Exhibit 99.2
Table of Contents | ||
| Same-Store Analysis | |
12-13 | |
Debt Covenants and Credit Ratings | |
22-26 | |
Forward-Looking Statements
We make statements in this report that are considered “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, which are usually identified by the use of words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “seeks,” “should,” “will,” and variations of such words or similar expressions and includes statements regarding our anticipated yields. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and are including this statement for purposes of complying with those safe harbor provisions. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control including, without limitation:
| • | national, international, regional and local economic conditions; |
| • | the general level of interest rates and the availability of capital; |
| • | the competitive environment in which we operate; |
| • | real estate risks, including fluctuations in real estate values and the general economic climate in local markets and competition for tenants in such markets; |
| • | decreased rental rates or increasing vacancy rates; |
| • | defaults on or non-renewal of leases by tenants; |
| • | acquisition and development risks, including failure of such acquisitions and development projects to perform in accordance with projections; |
| • | the timing of acquisitions, dispositions and development; |
| • | natural disasters such as fires, floods, tornadoes, hurricanes and earthquakes; |
| • | energy costs; |
| • | the terms of governmental regulations that affect us and interpretations of those regulations, including the costs of compliance with those regulations, changes in real estate and zoning laws and increases in real property tax rates; |
| • | financing risks, including the risk that our cash flows from operations may be insufficient to meet required payments of principal, interest and other commitments; |
| • | lack of or insufficient amounts of insurance; |
| • | litigation, including costs associated with prosecuting or defending claims and any adverse outcomes; |
| • | the consequences of future terrorist attacks or civil unrest; |
| • | environmental liabilities, including costs, fines or penalties that may be incurred due to necessary remediation of contamination of properties presently owned or previously owned by us; and |
| • | other risks and uncertainties detailed from time to time in our filings with the Securities and Exchange Commission. |
In addition, our current and continuing qualification as a real estate investment trust, or REIT, involves the application of highly technical and complex provisions of the Internal Revenue Code of 1986, or the Code, and depends on our ability to meet the various requirements imposed by the Code through actual operating results, distribution levels and diversity of stock ownership.
Second Quarter 2017 Supplemental Reporting Package |  | Page 2 |
Consolidated Statements of Operations (unaudited, amounts in thousands, except per share data) | ||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||||||
| REVENUES: | |||||||||||||||
| Rental revenues | $ | 104,217 | $ | 95,597 | $ | 209,641 | $ | 189,574 | |||||||
| Institutional capital management and other fees | 304 | 305 | 776 | 698 | |||||||||||
| Total revenues | 104,521 | 95,902 | 210,417 | 190,272 | |||||||||||
| OPERATING EXPENSES: | |||||||||||||||
| Rental expenses | 9,226 | 8,986 | 18,688 | 19,035 | |||||||||||
| Real estate taxes | 15,529 | 15,054 | 32,295 | 29,655 | |||||||||||
| Real estate related depreciation and amortization | 41,447 | 39,901 | 83,052 | 79,971 | |||||||||||
| General and administrative | 7,821 | 7,358 | 15,013 | 13,620 | |||||||||||
| Casualty (gain) loss | — | 162 | (270 | ) | 162 | ||||||||||
| Total operating expenses | 74,023 | 71,461 | 148,778 | 142,443 | |||||||||||
| Operating income | 30,498 | 24,441 | 61,639 | 47,829 | |||||||||||
| OTHER INCOME (EXPENSE): | |||||||||||||||
| Equity in earnings of unconsolidated joint ventures, net | 2,737 | 935 | 4,253 | 1,819 | |||||||||||
| Gain on dispositions of real estate interests | 28,076 | 12,955 | 28,102 | 43,052 | |||||||||||
| Interest expense | (16,805 | ) | (15,635 | ) | (33,560 | ) | (32,057 | ) | |||||||
| Interest and other income (expense) | (7 | ) | 48 | (12 | ) | 563 | |||||||||
| Impairment loss on land | (938 | ) | — | (938 | ) | — | |||||||||
| Income tax expense and other taxes | (69 | ) | (172 | ) | (203 | ) | (288 | ) | |||||||
| Consolidated net income of DCT Industrial Trust Inc. | 43,492 | 22,572 | 59,281 | 60,918 | |||||||||||
| Net income attributable to noncontrolling interests | (1,858 | ) | (1,154 | ) | (2,688 | ) | (3,109 | ) | |||||||
| Net income attributable to common stockholders | 41,634 | 21,418 | 56,593 | 57,809 | |||||||||||
| Distributed and undistributed earnings allocated to participating securities | (162 | ) | (106 | ) | (323 | ) | (334 | ) | |||||||
| Adjusted net income attributable to common stockholders | $ | 41,472 | $ | 21,312 | $ | 56,270 | $ | 57,475 | |||||||
| NET EARNINGS PER COMMON SHARE: | |||||||||||||||
| Basic | $ | 0.45 | $ | 0.24 | $ | 0.61 | $ | 0.65 | |||||||
| Diluted | $ | 0.45 | $ | 0.24 | $ | 0.61 | $ | 0.64 | |||||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | |||||||||||||||
| Basic | 92,307 | 89,748 | 92,030 | 89,066 | |||||||||||
| Diluted | 92,429 | 90,184 | 92,156 | 89,490 | |||||||||||
Second Quarter 2017 Supplemental Reporting Package | | Page 3 |
Consolidated Balance Sheets (unaudited, amounts in thousands) | ||
| June 30, 2017 | December 31, 2016 | ||||||
| ASSETS: | |||||||
| Operating portfolio | $ | 4,139,292 | $ | 4,123,130 | |||
| Value-add acquisitions | 31,233 | 54,512 | |||||
| Properties under development | 246,643 | 161,381 | |||||
| Properties in pre-development | 70,318 | 52,998 | |||||
| Properties under redevelopment | 19,948 | 29,754 | |||||
| Land held | 4,026 | 7,698 | |||||
| Total investment in properties | 4,511,460 | 4,429,473 | |||||
| Less accumulated depreciation and amortization | (891,553 | ) | (839,773 | ) | |||
| Net investment in properties | 3,619,907 | 3,589,700 | |||||
| Investments in and advances to unconsolidated joint ventures | 85,055 | 95,606 | |||||
| Net investment in real estate | 3,704,962 | 3,685,306 | |||||
| Cash and cash equivalents | 17,229 | 10,286 | |||||
| Restricted cash | 38,339 | 7,346 | |||||
| Straight-line rent and other receivables, net | 78,649 | 79,889 | |||||
| Other assets, net | 21,524 | 25,315 | |||||
| Assets held for sale | 6,246 | — | |||||
| Total assets | $ | 3,866,949 | $ | 3,808,142 | |||
| LIABILITIES AND EQUITY: | |||||||
| Accounts payable and accrued expenses | $ | 95,604 | $ | 93,097 | |||
| Distributions payable | 30,032 | 29,622 | |||||
| Tenant prepaids and security deposits | 34,745 | 32,884 | |||||
| Other liabilities | 37,426 | 37,403 | |||||
| Intangible lease liabilities, net | 19,863 | 21,421 | |||||
| Line of credit | 133,000 | 75,000 | |||||
| Senior unsecured notes | 1,328,122 | 1,351,969 | |||||
| Mortgage notes | 163,608 | 201,959 | |||||
| Liabilities related to assets held for sale | 190 | — | |||||
| Total liabilities | 1,842,590 | 1,843,355 | |||||
| Total stockholders’ equity | 1,924,389 | 1,862,049 | |||||
| Noncontrolling interests | 99,970 | 102,738 | |||||
| Total liabilities and equity | $ | 3,866,949 | $ | 3,808,142 | |||
Second Quarter 2017 Supplemental Reporting Package | | Page 4 |
Funds From Operations (“FFO”) (unaudited, amounts in thousands, except per share and unit data) | ||
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||||||||
| Reconciliation of net income attributable to common stockholders to FFO: | |||||||||||||||||
| Net income attributable to common stockholders | $ | 41,634 | $ | 21,418 | $ | 56,593 | $ | 57,809 | |||||||||
| Adjustments: | |||||||||||||||||
| Real estate related depreciation and amortization | 41,447 | �� | 39,901 | 83,052 | 79,971 | ||||||||||||
| Equity in earnings of unconsolidated joint ventures, net | (2,737 | ) | (935 | ) | (4,253 | ) | (1,819 | ) | |||||||||
Equity in FFO of unconsolidated joint ventures(1) | 3,394 | 2,451 | 6,632 | 4,818 | |||||||||||||
| Gain on dispositions of real estate interests | (28,076 | ) | (12,955 | ) | (28,102 | ) | (43,052 | ) | |||||||||
| Noncontrolling interests in the above adjustments | (664 | ) | (1,411 | ) | (2,499 | ) | (2,097 | ) | |||||||||
| FFO attributable to unitholders | 2,095 | 2,182 | 4,349 | 4,443 | |||||||||||||
FFO attributable to common stockholders and unitholders – basic and diluted(2) | 57,093 | 50,651 | 115,772 | 100,073 | |||||||||||||
| Adjustments: | |||||||||||||||||
| Impairment loss on land | 938 | — | 938 | — | |||||||||||||
| Acquisition costs | — | 72 | 13 | 92 | |||||||||||||
| Hedge ineffectiveness (non-cash) | (24 | ) | 357 | 6 | 1,420 | ||||||||||||
| FFO, as adjusted, attributable to common stockholders and unitholders – basic and diluted | $ | 58,007 | $ | 51,080 | $ | 116,729 | $ | 101,585 | |||||||||
| FFO per common share and unit – basic | $ | 0.59 | $ | 0.54 | $ | 1.20 | $ | 1.07 | |||||||||
| FFO per common share and unit – diluted | $ | 0.59 | $ | 0.53 | $ | 1.20 | $ | 1.06 | |||||||||
| FFO, as adjusted, per common share and unit – basic | $ | 0.60 | $ | 0.54 | $ | 1.21 | $ | 1.08 | |||||||||
| FFO, as adjusted, per common share and unit – diluted | $ | 0.60 | $ | 0.54 | $ | 1.21 | $ | 1.08 | |||||||||
| FFO weighted average common shares and units outstanding: | |||||||||||||||||
| Common shares for net earnings per share | 92,307 | 89,748 | 92,030 | 89,066 | |||||||||||||
| Participating securities | 520 | 592 | 494 | 550 | |||||||||||||
| Units | 3,520 | 4,039 | 3,592 | 4,138 | |||||||||||||
| FFO weighted average common shares, participating securities and units outstanding – basic | 96,347 | 94,379 | 96,116 | 93,754 | |||||||||||||
| Dilutive common stock equivalents | 122 | 436 | 126 | 424 | |||||||||||||
| FFO weighted average common shares, participating securities and units outstanding – diluted | 96,469 | 94,815 | 96,242 | 94,178 | |||||||||||||
| Reconciliation of net operating income (“NOI”) to FFO: | |||||||||||||||||
NOI(3)(4) | $ | 79,462 | $ | 71,557 | $ | 158,658 | $ | 140,884 | |||||||||
| Adjustments: | |||||||||||||||||
Equity in FFO of unconsolidated joint ventures(1) | 3,394 | 2,451 | 6,632 | 4,818 | |||||||||||||
| Institutional capital management and other fees | 304 | 305 | 776 | 698 | |||||||||||||
| Casualty gain (loss) | — | (162 | ) | 270 | (162 | ) | |||||||||||
| General and administrative expense | (7,821 | ) | (7,358 | ) | (15,013 | ) | (13,620 | ) | |||||||||
| Impairment loss on land | (938 | ) | — | (938 | ) | — | |||||||||||
| Interest expense | (19,892 | ) | (18,296 | ) | (39,332 | ) | (37,665 | ) | |||||||||
| Capitalized interest expense | 3,087 | 2,661 | 5,772 | 5,608 | |||||||||||||
| Interest and other income (expense) | (7 | ) | 48 | (12 | ) | 563 | |||||||||||
| Income tax expense and other taxes | (69 | ) | (172 | ) | (203 | ) | (288 | ) | |||||||||
| FFO attributable to noncontrolling interests | (427 | ) | (383 | ) | (838 | ) | (763 | ) | |||||||||
FFO attributable to common stockholders and unitholders – basic and diluted(2) | 57,093 | 50,651 | 115,772 | 100,073 | |||||||||||||
| Adjustments: | |||||||||||||||||
| Impairment loss on land | 938 | — | 938 | — | |||||||||||||
| Acquisition costs | — | 72 | 13 | 92 | |||||||||||||
| Hedge ineffectiveness (non-cash) | (24 | ) | 357 | 6 | 1,420 | ||||||||||||
| FFO, as adjusted, attributable to common stockholders and unitholders – basic and diluted | $ | 58,007 | $ | 51,080 | $ | 116,729 | $ | 101,585 | |||||||||
(1) | Equity in FFO of unconsolidated joint ventures is determined as our share of FFO from each unconsolidated joint venture. See Definitions for additional information. |
(2) | FFO as defined by the National Association of Real Estate Investment Trusts (NAREIT). |
(3) | See the reconciliation of non-GAAP financial measure to net income attributable to common stockholders in Definitions. |
(4) | Includes assets held for sale. |
Second Quarter 2017 Supplemental Reporting Package | | Page 5 |
Selected Financial Data (unaudited, amounts in thousands) | ||
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| NOI: | ||||||||||||||||
| Rental revenues | $ | 104,217 | $ | 95,597 | $ | 209,641 | $ | 189,574 | ||||||||
| Rental expenses and real estate taxes | (24,755 | ) | (24,040 | ) | (50,983 | ) | (48,690 | ) | ||||||||
NOI(1) | $ | 79,462 | $ | 71,557 | $ | 158,658 | $ | 140,884 | ||||||||
TOTAL CONSOLIDATED PROPERTIES:(2) | ||||||||||||||||
| Square feet as of period end | 65,712 | 64,464 | 65,712 | 64,464 | ||||||||||||
| Average occupancy | 95.6 | % | 94.0 | % | 95.3 | % | 93.9 | % | ||||||||
| Occupancy as of period end | 95.7 | % | 94.6 | % | 95.7 | % | 94.6 | % | ||||||||
CONSOLIDATED OPERATING PORTFOLIO:(2) | ||||||||||||||||
| Square feet as of period end | 63,812 | 62,917 | 63,812 | 62,917 | ||||||||||||
| Average occupancy | 97.3 | % | 96.0 | % | 97.3 | % | 95.6 | % | ||||||||
| Occupancy as of period end | 97.5 | % | 96.2 | % | 97.5 | % | 96.2 | % | ||||||||
| SUPPLEMENTAL CONSOLIDATED CASH FLOW AND OTHER INFORMATION: | ||||||||||||||||
Straight-line rent receivable (balance sheet)(2) | $ | 74,934 | $ | 61,669 | $ | 74,934 | $ | 61,669 | ||||||||
| Straight-line rents – increase to revenue, net of related bad debt expense | $ | 822 | $ | 5,694 | $ | 4,220 | $ | 11,151 | ||||||||
| Free rent | $ | 1,173 | $ | 5,381 | $ | 4,704 | $ | 11,356 | ||||||||
| Revenue from lease terminations | $ | 435 | $ | 572 | $ | 936 | $ | 652 | ||||||||
| Bad debt expense, excluding expense related to straight-line rent receivable | $ | (124 | ) | $ | (20 | ) | $ | (11 | ) | $ | 91 | |||||
| Net amortization of below market rents – increase to revenue | $ | 712 | $ | 769 | $ | 1,444 | $ | 1,480 | ||||||||
| Scheduled principal amortization | $ | 1,616 | $ | 2,134 | $ | 3,230 | $ | 3,309 | ||||||||
| Capitalized interest | $ | 3,087 | $ | 2,661 | $ | 5,772 | $ | 5,608 | ||||||||
| Non-cash interest expense | $ | 1,421 | $ | 1,605 | $ | 2,690 | $ | 3,918 | ||||||||
| Stock-based compensation amortization | $ | 1,578 | $ | 1,438 | $ | 3,004 | $ | 2,740 | ||||||||
Capitalized indirect leasing costs(3) | $ | 649 | $ | 807 | $ | 1,427 | $ | 1,725 | ||||||||
| NOI for properties sold during current quarter | $ | 604 | N/A | $ | 1,436 | N/A | ||||||||||
| CONSOLIDATED CAPITAL EXPENDITURES: | ||||||||||||||||
| Development | $ | 48,988 | $ | 48,439 | $ | 78,692 | $ | 109,086 | ||||||||
| Redevelopment | 1,245 | 6,381 | 4,154 | 8,781 | ||||||||||||
| Due diligence | 1,089 | 912 | 1,563 | 2,056 | ||||||||||||
| Casualty expenditures | 32 | 452 | 56 | 964 | ||||||||||||
| Building and land improvements | 5,218 | 3,888 | 6,110 | 5,008 | ||||||||||||
Tenant improvements and leasing costs(3) | 6,963 | 11,007 | 16,690 | 22,307 | ||||||||||||
| Total capital expenditures | $ | 63,535 | $ | 71,079 | $ | 107,265 | $ | 148,202 | ||||||||
(1) | See reconciliation of non-GAAP financial measure to net income attributable to common stockholders in Definitions. |
(2) | Includes assets held for sale. |
(3) | Capitalized indirect leasing costs are included in “Tenant improvements and leasing costs.” |
Second Quarter 2017 Supplemental Reporting Package | | Page 6 |
Same-Store Analysis (unaudited, amounts in thousands, except number of properties) | ||
| For the Three Months Ended June 30, | |||||||||||
Quarterly Same-Store Portfolio Analysis (Straight-Line Basis)(1) | 2017 | 2016 | Percentage Change | ||||||||
| Number of properties | 376 | 376 | |||||||||
| Square feet as of period end | 59,496 | 59,496 | |||||||||
| Average occupancy | 97.1 | % | 97.0 | % | 0.1 | % | |||||
| Occupancy as of period end | 97.3 | % | 97.3 | % | 0.0 | % | |||||
| Rental revenues | $ | 93,982 | $ | 91,353 | 2.9 | % | |||||
| Less: revenue from lease terminations | (435 | ) | (22 | ) | |||||||
| Add: early termination straight-line rent adjustment | 117 | 22 | |||||||||
| Rental revenues, excluding revenue from lease terminations | 93,664 | 91,353 | 2.5 | % | |||||||
| Rental expenses and real estate taxes | (22,435 | ) | (23,002 | ) | (2.5 | )% | |||||
NOI, excluding revenue from lease terminations(2) | $ | 71,229 | $ | 68,351 | 4.2 | % | |||||
| Quarterly Same-Store Portfolio Analysis (Cash Basis) | |||||||||||
| Rental revenues | $ | 93,316 | $ | 85,789 | 8.8 | % | |||||
| Less: revenue from lease terminations | (435 | ) | (22 | ) | |||||||
| Add: early termination straight-line rent adjustment | 117 | 22 | |||||||||
| Rental revenues, excluding revenue from lease terminations | 92,998 | 85,789 | 8.4 | % | |||||||
| Rental expenses and real estate taxes | (22,435 | ) | (23,003 | ) | (2.5 | )% | |||||
Cash NOI, excluding revenue from lease terminations(2) | $ | 70,563 | $ | 62,786 | 12.4 | % | |||||
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||||||||
Annual Same-Store Portfolio Analysis (Straight-Line Basis)(3) | 2017 | 2016 | Percentage Change | 2017 | 2016 | Percentage Change | ||||||||||||||||
| Number of properties | 367 | 367 | 367 | 367 | ||||||||||||||||||
| Square feet as of period end | 56,696 | 56,696 | 56,696 | 56,696 | ||||||||||||||||||
| Average occupancy | 96.9 | % | 96.9 | % | 0.0 | % | 96.9 | % | 96.5 | % | 0.4 | % | ||||||||||
| Occupancy as of period end | 97.1 | % | 97.2 | % | (0.1 | )% | 97.1 | % | 97.2 | % | (0.1 | )% | ||||||||||
| Rental revenues | $ | 88,800 | $ | 86,537 | 2.6 | % | $ | 179,391 | $ | 172,710 | 3.9 | % | ||||||||||
| Less: revenue from lease terminations | (435 | ) | (22 | ) | (936 | ) | (102 | ) | ||||||||||||||
| Add: early termination straight-line rent adjustment | 117 | 22 | 134 | 132 | ||||||||||||||||||
| Rental revenues, excluding revenue from lease terminations | 88,482 | 86,537 | 2.2 | % | 178,589 | 172,740 | 3.4 | % | ||||||||||||||
| Rental expenses and real estate taxes | (21,438 | ) | (21,995 | ) | (2.5 | )% | (44,306 | ) | (44,653 | ) | (0.8 | )% | ||||||||||
NOI, excluding revenue from lease terminations(2) | $ | 67,044 | $ | 64,542 | 3.9 | % | $ | 134,283 | $ | 128,087 | 4.8 | % | ||||||||||
| Annual Same-Store Portfolio Analysis (Cash Basis) | ||||||||||||||||||||||
| Rental revenues | $ | 88,370 | $ | 82,921 | 6.6 | % | $ | 177,317 | $ | 164,849 | 7.6 | % | ||||||||||
| Less: revenue from lease terminations | (435 | ) | (22 | ) | (936 | ) | (102 | ) | ||||||||||||||
| Add: early termination straight-line rent adjustment | 117 | 22 | 134 | 132 | ||||||||||||||||||
| Rental revenues, excluding revenue from lease terminations | 88,052 | 82,921 | 6.2 | % | 176,515 | 164,879 | 7.1 | % | ||||||||||||||
| Rental expenses and real estate taxes | (21,438 | ) | (21,996 | ) | (2.5 | )% | (44,312 | ) | (44,646 | ) | (0.7 | )% | ||||||||||
Cash NOI, excluding revenue from lease terminations(2) | $ | 66,614 | $ | 60,925 | 9.3 | % | $ | 132,203 | $ | 120,233 | 10.0 | % | ||||||||||
(1) | Includes all consolidated stabilized acquisitions acquired before April 1, 2016 and all consolidated Value-Add Acquisitions, developments and Redevelopments stabilized prior to April 1, 2016. Once a property is included in the Quarterly Same-Store Portfolio, it remains until it is subsequently disposed or placed into redevelopment. We consider NOI from our Quarterly Same-Store Portfolio to be a useful measure in evaluating our financial performance and to improve comparability between periods by including only properties owned for those comparable periods. |
(2) | See reconciliation of non-GAAP financial measure to net income attributable to common stockholders in Definitions. |
(3) | Includes all consolidated stabilized acquisitions acquired before January 1, 2016 and all consolidated Value-Add Acquisitions, developments and Redevelopments stabilized prior to January 1, 2016. Once a property is included in the Annual Same-Store Portfolio, it remains until it is subsequently disposed or placed into redevelopment. We consider NOI from our Annual Same-Store Portfolio to be a useful measure in evaluating our financial performance and to improve comparability between periods by including only properties owned for those comparable periods. |
Second Quarter 2017 Supplemental Reporting Package | | Page 7 |
Consolidated Leasing Activity (unaudited) | ||
Leasing Statistics(1)
Number of Leases Signed | Square Feet Signed | Cash Basis Rent Growth | Straight-Line Basis Rent Growth | Weighted Average Lease Term(2) | Turnover Costs(3) | Turnover Costs Per Square Foot(3) | |||||||||||||||
| SECOND QUARTER 2017 | (in thousands) | (in months) | (in thousands) | ||||||||||||||||||
| New | 28 | 1,150 | 6.9 | % | 27.8 | % | 64 | $ | 4,175 | $ | 3.63 | ||||||||||
| Renewal | 28 | 1,759 | 24.3 | % | 47.5 | % | 46 | 2,480 | 1.41 | ||||||||||||
| Value-add acquisition, development and redevelopment | 5 | 720 | N/A | N/A | 56 | N/A | N/A | ||||||||||||||
| Total/Weighted Average | 61 | 3,629 | 17.8 | % | 40.2 | % | 54 | $ | 6,655 | $ | 2.29 | ||||||||||
Weighted Average Retention(4) | 71.3 | % | |||||||||||||||||||
| YEAR TO DATE 2017 | |||||||||||||||||||||
| New | 46 | 1,976 | 10.3 | % | 27.6 | % | 57 | $ | 7,489 | $ | 3.79 | ||||||||||
| Renewal | 55 | 3,639 | 16.8 | % | 35.2 | % | 52 | 4,876 | 1.34 | ||||||||||||
| Value-add acquisition, development and redevelopment | 10 | 1,275 | N/A | N/A | 58 | N/A | N/A | ||||||||||||||
| Total/Weighted Average | 111 | 6,890 | 14.6 | % | 32.6 | % | 54 | $ | 12,365 | $ | 2.20 | ||||||||||
Weighted Average Retention(4) | 70.8 | % | |||||||||||||||||||
| FOUR QUARTERS ROLLING | |||||||||||||||||||||
| New | 78 | 3,230 | 9.2 | % | 24.9 | % | 57 | $ | 15,020 | $ | 4.65 | ||||||||||
| Renewal | 108 | 6,620 | 12.1 | % | 27.2 | % | 52 | 9,202 | 1.39 | ||||||||||||
| Value-add acquisition, development and redevelopment | 19 | 2,162 | N/A | N/A | 65 | N/A | N/A | ||||||||||||||
| Total/Weighted Average | 205 | 12,012 | 11.2 | % | 26.5 | % | 56 | $ | 24,222 | $ | 2.46 | ||||||||||
Weighted Average Retention(4) | 77.3 | % | |||||||||||||||||||
(1) | Reflects leases executed during the periods presented. Excludes leases with a term shorter than one year. |
(2) | Assumes no exercise of lease renewal options, if any. |
(3) | The estimated turnover costs associated with leases signed on Value-Add Acquisitions, developments and Redevelopments are included in the total projected costs for those investments and are therefore excluded from the leasing statistics. |
(4) | Excludes leases signed on Value-Add Acquisitions, developments and Redevelopments. |
Second Quarter 2017 Supplemental Reporting Package | | Page 8 |
Consolidated Lease Expirations (unaudited, amounts in thousands) | ||
Lease Expirations for Consolidated Portfolio by Market(1)
2017(2) | 2018 | 2019 | ||||||||||||||||
| Markets | Square Feet | Percentage of Total Square Feet(3) | Square Feet | Percentage of Total Square Feet(3) | Square Feet | Percentage of Total Square Feet(3) | ||||||||||||
| Atlanta | 80 | 1.1 | % | 746 | 10.0 | % | 1,070 | 14.3 | % | |||||||||
| Baltimore/Washington D.C. | 5 | 0.3 | % | 237 | 11.9 | % | 435 | 21.9 | % | |||||||||
| Charlotte | — | 0.0 | % | — | 0.0 | % | — | 0.0 | % | |||||||||
| Chicago | 377 | 5.1 | % | 863 | 11.6 | % | 865 | 11.7 | % | |||||||||
| Cincinnati | 200 | 6.3 | % | 797 | 25.1 | % | 498 | 15.7 | % | |||||||||
| Dallas | 58 | 1.0 | % | 472 | 8.4 | % | 795 | 14.1 | % | |||||||||
| Denver | 122 | 11.2 | % | 63 | 5.8 | % | 409 | 37.6 | % | |||||||||
| Houston | 147 | 3.3 | % | 452 | 10.1 | % | 306 | 6.8 | % | |||||||||
| Indianapolis | 141 | 16.7 | % | — | 0.0 | % | 140 | 16.6 | % | |||||||||
| Louisville | — | 0.0 | % | 38 | 12.7 | % | 200 | 66.7 | % | |||||||||
| Memphis | 472 | 34.1 | % | — | 0.0 | % | — | 0.0 | % | |||||||||
| Miami | — | 0.0 | % | 200 | 13.4 | % | 105 | 7.0 | % | |||||||||
| Nashville | — | 0.0 | % | 652 | 31.6 | % | 622 | 30.1 | % | |||||||||
| New Jersey | — | 0.0 | % | 191 | 14.5 | % | 91 | 6.9 | % | |||||||||
| Northern California | 87 | 1.9 | % | 412 | 9.2 | % | 1,849 | 41.3 | % | |||||||||
| Orlando | 11 | 0.6 | % | 184 | 9.8 | % | 387 | 20.7 | % | |||||||||
| Pennsylvania | — | 0.0 | % | 713 | 24.6 | % | 873 | 30.1 | % | |||||||||
| Phoenix | 154 | 7.5 | % | 357 | 17.5 | % | 220 | 10.8 | % | |||||||||
| Seattle | 54 | 1.4 | % | 62 | 1.6 | % | 226 | 5.9 | % | |||||||||
| Southern California | — | 0.0 | % | 244 | 2.8 | % | 849 | 9.8 | % | |||||||||
| Total | 1,908 | 3.0 | % | 6,683 | 10.6 | % | 9,940 | 15.8 | % | |||||||||
Lease Expirations for Consolidated Portfolio Summarized(1)
| Year | Square Feet Related to Expiring Leases | Annualized Base Rent of Expiring Leases(4) | Percentage of Total Annualized Base Rent | |||||||
2017(2) | 1,908 | $ | 9,558 | 2.7 | % | |||||
| 2018 | 6,683 | 31,507 | 9.0 | % | ||||||
| 2019 | 9,940 | 46,847 | 13.4 | % | ||||||
| 2020 | 8,728 | 47,398 | 13.5 | % | ||||||
| 2021 | 10,891 | 65,028 | 18.5 | % | ||||||
| Thereafter | 24,721 | 150,248 | 42.9 | % | ||||||
| Total occupied | 62,871 | $ | 350,586 | 100.0 | % | |||||
| Available or leased but not occupied | 2,841 | |||||||||
| Total consolidated properties | 65,712 | |||||||||
(1) | Assumes no exercise of lease renewal options, if any. |
(2) | Includes leases with an initial term of less than one year. |
(3) | Percentage is based on consolidated occupied square feet as of June 30, 2017 in each market and in total. |
(4) | Annualized base rent includes contractual rents in effect at the date of the lease expiration. |
Second Quarter 2017 Supplemental Reporting Package | | Page 9 |
Guidance (unaudited, dollar amounts in millions, except per share and unit data) | ||
Guidance(1)
| For the Six Months Ended June 30, 2017 | 2017 Estimate | |||||||||||||||||||
| Current Guidance | Previous Guidance | |||||||||||||||||||
| Actual | Low | High | Low | High | ||||||||||||||||
| Net earnings per common share – diluted | $ | 0.61 | $ | 0.84 | $ | 0.90 | $ | 0.54 | $ | 0.62 | ||||||||||
FFO, as adjusted, per common share and unit – diluted(2) | $ | 1.21 | $ | 2.39 | $ | 2.45 | $ | 2.36 | $ | 2.44 | ||||||||||
| ASSUMPTIONS: | ||||||||||||||||||||
Operating Metrics:(3) | ||||||||||||||||||||
| Average consolidated operating occupancy | 97.30 | % | 97.00 | % | 97.75 | % | 96.50 | % | 97.50 | % | ||||||||||
| Annual Same-Store Portfolio: | ||||||||||||||||||||
NOI growth – cash basis(4) | 10.00 | % | 7.25 | % | 8.00 | % | 6.50 | % | 7.50 | % | ||||||||||
NOI growth – straight-line basis(4) | 4.80 | % | 3.75 | % | 4.50 | % | 3.25 | % | 4.25 | % | ||||||||||
| Capital Deployment: | ||||||||||||||||||||
Development starts(5) | $ | 59 | $ | 275 | $ | 350 | $ | 250 | $ | 350 | ||||||||||
Acquisitions(6) | $ | 16 | $ | 50 | $ | 100 | $ | 5 | $ | 100 | ||||||||||
| Capital Funding: | ||||||||||||||||||||
| Dispositions | $ | 56 | $ | 150 | $ | 250 | $ | 100 | $ | 200 | ||||||||||
| Equity issuance | $ | 60 | $ | 60 | $ | 100 | $ | 11 | $ | 100 | ||||||||||
General and administrative expense(7) | $ | 15.00 | $ | 28.75 | $ | 29.25 | $ | 27.75 | $ | 29.25 | ||||||||||
| Reconciliation of net earnings per share to FFO per common share and unit: | ||||||||||||||||||||
| Net earnings per common share – diluted | $ | 0.61 | $ | 0.84 | $ | 0.90 | $ | 0.54 | $ | 0.62 | ||||||||||
| Adjustments: | ||||||||||||||||||||
| Gain on dispositions of real estate interests | (0.29 | ) | (0.29 | ) | (0.29 | ) | 0.00 | 0.00 | ||||||||||||
Real estate related depreciation and amortization(8) | 0.88 | 1.81 | 1.81 | 1.81 | 1.81 | |||||||||||||||
| Noncontrolling interests in adjustments | 0.00 | 0.02 | 0.02 | 0.01 | 0.01 | |||||||||||||||
FFO per common share and unit – diluted(9) | 1.20 | 2.38 | 2.44 | 2.36 | 2.44 | |||||||||||||||
| Adjustments: | ||||||||||||||||||||
| Hedge ineffectiveness (non-cash) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||||||||
| Impairment loss on land | 0.01 | 0.01 | 0.01 | 0.00 | 0.00 | |||||||||||||||
| FFO, as adjusted, per common share and unit – diluted | $ | 1.21 | $ | 2.39 | $ | 2.45 | $ | 2.36 | $ | 2.44 | ||||||||||
(1) | Net earnings and FFO guidance are based on the significant assumptions noted in this table. |
(2) | Excludes impairment loss on land and potential non-cash interest expense related to hedge ineffectiveness. |
(3) | Does not consider potential future acquisitions or dispositions other than assets held for sale. |
(4) | Actual and assumed amounts exclude revenue from lease terminations. |
(5) | Represents our total projected investment for construction projects started or projected to start in 2017. |
(6) | Excludes the acquisition of land. |
(7) | Excludes actual acquisition costs. |
(8) | Includes our proportionate share of real estate depreciation and amortization from unconsolidated joint ventures. |
(9) | FFO as defined by the National Association of Real Estate Investment Trusts (NAREIT). |
Second Quarter 2017 Supplemental Reporting Package | | Page 10 |
Components of Net Asset Value (unaudited, amounts in thousands) | ||
| Cash Net Operating Income (“Cash NOI”) | For the Three Months Ended June 30, 2017 | ||
NOI(1) | $ | 79,462 | |
| Less: | |||
| Revenue from lease terminations | (435 | ) | |
| Straight-line rents, net of related bad debt expense | (822 | ) | |
| Net amortization of below market rents | (712 | ) | |
Cash NOI, excluding revenue from lease terminations(1) | 77,493 | ||
Proportionate share of Cash NOI from unconsolidated joint ventures(2) | 3,869 | ||
| Proportionate share of Cash NOI relating to noncontrolling interests | (513 | ) | |
Cash NOI attributable to common stockholders(1) | 80,849 | ||
| NOI adjustments to normalize Cash NOI: | |||
Free rent(3) | 919 | ||
Partial quarter adjustment for stabilized properties acquired(4) | 71 | ||
Partial quarter adjustment for properties disposed(5) | (661 | ) | |
Partial quarter adjustment for value-add acquisitions stabilized(6) | 46 | ||
Partial quarter adjustment for development properties stabilized(6) | 292 | ||
Partial quarter adjustment for redevelopment properties stabilized(6) | 82 | ||
Value-add acquisitions not yet placed into operating portfolio(7) | (478 | ) | |
Development properties not yet placed into operating portfolio(7) | (410 | ) | |
Redevelopment properties not yet placed into operating portfolio(7) | — | ||
| NOI adjustments, net | (139 | ) | |
Proforma Cash NOI(1) | $ | 80,710 | |
| Other income: | |||
| Institutional capital management and other fees | $ | 304 | |
Balance Sheet Items(8) | As of June 30, 2017 | ||
| Other assets: | |||
| Cash, cash equivalents and restricted cash | $ | 55,568 | |
| Other receivables, net | 3,766 | ||
Other tangible assets, net(9) | 19,005 | ||
| Value-add acquisitions at book value | 31,233 | ||
| Development properties at book value | 246,643 | ||
| Properties in pre-development at book value | 70,318 | ||
| Redevelopment properties at book value | 19,948 | ||
| Land held at book value | 4,026 | ||
| Other assets | $ | 450,507 | |
| Liabilities: | |||
Line of credit, senior unsecured notes and mortgage notes(10) | $ | 1,623,451 | |
DCT's proportionate share of debt related to unconsolidated joint ventures(11) | 45,494 | ||
| Accounts payable, accrued expenses and distributions payable | 125,748 | ||
| Tenant prepaids and security deposits | 34,823 | ||
| Other tangible liabilities | 4,808 | ||
| Estimated cost to stabilize Q2 2017 building acquisitions, if applicable | 215 | ||
| Liabilities | $ | 1,834,539 | |
Other information:(12) | |||
| Common shares outstanding at period end | 92,956 | ||
| Operating partnership units outstanding at period end | 3,440 | ||
(1) | See reconciliation of non-GAAP financial measure to net income attributable to common stockholders in Definitions. |
(2) | Amount is determined as our share of Cash NOI from unconsolidated joint ventures. See Definitions for additional information. |
(3) | Excludes approximately $0.3 million of free rent given during the quarter at properties associated with footnotes 4, 5, 6 and 7 below. |
(4) | Reflects three months of expected Cash NOI for stabilized properties acquired during the quarter, less actual Cash NOI recognized during the quarter related to these properties. |
(5) | Reflects actual Cash NOI recognized during the quarter for properties disposed of during the quarter and our proportionate share of Cash NOI recognized during the quarter from unconsolidated joint venture properties disposed of during the quarter. |
(6) | Reflects three months of expected Cash NOI for Value-Add Acquisitions, development and Redevelopment properties stabilized during the quarter, including our proportionate share of three months of expected Cash NOI from unconsolidated joint venture properties stabilized, less actual Cash NOI recognized during the quarter related to these properties. |
(7) | Reflects actual Cash NOI recognized during the quarter for Value-Add Acquisitions, development and Redevelopment properties not yet stabilized as of the end of the quarter. |
(8) | Includes assets held for sale. |
(9) | Excludes goodwill of approximately $0.9 million and deferred loan costs, net of amortization of approximately $1.7 million. |
(10) | Excludes $1.5 million of premiums, $7.0 million of noncontrolling interests' share of consolidated debt and $7.2 million of deferred loan costs, net of amortization. |
(11) | Amount is determined as our share of debt related to unconsolidated joint ventures. See Definitions for additional information. |
(12) | Excludes 0.5 million of participating securities and 0.1 million of potentially dilutive securities. |
Second Quarter 2017 Supplemental Reporting Package | | Page 11 |
Property Overview (unaudited) | ||
As of June 30, 2017
| Markets | Number of Buildings | Square Feet | Percentage of Total Square Feet | Occupancy Percentage(1) | Annualized Base Rent (2) (3) | Annualized Base Rent per Occupied Square Foot | Percentage of Total Annualized Base Rent | |||||||||||||||
CONSOLIDATED OPERATING PORTFOLIO:(4) | (in thousands) | (in thousands) | ||||||||||||||||||||
| Atlanta | 35 | 7,347 | 11.2 | % | 98.7 | % | $ | 26,398 | $ | 3.64 | 8.6 | % | ||||||||||
| Baltimore/Washington D.C. | 18 | 2,164 | 3.3 | % | 91.7 | % | 14,244 | 7.18 | 4.6 | % | ||||||||||||
| Charlotte | 1 | 472 | 0.7 | % | 100.0 | % | 1,698 | 3.60 | 0.6 | % | ||||||||||||
| Chicago | 36 | 8,043 | 12.2 | % | 92.2 | % | 28,847 | 3.89 | 9.4 | % | ||||||||||||
| Cincinnati | 29 | 3,177 | 4.8 | % | 99.8 | % | 11,085 | 3.49 | 3.6 | % | ||||||||||||
| Dallas | 40 | 5,668 | 8.6 | % | 96.5 | % | 21,161 | 3.87 | 6.9 | % | ||||||||||||
| Denver | 7 | 969 | 1.5 | % | 92.8 | % | 4,546 | 5.06 | 1.5 | % | ||||||||||||
| Houston | 37 | 4,537 | 6.9 | % | 98.9 | % | 27,355 | 6.10 | 8.9 | % | ||||||||||||
| Indianapolis | 2 | 844 | 1.3 | % | 100.0 | % | 3,424 | 4.06 | 1.1 | % | ||||||||||||
| Louisville | 1 | 300 | 0.5 | % | 100.0 | % | 822 | 2.74 | 0.3 | % | ||||||||||||
| Memphis | 2 | 1,385 | 2.1 | % | 100.0 | % | 3,985 | 2.88 | 1.3 | % | ||||||||||||
Miami(5) | 12 | 1,491 | 2.3 | % | 100.0 | % | 12,225 | 8.20 | 4.0 | % | ||||||||||||
| Nashville | 4 | 2,064 | 3.1 | % | 100.0 | % | 6,904 | 3.35 | 2.3 | % | ||||||||||||
| New Jersey | 8 | 1,313 | 2.0 | % | 100.0 | % | 8,146 | 6.20 | 2.7 | % | ||||||||||||
| Northern California | 31 | 4,475 | 6.8 | % | 100.0 | % | 28,639 | 6.40 | 9.3 | % | ||||||||||||
| Orlando | 21 | 1,962 | 3.0 | % | 95.4 | % | 8,289 | 4.43 | 2.7 | % | ||||||||||||
| Pennsylvania | 13 | 3,038 | 4.6 | % | 95.4 | % | 14,153 | 4.88 | 4.6 | % | ||||||||||||
| Phoenix | 23 | 2,060 | 3.1 | % | 99.0 | % | 9,612 | 4.71 | 3.1 | % | ||||||||||||
| Seattle | 29 | 3,717 | 5.7 | % | 100.0 | % | 21,954 | 5.91 | 7.2 | % | ||||||||||||
Southern California(5) | 48 | 8,786 | 13.4 | % | 98.3 | % | 49,546 | 5.74 | 16.2 | % | ||||||||||||
| Total/weighted average – operating portfolio | 397 | 63,812 | 97.1 | % | 97.5 | % | 303,033 | 4.87 | 98.9 | % | ||||||||||||
| VALUE-ADD ACQUISITIONS: | ||||||||||||||||||||||
| Denver | 2 | 190 | 0.3 | % | 100.0 | % | 1,499 | 7.88 | 0.5 | % | ||||||||||||
| Seattle | 1 | 120 | 0.2 | % | 71.5 | % | 465 | 5.42 | 0.1 | % | ||||||||||||
| Total/weighted average – value-add acquisitions | 3 | 310 | 0.5 | % | 89.0 | % | 1,964 | 7.12 | 0.6 | % | ||||||||||||
| DEVELOPMENT PROPERTIES: | ||||||||||||||||||||||
| Atlanta | 1 | 549 | 0.8 | % | 41.4 | % | 987 | 4.35 | 0.3 | % | ||||||||||||
| Dallas | 1 | 347 | 0.5 | % | 52.3 | % | 693 | 3.82 | 0.2 | % | ||||||||||||
| Miami | 1 | 136 | 0.2 | % | 0.0 | % | — | — | 0.0 | % | ||||||||||||
| Orlando | 1 | 95 | 0.1 | % | 0.0 | % | — | — | 0.0 | % | ||||||||||||
| Seattle | 1 | 251 | 0.4 | % | 0.0 | % | — | — | 0.0 | % | ||||||||||||
| Total/weighted average – development properties | 5 | 1,378 | 2.0 | % | 29.6 | % | 1,680 | 4.11 | 0.5 | % | ||||||||||||
| REDEVELOPMENT PROPERTIES: | ||||||||||||||||||||||
| Chicago | 1 | 101 | 0.2 | % | 0.0 | % | — | — | 0.0 | % | ||||||||||||
| Southern California | 1 | 111 | 0.2 | % | 0.0 | % | — | — | 0.0 | % | ||||||||||||
| Total/weighted average – redevelopment properties | 2 | 212 | 0.4 | % | 0.0 | % | — | — | 0.0 | % | ||||||||||||
| Total/weighted average – consolidated properties | 407 | 65,712 | 100.0 | % | 95.7 | % | $ | 306,677 | $ | 4.88 | 100.0 | % | ||||||||||
See footnotes on next page.
Second Quarter 2017 Supplemental Reporting Package | | Page 12 |
Property Overview (continued) | ||
As of June 30, 2017
| Markets | Number of Buildings | Percentage Owned(6) | Square Feet | Percentage of Total Square Feet | Occupancy Percentage(1) | Annualized Base Rent(2) | Annualized Base Rent per Occupied Square Foot | Percentage of Total Annualized Base Rent | ||||||||||||||||
UNCONSOLIDATED OPERATING PORTFOLIO:(7) | (in thousands) | (in thousands) | ||||||||||||||||||||||
Southern California Logistics Airport(8) | 8 | 50.0 | % | 2,975 | 39.2 | % | 99.9 | % | $ | 10,946 | $ | 3.68 | 38.4 | % | ||||||||||
| Total/weighted average – unconsolidated operating portfolio | 8 | 50.0 | % | 2,975 | 39.2 | % | 99.9 | % | 10,946 | 3.68 | 38.4 | % | ||||||||||||
| OPERATING PORTFOLIO IN CO-INVESTMENT VENTURES: | ||||||||||||||||||||||||
| Chicago | 2 | 20.0 | % | 1,033 | 13.6 | % | 94.1 | % | 3,051 | 3.14 | 10.7 | % | ||||||||||||
| Cincinnati | 1 | 20.0 | % | 543 | 7.2 | % | 100.0 | % | 2,189 | 4.03 | 7.7 | % | ||||||||||||
| Dallas | 1 | 20.0 | % | 540 | 7.1 | % | 100.0 | % | 1,809 | 3.35 | 6.3 | % | ||||||||||||
| Denver | 5 | 20.0 | % | 773 | 10.2 | % | 100.0 | % | 4,285 | 5.55 | 15.0 | % | ||||||||||||
| Nashville | 2 | 20.0 | % | 1,020 | 13.5 | % | 100.0 | % | 2,924 | 2.87 | 10.2 | % | ||||||||||||
| Orlando | 2 | 20.0 | % | 696 | 9.2 | % | 100.0 | % | 3,333 | 4.79 | 11.7 | % | ||||||||||||
| Total/weighted average – co-investment operating properties | 13 | 20.0 | % | 4,605 | 60.8 | % | 98.7 | % | 17,591 | 3.87 | 61.6 | % | ||||||||||||
| Total/weighted average – unconsolidated portfolio | 21 | 31.8 | % | 7,580 | 100.0 | % | 99.1 | % | $ | 28,537 | $ | 3.80 | 100.0 | % | ||||||||||
(1) | Based on leases commenced as of June 30, 2017. |
(2) | Annualized base rent is calculated as monthly contractual base rent (cash basis) per the terms of the lease, as of June 30, 2017, multiplied by 12. |
(3) | Excludes total annualized base rent associated with tenants currently in free rent periods of $4.2 million, which includes our proportionate share of free rent from unconsolidated joint ventures and excludes free rent related to Value-Add Acquisitions, developments and Redevelopments not yet placed into operation or stabilized during the three months ended June 30, 2017, based on the first month of cash base rent. |
(4) | Includes assets held for sale. |
(5) | As of June 30, 2017, our ownership interest in the Miami and Southern California properties was 99.6% and 95.2%, respectively, based on our equity ownership weighted by square feet. |
(6) | Percentage owned is based on equity ownership weighted by square feet. |
(7) | See Definitions for additional information. |
(8) | Although we contributed 100% of the initial cash equity capital required by the venture, after return of certain preferential distributions on capital invested, profits and losses are generally split 50/50. |
Second Quarter 2017 Supplemental Reporting Package | | Page 13 |
Value-Add Acquisitions Overview (unaudited, amounts in thousands, except acres and number of buildings) | ||
As of June 30, 2017
| Cost Incurred | |||||||||||||||||||||||||||||
| Project | Market | Acres | Number of Buildings | Square Feet | Percentage Owned(1) | Q2-2017 | Cumulative Costs at 6/30/2017 | Projected Investment | Acquisition Date | Percentage Leased(2) | |||||||||||||||||||
| Consolidated Value-Add Acquisitions Activities: | |||||||||||||||||||||||||||||
| Stabilized in Q2 2017 | |||||||||||||||||||||||||||||
| 435 Henry Robinson | Atlanta | 52 | 1 | 399 | 100 | % | $ | 431 | $ | 17,602 | $ | 17,602 | Q1-2015 | 100 | % | ||||||||||||||
Projected Stabilized Yield(3) | 7.5 | % | |||||||||||||||||||||||||||
| Value-Add Acquisitions in Lease-Up | |||||||||||||||||||||||||||||
17801 East 40th Ave(4) | Denver | 4 | 1 | 44 | 100 | % | $ | 5,309 | $ | 5,309 | $ | 5,524 | Q2-2017 | 100 | % | ||||||||||||||
10000 East 45th Avenue(5) | Denver | 7 | 1 | 146 | 100 | % | 0 | 15,539 | 16,144 | Q4-2016 | 100 | % | |||||||||||||||||
| 1725 Puyallup Street | Seattle | 8 | 1 | 120 | 100 | % | 1 | 10,385 | 10,531 | Q3-2014 | 71 | % | |||||||||||||||||
| Total Value-Add Acquisitions in Lease-Up | 19 | 3 | 310 | 100 | % | $ | 5,310 | $ | 31,233 | $ | 32,199 | 89 | % | ||||||||||||||||
Projected Stabilized Yield – Value-Add Acquisitions in Lease-Up(3) | 6.8 | % | |||||||||||||||||||||||||||
(1) | Percentage owned is based on equity ownership weighted by square feet. |
(2) | Percentage leased is computed as of the press release date. |
(3) | Yield computed on a GAAP basis including rents on a straight-line basis. |
(4) | Percentage leased includes a 44,000 square foot lease with a known move-out expected to occur within 24 months of the acquisition date. |
(5) | Percentage leased includes a 116,000 square foot lease with a known move-out expected to occur within 24 months of the acquisition date. |
Second Quarter 2017 Supplemental Reporting Package | | Page 14 |
Development Overview (unaudited, amounts in thousands, except acres and number of buildings) | ||
As of June 30, 2017
| Cost Incurred | |||||||||||||||||||||||||||||||
| Project | Market | Acres | Number of Buildings | Square Feet | Percentage Owned(1) | Q2-2017 | Cumulative Costs at 6/30/2017 | Projected Investment | Completion Date(2) | Percentage Leased(3) | |||||||||||||||||||||
| Development Activities: | |||||||||||||||||||||||||||||||
| Stabilized in Q2 2017 | |||||||||||||||||||||||||||||||
SCLA Building 18(4) | Southern California | 16 | 1 | 370 | 50 | % | (5) | $ | 6,916 | $ | 12,915 | $ | 16,118 | Q2-2017 | 100 | % | |||||||||||||||
Projected Stabilized Yield(6) | 9.0 | % | |||||||||||||||||||||||||||||
| Development Projects in Lease-Up | |||||||||||||||||||||||||||||||
| DCT North Satellite Distribution Center | Atlanta | 47 | 1 | 549 | 100 | % | $ | 952 | $ | 27,041 | $ | 31,627 | Q4-2016 | 83 | % | ||||||||||||||||
| DCT Waters Ridge | Dallas | 18 | 1 | 347 | 100 | % | 251 | 20,441 | 21,072 | Q4-2016 | 52 | % | |||||||||||||||||||
| DCT Commerce Center Building C | Miami | 8 | 1 | 136 | 100 | % | 2,137 | 14,885 | 15,900 | Q2-2017 | 100 | % | |||||||||||||||||||
| DCT Airport Distribution Center Building D | Orlando | 6 | 1 | 95 | 100 | % | 293 | 6,196 | 7,006 | Q3-2016 | 33 | % | |||||||||||||||||||
| DCT White River Corporate Center North | Seattle | 13 | 1 | 251 | 100 | % | 1,608 | 20,221 | 21,615 | Q4-2016 | 100 | % | |||||||||||||||||||
| Total | 92 | 5 | 1,378 | 100 | % | $ | 5,241 | $ | 88,784 | $ | 97,220 | 76 | % | ||||||||||||||||||
| Under Construction | |||||||||||||||||||||||||||||||
| DCT Terrapin Commerce Center Building I | Baltimore/Washington D.C. | 13 | 1 | 126 | 100 | % | $ | 249 | $ | 4,507 | $ | 14,585 | Q1-2018 | 0 | % | ||||||||||||||||
| DCT Central Avenue | Chicago | 54 | 1 | 190 | 100 | % | 7,851 | 45,620 | 63,755 | Q3-2017 | 100 | % | |||||||||||||||||||
| DCT Stockyards Industrial Center | Chicago | 10 | 1 | 167 | 100 | % | 746 | 13,106 | 15,801 | Q3-2017 | 0 | % | |||||||||||||||||||
| DCT Greenwood | Chicago | 8 | 1 | 140 | 100 | % | 2,633 | 4,872 | 11,642 | Q4-2017 | 0 | % | |||||||||||||||||||
| DCT Miller Road | Dallas | 17 | 1 | 270 | 100 | % | 4,236 | 11,923 | 15,098 | Q3-2017 | 42 | % | |||||||||||||||||||
| DCT DFW Trade Center | Dallas | 10 | 1 | 112 | 100 | % | 1,999 | 7,731 | 9,609 | Q3-2017 | 0 | % | |||||||||||||||||||
| DCT Summit Distribution Center | Denver | 12 | 1 | 168 | 100 | % | 2,977 | 5,787 | 13,787 | Q4-2017 | 0 | % | |||||||||||||||||||
| DCT Rail Center 225, B | Houston | 13 | 1 | 222 | 100 | % | 433 | 2,942 | 14,866 | Q1-2018 | 100 | % | |||||||||||||||||||
| DCT Commerce Center Building D | Miami | 8 | 1 | 137 | 100 | % | 2,652 | 9,125 | 15,787 | Q4-2017 | 0 | % | |||||||||||||||||||
| DCT Commerce Center Building E | Miami | 10 | 1 | 162 | 100 | % | 2,740 | 12,561 | 19,826 | Q4-2017 | 83 | % | |||||||||||||||||||
| Seneca Commerce Center Building I | Miami | 13 | 1 | 222 | 90 | % | 2,302 | 6,050 | 21,572 | Q1-2018 | 0 | % | |||||||||||||||||||
| DCT Arbor Avenue | Northern California | 40 | 1 | 796 | 100 | % | 9,955 | 33,635 | 52,693 | Q3-2017 | 0 | % | |||||||||||||||||||
| Total | 208 | 12 | 2,712 | 99 | % | $ | 38,773 | $ | 157,859 | $ | 269,021 | 24 | % | ||||||||||||||||||
| Total Projects Under Development | 300 | 17 | 4,090 | 99 | % | $ | 44,014 | $ | 246,643 | $ | 366,241 | 42 | % | ||||||||||||||||||
Projected Stabilized Yield – Projects Under Development(6) | 7.4 | % | |||||||||||||||||||||||||||||
| Pre-Development | |||||||||||||||||||||||||||||||
| DCT Terrapin Commerce Center Building II | Baltimore/Washington D.C. | 10 | 100 | % | $ | 158 | $ | 3,313 | |||||||||||||||||||||||
| DCT Freeport West Building II | Dallas | 7 | 100 | % | 1,455 | 1,455 | |||||||||||||||||||||||||
| DCT Freeport West Building III | Dallas | 6 | 100 | % | 1,089 | 1,089 | |||||||||||||||||||||||||
| DCT PetroPort Industrial Park Building I | Houston | 12 | 100 | % | 898 | 898 | |||||||||||||||||||||||||
| DCT PetroPort Industrial Park Building II | Houston | 23 | 100 | % | 1,639 | 1,639 | |||||||||||||||||||||||||
| Seneca Commerce Center Building II | Miami | 11 | 90 | % | 411 | 2,909 | |||||||||||||||||||||||||
| Seneca Commerce Center Building III | Miami | 11 | 90 | % | 443 | 2,789 | |||||||||||||||||||||||||
| Seneca Commerce Center Building IV | Miami | 4 | 90 | % | 77 | 3,182 | |||||||||||||||||||||||||
| DCT Williams Corporate Center | Northern California | 4 | 100 | % | 157 | 5,876 | |||||||||||||||||||||||||
| DCT Airport Distribution Center Building E | Orlando | 6 | 100 | % | 27 | 1,531 | |||||||||||||||||||||||||
| DCT Airport Distribution Center Building F | Orlando | 6 | 100 | % | 22 | 1,456 | |||||||||||||||||||||||||
| DCT Airport Distribution Center Building G | Orlando | 11 | 100 | % | 68 | 2,329 | |||||||||||||||||||||||||
| DCT Rockline Commerce Center Building I | Pennsylvania | 8 | 100 | % | 2,045 | 2,045 | |||||||||||||||||||||||||
DCT Rockline Commerce Center Building II | Pennsylvania | 17 | 100 | % | 4,033 | 4,033 | |||||||||||||||||||||||||
| Blair Logistics Center Bldg A | Seattle | 26 | 100 | % | 1,667 | 17,633 | |||||||||||||||||||||||||
| Blair Logistics Center Bldg B | Seattle | 21 | 100 | % | 734 | 12,268 | |||||||||||||||||||||||||
| Blair Logistics Storage Yard | Seattle | 6 | 100 | % | 49 | 3,046 | |||||||||||||||||||||||||
| DCT Jurupa Logistics Center II | Southern California | 5 | 100 | % | 93 | 2,827 | |||||||||||||||||||||||||
| Total | 194 | $ | 15,065 | $ | 70,318 | ||||||||||||||||||||||||||
(1) | Percentage owned is based on equity ownership weighted by square feet. |
(2) | The completion date represents the date of building shell-completion or estimated date of shell-completion. |
(3) | Percentage leased is computed as of the press release date. |
(4) | During December 2016, DCT commenced construction on SCLA Building 18, a 370,000 square foot building located in our SCLA unconsolidated joint venture. The cumulative costs of $12.9 million represent the unconsolidated joint venture's cumulative costs and are not included in our “Operating portfolio” on our Consolidated Balance Sheet as of June 30, 2017. |
(5) | Although we contributed 100% of the initial cash equity capital required by the venture, after return of certain preferential distributions on capital invested, profits and losses are generally split 50/50. See Definitions for additional information. |
(6) | Yield computed on a GAAP basis including rents on a straight-line basis. |
Second Quarter 2017 Supplemental Reporting Package | | Page 15 |
Redevelopment Overview (unaudited, amounts in thousands, except acres and number of buildings) | ||
As of June 30, 2017
| Cost Incurred | |||||||||||||||||||||||||||||
| Project | Market | Acres | Number of Buildings | Square Feet | Percentage Owned(1) | Q2-2017 | Cumulative Costs at 6/30/2017 | Projected Investment | Completion Date(2) | Percentage Leased(3) | |||||||||||||||||||
| Consolidated Redevelopment Activities: | |||||||||||||||||||||||||||||
| Stabilized in Q2 2017 | |||||||||||||||||||||||||||||
| 5555 8th Street East | Seattle | 6 | 1 | 103 | 100 | % | $ | 48 | $ | 11,816 | $ | 11,822 | Q2-2016 | 100 | % | ||||||||||||||
Projected Stabilized Yield(4) | 5.8 | % | |||||||||||||||||||||||||||
| Redevelopment Projects in Lease-Up | |||||||||||||||||||||||||||||
| 2201 Arthur Avenue | Chicago | 5 | 1 | 101 | 100 | % | $ | 170 | $ | 9,236 | $ | 9,696 | Q3-2016 | 0 | % | ||||||||||||||
| Redevelopment Projects Under Construction | |||||||||||||||||||||||||||||
| 10810 Painter Avenue | Southern California | 5 | 1 | 111 | 100 | % | $ | 946 | $ | 10,712 | $ | 11,896 | Q3-2017 | 0 | % | ||||||||||||||
Total Redevelopment Projects in Lease-Up and Under Construction | 10 | 2 | 212 | 100 | % | $ | 1,116 | $ | 19,948 | $ | 21,592 | 0 | % | ||||||||||||||||
Projected Stabilized Yield – Projects Under Redevelopment(4) | 6.7 | % | |||||||||||||||||||||||||||
(1) | Percentage owned is based on equity ownership weighted by square feet. |
(2) | The completion date represents the date of building shell-completion or estimated date of shell-completion. |
(3) | Percentage leased is computed as of the press release date. |
(4) | Yield computed on a GAAP basis including rents on a straight-line basis. |
Second Quarter 2017 Supplemental Reporting Package | | Page 16 |
Acquisition and Disposition Summary (unaudited) | ||
For the Six Months Ended June 30, 2017
| Month | Property Name | Type | Market | Size | Occupancy at Acquisition/Disposition | Occupancy at June 30, 2017 | |||||||||
| BUILDING ACQUISITIONS: | (buildings in sq. ft.) | ||||||||||||||
| April | 17801 East 40th Ave. | Value-Add Acquisition | Denver | 44,000 | 100.0 | % | 100.0 | % | |||||||
| June | 3536 Arden Road | Stabilized | Northern California | 73,000 | 100.0 | % | 100.0 | % | |||||||
| Total YTD Purchase Price – $16.3 million | 117,000 | 100.0 | % | 100.0 | % | ||||||||||
| LAND ACQUISITIONS: | |||||||||||||||
| February | DCT Airport Distribution Center Building G | Land | Orlando | 11.6 acres | |||||||||||
| February | DCT Williams Corporate Center | Land | Northern California | 3.6 acres | |||||||||||
| March | DCT Rail Center 225, B | Land | Houston | 13.2 acres | |||||||||||
| May | DCT Freeport West Buildings II and III | Land | Dallas | 12.9 acres | |||||||||||
| May | DCT Rockline Commerce Center Buildings I and II | Land | Pennsylvania | 25.1 acres | |||||||||||
| June | DCT PetroPort Industrial Park Buildings I and II | Land | Houston | 34.8 acres | |||||||||||
| Total YTD Land Purchase Price – $18.5 million | 101.2 acres | ||||||||||||||
| BUILDING DISPOSITIONS: | |||||||||||||||
| Consolidated Properties | |||||||||||||||
| April | 6940 San Tomas Road | Stabilized | Baltimore/Washington D.C. | 144,000 | 100.0 | % | |||||||||
| June | 4701 Creek Road | Operating | Cincinnati | 66,000 | 88.6 | % | |||||||||
| June | 101 N. 103rd and 104th Ave. (2 buildings) | Stabilized | Phoenix | 558,000 | 100.0 | % | |||||||||
| Total YTD Sales Price – $53.0 million | 768,000 | 99.0 | % | ||||||||||||
| Unconsolidated Joint Ventures | |||||||||||||||
| June | TRT – Riverport Portfolio (3 buildings) | Stabilized | Louisville | 609,000 | 100.0 | % | |||||||||
Total YTD Sales Price – $2.7 million(1) | 609,000 | 100.0 | % | ||||||||||||
(1) | The sales price reflects our share of gross proceeds from the property sold by the unconsolidated joint venture. |
Second Quarter 2017 Supplemental Reporting Package | | Page 17 |
Indebtedness (unaudited, dollar amounts in thousands) | ||
As of June 30, 2017
| Description | Stated Interest Rate | Effective Interest Rate(1) | Maturity Date | Balance as of June 30, 2017 | ||||||
| SENIOR UNSECURED NOTES: | ||||||||||
| 2018 Notes, fixed rate | 5.62% | 5.62% | June & August 2018 | $ | 81,500 | |||||
| 2019 Notes, fixed rate | 4.97% | 4.97% | August 2019 | 46,000 | ||||||
| 2020 Notes, fixed rate | 5.43% | 5.43% | April 2020 | 50,000 | ||||||
| 2021 Notes, fixed rate | 6.70% | 6.70% | June & August 2021 | 92,500 | ||||||
| 2022 Notes, fixed rate | 4.61% | 7.13% | August & September 2022 | 130,000 | ||||||
| 2023 Notes, fixed rate | 4.60% | 4.75% | August & October 2023 | 360,000 | ||||||
| 2024 Notes, fixed rate | 3.75% | 3.75% | August 2024 | 80,000 | ||||||
| 2026 Notes, fixed rate | 3.92% | 3.92% | August 2026 | 90,000 | ||||||
| 2028 Notes, fixed rate | 4.02% | 4.02% | August 2028 | 80,000 | ||||||
| Premiums (discounts), net of amortization | 56 | |||||||||
| Deferred loan costs, net of amortization | (4,791 | ) | ||||||||
| 1,005,265 | ||||||||||
| MORTGAGE NOTES: | ||||||||||
| Fixed rate secured debt | 5.92% | 5.83% | October 2018 – August 2025 | 162,440 | ||||||
| Premiums (discounts), net of amortization | 1,443 | |||||||||
| Deferred loan costs, net of amortization | (275 | ) | ||||||||
| 163,608 | ||||||||||
| BANK UNSECURED CREDIT FACILITIES: | ||||||||||
Senior unsecured revolving credit facility(2) | 2.17% | 2.17% | April 2019 | 133,000 | ||||||
2020 Notes, variable rate(3) | 2.27% | 2.27% | April 2020 | 125,000 | ||||||
2022 Notes, fixed rate(4) | 3.31% | 3.31% | December 2022 | 200,000 | ||||||
| Deferred loan costs, net of amortization | (2,143 | ) | ||||||||
| 455,857 | ||||||||||
| Total carrying value of consolidated debt | $ | 1,624,730 | ||||||||
| Fixed rate debt | 4.69% | 4.95% | 84 | % | ||||||
| Variable rate debt | 2.22% | 2.22% | 16 | % | ||||||
| Weighted average interest rate | 4.30% | 4.52% | 100 | % | ||||||
DCT PROPORTIONATE SHARE OF UNCONSOLIDATED JOINT VENTURE DEBT(5) | ||||||||||
| Stirling Capital Investments (SCLA) | 3.77% | 3.77% | $ | 45,494 | ||||||
Scheduled Principal Payments of Debt as of June 30, 2017 (excluding premiums, discounts and deferred loan costs)
| Year | Senior Unsecured Notes | Mortgage Notes | Bank Unsecured Credit Facilities | Total | ||||||||||||
| 2017 | $ | — | $ | 3,309 | $ | — | $ | 3,309 | ||||||||
| 2018 | 81,500 | 6,747 | — | 88,247 | ||||||||||||
| 2019 | 46,000 | 51,344 | 133,000 | 230,344 | ||||||||||||
| 2020 | 50,000 | 71,933 | 125,000 | 246,933 | ||||||||||||
| 2021 | 92,500 | 18,436 | — | 110,936 | ||||||||||||
| 2022 | 130,000 | 3,116 | 200,000 | 333,116 | ||||||||||||
| 2023 | 360,000 | 6,366 | — | 366,366 | ||||||||||||
| 2024 | 80,000 | 739 | — | 80,739 | ||||||||||||
| 2025 | — | 450 | — | 450 | ||||||||||||
| 2026 | 90,000 | — | — | 90,000 | ||||||||||||
| Thereafter | 80,000 | — | — | 80,000 | ||||||||||||
| Total | $ | 1,010,000 | $ | 162,440 | $ | 458,000 | $ | 1,630,440 | ||||||||
(1) | Effective interest rate includes direct hedging costs (excludes hedge ineffectiveness) and mark-to-market adjustments. |
(2) | The $400.0 million senior unsecured revolving credit facility matures April 8, 2019 and bears interest at a variable rate equal to LIBOR, plus a margin of between 0.875% to 1.55% per annum or, at our election, an alternate base rate plus a margin of between 0.00% to 0.55% per annum, depending on our public debt credit rating. There was $265.1 million available under the senior unsecured revolving credit facility, net of two letters of credit totaling $1.9 million as of June 30, 2017. |
(3) | The senior unsecured $125.0 million term loan matures April 8, 2020 and bears interest at a variable rate equal to LIBOR, plus a margin, depending on our public debt credit rating, of between 0.90% to 1.75% per annum or, at our election, an alternate base rate plus a margin of between 0.00% to 0.75% per annum. |
(4) | The senior unsecured $200.0 million term loan matures December 10, 2022 and bears interest at a variable rate equal to LIBOR, plus a margin, depending on our public debt credit rating, of between 1.45% to 2.40% per annum or, at our election, an alternate base rate plus a margin of between 0.45% to 1.40% per annum. On December 11, 2015, we entered into a pay-fixed, receive-floating interest rate swap, which effectively fixes the interest rate on the term loan at 3.31% through maturity. |
(5) | Although we contributed 100% of the initial cash equity capital required by the venture, after return of certain preferential distributions on capital invested, profits and losses are generally split 50/50. See Definitions for additional information. |
Second Quarter 2017 Supplemental Reporting Package | | Page 18 |
Capitalization, Dividend Yield and Fixed Charge Coverage Ratio (unaudited, amounts in thousands, except per share data) | ||
Capitalization at June 30, 2017
| Description | Shares or Units(1) | Share Price | Market Value | ||||||||
| Common shares outstanding | 92,956 | $ | 53.44 | $ | 4,967,569 | ||||||
| Operating partnership units outstanding | 3,440 | $ | 53.44 | (2) | 183,834 | ||||||
| Total equity market capitalization | 5,151,403 | ||||||||||
| Consolidated debt, excluding deferred loan costs of $7.2 million | 1,631,939 | ||||||||||
Less: Noncontrolling interests’ share of consolidated debt(3) | (6,989 | ) | |||||||||
Proportionate share of debt related to unconsolidated joint ventures(4) | 45,494 | ||||||||||
| DCT share of total debt | 1,670,444 | ||||||||||
| Total market capitalization | $ | 6,821,847 | |||||||||
| DCT share of total debt to total market capitalization | 24.5 | % | |||||||||
Common Stock Dividend Yield
| For the Three Months Ended | ||||||||||||||||||||
| 6/30/2017 | 3/31/2017 | 12/31/2016 | 9/30/2016 | 6/30/2016 | ||||||||||||||||
| Dividend declared per common share | $ | 0.31 | $ | 0.31 | $ | 0.31 | $ | 0.29 | $ | 0.29 | ||||||||||
| Price per share | $ | 53.44 | $ | 48.12 | $ | 47.88 | $ | 48.55 | $ | 48.04 | ||||||||||
Dividend yield – annualized | 2.3 | % | 2.6 | % | 2.6 | % | 2.4 | % | 2.4 | % | ||||||||||
Fixed Charge Coverage Ratio
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||||||
| Net income attributable to common stockholders | $ | 41,634 | $ | 21,418 | $ | 56,593 | $ | 57,809 | |||||||
| Interest expense | 16,805 | 15,635 | 33,560 | 32,057 | |||||||||||
Proportionate share of interest expense from unconsolidated joint ventures(4) | 270 | 277 | 541 | 551 | |||||||||||
| Real estate related depreciation and amortization | 41,447 | 39,901 | 83,052 | 79,971 | |||||||||||
Proportionate share of real estate related depreciation and amortization from unconsolidated joint ventures(4) | 1,234 | 1,098 | 2,457 | 2,198 | |||||||||||
| Income tax expense and other taxes | 69 | 172 | 203 | 288 | |||||||||||
| Impairment loss on land | 938 | — | 938 | — | |||||||||||
| Stock-based compensation | 1,578 | 1,438 | 3,004 | 2,740 | |||||||||||
| Noncontrolling interests | 1,858 | 1,154 | 2,688 | 3,109 | |||||||||||
| Non-FFO gain on dispositions of real estate interests | (28,076 | ) | (12,955 | ) | (28,102 | ) | (43,052 | ) | |||||||
| Adjusted EBITDA | $ | 77,757 | $ | 68,138 | $ | 154,934 | $ | 135,671 | |||||||
| CALCULATION OF FIXED CHARGES: | |||||||||||||||
| Interest expense | $ | 16,805 | $ | 15,635 | $ | 33,560 | $ | 32,057 | |||||||
| Capitalized interest | 3,087 | 2,661 | 5,772 | 5,608 | |||||||||||
| Amortization of loan costs and debt premium/discount | (422 | ) | (224 | ) | (638 | ) | (450 | ) | |||||||
| Other non-cash interest expense | (999 | ) | (1,381 | ) | (2,052 | ) | (3,468 | ) | |||||||
Proportionate share of interest expense from unconsolidated joint ventures(4) | 270 | 277 | 541 | 551 | |||||||||||
| Total fixed charges | $ | 18,741 | $ | 16,968 | $ | 37,183 | $ | 34,298 | |||||||
| Fixed charge coverage ratio | 4.1x | 4.0x | 4.2x | 4.0x | |||||||||||
(1) | Excludes 0.4 million of unvested Long-Term Incentive Plan Units, 0.1 million shares of unvested Restricted Stock and 0.1 million Phantom Shares outstanding as of June 30, 2017. |
(2) | Operating partnership unit per share price is based on the per share closing price of DCT's common stock. |
(3) | Amount includes the portion of consolidated debt related to properties in which there are noncontrolling ownership interests. |
(4) | Amounts are determined based on our ownership share of such amounts from the unconsolidated joint ventures. See Definitions for additional information. |
Second Quarter 2017 Supplemental Reporting Package | | Page 19 |
Debt Covenants and Credit Ratings (unaudited) | ||
Debt Covenant Summary as of June 30, 2017
Senior Unsecured Notes(1) | Covenant | Actual Ratio | |||
| Leverage ratio | < 55% | 35.9% | |||
| Fixed charge coverage ratio | > 1.5 x | 3.78 x | |||
| Secured debt leverage ratio | < 45% | 5.3% | |||
| Unencumbered assets to unsecured debt | > 1.67 x | 2.63 x | |||
Bank Unsecured Credit Facilities(1) | Covenant | Actual Ratio | |||
| Leverage ratio | < 60% | 31.5% | |||
| Fixed charge coverage ratio | > 1.5 x | 3.78 x | |||
| Secured debt leverage ratio | < 35% | 3.9% | |||
Bond Indentures(1) | Covenant | Actual Ratio | |||
| Leverage ratio | < 60% | 34.8% | |||
| Fixed charge coverage ratio | > 1.5 x | 3.99 x | |||
| Secured debt leverage ratio | < 40% | 3.5% | |||
| Unencumbered assets to unsecured debt | > 1.50 x | 2.79 x | |||
Credit Ratings
| Agency | Rating | ||
| Moody's | Baa2 (Stable) | ||
| Standard & Poor's | BBB (Stable) | ||
(1) | Calculations are compiled in accordance with the note purchase agreement, credit agreement and bond indenture agreement, respectively, based upon definitions contained therein. The Company is not presenting these ratios and the related calculations for any purpose other than informational, and it is not intending for these measures to provide information to investors about the Company’s financial condition or results of operations. |
Second Quarter 2017 Supplemental Reporting Package | | Page 20 |
Investment in Unconsolidated Joint Ventures Summary (unaudited, dollar amounts in thousands) | ||
Statement of Operations and Other Data
| For the Six Months Ended June 30, 2017 | |||||||||
| JP Morgan | Stirling Capital Investments | ||||||||
| Total rental revenues | $ | 11,573 | $ | 7,797 | |||||
| Rental expenses and real estate taxes | (2,844 | ) | (1,095 | ) | |||||
| Depreciation and amortization | (4,917 | ) | (2,879 | ) | |||||
| General and administrative expense | (431 | ) | (722 | ) | |||||
| Operating income | 3,381 | 3,101 | |||||||
| Interest expense | — | (1,525 | ) | ||||||
| Interest and other expense | (111 | ) | (1 | ) | |||||
| Net income | $ | 3,270 | $ | 1,575 | |||||
| Other Data: | |||||||||
| Number of properties | 13 | 8 | |||||||
| Square feet (in thousands) | 4,605 | 2,975 | |||||||
| Occupancy | 98.7 | % | 99.9 | % | |||||
DCT ownership(1) | 20.0 | % | 50.0 | % | (2) | ||||
Balance Sheet
| As of June 30, 2017 | |||||||||
| JP Morgan | Stirling Capital Investments | ||||||||
| Total investment in properties | $ | 276,016 | $ | 143,642 | |||||
| Accumulated depreciation and amortization | (80,132 | ) | (34,487 | ) | |||||
| Net investment in properties | 195,884 | 109,155 | |||||||
| Cash, cash equivalents and restricted cash | 3,935 | 1,721 | |||||||
| Other assets | 4,764 | 2,180 | |||||||
| Total assets | $ | 204,583 | $ | 113,056 | |||||
| Other liabilities | $ | 5,310 | $ | 4,036 | |||||
| Secure debt maturities – 2017 | — | 60,942 | (3) | ||||||
| Secure debt maturities – 2021 | — | 7,720 | (3) | ||||||
| Secure debt maturities – thereafter | — | 29,465 | (3) | ||||||
| Total secured debt | — | 98,127 | |||||||
| Total liabilities | 5,310 | 102,163 | |||||||
| Partners or members' capital | 199,273 | 10,893 | |||||||
| Total liabilities and partners or members' capital | $ | 204,583 | $ | 113,056 | |||||
(1) | See Definitions for additional information. |
(2) | Although we contributed 100% of the initial cash equity capital required by the venture, after return of certain preferential distributions on capital invested, profits and losses are generally split 50/50. |
(3) | $61.0 million of debt, excluding $0.1 million of deferred loan costs, requires interest only payments through October 2017 and has a variable interest rate of LIBOR plus 2.2%. $30.0 million of debt, excluding $0.5 million of deferred loan costs, requires principal and interest payments through May 2024 and has a fixed interest rate of 4.6%. $7.7 million of debt is payable to DCT, requires principal and interest payments through November 2021 and has a fixed interest rate of 8.5%. |
Second Quarter 2017 Supplemental Reporting Package | | Page 21 |
Definitions | ||
Adjusted EBITDA: Adjusted EBITDA represents net income (loss) attributable to common stockholders before interest, taxes, depreciation, amortization, stock-based compensation expense, noncontrolling interests, impairment losses, and proportionate share of interest, depreciation and amortization from unconsolidated joint ventures, and excludes non-FFO gains and losses on disposed assets and business combinations. We use Adjusted EBITDA to measure our operating performance and to provide investors relevant and useful information because it allows fixed income investors to view income from our operations on an unleveraged basis before the effects of non-cash items, such as depreciation and amortization. Annualized Base Rent: Annualized Base Rent is calculated as monthly contractual base rent (cash basis) per the terms of the lease, as of period end, multiplied by 12. Capital Expenditures: Capital Expenditures include building and land improvements, development and redevelopment costs, Due Diligence Capital (defined below), casualty costs and tenant improvement. Cash Basis Rent Growth: Cash Basis Rent Growth reflects the percentage change in base rent of the lease executed during the period compared to base rent of the prior lease on the same space. The calculation compares the first base rent payment due after the lease commencement date compared to the base rent of the last monthly payment due prior to the termination of the lease (holdover payments are excluded). If the first payment under the new lease is less than 50% of the second year’s base rent (a “teaser rate”), then such lease is excluded from the calculation. All base rents are compared on a net basis. Base rent under gross or similar type leases are converted to a net base rent based on an estimate of the applicable recoverable expenses. Cash Net Operating Income (“Cash NOI”): We calculate Cash NOI as NOI (as defined on next page) excluding non-cash amounts recorded for straight-line rents including related bad debt expense and the amortization of above and below market rents. See definition of NOI for additional information. DCT Industrial considers Cash NOI to be an appropriate supplemental performance measure because Cash NOI reflects the operating performance of DCT Industrial’s properties and excludes certain non-cash items that are not considered to be controllable in connection with the management of the property such as accounting adjustments for straight-line rent and the amortization of above or below market rent. Additionally, DCT Industrial presents Cash NOI, excluding revenue from lease terminations, as such revenue is not considered indicative of recurring operating performance. Cash NOI, Excluding Revenue From Lease Terminations: See definition within Cash Net Operating Income above. Due Diligence Capital: Deferred acquisition costs identified during due diligence needed to stabilize an asset and/or bring an asset up to our physical standards. Effective Interest Rate: Reflects the impact to interest rates of GAAP amortization of discounts/premiums and hedging transactions. These rates do not reflect the impact of facility or administrative fees, amortization of loan costs or hedge ineffectiveness. Fixed Charge Coverage Ratio: We calculate Fixed Charge Coverage Ratio as Adjusted EBITDA divided by total Fixed Charges. Fixed Charges include interest expense, interest capitalized, our proportionate share of our unconsolidated joint venture interest expense and adjustments for amortization of discounts, premiums, loan costs and other non-cash interest expense. We consider Fixed Charge Coverage Ratio to be an appropriate supplemental measure of our ability to satisfy fixed financing obligations. | Funds From Operations (“FFO”): DCT Industrial believes that net income (loss) attributable to common stockholders, as defined by GAAP, is the most appropriate earnings measure. However, DCT Industrial considers FFO, as defined by the National Association of Real Estate Investment Trusts (“NAREIT”), to be a useful supplemental, non-GAAP measure of DCT Industrial’s operating performance. NAREIT developed FFO as a relative measure of performance of an equity REIT in order to recognize that the value of income-producing real estate historically has not depreciated on the basis determined under GAAP. FFO is generally defined as net income attributable to common stockholders, calculated in accordance with GAAP with the following adjustments: • Add real estate-related depreciation and amortization;• Subtract gains from dispositions of real estate held for investment purposes;• Add impairment losses on depreciable real estate and impairments of in substance real estate investments in investees that are driven by measurable decreases in the fair value of the depreciable real estate held by the unconsolidated joint ventures; and• Adjustments for the preceding items to derive DCT Industrial’s proportionate share of FFO of unconsolidated joint ventures. FFO, As Adjusted: We also present FFO, as adjusted, which excludes hedge ineffectiveness, certain severance costs, acquisition costs, debt modification costs and impairment losses on properties which are not depreciable. We believe that FFO, as adjusted, excluding hedge ineffectiveness, certain severance costs, acquisition costs, debt modification costs and impairment losses on non-depreciable real estate is useful supplemental information regarding our operating performance as it provides a more meaningful and consistent comparison of our operating performance and allows investors to more easily compare our operating results. Readers should note that FFO or FFO, as adjusted, captures neither the changes in the value of DCT Industrial’s properties that result from use or market conditions, nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of DCT Industrial’s properties, all of which have real economic effect and could materially impact DCT Industrial’s results from operations. NAREIT’s definition of FFO is subject to interpretation, and modifications to the NAREIT definition of FFO are common. Accordingly, DCT Industrial’s FFO, as adjusted, may not be comparable to other REITs’ FFO or FFO, as adjusted, should be considered only as a supplement to net income (loss) as a measure of DCT Industrial’s performance. Free Rent: Free rent represents the estimated base rent forgone during the period while a tenant occupies a space but does not pay any base rent. Such amount is calculated for a given space as the monthly contractual base rent amount of the first month following the free rent period multiplied by the number of months of abated rent. For any period in which a space is occupied for less than a full month, if occupancy begins prior to the 16th of the month, a full month of free rent is included in the calculation, and if occupancy begins on or after the 16th of the month, no free rent would be included in the calculation for that month. GAAP: United States generally accepted accounting principles. Land Held: Land Held that is not intended to be improved or developed in the near future. Net Effective Rent: Average monthly base rental income over the term of the lease, calculated on a straight-line basis. | |
Second Quarter 2017 Supplemental Reporting Package | | Page 22 |
Definitions (continued) | ||
Net Operating Income (“NOI”):
NOI is defined as rental revenues, which includes expense reimbursements, less rental expenses and real estate taxes, and excludes institutional capital management fees, depreciation, amortization, casualty and involuntary conversion gain (loss), impairment, general and administrative expenses, equity in earnings (loss) of unconsolidated joint ventures, interest expense, interest and other income and income tax expense and other taxes. DCT Industrial considers NOI to be an appropriate supplemental performance measure because NOI reflects the operating performance of DCT Industrial’s properties and excludes certain items that are not considered to be controllable in connection with the management of the properties such as amortization, depreciation, impairment, interest expense, interest and other income, income tax expense and other taxes and general and administrative expenses. We also present NOI excluding lease termination revenue as it is not considered to be indicative of recurring operating performance. However, NOI should not be viewed as an alternative measure of DCT Industrial’s overall financial performance since it excludes expenses which could materially impact our results of operations. Further, DCT Industrial’s NOI may not be comparable to that of other real estate companies, as they may use different methodologies for calculating NOI. Therefore, DCT Industrial believes net income, as defined by GAAP, to be the most appropriate measure to evaluate DCT Industrial’s overall financial performance.
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Reconciliation of net income attributable to common stockholders to NOI: (amounts in thousands) | ||||||||||||||||
| Net income attributable to common stockholders | $ | 41,634 | $ | 21,418 | $ | 56,593 | $ | 57,809 | ||||||||
| Net income attributable to noncontrolling interests | 1,858 | 1,154 | 2,688 | 3,109 | ||||||||||||
| Income tax expense and other taxes | 69 | 172 | 203 | 288 | ||||||||||||
| Impairment loss on land | 938 | — | 938 | — | ||||||||||||
| Interest and other (income) expense | 7 | (48 | ) | 12 | (563 | ) | ||||||||||
| Interest expense | 16,805 | 15,635 | 33,560 | 32,057 | ||||||||||||
| Equity in earnings of unconsolidated joint ventures, net | (2,737 | ) | (935 | ) | (4,253 | ) | (1,819 | ) | ||||||||
| General and administrative expense | 7,821 | 7,358 | 15,013 | 13,620 | ||||||||||||
| Real estate related depreciation and amortization | 41,447 | 39,901 | 83,052 | 79,971 | ||||||||||||
| Gain on dispositions of real estate interests | (28,076 | ) | (12,955 | ) | (28,102 | ) | (43,052 | ) | ||||||||
| Casualty (gain) loss | — | 162 | (270 | ) | 162 | |||||||||||
| Institutional capital management and other fees | (304 | ) | (305 | ) | (776 | ) | (698 | ) | ||||||||
| Total NOI | $ | 79,462 | $ | 71,557 | $ | 158,658 | $ | 140,884 | ||||||||
| Quarterly Same-Store Portfolio NOI: | ||||||||||||||||
| Total NOI | $ | 79,462 | $ | 71,557 | ||||||||||||
| Less NOI – non-same-store properties | (7,915 | ) | (3,206 | ) | ||||||||||||
| Less revenue from lease terminations | (435 | ) | (22 | ) | ||||||||||||
| Add early termination straight-line rent adjustment | 117 | 22 | ||||||||||||||
| NOI, excluding revenue from lease terminations | 71,229 | 68,351 | ||||||||||||||
| Less straight-line rents, net of related bad debt expense | (85 | ) | (4,803 | ) | ||||||||||||
| Less amortization of above/(below) market rents | (581 | ) | (762 | ) | ||||||||||||
| Cash NOI, excluding revenue from lease terminations | $ | 70,563 | $ | 62,786 | ||||||||||||
| Annual Same-Store Portfolio NOI: | ||||||||||||||||
| Total NOI | $ | 79,462 | $ | 71,557 | $ | 158,658 | $ | 140,884 | ||||||||
| Less NOI – non-same-store properties | (12,100 | ) | (7,015 | ) | (23,573 | ) | (12,827 | ) | ||||||||
| Less revenue from lease terminations | (435 | ) | (22 | ) | (936 | ) | (102 | ) | ||||||||
| Add early termination straight-line rent adjustment | 117 | 22 | 134 | 132 | ||||||||||||
| NOI, excluding revenue from lease terminations | 67,044 | 64,542 | 134,283 | 128,087 | ||||||||||||
| Less straight-line rents, net of related bad debt expense | 105 | (2,901 | ) | (949 | ) | (6,481 | ) | |||||||||
| Less amortization of above/(below) market rents | (535 | ) | (716 | ) | (1,131 | ) | (1,373 | ) | ||||||||
| Cash NOI, excluding revenue from lease terminations | $ | 66,614 | $ | 60,925 | $ | 132,203 | $ | 120,233 | ||||||||
Operating Portfolio:
Includes all consolidated stabilized properties. Value-Add Acquisitions, Developments and Redevelopments are placed into the Operating Portfolio upon stabilization. Stabilized acquisitions are included in the Operating Portfolio upon acquisition. Once a property is included in the Operating Portfolio, it remains until it is subsequently disposed or placed into redevelopment.
Second Quarter 2017 Supplemental Reporting Package | | Page 23 |
Definitions (continued) | ||
Proforma Cash NOI:
DCT Industrial considers Proforma Cash NOI to be a useful measure to assist investors and analysts in estimating the fair value of certain assets of our Company. The assessment of Proforma Cash NOI is subjective in that it involves estimates and assumptions and can be calculated using various methods. DCT Industrial’s Proforma Cash NOI may not be comparable to that of other real estate companies.
| For the Three Months Ended June 30, 2017 | ||||
| Reconciliation of net income attributable to common stockholders to Proforma Cash NOI: (amounts in thousands) | ||||
| Net income attributable to common stockholders | $ | 41,634 | ||
| Net income attributable to noncontrolling interests | 1,858 | |||
| Income tax expense and other taxes | 69 | |||
| Impairment loss on land | 938 | |||
| Interest and other expense | 7 | |||
| Interest expense | 16,805 | |||
| Equity in earnings of unconsolidated joint ventures, net | (2,737 | ) | ||
| General and administrative expense | 7,821 | |||
| Real estate related depreciation and amortization | 41,447 | |||
| Gain on dispositions of real estate interests | (28,076 | ) | ||
| Institutional capital management and other fees | (304 | ) | ||
| Total NOI | 79,462 | |||
| Less: | ||||
| Revenue from lease terminations | (435 | ) | ||
| Straight-line rents, net of related bad debt expense | (822 | ) | ||
| Net amortization of below market rents | (712 | ) | ||
| Cash NOI, excluding revenue from lease terminations | 77,493 | |||
Proportionate share of Cash NOI from unconsolidated joint ventures(1) | 3,869 | |||
| Proportionate share of Cash NOI relating to noncontrolling interests | (513 | ) | ||
| Cash NOI attributable to common stockholders | 80,849 | |||
| NOI adjustments to normalize Cash NOI: | ||||
| Free rent | 919 | |||
| Partial quarter adjustment for properties acquired | 71 | |||
| Partial quarter adjustment for properties disposed | (661 | ) | ||
| Partial quarter adjustment for value-add acquisitions stabilized | 46 | |||
| Partial quarter adjustment for development properties stabilized | 292 | |||
| Partial quarter adjustment for redevelopment properties stabilized | 82 | |||
| Value-add acquisitions not yet placed into operating portfolio | (478 | ) | ||
| Development properties not yet placed into operating portfolio | (410 | ) | ||
| Redevelopment properties not yet placed into operating portfolio | — | |||
| NOI adjustments, net | (139 | ) | ||
| Proforma Cash NOI | $ | 80,710 | ||
(1) | Amount is determined as our share of Cash NOI from unconsolidated joint ventures. See Unconsolidated Joint Ventures definition for additional information. |
Projected Investment:
An estimate of total expected costs to stabilize properties in accordance with GAAP.
Projected Stabilized Yield:
Calculated as projected stabilized NOI on a straight-line basis divided by total projected investment for Value-Add Acquisitions, Developments and Redevelopments.
Purchase Price:
Contractual price agreed upon by the owner and buyer for the transfer of property.
Redevelopment:
Represents properties out of service while significant physical renovation of the property is underway or while the property is in lease-up subsequent to such renovation. May include previously stabilized properties taken out of service to change the properties' use and/or enhance its functionality.
Retention:
Calculated as (retained square feet + relocated square feet) / ((retained square feet + relocated square feet + expired square feet) - (vacancies anticipated at acquisition square feet + bankruptcy and early termination square feet)).
Sales Price:
Contractual price of real estate sold.
Second Quarter 2017 Supplemental Reporting Package | | Page 24 |
Definitions (continued) | ||
Same-Store:
Annual Same-Store Portfolio:
Includes all consolidated stabilized acquisitions acquired before January 1, 2016 and all consolidated Value-Add Acquisitions, developments and Redevelopments stabilized prior to January 1, 2016. Once a property is included in the Annual Same-Store Portfolio, it remains until it is subsequently disposed or placed into redevelopment.
Quarterly Same-Store Portfolio:
Includes all consolidated stabilized acquisitions acquired before April 1, 2016 and all consolidated Value-Add Acquisitions, developments and Redevelopments stabilized prior to April 1, 2016. Once a property is included in the Quarterly Same-Store Portfolio, it remains until it is subsequently disposed or placed into redevelopment.
Same-Store NOI Growth:
Same-Store NOI Growth is calculated by dividing the change in NOI applicable to same-store properties only, period over period, by the preceding period's same-store properties' NOI. We consider NOI from our Annual and Quarterly Same-Store Portfolios to be useful measures in evaluating our financial performance and to improve comparability between periods by including only properties owned for those comparable periods.
Scheduled Principal Amortization:
The aggregate amount of scheduled principal payments required to be made during the period, excluding optional prepayments, balloon payments and scheduled principal payments which are not amortized through periodic installments of principal and interest over the term of the debt.
Square Footage Period Changes (in thousands):
| Total operating portfolio square feet as of March 31, 2017 | 64,003 | ||
| Acquisitions | 73 | ||
| Dispositions | (768 | ) | |
| Value-add acquisitions, developments and redevelopments stabilized and placed into operating portfolio | 502 | ||
| Miscellaneous | 2 | ||
| Total operating portfolio square feet including assets held for sale as of June 30, 2017 | 63,812 | ||
| Total value-add acquisitions square feet as of March 31, 2017 | 665 | ||
| Acquisitions | 44 | ||
| Value-add acquisitions stabilized and placed into operating portfolio | (399 | ) | |
| Total value-add acquisitions square feet as of June 30, 2017 | 310 | ||
| Total projects under development square feet as of March 31, 2017 | 4,334 | ||
| Construction starts | 126 | ||
Developments stabilized and placed into operation(1) | (370 | ) | |
| Total projects under development square feet as of June 30, 2017 | 4,090 | ||
| Total projects under redevelopment square feet as of March 31, 2017 | 315 | ||
| Redevelopments stabilized and placed into operation | (103 | ) | |
| Total projects under redevelopment square feet as of June 30, 2017 | 212 | ||
(1) | The 370,000 square feet relate to a building located in our SCLA unconsolidated joint venture and are not included in our “Operating portfolio.” |
Stabilized:
Developments and Redevelopments are deemed to be stabilized upon the earlier of achieving 90% occupancy or 12 months after shell-completion. Value-Add Acquisitions (defined below) are deemed to be stabilized:
| • | If the property acquired is less than 75% occupied upon acquisition, the property will stabilize upon the earlier of achieving 90% occupancy or 12 months from the acquisition date; or |
| • | If the property is acquired with known move-outs, the property will stabilize upon the earlier of achieving 90% occupancy after the known move-outs have occurred or 12 months after the known move-outs have occurred. |
All other acquisitions are deemed stabilized upon acquisition.
Stock-based Compensation Amortization Expense:
Represents the non-cash amortization of the cost of employee services received in exchange for an award of an equity instrument based on the award's fair value on the grant date and amortized over the vesting period, presented net of amounts capitalized.
Straight-Line Basis Rent Growth:
Straight-Line Basis Rent Growth reflects the percentage change in Net Effective Rent of the lease executed during the period compared to the Net Effective Rent of the prior lease on the same space (holdover payments are excluded). All net effective rents are compared on a net basis. Net Effective Rent under gross or similar type leases are converted to Net Effective Rent based on an estimate of the applicable recoverable expenses.
Second Quarter 2017 Supplemental Reporting Package | | Page 25 |
Definitions (continued) | ||
Turnover Costs:
Turnover Costs are comprised of the costs incurred or capitalized for improvements of vacant and renewal spaces, as well as the commissions paid and costs capitalized for leasing transactions. Turnover Costs and Turnover Costs Per Square Foot presented as a part of leasing statistics represent the total Turnover Costs estimated upon execution to be incurred associated with the leases signed during the period and may not ultimately reflect the actual expenditures.
Unconsolidated Joint Ventures:
We present certain measures in this report on a proportionate share basis which represents DCT Industrial’s share of the measure from our unconsolidated joint ventures. We believe that these measures provide useful information to investors regarding our financial condition and/or results of operations because they include DCT Industrial’s share of the applicable amount from unconsolidated joint ventures. DCT Industrial has non-controlling interests in a number of unconsolidated joint ventures and we believe that presenting various measures in this manner help investors better understand DCT Industrial’s financial condition and/or results of operations after taking into account our economic interest in these joint ventures. Our economic interest (as distinct from our legal ownership interest) may fluctuate from time to time and may not wholly align with our legal ownership interests because of provisions in certain joint venture agreements regarding distributions of cash flow, allocations of profits and losses, payments of preferred returns and control over major decisions. Additionally, DCT Industrial does not control our unconsolidated joint ventures and the presentation of certain items, such as assets, liabilities, revenues and expenses, from these unconsolidated joint ventures does not represent our legal claim or obligation for such items.
Value-Add Acquisitions:
Consolidated properties that were acquired and upon acquisition met either of the following criteria:
| • | Occupancy of less than 75% upon acquisition; or |
| • | Occupancy of less than 75% expected to occur due to known move-outs within 24 months of the acquisition date. |
Consolidated properties that were acquired vacant or with known move-outs within 24 months of the acquisition date with the intention to have the property out of service for significant physical renovations are classified as Redevelopment properties.
Second Quarter 2017 Supplemental Reporting Package | | Page 26 |