Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Jun. 30, 2014 | Aug. 05, 2014 | |
Document and Entity Information | ' | ' |
Entity Registrant Name | 'Government Properties Income Trust | ' |
Entity Central Index Key | '0001456772 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Jun-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 70,279,206 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Real estate properties: | ' | ' |
Land | $258,330 | $243,686 |
Buildings and improvements | 1,439,466 | 1,324,876 |
Total real estate properties, at cost, gross | 1,697,796 | 1,568,562 |
Accumulated depreciation | -205,660 | -187,635 |
Total real estate properties, at cost, net | 1,492,136 | 1,380,927 |
Assets of discontinued operations | 23,570 | 25,997 |
Acquired real estate leases, net | 163,831 | 142,266 |
Cash and cash equivalents | 5,035 | 7,663 |
Restricted cash | 2,501 | 1,689 |
Rents receivable, net | 34,656 | 33,350 |
Deferred leasing costs, net | 11,656 | 11,618 |
Deferred financing costs, net | 3,618 | 3,911 |
Other assets, net | 14,602 | 25,031 |
Total assets | 1,751,605 | 1,632,452 |
LIABILITIES AND SHAREHOLDERS' EQUITY | ' | ' |
Unsecured revolving credit facility | 195,500 | 157,000 |
Unsecured term loan | 350,000 | 350,000 |
Mortgage notes payable | 189,959 | 90,727 |
Liabilities of discontinued operations | 262 | 276 |
Accounts payable and accrued expenses | 22,175 | 23,216 |
Due to related persons | 2,734 | 2,474 |
Assumed real estate lease obligations, net | 17,752 | 19,084 |
Total liabilities | 778,382 | 642,777 |
Commitments and contingencies | ' | ' |
Shareholders' equity: | ' | ' |
Common shares of beneficial interest, $.01 par value: 70,000,000 shares authorized, 54,750,836 and 54,722,018 shares issued and outstanding, respectively | 548 | 547 |
Additional paid in capital | 1,106,452 | 1,105,679 |
Cumulative net income | 221,711 | 191,913 |
Cumulative other comprehensive income | 90 | 49 |
Cumulative common distributions | -355,578 | -308,513 |
Total shareholders' equity | 973,223 | 989,675 |
Total liabilities and shareholders' equity | $1,751,605 | $1,632,452 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ' | ' |
Common shares of beneficial interest, par value (in dollars per share) | $0.01 | $0.01 |
Common shares of beneficial interest, shares authorized | 70,000,000 | 70,000,000 |
Common shares of beneficial interest, shares issued | 54,750,836 | 54,722,018 |
Common shares of beneficial interest, shares outstanding | 54,750,836 | 54,722,018 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME | ' | ' | ' | ' |
Rental income | $62,428 | $55,934 | $122,248 | $112,238 |
Expenses: | ' | ' | ' | ' |
Real estate taxes | 7,166 | 6,484 | 13,978 | 12,805 |
Utility expenses | 4,049 | 3,860 | 9,745 | 7,709 |
Other operating expenses | 10,860 | 9,798 | 21,901 | 19,119 |
Depreciation and amortization | 16,191 | 13,603 | 31,618 | 26,929 |
Acquisition related costs | 671 | 105 | 1,180 | 139 |
General and administrative | 4,111 | 3,229 | 7,208 | 6,408 |
Total expenses | 43,048 | 37,079 | 85,630 | 73,109 |
Operating income | 19,380 | 18,855 | 36,618 | 39,129 |
Interest and other income | 8 | 4 | 58 | 10 |
Interest expense (including net amortization of debt premiums and deferred financing fees of $223, $332, $553 and $663, respectively) | -5,158 | -4,065 | -9,685 | -8,212 |
Income from continuing operations before income tax expense, and equity in earnings of an investee | 14,230 | 14,794 | 26,991 | 30,927 |
Income tax expense | -101 | -43 | -123 | -86 |
Equity in earnings of an investee | 118 | 79 | 21 | 155 |
Income from continuing operations | 14,247 | 14,830 | 26,889 | 30,996 |
Income from discontinued operations | 361 | 374 | 2,909 | 8,934 |
Net income | 14,608 | 15,204 | 29,798 | 39,930 |
Other comprehensive income (loss): | ' | ' | ' | ' |
Equity in unrealized gain (loss) of an investee | 22 | -73 | 41 | -81 |
Other comprehensive income (loss) | 22 | -73 | 41 | -81 |
Comprehensive income | $14,630 | $15,131 | $29,839 | $39,849 |
Weighted average common shares outstanding (in shares) | 54,743 | 54,669 | 54,734 | 54,657 |
Per common share amounts: | ' | ' | ' | ' |
Income from continuing operations (in dollars per share) | $0.26 | $0.27 | $0.49 | $0.57 |
Income from discontinued operations (in dollars per share) | $0.01 | $0.01 | $0.05 | $0.16 |
Net income (in dollars per share) | $0.27 | $0.28 | $0.54 | $0.73 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Parenthetical) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME | ' | ' | ' | ' |
Amortization of debt premiums and deferred financing fees | $223 | $332 | $553 | $663 |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' |
Net income | $29,798 | $39,930 |
Adjustments to reconcile net income to cash provided by operating activities: | ' | ' |
Depreciation | 18,392 | 17,273 |
Net amortization of debt premium and deferred financing fees | 553 | 663 |
Straight line rental income | -2,209 | -1,654 |
Amortization of acquired real estate leases | 12,702 | 10,413 |
Amortization of deferred leasing costs | 964 | 590 |
Other non-cash expenses | 1,008 | 1,046 |
Increase in carrying value of assets held for sale | -2,344 | ' |
Net gain on sale of properties | ' | -8,168 |
Equity in earnings of an investee | -21 | -155 |
Change in assets and liabilities: | ' | ' |
Restricted cash | -812 | -183 |
Deferred leasing costs | -1,690 | -2,075 |
Rents receivable | 1,008 | -59 |
Other assets | 2,016 | 1,258 |
Accounts payable and accrued expenses | 1,341 | 397 |
Due to related persons | 174 | -787 |
Cash provided by operating activities | 60,880 | 58,489 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' |
Real estate acquisitions and deposits | -47,359 | ' |
Real estate improvements | -9,704 | -6,542 |
Investment in Affiliates Insurance Company | -825 | ' |
Proceeds from sale of properties, net | 4,644 | 18,374 |
Cash (used in) provided by investing activities | -53,244 | 11,832 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Repayment of mortgage notes payable | -1,072 | -955 |
Borrowings on unsecured revolving credit facility | 85,500 | 46,500 |
Repayments on unsecured revolving credit facility | -47,000 | -71,000 |
Financing fees | -627 | ' |
Distributions to common shareholders | -47,065 | -47,002 |
Cash used in financing activities | -10,264 | -72,457 |
Decrease in cash and cash equivalents | -2,628 | -2,136 |
Cash and cash equivalents at beginning of period | 7,663 | 5,255 |
Cash and cash equivalents at end of period | 5,035 | 3,119 |
Supplemental cash flow information: | ' | ' |
Interest paid | 8,653 | 7,610 |
Income taxes paid | 87 | 128 |
Non-cash investing activities | ' | ' |
Real estate acquisition funded with the assumption of mortgage debt | -97,524 | ' |
Non-cash financing activities: | ' | ' |
Assumption of mortgage debt | $97,524 | ' |
Basis_of_Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2014 | |
Basis of Presentation | ' |
Basis of Presentation | ' |
Note 1. Basis of Presentation | |
The accompanying condensed consolidated financial statements of Government Properties Income Trust and its subsidiaries, or the Company, we or us, are unaudited. We operate in one business segment: ownership of properties that are primarily leased to government tenants. Certain information and disclosures required by U.S. generally accepted accounting principles, or GAAP, for complete financial statements have been condensed or omitted. We believe the disclosures made are adequate to make the information presented not misleading. However, the accompanying condensed consolidated financial statements should be read in conjunction with the financial statements and notes contained in our Annual Report on Form 10-K for the year ended December 31, 2013, or our Annual Report. In the opinion of our management, all adjustments, which include only normal recurring adjustments considered necessary for a fair presentation, have been included. All intercompany transactions and balances with or among our consolidated subsidiaries have been eliminated. Our operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. | |
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect reported amounts. Actual results could differ from those estimates. Significant estimates in the condensed consolidated financial statements include purchase price allocations, useful lives of fixed assets and impairment of real estate and intangible assets. |
Recent_Accounting_Pronouncemen
Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2014 | |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements | ' |
Note 2. Recent Accounting Pronouncements | |
In April 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. This update amends the criteria for reporting discontinued operations to, among other things, raise the threshold for disposals to qualify as discontinued operations. This update is effective for interim and annual reporting periods, beginning after December 15, 2014, with early adoption permitted. We currently expect, that when adopted, this update will reduce the number of any future property dispositions we make to be presented as discontinued operations in our consolidated financial statements. | |
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which provides guidance for revenue recognition. This update is effective for interim and annual reporting periods beginning after December 15, 2016. We are currently in the process of evaluating the impact, if any, the adoption of this ASU will have on our consolidated financial statements. |
Real_Estate_Properties
Real Estate Properties | 6 Months Ended | ||||||||||||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||||||||||||
Real Estate Properties | ' | ||||||||||||||||||||||||||||||
Real Estate Properties | ' | ||||||||||||||||||||||||||||||
Note 3. Real Estate Properties | |||||||||||||||||||||||||||||||
As of June 30, 2014, we owned 71 properties (91 buildings), excluding two properties (two buildings) classified as discontinued operations, with an undepreciated carrying value of $1,697,796. We generally lease space in our properties on a gross lease or modified gross lease basis pursuant to fixed term operating leases expiring between 2014 and 2029. Certain of our government tenants have the right to terminate their leases before the lease term expires. Our leases generally require us to pay all or some property operating expenses and to provide all or most property management services. During the three months ended June 30, 2014, we entered into 17 leases for 204,326 rentable square feet for a weighted (by rentable square feet) average lease term of 5.1 years and we made commitments for approximately $5,336 of leasing related costs. During the six months ended June 30, 2014, we entered into 30 leases for 266,796 rentable square feet for a weighted (by rentable square feet) average lease term of 5.3 years and we made commitments for approximately $6,994 of leasing related costs. We have estimated unspent leasing related obligations of $16,654 as of June 30, 2014. | |||||||||||||||||||||||||||||||
Acquisition Activities | |||||||||||||||||||||||||||||||
During the six months ended June 30, 2014, we acquired three office properties (four buildings) for an aggregate purchase price of $154,525, including the assumption of $97,524 of mortgage debt and excluding acquisition costs. We allocated the purchase prices of these acquisitions based on the estimated fair values of the acquired assets and assumed liabilities as follows: | |||||||||||||||||||||||||||||||
Number | Premium | ||||||||||||||||||||||||||||||
of | Buildings | Acquired | Other | on | |||||||||||||||||||||||||||
Acquisition | Properties/ | Square | Purchase | and | Acquired | Lease | Assumed | Assumed | |||||||||||||||||||||||
Date | Location | Type | Buildings | Feet | Price(1) | Land(2) | Improvements(2) | Leases(2) | Obligations(2) | Liabilities | Debt | ||||||||||||||||||||
March 2014 | Fairfax, VA | Office | 1-Jan | 83,130 | $ | 19,775 | $ | 2,964 | $ | 12,840 | $ | 3,971 | $ | — | $ | (233 | ) | $ | — | ||||||||||||
May 2014 | Richmond, VA | Office | 1-Jan | 173,932 | 22,500 | 2,614 | 15,930 | 4,003 | (47 | ) | — | — | |||||||||||||||||||
May 2014 | Reston, VA | Office | 2-Jan | 406,388 | 112,250 | 9,066 | 78,658 | 28,071 | (398 | ) | (93 | ) | (3,147 | ) | |||||||||||||||||
4-Mar | 663,450 | $ | 154,525 | $ | 14,644 | $ | 107,428 | $ | 36,045 | $ | (445 | ) | $ | (326 | ) | $ | (3,147 | ) | |||||||||||||
(1) Purchase price excludes acquisition related costs. | |||||||||||||||||||||||||||||||
(2) The allocation of purchase price is based upon preliminary estimates and may change based upon the completion of our analysis of acquired in place leases. | |||||||||||||||||||||||||||||||
In June 2014, we entered into an agreement to acquire an office property (one building) located in Lacey, WA with 109,576 rentable square feet. This property is 100% leased to the State of Washington. The contract purchase price is $19,200, excluding acquisition costs. | |||||||||||||||||||||||||||||||
Also in June 2014, we entered into an agreement to acquire an office property (one building) located in Lorton, VA with 54,721 rentable square feet. This property is 100% leased to the U.S. Government. The contract purchase price is $20,500, excluding acquisition costs. | |||||||||||||||||||||||||||||||
In August 2014, we entered into an agreement to acquire an office property (one building) located in Phoenix, AZ with 66,743 rentable square feet. This property is 100% leased to the State of Arizona. The contract purchase price is $13,000, excluding acquisition costs. | |||||||||||||||||||||||||||||||
These pending acquisitions are subject to closing conditions; accordingly, we can provide no assurance that we will acquire these properties or that these acquisitions will not be delayed or that their terms will not change. | |||||||||||||||||||||||||||||||
Disposition Activities | |||||||||||||||||||||||||||||||
During the year ended December 31, 2013, we began marketing for sale an office property (one building) located in Phoenix, AZ with 97,145 rentable square feet and recognized a loss on asset impairment of $8,344 to reduce the carrying value of this asset to its estimated fair value of $2,300. During the three months ended March 31, 2014, we increased the carrying value of this asset by $2,344 to its estimated fair value of $4,644. In February 2014, we sold this property for $5,000, excluding closing costs. We recognized no gain or loss on this sale. | |||||||||||||||||||||||||||||||
In April 2014, we entered an agreement to sell an office property (one building) located in Falls Church, VA with 164,746 rentable square feet and a net book value of $12,286 at June 30, 2014. The contract sales price is $16,500, excluding closing costs. The closing of this sale is subject to conditions, including the purchaser obtaining certain zoning entitlements and is currently expected to occur in 2015. In July 2014, we entered an agreement to sell an office property (one building) located in San Diego, CA with 94,272 rentable square feet and a net book value of $11,008 at June 30, 2014. The contract sales price is $12,500, excluding closing costs. The closing of this sale is subject to conditions and is currently expected to occur later in 2014. We can provide no assurance that sales of these two properties will occur. See Note 7 regarding the fair value of our assets and liabilities. | |||||||||||||||||||||||||||||||
Results of operations for two properties (two buildings) we sold February 2013 and March 2013, one property (one building) we sold in February 2014 and two properties (two buildings) held for sale at June 30, 2014 are classified as discontinued operations in our condensed consolidated financial statements. Summarized balance sheet and income statement information for properties classified as discontinued operations is as follows: | |||||||||||||||||||||||||||||||
Balance Sheets: | |||||||||||||||||||||||||||||||
June 30, | December 31, | ||||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||||
Real estate properties, net | $ | 23,267 | $ | 25,574 | |||||||||||||||||||||||||||
Rents receivable | 276 | 381 | |||||||||||||||||||||||||||||
Other assets | 27 | 42 | |||||||||||||||||||||||||||||
Assets of discontinued operations | $ | 23,570 | $ | 25,997 | |||||||||||||||||||||||||||
Other liabilities | $ | 262 | $ | 276 | |||||||||||||||||||||||||||
Liabilities of discontinued operations | $ | 262 | $ | 276 | |||||||||||||||||||||||||||
Statements of Operations: | |||||||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||||||
Rental income | $ | 746 | $ | 1,327 | $ | 1,486 | $ | 2,945 | |||||||||||||||||||||||
Real estate taxes | (124 | ) | (164 | ) | (273 | ) | (382 | ) | |||||||||||||||||||||||
Utility expenses | (52 | ) | (149 | ) | (154 | ) | (335 | ) | |||||||||||||||||||||||
Other operating expenses | (159 | ) | (202 | ) | (385 | ) | (520 | ) | |||||||||||||||||||||||
Depreciation and amortization | — | (369 | ) | — | (784 | ) | |||||||||||||||||||||||||
General and administrative | (50 | ) | (69 | ) | (109 | ) | (158 | ) | |||||||||||||||||||||||
Increase in carrying value of asset held for sale | — | — | 2,344 | — | |||||||||||||||||||||||||||
Net gain on sale of properties | — | — | — | 8,168 | |||||||||||||||||||||||||||
Income from discontinued operations | $ | 361 | $ | 374 | $ | 2,909 | $ | 8,934 | |||||||||||||||||||||||
Revenue_Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2014 | |
Revenue Recognition | ' |
Revenue Recognition | ' |
Note 4. Revenue Recognition | |
We recognize rental income from operating leases that contain fixed contractual rent changes on a straight line basis over the term of the lease agreements. Certain of our leases with government tenants provide the tenant the right to terminate its lease if its respective legislature or other funding authority does not appropriate the funding necessary for the government tenant to meet its lease obligations. We have determined the fixed non-cancelable lease term of these leases to be the fully executed term of the lease because we believe the occurrence of termination to be a remote contingency based on both our historical experience and our assessment of the likelihood of lease cancellation. | |
We increased rental income to record revenue on a straight line basis by $1,101 and $609 for the three months ended June 30, 2014 and 2013, respectively, and $2,243 and $1,347 for the six months ended June 30, 2014 and 2013, respectively. Rents receivable include $12,730 and $10,515 of straight line rent receivables at June 30, 2014 and December 31, 2013, respectively. |
Concentration
Concentration | 6 Months Ended |
Jun. 30, 2014 | |
Concentration | ' |
Concentration | ' |
Note 5. Concentration | |
Tenant and Credit Concentration | |
We define annualized rental income as the annualized contractual base rents from our tenants pursuant to our lease agreements with them as of the measurement date, plus straight line rent adjustments and estimated recurring expense reimbursements to be paid to us, and excluding lease value amortization. The U.S. Government, 11 state governments and the United Nations combined were responsible for approximately 93.0% and 93.9% of our annualized rental income, excluding properties classified as discontinued operations, as of June 30, 2014 and 2013, respectively. The U.S. Government is our largest tenant by annualized rental income and was responsible for approximately 70.0% and 70.9% of our annualized rental income, excluding properties classified as discontinued operations, as of June 30, 2014 and 2013, respectively. | |
Geographic Concentration | |
At June 30, 2014, our 71 properties (91 buildings), excluding properties classified as discontinued operations, were located in 31 states and the District of Columbia. Properties located in Maryland, California, Virginia, the District of Columbia, Georgia, New York and Massachusetts were responsible for approximately 12.3%, 10.6%, 9.9%, 9.7%, 8.8%, 8.3% and 5.3% of our annualized rental income as of June 30, 2014, respectively. |
Indebtedness
Indebtedness | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Indebtedness | ' | |||||||
Indebtedness | ' | |||||||
Note 6. Indebtedness | ||||||||
At June 30, 2014 and December 31, 2013, our outstanding indebtedness consisted of the following: | ||||||||
June 30, | December 31, | |||||||
2014 | 2013 | |||||||
Unsecured revolving credit facility, due in 2015 | $ | 195,500 | $ | 157,000 | ||||
Unsecured term loan, due in 2017 | 350,000 | 350,000 | ||||||
Mortgage note payable, 5.55% interest rate, including unamortized premium of $3,015, due in 2016(1) | 86,015 | — | ||||||
Mortgage note payable, 5.73% interest rate, including unamortized premium of $300, due in 2015(1) | 47,906 | 48,377 | ||||||
Mortgage note payable, 6.21% interest rate, due in 2016(1) | 23,990 | 24,147 | ||||||
Mortgage note payable, 5.88% interest rate, due in 2021(1) | 14,475 | — | ||||||
Mortgage note payable, 7.00% interest rate, including unamortized premium of $683, due in 2019(1) | 9,749 | 9,919 | ||||||
Mortgage note payable, 8.15% interest rate, including unamortized premium of $465, due in 2021(1) | 7,824 | 8,284 | ||||||
$ | 735,459 | $ | 597,727 | |||||
(1) We assumed these mortgages in connection with our acquisitions of certain properties. The stated interest rates for these mortgage debts are the contractually stated rates. We recorded the assumed mortgages at estimated fair value on the date of acquisition and we are amortizing the fair value premiums, if any, to interest expense over the respective terms of the mortgages to reduce interest expense to the estimated market interest rates as of the date of acquisition. | ||||||||
In March 2014, we assumed a mortgage with a balance of $14,524 in connection with a property acquisition. This mortgage note is secured by the acquired property, bears interest at 5.88% per annum and is amortized on a 30 year schedule (which commenced upon the original issuance of the note by its former obligor) until maturity in August 2021. We did not record a premium or discount on this assumed debt because we believed the interest rate payable under this mortgage was equal to the rate we would have had to pay for debt with the same maturity at the time we assumed this obligation. | ||||||||
In May 2014, we assumed a mortgage with a balance of $83,000 in connection with a property acquisition. This mortgage note is secured by the acquired property, bears interest at 5.55% per annum and monthly payments of interest only are due until maturity in April 2016. We recorded a $3,147 premium on this assumed debt, which reduced its effective interest rate to 3.50%, because we believed the interest rate payable under this mortgage was above the rate we would have had to pay for debt with the same maturity at the time we assumed this obligation. | ||||||||
We have a $550,000 unsecured revolving credit facility that is available for general business purposes, including acquisitions. The maturity date of our revolving credit facility is October 19, 2015 and, subject to the payment of an extension fee and meeting certain other conditions, includes an option for us to extend the stated maturity date of our revolving credit facility by one year to October 19, 2016. In addition, our revolving credit facility includes a feature under which maximum borrowings may be increased to up to $1,100,000 in certain circumstances. Borrowings under our revolving credit facility bear interest at a rate of LIBOR plus a premium, which was 150 basis points as of June 30, 2014. We also pay a facility fee of 35 basis points per annum on the total amount of lending commitments under our revolving credit facility. Both the interest rate premium and the facility fee are subject to adjustment based upon changes to our credit ratings. As of June 30, 2014, the interest rate payable on borrowings under our revolving credit facility was 1.7% and the weighted average annual interest rate for borrowings under our revolving credit facility was 1.7% for both the three and six months ended June 30, 2014, and 1.7% for both the three and six months ended June 30, 2013. As of June 30, 2014, we had $195,500 outstanding and $354,500 available under our revolving credit facility. | ||||||||
We have a $350,000 unsecured term loan, or our existing term loan. Our existing term loan matures on January 11, 2017, and is prepayable without penalty at any time. In addition, our existing term loan includes a feature under which maximum borrowings may be increased to up to $700,000 in certain circumstances. Our existing term loan bears interest at a rate of LIBOR plus a premium, which was 175 basis points as of June 30, 2014. The interest rate premium is subject to adjustment based upon changes to our credit ratings. As of June 30, 2014, the interest rate for the amount outstanding under our existing term loan was 1.9% and the weighted average interest rate for the amount outstanding under our existing term loan was 1.9% for both the three and six months ended June 30, 2014, and 1.9% for both the three and six months ended June 30, 2013. | ||||||||
On July 9, 2014, we entered into a new $500,000 unsecured term loan, or our new term loan. Our new term loan matures on July 8, 2015, and is prepayable without penalty at any time. Our new term loan bears interest at a rate of LIBOR plus a premium, which was 175 basis points as of July 9, 2014. The interest rate premium is subject to adjustment based upon changes to our credit ratings. We used the net proceeds of our new term loan to fund a portion of the purchase price of the Select Income REIT, or SIR, common shares we acquired on July 9, 2014. In July 2014, we sold 15,525,000 common shares in a public offering at a price of $23.50 per share for net proceeds of approximately $349,731. The net proceeds from this offering were used to partially repay amounts outstanding under our new term loan. See Notes 8 and 9 for further information regarding these transactions. | ||||||||
Our revolving credit facility agreement and our term loan agreements provide for acceleration of payment of all amounts due thereunder upon the occurrence and continuation of certain events of default, such as a change of control of us, which includes Reit Management & Research LLC, or RMR, ceasing to act as our business manager and property manager. Our revolving credit facility agreement and our term loan agreements also contain a number of covenants, including covenants that restrict our ability to incur debts or to make distributions under certain circumstances and require us to maintain financial ratios and a minimum net worth. On July 9, 2014, we amended the agreements governing our revolving credit facility and our existing term loan to modify certain covenants and associated defined terms to accommodate our acquisition of the SIR common shares and our new term loan. We believe we were in compliance with the terms and conditions of our revolving credit facility agreement and our then existing term loan agreement at June 30, 2014. | ||||||||
At June 30, 2014, six of our properties (eight buildings) with an aggregate net book value of $264,679 secured six mortgage notes that were assumed in connection with the acquisition of such properties. Our mortgage notes are non-recourse and do not contain any material financial covenants. |
Fair_Value_of_Assets_and_Liabi
Fair Value of Assets and Liabilities | 6 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Fair Value of Assets and Liabilities | ' | |||||||||||||
Fair Value of Assets and Liabilities | ' | |||||||||||||
Note 7. Fair Value of Assets and Liabilities | ||||||||||||||
Our assets and liabilities at June 30, 2014 include cash and cash equivalents, restricted cash, rents receivable, mortgage notes payable, accounts payable, our revolving credit facility and our then existing term loan, amounts due to related persons, other accrued expenses and security deposits. At June 30, 2014, the fair values of our financial instruments approximated their carrying values in our condensed consolidated financial statements due to their short term nature or variable interest rates, except as follows: | ||||||||||||||
Carrying Amount | Fair Value | |||||||||||||
Mortgage note payable, 5.55% interest rate, including unamortized premium of $3,015, due in 2016 | $ | 86,015 | $ | 86,015 | ||||||||||
Mortgage note payable, 5.73% interest rate, including unamortized premium of $300, due in 2015 | 47,906 | 49,238 | ||||||||||||
Mortgage note payable, 6.21% interest rate, due in 2016 | 23,990 | 25,928 | ||||||||||||
Mortgage note payable, 5.88% interest rate, due in 2021 | 14,475 | 14,926 | ||||||||||||
Mortgage note payable, 7.00% interest rate, including unamortized premium of $683, due in 2019 | 9,749 | 10,445 | ||||||||||||
Mortgage note payable, 8.15% interest rate, including unamortized premium of $465, due in 2021 | 7,824 | 8,435 | ||||||||||||
$ | 189,959 | $ | 194,987 | |||||||||||
(1) We assumed these mortgages in connection with our acquisitions of certain properties. The stated interest rates for these mortgage debts are the contractually stated rates. We recorded the assumed mortgages at estimated fair value on the date of acquisition and we are amortizing the fair value premiums, if any, to interest expense over the respective terms of the mortgages to reduce interest expense to the estimated market interest rates as of the date of acquisition. | ||||||||||||||
We estimate the fair values of our mortgage notes payable by using discounted cash flow analyses and currently prevailing market terms as of the measurement date (Level 3 inputs as defined in the fair value hierarchy under GAAP). Because Level 3 inputs are unobservable, our estimated fair value may differ materially from the actual fair value. | ||||||||||||||
The table below presents one of our assets measured on a non-recurring basis at fair value at June 30, 2014, categorized by the level of inputs used in the valuation of the asset: | ||||||||||||||
Quoted Prices in | Significant | |||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||
Description | Total | (Level 1) | (Level 2) | (Level 3) | ||||||||||
Property held for sale(1) | $ | 12,260 | $ | — | $ | — | $ | 12,260 | ||||||
(1) The estimated fair value at June 30, 2014 of the property, for which a loss on asset impairment was recognized during the year ended December 31, 2013, is based upon broker estimates of value less estimated sales costs (Level 3 inputs as defined in the fair value hierarchy under GAAP). | ||||||||||||||
During the three months ended March 31, 2014, we increased the carrying value of a property held for sale due to an increase in its estimated fair value. We sold this property in February 2014. See Note 3 for additional information regarding this property. |
Shareholders_Equity
Shareholders' Equity | 6 Months Ended |
Jun. 30, 2014 | |
Shareholders' Equity | ' |
Shareholders' Equity | ' |
Note 8. Shareholders’ Equity | |
Distributions | |
On February 21, 2014, we paid a distribution to common shareholders of $0.43 per share, or approximately $23,530, that was declared on January 3, 2014 and was payable to shareholders of record on January 13, 2014. | |
On May 21, 2014, we paid a distribution to common shareholders of $0.43 per share, or approximately $23,535, that was declared on April 8, 2014 and was payable to shareholders of record on April 25, 2014. | |
On July 14, 2014, we declared a distribution payable to common shareholders of record on July 25, 2014 of $0.43 per share, or approximately $23,541. We expect to pay this distribution on or about August 22, 2014 using cash on hand and borrowings under our revolving credit facility. | |
Share Issuances | |
During the three and six months ended June 30, 2014 and the period July 1, 2014 to August 5, 2014, we issued 9,943, 16,318, and 3,370, respectively, of our common shares to RMR as part of the business management fee payable by us under our business management agreement. See Note 9 for further information regarding this agreement. | |
On May 2, 2014, we granted 2,500 of our common shares, valued at $25.43 per share, the closing price of our common shares on the New York Stock Exchange, or the NYSE, on that day, to each of our five Trustees as part of their annual compensation. | |
In July 2014, we sold 15,525,000 common shares in a public offering at a price of $23.50 per share for net proceeds of approximately $349,731. The net proceeds from this offering were used to partially repay amounts outstanding under our new term loan. | |
We have no dilutive securities. |
Related_Person_Transactions
Related Person Transactions | 6 Months Ended |
Jun. 30, 2014 | |
Related Person Transactions | ' |
Related Person Transactions | ' |
Note 9. Related Person Transactions | |
RMR: We have no employees. Personnel and various services we require to operate our business are provided to us by RMR. We have two agreements with RMR to provide management and administrative services to us: (i) a business management agreement, which relates to our business generally, and (ii) a property management agreement, which relates to our property level operations. | |
One of our Managing Trustees, Mr. Barry Portnoy, is Chairman, majority owner and an employee of RMR. Our other Managing Trustee, Mr. Adam Portnoy, is the son of Mr. Barry Portnoy, and an owner, President, Chief Executive Officer and a director of RMR. Each of our executive officers is also an officer of RMR. Our Independent Trustees also serve as independent directors or independent trustees of other public companies to which RMR provides management services. Mr. Barry Portnoy serves as a managing director or managing trustee of a majority of the companies that RMR or its affiliates provide management services to and Mr. Adam Portnoy serves as a managing trustee of a majority of those companies. In addition, officers of RMR serve as officers of those companies. | |
On May 9, 2014, we and RMR entered into amendments to our business management agreement and property management agreement. As amended, RMR may terminate the agreements upon 120 days’ written notice. Prior to the amendments, RMR could terminate the agreements upon 60 days’ written notice and could also terminate the property management agreement upon five business days’ notice if we underwent a change of control. The amendments also provide for certain termination payments by us to RMR in the event that we terminate the agreements other than for cause, including certain proportional adjustments to the termination fees if we merge with another real estate investment trust to which RMR is providing management services or if we spin-off a subsidiary of ours to which we contributed properties and to which RMR is providing management services both at the time of the spin-off and on the date of the expiration or termination of the agreement. Also, as amended, RMR agrees to provide certain transition services to us for 120 days following an applicable termination by us or notice of termination by RMR. | |
Pursuant to our business management agreement with RMR, we recognized business management fees of $2,534 and $2,528 for the three months ended June 30, 2014 and 2013, respectively, and $4,935 and $4,982 for the six months ended June 30, 2014 and 2013, respectively. These amounts are included in general and administrative expenses in our condensed consolidated financial statements. In accordance with the terms of our business management agreement, as amended in December 2013, we issued 16,318 of our common shares to RMR for the six months ended June 30, 2014 as payment for 10% of the base business management fee we recognized for such period. | |
In connection with our property management agreement with RMR, the aggregate property management and construction supervision fees we recognized were $1,985 and $1,799 for the three months ended June 30, 2014 and 2013, respectively, and $3,939 and $3,615 for the six months ended June 30, 2014 and 2013, respectively. These amounts are included in other operating expenses or have been capitalized, as appropriate, in our condensed consolidated financial statements. | |
RMR leases from us office space for two of its regional offices. We earned approximately $14 and $8 in rental income from RMR for leased office space for the three months ended June 30, 2014 and 2013, respectively, and $33 and $15 for the six months ended June 30, 2014 and 2013, respectively. Our office space leases with RMR are terminable by RMR if our management agreements with RMR are terminated. | |
On July 8, 2014, we and RMR entered into an agreement with Equity Commonwealth (formerly known as CommonWealth REIT), or EQC, pursuant to which we and RMR purchased shares of SIR from EQC on July 9, 2014. For more information regarding this transaction, see below under “- EQC”. RMR provides management services to SIR; our Managing Trustees serve as managing trustees of SIR; one of our Independent Trustees, Mr. Jeffrey Somers, serves as an independent trustee of SIR; our President and Chief Operating Officer serves as an officer of SIR; and SIR’s other executive officer is an officer of RMR. SIR was not a contracting party to this transaction. | |
EQC: EQC organized us as a 100% owned subsidiary. One of our Managing Trustees, Mr. Barry Portnoy, was a managing trustee of EQC until March 25, 2014. Our other Managing Trustee, Mr. Adam Portnoy, was the President of EQC until May 23, 2014 and was a managing trustee of EQC until March 25, 2014. RMR provides management services to both us and EQC. | |
In 2009, we completed our initial public offering, or our IPO, pursuant to which we ceased to be a majority owned subsidiary of EQC. To facilitate our IPO, we and EQC entered into a transaction agreement that governs our separation from and relationship with EQC. Pursuant to this transaction agreement and subject to certain conditions, among other things, EQC granted us a right of first refusal to acquire any property owned by EQC that EQC determines to divest if the property is then majority leased to a government tenant, which right of first refusal also applied in the event of an indirect sale of any such properties resulting from a change of control of EQC. On July 23, 2014, this provision of the transaction agreement was terminated. | |
On March 15, 2013, EQC sold all 9,950,000 of our common shares it owned in a public offering. In connection with this public offering, on March 11, 2013, we entered into a registration agreement with EQC under which EQC agreed to pay all expenses incurred by us relating to the registration and sale of our common shares owned by EQC in the offering, pursuant to which EQC paid us $310 during 2013. In addition, under the registration agreement, EQC agreed to indemnify us and our officers, Trustees and controlling persons, and we agreed to indemnify EQC and its officers, trustees and controlling persons, against certain liabilities related to the public offering, including liabilities under the Securities Act of 1933, as amended, or the Securities Act. | |
On July 8, 2014, we and RMR entered into a stock purchase agreement, or the purchase agreement, with EQC, pursuant to which, on July 9, 2014, we acquired from EQC 21,500,000 common shares of beneficial interest, par value $.01 per share, of SIR, and RMR acquired from EQC 500,000 SIR common shares. Our cash purchase price was equal to approximately $677,500, or $31.51 per share, plus approximately $11,300, or $0.53 per share, of accrued dividends as defined in the purchase agreement, for a total of approximately $688,800. RMR purchased its 500,000 SIR common shares on the same terms that we paid. The SIR common shares that we and RMR purchased represent 35.9% and 0.8%, respectively, of SIR’s outstanding common shares. Under the purchase agreement, in the event that we or RMR consummates any sale of SIR common shares prior to July 9, 2015 and the price per share paid by the purchaser is greater than $31.51, we or RMR, as applicable, are required to pay to EQC an amount equal to 50% of the product of (i) the number of SIR common shares sold in the transaction times (ii) the excess of (x) the price per share paid by the purchaser and (y) $31.51. The foregoing requirement applies to any SIR common shares we or RMR own. In addition, we and RMR agreed, among other things, to indemnify EQC for certain claims related to the acquisition. In connection with the indemnity, we and RMR entered into an allocation agreement with regard to our respective liabilities in the event of a claim for indemnification. | |
AIC: We, RMR, SIR and four other companies to which RMR provides management services currently own Affiliates Insurance Company, or AIC, an Indiana insurance company. All of our Trustees and most of the trustees and directors of the other AIC shareholders currently serve on the board of directors of AIC. RMR provides management and administrative services to AIC pursuant to a management and administrative services agreement with AIC. | |
On March 25, 2014, as a result of the removal, without cause, of all of the trustees of EQC, this shareholder of AIC underwent a change in control, as defined in the shareholders’ agreement among us, the other shareholders of AIC and AIC. As a result of that change in control and in accordance with the terms of the shareholders agreement, on May 9, 2014, we and those other shareholders purchased pro rata the AIC shares EQC owned. Pursuant to that purchase, we purchased 2,857 AIC shares from EQC for $825. Following these purchases, we and the other remaining six shareholders each own approximately 14.3% of AIC. | |
In June 2014, we and the other shareholders of AIC renewed our participation in an insurance program arranged by AIC. In connection with that renewal, we purchased a one-year property insurance policy providing $500,000 of coverage, with respect to which AIC is a reinsurer of certain coverage amounts. We paid AIC a premium, including taxes and fees, of approximately $526 in connection with that policy, which amount may be adjusted from time to time as we acquire or dispose of properties that are covered in the policy. As of June 30, 2014, we had invested $6,019 in AIC since we became an equity owner of AIC in 2009. Although we own less than 20% of AIC, we use the equity method to account for this investment because we believe that we have significant influence over AIC as all of our Trustees are also directors of AIC. Our investment in AIC had a carrying value of $6,918 and $6,031 as of June 30, 2014 and December 31, 2013, respectively, which amounts are included in other assets on our condensed consolidated balance sheet. We recognized income of $118 and $79 for the three months ended June 30, 2014 and 2013, respectively, and $21 and $155 for the six months ended June 30, 2014 and 2013, respectively, related to our investment in AIC. | |
Directors’ and Officers’ Liability Insurance: In June 2014, we, RMR and four other companies to which RMR provides management services extended our and their combined directors’ and officers’ liability insurance policy, and we extended our separate directors’ and officers’ liability insurance policy, in each case for an interim period. We paid an aggregate premium of approximately $50 for these extensions. Further information about those policies is contained in Note 5 to our audited financial statements contained in our Annual Report. |
Real_Estate_Properties_Tables
Real Estate Properties (Tables) | 6 Months Ended | ||||||||||||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||||||||||||
Real Estate Properties | ' | ||||||||||||||||||||||||||||||
Purchase prices of acquisitions allocated based on the estimated fair values of the acquired assets and assumed liabilities | ' | ||||||||||||||||||||||||||||||
Number | Premium | ||||||||||||||||||||||||||||||
of | Buildings | Acquired | Other | on | |||||||||||||||||||||||||||
Acquisition | Properties/ | Square | Purchase | and | Acquired | Lease | Assumed | Assumed | |||||||||||||||||||||||
Date | Location | Type | Buildings | Feet | Price(1) | Land(2) | Improvements(2) | Leases(2) | Obligations(2) | Liabilities | Debt | ||||||||||||||||||||
March 2014 | Fairfax, VA | Office | 1-Jan | 83,130 | $ | 19,775 | $ | 2,964 | $ | 12,840 | $ | 3,971 | $ | — | $ | (233 | ) | $ | — | ||||||||||||
May 2014 | Richmond, VA | Office | 1-Jan | 173,932 | 22,500 | 2,614 | 15,930 | 4,003 | (47 | ) | — | — | |||||||||||||||||||
May 2014 | Reston, VA | Office | 2-Jan | 406,388 | 112,250 | 9,066 | 78,658 | 28,071 | (398 | ) | (93 | ) | (3,147 | ) | |||||||||||||||||
4-Mar | 663,450 | $ | 154,525 | $ | 14,644 | $ | 107,428 | $ | 36,045 | $ | (445 | ) | $ | (326 | ) | $ | (3,147 | ) | |||||||||||||
(1) Purchase price excludes acquisition related costs. | |||||||||||||||||||||||||||||||
(2) The allocation of purchase price is based upon preliminary estimates and may change based upon the completion of our analysis of acquired in place leases. | |||||||||||||||||||||||||||||||
Summarized balance sheet and income statement information for properties classified as discontinued operations | ' | ||||||||||||||||||||||||||||||
Balance Sheets: | |||||||||||||||||||||||||||||||
June 30, | December 31, | ||||||||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||||||||
Real estate properties, net | $ | 23,267 | $ | 25,574 | |||||||||||||||||||||||||||
Rents receivable | 276 | 381 | |||||||||||||||||||||||||||||
Other assets | 27 | 42 | |||||||||||||||||||||||||||||
Assets of discontinued operations | $ | 23,570 | $ | 25,997 | |||||||||||||||||||||||||||
Other liabilities | $ | 262 | $ | 276 | |||||||||||||||||||||||||||
Liabilities of discontinued operations | $ | 262 | $ | 276 | |||||||||||||||||||||||||||
Statements of Operations: | |||||||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||||||||
Rental income | $ | 746 | $ | 1,327 | $ | 1,486 | $ | 2,945 | |||||||||||||||||||||||
Real estate taxes | (124 | ) | (164 | ) | (273 | ) | (382 | ) | |||||||||||||||||||||||
Utility expenses | (52 | ) | (149 | ) | (154 | ) | (335 | ) | |||||||||||||||||||||||
Other operating expenses | (159 | ) | (202 | ) | (385 | ) | (520 | ) | |||||||||||||||||||||||
Depreciation and amortization | — | (369 | ) | — | (784 | ) | |||||||||||||||||||||||||
General and administrative | (50 | ) | (69 | ) | (109 | ) | (158 | ) | |||||||||||||||||||||||
Increase in carrying value of asset held for sale | — | — | 2,344 | — | |||||||||||||||||||||||||||
Net gain on sale of properties | — | — | — | 8,168 | |||||||||||||||||||||||||||
Income from discontinued operations | $ | 361 | $ | 374 | $ | 2,909 | $ | 8,934 |
Indebtedness_Tables
Indebtedness (Tables) | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Indebtedness | ' | |||||||
Composition of outstanding indebtedness | ' | |||||||
June 30, | December 31, | |||||||
2014 | 2013 | |||||||
Unsecured revolving credit facility, due in 2015 | $ | 195,500 | $ | 157,000 | ||||
Unsecured term loan, due in 2017 | 350,000 | 350,000 | ||||||
Mortgage note payable, 5.55% interest rate, including unamortized premium of $3,015, due in 2016(1) | 86,015 | — | ||||||
Mortgage note payable, 5.73% interest rate, including unamortized premium of $300, due in 2015(1) | 47,906 | 48,377 | ||||||
Mortgage note payable, 6.21% interest rate, due in 2016(1) | 23,990 | 24,147 | ||||||
Mortgage note payable, 5.88% interest rate, due in 2021(1) | 14,475 | — | ||||||
Mortgage note payable, 7.00% interest rate, including unamortized premium of $683, due in 2019(1) | 9,749 | 9,919 | ||||||
Mortgage note payable, 8.15% interest rate, including unamortized premium of $465, due in 2021(1) | 7,824 | 8,284 | ||||||
$ | 735,459 | $ | 597,727 | |||||
(1) We assumed these mortgages in connection with our acquisitions of certain properties. The stated interest rates for these mortgage debts are the contractually stated rates. We recorded the assumed mortgages at estimated fair value on the date of acquisition and we are amortizing the fair value premiums, if any, to interest expense over the respective terms of the mortgages to reduce interest expense to the estimated market interest rates as of the date of acquisition. |
Fair_Value_of_Assets_and_Liabi1
Fair Value of Assets and Liabilities (Tables) | 6 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Fair Value of Assets and Liabilities | ' | |||||||||||||
Schedule of fair value and carrying value of financial instruments | ' | |||||||||||||
Carrying Amount | Fair Value | |||||||||||||
Mortgage note payable, 5.55% interest rate, including unamortized premium of $3,015, due in 2016 | $ | 86,015 | $ | 86,015 | ||||||||||
Mortgage note payable, 5.73% interest rate, including unamortized premium of $300, due in 2015 | 47,906 | 49,238 | ||||||||||||
Mortgage note payable, 6.21% interest rate, due in 2016 | 23,990 | 25,928 | ||||||||||||
Mortgage note payable, 5.88% interest rate, due in 2021 | 14,475 | 14,926 | ||||||||||||
Mortgage note payable, 7.00% interest rate, including unamortized premium of $683, due in 2019 | 9,749 | 10,445 | ||||||||||||
Mortgage note payable, 8.15% interest rate, including unamortized premium of $465, due in 2021 | 7,824 | 8,435 | ||||||||||||
$ | 189,959 | $ | 194,987 | |||||||||||
(1) We assumed these mortgages in connection with our acquisitions of certain properties. The stated interest rates for these mortgage debts are the contractually stated rates. We recorded the assumed mortgages at estimated fair value on the date of acquisition and we are amortizing the fair value premiums, if any, to interest expense over the respective terms of the mortgages to reduce interest expense to the estimated market interest rates as of the date of acquisition. | ||||||||||||||
Schedule of assets measured on a non-recurring basis at fair value, categorized by the level of inputs used in the valuation assets | ' | |||||||||||||
Quoted Prices in | Significant | |||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||
Description | Total | (Level 1) | (Level 2) | (Level 3) | ||||||||||
Property held for sale(1) | $ | 12,260 | $ | — | $ | — | $ | 12,260 | ||||||
(1) The estimated fair value at June 30, 2014 of the property, for which a loss on asset impairment was recognized during the year ended December 31, 2013, is based upon broker estimates of value less estimated sales costs (Level 3 inputs as defined in the fair value hierarchy under GAAP). |
Basis_of_Presentation_Details
Basis of Presentation (Details) | 6 Months Ended |
Jun. 30, 2014 | |
segment | |
Basis of Presentation | ' |
Number of business segments | 1 |
Real_Estate_Properties_Details
Real Estate Properties (Details) (USD $) | 3 Months Ended | 6 Months Ended | 6 Months Ended | 3 Months Ended | 1 Months Ended | 1 Months Ended | 3 Months Ended | 12 Months Ended | 1 Months Ended | 1 Months Ended | ||||||||||||||
Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Jun. 30, 2014 | 31-May-14 | 31-May-14 | Aug. 31, 2014 | Mar. 31, 2014 | Aug. 31, 2014 | Feb. 28, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Apr. 30, 2014 | Apr. 30, 2014 | Jul. 31, 2014 | Apr. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | |
property | property | Continuing operations | Discontinued operations | Acquisition | Fairfax, VA | Fairfax, VA | Richmond VA | Reston, VA | Phoenix, AZ | Phoenix, AZ | Phoenix, AZ | Phoenix, AZ | Phoenix, AZ | Phoenix, AZ | Falls Church, VA | Falls Church, VA | San Diego, CA | San Diego, CA and Falls Church, VA | Lacey, WA | Lacey, WA | Lorton, VA | |||
sqft | sqft | property | property | sqft | One building | One building | One building | Two buildings | One building | One building | One building | One building | One building | One building | Sale of properties | One building | One building | Sale of properties | One building | One building | One building | |||
item | item | item | item | Office property | Office property | Office property | Office property | Office property | Office property | Office property | Office property | Office property | Office property | sqft | Office property | Office property | Office property | Office property | Office property | Office property | ||||
property | sqft | sqft | sqft | sqft | State of Arizona | sqft | item | Subsequent event | property | sqft | State of Washington | sqft | ||||||||||||
item | property | property | item | item | ||||||||||||||||||||
property | item | item | sqft | |||||||||||||||||||||
Real estate properties | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of properties owned | 71 | 71 | ' | ' | 71 | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of buildings | 91 | 91 | ' | ' | 91 | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate investment in properties | $1,697,796,000 | $1,697,796,000 | ' | $1,568,562,000 | $1,697,796,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of leases entered | 17 | 30 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average lease term | '5 years 1 month 6 days | '5 years 3 months 18 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expenditures committed on leases | 5,336,000 | 6,994,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Committed but unspent tenant related obligations estimated | 16,654,000 | 16,654,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of properties acquired or agreed to be acquired | ' | ' | ' | ' | ' | ' | 3 | 1 | ' | 1 | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' |
Number of buildings acquired or agreed to be acquired | ' | ' | ' | ' | ' | ' | 4 | 1 | ' | 1 | 2 | ' | ' | ' | ' | ' | 1 | ' | 1 | 1 | ' | ' | ' | ' |
Square Feet | 204,326 | 266,796 | ' | ' | ' | ' | 663,450 | 83,130 | ' | 173,932 | 406,388 | 66,743 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 109,576 | ' | 54,721 |
Purchase Price | ' | ' | ' | ' | ' | ' | 154,525,000 | 19,775,000 | ' | 22,500,000 | 112,250,000 | 13,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 19,200,000 | ' | 20,500,000 |
Land | ' | ' | ' | ' | ' | ' | 14,644,000 | 2,964,000 | ' | 2,614,000 | 9,066,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Buildings and Improvements | ' | ' | ' | ' | ' | ' | 107,428,000 | 12,840,000 | ' | 15,930,000 | 78,658,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Acquired Leases | ' | ' | ' | ' | ' | ' | 36,045,000 | 3,971,000 | ' | 4,003,000 | 28,071,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Acquired Lease Obligations | ' | ' | ' | ' | ' | ' | -445,000 | ' | ' | -47,000 | -398,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other Assumed Liabilities | ' | ' | ' | ' | ' | ' | -326,000 | -233,000 | ' | ' | -93,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Premium on assumed debt | ' | ' | ' | ' | ' | ' | -3,147,000 | ' | ' | ' | -3,147,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of property leased | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | 100.00% |
Amount of mortgage debt assumed in contract purchase price | ' | ' | ' | ' | 14,524,000 | ' | ' | ' | 97,524,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Rentable square feet of Properties | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 97,145 | 164,746 | ' | 94,272 | ' | ' | ' | ' |
Loss on impairment recognized | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,344,000 | ' | ' | ' | ' | ' | ' | ' |
Carrying value | 1,492,136,000 | 1,492,136,000 | ' | 1,380,927,000 | ' | ' | ' | ' | ' | ' | ' | ' | 4,644,000 | ' | ' | ' | 2,300,000 | 12,286,000 | ' | 11,008,000 | ' | ' | ' | ' |
Increase in carrying value of assets held for sale | ' | 2,344,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,344,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate sale price of properties sold, excluding closing costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,000,000 | ' | ' | 16,500,000 | ' | 12,500,000 | ' | ' | ' | ' |
Gain (loss) on sale of properties | ' | ' | $8,168,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Real_Estate_Properties_Details1
Real Estate Properties (Details 2) (USD $) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 1 Months Ended | |||||||||
In Thousands, unless otherwise specified | Feb. 28, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Feb. 28, 2014 | Mar. 31, 2013 | Feb. 28, 2013 | Jun. 30, 2014 |
property | property | property | Discontinued operations | Discontinued operations | Discontinued operations | Discontinued operations | Discontinued operations | One building | Two buildings | Two buildings | Two buildings | ||||
property | property | property | property | ||||||||||||
Real estate properties | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of properties sold | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | 2 | 2 | ' |
Number of properties held for sale | ' | 2 | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 |
Balance Sheets: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Real estate properties, net | ' | $1,492,136 | ' | $1,492,136 | ' | $1,380,927 | $23,267 | ' | $23,267 | ' | $25,574 | ' | ' | ' | ' |
Rents receivable | ' | 34,656 | ' | 34,656 | ' | 33,350 | 276 | ' | 276 | ' | 381 | ' | ' | ' | ' |
Other assets | ' | 14,602 | ' | 14,602 | ' | 25,031 | 27 | ' | 27 | ' | 42 | ' | ' | ' | ' |
Total assets | ' | 1,751,605 | ' | 1,751,605 | ' | 1,632,452 | 23,570 | ' | 23,570 | ' | 25,997 | ' | ' | ' | ' |
Other liabilities | ' | 22,175 | ' | 22,175 | ' | 23,216 | 262 | ' | 262 | ' | 276 | ' | ' | ' | ' |
Total liabilities | ' | 778,382 | ' | 778,382 | ' | 642,777 | 262 | ' | 262 | ' | 276 | ' | ' | ' | ' |
Statement of Operations: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Rental income | ' | 62,428 | 55,934 | 122,248 | 112,238 | ' | 746 | 1,327 | 1,486 | 2,945 | ' | ' | ' | ' | ' |
Real estate taxes | ' | -7,166 | -6,484 | -13,978 | -12,805 | ' | -124 | -164 | -273 | -382 | ' | ' | ' | ' | ' |
Utility expenses | ' | -4,049 | -3,860 | -9,745 | -7,709 | ' | -52 | -149 | -154 | -335 | ' | ' | ' | ' | ' |
Other operating expenses | ' | -10,860 | -9,798 | -21,901 | -19,119 | ' | -159 | -202 | -385 | -520 | ' | ' | ' | ' | ' |
Depreciation and amortization | ' | -16,191 | -13,603 | -31,618 | -26,929 | ' | ' | -369 | ' | -784 | ' | ' | ' | ' | ' |
General and administrative | ' | -4,111 | -3,229 | -7,208 | -6,408 | ' | -50 | -69 | -109 | -158 | ' | ' | ' | ' | ' |
Increase in carrying value of assets held for sale | ' | ' | ' | 2,344 | ' | ' | ' | ' | 2,344 | ' | ' | ' | ' | ' | ' |
Net gain on sale of properties | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,168 | ' | ' | ' | ' | ' |
Income from discontinued operations | ' | $361 | $374 | $2,909 | $8,934 | ' | $361 | $374 | $2,909 | $8,934 | ' | ' | ' | ' | ' |
Revenue_Recognition_Details
Revenue Recognition (Details) (USD $) | 3 Months Ended | 6 Months Ended | |||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 |
Revenue Recognition | ' | ' | ' | ' | ' |
Increase in rental income to record revenue on straight line basis | $1,101 | $609 | $2,243 | $1,347 | ' |
Straight line rent receivables | $12,730 | ' | $12,730 | ' | $10,515 |
Concentration_Details
Concentration (Details) | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Concentration | ' | ' |
Number of properties owned | 71 | ' |
Number of buildings | 91 | ' |
Number of states in which acquired properties located | 31 | ' |
Concentration | ' | ' |
Number of state governments | 11 | ' |
Annualized rental income, excluding properties classified as discontinued operations | Maryland | ' | ' |
Concentration | ' | ' |
Annualized Rental income percent | 0.123 | ' |
Annualized rental income, excluding properties classified as discontinued operations | California | ' | ' |
Concentration | ' | ' |
Annualized Rental income percent | 0.106 | ' |
Annualized rental income, excluding properties classified as discontinued operations | Virginia | ' | ' |
Concentration | ' | ' |
Annualized Rental income percent | 0.099 | ' |
Annualized rental income, excluding properties classified as discontinued operations | District of Columbia | ' | ' |
Concentration | ' | ' |
Annualized Rental income percent | 0.097 | ' |
Annualized rental income, excluding properties classified as discontinued operations | Georgia | ' | ' |
Concentration | ' | ' |
Annualized Rental income percent | 0.088 | ' |
Annualized rental income, excluding properties classified as discontinued operations | New York | ' | ' |
Concentration | ' | ' |
Annualized Rental income percent | 0.083 | ' |
Annualized rental income, excluding properties classified as discontinued operations | Massachusetts | ' | ' |
Concentration | ' | ' |
Annualized Rental income percent | 0.053 | ' |
Annualized rental income, excluding properties classified as discontinued operations | Tenant concentration | U.S. Government, state governments and the United Nations | ' | ' |
Concentration | ' | ' |
Concentration risk, percentage | 93.00% | 93.90% |
Annualized rental income, excluding properties classified as discontinued operations | Tenant concentration | U.S. Government | ' | ' |
Concentration | ' | ' |
Concentration risk, percentage | 70.00% | 70.90% |
Indebtedness_Details
Indebtedness (Details) (USD $) | 1 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 1 Months Ended | 0 Months Ended | ||||||||||||||||||||
In Thousands, except Share data, unless otherwise specified | Jul. 31, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Jun. 30, 2014 | 31-May-14 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Mar. 31, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jul. 09, 2014 |
loan | Unsecured revolving credit facility due in 2015 | Unsecured revolving credit facility due in 2015 | Unsecured revolving credit facility due in 2015 | Unsecured revolving credit facility due in 2015 | Unsecured revolving credit facility due in 2015 | Unsecured term loan, due in 2017 | Unsecured term loan, due in 2017 | Unsecured term loan, due in 2017 | Unsecured term loan, due in 2017 | Unsecured term loan, due in 2017 | Mortgage note payable, 5.55% interest rate, due in 2016 | Mortgage note payable, 5.55% interest rate, due in 2016 | Mortgage note payable, 5.55% interest rate, due in 2016 | 5.73% Mortgage notes due in 2015 | 5.73% Mortgage notes due in 2015 | 6.21% Mortgage notes due in 2016 | 6.21% Mortgage notes due in 2016 | Mortgage note payable, 5.88% interest rate, due in 2021 | Mortgage note payable, 5.88% interest rate, due in 2021 | Mortgage note payable, 5.88% interest rate, due in 2021 | 7% Mortgage notes due in 2019 | 7% Mortgage notes due in 2019 | 8.15% Mortgage notes due in 2021 | 8.15% Mortgage notes due in 2021 | Unsecured term loan, due in 2015 | |||
property | Subsequent event | |||||||||||||||||||||||||||
item | ||||||||||||||||||||||||||||
Indebtedness | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unsecured revolving credit facility | ' | $195,500 | $157,000 | $195,500 | ' | $195,500 | ' | $157,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term loan | ' | ' | ' | ' | ' | ' | ' | ' | 350,000 | ' | 350,000 | ' | 350,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 500,000 |
Mortgage notes payable | ' | 189,959 | 90,727 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 86,015 | 83,000 | ' | 47,906 | 48,377 | 23,990 | 24,147 | 14,524 | 14,475 | ' | 9,749 | 9,919 | 7,824 | 8,284 | ' |
Total | ' | 735,459 | 597,727 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.55% | 5.55% | 5.55% | 5.73% | 5.73% | 6.21% | 6.21% | ' | 5.88% | 5.88% | 7.00% | 7.00% | 8.15% | 8.15% | ' |
Unamortized fair value premium included in mortgage notes | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,015 | 3,147 | 3,015 | 300 | 300 | ' | ' | ' | ' | ' | 683 | 683 | 465 | 465 | ' |
Effective interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term of loan | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '30 years | ' | ' | ' | ' | ' | ' | ' |
Maximum borrowing capacity on revolving credit facility | ' | ' | ' | 550,000 | ' | 550,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revolving credit facility, interest rate basis | ' | ' | ' | ' | ' | 'LIBOR | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'LIBOR |
Maximum borrowing capacity on debt instruments may be increased under certain conditions | ' | ' | ' | 1,100,000 | ' | 1,100,000 | ' | ' | 700,000 | ' | 700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Option to extend the maturity date subject to certain conditions and the payment of a fee | ' | ' | ' | ' | ' | '1 year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term loan, interest rate basis | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'LIBOR | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate premium (as a percent) | ' | ' | ' | ' | ' | 1.50% | ' | ' | ' | ' | 1.75% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.75% |
Facility fee (as a percent) | ' | ' | ' | ' | ' | 0.35% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate (as a percent) | ' | ' | ' | 1.70% | ' | 1.70% | ' | ' | 1.90% | ' | 1.90% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
The weighted average annual interest rate (as a percent) | ' | ' | ' | 1.70% | 1.70% | 1.70% | 1.70% | ' | 1.90% | 1.90% | 1.90% | 1.90% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount available to be drawn | ' | ' | ' | 354,500 | ' | 354,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of common shares sold in public offering | 15,525,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Price per share of shares sold | $23.50 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net proceeds on sale of shares | 349,731 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of assumed secured mortgage loans | ' | 6 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate net book value of secured properties | ' | $264,679 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of properties secured by mortgage notes | ' | 6 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of buildings secured by mortgage notes | ' | 8 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair_Value_of_Assets_and_Liabi2
Fair Value of Assets and Liabilities (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | 31-May-14 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 |
In Thousands, unless otherwise specified | 5.55% Mortgage note due in 2016 | 5.55% Mortgage note due in 2016 | 5.55% Mortgage note due in 2016 | 5.73% Mortgage notes due in 2015 | 5.73% Mortgage notes due in 2015 | 6.21% Mortgage notes due in 2016 | 6.21% Mortgage notes due in 2016 | Mortgage note payable, 5.88% interest rate, due in 2021 | Mortgage note payable, 5.88% interest rate, due in 2021 | Mortgage note payable, 5.88% interest rate, due in 2021 | 7% Mortgage notes due in 2019 | 7% Mortgage notes due in 2019 | 8.15% Mortgage notes due in 2021 | 8.15% Mortgage notes due in 2021 | Carrying Amount | Carrying Amount | Carrying Amount | Carrying Amount | Carrying Amount | Carrying Amount | Carrying Amount | Fair Value | Fair Value | Fair Value | Fair Value | Fair Value | Fair Value | Fair Value | ||
5.55% Mortgage note due in 2016 | 5.73% Mortgage notes due in 2015 | 6.21% Mortgage notes due in 2016 | Mortgage note payable, 5.88% interest rate, due in 2021 | 7% Mortgage notes due in 2019 | 8.15% Mortgage notes due in 2021 | 5.55% Mortgage note due in 2016 | 5.73% Mortgage notes due in 2015 | 6.21% Mortgage notes due in 2016 | Mortgage note payable, 5.88% interest rate, due in 2021 | 7% Mortgage notes due in 2019 | 8.15% Mortgage notes due in 2021 | |||||||||||||||||||
Fair Value of Financial Instruments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Mortgage notes payable | $189,959 | $90,727 | $86,015 | $83,000 | ' | $47,906 | $48,377 | $23,990 | $24,147 | $14,475 | $14,524 | ' | $9,749 | $9,919 | $7,824 | $8,284 | $189,959 | $86,015 | $47,906 | $23,990 | $14,475 | $9,749 | $7,824 | $194,987 | $86,015 | $49,238 | $25,928 | $14,926 | $10,445 | $8,435 |
Interest rate (as a percent) | ' | ' | 5.55% | 5.55% | 5.55% | 5.73% | 5.73% | 6.21% | 6.21% | 5.88% | ' | 5.88% | 7.00% | 7.00% | 8.15% | 8.15% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unamortized fair value premium included in mortgage notes | ' | ' | $3,015 | $3,147 | $3,015 | $300 | $300 | ' | ' | ' | ' | ' | $683 | $683 | $465 | $465 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair_Value_of_Assets_and_Liabi3
Fair Value of Assets and Liabilities (Details 2) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Fair Value of Assets and Liabilities | ' | ' |
Property held for sale | $1,492,136 | $1,380,927 |
Nonrecurring | Total | ' | ' |
Fair Value of Assets and Liabilities | ' | ' |
Property held for sale | 12,260 | ' |
Nonrecurring | Significant Unobservable Inputs (Level 3) | ' | ' |
Fair Value of Assets and Liabilities | ' | ' |
Property held for sale | $12,260 | ' |
Shareholders_Equity_Details
Shareholders' Equity (Details) (USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
In Thousands, except Share data, unless otherwise specified | Jul. 14, 2014 | 21-May-14 | 2-May-14 | Feb. 21, 2014 | Jul. 31, 2014 | Aug. 05, 2014 | Jun. 30, 2014 | Jun. 30, 2014 |
item | ||||||||
Distributions | ' | ' | ' | ' | ' | ' | ' | ' |
Cash distribution to common shareholders (in dollars per share) | ' | $0.43 | ' | $0.43 | ' | ' | ' | ' |
Distribution payable to common shareholders | ' | $23,535 | ' | $23,530 | ' | ' | ' | ' |
Distribution payable to common shareholders (in dollars per share) | $0.43 | ' | ' | ' | ' | ' | ' | ' |
Distributions to common shareholders | 23,541 | ' | ' | ' | ' | ' | ' | ' |
Number of shares issued | ' | ' | 2,500 | ' | ' | 3,370 | 9,943 | 16,318 |
Number of common shares sold in public offering | ' | ' | ' | ' | 15,525,000 | ' | ' | ' |
Price per share of shares sold | ' | ' | ' | ' | $23.50 | ' | ' | ' |
Net proceeds on sale of shares | ' | ' | ' | ' | 349,731 | ' | ' | ' |
Share Issuances | ' | ' | ' | ' | ' | ' | ' | ' |
Dilutive securities | ' | ' | ' | ' | ' | ' | ' | $0 |
Number of trustees | ' | ' | 5 | ' | ' | ' | ' | ' |
Closing share price of the entity's common shares (in dollars per share) | ' | ' | $25.43 | ' | ' | ' | ' | ' |
Related_Person_Transactions_De
Related Person Transactions (Details) (USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | 6 Months Ended | 0 Months Ended | 3 Months Ended | 6 Months Ended | 0 Months Ended | 3 Months Ended | 6 Months Ended | 0 Months Ended | 6 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||||||||||
In Thousands, except Share data, unless otherwise specified | 2-May-14 | Aug. 05, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Jul. 09, 2014 | 9-May-14 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jul. 09, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Mar. 15, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | 9-May-14 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Jun. 30, 2014 |
item | EQC | RMR | RMR | RMR | RMR | RMR | RMR | RMR | RMR | RMR | RMR | EQC | EQC | EQC | AIC | AIC | AIC | AIC | AIC | AIC | AIC | AIC | ||||||||
SIR | agreement | agreement | EQC | Office | Office | Office | Office | item | item | item | item | Maximum | ||||||||||||||||||
item | item | SIR | item | |||||||||||||||||||||||||||
Related Party Transaction | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of employees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of agreements to avail management and administrative services | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period before which the written notice is required to be given for cancellation of business management agreement and the property management agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | '120 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period before which the written notice is required to be given for cancellation of business management agreement and the property management agreement before amendment of the agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | '60 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of business days before which the notice is required to be given for termination of property management agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period over which transition services will be provided by the related party after termination of the agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | '120 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business management fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $2,534 | $2,528 | $4,935 | $4,982 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares issued | 2,500 | 3,370 | ' | 9,943 | ' | 16,318 | ' | ' | ' | ' | ' | ' | 16,318 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Base business management fee payable in common shares (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property management and construction supervision fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,985 | 1,799 | 3,939 | 3,615 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of regional offices leased | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Rental income earned | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 14 | 8 | 33 | 15 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of interest in subsidiaries | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares sold by former parent company | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9,950,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common shares registration and sale expenses paid by related party | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 310 | ' | ' | ' | ' | ' | ' | ' | ' |
Par value of SIR common shares of beneficial interest acquired pursuant to stock purchase agreement (in dollars per share) | ' | ' | $0.01 | $0.01 | ' | $0.01 | ' | $0.01 | $0.01 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash purchase price excluding accrued dividends | ' | ' | ' | ' | ' | ' | ' | ' | 677,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash purchase price excluding accrued dividends (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | $31.51 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accrued dividends | ' | ' | ' | ' | ' | ' | ' | ' | 11,300 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accrued dividends (in dollars per share) | ' | ' | ' | ' | ' | ' | ' | ' | $0.53 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash purchase price including accrued dividends | ' | ' | ' | ' | ' | ' | ' | ' | 688,800 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of outstanding common shares owned | ' | ' | ' | ' | ' | ' | ' | ' | 35.90% | ' | ' | ' | ' | ' | 0.80% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of the product of the number of SIR common shares sold in the transaction times the excess of the price per share paid by the purchaser and $31.51 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of other companies owning interest in equity method investment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6 | 4 | 4 | ' | 4 | ' | ' | ' |
SIR Common shares of beneficial interest acquired pursuant to stock purchase agreement | ' | ' | ' | ' | ' | ' | ' | ' | 21,500,000 | ' | ' | ' | ' | ' | 500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of interest | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 14.30% | ' | ' | ' | ' | ' | ' | 20.00% |
Shares of related party expected to be purchased, formerly owned by former parent company | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,857 | ' | ' | ' | ' | ' | ' | ' |
Value of shares of related party expected to purchase, formerly owned by former parent company | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 825 | ' | ' | ' | ' | ' | ' | ' |
Program extension term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 year | ' | ' | ' | ' | ' | ' |
Coverage of purchased property insurance | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 500,000 | ' | ' | ' |
Premium for property insurance | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 526 | ' | ' | ' | ' | ' | ' |
Amount invested in equity investee | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,019 | 6,019 | ' | 6,019 | ' | ' | ' |
Investment at carrying value | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,918 | 6,918 | ' | 6,918 | ' | 6,031 | ' |
Recognized income (loss) related to investment in AIC | ' | ' | ' | 118 | 79 | 21 | 155 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 118 | 79 | 21 | 155 | ' | ' |
Number of other companies to whom management services were provided by related party | ' | ' | 4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Premium paid for combined directors' and officers' liability insurance policy | ' | ' | $50 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |