WASHINGTON, July 23, 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 June 30, 2015:
Second Quarter 2015 Highlights
- Generated Core Funds from Operations (FFO) of $0.42 per fully diluted share for the second
quarter, a $0.04 increase over first
quarter 2015 and a $0.01 increase
over second quarter 2014
- Same-store Net Operating Income (NOI) modestly declined by
0.3%, while cash NOI grew by 1.3% over second quarter 2014
- Achieved overall same-store physical occupancy of 92.8%, 30
basis points higher than the second quarter of 2014
- Executed new and renewal commercial leases totaling 259,000
square feet at an average rental rate increase of 15.6% over
in-place rents for new leases and an average rental rate increase
of 14.9% over in-place rents for renewal leases
- Subsequent to quarter end, acquired The Wellington, a 711-unit apartment community
with on-site density to develop approximately 360 additional units,
for $167 million
- Tightened 2015 Core FFO guidance to $1.68 to $1.72 from $1.66
to $1.74 per fully diluted share
"We continue to drive performance and operationally outperform
in most of our sub-markets in what remains a highly competitive
environment. Our second quarter results delivered improved
occupancy, NOI and cash NOI growth in office and multifamily and
strong rental rate increases in retail. We maintain the mid-point
of our guidance while tightening the range by $0.04 to reflect our increased visibility on
performance for the remainder of the year," said Paul T. McDermott, President and Chief Executive
Officer. "We continue to make steady progress on our strategic plan
to elevate the quality of the portfolio, both through value-add
acquisitions like The Wellington
as well as the continued sale of legacy assets, which we would look
to further accelerate under the right market conditions."
Financial Highlights
Core Funds from Operations(1), was $28.5 million, or $0.42 per diluted share, for the quarter ended
June 30, 2015, compared to $27.7
million, or $0.41 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 June 30, 2015 was $22.6 million, or $0.33 per diluted share, compared to $25.2 million, or $0.38 per diluted share, for the corresponding
prior year period. The decline in FFO is primarily driven by the
recognition of a real estate impairment loss of $5.9 million, or $0.09 per diluted share, on an undeveloped parcel
of land in the quarter ended June 30,
2015.
Net loss attributable to the controlling interests for the
quarter ended June 30, 2015 was $2.5
million, or $0.04 per diluted
share, compared to net income of $1.1
million, or $0.02 per diluted
share, in the corresponding prior period, due to the aforementioned
impairment loss.
Operating Results
The Company's overall portfolio NOI(2) was
$47.0 million for the quarter ended
June 30, 2015, compared to $46.7
million in the corresponding prior year period. Overall
portfolio physical occupancy for the second quarter was at 90.0%,
compared to 90.1% at the end of the second quarter last year and
89.5% at the end of the first quarter 2015.
Same-store(3) portfolio physical occupancy for the
second quarter of 2015 was 92.8%, compared to 92.5% at
June 30, 2014 and 93.0% at the end of the first quarter 2015.
Same-store portfolio NOI for the second quarter of 2015
declined by 0.3%, while cash NOI grew by 1.3% compared to the
corresponding prior period.
- Office: 56% of Total NOI - Office properties' same-store
NOI and cash NOI for the second quarter increased 0.2% and
2.5%, respectively, compared to the corresponding prior period.
Rental rate growth was 1.8% while same-store physical occupancy
increased 90 basis points over last year to 91.8%.
- Retail: 26% of Total NOI - Retail properties' same-store
NOI and cash NOI for the second quarter decreased by 2.1% and
0.7%, respectively, compared to the corresponding prior year
period. Rental rates increased 2.5% while same-store physical
occupancy decreased 140 basis points over last year to 92.8%.
Occupancy in retail is lower primarily due to known tenant move
outs that are either leased or at letter of intent.
- Multifamily: 18% of Total NOI - Multifamily properties'
same-store NOI and cash NOI increased 0.5% and 0.7%,
respectively, compared to the corresponding prior year period.
Rental rates declined 2.7% while same-store physical occupancy
increased 90 basis points over last year to 94.5%.
Leasing Activity
During the second quarter, Washington REIT signed commercial
leases totaling 259,000 square feet, including 93,000 square feet
of new leases and 166,000 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
|
58,000
|
|
6.8
|
|
$
|
41.61
|
|
14.5
|
%
|
$
|
38.29
|
|
$
|
31.37
|
|
Retail
|
35,000
|
|
9.6
|
|
28.17
|
|
18.5
|
%
|
16.88
|
|
16.88
|
|
Total
|
93,000
|
|
7.8
|
|
36.53
|
|
15.6
|
%
|
30.19
|
|
25.89
|
|
|
|
|
|
|
|
|
Renewal:
|
|
|
|
|
|
|
Office
|
71,000
|
|
3.9
|
|
$
|
32.43
|
|
4.9
|
%
|
$
|
5.96
|
|
$
|
5.19
|
|
Retail
|
95,000
|
|
5.8
|
|
22.49
|
|
28.0
|
%
|
0.41
|
|
2.10
|
|
Total
|
166,000
|
|
4.9
|
|
26.75
|
|
14.9
|
%
|
2.79
|
|
3.43
|
|
Acquisitions
On July 1, 2015, Washington REIT
acquired The Wellington, an
apartment community in Arlington,
VA consisting of 711 units and on-site density to develop
approximately 360 additional units, for $167
million. This acquisition provides a value-add opportunity
to renovate over 680 units to generate rental growth, and a further
opportunity to develop additional density in a sub-market with
limited supply and a strong population of both Class A and B
renters.
Originally built in 1960, The Wellington is a gated apartment community
comprising three mid-rise buildings located on the eastern end of
Columbia Pike, which features walkable restaurant and retail
amenities, is proximate to four major highways and offers easy
access to DC, The Pentagon and Crystal
City. In the last four years, The Wellington has upgraded common areas, lobbies
and facades and has added a rooftop fitness center.
Earnings Guidance
Management is tightening the 2015 Core FFO guidance range to
$1.68 to $1.72 from $1.66 to $1.74 per fully diluted share. The
following assumptions are incorporated into the tightened guidance
range:
- Same-store NOI growth remains projected to range from (0.5)% to
2%, with same-store occupancy improving modestly
- Same-store office NOI growth remains projected to range from 0%
to 2%, excluding the redevelopment project at Silverline
Center
- Silverline Center continues to be expected to contribute NOI of
$0.06 to $0.08 per share in the
current year and to further progress lease up in 2016
- Same-store multifamily NOI growth remains projected to range
from 0% to 1%
- The Maxwell development is expected to contribute NOI of
$0.01 in 2015. The Maxwell remains on
track to stabilize by year-end but the delayed delivery at the
beginning of the year has extended the timing of The Maxwell's
expected contribution to NOI
- Same-store retail NOI growth is projected to range from (1)% to
1% primarily due to adverse weather-related expenses at the
beginning of the year, and the postponement of a few rent
commencement dates to 2016
- Upon completion of 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 range from $140 to $150 million. We are presently preparing
to bring additional legacy assets to market over the next eighteen
months and intend to explore accelerating some of these additional
asset sales into 2016
- 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 to $60.5 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
Washington REIT favorably renewed its credit facility to extend
maturity to June 22, 2019, and also
has two six-month extension options. The new facility is better
aligned with the company's value-add business model, has increased
the available line of credit to $600
million, improved financial covenants and lowered pricing,
which remains based upon the company's unsecured debt rating.
Dividends
On June 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 September 30, 2015 to shareholders of record on
September 15, 2015.
Conference Call Information
The Conference Call for Second Quarter Earnings is scheduled for
Friday, July 24, 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 August 7, 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: 13599919
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 56 properties,
totaling approximately 7 million square feet of commercial space
and 3,537 multifamily units, and land held for development.
These 56 properties consist of 25 office properties, 17 retail
centers and 14 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
|
|
2nd
QTR
|
|
2nd
QTR
|
|
2nd
QTR
|
|
2nd
QTR
|
Segment
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Multifamily
|
94.5
|
%
|
|
93.6
|
%
|
|
91.7
|
%
|
|
93.7
|
%
|
Office
|
91.8
|
%
|
|
90.9
|
%
|
|
87.6
|
%
|
|
86.2
|
%
|
Retail
|
92.8
|
%
|
|
94.2
|
%
|
|
92.9
|
%
|
|
94.2
|
%
|
|
|
|
|
|
|
|
|
Overall
Portfolio
|
92.8
|
%
|
|
92.5
|
%
|
|
90.0
|
%
|
|
90.1
|
%
|
|
(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 Q2 2015 and Q2 2014, same-store
properties exclude:
|
Multifamily Development: The Maxwell;
Office Acquisition: 1775 Eye Street, NW;
Office Redevelopment: Silverline Center;
Retail Acquisition: Spring Valley Retail Center.
Also excluded from same-store properties in Q2 2015 and Q2 2014
are:
Sold Properties:
Multifamily: Country Club Towers;
Retail: 5740 Columbia Road (parcel at Gateway Overlook).
WASHINGTON REAL
ESTATE INVESTMENT TRUST
|
FINANCIAL
HIGHLIGHTS
|
(In thousands,
except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
OPERATING
RESULTS
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Revenue
|
|
|
|
|
|
|
|
Real estate rental
revenue
|
$
|
74,226
|
|
|
$
|
72,254
|
|
|
$
|
149,082
|
|
|
$
|
140,865
|
|
Expenses
|
|
|
|
|
|
|
|
Real estate
expenses
|
27,229
|
|
|
25,528
|
|
|
56,437
|
|
|
51,870
|
|
Depreciation and
amortization
|
25,503
|
|
|
24,401
|
|
|
50,778
|
|
|
47,154
|
|
Acquisition
costs
|
992
|
|
|
1,933
|
|
|
1,008
|
|
|
4,978
|
|
General and
administrative
|
4,306
|
|
|
4,828
|
|
|
10,386
|
|
|
9,257
|
|
Real estate
impairment
|
5,909
|
|
|
—
|
|
|
5,909
|
|
|
—
|
|
|
63,939
|
|
|
56,690
|
|
|
124,518
|
|
|
113,259
|
|
Other operating
income
|
|
|
|
|
|
|
|
Gain on sale of real
estate
|
1,454
|
|
|
570
|
|
|
31,731
|
|
|
570
|
|
Real estate operating
income
|
11,741
|
|
|
16,134
|
|
|
56,295
|
|
|
28,176
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest
expense
|
(14,700)
|
|
|
(14,985)
|
|
|
(30,048)
|
|
|
(29,515)
|
|
Loss on
extinguishment of debt
|
(119)
|
|
|
—
|
|
|
(119)
|
|
|
—
|
|
Other
income
|
192
|
|
|
219
|
|
|
384
|
|
|
442
|
|
|
(14,627)
|
|
|
(14,766)
|
|
|
(29,783)
|
|
|
(29,073)
|
|
|
|
|
|
|
|
|
|
(Loss) income from
continuing operations
|
(2,886)
|
|
|
1,368
|
|
|
26,512
|
|
|
(897)
|
|
|
|
|
|
|
|
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
Income from
operations of properties sold or held for sale
|
—
|
|
|
—
|
|
|
—
|
|
|
546
|
|
(Loss) gain on sale
of real estate
|
—
|
|
|
(288)
|
|
|
—
|
|
|
105,985
|
|
(Loss) income from
discontinued operations
|
—
|
|
|
(288)
|
|
|
—
|
|
|
106,531
|
|
Net (loss)
income
|
(2,886)
|
|
|
1,080
|
|
|
26,512
|
|
|
105,634
|
|
Less: Net loss
attributable to noncontrolling interests in subsidiaries
|
340
|
|
|
7
|
|
|
448
|
|
|
7
|
|
Net (loss) income
attributable to the controlling interests
|
$
|
(2,546)
|
|
|
$
|
1,087
|
|
|
$
|
26,960
|
|
|
$
|
105,641
|
|
|
|
|
|
|
|
|
|
(Loss) income from
continuing operations
|
(2,886)
|
|
|
1,368
|
|
|
26,512
|
|
|
(897)
|
|
Continuing operations
real estate depreciation and amortization
|
25,503
|
|
|
24,401
|
|
|
50,778
|
|
|
47,154
|
|
Gain on sale of
depreciable real estate
|
—
|
|
|
(570)
|
|
|
(30,277)
|
|
|
(570)
|
|
Funds from continuing
operations(1)
|
$
|
22,617
|
|
|
$
|
25,199
|
|
|
$
|
47,013
|
|
|
$
|
45,687
|
|
Income from
operations of properties sold or held for sale
|
—
|
|
|
—
|
|
|
—
|
|
|
546
|
|
Funds from
discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
546
|
|
NAREIT funds from
operations(1)
|
$
|
22,617
|
|
|
$
|
25,199
|
|
|
$
|
47,013
|
|
|
$
|
46,233
|
|
|
|
|
|
|
|
|
|
Non-cash loss on
extinguishment of debt
|
119
|
|
|
—
|
|
|
119
|
|
|
—
|
|
Tenant
improvements
|
(3,417)
|
|
|
(9,612)
|
|
|
(7,147)
|
|
|
(14,912)
|
|
External and internal
leasing commissions capitalized
|
(1,149)
|
|
|
(1,721)
|
|
|
(2,755)
|
|
|
(2,960)
|
|
Recurring capital
improvements
|
(737)
|
|
|
(1,610)
|
|
|
(1,426)
|
|
|
(2,498)
|
|
Straight-line rents,
net
|
(538)
|
|
|
(723)
|
|
|
(131)
|
|
|
(1,076)
|
|
Non-cash fair value
interest expense
|
36
|
|
|
30
|
|
|
71
|
|
|
225
|
|
Non real estate
depreciation & amortization of debt costs
|
1,123
|
|
|
904
|
|
|
2,061
|
|
|
1,776
|
|
Amortization of lease
intangibles, net
|
970
|
|
|
677
|
|
|
1,738
|
|
|
916
|
|
Amortization and
expensing of restricted share and unit compensation
|
1,195
|
|
|
1,429
|
|
|
3,021
|
|
|
2,470
|
|
Funds available for
distribution(4)
|
$
|
20,219
|
|
|
$
|
14,573
|
|
|
$
|
42,564
|
|
|
$
|
30,174
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
Per share
data:
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
(Loss) income from
continuing operations
|
(Basic)
|
$
|
(0.04)
|
|
|
$
|
0.02
|
|
|
$
|
0.39
|
|
|
$
|
(0.01)
|
|
|
(Diluted)
|
$
|
(0.04)
|
|
|
$
|
0.02
|
|
|
$
|
0.39
|
|
|
$
|
(0.01)
|
|
Net income
|
(Basic)
|
$
|
(0.04)
|
|
|
$
|
0.02
|
|
|
$
|
0.39
|
|
|
$
|
1.58
|
|
|
(Diluted)
|
$
|
(0.04)
|
|
|
$
|
0.02
|
|
|
$
|
0.39
|
|
|
$
|
1.58
|
|
Funds from continuing
operations
|
(Basic)
|
$
|
0.33
|
|
|
$
|
0.38
|
|
|
$
|
0.69
|
|
|
$
|
0.68
|
|
|
(Diluted)
|
$
|
0.33
|
|
|
$
|
0.38
|
|
|
$
|
0.69
|
|
|
$
|
0.68
|
|
NAREIT funds from
operations
|
(Basic)
|
$
|
0.33
|
|
|
$
|
0.38
|
|
|
$
|
0.69
|
|
|
$
|
0.69
|
|
|
(Diluted)
|
$
|
0.33
|
|
|
$
|
0.38
|
|
|
$
|
0.69
|
|
|
$
|
0.69
|
|
|
|
|
|
|
|
|
|
|
Dividends
paid
|
|
$
|
0.30
|
|
|
$
|
0.30
|
|
|
$
|
0.60
|
|
|
$
|
0.60
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
|
68,176
|
|
|
66,732
|
|
|
68,159
|
|
|
66,718
|
|
Fully diluted
weighted average shares outstanding
|
|
68,176
|
|
|
66,761
|
|
|
68,283
|
|
|
66,718
|
|
Fully diluted
weighted average shares outstanding (for FFO)
|
|
68,375
|
|
|
66,761
|
|
|
68,283
|
|
|
66,744
|
|
WASHINGTON REAL
ESTATE INVESTMENT TRUST
|
CONSOLIDATED
BALANCE SHEETS
|
(In thousands,
except per share data)
|
|
|
|
|
|
June 30,
2015
|
|
|
|
(unaudited)
|
|
December 31,
2014
|
Assets
|
|
|
|
Land
|
$
|
542,654
|
|
|
$
|
543,546
|
|
Income producing
property
|
1,966,612
|
|
|
1,927,407
|
|
|
2,509,266
|
|
|
2,470,953
|
|
Accumulated
depreciation and amortization
|
(670,103)
|
|
|
(640,434)
|
|
Net income producing
property
|
1,839,163
|
|
|
1,830,519
|
|
Properties under
development or held for future development
|
35,314
|
|
|
76,235
|
|
Total real estate
held for investment, net
|
1,874,477
|
|
|
1,906,754
|
|
Cash and cash
equivalents
|
22,778
|
|
|
15,827
|
|
Restricted
cash
|
13,705
|
|
|
10,299
|
|
Rents and other
receivables, net of allowance for doubtful accounts of $2,975 and
$3,392, respectively
|
61,577
|
|
|
59,745
|
|
Prepaid expenses and
other assets
|
117,657
|
|
|
121,082
|
|
Total
assets
|
$
|
2,090,194
|
|
|
$
|
2,113,707
|
|
|
|
|
|
Liabilities
|
|
|
|
Notes
payable
|
$
|
597,442
|
|
|
$
|
747,208
|
|
Mortgage notes
payable
|
419,755
|
|
|
418,525
|
|
Lines of
credit
|
185,000
|
|
|
50,000
|
|
Accounts payable and
other liabilities
|
50,281
|
|
|
54,318
|
|
Advance
rents
|
13,733
|
|
|
12,528
|
|
Tenant security
deposits
|
9,053
|
|
|
8,899
|
|
Total
liabilities
|
1,275,264
|
|
|
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; 68,162 and
67,819 shares issued and outstanding, respectively
|
682
|
|
|
678
|
|
Additional paid-in
capital
|
1,191,594
|
|
|
1,184,395
|
|
Distributions in
excess of net income
|
(379,577)
|
|
|
(365,518)
|
|
Total shareholders'
equity
|
812,699
|
|
|
819,555
|
|
|
|
|
|
Noncontrolling
interests in subsidiaries
|
2,231
|
|
|
2,674
|
|
Total
equity
|
814,930
|
|
|
822,229
|
|
|
|
|
|
Total liabilities and
equity
|
$
|
2,090,194
|
|
|
$
|
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
June 30, 2015
|
Multifamily
|
|
Office
|
|
Retail
|
|
Total
|
Same-store net
operating income(3)
|
$
|
8,702
|
|
|
$
|
24,415
|
|
|
$
|
11,270
|
|
|
$
|
44,387
|
|
Add: Net operating
income from non-same-store properties(3)
|
(44)
|
|
|
1,886
|
|
|
768
|
|
|
2,610
|
|
Total net operating
income(2)
|
$
|
8,658
|
|
|
$
|
26,301
|
|
|
$
|
12,038
|
|
|
$
|
46,997
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
Other
income
|
|
|
|
|
|
|
192
|
|
Acquisition
costs
|
|
|
|
|
|
|
(992)
|
|
Interest
expense
|
|
|
|
|
|
|
(14,700)
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
(25,503)
|
|
General and
administrative expenses
|
|
|
|
|
|
|
(4,306)
|
|
Loss on
extinguishment of debt
|
|
|
|
|
|
|
(119)
|
|
Gain on sale of real
estate
|
|
|
|
|
|
|
1,454
|
|
Real estate
impairment
|
|
|
|
|
|
|
(5,909)
|
|
Net loss
|
|
|
|
|
|
|
(2,886)
|
|
Less: Net loss
attributable to noncontrolling interests in subsidiaries
|
|
|
|
|
|
|
340
|
|
Net loss attributable
to the controlling interests
|
|
|
|
|
|
|
$
|
(2,546)
|
|
|
|
|
|
|
|
|
|
Three months ended
June 30, 2014
|
Multifamily
|
|
Office
|
|
Retail
|
|
Total
|
Same-store net
operating income(3)
|
$
|
8,660
|
|
|
$
|
24,360
|
|
|
$
|
11,517
|
|
|
$
|
44,537
|
|
Add: Net operating
income from non-same-store properties(3)
|
485
|
|
|
1,699
|
|
|
5
|
|
|
2,189
|
|
Total net operating
income(2)
|
$
|
9,145
|
|
|
$
|
26,059
|
|
|
$
|
11,522
|
|
|
$
|
46,726
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
Other
income
|
|
|
|
|
|
|
219
|
|
Acquisition
costs
|
|
|
|
|
|
|
(1,933)
|
|
Interest
expense
|
|
|
|
|
|
|
(14,985)
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
(24,401)
|
|
General and
administrative expenses
|
|
|
|
|
|
|
(4,828)
|
|
Gain on sale of real
estate
|
|
|
|
|
|
|
570
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
Gain on sale of real
estate classified as discontinued operations
|
|
|
|
|
|
|
(288)
|
|
Net income
|
|
|
|
|
|
|
1,080
|
|
Less: Net loss
attributable to noncontrolling interests in subsidiaries
|
|
|
|
|
|
|
7
|
|
Net income
attributable to the controlling interests
|
|
|
|
|
|
|
$
|
1,087
|
|
The following tables
contain reconciliations of net income to same-store net operating
income for the periods presented (in thousands):
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, 2015
|
Multifamily
|
|
Office
|
|
Retail
|
|
Total
|
Same-store net
operating income(3)
|
$
|
15,489
|
|
|
$
|
45,879
|
|
|
$
|
22,190
|
|
|
$
|
83,558
|
|
Add: Net operating
income from non-same-store properties(3)
|
1,921
|
|
|
5,775
|
|
|
1,391
|
|
|
9,087
|
|
Total net operating
income(2)
|
$
|
17,410
|
|
|
$
|
51,654
|
|
|
$
|
23,581
|
|
|
$
|
92,645
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
Other
income
|
|
|
|
|
|
|
384
|
|
Acquisition
costs
|
|
|
|
|
|
|
(1,008)
|
|
Interest
expense
|
|
|
|
|
|
|
(30,048)
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
(50,778)
|
|
General and
administrative expenses
|
|
|
|
|
|
|
(10,386)
|
|
Loss on
extinguishment of debt
|
|
|
|
|
|
|
(119)
|
|
Gain on sale of real
estate
|
|
|
|
|
|
|
31,731
|
|
Real estate
impairment
|
|
|
|
|
|
|
(5,909)
|
|
Net income
|
|
|
|
|
|
|
26,512
|
|
Less: Net loss
attributable to noncontrolling interests in subsidiaries
|
|
|
|
|
|
|
448
|
|
Net income
attributable to the controlling interests
|
|
|
|
|
|
|
$
|
26,960
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, 2014
|
Multifamily
|
|
Office
|
|
Retail
|
|
Total
|
Same-store net
operating income(3)
|
$
|
15,435
|
|
|
$
|
45,049
|
|
|
$
|
21,890
|
|
|
$
|
82,374
|
|
Add: Net operating
income from non-same-store properties(3)
|
2,217
|
|
|
4,378
|
|
|
26
|
|
|
6,621
|
|
Total net operating
income(2)
|
$
|
17,652
|
|
|
$
|
49,427
|
|
|
$
|
21,916
|
|
|
$
|
88,995
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
Other
income
|
|
|
|
|
|
|
442
|
|
Acquisition
costs
|
|
|
|
|
|
|
(4,978)
|
|
Interest
expense
|
|
|
|
|
|
|
(29,515)
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
(47,154)
|
|
General and
administrative expenses
|
|
|
|
|
|
|
(9,257)
|
|
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
|
|
|
|
|
|
|
105,634
|
|
Less: Net loss
attributable to noncontrolling interests in subsidiaries
|
|
|
|
|
|
|
7
|
|
Net income
attributable to the controlling interests
|
|
|
|
|
|
|
$
|
105,641
|
|
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
June 30,
|
|
Six Months
Ended
June 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Net (loss)
income
|
|
$
|
(2,886)
|
|
|
$
|
1,080
|
|
|
$
|
26,512
|
|
|
$
|
105,634
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
|
Real estate
depreciation and amortization
|
|
25,503
|
|
|
24,401
|
|
|
50,778
|
|
|
47,154
|
|
Gain on sale of
depreciable real estate
|
|
—
|
|
|
(570)
|
|
|
(30,277)
|
|
|
(570)
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
|
Loss (gain) on sale
of real estate
|
|
—
|
|
|
288
|
|
|
—
|
|
|
(105,985)
|
|
NAREIT funds from
operations(1)
|
|
22,617
|
|
|
25,199
|
|
|
47,013
|
|
|
46,233
|
|
Add/(deduct):
|
|
|
|
|
|
|
|
|
Real estate
impairment
|
|
5,909
|
|
|
—
|
|
|
5,909
|
|
|
—
|
|
Acquisition and
structuring expenses
|
|
1,264
|
|
|
1,933
|
|
|
1,498
|
|
|
4,978
|
|
Gain on sale of
non-depreciable real estate
|
|
(1,454)
|
|
|
—
|
|
|
(1,454)
|
|
|
—
|
|
Loss on
extinguishment of debt
|
|
119
|
|
|
—
|
|
|
119
|
|
|
—
|
|
Severance
expense
|
|
—
|
|
|
576
|
|
|
1,001
|
|
|
624
|
|
Relocation
expense
|
|
26
|
|
|
—
|
|
|
90
|
|
|
—
|
|
Core funds from
operations(1)
|
|
$
|
28,481
|
|
|
$
|
27,708
|
|
|
$
|
54,176
|
|
|
$
|
51,835
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
Per share
data:
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
NAREIT FFO
|
(Basic)
|
$
|
0.33
|
|
|
$
|
0.38
|
|
|
$
|
0.69
|
|
|
$
|
0.69
|
|
|
(Diluted)
|
$
|
0.33
|
|
|
$
|
0.38
|
|
|
$
|
0.69
|
|
|
$
|
0.69
|
|
Core FFO
|
(Basic)
|
$
|
0.42
|
|
|
$
|
0.42
|
|
|
$
|
0.79
|
|
|
$
|
0.77
|
|
|
(Diluted)
|
$
|
0.42
|
|
|
$
|
0.41
|
|
|
$
|
0.79
|
|
|
$
|
0.77
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
|
68,176
|
|
|
66,732
|
|
|
68,159
|
|
|
66,718
|
|
Fully diluted
weighted average shares outstanding (for FFO)
|
|
68,375
|
|
|
66,761
|
|
|
68,283
|
|
|
66,744
|
|
CONTACT:
Tejal R. Engman
Director of Investor Relations
E-Mail: tengman@washreit.com
Logo- http://photos.prnewswire.com/prnh/20150120/170344LOGO
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/washington-real-estate-investment-trust-announces-second-quarter-financial-and-operating-results-300118134.html
SOURCE Washington Real Estate Investment Trust