WASHINGTON, Oct. 22, 2015 /PRNewswire/ -- Washington Real
Estate Investment Trust ("Washington REIT" or the "Company") (NYSE:
WRE), a leading owner and operator of commercial and multifamily
properties in the Washington, DC
area, reported financial and operating results today for the
quarter ended September 30, 2015:
Third Quarter 2015 Highlights
- Generated Core Funds from Operations (FFO) of $0.45 per fully diluted share for the third
quarter, a $0.03 increase over second
quarter of 2015 and a $0.02 increase
over third quarter of 2014
- Maintained same-store portfolio occupancy of 92.4%, while
increasing overall portfolio occupancy by 70 basis points over
second quarter 2015 to 90.7%
- Executed new and renewal commercial leases totaling 412,000
square feet, the Company's strongest quarterly leasing performance
this year, with new leases delivering an average rental rate
increase of 28.5% over in-place rents
- Acquired The Wellington, a
711-unit apartment community with the opportunity to renovate
approximately 680 units and on-site density to develop
approximately 360 additional units, for $167.0 million
- Subsequent to quarter end, sold Munson
Hill Towers, a 279 unit Class B apartment building located
in Falls Church, Virginia, for
$57.1 million
- Tightened the 2015 Core FFO guidance range to $1.68 to $1.70 from $1.68
to $1.72 per fully diluted share, lowering the mid-point by
one cent per share to $1.69
"We are pleased with the strength of our leasing performance
this quarter, particularly in office, where leasing increased by
more than 120% over the second quarter and by almost 250% year over
year. Moreover, we have generated strong leasing momentum at the
three assets in our portfolio with the greatest lease-up potential,
Silverline Center, The Maxwell and 1775 Eye Street," said
Paul T. McDermott, President and
Chief Executive Officer. "We believe our increased leasing velocity
will further drive our occupancy, which continues to outperform in
most of our sub-markets. We are further encouraged by the strength
we are seeing in office-using job growth in our region and by the
increased prospects for a recovery in the Washington Metro Area."
Financial Highlights
Core Funds from Operations(1) was $31.0 million, or $0.45 per diluted share, for the quarter ended
September 30, 2015, compared to $28.5
million, or $0.43 per diluted
share, for the corresponding prior year period. Further detail will
be provided by management on the earnings call.
FFO for the quarter ended September 30, 2015 was
$29.9 million, or $0.44 per diluted share, compared to $28.0 million, or $0.42 per diluted share, for the corresponding
prior year period.
Net income attributable to the controlling interests for the
quarter ended September 30, 2015 was $0.6 million, or $0.01 per diluted share, compared to $3.7 million, or $0.05 per diluted share, for the corresponding
prior year period.
Operating Results
The Company's overall portfolio NOI(2) was
$50.1 million for the quarter ended
September 30, 2015, compared to $47.5
million in the corresponding prior year period. Overall
portfolio physical occupancy for the third quarter was at 90.7%,
compared to 90.7% at the end of the third quarter last year and
90.0% at the end of the second quarter 2015.
Same-store(3) portfolio physical occupancy for the
third quarter of 2015 was 92.4%, compared to 92.6% at
September 30, 2014 and 92.4% at the end of the second quarter
2015. Same-store portfolio cash NOI for the third quarter increased
by 0.2% while NOI declined by 1.0%, compared to the corresponding
prior year period.
- Office: 54% of Total NOI - Office properties' same-store
cash NOI increased by $573,000 or
2.2%, and NOI decreased by $43,000 or
(0.2%), compared to the corresponding prior year period. Rental
rate growth was 0.9% while same-store physical occupancy increased
10 basis points over last year to 90.8%.
- Retail: 24% of Total NOI - Retail properties' same-store
cash NOI decreased by $394,000 or
(3.4%) and NOI decreased by $285,000
or (2.5%), compared to the corresponding prior year period,
primarily driven by a full-quarter impact of known tenant move-outs
that have been re-leased with rents expected to commence in
mid-2016. Rental rates increased 3.2% while same-store physical
occupancy decreased 10 basis points over last year to 94.3%, which
included short-term seasonal rentals of space. Retail was 94.2%
leased as of September 30, 2015.
- Multifamily: 22% of Total NOI - Multifamily properties'
same-store cash NOI decreased by $103,000 or (1.2%) and NOI decreased by
$116,000 or (1.3%) respectively,
compared to the corresponding prior year period. Rental rates
declined (2.1%) while same-store physical occupancy decreased 80
basis points over last year to 93.4%. Multifamily deliveries in the
region, despite record-setting absorption, continue to create a
highly competitive market landscape.
Leasing Activity
During the third quarter, Washington REIT signed commercial
leases totaling 412,000 square feet, including 167,000 square feet
of new leases and 245,000 square feet of renewal leases, as follows
(all dollar amounts are on a per square foot basis):
|
Square
Feet
|
Weighted
Average Term
(in years)
|
Weighted
Average
Rental Rates
|
Weighted
Average
Rental Rate
% Increase
|
Tenant
Improvements
|
Leasing
Commissions
and
Incentives
|
New:
|
|
|
|
|
|
|
Office
|
93,000
|
|
6.8
|
|
$
|
36.46
|
|
31.6
|
%
|
$
|
51.14
|
|
$
|
48.79
|
|
Retail
|
74,000
|
|
10.1
|
|
27.61
|
|
23.7
|
%
|
70.46
|
|
22.26
|
|
Total
|
167,000
|
|
8.2
|
|
32.55
|
|
28.5
|
%
|
59.68
|
|
37.05
|
|
|
|
|
|
|
|
|
Renewal:
|
|
|
|
|
|
|
Office
|
192,000
|
|
2.7
|
|
$
|
31.37
|
|
(11.0)
|
%
|
$
|
3.03
|
|
$
|
3.89
|
|
Retail
|
53,000
|
|
4.4
|
|
26.63
|
|
14.7
|
%
|
0.68
|
|
2.25
|
|
Total
|
245,000
|
|
3.1
|
|
30.34
|
|
(7.0)
|
%
|
2.52
|
|
3.53
|
|
Office renewal spreads were significantly negatively impacted by
one anomalous, short-term lease renewal, excluding which, average
rental rates for office lease renewals increased by 1.4%.
Dispositions
On September 9, 2015, Washington
REIT sold its interest in a parcel of land (1225 First Street) in
Alexandria, Virginia, for
$14.5 million.
On October 21, 2015, Washington
REIT sold Munson Hill Towers, a
258,000 square foot Class B high-rise of 279 units located in
Falls Church, Virginia, for
$57.1 million, or approximately
$204,480 per unit. The sale is
structured as part of a reverse-1031 exchange in connection
with the acquisition of The Wellington, which the Company acquired in the
third quarter of 2015.
Earnings Guidance
Management is tightening the 2015 Core FFO guidance range to
$1.68 to $1.70 from $1.68 to $1.72 per fully diluted share, lowering
the mid-point by one cent per share
to $1.69. The following assumptions
are incorporated into the tightened guidance range:
- Same-store NOI growth is projected to range from 0% to 1%
- Same-store office NOI growth is projected to range from 1% to
1.5%, excluding the redevelopment project at Silverline Center
- Silverline Center is expected to contribute NOI of $0.06 to $0.07 per share in the current year and
to stabilize in 2016
- Same-store multifamily NOI growth is projected to range from a
little over (1)% at the bottom end to 0%
- The Maxwell development is expected to contribute NOI of
$0.01 in 2015. The Maxwell is
expected to stabilize by the end of 2015
- Same-store retail NOI growth is projected to range from (2)% to
(1)% primarily due to adverse weather-related expenses at the
beginning of the year, and second quarter move-outs that have now
been re-leased with commencements expected by mid-2016
- Following the acquisition of The Wellington, our guidance does not anticipate
closing any additional acquisitions in 2015 although we will
continue to underwrite value-add acquisition opportunities
- Dispositions for 2015 are expected to total approximately
$140 million. One parcel of land that
was scheduled for sale this year is now expected to close in the
second quarter of 2016. We continue to prepare additional legacy
assets for potential sale over the next 15 months
- General and administrative expense remains projected to range
from $19 to $20 million excluding
acquisition costs, severance and relocation expense
- Interest expense is projected to be approximately $60 million
Washington REIT's 2015 Core FFO guidance is also based on a
number of other factors, many of which are outside its control and
all of which are subject to change. Washington REIT may change its
guidance during the year as actual and anticipated results vary
from these assumptions.
Capital Update
On September 15, 2015, Washington
REIT entered into a five and a half year $150 million unsecured term loan maturing on
March 15, 2021 by exercising a
portion of the accordion feature under its existing unsecured
credit facility. The term loan proceeds were used to repay amounts
outstanding on the credit facility. Washington REIT entered into
interest rate swaps to swap from a LIBOR plus 110 basis points
floating interest rate to a 2.72% all-in fixed interest rate
commencing October 15, 2015. The term
loan fits well on Washington REIT's debt maturity ladder and
provides the Company with greater flexibility to accelerate legacy
asset sales.
Dividends
On September 30, 2015, Washington REIT paid a quarterly
dividend of $0.30 per share.
Washington REIT announced today that its Board of Trustees has
declared a quarterly dividend of $0.30 per share to be paid on January 5, 2016 to shareholders of record on
December 22, 2015. The Company has
typically paid its fourth quarter dividend during the month of
December. Going forward the Company expects the payment date of its
fourth quarter dividend to occur in early January of the following
year.
Conference Call Information
The Conference Call for Third Quarter Earnings is scheduled for
Friday, October 23, 2015 at 11:00 A.M.
Eastern time. Conference Call access information is as
follows:
USA Toll Free
Number:
|
1-877-407-9205
|
International Toll
Number:
|
1-201-689-8054
|
The instant replay of the Conference Call will be available
until November 6, 2015 at
11:59 P.M. Eastern time. Instant
replay access information is as follows:
USA Toll Free
Number:
|
1-877-660-6853
|
International Toll
Number:
|
1-201-612-7415
|
Conference
ID:
|
13599954
|
The live on-demand webcast of the Conference Call will be
available on the Investor section of Washington REIT's website at
www.washreit.com. On-line playback of the webcast will be available
for two weeks following the Conference Call.
About Washington REIT
Washington REIT is a self-administered, equity real estate
investment trust investing in income-producing properties in the
greater Washington metro region.
Washington REIT owns a diversified portfolio of 55 properties,
totaling approximately 7 million square feet of commercial space
and 3,258 multifamily units, and land held for development.
These 55 properties consist of 25 office properties, 17 retail
centers and 13 multifamily properties. Washington REIT shares are
publicly traded on the New York Stock Exchange (NYSE:WRE).
Note: Washington REIT's press releases and supplemental
financial information are available on the Company website at
www.washreit.com or by contacting Investor Relations at (202)
774-3200.
Certain statements in our earnings release and on our conference
call are "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements include statements in this earnings release preceded by,
followed by or that include the words "believe," "expect,"
"intend," "anticipate," "potential," "project," "will" and other
similar expressions. 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 potential for federal
government budget reductions, changes in general and local economic
and real estate market conditions, the timing and pricing of lease
transactions, the availability and cost of capital, fluctuations in
interest rates, tenants' financial conditions, levels of
competition, the effect of government regulation, the impact of
newly adopted accounting principles, and other risks and
uncertainties detailed from time to time in our filings with the
SEC, including our 2014 Form 10-K and subsequent Quarterly Reports
on Form 10-Q. We assume no obligation to update or supplement
forward-looking statements that become untrue because of subsequent
events.
(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) associated with sales of property, impairment of
depreciable real estate and real estate depreciation and
amortization. FFO is a non-GAAP measure and does not replace net
income as a measure of performance or net cash provided by
operating activities as a measure of liquidity. 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.
|
|
Core Funds From
Operations ("Core FFO") is calculated by adjusting FFO for the
following items (which we believe are not indicative of the
performance of Washington REIT's operating portfolio and affect the
comparative measurement of Washington REIT's operating performance
over time): (1) gains or losses on extinguishment of debt, (2)
expenses related to acquisition and structuring activities, (3)
executive transition costs and severance expense related to
corporate reorganization and related to executive retirements or
resignations, (4) property impairments not already excluded from
FFO, as appropriate, and (5) relocation expense. These items can
vary greatly from period to period, depending upon the volume of
our acquisition activity and debt retirements, among other factors.
We believe that by excluding these items, Core FFO serves as a
useful, supplementary measure of Washington REIT's ability to incur
and service debt and to distribute dividends to its
shareholders. Core FFO is a non-GAAP and non-standardized
measure and may be calculated differently by other
REITs.
|
|
(2) Net
Operating Income ("NOI"), defined as real estate rental revenue
less real estate expenses, is a non-GAAP measure. NOI is calculated
as net income, less non-real estate revenue and the results of
discontinued operations (including the gain on sale, if any), plus
interest expense, depreciation and amortization, general and
administrative expenses, acquisition costs and real estate
impairment. We also present NOI on a cash basis ("cash NOI") which
is calculated as NOI less the impact of straight-lining of rent and
amortization of market intangibles. We provide NOI as a supplement
to net income calculated in accordance with GAAP. As such, it
should not be considered an alternative to net income as an
indication of our operating performance. It is the primary
performance measure we use to assess the results of our operations
at the property level.
|
|
(3) For
purposes of evaluating comparative operating performance, we
categorize our properties as "same-store" or
"non-same-store". A same-store property is one that was owned
for the entirety of the periods being evaluated and excludes
properties under redevelopment or development and properties
purchased or sold at any time during the periods being compared. A
non-same-store property is one that was acquired, under
redevelopment or development, or placed into service during either
of the periods being evaluated. We define redevelopment properties
as those for which we expect to spend significant development and
construction costs on existing or acquired buildings pursuant to a
formal plan which has a current impact on operating results,
occupancy and the ability to lease space with the intended result
of a higher economic return on the property. Properties under
redevelopment or development are included within the non-same-store
properties beginning in the period during which redevelopment or
development activities commence. Redevelopment and development
properties are included in the same-store pool upon completion of
the redevelopment or development, and the earlier of achieving 90%
occupancy or two years after completion.
|
|
(4) Funds
Available for Distribution ("FAD") is a non-GAAP measure. It 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 (excluding items contemplated prior to acquisition or
associated with development / redevelopment of a property) and (2)
straight line rents, then adding (3) non-real estate depreciation
and amortization, (4) non-cash fair value interest expense and (5)
amortization of restricted share compensation, then adding or
subtracting the (6) amortization of lease intangibles, (7) real
estate impairment and (8) non-cash gain/loss on extinguishment of
debt, 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.
|
Physical Occupancy
Levels by Same-Store Properties (i) and All
Properties
|
|
Physical
Occupancy
|
|
Same-Store
Properties
|
|
All
Properties
|
|
3rd
QTR
|
|
3rd
QTR
|
|
3rd
QTR
|
|
3rd
QTR
|
Segment
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Multifamily
|
93.4
|
%
|
|
94.2
|
%
|
|
92.3
|
%
|
|
94.3
|
%
|
Office
|
90.8
|
%
|
|
90.7
|
%
|
|
87.8
|
%
|
|
87.1
|
%
|
Retail
|
94.3
|
%
|
|
94.4
|
%
|
|
94.4
|
%
|
|
94.4
|
%
|
|
|
|
|
|
|
|
|
Overall
Portfolio
|
92.4
|
%
|
|
92.6
|
%
|
|
90.7
|
%
|
|
90.7
|
%
|
(i) Same-store properties include all stabilized properties that
were owned for the entirety of the current and prior reporting
periods, and exclude properties under redevelopment or development
and properties purchased or sold at any time during the periods
being compared. We define redevelopment properties as those for
which we expect to spend significant development and construction
costs on existing or acquired buildings pursuant to a formal plan
which has a current impact on operating results, occupancy and the
ability to lease space with the intended result of a higher
economic return on the property. Redevelopment and development
properties are included in the same-store pool upon completion of
the redevelopment or development, and the earlier of achieving 90%
occupancy or two years after completion. For Q3 2015 and Q3 2014,
same-store properties exclude:
Multifamily Acquisition: The Wellington;
Multifamily Development: The Maxwell;
Office Redevelopment: Silverline Center;
Retail Acquisition: Spring Valley Retail Center.
Also excluded from same-store properties in Q3 2015 and Q3 2014
are:
Sold Property:
Multifamily: Country Club Towers.
WASHINGTON
REAL ESTATE INVESTMENT TRUST
|
FINANCIAL
HIGHLIGHTS
|
(In thousands,
except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
OPERATING
RESULTS
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Revenue
|
|
|
|
|
|
|
|
Real estate rental
revenue
|
$
|
78,243
|
|
|
$
|
73,413
|
|
|
$
|
227,325
|
|
|
$
|
214,278
|
|
Expenses
|
|
|
|
|
|
|
|
Real estate
expenses
|
28,109
|
|
|
25,914
|
|
|
84,546
|
|
|
77,784
|
|
Depreciation and
amortization
|
29,349
|
|
|
24,354
|
|
|
80,127
|
|
|
71,508
|
|
Acquisition
costs
|
929
|
|
|
69
|
|
|
1,937
|
|
|
5,047
|
|
General and
administrative
|
4,953
|
|
|
4,523
|
|
|
15,339
|
|
|
13,780
|
|
Real estate
impairment
|
—
|
|
|
—
|
|
|
5,909
|
|
|
—
|
|
|
63,340
|
|
|
54,860
|
|
|
187,858
|
|
|
168,119
|
|
Other operating
income
|
|
|
|
|
|
|
|
Gain on sale of real
estate
|
—
|
|
|
—
|
|
|
31,731
|
|
|
570
|
|
Real estate operating
income
|
14,903
|
|
|
18,553
|
|
|
71,198
|
|
|
46,729
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest
expense
|
(14,486)
|
|
|
(15,087)
|
|
|
(44,534)
|
|
|
(44,602)
|
|
Loss on
extinguishment of debt
|
—
|
|
|
—
|
|
|
(119)
|
|
|
—
|
|
Other
income
|
163
|
|
|
192
|
|
|
547
|
|
|
634
|
|
|
(14,323)
|
|
|
(14,895)
|
|
|
(44,106)
|
|
|
(43,968)
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
580
|
|
|
3,658
|
|
|
27,092
|
|
|
2,761
|
|
|
|
|
|
|
|
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
Income from
operations of properties sold or held for sale
|
—
|
|
|
—
|
|
|
—
|
|
|
546
|
|
Gain on sale of real
estate
|
—
|
|
|
—
|
|
|
—
|
|
|
105,985
|
|
Income from
discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
106,531
|
|
Net income
|
580
|
|
|
3,658
|
|
|
27,092
|
|
|
109,292
|
|
Less: Net loss
attributable to noncontrolling interests in subsidiaries
|
67
|
|
|
10
|
|
|
515
|
|
|
17
|
|
Net income
attributable to the controlling interests
|
$
|
647
|
|
|
$
|
3,668
|
|
|
$
|
27,607
|
|
|
$
|
109,309
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations
|
580
|
|
|
3,658
|
|
|
27,092
|
|
|
2,761
|
|
Continuing operations
real estate depreciation and amortization
|
29,349
|
|
|
24,354
|
|
|
80,127
|
|
|
71,508
|
|
Gain on sale of
depreciable real estate
|
—
|
|
|
—
|
|
|
(30,277)
|
|
|
(570)
|
|
Funds from continuing
operations(1)
|
$
|
29,929
|
|
|
$
|
28,012
|
|
|
$
|
76,942
|
|
|
$
|
73,699
|
|
Income from
operations of properties sold or held for sale
|
—
|
|
|
—
|
|
|
—
|
|
|
546
|
|
Funds from
discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
546
|
|
NAREIT funds from
operations(1)
|
$
|
29,929
|
|
|
$
|
28,012
|
|
|
$
|
76,942
|
|
|
$
|
74,245
|
|
|
|
|
|
|
|
|
|
Non-cash loss on
extinguishment of debt
|
—
|
|
|
—
|
|
|
119
|
|
|
—
|
|
Tenant
improvements
|
(5,231)
|
|
|
(7,649)
|
|
|
(12,378)
|
|
|
(22,561)
|
|
External and internal
leasing commissions capitalized
|
(1,714)
|
|
|
(1,323)
|
|
|
(4,469)
|
|
|
(4,283)
|
|
Recurring capital
improvements
|
(1,326)
|
|
|
(1,720)
|
|
|
(2,752)
|
|
|
(4,218)
|
|
Straight-line rents,
net
|
(680)
|
|
|
(658)
|
|
|
(811)
|
|
|
(1,734)
|
|
Non-cash fair value
interest expense
|
38
|
|
|
32
|
|
|
109
|
|
|
257
|
|
Non real estate
depreciation & amortization of debt costs
|
938
|
|
|
994
|
|
|
2,999
|
|
|
2,770
|
|
Amortization of lease
intangibles, net
|
913
|
|
|
704
|
|
|
2,651
|
|
|
1,620
|
|
Amortization and
expensing of restricted share and unit compensation
|
863
|
|
|
1,307
|
|
|
3,884
|
|
|
3,777
|
|
Funds available for
distribution(4)
|
$
|
23,730
|
|
|
$
|
19,699
|
|
|
$
|
66,294
|
|
|
$
|
49,873
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
Per share
data:
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Income from
continuing operations
|
(Basic)
|
$
|
0.01
|
|
|
$
|
0.05
|
|
|
$
|
0.40
|
|
|
$
|
0.04
|
|
|
(Diluted)
|
$
|
0.01
|
|
|
$
|
0.05
|
|
|
$
|
0.40
|
|
|
$
|
0.04
|
|
Net income
|
(Basic)
|
$
|
0.01
|
|
|
$
|
0.05
|
|
|
$
|
0.40
|
|
|
$
|
1.63
|
|
|
(Diluted)
|
$
|
0.01
|
|
|
$
|
0.05
|
|
|
$
|
0.40
|
|
|
$
|
1.63
|
|
Funds from continuing
operations
|
(Basic)
|
$
|
0.44
|
|
|
$
|
0.42
|
|
|
$
|
1.13
|
|
|
$
|
1.11
|
|
|
(Diluted)
|
$
|
0.44
|
|
|
$
|
0.42
|
|
|
$
|
1.12
|
|
|
$
|
1.11
|
|
NAREIT funds from
operations
|
(Basic)
|
$
|
0.44
|
|
|
$
|
0.42
|
|
|
$
|
1.13
|
|
|
$
|
1.11
|
|
|
(Diluted)
|
$
|
0.44
|
|
|
$
|
0.42
|
|
|
$
|
1.12
|
|
|
$
|
1.11
|
|
|
|
|
|
|
|
|
|
|
Dividends
paid
|
|
$
|
0.30
|
|
|
$
|
0.30
|
|
|
$
|
0.90
|
|
|
$
|
0.90
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
|
68,186
|
|
|
66,738
|
|
|
68,168
|
|
|
66,725
|
|
Fully diluted
weighted average shares outstanding
|
|
68,305
|
|
|
66,790
|
|
|
68,290
|
|
|
66,760
|
|
Fully diluted
weighted average shares outstanding (for FFO)
|
|
68,305
|
|
|
66,790
|
|
|
68,290
|
|
|
66,760
|
|
WASHINGTON REAL
ESTATE INVESTMENT TRUST
|
CONSOLIDATED
BALANCE SHEETS
|
(In thousands,
except per share data)
|
|
|
|
|
|
September 30,
2015
|
|
|
|
(unaudited)
|
|
December 31,
2014
|
Assets
|
|
|
|
Land
|
$
|
572,880
|
|
|
$
|
543,546
|
|
Income producing
property
|
2,074,425
|
|
|
1,927,407
|
|
|
2,647,305
|
|
|
2,470,953
|
|
Accumulated
depreciation and amortization
|
(677,480)
|
|
|
(640,434)
|
|
Net income producing
property
|
1,969,825
|
|
|
1,830,519
|
|
Properties under
development or held for future development
|
35,256
|
|
|
76,235
|
|
Total real estate
held for investment, net
|
2,005,081
|
|
|
1,906,754
|
|
Investment in real
estate held for sale, net
|
5,010
|
|
|
—
|
|
Cash and cash
equivalents
|
21,012
|
|
|
15,827
|
|
Restricted
cash
|
12,544
|
|
|
10,299
|
|
Rents and other
receivables, net of allowance for doubtful accounts of $2,945 and
$3,392,
respectively
|
62,306
|
|
|
59,745
|
|
Prepaid expenses and
other assets
|
122,629
|
|
|
121,082
|
|
Other assets related
to properties sold or held for sale
|
278
|
|
|
—
|
|
Total
assets
|
$
|
2,228,860
|
|
|
$
|
2,113,707
|
|
|
|
|
|
Liabilities
|
|
|
|
Notes
payable
|
$
|
747,540
|
|
|
$
|
747,208
|
|
Mortgage notes
payable
|
419,293
|
|
|
418,525
|
|
Lines of
credit
|
195,000
|
|
|
50,000
|
|
Accounts payable and
other liabilities
|
54,131
|
|
|
54,318
|
|
Advance
rents
|
10,766
|
|
|
12,528
|
|
Tenant security
deposits
|
9,225
|
|
|
8,899
|
|
Liabilities related to
properties sold or held for sale
|
329
|
|
|
—
|
|
Total
liabilities
|
1,436,284
|
|
|
1,291,478
|
|
|
|
|
|
Equity
|
|
|
|
Shareholders'
equity
|
|
|
|
Preferred shares;
$0.01 par value; 10,000 shares authorized; no shares issued and
outstanding
|
—
|
|
|
—
|
|
Shares of beneficial
interest, $0.01 par value; 100,000 shares authorized; 68,180
and
67,819 shares issued and outstanding, respectively
|
682
|
|
|
678
|
|
Additional paid-in
capital
|
1,192,202
|
|
|
1,184,395
|
|
Distributions in
excess of net income
|
(399,421)
|
|
|
(365,518)
|
|
Accumulated other
comprehensive income (loss)
|
(2,288)
|
|
|
—
|
|
Total shareholders'
equity
|
791,175
|
|
|
819,555
|
|
|
|
|
|
Noncontrolling
interests in subsidiaries
|
1,401
|
|
|
2,674
|
|
Total
equity
|
792,576
|
|
|
822,229
|
|
|
|
|
|
Total liabilities and
equity
|
$
|
2,228,860
|
|
|
$
|
2,113,707
|
|
The following tables
contain reconciliations of net income to same-store net operating
income for the periods presented (in thousands):
|
|
|
|
|
|
|
|
|
Three months ended
September 30, 2015
|
Multifamily
|
|
Office
|
|
Retail
|
|
Total
|
Same-store net
operating income(3)
|
$
|
8,770
|
|
|
$
|
25,688
|
|
|
$
|
11,336
|
|
|
$
|
45,794
|
|
Add: Net operating
income from non-same-store properties(3)
|
2,325
|
|
|
1,316
|
|
|
699
|
|
|
4,340
|
|
Total net operating
income(2)
|
$
|
11,095
|
|
|
$
|
27,004
|
|
|
$
|
12,035
|
|
|
$
|
50,134
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
Other
income
|
|
|
|
|
|
|
163
|
|
Acquisition
costs
|
|
|
|
|
|
|
(929)
|
|
Interest
expense
|
|
|
|
|
|
|
(14,486)
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
(29,349)
|
|
General and
administrative expenses
|
|
|
|
|
|
|
(4,953)
|
|
Net income
|
|
|
|
|
|
|
580
|
|
Less: Net loss
attributable to noncontrolling interests in subsidiaries
|
|
|
|
|
|
|
67
|
|
Net income
attributable to the controlling interests
|
|
|
|
|
|
|
$
|
647
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30, 2014
|
Multifamily
|
|
Office
|
|
Retail
|
|
Total
|
Same-store net
operating income(3)
|
$
|
8,886
|
|
|
$
|
25,731
|
|
|
$
|
11,621
|
|
|
$
|
46,238
|
|
Add: Net operating
income from non-same-store properties(3)
|
430
|
|
|
831
|
|
|
—
|
|
|
1,261
|
|
Total net operating
income(2)
|
$
|
9,316
|
|
|
$
|
26,562
|
|
|
$
|
11,621
|
|
|
$
|
47,499
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
Other
income
|
|
|
|
|
|
|
192
|
|
Acquisition
costs
|
|
|
|
|
|
|
(69)
|
|
Interest
expense
|
|
|
|
|
|
|
(15,087)
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
(24,354)
|
|
General and
administrative expenses
|
|
|
|
|
|
|
(4,523)
|
|
Net income
|
|
|
|
|
|
|
3,658
|
|
Less: Net loss
attributable to noncontrolling interests in subsidiaries
|
|
|
|
|
|
|
10
|
|
Net income
attributable to the controlling interests
|
|
|
|
|
|
|
$
|
3,668
|
|
The following tables
contain reconciliations of net income to same-store net operating
income for the periods presented (in thousands):
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2015
|
Multifamily
|
|
Office
|
|
Retail
|
|
Total
|
Same-store net
operating income(3)
|
$
|
23,472
|
|
|
$
|
69,527
|
|
|
$
|
33,526
|
|
|
$
|
126,525
|
|
Add: Net operating
income from non-same-store properties(3)
|
5,033
|
|
|
9,131
|
|
|
2,090
|
|
|
16,254
|
|
Total net operating
income(2)
|
$
|
28,505
|
|
|
$
|
78,658
|
|
|
$
|
35,616
|
|
|
$
|
142,779
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
Other
income
|
|
|
|
|
|
|
547
|
|
Acquisition
costs
|
|
|
|
|
|
|
(1,937)
|
|
Interest
expense
|
|
|
|
|
|
|
(44,534)
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
(80,127)
|
|
General and
administrative expenses
|
|
|
|
|
|
|
(15,339)
|
|
Loss on
extinguishment of debt
|
|
|
|
|
|
|
(119)
|
|
Gain on sale of real
estate
|
|
|
|
|
|
|
31,731
|
|
Real estate
impairment
|
|
|
|
|
|
|
(5,909)
|
|
Net income
|
|
|
|
|
|
|
27,092
|
|
Less: Net loss
attributable to noncontrolling interests in subsidiaries
|
|
|
|
|
|
|
515
|
|
Net income
attributable to the controlling interests
|
|
|
|
|
|
|
$
|
27,607
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2014
|
Multifamily
|
|
Office
|
|
Retail
|
|
Total
|
Same-store net
operating income(3)
|
$
|
23,405
|
|
|
$
|
68,714
|
|
|
$
|
33,511
|
|
|
$
|
125,630
|
|
Add: Net operating
income from non-same-store properties(3)
|
3,563
|
|
|
7,275
|
|
|
26
|
|
|
10,864
|
|
Total net operating
income(2)
|
$
|
26,968
|
|
|
$
|
75,989
|
|
|
$
|
33,537
|
|
|
$
|
136,494
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
Other
income
|
|
|
|
|
|
|
634
|
|
Acquisition
costs
|
|
|
|
|
|
|
(5,047)
|
|
Interest
expense
|
|
|
|
|
|
|
(44,602)
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
(71,508)
|
|
General and
administrative expenses
|
|
|
|
|
|
|
(13,780)
|
|
Gain on sale of real
estate
|
|
|
|
|
|
|
570
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
Income from
operations of properties sold or held for sale
|
|
|
|
|
|
|
546
|
|
Gain on sale of real
estate classified as discontinued operations
|
|
|
|
|
|
|
105,985
|
|
Net income
|
|
|
|
|
|
|
109,292
|
|
Less: Net loss
attributable to noncontrolling interests in subsidiaries
|
|
|
|
|
|
|
17
|
|
Net income
attributable to the controlling interests
|
|
|
|
|
|
|
$
|
109,309
|
|
The following table
contains a reconciliation of net income attributable to the
controlling interests to core funds from operations for the periods
presented (in thousands, except per share data):
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net income
|
|
$
|
580
|
|
|
$
|
3,658
|
|
|
$
|
27,092
|
|
|
$
|
109,292
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
|
Real estate
depreciation and amortization
|
|
29,349
|
|
|
24,354
|
|
|
80,127
|
|
|
71,508
|
|
Gain on sale of
depreciable real estate
|
|
—
|
|
|
—
|
|
|
(30,277)
|
|
|
(570)
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
|
Gain on sale of real
estate
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(105,985)
|
|
NAREIT funds from
operations(1)
|
|
29,929
|
|
|
28,012
|
|
|
76,942
|
|
|
74,245
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
|
Real estate
impairment
|
|
—
|
|
|
—
|
|
|
5,909
|
|
|
—
|
|
Acquisition and
structuring expenses
|
|
1,034
|
|
|
69
|
|
|
2,532
|
|
|
5,047
|
|
Loss (gain) on sale
of non-depreciable real estate
|
|
50
|
|
|
—
|
|
|
(1,404)
|
|
|
—
|
|
Loss on
extinguishment of debt
|
|
—
|
|
|
—
|
|
|
119
|
|
|
—
|
|
Severance
expense
|
|
—
|
|
|
394
|
|
|
1,001
|
|
|
1,018
|
|
Relocation
expense
|
|
—
|
|
|
—
|
|
|
90
|
|
|
—
|
|
Core funds from
operations(1)
|
|
$
|
31,013
|
|
|
$
|
28,475
|
|
|
$
|
85,189
|
|
|
$
|
80,310
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
Per share
data:
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
NAREIT FFO
|
(Basic)
|
$
|
0.44
|
|
|
$
|
0.42
|
|
|
$
|
1.13
|
|
|
$
|
1.11
|
|
|
(Diluted)
|
$
|
0.44
|
|
|
$
|
0.42
|
|
|
$
|
1.12
|
|
|
$
|
1.11
|
|
Core FFO
|
(Basic)
|
$
|
0.45
|
|
|
$
|
0.43
|
|
|
$
|
1.25
|
|
|
$
|
1.20
|
|
|
(Diluted)
|
$
|
0.45
|
|
|
$
|
0.43
|
|
|
$
|
1.24
|
|
|
$
|
1.20
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
|
68,186
|
|
|
66,738
|
|
|
68,168
|
|
|
66,725
|
|
Fully diluted
weighted average shares outstanding (for FFO)
|
|
68,305
|
|
|
66,790
|
|
|
68,290
|
|
|
66,760
|
|
CONTACT:
|
|
Tejal R. Engman
|
|
Director of Investor
Relations
|
|
E-Mail:
tengman@washreit.com
|
|
www.washreit.com
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/washington-real-estate-investment-trust-announces-third-quarter-financial-and-operating-results-300165017.html
SOURCE Washington Real Estate Investment Trust