Exhibit 99.2
Washington Real Estate Investment Trust
Supplemental Information
September 30, 2003
| Contact: |
6110 Executive Boulevard | |
| Sara Grootwassink |
Suite 800 | |
| Chief Financial Officer |
Rockville, MD 20852 | |
| Direct Dial: (301) 255-0820 |
(301) 984-9400 | |
| E-mail: sgrootwassink@writ.com |
(301) 984-9610 fax |
Washington Real Estate Investment Trust
Supplemental Information
Table of Contents
September 30, 2003
| Schedule | Page |
| About the Trust |
2 | |
| Consolidated Statements of Operations |
3 | |
| Consolidated Balance Sheets |
4 | |
| Funds From Operations and Funds Available for Distribution |
5 | |
| Earnings Before Interest Taxes Depreciation and Amortization (EBITDA) |
6 | |
| Long-Term Debt Analysis |
7 | |
| Capital Analysis |
8 | |
| Core Portfolio Net Operating Income (NOI) Growth & Rental Rate Growth |
9 | |
| Core Portfolio Net Operating Income (NOI) |
10 | |
| Core Portfolio & Overall Occupancy Levels by Sector |
11 | |
| Schedule of Properties |
12 | |
| Schedule of Properties (continued) |
13 | |
| Commercial Leasing Summary |
14 | |
| 10 Largest Tenants - Based on Annualized Base Rent |
15 | |
| Lease Expirations as of September 30, 2003 |
16 | |
| Acquisition Summary as of September 30, 2003 |
17 | |
| Total Return Chart |
18 | |
| Reporting Definitions |
19 | |
Washington Real Estate Investment Trust
About the Trust
Mission Statement
Washington Real Estate Investment Trust, founded in 1960 and headquartered in Rockville, Maryland, invests in a diversified range of income-producing property types. Our purpose is to acquire and manage real estate investments in markets we know well and protect our assets from single property-type value fluctuations through diversified holdings. Our goal is to continue to safely increase earnings and shareholder value.
Company Background
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 62 properties‘¹’ consisting of 11 retail centers, 26 office properties, 16 industrial and 9 multifamily properties.
WRIT’s dividends have increased every year for 33 consecutive years. WRIT’s FFO per share has increased every year for 30 consecutive years. WRIT shares are publicly traded on the New York Stock Exchange (symbol: WRE).
| ‘¹’ | Included in this total is the October 9, 2003 acquisition of Prosperity Medical Center located in Merrifield, VA. |
2
Washington Real Estate Investment Trust
Consolidated Statement of Operations
(In thousands, except per share data)
| Three Months Ended |
||||||||||||||||||||
| OPERATING RESULTS |
09/30/03 |
06/30/03 |
03/31/03 |
12/31/02 |
09/30/02 |
|||||||||||||||
| Real estate rental revenue |
$ | 41,109 | $ | 39,481 | $ | 38,961 | $ | 39,027 | $ | 38,324 | ||||||||||
| Real estate expenses |
(12,426 | ) | (11,235 | ) | (11,603 | ) | (11,124 | ) | (11,453 | ) | ||||||||||
| 28,683 | 28,246 | 27,358 | 27,903 | 26,871 | ||||||||||||||||
| Real estate depreciation and amortization |
(9,101 | ) | (8,245 | ) | (8,073 | ) | (7,894 | ) | (7,303 | ) | ||||||||||
| Income from real estate |
19,582 | 20,001 | 19,285 | 20,009 | 19,568 | |||||||||||||||
| Other income |
102 | 132 | 108 | 127 | 177 | |||||||||||||||
| Interest expense |
(7,401 | ) | (7,581 | ) | (7,047 | ) | (7,010 | ) | (7,068 | ) | ||||||||||
| General and administrative |
(1,296 | ) | (1,264 | ) | (1,132 | ) | (1,074 | ) | (1,034 | ) | ||||||||||
| Net Income |
$ | 10,987 | $ | 11,288 | $ | 11,214 | $ | 12,052 | $ | 11,643 | ||||||||||
| Per Share Data |
||||||||||||||||||||
| Net Income |
$ | 0.28 | $ | 0.29 | $ | 0.28 | $ | 0.31 | $ | 0.30 | ||||||||||
| Fully diluted weighted average shares outstanding |
39,528,812 | 39,451,560 | 39,357,895 | 39,328,198 | 39,358,143 | |||||||||||||||
| Percentage of Revenues: |
||||||||||||||||||||
| Real estate expenses |
30.2 | % | 28.5 | % | 29.8 | % | 28.5 | % | 29.9 | % | ||||||||||
| General and administrative |
3.2 | % | 3.2 | % | 2.9 | % | 2.8 | % | 2.7 | % | ||||||||||
| Ratios: |
||||||||||||||||||||
| EBITDA / Interest Expense |
3.7 | x | 3.6 | x | 3.6 | x | 3.9 | x | 3.7 | x | ||||||||||
| Net income / |
||||||||||||||||||||
| Total revenue |
26.7 | % | 28.6 | % | 28.8 | % | 30.9 | % | 30.4 | % | ||||||||||
| Earnings to Fixed Charges |
2.5 | x | 2.5 | x | 2.6 | x | 2.7 | x | 2.6 | x | ||||||||||
3
Washington Real Estate Investment Trust
Consolidated Balance Sheets
(In thousands)
| September 30, 2003 |
June 30, 2003 |
March 31, 2003 |
December 31, 2002 |
September 30, 2002 |
||||||||||||||||
| Assets |
||||||||||||||||||||
| Land |
$ | 203,878 | $ | 172,378 | $ | 171,514 | $ | 169,045 | $ | 169,045 | ||||||||||
| Building |
763,148 | 703,251 | 697,394 | 684,657 | 679,365 | |||||||||||||||
| Total real estate, at cost |
967,026 | 875,629 | 868,908 | 853,702 | 848,410 | |||||||||||||||
| Accumulated depreciation |
(168,524 | ) | (161,264 | ) | (154,004 | ) | (146,912 | ) | (139,965 | ) | ||||||||||
| Total investment in real estate, net |
798,502 | 714,365 | 714,904 | 706,790 | 708,445 | |||||||||||||||
| Cash and cash equivalents |
5,968 | 20,669 | 17,350 | 13,076 | 15,818 | |||||||||||||||
| Rents and other receivables, net of allowance for doubtful accounts |
17,266 | 15,967 | 14,822 | 14,072 | 12,617 | |||||||||||||||
| Prepaid expenses and other assets |
25,412 | 18,857 | 21,852 | 22,059 | 21,083 | |||||||||||||||
| Total Assets |
$ | 847,148 | $ | 769,858 | $ | 768,928 | $ | 755,997 | $ | 757,963 | ||||||||||
| Liabilities |
||||||||||||||||||||
| Accounts payable and other liabilities |
$ | 14,369 | $ | 16,400 | $ | 12,887 | $ | 14,661 | $ | 11,869 | ||||||||||
| Advance rents |
4,833 | 5,071 | 5,440 | 4,409 | 4,172 | |||||||||||||||
| Tenant security deposits |
6,276 | 6,282 | 6,582 | 6,495 | 6,442 | |||||||||||||||
| Mortgage notes payable |
92,909 | 93,201 | 93,499 | 86,951 | 87,197 | |||||||||||||||
| Lines of credit/short-term notes payable |
132,500 | — | — | 50,750 | 53,750 | |||||||||||||||
| Notes payable |
275,000 | 325,000 | 325,000 | 265,000 | 265,000 | |||||||||||||||
| Total Liabilities |
525,887 | 445,954 | 443,408 | 428,266 | 428,430 | |||||||||||||||
| Minority interest |
1,618 | 1,581 | 1,565 | 1,554 | 1,554 | |||||||||||||||
| Shareholders’ Equity |
||||||||||||||||||||
| Shares of beneficial interest, $.01 par value; 100,000 shares authorized |
$ | 394 | $ | 393 | $ | 392 | $ | 392 | $ | 391 | ||||||||||
| Additional paid-in capital |
332,261 | 330,808 | 329,134 | 328,797 | 328,387 | |||||||||||||||
| Retained earnings (deficit) |
(12,171 | ) | (8,498 | ) | (5,152 | ) | (2,554 | ) | (799 | ) | ||||||||||
| Less: Deferred Compensation on restricted shares |
(841 | ) | (380 | ) | (419 | ) | (458 | ) | — | |||||||||||
| Total Shareholders’ Equity |
319,643 | 322,323 | 323,955 | 326,177 | 327,979 | |||||||||||||||
| Total Liabilities and Shareholders’ Equity |
$ | 847,148 | $ | 769,858 | $ | 768,928 | $ | 755,997 | $ | 757,963 | ||||||||||
| Total Debt / Total Market Capitalization |
0.30:1 | 0.28:1 | 0.29:1 | 0.29:1 | 0.29:1 | |||||||||||||||
4
Washington Real Estate Investment Trust
Funds From Operations and Funds Available for Distribution
(In thousands, except per share data)
| Three Months Ended |
||||||||||||||||||||
| 09/30/03 |
06/30/03 |
03/31/03 |
12/31/02 |
09/30/02 |
||||||||||||||||
| Funds From Operations(1) |
||||||||||||||||||||
| Net Income |
$ | 10,987 | $ | 11,288 | $ | 11,214 | $ | 12,052 | $ | 11,643 | ||||||||||
| Real estate depreciation and amortization |
9,101 | 8,245 | 8,073 | 7,894 | 7,303 | |||||||||||||||
| Gain on sale of real estate investment |
— | — | — | — | — | |||||||||||||||
| Funds From Operations (FFO) |
20,088 | 19,533 | 19,287 | 19,946 | 18,946 | |||||||||||||||
| FFO per share - basic |
$ | 0.51 | $ | 0.50 | $ | 0.49 | $ | 0.51 | $ | 0.48 | ||||||||||
| FFO per share - fully diluted |
$ | 0.51 | $ | 0.50 | $ | 0.49 | $ | 0.51 | $ | 0.48 | ||||||||||
| Funds Available for Distribution(2) |
||||||||||||||||||||
| Accretive: |
||||||||||||||||||||
| Tenant Improvements |
(1,239 | ) | (1,696 | ) | (1,613 | ) | (1,267 | ) | (1,095 | ) | ||||||||||
| Leasing Commissions Capitalized |
(1,515 | ) | (372 | ) | (1,419 | ) | (496 | ) | (258 | ) | ||||||||||
| Non-Accretive: |
||||||||||||||||||||
| Recurring Capital Improvements |
(1,277 | ) | (1,519 | ) | (865 | ) | (2,475 | ) | (2,132 | ) | ||||||||||
| Straight-Line Rent, Net |
(503 | ) | (473 | ) | (318 | ) | (484 | ) | (338 | ) | ||||||||||
| Non-real estate depreciation and amortization |
467 | 453 | 476 | 501 | 491 | |||||||||||||||
| Funds Available for Distribution (FAD) |
$ | 16,021 | $ | 15,926 | $ | 15,548 | $ | 15,725 | $ | 15,614 | ||||||||||
| Total Dividends Paid |
$ | 14,659 | $ | 14,634 | $ | 13,812 | $ | 13,806 | $ | 13,799 | ||||||||||
| Average shares - basic |
39,311,293 | 39,240,682 | 39,173,898 | 39,150,598 | 39,133,714 | |||||||||||||||
| Average shares - fully diluted |
39,528,812 | 39,451,560 | 39,357,895 | 39,328,198 | 39,358,143 | |||||||||||||||
| (1) | Funds From Operations (“FFO”) – The National Association of Real Estate Investment Trusts, Inc. (“NAREIT”) defines FFO (April, 2002 White Paper) as net income (computed in accordance with generally accepted accounting principles (“GAAP”)) excluding gains (or losses) from sales of property plus depreciation and amortization. WRIT considers FFO to be a standard supplemental measure for equity real estate investment trusts (“REITs”) because it facilitates an understanding of the operating performance of its properties without giving effect to real estate depreciation and amortization, which historically assumes that the value of real estate assets diminish predictably over time. Since real estate values have instead historically risen or fallen with market conditions, WRIT believes that FFO more accurately provides investors an indication of its ability to incur and service debt, make capital expenditures and fund other needs. |
| (2) | Funds Available for Distribution (“FAD”) is calculated by subtracting from FFO recurring expenditures, tenant improvements and leasing costs, that are capitalized and amortized and are necessary to maintain WRIT’s properties and revenue stream, and straight line rents, then adding non-real estate depreciation and amortization. FAD is included herein, because WRIT considers it to be a measure of a REIT’s ability to incur and service debt and to distribute dividends to its shareholders. |
5
Washington Real Estate Investment Trust
Earnings Before Interest Taxes Depreciation and Amortization (EBITDA)
(In thousands)
| Three Months Ended |
||||||||||||||||||||
| 09/30/03 |
06/30/03 |
03/31/03 |
12/31/02 |
09/30/02 |
||||||||||||||||
| EBITDA(1) |
||||||||||||||||||||
| Net income |
$ | 10,987 | $ | 11,288 | $ | 11,214 | $ | 12,052 | $ | 11,643 | ||||||||||
| Add: |
||||||||||||||||||||
| Interest expense |
7,401 | 7,581 | 7,047 | 7,010 | 7,068 | |||||||||||||||
| Real estate depreciation and amortization |
9,101 | 8,245 | 8,073 | 7,894 | 7,303 | |||||||||||||||
| Non-real estate depreciation |
120 | 127 | 149 | 203 | 200 | |||||||||||||||
| Less: |
||||||||||||||||||||
| Other income |
(102 | ) | (132 | ) | (108 | ) | (127 | ) | (177 | ) | ||||||||||
| EBITDA |
$ | 27,507 | $ | 27,109 | $ | 26,375 | $ | 27,032 | $ | 26,037 | ||||||||||
| (1) | EBITDA is earnings before interest, taxes, depreciation and amortization. WRIT considers EBITDA to be an appropriate supplemental performance measure because it eliminates depreciation, interest and the gain (loss) from property dispositions, which permits investors to view income from operations without the effect of non-cash depreciation or the cost of debt. |
6
Washington Real Estate Investment Trust
Long-Term Debt Analysis
(In thousands)
| September 30, 2003 |
June 30, 2003 |
March 31, 2003 |
December 31, 2002 |
September 30, 2002 |
||||||||||||||||
| Balances Outstanding |
||||||||||||||||||||
| Secured |
||||||||||||||||||||
| Conventional fixed rate |
$ | 92,909 | $ | 93,201 | $ | 93,499 | $ | 86,951 | $ | 87,197 | ||||||||||
| Secured total |
92,909 | 93,201 | 93,499 | 86,951 | 87,197 | |||||||||||||||
| Unsecured |
||||||||||||||||||||
| Fixed rate bonds and notes |
275,000 | 325,000 | 325,000 | 265,000 | 265,000 | |||||||||||||||
| Credit facilities |
132,500 | — | — | 50,750 | 53,750 | |||||||||||||||
| Unsecured total |
407,500 | 325,000 | 325,000 | 315,750 | 318,750 | |||||||||||||||
| Total |
$ | 500,409 | $ | 418,201 | $ | 418,499 | $ | 402,701 | $ | 405,947 | ||||||||||
| Average Interest Rates |
||||||||||||||||||||
| Secured |
||||||||||||||||||||
| Conventional fixed rate |
7.2 | % | 7.2 | % | 7.2 | % | 7.3 | % | 7.3 | % | ||||||||||
| Secured total |
7.2 | % | 7.2 | % | 7.2 | % | 7.3 | % | 7.3 | % | ||||||||||
| Unsecured |
||||||||||||||||||||
| Fixed rate bonds |
6.9 | % | 7.0 | % | 7.0 | % | 7.4 | % | 7.4 | % | ||||||||||
| Credit facilities |
1.8 | % | 0.0 | % | 0.0 | % | 2.1 | % | 2.5 | % | ||||||||||
| Unsecured total |
5.2 | % | 7.0 | % | 7.0 | % | 6.5 | % | 6.6 | % | ||||||||||
| Average |
5.6 | % | 7.0 | % | 7.0 | % | 6.7 | % | 6.7 | % | ||||||||||
Maturity Schedule
| Year |
Future Maturities of Debt |
Total Debt |
Average Interest Rate |
|||||||||
| Secured Debt |
Unsecured Debt |
|||||||||||
| 2003 |
$ | 308 | $ | 132,500 | $ | 132,808 | 1.8 | % | ||||
| 2004 |
1,288 | 55,000 | 56,288 | 7.9 | % | |||||||
| 2005 |
26,834 | — | 26,834 | 7.7 | % | |||||||
| 2006 |
6,633 | 50,000 | 56,633 | 7.3 | % | |||||||
| 2007 |
7,846 | — | 7,846 | 6.8 | % | |||||||
| 2008 |
— | 60,000 | 60,000 | 6.7 | % | |||||||
| 2009 |
50,000 | — | 50,000 | 7.1 | % | |||||||
| 2010 |
— | — | — | 0.0 | % | |||||||
| 2011 |
— | — | — | 0.0 | % | |||||||
| Thereafter |
— | 110,000 | 110,000 | 6.1 | % | |||||||
| Total maturities |
$ | 92,909 | $ | 407,500 | $ | 500,409 | 6.9 | % | ||||
Weighted average maturity = 8.7 years
7
Washington Real Estate Investment Trust
Capital Analysis
(In thousands, except per share amounts)
| September 30, 2003 |
June 30, 2003 |
March 31, 2003 |
December 31, 2002 |
September 30, 2002 |
||||||||||||||||
| Market Data |
||||||||||||||||||||
| Shares Outstanding |
39,354 | 39,286 | 39,184 | 39,168 | 39,146 | |||||||||||||||
| Market Price per Share |
$ | 29.00 | $ | 27.20 | $ | 25.97 | $ | 25.50 | $ | 25.38 | ||||||||||
| Equity Market Capitalization |
$ | 1,141,266 | $ | 1,068,579 | $ | 1,017,608 | $ | 998,784 | $ | 993,525 | ||||||||||
| Total Debt |
$ | 500,409 | $ | 418,201 | $ | 418,499 | $ | 402,701 | $ | 405,947 | ||||||||||
| Total Market Capitalization |
$ | 1,641,675 | $ | 1,486,778 | $ | 1,436,101 | $ | 1,401,485 | $ | 1,399,472 | ||||||||||
| Total Debt to Market Capitalization |
0.30:1 | 0.28:1 | 0.29:1 | 0.29:1 | 0.29:1 | |||||||||||||||
| Earnings to Fixed Charges(1) |
2.5 | x | 2.5 | x | 2.6 | x | 2.7 | x | 2.6 | x | ||||||||||
| Debt Service Coverage Ratio(2) |
3.6 | x | 3.4 | x | 3.6 | x | 3.7 | x | 3.6 | x | ||||||||||
| Dividend Data |
||||||||||||||||||||
| Total Dividends Paid |
$ | 14,659 | $ | 14,634 | $ | 13,812 | $ | 13,806 | $ | 13,799 | ||||||||||
| Common Dividend per Share |
$ | 0.3725 | $ | 0.3725 | $ | 0.3525 | $ | 0.3525 | $ | 0.3525 | ||||||||||
| Payout Ratio (FFO per share basis) |
73.3 | % | 74.5 | % | 71.9 | % | 69.1 | % | 73.4 | % | ||||||||||
| (1) | Earnings to Fixed Charges is computed by dividing income before (a) gain on sale of real estate; (b) interest expense, including amortization; and (c) capitalized interest by the sum of interest expense, capitalized interest and amortized debt costs. |
| (2) | Debt Service Coverage Ratio is computed by dividing income before (a) gain on sale of real estate; (b) interest income; (c) interest expense; and (d) depreciation and amortization by the sum of interest expense, including interest costs capitalized, and the amortized costs of debt issuance plus mortgage principal amortization. |
8
Washington Real Estate Investment Trust
Core Portfolio Net Operating Income (NOI) Growth & Rental Rate Growth
Q3 2003 vs. Q3 2002
Cash Basis
| Sector |
NOI Growth |
Rental Rate Growth |
||||
| Multifamily(1) |
-3.5 | % | 1.7 | % | ||
| Office Buildings |
1.1 | % | 1.4 | % | ||
| Retail Centers |
0.3 | % | 1.7 | % | ||
| Industrial / Flex Properties |
1.4 | % | 4.7 | % | ||
| Overall Core Portfolio |
0.2 | % | 1.9 | % | ||
GAAP Basis
| Sector |
NOI Growth |
Rental Rate Growth |
||||
| Multifamily(1) |
-3.7 | % | 1.6 | % | ||
| Office Buildings |
3.3 | % | 1.5 | % | ||
| Retail Centers |
-2.3 | % | 0.2 | % | ||
| Industrial / Flex Properties |
-0.8 | % | 4.2 | % | ||
| Overall Core Portfolio |
0.4 | % | 1.7 | % | ||
| (1) | NOI for Multifamily and Core Porfolio for Q3 2003 would be as follows without the impact of the 42 HUD units and 4 additional units taken off the market at The Ashby at McLean for complete renovation. After renovation, these former HUD units will be leased at market rates. |
| Cash Basis |
GAAP Basis |
|||||
| Multifamily |
-0.7 | % | -0.9 | % | ||
| Overall Core Portfolio |
0.7 | % | 0.9 | % |
9
Washington Real Estate Investment Trust
Core Portfolio Net Operating Income (NOI)
(In Thousands)
| Three Months Ended September 30, |
||||||||
| 2003 |
2002 |
|||||||
| Net income |
$ | 10,987 | $ | 11,643 | ||||
| Real estate depreciation and amortization |
9,101 | 7,303 | ||||||
| Funds From Operations |
20,088 | 18,946 | ||||||
| Add: |
||||||||
| General and administrative |
1,296 | 1,034 | ||||||
| Interest expense |
7,401 | 7,068 | ||||||
| Less: |
||||||||
| NOI for non-core properties(1) |
(1,670 | ) | (105 | ) | ||||
| Cost Segregation Fees |
— | 128 | ||||||
| Other income |
(102 | ) | (177 | ) | ||||
| Core portfolio NOI, GAAP Basis |
27,013 | 26,894 | ||||||
| Straight-line revenue, net for core properties |
(563 | ) | (417 | ) | ||||
| Effect of SFAS 141 |
88 | — | ||||||
| Core portfolio NOI, Cash Basis |
$ | 26,538 | $ | 26,477 | ||||
| Core portfolio NOI by segment: |
||||||||
| GAAP Basis: |
||||||||
| Multifamily |
$ | 4,373 | $ | 4,540 | ||||
| Office Buildings |
13,553 | 13,118 | ||||||
| Retail Centers |
4,999 | 5,116 | ||||||
| Industrial/Flex |
4,088 | 4,120 | ||||||
| $ | 27,013 | $ | 26,894 | |||||
| Cash Basis: |
||||||||
| Multifamily |
$ | 4,378 | $ | 4,538 | ||||
| Office Buildings |
13,126 | 12,979 | ||||||
| Retail Centers |
4,980 | 4,964 | ||||||
| Industrial/Flex |
4,054 | 3,996 | ||||||
| $ | 26,538 | $ | 26,477 | |||||
| (1) | Non-core properties for Q3 2003 and Q3 2002 were The Atrium Building, Fullerton Industrial Center, 718 Jefferson Street and 1776 G Street. |
10
Washington Real Estate Investment Trust
Core Portfolio & Overall Occupancy Levels by Sector
Q3 2003 vs. Q3 2002
GAAP Basis
| Core Portfolio |
All Properties |
|||||||||||
| Sector |
3rd QTR 2003 |
3rd QTR 2002 |
3rd QTR 2003 |
3rd QTR 2002 |
||||||||
| Multifamily (1) |
91.9 | % | 94.6 | % | 91.9 | % | 94.6 | % | ||||
| Office Buildings |
87.6 | % | 88.5 | % | 87.8 | % | 87.6 | % | ||||
| Retail Centers |
95.8 | % | 95.1 | % | 95.8 | % | 95.1 | % | ||||
| Industrial / Flex Properties |
88.5 | % | 93.0 | % | 88.4 | % | 93.0 | % | ||||
| Overall Portfolio (2) |
89.8 | % | 91.2 | % | 89.8 | % | 90.7 | % | ||||
| (1) | Multifamily occupancy at 9/30/03 for the Core Portfolio and All Properties would be 94.5% without the 42 HUD units and 4 additional units at The Ashby at McLean taken off the market for complete renovation. |
| (2) | Overall Portfolio occupancy at 9/30/03 for the Core Portfolio and All Properties would be 90.3% and 90.2% without the impact of the 42 former HUD units and 4 additional units at The Ashby at McLean taken off the market for complete renovation. |
11
Washington Real Estate Investment Trust
Schedule of Properties
September 30, 2003
| PROPERTIES |
LOCATION |
YEAR ACQUIRED |
YEAR CONSTRUCTED |
NET RENTABLE SQUARE FEET | ||||
| Office Buildings |
||||||||
| 1901 Pennsylvania Avenue |
Washington, DC |
1977 | 1960 | 97,000 | ||||
| 51 Monroe Street |
Rockville, MD |
1979 | 1975 | 210,000 | ||||
| 7700 Leesburg Pike |
Falls Church, VA |
1990 | 1976 | 147,000 | ||||
| 515 King Street |
Alexandria, VA |
1992 | 1966 | 78,000 | ||||
| The Lexington Building |
Rockville, MD |
1993 | 1970 | 46,000 | ||||
| The Saratoga Building |
Rockville, MD |
1993 | 1977 | 59,000 | ||||
| Brandywine Center |
Rockville, MD |
1993 | 1969 | 35,000 | ||||
| Tycon Plaza II |
Vienna, VA |
1994 | 1981 | 127,000 | ||||
| Tycon Plaza III |
Vienna, VA |
1994 | 1978 | 151,000 | ||||
| 6110 Executive Boulevard |
Rockville, MD |
1995 | 1971 | 199,000 | ||||
| 1220 19th Street |
Washington, DC |
1995 | 1976 | 102,000 | ||||
| Maryland Trade Center I |
Greenbelt, MD |
1996 | 1981 | 190,000 | ||||
| Maryland Trade Center II |
Greenbelt, MD |
1996 | 1984 | 158,000 | ||||
| 1600 Wilson Boulevard |
Arlington, VA |
1997 | 1973 | 166,000 | ||||
| 7900 Westpark Drive |
McLean, VA |
1997 | 1972/1986/19991 | 526,000 | ||||
| 8230 Boone Boulevard |
Vienna, VA |
1998 | 1981 | 58,000 | ||||
| Woodburn Medical Park I |
Annandale, VA |
1998 | 1984 | 71,000 | ||||
| Woodburn Medical Park II |
Annandale, VA |
1998 | 1988 | 96,000 | ||||
| 600 Jefferson Plaza |
Rockville, MD |
1999 | 1985 | 115,000 | ||||
| 1700 Research Boulevard |
Rockville, MD |
1999 | 1982 | 103,000 | ||||
| Parklawn Plaza |
Rockville, MD |
1999 | 1986 | 40,000 | ||||
| Wayne Plaza |
Silver Spring, MD |
2000 | 1970 | 91,000 | ||||
| Courthouse Square |
Alexandria, VA |
2000 | 1979 | 113,000 | ||||
| One Central Plaza |
Rockville, MD |
2001 | 1974 | 267,000 | ||||
| The Atrium Building |
Rockville, MD |
2002 | 1980 | 81,000 | ||||
| 1776 G Street |
Washington, DC |
2003 | 1979 | 262,000 | ||||
| Subtotal |
3,588,000 | |||||||
| Retail Centers |
||||||||
| Takoma Park |
Takoma Park, MD |
1963 | 1962 | 51,000 | ||||
| Westminster |
Westminster, MD |
1972 | 1969 | 146,000 | ||||
| Concord Centre |
Springfield, VA |
1973 | 1960 | 76,000 | ||||
| Wheaton Park |
Wheaton, MD |
1977 | 1967 | 72,000 | ||||
| Bradlee |
Alexandria, VA |
1984 | 1955 | 168,000 | ||||
| Chevy Chase Metro Plaza |
Washington, DC |
1985 | 1975 | 50,000 | ||||
| Montgomery Village Center |
Gaithersburg, MD |
1992 | 1969 | 198,000 | ||||
| Shoppes of Foxchase |
Alexandria, VA |
1994 | 1960 | 128,000 | ||||
| Frederick County Square |
Frederick, MD |
1995 | 1973 | 235,000 | ||||
| 800 S. Washington Street2 |
Alexandria, VA |
1998 | 1955/1959 | 56,000 | ||||
| 1620 Wilson Boulevard |
Arlington, VA |
2002 | 1959 | 5,000 | ||||
| Centre at Hagerstown |
Hagerstown, MD |
2002 | 2000 | 334,000 | ||||
| Subtotal |
1,519,000 | |||||||
| 1 | A 49,000 square foot addition to 7900 Westpark Drive was completed in September 1999. |
| 2 | South Washington Street includes 5,000 square feet for the May 2003 acqusition of 718 E. Jefferson Street. 718 Jefferson Street was acquired to complete WRIT’s ownership of the entire block of 800 S. Washington Street. The surface parking lot on this block is now in the preliminary stages of development. |
12
Washington Real Estate Investment Trust
Schedule of Properties (Cont.)
September 30, 2003
| PROPERTIES |
LOCATION |
YEAR ACQUIRED |
YEAR CONSTRUCTED |
NET RENTABLE* SQUARE FEET | ||||
| Multifamily Buildings / # units |
||||||||
| 3801 Connecticut Avenue / 307 |
Washington, DC |
1963 | 1951 | 177,000 | ||||
| Roosevelt Towers / 190 |
Falls Church, VA |
1965 | 1964 | 168,000 | ||||
| Country Club Towers / 227 |
Arlington, VA |
1969 | 1965 | 159,000 | ||||
| Park Adams / 200 |
Arlington, VA |
1969 | 1959 | 172,000 | ||||
| Munson Hill Towers / 279 |
Falls Church, VA |
1970 | 1963 | 259,000 | ||||
| The Ashby at McLean / 250 |
McLean, VA |
1996 | 1982 | 244,000 | ||||
| Walker House Apartments / 196 |
Gaithersburg, MD |
1996 | 1971 | 145,000 | ||||
| Bethesda Hills Apartments / 194 |
Bethesda, MD |
1997 | 1986 | 226,000 | ||||
| Avondale / 236 |
Laurel, MD |
1999 | 1987 | 170,000 | ||||
| Subtotal (2,079 units) |
1,720,000 | |||||||
| Industrial Distribution / Flex Properties |
||||||||
| Fullerton Business Center |
Springfield, VA |
1985 | 1980 | 104,000 | ||||
| Pepsi-Cola Distribution Center |
Forestville, MD |
1987 | 1971 | 69,000 | ||||
| Charleston Business Center |
Rockville, MD |
1993 | 1973 | 85,000 | ||||
| Tech 100 Industrial Park |
Elkridge, MD |
1995 | 1990 | 167,000 | ||||
| Crossroads Distribution Center |
Elkridge, MD |
1995 | 1987 | 85,000 | ||||
| The Alban Business Center |
Springfield, VA |
1996 | 1981/1982 | 87,000 | ||||
| The Earhart Building |
Chantilly, VA |
1996 | 1987 | 90,000 | ||||
| Ammendale Technology Park I |
Beltsville, MD |
1997 | 1985 | 167,000 | ||||
| Ammendale Technology Park II |
Beltsville, MD |
1997 | 1986 | 108,000 | ||||
| Pickett Industrial Park |
Alexandria, VA |
1997 | 1973 | 246,000 | ||||
| Northern Virginia Industrial Park |
Lorton, VA |
1998 | 1968/1991 | 788,000 | ||||
| 8900 Telegraph Road |
Lorton, VA |
1998 | 1985 | 32,000 | ||||
| Dulles South IV |
Chantilly, VA |
1999 | 1988 | 83,000 | ||||
| Sully Square |
Chantilly, VA |
1999 | 1986 | 95,000 | ||||
| Amvax |
Beltsville, MD |
1999 | 1986 | 31,000 | ||||
| Sullyfield Center |
Chantilly, VA |
2001 | 1985 | 245,000 | ||||
| Fullerton Industrial Center |
Springfield, VA |
2003 | 1980 | 137,000 | ||||
| Subtotal |
2,619,000 | |||||||
| TOTAL |
9,446,000 | |||||||
| * | Multifamily buildings are presented in gross square feet. |
13
Washington Real Estate Investment Trust
Commercial Leasing Summary
Three months ended September 30, 2003
| 3rd Quarter 2003 |
YTD 2003 | |||
| Gross Leasing Square Footage |
||||
| Office Buildings |
161,239 | 659,519 | ||
| Retail Centers |
62,500 | 167,933 | ||
| Industrial Centers |
188,789 | 383,897 | ||
| Total |
412,528 | 1,211,349 | ||
| Weighted Average Term (yrs) |
||||
| Office Buildings |
3.7 | 4.7 | ||
| Retail Centers |
2.8 | 8.2 | ||
| Industrial Centers |
2.8 | 3.3 | ||
| Total |
3.2 | 4.7 | ||
| GAAP |
CASH |
GAAP |
CASH |
|||||||||||||
| Rental Rate Increases: |
||||||||||||||||
| Rate on expiring leases |
||||||||||||||||
| Office Buildings |
$ | 25.50 | $ | 26.01 | $ | 24.33 | $ | 25.14 | ||||||||
| Retail Centers |
12.37 | 13.38 | 12.14 | 12.58 | ||||||||||||
| Industrial Centers |
8.11 | 8.49 | 7.65 | 7.92 | ||||||||||||
| Total |
$ | 15.55 | $ | 16.08 | $ | 17.36 | $ | 17.94 | ||||||||
| Rate on new and renewal leases |
||||||||||||||||
| Office Buildings |
$ | 26.06 | $ | 24.96 | $ | 26.87 | $ | 25.57 | ||||||||
| Retail Centers |
14.23 | 13.71 | 16.43 | 15.50 | ||||||||||||
| Industrial Centers |
9.01 | 8.70 | 8.46 | 8.11 | ||||||||||||
| Total |
$ | 16.47 | $ | 15.81 | $ | 19.59 | $ | 18.64 | ||||||||
| Percentage Increase |
||||||||||||||||
| Office Buildings |
2.20 | % | -4.04 | % | 10.44 | % | 1.71 | % | ||||||||
| Retail Centers |
15.04 | % | 2.47 | % | 35.34 | % | 23.21 | % | ||||||||
| Industrial Centers |
11.10 | % | 2.47 | % | 10.59 | % | 2.40 | % | ||||||||
| Total |
5.92 | % | -1.68 | % | 12.85 | % | 3.90 | % | ||||||||
| Total Dollars |
Square Foot |
Total Dollars |
Square Foot |
|||||||||||||
| Tenant Improvements and Leasing Costs |
||||||||||||||||
| Office Buildings |
$ | 2,416,072 | $ | 14.98 | $ | 11,385,231 | $ | 17.26 | ||||||||
| Retail Centers |
249,897 | 4.00 | 614,122 | 3.66 | ||||||||||||
| Industrial Centers |
699,642 | 3.71 | 1,348,215 | 3.51 | ||||||||||||
| Total |
$ | 3,365,611 | $ | 8.16 | $ | 13,347,568 | $ | 11.02 | ||||||||
14
Washington Real Estate Investment Trust
10 Largest Tenants - Based on Annualized Base Rent
September 30, 2003
| Tenant |
Number of Buildings |
Weighted Average Remaining Lease Term in Months |
Percentage of Aggregate Portfolio Annualized Rent |
Aggregate Rentable Square Feet |
Percentage of Aggregate Occupied Square Feet |
|||||||
| World Bank |
1 | 32 | 3.78 | % | 118,748 | 1.74 | % | |||||
| Sunrise Senior Living, Inc. |
1 | 120 | 3.58 | % | 166,548 | 2.44 | % | |||||
| Lockheed Corporation |
2 | 9 | 3.05 | % | 166,481 | 2.44 | % | |||||
| General Services Administration |
7 | 25 | 2.69 | % | 268,349 | 3.93 | % | |||||
| Xerox Corporation |
1 | 11 | 2.39 | % | 90,994 | 1.33 | % | |||||
| SunTrust Bank |
4 | 17 | 2.33 | % | 104,290 | 1.53 | % | |||||
| Sun Microsystems, Inc. |
1 | 39 | 2.32 | % | 110,184 | 1.61 | % | |||||
| Northrup Grumman |
3 | 17 | 2.00 | % | 116,607 | 1.71 | % | |||||
| International Monetary Fund |
1 | 27 | 1.84 | % | 59,146 | 0.87 | % | |||||
| George Washington University |
3 | 54 | 1.65 | % | 68,164 | 1.00 | % | |||||
| Total/Weighted Average |
25.63 | % | 1,269,511 | 18.58 | % | |||||||
15
Washington Real Estate Investment Trust
Lease Expirations
September 30, 2003
| Year |
Number of Leases |
Rentable Square Feet |
Percent of Rentable Square Feet |
Annualized Base Rent |
Average Rental Rate |
Percent of Annualized Rent |
||||||||||
| Office: |
||||||||||||||||
| 2003 |
43 | 133,231 | 4.4 | % | $ | 3,522,144 | $ | 26.44 | 4.3 | % | ||||||
| 2004 |
119 | 849,613 | 28.1 | % | 21,626,688 | 25.45 | 26.7 | % | ||||||||
| 2005 |
114 | 432,061 | 14.3 | % | 13,433,409 | 31.09 | 16.6 | % | ||||||||
| 2006 |
99 | 469,209 | 15.5 | % | 12,143,514 | 25.88 | 15.0 | % | ||||||||
| 2007 |
50 | 238,218 | 7.9 | % | 6,017,032 | 25.26 | 7.4 | % | ||||||||
| 2008 and thereafter |
122 | 900,702 | 29.9 | % | 24,377,604 | 27.07 | 30.1 | % | ||||||||
| 547 | 3,023,034 | 100.0 | % | $ | 81,120,392 | $ | 26.83 | 100.0 | % | |||||||
| Retail: |
||||||||||||||||
| 2003 |
11 | 41,923 | 2.9 | % | $ | 479,544 | $ | 11.44 | 2.2 | % | ||||||
| 2004 |
41 | 135,940 | 9.6 | % | 1,992,260 | 14.66 | 9.2 | % | ||||||||
| 2005 |
44 | 199,786 | 14.0 | % | 3,435,106 | 17.19 | 15.8 | % | ||||||||
| 2006 |
46 | 150,971 | 10.6 | % | 2,865,004 | 18.98 | 13.2 | % | ||||||||
| 2007 |
38 | 127,739 | 9.0 | % | 2,815,739 | 22.04 | 12.9 | % | ||||||||
| 2008 and thereafter |
92 | 765,800 | 53.7 | % | 10,157,372 | 13.26 | 46.7 | % | ||||||||
| 272 | 1,422,159 | 100.0 | % | $ | 21,745,023 | $ | 15.29 | 100.0 | % | |||||||
| Industrial: |
||||||||||||||||
| 2003 |
12 | 115,260 | 5.0 | % | $ | 1,197,798 | $ | 10.39 | 6.6 | % | ||||||
| 2004 |
49 | 474,609 | 20.8 | % | 3,449,322 | 7.27 | 18.9 | % | ||||||||
| 2005 |
45 | 515,920 | 22.6 | % | 3,732,890 | 7.24 | 20.5 | % | ||||||||
| 2006 |
42 | 434,084 | 19.0 | % | 3,951,040 | 9.10 | 21.7 | % | ||||||||
| 2007 |
17 | 214,361 | 9.4 | % | 1,613,937 | 7.53 | 8.9 | % | ||||||||
| 2008 and thereafter |
34 | 528,972 | 23.3 | % | 4,264,133 | 8.06 | 23.4 | % | ||||||||
| 199 | 2,283,206 | 100.0 | % | $ | 18,209,120 | $ | 7.98 | 100.0 | % | |||||||
| Total: |
||||||||||||||||
| 2003 |
66 | 290,414 | 4.3 | % | $ | 5,199,487 | $ | 17.90 | 4.3 | % | ||||||
| 2004 |
209 | 1,460,162 | 21.7 | % | 27,068,271 | 18.54 | 22.4 | % | ||||||||
| 2005 |
203 | 1,147,767 | 17.1 | % | 20,601,405 | 17.95 | 17.0 | % | ||||||||
| 2006 |
187 | 1,054,264 | 15.7 | % | 18,959,557 | 17.98 | 15.7 | % | ||||||||
| 2007 |
105 | 580,318 | 8.6 | % | 10,446,709 | 18.00 | 8.6 | % | ||||||||
| 2008 and thereafter |
248 | 2,195,474 | 32.6 | % | 38,799,107 | 17.67 | 32.0 | % | ||||||||
| 1,018 | 6,728,399 | 100.0 | % | $ | 121,074,535 | $ | 17.99 | 100.0 | % | |||||||
| * | Annualized Rent is as of September 30, 2003 rental revenue (cash basis) multiplied by 12. |
16
Washington Real Estate Investment Trust
2003 Acquisition Summary
(Dollars in thousands)
| Acquisition Date |
Square Feet |
Occupancy Percentage at Acquisition |
September 30, 2003 Leased Percentage |
Investment | |||||||||
| Fullerton Industrial Center |
1/24/2003 | 137,000 | 100 | % | 87 | % | $ | 10,600 | |||||
| 718 Jefferson Street(1) |
5/29/2003 | 5,000 | 100 | % | 100 | % | $ | 1,100 | |||||
| 1776 G Street |
8/6/2003 | 262,000 | 88 | % | 88 | % | $ | 84,750 | |||||
| (1) 718 Jefferson Street in Alexandria, Virginia, was acquired to complete WRIT’s ownership of the entire block of 800 S. Washington Street. The surface parking lot on this block is now in the preliminary stages of development. | |||||||||||||
|
Subsequent Event:
| |||||||||||||
| Prosperity Medical Center |
10/9/2003 | 255,000 | 98 | % | N/A | $ | 78,000 | ||||||
17
18
Washington Real Estate Investment Trust
Reporting Definitions
September 30, 2003
Annualized base rent (ABR) is calculated as monthly base rent (cash basis) per the lease, as of the reporting period, multiplied by 12.
Debt to total market capitalization is total debt from the balance sheet divided by the sum of total debt from the balance sheet plus the market value of shares outstanding at the end of the period.
EBITDA is earnings before interest, taxes, depreciation and amortization.
Earnings to Fixed Charges is computed by dividing income before (a) gain on sale of real estate; (b) interest expense, including amortization; and (c) capitalized interest by the sum of interest expense, capitalized interest and amortized debt costs.
Debt Service Coverage Ratio is computed by dividing income before (a) gain on sale of real estate; (b) interest income; (c) interest expense; and (d) depreciation and amortization by the sum of interest expense, including interest costs capitalized, and the amortized costs of debt issuance plus mortgage principal amortization.
Funds from operations (FFO) - The National Association of Real Estate Investment Trusts, Inc. (NAREIT) defines FFO (April, 2002 White Paper) as net income (computed in accordance with generally accepted accounting principles (GAAP)) excluding gains (or losses) from sales of property plus real estate depreciation and amortization.
Funds Available for Distribution (FAD) is calculated by subtracting from FFO recurring expenditures, tenant improvements and leasing costs, that are capitalized and amortized and are necessary to maintain our properties and revenue stream and straight line rents, then adding non-real estate depreciation and amortization.
Recurring capital expenditures represents non-accretive building improvements and leasing costs required to maintain current revenues. Recurring capital expenditures do not include acquisition capital that was taken into consideration when underwriting the purchase of a building or which are incurred to bring a building up to “operating standard.”
Rent increases on renewals and rollovers are calculated as the difference, weighted by square feet, of the net ABR due to the first month after a term commencement date and the net ABR due the last month prior to the termination date of the former tenant’s term.
Core portfolio properties include all properties that were owned for the entirety of the current and prior year reporting periods.
Core portfolio net operating income (NOI) growth is the change in the NOI of the core portfolio properties from the prior reporting period to the current reporting period.
19