Fourth 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

Fourth 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.

2012 Highlights

In 2012 WRIT continued to improve the quality of its portfolio by acquiring a well-located office building near Metro in the Ballston submarket of Arlington, Virginia, selling an outer perimeter office and medical office property, and modernizing existing properties to attract and retain the best tenants.

WRIT posted same-store GAAP rental rate growth of 1.5% in 2012 and executed nearly 1 million square feet of commercial lease transactions.

On the capital side, WRIT priced an underwritten public offering of $300 million aggregate principal amount of senior unsecured notes due October 15, 2022. The notes have an annual coupon rate of 3.95% and were priced at 99.438% of the principal amount. J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Wells Fargo Securities, LLC and Credit Suisse Securities (USA) LLC were the Joint Book-Running Managers for the offering.

WRIT prepaid without penalty a total of seven property mortgages totaling approximately $80 million, amended and extended its unsecured credit facilities with SunTrust and Wells Fargo, and entered into a new a Sales Agency Financing Agreement with BNY Mellon Capital Markets, LLC (BNYMCM).

Fourth Quarter 2012 Update

WRIT sold Plumtree Professional Center, a 33,000 square foot medical office building in Bel Air, Maryland, for $8.75 million and a net book gain of $1.4 million. The property was built in 1991 and acquired by WRIT as part of a portfolio acquisition in 2006. The unleveraged internal rate of return over the holding period was 13%.

In the fourth quarter, WRIT prepaid without penalty five mortgage notes totaling approximately $58.8 million, including 15005 Shady Grove Road, 9707 Medical Center Drive, 8501-8503 Arlington Boulevard, 8505 Arlington Boulevard, and Plumtree Professional Center. The weighted average interest rate on these five notes was 5.43%. Subsequent to quarter end, WRIT prepaid without penalty the West Gude 5.855% mortgage note for $30.0 million.

WRIT signed commercial leases for 270,000 square feet with an average lease term of 6.2 years. The average rental rate increase on new and renewal leases was 9.5% on a GAAP basis and -0.6% on a cash basis. Commercial tenant improvement costs were $19.71 per square foot and leasing commissions and incentives were $9.83 per square foot for the quarter.

As of December 31, 2012, WRIT owned a diversified portfolio of 70 properties totaling approximately 9 million square feet of commercial space and 2,540 residential units, and land held for development. These 70 properties consist of 26 office properties, 17 medical office properties, 16 retail centers and 11 multifamily properties. WRIT shares are publicly traded on the New York Stock Exchange (NYSE: WRE).





Company Background and Highlights

Fourth Quarter 2012

Net Operating Income Contribution by Sector






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 Securities and Exchange Commission, including our 2011 Form 10-K filed on February 27, 2012 and our 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

December 31, 2012
 
 
 
Schedule
Page
 
 
 
Key Financial Data
 
 
Consolidated Statements of Operations
 
Consolidated Balance Sheets
 
Funds From Operations
 
Funds Available for Distribution
 
Adjusted Earnings Before Interest Taxes Depreciation and Amortization (EBITDA)
Capital Analysis
 
 
Long Term Debt Analysis
 
Debt Covenant Compliance
 
Capital Analysis
Portfolio Analysis
 
 
Same-Store Portfolio Net Operating Income (NOI) Growth & Rental Rate Growth
 
Same-Store Portfolio Net Operating Income (NOI) Detail for the Quarter
 
Same-Store Portfolio Net Operating Income (NOI) Detail for the Year
 
Net Operating Income (NOI) by Region
 
Same-Store Portfolio & Overall Physical Occupancy Levels by Sector
 
Same-Store Portfolio & Overall Economic Occupancy Levels by Sector
Tenant Analysis
 
 
Commercial Leasing Summary
 
10 Largest Tenants - Based on Annualized Rent
 
Industry Diversification
 
Lease Expirations
Growth and Strategy
 
 
Acquisition and Disposition Summary
Appendix
 
 
Schedule of Properties
 
Supplemental Definitions






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

 
Twelve Months Ended
 
Three Months Ended
OPERATING RESULTS
12/31/2012
 
12/31/2011
 
12/31/2012
 
9/30/2012
 
6/30/2012
 
3/31/2012
 
12/31/2011
Real estate rental revenue
$
304,983

 
$
284,156

 
$
77,071

 
$
77,108

 
$
75,590

 
$
75,214

 
$
75,413

Real estate expenses
(103,276
)
 
(95,342
)
 
(25,791
)
 
(26,901
)
 
(25,033
)
 
(25,551
)
 
(25,666
)
 
201,707

 
188,814

 
51,280

 
50,207

 
50,557

 
49,663

 
49,747

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate depreciation and amortization
(103,067
)
 
(91,805
)
 
(26,131
)
 
(26,127
)
 
(25,227
)
 
(25,582
)
 
(25,029
)
Income from real estate
98,640

 
97,009

 
25,149

 
24,080

 
25,330

 
24,081

 
24,718

 
 
 
 
 
 
 
 
 
 
 
 
 
 
General and administrative expenses
(15,488
)
 
(15,728
)
 
(4,545
)
 
(3,173
)
 
(4,164
)
 
(3,606
)
 
(4,140
)
Real estate impairment
(2,097
)
 
(14,526
)
 
(2,097
)
 

 

 

 
(14,526
)
Acquisition costs
(234
)
 
(3,607
)
 
(90
)
 
164

 
(254
)
 
(54
)
 
(36
)
Interest expense
(64,697
)
 
(66,214
)
 
(17,411
)
 
(15,985
)
 
(15,470
)
 
(15,831
)
 
(16,142
)
Other income
975

 
1,144

 
242

 
237

 
252

 
244

 
258

Loss on extinguishment of debt

 
(976
)
 

 

 

 

 
(976
)
Income (loss) from continuing operations
17,099

 
(2,898
)
 
1,248

 
5,323

 
5,694

 
4,834

 
(10,844
)
Discontinued operations:
 
 
 
 
 
 
 
 
 
 
 
 
 
  Income from operations of properties sold or held for sale
1,485

 
11,923

 
310

 
514

 
314

 
347

 
1,090

  Income tax expense

 
(1,138
)
 

 

 

 

 

  Gain on sale of real estate
5,124

 
97,491

 
1,400

 
3,724

 

 

 
40,852

Income from discontinued operations
6,609

 
108,276

 
1,710

 
4,238

 
314

 
347

 
41,942

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
23,708

 
105,378

 
2,958

 
9,561

 
6,008

 
5,181

 
31,098

Less: Net income from noncontrolling interests

 
(494
)
 

 

 

 

 
(409
)
Net income attributable to the controlling interests
$
23,708

 
$
104,884

 
$
2,958

 
$
9,561

 
$
6,008

 
$
5,181

 
$
30,689

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Per Share Data:
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to the controlling interests
$
0.35

 
$
1.58

 
$
0.04

 
$
0.14

 
$
0.09

 
$
0.08

 
$
0.46

Fully diluted weighted average shares outstanding
66,376

 
65,982

 
66,416

 
66,379

 
66,380

 
66,328

 
66,069

Percentage of Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate expenses
33.9
%
 
33.6
 %
 
33.5
%
 
34.9
%
 
33.1
%
 
34.0
%
 
34.0
 %
General and administrative expenses
5.1
%
 
5.5
 %
 
5.9
%
 
4.1
%
 
5.5
%
 
4.8
%
 
5.5
 %
Ratios:
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA / Interest expense
2.9
x
 
2.9
x
 
2.7
x
 
3.0
x
 
3.1
x
 
3.0
x
 
3.0
x
Income (loss) from continuing operations attributable to the controlling interest/Total real estate revenue
5.6
%
 
(1.0
)%
 
1.6
%
 
6.9
%
 
7.5
%
 
6.4
%
 
(14.4
)%
Net income attributable to the controlling interest/Total real estate revenue
7.8
%
 
36.9
 %
 
3.8
%
 
12.4
%
 
7.9
%
 
6.9
%
 
40.7
 %
Note: Certain prior period amounts have been reclassified to conform to the current period presentation.
 
 

4




Consolidated Balance Sheets
(In thousands)
(Unaudited)
 
12/31/2012
 
9/30/2012
 
6/30/2012
 
3/31/2012
 
12/31/2011
Assets
 
 
 
 
 
 
 
 
 
Land
$
483,198

 
$
483,198

 
$
483,199

 
$
465,445

 
$
465,445

Income producing property
1,979,348

 
1,966,032

 
1,953,160

 
1,912,395

 
1,899,440

 
2,462,546

 
2,449,230

 
2,436,359

 
2,377,840

 
2,364,885

Accumulated depreciation and amortization
(604,614
)
 
(583,706
)
 
(563,036
)
 
(542,322
)
 
(521,503
)
Net income producing property
1,857,932

 
1,865,524

 
1,873,323

 
1,835,518

 
1,843,382

Development in progress, including land held for development
49,135

 
48,106

 
45,928

 
44,236

 
43,089

Total real estate held for investment, net
1,907,067

 
1,913,630

 
1,919,251

 
1,879,754

 
1,886,471

Investment in real estate held for sale, net
11,528

 
18,264

 
27,076

 
27,475

 
27,669

Cash and cash equivalents
19,324

 
68,403

 
14,367

 
17,809

 
12,765

Restricted cash
14,582

 
19,615

 
19,632

 
21,722

 
19,229

Rents and other receivables, net of allowance for doubtful accounts
57,076

 
57,704

 
56,861

 
54,089

 
53,227

Prepaid expenses and other assets
114,541

 
120,486

 
115,192

 
114,279

 
120,075

Other assets related to properties sold or held for sale
258

 
693

 
1,292

 
1,418

 
1,322

Total assets
$
2,124,376

 
$
2,198,795

 
$
2,153,671

 
$
2,116,546

 
$
2,120,758

Liabilities
 
 
 
 
 
 
 
 
 
Notes payable
$
906,190

 
$
906,058

 
$
607,653

 
$
657,562

 
$
657,470

Mortgage notes payable
342,970

 
398,511

 
420,898

 
422,091

 
423,291

Lines of credit/short-term note payable

 

 
221,000

 
109,000

 
99,000

Accounts payable and other liabilities
52,823

 
54,916

 
54,304

 
57,408

 
51,079

Advance rents
16,096

 
13,829

 
15,104

 
14,965

 
13,584

Tenant security deposits
9,936

 
9,771

 
9,671

 
8,810

 
8,728

Other liabilities related to properties sold or held for sale
218

 
4,646

 
4,826

 
4,991

 
4,774

Total liabilities
1,328,233

 
1,387,731

 
1,333,456

 
1,274,827

 
1,257,926

Equity
 
 
 
 
 
 
 
 
 
Preferred shares; $0.01 par value; 10,000 shares authorized

 

 

 

 

Shares of beneficial interest, $0.01 par value; 100,000 shares authorized
664

 
662

 
662

 
662

 
662

Additional paid-in capital
1,145,515

 
1,143,554

 
1,142,391

 
1,141,062

 
1,138,478

Distributions in excess of net income
(354,122
)
 
(337,151
)
 
(326,714
)
 
(303,815
)
 
(280,096
)
Total shareholders' equity
792,057

 
807,065

 
816,339

 
837,909

 
859,044

Noncontrolling interests in subsidiaries
4,086

 
3,999

 
3,876

 
3,810

 
3,788

Total equity
796,143

 
811,064

 
820,215

 
841,719

 
862,832

Total liabilities and equity
$
2,124,376

 
$
2,198,795

 
$
2,153,671

 
$
2,116,546

 
$
2,120,758

Total Debt / Total Market Capitalization
0.42
:1
 
0.42
:1
 
0.40
:1
 
0.38
:1
 
0.40
:1

5




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

 
Twelve Months Ended
 
Three Months Ended
 
12/31/2012
 
12/31/2011
 
12/31/2012
 
9/30/2012
 
6/30/2012
 
3/31/2012
 
12/31/2011
Funds from operations (FFO)(1)
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to the controlling interests
$
23,708

 
$
104,884

 
$
2,958

 
$
9,561

 
$
6,008

 
$
5,181

 
$
30,689

Real estate depreciation and amortization
103,067

 
91,805

 
26,131

 
26,127

 
25,227

 
25,582

 
25,029

Discontinued operations:
 
 
 
 
 
 
 
 
 
 
 
 
 
Gain on sale of real estate
(5,124
)
 
(97,091
)
 
(1,400
)
 
(3,724
)
 

 

 
(40,452
)
Income tax expense

 
1,138

 

 

 

 

 

Real estate impairment

 
599

 

 

 

 

 

Real estate depreciation and amortization
867

 
8,723

 

 
91

 
364

 
412

 
369

FFO
$
122,518

 
$
110,058

 
$
27,689

 
$
32,055

 
$
31,599

 
$
31,175

 
$
15,635

Loss on extinguishment of debt

 
976

 

 

 

 

 
976

Real estate impairment
2,097

 
14,526

 
2,097

 

 

 

 
14,526

Severance expense
1,583

 

 
1,583

 

 

 

 

Acquisition costs
234

 
3,607

 
90

 
(164
)
 
254

 
54

 
36

Core FFO (1)
$
126,432

 
$
129,167

 
$
31,459

 
$
31,891

 
$
31,853

 
$
31,229

 
$
31,173

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allocation to participating securities(2)
$
(582
)
 
$
(712
)
 
$
(93
)
 
$
(125
)
 
$
(176
)
 
$
(188
)
 
$
(186
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FFO per share - basic
$
1.84

 
$
1.66

 
$
0.42

 
$
0.48

 
$
0.47

 
$
0.47

 
$
0.23

FFO per share - fully diluted
$
1.84

 
$
1.66

 
$
0.42

 
$
0.48

 
$
0.47

 
$
0.47

 
$
0.23

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Core FFO per share - fully diluted
$
1.90

 
$
1.95

 
$
0.47

 
$
0.48

 
$
0.48

 
$
0.47

 
$
0.47

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common dividend per share
$
1.4675

 
$
1.7350

 
$
0.3000

 
$
0.3000

 
$
0.4338

 
$
0.4338

 
$
0.4338

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average shares - basic
66,239

 
65,982

 
66,273

 
66,246

 
66,241

 
66,194

 
66,069

Average shares - fully diluted
66,376

 
65,982

 
66,416

 
66,379

 
66,380

 
66,328

 
66,069

 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)  See "Supplemental Definitions" on page 30 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)


 
Twelve Months Ended
 
Three Months Ended
 
12/31/2012
 
12/31/2011
 
12/31/2012
 
9/30/2012
 
6/30/2012
 
3/31/2012
 
12/31/2011
Funds available for distribution (FAD)(1)
 
 
 
 
 
 
 
 
 
 
 
 
 
FFO
$
122,518

 
$
110,058

 
$
27,689

 
$
32,055

 
$
31,599

 
$
31,175

 
$
15,635

Tenant improvements
(16,540
)
 
(11,889
)
 
(4,901
)
 
(5,216
)
 
(2,357
)
 
(4,066
)
 
(5,100
)
Leasing commissions and incentives
(9,157
)
 
(8,692
)
 
(2,334
)
 
(2,144
)
 
(2,122
)
 
(2,557
)
 
(1,485
)
Recurring capital improvements
(7,307
)
 
(7,537
)
 
(1,414
)
 
(1,362
)
 
(2,992
)
 
(1,539
)
 
(1,626
)
Straight-line rent, net
(3,265
)
 
(2,734
)
 
(738
)
 
(847
)
 
(688
)
 
(992
)
 
(776
)
Non-cash fair value interest expense
926

 
462

 
253

 
216

 
229

 
228

 
(53
)
Non-real estate depreciation and amortization
3,854

 
3,733

 
911

 
987

 
948

 
1,008

 
845

Amortization of lease intangibles, net
6

 
(1,052
)
 
41

 
(32
)
 
(3
)
 

 
(32
)
Amortization and expensing of restricted share and unit compensation
5,786

 
5,580

 
1,842

 
1,206

 
1,333

 
1,405

 
1,459

Real estate impairment
2,097

 
14,526

 
2,097

 

 

 

 
14,526

FAD
$
98,918

 
$
102,455

 
$
23,446

 
$
24,863

 
$
25,947

 
$
24,662

 
$
23,393

Cash loss (gain) on extinguishment of debt

 
976

 

 

 

 

 
976

Non-share-based severance expense
850

 

 
850

 

 

 

 

Acquisition costs
234

 
3,607

 
90

 
(164
)
 
254

 
54

 
36

Core FAD (1)
$
100,002

 
$
107,038

 
$
24,386

 
$
24,699

 
$
26,201

 
$
24,716

 
$
24,405

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allocation to participating securities(2)
$
(582
)
 
$
(712
)
 
$
(93
)
 
$
(125
)
 
$
(176
)
 
$
(188
)
 
$
(186
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FAD per share - basic
$
1.48

 
$
1.54

 
$
0.35

 
$
0.37

 
$
0.39

 
$
0.37

 
$
0.35

FAD per share - fully diluted
$
1.48

 
$
1.54

 
$
0.35

 
$
0.37

 
$
0.39

 
$
0.37

 
$
0.35

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Core FAD per share - fully diluted
$
1.50

 
$
1.61

 
$
0.37

 
$
0.37

 
$
0.39

 
$
0.37

 
$
0.37

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common dividend per share
$
1.4675

 
$
1.7350

 
$
0.3000

 
$
0.3000

 
$
0.4338

 
$
0.4338

 
$
0.4338

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average shares - basic
66,239

 
65,982

 
66,273

 
66,246

 
66,241

 
66,194

 
66,069

Average shares - fully diluted
66,376

 
65,982

 
66,416

 
66,379

 
66,380

 
66,328

 
66,069

 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)  See "Supplemental Definitions" on page 30 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




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

 
Twelve Months Ended
 
Three Months Ended
 
12/31/2012
 
12/31/2011
 
12/31/2012
 
9/30/2012
 
6/30/2012
 
3/31/2012
 
12/31/2011
Adjusted EBITDA(1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to the controlling interests
$
23,708

 
$
104,884

 
$
2,958

 
$
9,561

 
$
6,008

 
$
5,181

 
$
30,689

Add:
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense, including discontinued operations
64,958

 
66,947

 
17,481

 
16,049

 
15,533

 
15,895

 
15,985

Real estate depreciation and amortization, including discontinued operations
103,934

 
100,528

 
26,131

 
26,218

 
25,591

 
25,994

 
25,398

Income tax expense
245

 
1,146

 
57

 
17

 
158

 
13

 

Real estate impairment
2,097

 
15,125

 
2,097

 

 

 

 
14,526

Non-real estate depreciation
914

 
1,001

 
131

 
254

 
261

 
268

 
242

Less:
 
 
 
 
 
 
 
 
 
 
 
 
 
    Gain on sale of real estate
(5,124
)
 
(97,091
)
 
(1,400
)
 
(3,724
)
 

 

 
(40,452
)
    Loss on extinguishment of debt

 
976

 

 

 

 

 
976

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA
$
190,732

 
$
193,516

 
$
47,455

 
$
48,375

 
$
47,551

 
$
47,351

 
$
47,364

 
 
 
 
 
 
 
 
 
 
 
 
 
 
(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)

 
12/31/2012
 
9/30/2012
 
6/30/2012
 
3/31/2012
 
12/31/2011
Balances Outstanding
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Secured
 
 
 
 
 
 
 
 
 
Conventional fixed rate (1)
$
342,970

 
$
402,857

 
$
425,268

 
$
426,485

 
$
427,710

Unsecured
 
 
 
 
 
 
 
 
 
Fixed rate bonds and notes
906,190

 
906,058

 
607,653

 
657,562

 
657,470

Credit facility

 

 
221,000

 
109,000

 
99,000

Unsecured total
906,190

 
906,058

 
828,653

 
766,562

 
756,470

Total
$
1,249,160

 
$
1,308,915

 
$
1,253,921

 
$
1,193,047

 
$
1,184,180

 
 
 
 
 
 
 
 
 
 
Average Interest Rates
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Secured
 
 
 
 
 
 
 
 
 
Conventional fixed rate (1)
6.1
%
 
6.0
%
 
5.9
%
 
5.9
%
 
5.9
%
Unsecured
 
 
 
 
 
 
 
 
 
Fixed rate bonds
4.9
%
 
4.9
%
 
5.4
%
 
5.4
%
 
5.4
%
Credit facilities
%
 
%
 
1.3
%
 
0.9
%
 
0.9
%
Unsecured total
4.9
%
 
4.9
%
 
4.3
%
 
4.7
%
 
4.8
%
Average
5.3
%
 
5.3
%
 
4.9
%
 
5.2
%
 
5.2
%

Note: The current balances outstanding of the secured and unsecured fixed rate bonds and notes are shown net of discounts/premiums of $3.5 million and $3.8 million, respectively.
 
(1) Prior quarter balances include the $4.3 million mortgage note payable secured by Plumtree Professional Center, a property we sold on December 20, 2012 which has been reclassified to 'Other liabilities related to properties sold or held for sale'. We repaid this mortgage note payable without penalty on December 11, 2012.


    

9




Long Term Debt Analysis
(In thousands, except per share amounts)
 
 
 
Future Maturities of Debt
Year
Secured Debt
 
Unsecured Debt
 
Credit Facilities
 
Total Debt
 
Average Interest Rate
2013
$
33,313

(1) 
$
60,000

 
$

 
$
93,313

 
5.4%
2014
3,519

 
100,000

 

 
103,519

 
5.3%
2015
22,174

 
150,000

 

 
172,174

 
5.4%
2016
134,715

 

 

 
134,715

 
5.7%
2017
104,712

 

 

 
104,712

 
7.2%
2018
3,024

 

 

 
3,024

 
5.1%
2019
33,792

 

 

 
33,792

 
5.3%
2020
2,536

 
250,000

 

 
252,536

 
5.1%
2021
2,699

 


 

 
2,699

 
5.0%
2022
2,873

 
300,000

 

 
302,873

 
4.0%
2023
2,793

 

 

 
2,793

 
5.0%
Thereafter
369

 
50,000

 

 
50,369

 
7.3%
Scheduled principal payments
$
346,519

 
$
910,000

 
$

 
$
1,256,519

 
5.3%
Net discounts/premiums
(3,549
)
 
(3,810
)
 

 
(7,359
)
 
—%
Total maturities
$
342,970

 
$
906,190

 
$

 
$
1,249,160

 
5.3%
Weighted average maturity = 6.0 years
(1) Subsequent to quarter end on January 13, 2013, WRIT prepaid without penalty the remaining $30.0 million of principal on the mortgage note secured by West Gude Drive, primarily with borrowings from our unsecured lines of credit.

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 December 31, 2012
 
Covenant
 
Quarter Ended December 31, 2012
 
Covenant
 
Quarter Ended December 31, 2012
 
Covenant
% of Total Indebtedness to Total Assets(1)
43.5
%
 
≤ 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)
11.9
%
 
≤ 40.0%
 
 N/A

 
N/A
 
 N/A

 
N/A
Ratio of Total Unencumbered Assets(2) to Total Unsecured Indebtedness
2.5

 
≥ 1.5
 
 N/A

 
N/A
 
 N/A

 
N/A
Tangible Net Worth(3)
 N/A

 
N/A
 

$844.1 million

 
≥ $673.4 million
 

$845.4 million

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

 
N/A
 
49.5
%
 
≤ 60.0%
 
49.5
%
 
≤ 60.0%
% of Secured Indebtedness to Gross Asset Value(5)
 N/A

 
N/A
 
12.8
%
 
≤ 35.0%
 
12.8
%
 
≤ 35.0%
Ratio of EBITDA(4) to Fixed Charges(6)
 N/A

 
N/A
 
2.57

 
≥ 1.50
 
2.57

 
≥ 1.50
Ratio of Unencumbered Pool Value(7) to Unsecured Indebtedness
 N/A

 
N/A
 
2.31

 
≥ 1.67
 
2.31

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

 
N/A
 
3.26

 
≥ 2.00
 
3.26

 
≥ 2.00
Ratio of Investments(8) to Gross Asset Value(5)
 N/A

 
N/A
 
1.8
%
 
≤ 15.0%
 
1.8
%
 
≤ 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.

11



        

Capital Analysis
(In thousands, except per share amounts)
 
12/31/2012
 
9/30/2012
 
6/30/2012
 
3/31/2012
 
12/31/2011
Market Data
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares Outstanding
66,437

 
66,325

 
66,321

 
66,309

 
66,265

Market Price per Share
$
26.15

 
$
26.82

 
$
28.45

 
$
29.70

 
$
27.35

Equity Market Capitalization
$
1,737,328

 
$
1,778,837

 
$
1,886,832

 
$
1,969,377

 
$
1,812,348

 
 
 
 
 
 
 
 
 
 
Total Debt
$
1,249,160

 
$
1,308,915

 
$
1,253,921

 
$
1,193,047

 
$
1,184,180

Total Market Capitalization
$
2,986,488

 
$
3,087,752

 
$
3,140,753

 
$
3,162,424

 
$
2,996,528

 
 
 
 
 
 
 
 
 
 
Total Debt to Market Capitalization
0.42
:1
 
0.42
:1
 
0.40
:1
 
0.38
:1
 
0.40
:1
 
 
 
 
 
 
 
 
 
 
Earnings to Fixed Charges(1)
1.0x

 
1.3x

 
1.3x

 
1.3x

 
0.3x

Debt Service Coverage Ratio(2)
2.6x

 
2.8x

 
2.8x

 
2.7x

 
2.7x

 
 
 
 
 
 
 
 
 
 
Dividend Data
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Dividends Paid
$
19,928

 
$
19,998

 
$
28,772

 
$
28,746

 
$
28,669

Common Dividend per Share
$
0.30

 
$
0.30

 
$
0.43375

 
$
0.43375

 
$
0.43375

Payout Ratio (Core FFO per share basis)
63.8
%
 
62.5
%
 
90.4
%
 
92.3
%
 
92.3
%
Payout Ratio (Core FAD per share basis)
81.1
%
 
81.1
%
 
111.2
%
 
117.2
%
 
117.2
%
Payout Ratio (FAD per share basis)
85.7
%
 
81.1
%
 
111.2
%
 
117.2
%
 
123.9
%
 
 
 
 
 
 
 
 
 
 
(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) Growth & Rental Rate Growth
2012 vs. 2011

 
 
Three Months Ended December 31, (1)
 
Twelve Months Ended December 31, (2)
 
 
2012
 
2011
 
% Change
 
Rental Rate Growth
 
2012
 
2011
 
% Change
 
Rental Rate Growth
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash Basis:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Multifamily
 
$
8,181

 
$
7,838

 
4.4
 %
 
4.1
%
 
$
31,664

 
$
30,464

 
3.9
 %
 
3.9
%
Office
 
24,159

 
24,277

 
(0.5
)%
 
1.4
%
 
76,177

 
78,914

 
(3.5
)%
 
1.2
%
Medical Office
 
7,149

 
7,327

 
(2.4
)%
 
1.6
%
 
28,538

 
29,388

 
(2.9
)%
 
1.8
%
Retail
 
10,217

 
9,460

 
8.0
 %
 
1.7
%
 
37,104

 
34,007

 
9.1
 %
 
2.0
%
Overall Same-Store Portfolio
 
$
49,706

 
$
48,902

 
1.6
 %
 
1.9
%
 
$
173,483

 
$
172,773

 
0.4
 %
 
2.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP Basis:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Multifamily
 
$
8,364

 
$
8,033

 
4.1
 %
 
4.1
%
 
$
32,420

 
$
31,262

 
3.7
 %
 
3.9
%
Office
 
24,394

 
24,667

 
(1.1
)%
 
0.9
%
 
77,087

 
80,795

 
(4.6
)%
 
0.8
%
Medical Office
 
7,312

 
7,549

 
(3.1
)%
 
1.3
%
 
29,296

 
30,336

 
(3.4
)%
 
1.6
%
Retail
 
10,273

 
9,492

 
8.2
 %
 
0.3
%
 
37,806

 
34,764

 
8.8
 %
 
0.7
%
Overall Same-Store Portfolio
 
$
50,343

 
$
49,741

 
1.2
 %
 
1.4
%
 
$
176,609

 
$
177,157

 
(0.3
)%
 
1.5
%
(1) Non same-store properties were:
Acquisitions:
Office - Fairgate at Ballston.
Medical Office - Lansdowne Medical Office Building.    
Held for sale and sold properties:
Office -1700 Research Blvd and The Atrium Building.
Medical Office - Plumtree Professional Center

(2) Non same-store properties were:
Acquisitions:
Office - 1140 Connecticut Avenue, 1227 25th Street, Braddock Metro Center, John Marshall II and Fairgate at Ballston.
Retail - Olney Village Center.
Medical Office - Lansdowne Medical Office Building.    
Held for sale and sold properties:
Office -1700 Research Blvd and The Atrium Building.
Industrial/Office - the Industrial Portfolio (see Supplemental Definitions for list of properties).


13




Same-Store Portfolio Net Operating Income (NOI) Detail
(In thousands)
 
Three Months Ended December 31, 2012
 
Multifamily
 
Office
 
Medical Office
 
Retail
 
Corporate and Other
 
Total
Real estate rental revenue
 
 
 
 
 
 
 
 
 
 
 
Same-store portfolio
$
13,403

 
$
37,741

 
$
10,830

 
$
13,488

 
$

 
$
75,462

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

 
1,345

 
264

 

 

 
1,609

                         Total
13,403

 
39,086

 
11,094

 
13,488

 

 
77,071

 
 
 
 
 
 
 
 
 
 
 
 
Real estate expenses
 
 
 
 
 
 
 
 
 
 
 
Same-store portfolio
5,039

 
13,347

 
3,518

 
3,215

 

 
25,119

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

 
521

 
151

 

 

 
672

                         Total
5,039

 
13,868

 
3,669

 
3,215

 

 
25,791

 
 
 
 
 
 
 
 
 
 
 
 
Net Operating Income (NOI)
 
 
 
 
 
 
 
 
 
 
 
Same-store portfolio
8,364

 
24,394

 
7,312

 
10,273

 

 
50,343

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

 
824

 
113

 

 

 
937

                          Total
$
8,364

 
$
25,218

 
$
7,425

 
$
10,273

 
$

 
$
51,280

 
 
 
 
 
 
 
 
 
 
 
 
Same-store portfolio NOI GAAP basis (from above)
$
8,364

 
$
24,394

 
$
7,312

 
$
10,273

 
$

 
$
50,343

Straight-line revenue, net for same-store properties
1

 
(508
)
 
(106
)
 
(16
)
 

 
(629
)
FAS 141 Min Rent
(184
)
 
112

 
(68
)
 
(96
)
 

 
(236
)
Amortization of lease intangibles for same-store properties

 
161

 
11

 
56

 

 
228

Same-store portfolio NOI, cash basis
$
8,181

 
$
24,159

 
$
7,149

 
$
10,217

 
$

 
$
49,706

Reconciliation of NOI to net income:
 
 
 
 
 
 
 
 
 
 
 
Total NOI
$
8,364

 
$
25,218

 
$
7,425

 
$
10,273

 
$

 
$
51,280

Depreciation and amortization
(3,027
)
 
(15,486
)
 
(3,888
)
 
(3,443
)
 
(287
)
 
(26,131
)
General and administrative expenses

 

 

 

 
(4,545
)
 
(4,545
)
Real estate impairment

 

 

 

 
(2,097
)
 
(2,097
)
Acquisition costs

 

 

 

 
(90
)
 
(90
)
Interest expense
(1,709
)
 
(3,045
)
 
(767
)
 
(279
)
 
(11,611
)
 
(17,411
)
Other income

 

 

 

 
242

 
242

Discontinued operations:
 
 
 
 
 
 
 
 
 
 
 
Income from operations of properties sold or held for sale (1)

 
230

 
80

 

 

 
310

Gain on sale of real estate

 

 

 

 
1,400

 
1,400

Net Income
3,628

 
6,917

 
2,850

 
6,551

 
(16,988
)
 
2,958

Net income attributable to noncontrolling interests

 

 

 

 

 

Net income attributable to the controlling interests
$
3,628

 
$
6,917

 
$
2,850

 
$
6,551

 
$
(16,988
)
 
$
2,958

(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 December 31, 2011
 
Multifamily
 
Office
 
Medical Office
 
Retail
 
Industrial/Flex
 
Corporate and Other
 
Total
Real estate rental revenue
 
 
 
 
 
 
 
 
 
 
 
 
 
Same-store portfolio
$
12,906

 
$
37,915

 
$
10,856

 
$
13,537

 
$

 
$

 
$
75,214

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

 

 
199

 

 

 

 
199

                         Total
12,906

 
37,915

 
11,055

 
13,537

 

 

 
75,413

Real estate expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
Same-store portfolio
4,873

 
13,248

 
3,307

 
4,045

 

 

 
25,473

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

 
47

 
146

 

 

 

 
193

                         Total
4,873

 
13,295

 
3,453

 
4,045

 

 

 
25,666

Net Operating Income (NOI)
 
 
 
 
 
 
 
 
 
 
 
 
 
Same-store portfolio
8,033

 
24,667

 
7,549

 
9,492

 

 

 
49,741

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

 
(47
)
 
53

 

 

 

 
6

                          Total
$
8,033

 
$
24,620

 
$
7,602

 
$
9,492

 
$

 
$

 
$
49,747

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Same-store portfolio NOI GAAP basis (from above)
$
8,033

 
$
24,667

 
$
7,549

 
$
9,492

 
$

 
$

 
$
49,741

Straight-line revenue, net for same-store properties
(3
)
 
(586
)
 
(142
)
 
(20
)
 

 

 
(751
)
FAS 141 Min Rent
(192
)
 
68

 
(90
)
 
(88
)
 

 

 
(302
)
Amortization of lease intangibles for same-store properties

 
128

 
10

 
76

 

 

 
214

Same-store portfolio NOI, cash basis
$
7,838

 
$
24,277

 
$
7,327

 
$
9,460

 
$

 
$

 
$
48,902

Reconciliation of NOI to net income:
 
 
 
 
 
 
 
 
 
 
 
 
 
Total NOI
$
8,033

 
$
24,620

 
$
7,602

 
$
9,492

 
$

 
$

 
$
49,747

Depreciation and amortization
(3,175
)
 
(14,322
)
 
(3,776
)
 
(3,539
)
 

 
(217
)
 
(25,029
)
General and administrative expense

 

 

 

 

 
(4,140
)
 
(4,140
)
Real estate impairment

 

 

 

 

 
(14,526
)
 
(14,526
)
Acquisition costs

 

 

 

 

 
(36
)
 
(36
)
Interest expense
(1,717
)
 
(3,077
)
 
(1,123
)
 
(611
)
 

 
(9,614
)
 
(16,142
)
Other income

 

 

 

 

 
258

 
258

Loss on extinguishment of debt

 

 

 

 

 
(976
)
 
(976
)
Discontinued operations:
 
 
 
 
 
 
 
 
 
 
 
 
 
Income from operations of properties sold or held for sale(1)

 
456

 
13

 

 
621

 

 
1,090

Gain on sale of real estate

 

 

 

 

 
40,852

 
40,852

Net income
3,141

 
7,677

 
2,716

 
5,342

 
621

 
11,601

 
31,098

Net income attributable to noncontrolling interests

 

 

 

 

 
(409
)
 
(409
)
Net income attributable to the controlling interests
$
3,141

 
$
7,677

 
$
2,716

 
$
5,342

 
$
621

 
$
11,192

 
$
30,689

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

15




Same-Store Net Operating Income (NOI) Detail
(In thousands)
 
Twelve Months Ended December 31, 2012
 
Multifamily
 
Office
 
Medical Office
 
Retail
 
Corporate and Other
 
Total
Real estate rental revenue
 
 
 
 
 
 
 
 
 
 
 
Same-store portfolio
$
52,887

 
$
119,407

 
$
43,653

 
$
49,316

 
$

 
$
265,263

Non same-store - acquired and in development 1

 
33,509

 
1,021

 
5,190

 

 
39,720

                         Total
52,887

 
152,916

 
44,674

 
54,506

 

 
304,983

Real estate expenses
 
 
 
 
 
 
 
 
 
 
 
Same-store portfolio
20,467

 
42,320

 
14,357

 
11,510

 

 
88,654

Non same-store - acquired and in development 1

 
12,793

 
637

 
1,192

 

 
14,622

                         Total
20,467

 
55,113

 
14,994

 
12,702

 

 
103,276

Net Operating Income (NOI)
 
 
 
 
 
 
 
 
 
 
 
Same-store portfolio
32,420

 
77,087

 
29,296

 
37,806

 

 
176,609

Non same-store - acquired and in development 1

 
20,716

 
384

 
3,998

 

 
25,098

                          Total
$
32,420

 
$
97,803

 
$
29,680

 
$
41,804

 
$

 
$
201,707

 
 
 
 
 
 
 
 
 
 
 
 
Same-store portfolio NOI GAAP basis (from above)
$
32,420

 
$
77,087

 
$
29,296

 
$
37,806

 
$

 
$
176,609

Straight-line revenue, net for same-store properties
(4
)
 
(929
)
 
(486
)
 
(505
)
 

 
(1,924
)
FAS 141 Min Rent
(752
)
 
(502
)
 
(317
)
 
(401
)
 

 
(1,972
)
Amortization of lease intangibles for same-store properties

 
521

 
45

 
204

 

 
770

Same-store portfolio NOI, cash basis
$
31,664

 
$
76,177

 
$
28,538

 
$
37,104

 
$

 
$
173,483

 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of NOI to net income:
 
 
 
 
 
 
 
 
 
 
 
Total NOI
$
32,420

 
$
97,803

 
$
29,680

 
$
41,804

 
$

 
$
201,707

Depreciation and amortization
(12,629
)
 
(59,951
)
 
(15,386
)
 
(14,038
)
 
(1,063
)
 
(103,067
)
General and administrative expenses

 

 

 

 
(15,488
)
 
(15,488
)
Real estate impairment

 

 

 

 
(2,097
)
 
(2,097
)
Acquisition costs

 

 

 

 
(234
)
 
(234
)
Interest expense
(6,812
)
 
(12,189
)
 
(4,070
)
 
(1,846
)
 
(39,780
)
 
(64,697
)
Other income

 

 

 

 
975

 
975

Discontinued operations:
 
 
 
 
 
 
 
 
 
 
 
Income from operations of properties sold or held for sale (1)

 
1,288

 
197

 

 

 
1,485

Gain on sale of real estate

 

 

 

 
5,124

 
5,124

Net Income
12,979

 
26,951

 
10,421

 
25,920

 
(52,563
)
 
23,708

Net income attributable to noncontrolling interests

 

 

 

 

 

Net income attributable to the controlling interests
$
12,979

 
$
26,951

 
$
10,421

 
$
25,920

 
$
(52,563
)
 
$
23,708

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

16




Same-Store Net Operating Income (NOI) Detail
(In thousands)
 
Twelve Months Ended December 31, 2011
 
Multifamily
 
Office
 
Medical Office
 
Retail
 
Industrial/Flex
 
Corporate and Other
 
Total
Real estate rental revenue
 
 
 
 
 
 
 
 
 
 
 
 
 
Same-store portfolio
$
50,979

 
$
121,441

 
$
43,801

 
$
48,529

 
$

 
$

 
$
264,750

Non same-store - acquired and in development 1

 
16,884

 
630

 
1,892

 

 

 
19,406

                         Total
50,979

 
138,325

 
44,431

 
50,421

 

 

 
284,156

Real estate expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
Same-store portfolio
19,717

 
40,646

 
13,465

 
13,765

 

 

 
87,593

Non same-store - acquired and in development 1

 
6,643

 
598

 
508

 

 

 
7,749

                         Total
19,717

 
47,289

 
14,063

 
14,273

 

 

 
95,342

Net Operating Income (NOI)
 
 
 
 
 
 
 
 
 
 
 
 
 
Same-store portfolio
31,262

 
80,795

 
30,336

 
34,764

 

 

 
177,157

Non same-store - acquired and in development 1

 
10,241

 
32

 
1,384

 

 

 
11,657

                          Total
$
31,262

 
$
91,036

 
$
30,368

 
$
36,148

 
$

 
$

 
$
188,814

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Same-store portfolio NOI GAAP basis (from above)
$
31,262

 
$
80,795

 
$
30,336

 
$
34,764

 
$

 
$

 
$
177,157

Straight-line revenue, net for same-store properties
(32
)
 
(1,370
)
 
(601
)
 
(434
)
 

 

 
(2,437
)
FAS 141 Min Rent
(766
)
 
(967
)
 
(386
)
 
(448
)
 

 

 
(2,567
)
Amortization of lease intangibles for same-store properties

 
456

 
39

 
125

 

 

 
620

Same-store portfolio NOI, cash basis
$
30,464

 
$
78,914

 
$
29,388

 
$
34,007

 
$

 
$

 
$
172,773

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of NOI to Net Income
 
 
 
 
 
 
 
 
 
 
 
 
 
Total NOI
$
31,262

 
$
91,036

 
$
30,368

 
$
36,148

 
$

 
$

 
$
188,814

Depreciation and amortization
(12,620
)
 
(50,473
)
 
(15,162
)
 
(12,158
)
 

 
(1,392
)
 
(91,805
)
General and administrative expenses

 

 

 

 

 
(15,728
)
 
(15,728
)
Real estate impairment

 

 

 

 

 
(14,526
)
 
(14,526
)
Acquisition costs

 

 

 

 

 
(3,607
)
 
(3,607
)
Interest expense
(6,824
)
 
(9,957
)
 
(4,812
)
 
(1,653
)
 

 
(42,968
)
 
(66,214
)
Other income

 

 

 

 

 
1,144

 
1,144

Loss on extinguishment of debt

 

 

 

 

 
(976
)
 
(976
)
Discontinued operations:
 
 
 
 
 
 
 
 
 
 
 
 
 
Income from operations of properties sold or held for sale (1)

 
1,810

 
67

 

 
10,046

 

 
11,923

Income tax expense

 

 

 

 

 
(1,138
)
 
(1,138
)
Gain on sale of real estate

 

 

 

 

 
97,491

 
97,491

Net income
11,818

 
32,416

 
10,461

 
22,337

 
10,046

 
18,300

 
105,378

Net income attributable to noncontrolling interests

 

 

 

 

 
(494
)
 
(494
)
Net income attributable to the controlling interests
$
11,818

 
$
32,416

 
$
10,461

 
$
22,337

 
$
10,046

 
$
17,806

 
$
104,884

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

17




Net Operating Income (NOI) by Region
 
 
 
 
 
 
 
 
 
 
 
WRIT Portfolio
 
WRIT Portfolio
Maryland/Virginia/DC
 
Inside & Outside the Beltway
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage of
Q4 2012 GAAP NOI
 
Percentage of
YTD 2012 GAAP NOI
 
 
 
Percentage of
Q4 2012 GAAP NOI
 
Percentage of
YTD 2012 GAAP NOI
DC
 
 
 
 
 
Inside the Beltway
 
 
 
 
Multifamily
 
4.0
%
 
3.9
%
 
Multifamily
 
15.4
%
 
15.2
%
Office
 
18.2
%
 
17.4
%
 
Office
 
28.9
%
 
28.0
%
Medical Office
 
2.0
%
 
1.8
%
 
Medical Office
 
3.1
%
 
3.0
%
Retail
 
0.6
%
 
0.7
%
 
Retail
 
6.1
%
 
6.2
%
 
 
24.8
%
 
23.8
%
 
 
 
53.5
%
 
52.4
%
 
 
 
 
 
 
 
 
 
 
 
Maryland
 
 
 
 
 
Outside the Beltway
 
 
 
 
Multifamily
 
2.4
%
 
2.4
%
 
Multifamily
 
0.9
%
 
0.9
%
Office
 
9.4
%
 
9.9
%
 
Office
 
20.3
%
 
20.5
%
Medical Office
 
3.8
%
 
3.8
%
 
Medical Office
 
11.4
%
 
11.7
%
Retail
 
14.3
%
 
14.7
%
 
Retail
 
13.9
%
 
14.5
%
 
 
29.9
%
 
30.8
%
 
 
 
46.5
%
 
47.6
%
 
 
 
 
 
 
 
 
 
 
 
Virginia
 
 
 
 
 
Total Portfolio
 
100.0
%
 
100.0
%
Multifamily
 
9.9
%
 
9.8
%
 
 
 
 
 
 
Office
 
21.6
%
 
21.1
%
 
 
 
 
 
 
Medical Office
 
8.7
%
 
9.1
%
 
 
 
 
 
 
Retail
 
5.1
%
 
5.4
%
 
 
 
 
 
 
 
 
45.3
%
 
45.4
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Portfolio
 
100.0
%
 
100.0
%
 
 
 
 
 
 

18




Same-Store and Overall Physical Occupancy Levels by Sector


 
 
Physical Occupancy - Same-Store Properties (1)
Sector
 
12/31/2012
 
9/30/2012
 
6/30/2012
 
3/31/2012
 
12/31/2011
 
 
 
 
 
 
 
 
 
 
 
Multifamily
 
94.1
%
 
94.8
%
 
94.8
%
 
95.2
%
 
94.9
%
Office
 
84.9
%
 
86.3
%
 
86.0
%
 
86.4
%
 
89.2
%
Medical Office
 
89.1
%
 
88.0
%
 
89.7
%
 
90.5
%
 
90.5
%
Retail
 
91.2
%
 
92.8
%
 
93.3
%
 
92.9
%
 
93.3
%
 
 
 
 
 
 
 
 
 
 
 
Overall Portfolio
 
88.7
%
 
89.8
%
 
89.9
%
 
90.2
%
 
91.5
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Physical Occupancy - All Properties
Sector
 
12/31/2012
 
9/30/2012
 
6/30/2012
 
3/31/2012
 
12/31/2011
 
 
 
 
 
 
 
 
 
 
 
Multifamily
 
94.1
%
 
94.8
%
 
94.8
%
 
95.2
%
 
94.9
%
Office
 
84.5
%
 
86.2
%
 
85.8
%
 
86.3
%
 
89.0
%
Medical Office
 
85.6
%
 
85.0
%
 
86.4
%
 
87.1
%
 
86.5
%
Retail
 
91.2
%
 
92.8
%
 
93.3
%
 
92.9
%
 
93.3
%
 
 
 
 
 
 
 
 
 
 
 
Overall Portfolio
 
88.1
%
 
89.2
%
 
89.3
%
 
89.7
%
 
90.8
%

(1) Non same-store properties were:
Acquisitions:
Office - Fairgate at Ballston.
Medical Office - Lansdowne Medical Office Building.    
Held for sale and sold properties:
Office - 1700 Research Blvd and The Atrium Building.
Medical Office - Plumtree Professional Center.



19




Same-Store Portfolio and Overall Economic Occupancy Levels by Sector
 
 
Economic Occupancy - Same-Store Properties(1)
Sector
 
12/31/2012
 
9/30/2012
 
6/30/2012
 
3/31/2012
 
12/31/2011
 
 
 
 
 
 
 
 
 
 
 
Multifamily
 
93.5
%
 
94.1
%
 
94.1
%
 
94.0
%
 
94.2
%
Office
 
86.6
%
 
87.3
%
 
87.2
%
 
87.8
%
 
89.6
%
Medical Office
 
91.0
%
 
91.6
%
 
92.3
%
 
93.5
%
 
92.4
%
Retail
 
92.9
%
 
94.3
%
 
93.7
%
 
94.3
%
 
93.0
%
Industrial
 
%
 
%
 
%
 
%
 
%
 
 
 
 
 
 
 
 
 
 
 
Overall Portfolio
 
89.5
%
 
90.3
%
 
90.2
%
 
90.8
%
 
91.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Economic Occupancy - All Properties
Sector
 
12/31/2012
 
9/30/2012
 
6/30/2012
 
3/31/2012
 
12/31/2011
 
 
 
 
 
 
 
 
 
 
 
Multifamily
 
93.5
%
 
94.1
%
 
94.1
%
 
94.0
%
 
94.2
%
Office
 
86.0
%
 
87.1
%
 
87.1
%
 
87.8
%
 
89.4
%
Medical Office
 
88.7
%
 
89.3
%
 
90.0
%
 
90.8
%
 
89.5
%
Retail
 
92.9
%
 
94.3
%
 
93.7
%
 
94.3
%
 
93.0
%
Industrial
 
%
 
%
 
%
 
%
 
79.3
%
 
 
 
 
 
 
 
 
 
 
 
Overall Portfolio
 
88.8
%
 
89.8
%
 
89.8
%
 
90.3
%
 
90.8
%


((1) Non same-store properties were:
Acquisitions:
Office - Fairgate at Ballston.
Medical Office - Lansdowne Medical Office Building.    
Held for sale and sold properties:
Office - 1700 Research Blvd and The Atrium Building.
Medical Office - Plumtree Professional Center.



20




Commercial Leasing Summary
 
 

 
Three Months Ended
 
12/31/2012
 
9/30/2012
 
6/30/2012
 
3/31/2012
 
12/31/2011
Gross Leasing Square Footage
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Office
153,024
 
 
145,452
 
 
118,302
 
 
136,234
 
 
175,032
 
      Medical Office
43,080
 
 
43,766
 
 
31,811
 
 
69,171
 
 
65,162
 
      Retail
74,388
 
 
32,126
 
 
97,326
 
 
12,574
 
 
23,375
 
Total
270,492
 
 
221,344
 
 
247,439
 
 
217,979
 
 
263,569
 
Weighted Average Term (yrs)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Office
6.2
 
4.8
 
6.5
 
5.6
 
4.8
      Medical Office
7.3
 
6.9
 
5.8
 
5.3
 
4.4
      Retail
5.5
 
4.7
 
7.2
 
8.3
 
5.9
Total
6.2
 
5.2
 
6.7
 
5.7
 
4.8
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rental Rate Increases:
GAAP
 
CASH
 
GAAP
 
CASH
 
GAAP
 
CASH
 
GAAP
 
CASH
 
GAAP
 
CASH
      Rate on expiring leases
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Office
$
30.11

 
$
30.82

 
$
32.55

 
$
34.18

 
$
32.54

 
$
34.16

 
$
28.97

 
$
30.31

 
$
30.22

 
$
31.94

      Medical Office
$
33.44

 
$
35.78

 
$
31.52

 
$
32.92

 
$
35.39

 
$
38.27

 
$
28.31

 
$
29.70

 
$
34.70

 
$
37.70

      Retail
$
19.50

 
$
19.72

 
$
34.81

 
$
35.81

 
$
20.73

 
$
21.15

 
$
14.13

 
$
14.13

 
$
22.12

 
$
23.02

Total
$
27.78

 
$
28.61

 
$
32.67

 
$
34.17

 
$
27.99

 
$
29.29

 
$
27.90

 
$
29.18

 
$
30.61

 
$
32.57

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rate on new leases
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Office
$
33.67

 
$
31.28

 
$
36.35

 
$
34.20

 
$
38.88

 
$
35.85

 
$
31.87

 
$
29.73

 
$
31.38

 
$
29.66

      Medical Office
$
35.03

 
$
31.99

 
$
33.30

 
$
30.74

 
$
38.61

 
$
35.92

 
$
29.94

 
$
27.98

 
$
38.91

 
$
37.13

      Retail
$
20.64

 
$
20.12

 
$
40.50

 
$
38.84

 
$
22.21

 
$
20.61

 
$
15.13

 
$
14.24

 
$
28.89

 
$
26.86

Total
$
30.41

 
$
28.44

 
$
36.35

 
$
34.19

 
$
31.99

 
$
29.59

 
$
30.29

 
$
28.28

 
$
33.02

 
$
31.26

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage Increase
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
      Office
11.8
%
 
1.5
 %
 
11.7
%
 
0.1
 %
 
19.5
%
 
4.9
 %
 
10.0
%
 
(1.9
)%
 
3.8
%
 
(7.2
)%
      Medical Office
4.8
%
 
(10.6
)%
 
5.7
%
 
(6.6
)%
 
9.1
%
 
(6.2
)%
 
5.8
%
 
(5.8
)%
 
12.1
%
 
(1.5
)%
      Retail
5.8
%
 
2.0
 %
 
16.3
%
 
8.5
 %
 
7.1
%
 
(2.5
)%
 
7.1
%
 
0.8
 %
 
30.6
%
 
16.7
 %
Total
9.5
%
 
(0.6
)%
 
11.3
%
 
0.1
 %
 
14.3
%
 
1.0
 %
 
8.6
%
 
(3.1
)%
 
7.9
%
 
(4.0
)%



21





Commercial Leasing Summary
Tenant Improvements and Leasing Costs
 
Three Months Ended
 
12/31/2012
 
9/30/2012
 
6/30/2012
 
3/31/2012
 
12/31/2011
 
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
$
3,988,102

 
$
26.06

 
$
3,014,897

 
$
20.73

 
$
4,279,003

 
$
36.17

 
$
2,938,313

 
$
21.57

 
$
3,691,099

 
$
21.09

            Medical Office
1,173,812

 
27.25

 
1,210,182

 
27.65

 
783,528

 
24.63

 
1,220,567

 
17.65

 
788,535

 
12.10

            Retail
168,500

 
2.27

 
120,000

 
3.74

 
1,469,054

 
15.09

 

 

 
25,740

 
1.10

Subtotal
$
5,330,414

 
$
19.71

 
$
4,345,079

 
$
19.63

 
$
6,531,585

 
$
26.40

 
$
4,158,880

 
$
19.08

 
$
4,505,374

 
$
17.09

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Leasing Costs
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
            Office
$
1,946,499

 
$
12.72

 
$
2,161,240

 
$
14.86

 
$
2,854,636

 
$
24.13

 
$
2,363,552

 
$
17.35

 
$
2,133,927

 
$
12.19

            Medical Office
618,245

 
14.35

 
432,079

 
9.87

 
232,123

 
7.30

 
365,614

 
5.29

 
400,976

 
6.15

            Retail
93,943

 
1.26

 
95,203

 
2.96

 
257,096

 
2.64

 
9,232

 
0.73

 
178,127

 
7.62

Subtotal
$
2,658,687

 
$
9.83

 
$
2,688,522

 
$
12.15

 
$
3,343,855

 
$
13.51

 
$
2,738,398

 
$
12.56

 
$
2,713,030

 
$
10.29

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tenant Improvements and Leasing Costs
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
            Office
$
5,934,601

 
$
38.78

 
$
5,176,137

 
$
35.59

 
$
7,133,639

 
$
60.30

 
$
5,301,865

 
$
38.92

 
$
5,825,026

 
$
33.28

            Medical Office
1,792,057

 
41.60

 
1,642,261

 
37.52

 
1,015,651

 
31.93

 
1,586,181

 
22.94

 
1,189,511

 
18.25

            Retail
262,443

 
3.53

 
215,203

 
6.70

 
1,726,150

 
17.73

 
9,232

 
0.73

 
203,867

 
8.72

Total
$
7,989,101

 
$
29.54

 
$
7,033,601

 
$
31.78

 
$
9,875,440

 
$
39.91

 
$
6,897,278

 
$
31.64

 
$
7,218,404

 
$
27.38




22




10 Largest Tenants - Based on Annualized Rent
December 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
 
30
 
5.20
%
 
210,354

 
2.97
%
Advisory Board Company
1
 
77
 
2.94
%
 
180,925

 
2.56
%
Booz Allen Hamilton, Inc.
1
 
37
 
2.34
%
 
222,989

 
3.15
%
Engility Corporation
1
 
57
 
2.29
%
 
140,400

 
1.98
%
Patton Boggs LLP
1
 
52
 
2.09
%
 
110,566

 
1.56
%
INOVA Health System
7
 
39
 
2.07
%
 
112,408

 
1.59
%
Sunrise Senior Living, Inc.
1
 
9
 
1.67
%
 
115,289

 
1.63
%
General Services Administration
4
 
52
 
1.36
%
 
66,170

 
0.93
%
General Dynamics
2
 
18
 
1.23
%
 
88,359

 
1.25
%
Epstein, Becker & Green, P.C.
1
 
48
 
1.16
%
 
53,427

 
0.75
%
Total/Weighted Average
 
 
42
 
22.35
%
 
1,300,887

 
18.37
%



23




Industry Diversification
December 31, 2012
Industry Classification (NAICS)
Annualized Base Rental Revenue
 
% of Aggregate Annualized Rent
 
Aggregate Rentable Square Feet
 
% of Aggregate Square Feet
Professional, Scientific, and Technical Services
$
70,376,663

 
32.74
%
 
2,213,371

 
30.84
%
Ambulatory Health Care Services
38,627,333

 
17.97
%
 
1,121,848

 
15.63
%
Credit Intermediation and Related Activities
16,904,494

 
7.86
%
 
330,940

 
4.61
%
Religious, Grantmaking, Civic, Professional, and Similar Organizations
8,439,464

 
3.93
%
 
244,982

 
3.41
%
Food Services and Drinking Places
8,318,931

 
3.87
%
 
267,592

 
3.73
%
Executive, Legislative, and Other General Government Support
7,013,184

 
3.26
%
 
211,036

 
2.94
%
Food and Beverage Stores
6,112,414

 
2.84
%
 
339,366

 
4.73
%
Educational Services
6,017,427

 
2.80
%
 
202,416

 
2.82
%
Administrative and Support Services
4,358,503

 
2.03
%
 
120,730

 
1.68
%
Nursing and Residential Care Facilities
3,838,683

 
1.79
%
 
121,649

 
1.69
%
Health and Personal Care Stores
3,560,347

 
1.66
%
 
105,484

 
1.47
%
Furniture and Home Furnishings Stores
3,279,462

 
1.53
%
 
163,445

 
2.28
%
Broadcasting (except Internet)
3,206,204

 
1.49
%
 
89,702

 
1.25
%
Miscellaneous Store Retailers
3,139,989

 
1.46
%
 
168,468

 
2.35
%
Electronics and Appliance Stores
2,917,374

 
1.36
%
 
166,290

 
2.32
%
Sporting Goods, Hobby, Book, and Music Stores
2,833,861

 
1.32
%
 
171,094

 
2.38
%
Clothing and Clothing Accessories Stores
2,737,013

 
1.27
%
 
137,225

 
1.91
%
Personal and Laundry Services
2,461,305

 
1.15
%
 
77,255

 
1.08
%
Hospitals
1,921,112

 
0.89
%
 
51,715

 
0.72
%
General Merchandise Stores
1,863,527

 
0.87
%
 
221,503

 
3.09
%
Real Estate
1,349,834

 
0.63
%
 
42,402

 
0.59
%
Publishing Industries (except Internet)
1,251,886

 
0.58
%
 
43,362

 
0.60
%
Amusement, Gambling, and Recreation Industries
1,235,519

 
0.58
%
 
66,746

 
0.93
%
Computer and Electronic Product Manufacturing
1,202,988

 
0.56
%
 
41,689

 
0.58
%
Securities, Commodity Contracts, and Other Financial Investments and Related Activities
1,162,269

 
0.54
%
 
41,152

 
0.57
%
Printing and Related Support Activities
1,160,611

 
0.54
%
 
48,775

 
0.68
%
Insurance Carriers and Related Activities
863,840

 
0.40
%
 
31,078

 
0.43
%
Telecommunications
781,054

 
0.36
%
 
23,456

 
0.33
%
Transportation Equipment Manufacturing
769,417

 
0.36
%
 
28,851

 
0.40
%
Merchant Wholesalers, Durable Goods
739,032

 
0.34
%
 
41,421

 
0.58
%
Construction of Buildings
707,889

 
0.33
%
 
24,070

 
0.34
%
Social Assistance
590,960

 
0.28
%
 
19,241

 
0.27
%
Motor Vehicle and Parts Dealers
541,836

 
0.25
%
 
32,256

 
0.45
%
Merchant Wholesalers, Nondurable Goods
453,827

 
0.21
%
 
27,786

 
0.39
%
Other
4,215,444

 
1.95
%
 
138,262

 
1.92
%
Total
$
214,953,696

 
100.00
%
 
7,176,658

 
100.00
%

24




Lease Expirations
December 31, 2012
Year
 
Number of Leases
 
Rentable Square Feet
 
% of Rentable Square Feet
 
Annualized Rent (1)
 
Average Rental Rate
 
% of Annualized Rent (1)
Office:
 
 
 
 
 
 
 
 
 
 
 
 
2013
 
95

 
429,978

 
10.86
%
 
$
13,497,563

 
$
31.39

 
9.24
%
2014
 
100

 
791,689

 
20.00
%
 
27,390,098

 
34.60

 
18.76
%
2015
 
90

 
534,362

 
13.50
%
 
22,039,533

 
41.24

 
15.09
%
2016
 
81

 
584,438

 
14.76
%
 
18,425,697

 
31.53

 
12.62
%
2017
 
63

 
507,899

 
12.83
%
 
19,886,680

 
39.15

 
13.62
%
2018 and thereafter
 
131

 
1,110,619

 
28.05
%
 
44,777,556

 
40.32

 
30.67
%
 
 
560

 
3,958,985

 
100.00
%
 
$
146,017,127

 
$
36.88

 
100.00
%
Medical Office:
 
 
 
 
 
 
 
 
 
 
 
 
2013
 
59

 
162,639

 
15.02
%
 
$
5,765,160

 
$
35.45

 
13.26
%
2014
 
49

 
147,085

 
13.59
%
 
5,771,980

 
39.24

 
13.28
%
2015
 
29

 
84,473

 
7.80
%
 
3,409,553

 
40.36

 
7.84
%
2016
 
44

 
142,261

 
13.14
%
 
5,550,605

 
39.02

 
12.77
%
2017
 
42

 
129,789

 
11.99
%
 
5,283,624

 
40.71

 
12.16
%
2018 and thereafter
 
101

 
416,232

 
38.46
%
 
17,687,794

 
42.50

 
40.69
%
 
 
324

 
1,082,479

 
100.00
%
 
$
43,468,716

 
$
40.16

 
100.00
%
Retail:
 
 
 
 
 
 
 
 
 
 
 
 
2013
 
54

 
334,816

 
16.26
%
 
$
5,070,174

 
$
15.14

 
11.17
%
2014
 
39

 
139,242

 
6.76
%
 
3,174,881

 
22.80

 
7.00
%
2015
 
44

 
332,896

 
16.17
%
 
6,845,999

 
20.56

 
15.09
%
2016
 
24

 
198,239

 
9.63
%
 
4,153,189

 
20.95

 
9.15
%
2017
 
36

 
240,507

 
11.68
%
 
6,703,380

 
27.87

 
14.77
%
2018 and thereafter
 
91

 
812,883

 
39.50
%
 
19,432,471

 
23.91

 
42.82
%
 
 
288

 
2,058,583

 
100.00
%
 
$
45,380,094

 
$
22.04

 
100.00
%
Total:
 
 
 
 
 
 
 
 
 
 
 
 
2013
 
208

 
927,433

 
13.06
%
 
$
24,332,897

 
$
26.24

 
10.36
%
2014
 
188

 
1,078,016

 
15.18
%
 
36,336,959

 
33.71

 
15.47
%
2015
 
163

 
951,731

 
13.41
%
 
32,295,085

 
33.93

 
13.75
%
2016
 
149

 
924,938

 
13.03
%
 
28,129,491

 
30.41

 
11.98
%
2017
 
141

 
878,195

 
12.37
%
 
31,873,684

 
36.29

 
13.57
%
2018 and thereafter
 
323

 
2,339,734

 
32.95
%
 
81,897,821

 
35.00

 
34.87
%
 
 
1,172

 
7,100,047

 
100.00
%
 
$
234,865,937

 
$
33.08

 
100.00
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Annualized Rent is equal to the rental rate effective at lease expiration (cash basis) multiplied by 12.
 
 

25




Acquisition and Disposition Summary
December 31, 2012
($'s in thousands)
Acquisition Summary
 
 
 
 
 
 
 
 
 
 
 
 
Acquisition Date
 
Square Feet
 
Leased Percentage at Acquisition
 
12/31/2012 Leased Percentage
 
Investment
Fairgate at Ballston
Arlington, VA
June 21, 2012
 
142,000

 
82%
 
83%
 
$
52,250

 
 
 
 
 
 
 
 
 
 
 
Disposition Summary
 
 
 
 
 
 
 
 
 
 
 
 
Disposition Date
 
Property Type
 
Square Feet
 
Contract Sales Price
 
GAAP Gain
1700 Research Boulevard
Rockville, MD
August 31, 2012
 
Office
 
101,000

 
$
14,250

 
$
3,724

Plumtree Professional Center
Bel Air, MD
December 20, 2012
 
Medical Office
 
33,000

 
8,750

 
1,400

 
 
 
 
 
 
134,000

 
$
23,000

 
$
5,124





26




Schedule of Properties
December 31, 2012
 PROPERTIES
 
 LOCATION
 
 YEAR ACQUIRED
 
 YEAR CONSTRUCTED
 
 NET RENTABLE SQUARE FEET(1)
Office Buildings
 
 
 
 
 
 
 
 
1901 Pennsylvania Avenue
 
Washington, DC
 
1977
 
1960
 
99,000

51 Monroe Street
 
Rockville, MD
 
1979
 
1975
 
221,000

515 King Street
 
Alexandria, VA
 
1992
 
1966
 
74,000

6110 Executive Boulevard
 
Rockville, MD
 
1995
 
1971
 
202,000

1220 19th Street
 
Washington, DC
 
1995
 
1976
 
103,000

1600 Wilson Boulevard
 
Arlington, VA
 
1997
 
1973
 
167,000

7900 Westpark Drive
 
McLean, VA
 
1997
 
1972/1986/1999
 
538,000

600 Jefferson Plaza
 
Rockville, MD
 
1999
 
1985
 
113,000

Wayne Plaza
 
Silver Spring, MD
 
2000
 
1970
 
96,000

Courthouse Square
 
Alexandria, VA
 
2000
 
1979
 
115,000

One Central Plaza
 
Rockville, MD
 
2001
 
1974
 
267,000

The Atrium Building
 
Rockville, MD
 
2002
 
1980
 
79,000

1776 G Street
 
Washington, DC
 
2003
 
1979
 
263,000

6565 Arlington Boulevard
 
Falls Church, VA
 
2006
 
1967/1998
 
132,000

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
 
80,000

2000 M Street
 
Washington, DC
 
2007
 
1971
 
228,000

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
 
188,000

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

Braddock Metro Center
 
Alexandria, VA
 
2011
 
1985
 
351,000

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

Fairgate at Ballston
 
Arlington, VA
 
2012
 
1988
 
142,000

Subtotal
 
 
 
 
 
 
 
4,855,000


27




Schedule of Properties
December 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
 
88,000

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
 
50,000

Alexandria Professional Center
 
Alexandria, VA
 
2006
 
1968
 
117,000

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

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

15005 Shady Grove Road
 
Rockville, MD
 
2006
 
2002
 
51,000

2440 M Street
 
Washington, DC
 
2007
 
1986/2006
 
113,000

Woodholme Medical Office Building
 
Pikesville, MD
 
2007
 
1996
 
127,000

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

19500 at Riverside Office Park (formerly Lansdowne Medical Office Building)
 
Leesburg, VA
 
2009
 
2009
 
85,000

Subtotal
 
 
 
 
 
 
 
1,285,000



28



Schedule of Properties
December 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
 
197,000

Shoppes of Foxchase (1)
 
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
 
223,000

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

Subtotal
 
 
 
 
 
 
 
2,448,000

 
 
 
 
 
 
 
 
 
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
 
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

Subtotal (2,540 units)
 
 
 
 
 
 
 
2,137,000

 
 
 
 
 
 
 
 
 
TOTAL
 
 
 
 
 
 
 
10,725,000

(1) Multifamily buildings are presented in gross square feet.

29




Supplemental Definitions
December 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 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 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, (3) severance expense related to corporate reorganization, 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 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, (3)non-share-based severance expense related to corporate reorganization, 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 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.
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."

30



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.



31