First Quarter 2012
 
 
 
 
 
 
 
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

First Quarter 2012
Washington Real Estate Investment Trust ("WRIT") is a self-administered, self-managed, equity real estate investment trust investing in income-producing properties in the greater Washington metro region. WRIT is diversified, as it invests in office, medical office, retail, and multifamily properties and land for development.

In the first quarter of 2012, WRIT signed commercial leases for 218,000 square feet with an average lease term of 5.7 years. The average rental rate increase on new and renewal leases was 8.6% on a GAAP basis and -3.1% on a cash basis. Commercial tenant improvement costs were $19.08 per square foot and leasing costs were $12.56 per square foot for the quarter.

Net Operating Income Contribution by Sector - First Quarter 2012
As of March 31, 2012, WRIT owned a diversified portfolio of 71 properties totaling approximately 9 million square feet of commercial space and 2,540 residential units, and land held for development. These 71 properties consist of 26 office properties, 18 medical office properties, 16 retail centers and 11 multifamily properties. WRIT shares are publicly traded on the New York Stock Exchange (NYSE: WRE).

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 effect of the current credit and financial market conditions, 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 2011 Form 10-K. 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

March 31, 2012
 
 
 
Schedule
Page
Key Financial Data
 
 
 
 
 
 
Capital Analysis
 
 
 
 
 
Portfolio Analysis
 
 
 
 
 
 
Tenant Analysis
 
 
 
 
 
Appendix
 
 
 





Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)

 
Three Months Ended
OPERATING RESULTS
3/31/2012
 
12/31/2011
 
9/30/2011
 
6/30/2011
 
3/31/2011
Real estate rental revenue
$
76,499

 
$
76,708

 
$
71,931

 
$
71,684

 
$
69,204

Real estate expenses
(26,013
)
 
(26,068
)
 
(24,070
)
 
(23,801
)
 
(23,253
)
 
50,486

 
50,640

 
47,861

 
47,883

 
45,951

Real estate depreciation and amortization
(25,994
)
 
(25,398
)
 
(23,479
)
 
(22,526
)
 
(21,894
)
Income from real estate
24,492

 
25,242

 
24,382

 
25,357

 
24,057

Interest expense
(15,895
)
 
(16,207
)
 
(16,508
)
 
(16,865
)
 
(16,893
)
Other income
244

 
258

 
270

 
310

 
306

Acquisition costs
(54
)
 
(36
)
 
(1,600
)
 
(322
)
 
(1,649
)
Real estate impairment

 
(14,526
)
 

 
 
 

Gain (loss) on extinguishment of debt

 
(976
)
 

 

 

General and administrative
(3,606
)
 
(4,140
)
 
(3,837
)
 
(4,049
)
 
(3,702
)
Income (loss) from continuing operations
5,181

 
(10,385
)
 
2,707

 
4,431

 
2,119

Discontinued operations:
 
 
 
 
 
 
 
 
 
Income (loss) from operations of properties sold or held for sale

 
631

 
3,655

 
3,298

 
2,569

Gain on sale of real estate

 
40,852

 
56,639

 

 

Income tax benefit (expense)

 

 
35

 
(1,173
)
 

Income from discontinued operations

 
41,483

 
60,329

 
2,125

 
2,569

 
 
 
 
 
 
 
 
 
 
Net income
5,181

 
31,098

 
63,036

 
6,556

 
4,688

Less: Net income from noncontrolling interests

 
(409
)
 
(28
)
 
(34
)
 
(23
)
Net income attributable to the controlling interests
$
5,181

 
$
30,689

 
$
63,008

 
$
6,522

 
$
4,665

Per Share Data:
 
 
 
 
 
 
 
 
 
Net income attributable to the controlling interests
$
0.08

 
$
0.46

 
$
0.95

 
$
0.10

 
$
0.07

Fully diluted weighted average shares outstanding
66,328

 
66,069

 
66,064

 
65,989

 
65,907

Percentage of Revenues:
 
 
 
 
 
 
 
 
 
Real estate expenses
34.0
%
 
34.0
 %
 
33.5
%
 
33.2
%
 
33.6
%
General and administrative
4.7
%
 
5.4
 %
 
5.3
%
 
5.6
%
 
5.3
%
Ratios:
 
 
 
 
 
 
 
 
 
Adjusted EBITDA / Interest expense
3.0x

 
3.0x

 
2.9x

 
3.0x

 
2.8x

Income from continuing operations attributable to the controlling interest/Total real estate revenue
6.8
%
 
(13.5
)%
 
3.8
%
 
6.2
%
 
3.1
%
Net income attributable to the controlling interest/Total real estate revenue
6.8
%
 
40.0
 %
 
87.6
%
 
9.1
%
 
6.7
%
Note: Certain prior quarter amounts have been reclassified to conform to the current quarter presentation.
 
 

4




Consolidated Balance Sheets
(In thousands)
(Unaudited)
 
3/31/2012
 
12/31/2011
 
9/30/2011
 
6/30/2011
 
3/31/2011
Assets
 
 
 
 
 
 
 
 
 
Land
$
472,196

 
$
472,196

 
$
472,812

 
$
424,647

 
$
424,647

Income producing property
1,947,630

 
1,934,587

 
1,924,526

 
1,754,493

 
1,744,993

 
2,419,826

 
2,406,783

 
2,397,338

 
2,179,140

 
2,169,640

Accumulated depreciation and amortization
(556,833
)
 
(535,732
)
 
(516,319
)
 
(497,738
)
 
(479,090
)
Net income producing property
1,862,993

 
1,871,051

 
1,881,019

 
1,681,402

 
1,690,550

Development in progress, including land held for development
44,236

 
43,089

 
39,735

 
39,413

 
26,263

Total real estate held for investment, net
1,907,229

 
1,914,140

 
1,920,754

 
1,720,815

 
1,716,813

 
 
 
 
 
 
 
 
 
 
Investment in real estate held for sale, net

 

 
69,990

 
240,437

 
284,052

Cash and cash equivalents
17,809

 
12,765

 
40,751

 
42,886

 
12,480

Restricted cash
21,922

 
19,424

 
23,267

 
22,311

 
23,083

Rents and other receivables, net of allowance for doubtful accounts
54,727

 
53,828

 
52,396

 
48,472

 
46,864

Prepaid expenses and other assets
114,859

 
120,601

 
125,689

 
99,356

 
104,093

Other assets related to properties sold or held for sale

 

 
3,505

 
12,899

 
28,827

Total assets
$
2,116,546

 
$
2,120,758

 
$
2,236,352

 
$
2,187,176

 
$
2,216,212

Liabilities
 
 
 
 
 
 
 
 
 
Notes payable
$
657,562

 
$
657,470

 
$
657,378

 
$
659,934

 
$
753,692

Mortgage notes payable
426,485

 
427,710

 
428,909

 
360,493

 
361,189

Lines of credit/short-term note payable
109,000

 
99,000

 
193,000

 
245,000

 
160,000

Accounts payable and other liabilities
57,766

 
51,145

 
55,879

 
54,101

 
57,040

Advance rents
15,065

 
13,739

 
13,393

 
12,372

 
11,549

Tenant security deposits
8,949

 
8,862

 
8,751

 
8,027

 
8,024

Other liabilities related to properties sold or held for sale

 

 
19,229

 
24,528

 
24,902

Total Liabilities
1,274,827

 
1,257,926

 
1,376,539

 
1,364,455

 
1,376,396

Equity
 
 
 
 
 
 
 
 
 
Shares of beneficial interest, $0.01 par value; 100,000 shares authorized
662

 
662

 
661

 
661

 
660

Additional paid-in capital
1,141,062

 
1,138,478

 
1,136,240

 
1,133,823

 
1,130,297

Distributions in excess of net income
(303,815
)
 
(280,096
)
 
(281,930
)
 
(316,134
)
 
(293,860
)
Accumulated other comprehensive income (loss)

 

 
(160
)
 
(636
)
 
(1,057
)
Total shareholders' equity
837,909

 
859,044

 
854,811

 
817,714

 
836,040

Noncontrolling interests in subsidiaries
3,810

 
3,788

 
5,002

 
5,007

 
3,776

Total equity
841,719

 
862,832

 
859,813

 
822,721

 
839,816

Total liabilities and equity
$
2,116,546

 
$
2,120,758

 
$
2,236,352

 
$
2,187,176

 
$
2,216,212

 
 
 
 
 
 
 
 
 
 
Total Debt / Total Market Capitalization
0.38
:1
 
0.40
:1
 
0.41
:1
 
0.37
:1
 
0.39
:1

5




Funds from Operations
(In thousands, except per share data)
(Unaudited)

 
Three Months Ended
 
3/31/2012
 
12/31/2011
 
9/30/2011
 
6/30/2011
 
3/31/2011
Funds from operations(1)
 
 
 
 
 
 
 
 
 
Net income (loss) attributable to the controlling interests
$
5,181

 
$
30,689

 
$
63,008

 
$
6,522

 
$
4,665

Real estate depreciation and amortization
25,994

 
25,398

 
23,479

 
22,526

 
21,894

Gain from non-disposal activities

 

 

 

 

Discontinued operations:
 
 
 
 
 
 
 
 
 
Gain on sale of real estate

 
(40,452
)
 
(56,639
)
 

 

Income tax expense (benefit)

 

 
(35
)
 
1,173

 

Real estate impairment

 

 

 

 
599

Real estate depreciation and amortization

 

 
943

 
2,933

 
3,355

Funds from operations (FFO)
$
31,175

 
$
15,635

 
$
30,756

 
$
33,154

 
$
30,513

Loss (gain) on extinguishment of debt

 
976

 

 

 

Real estate impairment

 
14,526

 

 

 

Acquisition costs
54

 
36

 
1,600

 
322

 
1,649

Core FFO (1)
$
31,229

 
$
31,173

 
$
32,356

 
$
33,476

 
$
32,162

 
 
 
 
 
 
 
 
 
 
Allocation to participating securities(2)
(188
)
 
(186
)
 
(385
)
 
(38
)
 
(46
)
 
 
 
 
 
 
 
 
 
 
FFO per share - basic
$
0.47

 
$
0.23

 
$
0.46

 
$
0.50

 
$
0.46

FFO per share - fully diluted
$
0.47

 
$
0.23

 
$
0.46

 
$
0.50

 
$
0.46

Core FFO per share - fully diluted
$
0.47

 
$
0.47

 
$
0.48

 
$
0.51

 
$
0.49

 
 
 
 
 
 
 
 
 
 
Common dividend per share
$
0.43375

 
$
0.43375

 
$
0.43375

 
$
0.43375

 
$
0.43375

 
 
 
 
 
 
 
 
 
 
Average shares - basic
66,194

 
66,069

 
66,017

 
65,954

 
65,885

Average shares - fully diluted
66,328

 
66,069

 
66,064

 
65,989

 
65,907

(1)  See "Supplemental Definitions" on page 28 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.


6




Funds Available for Distribution
(In thousands, except per share data)
(Unaudited)

 
Three Months Ended
 
3/31/2012
 
12/31/2011
 
9/30/2011
 
6/30/2011
 
3/31/2011
Funds available for distribution(1)
 
 
 
 
 
 
 
 
 
FFO
$
31,175

 
$
15,635

 
$
30,756

 
$
33,154

 
$
30,513

Tenant improvements
(4,066
)
 
(5,100
)
 
(2,469
)
 
(1,950
)
 
(2,370
)
Leasing commissions and incentives
(2,557
)
 
(1,485
)
 
(3,859
)
 
(1,116
)
 
(2,232
)
Recurring capital improvements
(1,539
)
 
(1,626
)
 
(2,148
)
 
(3,072
)
 
(691
)
Straight-line rent, net
(992
)
 
(776
)
 
(715
)
 
(586
)
 
(657
)
Non-cash fair value interest expense
228

 
(53
)
 
145

 
191

 
179

Non-real estate depreciation and amortization
1,008

 
845

 
1,126

 
888

 
874

Amortization of lease intangibles, net

 
(32
)
 
(329
)
 
(413
)
 
(278
)
Amortization and expensing of restricted share and unit compensation
1,405

 
1,459

 
1,376

 
1,488

 
1,257

Real estate impairment

 
14,526

 

 

 

Funds available for distribution (FAD)
$
24,662

 
$
23,393

 
$
23,883

 
$
28,584

 
$
26,595

Cash loss (gain) on extinguishment of debt

 
976

 

 

 

Acquisition costs
54

 
36

 
1,600

 
322

 
1,649

Core FAD (1)
$
24,716

 
$
24,405

 
$
25,483

 
$
28,906

 
$
28,244

 
 
 
 
 
 
 
 
 
 
Allocation to participating securities(2)
(188
)
 
(186
)
 
(385
)
 
(38
)
 
(46
)
 
 
 
 
 
 
 
 
 
 
FAD per share - basic
$
0.37

 
$
0.35

 
$
0.36

 
$
0.43

 
$
0.40

FAD per share - fully diluted
$
0.37

 
$
0.35

 
$
0.36

 
$
0.43

 
$
0.40

Core FAD per share - fully diluted
$
0.37

 
$
0.37

 
$
0.38

 
$
0.44

 
$
0.43

 
 
 
 
 
 
 
 
 
 
Common dividend per share
$
0.43375

 
$
0.43375

 
$
0.43375

 
$
0.43375

 
$
0.43375

 
 
 
 
 
 
 
 
 
 
Average shares - basic
66,194

 
66,069

 
66,017

 
65,954

 
65,885

Average shares - fully diluted
66,328

 
66,069

 
66,064

 
65,989

 
65,907

(1)  See "Supplemental Definitions" on page 28 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.


7




Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)
(In thousands)
(Unaudited)

 
Three Months Ended
 
3/31/2012
 
12/31/2011
 
9/30/2011
 
6/30/2011
 
3/31/2011
Net income attributable to the controlling interests
$
5,181

 
$
30,689

 
$
63,008

 
$
6,522

 
$
4,665

Add:
 
 
 
 
 
 
 
 
 
Interest expense, including discontinued operations
15,895

 
15,985

 
16,739

 
17,097

 
17,126

Real estate depreciation and amortization, including discontinued operations
25,994

 
25,398

 
24,422

 
25,459

 
25,249

Income tax expense (benefit)
13

 

 
(27
)
 
1,173

 

Real estate impairment

 
14,526

 

 

 
599

Non-real estate depreciation
268

 
242

 
243

 
248

 
268

Less:
 
 
 
 
 
 
 
 
 
    Gain on sale of real estate

 
(40,452
)
 
(56,639
)
 

 

    Loss (gain) on extinguishment of debt

 
976

 

 

 

    Gain from non-disposal activities

 

 

 

 

Adjusted EBITDA (1)
$
47,351

 
$
47,364

 
$
47,746

 
$
50,499

 
$
47,907

(1) Adjusted EBITDA is earnings before interest expense, taxes, depreciation, amortization, gain on sale of real estate, 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, the cost of debt or non-operating gains and losses. Adjusted EBITDA is a non-GAAP measure.



8




Long Term Debt Analysis
(In thousands, except per share data)

 
3/31/2012
 
12/31/2011
 
9/30/2011
 
6/30/2011
 
3/31/2011
Balances Outstanding
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Secured
 
 
 
 
 
 
 
 
 
Conventional fixed rate
$
426,485

 
$
427,710

 
$
446,715

 
$
378,469

 
$
379,333

Secured total
426,485

 
427,710

 
446,715

 
378,469

 
379,333

Unsecured
 
 
 
 
 
 
 
 
 
Fixed rate bonds and notes
657,562

 
657,470

 
657,378

 
659,934

 
753,692

Credit facility
109,000

 
99,000

 
193,000

 
245,000

 
160,000

Unsecured total
766,562

 
756,470

 
850,378

 
904,934

 
913,692

Total
$
1,193,047

 
$
1,184,180

 
$
1,297,093

 
$
1,283,403

 
$
1,293,025

 
 
 
 
 
 
 
 
 
 
Average Interest Rates
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Secured
 
 
 
 
 
 
 
 
 
Conventional fixed rate
5.9
%
 
5.9
%
 
5.9
%
 
5.9
%
 
5.9
%
Secured total
5.9
%
 
5.9
%
 
5.9
%
 
5.9
%
 
5.9
%
Unsecured
 
 
 
 
 
 
 
 
 
Fixed rate bonds
5.4
%
 
5.4
%
 
5.4
%
 
5.4
%
 
5.4
%
Credit facilities
0.9
%
 
0.9
%
 
2.1
%
 
1.4
%
 
1.8
%
Unsecured total
4.7
%
 
4.8
%
 
4.6
%
 
4.3
%
 
4.8
%
Average
5.2
%
 
5.2
%
 
5.1
%
 
4.8
%
 
5.1
%

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 $4.2 million and $2.4 million, respectively.


    

9




Long Term Debt Maturities
(In thousands, except per share amounts)
 
Future Maturities of Debt
Year
Secured Debt
 
Unsecured Debt
 
Credit Facilities
 
Total Debt
 
Average Interest Rate
2012
$
25,547

 
$
50,000

 
74,000

 
$
149,547

 
3.0%
2013
87,580

 
60,000

 

 
147,580

 
5.4%
2014
3,724

 
100,000

 
35,000

 
138,724

 
4.4%
2015
22,390

 
150,000

 

 
172,390

 
5.4%
2016
134,943

 

 

 
134,943

 
5.7%
2017
104,953

 

 

 
104,953

 
7.2%
2018
3,277

 

 

 
3,277

 
5.1%
2019
34,060

 

 

 
34,060

 
5.3%
2020
2,818

 
250,000

 

 
252,818

 
5.1%
2021
2,997

 

 

 
2,997

 
5.1%
2022
3,187

 

 

 
3,187

 
5.1%
Thereafter
5,256

 
50,000

 

 
55,256

 
7.2%
Total maturities
$
430,732

 
$
660,000

 
$
109,000

 
$
1,199,732

 
5.2%
Weighted average maturity = 4.7 years

10




Debt Covenant Compliance

 
Unsecured Notes Payable
 
Unsecured Line of Credit #1
($75.0 million)
 
Unsecured Line of Credit #2
($400.0 million)
 
Quarter Ended March 31, 2012
 
Covenant
 
Quarter Ended March 31, 2012
 
Covenant
 
Quarter Ended March 31, 2012
 
Covenant
% of Total Indebtedness to Total Assets(1)
41.8
%
 
≤ 65.0%
 
 N/A

 
N/A
 
 N/A

 
N/A
Ratio of Income Available for Debt Service to Annual Debt Service
3.1

 
≥ 1.5
 
 N/A

 
N/A
 
 N/A

 
N/A
% of Secured Indebtedness to Total Assets(1)
15
%
 
≤ 40.0%
 
 N/A

 
N/A
 
 N/A

 
N/A
Ratio of Total Unencumbered Assets(2) to Total Unsecured Indebtedness
2.7

 
≥ 1.5
 
 N/A

 
N/A
 
 N/A

 
N/A
Tangible Net Worth(3)
 N/A

 
N/A
 
$1.1 billion

 
≥ $808.6 million
 
$843.0 million

 
≥ $671.9 million
% of Total Liabilities to Gross Asset Value(5)
 N/A

 
N/A
 
50.9
%
 
≤ 60.0%
 
49.3
%
 
≤ 60.0%
% of Secured Indebtedness to Gross Asset Value(5)
 N/A

 
N/A
 
17
%
 
≤ 35.0%
 
16.5
%
 
≤ 35.0%
Ratio of EBITDA(4) to Fixed Charges(6)
 N/A

 
N/A
 
2.61

 
≥ 1.75
 
2.61

 
≥ 1.50
Ratio of Unencumbered Pool Value(8) to Unsecured Indebtedness
 N/A

 
N/A
 
2.43

 
≥ 1.67
 
2.45

 
≥ 1.67
Ratio of Unencumbered Net Operating Income to Unsecured Interest Expense
 N/A

 
N/A
 
 N/A

 
N/A
 
3.60

 
≥ 2.00
% of Development in Progress to Gross Asset Value(5)
 N/A

 
N/A
 
1.8
%
 
≤ 30.0%
 
 N/A

 
N/A
% of Non-Wholly Owned Assets(7) to Gross Asset Value(5)
 N/A

 
N/A
 
0.8
%
 
≤ 15.0%
 
 N/A

 
N/A
Ratio of Investments(9) to Gross Asset Value(5)
 N/A

 
N/A
 
 N/A

 
N/A
 
1.7
%
 
≤ 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) Non-Wholly Owned Assets is calculated by applying a capitalization rate of 7.50% to the EBITDA(4) from properties subject to a joint operating agreement (i.e. NVIP I&II). We add to this amount the development in progress subject to a joint operating agreement (i.e. 4661 Kenmore Avenue).
(8) Unencumbered Pool Value is calculated by applying a capitalization rate of 7.75% 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 and, for Unsecured Line of Credit #1 only, development in progress.
(9) Investments is defined as development in progress, including land held for development, plus budgeted development costs upon commencement of construction, if any.

11



        

Capital Analysis
(In thousands, except per share amounts)
 
3/31/2012
 
12/31/2011
 
9/30/2011
 
6/30/2011
 
3/31/2011
Market Data
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares Outstanding
66,309

 
66,265

 
66,066

 
66,017

 
65,941

Market Price per Share
$
29.70

 
$
27.35

 
$
28.18

 
$
32.52

 
$
31.09

Equity Market Capitalization
$
1,969,377

 
$
1,812,348

 
$
1,861,740

 
$
2,146,873

 
$
2,050,106

 
 
 
 
 
 
 
 
 
 
Total Debt
$
1,193,047

 
$
1,184,180

 
$
1,297,093

 
$
1,283,403

 
$
1,293,025

Total Market Capitalization
$
3,162,424

 
$
2,996,528

 
$
3,158,833

 
$
3,430,276

 
$
3,343,131

 
 
 
 
 
 
 
 
 
 
Total Debt to Market Capitalization
0.38
:1
 
0.40
:1
 
0.41
:1
 
0.37
:1
 
0.39
:1
 
 
 
 
 
 
 
 
 
 
Earnings to Fixed Charges(1)
1.3x

 
0.3x

 
1.1x

 
1.3x

 
1.1x

Debt Service Coverage Ratio(2)
2.7x

 
2.7x

 
2.7x

 
2.8x

 
2.6x

 
 
 
 
 
 
 
 
 
 
Dividend Data
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Dividends Paid
$
28,746

 
$
28,669

 
$
28,641

 
$
28,621

 
$
28,587

Common Dividend per Share
$
0.43375

 
$
0.43375

 
$
0.43375

 
$
0.43375

 
$
0.43375

Payout Ratio (Core FFO per share basis)
92.3
%
 
92.3
%
 
90.4
%
 
85.0
%
 
88.5
%
Payout Ratio (Core FAD per share basis)
117.2
%
 
117.2
%
 
114.1
%
 
98.6
%
 
100.9
%
Payout Ratio (FAD per share basis)
117.2
%
 
123.9
%
 
120.5
%
 
100.9
%
 
108.4
%
 
 
 
 
 
 
 
 
 
 
(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 8) by interest expense and principal amortization.


12




Same-Store Portfolio Net Operating Income (NOI) Summary
(In thousands)

 
Three Months Ended March 31,
 
2012
 
2011
 
% Change
 
Rental Rate Growth
Cash Basis:
 
 
 
 
 
 
 
Multifamily
$
7,872

 
$
7,466

 
5.4
 %
 
4.0
%
Office Buildings
19,505

 
20,611

 
(5.4
)%
 
0.6
%
Medical Office Buildings
7,396

 
7,309

 
1.2
 %
 
2.0
%
Retail Centers
8,594

 
8,331

 
3.2
 %
 
1.8
%
Overall Same-Store Portfolio (1)
$
43,367

 
$
43,717

 
(0.8
)%
 
1.7
%
 
 
 
 
 
 
 
 
GAAP Basis:
 
 
 
 
 
 
 
Multifamily
$
8,065

 
$
7,665

 
5.2
 %
 
4.0
%
Office Buildings
19,778

 
21,123

 
(6.4
)%
 
0.3
%
Medical Office Buildings
7,618

 
7,505

 
1.5
 %
 
1.8
%
Retail Centers
8,962

 
8,605

 
4.1
 %
 
0.9
%
Overall Same-Store Portfolio (1)
$
44,423

 
$
44,898

 
(1.1
)%
 
1.3
%

(1)  Non same-store properties were:
Acquisitions:
Office - 1140 Connecticut Avenue, 1227 25th Street, Braddock Metro Center and John Marshall II
Retail - Olney Village Center
Medical Office - Lansdowne Medical Office Building
Held for sale and sold properties:
Office - Dulles Station, Phase I
Industrial/Office - Industrial Portfolio (see Supplemental Definitions for list of properties)


13




Same-Store Portfolio Net Operating Income (NOI) Detail
(In thousands)
 
Three Months Ended March 31, 2012
 
Multifamily
 
Office
 
Medical Office
 
Retail
 
Corporate and Other
 
Total
Real estate rental revenue
 
 
 
 
 
 
 
 
 
 
 
Same-store portfolio
$
12,996

 
$
30,781

 
$
11,198

 
$
12,098

 

 
$
67,073

Non same-store - acquired and in development (1)

 
7,848

 
230

 
1,348

 

 
9,426

Total
12,996

 
38,629

 
11,428

 
13,446

 

 
76,499

Real estate expenses
 
 
 
 
 
 
 
 
 
 
 
Same-store portfolio
4,931

 
11,003

 
3,580

 
3,136

 

 
22,650

Non same-store - acquired and in development (1)

 
2,891

 
164

 
308

 

 
3,363

Total
4,931

 
13,894

 
3,744

 
3,444

 

 
26,013

Net Operating Income (NOI)
 
 
 
 
 
 
 
 
 
 
 
Same-store portfolio
8,065

 
19,778

 
7,618

 
8,962

 

 
44,423

Non same-store - acquired and in development (1)

 
4,957

 
66

 
1,040

 

 
6,063

Total
$
8,065

 
$
24,735

 
$
7,684

 
$
10,002

 

 
$
50,486

 
 
 
 
 
 
 
 
 
 
 
 
Same-store portfolio NOI GAAP basis (from above)
$
8,065

 
$
19,778

 
$
7,618

 
$
8,962

 

 
$
44,423

Straight-line revenue, net for same-store properties
(2
)
 
(253
)
 
(143
)
 
(317
)
 

 
(715
)
FAS 141 Min Rent
(191
)
 
(148
)
 
(89
)
 
(100
)
 

 
(528
)
Amortization of lease intangibles for same-store properties

 
128

 
10

 
49

 

 
187

Same-store portfolio NOI, cash basis
$
7,872

 
$
19,505

 
$
7,396

 
$
8,594

 

 
$
43,367

Reconciliation of NOI to net income
 
 
 
 
 
 
 
 
 
 
 
Total NOI
$
8,065

 
$
24,735

 
$
7,684

 
$
10,002

 

 
$
50,486

Depreciation and amortization
(3,123
)
 
(15,175
)
 
(3,877
)
 
(3,583
)
 
(236
)
 
(25,994
)
General and administrative

 

 

 

 
(3,606
)
 
(3,606
)
Interest expense
(1,697
)
 
(3,044
)
 
(1,169
)
 
(602
)
 
(9,383
)
 
(15,895
)
Other income

 

 

 

 
244

 
244

Acquisition costs

 

 

 

 
(54
)
 
(54
)
Net Income
3,245

 
6,516

 
2,638

 
5,817

 
(13,035
)
 
5,181

Net income attributable to noncontrolling interests

 

 

 

 

 

Net income attributable to the controlling interests
$
3,245

 
$
6,516

 
$
2,638

 
$
5,817

 
$
(13,035
)
 
$
5,181

(1)  For a list of non-same-store properties and held for sale and sold properties, see page 13 of this Supplemental.

14




Same-Store Net Operating Income (NOI) Detail
(In thousands)
 
Three Months Ended March 31, 2011
 
Multifamily
 
Office
 
Medical Office
 
Retail
 
Industrial/Flex
 
Corporate and Other
 
Total
Real estate rental revenue
 
 
 
 
 
 
 
 
 
 
 
 
 
Same-store portfolio
$
12,493

 
$
31,583

 
$
11,023

 
$
12,147

 
$

 

 
$
67,246

Non same-store - acquired and in development (1)

 
1,850

 
108

 

 

 

 
1,958

                         Total
12,493

 
33,433

 
11,131

 
12,147

 

 

 
69,204

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
Same-store portfolio
4,828

 
10,460

 
3,518

 
3,542

 

 

 
22,348

Non same-store - acquired and in development (1)

 
754

 
151

 

 

 

 
905

                         Total
4,828

 
11,214

 
3,669

 
3,542

 

 

 
23,253

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Operating Income (NOI)
 
 
 
 
 
 
 
 
 
 
 
 
 
Same-store portfolio
7,665

 
21,123

 
7,505

 
8,605

 

 

 
44,898

Non same-store - acquired and in development (1)

 
1,096

 
(43
)
 

 

 

 
1,053

                          Total
$
7,665

 
$
22,219

 
$
7,462

 
$
8,605

 
$

 

 
$
45,951

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Same-store portfolio NOI GAAP basis (from above)
$
7,665

 
$
21,123

 
$
7,505

 
$
8,605

 
$

 

 
$
44,898

Straight-line revenue, net for same-store properties
(8
)
 
(346
)
 
(113
)
 
(184
)
 

 

 
(651
)
FAS 141 Min Rent
(191
)
 
(294
)
 
(93
)
 
(105
)
 

 

 
(683
)
Amortization of lease intangibles for same-store properties

 
128

 
10

 
15

 

 

 
153

Same-store portfolio NOI, cash basis
$
7,466

 
$
20,611

 
$
7,309

 
$
8,331

 
$

 

 
$
43,717

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of NOI to net income
 
 
 
 
 
 
 
 
 
 
 
 
 
Total NOI
$
7,665

 
$
22,219

 
$
7,462

 
$
8,605

 
$

 

 
$
45,951

Depreciation and amortization
(3,134
)
 
(11,960
)
 
(3,827
)
 
(2,662
)
 

 
(311
)
 
(21,894
)
General and administrative

 

 

 

 

 
(3,702
)
 
(3,702
)
Interest expense
(1,686
)
 
(2,231
)
 
(1,313
)
 
(306
)
 

 
(11,357
)
 
(16,893
)
Other income

 

 

 

 

 
306

 
306

Acquisition costs

 

 

 

 

 
(1,649
)
 
(1,649
)
Income from operations of properties sold or held for sale (1)

 
(389
)
 

 

 
2,958

 

 
2,569

Net income
2,845

 
7,639

 
2,322

 
5,637

 
2,958

 
(16,713
)
 
4,688

Net income attributable to noncontrolling interests

 

 

 

 

 
(23
)
 
(23
)
Net income attributable to the controlling interests
$
2,845

 
$
7,639

 
$
2,322

 
$
5,637

 
$
2,958

 
$
(16,736
)
 
$
4,665

(1)  For a list of non-same-store properties and held for sale and sold properties, see page 13 of this Supplemental.
 
 

15




Net Operating Income (NOI) by Region
 
 
 
WRIT Portfolio
 
WRIT Portfolio
Maryland/Virginia/DC
 
Inside & Outside the Beltway
 
 
 
 
 
 
 
 
 
Percentage of GAAP NOI
 
 
Percentage of GAAP NOI
 
Q1 2012
 
 
Q1 2012
DC
 
 
Inside the Beltway
Multifamily
3.8
%
 
Multifamily
15.1
%
Office
17.4
%
 
Office
27.4
%
Medical Office
1.7
%
 
Medical Office
3.0
%
Retail
0.7
%
 
Retail
6.3
%
 
23.6
%
 
 
51.8
%
Maryland
 
 
Outside the Beltway
Multifamily
2.3
%
 
Multifamily
0.8
%
Office
11.4
%
 
Office
21.7
%
Medical Office
4.2
%
 
Medical Office
12.2
%
Retail
13.9
%
 
Retail
13.5
%
 
31.8
%
 
 
48.2
%
Virginia
 
 
Total Portfolio
100.0
%
Multifamily
9.8
%
 
 
 
Office
20.3
%
 
 
 
Medical Office
9.3
%
 
 
 
Retail
5.2
%
 
 
 
 
44.6
%
 
 
 
 
 
 
 
 
Total Portfolio
100.0
%
 
 
 

16




Same-Store and Overall Physical Occupancy Levels by Sector


 
Physical Occupancy - Same-Store Properties (1)
Sector
3/31/2012
 
12/31/2011
 
9/30/2011
 
6/30/2011
 
3/31/2011
Multifamily
95.2
%
 
94.9
%
 
94.0
%
 
95.6
%
 
95.3
%
Office Buildings
85.9
%
 
88.8
%
 
88.1
%
 
88.4
%
 
89.3
%
Medical Office
90.7
%
 
90.6
%
 
91.3
%
 
91.7
%
 
93.5
%
Retail Centers
92.4
%
 
92.7
%
 
91.6
%
 
92.0
%
 
92.0
%
Industrial / Flex
%
 
%
 
%
 
%
 
%
 
 
 
 
 
 
 
 
 
 
Overall Portfolio
90.1
%
 
91.3
%
 
90.8
%
 
91.3
%
 
91.8
%
 
 
 
 
 
 
 
 
 
 
 
Physical Occupancy - All Properties
Sector
3/31/2012
 
12/31/2011
 
9/30/2011
 
6/30/2011
 
3/31/2011
Multifamily
95.2
%
 
94.9
%
 
94.0
%
 
95.6
%
 
95.3
%
Office Buildings
86.3
%
 
89.0
%
 
88.6
%
 
88.1
%
 
89.1
%
Medical Office
87.1
%
 
86.5
%
 
87.2
%
 
87.3
%
 
88.3
%
Retail Centers
92.9
%
 
93.3
%
 
92.3
%
 
92.0
%
 
92.0
%
Industrial / Flex
%
 
%
 
75.4
%
 
78.4
%
 
80.2
%
 
 
 
 
 
 
 
 
 
 
Overall Portfolio
89.7
%
 
90.8
%
 
89.0
%
 
87.7
%
 
88.5
%

(1)  Non same-store properties were:
Acquisitions:
Office - 1140 Connecticut Avenue, 1227 25th Street, Braddock Metro Center and John Marshall II
Retail - Olney Village Center
Medical Office - Lansdowne Medical Office Building
Held for sale and sold properties:
Office - Dulles Station, Phase I
Industrial/Office - Industrial Portfolio (see Supplemental Definitions for list of properties)

17




Same-Store Portfolio and Overall Economic Occupancy Levels by Sector
 
Economic Occupancy - Same-Store Properties(1)
Sector
3/31/2012
 
12/31/2011
 
9/30/2011
 
6/30/2011
 
3/31/2011
Multifamily
94.0
%
 
94.2
%
 
94.1
%
 
94.9
%
 
94.8
%
Office Buildings
88.0
%
 
89.8
%
 
89.2
%
 
90.2
%
 
90.3
%
Medical Office Buildings
93.5
%
 
92.4
%
 
92.8
%
 
94.0
%
 
94.2
%
Retail Centers
94.0
%
 
92.3
%
 
92.1
%
 
92.3
%
 
92.0
%
Industrial / Flex
%
 
%
 
%
 
%
 
%
 
 
 
 
 
 
 
 
 
 
Overall Portfolio
91.1
%
 
91.5
%
 
91.2
%
 
92.1
%
 
92.1
%
 
 
 
 
 
 
 
 
 
 
 
Economic Occupancy - All Properties
Sector
3/31/2012
 
12/31/2011
 
9/30/2011
 
6/30/2011
 
3/31/2011
Multifamily
94.0
%
 
94.2
%
 
94.1
%
 
94.9
%
 
94.8
%
Office Buildings
87.8
%
 
89.4
%
 
88.5
%
 
89.7
%
 
90.7
%
Medical Office Buildings
90.8
%
 
89.5
%
 
89.9
%
 
90.5
%
 
90.5
%
Retail Centers
94.3
%
 
93.0
%
 
92.3
%
 
92.3
%
 
92.0
%
Industrial / Flex
%
 
79.3
%
 
80.8
%
 
81.9
%
 
81.4
%
 
 
 
 
 
 
 
 
 
 
Overall Portfolio
90.3
%
 
90.8
%
 
89.5
%
 
90.2
%
 
90.5
%

(1)  Non same-store properties were:
Acquisitions:
Office - 1140 Connecticut Avenue, 1227 25th Street, Braddock Metro Center and John Marshall II
Retail - Olney Village Center
Medical Office - Lansdowne Medical Office Building
Held for sale and sold properties:
Office - Dulles Station, Phase I
Industrial/Office - Industrial Portfolio (see Supplemental Definitions for list of properties)


18




Commercial Leasing Summary
 
1st Quarter 2012
 
4th Quarter 2011
 
3rd Quarter 2011
 
2nd Quarter 2011
 
First Quarter 2011
Gross Leasing Square Footage
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Office Buildings
136,234
 
175,032
 
152,900
 
160,318
 
138,083
      Medical Office Buildings
69,171
 
65,162
 
29,070
 
61,374
 
43,355
      Retail Centers
12,574
 
23,375
 
59,910
 
38,482
 
78,669
Total
217,979
 
263,569
 
241,880
 
260,174
 
260,107
Weighted Average Term (yrs)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Office Buildings
5.6
 
4.8
 
4.3
 
7.5
 
3.6
      Medical Office Buildings
5.3
 
4.4
 
4.9
 
5.5
 
6.0
      Retail Centers
8.3
 
5.9
 
5.9
 
8.2
 
4.5
Total
5.7
 
4.8
 
4.7
 
7.1
 
4.3
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rental Rate Increases:
GAAP
 
CASH
 
GAAP
 
CASH
 
GAAP
 
CASH
 
GAAP
 
CASH
 
GAAP
 
CASH
      Rate on expiring leases
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
            Office Buildings
$
28.97

 
$
30.31

 
$
30.22

 
$
31.94

 
$
36.04

 
$
37.87

 
$
25.59

 
$
26.66

 
$
31.41

 
$
32.26

            Medical Office Buildings
28.31

 
29.70

 
34.70

 
37.70

 
34.63

 
36.79

 
30.74

 
32.36

 
32.91

 
34.90

            Retail Centers
14.13

 
14.13

 
22.12

 
23.02

 
14.14

 
17.39

 
23.67

 
24.20

 
15.64

 
15.91

Total
$
27.90

 
$
29.18

 
$
30.61

 
$
32.57

 
$
30.19

 
$
32.41

 
$
26.53

 
$
27.65

 
$
26.89

 
$
27.76

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Rate on new leases
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
            Office Buildings
$
31.87

 
$
29.73

 
$
31.38

 
$
29.66

 
$
39.53

 
$
37.76

 
$
29.06

 
$
26.64

 
$
30.97

 
$
29.91

            Medical Office Buildings
29.94

 
27.98

 
38.91

 
37.13

 
37.76

 
35.79

 
36.13

 
33.64

 
37.24

 
34.76

            Retail Centers
15.13

 
14.24

 
28.89

 
26.86

 
18.56

 
21.96

 
25.88

 
24.34

 
16.48

 
16.30

Total
$
30.29

 
$
28.28

 
$
33.02

 
$
31.26

 
$
33.71

 
$
33.24

 
$
30.25

 
$
27.96

 
$
27.63

 
$
26.60

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Percentage Increase
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
            Office Buildings
10.0
%
 
(1.9
)%
 
3.8
%
 
(7.2
)%
 
9.7
%
 
(0.3
)%
 
13.6
%
 
(0.1
)%
 
(1.4
)%
 
(7.3
)%
            Medical Office Buildings
5.8
%
 
(5.8
)%
 
12.1
%
 
(1.5
)%
 
9.0
%
 
(2.7
)%
 
17.5
%
 
4.0
 %
 
13.1
 %
 
(0.4
)%
            Retail Centers
7.1
%
 
0.8
 %
 
30.6
%
 
16.7
 %
 
31.3
%
 
26.3
 %
 
9.3
%
 
0.6
 %
 
5.4
 %
 
2.4
 %
Total
8.6
%
 
(3.1
)%
 
7.9
%
 
(4.0
)%
 
11.7
%
 
2.6
 %
 
14.1
%
 
1.1
 %
 
2.8
 %
 
(4.2
)%



19





Commercial Leasing Summary
Tenant Improvements and Leasing Costs
 
1st Quarter 2012
 
4th Quarter 2011
 
3rd Quarter 2011
 
2nd Quarter 2011
 
First Quarter 2011
 
Total Dollars
 
Dollars per Square Foot
 
Total Dollars
 
Dollars per Square Foot
 
Total Dollars
 
Dollars per Square Foot
 
Total Dollars
 
Dollars per Square Foot
 
Total Dollars
 
Dollars per Square Foot
Tenant Improvements
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Office Buildings
$
2,938,313

 
$
21.57

 
$
3,691,099

 
$
21.09

 
$
2,067,782

 
$
13.52

 
$
3,019,025

 
$
18.83

 
$
535,261

 
$
3.88

Medical Office Buildings
1,220,567

 
17.65

 
788,535

 
12.10

 
112,145

 
3.86

 
893,785

 
14.56

 
384,334

 
8.86

Retail Centers

 

 
25,740

 
1.10

 
1,424,151

 
23.77

 
265,135

 
6.89

 

 

Subtotal
$
4,158,880

 
$
19.08

 
$
4,505,374

 
$
17.09

 
$
3,604,078

 
$
14.90

 
$
4,177,945

 
$
16.06

 
$
919,595

 
$
3.54

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Leasing Costs
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Office Buildings
$
2,363,552

 
$
17.35

 
$
2,133,927

 
$
12.19

 
$
1,596,565

 
$
10.44

 
$
2,189,912

 
$
13.66

 
$
582,007

 
$
4.21

Medical Office Buildings
365,614

 
5.29

 
400,976

 
6.15

 
206,298

 
7.10

 
716,648

 
11.68

 
530,073

 
12.23

Retail Centers
9,232

 
0.73

 
178,127

 
7.62

 
504,673

 
8.42

 
269,557

 
7.00

 
77,260

 
0.98

Subtotal
$
2,738,398

 
$
12.56

 
$
2,713,030

 
$
10.29

 
$
2,307,536

 
$
9.54

 
$
3,176,117

 
$
12.21

 
$
1,189,340

 
$
4.57

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tenant Improvements and Leasing Costs
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Office Buildings
$
5,301,865

 
$
38.92

 
$
5,825,026

 
$
33.28

 
$
3,664,347

 
$
23.96

 
$
5,208,937

 
$
32.49

 
$
1,117,268

 
$
8.09

Medical Office Buildings
1,586,181

 
22.94

 
1,189,511

 
18.25

 
318,443

 
10.96

 
1,610,433

 
26.24

 
914,407

 
21.09

Retail Centers
9,232

 
0.73

 
203,867

 
8.72

 
1,928,824

 
32.19

 
534,692

 
13.89

 
77,260

 
0.98

Total
$
6,897,278

 
$
31.64

 
$
7,218,404

 
$
27.38

 
$
5,911,614

 
$
24.44

 
$
7,354,062

 
$
28.27

 
$
2,108,935

 
$
8.11




20




10 Largest Tenants - Based on Annualized Rent
March 31, 2012
Tenant
Number of Buildings
 
Weighted Average Remaining Lease Term in Months
 
 Percentage of Aggregate Portfolio Annualized Rent
 
Aggregate Rentable Square Feet
 
Percentage of Aggregate Occupied Square Feet
World Bank
1
 
39

 
5.07
%
 
210,354

 
2.88
%
General Services Administration
6
 
31

 
2.97
%
 
170,834

 
2.34
%
Advisory Board Company
1
 
86

 
2.87
%
 
180,925

 
2.48
%
Booz Allen Hamilton, Inc.
1
 
46

 
2.27
%
 
222,989

 
3.06
%
L-3 Services, Inc
1
 
66

 
2.22
%
 
140,400

 
1.93
%
Patton Boggs LLP
1
 
61

 
2.04
%
 
110,566

 
1.52
%
INOVA Health System
7
 
47

 
1.98
%
 
110,422

 
1.51
%
Sunrise Assisted Living, Inc.
1
 
18

 
1.62
%
 
115,289

 
1.58
%
Children's Hospital
3
 
79

 
1.28
%
 
77,858

 
1.07
%
General Dynamics
2
 
27

 
1.21
%
 
88,359

 
1.21
%
Total/Weighted Average
 
 
50

 
23.53
%
 
1,427,996

 
19.58
%



21




Industry Diversification
March 31, 2012
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
$
67,758,432

 
31.57
%
 
2,200,640

 
30.11
%
Ambulatory Health Care Services
38,958,187

 
18.15
%
 
1,140,848

 
15.61
%
Credit Intermediation and Related Activities
16,664,102

 
7.77
%
 
326,289

 
4.46
%
Executive, Legislative, and Other General Government Support
9,712,937

 
4.53
%
 
286,949

 
3.93
%
Food Services and Drinking Places
8,174,298

 
3.81
%
 
265,560

 
3.63
%
Religious, Grantmaking, Civic, Professional, and Similar Organizations
6,815,743

 
3.18
%
 
205,294

 
2.81
%
Educational Services
6,005,498

 
2.80
%
 
205,639

 
2.81
%
Food and Beverage Stores
5,905,126

 
2.75
%
 
338,881

 
4.64
%
Administrative and Support Services
4,131,830

 
1.93
%
 
116,212

 
1.59
%
Nursing and Residential Care Facilities
4,088,465

 
1.91
%
 
116,935

 
1.60
%
Health and Personal Care Stores
3,380,349

 
1.58
%
 
103,182

 
1.41
%
Clothing and Clothing Accessories Stores
3,281,042

 
1.53
%
 
169,042

 
2.31
%
Miscellaneous Store Retailers
3,215,478

 
1.50
%
 
172,247

 
2.36
%
Broadcasting (except Internet)
3,167,033

 
1.48
%
 
89,083

 
1.22
%
Electronics and Appliance Stores
2,869,736

 
1.34
%
 
166,345

 
2.28
%
Furniture and Home Furnishings Stores
2,730,691

 
1.27
%
 
133,851

 
1.83
%
Personal and Laundry Services
2,629,038

 
1.23
%
 
84,223

 
1.15
%
Hospitals
2,525,109

 
1.18
%
 
70,909

 
0.97
%
Sporting Goods, Hobby, Book, and Music Stores
2,481,728

 
1.16
%
 
157,094

 
2.15
%
General Merchandise Stores
1,839,527

 
0.86
%
 
221,503

 
3.03
%
Real Estate
1,766,175

 
0.82
%
 
59,560

 
0.81
%
Computer and Electronic Product Manufacturing
1,586,739

 
0.74
%
 
55,956

 
0.77
%
Amusement, Gambling, and Recreation Industries
1,372,852

 
0.64
%
 
83,112

 
1.14
%
Securities, Commodity Contracts, and Other Financial Investments and Related Activities
1,211,771

 
0.56
%
 
44,232

 
0.61
%
Printing and Related Support Activities
1,190,611

 
0.55
%
 
50,727

 
0.69
%
Insurance Carriers and Related Activities
934,647

 
0.44
%
 
36,026

 
0.49
%


22




Industry Diversification (continued)
March 31, 2012

Industry Classification (NAICS)
Annualized Base Rental Revenue
 
Percentage of Aggregate Annualized Rent
 
Aggregate Rentable Square Feet
 
Percentage of Aggregate Square Feet
Transportation Equipment Manufacturing
$
846,384

 
0.39
%
 
31,840

 
0.44
%
Publishing Industries (except Internet)
780,210

 
0.36
%
 
30,565

 
0.42
%
Merchant Wholesalers, Durable Goods
737,328

 
0.34
%
 
41,421

 
0.57
%
Motor Vehicle and Parts Dealers
647,725

 
0.30
%
 
39,057

 
0.53
%
Social Assistance
574,153

 
0.27
%
 
19,241

 
0.26
%
Building Material and Garden Equipment and Supplies Dealers
560,875

 
0.26
%
 
28,060

 
0.38
%
Construction of Buildings
508,632

 
0.24
%
 
19,070

 
0.26
%
Merchant Wholesalers, Nondurable Goods
450,766

 
0.21
%
 
27,786

 
0.38
%
Other
5,098,180

 
2.35
%
 
171,979

 
2.35
%
Total
214,601,397

 
100.00
%
 
7,309,358

 
100.00
%


23




Lease Expirations
March 31, 2012
Year
 
Number of Leases
 
Rentable Square Feet
 
Percent of Rentable Square Feet
 
Annualized Rent *
 
Average Rental Rate
 
Percent of Annualized Rent *
Office:
 
 
 
 
 
 
 
 
 
 
 
 
2012
 
65

 
289,683

 
7.20
%
 
$
9,537,164

 
$
32.92

 
6.58
%
2013
 
97

 
487,467

 
12.12
%
 
15,265,539

 
31.32

 
10.54
%
2014
 
98

 
788,727

 
19.60
%
 
27,195,307

 
34.48

 
18.77
%
2015
 
86

 
566,686

 
14.08
%
 
23,111,687

 
40.78

 
15.95
%
2016
 
78

 
575,885

 
14.31
%
 
17,870,741

 
31.03

 
12.33
%
2017 and thereafter
 
130

 
1,315,247

 
32.69
%
 
51,911,482

 
39.47

 
35.83
%
 
 
554

 
4,023,695

 
100.00
%
 
$
144,891,920

 
$
36.01

 
100.00
%
Medical Office:
 
 
 
 
 
 
 
 
 
 
 
 
2012
 
40

 
106,871

 
9.52
%
 
$
3,962,771

 
$
37.08

 
8.92
%
2013
 
57

 
171,171

 
15.25
%
 
5,999,763

 
35.05

 
13.50
%
2014
 
47

 
143,192

 
12.75
%
 
5,621,099

 
39.26

 
12.65
%
2015
 
29

 
84,473

 
7.52
%
 
3,409,553

 
40.36

 
7.67
%
2016
 
45

 
156,636

 
13.95
%
 
5,914,686

 
37.76

 
13.31
%
2017 and thereafter
 
114

 
460,394

 
41.01
%
 
19,534,608

 
42.43

 
43.95
%
 
 
332

 
1,122,737

 
100.00
%
 
$
44,442,480

 
$
39.58

 
100.00
%
Retail:
 
 
 
 
 
 
 
 
 
 
 
 
2012
 
56

 
143,933

 
6.93
%
 
$
3,774,764

 
$
26.23

 
8.37
%
2013
 
48

 
411,728

 
19.83
%
 
6,346,580

 
15.41

 
14.07
%
2014
 
32

 
133,913

 
6.45
%
 
2,876,055

 
21.48

 
6.38
%
2015
 
34

 
299,173

 
14.41
%
 
5,953,691

 
19.90

 
13.20
%
2016
 
22

 
189,965

 
9.15
%
 
3,945,257

 
20.77

 
8.75
%
2017 and thereafter
 
101

 
897,150

 
43.23
%
 
22,203,143

 
24.75

 
49.23
%
 
 
293

 
2,075,862

 
100.00
%
 
$
45,099,490

 
$
21.73

 
100.00
%
Total:
 
 
 
 
 
 
 
 
 
 
 
 
2012
 
161

 
540,487

 
7.48
%
 
$
17,274,699

 
$
31.96

 
7.37
%
2013
 
202

 
1,070,366

 
14.82
%
 
27,611,882

 
25.80

 
11.78
%
2014
 
177

 
1,065,832

 
14.76
%
 
35,692,461

 
33.49

 
15.22
%
2015
 
149

 
950,332

 
13.16
%
 
32,474,931

 
34.17

 
13.85
%
2016
 
145

 
922,486

 
12.77
%
 
27,730,684

 
30.06

 
11.83
%
2017 and thereafter
 
345

 
2,672,791

 
37.01
%
 
93,649,233

 
35.04

 
39.95
%
 
 
1,179

 
7,222,294

 
100.00
%
 
$
234,433,890

 
$
32.46

 
100.00
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Note: Lease expiration data exclude properties classified as sold or held for sale.
 
 
* Annualized Rent is equal to the rental rate effective at lease expiration (cash basis) multiplied by 12.
 
 

24




Schedule of Properties
March 31, 2012
 PROPERTIES
 
 LOCATION
 
 YEAR ACQUIRED
 
 YEAR CONSTRUCTED
 
 NET RENTABLE SQUARE FEET*
Office Buildings
 
 
 
 
 
 
 
 
1901 Pennsylvania Avenue
 
Washington, DC
 
1977
 
1960
 
98,000

51 Monroe Street
 
Rockville, MD
 
1979
 
1975
 
218,000

515 King Street
 
Alexandria, VA
 
1992
 
1966
 
73,000

6110 Executive Boulevard
 
Rockville, MD
 
1995
 
1971
 
199,000

1220 19th Street
 
Washington, DC
 
1995
 
1976
 
102,000

1600 Wilson Boulevard
 
Arlington, VA
 
1997
 
1973
 
168,000

7900 Westpark Drive
 
McLean, VA
 
1997
 
1972/1986/1999
 
533,000

600 Jefferson Plaza
 
Rockville, MD
 
1999
 
1985
 
113,000

1700 Research Boulevard
 
Rockville, MD
 
1999
 
1982
 
101,000

Wayne Plaza
 
Silver Spring, MD
 
2000
 
1970
 
94,000

Courthouse Square
 
Alexandria, VA
 
2000
 
1979
 
114,000

One Central Plaza
 
Rockville, MD
 
2001
 
1974
 
267,000

The Atrium Building
 
Rockville, MD
 
2002
 
1980
 
80,000

1776 G Street
 
Washington, DC
 
2003
 
1979
 
262,000

6565 Arlington Boulevard
 
Falls Church, VA
 
2006
 
1967/1998
 
130,000

West Gude Drive
 
Rockville, MD
 
2006
 
1984/1986/1988
 
275,000

Monument II
 
Herndon, VA
 
2007
 
2000
 
207,000

Woodholme Center
 
Pikesville, MD
 
2007
 
1989
 
75,000

2000 M Street
 
Washington, DC
 
2007
 
1971
 
239,000

2445 M Street
 
Washington, DC
 
2008
 
1986
 
290,000

925 Corporate Drive
 
Stafford, VA
 
2010
 
2007
 
134,000

1000 Corporate Drive
 
Stafford, VA
 
2010
 
2009
 
136,000

1140 Connecticut Avenue
 
Washington, DC
 
2011
 
1966
 
185,000

1227 25th Street
 
Washington, DC
 
2011
 
1988
 
132,000

Braddock Metro Center
 
Alexandria, VA
 
2011
 
1985
 
345,000

John Marshall II
 
Tysons Corner, VA
 
2011
 
1996/2010
 
223,000

Subtotal
 
 
 
 
 
 
 
4,793,000


25




Schedule of Properties (continued)
March 31, 2012
Medical Office Buildings
 
 
 
 
 
 
 
 
Woodburn Medical Park I
 
Annandale, VA
 
1998
 
1984
 
73,000

Woodburn Medical Park II
 
Annandale, VA
 
1998
 
1988
 
96,000

Prosperity Medical Center I
 
Merrifield, VA
 
2003
 
2000
 
92,000

Prosperity Medical Center II
 
Merrifield, VA
 
2003
 
2001
 
89,000

Prosperity Medical Center III
 
Merrifield, VA
 
2003
 
2002
 
75,000

Shady Grove Medical Village II
 
Rockville, MD
 
2004
 
1999
 
66,000

8301 Arlington Boulevard
 
Fairfax, VA
 
2004
 
1965
 
49,000

Alexandria Professional Center
 
Alexandria, VA
 
2006
 
1968
 
114,000

9707 Medical Center Drive
 
Rockville, MD
 
2006
 
1994
 
38,000

15001 Shady Grove Road
 
Rockville, MD
 
2006
 
1999
 
51,000

Plumtree Medical Center
 
Bel Air, MD
 
2006
 
1991
 
33,000

15005 Shady Grove Road
 
Rockville, MD
 
2006
 
2002
 
52,000

2440 M Street
 
Washington, DC
 
2007
 
1986/2006
 
112,000

Woodholme Medical Office Building
 
Pikesville, MD
 
2007
 
1996
 
123,000

Ashburn Office Park
 
Ashburn, VA
 
2007
 
1998/2000/2002
 
75,000

CentreMed I & II
 
Centreville, VA
 
2007
 
1998
 
52,000

Sterling Medical Office Building
 
Sterling, VA
 
2008
 
1986/2000
 
36,000

Lansdowne Medical Office Building
 
Leesburg, VA
 
2009
 
2009
 
85,000

Subtotal
 
 
 
 
 
 
 
1,311,000



26




Schedule of Properties (continued)
March 31, 2012
 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
 
Alexandria, VA
 
1984
 
1955
 
168,000

Chevy Chase Metro Plaza
 
Washington, DC
 
1985
 
1975
 
49,000

Montgomery Village Center
 
Gaithersburg, MD
 
1992
 
1969
 
198,000

Shoppes of Foxchase (1)
 
Alexandria, VA
 
1994
 
1960
 
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
 
223,000

Olney Village Center
 
Olney, MD
 
2011
 
1979/2003
 
198,000

Subtotal
 
 
 
 
 
 
 
2,449,000

 
 
 
 
 
 
 
 
 
Multifamily Buildings * / # units
 
 
 
 
 
 
 
 
3801 Connecticut Avenue / 308
 
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 (2)
 
158,000

Bethesda Hill Apartments / 195
 
Bethesda, MD
 
1997
 
1986
 
226,000

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

Subtotal (2,540 units)
 
 
 
 
 
 
 
2,139,000

 
 
 
 
 
 
 
 
 
TOTAL
 
 
 
 
 
 
 
10,692,000

* Multifamily buildings are presented in gross square feet. 
(1) Development on approximately 60,000 square feet of the center was completed in December 2006. 
(2) A 16 unit addition referred to as The Gardens at Walker House was completed in October 2003.

27




Supplemental Definitions
March 31, 2012

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 from the balance sheet divided by the sum of total debt from the balance sheet 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 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 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 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.
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 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 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 WRIT’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 Industrial Portfolio consists of every industrial property, as well as two office properties, the Crescent and Albemarle Point. We executed the sale in three phases. Phase I of the Industrial Portfolio sale consisted of industrial properties (8880 Gorman Road, Dulles South IV, Fullerton Business Center, Hampton Overlook, Alban Business Center, Pickett Industrial Park, Northern Virginia Industrial Park I, 270 Technology Park, Fullerton Industrial Center, Sully Square, 9950 Business Parkway, Hampton South and 8900 Telegraph Road) and two office properties (Crescent and Albemarle Point). On October 3, 2011 we closed on Phase II of the Industrial Portfolio sale, consisting of Northern Virginia Industrial Park II. We closed on Phase III of the Industrial Portfolio sale on November 1, 2011, consisting of 6100 Columbia Park Road and Dulles Business Park.
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 properties that were owned for the entirety of the current and prior year reporting periods.
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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