Exhibit 99.2
Fourth Quarter 2009
Supplemental Operating and Financial Data
for the Quarter Ended December 31, 2009
| Contact: | 6110 Executive Boulevard | |
| William T. Camp | Suite 800 | |
| Executive Vice President and | Rockville, MD 20852 | |
| Chief Financial Officer | (301) 984-9400 | |
| E-mail: bcamp@writ.com | (301) 984-9610 fax | |
Washington Real Estate Investment Trust (the “Company”) is a self-administered, self-managed, equity real estate investment trust investing in income-producing properties in the greater Washington metro region. WRIT is diversified, as it invests in office, industrial/flex, medical office, retail, and multifamily properties and land for development.
During 2009, WRIT reduced its total debt by $157 million and improved its debt to market capitalization from 48% at year end 2008 to 43% at year end 2009. WRIT achieved this by repurchasing $110 million of its convertible notes at discounts to par, issuing $167 million of equity and improving the quality of its property portfolio by disposing of $38 million of assets and acquiring a $20 million medical office building. Finally, WRIT executed 1.4 million square feet of commercial lease transactions, only slightly less than the 1.5 million square feet signed in 2008.
From a property operations perspective, WRIT’s portfolio performed well in 2009 considering the economic difficulties facing the metro Washington, DC region. Overall economic occupancy for 2009 was 92.6% compared to 92.2% for 2008, and portfolio net operating income grew 9.3% from 2008 to 2009.
In 2009, WRIT executed 1.4 million square feet of commercial lease transactions with an average lease term of 4.3 years. The average rental rate increase on new and renewal leases in the commercial portfolio was 10.2% on a GAAP basis and 0.6% on a cash basis. Commercial tenant improvement costs were $7.88 per square foot and leasing commissions were $6.07 per square foot for the year.
In the fourth quarter, WRIT used capacity on its line of credit to prepay its $100 million unsecured term loan due in November 2011. WRIT also repurchased $8.1 million of its 3.875% convertible notes at an average discounted price of 96.9% of par for approximately $7.8 million. As of December 31, 2009, approximately $134 million of the original $260 million of convertible notes remain outstanding. Subsequent to quarter end, WRIT repurchased an additional $1.2 million of its convertible notes at an average discounted price of 99.3% of par. Also in the fourth quarter, WRIT disposed of Crossroads Distribution Center, an 85,000 square foot industrial property in Elkridge, Maryland, for $4.4 million and a net book gain of $1.5 million.
WRIT executed 308,000 square feet of commercial lease transactions in the fourth quarter with an average lease term of 5.4 years. The average rental rate increase on new and renewal leases in the commercial portfolio was 4.2% on a GAAP basis and -7.1% on a cash basis. Commercial tenant improvement costs were $9.60 per square foot and leasing commissions were $9.63 per square foot for the quarter.
As of December 31, 2009, WRIT owned a diversified portfolio of 90 properties totaling approximately 11 million square feet of commercial space and 2,540 residential units. These 90 properties consist of 27 office properties, 20 industrial/flex properties, 18 medical office properties, 14 retail centers, 11 multi-family properties and land for development. WRIT shares are publicly traded on the New York Stock Exchange (NYSE:WRE).
2
With investments in the multifamily, retail, industrial/flex, office and medical office segments, WRIT is uniquely diversified. This balanced portfolio provides stability during market fluctuations in specific property types.
| * | Excludes discontinued operations: |
Sold Property: Crossroads Distribution Center
Held for Sale Property: Charleston Business Center
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, the effect of the current credit and financial market conditions, the availability and cost of capital, fluctuations in interest rates, tenants’ financial conditions, the timing and pricing of lease transactions, levels of competition, the effect of government regulation, the impact of newly adopted accounting principles, 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 2008 Form 10-K, our third quarter 2009 10-Q and our Form 8-K filed July 10, 2009. We assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.
3
| Schedule |
Page | |
| Key Financial Data |
||
| Consolidated Statements of Operations |
5 | |
| Consolidated Balance Sheets |
6 | |
| Funds From Operations and Funds Available for Distribution |
7 | |
| Earnings Before Interest Taxes Depreciation and Amortization (EBITDA) |
8 | |
| Capital Analysis |
||
| Long-Term Debt Analysis |
9-10 | |
| Capital Analysis |
11 | |
| Portfolio Analysis |
||
| Core Portfolio Net Operating Income (NOI) Growth & Rental Rate Growth |
12 | |
| Core Portfolio Net Operating Income (NOI) Summary |
13 | |
| Core Portfolio Net Operating Income (NOI) Detail for the Quarter |
14-15 | |
| Core Portfolio Net Operating Income (NOI) Detail for the Year |
16-17 | |
| Core Portfolio & Overall Economic Occupancy Levels by Sector |
18 | |
| Tenant Analysis |
||
| Commercial Leasing Summary |
19-20 | |
| 10 Largest Tenants - Based on Annualized Base Rent |
21 | |
| Industry Diversification |
22 | |
| Lease Expirations as of December 31, 2009 |
23 | |
| Growth and Strategy |
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| 2009 Acquisition and Disposition Summary |
24 | |
| Appendix |
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| Schedule of Properties |
25-26 | |
| Supplemental Definitions |
27 | |
| Twelve Months Ended | Three Months Ended | |||||||||||||||||||||||||||
| 12/31/09 | 12/31/08 | 12/31/09 | 09/30/09 | 06/30/09 | 03/31/09 | 12/31/08 | ||||||||||||||||||||||
| OPERATING RESULTS |
||||||||||||||||||||||||||||
| Real estate rental revenue |
$ | 306,929 | $ | 278,691 | $ | 77,866 | $ | 75,607 | $ | 76,262 | $ | 77,194 | $ | 72,286 | ||||||||||||||
| Real estate expenses |
(104,573 | ) | (93,499 | ) | (26,164 | ) | (25,868 | ) | (25,357 | ) | (27,184 | ) | (25,216 | ) | ||||||||||||||
| 202,356 | 185,192 | 51,702 | 49,739 | 50,905 | 50,010 | 47,070 | ||||||||||||||||||||||
| Real estate depreciation and amortization |
(94,042 | ) | (85,659 | ) | (23,947 | ) | (23,643 | ) | (23,339 | ) | (23,113 | ) | (23,446 | ) | ||||||||||||||
| Income from real estate |
108,314 | 99,533 | 27,755 | 26,096 | 27,566 | 26,897 | 23,624 | |||||||||||||||||||||
| Other income |
1,205 | 1,073 | 284 | 262 | 339 | 320 | 277 | |||||||||||||||||||||
| Gain from non-disposal activities |
73 | 17 | 11 | 62 | — | — | — | |||||||||||||||||||||
| Gain (loss) on extinguishment of debt |
5,336 | (5,583 | ) | (1,595 | ) | (133 | ) | 1,219 | 5,845 | 2,866 | ||||||||||||||||||
| Interest expense |
(75,001 | ) | (75,041 | ) | (17,780 | ) | (18,224 | ) | (19,316 | ) | (19,681 | ) | (18,854 | ) | ||||||||||||||
| General and administrative |
(13,906 | ) | (12,110 | ) | (3,174 | ) | (3,834 | ) | (3,716 | ) | (3,182 | ) | (3,297 | ) | ||||||||||||||
| Income from continuing operations |
26,021 | 7,889 | 5,501 | 4,229 | 6,092 | 10,199 | 4,616 | |||||||||||||||||||||
| Discontinued operations: |
||||||||||||||||||||||||||||
| Income from operations of properties held for sale |
1,579 | 4,129 | 275 | 227 | 376 | 701 | 712 | |||||||||||||||||||||
| Gain on sale of real estate |
13,348 | 15,275 | 1,527 | 5,147 | 6,674 | — | — | |||||||||||||||||||||
| Income from discontinued operations |
14,927 | 19,404 | 1,802 | 5,374 | 7,050 | 701 | 712 | |||||||||||||||||||||
| Net income |
40,948 | 27,293 | 7,303 | 9,603 | 13,142 | 10,900 | 5,328 | |||||||||||||||||||||
| Less: Net income from noncontrolling interests |
(203 | ) | (211 | ) | (49 | ) | (53 | ) | (52 | ) | (49 | ) | (53 | ) | ||||||||||||||
| Net income attributable to the controlling interests |
$ | 40,745 | $ | 27,082 | $ | 7,254 | $ | 9,550 | $ | 13,090 | $ | 10,851 | $ | 5,275 | ||||||||||||||
| Per Share Data |
||||||||||||||||||||||||||||
| Net income attributable to the controlling interests |
$ | 0.71 | $ | 0.55 | $ | 0.12 | $ | 0.16 | $ | 0.23 | $ | 0.20 | $ | 0.10 | ||||||||||||||
| Fully diluted weighted average shares outstanding |
56,968 | 49,217 | 59,833 | 58,571 | 56,277 | 52,915 | 52,387 | |||||||||||||||||||||
| Percentage of Revenues: |
||||||||||||||||||||||||||||
| Real estate expenses |
34.1 | % | 33.5 | % | 33.6 | % | 34.2 | % | 33.2 | % | 35.2 | % | 34.9 | % | ||||||||||||||
| General and administrative |
4.5 | % | 4.3 | % | 4.1 | % | 5.1 | % | 4.9 | % | 4.1 | % | 4.6 | % | ||||||||||||||
| Ratios: |
||||||||||||||||||||||||||||
| EBITDA / Interest expense |
2.6 | x | 2.3 | x | 2.7 | x | 2.5 | x | 2.5 | x | 2.7 | x | 2.5 | x | ||||||||||||||
| Income from continuing operations attributable to the controlling interest/Total real estate revenue |
8.4 | % | 2.8 | % | 7.0 | % | 5.5 | % | 7.9 | % | 13.1 | % | 6.3 | % | ||||||||||||||
| Net income attributable to the controlling interest/Total real estate revenue |
13.3 | % | 9.7 | % | 9.3 | % | 12.6 | % | 17.2 | % | 14.1 | % | 7.3 | % | ||||||||||||||
Note: Certain prior quarter amounts have been reclassified to conform to the current quarter presentation.
5
| December 31, 2009 |
September 30, 2009 |
June 30, 2009 |
March 31, 2009 |
December 31, 2008 |
||||||||||||||||
| Assets |
||||||||||||||||||||
| Land |
$ | 412,137 | $ | 412,137 | $ | 410,828 | $ | 410,833 | $ | 410,833 | ||||||||||
| Income producing property |
1,899,378 | 1,890,505 | 1,866,520 | 1,858,293 | 1,854,008 | |||||||||||||||
| 2,311,515 | 2,302,642 | 2,277,348 | 2,269,126 | 2,264,841 | ||||||||||||||||
| Accumulated depreciation and amortization |
(474,171 | ) | (454,407 | ) | (434,396 | ) | (414,543 | ) | (394,902 | ) | ||||||||||
| Net income producing property |
1,837,344 | 1,848,235 | 1,842,952 | 1,854,583 | 1,869,939 | |||||||||||||||
| Development in progress, including land held for development |
25,031 | 24,611 | 24,140 | 23,678 | 23,732 | |||||||||||||||
| Total real estate held for investment, net |
1,862,375 | 1,872,846 | 1,867,092 | 1,878,261 | 1,893,671 | |||||||||||||||
| Investment in real estate held for sale, net |
3,841 | 6,277 | 13,881 | 26,563 | 26,734 | |||||||||||||||
| Cash and cash equivalents |
11,203 | 7,119 | 58,446 | 9,685 | 11,874 | |||||||||||||||
| Restricted cash |
19,170 | 18,072 | 21,038 | 19,343 | 18,823 | |||||||||||||||
| Rents and other receivables, net of allowance for doubtful accounts |
50,525 | 49,109 | 48,777 | 46,753 | 44,675 | |||||||||||||||
| Prepaid expenses and other assets |
97,815 | 104,421 | 100,628 | 105,364 | 112,284 | |||||||||||||||
| Other assets related to properties sold or held for sale |
296 | 553 | 950 | 1,204 | 1,346 | |||||||||||||||
| Total assets |
$ | 2,045,225 | $ | 2,058,397 | $ | 2,110,812 | $ | 2,087,173 | $ | 2,109,407 | ||||||||||
| Liabilities and Equity |
||||||||||||||||||||
| Notes payable |
$ | 688,912 | $ | 796,064 | $ | 807,128 | $ | 845,364 | $ | 890,679 | ||||||||||
| Mortgage notes payable |
405,451 | 406,377 | 457,238 | 458,084 | 421,286 | |||||||||||||||
| Lines of credit/short-term note payable |
128,000 | 6,000 | 15,000 | 48,000 | 67,000 | |||||||||||||||
| Accounts payable and other liabilities |
52,649 | 64,462 | 70,979 | 71,571 | 70,538 | |||||||||||||||
| Advance rents |
11,211 | 9,792 | 9,388 | 9,034 | 8,926 | |||||||||||||||
| Tenant security deposits |
9,854 | 10,021 | 10,013 | 10,043 | 10,084 | |||||||||||||||
| Other liabilities related to properties sold or held for sale |
85 | 112 | 311 | 445 | 469 | |||||||||||||||
| Total Liabilities |
1,296,162 | 1,292,828 | 1,370,057 | 1,442,541 | 1,468,982 | |||||||||||||||
| Equity |
||||||||||||||||||||
| Shares of beneficial interest, $0.01 par value; 100,000 shares authorized |
599 | 598 | 584 | 531 | 526 | |||||||||||||||
| Additional paid-in capital |
944,825 | 942,884 | 901,603 | 793,441 | 777,375 | |||||||||||||||
| Distributions in excess of net income |
(198,412 | ) | (179,639 | ) | (163,425 | ) | (151,172 | ) | (138,936 | ) | ||||||||||
| Accumulated other comprehensive income (loss) |
(1,757 | ) | (2,080 | ) | (1,808 | ) | (1,963 | ) | (2,335 | ) | ||||||||||
| Total shareholders’ equity |
745,255 | 761,763 | 736,954 | 640,837 | 636,630 | |||||||||||||||
| Noncontrolling interests in subsidiaries |
3,808 | 3,806 | 3,801 | 3,795 | 3,795 | |||||||||||||||
| Total equity |
749,063 | 765,569 | 740,755 | 644,632 | 640,425 | |||||||||||||||
| Total liabilities and equity |
$ | 2,045,225 | $ | 2,058,397 | $ | 2,110,812 | $ | 2,087,173 | $ | 2,109,407 | ||||||||||
| Total Debt / Total Market Capitalization |
0.43:1 | 0.41:1 | 0.50:1 | 0.60:1 | 0.48:1 | |||||||||||||||
Note: Certain prior quarter amounts have been reclassified to conform to the current quarter presentation.
6
| Twelve Months Ended | Three Months Ended | |||||||||||||||||||||||||||
| 12/31/2009 | 12/31/2008 | 12/31/2009 | 9/30/2009 | 6/30/2009 | 3/31/2009 | 12/31/2008 | ||||||||||||||||||||||
| Funds from operations(1) |
||||||||||||||||||||||||||||
| Net income (loss) attributable to the controlling interests |
$ | 40,745 | $ | 27,082 | $ | 7,254 | $ | 9,550 | $ | 13,090 | $ | 10,851 | $ | 5,275 | ||||||||||||||
| Real estate depreciation and amortization |
94,042 | 85,659 | 23,947 | 23,643 | 23,339 | 23,113 | 23,446 | |||||||||||||||||||||
| Gain from non-disposal activities |
(73 | ) | (17 | ) | (11 | ) | (62 | ) | — | — | — | |||||||||||||||||
| Discontinued operations: |
||||||||||||||||||||||||||||
| Gain on sale of real estate |
(13,348 | ) | (15,275 | ) | (1,527 | ) | (5,147 | ) | (6,674 | ) | — | — | ||||||||||||||||
| Real estate depreciation and amortization |
405 | 1,239 | 1 | 46 | 169 | 189 | 184 | |||||||||||||||||||||
| Funds From Operations (FFO) |
$ | 121,771 | $ | 98,688 | $ | 29,664 | $ | 28,030 | $ | 29,924 | $ | 34,153 | $ | 28,905 | ||||||||||||||
| FFO per share - basic |
$ | 2.14 | $ | 2.01 | $ | 0.50 | $ | 0.48 | $ | 0.53 | $ | 0.65 | $ | 0.55 | ||||||||||||||
| FFO per share - fully diluted |
$ | 2.14 | $ | 2.00 | $ | 0.50 | $ | 0.48 | $ | 0.53 | $ | 0.65 | $ | 0.55 | ||||||||||||||
| FFO per share - fully diluted, excluding gain (loss) on extinguishment of debt |
$ | 2.04 | $ | 2.12 | $ | 0.52 | $ | 0.48 | $ | 0.51 | $ | 0.53 | $ | 0.50 | ||||||||||||||
| Funds available for distribution(2) |
||||||||||||||||||||||||||||
| Non-cash (gain)/loss on extinguishment of debt |
(6,336 | ) | (2,866 | ) | 595 | 133 | (1,219 | ) | (5,845 | ) | (2,866 | ) | ||||||||||||||||
| Tenant improvements |
(12,490 | ) | (11,350 | ) | (4,425 | ) | (2,272 | ) | (4,727 | ) | (1,066 | ) | (2,759 | ) | ||||||||||||||
| External and internal leasing commissions capitalized |
(5,845 | ) | (6,487 | ) | (1,058 | ) | (1,543 | ) | (2,186 | ) | (1,058 | ) | (1,184 | ) | ||||||||||||||
| Recurring capital improvements |
(6,356 | ) | (9,792 | ) | (1,442 | ) | (1,756 | ) | (1,984 | ) | (1,174 | ) | (2,688 | ) | ||||||||||||||
| Straight-line rent, net |
(3,379 | ) | (2,752 | ) | (1,527 | ) | (576 | ) | (612 | ) | (664 | ) | (517 | ) | ||||||||||||||
| Non-cash fair value interest expense |
3,595 | 3,441 | 773 | 794 | 900 | 1,128 | 266 | |||||||||||||||||||||
| Non-real estate depreciation and amortization |
4,555 | 5,039 | 1,037 | 1,122 | 1,177 | 1,219 | 1,261 | |||||||||||||||||||||
| Amortization of lease intangibles, net |
(2,587 | ) | (1,623 | ) | (777 | ) | (559 | ) | (654 | ) | (597 | ) | (47 | ) | ||||||||||||||
| Amortization and expensing of restricted share and unit compensation |
3,460 | 2,538 | 820 | 1,136 | 927 | 577 | 417 | |||||||||||||||||||||
| Funds Available for Distribution (FAD) |
$ | 96,388 | $ | 74,836 | $ | 23,660 | $ | 24,509 | $ | 21,546 | $ | 26,673 | $ | 20,788 | ||||||||||||||
| Total Dividends Paid |
$ | 99,550 | $ | 85,299 | $ | 25,843 | $ | 25,591 | $ | 25,193 | $ | 22,923 | $ | 22,666 | ||||||||||||||
| Average shares - basic |
56,894 | 49,138 | 59,735 | 58,556 | 56,276 | 52,914 | 52,358 | |||||||||||||||||||||
| Average shares - fully diluted |
56,968 | 49,217 | 59,833 | 58,571 | 56,277 | 52,915 | 52,387 | |||||||||||||||||||||
| (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. FFO is a non-GAAP measure. |
| (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 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. |
7
| Twelve Months Ended | Three Months Ended | |||||||||||||||||||||||||||
| 12/31/09 | 12/31/08 | 12/31/09 | 09/30/09 | 06/30/09 | 03/31/09 | 12/31/08 | ||||||||||||||||||||||
| EBITDA(1) |
||||||||||||||||||||||||||||
| Net income attributable to the controlling interests |
$ | 40,745 | $ | 27,082 | $ | 7,254 | $ | 9,550 | $ | 13,090 | $ | 10,851 | $ | 5,275 | ||||||||||||||
| Add: |
||||||||||||||||||||||||||||
| Interest expense |
75,001 | 75,041 | 17,780 | 18,224 | 19,316 | 19,681 | 18,854 | |||||||||||||||||||||
| Real estate depreciation and amortization |
94,447 | 86,898 | 23,948 | 23,689 | 23,508 | 23,302 | 23,630 | |||||||||||||||||||||
| Non-real estate depreciation |
1,192 | 1,175 | 288 | 293 | 306 | 305 | 315 | |||||||||||||||||||||
| Less: |
||||||||||||||||||||||||||||
| Gain on sale of real estate |
(13,348 | ) | (15,275 | ) | (1,527 | ) | (5,147 | ) | (6,674 | ) | — | — | ||||||||||||||||
| Gain from non-disposal activities |
(73 | ) | (17 | ) | (11 | ) | (62 | ) | — | — | — | |||||||||||||||||
| Other income |
(1,205 | ) | (1,073 | ) | (284 | ) | (262 | ) | (339 | ) | (320 | ) | (277 | ) | ||||||||||||||
| EBITDA |
$ | 196,759 | $ | 173,831 | $ | 47,448 | $ | 46,285 | $ | 49,207 | $ | 53,819 | $ | 47,797 | ||||||||||||||
| (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. EBITDA is a non-GAAP measure. |
8
| December 30, 2009 |
September 30, 2009 |
June 30, 2009 |
March 31, 2009 |
December 31, 2008 |
||||||||||||||||
| Balances Outstanding |
||||||||||||||||||||
| Secured |
||||||||||||||||||||
| Conventional fixed rate |
$ | 405,451 | (1) | $ | 406,377 | (1) | $ | 457,238 | (1) | $ | 458,084 | $ | 421,286 | |||||||
| Secured total |
405,451 | 406,377 | 457,238 | 458,084 | 421,286 | |||||||||||||||
| Unsecured |
||||||||||||||||||||
| Fixed rate bonds and notes |
688,912 | 796,064 | 807,128 | 845,364 | 890,679 | |||||||||||||||
| Credit facility |
128,000 | 6,000 | 15,000 | 48,000 | 67,000 | |||||||||||||||
| Unsecured total |
816,912 | 802,064 | 822,128 | 893,364 | 957,679 | |||||||||||||||
| Total |
$ | 1,222,363 | $ | 1,208,441 | $ | 1,279,366 | $ | 1,351,448 | $ | 1,378,965 | ||||||||||
| Average Interest Rates |
||||||||||||||||||||
| Secured |
||||||||||||||||||||
| Conventional fixed rate |
5.9 | % (1) | 5.9 | % (1) | 6.0 | % (1) | 6.0 | % (1) | 6.1 | % | ||||||||||
| Secured total |
5.9 | % | 5.9 | % | 6.0 | % | 6.0 | % | 6.1 | % | ||||||||||
| Unsecured |
||||||||||||||||||||
| Fixed rate bonds |
5.7 | % | 5.7 | % | 5.7 | % | 5.6 | % | 5.6 | % | ||||||||||
| Credit facilities |
2.8 | % (2) | 0.7 | % | 0.7 | % | 0.9 | % | 1.5 | % | ||||||||||
| Unsecured total |
5.2 | % | 5.7 | % | 5.6 | % | 5.3 | % | 5.3 | % | ||||||||||
| Average |
5.5 | % | 5.7 | % | 5.8 | % | 5.6 | % | 5.5 | % | ||||||||||
Note: The current balances outstanding of the secured and unsecured fixed rate bonds and notes are shown net of discounts/premiums in the amount of $7,409,991 and $5,416,014, respectively.
| (1) | Includes the impact of the $101.9 million loan with an interest rate of 5.619% per annum assumed with the purchase of 2445 M Street during the fourth quarter of 2008. In purchase accounting, the loan was recorded at its fair value of $91.7 million. The combined interest and discount amortization give the loan a fair value interest rate of 7.25%. |
| (2) | On December 1, 2009, we borrowed $100.0 million on a line of credit in order to prepay the $100.0 million term loan. The interest rate on this $100.0 million borrowing on our lines of credit is effectively fixed by an interest rate swap at 3.375% through February 19, 2010. A forward interest swap effectively fixes the interest rate at 2.525% from February 20, 2010 through November 1, 2011. |
9
| Future Maturities of Debt | |||||||||||||||||
| Year | Secured Debt | Unsecured Debt | Credit Facilities | Total Debt | Average Interest Rate |
||||||||||||
| 2010 |
$ | 4,510 | $ | — | $ | 100,000 | $ | 104,510 | 3.5 | % | |||||||
| 2011 |
13,788 | 284,328 | 28,000 | 326,116 | 5.4 | % | |||||||||||
| 2012 |
21,823 | 50,000 | (1) | — | 71,823 | 5.0 | % | ||||||||||
| 2013 |
107,123 | 60,000 | — | 167,123 | 5.5 | % | |||||||||||
| 2014 |
2,038 | 100,000 | — | 102,038 | 5.3 | % | |||||||||||
| 2015 |
20,595 | 150,000 | — | 170,595 | 5.3 | % | |||||||||||
| 2016 |
82,866 | — | — | 82,866 | 5.7 | % | |||||||||||
| 2017 |
103,816 | — | — | 103,816 | 7.2 | % | |||||||||||
| 2018 |
2,063 | — | — | 2,063 | 5.6 | % | |||||||||||
| Thereafter |
54,239 | (2) | 50,000 | — | 104,239 | 6.4 | % | ||||||||||
| Total maturities |
$ | 412,861 | $ | 694,328 | $ | 128,000 | $ | 1,235,189 | 5.5 | % | |||||||
Weighted average maturity = 4.7 years
| (1) | The 3.875% convertible notes due 2026 in the aggregate principal amount of $134.3 million are puttable at par in September, 2011. Due to the probability that the convertible notes will be paid off in September, 2011, that date is reflected in the future maturities schedule. |
| (2) | The 5.82% mortgage note payble maturing in August, 2033 in the aggregate principal amount of $21.9 million may be repaid without penalty on August 11, 2010. Due to the probability that the mortgage note will not be paid off on August 11, 2010, the date reflected in the future maturities schedule is August, 2033. |
10
| December 31, 2009 |
September 30, 2009 |
June 30, 2009 |
March 31, 2009 |
December 31, 2008 |
||||||||||||||||
| Market Data |
||||||||||||||||||||
| Shares Outstanding |
59,811 | 59,724 | 58,250 | 53,000 | 52,434 | |||||||||||||||
| Market Price per Share |
$ | 27.55 | $ | 28.80 | $ | 22.37 | $ | 17.30 | $ | 28.30 | ||||||||||
| Equity Market Capitalization |
$ | 1,647,793 | $ | 1,720,051 | $ | 1,303,053 | $ | 916,900 | $ | 1,483,882 | ||||||||||
| Total Debt |
$ | 1,222,363 | $ | 1,208,441 | $ | 1,279,366 | $ | 1,351,448 | $ | 1,378,965 | ||||||||||
| Total Market Capitalization |
$ | 2,870,156 | $ | 2,928,492 | $ | 2,582,419 | $ | 2,268,348 | $ | 2,862,847 | ||||||||||
| Total Debt to Market Capitalization |
0.43:1 | 0.41:1 | 0.50:1 | 0.60:1 | 0.48:1 | |||||||||||||||
| Earnings to Fixed Charges(1) |
1.3 | x | 1.2 | x | 1.3 | x | 1.5 | x | 1.2 | x | ||||||||||
| Debt Service Coverage Ratio(2) |
2.5 | x | 2.4 | x | 2.4 | x | 2.6 | x | 2.4 | x | ||||||||||
| Dividend Data |
||||||||||||||||||||
| Total Dividends Paid |
$ | 25,842 | $ | 25,591 | $ | 25,193 | $ | 22,923 | $ | 22,666 | ||||||||||
| Common Dividend per Share |
$ | 0.4325 | $ | 0.4325 | $ | 0.4325 | $ | 0.4325 | $ | 0.4325 | ||||||||||
| Payout Ratio (FFO per share basis) |
86.5 | % | 90.1 | % | 81.6 | % | 66.5 | % | 78.6 | % | ||||||||||
| (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 attributable to the controlling interests 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. |
11
| Fourth Quarter(1) | Year(2) | |||||||||||
| NOI Growth |
Rental Rate Growth |
NOI Growth |
Rental Rate Growth |
|||||||||
| Cash Basis: |
||||||||||||
| Multifamily |
1.3 | % | -1.9 | % | 3.4 | % | 0.2 | % | ||||
| Office Buildings |
0.0 | % | 2.6 | % | -2.5 | % | 3.0 | % | ||||
| Medical Office Buildings |
5.4 | % | 2.6 | % | 2.2 | % | 3.1 | % | ||||
| Retail Centers |
7.8 | % | 0.6 | % | -1.0 | % | 1.8 | % | ||||
| Industrial/Flex |
-4.9 | % | -1.1 | % | -4.3 | % | 1.1 | % | ||||
| Overall Core Portfolio |
1.6 | % | 1.1 | % | -1.1 | % | 2.2 | % | ||||
| Fourth Quarter(1) | Year(2) | |||||||||||
| NOI Growth |
Rental Rate Growth |
NOI Growth |
Rental Rate Growth |
|||||||||
| GAAP Basis: |
||||||||||||
| Multifamily |
0.8 | % | -1.8 | % | 3.4 | % | 0.3 | % | ||||
| Office Buildings |
6.6 | % | 5.5 | % | -1.7 | % | 3.3 | % | ||||
| Medical Office Buildings |
2.1 | % | 2.4 | % | 1.0 | % | 2.7 | % | ||||
| Retail Centers |
16.3 | % | -0.3 | % | -0.6 | % | 1.0 | % | ||||
| Industrial/Flex |
-5.2 | % | -3.1 | % | -5.3 | % | 0.0 | % | ||||
| Overall Core Portfolio |
4.8 | % | 1.9 | % | -1.1 | % | 2.0 | % | ||||
| 1 | Non-core properties were: |
Acquisitions - 2445 M Street and Lansdowne Medical Office Building.
Sold properties - Avondale, Tech 100 Industrial Park, Brandywine Center and Crossroads Distribution Center.
Held for sale property - Charleston Business Center.
In development - Bennett Park, Clayborne Apartments and Dulles Station.
| 2 | Non-core properties were: |
Acquisitions - 6100 Columbia Park Road, Sterling Medical Office Building, Kenmore Apartments, 2445 M Street and Lansdowne Medical Office Building.
Sold properties - Avondale, Tech 100 Industrial Park, Brandywine Center and Crossroads Distribution Center.
Held for sale properties - Charleston Business Center.
In development - Bennett Park, Clayborne Apartments and Dulles Station.
12
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||||
| 2009 | 2008 | % Change | 2009 | 2008 | % Change | |||||||||||||
| Cash Basis: |
||||||||||||||||||
| Multifamily |
$ | 5,675 | $ | 5,604 | 1.3 | % | $ | 19,507 | $ | 18,871 | 3.4 | % | ||||||
| Office Buildings |
17,728 | 17,730 | 0.0 | % | 70,757 | 72,576 | -2.5 | % | ||||||||||
| Medical Office Buildings |
7,361 | 6,982 | 5.4 | % | 28,625 | 28,003 | 2.2 | % | ||||||||||
| Retail Centers |
8,020 | 7,442 | 7.8 | % | 30,661 | 30,964 | -1.0 | % | ||||||||||
| Industrial/Flex |
6,444 | 6,774 | -4.9 | % | 25,791 | 26,948 | -4.3 | % | ||||||||||
| $ | 45,228 | $ | 44,532 | 1.6 | % | $ | 175,341 | $ | 177,362 | -1.1 | % | |||||||
| GAAP Basis: |
||||||||||||||||||
| Multifamily |
$ | 5,877 | $ | 5,832 | 0.8 | % | $ | 19,527 | $ | 18,884 | 3.4 | % | ||||||
| Office Buildings |
19,352 | 18,147 | 6.6 | % | 73,482 | 74,729 | -1.7 | % | ||||||||||
| Medical Office Buildings |
7,492 | 7,339 | 2.1 | % | 29,577 | 29,286 | 1.0 | % | ||||||||||
| Retail Centers |
8,101 | 6,965 | 16.3 | % | 31,141 | 31,340 | -0.6 | % | ||||||||||
| Industrial/Flex |
6,507 | 6,862 | -5.2 | % | 25,881 | 27,327 | -5.3 | % | ||||||||||
| $ | 47,329 | $ | 45,145 | 4.8 | % | $ | 179,608 | $ | 181,566 | -1.1 | % | |||||||
13
| Three Months Ended December 31, 2009 | ||||||||||||||||||||||||||||
| Multifamily | Office | Medical Office | Retail | Industrial/Flex | Corporate and Other |
Total | ||||||||||||||||||||||
| Real estate rental revenue |
||||||||||||||||||||||||||||
| Core portfolio |
$ | 9,934 | $ | 29,462 | $ | 11,293 | $ | 10,825 | $ | 9,102 | $ | — | $ | 70,616 | ||||||||||||||
| Non-core - acquired and in development 1 |
1,930 | 5,320 | — | — | — | — | 7,250 | |||||||||||||||||||||
| Total |
11,864 | 34,782 | 11,293 | 10,825 | 9,102 | — | 77,866 | |||||||||||||||||||||
| Real estate expenses |
||||||||||||||||||||||||||||
| Core portfolio |
4,057 | 10,110 | 3,801 | 2,724 | 2,595 | — | 23,287 | |||||||||||||||||||||
| Non-core - acquired and in development 1 |
888 | 1,902 | 87 | — | — | — | 2,877 | |||||||||||||||||||||
| Total |
4,945 | 12,012 | 3,888 | 2,724 | 2,595 | — | 26,164 | |||||||||||||||||||||
| Net Operating Income (NOI) |
||||||||||||||||||||||||||||
| Core portfolio |
5,877 | 19,352 | 7,492 | 8,101 | 6,507 | — | 47,329 | |||||||||||||||||||||
| Non-core - acquired and in development 1 |
1,042 | 3,418 | (87 | ) | — | — | — | 4,373 | ||||||||||||||||||||
| Total |
$ | 6,919 | $ | 22,770 | $ | 7,405 | $ | 8,101 | $ | 6,507 | $ | — | $ | 51,702 | ||||||||||||||
| Core portfolio NOI GAAP basis (from above) |
$ | 5,877 | $ | 19,352 | $ | 7,492 | $ | 8,101 | $ | 6,507 | $ | — | $ | 47,329 | ||||||||||||||
| Straight-line revenue, net for core properties |
(10 | ) | (1,112 | ) | (33 | ) | 82 | (47 | ) | — | (1,120 | ) | ||||||||||||||||
| FAS 141 Min Rent |
(192 | ) | (535 | ) | (99 | ) | (166 | ) | (21 | ) | — | (1,013 | ) | |||||||||||||||
| Amortization of lease intangibles for core properties |
— | 23 | 1 | 3 | 5 | — | 32 | |||||||||||||||||||||
| Core portfolio NOI, cash basis |
$ | 5,675 | $ | 17,728 | $ | 7,361 | $ | 8,020 | $ | 6,444 | $ | — | $ | 45,228 | ||||||||||||||
| Reconciliation of NOI to Net Income |
||||||||||||||||||||||||||||
| Total NOI |
$ | 6,919 | $ | 22,770 | $ | 7,405 | $ | 8,101 | $ | 6,507 | $ | — | $ | 51,702 | ||||||||||||||
| Other income |
— | — | — | — | — | 284 | 284 | |||||||||||||||||||||
| Interest expense |
(1,731 | ) | (2,617 | ) | (1,376 | ) | (329 | ) | (239 | ) | (11,488 | ) | (17,780 | ) | ||||||||||||||
| Depreciation and amortization |
(3,466 | ) | (11,523 | ) | (3,695 | ) | (1,897 | ) | (3,057 | ) | (309 | ) | (23,947 | ) | ||||||||||||||
| General and administrative |
— | — | — | — | — | (3,174 | ) | (3,174 | ) | |||||||||||||||||||
| Discontinued operations 2 |
— | — | — | — | 275 | — | 275 | |||||||||||||||||||||
| Gain from non-disposal activities |
— | 11 | — | — | — | — | 11 | |||||||||||||||||||||
| Gain on sale of real estate |
— | — | — | — | — | 1,527 | 1,527 | |||||||||||||||||||||
| Gain (loss) on extinguishment of debt |
— | — | — | — | — | (1,595 | ) | (1,595 | ) | |||||||||||||||||||
| Net Income |
1,722 | 8,641 | 2,334 | 5,875 | 3,486 | (14,755 | ) | 7,303 | ||||||||||||||||||||
| Net income attributable to noncontrolling interests |
— | — | — | — | — | (49 | ) | (49 | ) | |||||||||||||||||||
| Net income attributable to the controlling interests |
$ | 1,722 | $ | 8,641 | $ | 2,334 | $ | 5,875 | $ | 3,486 | $ | (14,804 | ) | $ | 7,254 | |||||||||||||
| 1 | Non-core acquired and in development properties: |
Acquisitions - 2445 M Street and Lansdowne Medical Office Building.
In development - Bennett Park, Clayborne Apartments and Dulles Station.
| 2 | Discontinued operations include: Sold Property - Crossroads Distribution Center; Held for Sale Property - Charleston Business Center. |
14
| Three Months Ended December 31, 2008 | ||||||||||||||||||||||||||||
| Multifamily | Office | Medical Office | Retail | Industrial/Flex | Corporate and Other |
Total | ||||||||||||||||||||||
| Real estate rental revenue |
||||||||||||||||||||||||||||
| Core portfolio |
$ | 9,856 | $ | 28,509 | $ | 10,950 | $ | 9,740 | $ | 9,425 | $ | — | $ | 68,480 | ||||||||||||||
| Non-core - acquired and in development 1 |
1,360 | 2,446 | — | — | — | — | 3,806 | |||||||||||||||||||||
| Total |
11,216 | 30,955 | 10,950 | 9,740 | 9,425 | — | 72,286 | |||||||||||||||||||||
| Real estate expenses |
||||||||||||||||||||||||||||
| Core portfolio |
4,024 | 10,362 | 3,611 | 2,775 | 2,563 | — | 23,335 | |||||||||||||||||||||
| Non-core - acquired and in development 1 |
1,038 | 843 | — | — | — | — | 1,881 | |||||||||||||||||||||
| Total |
5,062 | 11,205 | 3,611 | 2,775 | 2,563 | — | 25,216 | |||||||||||||||||||||
| Net operating income (NOI) |
||||||||||||||||||||||||||||
| Core portfolio |
5,832 | 18,147 | 7,339 | 6,965 | 6,862 | — | 45,145 | |||||||||||||||||||||
| Non-core - acquired and in development 1 |
322 | 1,603 | — | — | — | — | 1,925 | |||||||||||||||||||||
| Total |
$ | 6,154 | $ | 19,750 | $ | 7,339 | $ | 6,965 | $ | 6,862 | $ | — | $ | 47,070 | ||||||||||||||
| Core portfolio NOI GAAP basis (from above) |
$ | 5,832 | $ | 18,147 | $ | 7,339 | $ | 6,965 | $ | 6,862 | $ | — | $ | 45,145 | ||||||||||||||
| Straight-line revenue, net for core properties |
(4 | ) | (111 | ) | (186 | ) | 92 | (71 | ) | — | (280 | ) | ||||||||||||||||
| FAS 141 min rent |
(224 | ) | (311 | ) | (171 | ) | 382 | (22 | ) | — | (346 | ) | ||||||||||||||||
| Amortization of lease intangibles for core properties |
— | 5 | — | 3 | 5 | — | 13 | |||||||||||||||||||||
| Core portfolio NOI, cash basis |
$ | 5,604 | $ | 17,730 | $ | 6,982 | $ | 7,442 | $ | 6,774 | $ | — | $ | 44,532 | ||||||||||||||
| Reconciliation of NOI to net income |
||||||||||||||||||||||||||||
| Total NOI |
$ | 6,154 | $ | 19,750 | $ | 7,339 | $ | 6,965 | $ | 6,862 | $ | — | $ | 47,070 | ||||||||||||||
| Other income |
— | — | — | — | — | 277 | 277 | |||||||||||||||||||||
| Interest expense |
(2,118 | ) | (1,433 | ) | (1,403 | ) | (335 | ) | (247 | ) | (13,318 | ) | (18,854 | ) | ||||||||||||||
| Depreciation and amortization |
(4,504 | ) | (10,035 | ) | (3,683 | ) | (1,996 | ) | (2,986 | ) | (242 | ) | (23,446 | ) | ||||||||||||||
| General and administrative |
— | — | — | — | — | (3,297 | ) | (3,297 | ) | |||||||||||||||||||
| Discontinued operations 2 |
353 | 36 | — | — | 323 | — | 712 | |||||||||||||||||||||
| Gain (loss) on extinguishment of debt |
— | — | — | — | — | 2,866 | 2,866 | |||||||||||||||||||||
| Net income |
(115 | ) | 8,318 | 2,253 | 4,634 | 3,952 | (13,714 | ) | 5,328 | |||||||||||||||||||
| Net income attributable to noncontrolling interests |
— | — | — | — | — | (53 | ) | (53 | ) | |||||||||||||||||||
| Net income attributable to the controlling interests |
$ | (115 | ) | $ | 8,318 | $ | 2,253 | $ | 4,634 | $ | 3,952 | $ | (13,767 | ) | $ | 5,275 | ||||||||||||
| 1 | Non-core acquired and in development properties were: |
Acquisition - 2445 M Street.
In development - Bennett Park, Clayborne Apartments and Dulles Station.
| 2 | Discontinued operations include: Sold Properties - Crossroads Distribution Center, Brandywine Center, Tech 100 Industrial Park and Avondale; Held for Sale Property - Charleston Business Center. |
15
| Twelve Months Ended December 31, 2009 | ||||||||||||||||||||||||||||
| Multifamily | Office | Medical Office | Retail | Industrial/Flex | Corporate and Other |
Total | ||||||||||||||||||||||
| Real estate rental revenue |
||||||||||||||||||||||||||||
| Core portfolio |
$ | 32,909 | $ | 114,944 | $ | 44,251 | $ | 41,821 | $ | 35,730 | $ | — | $ | 269,655 | ||||||||||||||
| Non-core - acquired and in development 1 |
13,561 | 21,513 | 660 | — | 1,540 | — | 37,274 | |||||||||||||||||||||
| Total |
46,470 | 136,457 | 44,911 | 41,821 | 37,270 | — | 306,929 | |||||||||||||||||||||
| Real estate expenses |
||||||||||||||||||||||||||||
| Core portfolio |
13,382 | 41,462 | 14,674 | 10,680 | 9,849 | — | 90,047 | |||||||||||||||||||||
| Non-core - acquired and in development 1 |
6,112 | 7,436 | 544 | — | 434 | — | 14,526 | |||||||||||||||||||||
| Total |
19,494 | 48,898 | 15,218 | 10,680 | 10,283 | — | 104,573 | |||||||||||||||||||||
| Net Operating Income (NOI) |
||||||||||||||||||||||||||||
| Core portfolio |
19,527 | 73,482 | 29,577 | 31,141 | 25,881 | — | 179,608 | |||||||||||||||||||||
| Non-core - acquired and in development 1 |
7,449 | 14,077 | 116 | — | 1,106 | — | 22,748 | |||||||||||||||||||||
| Total |
$ | 26,976 | $ | 87,559 | $ | 29,693 | $ | 31,141 | $ | 26,987 | $ | — | $ | 202,356 | ||||||||||||||
| Core portfolio NOI GAAP basis (from above) |
$ | 19,527 | $ | 73,482 | $ | 29,577 | $ | 31,141 | $ | 25,881 | $ | — | $ | 179,608 | ||||||||||||||
| Straight-line revenue, net for core properties |
(20 | ) | (1,218 | ) | (387 | ) | (28 | ) | (34 | ) | — | (1,687 | ) | |||||||||||||||
| FAS 141 Min Rent |
— | (1,617 | ) | (566 | ) | (465 | ) | (75 | ) | — | (2,723 | ) | ||||||||||||||||
| Amortization of lease intangibles for core properties |
— | 110 | 1 | 13 | 19 | — | 143 | |||||||||||||||||||||
| Core portfolio NOI, cash basis |
$ | 19,507 | $ | 70,757 | $ | 28,625 | $ | 30,661 | $ | 25,791 | $ | — | $ | 175,341 | ||||||||||||||
| Reconciliation of NOI to Net Income |
||||||||||||||||||||||||||||
| Total NOI |
$ | 26,976 | $ | 87,559 | $ | 29,693 | $ | 31,141 | $ | 26,987 | $ | — | $ | 202,356 | ||||||||||||||
| Other income |
— | — | — | — | — | 1,205 | 1,205 | |||||||||||||||||||||
| Interest expense |
(8,466 | ) | (10,423 | ) | (5,503 | ) | (1,312 | ) | (963 | ) | (48,334 | ) | (75,001 | ) | ||||||||||||||
| Depreciation and amortization |
(13,921 | ) | (45,195 | ) | (14,814 | ) | (7,416 | ) | (11,596 | ) | (1,100 | ) | (94,042 | ) | ||||||||||||||
| General and administrative |
— | — | — | — | — | (13,906 | ) | (13,906 | ) | |||||||||||||||||||
| Discontinued operations 2 |
392 | 85 | — | — | 1,102 | — | 1,579 | |||||||||||||||||||||
| Gain from non-disposal activities |
— | 71 | 2 | — | — | — | 73 | |||||||||||||||||||||
| Gain on sale of real estate |
— | — | — | — | — | 13,348 | 13,348 | |||||||||||||||||||||
| Gain (loss) on extinguishment of debt |
— | — | — | — | — | 5,336 | 5,336 | |||||||||||||||||||||
| Net Income |
4,981 | 32,097 | 9,378 | 22,413 | 15,530 | (43,451 | ) | 40,948 | ||||||||||||||||||||
| Net income attributable to noncontrolling interests |
— | — | — | — | — | (203 | ) | (203 | ) | |||||||||||||||||||
| Net income attributable to the controlling interests |
$ | 4,981 | $ | 32,097 | $ | 9,378 | $ | 22,413 | $ | 15,530 | $ | (43,654 | ) | $ | 40,745 | |||||||||||||
| 1 | Non-core acquired and in development properties: |
Acquisitions - 6100 Columbia Park Road, Sterling Medical Office Building, Kenmore Apartments, 2445 M Street and Lansdowne Medical Office Building.
In development - Bennett Park, Clayborne Apartments and Dulles Station.
| 2 | Discontinued operations include: Sold Properties - Crossroads Distribution Center, Brandywine Center, Tech 100 Industrial Park, and Avondale; Held for Sale Property - Charleston Business Center. |
16
| Twelve Months Ended December 31, 2008 | ||||||||||||||||||||||||||||
| Multifamily | Office | Medical Office | Retail | Industrial/Flex | Corporate and Other |
Total | ||||||||||||||||||||||
| Real estate rental revenue |
||||||||||||||||||||||||||||
| Core portfolio |
$ | 32,199 | $ | 115,685 | $ | 43,210 | $ | 40,987 | $ | 36,700 | $ | — | $ | 268,781 | ||||||||||||||
| Non-core - acquired and in development 1 |
5,659 | 2,608 | 384 | — | 1,259 | — | 9,910 | |||||||||||||||||||||
| Total |
37,858 | 118,293 | 43,594 | 40,987 | 37,959 | — | 278,691 | |||||||||||||||||||||
| Real estate expenses |
||||||||||||||||||||||||||||
| Core portfolio |
13,315 | 40,956 | 13,924 | 9,647 | 9,373 | — | 87,215 | |||||||||||||||||||||
| Non-core - acquired and in development 1 |
4,121 | 1,471 | 253 | — | 439 | — | 6,284 | |||||||||||||||||||||
| Total |
17,436 | 42,427 | 14,177 | 9,647 | 9,812 | — | 93,499 | |||||||||||||||||||||
| Net operating income (NOI) |
||||||||||||||||||||||||||||
| Core portfolio |
18,884 | 74,729 | 29,286 | 31,340 | 27,327 | — | 181,566 | |||||||||||||||||||||
| Non-core - acquired and in development 1 |
1,538 | 1,137 | 131 | — | 820 | — | 3,626 | |||||||||||||||||||||
| Total |
$ | 20,422 | $ | 75,866 | $ | 29,417 | $ | 31,340 | $ | 28,147 | $ | — | $ | 185,192 | ||||||||||||||
| Core portfolio NOI GAAP basis (from above) |
$ | 18,884 | $ | 74,729 | $ | 29,286 | $ | 31,340 | $ | 27,327 | $ | — | $ | 181,566 | ||||||||||||||
| Straight-line revenue, net for core properties |
(15 | ) | (784 | ) | (718 | ) | (405 | ) | (423 | ) | — | (2,345 | ) | |||||||||||||||
| FAS 141 min rent |
— | (1,379 | ) | (565 | ) | 16 | 25 | — | (1,903 | ) | ||||||||||||||||||
| Amortization of lease intangibles for core properties |
2 | 10 | — | 13 | 19 | — | 44 | |||||||||||||||||||||
| Core portfolio NOI, cash basis |
$ | 18,871 | $ | 72,576 | $ | 28,003 | $ | 30,964 | $ | 26,948 | $ | — | $ | 177,362 | ||||||||||||||
| Reconciliation of NOI to net income |
||||||||||||||||||||||||||||
| Total NOI |
$ | 20,422 | $ | 75,866 | $ | 29,417 | $ | 31,340 | $ | 28,147 | $ | — | $ | 185,192 | ||||||||||||||
| Other income |
— | — | — | — | — | 1,073 | 1,073 | |||||||||||||||||||||
| Interest expense |
(6,514 | ) | (3,987 | ) | (5,622 | ) | (1,339 | ) | (983 | ) | (56,596 | ) | (75,041 | ) | ||||||||||||||
| Depreciation and amortization |
(13,431 | ) | (37,731 | ) | (14,441 | ) | (7,498 | ) | (11,770 | ) | (788 | ) | (85,659 | ) | ||||||||||||||
| General and administrative |
— | — | — | — | — | (12,110 | ) | (12,110 | ) | |||||||||||||||||||
| Discontinued operations 2 |
861 | 192 | — | — | 3,076 | — | 4,129 | |||||||||||||||||||||
| Gain from non-disposal activities |
— | — | — | — | — | 17 | 17 | |||||||||||||||||||||
| Gain on sale of real estate |
15,275 | 15,275 | ||||||||||||||||||||||||||
| Gain (loss) on extinguishment of debt |
— | — | — | — | — | (5,583 | ) | (5,583 | ) | |||||||||||||||||||
| Net income |
1,338 | 34,340 | 9,354 | 22,503 | 18,470 | (58,712 | ) | 27,293 | ||||||||||||||||||||
| Net income attributable to noncontrolling interests |
— | — | — | — | — | (211 | ) | (211 | ) | |||||||||||||||||||
| Net income attributable to the controlling interests |
$ | 1,338 | $ | 34,340 | $ | 9,354 | $ | 22,503 | $ | 18,470 | $ | (58,923 | ) | $ | 27,082 | |||||||||||||
| 1 | Non-core acquired and in development properties were: |
Acquisitions - 6100 Columbia Park Road, Sterling Medical Office Building, Kenmore Apartments, and 2445 M Street.
In development - Bennett Park, Clayborne Apartments and Dulles Station.
| 2 | Discontinued operations include: Sold Properties - Crossroads Distribution Center, Brandywine Center, Tech 100 Industrial Park, Avondale, Sullyfield Center and The Earhart Building; Held for Sale Property - Charleston Business Center. |
17
GAAP Basis
| Core Portfolio | All Properties | |||||||||||
| Sector |
4th QTR 2009 | 4th QTR 2008 | 4th QTR 2009 | 4th QTR 2008 | ||||||||
| Multifamily |
94.5 | % | 92.8 | % | 94.1 | % | 87.6 | % | ||||
| Office Buildings |
92.0 | % | 93.3 | % | 92.6 | % | 93.2 | % | ||||
| Medical Office Buildings |
95.9 | % | 95.2 | % | 92.7 | % | 95.2 | % | ||||
| Retail Centers |
94.4 | % | 94.8 | % | 94.4 | % | 94.8 | % | ||||
| Industrial / Flex |
87.1 | % | 93.0 | % | 87.3 | % | 92.5 | % | ||||
| Overall Portfolio |
92.7 | % | 93.7 | % | 92.4 | % | 92.6 | % | ||||
18
| 4th Quarter 2009 | Year to Date | |||||||||||||||
| Gross Leasing Square Footage |
||||||||||||||||
| Office Buildings |
133,548 | 683,793 | ||||||||||||||
| Medical Office Buildings |
34,931 | 139,602 | ||||||||||||||
| Retail Centers |
95,037 | 145,883 | ||||||||||||||
| Industrial/Flex |
44,503 | 453,375 | ||||||||||||||
| Total |
308,019 | 1,422,653 | ||||||||||||||
| Weighted Average Term (yrs) |
||||||||||||||||
| Office Buildings |
5.2 | 4.6 | ||||||||||||||
| Medical Office Buildings |
7.3 | 5.2 | ||||||||||||||
| Retail Centers |
5.2 | 4.6 | ||||||||||||||
| Industrial/Flex |
4.9 | 3.3 | ||||||||||||||
| Total |
5.4 | 4.3 | ||||||||||||||
| GAAP | CASH | GAAP | CASH | |||||||||||||
| Rental Rate Increases: |
||||||||||||||||
| Rate on expiring leases |
||||||||||||||||
| Office Buildings |
$ | 29.87 | $ | 31.85 | $ | 31.14 | $ | 32.37 | ||||||||
| Medical Office Buildings |
30.38 | 31.32 | 31.77 | 32.90 | ||||||||||||
| Retail Centers |
13.69 | 14.12 | 17.67 | 18.40 | ||||||||||||
| Industrial/Flex |
9.33 | 9.62 | 8.53 | 9.00 | ||||||||||||
| Total |
$ | 21.97 | $ | 23.11 | $ | 22.61 | $ | 23.54 | ||||||||
| Rate on new and renewal leases |
||||||||||||||||
| Office Buildings |
$ | 29.90 | $ | 28.19 | $ | 34.73 | $ | 33.05 | ||||||||
| Medical Office Buildings |
38.88 | 35.42 | 36.80 | 34.48 | ||||||||||||
| Retail Centers |
13.67 | 13.00 | 17.60 | 16.74 | ||||||||||||
| Industrial/Flex |
9.02 | 8.41 | 8.80 | 8.49 | ||||||||||||
| Total |
$ | 22.90 | $ | 21.46 | $ | 24.92 | $ | 23.69 | ||||||||
| Percentage Increase |
||||||||||||||||
| Office Buildings |
0.11 | % | -11.48 | % | 11.55 | % | 2.09 | % | ||||||||
| Medical Office Buildings |
27.99 | % | 13.07 | % | 15.85 | % | 4.79 | % | ||||||||
| Retail Centers |
-0.15 | % | -7.93 | % | -0.43 | % | -9.02 | % | ||||||||
| Industrial/Flex |
-3.29 | % | -12.61 | % | 3.24 | % | -5.64 | % | ||||||||
| Total |
4.22 | % | -7.11 | % | 10.18 | % | 0.63 | % | ||||||||
19
| 4th Quarter 2009 | Year to Date | |||||||||||
| Total Dollars | Dollars per Square Foot |
Total Dollars | Dollars per Square Foot | |||||||||
| Tenant Improvements |
||||||||||||
| Office Buildings |
$ | 1,430,285 | $ | 10.71 | $ | 8,086,595 | $ | 11.83 | ||||
| Medical Office Buildings |
750,289 | 21.48 | 2,000,373 | 14.33 | ||||||||
| Retail Centers |
711,150 | 7.48 | 716,150 | 4.91 | ||||||||
| Industrial/Flex |
64,692 | 1.45 | 411,135 | 0.91 | ||||||||
| Subtotal |
$ | 2,956,416 | $ | 9.60 | $ | 11,214,253 | $ | 7.88 | ||||
| Total Dollars | Dollars per Square Foot |
Total Dollars | Dollars per Square Foot | |||||||||
| Leasing Costs |
||||||||||||
| Office Buildings |
$ | 1,713,899 | $ | 12.83 | $ | 5,686,887 | $ | 8.32 | ||||
| Medical Office Buildings |
715,311 | 20.48 | 1,389,291 | 9.95 | ||||||||
| Retail Centers |
416,159 | 4.38 | 608,464 | 4.17 | ||||||||
| Industrial/Flex |
119,606 | 2.69 | 953,195 | 2.10 | ||||||||
| Subtotal |
$ | 2,964,975 | $ | 9.63 | $ | 8,637,837 | $ | 6.07 | ||||
| Total Dollars | Dollars per Square Foot |
Total Dollars | Dollars per Square Foot | |||||||||
| Tenant Improvements and Leasing Costs |
||||||||||||
| Office Buildings |
$ | 3,144,184 | $ | 23.54 | $ | 13,773,482 | $ | 20.14 | ||||
| Medical Office Buildings |
1,465,600 | 41.96 | 3,389,664 | 24.28 | ||||||||
| Retail Centers |
1,127,309 | 11.86 | 1,324,614 | 9.08 | ||||||||
| Industrial/Flex |
184,298 | 4.14 | 1,364,330 | 3.01 | ||||||||
| Total |
$ | 5,921,391 | $ | 19.22 | $ | 19,852,090 | $ | 13.95 | ||||
20
| 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 | 66 | 4.41 | % | 210,354 | 2.22 | % | |||||
| Advisory Board Company |
1 | 113 | 2.75 | % | 180,925 | 1.91 | % | |||||
| General Services Administration |
8 | 18 | 2.12 | % | 262,698 | 2.77 | % | |||||
| INOVA Health System |
7 | 51 | 1.92 | % | 114,208 | 1.21 | % | |||||
| IBM Corporation |
2 | 110 | 1.92 | % | 134,598 | 1.42 | % | |||||
| Patton Boggs LLP |
1 | 88 | 1.87 | % | 110,566 | 1.17 | % | |||||
| Sunrise Assisted Living, Inc. |
1 | 45 | 1.57 | % | 115,289 | 1.22 | % | |||||
| Lafarge North America, Inc |
1 | 7 | 1.31 | % | 80,610 | 0.85 | % | |||||
| URS Corporation |
1 | 48 | 1.21 | % | 84,970 | 0.90 | % | |||||
| Children’s Hospital |
3 | 59 | 1.02 | % | 69,230 | 0.73 | % | |||||
| Total/Weighted Average |
61 | 20.10 | % | 1,363,448 | 14.40 | % | ||||||
21
| Industry Classification (NAICS) |
Annualized Base Rental Revenue |
Percentage of Aggregate Annualized Rent |
Aggregate Rentable Square Feet |
Percentage of Aggregate Square Feet |
|||||||
| Professional, Scientific and Technical Services |
$ | 58,465,524 | 27.13 | % | 2,220,576 | 23.37 | % | ||||
| Ambulatory Health Care Services |
40,319,407 | 18.70 | % | 1,304,523 | 13.74 | % | |||||
| Credit Intermediation and Related Activities |
15,187,472 | 7.04 | % | 380,543 | 4.01 | % | |||||
| Executive, Legislative & Other General Government |
9,177,221 | 4.26 | % | 444,583 | 4.68 | % | |||||
| Educational Services |
6,766,662 | 3.14 | % | 250,671 | 2.64 | % | |||||
| Religious, Grantmaking, Civic, Professional |
6,539,899 | 3.04 | % | 203,329 | 2.14 | % | |||||
| Food Services and Drinking Places |
5,735,577 | 2.66 | % | 214,671 | 2.26 | % | |||||
| Administrative and Support Services |
5,044,315 | 2.34 | % | 322,261 | 3.39 | % | |||||
| Food and Beverage Stores |
4,131,651 | 1.92 | % | 255,416 | 2.69 | % | |||||
| Nursing and Residential Care Facilities |
3,931,270 | 1.83 | % | 145,010 | 1.53 | % | |||||
| Broadcasting (except Internet) |
3,513,648 | 1.63 | % | 104,459 | 1.10 | % | |||||
| Miscellaneous Store Retailers |
3,451,386 | 1.60 | % | 240,220 | 2.53 | % | |||||
| Furniture and Home Furnishing Stores |
3,371,369 | 1.57 | % | 215,942 | 2.27 | % | |||||
| Nonmetallic Mineral Product Manufacturing |
3,200,247 | 1.49 | % | 119,474 | 1.26 | % | |||||
| Merchant Wholesalers-Durable Goods |
2,943,430 | 1.37 | % | 293,226 | 3.09 | % | |||||
| Personal and Laundry Services |
2,804,802 | 1.30 | % | 101,829 | 1.07 | % | |||||
| Clothing and Clothing Accessories Stores |
2,262,857 | 1.05 | % | 140,834 | 1.48 | % | |||||
| Health and Personal Care Services |
2,190,686 | 1.02 | % | 63,149 | 0.67 | % | |||||
| Specialty Trade Contractors |
2,114,408 | 0.98 | % | 225,789 | 2.38 | % | |||||
| Hospitals |
2,050,447 | 0.95 | % | 64,910 | 0.68 | % | |||||
| Sporting Goods/Books/Hobby/Music Stores |
1,989,755 | 0.92 | % | 144,171 | 1.52 | % | |||||
| Printing and Related Support Activities |
1,972,059 | 0.92 | % | 92,128 | 0.97 | % | |||||
| Merchant Wholesalers-Non Durable Goods |
1,971,329 | 0.92 | % | 212,101 | 2.23 | % | |||||
| Miscellaneous Manufacturing |
1,920,393 | 0.89 | % | 181,959 | 1.92 | % | |||||
| Real Estate |
1,871,387 | 0.87 | % | 72,053 | 0.76 | % | |||||
| Construction of Buildings |
1,786,761 | 0.83 | % | 109,794 | 1.16 | % | |||||
| General Merchandise Stores |
1,673,509 | 0.78 | % | 222,430 | 2.34 | % | |||||
| Computer & Electronic Product Manufacturing |
1,404,026 | 0.65 | % | 78,832 | 0.83 | % | |||||
| Amusement, Gambling and Recreation industries |
1,351,336 | 0.63 | % | 107,108 | 1.13 | % | |||||
| Insurance Carriers and Related Activities |
1,329,725 | 0.62 | % | 54,026 | 0.57 | % | |||||
| Telecommunications |
1,180,350 | 0.55 | % | 35,231 | 0.37 | % | |||||
| Other |
13,803,382 | 6.40 | % | 876,287 | 9.22 | % | |||||
| Total |
$ | 215,456,290 | 100.00 | % | 9,497,535 | 100.00 | % | ||||
22
| Year |
Number of Leases |
Rentable Square Feet |
Percent of Rentable Square Feet |
Annualized Rent * |
Average Rental Rate |
Percent of Annualized Rent * |
||||||||||
| Office: |
||||||||||||||||
| 2010 |
127 | 560,911 | 14.95 | % | $ | 16,440,008 | $ | 29.31 | 12.80 | % | ||||||
| 2011 |
115 | 517,068 | 13.79 | % | 16,912,727 | 32.71 | 13.17 | % | ||||||||
| 2012 |
89 | 414,601 | 11.05 | % | 12,757,871 | 30.77 | 9.94 | % | ||||||||
| 2013 |
63 | 456,908 | 12.18 | % | 14,273,322 | 31.24 | 11.12 | % | ||||||||
| 2014 |
69 | 562,415 | 14.99 | % | 18,365,497 | 32.65 | 14.30 | % | ||||||||
| 2015 and thereafter |
135 | 1,238,978 | 33.04 | % | 49,670,427 | 40.09 | 38.67 | % | ||||||||
| 598 | 3,750,881 | 100.00 | % | $ | 128,419,852 | $ | 34.24 | 100.00 | % | |||||||
| Medical Office: |
||||||||||||||||
| 2010 |
60 | 182,641 | 15.28 | % | $ | 6,010,260 | $ | 32.91 | 13.44 | % | ||||||
| 2011 |
69 | 216,818 | 18.14 | % | 7,444,653 | 34.34 | 16.65 | % | ||||||||
| 2012 |
44 | 137,069 | 11.47 | % | 5,085,428 | 37.10 | 11.38 | % | ||||||||
| 2013 |
46 | 138,769 | 11.61 | % | 4,844,415 | 34.91 | 10.84 | % | ||||||||
| 2014 |
38 | 119,275 | 9.98 | % | 4,682,101 | 39.25 | 10.47 | % | ||||||||
| 2015 and thereafter |
100 | 401,018 | 33.53 | % | 16,639,203 | 41.49 | 37.22 | % | ||||||||
| 357 | 1,195,590 | 100.00 | % | $ | 44,706,060 | $ | 37.39 | 100.00 | % | |||||||
| Retail: |
||||||||||||||||
| 2010 |
55 | 242,191 | 13.51 | % | $ | 4,693,740 | $ | 19.38 | 13.29 | % | ||||||
| 2011 |
42 | 201,578 | 11.24 | % | 3,557,331 | 17.65 | 10.07 | % | ||||||||
| 2012 |
41 | 140,073 | 7.81 | % | 3,226,532 | 23.03 | 9.13 | % | ||||||||
| 2013 |
37 | 286,002 | 15.95 | % | 4,347,732 | 15.20 | 12.31 | % | ||||||||
| 2014 |
19 | 108,247 | 6.04 | % | 2,469,607 | 22.81 | 6.99 | % | ||||||||
| 2015 and thereafter |
83 | 814,933 | 45.45 | % | 17,031,800 | 20.90 | 48.21 | % | ||||||||
| 277 | 1,793,024 | 100.00 | % | $ | 35,326,742 | $ | 19.70 | 100.00 | % | |||||||
| Industrial/Flex: |
||||||||||||||||
| 2010 |
55 | 564,309 | 20.14 | % | $ | 6,264,495 | $ | 11.10 | 19.09 | % | ||||||
| 2011 |
66 | 553,614 | 19.76 | % | 5,637,367 | 10.18 | 17.18 | % | ||||||||
| 2012 |
38 | 495,356 | 17.68 | % | 5,617,674 | 11.34 | 17.12 | % | ||||||||
| 2013 |
29 | 417,951 | 14.91 | % | 4,904,205 | 11.73 | 14.95 | % | ||||||||
| 2014 |
17 | 283,557 | 10.12 | % | 3,418,137 | 12.05 | 10.42 | % | ||||||||
| 2015 and thereafter |
33 | 487,539 | 17.39 | % | 6,966,074 | 14.29 | 21.23 | % | ||||||||
| 238 | 2,802,326 | 100.00 | % | $ | 32,807,952 | $ | 11.71 | 100.00 | % | |||||||
| Total: |
||||||||||||||||
| 2010 |
297 | 1,550,052 | 16.25 | % | $ | 33,408,503 | $ | 21.55 | 13.85 | % | ||||||
| 2011 |
292 | 1,489,078 | 15.61 | % | 33,552,078 | 22.53 | 13.91 | % | ||||||||
| 2012 |
212 | 1,187,099 | 12.44 | % | 26,687,505 | 22.48 | 11.06 | % | ||||||||
| 2013 |
175 | 1,299,630 | 13.62 | % | 28,369,674 | 21.83 | 11.76 | % | ||||||||
| 2014 |
143 | 1,073,494 | 11.24 | % | 28,935,342 | 26.95 | 11.99 | % | ||||||||
| 2015 and thereafter |
351 | 2,942,468 | 30.84 | % | 90,307,504 | 30.69 | 37.43 | % | ||||||||
| 1,470 | 9,541,821 | 100.00 | % | $ | 241,260,606 | $ | 25.28 | 100.00 | % | |||||||
| * | Annualized Rent is equal to the rental rate effective at lease expiration (cash basis) multiplied by 12. |
23
Acquisition Summary
| Acquisition Date |
Square Feet |
Leased Percentage at Acquisition |
December 31, 2009 Leased Percentage |
Investment | ||||||||||||
| Lansdowne Medical Office Building |
Leesburg, VA | August 13, 2009 | 87,400 | 0 | % | 0 | % | $ | 19,900 | |||||||
| Disposition Summary | ||||||||||||||||
| Disposition Date |
Property Type |
Square Feet |
Sale Price | GAAP Gain | ||||||||||||
| Avondale Apartments (237 units) |
Laurel, MD | May 13, 2009 | Multifamily | 170,000 | $ | 19,750 | $ | 6,700 | ||||||||
| Tech 100 |
Elkridge, MD | July 23, 2009 | Industrial | 166,000 | $ | 10,540 | $ | 4,100 | ||||||||
| Brandywine Center |
Rockville, MD | July 31, 2009 | Office | 35,000 | $ | 3,300 | $ | 1,000 | ||||||||
| Crossroads Distribution Center |
Elkridge, MD | November 13, 2009 | Industrial | 85,000 | $ | 4,375 | $ | 1,500 | ||||||||
| Total |
456,000 | $ | 37,965 | $ | 13,300 | |||||||||||
24
| 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 | ||||
| 515 King Street |
Alexandria, VA | 1992 | 1966 | 76,000 | ||||
| The Lexington Building |
Rockville, MD | 1993 | 1970 | 46,000 | ||||
| The Saratoga Building |
Rockville, MD | 1993 | 1977 | 58,000 | ||||
| 6110 Executive Boulevard |
Rockville, MD | 1995 | 1971 | 198,000 | ||||
| 1220 19th Street |
Washington, DC | 1995 | 1976 | 102,000 | ||||
| 1600 Wilson Boulevard |
Arlington, VA | 1997 | 1973 | 166,000 | ||||
| 7900 Westpark Drive |
McLean, VA | 1997 | 1972/1986/1999 | 523,000 | ||||
| 600 Jefferson Plaza |
Rockville, MD | 1999 | 1985 | 112,000 | ||||
| 1700 Research Boulevard |
Rockville, MD | 1999 | 1982 | 101,000 | ||||
| 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 | 80,000 | ||||
| 1776 G Street |
Washington, DC | 2003 | 1979 | 263,000 | ||||
| Albemarle Point |
Chantilly, VA | 2005 | 2001 | 89,000 | ||||
| 6565 Arlington Boulevard |
Falls Church, VA | 2006 | 1967/1998 | 140,000 | ||||
| West Gude Drive |
Rockville, MD | 2006 | 1984/1986/1988 | 276,000 | ||||
| The Ridges |
Gaithersburg, MD | 2006 | 1990 | 104,000 | ||||
| The Crescent |
Gaithersburg, MD | 2006 | 1989 | 49,000 | ||||
| Monument II |
Herndon, VA | 2007 | 2000 | 205,000 | ||||
| Woodholme Center |
Pikesville, MD | 2007 | 1989 | 73,000 | ||||
| 2000 M Street |
Washington, DC | 2007 | 1971 | 227,000 | ||||
| Dulles Station |
Herndon, VA | 2005 | 2007 | 180,000 | ||||
| 2445 M Street |
Washington, DC | 2008 | 1986 | 290,000 | ||||
| Subtotal |
4,176,000 | |||||||
| Medical Office Buildings |
||||||||
| Woodburn Medical Park I |
Annandale, VA | 1998 | 1984 | 71,000 | ||||
| Woodburn Medical Park II |
Annandale, VA | 1998 | 1988 | 96,000 | ||||
| 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 | 49,000 | ||||
| Alexandria Professional Center |
Alexandria, VA | 2006 | 1968 | 113,000 | ||||
| 9707 Medical Center Drive |
Rockville, MD | 2006 | 1994 | 38,000 | ||||
| 15001 Shady Grove Road |
Rockville, MD | 2006 | 1999 | 51,000 | ||||
| Plumtree Medical Center |
Bel Air, MD | 2006 | 1991 | 33,000 | ||||
| 15005 Shady Grove Road |
Rockville, MD | 2006 | 2002 | 52,000 | ||||
| 2440 M Street |
Washington, DC | 2007 | 1986/2006 | 110,000 | ||||
| Woodholme Medical Office Building |
Pikesville, MD | 2007 | 1996 | 125,000 | ||||
| Ashburn Office Park |
Ashburn, VA | 2007 | 1998/2000/2002 | 75,000 | ||||
| CentreMed I & II |
Centreville, VA | 2007 | 1998 | 52,000 | ||||
| Sterling Medical Office Building |
Sterling, VA | 2008 | 1986/2000 | 36,000 | ||||
| Lansdowne Medical Office Building |
Leesburg, VA | 2009 | 2009 | 87,000 | ||||
| Subtotal |
1,309,000 | |||||||
| Retail Centers |
||||||||
| Takoma Park |
Takoma Park, MD | 1963 | 1962 | 51,000 | ||||
| Westminster |
Westminster, MD | 1972 | 1969 | 151,000 | ||||
| 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 | 49,000 | ||||
| Montgomery Village Center |
Gaithersburg, MD | 1992 | 1969 | 198,000 | ||||
| Shoppes of Foxchase (1) |
Alexandria, VA | 1994 | 1960 | 134,000 | ||||
| Frederick County Square |
Frederick, MD | 1995 | 1973 | 227,000 | ||||
| 800 S. Washington Street |
Alexandria, VA | 1998/2003 | 1955/1959 | 44,000 | ||||
| Centre at Hagerstown |
Hagerstown, MD | 2002 | 2000 | 332,000 | ||||
| Frederick Crossing |
Frederick, MD | 2005 | 1999/2003 | 295,000 | ||||
| Randolph Shopping Center |
Rockville, MD | 2006 | 1972 | 82,000 | ||||
| Montrose Shopping Center |
Rockville, MD | 2006 | 1970 | 143,000 | ||||
| Subtotal |
2,022,000 | |||||||
| (1) | Development on approximately 60,000 square feet of the center was completed in December 2006. |
25
| PROPERTIES |
LOCATION |
YEAR ACQUIRED | YEAR CONSTRUCTED | NET RENTABLE SQUARE FEET* | ||||
| Multifamily Buildings * / # units |
||||||||
| 3801 Connecticut Avenue / 308 |
Washington, DC | 1963 | 1951 | 179,000 | ||||
| Roosevelt Towers / 191 |
Falls Church, VA | 1965 | 1964 | 170,000 | ||||
| Country Club Towers / 227 |
Arlington, VA | 1969 | 1965 | 163,000 | ||||
| Park Adams / 200 |
Arlington, VA | 1969 | 1959 | 173,000 | ||||
| Munson Hill Towers / 279 |
Falls Church, VA | 1970 | 1963 | 259,000 | ||||
| The Ashby at McLean / 256 |
McLean, VA | 1996 | 1982 | 252,000 | ||||
| Walker House Apartments / 212 |
Gaithersburg, MD | 1996 | 1971/2003 (2) | 159,000 | ||||
| Bethesda Hill Apartments / 195 |
Bethesda, MD | 1997 | 1986 | 226,000 | ||||
| Bennett Park / 224 |
Arlington, VA | 2007 | 2007 | 268,000 | ||||
| Clayborne / 74 |
Alexandria, VA | 2008 | 2008 | 87,000 | ||||
| Kenmore Apartments / 374 |
Washington, DC | 2008 | 1948 | 270,000 | ||||
| Subtotal (2,540 units) |
2,206,000 | |||||||
| Industrial Distribution / Flex Properties |
||||||||
| Fullerton Business Center |
Springfield, VA | 1985 | 1980 | 104,000 | ||||
| Charleston Business Center |
Rockville, MD | 1993 | 1973 | 85,000 | ||||
| The Alban Business Center |
Springfield, VA | 1996 | 1981/1982 | 87,000 | ||||
| Ammendale Technology Park I |
Beltsville, MD | 1997 | 1985 | 167,000 | ||||
| Ammendale Technology Park II |
Beltsville, MD | 1997 | 1986 | 107,000 | ||||
| Pickett Industrial Park |
Alexandria, VA | 1997 | 1973 | 246,000 | ||||
| Northern Virginia Industrial Park |
Lorton, VA | 1998 | 1968/1991 | 787,000 | ||||
| 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 | ||||
| Fullerton Industrial Center |
Springfield, VA | 2003 | 1980 | 137,000 | ||||
| 8880 Gorman Road |
Laurel, MD | 2004 | 2000 | 141,000 | ||||
| Dulles Business Park Portfolio |
Chantilly, VA | 2004/2005 | 1999-2005 | 324,000 | ||||
| Albemarle Point |
Chantilly, VA | 2005 | 2001/2003/2005 | 207,000 | ||||
| Hampton Overlook |
Capital Heights, MD | 2006 | 1989 | 134,000 | ||||
| Hampton South |
Capital Heights, MD | 2006 | 1989/2005 | 168,000 | ||||
| 9950 Business Parkway |
Lanham, MD | 2006 | 2005 | 102,000 | ||||
| 270 Technology Park |
Frederick, MD | 2007 | 1986-1987 | 157,000 | ||||
| 6100 Columbia Park Road |
Landover, MD | 2008 | 1969 | 150,000 | ||||
| Subtotal |
3,344,000 | |||||||
| TOTAL |
13,057,000 | |||||||
| * | Multifamily buildings are presented in gross square feet. |
| (2) | A 16 unit addition referred to as The Gardens at Walker House was completed in October 2003. |
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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 (a non-GAAP measure) is earnings attributable to the controlling interest before interest, taxes, depreciation and amortization.
Ratio of earnings to fixed charges is computed by dividing earnings attributable to the controlling interest 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 attributable to the controlling interest 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 attributable to the controlling interest (computed in accordance with generally accepted accounting principles (GAAP)) excluding gains (or losses) from sales of property plus real estate depreciation and amortization. FFO is a non-GAAP measure.
Funds Available for Distribution (FAD), a non-GAAP measure, is calculated by subtracting from FFO recurring expenditures, tenant improvements, leasing incentives and leasing costs, that are capitalized and amortized and are necessary to maintain our properties and revenue stream, non-cash gain/loss from extinguishment of debt and straight line rents, then adding non-real estate depreciation and amortization, non-cash fair value interest expense, adding or subtracting amortization of lease intangibles and amortization of restricted share compensation, 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.
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