NEWS RELEASE | ||
CONTACT: | 6110 Executive Blvd., Suite 800 | |
William T. Camp | Rockville, Maryland 20852 | |
Executive Vice President and | Tel 301-984-9400 | |
Chief Financial Officer | Fax 301-984-9610 | |
E-Mail: bcamp@writ.com | www.writ.com | |
July 24, 2013 | ||
WASHINGTON REAL ESTATE INVESTMENT TRUST ANNOUNCES SECOND QUARTER FINANCIAL AND OPERATING RESULTS |
• | Generated Core Funds from Operations (FFO) of $0.47 per diluted share for the quarter, a 5% increase over first quarter 2013 |
• | Improved same-store physical occupancy in the office portfolio 90 bps and retail portfolio 80 bps over first quarter 2013 |
• | Produced same-store net operating income growth of 1.8% over first quarter of 2013 |
• | Executed 70 new and renewal leases totaling 417,615 square feet at an average rental rate increase of 7.0% over in-place rents for new leases and average rental rate increase of 8.9% over in-place rents for renewal leases |
• | Announced the renovation of largest asset in portfolio, 7900 Westpark Drive located in Tysons Corner, Virginia |
• | Achieved LEED® EB on over one million square feet of office space and was the recipient of the 2013 Apartment and Office Building Association's (AOBA) TOBY (The Outstanding Building of the Year) Award in the Earth category for WRIT's 1220 19th Street office property |
▪ | Office: 48.4% of Total NOI - Office properties' same-store NOI for the second quarter decreased 2.1% compared to the same period one year ago. Rental rate growth was 1.7% while same-store physical occupancy increased 30 bps to 86.3%. Sequentially, same-store physical occupancy increased 90 bps compared to the first quarter of 2013. |
▪ | Retail: 21.0% of Total NOI - Retail properties' same-store NOI for the second quarter decreased 2.2% compared to the same period one year ago. Rental rate growth was 4.1% while same-store physical occupancy decreased 10 bps to 93.2%. Sequentially, same-store physical occupancy increased 80 bps compared to the first quarter of 2013. |
▪ | Multifamily: 15.5% of Total NOI - Multifamily properties' same-store NOI for the second quarter decreased 1.3% compared to the same period one year ago. Rental rate growth was 3.8% while same-store physical occupancy decreased 170 bps to 93.1%. Sequentially, same-store physical occupancy decreased 70 bps compared to the first quarter of 2013. |
▪ | Medical: 15.1% of Total NOI - Medical office properties' same-store NOI for the second quarter increased 3.3% compared to the same period one year ago. Rental rate growth was 1.4% while same-store physical occupancy decreased 190 bps to 87.8%. Sequentially, same-store physical occupancy decreased 60 bps compared to the first quarter of 2013. |
Square Feet | Weighted Average Term (in years) | Weighted Average Rental Rates | Weighted Average Rental Rate % Increase | Tenant Improvements | Leasing Commissions and Incentives | ||||||||||
New: | |||||||||||||||
Office | 94,191 | 7.8 | $ | 30.34 | 7.3 | % | $ | 34.88 | $ | 23.08 | |||||
Retail | 6,240 | 7.1 | 33.54 | 7.1 | % | 19.20 | 11.50 | ||||||||
Medical Office | 3,082 | 5.4 | 30.97 | (1.8 | )% | 21.82 | 13.90 | ||||||||
Total | 103,513 | 7.6 | 30.55 | 7.0 | % | 33.55 | 22.10 | ||||||||
Renewal: | |||||||||||||||
Office | 92,245 | 3.5 | $ | 32.51 | 5.8 | % | $ | 6.12 | $ | 2.40 | |||||
Retail | 172,474 | 5.3 | 8.74 | 12.3 | % | 0.38 | 0.48 | ||||||||
Medical Office | 49,383 | 10.4 | 35.23 | 11.5 | % | 12.94 | 2.55 | ||||||||
Total | 314,102 | 5.6 | 19.88 | 8.9 | % | 4.04 | 1.37 |
Physical Occupancy Levels by Same-Store Properties (i) and All Properties | |||||||||||
Physical Occupancy | |||||||||||
Same-Store Properties | All Properties | ||||||||||
2nd QTR | 2nd QTR | 2nd QTR | 2nd QTR | ||||||||
Segment | 2013 | 2012 | 2013 | 2012 | |||||||
Multifamily | 93.1 | % | 94.8 | % | 93.1 | % | 94.8 | % | |||
Office | 86.3 | % | 86.0 | % | 86.3 | % | 85.8 | % | |||
Medical Office | 87.8 | % | 89.7 | % | 84.8 | % | 86.4 | % | |||
Retail | 93.2 | % | 93.3 | % | 93.2 | % | 93.3 | % | |||
Overall Portfolio | 89.5 | % | 89.9 | % | 89.1 | % | 89.3 | % |
WASHINGTON REAL ESTATE INVESTMENT TRUST | |||||||||||||||
FINANCIAL HIGHLIGHTS | |||||||||||||||
(In thousands, except per share data) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
OPERATING RESULTS | 2013 | 2012 | 2013 | 2012 | |||||||||||
Revenue | |||||||||||||||
Real estate rental revenue | $ | 78,272 | $ | 75,590 | $ | 155,196 | $ | 150,804 | |||||||
Expenses | |||||||||||||||
Real estate expenses | 27,429 | 25,033 | 54,520 | 50,584 | |||||||||||
Depreciation and amortization | 25,582 | 25,227 | 51,106 | 50,809 | |||||||||||
Acquisition costs | 87 | 254 | 300 | 308 | |||||||||||
General and administrative | 4,005 | 4,164 | 7,867 | 7,770 | |||||||||||
57,103 | 54,678 | 113,793 | 109,471 | ||||||||||||
Real estate operating income | 21,169 | 20,912 | 41,403 | 41,333 | |||||||||||
Other income (expense): | |||||||||||||||
Interest expense | (16,152 | ) | (15,470 | ) | (32,670 | ) | (31,301 | ) | |||||||
Other income | 246 | 252 | 485 | 496 | |||||||||||
(15,906 | ) | (15,218 | ) | (32,185 | ) | (30,805 | ) | ||||||||
Income from continuing operations | 5,263 | 5,694 | 9,218 | 10,528 | |||||||||||
Discontinued operations: | |||||||||||||||
Income from operations of properties sold or held for sale | — | 314 | 185 | 661 | |||||||||||
Gain on sale of real estate | — | — | 3,195 | — | |||||||||||
Net income | 5,263 | 6,008 | 12,598 | 11,189 | |||||||||||
Less: Net income attributable to noncontrolling interests in subsidiaries | — | — | — | — | |||||||||||
Net income attributable to the controlling interests | $ | 5,263 | $ | 6,008 | $ | 12,598 | $ | 11,189 | |||||||
Income from continuing operations | 5,263 | 5,694 | 9,218 | 10,528 | |||||||||||
Continuing operations real estate depreciation and amortization | 25,582 | 25,227 | 51,106 | 50,809 | |||||||||||
Funds from continuing operations(1) | $ | 30,845 | $ | 30,921 | $ | 60,324 | $ | 61,337 | |||||||
Income from operations of properties sold or held for sale | — | 314 | 185 | 661 | |||||||||||
Discontinued operations real estate depreciation and amortization | — | 364 | — | 776 | |||||||||||
Funds from discontinued operations | — | 678 | 185 | 1,437 | |||||||||||
Funds from operations(1) | $ | 30,845 | $ | 31,599 | $ | 60,509 | $ | 62,774 | |||||||
Tenant improvements | (5,918 | ) | (2,357 | ) | (9,893 | ) | (6,423 | ) | |||||||
External and internal leasing commissions capitalized | (2,342 | ) | (2,122 | ) | (4,948 | ) | (4,679 | ) | |||||||
Recurring capital improvements | (2,311 | ) | (2,992 | ) | (3,032 | ) | (4,531 | ) | |||||||
Straight-line rents, net | (483 | ) | (688 | ) | (826 | ) | (1,680 | ) | |||||||
Non-cash fair value interest expense | 255 | 229 | 509 | 457 | |||||||||||
Non real estate depreciation & amortization of debt costs | 933 | 948 | 1,891 | 1,956 | |||||||||||
Amortization of lease intangibles, net | 86 | (3 | ) | 127 | (3 | ) | |||||||||
Amortization and expensing of restricted share and unit compensation | 1,355 | 1,333 | 2,373 | 2,738 | |||||||||||
Funds available for distribution(4) | $ | 22,420 | $ | 25,947 | $ | 46,710 | $ | 50,609 | |||||||
Note: Certain prior period amounts have been reclassified to conform to the current presentation. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
Per share data: | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Income from continuing operations | (Basic) | $ | 0.08 | $ | 0.08 | $ | 0.14 | $ | 0.15 | |||||||
(Diluted) | $ | 0.08 | $ | 0.08 | $ | 0.14 | $ | 0.15 | ||||||||
Net income | (Basic) | $ | 0.08 | $ | 0.09 | $ | 0.19 | $ | 0.16 | |||||||
(Diluted) | $ | 0.08 | $ | 0.09 | $ | 0.19 | $ | 0.16 | ||||||||
Funds from continuing operations | (Basic) | $ | 0.46 | $ | 0.46 | $ | 0.91 | $ | 0.92 | |||||||
(Diluted) | $ | 0.46 | $ | 0.46 | $ | 0.90 | $ | 0.92 | ||||||||
Funds from operations | (Basic) | $ | 0.46 | $ | 0.47 | $ | 0.91 | $ | 0.94 | |||||||
(Diluted) | $ | 0.46 | $ | 0.47 | $ | 0.91 | $ | 0.94 | ||||||||
Dividends paid | $ | 0.3000 | $ | 0.4338 | $ | 0.6000 | $ | 0.8676 | ||||||||
Weighted average shares outstanding | 66,405 | 66,241 | 66,399 | 66,218 | ||||||||||||
Fully diluted weighted average shares outstanding | 66,556 | 66,380 | 66,537 | 66,354 |
WASHINGTON REAL ESTATE INVESTMENT TRUST | |||||||
CONSOLIDATED BALANCE SHEETS | |||||||
(In thousands, except per share data) | |||||||
June 30, 2013 | |||||||
(unaudited) | December 31, 2012 | ||||||
Assets | |||||||
Land | $ | 483,198 | $ | 483,198 | |||
Income producing property | 2,003,826 | 1,979,348 | |||||
2,487,024 | 2,462,546 | ||||||
Accumulated depreciation and amortization | (646,993 | ) | (604,614 | ) | |||
Net income producing property | 1,840,031 | 1,857,932 | |||||
Development in progress | 55,262 | 49,135 | |||||
Total real estate held for investment, net | 1,895,293 | 1,907,067 | |||||
Investment in real estate held for sale, net | — | 11,528 | |||||
Cash and cash equivalents | 5,919 | 19,324 | |||||
Restricted cash | 10,839 | 14,582 | |||||
Rents and other receivables, net of allowance for doubtful accounts of $9,585 and $10,958 respectively | 60,100 | 57,076 | |||||
Prepaid expenses and other assets | 108,591 | 114,541 | |||||
Other assets related to properties sold or held for sale | — | 258 | |||||
Total assets | $ | 2,080,742 | $ | 2,124,376 | |||
Liabilities | |||||||
Notes payable | $ | 846,450 | $ | 906,190 | |||
Mortgage notes payable | 312,211 | 342,970 | |||||
Lines of credit | 75,000 | — | |||||
Accounts payable and other liabilities | 51,715 | 52,823 | |||||
Advance rents | 14,239 | 16,096 | |||||
Tenant security deposits | 9,899 | 9,936 | |||||
Other liabilities related to properties sold or held for sale | — | 218 | |||||
Total liabilities | 1,309,514 | 1,328,233 | |||||
Equity | |||||||
Shareholders' equity | |||||||
Preferred shares; $0.01 par value; 10,000 shares authorized; no shares issued and outstanding | — | — | |||||
Shares of beneficial interest, $0.01 par value; 100,000 shares authorized; 66,500 and 66,437 shares issued and outstanding, respectively | 665 | 664 | |||||
Additional paid-in capital | 1,147,710 | 1,145,515 | |||||
Distributions in excess of net income | (381,623 | ) | (354,122 | ) | |||
Total shareholders' equity | 766,752 | 792,057 | |||||
Noncontrolling interests in subsidiaries | 4,476 | 4,086 | |||||
Total equity | 771,228 | 796,143 | |||||
Total liabilities and equity | $ | 2,080,742 | $ | 2,124,376 | |||
The following tables contain reconciliations of net income to same-store net operating income for the periods presented (in thousands): | |||||||||||||||||||
Quarter Ended June 30, 2013 | Multifamily | Office | Medical Office | Retail | Total | ||||||||||||||
Same-store net operating income(3) | $ | 7,893 | $ | 23,708 | $ | 7,490 | $ | 10,698 | $ | 49,789 | |||||||||
Add: Net operating income from non-same-store properties(3) | — | 850 | 204 | — | 1,054 | ||||||||||||||
Total net operating income(2) | $ | 7,893 | $ | 24,558 | $ | 7,694 | $ | 10,698 | $ | 50,843 | |||||||||
Add/(deduct): | |||||||||||||||||||
Other income | 246 | ||||||||||||||||||
Acquisition costs | (87 | ) | |||||||||||||||||
Interest expense | (16,152 | ) | |||||||||||||||||
Depreciation and amortization | (25,582 | ) | |||||||||||||||||
General and administrative expenses | (4,005 | ) | |||||||||||||||||
Net income | 5,263 | ||||||||||||||||||
Less: Net income attributable to noncontrolling interests in subsidiaries | — | ||||||||||||||||||
Net income attributable to the controlling interests | $ | 5,263 | |||||||||||||||||
Quarter Ended June 30, 2012 | Multifamily | Office | Medical Office | Retail | Total | ||||||||||||||
Same-store net operating income(3) | $ | 7,998 | $ | 24,224 | $ | 7,253 | $ | 10,940 | $ | 50,415 | |||||||||
Add: Net operating income from non-same-store properties(3) | — | 52 | 90 | — | 142 | ||||||||||||||
Total net operating income(2) | $ | 7,998 | $ | 24,276 | $ | 7,343 | $ | 10,940 | $ | 50,557 | |||||||||
Add/(deduct): | |||||||||||||||||||
Other income | 252 | ||||||||||||||||||
Acquisition costs | (254 | ) | |||||||||||||||||
Interest expense | (15,470 | ) | |||||||||||||||||
Depreciation and amortization | (25,227 | ) | |||||||||||||||||
General and administrative expenses | (4,164 | ) | |||||||||||||||||
Income from operations of properties sold or held for sale | 314 | ||||||||||||||||||
Net income | 6,008 | ||||||||||||||||||
Less: Net income attributable to noncontrolling interests in subsidiaries | — | ||||||||||||||||||
Net income attributable to the controlling interests | $ | 6,008 |
The following tables contain reconciliations of net income to same-store net operating income for the periods presented (in thousands): | |||||||||||||||||||
Period Ended June 30, 2013 | Multifamily | Office | Medical Office | Retail | Total | ||||||||||||||
Same-store net operating income(3) | $ | 15,836 | $ | 47,528 | $ | 14,354 | $ | 20,967 | $ | 98,685 | |||||||||
Add: Net operating income from non-same-store properties(3) | — | 1,681 | 310 | — | 1,991 | ||||||||||||||
Total net operating income(2) | $ | 15,836 | $ | 49,209 | $ | 14,664 | $ | 20,967 | $ | 100,676 | |||||||||
Add/(deduct): | |||||||||||||||||||
Other income | 485 | ||||||||||||||||||
Acquisition costs | (300 | ) | |||||||||||||||||
Interest expense | (32,670 | ) | |||||||||||||||||
Depreciation and amortization | (51,106 | ) | |||||||||||||||||
General and administrative expenses | (7,867 | ) | |||||||||||||||||
Income from operations of properties sold or held for sale | 185 | ||||||||||||||||||
Gain on sale of real estate | 3,195 | ||||||||||||||||||
Net income | 12,598 | ||||||||||||||||||
Less: Net income attributable to noncontrolling interests in subsidiaries | — | ||||||||||||||||||
Net income attributable to the controlling interests | $ | 12,598 | |||||||||||||||||
Period Ended June 30, 2012 | Multifamily | Office | Medical Office | Retail | Total | ||||||||||||||
Same-store net operating income(3) | $ | 16,063 | $ | 48,339 | $ | 14,713 | $ | 20,942 | $ | 100,057 | |||||||||
Add: Net operating income from non-same-store properties(3) | — | 7 | 156 | — | 163 | ||||||||||||||
Total net operating income(2) | $ | 16,063 | $ | 48,346 | $ | 14,869 | $ | 20,942 | $ | 100,220 | |||||||||
Add/(deduct): | |||||||||||||||||||
Other income | 496 | ||||||||||||||||||
Acquisition costs | (308 | ) | |||||||||||||||||
Interest expense | (31,301 | ) | |||||||||||||||||
Depreciation and amortization | (50,809 | ) | |||||||||||||||||
General and administrative expenses | (7,770 | ) | |||||||||||||||||
Income from operations of properties sold or held for sale | 661 | ||||||||||||||||||
Net income | 11,189 | ||||||||||||||||||
Less: Net income attributable to noncontrolling interests in subsidiaries | — | ||||||||||||||||||
Net income attributable to the controlling interests | $ | 11,189 |
The following table contains a reconciliation of net income attributable to the controlling interests to core funds from operations for the periods presented (in thousands, except per share data): | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Net income attributable to the controlling interests | $ | 5,263 | $ | 6,008 | $ | 12,598 | $ | 11,189 | ||||||||
Add/(deduct): | ||||||||||||||||
Real estate depreciation and amortization | 25,582 | 25,227 | 51,106 | 50,809 | ||||||||||||
Discontinued operations: | ||||||||||||||||
Gain on sale of real estate | — | — | (3,195 | ) | — | |||||||||||
Real estate depreciation and amortization | — | 364 | — | 776 | ||||||||||||
Funds from operations(1) | 30,845 | 31,599 | 60,509 | 62,774 | ||||||||||||
Add/(deduct): | ||||||||||||||||
Acquisition costs | 87 | 254 | 300 | 308 | ||||||||||||
Severance expense | 266 | — | 83 | — | ||||||||||||
Core funds from operations(1) | $ | 31,198 | $ | 31,853 | $ | 60,892 | $ | 63,082 | ||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
Per share data: | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Funds from operations | (Basic) | $ | 0.46 | $ | 0.47 | $ | 0.91 | $ | 0.94 | |||||||
(Diluted) | $ | 0.46 | $ | 0.47 | $ | 0.91 | $ | 0.94 | ||||||||
Core FFO | (Basic) | $ | 0.47 | $ | 0.48 | $ | 0.91 | $ | 0.95 | |||||||
(Diluted) | $ | 0.47 | $ | 0.48 | $ | 0.91 | $ | 0.95 | ||||||||
Weighted average shares outstanding | 66,405 | 66,241 | 66,399 | 66,218 | ||||||||||||
Fully diluted weighted average shares outstanding | 66,556 | 66,380 | 66,537 | 66,354 |