Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 1-May-15 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | WASHINGTON REAL ESTATE INVESTMENT TRUST | |
Entity Central Index Key | 104894 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 68,142,406 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Assets | ||
Land | $543,247 | $543,546 |
Income producing property | 1,932,908 | 1,927,407 |
Real estate investment property, at cost | 2,476,155 | 2,470,953 |
Accumulated depreciation and amortization | -649,279 | -640,434 |
Net income producing property | 1,826,876 | 1,830,519 |
Properties under development or held for future development | 65,656 | 76,235 |
Total real estate held for investment, net | 1,892,532 | 1,906,754 |
Cash and cash equivalents | 40,025 | 15,827 |
Restricted cash | 13,095 | 10,299 |
Rents and other receivables, net of allowance for doubtful accounts of $2,912 and $3,392, respectively | 60,215 | 59,745 |
Prepaid expenses and other assets | 117,367 | 121,082 |
Total assets | 2,123,234 | 2,113,707 |
Liabilities | ||
Notes payable | 747,335 | 747,208 |
Mortgage notes payable | 419,250 | 418,525 |
Lines of credit | 30,000 | 50,000 |
Accounts payable and other liabilities | 65,447 | 54,318 |
Advance rents | 14,471 | 12,528 |
Tenant security deposits | 8,892 | 8,899 |
Total liabilities | 1,285,395 | 1,291,478 |
Shareholders’ equity | ||
Preferred shares; $0.01 par value; 10,000 shares authorized; no shares issued or outstanding | 0 | 0 |
Shares of beneficial interest; $0.01 par value; 100,000 shares authorized: 68,126 and 67,819 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively | 681 | 678 |
Additional paid in capital | 1,191,123 | 1,184,395 |
Distributions in excess of net income | -356,531 | -365,518 |
Total shareholders’ equity | 835,273 | 819,555 |
Noncontrolling interests in subsidiaries | 2,566 | 2,674 |
Total equity | 837,839 | 822,229 |
Total liabilities and equity | $2,123,234 | $2,113,707 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, except Per Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ||
Rents and other receivables, allowance for doubtful accounts | $2,912 | $3,392 |
Preferred Stock, Par or Stated Value Per Share (in dollars per share) | $0.01 | $0.01 |
Preferred Stock, Shares Authorized (in shares) | 10,000 | 10,000 |
Preferred Stock, Shares Issued (in shares) | 0 | 0 |
Preferred Stock, Shares Outstanding (in shares) | 0 | 0 |
Shares of beneficial interest, par value (in dollars per share) | $0.01 | $0.01 |
Shares of beneficial interest, shares authorized (in shares) | 100,000 | 100,000 |
Shares of beneficial interest, shares issued (in shares) | 68,126 | 67,819 |
Shares of beneficial interest, shares outstanding (in shares) | 68,126 | 67,819 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Income (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Revenue | ||
Real estate rental revenue | $74,856 | $68,611 |
Expenses | ||
Real estate expenses | 29,208 | 26,342 |
Depreciation and amortization | 25,275 | 22,753 |
Acquisition costs | 16 | 3,045 |
General and administrative | 6,080 | 4,429 |
Operating Expenses | 60,579 | 56,569 |
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal | 30,277 | 0 |
Real estate operating income | 44,554 | 12,042 |
Other income (expense) | ||
Interest expense | -15,348 | -14,530 |
Other income | 192 | 223 |
Total other income (expense) | -15,156 | -14,307 |
Income (loss) from continuing operations | 29,398 | -2,265 |
Discontinued operations: | ||
Income from operations of properties sold or held for sale | 0 | 546 |
Gain on sale of real estate | 0 | 106,273 |
Net income | 29,398 | 104,554 |
Net Income (Loss) Attributable to Noncontrolling Interest | -108 | 0 |
Net income attributable to the controlling interests | $29,506 | $104,554 |
Basic net income per share: | ||
Continuing operations (in dollars per share) | $0.43 | ($0.04) |
Discontinued operations (in dollars per share) | $0 | $1.60 |
Net income per share (in dollars per share) | $0.43 | $1.56 |
Diluted net income per share: | ||
Continuing operations (in dollars per share) | $0.43 | ($0.04) |
Discontinued operations (in dollars per share) | $0 | $1.60 |
Net income per share (in dollars per share) | $0.43 | $1.56 |
Weighted average shares outstanding - basic (in shares) | 68,141 | 66,701 |
Weighted average shares outstanding - diluted (in shares) | 68,191 | 66,701 |
Dividends declared per share (in dollars per share) | $0.30 | $0.30 |
Consolidated_Statements_of_Sha
Consolidated Statements of Shareholders' Equity (USD $) | Total | Shares of Beneficial Interest at Par Value [Member] | Additional Paid in Capital [Member] | Distributions in Excess of Net Income Attributable to the Controlling Interests [Member] | Total Shareholders' Equity [Member] | Noncontrolling Interests in Subsidiaries [Member] |
In Thousands, unless otherwise specified | ||||||
Balance at Dec. 31, 2014 | $822,229 | $678 | $1,184,395 | ($365,518) | $819,555 | $2,674 |
Balance (in shares) at Dec. 31, 2014 | 67,819 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income attributable to the controlling interests | 29,506 | 29,506 | 29,506 | |||
Net Income (Loss) Attributable to Noncontrolling Interest | -108 | -108 | ||||
Dividends | -20,519 | -20,519 | -20,519 | |||
Stock Issued During Period, Shares, New Issues | 184 | |||||
Stock Issued During Period, Value, New Issues | 5,091 | 2 | 5,089 | |||
Share grants, net of share grant amortization and forfeitures | 1,640 | 1 | 1,639 | 1,640 | ||
Share grants, net of share grant amortization and forfeitures (in shares) | 123 | |||||
Balance at Mar. 31, 2015 | $837,839 | $681 | $1,191,123 | ($356,531) | $835,273 | $2,566 |
Balance (in shares) at Mar. 31, 2015 | 68,126 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Net Cash Provided by (Used in) Operating Activities [Abstract] | ||
Net income | $29,398 | $104,554 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization, including amounts in discontinued operations | 25,275 | 22,753 |
Provision for losses on accounts receivable | 441 | 568 |
Gain on sale of real estate | -30,277 | -106,273 |
Amortization of share grants, net | 1,852 | 1,058 |
Amortization of debt premiums, discounts and related financing costs | 872 | 937 |
Changes in operating other assets | 932 | 3,152 |
Changes in operating other liabilities | 9,075 | 2,040 |
Net cash provided by operating activities | 35,704 | 22,485 |
Cash flows from investing activities | ||
Real estate acquisitions, net | 0 | -48,051 |
Net cash received for sale of real estate | 37,013 | 189,386 |
Escrow Deposits Related to Property Sales | 0 | -96,610 |
Capital improvements to real estate | -4,781 | -10,369 |
Development in progress | -6,390 | -4,203 |
Real estate deposits, net | 0 | -2,500 |
Increase (Decrease) in Restricted Cash | -996 | 0 |
Non-real estate capital improvements | -1,376 | -17 |
Net cash provided by investing activities | 23,470 | 27,636 |
Cash flows from financing activities | ||
Line of credit repayments | -20,000 | 0 |
Dividends paid | -20,519 | -20,091 |
Payment of financing costs | -238 | -660 |
Proceeds from Issuance of Common Stock | 5,091 | 0 |
Principal payments – mortgage notes payable | -1,155 | -830 |
Borrowings under construction loan | 1,845 | 3,197 |
Notes payable repayments | 0 | -100,000 |
Net cash used in financing activities | -34,976 | -118,384 |
Net increase (decrease) in cash and cash equivalents | 24,198 | -68,263 |
Cash and cash equivalents at beginning of period | 15,827 | 130,343 |
Cash and cash equivalents at end of period | 40,025 | 62,080 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest, net of amounts capitalized | 7,531 | 8,970 |
Decrease in accrued capital improvements and development costs | 4,104 | 2,616 |
Noncash or Part Noncash Acquisition, Debt Assumed | $0 | $100,861 |
Nature_of_Business
Nature of Business | 3 Months Ended |
Mar. 31, 2015 | |
Nature Of Business [Abstract] | |
Nature of Business | NOTE 1: NATURE OF BUSINESS |
Washington Real Estate Investment Trust (“Washington REIT”), a Maryland real estate investment trust, is a self-administered real estate investment trust, successor to a trust organized in 1960. Our business consists of the ownership and operation of income-producing real estate properties in the greater Washington metro region. We own a diversified portfolio of office buildings, multifamily buildings and retail centers. | |
Federal Income Taxes | |
We believe that we qualify as a real estate investment trust (“REIT”) under Sections 856-860 of the Internal Revenue Code and intend to continue to qualify as such. To maintain our status as a REIT, we are among other things required to distribute 90% of our REIT taxable income (which is, generally, our ordinary taxable income, with certain modifications), excluding any net taxable gains and any deductions for dividends to our shareholders on an annual basis. When selling a property, we generally have the option of (a) reinvesting the sales proceeds of the property sold, in a way that allows us to defer recognition of some or all capital gain realized on the sale, (b) distributing gains to the shareholders with no tax to us or (c) treating net long-term capital gains as having been distributed to the shareholders, paying the tax on the gain deemed distributed and allocating the tax paid as a credit to the shareholders. | |
Generally, and subject to our ongoing qualification as a REIT, no provisions for income taxes are necessary except for taxes on undistributed taxable income and taxes on the income generated by our taxable REIT subsidiaries (“TRS's”). Our TRS's are subject to corporate federal and state income tax on their taxable income at regular statutory rates, or as calculated under the alternative minimum tax, as appropriate. As of March 31, 2015 and December 31, 2014, our TRS's had no net deferred tax assets and a net deferred tax liability of $0.6 million. This deferred tax liability is primarily related to temporary differences in the timing of the recognition of revenue, amortization and depreciation. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies and Basis of Presentation | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies and Basis of Presentation | NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION |
Significant Accounting Policies | |
We have prepared our consolidated financial statements using the accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2014. | |
New Accounting Pronouncements | |
In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest, which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the new standard. The new standard is effective for public entities for fiscal years beginning after December 15, 2015 and for interim periods therein. We do not expect this ASU to have a material impact on our consolidated financial statements. | |
In June 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which creates a single source of revenue guidance. The new standard provides accounting guidance for all revenue arising from contracts with customers and affects all entities that enter into contracts to provide goods or services to their customers (unless the contracts are in the scope of other U.S. generally accepted accounting principles (“GAAP”) requirements, such as the leasing literature). The guidance also provides a model for the measurement and recognition of gains and losses on the sale of certain nonfinancial assets, such as property and equipment, including real estate. The new standard is effective for public entities for fiscal years beginning after December 15, 2016 and for interim periods therein. Early adoption is not permitted for public entities. We are currently evaluating the impact the new standard may have on Washington REIT. | |
Principles of Consolidation and Basis of Presentation | |
The accompanying unaudited consolidated financial statements include the consolidated accounts of Washington REIT, our majority-owned subsidiaries and entities in which Washington REIT has a controlling interest, including where Washington REIT has been determined to be a primary beneficiary of a variable interest entity (“VIE”). See note 3 for additional information on the properties for which there is a noncontrolling interest. All intercompany balances and transactions have been eliminated in consolidation. | |
We have prepared the accompanying unaudited financial statements pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations, although we believe that the disclosures made are adequate to make the information presented not misleading. In addition, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results for the periods presented have been included. These unaudited financial statements should be read in conjunction with the financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2014. | |
Within these notes to the financial statements, we refer to the three months ended March 31, 2015 and March 31, 2014 as the “2015 Quarter” and the “2014 Quarter,” respectively. | |
Use of Estimates in the Financial Statements | |
The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Real_Estate
Real Estate | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Real Estate [Abstract] | |||||||||||||
Real Estate | NOTE 3: REAL ESTATE | ||||||||||||
Redevelopment | |||||||||||||
In the office segment, we have a redevelopment project to renovate Silverline Center. Our investment in the renovation at Silverline Center is included in properties under development on our consolidated balance sheet. As of March 31, 2015 and December 31, 2014, we had invested $35.1 million and $27.9 million, respectively, in the renovation. We substantially completed major construction activities on this project in April 2015. | |||||||||||||
Variable Interest Entities | |||||||||||||
In June 2011, we executed a joint venture operating agreement with a real estate development company to develop The Maxwell, a mid-rise multifamily property at 650 North Glebe Road in Arlington, Virginia. Major construction activities at The Maxwell ended during December 2014, and the building became available for occupancy by the end of the 2015 Quarter. Washington REIT is the 90% owner of the joint venture. The real estate development company owns 10% of the joint venture and was responsible for the development and construction of the property. | |||||||||||||
In November 2011, we executed a joint venture operating agreement with a real estate development company to develop a high-rise multifamily property at 1225 First Street in Alexandria, Virginia. We estimate the total cost of the project to be $95.3 million | |||||||||||||
. Washington REIT is the 95% owner of the joint venture and will have management and leasing responsibilities if the project is completed and stabilized. The real estate development company owns 5% of the joint venture and will be responsible for the development and construction of the property, if the property is developed. In the first quarter of 2013, we decided to delay commencement of construction due to market conditions and concerns of oversupply. We continue to reassess this project on a periodic basis going forward. | |||||||||||||
We have determined that The Maxwell and 1225 First Street joint ventures are variable interest entities ("VIE's") primarily based on the fact that the equity investment at risk is not sufficient to permit either entity to finance its activities without additional financial support. As of March 31, 2015, $29.5 million was outstanding on The Maxwell's construction loan, and we expect that 70% of the total development costs for 1225 First Street would be financed through debt. We have also determined that Washington REIT is the primary beneficiary of each VIE due to the fact that Washington REIT is providing 90% to 95% of the equity contributions and will oversee management of each property no later than stabilization. | |||||||||||||
We include the joint venture land acquisition for 1225 First Street on our consolidated balance sheets in properties under development or held for future development. As of March 31, 2015 and December 31, 2014, the land and capitalized development costs for 1225 First Street were as follows (in thousands): | |||||||||||||
March 31, 2015 | December 31, 2014 | ||||||||||||
Properties under development or held for future development | $ | 20,807 | $ | 20,807 | |||||||||
Cash and cash equivalents | 390 | 395 | |||||||||||
As of March 31, 2015 and December 31, 2014, the liabilities for 1225 First Street were as follows (in thousands): | |||||||||||||
March 31, 2015 | December 31, 2014 | ||||||||||||
Accounts payable and other liabilities | $ | 81 | $ | 38 | |||||||||
As of March 31, 2015 and December 31, 2014, The Maxwell's assets were as follows (in thousands): | |||||||||||||
March 31, 2015 | December 31, 2014 | ||||||||||||
Land | $ | 12,851 | $ | 12,851 | |||||||||
Income producing property | 37,647 | 18,432 | |||||||||||
Accumulated depreciation and amortization | (543 | ) | — | ||||||||||
Properties under development or held for future development | — | 17,947 | |||||||||||
Other assets | 393 | $ | — | ||||||||||
$ | 50,348 | $ | 49,230 | ||||||||||
As of March 31, 2015 and December 31, 2014, The Maxwell's liabilities were as follows (in thousands): | |||||||||||||
March 31, 2015 | December 31, 2014 | ||||||||||||
Mortgage notes payable | $ | 29,535 | $ | 27,690 | |||||||||
Accounts payable and other liabilities | 2,006 | 2,196 | |||||||||||
Tenant security deposits | 35 | 17 | |||||||||||
$ | 31,576 | $ | 29,903 | ||||||||||
Sold Properties and Discontinued Operations | |||||||||||||
We dispose of assets that no longer meet our long-term strategy or return objectives and where market conditions for sale are favorable. The proceeds from the sales may be reinvested into other properties, used to fund development operations or to support other corporate needs, or distributed to our shareholders. | |||||||||||||
In September 2013, we entered into four separate purchase and sale agreements to effectuate the sale of our entire medical office segment (including land held for development at 4661 Kenmore Avenue) and two office buildings (Woodholme Center and 6565 Arlington Boulevard) for an aggregate purchase price of $500.8 million. The sale was structured as four transactions. Transactions I and II closed in November 2013 and Transactions III and IV closed in January 2014. | |||||||||||||
The results of the assets in our former medical office segment sold in January 2014 are summarized as follows (amounts in thousands, except per share data): | |||||||||||||
Three Months Ended March 31, | |||||||||||||
2015 | 2014 | ||||||||||||
Real estate rental revenue | $ | — | $ | 892 | |||||||||
Net income | — | 546 | |||||||||||
Basic net income per share | — | 0.01 | |||||||||||
Diluted net income per share | — | 0.01 | |||||||||||
We sold the following properties in 2015 and 2014: | |||||||||||||
Property Name | Segment | Rentable Square Feet | Contract | Gain on Sale | |||||||||
Purchase Price | (in thousands) | ||||||||||||
(in thousands) | |||||||||||||
Country Club Towers (227 units) (1) | Multifamily | N/A | $ | 37,800 | $ | 30,277 | |||||||
Total 2015 | $ | 37,800 | $ | 30,277 | |||||||||
Medical Office Portfolio Transactions III & IV (2) | Medical Office | 427,000 | $ | 193,561 | $ | 105,985 | |||||||
5740 Columbia Road (1) | Retail | 3,000 | 1,600 | 570 | |||||||||
Total 2014 | 430,000 | $ | 195,161 | $ | 106,555 | ||||||||
(1) | These properties are classified as continuing operations. | ||||||||||||
(2) Woodburn Medical Park I and II and Prosperity Medical Center I, II and III, which are classified as discontinued operations. | |||||||||||||
Income from operations of properties classified as discontinued operations for the three months ended March 31, 2015 and 2014 was as follows (in thousands): | |||||||||||||
Three Months Ended March 31, | |||||||||||||
2015 | 2014 | ||||||||||||
Real estate rental revenue | $ | — | $ | 892 | |||||||||
Real estate expenses | — | (346 | ) | ||||||||||
Income from operations classified as discontinued operations | $ | — | $ | 546 | |||||||||
Unsecured_Lines_of_Credit_Paya
Unsecured Lines of Credit Payable | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Unsecured Debt [Abstract] | ||||||||
Unsecured Lines of Credit Payable | NOTE 4: UNSECURED LINES OF CREDIT PAYABLE | |||||||
As of March 31, 2015, we maintained a $100.0 million unsecured line of credit maturing in June 2015 ("Credit Facility No. 1") and a $400.0 million unsecured line of credit maturing in July 2016 ("Credit Facility No. 2"). Credit Facilities No. 1 and No. 2 have accordion features that allow us to increase the facilities to $200.0 million and $600.0 million, respectively, subject to additional lender commitments. | ||||||||
The amounts of these lines of credit unused and available at March 31, 2015 are as follows (in thousands): | ||||||||
Credit Facility No. 1 | Credit Facility No. 2 | |||||||
Committed capacity | $ | 100,000 | $ | 400,000 | ||||
Borrowings outstanding | — | (30,000 | ) | |||||
Letters of credit issued (1) | — | (15,474 | ) | |||||
Unused and available | $ | 100,000 | $ | 354,526 | ||||
(1) The letter of credit under Credit Facility No. 2 is provided to the lender for John Marshall II relating to tenant improvements. | ||||||||
We executed repayments on the unsecured lines of credit during the 2015 Quarter as follows (in thousands): | ||||||||
Credit Facility No. 1 | Credit Facility No. 2 | |||||||
Balance at December 31, 2014 | $ | 5,000 | $ | 45,000 | ||||
Repayments | (5,000 | ) | (15,000 | ) | ||||
Balance at March 31, 2015 | $ | — | $ | 30,000 | ||||
Stock_Based_Compensation
Stock Based Compensation | 3 Months Ended |
Mar. 31, 2015 | |
Share-based Compensation [Abstract] | |
Stock Based Compensation | NOTE 5: STOCK BASED COMPENSATION |
Washington REIT maintains short-term ("STIP") and long-term ("LTIP") incentive plans that allow for stock-based awards to officers and non-officer employees. Stock based awards are provided to officers and non-officer employees, as well as trustees, under the Washington Real Estate Investment Trust 2007 Omnibus Long-Term Incentive Plan which allows for awards in the form of restricted shares, restricted share units, options and other awards up to an aggregate of 2,000,000 shares over the ten year period in which the plan will be in effect. Restricted share units are converted into shares of our stock upon full vesting through the issuance of new shares. | |
Total Compensation Expense | |
Total compensation expense recognized in the consolidated financial statements for all outstanding share based awards was $1.9 million and $1.1 million for the 2015 and 2014 Quarters, respectively. | |
Restricted Share Awards | |
The total fair values of restricted share awards vested was $1.7 million and $0.2 million for the 2015 and 2014 Quarters, respectively. | |
The total unvested restricted share awards at March 31, 2015 was 230,237 shares, which had a weighted average grant date fair value of $27.26 per share. As of March 31, 2015, the total compensation cost related to unvested restricted share awards was $3.7 million, which we expect to recognize over a weighted average period of 23 months. |
Fair_Value_Disclosures
Fair Value Disclosures | 3 Months Ended | |||||||||||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||
Fair Value Disclosures | NOTE 6: FAIR VALUE DISCLOSURES | |||||||||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value | ||||||||||||||||||||||||||||||||
For assets and liabilities measured at fair value on a recurring basis, quantitative disclosures about the fair value measurements are required to be disclosed separately for each major category of assets and liabilities, as follows: | ||||||||||||||||||||||||||||||||
Level 1: Quoted prices in active markets for identical assets | ||||||||||||||||||||||||||||||||
Level 2: Significant other observable inputs | ||||||||||||||||||||||||||||||||
Level 3: Significant unobservable inputs | ||||||||||||||||||||||||||||||||
The only assets or liabilities we had at March 31, 2015 and December 31, 2014 that are recorded at fair value on a recurring basis are the assets held in the Supplemental Executive Retirement Program (“SERP”), which primarily consists of investments in mutual funds. We base the valuations related to this asset on the observable market values of the investments that comprise the SERP (Level 2 inputs). | ||||||||||||||||||||||||||||||||
The fair values of these assets at March 31, 2015 and December 31, 2014 were as follows (in thousands): | ||||||||||||||||||||||||||||||||
March 31, 2015 | December 31, 2014 | |||||||||||||||||||||||||||||||
Fair | Level 1 | Level 2 | Level 3 | Fair | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||
Value | Value | |||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||
SERP | $ | 2,459 | $ | — | $ | 2,459 | $ | — | $ | 2,778 | $ | — | $ | 2,778 | $ | — | ||||||||||||||||
Financial Assets and Liabilities Not Measured at Fair Value | ||||||||||||||||||||||||||||||||
The following disclosures of estimated fair value were determined by management using available market information and established valuation methodologies, including discounted cash flow. Many of these estimates involve significant judgment. The estimated fair value disclosed may not necessarily be indicative of the amounts we could realize on disposition of the financial instruments. The use of different market assumptions or estimation methodologies could have an effect on the estimated fair value amounts. In addition, fair value estimates are made at a point in time and thus, estimates of fair value subsequent to March 31, 2015 may differ significantly from the amounts presented. | ||||||||||||||||||||||||||||||||
Following is a summary of significant methodologies used in estimating fair values and a schedule of fair values at March 31, 2015 and December 31, 2014. | ||||||||||||||||||||||||||||||||
Cash and Cash Equivalents and Restricted Cash | ||||||||||||||||||||||||||||||||
Cash and cash equivalents and restricted cash include cash and commercial paper with original maturities of less than 90 days, which are valued at the carrying value, which approximates fair value due to the short maturity of these instruments (Level 1 inputs). | ||||||||||||||||||||||||||||||||
Notes Receivable | ||||||||||||||||||||||||||||||||
We acquired a note receivable ("2445 M Street note") in 2008 with the purchase of 2445 M Street. We estimate the fair value of the 2445 M Street note based on a discounted cash flow methodology using market discount rates (Level 3 inputs). | ||||||||||||||||||||||||||||||||
Debt | ||||||||||||||||||||||||||||||||
Mortgage notes payable consist of instruments in which certain of our real estate assets are used for collateral. We estimate the fair value of the mortgage notes payable by discounting the contractual cash flows at a rate equal to the relevant treasury rates (with respect to the timing of each cash flow) plus credit spreads estimated through independent comparisons to real estate assets or loans with similar characteristics. Lines of credit payable consist of bank facilities which we use for various purposes including working capital, acquisition funding or capital improvements. The lines of credit advances are priced at a specified rate plus a spread. We estimate the market value based on a comparison of the spreads of the advances to market given the adjustable base rate. We estimate the fair value of the notes payable by discounting the contractual cash flows at a rate equal to the relevant treasury rates (with respect to the timing of each cash flow) plus credit spreads derived using the relevant securities’ market prices. We classify these fair value measurements as Level 3 as we use significant unobservable inputs and management judgment due to the absence of quoted market prices. | ||||||||||||||||||||||||||||||||
As of March 31, 2015 and December 31, 2014, the carrying values and estimated fair values of our financial instruments were as follows (in thousands): | ||||||||||||||||||||||||||||||||
March 31, 2015 | December 31, 2014 | |||||||||||||||||||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 40,025 | $ | 40,025 | $ | 15,827 | $ | 15,827 | ||||||||||||||||||||||||
Restricted cash | 13,095 | 13,095 | 10,299 | 10,299 | ||||||||||||||||||||||||||||
2445 M Street note | 4,592 | 5,216 | 4,404 | 5,113 | ||||||||||||||||||||||||||||
Mortgage notes payable | 419,250 | 433,712 | 418,525 | 433,762 | ||||||||||||||||||||||||||||
Lines of credit | 30,000 | 30,000 | 50,000 | 50,000 | ||||||||||||||||||||||||||||
Notes payable | 747,335 | 784,342 | 747,208 | 782,042 | ||||||||||||||||||||||||||||
Earnings_per_Common_Share
Earnings per Common Share | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Earnings Per Share [Abstract] | ||||||||
Earnings per Common Share | NOTE 7: EARNINGS PER COMMON SHARE | |||||||
We determine “Basic earnings per share” using the two-class method as our unvested restricted share awards and units have non-forfeitable rights to dividends and are therefore considered participating securities. We compute basic earnings per share by dividing net income attributable to the controlling interest less the allocation of undistributed earnings to unvested restricted share awards and units by the weighted-average number of common shares outstanding for the period. | ||||||||
We determine “Diluted earnings per share” as the more dilutive of the two-class method or the treasury stock method with respect to the unvested restricted share awards. We further evaluate any other potentially dilutive securities at the end of the period and adjust the basic earnings per share calculation for the impact of those securities that are dilutive. Our diluted earnings per share calculation includes the dilutive impact of employee stock options (prior to their expiration at December 31, 2014) based on the treasury stock method and our share based awards with performance conditions prior to the grant date and all market condition awards under the contingently issuable method. We had a loss from continuing operations for the 2014 Quarter and therefore diluted earnings per share is calculated in the same manner as basic earnings per share for that quarter. | ||||||||
The computations of basic and diluted earnings per share for the three months ended March 31, 2015 and 2014 were as follows (in thousands, except per share data): | ||||||||
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
Numerator: | ||||||||
Income (loss) from continuing operations | $ | 29,398 | $ | (2,265 | ) | |||
Net loss attributable to noncontrolling interests | 108 | — | ||||||
Allocation of earnings to unvested restricted share awards | (108 | ) | (10 | ) | ||||
Adjusted income (loss) from continuing operations attributable to the controlling interests | 29,398 | (2,275 | ) | |||||
Income from discontinued operations, including gain on sale of real estate, net of taxes | — | 106,819 | ||||||
Allocation of earnings to unvested restricted share awards | — | (285 | ) | |||||
Adjusted income from discontinuing operations attributable to the controlling interests | — | 106,534 | ||||||
Adjusted net income attributable to the controlling interests | $ | 29,398 | $ | 104,259 | ||||
Denominator: | ||||||||
Weighted average shares outstanding – basic | 68,141 | 66,701 | ||||||
Effect of dilutive securities: | ||||||||
Employee restricted share awards | 50 | — | ||||||
Weighted average shares outstanding – diluted | 68,191 | 66,701 | ||||||
Earnings per common share, basic: | ||||||||
Continuing operations | $ | 0.43 | $ | (0.04 | ) | |||
Discontinued operations | — | 1.6 | ||||||
$ | 0.43 | $ | 1.56 | |||||
Earnings per common share, diluted: | ||||||||
Continuing operations | $ | 0.43 | $ | (0.04 | ) | |||
Discontinued operations | — | 1.6 | ||||||
$ | 0.43 | $ | 1.56 | |||||
Segment_Information
Segment Information | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||
Segment Reporting Information, Revenue for Reportable Segment [Abstract] | ||||||||||||||||||||
Segment Information | NOTE 8: SEGMENT INFORMATION | |||||||||||||||||||
We have three reportable segments: office, retail and multifamily. Office buildings provide office space for various types of businesses and professions. Retail shopping centers are typically grocery store anchored neighborhood centers that include other small shop tenants or regional power centers with several junior box tenants. Multifamily properties provide rental housing for individuals and families throughout the Washington metropolitan area. | ||||||||||||||||||||
We evaluate performance based upon operating income from the combined properties in each segment. Our reportable operating segments are consolidations of similar properties. GAAP requires that segment disclosures present the measure(s) used by the chief operating decision maker for purposes of assessing segments’ performance. Net operating income is a key measurement of our segment profit and loss. Net operating income is defined as segment real estate rental revenue less segment real estate expenses. | ||||||||||||||||||||
The following tables present revenues, net operating income, capital expenditures and total assets for the 2015 and 2014 Quarters from these segments, and reconciles net operating income of reportable segments to net income attributable to the controlling interests as reported (in thousands): | ||||||||||||||||||||
Three Months Ended March 31, 2015 | ||||||||||||||||||||
Office | Retail | Multifamily | Corporate and Other | Consolidated | ||||||||||||||||
Real estate rental revenue | $ | 42,495 | $ | 16,330 | $ | 16,031 | $ | — | $ | 74,856 | ||||||||||
Real estate expenses | 17,143 | 4,787 | 7,278 | — | 29,208 | |||||||||||||||
Net operating income | $ | 25,352 | $ | 11,543 | $ | 8,753 | $ | — | $ | 45,648 | ||||||||||
Depreciation and amortization | (25,275 | ) | ||||||||||||||||||
General and administrative | (6,080 | ) | ||||||||||||||||||
Acquisition costs | (16 | ) | ||||||||||||||||||
Interest expense | (15,348 | ) | ||||||||||||||||||
Other income | 192 | |||||||||||||||||||
Gain on sale of real estate (classified as continuing operations) | 30,277 | |||||||||||||||||||
Net income | 29,398 | |||||||||||||||||||
Less: Net loss attributable to noncontrolling interests in subsidiaries | 108 | |||||||||||||||||||
Net income attributable to the controlling interests | $ | 29,506 | ||||||||||||||||||
Capital expenditures | $ | 2,518 | $ | 850 | $ | 1,413 | $ | 1,376 | $ | 6,157 | ||||||||||
Total assets | $ | 1,279,406 | $ | 383,511 | $ | 407,639 | $ | 52,678 | $ | 2,123,234 | ||||||||||
Three Months Ended March 31, 2014 | ||||||||||||||||||||
Office | Retail | Multifamily | Corporate | Consolidated | ||||||||||||||||
and Other | ||||||||||||||||||||
Real estate rental revenue | $ | 39,064 | $ | 14,625 | $ | 14,922 | $ | — | $ | 68,611 | ||||||||||
Real estate expenses | 15,696 | 4,231 | 6,415 | — | 26,342 | |||||||||||||||
Net operating income | $ | 23,368 | $ | 10,394 | $ | 8,507 | $ | — | $ | 42,269 | ||||||||||
Depreciation and amortization | (22,753 | ) | ||||||||||||||||||
Acquisition costs | (3,045 | ) | ||||||||||||||||||
General and administrative | (4,429 | ) | ||||||||||||||||||
Interest expense | (14,530 | ) | ||||||||||||||||||
Other income | 223 | |||||||||||||||||||
Discontinued operations: | ||||||||||||||||||||
Income from operations of properties sold or held for sale | 546 | |||||||||||||||||||
Gain on sale of real estate, discontinued operations | 106,273 | |||||||||||||||||||
Net income | 104,554 | |||||||||||||||||||
Less: Net income attributable to noncontrolling interests in subsidiaries | — | |||||||||||||||||||
Net income attributable to the controlling interests | $ | 104,554 | ||||||||||||||||||
Capital expenditures | $ | 8,703 | $ | 110 | $ | 1,556 | $ | 17 | $ | 10,386 | ||||||||||
Total assets | $ | 1,151,585 | $ | 341,134 | $ | 392,531 | $ | 189,922 | $ | 2,075,172 | ||||||||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies and Basis of Presentation (Policy) | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies |
We have prepared our consolidated financial statements using the accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2014. | |
New Accounting Pronouncements, Policy [Policy Text Block] | New Accounting Pronouncements |
In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest, which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the new standard. The new standard is effective for public entities for fiscal years beginning after December 15, 2015 and for interim periods therein. We do not expect this ASU to have a material impact on our consolidated financial statements. | |
In June 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which creates a single source of revenue guidance. The new standard provides accounting guidance for all revenue arising from contracts with customers and affects all entities that enter into contracts to provide goods or services to their customers (unless the contracts are in the scope of other U.S. generally accepted accounting principles (“GAAP”) requirements, such as the leasing literature). The guidance also provides a model for the measurement and recognition of gains and losses on the sale of certain nonfinancial assets, such as property and equipment, including real estate. The new standard is effective for public entities for fiscal years beginning after December 15, 2016 and for interim periods therein. Early adoption is not permitted for public entities. We are currently evaluating the impact the new standard may have on Washington REIT. | |
Consolidation, Policy [Policy text block] | Principles of Consolidation and Basis of Presentation |
The accompanying unaudited consolidated financial statements include the consolidated accounts of Washington REIT, our majority-owned subsidiaries and entities in which Washington REIT has a controlling interest, including where Washington REIT has been determined to be a primary beneficiary of a variable interest entity (“VIE”). See note 3 for additional information on the properties for which there is a noncontrolling interest. All intercompany balances and transactions have been eliminated in consolidation. | |
Basis of Accounting, Policy [Policy Text Block] | We have prepared the accompanying unaudited financial statements pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations, although we believe that the disclosures made are adequate to make the information presented not misleading. In addition, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results for the periods presented have been included. These unaudited financial statements should be read in conjunction with the financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2014. |
Within these notes to the financial statements, we refer to the three months ended March 31, 2015 and March 31, 2014 as the “2015 Quarter” and the “2014 Quarter,” respectively. | |
Use of Estimates in the Financial Statements | Use of Estimates in the Financial Statements |
The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Real_Estate_Tables
Real Estate (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Real Estate [Abstract] | |||||||||||||
Land and Capitalized Development Costs | We include the joint venture land acquisition for 1225 First Street on our consolidated balance sheets in properties under development or held for future development. As of March 31, 2015 and December 31, 2014, the land and capitalized development costs for 1225 First Street were as follows (in thousands): | ||||||||||||
March 31, 2015 | December 31, 2014 | ||||||||||||
Properties under development or held for future development | $ | 20,807 | $ | 20,807 | |||||||||
Cash and cash equivalents | 390 | 395 | |||||||||||
Schedule of Accounts Payable and Accrued Liabilities of Joint Ventures | As of March 31, 2015 and December 31, 2014, the liabilities for 1225 First Street were as follows (in thousands): | ||||||||||||
March 31, 2015 | December 31, 2014 | ||||||||||||
Accounts payable and other liabilities | $ | 81 | $ | 38 | |||||||||
As of March 31, 2015 and December 31, 2014, The Maxwell's liabilities were as follows (in thousands): | |||||||||||||
March 31, 2015 | December 31, 2014 | ||||||||||||
Mortgage notes payable | $ | 29,535 | $ | 27,690 | |||||||||
Accounts payable and other liabilities | 2,006 | 2,196 | |||||||||||
Tenant security deposits | 35 | 17 | |||||||||||
$ | 31,576 | $ | 29,903 | ||||||||||
schedule of assets in joint venture [Table Text Block] | As of March 31, 2015 and December 31, 2014, The Maxwell's assets were as follows (in thousands): | ||||||||||||
March 31, 2015 | December 31, 2014 | ||||||||||||
Land | $ | 12,851 | $ | 12,851 | |||||||||
Income producing property | 37,647 | 18,432 | |||||||||||
Accumulated depreciation and amortization | (543 | ) | — | ||||||||||
Properties under development or held for future development | — | 17,947 | |||||||||||
Other assets | 393 | $ | — | ||||||||||
$ | 50,348 | $ | 49,230 | ||||||||||
Schedule of Income Statement Results for Medical Office Segment | The results of the assets in our former medical office segment sold in January 2014 are summarized as follows (amounts in thousands, except per share data): | ||||||||||||
Three Months Ended March 31, | |||||||||||||
2015 | 2014 | ||||||||||||
Real estate rental revenue | $ | — | $ | 892 | |||||||||
Net income | — | 546 | |||||||||||
Basic net income per share | — | 0.01 | |||||||||||
Diluted net income per share | — | 0.01 | |||||||||||
Schedule of Dispositions | We sold the following properties in 2015 and 2014: | ||||||||||||
Property Name | Segment | Rentable Square Feet | Contract | Gain on Sale | |||||||||
Purchase Price | (in thousands) | ||||||||||||
(in thousands) | |||||||||||||
Country Club Towers (227 units) (1) | Multifamily | N/A | $ | 37,800 | $ | 30,277 | |||||||
Total 2015 | $ | 37,800 | $ | 30,277 | |||||||||
Medical Office Portfolio Transactions III & IV (2) | Medical Office | 427,000 | $ | 193,561 | $ | 105,985 | |||||||
5740 Columbia Road (1) | Retail | 3,000 | 1,600 | 570 | |||||||||
Total 2014 | 430,000 | $ | 195,161 | $ | 106,555 | ||||||||
Operating Income (Loss) for Discontinued Operations | Income from operations of properties classified as discontinued operations for the three months ended March 31, 2015 and 2014 was as follows (in thousands): | ||||||||||||
Three Months Ended March 31, | |||||||||||||
2015 | 2014 | ||||||||||||
Real estate rental revenue | $ | — | $ | 892 | |||||||||
Real estate expenses | — | (346 | ) | ||||||||||
Income from operations classified as discontinued operations | $ | — | $ | 546 | |||||||||
Unsecured_Lines_of_Credit_Paya1
Unsecured Lines of Credit Payable (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Unsecured Debt [Abstract] | ||||||||
Unsecured Lines Of Credit Unused And Available [Table Text Block] | The amounts of these lines of credit unused and available at March 31, 2015 are as follows (in thousands): | |||||||
Credit Facility No. 1 | Credit Facility No. 2 | |||||||
Committed capacity | $ | 100,000 | $ | 400,000 | ||||
Borrowings outstanding | — | (30,000 | ) | |||||
Letters of credit issued (1) | — | (15,474 | ) | |||||
Unused and available | $ | 100,000 | $ | 354,526 | ||||
(1) The letter of credit under Credit Facility No. 2 is provided to the lender for John Marshall II relating to tenant improvements. | ||||||||
Lines Of Credit Repayments And Borrowings [Table Text Block] | We executed repayments on the unsecured lines of credit during the 2015 Quarter as follows (in thousands): | |||||||
Credit Facility No. 1 | Credit Facility No. 2 | |||||||
Balance at December 31, 2014 | $ | 5,000 | $ | 45,000 | ||||
Repayments | (5,000 | ) | (15,000 | ) | ||||
Balance at March 31, 2015 | $ | — | $ | 30,000 | ||||
Fair_Value_Disclosures_Tables
Fair Value Disclosures (Tables) | 3 Months Ended | |||||||||||||||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||
Financial Assets and Liabilities Measured at Fair Value | The fair values of these assets at March 31, 2015 and December 31, 2014 were as follows (in thousands): | |||||||||||||||||||||||||||||||
March 31, 2015 | December 31, 2014 | |||||||||||||||||||||||||||||||
Fair | Level 1 | Level 2 | Level 3 | Fair | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||
Value | Value | |||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||
SERP | $ | 2,459 | $ | — | $ | 2,459 | $ | — | $ | 2,778 | $ | — | $ | 2,778 | $ | — | ||||||||||||||||
Financial Assets and Liabilities Not Measured at Fair Value | As of March 31, 2015 and December 31, 2014, the carrying values and estimated fair values of our financial instruments were as follows (in thousands): | |||||||||||||||||||||||||||||||
March 31, 2015 | December 31, 2014 | |||||||||||||||||||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 40,025 | $ | 40,025 | $ | 15,827 | $ | 15,827 | ||||||||||||||||||||||||
Restricted cash | 13,095 | 13,095 | 10,299 | 10,299 | ||||||||||||||||||||||||||||
2445 M Street note | 4,592 | 5,216 | 4,404 | 5,113 | ||||||||||||||||||||||||||||
Mortgage notes payable | 419,250 | 433,712 | 418,525 | 433,762 | ||||||||||||||||||||||||||||
Lines of credit | 30,000 | 30,000 | 50,000 | 50,000 | ||||||||||||||||||||||||||||
Notes payable | 747,335 | 784,342 | 747,208 | 782,042 | ||||||||||||||||||||||||||||
Earnings_per_Common_Share_Tabl
Earnings per Common Share (Tables) | 3 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Earnings Per Share [Abstract] | ||||||||
Computation of Basic and Diluted Earnings per Share | The computations of basic and diluted earnings per share for the three months ended March 31, 2015 and 2014 were as follows (in thousands, except per share data): | |||||||
Three Months Ended March 31, | ||||||||
2015 | 2014 | |||||||
Numerator: | ||||||||
Income (loss) from continuing operations | $ | 29,398 | $ | (2,265 | ) | |||
Net loss attributable to noncontrolling interests | 108 | — | ||||||
Allocation of earnings to unvested restricted share awards | (108 | ) | (10 | ) | ||||
Adjusted income (loss) from continuing operations attributable to the controlling interests | 29,398 | (2,275 | ) | |||||
Income from discontinued operations, including gain on sale of real estate, net of taxes | — | 106,819 | ||||||
Allocation of earnings to unvested restricted share awards | — | (285 | ) | |||||
Adjusted income from discontinuing operations attributable to the controlling interests | — | 106,534 | ||||||
Adjusted net income attributable to the controlling interests | $ | 29,398 | $ | 104,259 | ||||
Denominator: | ||||||||
Weighted average shares outstanding – basic | 68,141 | 66,701 | ||||||
Effect of dilutive securities: | ||||||||
Employee restricted share awards | 50 | — | ||||||
Weighted average shares outstanding – diluted | 68,191 | 66,701 | ||||||
Earnings per common share, basic: | ||||||||
Continuing operations | $ | 0.43 | $ | (0.04 | ) | |||
Discontinued operations | — | 1.6 | ||||||
$ | 0.43 | $ | 1.56 | |||||
Earnings per common share, diluted: | ||||||||
Continuing operations | $ | 0.43 | $ | (0.04 | ) | |||
Discontinued operations | — | 1.6 | ||||||
$ | 0.43 | $ | 1.56 | |||||
Segment_Information_Tables
Segment Information (Tables) | 3 Months Ended | |||||||||||||||||||
Mar. 31, 2015 | ||||||||||||||||||||
Segment Reporting Information, Revenue for Reportable Segment [Abstract] | ||||||||||||||||||||
Reconciliation of Net Operating Income of Reportable Segments | The following tables present revenues, net operating income, capital expenditures and total assets for the 2015 and 2014 Quarters from these segments, and reconciles net operating income of reportable segments to net income attributable to the controlling interests as reported (in thousands): | |||||||||||||||||||
Three Months Ended March 31, 2015 | ||||||||||||||||||||
Office | Retail | Multifamily | Corporate and Other | Consolidated | ||||||||||||||||
Real estate rental revenue | $ | 42,495 | $ | 16,330 | $ | 16,031 | $ | — | $ | 74,856 | ||||||||||
Real estate expenses | 17,143 | 4,787 | 7,278 | — | 29,208 | |||||||||||||||
Net operating income | $ | 25,352 | $ | 11,543 | $ | 8,753 | $ | — | $ | 45,648 | ||||||||||
Depreciation and amortization | (25,275 | ) | ||||||||||||||||||
General and administrative | (6,080 | ) | ||||||||||||||||||
Acquisition costs | (16 | ) | ||||||||||||||||||
Interest expense | (15,348 | ) | ||||||||||||||||||
Other income | 192 | |||||||||||||||||||
Gain on sale of real estate (classified as continuing operations) | 30,277 | |||||||||||||||||||
Net income | 29,398 | |||||||||||||||||||
Less: Net loss attributable to noncontrolling interests in subsidiaries | 108 | |||||||||||||||||||
Net income attributable to the controlling interests | $ | 29,506 | ||||||||||||||||||
Capital expenditures | $ | 2,518 | $ | 850 | $ | 1,413 | $ | 1,376 | $ | 6,157 | ||||||||||
Total assets | $ | 1,279,406 | $ | 383,511 | $ | 407,639 | $ | 52,678 | $ | 2,123,234 | ||||||||||
Three Months Ended March 31, 2014 | ||||||||||||||||||||
Office | Retail | Multifamily | Corporate | Consolidated | ||||||||||||||||
and Other | ||||||||||||||||||||
Real estate rental revenue | $ | 39,064 | $ | 14,625 | $ | 14,922 | $ | — | $ | 68,611 | ||||||||||
Real estate expenses | 15,696 | 4,231 | 6,415 | — | 26,342 | |||||||||||||||
Net operating income | $ | 23,368 | $ | 10,394 | $ | 8,507 | $ | — | $ | 42,269 | ||||||||||
Depreciation and amortization | (22,753 | ) | ||||||||||||||||||
Acquisition costs | (3,045 | ) | ||||||||||||||||||
General and administrative | (4,429 | ) | ||||||||||||||||||
Interest expense | (14,530 | ) | ||||||||||||||||||
Other income | 223 | |||||||||||||||||||
Discontinued operations: | ||||||||||||||||||||
Income from operations of properties sold or held for sale | 546 | |||||||||||||||||||
Gain on sale of real estate, discontinued operations | 106,273 | |||||||||||||||||||
Net income | 104,554 | |||||||||||||||||||
Less: Net income attributable to noncontrolling interests in subsidiaries | — | |||||||||||||||||||
Net income attributable to the controlling interests | $ | 104,554 | ||||||||||||||||||
Capital expenditures | $ | 8,703 | $ | 110 | $ | 1,556 | $ | 17 | $ | 10,386 | ||||||||||
Total assets | $ | 1,151,585 | $ | 341,134 | $ | 392,531 | $ | 189,922 | $ | 2,075,172 | ||||||||||
Nature_of_Business_Details
Nature of Business (Details) (USD $) | 3 Months Ended |
In Millions, unless otherwise specified | Mar. 31, 2015 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Percentage of distribution of ordinary taxable income | 90.00% |
Taxable Reit Subsidiary [Member] | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Deferred Tax Assets, Net of Valuation Allowance | 0 |
Deferred Tax Liabilities, Net | 0.6 |
Real_Estate_Redevelopment_Deta
Real Estate - Redevelopment (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Real Estate Properties [Line Items] | ||
Development in Process | $65,656 | $76,235 |
7900 Westpark Drive [Member] | ||
Real Estate Properties [Line Items] | ||
Development in Process | $35,100 | $27,900 |
Real_Estate_Variable_Interest_
Real Estate - Variable Interest Entities (Details) (USD $) | 3 Months Ended | 1 Months Ended | |
Mar. 31, 2015 | Nov. 30, 2011 | Dec. 31, 2014 | |
Real Estate Properties [Line Items] | |||
Land | 543,247,000 | $543,546,000 | |
Mortgage notes payable | 419,250,000 | 418,525,000 | |
First Street 1225 [Member] | |||
Real Estate Properties [Line Items] | |||
Variable interest entity, qualitative or quantitative information, ownership percentage | 95.00% | ||
Noncontrolling interest, ownership percentage by noncontrolling owners | 5.00% | ||
Percentage of capital contribution through debt | 70.00% | ||
Six Fifty North Glebe Road [Member] | |||
Real Estate Properties [Line Items] | |||
Variable interest entity, qualitative or quantitative information, ownership percentage | 90.00% | ||
Noncontrolling interest, ownership percentage by noncontrolling owners | 10.00% | ||
650 N Glebe [Member] [Domain] | |||
Real Estate Properties [Line Items] | |||
Mortgage notes payable | 29,535,000 | 27,700,000 | |
Six Fifty North Glebe Road [Member] | |||
Real Estate Properties [Line Items] | |||
Land | 12,851,000 | 12,851,000 | |
Investment Building and Building Improvements | 37,647,000 | 18,432,000 | |
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | -543,000 | 0 | |
Land and capitalized development costs related to joint ventures | 0 | 17,947,000 | |
Other Assets | 393,000 | 0 | |
Real Estate Investments, Joint Ventures | 50,348,000 | 49,230,000 | |
Construction Payable | 2,006,000 | 2,196,000 | |
Accrued Liabilities | 35,000 | 17,000 | |
Accounts payable and accrued liabilities related to joint ventures | 31,576,000 | 29,903,000 | |
First Street 1225 [Member] | |||
Real Estate Properties [Line Items] | |||
Cash, Cash Equivalents, and Short-term Investments | 390,000 | 395,000 | |
Land and capitalized development costs related to joint ventures | 20,807,000 | 20,807,000 | |
Accounts payable and accrued liabilities related to joint ventures | 81,000 | 38,000 | |
First Street 1225 [Member] | First Street 1225 [Member] | |||
Real Estate Properties [Line Items] | |||
Estimated development costs | $95,300,000 |
Real_Estate_Discontinued_Opera
Real Estate - Discontinued Operations (Details) (USD $) | 3 Months Ended | 12 Months Ended | 1 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Sep. 30, 2013 | ||
sqft | agreements | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Rentable Square Feet | 430,000 | |||||
Contract sale price | $37,800 | $195,161 | ||||
Disposal Group, including discontinued operation, gain (loss) on sale of real estate | 30,277 | 106,555 | ||||
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal | 30,277 | 0 | ||||
Gain on sale of real estate | 0 | 106,273 | ||||
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | ||||||
Real estate rental revenue | 0 | 892 | ||||
Real estate expenses | 0 | -346 | ||||
Income from operations classified as discontinued operations | 0 | 546 | ||||
Country Club Towers [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Number of Units in Real Estate Property | 227 | |||||
Medical Office Porfolio [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Number of Purchase and Sale Agreements | 4 | |||||
Multifamily [Member] | Country Club Towers [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Disposal Group, Not Discontinued Operation, Sale Price | 37,800 | [1] | ||||
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal | 30,277 | [1] | ||||
Medical Office Building [Member] | Medical Office Portfolio Transactions III & IV [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Rentable Square Feet | 427,000 | [2] | ||||
Contract sale price | 193,561 | [2] | ||||
Medical Office [Member] | Medical Office Portfolio Transactions III & IV [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Gain on sale of real estate | 105,985 | |||||
Retail [Member] | Gateway 7-11 [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Rentable Square Feet | 3,000 | [1] | ||||
Disposal Group, Not Discontinued Operation, Sale Price | 1,600 | [1] | ||||
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal | 570 | [1] | ||||
Office [Member] | Medical Office Porfolio [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Number of Buildings Sold | 2 | |||||
Medical Office And Office Building [Member] | Medical Office Porfolio [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Contract sale price | $500,800 | |||||
[1] | (1)Â These properties are classified as continuing operations. | |||||
[2] | (2) Woodburn Medical Park I and II and Prosperity Medical Center I, II and III, which are classified as discontinued operations. |
Real_Estate_Income_statement_r
Real Estate - Income statement results of assets held for sale (Details) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Impact of potential sale on operating results | ||
Real estate revenues | $74,856 | $68,611 |
Net income | 29,506 | 104,554 |
Basic net income per share (in dollars per share) | $0.43 | $1.56 |
Diluted net income per share (in dollars per share) | $0.43 | $1.56 |
Medical Office [Member] | ||
Impact of potential sale on operating results | ||
Real estate revenues | 0 | 892 |
Net income | $0 | $546 |
Basic net income per share (in dollars per share) | $0 | $0.01 |
Diluted net income per share (in dollars per share) | $0 | $0.01 |
Unsecured_Lines_of_Credit_Paya2
Unsecured Lines of Credit Payable - Schedule of Credit Unused and Available (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Line of Credit Facility [Line Items] | ||
Borrowings outstanding | ($30,000) | ($50,000) |
Line of Credit | Credit Facility No. 1 | ||
Line of Credit Facility [Line Items] | ||
Committed capacity | 100,000 | |
Borrowings outstanding | 0 | -5,000 |
Letters of credit issued (1) | 0 | |
Unused and available | 100,000 | |
Line of Credit | Credit Facility No. 2 | ||
Line of Credit Facility [Line Items] | ||
Committed capacity | 400,000 | |
Borrowings outstanding | -30,000 | -45,000 |
Letters of credit issued (1) | 15,474 | |
Unused and available | $354,526 |
Unsecured_Lines_of_Credit_Paya3
Unsecured Lines of Credit Payable - Line of Credit Facility, Increase (decrease), net (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Line of Credit Facility, Increase (Decrease) During the Period [Roll Forward] | ||
Balance at December 31, 2014 | $50,000 | |
Balance at March 31, 2015 | 30,000 | 50,000 |
Credit Facility No. 1 | Line of Credit | ||
Line of Credit Facility, Increase (Decrease) During the Period [Roll Forward] | ||
Balance at December 31, 2014 | 5,000 | |
Repayments | -5,000 | |
Balance at March 31, 2015 | 0 | |
Credit Facility No. 2 | Line of Credit | ||
Line of Credit Facility, Increase (Decrease) During the Period [Roll Forward] | ||
Balance at December 31, 2014 | 45,000 | |
Repayments | -15,000 | |
Balance at March 31, 2015 | $30,000 |
Unsecured_Lines_of_Credit_Paya4
Unsecured Lines of Credit Payable - Narrative (Details) (Line of Credit, USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Mar. 31, 2015 |
Credit Facility No. 1 | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Expiration Date | 30-Jun-15 |
Line of Credit Facility, Maximum Borrowing Capacity | $100,000 |
Credit Facility No. 2 | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Expiration Date | 31-Jul-16 |
Line of Credit Facility, Maximum Borrowing Capacity | 400,000 |
Credit Facility Accordion Feature | Credit Facility No. 1 | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Maximum Borrowing Capacity | 200,000 |
Credit Facility Accordion Feature | Credit Facility No. 2 | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Maximum Borrowing Capacity | $600,000 |
Stock_Based_Compensation_Detai
Stock Based Compensation (Details) (USD $) | 3 Months Ended | |
In Millions, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $1.90 | $1.10 |
Restricted Share Awards [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Fair value of share grants vested | 1.7 | 0.2 |
Total unvested restricted share awards (in shares) | 230,237 | |
Weighted average grant date fair value (in dollars per share) | $27.26 | |
Total compensation costs, non-vested restricted share awards | $3.70 | |
Total compensation cost not yet recognized, period for recognition (in months) | 23 months | |
Washington Real Estate Investment Trust 2007 Omnibus Long-Term Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock based plan, aggregate number of shares authorized (in shares) | 2,000,000 | |
Stock based plan, period in effect (in years) | 10 years |
Fair_Value_Disclosures_Financi
Fair Value Disclosures - Financial Assets and Liabilities Measured at Fair Value (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets: SERP | $2,459 | $2,778 |
Level 1 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets: SERP | 0 | 0 |
Level 2 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets: SERP | 2,459 | 2,778 |
Level 3 [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Assets: SERP | $0 | $0 |
Fair_Value_Disclosures_Financi1
Fair Value Disclosures - Financial Assets and Liabilities Not Measured at Fair Value (Details) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Dec. 31, 2014 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Commercial paper, maturity | 90 | |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents, Fair Value | 40,025 | $15,827 |
Restricted Cash, Fair Value | 13,095 | 10,299 |
Mortgage notes payable, Fair Value | 433,712 | 433,762 |
Lines of Credit, Fair Value Disclosure | 30,000 | 50,000 |
Notes payable, Fair Value | 784,342 | 782,042 |
Fair Value | 2445 M Street Note Receivable [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
2445 M Street note receivable, Fair Value | 5,216 | 5,113 |
Reported Value Measurement [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cash and cash equivalents, Fair Value | 40,025 | 15,827 |
Restricted Cash, Fair Value | 13,095 | 10,299 |
Mortgage notes payable, Fair Value | 419,250 | 418,525 |
Lines of Credit, Fair Value Disclosure | 30,000 | 50,000 |
Notes payable, Fair Value | 747,335 | 747,208 |
Reported Value Measurement [Member] | 2445 M Street Note Receivable [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
2445 M Street note receivable, Fair Value | 4,592 | $4,404 |
Earnings_per_Common_Share_Deta
Earnings per Common Share (Details) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Earnings Per Share [Abstract] | ||
Income (loss) from continuing operations | $29,398 | ($2,265) |
Less: Net income attributable to noncontrolling interests in subsidiaries | 108 | 0 |
Undistributed Earnings (Loss) Allocated to Participating Securities, Basic | 108 | 10 |
Adjusted income (loss) from continuing operations attributable to the controlling interests | 29,398 | -2,275 |
Income from discontinued operations, including gain on sale of real estate, net of taxes | 0 | 106,819 |
Allocation of earnings to unvested restricted share awards | 0 | -285 |
Adjusted income from discontinuing operations attributable to the controlling interests | 0 | 106,534 |
Adjusted net income attributable to the controlling interests | $29,398 | $104,259 |
Weighted average shares outstanding - basic (in shares) | 68,141 | 66,701 |
Effect of dilutive securities: Employee stock options and restricted share awards | 50 | 0 |
Weighted average shares outstanding - diluted (in shares) | 68,191 | 66,701 |
Earnings per common share, basic, Continuing operations (in dollars per share) | $0.43 | ($0.04) |
Earnings per common share, basic, Discontinued operations (in dollars per share) | $0 | $1.60 |
Net income per share (in dollars per share) | $0.43 | $1.56 |
Earnings per common share, diluted, Continuing operations (in dollars per share) | $0.43 | ($0.04) |
Earnings per common share, diluted, Discontinued operations (in dollars per share) | $0 | $1.60 |
Net income per share (in dollars per share) | $0.43 | $1.56 |
Segment_Information_Details
Segment Information (Details) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
segment | |||
Segment Reporting Information [Line Items] | |||
Number of reportable segments | 3 | ||
Real estate rental revenue | $74,856 | $68,611 | |
Real estate expenses | 29,208 | 26,342 | |
Operating Income Loss Net | 45,648 | 42,269 | |
Depreciation and amortization | -25,275 | -22,753 | |
General and administrative | -6,080 | -4,429 | |
Acquisition costs | -16 | -3,045 | |
Interest expense | -15,348 | -14,530 | |
Other income | 192 | 223 | |
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal | 30,277 | 0 | |
Income from operations of properties sold or held for sale | 0 | 546 | |
Gain on sale of real estate | 0 | 106,273 | |
Net income | 29,398 | 104,554 | |
Less: Net income attributable to noncontrolling interests in subsidiaries | 108 | 0 | |
Net income attributable to the controlling interests | 29,506 | 104,554 | |
Capital expenditures | 6,157 | 10,386 | |
Total assets | 2,123,234 | 2,075,172 | 2,113,707 |
Office [Member] | |||
Segment Reporting Information [Line Items] | |||
Real estate rental revenue | 42,495 | 39,064 | |
Real estate expenses | 17,143 | 15,696 | |
Operating Income Loss Net | 25,352 | 23,368 | |
Capital expenditures | 2,518 | 8,703 | |
Total assets | 1,279,406 | 1,151,585 | |
Retail [Member] | |||
Segment Reporting Information [Line Items] | |||
Real estate rental revenue | 16,330 | 14,625 | |
Real estate expenses | 4,787 | 4,231 | |
Operating Income Loss Net | 11,543 | 10,394 | |
Capital expenditures | 850 | 110 | |
Total assets | 383,511 | 341,134 | |
Multifamily [Member] | |||
Segment Reporting Information [Line Items] | |||
Real estate rental revenue | 16,031 | 14,922 | |
Real estate expenses | 7,278 | 6,415 | |
Operating Income Loss Net | 8,753 | 8,507 | |
Capital expenditures | 1,413 | 1,556 | |
Total assets | 407,639 | 392,531 | |
Corporate and Other [Member] | |||
Segment Reporting Information [Line Items] | |||
Real estate rental revenue | 0 | 0 | |
Real estate expenses | 0 | 0 | |
Operating Income Loss Net | 0 | 0 | |
Capital expenditures | 1,376 | 17 | |
Total assets | $52,678 | $189,922 |