Exhibit 99.2
Supplemental Information
December 31, 2004
| 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
December 31, 2004
| 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) Summary |
10 | |
| Core Portfolio Net Operating Income (NOI) Detail |
11 | |
| Core Portfolio & Overall Occupancy Levels by Sector |
12 | |
| Schedule of Properties |
13 | |
| Schedule of Properties (continued) |
14 | |
| Commercial Leasing Summary |
15 | |
| Commercial Leasing Summary Excluding Properties Held for Sale |
16 | |
| 10 Largest Tenants - Based on Annualized Base Rent |
17 | |
| Lease Expirations as of December 31, 2004 |
18 | |
| 2004 Acquisition and Development Summary |
19 | |
| 12, 36 and 60 Month Total Returns Chart |
20 | |
| Reporting Definitions |
21 | |
Washington Real Estate Investment Trust
About the Trust
Mission Statement
Washington Real Estate Investment Trust, founded in 1960 and headquarted 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
We are a self-administered, self-managed, equity real estate investment trust investing in income-producing properties in the greater Washington-Baltimore region. We own a diversified portfolio of 66 properties consisting of 11 retail centers, 27 office properties1, 19 industrial properties and 9 multifamily properties.
Our dividends have increased every year for 34 consecutive years and our Funds From Operations ("FFO") per share has increased every year for 32 consecutive years. WRIT shares are publicly traded on the New York Stock Exchange (symbol: WRE).
| 1 | Reflects the February 2005 disposition of 7700 Leesburg, Tycon Plaza II and Tycon Plaza III. |
Certain statements in the supplemental disclosures which follow 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, the timing and pricing of lease transactions and changes in general and local economic and real estate market conditions, and other risks and uncertainties detailed from time to time in our filings with the SEC, including our 2003 Form 10-K. We assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.
2
Washington Real Estate Investment Trust
Consolidated Statements of Operations
(In thousands, except per share data)
(unaudited)
| Twelve Months Ended |
Three Months Ended |
|||||||||||||||||||||||||||
| OPERATING RESULTS |
12/31/04 |
12/31/03 |
12/31/04 |
09/30/04 |
06/30/04 |
03/31/04 |
12/31/03 |
|||||||||||||||||||||
| Real estate rental revenue |
$ | 172,067 | $ | 154,004 | $ | 43,828 | $ | 43,351 | $ | 42,624 | $ | 42,264 | $ | 41,713 | ||||||||||||||
| Real estate expenses |
(51,394 | ) | (44,689 | ) | (12,984 | ) | (13,165 | ) | (12,604 | ) | (12,641 | ) | (11,828 | ) | ||||||||||||||
| 120,673 | 109,315 | 30,844 | 30,186 | 30,020 | 29,623 | 29,885 | ||||||||||||||||||||||
| Real estate depreciation and amortization |
(39,441 | ) | (33,622 | ) | (10,315 | ) | (10,051 | ) | (9,651 | ) | (9,424 | ) | (9,872 | ) | ||||||||||||||
| Income from real estate |
81,232 | 75,693 | 20,529 | 20,135 | 20,369 | 20,199 | 20,013 | |||||||||||||||||||||
| Other income |
327 | 414 | 88 | 59 | 115 | 65 | 72 | |||||||||||||||||||||
| Interest expense |
(34,500 | ) | (30,040 | ) | (8,551 | ) | (8,760 | ) | (8,614 | ) | (8,575 | ) | (8,011 | ) | ||||||||||||||
| General and administrative |
(6,194 | ) | (5,275 | ) | (1,622 | ) | (1,616 | ) | (1,727 | ) | (1,229 | ) | (1,583 | ) | ||||||||||||||
| Income from continuing operations |
40,865 | 40,792 | 10,444 | 9,818 | 10,143 | 10,460 | 10,491 | |||||||||||||||||||||
| Discontinued Operations: |
||||||||||||||||||||||||||||
| Income (loss) from operations of properties sold or held for sale |
3,670 | 4,095 | 910 | 979 | 939 | 842 | 907 | |||||||||||||||||||||
| Gain on sale of real estate investment |
1,029 | — | 1,029 | — | — | — | — | |||||||||||||||||||||
| Income (loss) from discontinued operations |
4,699 | 4,095 | 1,939 | 979 | 939 | 842 | 907 | |||||||||||||||||||||
| Net Income |
$ | 45,564 | $ | 44,887 | $ | 12,383 | $ | 10,797 | $ | 11,082 | $ | 11,302 | $ | 11,398 | ||||||||||||||
| Per Share Data | ||||||||||||||||||||||||||||
| Net Income |
$ | 1.09 | $ | 1.13 | $ | 0.30 | $ | 0.26 | $ | 0.26 | $ | 0.27 | $ | 0.28 | ||||||||||||||
| Fully diluted weighted average shares outstanding |
41,863 | 39,600 | 41,911 | 41,883 | 41,838 | 41,820 | 40,121 | |||||||||||||||||||||
| Percentage of Revenues: |
||||||||||||||||||||||||||||
| Real estate expenses |
29.9 | % | 29.0 | % | 29.6 | % | 30.4 | % | 29.6 | % | 29.9 | % | 28.4 | % | ||||||||||||||
| General and administrative |
3.6 | % | 3.4 | % | 3.7 | % | 3.7 | % | 4.1 | % | 2.9 | % | 3.8 | % | ||||||||||||||
| Ratios: |
||||||||||||||||||||||||||||
| EBITDA / Interest Expense |
3.5 | x | 3.7 | x | 3.6 | x | 3.4 | x | 3.5 | x | 3.5 | x | 3.7 | x | ||||||||||||||
| Income from continuing operations/Total real estate revenue |
23.7 | % | 26.5 | % | 23.8 | % | 22.6 | % | 23.8 | % | 24.7 | % | 25.2 | % | ||||||||||||||
| Net income/Total real estate revenue |
26.5 | % | 29.1 | % | 28.3 | % | 24.9 | % | 26.0 | % | 26.7 | % | 27.3 | % | ||||||||||||||
3
Washington Real Estate Investment Trust
Consolidated Balance Sheets
(In thousands)
(unaudited)
| December 31, 2004 |
September 30, 2004 |
June 30, 2004 |
March 31, 2004 |
December 31, 2003 |
||||||||||||||||
| Assets |
||||||||||||||||||||
| Land |
$ | 210,647 | $ | 204,456 | $ | 202,453 | $ | 201,578 | $ | 199,808 | ||||||||||
| Building and improvements |
906,228 | 847,146 | 820,917 | 815,566 | 799,932 | |||||||||||||||
| Total real estate, at cost |
1,116,875 | 1,051,602 | 1,023,370 | 1,017,144 | 999,740 | |||||||||||||||
| Accumulated depreciation |
(201,758 | ) | (192,338 | ) | (183,339 | ) | (174,665 | ) | (166,095 | ) | ||||||||||
| Total investment in real estate, net |
915,117 | 859,264 | 840,031 | 842,479 | 833,645 | |||||||||||||||
| Investment in real estate sold or held for sale, net |
34,158 | 41,091 | 41,315 | 41,492 | 41,582 | |||||||||||||||
| Cash and cash equivalents |
5,950 | 3,127 | 8,336 | 6,064 | 5,486 | |||||||||||||||
| Rents and other receivables, net of allowance for doubtful accounts |
21,423 | 21,098 | 20,529 | 18,938 | 17,956 | |||||||||||||||
| Prepaid expenses and other assets |
35,066 | 32,911 | 26,499 | 28,328 | 28,686 | |||||||||||||||
| Other assets related to properties sold or held for sale |
679 | 711 | 756 | 727 | 734 | |||||||||||||||
| Total Assets |
$ | 1,012,393 | $ | 958,202 | $ | 937,466 | $ | 938,028 | $ | 928,089 | ||||||||||
| Liabilities and Shareholders’ Equity |
||||||||||||||||||||
| Accounts payable and other liabilities |
$ | 22,586 | $ | 21,170 | $ | 22,475 | $ | 17,250 | $ | 18,922 | ||||||||||
| Advance rents |
5,108 | 4,882 | 4,947 | 5,321 | 4,903 | |||||||||||||||
| Tenant security deposits |
5,784 | 5,718 | 5,621 | 5,678 | 5,562 | |||||||||||||||
| Other liabilities related to properties sold or held for sale |
848 | 1,208 | 1,461 | 1,311 | 1,171 | |||||||||||||||
| Mortgage notes payable |
173,429 | 150,904 | 141,271 | 141,752 | 142,182 | |||||||||||||||
| Lines of credit/short-term note payable |
117,000 | 30,850 | 13,250 | 13,250 | — | |||||||||||||||
| Notes payable |
320,000 | 375,000 | 375,000 | 375,000 | 375,000 | |||||||||||||||
| Total Liabilities |
644,755 | 589,732 | 564,025 | 559,562 | 547,740 | |||||||||||||||
| Minority interest |
1,629 | 1,624 | 1,615 | 1,609 | 1,601 | |||||||||||||||
| Shareholders’ Equity |
||||||||||||||||||||
| Shares of beneficial interest, $0.01 par value; |
$ | 420 | $ | 418 | $ | 418 | $ | 418 | $ | 416 | ||||||||||
| Additional paid-in capital |
405,029 | 401,006 | 400,713 | 400,582 | 396,462 | |||||||||||||||
| Distributions in excess of net income |
(35,544 | ) | (31,444 | ) | (25,840 | ) | (20,528 | ) | (16,272 | ) | ||||||||||
| Less: Deferred Compensation on restricted shares |
(3,896 | ) | (3,134 | ) | (3,465 | ) | (3,615 | ) | (1,858 | ) | ||||||||||
| Total Shareholders’ Equity |
366,009 | 366,846 | 371,826 | 376,857 | 378,748 | |||||||||||||||
| Total Liabilities and Shareholders’ Equity |
$ | 1,012,393 | $ | 958,202 | $ | 937,466 | $ | 938,028 | $ | 928,089 | ||||||||||
| Total Debt / Total Market Capitalization |
0.30:1 | 0.31:1 | 0.30:1 | 0.28:1 | 0.30:1 | |||||||||||||||
Note: Certain prior quarter amounts have been reclassified to conform to the current quarter presentation.
4
Washington Real Estate Investment Trust
Funds From Operations and Funds Available for Distribution
(In thousands, except per share data)
(unaudited)
| Twelve Months Ended |
Three Months Ended |
|||||||||||||||||||||||||||
| 12/31/04 |
12/31/03 |
12/31/04 |
09/30/04 |
06/30/04 |
03/31/04 |
12/31/03 |
||||||||||||||||||||||
| Funds From Operations(1) |
||||||||||||||||||||||||||||
| Net Income |
$ | 45,564 | $ | 44,887 | $ | 12,383 | $ | 10,797 | $ | 11,082 | $ | 11,302 | $ | 11,398 | ||||||||||||||
| Real estate depreciation and amortization |
39,441 | 33,622 | 10,315 | 10,051 | 9,651 | 9,424 | 9,872 | |||||||||||||||||||||
| Discontinued operations: |
||||||||||||||||||||||||||||
| Gain on property disposed |
(1,029 | ) | — | (1,029 | ) | — | — | — | — | |||||||||||||||||||
| Real estate depreciation and amortization |
1,652 | 2,133 | 270 | 464 | 470 | 448 | 464 | |||||||||||||||||||||
| Funds From Operations (FFO) |
85,628 | 80,642 | 21,939 | 21,312 | 21,203 | 21,174 | 21,734 | |||||||||||||||||||||
| FFO per share - basic |
$ | 2.06 | $ | 2.05 | $ | 0.53 | $ | 0.51 | $ | 0.51 | $ | 0.51 | $ | 0.55 | ||||||||||||||
| FFO per share - fully diluted |
$ | 2.05 | $ | 2.04 | $ | 0.52 | $ | 0.51 | $ | 0.51 | $ | 0.51 | $ | 0.54 | ||||||||||||||
| Funds Available for Distribution(2) |
||||||||||||||||||||||||||||
| Accretive: |
||||||||||||||||||||||||||||
| Tenant Improvements (3) |
(9,432 | ) | (9,506 | ) | (3,057 | ) | (1,561 | ) | (2,022 | ) | (2,792 | ) | (4,958 | ) | ||||||||||||||
| Leasing Commissions Capitalized |
(2,713 | ) | (4,241 | ) | (923 | ) | (533 | ) | (624 | ) | (633 | ) | (935 | ) | ||||||||||||||
| Non-Accretive: |
||||||||||||||||||||||||||||
| Recurring Capital Improvements |
(9,068 | ) | (6,548 | ) | (3,009 | ) | (2,274 | ) | (2,357 | ) | (1,428 | ) | (2,887 | ) | ||||||||||||||
| Straight-Line Rent, Net |
(2,129 | ) | (1,689 | ) | (610 | ) | (434 | ) | (520 | ) | (565 | ) | (395 | ) | ||||||||||||||
| Rent abatement amortization |
1,216 | 933 | 308 | 331 | 277 | 300 | 220 | |||||||||||||||||||||
| Non-real estate depreciation and amortization |
1,698 | 1,844 | 400 | 424 | 426 | 448 | 448 | |||||||||||||||||||||
| Amortization of lease intangibles |
(12 | ) | (5 | ) | 51 | 8 | (6 | ) | (65 | ) | (35 | ) | ||||||||||||||||
| Funds Available for Distribution (FAD) |
$ | 65,188 | $ | 61,430 | $ | 15,099 | $ | 17,273 | $ | 16,377 | $ | 16,439 | $ | 13,192 | ||||||||||||||
| Total Dividends Paid |
$ | 64,836 | $ | 58,604 | 16,483 | $ | 16,401 | $ | 16,394 | $ | 15,558 | $ | 15,499 | |||||||||||||||
| Average shares - basic |
41,642 | 39,399 | 41,711 | 41,648 | 41,638 | 41,572 | 39,862 | |||||||||||||||||||||
| Average shares - fully diluted |
41,863 | 39,600 | 41,911 | 41,883 | 41,838 | 41,820 | 40,121 | |||||||||||||||||||||
| (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 real estate depreciation and amortization. We consider 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 FFO more accurately provides investors an indication of our 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 (1) recurring expenditures, tenant improvements and leasing costs, that are capitalized and amortized and are necessary to maintain our properties and revenue stream and (2) straight line rents, then adding (3) non-real estate depreciation and amortization and (4) non-cash amortization of rent abatements, and adding or subtracting the amortization of lease intangibles as appropriate. FAD is included herein, because we consider it to be a measure of a REIT’s ability to incur and service debt and to distribute dividends to its shareholders. FAD is a non-GAAP and non-standardized measure, and may be calculated differently by other REITs. |
5
Washington Real Estate Investment Trust
Earnings Before Interest Taxes Depreciation and Amortization (EBITDA)
(In thousands)
(unaudited)
| Three Months Ended |
||||||||||||||||||||
| 12/31/04 |
09/30/04 |
06/30/04 |
03/31/04 |
12/31/03 |
||||||||||||||||
| EBITDA(1) |
||||||||||||||||||||
| Net income |
$ | 12,383 | $ | 10,797 | $ | 11,082 | $ | 11,302 | $ | 11,398 | ||||||||||
| Add: |
||||||||||||||||||||
| Interest expense |
8,551 | 8,760 | 8,614 | 8,575 | 8,011 | |||||||||||||||
| Real estate depreciation and amortization |
10,585 | 10,515 | 10,121 | 9,872 | 10,336 | |||||||||||||||
| Non-real estate depreciation |
95 | 103 | 111 | 114 | 117 | |||||||||||||||
| Less: |
||||||||||||||||||||
| Gain on sale of real estate |
(1,029 | ) | — | — | — | — | ||||||||||||||
| Other income |
(88 | ) | (59 | ) | (115 | ) | (65 | ) | (72 | ) | ||||||||||
| EBITDA |
$ | 30,497 | $ | 30,116 | $ | 29,813 | $ | 29,798 | $ | 29,790 | ||||||||||
| (1) | EBITDA is earnings before interest, taxes, depreciation and amortization. We consider 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, except per share amounts)
| December 31, 2004 |
September 30, 2004 |
June 30, 2004 |
March 31, 2004 |
December 31, 2003 |
||||||||||||||||
| Balances Outstanding |
||||||||||||||||||||
| Secured |
||||||||||||||||||||
| Conventional fixed rate |
$ | 173,429 | $ | 150,904 | $ | 141,271 | $ | 141,752 | $ | 142,182 | ||||||||||
| Secured total |
173,429 | 150,904 | 141,271 | 141,752 | 142,182 | |||||||||||||||
| Unsecured |
||||||||||||||||||||
| Fixed rate bonds and notes |
320,000 | 375,000 | 375,000 | 375,000 | 375,000 | |||||||||||||||
| Credit facility |
117,000 | 30,850 | 13,250 | 13,250 | — | |||||||||||||||
| Unsecured total |
437,000 | 405,850 | 388,250 | 388,250 | 375,000 | |||||||||||||||
| Total |
$ | 610,429 | $ | 556,754 | $ | 529,521 | $ | 530,002 | $ | 517,182 | ||||||||||
| Average Interest Rates |
||||||||||||||||||||
| Secured |
||||||||||||||||||||
| Conventional fixed rate |
6.6 | % | 6.6 | % | 6.6 | % | 6.6 | % | 6.6 | % | ||||||||||
| Secured total |
6.6 | % | 6.6 | % | 6.6 | % | 6.6 | % | 6.6 | % | ||||||||||
| Unsecured |
||||||||||||||||||||
| Fixed rate bonds |
6.2 | % | 6.5 | % | 6.5 | % | 6.5 | % | 6.5 | % | ||||||||||
| Credit facilities |
3.1 | % | 2.4 | % | 1.8 | % | 1.8 | % | 0.0 | % | ||||||||||
| Unsecured total |
5.4 | % | 6.2 | % | 6.3 | % | 6.3 | % | 6.5 | % | ||||||||||
| Average |
5.7 | % | 6.3 | % | 6.4 | % | 6.4 | % | 6.5 | % | ||||||||||
| Maturity Schedule |
||||||||||||||||||||
| Future Maturities of Debt |
Average Interest |
||||||||||||||
| Year |
Secured Debt |
Unsecured Debt |
Credit Facilities |
Total Debt |
|||||||||||
| 2005 | $ | 28,352 | $ | — | $ | 50,000 | $ | 78,352 | 4.8 | % | |||||
| 2006 | 8,231 | 50,000 | — | 58,231 | 7.3 | % | |||||||||
| 2007 | 9,528 | — | 67,000 | 76,528 | 3.4 | % | |||||||||
| 2008 | 1,763 | 60,000 | — | 61,763 | 6.7 | % | |||||||||
| 2009 | 51,863 | — | — | 51,863 | 7.1 | % | |||||||||
| 2010 | 1,961 | — | — | 1,961 | 6.2 | % | |||||||||
| 2011 | 11,107 | — | — | 11,107 | 6.8 | % | |||||||||
| 2012 | 18,664 | — | — | 18,664 | 6.8 | % | |||||||||
| 2013 | 41,960 | 60,000 | — | 101,960 | 5.3 | % | |||||||||
| Thereafter | — | 150,000 | — | 150,000 | 6.0 | % | |||||||||
| Total maturities | $ | 173,429 | $ | 320,000 | $ | 117,000 | $ | 610,429 | 5.7 | % | |||||
Weighted average maturity = 6.5 years
7
Washington Real Estate Investment Trust
Capital Analysis
(In thousands, except per share amounts)
| December 31, 2004 |
September 30, 2004 |
June 30, 2004 |
March 31, 2004 |
December 31, 2003 |
||||||||||||||||
| Market Data |
||||||||||||||||||||
| Shares Outstanding |
42,000 | 41,786 | 41,769 | 41,764 | 41,607 | |||||||||||||||
| Market Price per Share |
$ | 33.87 | $ | 30.30 | $ | 29.38 | $ | 32.45 | $ | 29.20 | ||||||||||
| Equity Market Capitalization |
$ | 1,422,540 | $ | 1,266,116 | $ | 1,227,173 | $ | 1,355,242 | $ | 1,214,924 | ||||||||||
| Total Debt |
$ | 610,429 | $ | 556,754 | $ | 529,521 | $ | 530,002 | $ | 517,182 | ||||||||||
| Total Market Capitalization |
$ | 2,032,969 | $ | 1,822,870 | $ | 1,756,694 | $ | 1,885,244 | $ | 1,732,106 | ||||||||||
| Total Debt to Market Capitalization |
0.30:1 | 0.31:1 | 0.30:1 | 0.28:1 | 0.30:1 | |||||||||||||||
| Earnings to Fixed Charges(1) |
2.2 | x | 2.1 | x | 2.1 | x | 2.2 | x | 2.3 | x | ||||||||||
| Debt Service Coverage Ratio(2) |
3.3 | x | 3.3 | x | 3.3 | x | 3.3 | x | 3.5 | x | ||||||||||
| Dividend Data |
||||||||||||||||||||
| Total Dividends Paid |
$ | 16,483 | $ | 16,401 | $ | 16,394 | $ | 15,558 | $ | 15,499 | ||||||||||
| Common Dividend per Share |
$ | 0.3925 | $ | 0.3925 | $ | 0.3925 | $ | 0.3725 | $ | 0.3725 | ||||||||||
| Payout Ratio (FFO per share basis) |
75.0 | % | 77.1 | % | 77.5 | % | 73.6 | % | 68.8 | % | ||||||||||
| (1) | The ratio of earnings to fixed charges is computed by dividing earnings by fixed charges. For this purpose, earnings consist of income from continuing operations plus fixed charges, less capitalized interest. Fixed charges consist of interest expense, including amortized costs of debt issuance, plus interest costs capitalized. |
| (2) | Debt service coverage ratio is computed by dividing earnings before interest income and expense, depreciation, amortization and gain on sale of real estate by interest expense and principal amortization. |
8
Washington Real Estate Investment Trust
Core Portfolio Net Operating Income (NOI) Growth & Rental Rate Growth
Q4 2004 vs. Q4 2003
| Cash Basis |
||||||||
| Sector |
NOI Growth |
Rental Rate Growth |
||||||
| Multifamily |
3.0 | % | 2.5 | % | ||||
| Office Buildings |
-6.9 | % | 0.8 | % | ||||
| Retail Centers |
4.3 | % | 0.7 | % | ||||
| Industrial / Flex Properties |
8.7 | % | 0.0 | % | ||||
| Overall Core Portfolio |
-1.0 | % | 1.0 | % | ||||
| GAAP Basis |
||||||||
| Sector |
NOI Growth |
Rental Rate Growth |
||||||
| Multifamily |
3.1 | % | 2.5 | % | ||||
| Office Buildings |
-6.0 | % | 0.2 | % | ||||
| Retail Centers |
4.8 | % | 2.0 | % | ||||
| Industrial / Flex Properties |
10.0 | % | -0.3 | % | ||||
| Overall Core Portfolio |
-0.2 | % | 0.8 | % | ||||
9
Washington Real Estate Investment Trust
Core Portfolio Net Operating Income (NOI) Summary
(In Thousands)
| Three Months Ended December 31 |
|||||||||
| 2004 |
2003 |
% Change |
|||||||
| Cash Basis: |
|||||||||
| Multifamily |
$ | 4,418 | $ | 4,290 | 3.0 | % | |||
| Office Buildings |
13,383 | 14,376 | -6.9 | % | |||||
| Retail Centers |
5,474 | 5,250 | 4.3 | % | |||||
| Industrial/Flex |
4,582 | 4,215 | 8.7 | % | |||||
| $ | 27,857 | $ | 28,131 | -1.0 | % | ||||
| GAAP Basis: |
|||||||||
| Multifamily |
$ | 4,416 | $ | 4,282 | 3.1 | % | |||
| Office Buildings |
13,678 | 14,551 | -6.0 | % | |||||
| Retail Centers |
5,557 | 5,301 | 4.8 | % | |||||
| Industrial/Flex |
4,637 | 4,215 | 10.0 | % | |||||
| $ | 28,288 | $ | 28,349 | -0.2 | % | ||||
10
Washington Real Estate Investment Trust
Core Portfolio Net Operating Income (NOI) Detail
(In Thousands)
| Three Months Ended December 31, 2004 |
||||||||||||||||||||||||
| Multifamily |
Office |
Retail |
Industrial |
Corporate and Other |
Total |
|||||||||||||||||||
| Real estate rental revenue |
||||||||||||||||||||||||
| Core Portfolio |
$ | 7,336 | $ | 20,195 | $ | 6,962 | $ | 5,905 | $ | — | $ | 40,398 | ||||||||||||
| Non-core- acquired 1 |
— | 3,047 | — | 383 | — | 3,430 | ||||||||||||||||||
| Total |
7,336 | 23,242 | 6,962 | 6,288 | — | 43,828 | ||||||||||||||||||
| Real estate expenses |
||||||||||||||||||||||||
| Core Portfolio |
2,920 | 6,517 | 1,405 | 1,268 | — | 12,110 | ||||||||||||||||||
| Non-core- acquired 1 |
— | 819 | — | 55 | — | 874 | ||||||||||||||||||
| Total |
2,920 | 7,336 | 1,405 | 1,323 | — | 12,984 | ||||||||||||||||||
| Net Operating Income (NOI) |
||||||||||||||||||||||||
| Core Portfolio |
4,416 | 13,678 | 5,557 | 4,637 | — | 28,288 | ||||||||||||||||||
| Non-core- acquired 1 |
— | 2,228 | — | 328 | — | 2,556 | ||||||||||||||||||
| Total |
$ | 4,416 | $ | 15,906 | $ | 5,557 | $ | 4,965 | $ | — | $ | 30,844 | ||||||||||||
| Core Portfolio NOI GAAP Basis (from above) |
$ | 4,416 | $ | 13,678 | $ | 5,557 | $ | 4,637 | $ | — | $ | 28,288 | ||||||||||||
| Straight-line revenue, net for core properties |
2 | (246 | ) | (111 | ) | (55 | ) | — | (410 | ) | ||||||||||||||
| Amortization of lease intangibles for core properties |
— | (49 | ) | 28 | — | — | (21 | ) | ||||||||||||||||
| Core portfolio NOI, Cash Basis |
$ | 4,418 | $ | 13,383 | $ | 5,474 | $ | 4,582 | $ | — | $ | 27,857 | ||||||||||||
| Reconciliation of NOI to Net Income |
||||||||||||||||||||||||
| Total NOI |
$ | 4,416 | $ | 15,906 | $ | 5,557 | $ | 4,965 | $ | — | $ | 30,844 | ||||||||||||
| Other revenue |
— | — | — | — | 88 | 88 | ||||||||||||||||||
| Interest expense |
(1,065 | ) | (1,180 | ) | — | (284 | ) | (6,022 | ) | (8,551 | ) | |||||||||||||
| Depreciation and amortization |
(1,228 | ) | (6,345 | ) | (928 | ) | (1,542 | ) | (272 | ) | (10,315 | ) | ||||||||||||
| General and administrative |
— | — | — | — | (1,622 | ) | (1,622 | ) | ||||||||||||||||
| Discontinued Operations 2 |
1,939 | 1,939 | ||||||||||||||||||||||
| Net Income |
$ | 2,123 | $ | 10,320 | $ | 4,629 | $ | 3,139 | $ | (7,828 | ) | $ | 12,383 | |||||||||||
| Three Months Ended December 31, 2003 |
||||||||||||||||||||||||
| Multifamily |
Office |
Retail |
Industrial |
Corporate and Other |
Total |
|||||||||||||||||||
| Real estate rental revenue |
||||||||||||||||||||||||
| Core Portfolio |
$ | 6,966 | $ | 20,452 | $ | 6,815 | $ | 5,533 | $ | — | $ | 39,766 | ||||||||||||
| Non-core- acquired 1 |
— | 1,947 | — | — | — | 1,947 | ||||||||||||||||||
| Total |
6,966 | 22,399 | 6,815 | 5,533 | — | 41,713 | ||||||||||||||||||
| Real estate expenses |
||||||||||||||||||||||||
| Core Portfolio |
2,684 | 5,901 | 1,514 | 1,318 | — | 11,417 | ||||||||||||||||||
| Non-core- acquired 1 |
— | 411 | — | — | — | 411 | ||||||||||||||||||
| Total |
2,684 | 6,312 | 1,514 | 1,318 | — | 11,828 | ||||||||||||||||||
| Net Operating Income (NOI) |
||||||||||||||||||||||||
| Core Portfolio |
4,282 | 14,551 | 5,301 | 4,215 | — | 28,349 | ||||||||||||||||||
| Non-core- acquired 1 |
— | 1,536 | — | — | — | 1,536 | ||||||||||||||||||
| Total |
$ | 4,282 | $ | 16,087 | $ | 5,301 | $ | 4,215 | $ | — | $ | 29,885 | ||||||||||||
| Core Portfolio NOI GAAP Basis (from above) |
$ | 4,282 | $ | 14,551 | $ | 5,301 | $ | 4,215 | $ | — | $ | 28,349 | ||||||||||||
| Straight-line revenue, net for core properties |
8 | (124 | ) | (101 | ) | — | — | (217 | ) | |||||||||||||||
| Amortization of lease intangibles for core properties |
— | (51 | ) | 50 | — | — | (1 | ) | ||||||||||||||||
| Core portfolio NOI, Cash Basis |
$ | 4,290 | $ | 14,376 | $ | 5,250 | $ | 4,215 | $ | — | $ | 28,131 | ||||||||||||
| Reconciliation of NOI to Net Income |
||||||||||||||||||||||||
| Total NOI |
$ | 4,282 | $ | 16,087 | $ | 5,301 | $ | 4,215 | $ | — | $ | 29,885 | ||||||||||||
| Other revenue |
— | — | — | — | 72 | 72 | ||||||||||||||||||
| Interest expense |
(1,069 | ) | (1,000 | ) | — | (256 | ) | (5,686 | ) | (8,011 | ) | |||||||||||||
| Depreciation and amortization |
(1,242 | ) | (5,585 | ) | (1,190 | ) | (1,495 | ) | (360 | ) | (9,872 | ) | ||||||||||||
| General and administrative |
— | — | — | — | (1,583 | ) | (1,583 | ) | ||||||||||||||||
| Discontinued Operations 2 |
907 | 907 | ||||||||||||||||||||||
| Net Income |
$ | 1,971 | $ | 10,409 | $ | 4,111 | $ | 2,464 | $ | (7,557 | ) | $ | 11,398 | |||||||||||
| 1 | Non-core acquired properties for Q4 2004 and Q4 2003 were Prosperity Medical Center, 8880 Gorman Road, Shady Grove Medical Village II, 8301 Arlington Boulevard and Dulles Business Park. |
| 2 | Discontinued operations consists of: |
| Properties sold - 8230 Boone Boulevard |
| Properties held for sale at December 31, 2004 - 7700 Leesburg, Tycon Plaza II and Tycon Plaza III. |
11
Washington Real Estate Investment Trust
Core Portfolio & Overall Occupancy Levels by Sector
Q4 2004 vs. Q4 2003
GAAP Basis
| Core Portfolio |
All Properties |
|||||||||||
| Sector |
4th QTR 2004 |
4th QTR 2003 |
4th QTR 2004 |
4th QTR 2003 |
||||||||
| Multifamily |
91.6 | % | 89.2 | % | 91.6 | % | 89.2 | % | ||||
| Office Buildings |
88.6 | % | 89.5 | % | 88.4 | % | 88.1 | % | ||||
| Retail Centers |
95.8 | % | 96.1 | % | 95.8 | % | 96.1 | % | ||||
| Industrial / Flex Properties |
94.0 | % | 88.8 | % | 94.3 | % | 88.8 | % | ||||
| Overall Portfolio |
90.9 | % | 90.3 | % | 90.6 | % | 89.4 | % | ||||
12
Washington Real Estate Investment Trust
Schedule of Properties
December 31, 2004
| 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 | 208,000 | ||||
| 7700 Leesburg Pike 2 |
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 2 |
Vienna, VA | 1994 | 1981 | 127,000 | ||||
| Tycon Plaza III 2 |
Vienna, VA | 1994 | 1978 | 137,000 | ||||
| 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 | 521,000 | ||||
| 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 | ||||
| Prosperity Medical Center I |
Merrifield, VA | 2003 | 2000 | 92,000 | ||||
| Prosperity Medical Center II |
Merrifield, VA | 2003 | 2001 | 88,000 | ||||
| Prosperity Medical Center III |
Merrifield, VA | 2003 | 2002 | 75,000 | ||||
| Shady Grove Medical Village II |
Rockville, MD | 2004 | 1999 | 66,000 | ||||
| 8301 Arlington Boulevard |
Fairfax, VA | 2004 | 1965 | 50,000 | ||||
| Subtotal |
3,880,000 | |||||||
| 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 | 227,000 | ||||
| 800 S. Washington Street3 |
Alexandria, VA | 1998/2003 | 1955/1959 | 45,000 | ||||
| Centre at Hagerstown |
Hagerstown, MD | 2002 | 2000 | 334,000 | ||||
| Subtotal |
1,495,000 | |||||||
| 1 | A 49,000 square foot addition to 7900 Westpark Drive was completed in September 1999. |
| 2 | These buldings were sold on February 1, 2005. They are classified as properties held for sale at December 31, 2004. Excluding these properties, net rentable square feet in the Office segment total 3,469,000 and in the total portfolio, 9,721,000. |
| 3 | South Washington Street includes 718 Jefferson Street, acquired in May 2003 to complete the ownership of the entire block of 800 S. Washington Street. The net rentable square feet reduction from 12/31/03 is due to space taken off market for development of residential units. |
13
Washington Real Estate Investment Trust
Schedule of Properties (Cont.)
December 31, 2004
| 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 / 212 |
Gaithersburg, MD | 1996 | 1971/2003 4 | 154,000 | ||||
| Bethesda Hill Apartments / 194 |
Bethesda, MD | 1997 | 1986 | 226,000 | ||||
| Avondale / 236 |
Laurel, MD | 1999 | 1987 | 170,000 | ||||
| Subtotal (2,095 units) |
1,729,000 | |||||||
| 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 | 93,000 | ||||
| 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 | ||||
| 8880 Gorman Road |
Laurel, MD | 2004 | 2000 | 141,000 | ||||
| Dulles Business Park Portfolio |
Chantilly, VA | 2004 | 1999-2004 | 265,000 | ||||
| Subtotal |
3,028,000 | |||||||
| TOTAL |
10,132,000 | |||||||
| * | Multifamily buildings are presented in gross square feet. |
| 4 | A 16 unit addition referred to as The Gardens at Walker House was completed in October 2003. |
14
Washington Real Estate Investment Trust
Commercial Leasing Summary
Three months and Twelve months ended 12/31/04
| 4th Quarter 2004 |
YTD 2004 | |||
| Gross Leasing Square Footage |
||||
| Office Buildings 1 |
160,236 | 761,380 | ||
| Retail Centers |
39,442 | 278,750 | ||
| Industrial Centers |
272,075 | 759,311 | ||
| Total 1 |
471,753 | 1,799,441 | ||
| Weighted Average Term (yrs) |
||||
| Office Buildings 1 |
4.1 | 4.2 | ||
| Retail Centers |
5.8 | 7.8 | ||
| Industrial Centers |
4.7 | 3.7 | ||
| Total 1 |
4.6 | 4.5 | ||
| GAAP |
CASH |
GAAP |
CASH |
|||||||||||||
| Rental Rate Increases: |
||||||||||||||||
| Rate on expiring leases |
||||||||||||||||
| Office Buildings 1 |
$ | 25.03 | $ | 25.87 | $ | 25.22 | $ | 26.01 | ||||||||
| Retail Centers |
16.81 | 17.54 | 14.42 | 14.66 | ||||||||||||
| Industrial Centers |
7.20 | 7.60 | 7.57 | 7.82 | ||||||||||||
| Total 1 |
$ | 14.06 | $ | 14.63 | $ | 16.10 | $ | 16.58 | ||||||||
| Rate on new and renewal leases |
||||||||||||||||
| Office Buildings 1 |
$ | 24.51 | $ | 23.32 | $ | 25.13 | $ | 24.02 | ||||||||
| Retail Centers |
19.67 | 18.42 | 18.93 | 18.11 | ||||||||||||
| Industrial Centers |
8.30 | 7.81 | 8.28 | 7.89 | ||||||||||||
| Total 1 |
$ | 14.76 | $ | 13.97 | $ | 17.06 | $ | 16.30 | ||||||||
| Percentage Increase |
||||||||||||||||
| Office Buildings 1 |
-2.08 | % | -9.86 | % | -0.36 | % | -7.65 | % | ||||||||
| Retail Centers |
17.01 | % | 5.02 | % | 31.28 | % | 23.53 | % | ||||||||
| Industrial Centers |
15.28 | % | 2.76 | % | 9.38 | % | 0.90 | % | ||||||||
| Total 1 |
4.98 | % | -4.51 | % | 5.96 | % | -1.69 | % | ||||||||
| Total Dollars |
Dollars per Square Foot |
Total Dollars |
Dollars per Square Foot |
|||||||||||||
| Tenant Improvements and Leasing Costs |
||||||||||||||||
| Office Buildings |
$ | 1,763,319 | $ | 11.00 | $ | 8,923,375 | $ | 11.72 | ||||||||
| Retail Centers |
382,633 | 9.70 | 945,014 | 3.39 | ||||||||||||
| Industrial Centers |
618,236 | 2.27 | 1,813,242 | 2.39 | ||||||||||||
| Total |
$ | 2,764,188 | $ | 5.86 | $ | 11,681,631 | $ | 6.49 | ||||||||
| 1 | Results excluding properties held for sale at December 31, 2004 are shown on the following page. |
15
Washington Real Estate Investment Trust
Commercial Leasing Summary
Excluding Properties Held for Sale 1
Three months and Twelve months ended 12/31/04
| 4th Quarter 2004 |
YTD 2004 | |||
| Gross Leasing Square Footage |
||||
| Office Buildings |
130,993 | 668,891 | ||
| Retail Centers |
39,442 | 278,750 | ||
| Industrial Centers |
272,075 | 759,311 | ||
| Total |
442,510 | 1,706,952 | ||
| Weighted Average Term (yrs) |
||||
| Office Buildings |
4.4 | 4.3 | ||
| Retail Centers |
5.8 | 7.8 | ||
| Industrial Centers |
4.7 | 3.7 | ||
| Total |
4.7 | 4.6 | ||
| GAAP |
CASH |
GAAP |
CASH |
|||||||||||||
| Rental Rate Increases: |
||||||||||||||||
| Rate on expiring leases |
||||||||||||||||
| Office Buildings |
$ | 24.76 | $ | 25.68 | $ | 25.22 | $ | 26.00 | ||||||||
| Retail Centers |
16.81 | 17.54 | 14.42 | 14.66 | ||||||||||||
| Industrial Centers |
7.20 | 7.60 | 7.57 | 7.82 | ||||||||||||
| Total |
$ | 13.26 | $ | 13.84 | $ | 15.60 | $ | 16.06 | ||||||||
| Rate on new and renewal leases |
||||||||||||||||
| Office Buildings |
$ | 25.17 | $ | 23.84 | $ | 25.54 | $ | 24.36 | ||||||||
| Retail Centers |
19.67 | 18.42 | 18.93 | 18.11 | ||||||||||||
| Industrial Centers |
8.30 | 7.81 | 8.28 | 7.89 | ||||||||||||
| Total |
$ | 14.31 | $ | 13.50 | $ | 16.78 | $ | 16.01 | ||||||||
| Percentage Increase |
||||||||||||||||
| Office Buildings |
1.66 | % | -7.17 | % | 1.27 | % | -6.31 | % | ||||||||
| Retail Centers |
17.01 | % | 5.02 | % | 31.28 | % | 23.53 | % | ||||||||
| Industrial Centers |
15.28 | % | 2.76 | % | 9.38 | % | 0.90 | % | ||||||||
| Total |
7.92 | % | -2.46 | % | 7.56 | % | -0.31 | % | ||||||||
| Total Dollars |
Dollars per Square Foot |
Total Dollars |
Dollars per Square Foot |
|||||||||||||
| Tenant Improvements and Leasing Costs |
||||||||||||||||
| Office Buildings |
$ | 1,537,500 | $ | 11.74 | $ | 8,095,927 | $ | 12.10 | ||||||||
| Retail Centers |
382,633 | 9.70 | 945,014 | 3.39 | ||||||||||||
| Industrial Centers |
618,236 | 2.27 | 1,813,242 | 2.39 | ||||||||||||
| Total |
$ | 2,538,369 | $ | 5.74 | $ | 10,854,183 | $ | 6.36 | ||||||||
| 1 | Properties classified as Held for Sale as of December 31, 2004 are 7700 Leesburg, Tycon Plaza II and Tycon Plaza III. |
16
Washington Real Estate Investment Trust
10 Largest Tenants - Based on Annualized Rent
December 31, 2004
| 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 | 24 | 4.39 | % | 149,284 | 2.01 | % | |||||
| Sunrise Senior Living, Inc. |
1 | 105 | 3.48 | % | 180,066 | 2.42 | % | |||||
| General Services Administration |
6 | 46 | 2.35 | % | 250,349 | 3.36 | % | |||||
| Sun Microsystems, Inc. |
1 | 24 | 2.17 | % | 110,184 | 1.48 | % | |||||
| INOVA Health Care Services |
4 | 65 | 1.95 | % | 83,631 | 1.12 | % | |||||
| International Monetary Fund |
1 | 12 | 1.71 | % | 59,146 | 0.79 | % | |||||
| George Washington University |
2 | 42 | 1.51 | % | 66,066 | 0.89 | % | |||||
| IQ Solutions |
1 | 65 | 1.24 | % | 58,473 | 0.79 | % | |||||
| United Communications Group |
1 | 41 | 1.23 | % | 62,793 | 0.84 | % | |||||
| Lockheed Corporation |
2 | 20 | 1.20 | % | 73,770 | 0.99 | % | |||||
| Total/Weighted Average |
49 | 21.23 | % | 1,093,762 | 14.69 | % | ||||||
17
Washington Real Estate Investment Trust
Lease Expirations Excluding Properties Held for Sale1
December 31, 2004
| Year |
Number of Leases |
Rentable Square Feet |
Percent of Rentable |
Annualized Rent * |
Average Rental Rate |
Percent of Annualized Rent * |
||||||||||
| Office: |
||||||||||||||||
| 2005 |
109 | 433,045 | 14.8 | % | $ | 13,753,708 | $ | 31.76 | 16.9 | % | ||||||
| 2006 |
104 | 471,136 | 16.1 | % | 12,342,414 | 26.20 | 15.2 | % | ||||||||
| 2007 |
80 | 282,418 | 9.6 | % | 7,266,015 | 25.73 | 8.9 | % | ||||||||
| 2008 |
69 | 371,417 | 12.7 | % | 10,628,594 | 28.62 | 13.1 | % | ||||||||
| 2009 |
77 | 368,415 | 12.6 | % | 10,021,372 | 27.20 | 12.3 | % | ||||||||
| 2010 and thereafter |
122 | 1,007,545 | 34.3 | % | 27,243,244 | 27.04 | 33.5 | % | ||||||||
| 561 | 2,933,976 | 100.0 | % | $ | 81,255,347 | $ | 27.69 | 100.0 | % | |||||||
| Retail: |
||||||||||||||||
| 2005 |
42 | 96,904 | 6.6 | % | $ | 2,127,712 | $ | 21.96 | 9.1 | % | ||||||
| 2006 |
44 | 146,055 | 10.0 | % | 2,844,054 | 19.47 | 12.1 | % | ||||||||
| 2007 |
49 | 147,792 | 10.1 | % | 3,218,712 | 21.78 | 13.7 | % | ||||||||
| 2008 |
26 | 169,479 | 11.6 | % | 1,515,411 | 8.94 | 6.5 | % | ||||||||
| 2009 |
25 | 104,315 | 7.1 | % | 2,063,645 | 19.78 | 8.8 | % | ||||||||
| 2010 and thereafter |
78 | 795,677 | 54.5 | % | 11,648,992 | 14.64 | 49.7 | % | ||||||||
| 264 | 1,460,222 | 100.0 | % | $ | 23,418,526 | $ | 16.04 | 100.0 | % | |||||||
| Industrial: |
||||||||||||||||
| 2005 |
63 | 632,220 | 22.7 | % | $ | 4,871,482 | $ | 7.71 | 20.2 | % | ||||||
| 2006 |
53 | 509,226 | 18.3 | % | 4,593,525 | 9.02 | 19.0 | % | ||||||||
| 2007 |
30 | 301,752 | 10.8 | % | 2,324,605 | 7.70 | 9.6 | % | ||||||||
| 2008 |
26 | 281,726 | 10.1 | % | 2,567,192 | 9.11 | 10.6 | % | ||||||||
| 2009 |
30 | 495,393 | 17.8 | % | 4,671,894 | 9.43 | 19.3 | % | ||||||||
| 2010 and thereafter |
25 | 568,552 | 20.4 | % | 5,119,520 | 9.00 | 21.2 | % | ||||||||
| 227 | 2,788,869 | 100.0 | % | $ | 24,148,218 | $ | 8.66 | 100.0 | % | |||||||
| Total: |
||||||||||||||||
| 2005 |
214 | 1,162,169 | 16.2 | % | $ | 20,752,902 | $ | 17.86 | 16.1 | % | ||||||
| 2006 |
201 | 1,126,417 | 15.7 | % | 19,779,993 | 17.56 | 15.4 | % | ||||||||
| 2007 |
159 | 731,962 | 10.2 | % | 12,809,332 | 17.50 | 9.9 | % | ||||||||
| 2008 |
121 | 822,622 | 11.5 | % | 14,711,197 | 17.88 | 11.4 | % | ||||||||
| 2009 |
132 | 968,123 | 13.5 | % | 16,756,911 | 17.31 | 13.0 | % | ||||||||
| 2010 and thereafter |
225 | 2,371,774 | 33.0 | % | 44,011,756 | 18.56 | 34.2 | % | ||||||||
| 1,052 | 7,183,067 | 100.0 | % | $ | 128,822,091 | $ | 17.93 | 100.0 | % | |||||||
| * | Annualized Rent is as of December 31, 2004 rental revenue (cash basis) multiplied by 12. |
| 1 | Properties classified as Held for Sale as of December 31, 2004 are 7700 Leesburg, Tycon Plaza II and Tycon Plaza III. |
18
Washington Real Estate Investment Trust
2004 Acquisition and Development Summary
as of December 31, 2004
($’s in thousands)
Acquisition Summary
| Acquisition Date |
Square Feet |
Leased Percentage at Acquisition |
December 31, 2004 Leased Percentage |
Investment | |||||||||
| 8880 Gorman Road |
03/10/04 | 140,700 | 100 | % | 100 | % | $ | 11,500 | |||||
| Laurel, MD |
|||||||||||||
| Shady Grove Medical Village II |
08/12/04 | 66,157 | 100 | % | 100 | % | 18,500 | ||||||
| Rockville, MD |
|||||||||||||
| 8301 Arlington Boulevard |
10/12/04 | 49,744 | 90 | % | 92 | % | 8,000 | ||||||
| Fairfax, VA |
|||||||||||||
| Dulles Business Park Portfolio |
12/22/04 | 264,657 | 99 | % | 99 | % | 46,000 | ||||||
| Chantilly, VA |
|||||||||||||
| Total |
$ | 84,000 | |||||||||||
Development Summary
| Property and Location |
Total Rentable Square Feet |
Percentage Leased or Committed |
Anticipated Total Cost |
Cost to Date |
Anticipated Construction Completion Date | |||||||||||
| Redevelopment |
||||||||||||||||
| Westminster Shopping Center 1 | ||||||||||||||||
| Westminster, MD | 38,000 sq ft. | 100 | % | $ | 3,700 | $ | 4,288 | Completed | ||||||||
| Development |
||||||||||||||||
| Rosslyn Towers 2 | ||||||||||||||||
| (High Rise) | 178 units & 1,600 sq ft. retail |
0 | % | 4Q 06 | ||||||||||||
| (Medium Rise) | 46 units & 4,300 sq ft. retail |
0 | % | 3Q 06 | ||||||||||||
| Arlington, VA | 56,100 | 10,171 | 4 | |||||||||||||
| South Washington Street 3 Alexandria, VA | 75 units & 4,500 sq ft. retail |
0 | % | 20,200 | 2,459 | 4 | 3Q 06 | |||||||||
| Total |
$ | 80,000 | $ | 16,918 | ||||||||||||
| 1 | Redevelopment in conjunction with a lease executed in May 2003 with a national food chain. |
| 2 | Rosslyn Towers, formerly known as WRIT Rosslyn Center, is a planned 224 unit multifamily property. 1620 Wilson Boulevard was acquired in conjunction with the overall development plan for Rosslyn Towers. |
| 3 | 718 E. Jefferson Street was acquired to complete our 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. We refer to this development project as South Washington Street. |
| 4 | Includes land cost. |
19
WRIT vs. Morgan Stanley REIT Index & NAREIT All Equity Index & Russell 2000
12, 36, and 60 Month Total Returns
December 31, 2004
Source: SNL Interactive
20
Washington Real Estate Investment Trust
Reporting Definitions
December 31, 2004
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.
Ratio of earnings to fixed charges is computed by dividing earnings 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, including amortized costs of debt issuance, plus interest costs capitalized.
Debt service coverage ratio is computed by dividing earnings before interest income and expense, depreciation, amortization and gain on sale of real estate by interest expense and 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 and rent abatement amortization, and adding or subtracting amortization of lease intangibles, as appropriate.
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 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.
21