EXHIBIT 99.1
[LETTERHEAD OF WASHINGTON REAL ESTATE INVESTMENT TRUST APPEARS HERE]
FOR IMMEDIATE RELEASE July 25, 2000
Page 1 of 7
WASHINGTON REAL ESTATE INVESTMENT TRUST
2nd Quarter 2000 FFO Per Share Up 16%
Washington Real Estate Investment Trust (WRIT) reported today that Funds From
Operations (FFO) per share increased 16% to $0.44 in the second quarter of 2000
from $0.38 in the second quarter of 1999. FFO increased 16.2% to $15,587,000 for
the quarter ended June 30, 2000 from $13,409,000 for the quarter ended June 30,
1999. FFO is the primary performance measure for the REIT industry.
Edmund B. Cronin, Jr., President and CEO, stated that, "WRIT's FFO growth is due
to the excellent performance of recent acquisitions, combined with the strong
core portfolio net operating income increase of 7.4%." WRIT's core portfolio
excludes properties not owned for the entirety of both periods being compared.
WRIT is a self-administered, self-managed, equity real estate investment trust
investing in income-producing properties in the greater Washington-Baltimore
region. The Trust owns a diversified portfolio of 57 properties consisting of 11
neighborhood retail centers, 22 office buildings, 9 apartment properties and 15
industrial/flex properties.
WRIT dividends have increased every year for 29 consecutive years. During these
29 years, WRIT's dividends have increased 34 times, a record unmatched by any
other publicly traded real estate investment trust. WRIT shares are publicly
traded on the New York Stock Exchange (symbol: WRE).
Certain statements in this press release 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, fluctuations in interest rates,
availability of raw materials and labor costs, levels of competition, the effect
of government regulation, the availability of capital, weather conditions and
changes in general economic conditions.
FOR IMMEDIATE RELEASE July 25, 2000
Page 2 of 7
WASHINGTON REAL ESTATE INVESTMENT TRUST
FINANCIAL HIGHLIGHTS
(in thousands except per share data)
Quarter Ended June 30, Six Months Ended June 30,
---------------------- -------------------------
OPERATING RESULTS 2000 1999 2000 1999
- ------------------ ------------ ----------- ----------- -----------
Real estate rental revenue $ 33,350 $ 28,864 $ 65,205 $ 56,518
Real estate expenses (9,633) (8,595) (18,971) (17,100)
----------- ----------- ----------- -----------
23,717 20,269 46,234 39,418
Real estate depreciation and amortization (5,624) (4,644) (11,054) (9,095)
----------- ----------- ----------- -----------
Income from real estate $ 18,093 $ 15,625 35,180 $ 30,323
Other income 242 232 391 437
Interest expense (6,311) (5,386) (12,402) (10,607)
General and administrative (2,061) (1,706) (3,843) (2,939)
----------- ----------- ----------- -----------
Income before gain on sale of real estate $ 9,963 $ 8,765 $ 19,326 $ 17,214
Gain on sale of real estate 0 0 1,498 7,909
----------- ----------- ----------- -----------
Net Income $ 9,963 $ 8,765 $ 20,824 $ 25,123
=========== =========== =========== ===========
Income before gain on real estate per share
(Basic) $ 0.28 $ 0.25 $ 0.54 $ 0.48
=========== =========== =========== ===========
Income before gain on real estate per share
(Diluted) $ 0.28 $ 0.25 $ 0.54 $ 0.48
=========== =========== =========== ===========
Net income per share (Basic) $ 0.28 $ 0.25 $ 0.58 $ 0.70
=========== =========== =========== ===========
Net income per share (Diluted) $ 0.28 $ 0.25 $ 0.58 $ 0.70
=========== =========== =========== ===========
Income before gain on sale of real estate $ 9,963 $ 8,765 $ 19,326 $ 17,214
Real estate depreciation and amortization 5,624 4,644 11,054 9,095
----------- ----------- ----------- -----------
Funds from operations $ 15,587 $ 13,409 $ 30,380 $ 26,309
=========== =========== =========== ===========
Funds from operations per share (Basic) $ 0.44 $ 0.38 $ 0.85 $ 0.74
=========== =========== =========== ===========
Funds from operations per share (Diluted) $ 0.44 $ 0.38 $ 0.85 $ 0.74
=========== =========== =========== ===========
Dividends paid per share $ 0.3125 $ 0.2925 $ 0.6050 $ 0.5725
=========== =========== =========== ===========
Weighted average shares outstanding 35,733,793 35,709,789 35,733,793 35,708,988
Fully diluted weighted average shares 35,810,460 35,730,395 35,810,460 35,729,594
outstanding
As of As of
BALANCE SHEET DATA June 30, 2000 December 31, 1999
- ------------------ ------------- -----------------
Cash and temporary investments $ 8,983 $ 4,716
Real estate assets, at cost (1) 676,724 661,870
Total assets, at cost (1) 709,749 692,054
Lines of credit payable 40,000 33,000
Mortgage notes payable 86,660 87,038
Notes payable 210,000 210,000
Total liabilities 358,691 349,769
Shareholders' equity 256,577 257,189
Shareholders' equity, at cost (1) 349,518 340,763
(1) At cost means adding back accumulated depreciation
Washington Real Estate Investment Trust
Q2 2000 Supplemental Disclosures
Page 3 of 7
WRIT Continues to Produce Significantly Higher FFO Per Share Growth Than the
- ----------------------------------------------------------------------------
REIT Industry
- -------------
As reflected in the following graph WRIT's FFO per share growth, as compared to
the corresponding quarter in the preceding calendar year, continues to
significantly outperform the industry
[GRAPH]
Q3 1999 Q4 1999 Q1 2000 Q2 2000 Average
11.8% 8.2% 13.6% 8.1% 12.2% 6.2% 10.6% 12.5% 7.5%
*WRIT growth is shown excluding accounting change to straight-line rents in Q4
1999.
**REIT Industry data for Q3 1999 - Q1 2000 is actual FFO per share growth per
DLJ Equity REIT Research. Q2 2000 Industry data is not yet available and
therefore the industry average is the average over Q3 1999 - Q1 2000.
Core Portfolio Operating Income (NOI) Growth, Rental Rate Growth, Net Revenue
- -----------------------------------------------------------------------------
Growth and Operating Expense Increase By Sector - Q2 2000 vs. Q2 1999
- ---------------------------------------------------------------------
Rental Rate Net Revenue Operating
Sector NOI Growth* Growth* Growth* Exp. Incr(Decr)
------ ----------- ------- ------- ---------------
Apartments 10.3% 4.7% 7.2% -0.3%
Office Buildings 7.3% 9.1% 5.0% 5.6%
Retail Centers 4.8% 3.8% 0.3% -3.7%
Industrial/Flex Centers 7.0% 0.4% 6.5% 9.6%
--- --- --- ---
Overall Core Portfolio 7.4% 6.2% 4.9% 3.3%
*Growth is shown excluding effect of accounting change to straight-line rents in
Q4 1999.
Washington Real Estate Investment Trust
Q2 2000 Supplemental Disclosures
Page 4 of 7
Core Portfolio & Overall Occupancy Levels By Sector
- ---------------------------------------------------
Core Portfolio All Properties
----------------------------------------------------------------
2nd QTR 2nd QTR 2nd QTR 2nd QTR
Sector 2000 1999 2000 1999
- ------ ---- ---- ---- ----
Apartments 97.6% 95.9% 97.2% 95.9%
Office Buildings 97.1% 98.2% 96.8% 98.2%
Retail Centers 94.2% 95.4% 94.2% 95.4%
Industrial/Flex Centers 96.3% 94.3% 96.8% 94.5%
---- ---- ---- ----
Overall Portfolio 96.7% 96.8% 96.6% 96.8%
WRIT Continues to Produce Significantly Higher Core Portfolio NOI Growth Than
- -----------------------------------------------------------------------------
the REIT Industry
- -----------------
As reflected in the following graph WRIT's core portfolio NOI growth, as
compared to the corresponding quarter in the preceding calendar year, continues
to significantly outperform the industry.
Q3 1999 Q4 1999 Q1 2000 Q2 2000 Average
6.8% 5.4% 7.4% 6.6% 9.3% 6.2% 7.4% 7.7% 5.7%
*WRIT growth is shown excluding accounting change to straight-line rents in Q4
1999.
**REIT Industry Same Store NOI growth data is per Salomon Smith Barney Equity
REIT Research. Q2 2000 Industry data is not yet available and therefore the
industry average is the average over Q3 1999 - Q1 2000.
Capital Improvements Summary
- ----------------------------
During Q2 2000, WRIT invested $3.6 million in real estate capital improvements.
A breakdown of these improvements is as follows (in 000's):
Accretive Capital Improvements
Acquisition Related $ 302
Expansions & Major Renovations 83
Tenant Improvements 974
------
Total Accretive Capital Improvements 1,359
Recurring Capital Improvements 2,239
------
Total Capital Improvements $3,598
Leasing Commissions Capitalized $ 93
Washington Real Estate Investment Trust
Q2 2000 Supplemental Disclosures
Page 5 of 7
Q2 2000 Commercial Leasing Activity
- -----------------------------------
In Q2 2000, WRIT executed leases for 564,000 square feet of commercial space at
a weighted average increase of 24.4% over the prior rent in place on a cash,
i.e., non-straight lined basis. Details by sector are as follows:
------------------------
Square Previous New
Sector Feet Face Rent Face Rent $ Increase % Increase
- ------ ---- --------- --------- ---------- ----------
Office 150,834 $ 20.67 $24.79 $4.11 19.9%
Retail 46,936 $ 18.90 $19.92 $1.02 5.4%
Industrial/Flex 366,659 $ 5.99 $ 8.29 $2.30 38.4%
------- ------- ------ ----- ----
Overall 564,429 $ 10.99 $13.67 $2.68 24.4%
Avg Term Avg Square Avg Tenant
Sector (Years) Footage Imp/SF
- ------ ------- ------- ------
Office 3.8 2,473 $ 5.85
Retail 5.4 2,608 $ 1.76
Industrial/Flex 3.3 21,568 $ 0.76
------- ------- ------
Overall 3.6 5,879 $ 2.20
Northern Virginia Industrial Park Update
- ----------------------------------------
On May 22, 1998 WRIT acquired the 790,000 square foot Northern Virginia
Industrial Park (NVIP). At acquisition, the property was 83% leased at an
average per square foot rent of $4.25 NNN. Upon acquisition, WRIT reported that
the property had been under-managed and that the market vacancy rate was
approximately 1/2 the project vacancy rate. In addition, WRIT indicated that
market rents for the property, in a well managed condition, would range from
$5.00 to $5.50 NNN, depending on the interior office build-out of the various
spaces.
As of June 30, 2000, i.e., in the 25 months since acquisition, WRIT has executed
leases for 590,000 square feet at a weighted average $5.43 NNN psf. This
average rent is 28% above the average rent in the park at acquisition.
NVIP was 93% leased as of June 30,2000.
Washington Real Estate Investment Trust
Q2 2000 Supplemental Disclosures
Page 6 of 7
Q2 2000 Acquisitions
- --------------------
On May 8, 2000, WRIT acquired Wayne Plaza, a nine-story office building
containing 91,127 rentable square feet and a two-level underground parking
garage, for $7,700,000. At $85 per square foot the property was acquired at
substantially below replacement cost.
The property is located at 962 Wayne Avenue in Silver Spring, Maryland.
Discovery Communications headquarters, a 650,000 s.f. building to be occupied in
January 2003, is under construction on the northwest corner across from Wayne
Plaza. Directly across from the property, construction of the Downtown Silver
Spring Redevelopment Project is progressing. When complete it will contain
250,000 s.f. of office space, 70,000 s.f. of retail space anchored by Fresh
Fields, 160 apartments, a 200 room hotel, an 18 screen - 5,000 stadium seat
entertainment center and a 3,200 car public parking facility. The Silver Spring
Metrorail and MARC train stations are located three blocks west of Wayne Plaza.
Wayne Plaza was 89.7% leased at acquisition and is anticipated to produce a
first year cash return on investment of 10.2%. The acquisition provides WRIT
with an extraordinary value-added opportunity. Despite its prime location,
deferred maintenance has kept rents below market. WRIT intends to invest
approximately $2,000,000 in the building to renovate and replace aging building
systems including HVAC equipment, elevators and building cosmetics. These
capital improvements and the major redevelopment of the area, combined with an
aggressive hands on property management and leasing program, are expected to
result in increased occupancies and revenue.
Q2 2000 Dispositions
- --------------------
None
Q2 2000 Dividend Increase - Largest in WRIT History
- ---------------------------------------------------
On May 18,2000, the Trustees of WRIT announced a $.02 per share increase in the
quarterly dividend rate to a new indicated annual rate of $1.25 per share. The
new quarterly dividend of $.3125 per share was paid on June 29, 2000.
This dividend increase was 60% greater than WRIT's 1999 dividend increase and
the largest quarterly dividend increase in WRIT's 40 year history. The increase
was required to maintain WRIT's target payout of 100% of taxable income.
Edmund B. Cronin, Jr. Elected Chairman
- --------------------------------------
On May 25, 2000, Edmund B. Cronin, Jr. was elected Chairman of the Board in
addition to his current duties as President and Chief Executive Officer.
Mr. Cronin joined the Trust in 1994 as Trustee, President and Chief Operating
Officer. From 1995 to the present he has served as President and Chief
Executive Officer.
Washington Real Estate Investment Trust
Q2 2000 Supplemental Disclosures
Page 7of 7
Mr. Cronin is a Director of Potomac Electric Power Company, a Director of the
John J. Kirlin Companies, and a member of the American Society of Real Estate
Counselors. He formerly served as Chairman of the Greater Washington Board of
Trade, and Chairman of the Washington/Baltimore Regional Association. Mr.
Cronin holds trusteeships in the Federal City Council, the Greater Washington
Research Center, and the Meridian House International.
June 30, 2000 Debt Summary
- --------------------------
At June 30, 2000, WRIT's debt was as follows (in $millions):
Wtd Avg Wtd Avg
Amount Maturity (Yrs) Interest Rate
------ -------------- -------------
Secured $ 86.7 7.3 7.5%
Senior Notes & MTNs $ 210.0 11.0 7.2%
------------------------------------------------
Subtotal $ 296.7 9.9 7.3%
Lines of Credit* $ 40.0 1.9 7.3%
------------------------------------------------
Total Debt $ 336.7 8.9 7.2%
*WRIT's Lines of Credit total $75 million of capacity at LIBOR+ 70bp.
No more than $60 million of debt matures in any one year and less than $1
million matures in each year until 2003.
Supplemental Debt Information at June 30, 2000:
- ----------------------------------------------
Debt to Total Market Capitalization: 34.5%
Earnings to Fixed Charges Ratio: 3.48x
Debt Service Coverage Ratio: 3.48x