Exhibit 99.1
NEWS RELEASE
| CONTACT: Sara Grootwassink Chief Financial Officer Direct Dial: 301-255-0820 E-Mail: sgrootwassink@writ.com |
 |
6110 Executive Blvd., Suite 800 Rockville, Maryland 20852 Tel 301-984-9400 Fax 301-984-9610 www.writ.com |
Newspaper Quote: WRIT
| Page 1 of 6 | FOR IMMEDIATE RELEASE | April 19, 2005 |
WASHINGTON REAL ESTATE INVESTMENT TRUST ANNOUNCES RESULTS FOR
THE QUARTER ENDED MARCH 31, 2005
Washington Real Estate Investment Trust (WRIT) reported the following results today:
| Q1 2005 |
Q1 2004 | |||||
| Net Income Per Share |
$ | 1.01 | $ | 0.27 | ||
| Funds from Operations (“FFO”) Per Share |
$ | 0.49 | $ | 0.51 | ||
| • | First quarter 2005 Net Income per fully diluted share was $1.01, compared to $0.27 in the first quarter 2004. The 274% increase in Net Income per fully diluted share is due primarily to the $32.1 million gain on the sale of three properties in February 2005 ($0.76 per fully diluted share), offset somewhat by the increase in depreciation expense ($0.02 per fully diluted share) driven primarily by the properties acquired in 2004, higher real estate expenses ($0.01 per fully diluted share) driven by higher utility costs, and additional general & administrative expense ($0.02 per fully diluted share). |
| • | Funds from Operations (“FFO”) per fully diluted share, a non-GAAP financial measure, for the first quarter 2005 was $0.49, representing a 3.9% decrease over FFO per fully diluted share of $0.51 in the first quarter of 2004 due to the factors discussed above. |
A reconciliation of net income to funds from operations is provided on the attached income statement.
Edmund B. Cronin, Jr., Chairman, President and CEO, stated, “During this quarter the net operating income from the Industrial, Multi-family and Retail sectors of our portfolio on a comparative basis to the first quarter of 2004 has exhibited positive growth. The Office sector is the laggard but that market continues to improve.”
Company Information
WRIT is a self-administered, self-managed, equity real estate investment trust investing in income-producing properties in the greater Washington/Baltimore metropolitan region. WRIT owns a diversified portfolio of 67 properties consisting of 12 retail centers, 27 office properties, 19 industrial properties and 9 multifamily properties.
WRIT’s dividends have increased every year for 34 consecutive years. WRIT’s FFO per share has increased every year for 32 consecutive years. WRIT shares are publicly traded on the New York Stock Exchange (symbol: WRE).
Note: WRIT’s press releases and supplemental financial information are available on the company website at www.writ.com or by contacting Investor Relations at 301-984-9400.
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, 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 2004 Form 10-K. We assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.
FOR IMMEDIATE RELEASE
Page 2 of 6
WASHINGTON REAL ESTATE INVESTMENT TRUST
FINANCIAL HIGHLIGHTS
(In thousands, except per share data)
(Unaudited)
| Three Months Ended March 31, |
||||||||||
| OPERATING RESULTS |
2005 |
2004 |
||||||||
| Revenue |
||||||||||
| Real estate rental revenue |
$ | 45,387 | $ | 42,264 | ||||||
| Other income |
114 | 65 | ||||||||
| 45,501 | 42,329 | |||||||||
| Expenses |
||||||||||
| Real estate expenses |
(14,205 | ) | (12,641 | ) | ||||||
| Interest expense |
(8,588 | ) | (8,575 | ) | ||||||
| Depreciation and amortization |
(10,565 | ) | (9,424 | ) | ||||||
| General and administrative |
(2,232 | ) | (1,229 | ) | ||||||
| (35,590 | ) | (31,869 | ) | |||||||
| Income from continuing operations |
9,911 | 10,460 | ||||||||
| Discontinued operations: |
||||||||||
| Income from operations of properties sold or held for sale |
234 | 842 | ||||||||
| Gain on property disposed |
32,089 | — | ||||||||
| Net Income |
$ | 42,234 | $ | 11,302 | ||||||
| Income from continuing operations |
$ | 9,911 | $ | 10,460 | ||||||
| Continuing operations real estate depreciation and amortization |
10,565 | 9,424 | ||||||||
| Funds from continuing operations |
20,476 | 19,884 | ||||||||
| Income from discontinued operations before gain on disposal |
234 | 842 | ||||||||
| Discontinued operations real estate depreciation and amortization |
— | 448 | ||||||||
| Funds from discontinued operations |
234 | 1,290 | ||||||||
| Funds from operations(1) |
$ | 20,710 | $ | 21,174 | ||||||
| Accretive: |
||||||||||
| Tenant improvements (3) |
(1,805 | ) | (2,792 | ) | ||||||
| Leasing commissions capitalized (4) |
(1,063 | ) | (633 | ) | ||||||
| Non-Accretive: |
||||||||||
| Recurring capital improvements |
(2,192 | ) | (1,428 | ) | ||||||
| Straight-line rents, net |
(697 | ) | (565 | ) | ||||||
| Rent abatement amortization |
336 | 300 | ||||||||
| Non real estate depreciation & amortization |
407 | 448 | ||||||||
| Amortization of lease intangibles |
50 | (65 | ) | |||||||
| Funds Available for Distribution(2) |
$ | 15,746 | $ | 16,439 | ||||||
| Per Share Data |
||||||||||
| Income from continuing operations |
(Basic) | $ | 0.24 | $ | 0.25 | |||||
| (Diluted) | $ | 0.24 | $ | 0.25 | ||||||
| Net income |
(Basic) | $ | 1.01 | $ | 0.27 | |||||
| (Diluted) | $ | 1.01 | $ | 0.27 | ||||||
| Funds from continuing operations |
(Basic) | $ | 0.49 | $ | 0.48 | |||||
| (Diluted) | $ | 0.49 | $ | 0.48 | ||||||
| Funds from operations |
(Basic) | $ | 0.49 | $ | 0.51 | |||||
| (Diluted) | $ | 0.49 | $ | 0.51 | ||||||
| Dividends paid |
$ | 0.3925 | $ | 0.3725 | ||||||
| Weighted average shares outstanding |
41,866 | 41,572 | ||||||||
| Fully diluted weighted average shares outstanding |
42,015 | 41,820 | ||||||||
| (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. |
Washington Real Estate Investment Trust
FOR IMMEDIATE RELEASE
Page 3 of 6
| (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 rent abatement amortization, and adding or subtracting 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. |
| (3) | Tenant improvements for the three months ended March 31, 2004 include payments to one tenant of $1.1 million. |
| (4) | Leasing commissions capitalized for the three months ended March 31, 2005 include payments totaling $0.5 million for the execution of World Bank leases at 1776 G Street expanding (for an additional 88,000 square feet of office space) and extending (61,000 square feet of office space) the tenant’s space through 2010. The balance of the commission will be paid in the fourth quarter of 2005 when the tenant takes occupancy of the space. |
FOR IMMEDIATE RELEASE
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WASHINGTON REAL ESTATE INVESTMENT TRUST
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
| March 31, 2005 |
December 31, 2004 |
|||||||
| Assets |
||||||||
| Land |
$ | 223,407 | $ | 210,647 | ||||
| Building |
949,905 | 906,228 | ||||||
| Total real estate, at cost |
1,173,312 | 1,116,875 | ||||||
| Accumulated depreciation |
(210,849 | ) | (201,758 | ) | ||||
| Total investment in real estate, net |
962,463 | 915,117 | ||||||
| Investment in real estate held for sale, net |
— | 34,158 | ||||||
| Cash and cash equivalents |
5,491 | 5,562 | ||||||
| Restricted cash |
12,515 | 388 | ||||||
| Rents and other receivables, net of allowance for doubtful accounts of $2,561 and $2,605, respectively |
21,365 | 21,423 | ||||||
| Prepaid expenses and other assets |
34,997 | 35,066 | ||||||
| Other assets related to properties held for sale |
— | 679 | ||||||
| Total Assets |
$ | 1,036,831 | $ | 1,012,393 | ||||
| Liabilities |
||||||||
| Accounts payable and other liabilities |
$ | 23,285 | $ | 22,586 | ||||
| Advance rents |
5,551 | 5,108 | ||||||
| Tenant security deposits |
5,990 | 5,784 | ||||||
| Other liabilities related to properties held for sale |
— | 848 | ||||||
| Mortgage notes payable |
197,775 | 173,429 | ||||||
| Lines of credit/short-term note payable |
90,500 | 117,000 | ||||||
| Notes payable |
320,000 | 320,000 | ||||||
| Total Liabilities |
643,101 | 644,755 | ||||||
| Minority interest |
1,642 | 1,629 | ||||||
| Shareholders’ Equity |
||||||||
| Shares of beneficial interest, $.01 par value; 100,000 shares authorized: 42,004 and 42,000 shares issued and outstanding, respectively |
420 | 420 | ||||||
| Additional paid-in capital |
405,119 | 405,029 | ||||||
| Distributions in excess of net income |
(9,796 | ) | (35,544 | ) | ||||
| Less: Deferred compensation on restricted shares |
(3,655 | ) | (3,896 | ) | ||||
| Total Shareholders’ Equity |
392,088 | 366,009 | ||||||
| Total Liabilities and Shareholders’ Equity |
$ | 1,036,831 | $ | 1,012,393 | ||||
Certain prior year amounts have been reclassified to conform to the current year presentation.
Washington Real Estate Investment Trust
FOR IMMEDIATE RELEASE
Page 5 of 6
Occupancy Levels by Core Portfolio(1) and All Properties
| Core Portfolio |
All Properties |
|||||||||||
| 1st QTR 2005 |
1st QTR 2004 |
1st QTR 2005 |
1st QTR 2004 |
|||||||||
| Sector |
||||||||||||
| Multifamily |
92.3 | % | 88.6 | % | 92.3 | % | 88.6 | % | ||||
| Office Buildings |
88.6 | % | 91.2 | % | 88.3 | % | 89.1 | % | ||||
| Retail Centers |
96.4 | % | 94.4 | % | 96.4 | % | 94.4 | % | ||||
| Industrial/Flex Centers |
94.6 | % | 91.4 | % | 95.0 | % | 91.5 | % | ||||
| Overall Portfolio |
91.2 | % | 91.2 | % | 91.1 | % | 90.0 | % | ||||
| (1) | Core portfolio properties include all properties that were owned for the entirety of the current and prior year reporting periods. For Q1 2005 and Q1 2004, core portfolio properties exclude 8880 Gorman Road, Shady Grove Medical Village II, 8301 Arlington Boulevard, Dulles Business Park, Frederick Crossing, 8230 Boone Boulevard, Tycon Plaza II, Tycon Plaza III, and 7700 Leesburg Pike. |
2005 Acquisition Summary
| Acquisition Date |
Square Feet |
Leased Sq. Ft. at |
Leased Percentage at Acquisition |
March 31, 2005 Leased Percentage |
Investment | ||||||||||
| Frederick Crossing Shopping Center |
3/23/2005 | 294,724 | 294,724 | 100.0 | % | 100.0 | % | $ | 45,100,000 | ||||||
Subsequent Event
On April 8, 2005, WRIT acquired the Coleman Building in Chantilly, Virginia for $10 million, completing its acquisition of the Dulles Business Park portfolio. Coleman is a single-story flex/warehouse building consisting of 59,767 rentable square feet and a surface parking lot with 228 spaces. The property is 64% leased to a single tenant with 21,539 square feet available.
Washington Real Estate Investment Trust
FOR IMMEDIATE RELEASE
Page 6 of 6
Conference Call Information
WRIT will conduct a Conference/Webcast Call to discuss 1st Quarter results on Wednesday, April 20, 2005 at 11:00 AM, Eastern Time. Conference call access information is as follows:
| USA Toll Free Number: | 1-800-271-8857 | |
| International Toll Number: | 1-706-679-7697 | |
| Leader: | Sara Grootwassink | |
| Conference ID: | 5244267 |
The instant replay of the Conference Call will be available until May 4, 2005 at 11:59 PM Eastern Time. Instant Replay access information is as follows:
| USA Toll Free Number: | 1-800-642-1687 | |
| International Toll Number: | 1-706-645-9291 | |
| Conference ID: | 5244267 |
The live on-demand webcast of the Conference Call will also be available on WRIT’s website at www.writ.com. The on-line playback of the webcast will be available at www.writ.com for 30 days following the Conference Call.