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CONTACT:1775 Eye Street, NW, Suite 1000
Amy HopkinsWashington, DC 20006
Vice President, Investor RelationsTel 202-774-3198
E-Mail: ahopkins@washreit.comFax 301-984-9610
www.washreit.com
February 17, 2022
WashREIT Announces Fourth Quarter and Full Year 2021 Results
Washington Real Estate Investment Trust (“WashREIT” or the “Company”) (NYSE: WRE), a multifamily REIT with properties in the Washington metro area and the Southeast, reported financial and operating results today for the quarter and year ended December 31, 2021:

Full-Year 2021 Financial and Operational Results
Net income was $16.4 million, or $0.19 per diluted share
NAREIT FFO was $65.5 million, or $0.77 per diluted share
Core FFO was $1.06 per diluted share
Net Operating Income (NOI) was $108.4 million
Same-store Multifamily NOI decreased by 1.8% for the year and 0.9% on a cash basis for the year
Same-store Other NOI increased by 0.6% for the year
Fourth Quarter 2021 Financial and Operational Results
Net loss was $6.8 million, or $0.08 per diluted share
NAREIT FFO was $13.3 million, or $0.16 per diluted share
Core FFO was $0.17 per diluted share
NOI was $29.1 million
Same-store Multifamily NOI increased by 4.2% year-over-year and 8.0% on a cash basis
Effective new Lease Rate Growth was 8.7%, effective renewal Lease Rate Growth was 8.2%, and effective blended Lease Rate Growth was 8.4% during the quarter for our same-store portfolio
Retention increased to 72% compared to 51% in the fourth quarter of 2020 driven by a reduction in move-outs related to home purchases and transfers within our apartment communities
Same-store Average Occupancy increased 1.9% from the fourth quarter of 2020 to 95.9%, and same-store Ending Occupancy increased 1.7% from the fourth quarter of 2020 to 96.0%
Trove stabilized during the fourth quarter and ended the year with occupancy of 94.5%. Trove is expected to add approximately $7.0 million of NOI in 2022 and $8.0 million in 2023
YTD Highlights
Atlanta acquisitions are performing very well and are contributing NOI growth that is above our initial expectations
Same-store portfolio is off to a strong start in 2022 with increasing lease rate momentum supported by strong retention and occupancy
New lease executions increased approximately 10.7% for our same-store communities and 22.4% for our Atlanta communities on an effective average year-to-date basis
Renewal lease executions increased 9.7% for our same-store communities and 13.7% for our Atlanta communities on an effective average year-to-date basis
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Washington Real Estate Investment Trust

Transformation Update
Completed the acquisitions of 860 South and 900 Dwell, two adjacent garden style apartment communities in Stockbridge, GA, for a total of $106 million on November 19, 2021. We believe that significant economies of scale can be achieved from operating and managing these properties together, and we are focused on unlocking that value. We will refer to these properties collectively as Assembly Eagles Landing.
Completed the acquisition of Carlyle of Sandy Springs, a garden style community located in Sandy Springs, GA, for $106 million on February 1, 2022.

Liquidity Position
Available liquidity was approximately $930 million as of December 31st, consisting of the entire capacity under the Company's $700 million revolving credit facility and cash on hand
The Company has no secured debt and no scheduled debt maturities until July 2023
During the fourth quarter, issued 1,611,618 common shares through the Company’s At-the-Market (ATM) program at an average share price of $25.49 for gross proceeds of $41.1 million. Subsequent to year end, the Company issued another 1,032,286 common shares through the ATM program at an average share price of $26.27 for gross proceeds of $27.1 million, for a combined total of 2,643,904 common shares for gross proceeds of approximately $68.2 million.

"Our 2021 results reflect our transformation into multifamily, which is the asset class we identified as having the best long term growth prospects," said Paul T. McDermott, President and CEO. "We continue to make progress on our geographic expansion and have deployed approximately 60% of our commercial sale net proceeds and are in process on multiple opportunities that would improve our NOI growth trajectory. We expect to deploy the remainder of the net sale proceeds from our commercial portfolio sales by early in the second quarter of 2022. We believe we will continue to execute on opportunities that fit our portfolio strategies and to create increasing long-term value for our shareholders.”

Fourth Quarter Operating Results
Multifamily Same-store NOI - Same-store NOI increased 4.2% compared to the corresponding prior year period and 8.0% on a cash basis, which includes the impact of cash concessions. Average occupancy for the quarter increased 1.9% from the prior year period to 95.9%.
Other Same-store NOI - The Other same-store portfolio is comprised of one asset, Watergate 600. Same-store NOI increased by 7.7% compared to the corresponding prior year period due to higher rental and parking income partially offset by higher operating expenses. Watergate 600 was 91.3% occupied and 92.4% leased at year end.

"Our portfolio is performing historically well and certainly outperforming our normal seasonal patterns," said Steve Riffee, Executive Vice President and CFO. "Effective lease rates have continued to grow through the winter months further boosted by concessions burning off and a very limited amount of new concessions being issued, occupancy that is historically strong as we head into the spring and summer leasing seasons, and very strong renewal demand. The trends that we are seeing keep us confident that we should have strong NOI growth throughout 2022 into 2023."

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Washington Real Estate Investment Trust

2022 Guidance

Core FFO for 2022 is expected to range from $0.87 to $0.93 per fully diluted share. The following assumptions are included in the Core FFO guidance for 2022 as set forth below:

Full Year Outlook on Key Assumptions and Metrics

Same-store multifamily NOI growth is expected to range between 7.75% to 9.75%
Same-store multifamily and Trove NOI, which was fully delivered and invested by the start of 2021, is expected to grow between 11.5% and 13.5%
Non same-store multifamily NOI is expected to range from $17.75 million to $18.5 million in 2022 including Trove, which is expected to contribute approximately $7.0 million of NOI
Other same-store NOI, which consists solely of Watergate 600, is expected to range from $13.0 million to $13.75 million
The acquisition of Carlyle of Sandy Springs closed on February 1, 2022 for $106 million
Approximately $270 million to $290 million of additional multifamily acquisitions are expected to be completed in the Southeastern markets of Atlanta, and/or Charlotte, Raleigh/Durham in the first half of the year
Core AFFO payout ratio is expected to be in the mid-70% range

Full Year 2022
Core FFO per diluted share$0.87 - $0.93
Net Operating Income
  Same-store multifamily NOI growth7.75% - 9.75%
  Same-store multifamily and Trove NOI growth11.5% - 13.5%
  Non-same-store NOI (a)
$17.75 million - $18.5 million
  Non-residential NOI (b)
~$0.75 million
  Other same-store NOI (c)
$13.0 million - $13.75 million
Transactions
   Acquisitions (d)
$270 million - $290 million
Expenses
   Property Management Expenses $7.5 million - $8.0 million
   G&A $25.5 million - $26.5 million
   Interest expense$24.75 million - $25.75 million
   Transformation costs$11.0 million - $13.0 million

(a) Includes Trove, The Oxford, Assembly Eagles Landing, and Carlyle of Sandy Springs
(b) Includes revenues and expenses from retail operations at multifamily properties
(c) Other NOI consists of Watergate 600
(d) Anticipated completion in first half of 2022, assumes full deployment of remaining commercial sale net proceeds plus levered
ATM proceeds

WashREIT's Core FFO guidance and outlook are based on a number of factors, many of which are outside the Company's control and all of which are subject to change. WashREIT may change the guidance provided during the year as actual and anticipated results vary from these assumptions, but WashREIT undertakes no obligation to do so.

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Washington Real Estate Investment Trust
2022 Guidance Reconciliation Table

A reconciliation of projected net loss per diluted share to projected Core FFO per diluted share for the full year ending December 31, 2022 is as follows:
LowHigh
Net loss per diluted share                                     
$(0.27)$(0.23)
Real estate depreciation and amortization1.011.01
NAREIT FFO per diluted share 0.740.78
Core adjustments0.130.15
Core FFO per diluted share                                                                           $0.87$0.93


Dividends

On January 5, 2022, WashREIT paid a quarterly dividend of $0.17 per share.

WashREIT announced today that its Board of Trustees has declared a quarterly dividend of $0.17 per share to be paid on April 5, 2022 to shareholders of record on March 23, 2022.


Conference Call Information

The Fourth Quarter 2021 Earnings Call is scheduled for Friday, February 18, 2022 at 11:00 A.M. Eastern Time. Conference Call access information is as follows:

USA Toll Free Number:            1-888-506-0062
International Toll Number:        1-973-528-0011
Conference ID:                484083

The instant replay of the Earnings Call will be available until Friday, March 4, 2022. Instant replay access information is as follows:

USA Toll Free Number:            1-877-481-4010
International Toll Number:        1-919-882-2331
Conference ID:                44242

The live on-demand webcast of the Conference Call will be available on the Investor section of WashREIT's website at www.washreit.com. Online playback of the webcast will be available following the Conference Call.
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Washington Real Estate Investment Trust
About WashREIT

WashREIT owns approximately 8,200 residential apartment homes in the Washington, DC metro and the Southeast. WashREIT also owns and operates approximately 300,000 square feet of commercial space in the Washington, DC metro region. We are focused on providing quality housing to under-served, middle-income renters in submarkets poised for strong, sustained demand. With a proven track record in residential repositioning, we are utilizing the experience and research from the Washington, DC metro region to continue to grow as we geographically diversify into Southeastern markets. We are targeting the deepest demand segments in submarkets with the greatest probability of rent growth outperformance, and tailoring our specific investment strategy to best create value.
Note: WashREIT's press releases and supplemental financial information are available on the Company website at www.washreit.com or by contacting Investor Relations at (202) 774-3200.

Forward Looking Statements
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 and involve risks and uncertainties. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. Such statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of WashREIT to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Currently, one of the most significant factors continues to be the adverse effect of the COVID-19 virus, including any variants and mutations thereof, the actions taken to contain the pandemic or mitigate the impact of COVID-19, and the direct and indirect economic effects of the pandemic and containment measures. The extent to which COVID-19 continues to impact WashREIT, its properties and its residents and tenants will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, the continued speed and success of the vaccine distribution, effectiveness and willingness of people to take COVID-19 vaccines, and the duration of associated immunity and their efficacy against emerging variants of COVID-19, among others. Moreover, investors are cautioned to interpret many of the risks identified in the risk factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2020 filed on February 16, 2021, as being heightened as a result of the ongoing and numerous adverse impacts of COVID-19. Additional factors which may cause the actual results, performance, or achievements of WashREIT to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements include, but are not limited to the risks associated with the failure to enter into and/or complete contemplated acquisitions or dispositions within the price ranges anticipated and on the terms and timing anticipated, or at all; our ability to execute on our strategies, including new strategies with respect to our operations and our portfolio, including the acquisition of residential properties in the Southeastern markets, on the terms anticipated, or at all, and to realize any anticipated benefits, including the performance of any acquired residential properties at the levels anticipated; whether our actual 2022 NOI for Trove will be consistent with our expected NOI for Trove; the risks associated with ownership of real estate in general and our real estate assets in particular; the economic health of the greater Washington, DC metro region and the larger Southeastern region; changes in the composition and geographic location of our portfolio; fluctuations in interest rates; reductions in or actual or threatened changes to the timing of federal government spending; the risks related to use of third-party providers; the economic health of our residents and tenants; the availability and terms of financing and capital and the general volatility of securities markets; compliance with applicable laws, including those concerning the environment and access by persons with disabilities; the risks related to not having adequate insurance to cover potential losses; the risks related to our organizational structure and limitations of stock ownership; changes in the market value of securities; terrorist attacks or actions and/or cyber-attacks; failure to qualify and maintain our qualification as a REIT and the risks of changes in laws affecting REITs; and other risks and uncertainties detailed from time to time in our filings with the SEC, including our 2020 Form 10-K filed on February 16, 2021 and our quarterly report on Form 10-Q filed on October 29, 2021. While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. We undertake no obligation to update our forward-looking statements or risk factors to reflect new information, future events, or otherwise.

This Earnings Release also includes certain forward-looking non-GAAP information. Due to the high variability and difficulty in making accurate forecasts and projections of some of the information excluded from these estimates, together with some of the excluded information not being ascertainable or accessible, the Company is unable to quantify certain amounts that would be required to be included in the most directly comparable GAAP financial measures without unreasonable efforts.
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 WASHINGTON REAL ESTATE INVESTMENT TRUST AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
(In thousands, except per share data)
(Unaudited)
Three Months Ended December 31,Twelve Months Ended December 31,
OPERATING RESULTS2021202020212020
Revenue
Real estate rental revenue$44,748 $42,788 $169,151 $176,004 
Expenses
Property operating and maintenance10,086 10,027 38,741 39,625 
Real estate taxes and insurance5,516 5,937 22,041 23,357 
Property management1,685 1,463 6,133 6,145 
General and administrative7,700 5,988 27,538 23,951 
Transformation costs1,839 — 6,635 — 
Depreciation and amortization20,114 17,653 72,656 70,336 
46,940 41,068 173,744 163,414 
     Loss on sale of real estate— (7,470)— (15,009)
Real estate operating loss(2,192)(5,750)(4,593)(2,419)
Other income (expense)
Interest expense(5,676)(8,998)(34,063)(37,305)
Loss on interest rate derivatives— (560)(5,866)(560)
Loss on extinguishment of debt— (296)(12,727)(34)
Other income1,072 — 4,109 — 
(4,604)(9,854)(48,547)(37,899)
Loss from continuing operations(6,796)(15,604)(53,140)(40,318)
Discontinued operations:
Income from operations of properties sold or held for sale— 4,567 23,083 24,638 
Gain on sale of real estate, net— — 46,441 — 
Income from discontinued operations— 4,567 69,524 24,638 
Net (loss) income$(6,796)$(11,037)$16,384 $(15,680)
Loss from continuing operations$(6,796)$(15,604)$(53,140)$(40,318)
Depreciation and amortization20,114 17,653 72,656 70,336 
Loss on sale of depreciable real estate— 7,470 — 15,009 
Funds from continuing operations13,318 9,519 19,516 45,027 
Income from discontinued operations— 4,567 69,524 24,638 
Discontinued operations real estate depreciation and amortization— 12,588 22,904 49,694 
Gain on sale of real estate, net— — (46,441)— 
Funds from discontinued operations— 17,155 45,987 74,332 
NAREIT funds from operations$13,318 $26,674 $65,503 $119,359 
Non-cash loss (gain) on extinguishment of debt$— $296 $833 $(881)
Tenant improvements and incentives, net of reimbursements(642)(6,250)(1,546)(13,212)
Leasing commissions capitalized(24)(1,445)(2,808)(3,852)
Recurring capital improvements(1,366)(2,164)(4,874)(5,044)
Straight-line rents, net(218)82 (1,738)(1,758)
Non-cash fair value interest expense— — — (59)
Non-real estate depreciation & amortization of debt costs1,241 987 5,265 3,795 
Amortization of lease intangibles, net(172)477 368 1,942 
Amortization and expensing of restricted share and unit compensation2,075 1,972 8,553 7,873 
Adjusted funds from operations$14,212 $20,629 $69,556 $108,163 
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Washington Real Estate Investment Trust
Three Months Ended December 31,Twelve Months Ended December 31,
Per share data:2021202020212020
Loss from continuing operations(Basic)$(0.08)$(0.19)$(0.63)$(0.50)
(Diluted)$(0.08)$(0.19)$(0.63)$(0.50)
Net (loss) income(Basic)$(0.08)$(0.13)$0.19 $(0.20)
(Diluted)$(0.08)$(0.13)$0.19 $(0.20)
NAREIT FFO(Basic)$0.16 $0.32 $0.77 $1.44 
(Diluted)$0.16 $0.32 $0.77 $1.44 
Dividends paid$0.17 $0.30 $0.94 $1.20 
Weighted average shares outstanding - basic84,804 82,962 84,544 82,348 
Weighted average shares outstanding - diluted84,804 82,962 84,544 82,348 
Weighted average shares outstanding - diluted (for NAREIT FFO)84,911 83,093 84,629 82,516 
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Washington Real Estate Investment Trust
WASHINGTON REAL ESTATE INVESTMENT TRUST AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)
December 31, 2021December 31, 2020
Assets
Land$322,623 $301,709 
Income producing property1,642,147 1,473,335 
1,964,770 1,775,044 
Accumulated depreciation and amortization(402,560)(335,006)
Net income producing property1,562,210 1,440,038 
Properties under development or held for future development30,631 36,494 
Total real estate held for investment, net1,592,841 1,476,532 
Investment in real estate held for sale, net— 795,687 
Cash and cash equivalents233,600 7,697 
Restricted cash620 593 
Rents and other receivables15,067 11,888 
Prepaid expenses and other assets33,866 29,587 
Other assets related to properties sold or held for sale— 87,834 
Total assets$1,875,994 $2,409,818 
Liabilities
Notes payable, net$496,946 $945,370 
Line of credit— 42,000 
Accounts payable and other liabilities40,585 44,067 
Dividend payable14,650 25,361 
Advance rents2,082 2,461 
Tenant security deposits4,669 4,221 
Other liabilities related to properties sold or held for sale— 25,229 
Total liabilities558,932 1,088,709 
Equity
Shareholders' equity
Preferred shares; $0.01 par value; 10,000 shares authorized; no shares issued or outstanding— — 
Shares of beneficial interest, $0.01 par value; 150,000 and 100,000 shares authorized; 86,261 and 84,409 shares issued and outstanding, as of December 31, 2021 and December 31, 2020, respectively
863 844 
Additional paid in capital1,697,477 1,649,366 
Distributions in excess of net income(362,494)(298,860)
Accumulated other comprehensive loss(19,091)(30,563)
Total shareholders' equity1,316,755 1,320,787 
Noncontrolling interests in subsidiaries307 322 
Total equity1,317,062 1,321,109 
Total liabilities and equity$1,875,994 $2,409,818 

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Washington Real Estate Investment Trust




The following tables contain reconciliations of net loss (income) to NOI for the periods presented (in thousands):
Three Months Ended December 31,Twelve Months Ended December 31,
2021202020212020
Net (loss) income$(6,796)$(11,037)$16,384 $(15,680)
Adjustments:
Property management1,685 1,463 6,133 6,145 
General and administrative7,700 5,988 27,538 23,951 
Transformation costs1,839 — 6,635 — 
Real estate depreciation and amortization20,114 17,653 72,656 70,336 
Loss on sale of real estate— 7,470 — 15,009 
Interest expense5,676 8,998 34,063 37,305 
Loss on interest rate derivatives— 560 5,866 560 
Loss on extinguishment of debt, net— 296 12,727 34 
Other income(1,072)— (4,109)— 
Discontinued operations:
Income from operations of properties sold or held for sale— (4,567)(23,083)(24,638)
Gain on sale of real estate, net— — (46,441)— 
Total Net Operating Income (NOI)$29,146 $26,824 $108,369 $113,022 
Multifamily NOI:
Same-store portfolio$23,137 $22,209 $90,189 $91,863 
Acquisitions1,121— 1,397 — 
Development1,38514 3,117 (185)
Non-residential160221 735 608 
Total25,803 22,444 95,438 92,286 
Watergate 600 NOI3,343 3,105 12,931 12,853 
Other NOI (1)
— 1,275 — 7,883 
Total NOI$29,146 $26,824 $108,369 $113,022 
Multifamily same-store NOI$23,137 $22,209 $90,189 $91,863 
Adjust: Straight-lining of apartment lease concessions400 (410)197 (613)
Multifamily same-store Cash NOI$23,537 $21,799 $90,386 $91,250 

(1) Represents other continuing operations office properties sold in 2020: Monument II, 1227 25th Street, John Marshall II
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Washington Real Estate Investment Trust
The following table contains a reconciliation of net (loss) income to core funds from operations for the periods presented (in thousands, except per share data):
Three Months Ended December 31,Twelve Months Ended December 31,
2021202020212020
Net (loss) income$(6,796)$(11,037)$16,384 $(15,680)
Add:
Real estate depreciation and amortization20,114 17,653 72,656 70,336 
Loss on sale of depreciable real estate— 7,470 — 15,009 
Discontinued operations:
Gain on sale of real estate, net— — (46,441)— 
Real estate depreciation and amortization— 12,588 22,904 49,694 
NAREIT funds from operations13,318 26,674 65,503 119,359 
Add:
Loss on extinguishment of debt, net— 296 12,727 34 
Loss on interest rate derivatives— 560 5,866 560 
Severance expense— — 173 — 
Transformation costs1,839 — 6,635 — 
Insurance gain(1,026)— (1,026)— 
Core funds from operations$14,131 $27,530 $89,878 $119,953 
Three Months Ended December 31,Twelve Months Ended December 31,
Per share data:2021202020212020
NAREIT FFO(Basic)$0.16 $0.32 $0.77 $1.44 
(Diluted)$0.16 $0.32 $0.77 $1.44 
Core FFO(Basic)$0.17 $0.33 $1.06 $1.45 
(Diluted)$0.17 $0.33 $1.06 $1.45 
Weighted average shares outstanding - basic84,804 82,962 84,544 82,348 
Weighted average shares outstanding - diluted
(for NAREIT and Core FFO)
84,911 83,093 84,629 82,516 

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Washington Real Estate Investment Trust
Non-GAAP Financial Measures

Adjusted EBITDA is earnings before interest expense, taxes, depreciation, amortization, gain/loss on sale of real estate, casualty gain/loss, real estate impairment, gain/loss on extinguishment of debt, gain/loss on interest rate derivatives, severance expense, acquisition expenses and gain from non-disposal activities and transformation costs. Adjusted EBITDA is included herein because we believe it helps investors and lenders understand our ability to incur and service debt and to make capital expenditures. Adjusted EBITDA is a non-GAAP and non-standardized measure and may be calculated differently by other REITs.

Adjusted Funds From Operations (“AFFO”) is a non-GAAP measure. It is calculated by subtracting from FFO (1) recurring expenditures, tenant improvements and leasing costs, that are capitalized and amortized and are necessary to maintain our properties and revenue stream (excluding items contemplated prior to acquisition or associated with development / redevelopment of a property) 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. AFFO is included herein, because we consider it to be a performance measure of a REIT’s ability to incur and service debt and to distribute dividends to its shareholders. AFFO is a non-GAAP and non-standardized measure, and may be calculated differently by other REITs.

Core Adjusted Funds From Operations ("Core AFFO") is calculated by adjusting AFFO for the following items (which we believe are not indicative of the performance of Washington REIT’s operating portfolio and affect the comparative measurement of Washington REIT’s operating performance over time): (1) gains or losses on extinguishment of debt and gains or losses on interest rate derivatives, (2) costs related to the acquisition of properties, (3) non-share-based executive transition costs, severance expenses and other expenses related to corporate restructuring and executive retirements or resignations, (4) property impairments, casualty gains and losses, and gains or losses on sale not already excluded from FAD, as appropriate, (5) relocation expense and (6) transformation costs. 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 AFFO serves as a useful, supplementary performance measure of Washington REIT’s ability to incur and service debt, and distribute dividends to its shareholders. Core AFFO is a non-GAAP and non-standardized measure, and may be calculated differently by other REITs.

Core Funds From Operations (“Core FFO”) is calculated by adjusting NAREIT FFO for the following items (which we believe are not indicative of the performance of Washington REIT’s operating portfolio and affect the comparative measurement of Washington REIT’s operating performance over time): (1) gains or losses on extinguishment of debt and gains or losses on interest rate derivatives, (2) expenses related to acquisition and structuring activities, (3) executive transition costs, severance expenses and other expenses related to corporate restructuring and executive retirements or resignations, (4) property impairments, casualty gains and losses, and gains or losses on sale not already excluded from NAREIT FFO, as appropriate, (5) relocation expense and (6) transformation costs. These items can vary greatly from period to period, depending upon the volume of our acquisition activity and debt retirements, among other factors. We believe that by excluding these items, Core FFO serves as a useful, supplementary measure of Washington REIT’s ability to incur and service debt, and distribute dividends to its shareholders. Core FFO is a non-GAAP and non-standardized measure, and may be calculated differently by other REITs.

NAREIT Funds From Operations (“FFO”) is defined by 2018 National Association of Real Estate Investment Trusts, Inc. (“NAREIT”) FFO White Paper Restatement, as net income (computed in accordance with generally accepted accounting principles (“GAAP”)) excluding gains (or losses) associated with sales of properties, impairments of depreciable real estate and real estate depreciation and amortization. We consider NAREIT 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 NAREIT FFO more accurately provides investors an indication of our ability to incur and service debt, make capital expenditures and fund other needs. Our FFO may not be comparable to FFO reported by other real estate investment trusts. These other REITs may not define the term in accordance with the current NAREIT definition or may interpret the current NAREIT definition differently. NAREIT FFO is a non-GAAP measure.

Net Operating Income (“NOI”), defined as real estate rental revenue less direct real estate operating expenses, is a non-GAAP measure. NOI is calculated as net income, less non-real estate revenue and the results of discontinued operations (including the gain or loss on sale, if any), plus interest expense, depreciation and amortization, lease origination expenses, general and administrative expenses, acquisition costs, real estate impairment, casualty gain and losses and gain or loss on extinguishment of debt. NOI does not include management expenses, which consist of corporate property management costs and property management fees paid to third parties. They are the primary performance measures we use to assess the results of our operations at the property level. We also present NOI on a cash basis ("Cash NOI") which is calculated as NOI less the impact of straight-lining apartment rent concessions. We believe that each of NOI and Cash NOI is a useful performance measure because, when compared across periods, they reflect the impact on operations of trends in occupancy rates, rental rates and operating costs on an unleveraged basis, providing perspective not immediately apparent from net income. NOI and Cash NOI exclude certain components from net income in order to provide results more closely related to a property’s results of operations. For example, interest expense is not necessarily
11

Washington Real Estate Investment Trust
linked to the operating performance of a real estate asset. In addition, depreciation and amortization, because of historical cost accounting and useful life estimates, may distort operating performance at the property level. As a result of the foregoing, we provide each NOI and Cash NOI as a supplement to net income, calculated in accordance with GAAP. NOI and Cash NOI do not represent net income or income from continuing operations calculated in accordance with GAAP. As such, neither should be considered an alternative to these measures as an indication of our operating performance.

Other Definitions

Average Effective Monthly Rent Per Home represents the average of effective rent (net of concessions) for in-place leases and the market rent for vacant homes.

Average Occupancy is based on average daily occupied apartment homes as a percentage of total apartment homes.

Current Strategy represents the class of each community in our portfolio based on a set of criteria. Our strategies consist of the following subcategories: Class A, Class A-, Class B Value-Add and Class B. A community's class is dependent on a variety of factors, including its vintage, site location, amenities and services, rent growth drivers and rent relative to the market.
Class A communities are recently-developed, well-located, have competitive amenities and services and command average rental rates well above market median rents.
Class A- communities have been developed within the past 20 years and feature operational improvements and unit upgrades and command rents at or above median market rents.
Class B Value-Add communities are over 20 years old but feature operational improvements and strong potential for unit renovations. These communities command average rental rates below median market rents for units that have not been renovated.
Class B communities are over 20 years old, feature operational improvements and command average rental rates below median market rents.

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, severance expense, relocation expense, acquisition and structuring expenses 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.

Ending Occupancy is calculated as occupied homes as a percentage of total homes as of the last day of that period.

Lease Rate Growth is defined as the average percentage change in either gross (excluding the impact of concessions) or effective rent (net of concessions) for a new or renewed lease compared to the prior lease based on the move-in date. The blended rate represents the weighted average of new and renewal lease rate growth achieved.

Recurring Capital Expenditures represent non-accretive building improvements 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".

Retention represents the percentage of leases renewed that were set to expire in the period presented.

Same-store Portfolio Properties include properties that were owned for the entirety of the years being compared, and exclude properties under redevelopment or development and properties acquired, sold or classified as held for sale during the years being compared. We categorize our properties as "same-store" or "non-same-store" for purposes of evaluating comparative operating performance. We define development properties as those for which we have planned or ongoing major construction activities on existing or acquired land pursuant to an authorized development plan. Development properties are categorized as same-store when they have reached stabilized occupancy (90%) before the start of the prior year. We define redevelopment properties as those for which have planned or ongoing significant development and construction activities on existing or acquired buildings pursuant to an authorized plan, which has an impact on current operating results, occupancy and the ability to lease space with the intended result of a higher economic return on the property. We categorize a redevelopment property as same-store when redevelopment activities have been complete for the majority of each year being compared.

Transformation Costs include costs related to the strategic transformation including the allocation of internal costs, consulting, advisory and termination benefits.
12


Table of Contents
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December 31, 2021


SchedulePage
Key Financial Data
Portfolio Analysis
Net Operating Income (NOI) - Multifamily
Same-Store Operating Results - Multifamily
Same-Store Operating Expenses - Multifamily
Growth and Strategy
Acquisition and Disposition Summary
Schedule of Properties
Capital Analysis
13


Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
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Twelve Months EndedThree Months Ended
OPERATING RESULTS12/31/202112/31/202012/31/20219/30/20216/30/20213/31/202112/31/2020
Revenues
Real estate rental revenue$169,151 $176,004 $44,748 $42,499 $41,297 $40,607 $42,788 
Expenses
Property operating and maintenance(38,741)(39,625)(10,086)(9,901)(9,359)(9,395)(10,027)
Real estate taxes and insurance(22,041)(23,357)(5,516)(5,544)(5,385)(5,596)(5,937)
Property management(6,133)(6,145)(1,685)(1,499)(1,486)(1,463)(1,463)
General and administrative(27,538)(23,951)(7,700)(7,909)(6,325)(5,604)(5,988)
Transformation costs(6,635)— (1,839)(1,016)(3,780)— — 
Depreciation and amortization(72,656)(70,336)(20,114)(18,252)(17,303)(16,987)(17,653)
(173,744)(163,414)(46,940)(44,121)(43,638)(39,045)(41,068)
Loss on sale of real estate— (15,009)— — — — (7,470)
Real estate operating (loss) income(4,593)(2,419)(2,192)(1,622)(2,341)1,562 (5,750)
Other income (expense)
Interest expense(34,063)(37,305)(5,676)(8,106)(10,158)(10,123)(8,998)
Loss on interest rate derivatives(5,866)(560)— (106)(5,760)— (560)
Loss on extinguishment of debt(12,727)(34)— (12,727)— — (296)
Other income4,109 — 1,072 231 1,522 1,284 — 
Loss from continuing operations(53,140)(40,318)(6,796)(22,330)(16,737)(7,277)(15,604)
Discontinued operations:
Income from operations of properties sold or held for sale23,083 24,638 — 7,208 9,745 6,130 4,567 
Gain on sale of real estate, net46,441 — — 46,441 — — — 
Income from discontinued operations69,524 24,638 — 53,649 9,745 6,130 4,567 
Net income (loss)$16,384 $(15,680)$(6,796)$31,319 $(6,992)$(1,147)$(11,037)
Per Share Data:
Net income (loss)$0.19 $(0.20)$(0.08)$0.37 $(0.08)$(0.02)$(0.13)
Fully diluted weighted average shares outstanding84,544 82,348 84,804 84,496 84,461 84,413 82,962 
Percentage of Revenues:
General and administrative expenses16.3 %13.6 %17.2 %18.6 %15.3 %13.8 %14.0 %
Ratios:
Adjusted EBITDA / Interest expense3.7 x4.2 x3.5 x3.1 x4.0 x3.9 x4.1 x
Net income (loss) / Real estate rental revenue9.7 %(8.9)%(15.2)%73.7 %(16.9)%(2.8)%(25.8)%
14


Consolidated Balance Sheets
(In thousands, except per share data)
(Unaudited)
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12/31/20219/30/20216/30/20213/31/202112/31/2020
Assets
Land$322,623 $306,507 $301,709 $301,709 $301,709 
Income producing property1,642,147 1,544,217 1,490,975 1,483,774 1,473,335 
1,964,770 1,850,724 1,792,684 1,785,483 1,775,044 
Accumulated depreciation and amortization(402,560)(384,392)(367,519)(351,133)(335,006)
Net income producing property1,562,210 1,466,332 1,425,165 1,434,350 1,440,038 
Properties under development or held for future development30,631 30,254 30,065 29,718 36,494 
Total real estate held for investment, net1,592,841 1,496,586 1,455,230 1,464,068 1,476,532 
Investment in real estate held for sale, net— — 779,121 785,763 795,687 
Cash and cash equivalents233,600 307,797 5,435 3,015 7,697 
Restricted cash620 605 595 566 593 
Rents and other receivables15,067 14,713 15,079 13,492 11,888 
Prepaid expenses and other assets33,866 33,109 28,297 28,126 29,587 
Other assets related to properties sold or held for sale— — 84,648 85,006 87,834 
Total assets$1,875,994 $1,852,810 $2,368,405 $2,380,036 $2,409,818 
Liabilities
Notes payable, net$496,946 $496,823 $945,905 $945,634 $945,370 
Line of credit— — 43,000 33,000 42,000 
Accounts payable and other liabilities40,585 38,864 47,897 44,241 44,067 
Dividend payable14,650 14,440 25,474 25,424 25,361 
Advance rents2,082 1,747 1,572 1,667 2,461 
Tenant security deposits4,669 4,480 4,374 4,256 4,221 
Other liabilities related to properties sold or held for sale— — 23,748 26,912 25,229 
Total liabilities558,932 556,354 1,091,970 1,081,134 1,088,709 
Equity
Preferred shares; $0.01 par value; 10,000 shares authorized— — — — — 
Shares of beneficial interest, $0.01 par value; 150,000 shares authorized863 846 846 846 844 
Additional paid-in capital1,697,477 1,656,821 1,654,409 1,651,680 1,649,366 
Distributions in excess of net income(362,494)(341,052)(357,934)(325,469)(298,860)
Accumulated other comprehensive loss (19,091)(20,468)(21,200)(28,473)(30,563)
Total shareholders' equity1,316,755 1,296,147 1,276,121 1,298,584 1,320,787 
Noncontrolling interests in subsidiaries307 309 314 318 322 
Total equity1,317,062 1,296,456 1,276,435 1,298,902 1,321,109 
Total liabilities and equity$1,875,994 $1,852,810 $2,368,405 $2,380,036 $2,409,818 
15


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

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Twelve Months EndedThree Months Ended
12/31/202112/31/202012/31/20219/30/20216/30/20213/31/202112/31/2020
Funds from operations (FFO) (1)
Net income (loss)$16,384 $(15,680)$(6,796)$31,319 $(6,992)$(1,147)$(11,037)
Real estate depreciation and amortization72,656 70,336 20,114 18,252 17,303 16,987 17,653 
Loss on sale of depreciable real estate— 15,009 — — — — 7,470 
Discontinued operations:
Gain on sale of depreciable real estate, net(46,441)— — (46,441)— — — 
Real estate depreciation and amortization22,904 49,694 — — 10,248 12,656 12,588 
NAREIT funds from operations (FFO)65,503 119,359 13,318 3,130 20,559 28,496 26,674 
Loss on extinguishment of debt12,727 34 — 12,727 — — 296 
Loss on interest rate derivatives5,866 560 — 106 5,760 — 560 
Severance expense173 — — — — 173 — 
Transformation costs6,635 — 1,839 1,016 3,780 — — 
Insurance gain(1,026)— (1,026)— — — — 
Core FFO (1)
$89,878 $119,953 $14,131 $16,979 $30,099 $28,669 $27,530 
Allocation to participating securities (2)
(393)(545)(44)(73)(137)(139)(92)
NAREIT FFO per share - basic$0.77 $1.44 $0.16 $0.04 $0.24 $0.34 $0.32 
NAREIT FFO per share - fully diluted$0.77 $1.44 $0.16 $0.04 $0.24 $0.34 $0.32 
Core FFO per share - fully diluted$1.06 $1.45 $0.17 $0.20 $0.35 $0.34 $0.33 
Common dividend per share$0.94 $1.20 $0.17 $0.17 $0.30 $0.30 $0.30 
Average shares - basic84,544 82,348 84,804 84,496 84,461 84,413 82,962 
Average shares - fully diluted (for NAREIT FFO and Core FFO)84,629 82,516 84,911 84,586 84,519 84,495 83,093 
______________________________
(1) See "Definitions" on page 11 for the definitions of NAREIT 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.
16


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

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Twelve Months EndedThree Months Ended
12/31/202112/31/202012/31/20219/30/20216/30/20213/31/202112/31/2020
Adjusted funds from operations (AFFO) (1)
NAREIT FFO$65,503 $119,359 $13,318 $3,130 $20,559 $28,496 $26,674 
Non-cash loss (gain) on extinguishment of debt833 (881)— 833 — — 296 
Tenant improvements and incentives, net of reimbursements(1,546)(13,212)(642)(331)(1,112)539 (6,250)
Leasing commissions capitalized(2,808)(3,852)(24)(378)(1,868)(538)(1,445)
Recurring capital improvements(4,874)(5,044)(1,366)(1,485)(1,156)(867)(2,164)
Straight-line rent, net(1,738)(1,758)(218)(347)(625)(548)82 
Non-cash fair value interest expense— (59)— — — — — 
Non-real estate depreciation and amortization of debt costs5,265 3,795 1,241 1,330 1,350 1,344 987 
Amortization of lease intangibles, net368 1,942 (172)(32)195 377 477 
Amortization and expensing of restricted share and unit compensation (2)
8,553 7,873 2,075 2,651 2,163 1,664 1,972 
AFFO69,556 108,163 14,212 5,371 19,506 30,467 20,629 
Cash loss on extinguishment of debt11,894 915 — 11,894 — — — 
Loss on interest rate derivatives5,866 560 — 106 5,760 — 560 
Non-share-based severance expense103 — — — — 103 — 
Transformation costs (3)
6,179 — 1,802 674 3,703 — — 
Insurance gain(1,026)— (1,026)— — — — 
Core AFFO (1)
$92,572 $109,638 $14,988 $18,045 $28,969 $30,570 $21,189 
______________________________
(1) See "Definitions" on page 11 for the definitions of AFFO and Core AFFO
(2) Includes share award modifications related to transformation costs
(3) Excludes share award modifications related to transformation costs

17


Net Operating Income (NOI) - Multifamily
(Dollars In thousands)

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Apartment Homes as of 12/31/2021Twelve Months EndedThree Months Ended
12/31/202112/31/202012/31/20219/30/20216/30/20213/31/202112/31/2020
Rental and other property revenues
Same-store (1)
6,658$141,301 $142,856 $35,660 $35,408 $35,321 $34,912 $35,205 
Acquisitions (2)
7302,262 — 1,774 488 — — — 
Development (3)
4016,375 1,394 2,223 1,846 1,330 976 698 
Non-residential (4)
N/A1,027 888 233 304 211 279 293 
Total rental and other property revenues7,789150,965 145,138 39,890 38,046 36,862 36,167 36,196 
Property operating expenses
Same-store51,112 50,993 12,523 13,003 12,550 13,036 12,996 
Acquisitions865 — 653 212 — — — 
Development3,258 1,579 838 846 853 721 684 
Non-residential292 280 73 85 65 69 72 
Total property operating expenses55,527 52,852 14,087 14,146 13,468 13,826 13,752 
Net Operating Income (NOI)
Same-store90,189 91,863 23,137 22,405 22,771 21,876 22,209 
Acquisitions1,397 — 1,121 276 — — — 
Development3,117 (185)1,385 1,000 477 255 14 
Non-residential735 608 160 219 146 210 221 
Total NOI$95,438 $92,286 $25,803 $23,900 $23,394 $22,341 $22,444 
Same-store metrics
Operating margin64 %64 %65 %63 %64 %63 %63 %
Retention60 %57 %72 %60 %57 %51 %51 %
Effective lease rate growth
    New(3.0)%(7.8)%8.7 %3.2 %(8.1)%(15.0)%(15.1)%
    Renewal4.8 %2.3 %8.2 %5.1 %3.5 %1.9 %2.6 %
    Blended1.3 %(2.1)%8.4 %4.3 %(2.1)%(6.8)%(6.4)%
______________________________
(1)     Includes properties that were owned for the entirety of the years being compared, and excludes properties under redevelopment or development and properties acquired, sold or classified as held for sale during the years being compared.
(2)    Includes properties that were acquired during one of the years presented. An acquired property is categorized as same-store when it has been owned for the entirety of the years being compared.
(3)    Includes properties for which we have planned or ongoing major construction activities on existing or acquired land pursuant to an authorized development plan. We consider a property's development activities to be complete when the property is ready for its intended use. The property is categorized as same-store when it has been ready for its intended use for the entirety of the years being compared.
(4)     Includes revenues and expenses from retail operations at multifamily properties.
18


Same-Store Operating Results - Multifamily
(Dollars in thousands, except Average Effective Monthly Rent per Home)
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Rental and Other Property RevenueProperty Operating ExpensesNet Operating IncomeAverage OccupancyAverage Effective Monthly Rent per Home
Quarter-to-Date ComparisonApt HomesQ4 2021Q4 2020% ChgQ4 2021Q4 2020% ChgQ4 2021Q4 2020% ChgQ4 2021Q4 2020% ChgQ4 2021Q4 2020% Chg
Virginia5,138$27,875 $27,324 2.0 %$9,574 $10,045 (4.7)%$18,301 $17,279 5.9 %95.8 %94.3 %1.5 %$1,710 $1,686 1.4 %
DC / Maryland1,5207,785 7,881 (1.2)%2,949 2,951 (0.1)%4,836 4,930 (1.9)%96.0 %93.0 %3.0 %1,703 1,744 (2.4)%
DC Metro Total 6,658$35,660 $35,205 1.3 %$12,523 $12,996 (3.6)%$23,137 $22,209 4.2 %95.9 %94.0 %1.9 %$1,708 $1,699 0.5 %
Sequential ComparisonApt HomesQ4 2021Q3 2021% ChgQ4 2021Q3 2021% ChgQ4 2021Q3 2021% ChgQ4 2021Q3 2021% ChgQ4 2021Q3 2021% Chg
Virginia5,138$27,875 $27,650 0.8 %$9,574 $10,072 (4.9)%$18,301 $17,578 4.1 %95.8 %95.8 %— %$1,710 $1,665 2.7 %
DC / Maryland1,5207,785 7,758 0.3 %2,949 2,931 0.6 %4,836 4,827 0.2 %96.0 %95.8 %0.2 %1,703 1,672 1.9 %
DC Metro Total6,658$35,660 $35,408 0.7 %$12,523 $13,003 (3.7)%$23,137 $22,405 3.3 %95.9 %95.8 %0.1 %$1,708 $1,666 2.5 %
Year-to-Date ComparisonApt HomesYTD 2021YTD 2020% ChgYTD 2021YTD 2020% ChgYTD 2021YTD 2020% ChgYTD 2021YTD 2020% ChgYTD 2021YTD 2020% Chg
Virginia5,138$110,341 $110,847 (0.5)%$39,311 $39,670 (0.9)%$71,030 $71,177 (0.2)%95.5 %94.7 %0.8 %$1,676 $1,711 (2.0)%
DC / Maryland1,52030,960 32,009 (3.3)%11,801 11,323 4.2 %19,159 20,686 (7.4)%94.5 %93.9 %0.6 %1,693 1,761 (3.9)%
DC Metro Total6,658$141,301 $142,856 (1.1)%$51,112 $50,993 0.2 %$90,189 $91,863 (1.8)%95.3 %94.5 %0.8 %$1,680 $1,723 (2.5)%



19


Same-Store Operating Expenses - Multifamily
(In thousands)
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Quarter-to-Date ComparisonQ4 2021Q4 2020$ Change% Change% of Q4 2021 Total
Controllable (1)
$6,489 $6,704 $(215)(3.2)%51.8 %
Non-Controllable (2)
6,034 6,292 (258)(4.1)%48.2 %
Total same-store operating expenses$12,523 $12,996 $(473)(3.6)%100.0 %

Sequential ComparisonQ4 2021Q3 2021$ Change% Change% of Q4 2021 Total
Controllable$6,489 $6,591 $(102)(1.5)%51.8 %
Non-Controllable6,034 6,412 (378)(5.9)%48.2 %
Total same-store operating expenses$12,523 $13,003 $(480)(3.7)%100.0 %

Year-to-Date ComparisonYTD 2021YTD 2020$ Change% Change% of YTD 2021 Total
Controllable$26,089 $25,989 $100 0.4 %51.0 %
Non-Controllable25,023 25,004 19 0.1 %49.0 %
Total same-store operating expenses$51,112 $50,993 $119 0.2 %100.0 %
______________________________
(1) Controllable operating expenses consist of:
Payroll, Repairs & Maintenance, Marketing, Administrative and other
(2) Non-Controllable operating expenses consist of:
Utilities, Insurance and Real Estate Taxes
20


Acquisition and Disposition Summary
(Dollars in thousands)
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Acquisitions
LocationAcquisition DateNumber of HomesDecember 31, 2021 Average Occupancy
(YTD)
Contract Purchase Price
The OxfordConyers, GAAugust 10, 202124093.0%$48,000 
Assembly Eagles Landing (1)
Stockbridge, GANovember 19, 202149096.1%106,000 
730$154,000 
Dispositions
LocationDisposition DateSquare FeetContract Sales Price
(in thousands)
GAAP (Loss) gain on Sale
Office Portfolio (2)
VA, DCJuly 26, 20212,370,000$766,000 $(11,220)
Retail Portfolio (3)
VA, DC, MDSeptember 22, 2021693,000168,314 57,661 
3,063,000$934,314 $46,441 
______________________________
(1) Reflects the acquisitions of 860 South and 900 Dwell in Henry County, Georgia.
(2) Office Portfolio consists of twelve office properties: 1901 Pennsylvania Avenue, 515 King Street, 1220 19th Street, 1600 Wilson Boulevard, Silverline Center, Courthouse Square, 2000 M Street, 1140 Connecticut Avenue, Army Navy Club, 1775 Eye Street, Fairgate at Ballston and Arlington Tower.
(3) Retail Portfolio consists of eight retail properties: Takoma Park, Westminster, Concord Centre, Chevy Chase Metro Plaza, 800 S. Washington Street, Randolph Shopping Center, Montrose Shopping Center and Spring Valley Village.



21


Multifamily Communities
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December 31, 2021
PropertyLocationApartment HomesCurrent StrategyYear AcquiredYear Built
Average Occupancy (1)
Ending Occupancy
% of Total Portfolio NOI (1)
Virginia
Assembly AlexandriaAlexandria, VA532B Value-Add2019199095.7%95.9%6%
Cascade at LandmarkAlexandria, VA277B Value-Add2019198895.1%96.8%4%
Clayborne Alexandria, VA74A-N/A200896.9%97.3%1%
Riverside ApartmentsAlexandria, VA1,222B Value-Add2016197194.8%95.3%14%
Bennett ParkArlington, VA224A-N/A200796.4%96.4%5%
Park AdamsArlington, VA200B1969195995.6%95.5%2%
The MaxwellArlington, VA163A-N/A201496.1%96.3%2%
The ParamountArlington, VA135B2013198496.2%95.6%2%
The WellingtonArlington, VA711B Value Add2015196095.1%96.3%8%
TroveArlington, VA401AN/A202061.9%94.5%3%
Roosevelt TowersFalls Church, VA191B1965196496.0%94.8%2%
Assembly DullesHerndon, VA328B Value-Add2019200095.9%95.4%4%
Assembly HerndonHerndon, VA283B Value-Add2019199195.1%95.8%3%
Assembly LeesburgLeesburg, VA134B 2019198696.5%98.5%2%
Assembly ManassasManassas, VA408B Value-Add2019198695.6%95.3%5%
The Ashby at McLeanMcLean, VA256B1996198296.3%95.7%5%
Washington, DC
3801 Connecticut AvenueWashington, DC307B Value-Add1963195193.7%97.1%3%
Kenmore ApartmentsWashington, DC374B Value-Add2008194892.3%94.9%4%
Yale WestWashington, DC216A-2014201195.3%96.3%4%
Maryland
Bethesda Hill Apartments Bethesda, MD195B1997198695.7%95.9%3%
Assembly GermantownGermantown, MD218B Value-Add2019199095.6%96.3%2%
Assembly Watkins MillGaithersburg, MD210B2019197596.8%98.6%2%
Georgia
Assembly Eagles LandingStockbridge, GA490B20211997/200096.1%95.7%1%
The OxfordConyers, GA240B 2021199993.0%95.0%1%
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(1)     For the twelve months ended December 31, 2021.
22


Office Properties
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December 31, 2021

PropertyLocationYear AcquiredYear BuiltNet Rentable Square Feet
Leased % (1)
Ending Occupancy (1)
% of Total Portfolio NOI (2)
Washington, DC
Watergate 600Washington, DC20171972/1997295,00092.4%91.3%12 %
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(1)     The leased and occupied square footage for office properties includes short-term lease agreements.
(2)     For the twelve months ended December 31, 2021.

23


Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)
(In thousands)
(Unaudited)
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Twelve Months EndedThree Months Ended
12/31/202112/31/202012/31/20219/30/20216/30/20213/31/202112/31/2020
Adjusted EBITDA (1)
Net income (loss)$16,384 $(15,680)$(6,796)$31,319 $(6,992)$(1,147)$(11,037)
Add/(deduct):
Interest expense34,063 37,305 5,676 8,106 10,158 10,123 8,998 
Real estate depreciation and amortization95,560 120,030 20,114 18,252 27,551 29,643 30,241 
Non-real estate depreciation940 942 239 234 234 233 229 
Severance expense173 — — — — 173 — 
Transformation costs6,635 — 1,839 1,016 3,780 — — 
(Gain) loss on sale of depreciable real estate, net(46,441)15,009 — (46,441)— — 7,470 
Loss on extinguishment of debt12,727 34 — 12,727 — — 296 
Loss on interest rate derivatives5,866 560 — 106 5,760 — 560 
Insurance gain(1,026)— (1,026)— — — — 
Adjusted EBITDA $124,881 $158,200 $20,046 $25,319 $40,491 $39,025 $36,757 
______________________________
(1) Adjusted EBITDA is earnings before interest expense, taxes, depreciation, amortization, gain/loss on sale of real estate, casualty gain/loss, real estate impairment, gain/loss on extinguishment of debt, gain/loss on interest rate derivatives, severance expense, acquisition expenses, gain from non-disposal activities and transformation costs. We consider Adjusted EBITDA to be an appropriate supplemental performance measure because it permits investors to view income from operations without the effect of depreciation, and the cost of debt or non-operating gains and losses. Adjusted EBITDA is a non-GAAP measure.

24


Long Term Debt Analysis
(Dollars in thousands)
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12/31/20219/30/20216/30/20213/31/202112/31/2020
Balances Outstanding
Unsecured
Fixed rate bonds$397,058 $396,993 $696,387 $696,174 $695,968 
Term loan99,888 99,830 249,518 249,460 249,402 
Credit facility— — 43,000 33,000 42,000 
Total$496,946 $496,823 $988,905