SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A1
Amendment No. 1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) March 9, 2007
WASHINGTON REAL ESTATE INVESTMENT TRUST
(Exact name of registrant as specified in its charter)
Maryland | 1-6622 | 53-0261100 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) | IRS Employer Identification Number) |
6110 Executive Boulevard, Suite 800, Rockville, Maryland | 20852 | |
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code (301) 984- 9400
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
ITEM 2.01 | COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS |
The undersigned registrant, in order to provide the financial statements required to be included in the Current Report on Form 8-K dated March 9, 2007 in connection with the acquisition of certain assets and the borrowing under the lines of credit to pay for the acquisitions of 270 Technology Park, Monument II and 2440 M Street hereby amends the following items, as set forth in the pages attached hereto.
Item 9.01 | FINANCIAL STATEMENTS AND EXHIBITS |
(a) | Financial Statements of Businesses Acquired |
1. | 270 Technology Park- Audited Historical Summary of Gross Income and Direct Operating Expenses for the year ended December 31, 2006. |
2. | Monument II - Audited Historical Summary of Gross Income and Direct Operating Expenses for the year ended December 31, 2006. |
3. | 2440 M Street - Audited Historical Summary of Gross Income and Direct Operating Expenses for the year ended December 31, 2006. |
In acquiring the properties listed above, Washington Real Estate Investment Trust (WRIT) evaluated among other things, sources of revenue (including but not limited to, competition in the rental market, comparative rents and occupancy rates) and expenses (including but not limited to, utility rates, ad valorem tax rates, maintenance expenses and anticipated capital expenditures). After reasonable inquiry, management is not aware of any material factors affecting these properties that would cause the reported financial information not to be indicative of their future operating results.
(b) | Pro Forma Financial Information |
The following pro forma financial statements for the property acquisitions listed above (as defined in Regulation S-X) are filed as an exhibit hereto:
1. | WRIT Unaudited Pro Forma Condensed Consolidated Balance Sheet as of December 31, 2006. |
2. | WRIT Unaudited Pro Forma Condensed Consolidated Statements of Operations for the year ended December 31, 2006. |
(d) | Exhibits |
23. | Consent of Independent Public Accounting Firm |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
WASHINGTON REAL ESTATE INVESTMENT TRUST | ||
(Registrant) | ||
By: | /s/ Laura M. Franklin | |
(Signature) | ||
Laura M. Franklin | ||
Senior Vice President Accounting, | ||
Administration and Corporate Secretary |
May 25, 2007
(Date)
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of
Washington Real Estate Investment Trust
We have audited the accompanying Historical Summary of Gross Income and Direct Operating Expenses of 270 Technology Park (Historical Summary) for the year ended December 31, 2006. This Historical Summary is the responsibility of the Propertys management. Our responsibility is to express an opinion on the Historical Summary based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Historical Summary is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Historical Summary. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Historical Summary. We believe that our audit provides a reasonable basis for our opinion.
The accompanying Historical Summary was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission as described in Note 2, and is not intended to be a complete presentation of 270 Technology Parks revenues and expenses.
In our opinion, the Historical Summary referred to above presents fairly, in all material respects, the gross income and direct operating expenses described in Note 2 of 270 Technology Park for the year ended December 31, 2006, in conformity with accounting principles generally accepted in the United States of America.
/s/ ARGY, WILTSE & ROBINSON, P.C.
McLean, Virginia
May 17, 2007
270 TECHNOLOGY PARK
HISTORICAL SUMMARY OF GROSS INCOME AND DIRECT OPERATING EXPENSES
YEAR ENDED DECEMBER 31, 2006
2006 | |||
Gross income: |
|||
Base rents |
$ | 1,917,981 | |
Expense recoveries |
386,168 | ||
Other |
1,773 | ||
Total gross income |
2,305,922 | ||
Direct operating expenses: |
|||
Real estate taxes |
168,939 | ||
Repairs, maintenance and supplies |
146,087 | ||
Utilities |
28,742 | ||
Insurance |
19,960 | ||
Total direct operating expenses |
363,728 | ||
Gross income in excess of direct operating expenses |
$ | 1,942,194 | |
The accompanying notes are an integral part of this historical summary.
270 TECHNOLOGY PARK
NOTES TO THE HISTORICAL SUMMARY OF GROSS INCOME AND
DIRECT OPERATING EXPENSES
YEAR ENDED DECEMBER 31, 2006
NOTE 1 - NATURE OF BUSINESS
270 Technology Park consists of five single-story flex buildings containing a total of approximately 157,000 rentable square feet plus 595 parking spaces, located within 270 Technology Park in Frederick, Maryland. The operations of 270 Technology Park consist of leasing space to various business tenants.
NOTE 2 - BASIS OF PRESENTATION
Washington Real Estate Investment Trust purchased 270 Technology Park in February, 2007. The Historical Summary has been prepared for the purpose of complying with Regulation S-X, Rule 3-14 of the Securities and Exchange Commission (SEC), which requires certain information with respect to real estate operations acquired to be included with certain filings with the SEC. This Historical Summary includes the historical gross income and direct operating expenses of 270 Technology Park, exclusive of the following expenses which may not be comparable to the proposed future operations:
(a) | Interest expense on existing mortgages and borrowings |
(b) | Depreciation of property and equipment |
(c) | Management and leasing fees |
(d) | Certain corporate and administrative expenses |
(e) | Provisions for income taxes |
NOTE 3 - USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions regarding revenues and expenses. Such estimates primarily relate to unsettled transactions and events as of the date of the financial statements. Accordingly, upon settlement, actual results could differ from estimated amounts.
NOTE 4 - DESCRIPTION OF LEASING ARRANGEMENTS
All leases are classified as operating leases and expire at various dates through 2016. The following is a schedule by years of future minimum rents receivable on non-cancelable operating leases in effect as of December 31, 2006:
2007 |
$ | 1,811,000 | |
2008 |
1,396,000 | ||
2009 |
977,000 | ||
2010 |
902,000 | ||
2011 |
778,000 | ||
Thereafter |
2,409,000 | ||
$ | 8,273,000 | ||
During the year ended December 31, 2006, three tenants accounted for approximately 35% of the total base rents.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of
Washington Real Estate Investment Trust
We have audited the accompanying Historical Summary of Gross Income and Direct Operating Expenses of Monument II (Historical Summary) for the year ended December 31, 2006. This Historical Summary is the responsibility of the Propertys management. Our responsibility is to express an opinion on the Historical Summary based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Historical Summary is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Historical Summary. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Historical Summary. We believe that our audit provides a reasonable basis for our opinion.
The accompanying Historical Summary was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission as described in Note 2, and is not intended to be a complete presentation of Monument IIs revenues and expenses.
In our opinion, the Historical Summary referred to above presents fairly, in all material respects, the gross income and direct operating expenses described in Note 2 of Monument II for the year ended December 31, 2006, in conformity with accounting principles generally accepted in the United States of America.
/s/ ARGY, WILTSE & ROBINSON, P.C.
McLean, Virginia
May 17, 2007
MONUMENT II
HISTORICAL SUMMARY OF GROSS INCOME AND DIRECT OPERATING EXPENSES
YEAR ENDED DECEMBER 31, 2006
2006 | |||
Gross income: |
|||
Base rents |
$ | 6,378,670 | |
Expense recoveries |
290,614 | ||
Total gross income |
6,669,284 | ||
Direct operating expenses: |
|||
Real estate taxes |
534,630 | ||
Contract services |
411,411 | ||
Utilities |
290,131 | ||
Repairs, maintenance and supplies |
68,738 | ||
Insurance |
31,015 | ||
Other expenses |
42,398 | ||
Total direct operating expenses |
1,378,323 | ||
Gross income in excess of direct operating expenses |
$ | 5,290,961 | |
The accompanying notes are an integral part of this historical summary.
MONUMENT II
NOTES TO THE HISTORICAL SUMMARY OF GROSS INCOME AND
DIRECT OPERATING EXPENSES
YEAR ENDED DECEMBER 31, 2006
NOTE 1 - NATURE OF BUSINESS
Monument II is a class A, 205,000 square foot, eight-story building with a five-level parking garage located in Herndon, Virginia. The operations of Monument II consist of leasing offices to various business tenants.
NOTE 2 - BASIS OF PRESENTATION
Washington Real Estate Investment Trust purchased Monument II in March, 2007. The Historical Summary has been prepared for the purpose of complying with Regulation S-X, Rule 3-14 of the Securities and Exchange Commission (SEC), which requires certain information with respect to real estate operations acquired to be included with certain filings with the SEC. This Historical Summary includes the historical gross income and direct operating expenses of Monument II, exclusive of the following expenses which may not be comparable to the proposed future operations:
(a) | Interest expense on existing mortgages and borrowings |
(b) | Depreciation of property and equipment |
(c) | Management and leasing fees |
(d) | Certain corporate and administrative expenses |
(e) | Provisions for income taxes |
NOTE 3 - USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions regarding revenues and expenses. Such estimates primarily relate to unsettled transactions and events as of the date of the financial statements. Accordingly, upon settlement, actual results could differ from estimated amounts.
NOTE 4 - DESCRIPTION OF LEASING ARRANGEMENTS
All leases are classified as operating leases and expire at various dates through 2011. The following is a schedule by years of future minimum rents receivable on non-cancelable operating leases in effect as of December 31, 2006:
2007 |
$ | 6,476,000 | |
2008 |
6,577,000 | ||
2009 |
6,564,000 | ||
2010 |
4,420,000 | ||
2011 |
621,000 | ||
$ | 24,658,000 | ||
During the year ended December 31, 2006, three tenants accounted for approximately 80% of the total base rents.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of
Washington Real Estate Investment Trust
We have audited the accompanying Historical Summary of Gross Income and Direct Operating Expenses of 2440 M Street (Historical Summary) for the year ended December 31, 2006. This Historical Summary is the responsibility of the Propertys management. Our responsibility is to express an opinion on the Historical Summary based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Historical Summary is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Historical Summary. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Historical Summary. We believe that our audit provides a reasonable basis for our opinion.
The accompanying Historical Summary was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission as described in Note 2, and is not intended to be a complete presentation of 2440 M Streets revenues and expenses.
In our opinion, the Historical Summary referred to above presents fairly, in all material respects, the gross income and direct operating expenses described in Note 2 of 2440 M Street for the year ended December 31, 2006, in conformity with accounting principles generally accepted in the United States of America.
/s/ ARGY, WILTSE & ROBINSON, P.C.
McLean, Virginia
May 17, 2007
2440 M STREET
HISTORICAL SUMMARY OF GROSS INCOME AND DIRECT OPERATING EXPENSES
YEAR ENDED DECEMBER 31, 2006
2006 | |||
Gross income: |
|||
Base rents |
$ | 3,490,215 | |
Expense recoveries |
211,161 | ||
Total gross income |
3,701,376 | ||
Direct operating expenses: |
|||
Real estate taxes |
448,765 | ||
Utilities |
448,220 | ||
Contract services |
435,077 | ||
Repairs, maintenance and supplies |
158,741 | ||
Insurance |
26,223 | ||
Other expenses |
60,966 | ||
Total direct operating expenses |
1,577,992 | ||
Gross income in excess of direct operating expenses |
$ | 2,123,384 | |
The accompanying notes are an integral part of this historical summary.
2440 M STREET
NOTES TO THE HISTORICAL SUMMARY OF GROSS INCOME AND
DIRECT OPERATING EXPENSES
YEAR ENDED DECEMBER 31, 2006
NOTE 1 - NATURE OF BUSINESS
2440 M Street is a class A, 110,000 square foot medical office building with a three-level parking garage in northwest Washington, D.C. The operations of 2440 M Street consist of leasing offices primarily to medical related tenants.
NOTE 2 - BASIS OF PRESENTATION
Washington Real Estate Investment Trust purchased 2440 M Street in March, 2007. The Historical Summary has been prepared for the purpose of complying with Regulation S-X, Rule 3-14 of the Securities and Exchange Commission (SEC), which requires certain information with respect to real estate operations acquired to be included with certain filings with the SEC. This Historical Summary includes the historical gross income and direct operating expenses of 2440 M Street, exclusive of the following expenses which may not be comparable to the proposed future operations:
(a) | Interest expense on existing mortgages and borrowings |
(b) | Depreciation of property and equipment |
(c) | Management and leasing fees |
(d) | Certain corporate and administrative expenses |
(e) | Provisions for income taxes |
NOTE 3 - USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions regarding revenues and expenses. Such estimates primarily relate to unsettled transactions and events as of the date of the financial statements. Accordingly, upon settlement, actual results could differ from estimated amounts.
NOTE 4 - DESCRIPTION OF LEASING ARRANGEMENTS
All leases are classified as operating leases and expire at various dates through 2019. The following is a schedule by years of future minimum rents receivable on non-cancelable operating leases in effect as of December 31, 2006:
2007 |
$ 3,501,000 | |
2008 |
3,528,000 | |
2009 |
3,062,000 | |
2010 |
2,487,000 | |
2011 |
2,310,000 | |
Thereafter |
9,269,000 | |
$24,157,000 | ||
WASHINGTON REAL ESTATE INVESTMENT TRUST
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AND
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
The pro forma balance sheet as of December 31, 2006 presents consolidated financial information as if the acquisitions had taken place on December 31, 2006. The pro forma statements of operations for the year ended December 31, 2006 present the pro forma results of operations as if the acquisitions had taken place as of the beginning of the reporting period. Both the balance sheets and statements of operations illustrate the operating results of each of the properties acquired as well as compilation of the pro forma adjustments that were necessary to develop the pro forma results for the registrant. Explanations or details of the pro forma adjustments are in the notes to each of the financial statements.
WRIT purchased these properties as follows during 2007:
Acquisition Date |
Property Name | |
February 8, 2007 |
270 Technology Park | |
March 1, 2007 |
Monument II | |
March 9, 2007 |
2440 M Street |
The unaudited consolidated pro forma financial information is not necessarily indicative of what WRITs actual results of operations or financial position would have been had these transactions been consummated on the dates indicated, nor does it purport to represent WRITs results of operations or financial position for any future period. The results of operations for the period ended December 31, 2006 are not necessarily indicative of the operating results for the period.
The unaudited consolidated pro forma financial information should be read in conjunction with WRITs Form 8-K filed with the Securities and Exchange Commission (SEC) on March 9, 2007, announcing the acquisitions; the consolidated financial statements and notes thereto included in WRITs Annual Report on Form 10-K for the year ended December 31, 2006; and the Historical Summary of Gross Income and Direct Operating Expenses and Notes included elsewhere in this Form 8-K/A1. In managements opinion, all adjustments necessary to reflect these acquisitions and related transactions have been made.
WASHINGTON REAL ESTATE INVESTMENT TRUST
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2006
(In thousands)
Registrant | 270 Technology Park |
Monument II | 2440 M Street |
Pro Forma |
||||||||||||||
Assets |
||||||||||||||||||
Land |
$ | 294,977 | $ | 4,704 | $ | 10,244 | $ | 12,500 | (1) | $ | 322,425 | |||||||
Income producing property |
1,300,824 | 21,049 | 65,241 | 37,184 | (1) | 1,424,298 | ||||||||||||
Accumulated depreciation |
(290,003 | ) | (290,003 | ) | ||||||||||||||
Net income producing property |
1,305,798 | 25,753 | 75,485 | 49,684 | 1,456,720 | |||||||||||||
Development in progress |
120,656 | 120,656 | ||||||||||||||||
Total investment in real estate, net |
1,426,454 | 25,753 | 75,485 | 49,684 | 1,577,376 | |||||||||||||
Cash and cash equivalents |
8,721 | (545 | )(2) | 8,176 | ||||||||||||||
Restricted cash |
4,151 | 4,151 | ||||||||||||||||
Rents and other receivables, net of allowance for doubtful accounts |
32,632 | 32,632 | ||||||||||||||||
Prepaid expenses and other assets |
59,307 | 65 | 6 | 43 | (2) | 66,684 | ||||||||||||
1,402 | 3,697 | 2,164 | (1) | |||||||||||||||
Total assets |
$ | 1,531,265 | $ | 27,220 | $ | 79,188 | $ | 51,346 | $ | 1,689,019 | ||||||||
Liabilities |
||||||||||||||||||
Notes payable |
$ | 728,255 | $ | 26,385 | $ | 47,521 | $ | | (2) | $ | 802,161 | |||||||
Mortgage notes payable |
237,073 | 237,073 | ||||||||||||||||
Lines of credit/short-term note payable |
61,000 | 30,000 | 49,200 | (2) | 140,200 | |||||||||||||
Accounts payable and other liabilities |
45,291 | 620 | 1,518 | 1,647 | (1) | 49,269 | ||||||||||||
87 | 106 | (2) | ||||||||||||||||
Advance rents |
6,325 | 128 | 159 | (2) | 6,612 | |||||||||||||
Tenant security deposits |
9,651 | 87 | 62 | 234 | (2) | 10,034 | ||||||||||||
Total liabilities |
1,087,595 | 27,220 | 79,188 | 51,346 | 1,245,349 | |||||||||||||
Minority interest |
1,739 | 1,739 | ||||||||||||||||
Shareholders Equity |
||||||||||||||||||
Shares of beneficial interest; $.01 par value |
451 | 451 | ||||||||||||||||
Additional paid-in capital |
500,727 | 500,727 | ||||||||||||||||
Distributions in excess of net income |
(59,247 | ) | (59,247 | ) | ||||||||||||||
Total Shareholders Equity |
441,931 | 441,931 | ||||||||||||||||
Total Liabilities and Shareholders Equity |
$ | 1,531,265 | $ | 27,220 | $ | 79,188 | $ | 51,346 | $ | 1,689,019 | ||||||||
WASHINGTON REAL ESTATE INVESTMENT TRUST
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2006
(In thousands, except per share amounts)
NOTES TO PRO FORMA BALANCE SHEET
Note 1: WRIT accounted for the acquisitions using the purchase method of accounting. WRIT allocated the purchase price to the related physical assets (land, building and tenant improvements) and in-place leases (tenant origination costs, leasing commissions and absorption costs, and net lease intangible assets/liabilities) based on their fair values, in accordance with SFAS No. 141, Business Combinations.
270 Technology Park |
Monument II | 2440 M Street |
||||||||||
Contract purchase price |
$ | 26,441 | $ | 77,304 | $ | 50,000 | ||||||
Acquisition costs |
94 | 360 | 201 | |||||||||
Total purchase price |
$ | 26,535 | $ | 77,664 | $ | 50,201 | ||||||
Amounts allocated to investment in real estate: |
||||||||||||
Amount allocated to building |
$ | 20,098 | $ | 63,219 | $ | 35,199 | ||||||
Amount allocated to land |
4,704 | 10,244 | 12,500 | |||||||||
Amount allocated to tenant origination costs |
951 | 2,022 | 1,985 | |||||||||
25,753 | 75,485 | 49,684 | ||||||||||
Amounts allocated to other assets and liabilities: |
||||||||||||
Amount allocated to leasing commissions |
423 | 699 | 698 | |||||||||
Amount allocated to absorption costs |
950 | 2,975 | 1,466 | |||||||||
Amount allocated to net lease intangible asset |
29 | 23 | | |||||||||
Amount allocated to net intangible lease liability |
(620 | ) | (1,518 | ) | (1,647 | ) | ||||||
782 | 2,179 | 517 | ||||||||||
Total |
$ | 26,535 | $ | 77,664 | $ | 50,201 | ||||||
Note 2: Adjustments to the Pro Forma Condensed Consolidated Balance Sheet represent funds raised through an equity offering, draws on the line of credit, cash paid and deposits applied at closing, and the assumption of certain assets and liabilities, including real estate and personal property taxes and security deposits.
270 Technology Park |
Monument II | 2440 M Street |
||||||||||
Funding of purchase price: |
||||||||||||
Lines of credit |
$ | | $ | (30,000 | ) | $ | (49,200 | ) | ||||
Debt offering |
(26,385 | ) | (47,521 | ) | | |||||||
Cash and cash equivalents |
| (545 | ) | |||||||||
Prepaid expenses and other assets |
65 | 6 | 43 | |||||||||
(26,320 | ) | (77,515 | ) | (49,702 | ) | |||||||
Other liabilities assumed: |
||||||||||||
Accounts payable and other liabilities |
| (87 | ) | (106 | ) | |||||||
Advance rents |
(128 | ) | | (159 | ) | |||||||
Tenant security deposits |
(87 | ) | (62 | ) | (234 | ) | ||||||
$ | (26,535 | ) | $ | (77,664 | ) | $ | (50,201 | ) | ||||
Acquisition related borrowings on our credit facilities totaled $79.2 million. This was to fund $30 million of the purchase price for Monument II and $49.2 for the purchase of 2440 M Street. Advances under this agreement bear interest at WRITs option of LIBOR plus a spread based on the credit rating on our publicly issued debt or the higher of Wells Fargo Banks prime rate and the Federal Funds Rate in effect on that day plus 0.5%. All outstanding advances are due and payable upon maturity in November 2010.
WASHINGTON REAL ESTATE INVESTMENT TRUST
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2006
(In thousands, except per share amounts)
Registrant | 270 Technology Park |
Monument II | 2440 M Street |
Total All |
Pro Forma | |||||||||||||||||||
Revenue |
||||||||||||||||||||||||
Real estate rental revenue |
$ | 219,662 | $ | 2,306 | $ | 6,670 | $ | 3,701 | $ | 12,677 | $ | 233,926 | ||||||||||||
FAS 141 |
139 | 428 | 431 | 998 | (1),(6) | |||||||||||||||||||
Straight Line Rent |
77 | 226 | 286 | 589 | (2),(6) | |||||||||||||||||||
Expenses |
||||||||||||||||||||||||
Real estate expenses |
67,269 | 364 | 1,378 | 1,578 | 3,320 | 70,943 | ||||||||||||||||||
58 | 191 | 105 | 354 | (3),(6) | ||||||||||||||||||||
Depreciation and amortization |
54,170 | 1,721 | 3,731 | 2,133 | 7,585 | (4),(6) | 61,755 | |||||||||||||||||
General and administrative |
12,622 | 12,622 | ||||||||||||||||||||||
134,061 | 2,143 | 5,300 | 3,816 | 11,259 | 145,320 | |||||||||||||||||||
Real estate operating income |
85,601 | 379 | 2,024 | 602 | 3,005 | 88,606 | ||||||||||||||||||
Other income (expense) |
||||||||||||||||||||||||
Interest expense |
(47,846 | ) | (1,027 | ) | (3,624 | ) | (2,915 | ) | (7,566 | )(5),(6) | (55,412 | ) | ||||||||||||
Other income |
906 | 906 | ||||||||||||||||||||||
(46,940 | ) | (1,027 | ) | (3,624 | ) | (2,915 | ) | (7,566 | ) | (54,506 | ) | |||||||||||||
Income from continuing operations |
38,661 | (648 | ) | (1,600 | ) | (2,313 | ) | (4,561 | ) | 34,100 | ||||||||||||||
Net Income |
$ | 38,661 | $ | (648 | ) | $ | (1,600 | ) | $ | (2,313 | ) | $ | (4,561 | ) | 34,100 | |||||||||
Per share information based on the weighted average of shares outstanding |
||||||||||||||||||||||||
Shares basic |
43,679 | 43,679 | ||||||||||||||||||||||
Shares diluted |
43,874 | 43,874 | ||||||||||||||||||||||
Income from continuing operations per share basic |
$ | 0.89 | $ | 0.78 | ||||||||||||||||||||
Income from continuing operations per share diluted |
$ | 0.88 | $ | 0.78 | ||||||||||||||||||||
Net income per share basic |
$ | 0.89 | $ | 0.78 | ||||||||||||||||||||
Net income per share diluted |
$ | 0.88 | $ | 0.78 | ||||||||||||||||||||
NOTES TO PRO FORMA STATEMENT OF OPERATIONS
(1) | Represents amortization of the net intangible lease liability based on the average remaining life of the acquired leases. |
(2) | Represents straight-line revenue adjustment. |
(3) | Represents property management costs incurred by the properties |
(4) | Represents depreciation over 30 years, based upon the portion of the purchase price allocated to building and improvements, plus amortization of tenant origination costs and FAS 141 leasing commissions over the average remaining life of the acquired leases. |
(5) | Represents interest expense on the line of credit borrowings, used to fund the acquisitionsSee Note 3 to the Balance Sheet and interest on assumed mortgages. |
(6) | The table below illustrates the corporate pro forma adjustments for each property (in thousands): |
270 Technology Park |
Monument II | 2440 M Street |
Total All | |||||||||
(1) Amortization of lease intangibles, net |
$ | 139 | $ | 428 | $ | 431 | $ | 998 | ||||
(2) Straight line rent adjustment |
$ | 77 | $ | 226 | $ | 286 | $ | 589 | ||||
(3) Property management costs |
$ | 58 | $ | 191 | $ | 105 | $ | 354 | ||||
(4) Depreciation and amortization |
$ | 1,721 | $ | 3,731 | $ | 2,133 | $ | 7,585 | ||||
(5) Interest expense |
$ | 1,027 | $ | 3,624 | $ | 2,915 | $ | 7,566 |