (3.0 | )% | 15.5 | % | (0.8 | )% | 11.7 | % | 0.9 | % | |||||||||||||||||||
Total Dollars | $ per Sq Ft | Total Dollars | $ per Sq Ft | Total Dollars | $ per Sq Ft | Total Dollars | $ per Sq Ft | Total Dollars | $ per Sq Ft | ||||||||||||||||||||||||||||||
Tenant Improvements | |||||||||||||||||||||||||||||||||||||||
Office Buildings | $ | 595,757 | $ | 13.47 | $ | 1,897,016 | $ | 17.29 | $ | 896,712 | $ | 14.92 | $ | 7,573,493 | $ | 37.66 | $ | 2,788,460 | $ | 19.79 | |||||||||||||||||||
Medical Office Buildings | — | — | — | — | — | — | 183,219 | 14.98 | 114,252 | 4.67 | |||||||||||||||||||||||||||||
Retail Centers | — | — | — | — | — | — | — | — | 28,600 | 0.25 | |||||||||||||||||||||||||||||
Subtotal | $ | 595,757 | $ | 2.77 | $ | 1,897,016 | $ | 15.76 | $ | 896,712 | $ | 10.28 | $ | 7,756,712 | $ | 30.74 | $ | 2,931,312 | $ | 10.54 | |||||||||||||||||||
Leasing Commissions and Incentives | |||||||||||||||||||||||||||||||||||||||
Office Buildings | $ | 532,789 | $ | 12.05 | $ | 1,517,271 | $ | 13.83 | $ | 1,318,800 | $ | 21.94 | $ | 4,065,164 | $ | 20.21 | $ | 2,747,403 | $ | 19.50 | |||||||||||||||||||
Medical Office Buildings | — | — | — | — | — | — | 143,190 | 11.71 | 68,973 | 2.82 | |||||||||||||||||||||||||||||
Retail Centers | 51,270 | 0.30 | 27,278 | 2.56 | 32,300 | 1.19 | 32,725 | 0.84 | 176,809 | 1.57 | |||||||||||||||||||||||||||||
Subtotal | $ | 584,059 | $ | 2.72 | $ | 1,544,549 | $ | 12.84 | $ | 1,351,100 | $ | 15.49 | $ | 4,241,079 | $ | 16.80 | $ | 2,993,185 | $ | 10.77 | |||||||||||||||||||
Tenant Improvements and Leasing Commissions and Incentives | |||||||||||||||||||||||||||||||||||||||
Office Buildings | $ | 1,128,546 | $ | 25.52 | $ | 3,414,287 | $ | 31.12 | $ | 2,215,512 | $ | 36.86 | $ | 11,638,657 | $ | 57.87 | $ | 5,535,863 | $ | 39.29 | |||||||||||||||||||
Medical Office Buildings | — | — | — | — | — | — | 326,409 | 26.69 | 183,225 | 7.49 | |||||||||||||||||||||||||||||
Retail Centers | 51,270 | 0.30 | 27,278 | 2.56 | 32,300 | 1.19 | 32,725 | 0.84 | 205,409 | 1.82 | |||||||||||||||||||||||||||||
Total | $ | 1,179,816 | $ | 5.49 | $ | 3,441,565 | $ | 28.60 | $ | 2,247,812 | $ | 25.77 | $ | 11,997,791 | $ | 47.54 | $ | 5,924,497 | $ | 21.31 | |||||||||||||||||||
23
10 Largest Tenants - Based on Annualized Commercial Income | |
September 30, 2014 | |
Tenant | Number of Buildings | Weighted Average Remaining Lease Term in Months | Percentage of Aggregate Portfolio Annualized Commercial Income | Aggregate Rentable Square Feet | Percentage of Aggregate Occupied Square Feet | ||||||||
World Bank | 1 | 27 | 5.86 | % | 210,354 | 3.33 | % | ||||||
Advisory Board Company | 2 | 56 | 3.80 | % | 199,762 | 3.17 | % | ||||||
Booz Allen Hamilton, Inc. | 1 | 16 | 2.73 | % | 222,989 | 3.53 | % | ||||||
Engility Corporation | 1 | 36 | 2.56 | % | 134,126 | 2.13 | % | ||||||
Squire Patton Boggs (USA) LLP | 1 | 31 | 2.43 | % | 110,566 | 1.75 | % | ||||||
Epstein, Becker & Green, P.C. | 1 | 27 | 1.32 | % | 53,427 | 0.85 | % | ||||||
General Services Administration | 3 | 50 | 1.28 | % | 52,282 | 0.83 | % | ||||||
ManTech International Corporation | 2 | 4 | 1.28 | % | 68,846 | 1.09 | % | ||||||
George Washington University | 2 | 23 | 1.26 | % | 69,775 | 1.11 | % | ||||||
Alexandria City School Board | 1 | 176 | 1.19 | % | 87,883 | 1.39 | % | ||||||
Total/Weighted Average | 42 | 23.71 | % | 1,210,010 | 19.18 | % | |||||||
24
Industry Diversification | |
September 30, 2014 | |
Industry Classification (NAICS) | Annualized Base Rental Revenue | Percentage of Aggregate Annualized Rent | Aggregate Rentable Square Feet | Percentage of Aggregate Square Feet | ||||||||
Professional, Scientific, and Technical Services | $ | 73,481,207 | 38.35 | % | 2,166,004 | 34.50 | % | |||||
Credit Intermediation and Related Activities | 17,726,575 | 9.25 | % | 329,708 | 5.25 | % | ||||||
Religious, Grantmaking, Civic, Professional, and Similar Organizations | 11,867,200 | 6.19 | % | 323,559 | 5.15 | % | ||||||
Food Services and Drinking Places | 8,613,122 | 4.49 | % | 280,253 | 4.46 | % | ||||||
Educational Services | 8,159,897 | 4.26 | % | 270,371 | 4.31 | % | ||||||
Food and Beverage Stores | 6,607,170 | 3.45 | % | 337,197 | 5.37 | % | ||||||
Executive, Legislative, and Other General Government Support | 5,120,019 | 2.67 | % | 140,038 | 2.23 | % | ||||||
Ambulatory Health Care Services | 4,715,160 | 2.46 | % | 153,659 | 2.45 | % | ||||||
Health and Personal Care Stores | 3,775,163 | 1.97 | % | 105,325 | 1.68 | % | ||||||
Broadcasting (except Internet) | 3,585,870 | 1.87 | % | 90,810 | 1.45 | % | ||||||
Personal and Laundry Services | 3,538,018 | 1.85 | % | 113,077 | 1.80 | % | ||||||
Securities, Commodity Contracts, and Other Financial Investments and Related Activities | 3,371,384 | 1.76 | % | 90,875 | 1.45 | % | ||||||
Sporting Goods, Hobby, Book, and Music Stores | 3,316,339 | 1.73 | % | 201,827 | 3.21 | % | ||||||
Furniture and Home Furnishings Stores | 3,210,790 | 1.68 | % | 162,075 | 2.58 | % | ||||||
Electronics and Appliance Stores | 3,064,042 | 1.60 | % | 169,094 | 2.69 | % | ||||||
Miscellaneous Store Retailers | 3,054,143 | 1.59 | % | 166,012 | 2.64 | % | ||||||
Publishing Industries (except Internet) | 2,757,725 | 1.44 | % | 79,659 | 1.27 | % | ||||||
Administrative and Support Services | 2,727,105 | 1.42 | % | 72,770 | 1.16 | % | ||||||
Clothing and Clothing Accessories Stores | 2,696,091 | 1.41 | % | 136,426 | 2.17 | % | ||||||
Amusement, Gambling, and Recreation Industries | 2,315,421 | 1.21 | % | 123,998 | 1.98 | % | ||||||
General Merchandise Stores | 1,875,727 | 0.98 | % | 221,502 | 3.53 | % | ||||||
Nursing and Residential Care Facilities | 1,837,275 | 0.96 | % | 66,810 | 1.06 | % | ||||||
Telecommunications | 1,572,136 | 0.82 | % | 41,334 | 0.66 | % | ||||||
Real Estate | 1,519,469 | 0.79 | % | 46,519 | 0.74 | % | ||||||
Merchant Wholesalers, Durable Goods | 1,076,948 | 0.56 | % | 32,539 | 0.52 | % | ||||||
Social Assistance | 957,882 | 0.50 | % | 40,408 | 0.64 | % | ||||||
25
Industry Diversification (continued) | |
September 30, 2014 | |
Industry Classification (NAICS) | Annualized Base Rental Revenue | Percentage of Aggregate Annualized Rent | Aggregate Rentable Square Feet | Percentage of Aggregate Square Feet | |||||||||
Chemical Manufacturing | 918,560 | 0.48 | % | 20,036 | 0.32 | % | |||||||
Building Material and Garden Equipment and Supplies Dealers | 912,397 | 0.48 | % | 29,470 | 0.47 | % | |||||||
Insurance Carriers and Related Activities | 799,607 | 0.42 | % | 25,182 | 0.40 | % | |||||||
Construction of Buildings | 634,840 | 0.33 | % | 21,127 | 0.34 | % | |||||||
Motor Vehicle and Parts Dealers | 601,815 | 0.31 | % | 36,832 | 0.59 | % | |||||||
Transportation Equipment Manufacturing | 542,685 | 0.28 | % | 19,864 | 0.32 | % | |||||||
Repair and Maintenance | 510,500 | 0.27 | % | 22,449 | 0.36 | % | |||||||
Other | 4,158,947 | 2.17 | % | 141,256 | 2.25 | % | |||||||
Total | $ | 191,621,229 | 100.00 | % | $ | 6,278,065 | 100.00 | % | |||||
26
Lease Expirations | |
September 30, 2014 | |
Year | Number of Leases | Rentable Square Feet | Percent of Rentable Square Feet | Annualized Rent * | Average Rental Rate | Percent of Annualized Rent * | ||||||||||||||
Office: | ||||||||||||||||||||
2014 | 18 | 109,625 | 2.62 | % | $ | 3,839,822 | $ | 35.03 | 2.32 | % | ||||||||||
2015 | 99 | 600,898 | 14.37 | % | 24,150,255 | 40.19 | 14.61 | % | ||||||||||||
2016 | 106 | 641,172 | 15.34 | % | 21,624,977 | 33.73 | 13.08 | % | ||||||||||||
2017 | 82 | 518,609 | 12.41 | % | 20,377,458 | 39.29 | 12.33 | % | ||||||||||||
2018 | 74 | 361,418 | 8.65 | % | 13,943,350 | 38.58 | 8.43 | % | ||||||||||||
2019 and thereafter | 245 | 1,948,580 | 46.61 | % | 81,390,656 | 41.77 | 49.23 | % | ||||||||||||
624 | 4,180,302 | 100.00 | % | $ | 165,326,518 | 39.55 | 100.00 | % | ||||||||||||
Retail: | ||||||||||||||||||||
2014 | 7 | 19,459 | 0.86 | % | $ | 522,609 | 26.86 | 0.99 | % | |||||||||||
2015 | 52 | 237,702 | 10.49 | % | 5,765,978 | 24.26 | 10.96 | % | ||||||||||||
2016 | 29 | 211,131 | 9.32 | % | 4,567,236 | 21.63 | 8.68 | % | ||||||||||||
2017 | 48 | 260,028 | 11.48 | % | 7,112,938 | 27.35 | 13.52 | % | ||||||||||||
2018 | 41 | 366,907 | 16.20 | % | 5,569,710 | 15.18 | 10.59 | % | ||||||||||||
2019 and thereafter | 133 | 1,170,208 | 51.65 | % | 29,075,831 | 24.85 | 55.26 | % | ||||||||||||
310 | 2,265,435 | 100.00 | % | $ | 52,614,302 | 23.22 | 100.00 | % | ||||||||||||
Total: | ||||||||||||||||||||
2014 | 25 | 129,084 | 2.00 | % | 4,362,431 | 33.80 | 2.00 | % | ||||||||||||
2015 | 151 | 838,600 | 13.01 | % | 29,916,233 | 35.67 | 13.73 | % | ||||||||||||
2016 | 135 | 852,303 | 13.22 | % | 26,192,213 | 30.73 | 12.02 | % | ||||||||||||
2017 | 130 | 778,637 | 12.08 | % | 27,490,396 | 35.31 | 12.61 | % | ||||||||||||
2018 | 115 | 728,325 | 11.30 | % | 19,513,060 | 26.79 | 8.95 | % | ||||||||||||
2019 and thereafter | 378 | 3,118,788 | 48.39 | % | 110,466,487 | 35.42 | 50.69 | % | ||||||||||||
934 | 6,445,737 | 100.00 | % | $ | 217,940,820 | 33.81 | 100.00 | % | ||||||||||||
* Annualized Rent is equal to the rental rate effective at lease expiration (cash basis) multiplied by 12. | ||||||||||||||||||||
27
Schedule of Properties | |
September 30, 2014 | |
PROPERTIES | LOCATION | YEAR ACQUIRED | YEAR CONSTRUCTED | NET RENTABLE SQUARE FEET | |||||
Office Buildings | |||||||||
1901 Pennsylvania Avenue | Washington, DC | 1977 | 1960 | 101,000 | |||||
51 Monroe Street | Rockville, MD | 1979 | 1975 | 221,000 | |||||
515 King Street | Alexandria, VA | 1992 | 1966 | 75,000 | |||||
6110 Executive Boulevard | Rockville, MD | 1995 | 1971 | 201,000 | |||||
1220 19th Street | Washington, DC | 1995 | 1976 | 104,000 | |||||
1600 Wilson Boulevard | Arlington, VA | 1997 | 1973 | 166,000 | |||||
7900 Westpark Drive | McLean, VA | 1997 | 1972/1986/1999 | 527,000 | |||||
600 Jefferson Plaza | Rockville, MD | 1999 | 1985 | 113,000 | |||||
Wayne Plaza | Silver Spring, MD | 2000 | 1970 | 97,000 | |||||
Courthouse Square | Alexandria, VA | 2000 | 1979 | 115,000 | |||||
One Central Plaza | Rockville, MD | 2001 | 1974 | 267,000 | |||||
1776 G Street | Washington, DC | 2003 | 1979 | 263,000 | |||||
West Gude Drive | Rockville, MD | 2006 | 1984/1986/1988 | 275,000 | |||||
Monument II | Herndon, VA | 2007 | 2000 | 208,000 | |||||
2000 M Street | Washington, DC | 2007 | 1971 | 230,000 | |||||
2445 M Street | Washington, DC | 2008 | 1986 | 290,000 | |||||
925 Corporate Drive | Stafford, VA | 2010 | 2007 | 133,000 | |||||
1000 Corporate Drive | Stafford, VA | 2010 | 2009 | 136,000 | |||||
1140 Connecticut Avenue | Washington, DC | 2011 | 1966 | 183,000 | |||||
1227 25th Street | Washington, DC | 2011 | 1988 | 135,000 | |||||
Braddock Metro Center | Alexandria, VA | 2011 | 1985 | 349,000 | |||||
John Marshall II | Tysons Corner, VA | 2011 | 1996/2010 | 223,000 | |||||
Fairgate at Ballston | Arlington, VA | 2012 | 1988 | 142,000 | |||||
The Army Navy Club Building | Washington, DC | 2014 | 1912/1987 | 108,000 | |||||
1775 Eye Street, NW | Washington, DC | 2014 | 1964 | 185,000 | |||||
Subtotal | 4,847,000 | ||||||||
28
Schedule of Properties (continued) | |
September 30, 2014 | |
PROPERTIES | LOCATION | YEAR ACQUIRED | YEAR CONSTRUCTED | NET RENTABLE SQUARE FEET | |||||
Retail Centers | |||||||||
Takoma Park | Takoma Park, MD | 1963 | 1962 | 51,000 | |||||
Westminster | Westminster, MD | 1972 | 1969 | 150,000 | |||||
Concord Centre | Springfield, VA | 1973 | 1960 | 76,000 | |||||
Wheaton Park | Wheaton, MD | 1977 | 1967 | 74,000 | |||||
Bradlee Shopping Center | Alexandria, VA | 1984 | 1955 | 171,000 | |||||
Chevy Chase Metro Plaza | Washington, DC | 1985 | 1975 | 49,000 | |||||
Montgomery Village Center | Gaithersburg, MD | 1992 | 1969 | 197,000 | |||||
Shoppes of Foxchase | Alexandria, VA | 1994 | 1960/2006 | 134,000 | |||||
Frederick County Square | Frederick, MD | 1995 | 1973 | 227,000 | |||||
800 S. Washington Street | Alexandria, VA | 1998/2003 | 1955/1959 | 47,000 | |||||
Centre at Hagerstown | Hagerstown, MD | 2002 | 2000 | 332,000 | |||||
Frederick Crossing | Frederick, MD | 2005 | 1999/2003 | 295,000 | |||||
Randolph Shopping Center | Rockville, MD | 2006 | 1972 | 82,000 | |||||
Montrose Shopping Center | Rockville, MD | 2006 | 1970 | 145,000 | |||||
Gateway Overlook | Columbia, MD | 2010 | 2007 | 220,000 | |||||
Olney Village Center | Olney, MD | 2011 | 1979/2003 | 199,000 | |||||
Subtotal | 2,449,000 | ||||||||
29
Schedule of Properties (continued) | |
September 30, 2014 | |
PROPERTIES | LOCATION | YEAR ACQUIRED | YEAR CONSTRUCTED | NET RENTABLE SQUARE FEET (1) | |||||
Multifamily Buildings / # units | |||||||||
3801 Connecticut Avenue / 307 | Washington, DC | 1963 | 1951 | 179,000 | |||||
Roosevelt Towers / 191 | Falls Church, VA | 1965 | 1964 | 170,000 | |||||
Country Club Towers / 227 | Arlington, VA | 1969 | 1965 | 159,000 | |||||
Park Adams / 200 | Arlington, VA | 1969 | 1959 | 173,000 | |||||
Munson Hill Towers / 279 | Falls Church, VA | 1970 | 1963 | 258,000 | |||||
The Ashby at McLean / 256 | McLean, VA | 1996 | 1982 | 274,000 | |||||
Walker House Apartments / 212 | Gaithersburg, MD | 1996 | 1971/2003 | 157,000 | |||||
Bethesda Hill Apartments / 195 | Bethesda, MD | 1997 | 1986 | 225,000 | |||||
Bennett Park / 224 | Arlington, VA | 2007 | 2007 | 214,000 | |||||
Clayborne / 74 | Alexandria, VA | 2008 | 2008 | 60,000 | |||||
Kenmore Apartments / 374 | Washington, DC | 2008 | 1948 | 268,000 | |||||
The Paramount / 135 | Arlington, VA | 2013 | 1984 | 141,000 | |||||
Yale West / 216 | Washington, DC | 2014 | 2011 | 173,000 | |||||
Subtotal (2,890 units) | 2,451,000 | ||||||||
TOTAL | 9,747,000 | ||||||||
(1) Multifamily buildings are presented in gross square feet. | |||||||||
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Supplemental Definitions | |
September 30, 2014 | |
Adjusted EBITDA (a non-GAAP measure) is earnings attributable to the controlling interest before interest expense, taxes, depreciation, amortization, real estate impairment, gain on sale of real estate, gain/loss on extinguishment of debt and gain/loss from non-disposal activities. |
Annualized base rent ("ABR") is calculated as monthly base rent (cash basis) per the lease, as of the reporting period, multiplied by 12. |
Debt service coverage ratio is computed by dividing earnings attributable to the controlling interest before interest expense, taxes, depreciation, amortization, real estate impairment, gain on sale of real estate, gain/loss on extinguishment of debt and gain/loss from non-disposal activities by interest expense (including interest expense from discontinued operations) and principal amortization. |
Debt to total market capitalization is total debt divided by the sum of total debt plus the market value of shares outstanding at the end of the period. |
Earnings to fixed charges ratio is computed by dividing earnings attributable to the controlling interest by fixed charges. For this purpose, earnings consist of income from continuing operations (or net income if there are no discontinued operations) plus fixed charges, less capitalized interest. Fixed charges consist of interest expense (excluding interest expense from discontinued operations), including amortized costs of debt issuance, plus interest costs capitalized. |
Economic occupancy is calculated as actual real estate rental revenue recognized for the period indicated as a percentage of gross potential real estate rental revenue for that period. We determine gross potential real estate rental revenue by valuing occupied units or square footage at contract rates and vacant units or square footage at market rates for comparable properties. We do not consider percentage rents and expense reimbursements in computing economic occupancy percentages. |
Funds from operations ("FFO") is defined by The National Association of Real Estate Investment Trusts, Inc. (“NAREIT”) in an April, 2002 White Paper as net income (computed in accordance with generally accepted accounting principles (“GAAP”)) excluding gains (or losses) associated with sales of property and impairment of depreciable real estate, plus real estate depreciation and amortization. We consider FFO to be a standard supplemental measure for equity real estate investment trusts (“REITs”) because it facilitates an understanding of the operating performance of our properties without giving effect to real estate depreciation and amortization, which historically assumes that the value of real estate assets diminishes predictably over time. Since real estate values have instead historically risen or fallen with market conditions, we believe that FFO more accurately provides investors an indication of our ability to incur and service debt, make capital expenditures and fund other needs. FFO is a non-GAAP measure. |
Core Funds From Operations ("Core FFO") is calculated by adjusting FFO for the following items (which we believe are not indicative of the performance of Washington REIT’s operating portfolio and affect the comparative measurement of Washington REIT’s operating performance over time): (1) gains or losses on extinguishment of debt, (2) costs related to the acquisition of properties, (3) severance expense related to corporate reorganization and related to executive retirements or resignations and (4) property impairments not already excluded from FFO, as appropriate. These items can vary greatly from period to period, depending upon the volume of our acquisition activity and debt retirements, among other factors. We believe that by excluding these items, Core FFO serves as a useful, supplementary measure of Washington REIT’s ability to incur and service debt, and distribute dividends to its shareholders. Core FFO is a non-GAAP and non-standardized measure, and may be calculated differently by other REITs. |
Funds Available for Distribution ("FAD") is calculated by subtracting from FFO (1) recurring expenditures, tenant improvements and leasing costs, that are capitalized and amortized and are necessary to maintain our properties and revenue stream and (2) straight line rents, then adding (3) non-real estate depreciation and amortization, (4) non-cash fair value interest expense and (5) amortization of restricted share compensation, then adding or subtracting the (6) amortization of lease intangibles , (7) real estate impairment and (8) non-cash gain/loss on extinguishment of debt, as appropriate. FAD is included herein, because we consider it to be a measure of a REIT’s ability to incur and service debt and to distribute dividends to its shareholders. FAD is a non-GAAP and non-standardized measure, and may be calculated differently by other REITs. |
Core Funds Available for Distribution ("Core FAD") is calculated by adjusting FAD for the following items (which we believe are not indicative of the performance of Washington REIT’s operating portfolio and affect the comparative measurement of Washington REIT’s operating performance over time): (1) gains or losses on extinguishment of debt, (2) costs related to the acquisition of properties, (3) non-share-based severance expense related to corporate reorganization and related to executive retirements or resignations and (4) property impairments not already excluded from FAD, as appropriate. These items can vary greatly from period to period, depending upon the volume of our acquisition activity and debt retirements, among other factors. We believe that by excluding these items, Core FAD serves as a useful, supplementary measure of Washington REIT’s ability to incur and service debt, and distribute dividends to its shareholders. Core FAD is a non-GAAP and non-standardized measure, and may be calculated differently by other REITs. |
The Medical Office Portfolio consists of every medical property, as well as undeveloped land, 4661 Kenmore Ave, and two office properties, Woodholme Center and 6565 Arlington Boulevard. We entered into four separate purchase and sale agreements. Transaction I of the Medical Office Portfolio sale and purchase agreement consists of medical office properties (2440 M Street, 15001 Shady Grove Road, 15505 Shady Grove Road, 19500 at Riverside Park formerly Lansdowne Medical Office Building, 9707 Medical Center Drive, CentreMed I and II, 8301 Arlington Boulevard, Sterling Medical Office Building, Shady Grove Medical Village II, Alexandria Professional Center, Ashburn Farm Office Park I, Ashburn Farm Office Park II, Ashburn Farm Office Park III and Woodholme Medical Office Building) and two office properties (6565 Arlington Boulevard and Woodholme Center). Transaction II of the Medical Office Portfolio purchase and sale agreement consist of undeveloped land (4661 Kenmore Ave). Transaction III of the Medical Office Portfolio purchase and sale agreement consists of medical office properties (Woodburn Medical Park I and Woodburn Medical Park II). Transaction IV of the Medical Office Portfolio purchase and sale agreement consists of a medical office properties (Prosperity Medical Center I and II, and Prosperity Medical Center III). |
Physical occupancy is calculated as occupied square footage as a percentage of total square footage as of the last day of that period. |
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Recurring capital expenditures represent non-accretive building improvements and leasing costs required to maintain current revenues. Recurring capital expenditures do not include acquisition capital that was taken into consideration when underwriting the purchase of a building or which are incurred to bring a building up to "operating standard." |
Rent increases on renewals and rollovers are calculated as the difference, weighted by square feet, of the net ABR due the first month after a term commencement date and the net ABR due the last month prior to the termination date of the former tenant's term. |
Same-store portfolio properties include all stabilized properties that were owned for the entirety of the current and prior reporting periods, and exclude properties under redevelopment or development and properties purchased or sold at any time during the periods being compared. We define redevelopment properties as those for which we expect to spend significant development and construction costs on existing or acquired buildings pursuant to a formal plan which has a current impact on operating results, occupancy and the ability to lease space with the intended result of a higher economic return on the property. Redevelopment and development properties are included in the same-store pool upon completion of the redevelopment or development, and the earlier of achieving 90% occupancy or two years after completion. |
Same-store portfolio net operating income (NOI) growth is the change in the NOI of the same-store portfolio properties from the prior reporting period to the current reporting period. |
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