Washington Real Estate Investment Trust Announces Fourth Quarter and Year-End Operating Results for 2010
ROCKVILLE, Md.--(BUSINESS WIRE)-- Washington Real Estate Investment Trust ("WRIT" or the "Company") (NYSE: WRE), a leading owner and operator of diversified properties in the Washington, DC region, reported financial and operating results today for the quarter and year ending December 31, 2010:
-- Core Funds from Operations(1)per diluted share, defined as Funds from
Operations(1) ("FFO") excluding acquisition expense, gains or losses on
extinguishment of debt and impairment, was $1.96 for the year and $0.48
for the quarter ended December 31, 2010, respectively, as compared to
$2.06 and $0.52 for the prior year period. FFO for the year ending
December 31, 2010 was $111.6 million, or $1.79 per diluted share,
compared to $121.8 million, or $2.14 per diluted share, in 2009. FFO for
the quarter ended December 31, 2010 was $21.1 million, or $0.33 per
diluted share, compared to $29.7 million, or $0.50 per diluted share, in
the same period one year ago.
-- Net income attributable to the controlling interests for the year ending
December 31, 2010 was $37.4 million, or $0.60 per diluted share,
compared to $40.7 million, or $0.71 per diluted share, in 2009. Included
in 2010 net income per share is a $0.15 loss on extinguishment of debt.
Included in 2009 net income per share is a $0.09 gain related to the
extinguishment of debt.
-- Net income attributable to the controlling interests for the quarter
ended December 31, 2010 was $10.6 million, or $0.16 per diluted share,
compared to $7.3 million, or $0.12 per diluted share, in the same period
one year ago. Included in fourth quarter 2010 net income per share is a
$0.14 loss on extinguishment of debt. Included in fourth quarter 2009
net income per share is a $0.03 loss on extinguishment of debt.
"During 2010 we continued to execute on our strategy of repositioning our holdings toward properties inside the Beltway, near major transportation nodes and in areas with strong employment drivers and superior growth demographics. Our portfolio repositioning has been, and will continue to be, funded with proceeds from the disposition of properties that no longer meet our investment criteria, equity, and debt or cash on hand. We have a strong interest in refining our diversified property holdings to focus on high quality office, medical office, retail and multifamily. We are also exploring the sale of industrial and flex properties to facilitate this long term strategy," said George "Skip" McKenzie, President and Chief Executive Officer of WRIT.
Acquisitions and Dispositions
In the fourth quarter, the Company sold an office building and three industrial properties that no longer fit into the Company's long term growth plan. The Ridges, a 104,000 square foot office building in Gaithersburg, Maryland was sold for $27.5 million. The sale generated a net book gain of $4.4 million and produced an unleveraged internal rate of return of 11% over the four year holding period. In a separate transaction, WRIT completed the sale of three industrial properties, Ammendale I and II and Amvax, totaling 305,000 square feet in Beltsville, Maryland for $23.0 million and a net book gain of $9.2 million. The unleveraged internal rate of return was 15%.
In tandem with its strategy to dispose of lower growth assets, WRIT continued its focused acquisitions on superior-located, newer assets. During the fourth quarter, WRIT acquired Gateway Overlook, a 223,000 square foot Class A shopping center in Columbia, Maryland for $88.35 million. The property was completed in 2007 and is located immediately off of I-95 at the intersection of Little Patuxent Parkway/Route 175 and Waterloo Road/Route 108 in Howard County. It is 90% leased to 21 tenants, including national retailers Trader Joe's, Best Buy and Office Depot, as well as Wachovia Bank and Capital One Bank. The shopping center is shadow anchored by a Lowe's and a Costco, neither of which are included in the transaction. WRIT funded the acquisition using available cash and its line of credit. The expected first year unleveraged yield is 6.9% on a cash basis.
Subsequent to quarter end, WRIT furthered its stated plan by acquiring a Washington, DC office property. WRIT acquired 1140 Connecticut Avenue, NW, a twelve story, 184,135 square foot office building with a three level parking garage in Washington, DC, for $80.25 million. The property is 99% leased to 25 office tenants and four retail tenants and is located near the intersection of Connecticut Avenue and M Street in the heart of Washington's "Golden Triangle" Central Business District. WRIT funded this acquisition using available cash and its line of credit. The projected first year unleveraged yield is 6.0% on a cash basis.
In addition, WRIT entered into a contract to purchase 1227 25th Street, NW, an eight story, 130,000 square foot office building with a two level parking garage in Washington, DC, for $47.0 million. The Company anticipates closing on 1227 25th Street by April 6, 2011. The property is 72% leased to the GSA and law firms. It is located near the corner of 25th and M Streets in Washington's West End submarket, immediately adjacent to the Company's 2445 M Street office building. WRIT plans to fund this acquisition using available cash and its line of credit and projects a stabilized yield of 8.7% on a cash basis.
Operating Results
The Company's overall portfolio physical occupancy for the fourth quarter was 88.3%, compared to 89.9% in the same period one year ago and 88.4% in the third quarter of 2010. Overall portfolio Net Operating Income ("NOI")(2) was $51.2 million compared to $50.5 million in the same period one year ago and $50.1 million in the third quarter of 2010.
Same-store(3) portfolio physical occupancy for the fourth quarter was 88.6%, compared to 91.0% in the same period one year ago. Sequentially, same-store physical occupancy decreased 30 basis points (bps) compared to the third quarter of 2010. Same-store portfolio NOI for the fourth quarter decreased 2.7% and rental rate growth was 1.2% compared to the same period one year ago.
-- Multifamily: 14.8% of Total NOI -Multifamily properties' same-store NOI
for the fourth quarter increased 9.7% compared to the same period one
year ago. Rental rate growth was 2.4% while same-store physical
occupancy for the fourth quarter of 2010 compared to 2009 increased 130
bps to 95.7%. Sequentially, same-store physical occupancy decreased 80
bps compared to the third quarter of 2010.
-- Office: 43.1% of Total NOI -Office properties' same-store NOI for the
fourth quarter decreased 6.7% compared to the same period one year ago.
A large contributor to the decline in NOI was a fourth quarter 2009
true-up adjustment to straight-line rent caused by the execution of a
large lease. Rental rates decreased 0.5% while same-store physical
occupancy decreased 280 bps to 88.6%. Sequentially, same-store physical
occupancy increased by 10 bps compared to the third quarter of 2010.
-- Medical: 15.3% of Total NOI -Medical office properties' same-store NOI
for the fourth quarter increased 5.1% compared to the same period one
year ago. Rental rate growth was 3.4% while same-store physical
occupancy decreased 40 bps to 93.8%. Sequentially, same-store physical
occupancy increased 50 bps compared to the third quarter of 2010.
-- Retail: 15.6% of Total NOI -Retail properties' same-store NOI for the
fourth quarter decreased 7.3% compared to the same period one year ago.
A significant portion of the decline is due to a lease termination fee
received in the fourth quarter of 2009. Rental rate growth was 1.4%
while same-store physical occupancy decreased 110 bps to 92.5%.
Sequentially, same-store physical occupancy increased 30 bps compared to
the third quarter of 2010.
-- Industrial: 11.2% of Total NOI -Industrial properties' same-store NOI
for the fourth quarter decreased 5.5% compared to the same period one
year ago. Rental rate growth was 3.2% while same-store physical
occupancy decreased 620 bps to 78.6%. Sequentially, same-store physical
occupancy decreased 110 bps compared to the third quarter of 2010.
Leasing Activity
During the fourth quarter, WRIT signed commercial leases for 382,121 square feet with an average rental rate increase of 11.5% over expiring lease rates, an average lease term of 5.8 years, tenant improvement costs of $7.86 per square foot and leasing costs of $6.01 per square foot.
-- Rental rates for new and renewed office leases increased 9.3% to $31.39
per square foot, with $19.63 per square foot in tenant improvement costs
and $11.79 per square foot in leasing costs.
-- Rental rates for new and renewed medical office leases increased 5.3% to
$37.41 per square foot, with $12.18 per square foot in tenant
improvement costs and $3.04 per square foot in leasing costs.
-- Rental rates for new and renewed retail leases increased 40.6% to $21.79
per square foot, with $2.97 per square foot in tenant improvement costs
and $4.37 per square foot in leasing costs. This increase was driven by
a new lease with an anchor grocery store tenant at Montgomery Village
Center.
-- Rental rates for new and renewed industrial/flex leases decreased 9.4%
to $9.80 per square foot, with $1.09 per square foot in tenant
improvement costs and $2.44 per square foot in leasing costs.
Capital Markets Update
In the fourth quarter, WRIT issued 1,679,508 shares at a weighted average price of $30.68 per share through its Sales Agency Financing Agreement with BNY Capital Markets, generating approximately $51.5 million in proceeds. These proceeds were used for general corporate purposes, including partially funding the acquisition of Gateway Overlook Shopping Center. In 2010 WRIT issued 5,644,777 shares for total proceeds of approximately $171.1 million.
As previously announced, in the fourth quarter, WRIT completed tender offers for its 5.95% senior notes due June 15, 2011 and its 3 7/8% convertible senior notes due September 15, 2026. Of the $150 million 5.95% senior notes, $56.1 million were tendered. With respect to the $125.5 million of 3 7/8% convertible senior notes outstanding, $122.8 million were tendered. The repurchases were funded with a portion of the proceeds from its previously announced $250 million 4.95% senior unsecured notes offering completed in September 2010. As of December 31, 2010, WRIT had a total market capitalization of $3.3 billion.(4)
Dividends
On December 31, 2010, WRIT paid a quarterly dividend of $0.43375 per share for its 196th consecutive quarterly dividend at equal or increasing rates.
Earnings Guidance
For 2011, WRIT projects Core FFO per fully diluted share to be $1.96 - $2.08. The following assumptions are incorporated into this guidance:
-- Same-store occupancy, which ended 2010 at 88.6%, is projected to improve
150 to 200 basis points throughout 2011.
-- Same-store NOI is expected to improve by a range of $0.06 - $0.08 per
fully diluted share.
-- Dilution from the full year impact of issuing additional equity in 2010
is expected to lower FFO per fully diluted share by an additional $0.10
in 2011.
-- Interest expense for 2011 is estimated to range between $0.03 - $0.05
per fully diluted share lower than reported 2010 results due to the
reduction in overall debt.
-- General and administrative expense is estimated to range between $0.02 -
$0.03 per fully diluted share higher than 2010 results due to higher
overhead costs related to the execution of our strategic plan.
-- Net acquisition/disposition volume of $0 - $50 million.
-- Full year impact of 2010 net acquisition/disposition volume and
previously announced 2011 acquisitions is expected to range from $0.10 -
$0.12 per fully diluted share.
Conference Call Information
The Conference Call for 4th Quarter Earnings is scheduled for Friday, February 18, 2011 at 11:00 A.M. Eastern time. Conference Call access information is as follows:
USA Toll Free Number: 1-877-407-9205 International Toll Number: 1-201-689-8054
The instant replay of the Conference Call will be available until March 4, 2011 at 11:59 P.M. Eastern time. Instant replay access information is as follows:
USA Toll Free Number: 1-877-660-6853 International Toll Number: 1-201-612-7415 Account: 286 Conference ID: 364034
The live on-demand webcast of the Conference Call will be available on the Investor section of WRIT's website at www.writ.com. On-line playback of the webcast will be available for two weeks following the Conference Call.
About WRIT
WRIT is a self-administered, self-managed, equity real estate investment trust investing in income-producing properties in the greater Washington metro region. WRIT owns a diversified portfolio of 86 properties totaling approximately 11 million square feet of commercial space and 2,540 residential units, and land held for development. These 86 properties consist of 26 office properties, 16 industrial/flex properties, 18 medical office properties, 15 retail centers and 11 multi-family properties. WRIT shares are publicly traded on the New York Stock Exchange (NYSE:WRE).
Note: WRIT's press releases and supplemental financial information are available on the company website at www.writ.com or by contacting Investor Relations at (301) 984-9400.
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 effect of the current credit and financial market conditions, the availability and cost of capital, fluctuations in interest rates, tenants' financial conditions, the timing and pricing of lease transactions, levels of competition, the effect of government regulation, the impact of newly adopted accounting principles, changes in general and local economic and real estate market conditions, and other risks and uncertainties detailed from time to time in our filings with the SEC, including our 2009 Form 10-K and our third quarter 2010 10-Q. We assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.
(1) Funds From Operations ("FFO") - The National Association of Real Estate Investment Trusts, Inc. ("NAREIT") defines FFO (April, 2002 White Paper) as net income (computed in accordance with generally accepted accounting principles ("GAAP")) excluding gains (or losses) from sales of property plus real estate depreciation and amortization. FFO is a non-GAAP measure and does not replace net income as a measure of performance or net cash provided by operating activities as a measure of liquidity. 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.
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 WRIT's operating portfolio and affect the comparative measurement of WRIT's operating performance over time): (1) gains or losses on extinguishment of debt, (2) costs related to the acquisition of properties and (3) property impairments, 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 WRIT'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.
(2) Net Operating income ("NOI"), defined as real estate rental revenue less real estate expenses, is a non-GAAP measure. NOI is calculated as net income, less non-real estate revenue and the results of discontinued operations (including the gain on sale, if any), plus interest expense, depreciation and amortization and general and administrative expenses. We provide NOI as a supplement to net income calculated in accordance with GAAP. As such, it should not be considered an alternative to net income as an indication of our operating performance. It is the primary performance measure we use to assess the results of our operations at the property level.
(3) For purposes of evaluating comparative operating performance, we categorize our properties as "same-store" or "non-same-store". A same-store property is one that was owned for the entirety of the periods being evaluated. A non-same-store property is one that was acquired or placed into service during either of the periods being evaluated.
(4) Total market capitalization is calculated by multiplying the total outstanding common shares at period end by the closing share price on the last trading day of the period, and then adding the book value of the total outstanding debt at period end.
(5) Funds Available for Distribution ("FAD") is a non-GAAP measure. It 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) amortization of restricted share and unit compensation, and adding or subtracting amortization of lease intangibles, as appropriate. We consider FAD 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-standardized measure and may be calculated differently by other REITs.
Physical Occupancy Levels by Core Properties(i)and All Properties
Physical Occupancy
Core Properties All Properties
Segment 4th QTR 4th QTR 4th QTR 4th QTR
2010 2009 2010 2009
Residential 95.7% 94.4% 95.7% 94.4%
Office 88.6% 91.4% 89.4% 90.8%
Medical Office 93.8% 94.2% 88.5% 87.9%
Retail 92.5% 93.6% 92.1% 93.6%
Industrial 78.6% 84.8% 78.6% 84.4%
Overall Portfolio 88.6% 91.0% 88.3% 89.9%
(i) Core properties include all properties that were owned for the entirety of the current and prior year reporting periods. For Q4 2010 and Q4 2009, core properties exclude: Residential Acquisitions: none; Office Acquisition: Quantico Corporate Center; Medical Office Acquisition: Lansdowne Medical Office Building; Retail Acquisition: Gateway Overlook Shopping Center; Industrial Acquisitions: none. Also excluded from Core Properties in Q4 2010 and Q4 2009 are: Sold Properties: Crossroads Distribution Center, Charleston Business Center, Parklawn Plaza, Lexington, Saratoga, The Ridges, Ammendale I & II and Amvax; Held for Sale Properties: none.
WASHINGTON REAL ESTATE INVESTMENT TRUST
FINANCIAL HIGHLIGHTS
(In thousands, except per share data)
(Unaudited)
Three Months Ended December Twelve Months Ended
31, December 31,
OPERATING RESULTS 2010 2009 2010 2009
Revenue
Real estate rental $ 75,143 $ 75,774 $ 297,977 $ 298,161
revenue
Expenses
Real estate expenses 23,957 25,319 98,922 101,304
Depreciation and 23,889 23,358 93,992 91,668
amortization
General and 3,951 3,187 14,406 13,118
administrative
51,797 51,864 207,320 206,090
Real estate operating 23,346 23,910 90,657 92,071
income
Other income (expense):
Interest expense (17,801 ) (17,548 ) (68,389 ) (74,074 )
Gain (loss) on (8,896 ) (1,595 ) (9,176 ) 5,336
extinguishment of debt
Gain from non-disposal 3 11 7 73
activities
Other income (expense) (391 ) 297 32 417
(27,085 ) (18,835 ) (77,526 ) (68,248 )
Income from continuing (3,739 ) 5,075 13,131 23,823
operations
Discontinued
operations:
Income from operations
of properties held for 697 701 2,829 3,777
sale
Gain on sale of real 13,657 1,527 21,599 13,348
estate
Net income 10,615 7,303 37,559 40,948
Less: Net income
attributable to
noncontrolling (24 ) (49 ) (133 ) (203 )
interests in
subsidiaries
Net income attributable
to the controlling $ 10,591 $ 7,254 $ 37,426 $ 40,745
interests
Income from continuing
operations attributable (3,763 ) 5,026 12,998 23,620
to the controlling
interests
Gain from non-disposal (3 ) (11 ) (7 ) (73 )
activities
Continuing operations
real estate 23,889 23,358 93,992 91,668
depreciation and
amortization
Funds from continuing $ 20,123 $ 28,373 $ 106,983 $ 115,215
operations(1)
Income from
discontinued operations 697 701 2,829 3,777
before gain on sale
Discontinued operations
real estate 302 590 1,754 2,779
depreciation and
amortization
Funds from discontinued 999 1,291 4,583 6,556
operations
Funds from operations $ 21,122 $ 29,664 $ 111,566 $ 121,771
(1)
Non-cash (gain) loss on 2,922 595 3,202 (6,336 )
extinguishment of debt
Tenant improvements (6,373 ) (4,425 ) (13,579 ) (12,490 )
External and internal
leasing commissions (2,089 ) (1,058 ) (9,511 ) (5,845 )
capitalized
Recurring capital (1,698 ) (1,442 ) (5,938 ) (6,356 )
improvements
Straight-line rents, (951 ) (1,527 ) (3,470 ) (3,379 )
net
Non-cash fair value 345 773 2,664 3,595
interest expense
Non real estate
depreciation & 889 1,037 3,969 4,555
amortization of debt
costs
Amortization of lease (437 ) (777 ) (1,817 ) (2,587 )
intangibles, net
Amortization and
expensing of restricted 1,553 820 5,852 3,460
share and unit
compensation
Funds available for $ 15,283 $ 23,660 $ 92,938 $ 96,388
distribution(5)
Note: Certain prior period amounts have been reclassified to conform to the
current presentation.
Three Months Ended December Twelve Months Ended
31, December 31,
Per share
data
attributable 2010 2009 2010 2009
to the
controlling
interests:
Income from
continuing (Basic) $ (0.06 ) $ 0.08 $ 0.21 $ 0.41
operations
(Diluted) $ (0.06 ) $ 0.08 $ 0.21 $ 0.41
Net income (Basic) $ 0.16 $ 0.12 $ 0.60 $ 0.71
(Diluted) $ 0.16 $ 0.12 $ 0.60 $ 0.71
Funds from
continuing (Basic) $ 0.31 $ 0.47 $ 1.72 $ 2.02
operations
(Diluted) $ 0.31 $ 0.47 $ 1.72 $ 2.02
Funds from (Basic) $ 0.33 $ 0.50 $ 1.79 $ 2.14
operations
(Diluted) $ 0.33 $ 0.50 $ 1.79 $ 2.14
Dividends $ 0.4338 $ 0.4325 $ 1.7313 $ 1.7300
paid
Weighted
average 64,536 59,735 62,140 56,894
shares
outstanding
Fully
diluted
weighted 64,536 59,833 62,264 56,968
average
shares
outstanding
WASHINGTON REAL ESTATE INVESTMENT TRUST
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)
December 31, December 31,
2010 2009
Assets
Land $ 440,509 $ 402,277
Income producing property 1,976,378 1,848,129
2,416,887 2,250,406
Accumulated depreciation and amortization (538,786 ) (457,858 )
Net income producing property 1,878,101 1,792,548
Development in progress 26,240 25,031
Total real estate held for investment, net 1,904,341 1,817,579
Investment in real estate sold or held for sale - 48,636
Cash and cash equivalents 78,767 11,203
Restricted cash 21,552 17,668
Rents and other receivables, net of allowance
for doubtful accounts of $8,394 and $6,412 55,176 49,617
respectively
Prepaid expenses and other assets 108,045 95,986
Other assets related to property sold or held - 4,536
for sale
Total assets $ 2,167,881 $ 2,045,225
Liabilities
Notes payable $ 753,587 $ 688,912
Mortgage notes payable 380,171 383,563
Lines of credit 100,000 128,000
Accounts payable and other liabilities 51,130 52,324
Advance rents 12,597 10,743
Tenant security deposits 9,538 9,512
Other liabilities related to property sold or - 23,108
held for sale
Total liabilities $ 1,307,023 $ 1,296,162
Shareholders' equity
Shares of beneficial interest, $0.01 par value;
100,000
Shares authorized; 65,870 and 59,811 shares 659 599
issued and outstanding, respectively
Additional paid-in capital 1,127,825 944,825
Distributions in excess of net income (269,935 ) (198,412 )
Accumulated other comprehensive income (1,469 ) (1,757 )
Total shareholders' equity 857,080 745,255
Noncontrolling interests in subsidiaries 3,778 3,808
Total equity 860,858 749,063
Total liabilities and equity $ 2,167,881 $ 2,045,225
Note: Certain prior year amounts have been reclassified to conform to the
current year presentation.
The following tables contain reconciliations of net income to same-store net operating income for the periods presented: Three months Medical ended December Multifamily Office Retail Industrial Total 31, 2010 Office Same-store net operating $ 7,588 $ 20,467 $ 7,877 $ 7,507 $ 5,746 $ 49,185 income(3) Add: Net operating income from - 1,572 (69 ) 498 - 2,001 non-same-store properties(3) Total net operating $ 7,588 $ 22,039 $ 7,808 $ 8,005 $ 5,746 $ 51,186 income(2) Add/(deduct): Other income (391 ) (expense) Gain from non-disposal 3 activities Interest (17,801 ) expense Gain (loss) on extinguishment (8,896 ) of debt Depreciation and (23,889 ) amortization General and administrative (3,951 ) expenses Income from operations of 697 properties held for sale Gain on sale 13,657 of real estate Net income 10,615 Less: Net income attributable to (24 ) noncontrolling interests in subsidiaries Net income attributable to the $ 10,591 controlling interests Three months Medical ended December Multifamily Office Retail Industrial Total 31, 2009 Office Same-store net operating $ 6,919 $ 21,948 $ 7,492 $ 8,101 $ 6,082 $ 50,542 income(3) Add: Net operating income from - - (87 ) - - (87 ) non-same-store properties(3) Total net operating $ 6,919 $ 21,948 $ 7,405 $ 8,101 $ 6,082 $ 50,455 income(2) Add/(deduct): Other income 297 (expense) Gain from non-disposal 11 activities Interest (17,548 ) expense Gain (loss) on extinguishment (1,595 ) of debt Depreciation and (23,358 ) amortization General and administrative (3,187 ) expenses Income from operations of 701 properties held for sale Gain on sale 1,527 of real estate Net income 7,303 Less: Net income attributable to (49 ) noncontrolling interests in subsidiaries Net income attributable to the $ 7,254 controlling interests The following tables contain reconciliations of net income to same-store net operating income for the periods presented: Twelve months Medical ended December Multifamily Office Retail Industrial Total 31, 2010 Office Same-store net operating $ 24,699 $ 79,721 $ 30,744 $ 30,196 $ 22,856 $ 188,216 income(3) Add: Net operating income from 4,657 6,116 (431 ) 497 - 10,839 non-same-store properties(3) Total net operating $ 29,356 $ 85,837 $ 30,313 $ 30,693 $ 22,856 $ 199,055 income(2) Add/(deduct): Other income 32 (expense) Gain from non-disposal 7 activities Interest (68,389 ) expense Gain (loss) on extinguishment (9,176 ) of debt Depreciation and (93,992 ) amortization General and administrative (14,406 ) expenses Income from operations of 2,829 properties held for sale Gain on sale 21,599 of real estate Net income 37,559 Less: Net income attributable to (133 ) noncontrolling interests in subsidiaries Net income attributable to the $ 37,426 controlling interests Twelve months Medical ended December Multifamily Office Retail Industrial Total 31, 2009 Office Same-store net operating $ 23,620 $ 81,728 $ 29,860 $ 31,141 $ 24,904 $ 191,253 income(3) Add: Net operating income from 3,356 2,415 (167 ) - - 5,604 non-same-store properties(3) Total net operating $ 26,976 $ 84,143 $ 29,693 $ 31,141 $ 24,904 $ 196,857 income(2) Add/(deduct): Other income 417 (expense) Gain from non-disposal 73 activities Interest (74,074 ) expense Gain (loss) on extinguishment 5,336 of debt Depreciation and (91,668 ) amortization General and administrative (13,118 ) expenses Income from operations of 3,777 properties held for sale Gain on sale 13,348 of real estate Net income 40,948 Less: Net income attributable to (203 ) noncontrolling interests in subsidiaries Net income attributable to the $ 40,745 controlling interests
The following table contains a reconciliation of net income attributable to the controlling interests to core funds from operations for the periods presented:
Three Months Ended December Twelve Months Ended December 31,
31,
2010 2009 2010 2009
Net income
attributable
to the $ 10,591 $ 7,254 $ 37,426 $ 40,745
controlling
interests
Add/(deduct):
Real estate
depreciation 23,889 23,358 93,992 91,668
and
amortization
Gain from
non-disposal (3 ) (11 ) (7 ) (73 )
activities
Discontinued
operations:
Gain on sale (13,657 ) (1,527 ) (21,599 ) (13,348 )
of real estate
Real estate
depreciation 302 590 1,754 2,779
and
amortization
Funds from 21,122 29,664 111,566 121,771
Operations(1)
Add/(deduct):
Loss (gain) on
extinguishment 8,896 1,595 9,176 (5,336 )
of debt
Acquisition 709 (13 ) 1,161 788
costs
Core funds
from $ 30,727 $ 31,246 $ 121,903 $ 117,223
operations(1)
Source: Washington Real Estate Investment Trust
Released February 17, 2011