Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2024 | Jul. 29, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2024 | |
Document Transition Report | false | |
Entity File Number | 1-6622 | |
Entity Registrant Name | ELME COMMUNITIES | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 53-0261100 | |
Entity Address, Address Line One | 7550 WISCONSIN AVE | |
Entity Address, Address Line Two | SUITE 900 | |
Entity Address, City or Town | BETHESDA | |
Entity Address, State or Province | MD | |
Entity Address, Postal Zip Code | 20814 | |
City Area Code | 202 | |
Local Phone Number | 774-3200 | |
Title of 12(b) Security | Shares of Beneficial Interest | |
Trading Symbol | ELME | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 88,010,570 | |
Entity Central Index Key | 0000104894 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Assets | ||
Land | $ 383,808 | $ 384,097 |
Income producing property | 1,976,127 | 1,960,020 |
Income producing property, at cost | 2,359,935 | 2,344,117 |
Accumulated depreciation and amortization | (573,054) | (528,024) |
Net income producing property | 1,786,881 | 1,816,093 |
Properties under development or held for future development | 30,980 | 30,980 |
Total real estate held for investment, net | 1,817,861 | 1,847,073 |
Cash and cash equivalents | 5,629 | 5,984 |
Restricted cash | 2,263 | 2,554 |
Rents and other receivables | 12,575 | 17,642 |
Prepaid expenses and other assets | 23,147 | 26,775 |
Total assets | 1,861,475 | 1,900,028 |
Liabilities | ||
Notes payable, net | 522,734 | 522,345 |
Line of credit | 156,000 | 157,000 |
Accounts payable and other liabilities | 37,283 | 38,997 |
Dividend payable | 15,905 | 15,863 |
Advance rents | 5,074 | 5,248 |
Tenant security deposits | 6,334 | 6,225 |
Total liabilities | 743,330 | 745,678 |
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; 150,000 shares authorized; 88,011 and 87,867 shares issued and outstanding, as of June 30, 2024 and December 31, 2023, respectively | 880 | 879 |
Additional paid in capital | 1,737,941 | 1,735,530 |
Distributions in excess of net income | (608,310) | (569,391) |
Accumulated other comprehensive loss | (12,651) | (12,958) |
Total shareholders’ equity | 1,117,860 | 1,154,060 |
Noncontrolling interests in subsidiaries | 285 | 290 |
Total equity | 1,118,145 | 1,154,350 |
Total liabilities and equity | $ 1,861,475 | $ 1,900,028 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Preferred shares, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred shares, authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred shares, issued (in shares) | 0 | 0 |
Preferred shares, outstanding (in shares) | 0 | 0 |
Shares of beneficial interest, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Shares of beneficial interest, authorized (in shares) | 150,000,000 | 150,000,000 |
Shares of beneficial interest, issued (in shares) | 88,011,000 | 87,867,000 |
Shares of beneficial interest, outstanding (in shares) | 88,011,000 | 87,867,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Revenue | ||||
Real estate rental revenue | $ 60,103 | $ 56,599 | $ 119,616 | $ 112,408 |
Revenue, type [Extensible Enumeration] | Real Estate [Member] | Real Estate [Member] | Real Estate [Member] | Real Estate [Member] |
Expenses | ||||
Property operating and maintenance | $ 13,996 | $ 13,325 | $ 27,460 | $ 25,664 |
Real estate taxes and insurance | 7,986 | 6,933 | 16,241 | 14,115 |
Property management | 2,175 | 2,178 | 4,393 | 3,947 |
General and administrative | 6,138 | 6,680 | 12,334 | 13,521 |
Transformation costs | 0 | 2,454 | 0 | 5,354 |
Depreciation and amortization | 23,895 | 21,415 | 48,838 | 42,951 |
Total expenses | 54,190 | 52,985 | 109,266 | 105,552 |
Real estate operating income | 5,913 | 3,614 | 10,350 | 6,856 |
Other income (expense) | ||||
Interest expense | (9,384) | (6,794) | (18,878) | (13,625) |
Loss on extinguishment of debt | 0 | 0 | 0 | (54) |
Other income | 0 | 569 | 1,410 | 569 |
Total other income (expense) | (9,384) | (6,225) | (17,468) | (13,110) |
Net loss | $ (3,471) | $ (2,611) | $ (7,118) | $ (6,254) |
Basic net loss per common share (in dollars per share) | $ (0.04) | $ (0.03) | $ (0.08) | $ (0.07) |
Diluted net loss per common share (in dollars per share) | $ (0.04) | $ (0.03) | $ (0.08) | $ (0.07) |
Weighted average shares outstanding - basic (in shares) | 87,910 | 87,741 | 87,898 | 87,695 |
Weighted average shares outstanding - diluted (in shares) | 87,910 | 87,741 | 87,898 | 87,695 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (3,471) | $ (2,611) | $ (7,118) | $ (6,254) |
Other comprehensive income: | ||||
Unrealized (loss) gain on interest rate hedges | (796) | 854 | (713) | 521 |
Reclassification of unrealized loss on interest rate derivatives to earnings | 510 | 509 | 1,020 | 1,019 |
Comprehensive loss | $ (3,757) | $ (1,248) | $ (6,811) | $ (4,714) |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Total Shareholders’ Equity | Shares of Beneficial Interest at Par Value | Additional Paid in Capital | Distributions in Excess of Net Income | Accumulated Other Comprehensive Loss | Noncontrolling Interests in Subsidiaries |
Beginning balance (in shares) at Dec. 31, 2022 | 87,534,000 | ||||||
Beginning balance at Dec. 31, 2022 | $ 1,263,786 | $ 1,263,488 | $ 875 | $ 1,729,854 | $ (453,008) | $ (14,233) | $ 298 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | (6,254) | (6,254) | (6,254) | ||||
Unrealized (loss) gain on interest rate hedges | 521 | 521 | 521 | ||||
Amortization of swap settlements | 1,019 | 1,019 | 1,019 | ||||
Distributions to noncontrolling interests | (4) | (4) | |||||
Dividends | $ (31,677) | (31,677) | (31,677) | ||||
Shares issued under Dividend Reinvestment Program (in shares) | 28,000 | 28,000 | |||||
Shares issued under Dividend Reinvestment Program | $ 497 | 497 | 497 | ||||
Share grants, net of forfeitures and tax withholdings (in shares) | 247,000 | ||||||
Share grants, net of forfeitures and tax withholdings | 3,040 | 3,040 | $ 3 | 3,037 | |||
Ending balance (in shares) at Jun. 30, 2023 | 87,809,000 | ||||||
Ending balance at Jun. 30, 2023 | 1,230,928 | 1,230,634 | $ 878 | 1,733,388 | (490,939) | (12,693) | 294 |
Beginning balance (in shares) at Mar. 31, 2023 | 87,709,000 | ||||||
Beginning balance at Mar. 31, 2023 | 1,246,315 | 1,246,019 | $ 877 | 1,731,701 | (472,503) | (14,056) | 296 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | (2,611) | (2,611) | (2,611) | ||||
Unrealized (loss) gain on interest rate hedges | 854 | 854 | 854 | ||||
Amortization of swap settlements | 509 | 509 | 509 | ||||
Distributions to noncontrolling interests | (2) | (2) | |||||
Dividends | $ (15,825) | (15,825) | (15,825) | ||||
Shares issued under Dividend Reinvestment Program (in shares) | 14,000 | 14,000 | |||||
Shares issued under Dividend Reinvestment Program | $ 249 | 249 | 249 | ||||
Share grants, net of forfeitures and tax withholdings (in shares) | 86,000 | ||||||
Share grants, net of forfeitures and tax withholdings | 1,439 | 1,439 | $ 1 | 1,438 | |||
Ending balance (in shares) at Jun. 30, 2023 | 87,809,000 | ||||||
Ending balance at Jun. 30, 2023 | $ 1,230,928 | 1,230,634 | $ 878 | 1,733,388 | (490,939) | (12,693) | 294 |
Beginning balance (in shares) at Dec. 31, 2023 | 87,867,000 | 87,867,000 | |||||
Beginning balance at Dec. 31, 2023 | $ 1,154,350 | 1,154,060 | $ 879 | 1,735,530 | (569,391) | (12,958) | 290 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | (7,118) | (7,118) | (7,118) | ||||
Unrealized (loss) gain on interest rate hedges | (713) | (713) | (713) | ||||
Amortization of swap settlements | 1,020 | 1,020 | 1,020 | ||||
Distributions to noncontrolling interests | (5) | (5) | |||||
Dividends | $ (31,801) | (31,801) | (31,801) | ||||
Shares issued under Dividend Reinvestment Program (in shares) | 0 | ||||||
Share grants, net of forfeitures and tax withholdings (in shares) | 144,000 | ||||||
Share grants, net of forfeitures and tax withholdings | $ 2,412 | 2,412 | $ 1 | 2,411 | |||
Ending balance (in shares) at Jun. 30, 2024 | 88,011,000 | 88,011,000 | |||||
Ending balance at Jun. 30, 2024 | $ 1,118,145 | 1,117,860 | $ 880 | 1,737,941 | (608,310) | (12,651) | 285 |
Beginning balance (in shares) at Mar. 31, 2024 | 88,003,000 | ||||||
Beginning balance at Mar. 31, 2024 | 1,136,404 | 1,136,116 | $ 880 | 1,736,524 | (588,923) | (12,365) | 288 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | (3,471) | (3,471) | (3,471) | ||||
Unrealized (loss) gain on interest rate hedges | (796) | (796) | (796) | ||||
Amortization of swap settlements | 510 | 510 | 510 | ||||
Distributions to noncontrolling interests | (3) | (3) | |||||
Dividends | (15,916) | (15,916) | (15,916) | ||||
Share grants, net of forfeitures and tax withholdings (in shares) | 8,000 | ||||||
Share grants, net of forfeitures and tax withholdings | $ 1,417 | 1,417 | 1,417 | ||||
Ending balance (in shares) at Jun. 30, 2024 | 88,011,000 | 88,011,000 | |||||
Ending balance at Jun. 30, 2024 | $ 1,118,145 | $ 1,117,860 | $ 880 | $ 1,737,941 | $ (608,310) | $ (12,651) | $ 285 |
CONSOLIDATED STATEMENTS OF EQ_2
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Statement of Stockholders' Equity [Abstract] | ||||
Dividends declared per share (in dollars per share) | $ 0.18 | $ 0.18 | $ 0.36 | $ 0.36 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2023 USD ($) | Jun. 30, 2024 USD ($) | Jun. 30, 2023 USD ($) | |
Cash flows from operating activities | |||
Net loss | $ (2,611) | $ (7,118) | $ (6,254) |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||
Depreciation and amortization | 48,838 | 42,951 | |
Credit losses on lease related receivables | 2,548 | 1,512 | |
Share-based compensation expense | 2,135 | 2,599 | |
Net amortization of debt premiums, discounts and related financing costs | 2,117 | 2,101 | |
Loss on extinguishment of debt | 0 | 0 | 54 |
Gain on land easements | (1,410) | 0 | |
Changes in operating other assets | (666) | 119 | |
Changes in operating other liabilities | 3,629 | 3,168 | |
Net cash provided by operating activities | 50,073 | 46,250 | |
Cash flows from investing activities | |||
Capital improvements to real estate | (21,487) | (9,890) | |
Non-real estate capital improvements | (59) | (293) | |
Payments received for land easements | 3,862 | 0 | |
Net cash used in investing activities | (17,684) | (10,183) | |
Cash flows from financing activities | |||
Line of credit repayments, net | (1,000) | (31,000) | |
Dividends paid | (31,843) | (30,777) | |
Repayments of unsecured term loan debt | 0 | (100,000) | |
Proceeds from term loan | 0 | 125,000 | |
Payment of financing costs | 0 | (844) | |
Distributions to noncontrolling interests | (5) | (4) | |
Proceeds from dividend reinvestment program | 249 | 0 | 497 |
Payment of tax withholdings for restricted share awards | (187) | (1,350) | |
Net cash used in financing activities | (33,035) | (38,478) | |
Net decrease in cash, cash equivalents and restricted cash | (646) | (2,411) | |
Cash, cash equivalents and restricted cash at beginning of period | 8,538 | 9,852 | |
Cash, cash equivalents and restricted cash at end of period | 7,441 | 7,892 | 7,441 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest, net of amounts capitalized | 16,140 | 10,495 | |
Change in accrued capital improvements and development costs | (5,339) | 3,395 | |
Dividend payable | 15,834 | 15,905 | 15,834 |
Reconciliation of cash, cash equivalents and restricted cash: | |||
Cash and cash equivalents | 5,554 | 5,629 | 5,554 |
Restricted cash | 1,887 | 2,263 | 1,887 |
Cash, cash equivalents and restricted cash | $ 7,441 | $ 7,892 | $ 7,441 |
NATURE OF BUSINESS
NATURE OF BUSINESS | 6 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF BUSINESS | NATURE OF BUSINESS Elme Communities, a Maryland real estate investment trust, is a self-administered equity real estate investment trust (“REIT”), and successor to a trust organized in 1960. Our business primarily consists of the ownership of apartment communities in the greater Washington, DC metro and Sunbelt regions. Within these notes to the financial statements, we refer to the three months ended June 30, 2024 and June 30, 2023 as the “2024 Quarter” and the “2023 Quarter,” respectively, and the six months ended June 30, 2024 and June 30, 2023 as the “2024 Period” and the “2023 Period,” respectively. Federal Income Taxes We believe that we qualify as a REIT under Sections 856-860 of the Internal Revenue Code of 1986, as amended (the “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 (determined before the deduction for dividends paid and excluding net capital gains to our shareholders) on an annual basis. When selling a property, we generally have the option of (a) reinvesting the sales proceeds of property sold in a way that allows us to defer recognition of some or all taxable 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 our shareholders, paying the tax on the gain deemed distributed and allocating the tax paid as a credit to our shareholders. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATIONS | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATIONS | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATIONS 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, 2023. Recent Accounting Pronouncements In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (“Topic 848”), which was amended in December 2022 by ASU 2022-06, Reference Rate Reform (Topic 848). Topic 848 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in Topic 848 is optional and may be elected through December 31, 2024 as reference rate reform activities occur. During the first quarter of 2023, we executed an amendment to the $700.0 million unsecured revolving credit facility (“Revolving Credit Facility”) to convert the benchmark interest rate from LIBOR to an adjusted SOFR ("Secured Overnight Financing Rate"). We elected to apply the optional expedients in Topic 848 to (i) assert that the hedged interest payments remain probable regardless of any expected modification in terms related to reference rate reform, and (ii) continue the method of assessing effectiveness as documented in the original hedge documentation so that the reference rate on the hypothetical derivative matches the reference rate on the hedging instrument. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The impact of this guidance did not have a material impact on our consolidated financial statements. In November 2023, the FASB issued an amendment to the segment reporting standards which requires disclosure for each reportable segment, on an interim and annual basis, of the significant expense categories and amounts that are regularly provided to the chief operating decision maker and included in each reported measure of a segment’s profit or loss. Additionally, it requires a disclosure of the title and position of the individual or the name of the group or committee identified as the chief operating decision maker. The new standard will be effective for annual periods beginning on January 1, 2024 and interim periods beginning on January 1, 2025 on a retrospective basis. We are currently evaluating the impact of adopting the standard on our consolidated financial statements. In March 2024, the Securities and Exchange Commission (“SEC”) issued its final rule that requires registrants to provide climate disclosures in their annual reports and registration statements, beginning with annual reports for the year ending December 31, 2025. On April 4, 2024, the SEC voluntarily stayed the final rule pending the completion of judicial review of cases pending in the Eighth Circuit. We are continuing to evaluate the disclosure impact of the final rule. Principles of Consolidation and Basis of Presentation The accompanying unaudited consolidated financial statements include the consolidated accounts of Elme Communities and our subsidiaries and entities in which Elme Communities has a controlling financial 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 SEC. Certain information and note disclosures normally included in annual financial statements prepared in accordance with Generally Accepted Accounting Principles (“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, 2023. Lessee Accounting For leases where we are the lessee, primarily our corporate office operating lease, we recognize a right-of-use asset and a lease liability in accordance with Accounting Standards Codification (“ASC”) Topic 842. The right-of-use asset and associated liability is equal to the present value of the minimum lease payments, applying our incremental borrowing rate. Our borrowing rate is computed based on observable borrowing rates taking into consideration our credit quality and adjusting to a secured borrowing rate for similar assets and term. Lease expense for the operating lease is recognized on a straight-line basis over the expected lease term and is included in “General and administrative expenses.” Restricted Cash Restricted cash includes funds held in escrow for tenant security deposits. Transformation Costs Transformation costs include costs related to the strategic shift away from the commercial sector to the residential sector, including the allocation of internal costs, consulting, advisory and termination benefits. 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 | 6 Months Ended |
Jun. 30, 2024 | |
Real Estate [Abstract] | |
REAL ESTATE | REAL ESTATE Development/Redevelopment We have properties under development/redevelopment and held for current or future development. As of June 30, 2024, we have invested $30.4 million, including the cost of acquired land, in a residential development adjacent to Riverside Apartments. During the second quarter of 2022, we paused development activities at the aforementioned property and ceased associated capitalization of interest on spending and real estate taxes. Properties Sold and Held for Sale We intend to hold our properties for investment with a view to long-term appreciation, to engage in the business of acquiring, developing and owning our properties and to make occasional sales of properties 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. Depreciation on these properties is discontinued at the time they are classified as held for sale, but operating revenues, operating expenses and interest expense continue to be recognized until the date of sale. We did not sell or classify any properties as held for sale during the 2024 Period or in 2023. As of June 30, 2024, we assessed our properties, including assets held for development, for impairment and did not recognize any impairment charges during the 2024 Quarter. We applied reasonable estimates and judgments in evaluating each of the properties as of June 30, 2024. Should external or internal circumstances change requiring the need to shorten holding periods or adjust future estimated cash flows from our properties, we could be required to record impairment charges in the future. |
UNSECURED LINE OF CREDIT PAYABL
UNSECURED LINE OF CREDIT PAYABLE | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
UNSECURED LINE OF CREDIT PAYABLE | UNSECURED LINE OF CREDIT PAYABLE During the third quarter of 2021, we entered into a second amended and restated credit agreement (the “2021 Credit Agreement”) which provided for the Revolving Credit Facility with aggregate revolving loan commitments of $700 million and the continuation of an existing $250.0 million unsecured term loan (“2018 Term Loan”). Under the 2021 Credit Agreement, the Revolving Credit Facility had a four-year term ending in August 2025, with two six-month extension options. The 2021 Credit Agreement included an accordion feature that allowed us to increase the aggregate facility to $1.5 billion, subject to the lenders’ agreement to provide additional revolving loan commitments or term loans. During the first quarter of 2023, we executed an amendment to the 2021 Credit Agreement to convert the benchmark interest rate from LIBOR to an adjusted SOFR, with no change in the applicable interest rate margins. Pursuant to this amendment, the Revolving Credit Facility accrued interest at a rate of adjusted SOFR plus 0.10% plus a margin ranging from 0.70% to 1.40%. In addition, the Revolving Credit Facility requires the payment of a facility fee ranging from 0.10% to 0.30% (in each case, depending on Elme Communities’ credit rating) on the $700.0 million committed revolving loan capacity, without regard to usage. As of June 30, 2024, the interest rate on the Revolving Credit Facility was based on an adjusted daily SOFR (inclusive of the 0.10% credit spread adjustment) plus 0.85% applicable margin, the daily SOFR is 5.33% and the facility fee was 0.20%. As of June 30, 2024, all outstanding advances for the Revolving Credit Facility were due and payable upon maturity in August 2025, unless extended pursuant to one or both of the two six-month extension options. Interest only payments were due and payable generally on a monthly basis. The amount of the Revolving Credit Facility’s unsecured line of credit unused and available at June 30, 2024 was as follows (in thousands): Committed capacity $ 700,000 Borrowings outstanding (156,000) Unused and available $ 544,000 We executed borrowings and repayments on the Revolving Credit Facility during the 2024 Period as follows (in thousands): Balance, December 31, 2023 $ 157,000 Borrowings 70,000 Repayments (71,000) Balance, June 30, 2024 $ 156,000 Subsequent to the 2024 Quarter, we entered into a third amended and restated credit agreement (the “Amended Credit Agreement”) which provides for aggregate revolving loan commitments of $500.0 million (the “Amended and Restated Revolving Credit Facility”) with an accordion feature that allows us to increase the aggregate revolving loan commitments or add term loans of up to $1.0 billion, subject to the lenders’ agreement to provide additional revolving commitments or term loans. The Amended and Restated Revolving Credit Facility has a four-year term ending in July 2028, with two six-month extension options. Borrowings under the Amended and Restated Revolving Credit Facility will bear interest, at Elme Communities’ option, at a rate of either (a)(i) daily SOFR plus 0.10% (the “Adjusted Daily Simple SOFR”) or (ii) term SOFR plus 0.10%, plus, in each case, a margin ranging from 0.70% to 1.40% (depending on Elme Communities’ credit rating) or (b) the base rate plus a margin ranging from 0.00% to 0.40% (based upon Elme Communities’ credit rating). The base rate is the highest of the administrative agent’s prime rate, the federal funds rate plus 0.50% and Adjusted Daily Simple SOFR plus 1.0%. In addition, the Amended Credit Agreement requires the payment of a facility fee equal to 0.10% to 0.30% (depending on Elme Communities’ credit rating) on the $500.0 million committed capacity in respect of the Amended and Restated Revolving Credit Facility, without regard to usage. The initial interest rate is based on Adjusted Daily Simple SOFR plus a margin of 0.85% and the initial facility fee equals 0.20%. All outstanding advances for the Amended and Restated Revolving Credit Facility are due and payable upon maturity in July 2028, unless extended pursuant to one or both of the two six-month extension options. Interest only payments are due and payable generally on a monthly basis. |
NOTES PAYABLE
NOTES PAYABLE | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTES PAYABLE During the first quarter of 2023, we entered into a $125.0 million unsecured term loan (“2023 Term Loan”) with an interest rate of adjusted SOFR (subject to a credit spread adjustment of 10 basis points) plus a margin of 95 basis points (subject to adjustment depending on Elme Communities’ credit rating). The 2023 Term Loan has a two-year term ending in January 2025, with two one-year extension options. We used the proceeds to prepay the $100.0 million 2018 Term Loan in full and a portion of our borrowings under our Revolving Credit Facility. Subsequent to the 2024 Quarter, we entered into a first amendment of the 2023 Term Loan (the “Term Loan Amendment”). The Term Loan Amendment implements various covenant and technical amendments to make the 2023 Term Loan consistent with corresponding provisions in the Amended Credit Agreement. The Term Loan Amendment does not change the maturity or any of the pricing terms of the term loan outstanding under the 2023 Term Loan. |
DERIVATIVE INSTRUMENTS
DERIVATIVE INSTRUMENTS | 6 Months Ended |
Jun. 30, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS During the first quarter of 2023, we entered into two interest rate swap arrangements with an aggregate notional amount of $125.0 million that effectively fixed the interest at 4.73% for the 2023 Term Loan beginning on July 21, 2023 through the 2023 Term Loan’s maturity date of January 10, 2025. During the 2024 Quarter, we entered into two forward interest rate swap arrangements with an aggregate notional amount of $150.0 million beginning on January 10, 2025 through January 10, 2026. These forward interest rate swap arrangements effectively fix a portion of our variable rate debt based on an adjusted daily SOFR at 4.72% (subject to applicable interest rate margins). The interest rate swap arrangements are recorded at fair value in accordance with GAAP, based on discounted cash flow methodologies and observable inputs. We record the effective portion of changes in fair value of the cash flow hedges in Other comprehensive income (loss). We assess the effectiveness of a cash flow hedge both at inception and on an ongoing basis. If a cash flow hedge is no longer expected to be effective, hedge accounting is discontinued. Hedge ineffectiveness of our cash flow hedges is recorded in earnings. The fair values of the interest rate swaps as of June 30, 2024 and December 31, 2023, were as follows (in thousands): Fair Value Derivative Assets (Liabilities) Derivative Instrument Aggregate Notional Amount Effective Date Maturity Date June 30, 2024 December 31, 2023 Interest rate swap $ 75,000 July 21, 2023 January 10, 2025 $ 587 $ 740 Interest rate swap 50,000 July 21, 2023 January 10, 2025 392 494 Interest rate swap 100,000 January 10, 2025 January 10, 2026 (305) — Interest rate swap 50,000 January 10, 2025 January 10, 2026 (153) — $ 521 $ 1,234 We record interest rate swaps on our consolidated balance sheets within Prepaid expenses and other assets when in a net asset position and within Accounts payable and other liabilities when in a net liability position. The net unrealized gains and losses on the effective swaps were recognized in Other comprehensive income (loss), as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Unrealized (loss) gain on interest rate hedges $ (796) $ 854 $ (713) $ 521 Amounts reported in Accumulated other comprehensive loss related to effective cash flow hedges will be reclassified to interest expense as interest payments are made on our variable-rate debt. During the next twelve months, we estimate that an additional $0.9 million related to our outstanding interest rate swap arrangements will be reclassified as a net decrease to interest expense. The losses reclassified from Accumulated other comprehensive loss into interest expense for the three and six months ended June 30, 2024 and 2023, were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Loss reclassified from accumulated other comprehensive loss into interest expense $ 510 $ 509 $ 1,020 $ 1,019 During the next twelve months, we estimate that an additional $2.0 million related to the previously settled interest rate swap arrangements will be reclassified as an increase to interest expense. We have agreements with each of our derivative counterparties that contain a provision whereby we could be declared in default on our derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to our default on the indebtedness. As of June 30, 2024, the fair value of derivative assets, including accrued interest, was $1.0 million and the fair value of derivative liabilities was $0.5 million. As of June 30, 2024, we have not posted any collateral related to these agreements. Derivative instruments expose us to credit risk in the event of non-performance by the counterparty under the terms of the interest rate hedge agreements. We believe that we minimize our credit risk on these transactions by dealing with major, creditworthy financial institutions. We monitor the credit ratings of counterparties and our exposure to any single entity, thus minimizing our credit risk concentration. |
FAIR VALUE DISCLOSURES
FAIR VALUE DISCLOSURES | 6 Months Ended |
Jun. 30, 2024 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE DISCLOSURES | FAIR VALUE DISCLOSURES Assets and Liabilities Measured at Fair Value on a Recurring Basis 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 June 30, 2024 and December 31, 2023 that are recorded at fair value on a recurring basis are the assets held in the Supplemental Executive Retirement Plan (“SERP”), which primarily consist of investments in mutual funds, and the interest rate derivatives (see note 6). We base the valuations related to the SERP on quoted prices in active markets and accordingly these valuations fall into Level 1 in the fair value hierarchy. The valuation of the interest rate derivatives is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each interest rate derivative. This analysis reflects the contractual terms of the interest rate derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of interest rate derivatives are determined using the market standard methodology of netting the discounted future fixed cash payments (or receipts) and the discounted expected variable cash receipts (or payments). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. To comply with the provisions of ASC 820, Fair Value Measurement , we incorporate credit valuation adjustments in the fair value measurements to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk. These credit valuation adjustments were concluded to not be significant inputs for the fair value calculations for the periods presented. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as the posting of collateral, thresholds, mutual puts and guarantees. The valuation of interest rate derivatives fall into Level 2 in the fair value hierarchy. The fair values of these assets as of June 30, 2024 and December 31, 2023 were as follows (in thousands): June 30, 2024 December 31, 2023 Fair Level 1 Level 2 Level 3 Fair Level 1 Level 2 Level 3 Assets: SERP $ 2,371 $ 2,371 $ — $ — $ 1,984 $ 1,984 $ — $ — Interest rate derivatives 979 — 979 — 1,234 — 1,234 — Liabilities: Interest rate derivatives $ (458) $ — $ (458) $ — $ — $ — $ — $ — Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Certain assets not measured at fair value on an ongoing basis but subject to fair value adjustments only in certain circumstances, such as when there is evidence of impairment, are measured at fair value on a nonrecurring basis. In the 2024 Quarter, the Company did not have any assets or liabilities measured at fair value on a nonrecurring basis. 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 models. 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 June 30, 2024 may differ significantly from the amounts presented. The valuations of cash and cash equivalents and restricted cash fall into Level 1 in the fair value hierarchy and the valuations of debt instruments fall into Level 3 in the fair value hierarchy. As of June 30, 2024 and December 31, 2023, the carrying values and estimated fair values of our financial instruments were as follows (in thousands): June 30, 2024 December 31, 2023 Carrying Value Fair Value Carrying Value Fair Value Cash and cash equivalents $ 5,629 $ 5,629 $ 5,984 $ 5,984 Restricted cash 2,263 2,263 2,554 2,554 Line of credit 156,000 156,000 157,000 157,000 Notes payable, net 522,734 467,660 522,345 466,668 |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION Elme Communities 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 2016 Omnibus Incentive Plan (the “Omnibus Incentive Plan”). An amendment and restatement of the Omnibus Incentive Plan was approved by our board of trustees in April 2024 and approved by our shareholders in May 2024 to, among other changes, increase the number of shares available to be issued by 2,900,000, from 2,400,000 shares to 5,300,000 shares (including shares issued pursuant to awards made under the Omnibus Incentive Plan prior to its amendment). The Omnibus Incentive Plan, as amended, allows for awards in the form of restricted shares, restricted share units, options and other awards up to an aggregate of 5,300,000 shares over the ten-year period in which the plan is 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 $1.0 million and $1.4 million for the 2024 Quarter and 2023 Quarter, respectively, and $2.1 million and $2.6 million for the 2024 Period and 2023 Period, respectively. Restricted Share Awards The total fair values of restricted share awards vested was $0.9 million and $4.0 million for the 2024 Period and 2023 Period, respectively. |
EARNINGS PER COMMON SHARE
EARNINGS PER COMMON SHARE | 6 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
EARNINGS PER COMMON SHARE | 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 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 also 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 dilutive earnings per share calculation includes the dilutive impact of operating partnership units under the if-converted method and our share based awards with performance conditions prior to the grant date and all market condition awards under the contingently issuable method. The computations of basic and diluted earnings per share for the three and six months ended June 30, 2024 and 2023 were as follows (in thousands, except per share data): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Numerator: Net loss $ (3,471) $ (2,611) $ (7,118) $ (6,254) Allocation of earnings to unvested restricted share awards (79) (68) (158) (138) Adjusted net loss $ (3,550) $ (2,679) $ (7,276) $ (6,392) Denominator: Weighted average shares outstanding – basic and diluted 87,910 87,741 87,898 87,695 Basic net loss per common share $ (0.04) $ (0.03) $ (0.08) $ (0.07) Diluted net loss per common share $ (0.04) $ (0.03) $ (0.08) $ (0.07) Dividends declared per common share $ 0.18 $ 0.18 $ 0.36 $ 0.36 |
SEGMENT INFORMATION
SEGMENT INFORMATION | 6 Months Ended |
Jun. 30, 2024 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION We operate in a single reportable segment which includes the ownership, development, redevelopment and acquisition of apartment communities. None of our operating properties meet the criteria to be considered separate operating segments on a stand-alone basis. Within the residential segment, we do not distinguish or group our consolidated operations based on size (only one community, Riverside Apartments, comprises more than 10% of consolidated revenues), type (all assets in the segment are residential) or geography (all but six communities are within the Washington, DC metro region). Further, our apartment communities have similar long-term economic characteristics and provide similar products and services to our residents. As a result, our operating properties are aggregated into a single reportable segment: residential. We have one remaining office property, Watergate 600, which does not meet the criteria for a reportable segment, and has been classified within “Other” on our segment disclosure tables. We evaluate performance based upon net operating income (“NOI”) of the combined properties in the segment. Our reportable operating segment consolidates similar properties. GAAP requires that segment disclosures present the measure(s) used by the chief operating decision maker for purposes of assessing each segment’s performance. NOI is a key measurement of our segment profit and loss and is defined as real estate rental revenue less real estate expenses. The following tables present revenues, NOI, capital expenditures and total assets for the three and six months ended June 30, 2024 and 2023 from our Residential segment as well as Other, and reconcile NOI to net loss as reported (in thousands): Three Months Ended June 30, 2024 Residential Other (1) Consolidated Real estate rental revenue $ 55,492 $ 4,611 $ 60,103 Real estate expenses 20,622 1,360 21,982 Net operating income $ 34,870 $ 3,251 $ 38,121 Other income (expense): Property management expenses (2,175) General and administrative expenses (6,138) Depreciation and amortization (23,895) Interest expense (9,384) Net loss $ (3,471) Capital expenditures $ 7,872 $ 52 $ 7,924 Total assets $ 1,738,354 $ 123,121 $ 1,861,475 Three Months Ended June 30, 2023 Residential Other (1) Consolidated Real estate rental revenue $ 52,100 $ 4,499 $ 56,599 Real estate expenses 19,054 1,204 20,258 Net operating income $ 33,046 $ 3,295 $ 36,341 Other expense: Property management expenses (2,178) General and administrative expenses (6,680) Transformation costs (2,454) Depreciation and amortization (21,415) Interest expense (6,794) Other income 569 Net loss $ (2,611) Capital expenditures $ 4,130 $ 262 $ 4,392 Total assets $ 1,664,947 $ 173,552 $ 1,838,499 (1) Other represents Watergate 600, an office property that does not meet the qualitative or quantitative criteria for a reportable segment. Six Months Ended June 30, 2024 Residential Other (1) Consolidated Real estate rental revenue $ 110,363 9,253 $ 119,616 Real estate expenses 40,980 2,721 43,701 Net operating income $ 69,383 $ 6,532 $ 75,915 Other income (expense): Property management expenses (4,393) General and administrative expenses (12,334) Depreciation and amortization (48,838) Interest expense (18,878) Other income 1,410 Net loss $ (7,118) Capital expenditures $ 21,437 $ 109 $ 21,546 Six Months Ended June 30, 2023 Residential Other (1) Consolidated Real estate rental revenue 103,091 9,317 $ 112,408 Real estate expenses 37,198 2,581 39,779 Net operating income $ 65,893 $ 6,736 $ 72,629 Other income (expense): Property management expenses (3,947) General and administrative expenses (13,521) Transformation costs (5,354) Depreciation and amortization (42,951) Interest expense (13,625) Loss on extinguishment of debt (54) Other income 569 Net loss $ (6,254) Capital expenditures $ 9,547 $ 636 $ 10,183 ______________________________ (1) Other represents Watergate 600, an office property that does not meet the qualitative or quantitative criteria for a reportable segment. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 6 Months Ended |
Jun. 30, 2024 | |
Equity [Abstract] | |
SHAREHOLDERS' EQUITY | SHAREHOLDERS' EQUITY On February 20, 2024, we entered into an equity distribution agreement (the “Equity Distribution Agreement”) with Wells Fargo Securities, LLC, BNY Mellon Capital Markets, LLC, Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, KeyBanc Capital Markets Inc., TD Securities (USA) LLC and Truist Securities, Inc. as agents and forward sellers, as applicable, (collectively, the “Agents” or “Forward Sellers”, as applicable), and Wells Fargo Bank, National Association, The Bank of New York Mellon, Citibank, N.A., Goldman Sachs & Co. LLC, KeyBanc Capital Markets Inc., The Toronto-Dominion Bank and Truist Bank as forward purchasers pursuant to which up to an aggregate gross sales price of $350,000,000 of Elme Communities’ common shares of beneficial interest, $0.01 par value per share, may be offered and sold from time to time through the Agents, acting as the Company’s sales agents or, if applicable, the Forward Sellers, or directly to the Agents as principals for their own accounts. In connection with entry into the Equity Distribution Agreement, we terminated our prior at-the-market offering program. At the time of such termination, approximately $340.0 million remained unsold under such prior program. We did not issue common shares under the Equity Distribution Agreement or any prior equity distribution agreements during the 2024 Period or 2023 Period. We have a dividend reinvestment program whereby shareholders may use their dividends and optional cash payments to purchase common shares. The shares sold under this program may either be common shares issued by us or common shares purchased in the open market. Net proceeds under this program are used for general corporate purposes. We did not issue common shares under the dividend reinvestment program during the 2024 Period. Our issuances and net proceeds on the dividend reinvestment program for the three and six months ended June 30, 2023 were as follows ($ in thousands, except per share data): Three Months Ended June 30, Six Months Ended June 30, 2023 2023 Issuance of common shares 14 28 Weighted average price per share $ 17.62 $ 17.64 Net proceeds $ 249 $ 497 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Pay vs Performance Disclosure | ||||
Net loss | $ (3,471) | $ (2,611) | $ (7,118) | $ (6,254) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATIONS (Policies) | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (“Topic 848”), which was amended in December 2022 by ASU 2022-06, Reference Rate Reform (Topic 848). Topic 848 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in Topic 848 is optional and may be elected through December 31, 2024 as reference rate reform activities occur. During the first quarter of 2023, we executed an amendment to the $700.0 million unsecured revolving credit facility (“Revolving Credit Facility”) to convert the benchmark interest rate from LIBOR to an adjusted SOFR ("Secured Overnight Financing Rate"). We elected to apply the optional expedients in Topic 848 to (i) assert that the hedged interest payments remain probable regardless of any expected modification in terms related to reference rate reform, and (ii) continue the method of assessing effectiveness as documented in the original hedge documentation so that the reference rate on the hypothetical derivative matches the reference rate on the hedging instrument. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The impact of this guidance did not have a material impact on our consolidated financial statements. In November 2023, the FASB issued an amendment to the segment reporting standards which requires disclosure for each reportable segment, on an interim and annual basis, of the significant expense categories and amounts that are regularly provided to the chief operating decision maker and included in each reported measure of a segment’s profit or loss. Additionally, it requires a disclosure of the title and position of the individual or the name of the group or committee identified as the chief operating decision maker. The new standard will be effective for annual periods beginning on January 1, 2024 and interim periods beginning on January 1, 2025 on a retrospective basis. We are currently evaluating the impact of adopting the standard on our consolidated financial statements. In March 2024, the Securities and Exchange Commission (“SEC”) issued its final rule that requires registrants to provide climate disclosures in their annual reports and registration statements, beginning with annual reports for the year ending December 31, 2025. On April 4, 2024, the SEC voluntarily stayed the final rule pending the completion of judicial review of cases pending in the Eighth Circuit. We are continuing to evaluate the disclosure impact of the final rule. |
Principles of Consolidation | The accompanying unaudited consolidated financial statements include the consolidated accounts of Elme Communities and our subsidiaries and entities in which Elme Communities has a controlling financial interest. All intercompany balances and transactions have been eliminated in consolidation. |
Basis of Presentation | We have prepared the accompanying unaudited financial statements pursuant to the rules and regulations of the SEC. Certain information and note disclosures normally included in annual financial statements prepared in accordance with Generally Accepted Accounting Principles (“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, 2023. |
Lessee Accounting | For leases where we are the lessee, primarily our corporate office operating lease, we recognize a right-of-use asset and a lease liability in accordance with Accounting Standards Codification (“ASC”) Topic 842. The right-of-use asset and associated liability is equal to the present value of the minimum lease payments, applying our incremental borrowing rate. Our borrowing rate is computed based on observable borrowing rates taking into consideration our credit quality and adjusting to a secured borrowing rate for similar assets and term. Lease expense for the operating lease is recognized on a straight-line basis over the expected lease term and is included in “General and administrative expenses.” |
Restricted Cash | Restricted cash includes funds held in escrow for tenant security deposits. |
Transformation Costs | Transformation costs include costs related to the strategic shift away from the commercial sector to the residential sector, including the allocation of internal costs, consulting, advisory and termination benefits. |
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. |
Fair Value Measurement | Assets and Liabilities Measured at Fair Value on a Recurring Basis 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 June 30, 2024 and December 31, 2023 that are recorded at fair value on a recurring basis are the assets held in the Supplemental Executive Retirement Plan (“SERP”), which primarily consist of investments in mutual funds, and the interest rate derivatives (see note 6). We base the valuations related to the SERP on quoted prices in active markets and accordingly these valuations fall into Level 1 in the fair value hierarchy. The valuation of the interest rate derivatives is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each interest rate derivative. This analysis reflects the contractual terms of the interest rate derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of interest rate derivatives are determined using the market standard methodology of netting the discounted future fixed cash payments (or receipts) and the discounted expected variable cash receipts (or payments). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. To comply with the provisions of ASC 820, Fair Value Measurement , we incorporate credit valuation adjustments in the fair value measurements to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk. These credit valuation adjustments were concluded to not be significant inputs for the fair value calculations for the periods presented. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as the posting of collateral, thresholds, mutual puts and guarantees. The valuation of interest rate derivatives fall into Level 2 in the fair value hierarchy. |
UNSECURED LINE OF CREDIT PAYA_2
UNSECURED LINE OF CREDIT PAYABLE (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Revolving Credit Facility's Unsecured Line of Credit Unused and Available and its Borrowings and Repayments | The amount of the Revolving Credit Facility’s unsecured line of credit unused and available at June 30, 2024 was as follows (in thousands): Committed capacity $ 700,000 Borrowings outstanding (156,000) Unused and available $ 544,000 We executed borrowings and repayments on the Revolving Credit Facility during the 2024 Period as follows (in thousands): Balance, December 31, 2023 $ 157,000 Borrowings 70,000 Repayments (71,000) Balance, June 30, 2024 $ 156,000 |
DERIVATIVE INSTRUMENTS (Tables)
DERIVATIVE INSTRUMENTS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Fair Values of Interest Rate Swaps | The fair values of the interest rate swaps as of June 30, 2024 and December 31, 2023, were as follows (in thousands): Fair Value Derivative Assets (Liabilities) Derivative Instrument Aggregate Notional Amount Effective Date Maturity Date June 30, 2024 December 31, 2023 Interest rate swap $ 75,000 July 21, 2023 January 10, 2025 $ 587 $ 740 Interest rate swap 50,000 July 21, 2023 January 10, 2025 392 494 Interest rate swap 100,000 January 10, 2025 January 10, 2026 (305) — Interest rate swap 50,000 January 10, 2025 January 10, 2026 (153) — $ 521 $ 1,234 |
Schedule of Net Unrealized Gain (Loss) in/from AOCL | The net unrealized gains and losses on the effective swaps were recognized in Other comprehensive income (loss), as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Unrealized (loss) gain on interest rate hedges $ (796) $ 854 $ (713) $ 521 The losses reclassified from Accumulated other comprehensive loss into interest expense for the three and six months ended June 30, 2024 and 2023, were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Loss reclassified from accumulated other comprehensive loss into interest expense $ 510 $ 509 $ 1,020 $ 1,019 |
FAIR VALUE DISCLOSURES (Tables)
FAIR VALUE DISCLOSURES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value of Assets | The fair values of these assets as of June 30, 2024 and December 31, 2023 were as follows (in thousands): June 30, 2024 December 31, 2023 Fair Level 1 Level 2 Level 3 Fair Level 1 Level 2 Level 3 Assets: SERP $ 2,371 $ 2,371 $ — $ — $ 1,984 $ 1,984 $ — $ — Interest rate derivatives 979 — 979 — 1,234 — 1,234 — Liabilities: Interest rate derivatives $ (458) $ — $ (458) $ — $ — $ — $ — $ — |
Schedule of Carrying Values and Estimated Fair Values of Financial Instruments | As of June 30, 2024 and December 31, 2023, the carrying values and estimated fair values of our financial instruments were as follows (in thousands): June 30, 2024 December 31, 2023 Carrying Value Fair Value Carrying Value Fair Value Cash and cash equivalents $ 5,629 $ 5,629 $ 5,984 $ 5,984 Restricted cash 2,263 2,263 2,554 2,554 Line of credit 156,000 156,000 157,000 157,000 Notes payable, net 522,734 467,660 522,345 466,668 |
EARNINGS PER COMMON SHARE (Tabl
EARNINGS PER COMMON SHARE (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Earnings Per Share | The computations of basic and diluted earnings per share for the three and six months ended June 30, 2024 and 2023 were as follows (in thousands, except per share data): Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Numerator: Net loss $ (3,471) $ (2,611) $ (7,118) $ (6,254) Allocation of earnings to unvested restricted share awards (79) (68) (158) (138) Adjusted net loss $ (3,550) $ (2,679) $ (7,276) $ (6,392) Denominator: Weighted average shares outstanding – basic and diluted 87,910 87,741 87,898 87,695 Basic net loss per common share $ (0.04) $ (0.03) $ (0.08) $ (0.07) Diluted net loss per common share $ (0.04) $ (0.03) $ (0.08) $ (0.07) Dividends declared per common share $ 0.18 $ 0.18 $ 0.36 $ 0.36 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Segment Reporting [Abstract] | |
Schedule of Reconciliation of Net Operating Income of Reportable Segments | The following tables present revenues, NOI, capital expenditures and total assets for the three and six months ended June 30, 2024 and 2023 from our Residential segment as well as Other, and reconcile NOI to net loss as reported (in thousands): Three Months Ended June 30, 2024 Residential Other (1) Consolidated Real estate rental revenue $ 55,492 $ 4,611 $ 60,103 Real estate expenses 20,622 1,360 21,982 Net operating income $ 34,870 $ 3,251 $ 38,121 Other income (expense): Property management expenses (2,175) General and administrative expenses (6,138) Depreciation and amortization (23,895) Interest expense (9,384) Net loss $ (3,471) Capital expenditures $ 7,872 $ 52 $ 7,924 Total assets $ 1,738,354 $ 123,121 $ 1,861,475 Three Months Ended June 30, 2023 Residential Other (1) Consolidated Real estate rental revenue $ 52,100 $ 4,499 $ 56,599 Real estate expenses 19,054 1,204 20,258 Net operating income $ 33,046 $ 3,295 $ 36,341 Other expense: Property management expenses (2,178) General and administrative expenses (6,680) Transformation costs (2,454) Depreciation and amortization (21,415) Interest expense (6,794) Other income 569 Net loss $ (2,611) Capital expenditures $ 4,130 $ 262 $ 4,392 Total assets $ 1,664,947 $ 173,552 $ 1,838,499 (1) Other represents Watergate 600, an office property that does not meet the qualitative or quantitative criteria for a reportable segment. Six Months Ended June 30, 2024 Residential Other (1) Consolidated Real estate rental revenue $ 110,363 9,253 $ 119,616 Real estate expenses 40,980 2,721 43,701 Net operating income $ 69,383 $ 6,532 $ 75,915 Other income (expense): Property management expenses (4,393) General and administrative expenses (12,334) Depreciation and amortization (48,838) Interest expense (18,878) Other income 1,410 Net loss $ (7,118) Capital expenditures $ 21,437 $ 109 $ 21,546 Six Months Ended June 30, 2023 Residential Other (1) Consolidated Real estate rental revenue 103,091 9,317 $ 112,408 Real estate expenses 37,198 2,581 39,779 Net operating income $ 65,893 $ 6,736 $ 72,629 Other income (expense): Property management expenses (3,947) General and administrative expenses (13,521) Transformation costs (5,354) Depreciation and amortization (42,951) Interest expense (13,625) Loss on extinguishment of debt (54) Other income 569 Net loss $ (6,254) Capital expenditures $ 9,547 $ 636 $ 10,183 ______________________________ (1) Other represents Watergate 600, an office property that does not meet the qualitative or quantitative criteria for a reportable segment. |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Equity [Abstract] | |
Schedule of Dividend Reinvestment Program | Our issuances and net proceeds on the dividend reinvestment program for the three and six months ended June 30, 2023 were as follows ($ in thousands, except per share data): Three Months Ended June 30, Six Months Ended June 30, 2023 2023 Issuance of common shares 14 28 Weighted average price per share $ 17.62 $ 17.64 Net proceeds $ 249 $ 497 |
NATURE OF BUSINESS (Details)
NATURE OF BUSINESS (Details) - TRSs - USD ($) $ in Millions | Jun. 30, 2024 | Dec. 31, 2023 |
Product Information [Line Items] | ||
Deferred tax valuation allowance | $ 1.4 | $ 1.4 |
Deferred tax asset | $ 1.4 | $ 1.4 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATIONS (Details) - USD ($) | Jun. 30, 2024 | Mar. 31, 2023 | Sep. 30, 2021 |
Line of Credit Facility [Line Items] | |||
Revolving credit facility borrowing capacity | $ 1,500,000,000 | ||
Revolving Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Revolving credit facility borrowing capacity | $ 700,000,000 | $ 700,000,000 | $ 700,000,000 |
REAL ESTATE (Details)
REAL ESTATE (Details) - USD ($) | 3 Months Ended | |
Jun. 30, 2024 | Dec. 31, 2023 | |
Real Estate [Line Items] | ||
Properties under development or held for future development | $ 30,980,000 | $ 30,980,000 |
Real estate impairment | 0 | |
Riverside Developments | ||
Real Estate [Line Items] | ||
Properties under development or held for future development | $ 30,400,000 |
UNSECURED LINE OF CREDIT PAYA_3
UNSECURED LINE OF CREDIT PAYABLE - Narrative (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Aug. 02, 2024 USD ($) extension_option | Mar. 31, 2023 USD ($) | Sep. 30, 2021 USD ($) extension_option | Jun. 30, 2024 USD ($) extension_option | Dec. 31, 2018 USD ($) | |
Line of Credit Facility [Line Items] | |||||
Revolving credit facility borrowing capacity | $ 1,500,000,000 | ||||
Credit agreement, aggregate maximum borrowing capacity including accordion feature | 1,500,000,000 | ||||
Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Revolving credit facility borrowing capacity | $ 700,000,000 | $ 700,000,000 | $ 700,000,000 | ||
Debt instrument term | 4 years | ||||
Number of extensions allowed | extension_option | 2 | 2 | |||
Term of allowable extension (in months) | 6 months | 6 months | |||
Credit agreement, aggregate maximum borrowing capacity including accordion feature | $ 700,000,000 | $ 700,000,000 | $ 700,000,000 | ||
Debt instrument, adjustment rate | 0.10% | ||||
Revolving Credit Facility | Variable Rate Component One | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate (percent) | 0.10% | ||||
Revolving Credit Facility | Variable Rate Component Two | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate (percent) | 0.85% | ||||
Facility fee (percent) | 0.20% | ||||
Revolving Credit Facility | Subsequent event | |||||
Line of Credit Facility [Line Items] | |||||
Revolving credit facility borrowing capacity | $ 500,000,000 | ||||
Debt instrument term | 4 years | ||||
Number of extensions allowed | extension_option | 2 | ||||
Term of allowable extension (in months) | 6 months | ||||
Credit agreement, aggregate maximum borrowing capacity including accordion feature | $ 500,000,000 | ||||
Basis spread on variable rate (percent) | 0.85% | ||||
Facility fee (percent) | 0.20% | ||||
Accordion feature, higher borrowing capacity option | $ 1,000,000,000 | ||||
Revolving Credit Facility | Term Secured Overnight Financing Rate | Subsequent event | |||||
Line of Credit Facility [Line Items] | |||||
Debt instrument, adjustment rate | 0.10% | ||||
Revolving Credit Facility | Adjusted Daily Simple Secured Overnight Financing Rate | Subsequent event | |||||
Line of Credit Facility [Line Items] | |||||
Debt instrument, adjustment rate | 0.10% | ||||
Debt instrument base rate spread on variable rate (percent) | 1% | ||||
Revolving Credit Facility | Minimum | |||||
Line of Credit Facility [Line Items] | |||||
Facility fee (percent) | 0.10% | ||||
Revolving Credit Facility | Minimum | Variable Rate Component One | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate (percent) | 0.70% | ||||
Revolving Credit Facility | Minimum | Subsequent event | |||||
Line of Credit Facility [Line Items] | |||||
Facility fee (percent) | 0.10% | ||||
Revolving Credit Facility | Minimum | Term Secured Overnight Financing Rate | Subsequent event | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate (percent) | 0.70% | ||||
Revolving Credit Facility | Minimum | Base Rate | Subsequent event | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate (percent) | 0% | ||||
Revolving Credit Facility | Minimum | Adjusted Daily Simple Secured Overnight Financing Rate | Subsequent event | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate (percent) | 0.70% | ||||
Revolving Credit Facility | Maximum | |||||
Line of Credit Facility [Line Items] | |||||
Facility fee (percent) | 0.30% | ||||
Revolving Credit Facility | Maximum | Variable Rate Component One | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate (percent) | 1.40% | ||||
Revolving Credit Facility | Maximum | Subsequent event | |||||
Line of Credit Facility [Line Items] | |||||
Facility fee (percent) | 0.30% | ||||
Revolving Credit Facility | Maximum | Term Secured Overnight Financing Rate | Subsequent event | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate (percent) | 1.40% | ||||
Revolving Credit Facility | Maximum | Base Rate | Subsequent event | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate (percent) | 0.40% | ||||
Revolving Credit Facility | Maximum | Adjusted Daily Simple Secured Overnight Financing Rate | Subsequent event | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate (percent) | 1.40% | ||||
Term Loan | |||||
Line of Credit Facility [Line Items] | |||||
Debt instrument face amount | $ 250,000,000 | ||||
Unsecured Line of Credit Payable | Revolving Credit Facility | Federal Funds Rate | Subsequent event | |||||
Line of Credit Facility [Line Items] | |||||
Debt instrument base rate spread on variable rate (percent) | 0.50% |
UNSECURED LINE OF CREDIT PAYA_4
UNSECURED LINE OF CREDIT PAYABLE - Schedule of Revolving Credit Facility's Unsecured Line of Credit Unused and Available (Details) - USD ($) | Jun. 30, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | Sep. 30, 2021 |
Line of Credit Facility [Line Items] | ||||
Committed capacity | $ 1,500,000,000 | |||
Borrowings outstanding | $ (156,000,000) | $ (157,000,000) | ||
Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Committed capacity | 700,000,000 | $ 700,000,000 | $ 700,000,000 | |
Borrowings outstanding | (156,000,000) | $ (157,000,000) | ||
Unused and available | $ 544,000,000 |
UNSECURED LINE OF CREDIT PAYA_5
UNSECURED LINE OF CREDIT PAYABLE - Schedule of Revolving Credit Facility's Borrowings and Repayments (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2024 USD ($) | |
Line of Credit [Roll Forward] | |
Beginning balance | $ 157,000 |
Ending balance | 156,000 |
Revolving Credit Facility | |
Line of Credit [Roll Forward] | |
Beginning balance | 157,000 |
Borrowings | 70,000 |
Repayments | (71,000) |
Ending balance | $ 156,000 |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - Unsecured Debt | 3 Months Ended |
Mar. 31, 2023 USD ($) extension_option | |
2023 Term Loan | |
Debt Instrument [Line Items] | |
Debt instrument face amount | $ 125,000,000 |
Debt instrument term | 2 years |
Term loan, number of extensions allowed | extension_option | 2 |
Term loan, extension, term | 1 year |
2023 Term Loan | Variable Rate Component One | |
Debt Instrument [Line Items] | |
Basis spread on variable rate (percent) | 0.10% |
2023 Term Loan | Variable Rate Component Two | |
Debt Instrument [Line Items] | |
Basis spread on variable rate (percent) | 0.95% |
2018 Term Loan | |
Debt Instrument [Line Items] | |
Long-term debt, gross | $ 100,000,000 |
DERIVATIVE INSTRUMENTS - Narrat
DERIVATIVE INSTRUMENTS - Narrative (Details) $ in Thousands | 6 Months Ended | |||
Jun. 30, 2024 USD ($) arrangement | Dec. 31, 2023 USD ($) | Jul. 21, 2023 | Mar. 31, 2023 USD ($) arrangement | |
Interest rate derivatives | Recurring | ||||
Derivative [Line Items] | ||||
Interest rate derivatives | $ (458) | $ 0 | ||
Interest rate derivatives | ||||
Derivative [Line Items] | ||||
Number of interest rate swap arrangements | arrangement | 2 | 2 | ||
Derivative notional amount | $ 150,000 | $ 125,000 | ||
Fixed interest rate (percent) | 4.73% | |||
Variable interest rate (percent) | 4.72% | |||
Estimated amount to be reclassified within next twelve months as an increase to interest expense | $ 900 | |||
Fair value of derivative assets | 1,000 | |||
Interest rate derivatives | Recurring | ||||
Derivative [Line Items] | ||||
Fair value of derivative assets | 979 | $ 1,234 | ||
Interest Rate Swap, Previously Settled | ||||
Derivative [Line Items] | ||||
Estimated amount to be reclassified within next twelve months as an increase to interest expense | $ (2,000) |
DERIVATIVE INSTRUMENTS - Schedu
DERIVATIVE INSTRUMENTS - Schedule of Fair Values of Interest Rate Swaps (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 | Mar. 31, 2023 |
Interest rate derivatives | |||
Derivatives, Fair Value [Line Items] | |||
Aggregate Notional Amount | $ 150,000 | $ 125,000 | |
Derivative Assets (Liabilities) | 521 | $ 1,234 | |
Interest Rate Swap Effective July 2023, One | |||
Derivatives, Fair Value [Line Items] | |||
Aggregate Notional Amount | 75,000 | ||
Derivative Assets (Liabilities) | 587 | 740 | |
Interest Rate Swap Effective July 2023, Two | |||
Derivatives, Fair Value [Line Items] | |||
Aggregate Notional Amount | 50,000 | ||
Derivative Assets (Liabilities) | 392 | 494 | |
Interest Rate Swap Effective January 2025, One | |||
Derivatives, Fair Value [Line Items] | |||
Aggregate Notional Amount | 100,000 | ||
Derivative Assets (Liabilities) | (305) | 0 | |
Interest Rate Swap Effective January 2025, Two | |||
Derivatives, Fair Value [Line Items] | |||
Aggregate Notional Amount | 50,000 | ||
Derivative Assets (Liabilities) | $ (153) | $ 0 |
DERIVATIVE INSTRUMENTS - Sche_2
DERIVATIVE INSTRUMENTS - Schedule of Net Unrealized Gain (Loss) in/from AOCL (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||
Unrealized (loss) gain on interest rate hedges | $ (796) | $ 854 | $ (713) | $ 521 |
Loss reclassified from accumulated other comprehensive loss into interest expense | $ 510 | $ 509 | $ 1,020 | $ 1,019 |
FAIR VALUE DISCLOSURES - Schedu
FAIR VALUE DISCLOSURES - Schedule of Fair Value of Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Interest rate derivatives | ||
Assets: | ||
Interest rate derivatives | $ 1,000 | |
Recurring | ||
Assets: | ||
SERP | 2,371 | $ 1,984 |
Recurring | Interest rate derivatives | ||
Liabilities: | ||
Interest rate derivatives | (458) | 0 |
Recurring | Interest rate derivatives | ||
Assets: | ||
Interest rate derivatives | 979 | 1,234 |
Recurring | Level 1 | ||
Assets: | ||
SERP | 2,371 | 1,984 |
Recurring | Level 1 | Interest rate derivatives | ||
Liabilities: | ||
Interest rate derivatives | 0 | 0 |
Recurring | Level 1 | Interest rate derivatives | ||
Assets: | ||
Interest rate derivatives | 0 | 0 |
Recurring | Level 2 | ||
Assets: | ||
SERP | 0 | 0 |
Recurring | Level 2 | Interest rate derivatives | ||
Liabilities: | ||
Interest rate derivatives | (458) | 0 |
Recurring | Level 2 | Interest rate derivatives | ||
Assets: | ||
Interest rate derivatives | 979 | 1,234 |
Recurring | Level 3 | ||
Assets: | ||
SERP | 0 | 0 |
Recurring | Level 3 | Interest rate derivatives | ||
Liabilities: | ||
Interest rate derivatives | 0 | 0 |
Recurring | Level 3 | Interest rate derivatives | ||
Assets: | ||
Interest rate derivatives | $ 0 | $ 0 |
FAIR VALUE DISCLOSURES -Narrati
FAIR VALUE DISCLOSURES -Narrative (Details) | Jun. 30, 2024 USD ($) |
Fair Value Disclosures [Abstract] | |
Fair value measurement of assets or liabilities | $ 0 |
FAIR VALUE DISCLOSURES - Sche_2
FAIR VALUE DISCLOSURES - Schedule of Carrying Values and Estimated Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Carrying Value | ||
Carrying Value and Estimated Fair Values [Line Items] | ||
Cash and cash equivalents | $ 5,629 | $ 5,984 |
Restricted cash | 2,263 | 2,554 |
Line of credit | 156,000 | 157,000 |
Notes payable, net | 522,734 | 522,345 |
Fair Value | ||
Carrying Value and Estimated Fair Values [Line Items] | ||
Cash and cash equivalents | 5,629 | 5,984 |
Restricted cash | 2,263 | 2,554 |
Line of credit | 156,000 | 157,000 |
Notes payable, net | $ 467,660 | $ 466,668 |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
May 31, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Apr. 30, 2024 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock based compensation expense | $ 1 | $ 1.4 | $ 2.1 | $ 2.6 | ||
Restricted Share Awards | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Fair value of share awards vested | $ 0.9 | $ 4 | ||||
Total unvested restricted share awards (in shares) | 436,834 | 436,834 | ||||
Weighted average grant date fair value (in dollars per share) | $ 16.96 | $ 16.96 | ||||
Compensation costs not yet recognized | $ 5.2 | $ 5.2 | ||||
Recognition period for compensation expense | 24 months | |||||
Washington Real Estate Investment Trust 2016 Omnibus Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Aggregate number of shares additional authorized for stock based awards (in shares) | 2,900,000 | |||||
Aggregate number of shares authorized for stock based awards (in shares) | 5,300,000 | 2,400,000 | ||||
Incentive plan, period in effect (in years) | 10 years |
EARNINGS PER COMMON SHARE (Deta
EARNINGS PER COMMON SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Numerator: | ||||
Net loss | $ (3,471) | $ (2,611) | $ (7,118) | $ (6,254) |
Allocation of earnings to unvested restricted share awards | (79) | (68) | (158) | (138) |
Adjusted net loss, basic | (3,550) | (2,679) | (7,276) | (6,392) |
Adjusted net loss, diluted | $ (3,550) | $ (2,679) | $ (7,276) | $ (6,392) |
Denominator: | ||||
Weighted average shares outstanding - basic (in shares) | 87,910 | 87,741 | 87,898 | 87,695 |
Weighted average shares outstanding - diluted (in shares) | 87,910 | 87,741 | 87,898 | 87,695 |
Basic net loss per common share (in dollars per share) | $ (0.04) | $ (0.03) | $ (0.08) | $ (0.07) |
Diluted net loss per common share (in dollars per share) | (0.04) | (0.03) | (0.08) | (0.07) |
Dividends declared per common share (in dollars per share) | $ 0.18 | $ 0.18 | $ 0.36 | $ 0.36 |
SEGMENT INFORMATION - Narrative
SEGMENT INFORMATION - Narrative (Details) | 6 Months Ended |
Jun. 30, 2024 property community segment | |
Segment Reporting Information [Line Items] | |
Number of reportable segments | segment | 1 |
Outside Of Washington, DC Metro Region | |
Segment Reporting Information [Line Items] | |
Number of properties | community | 6 |
Riverside Apartments | Revenue Benchmark | Property Concentration Risk | |
Segment Reporting Information [Line Items] | |
Concentration risk, percentage (as a percent) | 10% |
Office | |
Segment Reporting Information [Line Items] | |
Number of properties that do not meet criteria for reportable segment | property | 1 |
SEGMENT INFORMATION - Schedule
SEGMENT INFORMATION - Schedule of Reconciliation of Net Operating Income of Reportable Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Segment Reporting Information [Line Items] | |||||
Real estate rental revenue | $ 60,103 | $ 56,599 | $ 119,616 | $ 112,408 | |
Real estate expenses | 21,982 | 20,258 | 43,701 | 39,779 | |
Net operating income | 38,121 | 36,341 | 75,915 | 72,629 | |
Other income (expense): | |||||
Property management expenses | (2,175) | (2,178) | (4,393) | (3,947) | |
General and administrative expenses | (6,138) | (6,680) | (12,334) | (13,521) | |
Transformation costs | 0 | (2,454) | 0 | (5,354) | |
Depreciation and amortization | (23,895) | (21,415) | (48,838) | (42,951) | |
Interest expense | (9,384) | (6,794) | (18,878) | (13,625) | |
Other income | 0 | 569 | 1,410 | 569 | |
Net loss | (3,471) | ||||
Net loss | (3,471) | (2,611) | (7,118) | (6,254) | |
Capital expenditures | 7,924 | 4,392 | 21,546 | 10,183 | |
Total assets | 1,861,475 | 1,838,499 | 1,861,475 | 1,838,499 | $ 1,900,028 |
Residential | |||||
Segment Reporting Information [Line Items] | |||||
Real estate rental revenue | 55,492 | 52,100 | 110,363 | 103,091 | |
Real estate expenses | 20,622 | 19,054 | 40,980 | 37,198 | |
Net operating income | 34,870 | 33,046 | 69,383 | 65,893 | |
Other income (expense): | |||||
Capital expenditures | 7,872 | 4,130 | 21,437 | 9,547 | |
Total assets | 1,738,354 | 1,664,947 | 1,738,354 | 1,664,947 | |
Other | |||||
Segment Reporting Information [Line Items] | |||||
Real estate rental revenue | 4,611 | 4,499 | 9,253 | 9,317 | |
Real estate expenses | 1,360 | 1,204 | 2,721 | 2,581 | |
Net operating income | 3,251 | 3,295 | 6,532 | 6,736 | |
Other income (expense): | |||||
Capital expenditures | 52 | 262 | 109 | 636 | |
Total assets | $ 123,121 | $ 173,552 | $ 123,121 | $ 173,552 |
SHAREHOLDERS' EQUITY - Narrativ
SHAREHOLDERS' EQUITY - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Feb. 20, 2024 | Dec. 31, 2023 | |
Equity Distribution Agreements [Line Items] | |||||
Shares of beneficial interest, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||
Shares issued under dividend reinvestment program (in shares) | 14,000 | 0 | 28,000 | ||
Equity Distribution Agreement | |||||
Equity Distribution Agreements [Line Items] | |||||
Common shares of beneficial interest reserved for future issuance | $ 350,000,000 | ||||
Shares of beneficial interest, par value (in dollars per share) | $ 0.01 | ||||
At The Market Offering Program | |||||
Equity Distribution Agreements [Line Items] | |||||
Common stock, remained unsold upon termination | $ 340,000,000 |
SHAREHOLDERS' EQUITY - Schedule
SHAREHOLDERS' EQUITY - Schedule of Dividend Reinvestment Program (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Dividend Reinvestment Program | |||
Issuance of common shares (in shares) | 14,000 | 0 | 28,000 |
Weighted average price per share (in dollars per share) | $ 17.62 | $ 17.64 | |
Net proceeds | $ 249 | $ 0 | $ 497 |