EXHIBIT 99.1
[LETTERHEAD OF WASHINGTON REAL ESTATE INVESTMENT TRUST]
FOR IMMEDIATE RELEASE February 27, 2001
Page 1 of 8
WASHINGTON REAL ESTATE INVESTMENT TRUST
2000 Funds From Operations Per Share Up 14%
Washington Real Estate Investment Trust (WRIT) reported today that Funds From
Operations (FFO) increased 14.8% to $64,295,000 for the year ended December 31,
2000 from $55,982,000 for the year ended December 31, 1999. FFO per share
increased 14.0% to $1.79 in 2000 from $1.57 in 1999. FFO is the primary
performance measure for the REIT industry.
FFO per share increased 15.0% to $.48 per share in the fourth quarter of 2000
over the fourth quarter of 1999, excluding the one-time effects of an accounting
change in Q4 1999. When the one-time effects of the accounting change are
included, FFO per share increased 6.7% in the fourth quater of 2000 over the
fourth quarter of 1999.
Edmund B. Cronin, Jr., Chairman, 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 9.0% for the year
ended December 31, 2000." 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 10
retail centers, 23 office properties, 15 industrial/flex properties and 9 multi-
family properties.
WRIT's streak of 34 consecutive years of increased earnings per share and 28
consecutive years of increased FFO per share growth spans 4 recessions. WRIT's
dividends have increased every year for 30 consecutive years. During these 30
years, WRIT's dividends have increased 36 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 and the supplemental disclosures
attached hereto 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 and local economic and real estate market conditions and the timing and
pricing of lease transactions.
CONTINUED
FOR IMMEDIATE RELEASE FEBRUARY 27, 2001
Page 2 of 8
WASHINGTON REAL ESTATE INVESTMENT TRUST
FINANCIAL HIGHLIGHTS
(in thousands except per share data)
Quarter Ended December 31, Twelve Months Ended December 31,
-------------------------------- ---------------------------------
OPERATING RESULTS 2000 1999 2000 1999
- -------------------------------------------- ----------- ----------- ----------- -----------
Real estate rental revenue $ 35,211 $ 32,891 134,732 $ 118,975
Real estate expenses (9,636) (9,196) (38,316) (35,281)
----------- ----------- ----------- -----------
25,575 23,695 96,416 83,694
Real estate depreciation and amortization (5,833) (5,690) (22,723) (19,590)
----------- ----------- ----------- -----------
Income from real estate $ 19,742 $ 18,005 $ 73,693 $ 64,104
Other income 264 210 943 732
Interest expense (6,735) (6,200) (25,531) (22,271)
General and administrative (1,774) (1,663) (7,533) (6,173)
----------- ----------- ----------- -----------
Income before gain on sale of real estate $ 11,497 $ 10,352 $ 41,572 $ 36,392
Gain on sale of real estate 0 0 3,567 7,909
----------- ----------- ----------- -----------
Net Income $ 11,497 $ 10,352 $ 45,139 $ 44,301
=========== =========== =========== ===========
Income before gain on real estate per share
(Basic) $ 0.32 $ 0.29 $ 1.16 $ 1.02
=========== =========== =========== ===========
Income before gain on real estate per share
(Diluted) $ 0.32 $ 0.29 $ 1.16 $ 1.02
=========== =========== =========== ===========
Net income per share (Basic) $ 0.32 $ 0.29 $ 1.26 $ 1.24
=========== =========== =========== ===========
Net income per share (Diluted) $ 0.32 $ 0.29 $ 1.26 $ 1.24
=========== =========== =========== ===========
Income before gain on sale of real estate $ 11,497 $ 10,352 $ 41,572 $ 36,392
Real estate depreciation and amortization 5,833 5,690 22,723 19,590
----------- ----------- ----------- -----------
Funds from operations $ 17,330 $ 16,042 $ 64,295 $ 55,982
=========== =========== =========== ===========
Funds from operations per share
(Basic) $ 0.48 $ 0.45 $ 1.80 $ 1.57
=========== =========== =========== ===========
Funds from operations per share
(Diluted) $ 0.48 $ 0.45 $ 1.79 $ 1.57
=========== =========== =========== ===========
Dividends paid per share $ .3125 $ 0.2925 $ 1.2300 $ 1.1575
=========== =========== =========== ===========
Weighted average shares outstanding 35,736,723 35,721,494 35,734,530 35,713,945
Fully diluted weighted average shares 36,027,658 35,722,991 35,872,366 35,722,602
outstanding
As of As of
BALANCE SHEET DATA December 31, 2000 December 31, 1999
- ------------------ ----------------- -----------------
Cash and temporary investments $ 6,426 $ 4,716
Real estate assets, at cost (1) 698,513 661,870
Total assets, at cost (1) 732,953 692,054
Lines of credit payable 0 33,000
Mortgage notes payable 86,260 87,038
Notes payable 265,000 210,000
Total liabilities 371,833 349,769
Shareholders' equity 258,656 257,189
Shareholders' equity, at cost (1) 359,562 340,763
(1) At cost means adding back accumulated depreciation
CONTINUED
Washington Real Estate Investment Trust
Q4 2000 Supplemental Disclosures
Page 3 of 8
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]
REIT
WRIT* INDUSTRY**
Q3 1999 11.8% 8.9%
Q4 1999 13.6% 8.1%
Q1 2000 12.2% 8.4%
Q2 2000 10.6% 8.5%
Q3 2000 15.8% 9.1%
Q4 2000 15.0% N/A
Average 13.2% 8.4%
*WRIT growth is shown excluding accounting change to straight-line rents in Q4
1999. The Q4 2000 straight-line rents were $0.6 million net of reserves.
**REIT Industry data for Q3 1999 through Q3 2000 is actual FFO per share growth
per Credit Suisse First Boston Equity REIT Research. Q4 2000 Industry data is
not yet available and, therefore, the industry average is the five quarter
average from Q3 1999 through Q3 2000.
Core Portfolio Operating Income (NOI) Growth and Rental Rate Growth - Q4 2000
- -----------------------------------------------------------------------------
vs. Q4 1999
- -----------
Rental Rate
Sector NOI Growth Growth
---------- -----------
Apartments 7.2% 9.1%
Office Buildings 6.4% 5.0%
Retail Centers 9.0% 2.9%
Industrial/Flex Centers 14.9% 6.0%
---- ---
Overall Core Portfolio 8.2% 5.7%
Core portfolio operating expenses increased 8.2% in Q4 2000 vs. Q4 1999.
CONTINUED
Washington Real Estate Investment Trust
Q4 2000 Supplemental Disclosures
Page 4 of 8
Core Portfolio & Overall Occupancy Levels By Sector
- ---------------------------------------------------
Core Portfolio All Properties
------------------------------------------------------------------
4th QTR 4th QTR 4th QTR 4th QTR
Sector 2000 1999 2000 1999
- ------ ---- ---- ---- ----
Apartments 96.1% 97.2% 96.1% 97.2%
Office Buildings 97.6% 96.8% 97.4% 96.7%
Retail Centers 97.2% 94.2% 97.2% 93.5%
Industrial/Flex Centers 98.1% 94.6% 98.1% 94.6%
---- ---- ---- ----
Overall Portfolio 97.3% 96.3% 97.2% 96.1%
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.
[GRAPH]
WRIT* REIT INDUSTRY**
----- -------------
Q3 1999 6.8% 5.4%
Q4 1000 7.4% 5.6%
Q1 2000 9.3% 6.2%
Q2 2000 7.4% 6.3%
Q3 2000 10.4% 6.9%
Q4 2000 8.2% N/A
AVERAGE 8.3% 6.1%
*WRIT growth is shown excluding accounting change to straight-line rents in Q4
1999. The Q4 2000 core portfolio straight-line rents were $0.6 million net of
reserves.
**REIT Industry Same Store NOI growth data is per Salomon Smith Barney Equity
REIT Research. Q4 2000 Industry data is not yet available and, therefore, the
industry average is the 5 quarter average from Q3 1999 through Q3 2000.
Straight Line Rents
- -------------------
In response to the SEC's Staff Accounting Bulletin No. 99 on Materiality, in Q4
1999, WRIT commenced recognition of rental revenue on a straight-line basis.
The following disclosure is provided to improve
CONTINUED
Washington Real Estate Investment Trust
Q4 2000 Supplemental Disclosures
Page 5 of 8
comparability between Q4 2000 and Q4 1999 (all amounts except per share amounts
are in $000's):
Including Straight Line Excluding Straight Line
Rents Rents
------------------------------------------------------------------
4th QTR 4th QTR 4th QTR 4th QTR
2000 1999 2000 1999
---- ---- ---- ----
Straight Line Rent Adjustment 670 1,807/1/ N/A N/A
FFO 17,330 16,042 16,660 14,235
FFO Per Share $ 0.48 $ 0.45 $ 0.46 $ 0.40
FFO Per Share Growth 6.7% 15.0%
Core Portfolio Operating Income
(NOI) Growth 2.8% 8.2%
/1/ Q4 1999 reflected full year impact of 1999 straight-line rent activity.
Q4 2000 Commercial Leasing Activity
- -----------------------------------
In Q4 2000, WRIT executed leases for 636,000 square feet of commercial space at
a weighted average increase of 18.5% over the prior rent in place on a cash,
i.e., non-straight lined basis. Details by sector are as follows:
------------------------
Previous New
Sector Square Feet Face Rent Face Rent $ Increase % Increase
- ------ ----------- --------- --------- ---------- ----------
Office 289,229 $23.21 $27.69 $4.48 19.3%
Retail 64,955 $12.25 $14.42 $2.17 17.6%
Industrial/Flex 281,684 $ 6.72 $ 7.78 $1.06 15.8%
------- ------ ------ ----- ----
Overall 635,868 $14.79 $17.52 $2.73 18.5%
Avg Term Avg Tenant
Sector (Years) Imp/SF
- ------ ------- ------
Office 3.2 $ 2.76
Retail 4.3 $ .64
Industrial/Flex 1.8 $ .06
----- ------
Overall 2.7 $ 1.35
This average 18.5% cash rent increase compares to an average of 17.1% in Q3
2000.
Q4 2000 Acquisitions
- --------------------
Courthouse Square, an office/retail complex in historic Old Town Alexandria,
Virginia, was acquired for $17 million on October 10, 2000. The 113,000 rentable
square foot building, with 139 parking spaces, was 98% leased at acquisition.
At a purchase price of $150 per square foot, the building was acquired at a
substantial discount to replacement cost.
WRIT expects this acquisition to produce a first year cash return on investment
of 10.5%.
CONTINUED
Washington Real Estate Investment Trust
Q4 2000 Supplemental Disclosures
Page 6 of 8
Over the next two years leases for 31% of the building's rentable area expire.
Those leases are at rents currently 36% below market.
Courthouse Square is located in the heart of historic Old Town Alexandria,
Virginia, adjacent to the City of Alexandria Courthouse and one block west of
the Alexandria City Hall. Leasing and operational synergies are anticipated at
Courthouse Square as it is located directly across from WRIT's 515 King Street
property, a 78,140 square foot office building.
Q4 2000 Dispositions
- --------------------
None
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 half 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 December 31, 2000, i.e., in the 31 months since acquisition, WRIT has
executed leases for 760,000 square feet at a weighted average $5.59 NNN psf.
This average rent is 31% above the average rent in the park at acquisition.
NVIP was 96% leased as of December 31, 2000.
Capital Improvements Summary
- ----------------------------
During Q4 2000, WRIT invested $4.0 million in real estate capital improvements.
A breakdown of these improvements is as follows (in 000's):
Accretive Capital Improvements
Acquisition Related $ 570
Expansions & Major Renovations -
Tenant Improvements 1,323
------
Total Accretive Capital Improvements 1,893
Recurring Capital Improvements 2,156
------
Total Capital Improvements $4,049
Leasing Commissions Capitalized $ 473
CONTINUED
Washington Real Estate Investment Trust
Q4 2000 SUPPLEMENTAL DISCLOSURES
Page 7 of 8
DECEMBER 31, 2000 DEBT SUMMARY
- ------------------------------
At December 31, 2000, WRIT's debt was as follows (in $millions):
Wtd Avg Wtd Avg
Amount Maturity (Yrs) Interest Rate
------ -------------- -------------
Secured $ 86.3 6.8 7.5%
Senior Notes & MTNs $ 265.0 8.5 7.4%
------------------------------------------
Subtotal $ 351.3 8.7 7.4%
Lines of Credit* $ 0
------------------------------------------
Total Debt $ 351.3 8.7 7.4%
*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 December 31, 2000
- --------------------------------------------------
Debt to Total Market Capitalization: 29.1%
Earnings to Fixed Charges Ratio: 3.47x
Debt Service Coverage Ratio: 3.47x
REIT INDUSTRY ISSUES
- --------------------
In light of recent issues raised in the REIT industry, WRIT makes the following
disclosures:
1. WRIT has no non-income producing land held for development.
2. WRIT has only one theatre lease in its portfolio. This lease runs through
6/30/02 at rent that WRIT estimates to be less than 1/3 of current market
rent.
CONTINUED
Washington Real Estate Investment Trust
Q4 2000 SUPPLEMENTAL DISCLOSURES
Page 8 of 8
Conference Call Information
- ---------------------------
WRIT will conduct a Conference Call to discuss 4th Quarter Earnings on
Wednesday, February 28, 2001 at 11:00 A.M. Eastern Standard Time. Conference
Call access information is as follows:
USA Toll Free Number: 877-601-3546
International Toll Number: 415-228-4999
Pass Code: Washington REIT
Conference Leader: Mr. Larry Finger
A replay of the Conference Call will be available for two weeks commencing one
hour after the Conference Call concludes until March 13, 2001 at 5:00 P.M.
Eastern Standard Time. Instant Replay access information is as follows:
USA Toll Free Number: 800-568-6411
International Toll Number: 402-220-2168
A live on-demand webcast of the Conference Call will also be available on WRIT's
website at www.writ.com. An on-line playback of the webcast will be available
------------
at www.writ.com for 30 days following the Conference Call.
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END