Exhibit 99.2
Fourth Quarter 2007
Supplemental Operating and Financial Data
for the Quarter Ended December 31, 2007
Contact: | 6110 Executive Boulevard | |
Sara Grootwassink | Suite 800 | |
Executive Vice President and | Rockville, MD 20852 | |
Chief Financial Officer | (301) 984-9400 | |
Direct Dial: (301) 255-0820 | (301) 984-9610 fax | |
E-mail: sgrootwassink@writ.com |
Company Background and Highlights
Fourth Quarter 2007
Washington Real Estate Investment Trust (the "Company") is a self-administered, self-managed, equity real estate investment trust (REIT) investing in income-producing properties in the greater Washington metropolitan region. WRIT is diversified, as it invests in multifamily, retail, industrial/flex, office, and medical office properties.
During 2007, WRIT acquired $319 million of assets and land for development, disposed of $58 million of assets, completed several development projects and executed 1.8 million square feet of lease transactions. WRIT raised over $200 million of capital, closed on a new unsecured borrowing facility, and successfully amended its bond covenants. Also, WRIT announced its 184th consecutive quarterly dividend per share at equal or increasing rates and increased its funds from operations per share for the 35th consecutive year.
In 2007, WRIT acquired three office properties for $170 million, four medical office properties for $119 million, one industrial/flex property for $27 million and land held for medical office development for $4 million. The acquisitions added approximately 505,000 square feet to the office portfolio, 362,000 square feet to the medical office portfolio and 157,000 square feet to the industrial/flex portfolio. WRIT disposed of two office buildings for a contract sales price of $58 million and a gain on sale of $25 million.
In fourth quarter, WRIT acquired the leasehold interest for 2000 M Street, NW, an eight-story, 227,000 square foot Class A office building with a three-level parking garage in Washington, D.C. for $73.5 million. 2000 M Street is well-positioned in the Central Business District (CBD) on the southwest corner of 20th and M Streets, NW. The investment offers significant upside, as rents are well below market. Upon acquisition, the property was 100% leased and is expected to achieve a first-year, unleveraged yield of 6.2% on a cash basis and 6.7% on a GAAP basis.
During the year, WRIT completed several ground-up development projects for a total investment of $151 million. In July, WRIT completed base construction on Dulles Station, a 180,000 square foot development project of Class A office and retail space located in Herndon, VA. The building, prominently visible from the Dulles Toll Road, is part of a mixed-use development which will include 1,095 multifamily units and 56,000 square feet of retail and restaurant space.
In fourth quarter, WRIT delivered the majority of units at Bennett Park. Bennett Park is a ground-up development project in Arlington, VA consisting of high-rise and mid-rise Class A apartment buildings with a total of 224 units and 5,800 square feet of retail space. The property was 24% leased at quarter-end.
Subsequent to the year-end, WRIT began delivering units at The Clayborne Apartments in Alexandria, VA. The Clayborne is a ground-up development project, adjacent to our 800 South Washington retail property. The project consists of a 74-unit Class A apartment building with 2,700 square feet of additional retail space. WRIT anticipates the property will be 96% leased by year-end 2008.
In 2007, WRIT executed 1.8 million square feet of commercial lease transactions with an average term of five years. The average rental rate increase on new and renewal leases was 17.3% on a GAAP basis, and 6.4% on a cash basis. Tenant improvements averaged $6.62 per square foot for the year. WRIT focuses on tenant diversification and as of year-end 2007 there are no tenants that account for more than 5% of WRIT's annual rental revenue.
1
In 2007, WRIT raised over $200 million of capital, closed on a new unsecured borrowing facility, and successfully amended its bond covenants. In January, WRIT issued $150 million of 3.875% senior unsecured notes due 2026. In June, WRIT completed a public offering of 1.6 million common shares priced at $37 per share, raising $58 million, net. Also in June, WRIT opened a new unsecured revolving credit facility with a committed capacity of $75 million and a maturity date of June 29, 2011. In July, WRIT successfully completed its consent solicitation to amend the terms of its outstanding unsecured notes from a restrictive total assets definition to a market based asset definition. Subsequent to year end, WRIT exercised a portion of the accordion feature on its second unsecured revolving credit facility. WRIT's total borrowing capacity was increased to $337 million at a rate of LIBOR plus 0.425%.
As of December 31, 2007, WRIT owns a diversified portfolio of 89 properties consisting of 14 retail centers, 25 office properties, 17 medical office properties, 23 industrial/flex properties, 10 multifamily properties and land for development. WRIT's dividends have increased every year for 37 consecutive years and its FFO per share has increased every year for 35 consecutive years. WRIT shares are publicly traded on the New York Stock Exchange (NYSE:WRE).
2
Net Operating Income Contribution by Sector - Fourth Quarter 2007
With investments in the multifamily, retail, industrial/flex, office and medical office segments, WRIT is uniquely diversified. This balanced portfolio provides stability during market fluctuations in specific property types.
Fourth Quarter 2007 Acquisitions
2000 M Street, NW
Washington, DC
Certain statements in the supplemental disclosures which follow are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors.
3
Exhibit 99.2
Supplemental Financial and Operating Data
Table of Contents
December 31, 2007
Schedule | Page | |
| Key Financial Data | ||
Consolidated Statements of Operations | 5 | |
Consolidated Balance Sheets | 6 | |
Funds From Operations and Funds Available for Distribution | 7 | |
Earnings Before Interest Taxes Depreciation and Amortization (EBITDA) | 8 | |
| Capital Analysis | ||
Long-Term Debt Analysis | 9-10 | |
Capital Analysis | 11 | |
| Portfolio Analysis | ||
Core Portfolio Net Operating Income (NOI) Growth & Rental Rate Growth | 12 | |
Core Portfolio Net Operating Income (NOI) Summary | 13 | |
Core Portfolio Net Operating Income (NOI) Detail for the Quarter | 14-15 | |
Core Portfolio Net Operating Income (NOI) Detail for the Year | 16-17 | |
Core Portfolio & Overall Economic Occupancy Levels by Sector | 18 | |
| Tenant Analysis | ||
Commercial Leasing Summary | 19-20 | |
10 Largest Tenants - Based on Annualized Base Rent | 21 | |
Industry Diversification | 22 | |
Lease Expirations as of December 31, 2007 | 23 | |
| Growth and Strategy | ||
2007 Acquisition and Disposition Summary | 24 | |
2007 Development Summary | 25 | |
| Appendix | ||
Schedule of Properties | 26-27 | |
Supplemental Definitions | 28 | |
Consolidated Statements of Operations
(In thousands, except per share data)
(unaudited)
| Twelve Months Ended | Three Months Ended | |||||||||||||||||||||||||||
OPERATING RESULTS | 12/31/07 | 12/31/06 | 12/31/07 | 09/30/07 | 06/30/07 | 03/31/07 | 12/31/06 | |||||||||||||||||||||
Real estate rental revenue | $ | 255,655 | $ | 208,741 | $ | 67,528 | $ | 65,020 | $ | 63,255 | $ | 59,852 | $ | 56,282 | ||||||||||||||
Real estate expenses | $ | (79,914 | ) | $ | (63,225 | ) | (21,271 | ) | (20,395 | ) | (19,542 | ) | (18,706 | ) | (17,259 | ) | ||||||||||||
| $ | 175,741 | $ | 145,516 | 46,257 | 44,625 | 43,713 | 41,146 | 39,023 | ||||||||||||||||||||
Real estate depreciation and amortization | (69,775 | ) | (50,915 | ) | (18,998 | ) | (18,019 | ) | (16,632 | ) | (16,126 | ) | (14,133 | ) | ||||||||||||||
Income from real estate | 105,966 | 94,601 | 27,259 | 26,606 | 27,081 | 25,020 | 24,890 | |||||||||||||||||||||
Other income | 1,875 | 906 | 480 | 357 | 420 | 618 | 269 | |||||||||||||||||||||
Other income from life insurance proceeds | 1,303 | — | — | — | — | 1,303 | — | |||||||||||||||||||||
Interest expense | (61,906 | ) | (47,265 | ) | (16,400 | ) | (15,824 | ) | (15,298 | ) | (14,384 | ) | (13,248 | ) | ||||||||||||||
General and administrative | (15,099 | ) | (12,622 | ) | (3,675 | ) | (3,174 | ) | (5,367 | ) | (2,883 | ) | (2,461 | ) | ||||||||||||||
Income from continuing operations | 32,139 | 35,620 | 7,664 | 7,965 | 6,836 | 9,674 | 9,450 | |||||||||||||||||||||
Discontinued operations: | ||||||||||||||||||||||||||||
Income from operations of properties sold or held for sale | 4,720 | 3,041 | 778 | 1,403 | 1,501 | 1,038 | 631 | |||||||||||||||||||||
Gain on sale of real estate investment | 25,022 | — | — | 25,022 | — | — | — | |||||||||||||||||||||
Income from discontinued operations | 29,742 | 3,041 | 778 | 26,425 | 1,501 | 1,038 | 631 | |||||||||||||||||||||
Net Income | $ | 61,881 | $ | 38,661 | $ | 8,442 | $ | 34,390 | $ | 8,337 | $ | 10,712 | $ | 10,081 | ||||||||||||||
Per Share Data | ||||||||||||||||||||||||||||
Net Income | $ | 1.34 | $ | 0.88 | $ | 0.18 | $ | 0.73 | $ | 0.18 | $ | 0.24 | $ | 0.22 | ||||||||||||||
Fully diluted weighted average shares outstanding | 46,115 | 43,874 | 46,822 | 46,802 | 45,658 | 45,153 | 45,122 | |||||||||||||||||||||
Percentage of Revenues: | ||||||||||||||||||||||||||||
Real estate expenses | 31.3 | % | 30.3 | % | 31.5 | % | 31.4 | % | 30.9 | % | 31.3 | % | 30.7 | % | ||||||||||||||
General and administrative | 5.9 | % | 6.0 | % | 5.4 | % | 4.9 | % | 8.5 | % | 4.8 | % | 4.4 | % | ||||||||||||||
Ratios: | ||||||||||||||||||||||||||||
EBITDA / Interest expense | 2.7 | x | 2.9 | x | 2.7 | x | 2.7 | x | 2.6 | x | 2.8 | x | 2.9 | x | ||||||||||||||
Income from continuing operations/Total real estate revenue | 12.6 | % | 17.1 | % | 11.3 | % | 12.3 | % | 10.8 | % | 16.2 | % | 16.8 | % | ||||||||||||||
Net income/Total real estate revenue | 24.2 | % | 18.5 | % | 12.5 | % | 52.9 | % | 13.2 | % | 17.9 | % | 17.9 | % | ||||||||||||||
Note: Certain prior quarter amounts have been reclassified to conform to the current quarter presentation.
5
Consolidated Balance Sheets
(In thousands)
(unaudited)
| December 31, 2007 | September 30, 2007 | June 30, 2007 | March 31, 2007 | December 31, 2006 | ||||||||||||||||
Assets | ||||||||||||||||||||
Land | $ | 328,951 | $ | 334,484 | $ | 322,733 | $ | 312,550 | $ | 285,103 | ||||||||||
Income producing property | 1,635,169 | 1,496,731 | 1,448,874 | 1,369,005 | 1,238,548 | |||||||||||||||
| 1,964,120 | 1,831,215 | 1,771,607 | 1,681,555 | 1,523,651 | ||||||||||||||||
Accumulated depreciation and amortization | (331,991 | ) | (315,444 | ) | (299,494 | ) | (284,750 | ) | (271,342 | ) | ||||||||||
Net income producing property | 1,632,129 | 1,515,771 | 1,472,113 | 1,396,805 | 1,252,309 | |||||||||||||||
Development in progress, including land held for development | 98,321 | 138,093 | 151,393 | 136,831 | 120,656 | |||||||||||||||
Total real estate held for investment , net | 1,730,450 | 1,653,864 | 1,623,506 | 1,533,636 | 1,372,965 | |||||||||||||||
Investment in real estate held for sale, net | 23,843 | 23,382 | 52,907 | 52,912 | 53,489 | |||||||||||||||
Cash and cash equivalents | 21,488 | 9,919 | 8,133 | 7,305 | 8,721 | |||||||||||||||
Restricted cash | 6,030 | 46,002 | 6,835 | 5,143 | 4,151 | |||||||||||||||
Rents and other receivables, net of allowance for doubtful accounts | 36,595 | 34,520 | 34,359 | 32,045 | 30,229 | |||||||||||||||
Prepaid expenses and other assets | 78,517 | 76,689 | 68,179 | 70,111 | 58,049 | |||||||||||||||
Other assets related to properties sold or held for sale | 1,403 | 1,425 | 3,276 | 3,488 | 3,661 | |||||||||||||||
Total Assets | $ | 1,898,326 | $ | 1,845,801 | $ | 1,797,195 | $ | 1,704,640 | $ | 1,531,265 | ||||||||||
Liabilities and Shareholders’ Equity | ||||||||||||||||||||
Notes payable | $ | 879,123 | $ | 879,094 | $ | 879,064 | $ | 879,035 | $ | 728,255 | ||||||||||
Mortgage notes payable | 252,484 | 253,500 | 254,324 | 228,367 | 229,240 | |||||||||||||||
Lines of credit/short-term note payable | 192,500 | 128,500 | 95,500 | 91,200 | 61,000 | |||||||||||||||
Accounts payable and other liabilities | 63,543 | 65,228 | 66,223 | 52,096 | 45,009 | |||||||||||||||
Advance rents | 9,552 | 6,424 | 6,544 | 6,644 | 5,825 | |||||||||||||||
Tenant security deposits | 10,487 | 9,961 | 10,262 | 9,395 | 9,128 | |||||||||||||||
Other liabilities related to properties sold or held for sale | 317 | 358 | 1,360 | 1,502 | 9,138 | |||||||||||||||
Total Liabilities | 1,408,006 | 1,343,065 | 1,313,277 | 1,268,239 | 1,087,595 | |||||||||||||||
Minority interest | 3,776 | 5,593 | 1,776 | 1,758 | 1,739 | |||||||||||||||
Shareholders’ Equity | ||||||||||||||||||||
Shares of beneficial interest, $0.01 par value; 100,000 shares authorized | 468 | 467 | 467 | 451 | 451 | |||||||||||||||
Additional paid-in capital | 561,492 | 560,695 | 560,276 | 501,325 | 500,727 | |||||||||||||||
Distributions in excess of net income | (75,416 | ) | (64,019 | ) | (78,601 | ) | (67,133 | ) | (59,247 | ) | ||||||||||
Total Shareholders’ Equity | 486,544 | 497,143 | 482,142 | 434,643 | 441,931 | |||||||||||||||
Total Liabilities and Shareholders’ Equity | $ | 1,898,326 | $ | 1,845,801 | $ | 1,797,195 | $ | 1,704,640 | $ | 1,531,265 | ||||||||||
Total Debt / Total Market Capitalization | 0.47:1 | 0.44:1 | 0.44:1 | 0.42:1 | 0.36:1 | |||||||||||||||
Note: Certain prior quarter amounts have been reclassified to conform to the current quarter presentation.
6
Funds From Operations and Funds Available for Distribution
(In thousands, except per share data)
(unaudited)
| Twelve Months Ended | Three Months Ended | |||||||||||||||||||||||||||
| 12/31/07 | 12/31/06 | 12/31/2007 | 9/30/2007 | 6/30/2007 | 3/31/2007 | 12/31/2006 | ||||||||||||||||||||||
Funds From Operations(1) | ||||||||||||||||||||||||||||
Net Income | $ | 61,881 | $ | 38,661 | $ | 8,442 | $ | 34,390 | $ | 8,337 | $ | 10,712 | $ | 10,081 | ||||||||||||||
Real estate depreciation and amortization | 69,775 | 50,915 | 18,998 | 18,019 | 16,632 | 16,126 | 14,133 | |||||||||||||||||||||
Other income from life insurance proceeds | (1,303 | ) | — | — | — | (1,303 | ) | — | ||||||||||||||||||||
Discontinued operations: | ||||||||||||||||||||||||||||
Gain on sale | (25,022 | ) | — | (25,022 | ) | — | — | — | ||||||||||||||||||||
Real estate depreciation and amortization | 1,250 | 3,255 | 87 | 266 | 248 | 649 | 941 | |||||||||||||||||||||
Funds From Operations (FFO) | $ | 106,581 | $ | 92,831 | $ | 27,527 | $ | 27,653 | $ | 25,217 | $ | 26,184 | $ | 25,155 | ||||||||||||||
FFO per share - basic | $ | 2.32 | $ | 2.13 | $ | 0.59 | $ | 0.59 | $ | 0.55 | $ | 0.58 | $ | 0.56 | ||||||||||||||
FFO per share - fully diluted | $ | 2.31 | $ | 2.12 | $ | 0.59 | $ | 0.59 | $ | 0.55 | $ | 0.58 | $ | 0.56 | ||||||||||||||
Funds Available for Distribution(2) | ||||||||||||||||||||||||||||
Tenant Improvements | (16,587 | ) | (9,473 | ) | (5,026 | ) | (4,215 | ) | (5,185 | ) | (2,161 | ) | (2,143 | ) | ||||||||||||||
External and Internal Leasing Commissions Capitalized | (6,005 | ) | (5,595 | ) | (1,613 | ) | (1,159 | ) | (1,165 | ) | (2,068 | ) | (1,554 | ) | ||||||||||||||
Recurring Capital Improvements | (11,895 | ) | (8,685 | ) | (3,899 | ) | (2,635 | ) | (3,425 | ) | (1,936 | ) | (1,648 | ) | ||||||||||||||
Straight-Line Rent, Net | (4,204 | ) | (3,093 | ) | (957 | ) | (988 | ) | (1,088 | ) | (1,171 | ) | (757 | ) | ||||||||||||||
Non-real estate depreciation and amortization | 3,572 | 2,453 | 1,011 | 987 | 824 | 750 | 765 | |||||||||||||||||||||
Amortization of lease intangibles, net | (1,381 | ) | 283 | (191 | ) | (315 | ) | (280 | ) | (595 | ) | 197 | ||||||||||||||||
Amortization and expensing of restricted share and unit compensation | 4,088 | 3,464 | 850 | 882 | 1,574 | 782 | 1,081 | |||||||||||||||||||||
Other | 1,303 | — | — | 102 | 1,201 | — | — | |||||||||||||||||||||
Funds Available for Distribution (FAD) | $ | 75,472 | $ | 72,185 | $ | 17,702 | $ | 20,312 | $ | 17,673 | $ | 19,785 | $ | 21,096 | ||||||||||||||
Total Dividends Paid | $ | 77,736 | $ | 72,688 | $ | 19,723 | $ | 19,716 | $ | 19,716 | $ | 18,581 | $ | 18,580 | ||||||||||||||
Average shares - basic | 45,911 | 43,679 | 46,604 | 46,596 | 45,490 | 44,931 | 44,894 | |||||||||||||||||||||
Average shares - fully diluted | 46,115 | 43,874 | 46,822 | 46,802 | 45,658 | 45,153 | 45,122 | |||||||||||||||||||||
(1) | Funds From Operations (“FFO”) – The National Association of Real Estate Investment Trusts, Inc. (“NAREIT”) defines FFO (April, 2002 White Paper) as net income (computed in accordance with generally accepted accounting principles (“GAAP”)) excluding gains (or losses) from sales of property plus real estate depreciation and amortization. We consider FFO to be a standard supplemental measure for equity real estate investment trusts (“REITs”) because it facilitates an understanding of the operating performance of our properties without giving effect to real estate depreciation and amortization, which historically assumes that the value of real estate assets diminishes predictably over time. Since real estate values have instead historically risen or fallen with market conditions, we believe that FFO more accurately provides investors an indication of our ability to incur and service debt, make capital expenditures and fund other needs. FFO is a non-GAAP measure. |
(2) | Funds Available for Distribution (“FAD”) is calculated by subtracting from FFO (1) recurring expenditures, tenant improvements and leasing costs, that are capitalized and amortized and are necessary to maintain our properties and revenue stream and (2) straight line rents, then adding (3) non-real estate depreciation and amortization and adding or subtracting the amortization of lease intangibles as appropriate. FAD is included herein, because we consider it to be a measure of a REIT’s ability to incur and service debt and to distribute dividends to its shareholders. FAD is a non-GAAP and non-standardized measure, and may be calculated differently by other REITs. |
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Earnings Before Interest Taxes Depreciation and Amortization (EBITDA)
(In thousands)
(unaudited)
| Three Months Ended | ||||||||||||||||||||
| 12/31/07 | 09/30/07 | 06/30/07 | 03/31/07 | 12/31/06 | ||||||||||||||||
EBITDA(1) | ||||||||||||||||||||
Net income | $ | 8,442 | $ | 34,390 | $ | 8,337 | $ | 10,712 | $ | 10,081 | ||||||||||
Add: | ||||||||||||||||||||
Interest expense | 16,400 | 15,824 | 15,298 | 14,376 | 13,392 | |||||||||||||||
Real estate depreciation and amortization | 19,085 | 18,285 | 16,880 | 16,775 | 15,074 | |||||||||||||||
Non-real estate depreciation | 277 | 261 | 202 | 136 | 117 | |||||||||||||||
Less: | ||||||||||||||||||||
Gain on sale of real estate | (25,022 | ) | — | — | — | |||||||||||||||
Other income | (480 | ) | (357 | ) | (420 | ) | (1,921 | ) | (269 | ) | ||||||||||
EBITDA | $ | 43,724 | $ | 43,381 | $ | 40,297 | $ | 40,078 | $ | 38,395 | ||||||||||
(1) | EBITDA is earnings before interest, taxes, depreciation and amortization. We consider EBITDA to be an appropriate supplemental performance measure because it eliminates depreciation, interest and the gain (loss) from property dispositions, which permits investors to view income from operations without the effect of non-cash depreciation or the cost of debt. EBITDA is a non-GAAP measure. |
8
Long-Term Debt Analysis
(In thousands, except per share amounts)
| December 31, 2007 | September 30, 2007 | June 30, 2007 | March 31, 2007 | December 31, 2006 | ||||||||||||||||
Balances Outstanding | ||||||||||||||||||||
Secured | ||||||||||||||||||||
Conventional fixed rate | $ | 252,484 | $ | 253,500 | $ | 254,323 | $ | 228,367 | $ | 237,073 | ||||||||||
Secured total | 252,484 | 253,500 | 254,323 | 228,367 | 237,073 | |||||||||||||||
Unsecured | ||||||||||||||||||||
Fixed rate bonds and notes | 879,123 | 879,094 | 879,064 | 879,035 | 728,255 | |||||||||||||||
Credit facility | 192,500 | 128,500 | 95,500 | 91,200 | 61,000 | |||||||||||||||
Unsecured total | 1,071,623 | 1,007,594 | 974,564 | 970,235 | 789,255 | |||||||||||||||
Total | $ | 1,324,107 | $ | 1,261,094 | $ | 1,228,887 | $ | 1,198,602 | $ | 1,026,328 | ||||||||||
Average Interest Rates | ||||||||||||||||||||
Secured | ||||||||||||||||||||
Conventional fixed rate | 5.8 | % | 5.8 | % | 5.8 | % | 5.9 | % | 5.9 | % | ||||||||||
Secured total | 5.8 | % | 5.8 | % | 5.8 | % | 5.9 | % | 5.9 | % | ||||||||||
Unsecured | ||||||||||||||||||||
Fixed rate bonds | 5.2 | % | 5.2 | % | 5.2 | % | 5.2 | % | 5.5 | % | ||||||||||
Credit facilities | 5.4 | % | 5.9 | % | 5.8 | % | 5.8 | % | 6.0 | % | ||||||||||
Unsecured total | 5.2 | % | 5.3 | % | 5.3 | % | 5.3 | % | 5.6 | % | ||||||||||
Average | 5.3 | % | 5.4 | % | 5.4 | % | 5.4 | % | 5.6 | % | ||||||||||
Note: The current balance outstanding of the fixed rate bonds and notes is shown net of discounts/premiums in the amount of $876,570.
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Long-Term Debt Analysis
(In thousands, except per share amounts)
Continued from previous page
| Future Maturities of Debt | |||||||||||||||
| Year | Secured Debt | Unsecured Debt | Credit Facilities | Total Debt | Average Interest Rate | ||||||||||
2008 | $ | 4,057 | $ | 60,000 | $ | — | $ | 64,057 | 6.7 | % | |||||
2009 | 54,285 | — | — | 54,285 | 7.0 | % | |||||||||
2010 | 25,973 | — | 122,500 | 148,473 | 5.6 | % | |||||||||
2011 | 13,339 | 150,000 | 70,000 | 233,339 | 5.7 | % | |||||||||
2012 | 21,088 | 50,000 | — | 71,088 | 5.0 | % | |||||||||
2013 | 106,039 | 60,000 | — | 166,039 | 5.5 | % | |||||||||
2014 | 884 | 100,000 | — | 100,884 | 5.3 | % | |||||||||
2015 | 19,373 | 150,000 | — | 169,373 | 5.3 | % | |||||||||
2016 | 553 | — | — | 553 | 5.3 | % | |||||||||
Thereafter | 6,893 | 310,000 | — | 316,893 | 4.5 | % | |||||||||
Total maturities | $ | 252,484 | $ | 880,000 | $ | 192,500 | $ | 1,324,984 | 5.3 | % | |||||
Weighted average maturity = 8.0 years
10
Capital Analysis
(In thousands, except per share amounts)
| December 31, 2007 | September 30, 2007 | June 30, 2007 | March 31, 2007 | December 31, 2006 | ||||||||||||||||
Market Data | ||||||||||||||||||||
Shares Outstanding | 46,682 | 46,669 | 46,665 | 45,045 | 45,042 | |||||||||||||||
Market Price per Share | $ | 31.41 | $ | 33.18 | $ | 34.00 | $ | 37.42 | $ | 40.00 | ||||||||||
Equity Market Capitalization | $ | 1,466,282 | $ | 1,548,477 | $ | 1,586,610 | $ | 1,685,584 | $ | 1,801,680 | ||||||||||
Total Debt | $ | 1,324,107 | $ | 1,261,094 | $ | 1,228,888 | $ | 1,198,602 | $ | 1,026,328 | ||||||||||
Total Market Capitalization | $ | 2,790,389 | $ | 2,809,571 | $ | 2,815,498 | $ | 2,884,186 | $ | 2,828,008 | ||||||||||
Total Debt to Market Capitalization | 0.47:1 | 0.44:1 | 0.44:1 | 0.42:1 | 0.36:1 | |||||||||||||||
Earnings to Fixed Charges(1) | 1.3 | x | 1.4 | x | 1.3 | x | 1.5 | x | 1.6 | x | ||||||||||
Debt Service Coverage Ratio(2) | 2.5 | x | 2.6 | x | 2.5 | x | 2.6 | x | 2.7 | x | ||||||||||
Dividend Data | ||||||||||||||||||||
Total Dividends Paid | $ | 19,723 | $ | 19,716 | $ | 19,716 | $ | 18,581 | $ | 18,580 | ||||||||||
Common Dividend per Share | $ | 0.4225 | $ | 0.4225 | $ | 0.4225 | $ | 0.4125 | $ | 0.4125 | ||||||||||
Payout Ratio (FFO per share basis) | 71.6 | % | 71.6 | % | 76.8 | % | 71.1 | % | 73.7 | % | ||||||||||
(1) | The ratio of earnings to fixed charges is computed by dividing earnings by fixed charges. For this purpose, earnings consist of income from continuing operations plus fixed charges, less capitalized interest. Fixed charges consist of interest expense, including amortized costs of debt issuance, plus interest costs capitalized. |
(2) | Debt service coverage ratio is computed by dividing earnings before interest income and expense, depreciation, amortization and gain on sale of real estate by interest expense and principal amortization. |
11
Core Portfolio Net Operating Income (NOI) Growth & Rental Rate Growth
2007 vs. 2006
Cash Basis
| Fourth Quarter(1) | Year(2) | |||||||||||
Sector | NOI Growth | Rental Rate Growth | NOI Growth | Rental Rate Growth | ||||||||
Multifamily | 2.8 | % | 4.9 | % | 2.3 | % | 5.2 | % | ||||
Office Buildings | 5.5 | % | 2.4 | % | 6.1 | % | 2.0 | % | ||||
Medical Office Buildings | 6.7 | % | 3.0 | % | 3.3 | % | 3.1 | % | ||||
Retail Centers | 13.8 | % | 3.2 | % | 3.9 | % | 4.9 | % | ||||
Industrial / Flex Properties | 6.8 | % | 3.6 | % | 4.3 | % | 3.7 | % | ||||
Overall Core Portfolio | 7.1 | % | 3.2 | % | 4.5 | % | 3.4 | % | ||||
GAAP Basis
| Fourth Quarter(1) | Year(2) | |||||||||||
Sector | NOI Growth | Rental Rate Growth | NOI Growth | Rental Rate Growth | ||||||||
Multifamily | 2.8 | % | 4.9 | % | 2.2 | % | 5.2 | % | ||||
Office Buildings | 6.2 | % | 2.7 | % | 6.5 | % | 2.2 | % | ||||
Medical Office Buildings | 8.2 | % | 2.1 | % | 0.9 | % | 2.3 | % | ||||
Retail Centers | 13.7 | % | 4.1 | % | 4.7 | % | 5.7 | % | ||||
Industrial / Flex Properties | 2.7 | % | 2.9 | % | 2.1 | % | 2.8 | % | ||||
Overall Core Portfolio | 6.8 | % | 3.2 | % | 4.2 | % | 3.4 | % | ||||
1 | Non-core properties were: |
2007 in development - Bennett Park, Clayborne Apartments and Dulles Station
2007 sold properties - Maryland Trade Centers I and II
2007 held for sale properties - Sullyfield Center and The Earhart Building
2007 acquisitions - 270 Technology Park, Monument II, 2440 M Street, Woodholme Medical Office Building, Woodholme Center, Ashburn Farm Office Park, CentreMed I & II and 2000 M Street.
2 | Non-core properties were: |
2007 in development - Bennett Park, Clayborne Apartments and Dulles Station
2007 sold properties - Maryland Trade Centers I and II
2007 held for sale properties - Sullyfield Center and The Earhart Building
2007 acquisitions - 270 Technology Park, Monument II, 2440 M Street, Woodholme Medical Office Building, Woodholme Center, Ashburn Farm Office Park, CentreMed I & II and 2000 M Street.
2006 acquisitions - Hampton Overlook, Hampton South, Alexandria Professional Center, 9707 Medical Center Dr., 15001 Shady Grove Rd., Plumtree Medical Center, Randolph Shopping Center, Montrose Shopping Center, 9950 Business Parkway, 15005 Shady Grove Road, 6565 Arlington Blvd, West Gude Drive, The Ridges and The Crescent.
12
Core Portfolio Net Operating Income (NOI) Summary
(In thousands)
| Three Months Ended December 31, | |||||||||
| 2007 | 2006 | % Change | |||||||
Cash Basis: | |||||||||
Multifamily | $ | 5,016 | $ | 4,877 | 2.8 | % | |||
Office Buildings | 15,355 | 14,553 | 5.5 | % | |||||
Medical Office Buildings | 5,343 | 5,006 | 6.7 | % | |||||
Retail Centers | 8,068 | 7,088 | 13.8 | % | |||||
Industrial/Flex | 7,295 | 6,827 | 6.8 | % | |||||
| $ | 41,077 | $ | 38,351 | 7.1 | % | ||||
GAAP Basis: | |||||||||
Multifamily | $ | 5,020 | $ | 4,883 | 2.8 | % | |||
Office Buildings | 15,573 | 14,667 | 6.2 | % | |||||
Medical Office Buildings | 5,421 | 5,011 | 8.2 | % | |||||
Retail Centers | 8,420 | 7,406 | 13.7 | % | |||||
Industrial/Flex | 7,249 | 7,056 | 2.7 | % | |||||
| $ | 41,683 | $ | 39,023 | 6.8 | % | ||||
13
Core Portfolio Net Operating Income (NOI) Detail
(In thousands)
| Three Months Ended December 31, 2007 | ||||||||||||||||||||||||||||
| Multifamily | Office | Medical Office | Retail | Industrial | Corporate and Other | Total | ||||||||||||||||||||||
Real estate rental revenue | ||||||||||||||||||||||||||||
Core Portfolio | $ | 8,637 | $ | 23,653 | $ | 7,640 | $ | 10,698 | $ | 9,499 | $ | — | $ | 60,127 | ||||||||||||||
Non-core - acquired and in development1 | 206 | 3,153 | 3,419 | — | 623 | — | 7,401 | |||||||||||||||||||||
Total | 8,843 | 26,806 | 11,059 | 10,698 | 10,122 | — | 67,528 | |||||||||||||||||||||
Real estate expenses | ||||||||||||||||||||||||||||
Core Portfolio | 3,617 | 8,080 | 2,219 | 2,278 | 2,250 | — | 18,444 | |||||||||||||||||||||
Non-core - acquired and in development1 | 318 | 1,171 | 1,197 | — | 141 | — | 2,827 | |||||||||||||||||||||
Total | 3,935 | 9,251 | 3,416 | 2,278 | 2,391 | — | 21,271 | |||||||||||||||||||||
Net Operating Income (NOI) | ||||||||||||||||||||||||||||
Core Portfolio | 5,020 | 15,573 | 5,421 | 8,420 | 7,249 | — | 41,683 | |||||||||||||||||||||
Non-core - acquired and in development1 | (112 | ) | 1,982 | 2,222 | — | 482 | — | 4,574 | ||||||||||||||||||||
Total | $ | 4,908 | $ | 17,555 | $ | 7,643 | $ | 8,420 | $ | 7,731 | $ | — | $ | 46,257 | ||||||||||||||
Core Portfolio NOI GAAP Basis (from above) | $ | 5,020 | $ | 15,573 | $ | 5,421 | $ | 8,420 | $ | 7,249 | $ | — | $ | 41,683 | ||||||||||||||
Straight-line revenue, net for core properties | (5 | ) | (225 | ) | (79 | ) | (230 | ) | (125 | ) | — | (664 | ) | |||||||||||||||
FAS 141 Min Rent | — | 2 | 1 | (125 | ) | 166 | — | 44 | ||||||||||||||||||||
Amortization of lease intangibles for core properties | 1 | 5 | — | 3 | 5 | — | 14 | |||||||||||||||||||||
Core portfolio NOI, Cash Basis | $ | 5,016 | $ | 15,355 | $ | 5,343 | $ | 8,068 | $ | 7,295 | $ | — | $ | 41,077 | ||||||||||||||
Reconciliation of NOI to Net Income | ||||||||||||||||||||||||||||
Total NOI | $ | 4,908 | $ | 17,555 | $ | 7,643 | $ | 8,420 | $ | 7,731 | $ | — | $ | 46,257 | ||||||||||||||
Other income | — | — | — | — | — | 480 | 480 | |||||||||||||||||||||
Other income from life insurance proceeds | — | — | — | — | — | — | — | |||||||||||||||||||||
Interest expense | (913 | ) | (757 | ) | (1,531 | ) | (340 | ) | (248 | ) | (12,611 | ) | (16,400 | ) | ||||||||||||||
Depreciation and amortization | (2,342 | ) | (8,009 | ) | (3,689 | ) | (1,756 | ) | (3,060 | ) | (142 | ) | (18,998 | ) | ||||||||||||||
General and administrative | — | — | — | — | — | (3,675 | ) | (3,675 | ) | |||||||||||||||||||
Discontinued Operations2 | — | — | — | — | 778 | — | 778 | |||||||||||||||||||||
Gain on Disposal | — | — | — | — | — | — | — | |||||||||||||||||||||
Net Income | $ | 1,653 | $ | 8,789 | $ | 2,423 | $ | 6,324 | $ | 5,201 | $ | (15,948 | ) | $ | 8,442 | |||||||||||||
1 | Non-core acquired and in development properties: |
2007 in development - Bennett Park, Clayborne Apartments and Dulles Station.
2007 acquisitions - 270 Technology Park, Monument II, 2440 M Street, Woodholme Medical Office Building, Woodholme Center, Ashburn Farm Office Park, CentreMed I & II and 2000 M Street.
2006 acquisitions - None in Q4 2006.
2 | Discontinued operations include: Sold Properties - Maryland Trade Center I and II, and Held For Sale Properties - Sullyfield Center and The Earhart Building. |
14
Core Portfolio Net Operating Income (NOI) Detail
(In thousands)
| Three Months Ended December 31, 2006 | ||||||||||||||||||||||||||||
| Multifamily | Office | Medical Office | Retail | Industrial | Corporate and Other | Total | ||||||||||||||||||||||
Real estate rental revenue | ||||||||||||||||||||||||||||
Core Portfolio | $ | 8,377 | $ | 22,230 | $ | 7,120 | $ | 9,475 | $ | 9,080 | $ | — | $ | 56,282 | ||||||||||||||
Non-core - acquired and in development1 | — | — | — | — | — | — | — | |||||||||||||||||||||
Total | 8,377 | 22,230 | 7,120 | 9,475 | 9,080 | — | 56,282 | |||||||||||||||||||||
Real estate expenses | ||||||||||||||||||||||||||||
Core Portfolio | 3,494 | 7,563 | 2,109 | 2,069 | 2,024 | — | 17,259 | |||||||||||||||||||||
Non-core - acquired and in development1 | — | — | — | — | — | — | — | |||||||||||||||||||||
Total | 3,494 | 7,563 | 2,109 | 2,069 | 2,024 | — | 17,259 | |||||||||||||||||||||
Net Operating Income (NOI) | ||||||||||||||||||||||||||||
Core Portfolio | 4,883 | 14,667 | 5,011 | 7,406 | 7,056 | — | 39,023 | |||||||||||||||||||||
Non-core - acquired and in development1 | — | — | — | — | — | — | — | |||||||||||||||||||||
Total | $ | 4,883 | $ | 14,667 | $ | 5,011 | $ | 7,406 | $ | 7,056 | $ | — | $ | 39,023 | ||||||||||||||
Core Portfolio NOI GAAP Basis (from above) | $ | 4,883 | $ | 14,667 | $ | 5,011 | $ | 7,406 | $ | 7,056 | $ | — | $ | 39,023 | ||||||||||||||
Straight-line revenue, net for core properties | (6 | ) | (218 | ) | (150 | ) | (173 | ) | (320 | ) | — | (867 | ) | |||||||||||||||
FAS 141 Min Rent | — | 99 | 145 | (147 | ) | 87 | — | 184 | ||||||||||||||||||||
Amortization of lease intangibles for core properties | — | 5 | — | 2 | 4 | — | 11 | |||||||||||||||||||||
Core portfolio NOI, Cash Basis | $ | 4,877 | $ | 14,553 | $ | 5,006 | $ | 7,088 | $ | 6,827 | $ | — | $ | 38,351 | ||||||||||||||
Reconciliation of NOI to Net Income | ||||||||||||||||||||||||||||
Total NOI | $ | 4,883 | $ | 14,667 | $ | 5,011 | $ | 7,406 | $ | 7,056 | $ | — | $ | 39,023 | ||||||||||||||
Other income | — | — | — | — | — | 269 | 269 | |||||||||||||||||||||
Other income from life insurance proceeds | — | — | — | — | — | — | — | |||||||||||||||||||||
Interest expense | (913 | ) | (778 | ) | (1,182 | ) | (346 | ) | (250 | ) | (9,779 | ) | (13,248 | ) | ||||||||||||||
Depreciation and amortization | (1,621 | ) | (5,993 | ) | (2,080 | ) | (1,744 | ) | (2,532 | ) | (163 | ) | (14,133 | ) | ||||||||||||||
General and administrative | — | — | — | — | — | (2,461 | ) | (2,461 | ) | |||||||||||||||||||
Discontinued Operations2 | — | 522 | — | — | 109 | — | 631 | |||||||||||||||||||||
Gain on Disposal | — | — | — | — | — | — | — | |||||||||||||||||||||
Net Income | $ | 2,349 | $ | 8,418 | $ | 1,749 | $ | 5,316 | $ | 4,383 | $ | (12,134 | ) | $ | 10,081 | |||||||||||||
1 | Non-core acquired and in development properties were: |
2007 in development - Bennett Park, Clayborne Apartments and Dulles Station.
2006 acquisitions - None in Q4 2006.
2 | Discontinued operations include: Sold Properties - Maryland Trade Center I and II, and Held For Sale Properties - Sullyfield Center and The Earhart Building. |
15
Core Portfolio Net Operating Income (NOI) Detail
(In thousands)
| Twelve Months Ended December 31, 2007 | ||||||||||||||||||||||||||||
| Multifamily | Office | Medical Office | Retail | Industrial | Corporate and Other | Total | ||||||||||||||||||||||
Real estate rental revenue | ||||||||||||||||||||||||||||
Core Portfolio | $ | 34,012 | $ | 80,747 | $ | 18,478 | $ | 37,066 | $ | 33,422 | $ | — | $ | 203,725 | ||||||||||||||
Non-core - acquired and in development1 | 275 | 20,831 | 20,414 | 4,446 | 5,964 | — | 51,930 | |||||||||||||||||||||
Total | 34,287 | 101,578 | 38,892 | 41,512 | 39,386 | — | 255,655 | |||||||||||||||||||||
Real estate expenses | ||||||||||||||||||||||||||||
Core Portfolio | 14,323 | 27,373 | 5,018 | 8,090 | 8,081 | — | 62,885 | |||||||||||||||||||||
Non-core - acquired and in development1 | 639 | 7,114 | 7,004 | 831 | 1,441 | — | 17,029 | |||||||||||||||||||||
Total | 14,962 | 34,487 | 12,022 | 8,921 | 9,522 | — | 79,914 | |||||||||||||||||||||
Net Operating Income (NOI) | ||||||||||||||||||||||||||||
Core Portfolio | 19,689 | 53,374 | 13,460 | 28,976 | 25,341 | — | 140,840 | |||||||||||||||||||||
Non-core - acquired and in development1 | (364 | ) | 13,717 | 13,410 | 3,615 | 4,523 | — | 34,901 | ||||||||||||||||||||
Total | $ | 19,325 | $ | 67,091 | $ | 26,870 | $ | 32,591 | $ | 29,864 | $ | — | $ | 175,741 | ||||||||||||||
Core Portfolio NOI GAAP Basis (from above) | $ | 19,689 | $ | 53,374 | $ | 13,460 | $ | 28,976 | $ | 25,341 | $ | — | $ | 140,840 | ||||||||||||||
Straight-line revenue, net for core properties | (24 | ) | (947 | ) | 68 | (858 | ) | (311 | ) | — | (2,072 | ) | ||||||||||||||||
FAS 141 Min Rent | — | (175 | ) | 83 | (217 | ) | 449 | — | 140 | |||||||||||||||||||
Amortization of lease intangibles for core properties | 3 | 20 | — | 13 | 17 | — | 53 | |||||||||||||||||||||
Core portfolio NOI, Cash Basis | $ | 19,668 | $ | 52,272 | $ | 13,611 | $ | 27,914 | $ | 25,496 | $ | — | $ | 138,961 | ||||||||||||||
Reconciliation of NOI to Net Income | ||||||||||||||||||||||||||||
Total NOI | $ | 19,325 | $ | 67,091 | $ | 26,870 | $ | 32,591 | $ | 29,864 | $ | — | $ | 175,741 | ||||||||||||||
Other income | — | — | — | — | — | 1,875 | 1,875 | |||||||||||||||||||||
Other income from life insurance proceeds | — | — | — | — | — | 1,303 | 1,303 | |||||||||||||||||||||
Interest expense | (3,653 | ) | (3,023 | ) | (5,496 | ) | (1,360 | ) | (997 | ) | (47,377 | ) | (61,906 | ) | ||||||||||||||
Depreciation and amortization | (7,528 | ) | (29,759 | ) | (12,983 | ) | (7,252 | ) | (11,745 | ) | (508 | ) | (69,775 | ) | ||||||||||||||
General and administrative | — | — | — | — | — | (15,099 | ) | (15,099 | ) | |||||||||||||||||||
Discontinued Operations2 | — | 2,474 | — | — | 2,246 | — | 4,720 | |||||||||||||||||||||
Gain on Disposal | — | — | — | — | — | 25,022 | 25,022 | |||||||||||||||||||||
Net Income | $ | 8,144 | $ | 36,783 | $ | 8,391 | $ | 23,979 | $ | 19,368 | $ | (34,784 | ) | $ | 61,881 | |||||||||||||
1 | Non-core acquired and in development properties: |
2007 in development - Bennett Park, Clayborne Apartments and Dulles Station.
2007 acquisitions - 270 Technology Park, Monument II, 2440 M Street, Woodholme Medical Office Building, Woodholme Center, Ashburn Farm Office Park, CentreMed I & II and 2000 M Street.
2006 acquisitions - Hampton Overlook, Hampton South, Alexandria Professional Center, 9707 Medical Center Dr., 15001 Shady Grove Rd., Plumtree Medical Center, Randolph Shopping Center, Montrose Shopping Center, 9950 Business Parkway, 15005 Shady Grove Road, 6565 Arlington Blvd, West Gude Drive, The Ridges and The Crescent.
2 | Discontinued operations include: Sold Properties - Maryland Trade Center I and II, and Held For Sale Properties - Sullyfield Center and The Earhart Building. |
16
Core Portfolio Net Operating Income (NOI) Detail
(In thousands)
| Twelve Months Ended December 31, 2006 | ||||||||||||||||||||||||||||
| Multifamily | Office | Medical Office | Retail | Industrial | Corporate and Other | Total | ||||||||||||||||||||||
Real estate rental revenue | ||||||||||||||||||||||||||||
Core Portfolio | $ | 32,478 | $ | 75,236 | $ | 18,094 | $ | 35,194 | $ | 32,323 | $ | — | $ | 193,325 | ||||||||||||||
Non-core - acquired and in development1 | — | 4,455 | 6,566 | 2,069 | 2,326 | — | 15,416 | |||||||||||||||||||||
Total | 32,478 | 79,691 | 24,660 | 37,263 | 34,649 | — | 208,741 | |||||||||||||||||||||
Real estate expenses | ||||||||||||||||||||||||||||
Core Portfolio | 13,220 | 25,136 | 4,759 | 7,512 | 7,513 | — | 58,140 | |||||||||||||||||||||
Non-core - acquired and in development1 | — | 1,546 | 2,427 | 471 | 641 | — | 5,085 | |||||||||||||||||||||
Total | 13,220 | 26,682 | 7,186 | 7,983 | 8,154 | — | 63,225 | |||||||||||||||||||||
Net Operating Income (NOI) | ||||||||||||||||||||||||||||
Core Portfolio | 19,258 | 50,100 | 13,335 | 27,682 | 24,810 | — | 135,185 | |||||||||||||||||||||
Non-core - acquired and in development1 | — | 2,909 | 4,139 | 1,598 | 1,685 | — | 10,331 | |||||||||||||||||||||
Total | $ | 19,258 | $ | 53,009 | $ | 17,474 | $ | 29,280 | $ | 26,495 | $ | — | $ | 145,516 | ||||||||||||||
Core Portfolio NOI GAAP Basis (from above) | $ | 19,258 | $ | 50,100 | $ | 13,335 | $ | 27,682 | $ | 24,810 | $ | — | $ | 135,185 | ||||||||||||||
Straight-line revenue, net for core properties | (23 | ) | (685 | ) | (259 | ) | (552 | ) | (769 | ) | — | (2,288 | ) | |||||||||||||||
FAS 141 Min Rent | — | (176 | ) | 104 | (270 | ) | 375 | — | 33 | |||||||||||||||||||
Amortization of lease intangibles for core properties | — | 15 | — | 2 | 19 | — | 36 | |||||||||||||||||||||
Core portfolio NOI, Cash Basis | $ | 19,235 | $ | 49,254 | $ | 13,180 | $ | 26,862 | $ | 24,435 | $ | — | $ | 132,966 | ||||||||||||||
Reconciliation of NOI to Net Income | ||||||||||||||||||||||||||||
Total NOI | $ | 19,258 | $ | 53,009 | $ | 17,474 | $ | 29,280 | $ | 26,495 | $ | — | $ | 145,516 | ||||||||||||||
Other income | — | — | — | — | — | 906 | 906 | |||||||||||||||||||||
Other income from life insurance proceeds | — | — | — | — | — | — | — | |||||||||||||||||||||
Interest expense | (3,653 | ) | (1,083 | ) | (3,942 | ) | (1,378 | ) | (1,209 | ) | (36,000 | ) | (47,265 | ) | ||||||||||||||
Depreciation and amortization | (6,236 | ) | (21,154 | ) | (7,058 | ) | (6,231 | ) | (9,801 | ) | (435 | ) | (50,915 | ) | ||||||||||||||
General and administrative | — | — | — | — | — | (12,622 | ) | (12,622 | ) | |||||||||||||||||||
Discontinued Operations2 | — | 1,841 | — | — | 1,200 | — | 3,041 | |||||||||||||||||||||
Gain on Disposal | — | — | — | — | — | — | — | |||||||||||||||||||||
Net Income | $ | 9,369 | $ | 32,613 | $ | 6,474 | $ | 21,671 | $ | 16,685 | $ | (48,151 | ) | $ | 38,661 | |||||||||||||
1 | Non-core acquired and in development properties: |
2007 in development - Bennett Park, Clayborne Apartments and Dulles Station.
2006 acquisitions - Hampton Overlook, Hampton South, Alexandria Professional Center, 9707 Medical Center Dr., 15001 Shady Grove Rd., Plumtree Medical Center, Randolph Shopping Center, Montrose Shopping Center, 9950 Business Parkway, 15005 Shady Grove Road, 6565 Arlington Blvd, West Gude Drive, The Ridges and The Crescent.
2 | Discontinued operations include: Sold Properties - Maryland Trade Center I and II, and Held For Sale Properties - Sullyfield Center and The Earhart Building. |
17
Core Portfolio & Overall Economic Occupancy Levels by Sector
Q4 2007 vs. Q4 2006
| GAAP Basis | ||||||||||||
| Core Portfolio | All Properties | |||||||||||
Sector | 4th QTR 2007 | 4th QTR 2006 | 4th QTR 2007 | 4th QTR 2006 | ||||||||
Multifamily | 90.5 | % | 94.0 | % | 84.9 | % | 94.0 | % | ||||
Office Buildings | 95.3 | % | 92.2 | % | 95.6 | % | 92.4 | % | ||||
Medical Office Buildings | 97.9 | % | 98.5 | % | 97.8 | % | 98.5 | % | ||||
Retail Centers | 96.1 | % | 94.8 | % | 96.1 | % | 94.8 | % | ||||
Industrial / Flex Properties | 96.0 | % | 94.6 | % | 95.5 | % | 93.0 | % | ||||
Overall Portfolio | 95.1 | % | 94.0 | % | 94.3 | % | 93.8 | % | ||||
18
Commercial Leasing Summary
Three and Twelve months ended 12/31/07
| 4th Quarter 2007 | Year-To-Date | |||||||||||||||
Gross Leasing Square Footage | ||||||||||||||||
Office Buildings | 142,284 | 525,573 | ||||||||||||||
Medical Office Buildings | 42,238 | 103,231 | ||||||||||||||
Retail Centers | 36,317 | 223,865 | ||||||||||||||
Industrial Centers | 321,032 | 912,124 | ||||||||||||||
Total | 541,871 | 1,764,793 | ||||||||||||||
Weighted Average Term (yrs) | ||||||||||||||||
Office Buildings | 5.6 | 5.1 | ||||||||||||||
Medical Office Buildings | 7.7 | 6.7 | ||||||||||||||
Retail Centers | 7.7 | 6.7 | ||||||||||||||
Industrial Centers | 5.0 | 4.3 | ||||||||||||||
Total | 5.5 | 5.0 | ||||||||||||||
| GAAP | CASH | GAAP | CASH | |||||||||||||
Rental Rate Increases: | ||||||||||||||||
Rate on expiring leases | ||||||||||||||||
Office Buildings | $ | 28.52 | $ | 30.14 | $ | 25.08 | $ | 26.19 | ||||||||
Medical Office Buildings | 26.91 | 27.37 | 28.23 | 28.66 | ||||||||||||
Retail Centers | 20.14 | 20.36 | 18.67 | 19.15 | ||||||||||||
Industrial Centers | 8.88 | 9.09 | 9.10 | 9.36 | ||||||||||||
Total | $ | 16.20 | $ | 16.80 | $ | 16.19 | $ | 16.74 | ||||||||
Rate on new and renewal leases | ||||||||||||||||
Office Buildings | $ | 31.82 | $ | 29.68 | $ | 28.10 | $ | 26.37 | ||||||||
Medical Office Buildings | 33.79 | 30.30 | 33.82 | 30.88 | ||||||||||||
Retail Centers | 27.65 | 25.30 | 24.78 | 22.88 | ||||||||||||
Industrial Centers | 10.27 | 9.76 | 10.64 | 10.15 | ||||||||||||
Total | $ | 18.93 | $ | 17.64 | $ | 18.99 | $ | 17.81 | ||||||||
Percentage Increase | ||||||||||||||||
Office Buildings | 11.56 | % | -1.52 | % | 12.06 | % | 0.70 | % | ||||||||
Medical Office Buildings | 25.54 | % | 10.69 | % | 19.82 | % | 7.75 | % | ||||||||
Retail Centers | 37.28 | % | 24.30 | % | 32.73 | % | 19.45 | % | ||||||||
Industrial Centers | 15.67 | % | 7.35 | % | 16.95 | % | 8.39 | % | ||||||||
Total | 16.85 | % | 4.97 | % | 17.30 | % | 6.35 | % | ||||||||
19
Commercial Leasing Summary
Continued from previous page
Three and Twelve months ended 12/31/07
| 4th Quarter 2007 | Year-To-Date | |||||||||||
| Total Dollars | Dollars per Square Foot | Total Dollars | Dollars per Square Foot | |||||||||
Tenant Improvements | ||||||||||||
Office Buildings | $ | 1,753,560 | $ | 12.32 | $ | 7,419,511 | $ | 14.12 | ||||
Medical Office Buildings | 862,559 | 20.42 | 1,440,176 | 13.95 | ||||||||
Retail Centers | 119,404 | 3.29 | 414,279 | 1.85 | ||||||||
Industrial Centers | 683,742 | 2.13 | 2,416,238 | 2.65 | ||||||||
Subtotal | $ | 3,419,265 | $ | 6.31 | $ | 11,690,204 | $ | 6.62 | ||||
| Total Dollars | Dollars per Square Foot | Total Dollars | Dollars per Square Foot | |||||||||
Leasing Costs | ||||||||||||
Office Buildings | $ | 889,814 | $ | 6.25 | $ | 3,968,631 | $ | 7.55 | ||||
Medical Office Buildings | 233,074 | 5.52 | 446,499 | 4.33 | ||||||||
Retail Centers | 488,430 | 13.45 | 1,658,354 | 7.41 | ||||||||
Industrial Centers | 622,810 | 1.94 | 1,745,298 | 1.91 | ||||||||
Subtotal | $ | 2,234,128 | $ | 4.12 | $ | 7,818,782 | $ | 4.43 | ||||
| Total Dollars | Dollars per Square Foot | Total Dollars | Dollars per Square Foot | |||||||||
Tenant Improvements and Leasing Costs | ||||||||||||
Office Buildings | $ | 2,643,375 | $ | 18.58 | $ | 11,388,141 | $ | 21.67 | ||||
Medical Office Buildings | 1,095,632 | 25.94 | 1,886,675 | 18.28 | ||||||||
Retail Centers | 607,834 | 16.74 | 2,072,633 | 9.26 | ||||||||
Industrial Centers | 1,306,553 | 4.07 | 4,161,536 | 4.56 | ||||||||
Total | $ | 5,653,394 | $ | 10.43 | $ | 19,508,985 | $ | 11.05 | ||||
20
10 Largest Tenants - Based on Annualized Rent
December 31, 2007
Tenant | Number of Buildings | Weighted Average Remaining Lease Term in Months | Percentage of Aggregate Portfolio Annualized Rent | Aggregate Rentable Square Feet | Percentage of Aggregate Occupied Square Feet | |||||||
World Bank | 1 | 29 | 4.29 | % | 210,354 | 2.08 | % | |||||
Sunrise Assisted Living, Inc. | 1 | 69 | 2.51 | % | 184,202 | 1.82 | % | |||||
General Services Administration | 8 | 26 | 2.03 | % | 256,038 | 2.53 | % | |||||
INOVA Health System Hospital | 6 | 35 | 1.50 | % | 93,038 | 0.92 | % | |||||
URS Corporation | 1 | 72 | 1.35 | % | 97,208 | 0.96 | % | |||||
Lafarge North America, Inc | 1 | 31 | 1.32 | % | 80,610 | 0.80 | % | |||||
George Washington University | 2 | 70 | 1.15 | % | 77,538 | 0.77 | % | |||||
Westat, Inc. | 2 | 33 | 0.90 | % | 83,549 | 0.83 | % | |||||
Sun Microsystems, Inc. | 1 | 48 | 0.89 | % | 65,443 | 0.65 | % | |||||
United Communications Group, L.P. | 1 | 5 | 0.87 | % | 63,441 | 0.63 | % | |||||
Total/Weighted Average | 41 | 16.83 | % | 1,211,421 | 11.99 | % | ||||||
21
Industry Diversification
December 31, 2007
Industry Classification (NAICS) | Annualized Base Rental Revenue | Percentage of Aggregate Annualized Rent | Aggregate Rentable Square Feet | Percentage of Aggregate Square Feet | ||||||||
Professional, Scientific and Technical Services | $ | 46,187,031 | 22.42 | % | 2,029,821 | 20.09 | % | |||||
Ambulatory Health Care Services | 38,640,748 | 18.75 | % | 1,327,712 | 13.14 | % | ||||||
Credit Intermediation and related Activities | 15,438,787 | 7.49 | % | 432,934 | 4.29 | % | ||||||
Executive, Legislative & Other General Government | 8,277,610 | 4.02 | % | 417,510 | 4.13 | % | ||||||
Religious, Grantmaking, Civic, Professional | 6,785,790 | 3.29 | % | 217,141 | 2.15 | % | ||||||
Nursing and Residential Care Facilities | 5,701,069 | 2.77 | % | 209,671 | 2.08 | % | ||||||
Food Services and Drinking Places | 5,576,454 | 2.71 | % | 223,365 | 2.21 | % | ||||||
Educational Services | 4,723,177 | 2.29 | % | 191,509 | 1.90 | % | ||||||
Administrative and Support Services | 4,272,490 | 2.07 | % | 265,740 | 2.63 | % | ||||||
Food and Beverage Stores | 4,094,729 | 1.99 | % | 256,822 | 2.54 | % | ||||||
Furniture and Home Furnishing Stores | 3,968,241 | 1.93 | % | 253,143 | 2.51 | % | ||||||
Specialty Trade Contractors | 3,778,161 | 1.83 | % | 440,327 | 4.36 | % | ||||||
Miscellaneous Store Retailers | 3,539,707 | 1.72 | % | 262,627 | 2.60 | % | ||||||
Nonmetallic Mineral Product Manufacturing | 3,082,484 | 1.50 | % | 119,474 | 1.18 | % | ||||||
Broadcasting (except Internet) | 2,955,565 | 1.43 | % | 87,939 | 0.87 | % | ||||||
Merchant Wholesalers-Durable Goods | 2,846,074 | 1.38 | % | 337,834 | 3.34 | % | ||||||
Personal and Laundry Services | 2,617,552 | 1.27 | % | 120,665 | 1.19 | % | ||||||
Real Estate | 2,602,563 | 1.26 | % | 114,649 | 1.13 | % | ||||||
Publishing Industries (except Internet) | 2,495,855 | 1.21 | % | 91,703 | 0.91 | % | ||||||
Clothing & Clothing Accessories Stores | 2,382,267 | 1.16 | % | 148,410 | 1.47 | % | ||||||
Health & Personal Care Stores | 2,304,260 | 1.12 | % | 80,881 | 0.80 | % | ||||||
Computer & Electronic Product Manufacturing | 2,134,982 | 1.04 | % | 189,832 | 1.88 | % | ||||||
Amusement, Gambling and Recreation Industries | 2,041,330 | 0.99 | % | 152,672 | 1.51 | % | ||||||
Merchant Wholesalers-Non Durable Goods | 1,906,493 | 0.93 | % | 206,277 | 2.04 | % | ||||||
Transportation Equipment Manufacturing | 1,864,227 | 0.90 | % | 104,133 | 1.03 | % | ||||||
Sporting Goods/Books/Hobby/Music Stores | 1,816,045 | 0.88 | % | 136,925 | 1.36 | % | ||||||
Construction of Buildings | 1,649,911 | 0.80 | % | 111,142 | 1.10 | % | ||||||
General Merchandise Stores | 1,604,484 | 0.78 | % | 249,651 | 2.47 | % | ||||||
Insurance Carriers and Related Activities | 1,554,735 | 0.75 | % | 80,206 | 0.79 | % | ||||||
Electronics/Appliance Stores | 1,130,742 | 0.55 | % | 90,414 | 0.89 | % | ||||||
Other | 18,060,998 | 8.77 | % | 1,151,117 | 11.41 | % | ||||||
Total | $ | 206,034,561 | 100.00 | % | $ | 10,102,246 | 100.00 | % | ||||
22
Lease Expirations
December 31, 2007
Year | Number of Leases | Rentable Square Feet | Percent of Rentable Square Feet | Annualized Rent * | Average Rental Rate | Percent of Annualized Rent * | ||||||||||
Office: | ||||||||||||||||
2008 | 82 | 354,845 | 10.09 | % | $ | 10,679,158 | $ | 30.10 | 10.56 | % | ||||||
2009 | 109 | 532,810 | 15.15 | % | 14,815,336 | 27.81 | 14.65 | % | ||||||||
2010 | 105 | 853,132 | 24.26 | % | 25,249,685 | 29.60 | 24.97 | % | ||||||||
2011 | 83 | 519,593 | 14.77 | % | 15,909,965 | 30.62 | 15.73 | % | ||||||||
2012 | 48 | 299,977 | 8.53 | % | 8,353,739 | 27.85 | 8.26 | % | ||||||||
2013 and thereafter | 82 | 956,787 | 27.20 | % | 26,112,782 | 27.29 | 25.83 | % | ||||||||
| 509 | 3,517,144 | 100.00 | % | $ | 101,120,665 | $ | 28.75 | 100.00 | % | |||||||
Medical Office: | ||||||||||||||||
2008 | 48 | 116,095 | 9.74 | % | $ | 3,616,502 | $ | 31.15 | 9.80 | % | ||||||
2009 | 44 | 128,199 | 10.75 | % | 3,836,518 | 29.93 | 10.39 | % | ||||||||
2010 | 50 | 179,651 | 15.06 | % | 5,724,862 | 31.87 | 15.51 | % | ||||||||
2011 | 59 | 227,545 | 19.08 | % | 7,090,672 | 31.16 | 19.21 | % | ||||||||
2012 | 41 | 143,878 | 12.07 | % | 4,682,923 | 32.55 | 12.69 | % | ||||||||
2013 and thereafter | 93 | 397,236 | 33.30 | % | 11,960,835 | 30.11 | 32.40 | % | ||||||||
| 335 | 1,192,604 | 100.00 | % | $ | 36,912,312 | $ | 30.95 | 100.00 | % | |||||||
Retail: | ||||||||||||||||
2008 | 45 | 213,062 | 11.40 | % | $ | 2,321,635 | $ | 10.90 | 7.31 | % | ||||||
2009 | 43 | 148,265 | 7.93 | % | 3,161,216 | 21.32 | 9.95 | % | ||||||||
2010 | 53 | 309,244 | 16.54 | % | 5,414,889 | 17.51 | 17.05 | % | ||||||||
2011 | 26 | 152,355 | 8.15 | % | 2,702,879 | 17.74 | 8.51 | % | ||||||||
2012 | 36 | 162,192 | 8.67 | % | 3,070,959 | 18.93 | 9.67 | % | ||||||||
2013 and thereafter | 87 | 884,615 | 47.31 | % | 15,096,099 | 17.07 | 47.51 | % | ||||||||
| 290 | 1,869,733 | 100.00 | % | $ | 31,767,677 | $ | 16.99 | 100.00 | % | |||||||
Industrial: | ||||||||||||||||
2008 | 70 | 641,351 | 18.21 | % | $ | 6,912,746 | $ | 10.78 | 19.08 | % | ||||||
2009 | 57 | 648,711 | 18.41 | % | 6,537,736 | 10.08 | 18.04 | % | ||||||||
2010 | 56 | 368,127 | 10.45 | % | 4,048,084 | 11.00 | 11.17 | % | ||||||||
2011 | 36 | 439,152 | 12.47 | % | 3,646,644 | 8.30 | 10.07 | % | ||||||||
2012 | 27 | 471,241 | 13.38 | % | 4,965,638 | 10.54 | 13.71 | % | ||||||||
2013 and thereafter | 44 | 954,183 | 27.08 | % | 10,123,059 | 10.61 | 27.93 | % | ||||||||
| 290 | 3,522,765 | 100.00 | % | $ | 36,233,907 | $ | 10.29 | 100.00 | % | |||||||
Total: | ||||||||||||||||
2008 | 245 | 1,325,353 | 13.12 | % | $ | 23,530,041 | $ | 17.75 | 11.42 | % | ||||||
2009 | 253 | 1,457,985 | 14.43 | % | 28,350,806 | 19.45 | 13.76 | % | ||||||||
2010 | 264 | 1,710,154 | 16.93 | % | 40,437,520 | 23.65 | 19.63 | % | ||||||||
2011 | 204 | 1,338,645 | 13.25 | % | 29,350,160 | 21.93 | 14.25 | % | ||||||||
2012 | 152 | 1,077,288 | 10.66 | % | 21,073,259 | 19.56 | 10.23 | % | ||||||||
2013 and thereafter | 306 | 3,192,821 | 31.61 | % | 63,292,775 | 19.82 | 30.71 | % | ||||||||
| 1,424 | 10,102,246 | 100.00 | % | $ | 206,034,561 | $ | 20.39 | 100.00 | % | |||||||
| * | Annualized Rent is as of December 31, 2007 rental revenue (cash basis) multiplied by 12. |
23
2007 Acquisition and Disposition Summary
as of December 31, 2007
($’s in thousands)
| Acquisition Summary | ||||||||||||||||
Acquisition Date | Square Feet | Leased Percentage at Acquisition | December 31, 2007 Leased Percentage | Investment | ||||||||||||
270 Technology Park | Frederick, MD | February 8, 2007 | 157,000 | 97 | % | 87 | % | $ | 26,500 | |||||||
Monument II | Herndon, VA | March 1, 2007 | 205,000 | 100 | % | 97 | % | 78,200 | ||||||||
2440 M Street | Washington, DC | March 9, 2007 | 110,000 | 96 | % | 95 | % | 50,000 | ||||||||
Woodholme Medical Office Building | Pikesville, MD | June 1, 2007 | 125,000 | 97 | % | 97 | % | 30,800 | ||||||||
Woodholme Center | Pikesville, MD | June 1, 2007 | 73,000 | 95 | % | 95 | % | 18,200 | ||||||||
Ashburn Farm Office Park | Ashburn, VA | June 1, 2007 | 75,000 | 100 | % | 100 | % | 23,000 | ||||||||
CentreMed I & II | Centreville, VA | August 16, 2007 | 52,000 | 100 | % | 100 | % | 15,300 | ||||||||
4661 Kenmore Ave | Alexandria, VA | August 30, 2007 | land for development | NA | NA | 3,750 | ||||||||||
2000 M Street | Washington, DC | December 4, 2007 | 227,000 | 100 | % | 100 | % | 73,500 | ||||||||
Total | 1,024,000 | $ | 319,250 | |||||||||||||
| Disposition Summary | ||||||||||||||||
Disposition Date | Property Type | Square Feet | Sale Price | GAAP Gain | ||||||||||||
Maryland Trade Center I & II | Greenbelt, MD | September 26, 2007 | Office | 350,000 | $ | 57,950 | $ | 25,022 | ||||||||
24
2007 Development Summary
as of December 31, 2007
($’s in thousands)
Property and Location | Total Rentable Square Feet or # of Units | Percentage Leased or Committed | Anticipated Total Cash Cost | Cash Cost to Date | Anticipated Construction Completion Date | ||||||||||
Development | |||||||||||||||
Bennett Park | $ | 83,200 | 1 | $ | 74,868 | ||||||||||
Arlington, VA | |||||||||||||||
(High Rise) | 178 units, 1,400 sq ft. retail & 498 parking spaces underground (includes parking for existing office) | 16 | % | Complete | |||||||||||
(Mid Rise) | 46 units, 4,400 sq ft. retail | 72 | % | Complete | |||||||||||
The Clayborne Apartments | 74 units & 2,700 sq ft. retail | 0 | % | $ | 36,300 | 1,3 | $ | 33,025 | 3 | 1Q 08 | |||||
Alexandria, VA | |||||||||||||||
Dulles Station Phase I | 180,000 sq ft office | 0 | % | $ | 52,000 | 1 | $ | 43,024 | Complete | ||||||
Phase II | 360,000 sq ft office | TBD | $ | 24,427 | 2 | TBD | |||||||||
Herndon, VA | |||||||||||||||
| Total | $ | 171,500 | $ | 175,344 | |||||||||||
1 | Includes land cost. |
2 | Dulles Station Phase II cost includes land allocation of $16.1M and allocation of the parking garage structure of 7.2M. |
3 | Includes approximately $6.2M of construction costs for the garage to benefit our 800 South Washington Street shopping center. |
25
Schedule of Properties
December 31, 2007
PROPERTIES | LOCATION | YEAR ACQUIRED | YEAR CONSTRUCTED | NET RENTABLE SQUARE FEET* | ||||
Office Buildings | ||||||||
1901 Pennsylvania Avenue | Washington, DC | 1977 | 1960 | 97,000 | ||||
51 Monroe Street | Rockville, MD | 1979 | 1975 | 210,000 | ||||
515 King Street | Alexandria, VA | 1992 | 1966 | 76,000 | ||||
The Lexington Building | Rockville, MD | 1993 | 1970 | 46,000 | ||||
The Saratoga Building | Rockville, MD | 1993 | 1977 | 58,000 | ||||
Brandywine Center | Rockville, MD | 1993 | 1969 | 35,000 | ||||
6110 Executive Boulevard | Rockville, MD | 1995 | 1971 | 198,000 | ||||
1220 19th Street | Washington, DC | 1995 | 1976 | 102,000 | ||||
1600 Wilson Boulevard | Arlington, VA | 1997 | 1973 | 166,000 | ||||
7900 Westpark Drive | McLean, VA | 1997 | 1972/1986/19991 | 523,000 | ||||
600 Jefferson Plaza | Rockville, MD | 1999 | 1985 | 112,000 | ||||
1700 Research Boulevard | Rockville, MD | 1999 | 1982 | 101,000 | ||||
Parklawn Plaza | Rockville, MD | 1999 | 1986 | 40,000 | ||||
Wayne Plaza | Silver Spring, MD | 2000 | 1970 | 91,000 | ||||
Courthouse Square | Alexandria, VA | 2000 | 1979 | 113,000 | ||||
One Central Plaza | Rockville, MD | 2001 | 1974 | 267,000 | ||||
The Atrium Building | Rockville, MD | 2002 | 1980 | 80,000 | ||||
1776 G Street | Washington, DC | 2003 | 1979 | 263,000 | ||||
Albemarle Point | Chantilly, VA | 2005 | 2001 | 89,000 | ||||
6565 Arlington Blvd | Falls Church, VA | 2006 | 1967/1998 | 140,000 | ||||
West Gude Drive | Rockville, MD | 2006 | 1984/1986/1988 | 289,000 | ||||
The Ridges | Gaithersburg, MD | 2006 | 1990 | 104,000 | ||||
Monument II | Herndon, VA | 2007 | 2000 | 205,000 | ||||
Woodholme Center | Pikesville, MD | 2007 | 1989 | 73,000 | ||||
2000 M Street | Washington, DC | 2007 | 1971 | 227,000 | ||||
Subtotal | 3,705,000 | |||||||
Medical Office Buildings | ||||||||
Woodburn Medical Park I | Annandale, VA | 1998 | 1984 | 71,000 | ||||
Woodburn Medical Park II | Annandale, VA | 1998 | 1988 | 96,000 | ||||
Prosperity Medical Center I | Merrifield, VA | 2003 | 2000 | 92,000 | ||||
Prosperity Medical Center II | Merrifield, VA | 2003 | 2001 | 88,000 | ||||
Prosperity Medical Center III | Merrifield, VA | 2003 | 2002 | 75,000 | ||||
Shady Grove Medical Village II | Rockville, MD | 2004 | 1999 | 66,000 | ||||
8301 Arlington Boulevard | Fairfax, VA | 2004 | 1965 | 49,000 | ||||
Alexandria Professional Center | Alexandria, VA | 2006 | 1968 | 113,000 | ||||
9707 Medical Center Drive | Rockville, MD | 2006 | 1994 | 38,000 | ||||
15001 Shady Grove Road | Rockville, MD | 2006 | 1999 | 51,000 | ||||
Plumtree Medical Center | Bel Air, MD | 2006 | 1991 | 33,000 | ||||
15005 Shady Grove Road | Rockville, MD | 2006 | 2002 | 52,000 | ||||
The Crescent | Gaithersburg, MD | 2006 | 1989 | 49,000 | ||||
2440 M Street | Washington, DC | 2007 | 1986/2006 | 110,000 | ||||
Woodholme Medical Office Building | Pikesville, MD | 2007 | 1996 | 125,000 | ||||
Ashburn Office Park | Ashburn, VA | 2007 | 1998/2000/2002 | 75,000 | ||||
CentreMed I & II | Centreville, VA | 2007 | 1998 | 52,000 | ||||
Subtotal | 1,235,000 | |||||||
Retail Centers | ||||||||
Takoma Park | Takoma Park, MD | 1963 | 1962 | 51,000 | ||||
Westminster | Westminster, MD | 1972 | 1969 | 151,000 | ||||
Concord Centre | Springfield, VA | 1973 | 1960 | 76,000 | ||||
Wheaton Park | Wheaton, MD | 1977 | 1967 | 72,000 | ||||
Bradlee | Alexandria, VA | 1984 | 1955 | 168,000 | ||||
Chevy Chase Metro Plaza | Washington, DC | 1985 | 1975 | 49,000 | ||||
Montgomery Village Center | Gaithersburg, MD | 1992 | 1969 | 198,000 | ||||
Shoppes of Foxchase2 | Alexandria, VA | 1994 | 1960 | 134,000 | ||||
Frederick County Square | Frederick, MD | 1995 | 1973 | 227,000 | ||||
800 S. Washington Street3 | Alexandria, VA | 1998/2003 | 1955/1959 | 44,000 | ||||
Centre at Hagerstown | Hagerstown, MD | 2002 | 2000 | 332,000 | ||||
Frederick Crossing | Frederick, MD | 2005 | 1999/2003 | 295,000 | ||||
Randolph Shopping Center | Rockville, MD | 2006 | 1972 | 82,000 | ||||
Montrose Shopping Center | Rockville, MD | 2006 | 1970 | 143,000 | ||||
Subtotal | 2,022,000 | |||||||
1 | A 49,000 square foot addition to 7900 Westpark Drive was completed in September 1999. |
2 | Development on approximately 60,000 square feet of the center was completed in December 2006. |
3 | South Washington Street includes 718 Jefferson Street, acquired in May 2003 to complete the ownership of the entire block of 800 S. Washington Street. See Development Summary on page 25. |
26
Schedule of Properties (Cont.)
December 31, 2007
PROPERTIES | LOCATION | YEAR ACQUIRED | YEAR CONSTRUCTED | NET RENTABLE SQUARE FEET* | ||||
Multifamily Buildings * / # units | ||||||||
3801 Connecticut Avenue / 307 | Washington, DC | 1963 | 1951 | 179,000 | ||||
Roosevelt Towers / 191 | Falls Church, VA | 1965 | 1964 | 170,000 | ||||
Country Club Towers / 227 | Arlington, VA | 1969 | 1965 | 163,000 | ||||
Park Adams / 200 | Arlington, VA | 1969 | 1959 | 173,000 | ||||
Munson Hill Towers / 279 | Falls Church, VA | 1970 | 1963 | 259,000 | ||||
The Ashby at McLean / 253 | McLean, VA | 1996 | 1982 | 252,000 | ||||
Walker House Apartments / 212 | Gaithersburg, MD | 1996 | 1971/20034 | 159,000 | ||||
Bethesda Hill Apartments / 195 | Bethesda, MD | 1997 | 1986 | 226,000 | ||||
Avondale / 237 | Laurel, MD | 1999 | 1987 | 170,000 | ||||
Bennett Park / 211 | Arlington, VA | 2007 | 2007 | 268,000 | ||||
Subtotal (2,312 units) | 2,019,000 | |||||||
Industrial Distribution / Flex Properties | ||||||||
Fullerton Business Center | Springfield, VA | 1985 | 1980 | 104,000 | ||||
Charleston Business Center | Rockville, MD | 1993 | 1973 | 85,000 | ||||
Tech 100 Industrial Park | Elkridge, MD | 1995 | 1990 | 166,000 | ||||
Crossroads Distribution Center | Elkridge, MD | 1995 | 1987 | 85,000 | ||||
The Alban Business Center | Springfield, VA | 1996 | 1981/1982 | 87,000 | ||||
The Earhart Building | Chantilly, VA | 1996 | 1987 | 92,000 | ||||
Ammendale Technology Park I | Beltsville, MD | 1997 | 1985 | 167,000 | ||||
Ammendale Technology Park II | Beltsville, MD | 1997 | 1986 | 107,000 | ||||
Pickett Industrial Park | Alexandria, VA | 1997 | 1973 | 246,000 | ||||
Northern Virginia Industrial Park | Lorton, VA | 1998 | 1968/1991 | 787,000 | ||||
8900 Telegraph Road | Lorton, VA | 1998 | 1985 | 32,000 | ||||
Dulles South IV | Chantilly, VA | 1999 | 1988 | 83,000 | ||||
Sully Square | Chantilly, VA | 1999 | 1986 | 95,000 | ||||
Amvax | Beltsville, MD | 1999 | 1986 | 31,000 | ||||
Sullyfield Center | Chantilly, VA | 2001 | 1985 | 244,000 | ||||
Fullerton Industrial Center | Springfield, VA | 2003 | 1980 | 137,000 | ||||
8880 Gorman Road | Laurel, MD | 2004 | 2000 | 141,000 | ||||
Dulles Business Park Portfolio | Chantilly, VA | 2004/2005 | 1999-2005 | 324,000 | ||||
Albemarle Point | Chantilly, VA | 2005 | 2001/2003/2005 | 207,000 | ||||
Hampton Overlook | Capital Heights, MD | 2006 | 1989 | 134,000 | ||||
Hampton South | Capital Heights, MD | 2006 | 1989/2005 | 168,000 | ||||
9950 Business Parkway | Lanham, MD | 2006 | 2005 | 102,000 | ||||
270 Technology Park | Frederick, MD | 2007 | 1986-1987 | 157,000 | ||||
Subtotal | 3,781,000 | |||||||
TOTAL | 12,762,000 | |||||||
| * | Multifamily buildings are presented in gross square feet. |
4 | A 16 unit addition referred to as The Gardens at Walker House was completed in October 2003. |
27
Supplemental Definitions
December 31, 2007
Annualized base rent (ABR) is calculated as monthly base rent (cash basis) per the lease, as of the reporting period, multiplied by 12.
Debt to total market capitalization is total debt from the balance sheet divided by the sum of total debt from the balance sheet plus the market value of shares outstanding at the end of the period.
EBITDA(a non-GAAP measure) is earnings before interest, taxes, depreciation and amortization.
Ratio of earnings to fixed charges is computed by dividing earnings by fixed charges. For this purpose, earnings consist of income from continuing operations (or net income if there are no discontinued operations) plus fixed charges, less capitalized interest. Fixed charges consist of interest expense, including amortized costs of debt issuance, plus interest costs capitalized.
Debt service coverage ratiois computed by dividing earnings before interest income and expense, depreciation, amortization and gain on sale of real estate by interest expense and principal amortization.
Funds from operations (FFO) - The National Association of Real Estate Investment Trusts, Inc. (NAREIT) defines FFO (April, 2002 White Paper) as net income (computed in accordance with generally accepted accounting principles (GAAP)) excluding gains (or losses) from sales of property plus real estate depreciation and amortization. FFO is a non-GAAP measure.
Funds Available for Distribution (FAD), a non-GAAP measure, is calculated by subtracting from FFO recurring expenditures, tenant improvements and leasing costs, that are capitalized and amortized and are necessary to maintain our properties and revenue stream and straight line rents, then adding non-real estate depreciation and amortization and adding or subtracting amortization of lease intangibles, as appropriate.
Recurring capital expenditures represents non-accretive building improvements and leasing costs required to maintain current revenues. Recurring capital expenditures do not include acquisition capital that was taken into consideration when underwriting the purchase of a building or which are incurred to bring a building up to “operating standard.”
Rent increases on renewals and rollovers are calculated as the difference, weighted by square feet, of the net ABR due the first month after a term commencement date and the net ABR due the last month prior to the termination date of the former tenant’s term.
Core portfolio properties include all properties that were owned for the entirety of the current and prior year reporting periods.
Core portfolio net operating income (NOI) growthis the change in the NOI of the core portfolio properties from the prior reporting period to the current reporting period.
28