Document and Entity Information
Document and Entity Information Document - shares | 3 Months Ended | |
Mar. 31, 2019 | Apr. 26, 2019 | |
Document Information [Line Items] | ||
Entity Registrant Name | BRANDYWINE REALTY TRUST | |
Trading Symbol | BDN | |
Entity Central Index Key | 0000790816 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 176,137,761 | |
BRANDYWINE OPERATING PARTNERSHIP, L.P. | ||
Document Information [Line Items] | ||
Entity Registrant Name | BRANDYWINE OPERATING PARTNERSHIP, L.P. | |
Entity Central Index Key | 0001060386 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | ||
Real estate investments: | ||||
Operating properties | $ 4,015,879 | $ 3,953,319 | ||
Right of use asset - operating leases | 22,175 | [1] | 0 | |
Accumulated depreciation | (891,125) | (865,462) | ||
Operating real estate investments, net | 3,146,929 | 3,087,857 | ||
Construction-in-progress | 112,176 | 150,263 | ||
Land held for development | [2] | 88,047 | 86,401 | |
Prepaid leasehold interests in land held for development, net | [3] | 39,897 | 39,999 | |
Total real estate investments, net | 3,387,049 | 3,364,520 | ||
Assets held for sale, net | 7,345 | 11,599 | ||
Cash and cash equivalents | 14,449 | 22,842 | ||
Accounts receivable, net of allowance of $284 and $1,653 as of March 31, 2019 and December 31, 2018, respectively | 21,780 | 16,394 | ||
Accrued rent receivable, net of allowance of $11,018 and $11,266 as of March 31, 2019 and December 31, 2018, respectively | 168,781 | 165,243 | ||
Investment in Real Estate Ventures, equity method | 161,568 | 169,100 | ||
Deferred costs, net | 95,293 | 91,075 | ||
Intangible assets, net | 119,903 | 131,348 | ||
Other assets | 139,761 | 126,400 | ||
Total assets | 4,115,929 | 4,098,521 | ||
LIABILITIES AND EQUITY | ||||
Mortgage notes payable, net | 319,132 | 320,869 | ||
Unsecured credit facility | 160,500 | 92,500 | ||
Unsecured term loan, net | 248,168 | 248,042 | ||
Unsecured senior notes, net | 1,366,997 | 1,366,635 | ||
Accounts payable and accrued expenses | 112,375 | 125,696 | ||
Distributions payable | 34,107 | 33,632 | ||
Deferred income, gains and rent | 24,749 | 28,293 | ||
Acquired lease intangibles, net | 29,813 | 31,783 | ||
Lease liability - operating leases | 22,402 | 0 | ||
Other liabilities | 16,194 | 18,498 | ||
Total liabilities | 2,334,437 | 2,265,948 | ||
Commitments and contingencies | ||||
Equity: | ||||
Common Shares of Brandywine Realty Trust's beneficial interest, $0.01 par value; shares authorized 400,000,000; 176,001,580 and 176,873,324 issued and outstanding as of March 31, 2019 and December 31, 2018, respectively | 1,761 | 1,770 | ||
Additional paid-in-capital | 3,187,312 | 3,200,850 | ||
Deferred compensation payable in common shares | 14,640 | 14,021 | ||
Common shares in grantor trust, 1,012,542 and 977,120 issued and outstanding as of March 31, 2019 and December 31, 2018, respectively | (14,640) | (14,021) | ||
Cumulative earnings | 795,186 | 796,513 | ||
Accumulated other comprehensive income | 2,560 | 5,029 | ||
Cumulative distributions | (2,217,469) | (2,183,909) | ||
Total Brandywine Realty Trust's equity | 1,769,350 | 1,820,253 | ||
Noncontrolling interests | 12,142 | 12,320 | ||
Total beneficiaries' equity | 1,781,492 | 1,832,573 | ||
Total liabilities and beneficiaries' equity | 4,115,929 | 4,098,521 | ||
BRANDYWINE OPERATING PARTNERSHIP, L.P. | ||||
Real estate investments: | ||||
Operating properties | 4,015,879 | 3,953,319 | ||
Right of use asset - operating leases | 22,175 | 0 | ||
Accumulated depreciation | (891,125) | (865,462) | ||
Operating real estate investments, net | 3,146,929 | 3,087,857 | ||
Construction-in-progress | 112,176 | 150,263 | ||
Land held for development | 88,047 | 86,401 | ||
Prepaid leasehold interests in land held for development, net | 39,897 | 39,999 | ||
Total real estate investments, net | 3,387,049 | 3,364,520 | ||
Assets held for sale, net | 7,345 | 11,599 | ||
Cash and cash equivalents | 14,449 | 22,842 | ||
Accounts receivable, net of allowance of $284 and $1,653 as of March 31, 2019 and December 31, 2018, respectively | 21,780 | 16,394 | ||
Accrued rent receivable, net of allowance of $11,018 and $11,266 as of March 31, 2019 and December 31, 2018, respectively | 168,781 | 165,243 | ||
Investment in Real Estate Ventures, equity method | 161,568 | 169,100 | ||
Deferred costs, net | 95,293 | 91,075 | ||
Intangible assets, net | 119,903 | 131,348 | ||
Other assets | 139,761 | 126,400 | ||
Total assets | 4,115,929 | 4,098,521 | ||
LIABILITIES AND EQUITY | ||||
Mortgage notes payable, net | 319,132 | 320,869 | ||
Unsecured credit facility | 160,500 | 92,500 | ||
Unsecured term loan, net | 248,168 | 248,042 | ||
Unsecured senior notes, net | 1,366,997 | 1,366,635 | ||
Accounts payable and accrued expenses | 112,375 | 125,696 | ||
Distributions payable | 34,107 | 33,632 | ||
Deferred income, gains and rent | 24,749 | 28,293 | ||
Acquired lease intangibles, net | 29,813 | 31,783 | ||
Lease liability - operating leases | 22,402 | 0 | ||
Other liabilities | 16,194 | 18,498 | ||
Total liabilities | 2,334,437 | 2,265,948 | ||
Commitments and contingencies | ||||
Redeemable limited partnership units at redemption value; 982,871 issued and outstanding as of March 31, 2019 and December 31, 2018 | 15,421 | 12,520 | ||
Equity: | ||||
General Partnership Capital; 176,001,580 and 176,873,324 units issued and outstanding as of March 31, 2019 and December 31, 2018, respectively | 1,761,580 | 1,813,136 | ||
Accumulated other comprehensive income | 2,242 | 4,725 | ||
Total Brandywine Operating Partnership, L.P.'s equity | 1,763,822 | 1,817,861 | ||
Non-controlling interest - consolidated real estate ventures | 2,249 | 2,192 | ||
Total partners' equity | 1,766,071 | 1,820,053 | ||
Total liabilities and beneficiaries' equity | $ 4,115,929 | $ 4,098,521 | ||
[1] | On January 1, 2019, as a result of the adoption of Topic 842, Leases, the Company recognized operating ground leases for which it is a lessee on its consolidated balance sheets for the period ended March 31, 2019. See Note 2, “ Basis of Presentation | |||
[2] | As of March 31, 2019, the Company categorized 35.2 acres of land held for development, located in the Other segment, as held for sale in accordance with applicable accounting standards for long lived assets. As of December 31, 2018, the Company categorized 37.9 acres of land held for development, comprised of 2.7 acres and 35.2 acres, located in the Pennsylvania Suburbs segment and Other segment, respectively, as held for sale in accordance with applicable accounting standards for long lived assets. See Note 3, “Real Estate Investments ,” for further information. | |||
[3] | As of March 31, 2019 and December 31, 2018, this caption comprised leasehold interests in prepaid 99-year |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Accounts receivable, allowance | $ 284 | $ 1,653 |
Accrued rent receivable, allowance | $ 11,018 | $ 11,266 |
Common Stock, Par or Stated Value Per Share (USD per share) | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 400,000,000 | 400,000,000 |
Common Stock, Shares, Issued and Outstanding | 176,001,580 | 176,873,324 |
Common Shares in Grantor Trust, Issued and Outstanding | 1,012,542 | 977,120 |
BRANDYWINE OPERATING PARTNERSHIP, L.P. | ||
Accounts receivable, allowance | $ 284 | $ 1,653 |
Accrued rent receivable, allowance | $ 11,018 | $ 11,266 |
Redeemable Limited Partnership Units Issued and Outstanding | 982,871 | 982,871 |
General Partners' Capital Account, Units Issued and Outstanding | 176,001,580 | 176,873,324 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue | ||
Total revenue | $ 143,896 | $ 136,358 |
Operating expenses | ||
Property operating expenses | 39,481 | 39,332 |
Real estate taxes | 15,783 | 12,422 |
Third party management expenses | 2,117 | 4,750 |
Depreciation and amortization | 51,980 | 43,291 |
General and administrative expenses | 9,844 | 8,723 |
Total operating expenses | 119,205 | 108,518 |
Gain on sale of real estate | ||
Net gain on sale of undepreciated real estate | 1,001 | 22 |
Total gain on sale of real estate | 1,001 | 22 |
Operating income | 25,692 | 27,862 |
Other income (expense): | ||
Interest income | 525 | 703 |
Interest expense | (20,357) | (19,533) |
Interest expense - amortization of deferred financing costs | (666) | (627) |
Equity in loss of Real Estate Ventures | (1,358) | (825) |
Net gain on real estate venture transactions | 259 | 37,263 |
Net income before income taxes | 4,095 | 44,843 |
Income tax provision | (29) | (138) |
Net income | 4,066 | 44,705 |
Net income attributable to noncontrolling interests | (57) | (376) |
Net income attributable to Brandywine Realty Trust | 4,009 | 44,329 |
Nonforfeitable dividends allocated to unvested restricted shareholders | (119) | (114) |
Net income attributable to Common Shareholders of Brandywine Realty Trust | $ 3,890 | $ 44,215 |
Basic income per Common Share | $ 0.02 | $ 0.25 |
Diluted income per Common Share | $ 0.02 | $ 0.25 |
Basic weighted average shares outstanding | 175,857,358 | 178,395,525 |
Diluted weighted average shares outstanding | 176,464,218 | 179,788,311 |
BRANDYWINE OPERATING PARTNERSHIP, L.P. | ||
Revenue | ||
Total revenue | $ 143,896 | $ 136,358 |
Operating expenses | ||
Property operating expenses | 39,481 | 39,332 |
Real estate taxes | 15,783 | 12,422 |
Third party management expenses | 2,117 | 4,750 |
Depreciation and amortization | 51,980 | 43,291 |
General and administrative expenses | 9,844 | 8,723 |
Total operating expenses | 119,205 | 108,518 |
Gain on sale of real estate | ||
Net gain on sale of undepreciated real estate | 1,001 | 22 |
Total gain on sale of real estate | 1,001 | 22 |
Operating income | 25,692 | 27,862 |
Other income (expense): | ||
Interest income | 525 | 703 |
Interest expense | (20,357) | (19,533) |
Interest expense - amortization of deferred financing costs | (666) | (627) |
Equity in loss of Real Estate Ventures | (1,358) | (825) |
Net gain on real estate venture transactions | 259 | 37,263 |
Net income before income taxes | 4,095 | 44,843 |
Income tax provision | (29) | (138) |
Net income | 4,066 | 44,705 |
Net income attributable to non-controlling interests - consolidated real estate ventures | (34) | (5) |
Net Income (Loss) Allocated to Limited Partners | 4,032 | 44,700 |
Nonforfeitable dividends allocated to unvested restricted shareholders | (119) | (114) |
Net income attributable to Common Shareholders of Brandywine Realty Trust | $ 3,913 | $ 44,586 |
Basic income per Common Share | $ 0.02 | $ 0.25 |
Diluted income per Common Share | $ 0.02 | $ 0.25 |
Basic weighted average shares outstanding | 176,840,229 | 179,875,324 |
Diluted weighted average shares outstanding | 177,447,089 | 181,268,110 |
Rents [Member] | ||
Revenue | ||
Lease revenue | $ 138,098 | $ 126,759 |
Rents [Member] | BRANDYWINE OPERATING PARTNERSHIP, L.P. | ||
Revenue | ||
Lease revenue | 138,098 | 126,759 |
Third Party Management Fees, Labor Reimbursement and Leasing [Member] | ||
Revenue | ||
Service and other revenue | 3,955 | 7,674 |
Third Party Management Fees, Labor Reimbursement and Leasing [Member] | BRANDYWINE OPERATING PARTNERSHIP, L.P. | ||
Revenue | ||
Service and other revenue | 3,955 | 7,674 |
Other [Member] | ||
Revenue | ||
Service and other revenue | 1,843 | 1,925 |
Other [Member] | BRANDYWINE OPERATING PARTNERSHIP, L.P. | ||
Revenue | ||
Service and other revenue | $ 1,843 | $ 1,925 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | ||
Net income | $ 4,066 | $ 44,705 | |
Comprehensive income (loss): | |||
Unrealized gain (loss) on derivative financial instruments | (2,689) | 4,696 | |
Amortization of interest rate contracts | [1] | 206 | 312 |
Comprehensive income (loss): | (2,483) | 5,008 | |
Comprehensive income | 1,583 | 49,713 | |
Comprehensive income attributable to noncontrolling interest | (43) | (418) | |
Comprehensive income attributable to Brandywine Realty Trust | 1,540 | 49,295 | |
BRANDYWINE OPERATING PARTNERSHIP, L.P. | |||
Net income | 4,066 | 44,705 | |
Comprehensive income (loss): | |||
Unrealized gain (loss) on derivative financial instruments | (2,689) | 4,696 | |
Amortization of interest rate contracts | [1] | 206 | 312 |
Comprehensive income (loss): | (2,483) | 5,008 | |
Comprehensive income | 1,583 | 49,713 | |
Comprehensive income attributable to noncontrolling interest | (34) | (5) | |
Comprehensive income attributable to Brandywine Realty Trust | $ 1,549 | $ 49,708 | |
[1] | Amounts reclassified from comprehensive income to interest expense within the Consolidated Statements of Operations. |
Consolidated Statements of Bene
Consolidated Statements of Beneficiaries' Equity - USD ($) $ in Thousands | Total | Common Stock [Member] | Deferred Compensation, Share-based Payments [Member] | Additional Paid-in Capital [Member] | Common Stock In Grantor Trust [Member] | Cumulative Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Cumulative Distributions [Member] | Noncontrolling Interest [Member] |
Beginning Balance at Dec. 31, 2017 | $ 1,846,600 | $ 1,784 | $ 12,445 | $ 3,218,564 | $ (12,445) | $ 660,174 | $ 2,399 | $ (2,053,741) | $ 17,420 |
Beginning Balance, Shares at Dec. 31, 2017 | 178,285,236 | 894,736 | |||||||
Net income | 44,705 | 44,329 | 376 | ||||||
Other comprehensive income | 5,008 | 4,966 | 42 | ||||||
Issuance of Common Shares of Beneficial Interest | 416 | 416 | |||||||
Issuance of Common Shares of Beneficial Interest, Shares | 23,311 | ||||||||
Issuance of partnership interest in consolidated real estate ventures | 15 | 15 | |||||||
Distributions from consolidated real estate ventures | (54) | (54) | |||||||
Share-based compensation activity | 3,076 | $ 1 | 3,072 | 3 | |||||
Share-based compensation activity, Shares | 68,425 | ||||||||
Share Issuance from/(to) Deferred Compensation Plan | $ 0 | $ 1,061 | (1,061) | ||||||
Share Issuance from/(to) Deferred Compensation Plan, Shares | 66,830 | 53,856 | |||||||
Share Choice Plan issuance | 0 | (1,285) | |||||||
Reallocation of Noncontrolling interest | $ 0 | (5) | 5 | ||||||
Distributions declared | (32,525) | (32,259) | (266) | ||||||
Ending Balance at Mar. 31, 2018 | 1,867,241 | $ 1,785 | $ 13,506 | 3,222,047 | (13,506) | 704,506 | 7,365 | (2,086,000) | 17,538 |
Ending Balance, Shares at Mar. 31, 2018 | 178,442,517 | 948,592 | |||||||
Beginning Balance at Dec. 31, 2018 | 1,832,573 | $ 1,770 | $ 14,021 | 3,200,850 | (14,021) | 796,513 | 5,029 | (2,183,909) | 12,320 |
Beginning Balance, Shares at Dec. 31, 2018 | 176,873,324 | 977,120 | |||||||
Cumulative effect of accounting change | (5,336) | (5,336) | |||||||
Net income | 4,066 | 4,009 | 57 | ||||||
Other comprehensive income | (2,483) | (2,469) | (14) | ||||||
Repurchase and retirement of Common Shares of Beneficial Interest | $ (17,281) | $ (13) | (17,268) | ||||||
Repurchase and retirement of Common Shares of Beneficial Interest, Shares | (1,337,169) | (1,337,169) | |||||||
Issuance of partnership interest in consolidated real estate ventures | $ 23 | 23 | |||||||
Share-based compensation activity | 3,677 | $ 4 | 3,673 | ||||||
Share-based compensation activity, Shares | 465,883 | 41,342 | |||||||
Share Issuance from/(to) Deferred Compensation Plan | 0 | $ 619 | (619) | ||||||
Share Issuance from/(to) Deferred Compensation Plan, Shares | (458) | (5,920) | |||||||
Reallocation of Noncontrolling interest | 0 | 57 | (57) | ||||||
Distributions declared | (33,747) | (33,560) | (187) | ||||||
Ending Balance at Mar. 31, 2019 | $ 1,781,492 | $ 1,761 | $ 14,640 | $ 3,187,312 | $ (14,640) | $ 795,186 | $ 2,560 | $ (2,217,469) | $ 12,142 |
Ending Balance, Shares at Mar. 31, 2019 | 176,001,580 | 1,012,542 |
Consolidated Statements of Be_2
Consolidated Statements of Beneficiaries' Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement Of Stockholders Equity [Abstract] | ||
Distributions declared per Common Share | $ 0.19 | $ 0.18 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 4,066 | $ 44,705 |
Adjustments to reconcile net income to net cash from operating activities: | ||
Depreciation and amortization | 51,980 | 43,291 |
Amortization of deferred financing costs | 666 | 627 |
Amortization of debt discount/(premium), net | 175 | 176 |
Amortization of stock compensation costs | 3,449 | 3,265 |
Straight-line rent income | (4,165) | (4,978) |
Amortization of acquired above (below) market leases, net | (1,805) | (793) |
Straight-line ground rent expense | 351 | 22 |
Provision for doubtful accounts | 0 | 467 |
Net gain on real estate venture transactions | 0 | (37,263) |
Net gain on sale of interests in real estate | (1,001) | (22) |
Income from Real Estate Ventures, net of distributions | 1,159 | 2,209 |
Income tax provision | 29 | 138 |
Accounts receivable | (3,539) | (646) |
Other assets | (39,088) | (12,911) |
Accounts payable and accrued expenses | (10,822) | (1,146) |
Deferred income, gains and rent | (3,148) | 2,295 |
Other liabilities | 19,459 | (738) |
Net cash provided by operating activities | 17,766 | 38,698 |
Cash flows from investing activities: | ||
Acquisition of properties | 0 | (24,946) |
Proceeds from the sale of properties | 5,273 | 14,921 |
Proceeds from real estate venture sales | 259 | 42,953 |
Proceeds from repayment of mortgage notes receivable | 15 | 562 |
Capital expenditures for tenant improvements | (14,978) | (16,569) |
Capital expenditures for redevelopments | (10,777) | (2,429) |
Capital expenditures for developments | (18,645) | (19,387) |
Advances for the purchase of tenant assets, net of repayments | (1,615) | 316 |
Investment in unconsolidated Real Estate Ventures | (182) | (261) |
Deposits for real estate | 3,152 | (162) |
Capital distributions from Real Estate Ventures | 1,851 | 1,951 |
Leasing costs paid | (5,696) | (3,120) |
Net cash used in investing activities | (41,343) | (6,171) |
Cash flows from financing activities: | ||
Repayments of mortgage notes payable | (1,871) | (1,317) |
Proceeds from credit facility borrowings | 198,000 | 0 |
Repayments of credit facility borrowings | (130,000) | 0 |
Proceeds from the exercise of stock options | 800 | 0 |
Proceeds from the issuance of common shares | 0 | 416 |
Shares used for employee taxes upon vesting of share awards | (1,230) | (942) |
Partner contributions to consolidated real estate venture | 23 | 15 |
Partner distributions from consolidated real estate venture | 0 | (54) |
Repurchase and retirement of common shares | (17,282) | 0 |
Distributions paid to shareholders | (33,084) | (32,173) |
Distributions to noncontrolling interest | (187) | (266) |
Net cash provided by (used in) financing activities | 15,169 | (34,321) |
Decrease in cash and cash equivalents and restricted cash | (8,408) | (1,794) |
Cash and cash equivalents and restricted cash at beginning of year | 23,211 | 203,442 |
Cash and cash equivalents and restricted cash at end of period | 14,803 | 201,648 |
Reconciliation of cash and cash equivalents and restricted cash: | ||
Cash and cash equivalents, beginning of period | 22,842 | 202,179 |
Restricted cash, beginning of period | 369 | 1,263 |
Cash and cash equivalents and restricted cash at beginning of year | 23,211 | 203,442 |
Cash and cash equivalents, end of period | 14,449 | 200,813 |
Restricted cash, end of period | 354 | 835 |
Cash and cash equivalents and restricted cash at end of period | 14,803 | 201,648 |
Supplemental disclosure: | ||
Cash paid for interest, net of capitalized interest during the three months ended March 31, 2019 and 2018 of $728 and $687, respectively | 14,251 | 12,705 |
Cash paid for income taxes | 0 | 7 |
Supplemental disclosure of non-cash activity: | ||
Dividends and distributions declared but not paid | 34,107 | 32,502 |
Change in investment in real estate ventures as a result of dispositions | 0 | (17,313) |
Change in operating real estate related to a non-cash acquisition of an operating property | 0 | (20,653) |
Change in intangible assets, net related to non-cash acquisition of an operating property | 0 | (3,144) |
Change in acquired lease intangibles, net related to non-cash acquisition of an operating property | 0 | 182 |
Change in investments in joint venture related to non-cash acquisition of property | 0 | (2,042) |
Change in mortgage notes payable related to acquisition of an operating property | 0 | 9,940 |
Change in capital expenditures financed through accounts payable at period end | (1,080) | (1,112) |
Change in capital expenditures financed through retention payable at period end | (4,503) | (792) |
BRANDYWINE OPERATING PARTNERSHIP, L.P. | ||
Cash flows from operating activities: | ||
Net income | 4,066 | 44,705 |
Adjustments to reconcile net income to net cash from operating activities: | ||
Depreciation and amortization | 51,980 | 43,291 |
Amortization of deferred financing costs | 666 | 627 |
Amortization of debt discount/(premium), net | 175 | 176 |
Amortization of stock compensation costs | 3,449 | 3,265 |
Straight-line rent income | (4,165) | (4,978) |
Amortization of acquired above (below) market leases, net | (1,805) | (793) |
Straight-line ground rent expense | 351 | 22 |
Provision for doubtful accounts | 0 | 467 |
Net gain on real estate venture transactions | 0 | (37,263) |
Net gain on sale of interests in real estate | (1,001) | (22) |
Income from Real Estate Ventures, net of distributions | 1,159 | 2,209 |
Income tax provision | 29 | 138 |
Accounts receivable | (3,539) | (646) |
Other assets | (39,088) | (12,911) |
Accounts payable and accrued expenses | (10,822) | (1,146) |
Other liabilities | 19,459 | (738) |
Deferred income, gains and rent | (3,148) | 2,295 |
Net cash provided by operating activities | 17,766 | 38,698 |
Cash flows from investing activities: | ||
Acquisition of properties | 0 | (24,946) |
Proceeds from the sale of properties | 5,273 | 14,921 |
Proceeds from real estate venture sales | 259 | 42,953 |
Proceeds from repayment of mortgage notes receivable | 15 | 562 |
Capital expenditures for tenant improvements | (14,978) | (16,569) |
Capital expenditures for redevelopments | (10,777) | (2,429) |
Capital expenditures for developments | (18,645) | (19,387) |
Advances for the purchase of tenant assets, net of repayments | (1,615) | 316 |
Investment in unconsolidated Real Estate Ventures | (182) | (261) |
Deposits for real estate | 3,152 | (162) |
Capital distributions from Real Estate Ventures | 1,851 | 1,951 |
Leasing costs paid | (5,696) | (3,120) |
Net cash used in investing activities | (41,343) | (6,171) |
Cash flows from financing activities: | ||
Repayments of mortgage notes payable | (1,871) | (1,317) |
Proceeds from credit facility borrowings | 198,000 | 0 |
Repayments of credit facility borrowings | (130,000) | 0 |
Proceeds from the exercise of stock options | 800 | 0 |
Proceeds from the issuance of common shares | 0 | 416 |
Shares used for employee taxes upon vesting of share awards | (1,230) | (942) |
Partner contributions to consolidated real estate venture | 23 | 15 |
Partner distributions from consolidated real estate venture | 0 | (54) |
Repurchase and retirement of common shares | (17,282) | 0 |
Distributions paid to shareholders | (33,271) | (32,439) |
Net cash provided by (used in) financing activities | 15,169 | (34,321) |
Decrease in cash and cash equivalents and restricted cash | (8,408) | (1,794) |
Cash and cash equivalents and restricted cash at beginning of year | 23,211 | 203,442 |
Cash and cash equivalents and restricted cash at end of period | 14,803 | 201,648 |
Reconciliation of cash and cash equivalents and restricted cash: | ||
Cash and cash equivalents, beginning of period | 22,842 | 202,179 |
Restricted cash, beginning of period | 369 | 1,263 |
Cash and cash equivalents and restricted cash at beginning of year | 23,211 | 203,442 |
Cash and cash equivalents, end of period | 14,449 | 200,813 |
Restricted cash, end of period | 354 | 835 |
Cash and cash equivalents and restricted cash at end of period | 14,803 | 201,648 |
Supplemental disclosure: | ||
Cash paid for interest, net of capitalized interest during the three months ended March 31, 2019 and 2018 of $728 and $687, respectively | 14,251 | 12,705 |
Cash paid for income taxes | 0 | 7 |
Supplemental disclosure of non-cash activity: | ||
Dividends and distributions declared but not paid | 34,107 | 32,502 |
Change in investment in real estate ventures as a result of dispositions | 0 | (17,313) |
Change in operating real estate related to a non-cash acquisition of an operating property | 0 | (20,653) |
Change in intangible assets, net related to non-cash acquisition of an operating property | 0 | (3,144) |
Change in acquired lease intangibles, net related to non-cash acquisition of an operating property | 0 | 182 |
Change in investments in joint venture related to non-cash acquisition of property | 0 | (2,042) |
Change in mortgage notes payable related to acquisition of an operating property | 0 | 9,940 |
Change in capital expenditures financed through accounts payable at period end | (1,080) | (1,112) |
Change in capital expenditures financed through retention payable at period end | $ (4,503) | $ (792) |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Capitalized interest | $ 728 | $ 687 |
BRANDYWINE OPERATING PARTNERSHIP, L.P. | ||
Capitalized interest | $ 728 | $ 687 |
Consolidated Statements of Part
Consolidated Statements of Partners' Equity - USD ($) $ in Thousands | Total | Accumulated Other Comprehensive Income (Loss) [Member] | Noncontrolling Interest [Member] | BRANDYWINE OPERATING PARTNERSHIP, L.P. | BRANDYWINE OPERATING PARTNERSHIP, L.P.General Partner Capital [Member] | BRANDYWINE OPERATING PARTNERSHIP, L.P.Accumulated Other Comprehensive Income (Loss) [Member] | BRANDYWINE OPERATING PARTNERSHIP, L.P.Noncontrolling Interest [Member] |
Beginning Balance at Dec. 31, 2017 | $ 1,819,682 | $ 1,815,411 | $ 2,056 | $ 2,215 | |||
Beginning Balance, Shares at Dec. 31, 2017 | 178,285,236 | ||||||
Net income | $ 44,705 | $ 376 | 44,705 | $ 44,700 | 5 | ||
Other comprehensive income | 5,008 | $ 4,966 | 42 | 5,008 | 5,008 | ||
Share Issuance from/(to) Deferred Compensation Plan | 0 | 0 | |||||
Share Issuance from/(to) Deferred Compensation Plan, Shares | 66,830 | ||||||
Issuance of LP Units | 416 | $ 416 | |||||
Issuance of LP Units, Shares | 23,311 | ||||||
Issuance of partnership interest in consolidated real estate ventures | 15 | 15 | 15 | 15 | |||
Distributions from consolidated real estate ventures | $ (54) | (54) | $ (54) | (54) | |||
Share Choice Plan issuance | 0 | 0 | (1,285) | ||||
Share-based compensation activity | $ 3,076 | $ 3,075 | $ 3,075 | ||||
Share-based compensation activity, Shares | 68,425 | ||||||
Adjustment of redeemable partnership units to liquidation value at period end | 3,604 | $ 3,604 | |||||
Distributions declared to general partnership unitholders | (32,259) | (32,259) | |||||
Ending Balance at Mar. 31, 2018 | 1,844,192 | $ 1,834,947 | 7,064 | 2,181 | |||
Ending Balance, Shares at Mar. 31, 2018 | 178,442,517 | ||||||
Beginning Balance at Dec. 31, 2018 | 1,820,053 | $ 1,813,136 | 4,725 | 2,192 | |||
Beginning Balance, Shares at Dec. 31, 2018 | 176,873,324 | ||||||
Cumulative effect of accounting change | (5,336) | (5,336) | $ (5,336) | ||||
Net income | 4,066 | 57 | 4,066 | $ 4,032 | 34 | ||
Other comprehensive income | (2,483) | $ (2,469) | (14) | (2,483) | (2,483) | ||
Share Issuance from/(to) Deferred Compensation Plan | 0 | 0 | |||||
Share Issuance from/(to) Deferred Compensation Plan, Shares | (458) | ||||||
Repurchase and retirement of LP units | (17,281) | $ (17,281) | |||||
Repurchase and retirement of LP units, Shares | (1,337,169) | ||||||
Issuance of partnership interest in consolidated real estate ventures | 23 | $ 23 | 23 | 23 | |||
Share-based compensation activity | $ 3,677 | 3,677 | $ 3,677 | ||||
Share-based compensation activity, Shares | 465,883 | ||||||
Adjustment of redeemable partnership units to liquidation value at period end | (3,088) | $ (3,088) | |||||
Distributions declared to general partnership unitholders | (33,560) | (33,560) | |||||
Ending Balance at Mar. 31, 2019 | $ 1,766,071 | $ 1,761,580 | $ 2,242 | $ 2,249 | |||
Ending Balance, Shares at Mar. 31, 2019 | 176,001,580 |
Consolidated Statements of Pa_2
Consolidated Statements of Partners' Equity (Parenthetical) - BRANDYWINE OPERATING PARTNERSHIP, L.P. - $ / shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Distributions to general partnership unitholders (USD per share) | $ 0.19 | $ 0.18 |
General Partner Capital [Member] | ||
Distributions to general partnership unitholders (USD per share) | $ 0.19 | $ 0.18 |
Organization of the Parent Comp
Organization of the Parent Company and The Operating Partnership | 3 Months Ended |
Mar. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
ORGANIZATION OF THE PARENT COMPANY AND THE OPERATING PARTNERSHIP | 1. ORGANIZATION OF THE PARENT COMPANY AND THE OPERATING PARTNERSHIP The Parent Company is a self-administered and self-managed real estate investment trust (“REIT”) that provides leasing, property management, development, redevelopment, acquisition and other tenant-related services for a portfolio of office, retail and mixed-use properties. The Parent Company owns its assets and conducts its operations through the Operating Partnership and subsidiaries of the Operating Partnership. The Parent Company is the sole general partner of the Operating Partnership and, as of March 31, 2019, owned a 99.4% interest in the Operating Partnership. The Parent Company’s common shares of beneficial interest are publicly traded on the New York Stock Exchange under the ticker symbol “BDN”. As of March 31, 2019, the Company owned 96 properties that contained an aggregate of approximately 16.9 million net rentable square feet (collectively, the “Properties”). The Company’s core portfolio of operating properties, as of March 31, 2019, excludes one development property and three redevelopment properties under construction or committed for construction (collectively, the “Core Properties”). The Properties were comprised of the following as of March 31, 2019: Number of Properties Rentable Square Feet Office properties 88 15,719,636 Mixed-use properties 3 641,741 Retail property 1 17,884 Core Properties 92 16,379,261 Development property 1 204,108 Redevelopment properties 3 338,650 The Properties 96 16,922,019 In addition to the Properties, as of March 31, 2019, the Company owned land held for development, comprised of 234.7 acres of undeveloped land, of which 35.2 acres were held for sale and 1.8 acres related to leasehold interests in two land parcels, each acquired through prepaid 99-year “Investment in Unconsolidated Real Estate Ventures,” The Company conducts its third-party real estate management services business primarily through wholly-owned management company subsidiaries. As of March 31, 2019, the management company subsidiaries were managing properties containing an aggregate of approximately 24.9 million net rentable square feet, of which approximately 16.9 million net rentable square feet related to Properties owned by the Company and approximately 8.0 million net rentable square feet related to properties owned by third parties and Real Estate Ventures. Unless otherwise indicated, all references in this Form 10-Q to square feet represent net rentable area. |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | 2. BASIS OF PRESENTATION Basis of Presentation The consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial statements. Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments consist solely of normal recurring matters, and result in a fair statement of the financial position of the Company as of March 31, 2019, the results of its operations for the three-month periods ended March 31, 2019 and 2018 and its cash flows for the three-month periods ended March 31, 2019 and 2018 have been included. The results of operations for such interim periods are not necessarily indicative of the results for a full year. These consolidated financial statements should be read in conjunction with the Parent Company’s and the Operating Partnership’s consolidated financial statements and footnotes included in their combined 2018 Annual Report on Form 10-K filed with the SEC on February 22, 2019. The Company's Annual Report on Form 10-K for the year ended December 31, 2018 contains a discussion of our significant accounting policies under Note 2, "Summary of Significant Accounting Policies". there have been no significant changes in our significant accounting policies since December 31, 2018 . Management discusses our significant accounting policies and management’s judgments and estimates with the Company's Audit Committee. Out of Period Adjustment The Company recorded $0.8 million of depreciation expense during the three-month period ended March 31, 2019, which should have been recorded in the consolidated financial statements for the three and twelve-month periods ended December 31, 2018. Management concluded that this misstatement was not material to the consolidated financial statements as of and for the twelve-month period ended December 31, 2018 or the three-month period ended March 31, 2019. Reclassifications The Company reclassified tenant reimbursements and termination fees within the “Rents” caption on the consolidated statements of operations as a result of the adoption of Topic 842, Leases as of January 1, 2019. Tenant reimbursements and termination fees, which were reclassified retrospectively for all periods, were formerly presented separately in the “Tenant reimbursements” and “Termination fees” captions, respectively, on the consolidated statements of operations. The prior year reclassifications were made to conform to current-year presentation under Topic 842 and did not result in any change in total revenue. Adoptions of New Accounting Guidance In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), modifying the principles for the recognition, measurement, presentation, and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification determines whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and lease liability for all leases with a term of greater than twelve months regardless of their classification. Leases with a term of twelve months or less will be accounted for in the same manner as operating leases under ASC 840, Leases. The new standard requires lessors to account for leases using an approach that is substantially equivalent to previous guidance for sales-type leases, direct financing leases, and operating leases. The guidance supersedes previously issued guidance under ASC 840. The Company adopted Topic 842 effective January 1, 2019. In applying the modified retrospective transition method, the Company elected the package of practical expedients available for implementation, which allows for the following: • An entity need not reassess whether any expired or existing contracts are or contain leases; • An entity need not reassess the lease classification for any expired or existing leases; and • An entity need not reassess initial indirect costs for any existing leases. Furthermore, the Company elected the optional transition method to make January 1, 2019 the initial application date of the standard. This package of practical expedients allows entities to account for their existing leases for the remainder of their respective lease terms following the previous accounting guidance. The Company also elected to adopt the optional transition practical expedient provided in ASU 2018-01 to not evaluate under Topic 842 for existing or expired land easements prior to the application date to determine if they meet the definition of a lease. The Company also elected to adopt the practical expedient offered in ASU 2018-11 that allows lessors to not allocate the total consideration to lease and nonlease components, such as tenant reimbursements, based on their relative standalone selling prices as the timing and pattern of revenue recognition of the combined single lease component is the same and the leases are classified as operating leases. The Company elected to adopt ASU 2018-20, which allows lessors to not evaluate whether certain sal es taxes and other similar taxes are lessor costs or lessee costs. Instead, lessors will account for those costs as if they are lessee costs. All collections from lessees of taxes within the scope of the election are excluded from the consideration of the contract and from variable payments not included in the consideration of the contract. Lessor accounting The Company generates revenue under leases with tenants occupying the Properties. Generally, leases with tenants are accounted for as operating leases. As of March 31, 2019, the Company does not have any leases classified as direct-financing or sales-type leases. The operating leases have various expiration dates. Lease payments on non-cancellable leases at March 31, 2019 are as follows (in thousands): Year Lease payments 2019 (nine months remaining) $ 292,215 2020 377,088 2021 354,913 2022 309,125 2023 281,437 Thereafter 1,270,928 Total $ 2,885,706 Lease payments on non-cancellable leases at December 31, 2018 are as follows (in thousands): Year Lease payments 2019 $ 392,058 2020 372,619 2021 349,160 2022 304,445 2023 277,388 Thereafter 1,265,810 Total $ 2,961,480 Fixed lease payments under tenant leases are recognized on a straight-line basis over the term of the related lease. The cumulative difference between lease revenue recognized under the straight-line method and contractual lease payments are recorded as “Accrued rent receivable” on the consolidated balance sheets. Variable lease payments are recognized as lease revenue in the period in which changes in facts and circumstances on which the variable lease payments are based occur. In November 2018, the FASB issued ASU No. 2018-19, which clarifies that operating lease receivables are not within the scope of ASC 326-20 and should instead be accounted for under the new leasing standard, ASC 842. Topic 842 requires a binary approach to evaluating leases for collectability. Lessors are required to determine if it is probable that substantially all of the lease payments will be collected from the tenant over the lease term. Should the lessor determine that it is not probable that substantially all of the lease payments will be collected, the standard requires that the lessor writes off any accrued rent receivable and begin recognizing lease payments on a cash-basis. The Company has evaluated all leases for collectability and is recognizing lease payments for certain leases on a cash-basis as collectability of substantially all of the lease payments is not probable. As a result, during the quarter ended March 31, 2019, the write off of the accrued rent receivable of $0.7 million was recorded by the Company upon adoption of Topic 842 as a cumulative effect of accounting change adjustment to equity through the “Cumulative earnings” caption on the consolidated balance sheets. The Company maintains a general reserve of $11.3 million relating to leases that existed prior to adoption of Topic 842 for which the Company has determined that collectability of substantially all of lease payments remains probable as of March 31, 2019. The Company’s lease revenue is impacted by the Company’s determination of whether improvements to the property, whether made by the Company or by the tenant, are landlord assets. The determination of whether an improvement is a landlord asset requires judgment. In making this judgment, the Company’s primary consideration is whether an improvement would be utilizable by another tenant upon move out of the improved space by the then-existing tenant. If the Company has funded an improvement that it determines not to be landlord assets, then it treats the cost of the improvement as a lease incentive. If the tenant has funded the improvement that the Company determines to be landlord assets, then the Company treats the costs of the improvement as deferred revenue and amortizes this costs into revenue over the lease term. For certain leases, the Company also makes significant assumptions and judgments in determining the lease term, including assumptions when the lease provides the tenant with an early termination option or purchase option. The lease term impacts the period over which the Company determines and records lease payments and also impacts the period of which it amortizes lease-related costs. The Company considers all relevant factors that create an economic incentive for the lessee and uses judgement to determine if those factors, considered together, signify that the lessee is reasonably certain to exercise the option. For leases where a tenant executes a lease termination, termination fees are recognized over the modified term of the lease as rental income. Additionally, any deferred rents receivable are accelerated over the modified lease term. The Company’s leases also typically provide for tenant reimbursement of a portion of common area maintenance expenses and other operating expenses to the extent that a tenant’s pro rata share of expenses exceeds a base year level set in the lease or to the extent that the tenant has a lease on a triple net basis. The Company also contracts with third-party vendors and suppliers for goods and services to fulfill certain of the Company’s obligations to tenants. Tenant reimbursement s are billed in the period in which the related expenses are incurred. The table below sets forth the allocation of lease revenue recognized between fixed contractual payments and variable lease payments (in thousands): Three Months Ended March 31, Lease Revenue 2019 Fixed lease payments $ 108,033 Variable lease payments 30,064 Total $ 138,097 Fixed lease payments include contractual rents under lease agreements with tenants recognized on a straight-line basis over the lease term, including amortization of lease incentives and above or below market rent intangibles, and parking income that is fixed under a long-term contract. Variable lease payments include reimbursements billed to tenants, termination fees, bad debt expense, and parking income that is not fixed under a long-term contract . Lessee Accounting The Company is the lessee under six long-term ground leases classified as operating leases. While adoption of the practical expedient allows the Company to not revisit the classification of existing leases, the Company measured the present value of the future lease payments for each ground lease agreement and recognized a right of use asset and lease liability in the aggregate amount of $22.4 million, each as of January 1, 2019 in accordance with Topic 842. The right of use assets and lease liabilities are presented in the “Right of use asset – operating leases” and “Lease liability – operating leases” captions, respectively, on the consolidated balance sheets as of March 31, 2019. The Company makes significant assumptions and judgements when determining the discount rate for the lease to calculate the present value of the lease payments. As the rate implicit in the lease is not readily determinable, the Company estimates the incremental borrowing rate (“IBR”) that it would need to pay to borrow on a collateralized basis over a similar lease term an amount equal to the lease payments in a similar economic environment. The Company utilized a market-based approach to estimate the IBR for each individual lease. The base IBR was estimated utilizing observable mortgage and corporate bond rates, which were then adjusted to account for considerations related to the Company’s credit rating and the lease term to select an incremental borrowing rate for each lease. The lease liabilities and right of use assets are amortized on a straight-line basis over the lease term with the corresponding expense classified in the “Property operating expenses” caption on the consolidated statement of operations. Certain of the Company’s ground leases contain extension options. The Company has exercised judgment in considering all economic factors to determine that it is not reasonably certain to exercise the extension options and therefore has not included the extension period in the remaining lease term. With the exception of certain ground leases that are subject to rent increases periodically based on the CPI index, all lease payments under the ground lease are fixed. Topic 842 requires use of the most recent CPI adjustment when determining the present value of the lease payments for an indexed lease. As such, the 2018 CPI index was used to determine the right of use asset and corresponding lease liability as of January 1, 2019. Additional rent payments for amounts in excess of this estimated growth rate will be expensed on a cash basis as incurred and are considered variable lease costs. The table below summarizes the Company’s operating lease cost (in thousands) recognized through the “Property operating expenses” caption on the consolidated statement of operations: Three Months Ended March 31, Lease Cost 2019 Fixed lease cost $ 525 Variable lease cost 14 Total $ 539 Weighted-average remaining lease term (years) 53.2 Weighted-average discount rate 6.3 % Marine Piers Sublease Interest Sale On March 15, 2017, the Company sold its sublease interest in the Piers at Penn’s Landing (the “Marine Piers”), which includes leasehold improvements containing 181,900 net rentable square feet, and a marina, located in Philadelphia, Pennsylvania, for an aggregate sales price of $21.4 million. On the closing date, the buyer paid $12.0 million in cash and the Company received cash proceeds of $11.2 million, after closing costs and prorations. The $9.4 million balance of the purchase is due on (a) January 31, 2020, in the event that the tenant at the Marine Piers does not exercise an option it holds to extend the term of the sublease or (b) January 15, 2024, in the event that the tenant does exercise the option to extend the term of the sublease. In accordance with ASU 2017-05, the Company determined that it is appropriate to recognize the sale of the sublease interest in the Marine Piers and to defer the amount of the pending payment due from the buyer because the Company cannot determine the collectability of the remaining $9.4 million balance due under the purchase and sale agreement. The net book value of the Marine Piers was $4.7 million, resulting in a gain on sale of $6.5 million. The remaining gain on sale of $9.4 million arising from the pending payment will be recognized at the earlier of: (i) the time that the Company determines collection of the deferred payment is probable or (ii) on the second purchase price installment date. Based on the facts and circumstances, revenue recognition under ASU 2017-05 coincides with the Company’s previous conclusion under ASC 360-20, and therefore no restatement of the consolidated financial statements is necessary as a result of implementing the guidance for the sale of nonfinancial assets. During the first quarter of 2019, the tenant at the Marine Piers exercised its option to extend the term of its sublease. Therefore, the Company expects to receive the $9.4 million balance on January 15, 2024. Recent Accounting Pronouncements In March 2019, the FASB issued ASU No. 2019-01, an amendment to the lease ASU to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing essential information about leasing transactions. The amendments in this update reinstate the exception in Topic 842 for lessors that are not manufacturers or dealers. The amendment is effective with Topic 842. Specifically, those lessors will use their cost, reflecting any volume or trade discounts that may apply, as the fair value of the underlying asset. However, if significant time lapses between the acquisition of the underlying asset and lease commencement, those lessors will be required to apply the definition of fair value (exit price) in Topic 820. The Company has evaluated the impact of this new guidance and determined that it will not have a material impact on its consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13 that changes how entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The guidance replaces the current incurred loss model with an expected loss approach, resulting in more timely recognition of such losses. The guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted after December 2018. The Company is in the process of evaluating the impact of this new guidance on reserves for notes receivable. The Company has not quantified the impact that this guidance will have on its consolidated financial statements. |
Real Estate Investments
Real Estate Investments | 3 Months Ended |
Mar. 31, 2019 | |
Real Estate [Abstract] | |
REAL ESTATE INVESTMENTS | 3. REAL ESTATE INVESTMENTS As of March 31, 2019 and December 31, 2018, the gross carrying value of the operating properties was as follows (in thousands): March 31, 2019 December 31, 2018 Land $ 509,503 $ 508,363 Building and improvements 3,068,255 3,029,427 Tenant improvements 438,121 415,529 Total $ 4,015,879 $ 3,953,319 Dispositions The Company sold the following land parcel and recognized a gain on a property sold in a prior year during the three-month period ended March 31, 2019 (dollars in thousands): Disposition Date Property/Portfolio Name Location Number of Parcels Acres Sales Price Net Proceeds on Sale Gain on Sale March 15, 2019 9 Presidential Boulevard Bala Cynwyd, PA 1 2.7 $ 5,325 $ 5,023 $ 751 January 8, 2015 Libertyview Cherry Hill, NJ - - - 250 250 (a) Total Dispositions 1 2.7 $ 5,325 $ 5,273 $ 1,001 (a) As of January 2019, the Company will receive an additional $1.0 million of contingent consideration. The Company will recognize this consideration on a cash basis due to uncertainty of collectability. The $1.0 million consideration is payable to the Company in twelve equal installments, of which $0.3 million has been received during the three-month period ended March 31, 2019. The sale of land referenced above does not represent a strategic shift that has a major effect on the Company’s operations and financial results. Accordingly, the operating results of the property remains classified within continuing operations for all periods presented. Held for Sale As of March 31, 2019, the Company determined that the sale of two parcels of land totaling 35.2 acres in the Other segment was probable and classified these properties as held for sale in accordance with applicable accounting standards for long-lived assets. As of March 31, 2019, $7.3 million was reclassified from the “Land held for development” caption to the “Assets held for sale, net” caption on the consolidated balance sheets. There were no other reclassifications related to these parcels of land. As of March 31, 2019, the fair value less the anticipated costs of sale of the properties exceeded the carrying values. As a result, the Company expects to record gains on sale. The fair value measurement is based on the pricing in the purchase and sale agreements. The disposals of the land referenced above do not represent a strategic shift that has a major effect on the operations and financial results of the Company. As a result, the operating results of the properties remain classified within continuing operations for all periods presented. |
Investment in Unconsolidated Re
Investment in Unconsolidated Real Estate Ventures | 3 Months Ended |
Mar. 31, 2019 | |
Equity Method Investments And Joint Ventures [Abstract] | |
INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES | 4. INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES As of March 31, 2019, the Company held ownership interests in ten unconsolidated Real Estate Ventures for an aggregate investment balance of $161.6 million. The Company formed or acquired interests in these Real Estate Ventures with unaffiliated third parties to develop or manage office, residential and/or mixed-use properties or to acquire land in anticipation of possible development of office, residential and/or mixed-use properties. As of March 31, 2019, six real estate ventures owned properties that contain an aggregate of approximately 5.8 million net rentable square feet of office space; two real estate ventures owned 1.4 acres of land held for development; one real estate venture owned 1.3 acres of land in active development; and one real estate venture owned a residential tower that contains 321 apartment units. The Company accounts for its unconsolidated interests in the Real Estate Ventures using the equity method. The Company’s unconsolidated interests range from 15% to 70%, subject to specified priority allocations of distributable cash in certain of the Real Estate Ventures. The Company earned management fees from its Real Estate Ventures of $1.1 million and $1.3 million for the three-month periods ended March 31, 2019 and March 31, 2018, respectively. The Company earned leasing commission income from its Real Estate Ventures of $0.2 million and $0.8 million for the three-month periods ended March 31, 2019, and March 31, 2018, respectively. The Company had outstanding accounts receivable balances from its Real Estate Ventures of $0.8 million as of both March 31, 2019 and December 31, 2018. The amounts reflected in the following tables (except for the Company’s share of equity and income) are based on the financial information of the individual Real Estate Ventures. The Company does not record operating losses of a Real Estate Venture in excess of its investment balance unless the Company is liable for the obligations of the Real Estate Venture or is otherwise committed to provide financial support to the Real Estate Venture. The following is a summary of the financial position of the Real Estate Ventures in which the Company held interests as of March 31, 2019 and December 31, 2018 (in thousands): March 31, 2019 December 31, 2018 Net property $ 835,827 $ 835,983 Other assets (a) 365,840 159,499 Other liabilities (a) 287,138 85,681 Debt, net (b) 490,840 365,707 Equity (c) 423,689 544,094 (a) The increase in ‘Other assets’ and ‘Other liabilities’ for the period ended March 31, 2019 compared to the period ended December 31, 2018 is due to the recording of the right of use asset and lease liability of $197.1 million and $249.3 million, respectively, for the MAP Venture ground lease upon adoption of Topic 842, which was adopted by the venture on January 1, 2019. (b) This amount increased as a result of third-party debt financing received by Herndon Innovation Center Venture, an unconsolidated real estate venture on March 29, 2019. See “Herndon Innovation Center Metro Portfolio Venture” section below for further information. (c) This amount includes the effect of the basis difference between the Company's historical cost basis and the basis recorded at the Real Estate Venture level, which is typically amortized over the life of the related assets and liabilities. Basis differentials occur from the impairment of investments, purchases of third party interests in existing Real Estate Ventures and upon the transfer of assets that were previously owned by the Company into a Real Estate Venture. In addition, certain acquisition, transaction and other costs may not be reflected in the net assets at the Real Estate Venture level. The following is a summary of results of operations of the Real Estate Ventures in which the Company held interests during the three--month periods ended March 31, 2019 and 2018, respectively (in thousands): Three-month period ended March 31, 2019 evo MAP Venture Other Total Revenue $ - $ 18,288 $ 16,771 $ 35,059 Operating expenses - (12,155 ) (6,563 ) (18,718 ) Interest expense, net - (2,536 ) (1,384 ) (3,920 ) Depreciation and amortization - (6,349 ) (7,363 ) (13,712 ) Net income (loss) $ - $ (2,752 ) $ 1,461 $ (1,291 ) Ownership interest % 50 % 50 % (b) (b) Company's share of net income (loss) $ - $ (1,376 ) $ 64 $ (1,312 ) Basis adjustments and other - (56 ) 10 (46 ) Equity in income (loss) of Real Estate Ventures $ - $ (1,432 ) $ 74 $ (1,358 ) Three-month period ended March 31, 2018 evo MAP Venture Other Total Revenue $ 995 $ 17,080 $ 24,746 $ 42,821 Operating expenses (250 ) (10,307 ) (10,211 ) (20,768 ) Interest expense, net (388 ) (3,791 ) (3,947 ) (8,126 ) Depreciation and amortization (376 ) (4,701 ) (9,307 ) (14,384 ) Loss on early extinguishment of debt (718 ) - - (718 ) Net income (loss) $ (737 ) $ (1,719 ) $ 1,281 $ (1,175 ) Ownership interest % 50 % 50 % (b) (b) Company's share of net income (loss) $ (369 ) $ (860 ) $ 523 $ (706 ) Basis adjustments and other 11 7 (137 ) (119 ) Equity in income (loss) of Real Estate Ventures $ (358 ) $ (853 ) $ 386 $ (825 ) (a) The Company sold its 50% ownership interest in evo at Cira Centre South Venture during the first quarter of 2018. (b) The Company’s unconsolidated ownership interests ranged from 15% to 70% during the three-month periods ended March 31, 2019 and 25% to 70% during the three-month periods ended March 31, 2018, subject to specified priority allocations of distributable cash in certain of the Real Estate Ventures. MAP Venture MAP Ground Lease Venture LLC (the “MAP Venture”), an unconsolidated real estate venture in which the Company holds a 50% ownership interest, is the lessee under a 99-year ground lease of land parcels underlying 58 office properties owned by the MAP Venture. Upon adoption of Topic 842, Leases on January 1, 2019, the MAP Venture determined that the carrying amount of the right of use asset was greater than the fair value of the underlying right of use asset. The fair value of the underlying right of use asset was determined using the purchase price paid by a third-party to acquire the ground lease. As a result, the venture recorded a $9.2 million cumulative effect of accounting change adjustment simultaneously with the recording of the right of use asset to reduce the value of the right of use asset to its estimated fair value. The Company recorded its $4.6 million proportionate share of the cumulative effect of accounting change adjustment through the "Cumulative earnings” caption on its consolidated balance sheets. Herndon Innovation Center Metro Portfolio Venture, LLC On March 29, 2019, Herndon Innovation Center Metro Portfolio Venture, LLC (“Herndon Innovation Center Venture”), in which the Company holds a 15% ownership interest, obtained $134.1 million of third-party debt financing, secured by four properties within the venture, with an initial advance of $113.1 million. On April 1, 2019, the venture received $111.0 million in net cash proceeds from the financing, of which $16.7 million was distributed to the Company for its share in the venture. The loan bears interest at LIBOR + 1.95% capped at a total maximum interest rate of 5.45% - 6.45% over the term of the loan and matures on March 29, 2024. Guarantees As of March 31, 2019, the Real Estate Ventures had aggregate indebtedness of $498.2 million. These loans are generally mortgage or construction loans, most of which are nonrecourse to the Company, except for customary carve-outs. As of March 31, 2019, the loans to Real Estate Ventures for which there is recourse to the Company consist of the following: ( |
Intangible Assets and Liabiliti
Intangible Assets and Liabilities | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND LIABILITIES | 5. INTANGIBLE ASSETS AND LIABILITIES As of March 31, 2019 and December 31, 2018, the Company’s intangible assets/liabilities were comprised of the following (in thousands): March 31, 2019 Total Cost Accumulated Amortization Intangible Assets, net Intangible assets, net: In-place lease value $ 179,979 $ (62,584 ) $ 117,395 Tenant relationship value 9,564 (8,715 ) 849 Above market leases acquired 4,966 (3,307 ) 1,659 Total intangible assets, net $ 194,509 $ (74,606 ) $ 119,903 Acquired lease intangibles, net: Below market leases acquired $ 49,228 $ (19,415 ) $ 29,813 December 31, 2018 Total Cost Accumulated Amortization Intangible Assets, net Intangible assets, net: In-place lease value $ 181,887 $ (53,376 ) $ 128,511 Tenant relationship value 9,564 (8,551 ) 1,013 Above market leases acquired 4,966 (3,142 ) 1,824 Total intangible assets, net $ 196,417 $ (65,069 ) $ 131,348 Acquired lease intangibles, net: Below market leases acquired $ 49,655 $ (17,872 ) $ 31,783 As of March 31, 2019, the Company’s annual amortization for its intangible assets/liabilities, assuming no prospective early lease terminations, was as follows (dollars in thousands): Assets Liabilities 2019 (nine months remaining) $ 30,532 $ 5,433 2020 28,393 5,707 2021 20,128 4,302 2022 12,791 2,654 2023 9,756 2,094 Thereafter 18,303 9,623 Total $ 119,903 $ 29,813 |
Debt Obligations
Debt Obligations | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
DEBT OBLIGATIONS | 6. DEBT OBLIGATIONS The following table sets forth information regarding the Company’s consolidated debt obligations outstanding at March 31, 2019 and December 31, 2018 (in thousands): March 31, 2019 December 31, 2018 Effective Interest Rate Maturity Date MORTGAGE DEBT: Two Logan Square $ 82,385 $ 82,805 3.98% May 2020 Four Tower Bridge 9,469 9,526 4.50% Feb 2021 One Commerce Square 119,292 120,183 3.64% Apr 2023 Two Commerce Square 110,014 110,518 4.51% Apr 2023 Principal balance outstanding 321,160 323,032 Plus: fair market value premium (discount), net (1,664 ) (1,759 ) Less: deferred financing costs (364 ) (404 ) Mortgage indebtedness $ 319,132 $ 320,869 UNSECURED DEBT $600 million Unsecured Credit Facility $ 160,500 $ 92,500 LIBOR + 1.10% Jul 2022 Seven-Year Term Loan - Swapped to fixed 250,000 250,000 2.87% Oct 2022 $350.0M 3.95% Guaranteed Notes due 2023 350,000 350,000 3.87% Feb 2023 $250.0M 4.10% Guaranteed Notes due 2024 250,000 250,000 4.33% Oct 2024 $450.0M 3.95% Guaranteed Notes due 2027 450,000 450,000 4.03% Nov 2027 $250.0M 4.55% Guaranteed Notes due 2029 250,000 250,000 4.60% Oct 2029 Indenture IA (Preferred Trust I) 27,062 27,062 LIBOR + 1.25% Mar 2035 Indenture IB (Preferred Trust I) - Swapped to fixed 25,774 25,774 3.30% Apr 2035 Indenture II (Preferred Trust II) - Swapped to fixed 25,774 25,774 3.09% Jul 2035 Principal balance outstanding 1,789,110 1,721,110 Plus: original issue premium (discount), net (4,015 ) (4,096 ) Less: deferred financing costs (9,430 ) (9,837 ) Total unsecured indebtedness $ 1,775,665 $ 1,707,177 Total Debt Obligations $ 2,094,797 $ 2,028,046 As of both March 31, 2019 and December 31, 2018, 4.05% In addition to the debt described above, the Company utilizes borrowings under its unsecured revolving credit facility (the “Credit Facility”) for general business purposes, including to fund costs of acquisitions, developments and redevelopments of properties, fund share repurchases and to repay from time to time other debt. The Credit Facility provides for borrowings of up to $600.0 million and the per annum variable interest rate on borrowings is LIBOR plus 1.10%. The interest rate and facility fee are subject to adjustment upon a change in the Company’s unsecured debt ratings. During the three months ended March 31, 2019, the weighted-average interest rate on Credit Facility borrowings was 2.50% resulting in $1.3 million of interest expense. As of March 31, 2019, the effective interest rate on Credit Facility borrowings was 3.60% . The Company had no borrowings under the Credit Facility as of and during the three-months ended March 31, 2018. The Parent Company unconditionally guarantees the unsecured debt obligations of the Operating Partnership (or is a co-borrower with the Operating Partnership) but does not by itself incur unsecured indebtedness. The Parent Company has no material assets other than its investment in the Operating Partnership. The Company was in compliance with all financial covenants as of March 31, 2019. Management continuously monitors the Company’s current and anticipated compliance with the covenants. Certain of the covenants restrict the Company’s ability to obtain alternative sources of capital. As of March 31, 2019, the Company’s aggregate scheduled principal payments of debt obligations, excluding amortization of discounts and premiums, are as follows (in thousands): 2019 (nine months remaining) $ 5,723 2020 87,226 2021 15,143 2022 416,832 2023 556,736 Thereafter 1,028,610 Total principal payments 2,110,270 Net unamortized premiums/(discounts) (5,679 ) Net deferred financing costs (9,794 ) Outstanding indebtedness $ 2,094,797 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | 7. FAIR VALUE OF FINANCIAL INSTRUMENTS Financial assets and liabilities recorded on the consolidated balance sheets are categorized based on the inputs to the valuation techniques as follows: • Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access; • Level 2 inputs are inputs, other than quoted prices included in Level 1, which are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals; and • Level 3 inputs are unobservable inputs for the asset or liability, which is typically based on an entity’s own assumptions, as there is little, if any, related market activity or information. The Company determined the fair values disclosed below using available market information and discounted cash flow analyses as of March 31, 2019 and December 31, 2018, respectively. The discount rate used in calculating fair value is the sum of the current risk free rate and the risk premium on the date of measurement of the instruments or obligations. Considerable judgment is necessary to interpret market data and to develop the related estimates of fair value. Accordingly, the estimates presented are not necessarily indicative of the amounts that the Company could realize upon disposition. The use of different estimates and valuation methodologies may have a material effect on the fair value amounts shown. The Company believes that the carrying amounts reflected in the consolidated balance sheets at March 31, 2019 and December 31, 2018 approximate the fair values for cash and cash equivalents, accounts receivable, other assets (except for the note receivable disclosed below), accounts payable and accrued expenses. The following are financial instruments for which the Company’s estimates of fair value differ from the carrying amounts (in thousands): March 31, 2019 December 31, 2018 Carrying Amount (a) Fair Value Carrying Amount (a) Fair Value Unsecured notes payable $ 1,288,387 $ 1,301,735 $ 1,288,024 $ 1,262,570 Variable rate debt $ 487,278 $ 470,869 $ 419,153 $ 402,924 Mortgage notes payable $ 319,132 $ 320,187 $ 320,869 $ 318,515 Notes receivable (b) $ 47,753 $ 47,691 $ 47,771 $ 47,747 (a) The carrying amounts presented in the table above are net of deferred financing costs of $ 7.6 million and $ 7.9 million for unsecured notes payable, $ 1.8 million and $ 5.1 million for variable rate debt and $ 0.4 million for mortgage notes payable as of both March 31, 2019 and December 31, 2018 , respectively. (b) T he inputs to originate the notes receivable are unobservable and, as a result, are categorized as Level 3. The Company determined fair value by calculating the present value of the cash payments to be received through the maturity date of the loans. On June 26, 2018, the Company provided a $44.4 million mortgage loan to Brandywine 1919 Ventures, an unconsolidated real estate venture in which the Company holds a 50% ownership interest, and recorded a note receivable of $44.4 million. Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 for further detail regarding this financing. As of March 31, 2019, notes receivable also include a $3.4 million note receivable that was provided to a third party to acquire a property. The loan bears interest at 7.0% through March 2019 and at 8.0% thereafter until its maturity date in March of 2020. The principal balance of the loan amortizes down to a $3.1 million balloon payment, which the Company expects to receive at the maturity date of March of 2020. The Company periodically assesses collectability of the notes receivable in accordance with the accounting standard for loan receivables. As of March 31, 2019, the Company’s notes receivable are collectible. The inputs utilized to determine the fair value of the Company’s unsecured notes payable are categorized as Level 2. This is because the Company valued these instruments using quoted market prices as of March 31, 2019 and December 31, 2018. For the fair value of the Company’s unsecured notes, the Company uses a discount rate based on the indicative new issue pricing provided by lenders. The inputs utilized to determine the fair value of the Company’s mortgage notes payable and variable rate debt are categorized as Level 3. The fair value of the variable rate debt was estimated using a discounted cash flow analysis valuation on the borrowing rates currently available to the Company for loans with similar terms and maturities, as applicable. The fair value of the mortgage debt was determined by discounting the future contractual interest and principal payments by a blended market rate for loans with similar terms, maturities and loan-to-value. These inputs have been categorized as Level 3 because the Company considers the rates used in the valuation techniques to be unobservable inputs. The inputs to originate the notes receivable are unobservable and, as a result, are categorized as Level 3 . The Company determined fair value by calculating the present value of the cash payments to be received through the maturity dates of the loans. For the Company’s mortgage loans, the Company uses an estimate based discounted cash flow analyses and its knowledge of the mortgage market. An increase in the discount rate used in the discounted cash flow model would result in a decrease to the fair value of the Company’s long-term debt. Conversely, a decrease in the discount rate used in the discounted cash flow model would result in an increase to the fair value of the Company’s long-term debt. Disclosure about the fair value of financial instruments is based upon pertinent information available to management as of March 31, 2019 and December 31, 2018. Although management is not aware of any factors that would significantly affect the fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since March 31, 2019, and current estimates of fair value may differ from the amounts presented herein. |
Limited Partners' Non-Controlli
Limited Partners' Non-Controlling Interests in the Parent Company | 3 Months Ended |
Mar. 31, 2019 | |
Noncontrolling Interest [Abstract] | |
LIMITED PARTNERS' NON-CONTROLLING INTERESTS IN THE PARENT COMPANY | 8. LIMITED PARTNERS' NON-CONTROLLING INTERESTS IN THE PARENT COMPANY Non-controlling interests in the Parent Company’s financial statements relate to redeemable common limited partnership interests in the Operating Partnership held by parties other than the Parent Company and properties which are consolidated but not wholly owned by the Operating Partnership. Operating Partnership The aggregate book value of the non-controlling interests associated with the redeemable common limited partnership interests in the accompanying consolidated balance sheet of the Parent Company was $9.9 million and $10.1 million as of March 31, 2019 and December 31, 2018, respectively. Under the applicable accounting guidance, the redemption value of limited partnership units are carried at, on a limited partner basis, the greater of historical cost adjusted for the allocation of income and distributions or fair value. The Parent Company believes that the aggregate settlement value of these interests, based on the number of units outstanding and the closing price of the common shares on the balance sheet dates as of March 31, 2019 and December 31, 2018, was approximately $15.6 million and $12.6 million, respectively. |
Fair Value of Derivative Financ
Fair Value of Derivative Financial Instruments | 3 Months Ended |
Mar. 31, 2019 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
FAIR VALUE OF DERIVATIVE FINANCIAL INSTRUMENTS | 9. FAIR VALUE OF DERIVATIVE FINANCIAL INSTRUMENTS The following table summarizes the terms and fair values of the Company’s derivative financial instruments as of March 31, 2019 and December 31, 2018. The notional amounts provide an indication of the extent of the Company’s involvement in these instruments at that time, but do not represent exposure to credit, interest rate or market risks (amounts presented in thousands and included in other assets and other liabilities on the Company’s consolidated balance sheets). Hedge Product Hedge Type Designation Notional Amount Strike Trade Date Maturity Date Fair value 3/31/2019 12/31/2018 3/31/2019 12/31/2018 Assets Swap Interest Rate Cash Flow (a) $ 250,000 $ 250,000 2.868 % October 8, 2015 October 8, 2022 $ 4,522 $ 7,008 Swap Interest Rate Cash Flow (a) 25,774 25,774 3.300 % December 22, 2011 January 30, 2021 185 292 Swap Interest Rate Cash Flow (a) 25,774 25,774 3.090 % January 6, 2012 October 30, 2019 151 183 $ 301,548 $ 301,548 (a) Hedging unsecured variable rate debt. The Company measures its derivative instruments at fair value and records them in the “Other assets” and (“Other liabilities”) captions on the Company’s consolidated balance sheets. Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. The Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that the inputs utilized to determine the fair value of derivative instruments are classified in Level 2 of the fair value hierarchy. Disclosure about the fair value of derivative instruments is based upon pertinent information available to management as of March 31, 2019 and December 31, 2018. Although management is not aware of any factors that would significantly affect the fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since March 31, 2019. Current estimates of fair value may differ from the amounts presented herein. |
Beneficiaries Equity of the Par
Beneficiaries Equity of the Parent Company | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
BENEFICIARIES' EQUITY OF THE PARENT COMPANY | 10. BENEFICIARIES’ EQUITY OF THE PARENT COMPANY Earnings per Share (EPS) The following tables detail the number of shares and net income used to calculate basic and diluted earnings per share (in thousands, except share and per share amounts; results may not add due to rounding): Three-month periods ended March 31, 2019 2018 Basic Diluted Basic Diluted Numerator Net income $ 4,066 $ 4,066 $ 44,705 $ 44,705 Net income attributable to noncontrolling interests (57 ) (57 ) (376 ) (376 ) Nonforfeitable dividends allocated to unvested restricted shareholders (119 ) (119 ) (114 ) (114 ) Net income attributable to common shareholders $ 3,890 $ 3,890 $ 44,215 $ 44,215 Denominator Weighted-average shares outstanding 175,857,358 175,857,358 178,395,525 178,395,525 Contingent securities/Share based compensation - 606,860 - 1,392,786 Weighted-average shares outstanding 175,857,358 176,464,218 178,395,525 179,788,311 Earnings per Common Share: Net income attributable to common shareholders $ 0.02 $ 0.02 $ 0.25 $ 0.25 Redeemable common limited partnership units totaling 982,871 at March 31, 2019 and 1,479,799 at March 31, 2018, were excluded from the diluted earnings per share computations because they are not dilutive. Unvested restricted shares are considered participating securities which require the use of the two-class method for the computation of basic and diluted earnings per share. For the three-month periods ended March 31, 2019 and 2018 , earnings representing nonforfeitable dividends as noted in the table above were allocated to the unvested restricted shares issued to the Company’s executives and other employees under the Company's shareholder-approved long-term incentive plan. Common Shares On February 21, 2019, the Parent Company declared a distribution of $0.19 per common share, totaling $33.7 million, which was paid on April 18, 2019 to shareholders of record as of April 4, 2019. The Parent Company maintains a common share repurchase program under which the Board of Trustees has authorized the Parent Company to repurchase common shares. On January 3, 2019, the Board of Trustees authorized the repurchase of up to $150.0 million common shares from and after January 3, 2019. During the three months ended March 31, 2019, the Company repurchased and retired 1,337,169 common shares at an average price of $12.92 per share, totaling $17.3 million. |
Partners Equity of The Operatin
Partners Equity of The Operating Partnership | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
PARTNERS' EQUITY OF THE OPERATING PARTNERSHIP | 11. PARTNERS’ EQUITY OF THE OPERATING PARTNERSHIP Earnings per Common Partnership Unit The following tables detail the number of units and net income used to calculate basic and diluted earnings per common partnership unit (in thousands, except unit and per unit amounts; results may not add due to rounding): Three-month periods ended March 31, 2019 2018 Basic Diluted Basic Diluted Numerator Net income $ 4,066 $ 4,066 $ 44,705 $ 44,705 Net income attributable to noncontrolling interests (34 ) (34 ) (5 ) (5 ) Nonforfeitable dividends allocated to unvested restricted unitholders (119 ) (119 ) (114 ) (114 ) Net income attributable to common unitholders $ 3,913 $ 3,913 $ 44,586 $ 44,586 Denominator Weighted-average units outstanding 176,840,229 176,840,229 179,875,324 179,875,324 Contingent securities/Share based compensation - 606,860 - 1,392,786 Total weighted-average units outstanding 176,840,229 177,447,089 179,875,324 181,268,110 Earnings per Common Partnership Unit: Net income attributable to common unitholders $ 0.02 $ 0.02 $ 0.25 $ 0.25 Unvested restricted units are considered participating securities which require the use of the two-class method for the computation of basic and diluted earnings per share. For the three-month periods ended March 31, 2019 and 2018, earnings representing nonforfeitable dividends as noted in the table above were allocated to the unvested restricted units issued to the Parent Company in connection with awards to the Parent Company’s executives and other employees under the Parent Company's shareholder-approved long-term incentive plan. Common Partnership Units On February 21, 2019, the Operating Partnership declared a distribution of $0.19 per common partnership unit, totaling $33.7 million, which was paid on April 18, 2019 to unitholders of record as of April 4, 2019. In connection with the Parent Company’s common share repurchase program, one common unit of the Operating Partnership is retired for each common share repurchased. During the three months ended March 31, 2019, the Company repurchased and retired 1,337,169 common partnership units at an average price of $12.92 per unit, totaling $17.3 million. |
Share Based Compensation
Share Based Compensation | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
SHARE BASED COMPENSATION | 12. SHARE BASED COMPENSATION Restricted Share Rights Awards As of March 31, 2019, 626,649 restricted common share rights (“Restricted Share Rights”) were outstanding under the Equity Incentive Plan. These Restricted Share Rights generally vest over two to three years from the initial grant dates. The remaining compensation expense to be recognized with respect to these awards at March 31, 2019 was $ 3.4 million, and is expected to be recognized over a weighted average remaining period of 1.7 years . During the three-month periods ended March 31, 2019 and 2018, the Company recognized compensation expense related to outstanding Restricted Share Rights of $ 1.6 million and $ 1.5 million, respectively, of which $ 0.2 million and $ 0.3 million, respectively, were capitalized as part of the Company’s review of employee salaries eligible for capitalization for both periods . The following table summarizes the Company’s Restricted Share Right activity during the three months ended March 31, 2019: Shares Weighted Average Grant Date Fair Value Aggregate Intrinsic Value Non-vested at January 1, 2019 466,439 $ 14.93 $ 70,677 Granted 196,667 15.61 3,070 Vested (33,020 ) 15.15 298 Forfeited (3,437 ) 15.34 - Non-vested at March 31, 2019 626,649 15.13 9,939 On February 21, 2019, the Compensation Committee of the Parent Company’s Board of Trustees awarded to officers of the Parent Company an aggregate of 196,667 Restricted Share Rights, which generally vest over two to three years from the grant date. Each Restricted Share Right entitles the holder to one common share upon settlement. The Parent Company pays dividend equivalents on the Restricted Share Rights prior to the settlement date. Vesting and/or settlement would accelerate if the recipient of the award were to die, become disabled or, in the case of certain of such Restricted Share Rights, retire in a qualifying retirement prior to the otherwise applicable vesting or settlement date. Qualifying retirement generally means the recipient’s voluntary termination of employment after reaching at least age 57 and accumulating at least 15 years of service with the Company. In addition, vesting would also accelerate if the Parent Company were to undergo a change of control and, on or before the first anniversary of the change of control, the recipient’s employment were to cease due to a termination without cause or resignation with good reason. The Restricted Share Rights granted in 2019 to certain senior executives and that vest over three years include an “outperformance feature” whereby additional shares may be earned, up to 200% of the shares subject to the basic award, based on the Company’s achievement of targets for same-store net operating cash income growth and development activity provided certain operating and balance sheet metrics are also achieved during the three-year period ending December 31, 2021. Half of any additional shares earned will vest based on continued service through each of January 1, 2022 and January 1, 2023, provided that this additional service requirement will be waived in the event of a death, disability or qualifying retirement. In addition to the basic award, up to 233,890 shares may be awarded under the outperformance feature. These shares have a $3.7 million intrinsic value using a $15.61 weighted average grant date fair value. As of March 31, 2019, the Company has not recognized any compensation expense for these awards as it has been determined that it is not probable that the performance metrics will be achieved. The Company will evaluate progression towards achievement of the performance metrics on a quarterly basis and recognize compensation expense for these awards should it be determined that achievement of these metrics is probable. In accordance with the accounting standard for share-based compensation, the Company amortizes share-based compensation costs through the qualifying retirement dates for those executives who meet the conditions for qualifying retirement during the scheduled vesting period and whose award agreements provide for vesting upon a qualifying retirement. Restricted Performance Share Units Plan The Compensation Committee of the Parent Company’s Board of Trustees has granted performance share-based awards (referred to as Restricted Performance Share Units, or RPSUs) to officers of the Parent Company. The RPSUs are settled in common shares, with the number of common shares issuable in settlement determined based on the Parent Company’s total shareholder return over specified measurement periods compared to total shareholder returns of an index over the measurement periods. The table below presents certain information as to unvested RPSU awards. RPSU Grant 3/1/2017 2/28/2018 2/21/2019 Total (Amounts below in shares, unless otherwise noted) Non-vested at January 1, 2019 169,525 206,025 - 375,550 Units Granted - - 213,728 213,728 Units Vested (8,420 ) - - (8,420 ) Units Cancelled - (8,975 ) - (8,975 ) Non-vested at March 31, 2019 161,105 197,050 213,728 571,883 Measurement Period Commencement Date 1/1/2017 1/1/2018 1/1/2019 Measurement Period End Date 12/31/2019 12/31/2020 12/31/2021 Units Granted 174,854 209,193 213,728 Fair Value of Units on Grant Date (in thousands) $ 3,735 $ 4,276 $ 4,627 The Company values each RPSU on its grant date using a Monte Carlo simulation. The fair values of each award are being amortized over the three year performance period. During the performance period, dividend equivalents are credited as additional RPSU’s, subject to the same terms and conditions as the original RPSU’s. The performance period will be abbreviated and the delivery of earned shares will be accelerated in the event of a change in control or if the recipient of the award were to die, become disabled or retire in a qualifying retirement prior to the end of the otherwise applicable three year performance period. In accordance with the accounting standard for share-based compensation, the Company amortizes stock-based compensation costs through the qualifying retirement date for those executives who meet the conditions for qualifying retirement during the schedule vesting period. For the three months ended March 31, 2019, the Company recognized total compensation expense for the 2019, 2018 and 2017 RPSU awards of $2.7 million, of which $0.4 million was capitalized consistent with the Company’s policies for capitalizing eligible portions of employee compensation. For the three months ended March 31, 2018, the Company recognized total compensation expense for the 2018, 2017 and 2016 RPSU awards of $2.6 million, of which $0.5 million was capitalized consistent with the Company’s policies for capitalizing eligible portions of employee compensation. The remaining compensation expense to be recognized at March 31, 2019 was approximately $4.0 million, and is expected to be recognized over a weighted average remaining vesting period of 2.1 years. The Company issued 147,111 common shares on February 1, 2019 in settlement of RPSUs that had been awarded on February 22, 2016 (with a three-year measurement period ended December 31, 2018). Holders of these RPSUs also received a cash dividend of $0.19 per share for these common shares on January 22, 2019. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | 13. SEGMENT INFORMATION As of March 31, 2019, the Company owns and manages properties within five segments: (1) Philadelphia Central Business District (Philadelphia CBD), (2) Pennsylvania Suburbs, (3) Austin, Texas (4) Metropolitan Washington, D.C. and (5) Other. The Philadelphia CBD segment includes properties located in the City of Philadelphia, Pennsylvania. The Pennsylvania Suburbs segment includes properties in Chester, Delaware, and Montgomery counties in the Philadelphia suburbs. The Austin, Texas segment includes properties in the City of Austin, Texas. The Metropolitan Washington, D.C. segment includes properties in the District of Columbia, Northern Virginia and southern Maryland. The Other segment includes properties located in Camden County in New Jersey and properties in New Castle County in Delaware. In addition to the five segments, the corporate group is responsible for cash and investment management, development of certain real estate properties during the construction period, and certain other general support functions. Land held for development and construction in progress is transferred to operating properties by region upon completion of the associated construction or project. The following tables provide selected asset information and results of operations of the Company's reportable segments (in thousands): Real estate investments, at cost: March 31, 2019 December 31, 2018 Philadelphia CBD $ 1,683,406 $ 1,670,388 Pennsylvania Suburbs 1,008,066 1,004,537 Austin, Texas 713,189 667,698 Metropolitan Washington, D.C. 524,385 524,190 Other 86,833 86,506 $ 4,015,879 $ 3,953,319 Right of use asset - operating leases (a) $ 22,175 $ - Corporate Construction-in-progress $ 112,176 $ 150,263 Land held for development (b) $ 88,047 $ 86,401 Prepaid $ 39,897 $ 39,999 (a) On January 1, 2019, as a result of the adoption of Topic 842, Leases, the Company recognized operating ground leases for which it is a lessee on its consolidated balance sheets for the period ended March 31, 2019. See Note 2, “ Basis of Presentation (b) As of March 31, 2019, the Company categorized 35.2 acres of land held for development, located in the Other segment, as held for sale in accordance with applicable accounting standards for long lived assets. As of December 31, 2018, the Company categorized 37.9 acres of land held for development, comprised of 2.7 acres and 35.2 acres, located in the Pennsylvania Suburbs segment and Other segment, respectively, as held for sale in accordance with applicable accounting standards for long lived assets. See Note 3, “Real Estate Investments ,” for further information. (c) As of March 31, 2019 and December 31, 2018, this caption comprised leasehold interests in prepaid 99-year Net operating income (in thousands): Three-month periods ended March 31, 2019 2018 Total revenue Operating expenses (a) Net operating income (loss) Total revenue Operating expenses (a) Net operating income (loss) Philadelphia CBD $ 65,798 $ (25,185 ) $ 40,613 $ 62,602 $ (24,327 ) $ 38,275 Pennsylvania Suburbs 35,627 (12,972 ) 22,655 34,882 (12,964 ) 21,918 Austin, Texas (b) 24,766 (9,076 ) 15,690 8,364 (3,523 ) 4,841 Metropolitan Washington, D.C. (c) 13,520 (6,204 ) 7,316 23,059 (8,759 ) 14,300 Other 3,182 (2,145 ) 1,037 6,141 (4,965 ) 1,176 Corporate 1,003 (1,799 ) (796 ) 1,310 (1,966 ) (656 ) Operating properties $ 143,896 $ (57,381 ) $ 86,515 $ 136,358 $ (56,504 ) $ 79,854 (a) Includes property operating expenses, real estate taxes and third party management expense. (b) On December 11, 2018, the Company acquired from DRA Advisors its 50% ownership interest in the G&I Austin Office LLC real estate venture. The DRA Austin Venture owned twelve office properties containing an aggregate 1,570,123 square feet, located in Austin, Texas. As a result of the acquisition, the Company acquired complete ownership of the Austin properties. (c) On December 20, 2018, the Company contributed a portfolio of eight properties containing an aggregate of 1,293,197 square feet, located in its Metropolitan Washington, D.C. segment, known as the Rockpoint Portfolio, to the Herndon Innovation Center Venture. The Company and its partner own 15% and 85% interests in the Herndon Innovation Center Venture, respectively. Unconsolidated real estate ventures (in thousands): Investment in real estate ventures, at equity Equity in income (loss) of real estate venture As of Three-month periods ended March 31, March 31, 2019 December 31, 2018 2019 2018 Philadelphia CBD $ 19,325 $ 19,897 $ 78 $ (236 ) Metropolitan Washington, D.C. 135,149 136,142 (175 ) (37 ) MAP Venture (b) 5,101 11,173 (1,367 ) (736 ) Other 1,993 1,888 106 104 Austin, Texas (c) - - - 80 Total $ 161,568 $ 169,100 $ (1,358 ) $ (825 ) (a) On December 20, 2018, the Company formed the Herndon Innovation Center Venture. See footnote (b) to the “Net operating income” table above for further information regarding this transaction. (b) The MAP Venture represents a joint venture formed between the Company and MAP Ground Lease Holdings LLC, an affiliate of Och-Ziff Capital Management Group, LLC, on February 4, 2016. The MAP Venture’s business operations, including properties in Richmond, Virginia; Metropolitan Washington, D.C.; New Jersey/Delaware and Pennsylvania Suburbs, are centrally managed with the results reported to management of the Company on a consolidated basis. As a result, the investment in the MAP Venture is separately presented. All other unconsolidated real estate ventures are managed consistently with the Company’s regional segments. (c) On December 11, 2018, the Company acquired from DRA Advisors its 50% ownership interest in the G&I Austin Office LLC real estate venture. The DRA Austin Venture owned twelve office properties containing an aggregate 1,570,123 square feet, located in Austin, Texas. As a result of the acquisition, the Company acquired complete ownership of the Austin properties. Net operating income (“NOI”) is a non-GAAP financial measure defined as total revenue less property operating expenses, real estate taxes and third party management expenses. Property operating expenses that are included in determining NOI consist of costs that are necessary and allocable to our operating properties such as utilities, property-level salaries, repairs and maintenance, property insurance and management fees. General and administrative expenses that are not reflected in NOI primarily consist of corporate-level salaries, amortization of share awards and professional fees that are incurred as part of corporate office management. All companies may not calculate NOI in the same manner. NOI is the measure that is used by the Company’s management to evaluate the operating performance of the Company’s real estate assets by segment. The Company believes NOI provides useful information to investors regarding the financial condition and results of operations because it reflects only those income and expense items that are incurred at the property level. While NOI is a relevant and widely used measure of operating performance of real estate investment trusts, it does not represent cash flow from operations or net income as defined by GAAP and should not be considered as an alternative to those measures in evaluating our liquidity or operating performance. NOI does not reflect interest expenses, real estate impairment losses, depreciation and amortization costs, capital expenditures and leasing costs. The Company believes that net income (loss), as defined by GAAP, is the most appropriate earnings measure. The following is a reconciliation of consolidated net income, as defined by GAAP, to consolidated NOI, (in thousands): Three-month periods ended March 31, 2019 2018 Net income $ 4,066 $ 44,705 Plus: Interest expense 20,357 19,533 Interest 666 627 Depreciation and amortization 51,980 43,291 General and administrative expenses 9,844 8,723 Equity in loss of Real Estate Ventures 1,358 825 Less: Interest income 525 703 Income tax provision (29 ) (138 ) Net gain on sale of undepreciated real estate 1,001 22 Net gain on real estate venture transactions 259 37,263 Consolidated net operating income $ 86,515 $ 79,854 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 14. COMMITMENTS AND CONTINGENCIES Legal Proceedings The Company is involved from time to time in litigation on various matters, including disputes with tenants, vendors and disputes arising out of agreements to purchase or sell properties. Given the nature of the Company’s business activities, these lawsuits are considered routine to the conduct of its business. The result of any particular lawsuit cannot be predicted, because of the very nature of litigation, the litigation process and its adversarial nature, and the jury system. The Company will establish reserves for specific legal proceedings when it determines that the likelihood of an unfavorable outcome is probable and when the amount of loss is reasonably estimable. The Company does not expect that the liabilities, if any, that may ultimately result from such legal actions will have a material adverse effect on the consolidated financial position, results of operations or cash flows of the Company. Letters-of-Credit Under certain mortgages, including mortgages held by Real Estate Ventures, the Company may be required to fund required leasing and capital reserve accounts for the benefit of the mortgage lenders with a letter-of-credit. There were no associated letters-of-credit for a mortgage lender on March 31, 2019. Certain of the tenant rents at properties that secure these mortgage loans are deposited into the loan servicer’s depository accounts, which are used to fund debt service, operating expenses, capital expenditures and the escrow and reserve accounts, as necessary. Any excess cash is included in cash and cash equivalents. Environmental As an owner of real estate, the Company is subject to various environmental laws of federal, state, and local governments. The Company’s compliance with existing laws has not had a material adverse effect on its financial condition and results of operations, and the Company does not believe it will have a material adverse effect in the future. However, the Company cannot predict the impact of unforeseen environmental contingencies or new or changed laws or regulations on its current Properties or on properties that the Company may acquire. Ground Rent Lease payments by the Company under the terms of all non-cancelable ground leases of land on which properties in the Company’s consolidated portfolio are situated are expensed on a straight-line basis regardless of when payments are due. The Company’s ground leases, excluding prepaid ground leases, have remaining lease terms ranging from 10 to 66 years. Lease payments on non-cancelable leases at March 31, 2019, which, where applicable, considered CPI index rates upon adoption of Topic 842, are as follows (in thousands): Year Lease Payments 2019 (nine months remaining) $ 905 2020 1,217 2021 1,232 2022 1,248 2023 1,263 Thereafter 111,757 Total lease payments $ 117,622 Less: Imputed interest (95,220 ) Present value of operating lease liabilities $ 22,402 Lease payments on non-cancelable leases at December 31, 2018, which were determined under ASC 840 and are therefore not adjusted for increases based on CPI, are as follows (in thousands): Year Lease Payments 2019 $ 1,222 2020 1,222 2021 1,222 2022 1,222 2023 1,222 Thereafter 55,689 Total $ 61,799 The Company obtained ground tenancy rights related to three properties in Philadelphia, Pennsylvania, which provide for contingent rent participation by the lessor in certain capital transactions and net operating cash flows of the properties after certain returns are achieved by the Company. Such amounts, if any, will be reflected as contingent rent when incurred. The leases also provide for payment by the Company of certain operating costs relating to the land, primarily real estate taxes. The above schedule of lease payments does not include any contingent rent amounts or any reimbursed expenses. Reference is made in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 for further detail regarding commitments and contingencies. Fair Value of Contingent Consideration On April 2, 2015, the Company purchased 618 Market Street in Philadelphia, Pennsylvania. The allocated purchase price included contingent consideration of $2.0 million payable to the seller upon commencement of development. The liability was initially recorded at fair value of $1.6 million and will accrete through interest expense to $2.0 million over the expected period until development is commenced. The fair value of this contingent consideration was determined using a probability weighted discounted cash flow model. The significant inputs to the discounted cash flow model were the discount rate and weighted probability scenarios. As the inputs are unobservable, the Company determined the inputs used to value this liability fall within Level 3 for fair value reporting. As of March 31, 2019, the liability had accreted to $1.9 million. As there were no significant changes to the inputs, the liability remains within Level 3 for fair value reporting. Debt Guarantees As of March 31, 2019, the Company’s unconsolidated real estate ventures had aggregate indebtedness of $498.2 million. These loans are generally mortgage or construction loans, most of which are nonrecourse to the Company, except for customary recourse carve-outs. As of March 31, 2019, the loans for which the Company has provided recourse guarantees consist of the following: (i) a $0.3 million payment guarantee on a loan with a $3.7 million outstanding principal balance, provided to PJP VII; and (ii) up to a $41.3 million payment guarantee on a $150.0 million loan provided to 4040 Wilson. In addition, during construction undertaken by real estate ventures, including 4040 Wilson, the Company has provided and expects to continue to provide cost overrun and completion guarantees, with rights of contribution among partners or members in the real estate ventures, as well as customary environmental indemnities and guarantees of customary exceptions to nonrecourse provisions in loan agreements. Other Commitments or Contingencies On October 13, 2017, the Company acquired a leasehold interest in the office building known as The Bulletin Building, in Philadelphia, Pennsylvania. In connection with the acquisition, the Company is required to spend no less than $8.0 million in capital improvements to the property. As of March 31, 2019, $1.7 million of the funding related to this requirement had been met. The Company estimates that it will incur $37.3 million in excess of this funding requirement and expects to complete the redevelopment of The Bulletin Building during the second quarter of 2020 at an estimated aggregate cost of $83.1 million, inclusive of the acquisition cost of $37.8 million. Also on October 13, 2017, the Company acquired a leasehold interest in the land parcel at 3001 Market Street in Philadelphia, Pennsylvania (“Drexel Square”). During the fourth quarter of 2017, the Company broke ground on the construction of a public park on the site, marking the commencement of construction at our Schuylkill Yards Project with Drexel. Under the terms of the Development Agreement with Drexel University, the Company has until July 2019 to complete development of Drexel Square. If the Company is unable to complete such development within this timeframe, it may be subject to damages under the Development Agreement. As of March 31, 2019, the development of Drexel Square is substantially complete. During the fourth quarter of 2017, in connection with the Schuylkill Yards Project, the Company entered into a neighborhood engagement program and, as of March 31, 2019, had $2.7 million of future contractual obligations. In addition, the Company estimates $0.6 million of potential additional contributions for which the Company is not currently contractually obligated. The Company invests in its properties and regularly incurs capital expenditures in the ordinary course of business to maintain the properties. The Company believes that such expenditures enhance its competitiveness. The Company also enters into construction, utility and service contracts in the ordinary course of business which may extend beyond one year. These contracts typically provide for cancellation with insignificant or no cancellation penalties. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 15. SUBSEQUENT EVENTS On April 11, 2019, Herndon Innovation Center Venture, an unconsolidated real estate venture in which the Company holds a 15% ownership interest, obtained $115.3 million of third-party debt financing secured by four properties within the venture. The loan bears interest at LIBOR + 1.80% capped at a total maximum interest rate of 6.3% and matures on April 11, 2024. The Company received $13.8 million for its share of the cash proceeds from the financing on April 12, 2019. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial statements. Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments consist solely of normal recurring matters, and result in a fair statement of the financial position of the Company as of March 31, 2019, the results of its operations for the three-month periods ended March 31, 2019 and 2018 and its cash flows for the three-month periods ended March 31, 2019 and 2018 have been included. The results of operations for such interim periods are not necessarily indicative of the results for a full year. These consolidated financial statements should be read in conjunction with the Parent Company’s and the Operating Partnership’s consolidated financial statements and footnotes included in their combined 2018 Annual Report on Form 10-K filed with the SEC on February 22, 2019. The Company's Annual Report on Form 10-K for the year ended December 31, 2018 contains a discussion of our significant accounting policies under Note 2, "Summary of Significant Accounting Policies". there have been no significant changes in our significant accounting policies since December 31, 2018 . Management discusses our significant accounting policies and management’s judgments and estimates with the Company's Audit Committee. |
Out Of Period Adjustment | Out of Period Adjustment The Company recorded $0.8 million of depreciation expense during the three-month period ended March 31, 2019, which should have been recorded in the consolidated financial statements for the three and twelve-month periods ended December 31, 2018. Management concluded that this misstatement was not material to the consolidated financial statements as of and for the twelve-month period ended December 31, 2018 or the three-month period ended March 31, 2019. |
Reclassifications | Reclassifications The Company reclassified tenant reimbursements and termination fees within the “Rents” caption on the consolidated statements of operations as a result of the adoption of Topic 842, Leases as of January 1, 2019. Tenant reimbursements and termination fees, which were reclassified retrospectively for all periods, were formerly presented separately in the “Tenant reimbursements” and “Termination fees” captions, respectively, on the consolidated statements of operations. The prior year reclassifications were made to conform to current-year presentation under Topic 842 and did not result in any change in total revenue. |
Adoptions of New Accounting Guidance | Adoptions of New Accounting Guidance In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), modifying the principles for the recognition, measurement, presentation, and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification determines whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and lease liability for all leases with a term of greater than twelve months regardless of their classification. Leases with a term of twelve months or less will be accounted for in the same manner as operating leases under ASC 840, Leases. The new standard requires lessors to account for leases using an approach that is substantially equivalent to previous guidance for sales-type leases, direct financing leases, and operating leases. The guidance supersedes previously issued guidance under ASC 840. The Company adopted Topic 842 effective January 1, 2019. In applying the modified retrospective transition method, the Company elected the package of practical expedients available for implementation, which allows for the following: • An entity need not reassess whether any expired or existing contracts are or contain leases; • An entity need not reassess the lease classification for any expired or existing leases; and • An entity need not reassess initial indirect costs for any existing leases. Furthermore, the Company elected the optional transition method to make January 1, 2019 the initial application date of the standard. This package of practical expedients allows entities to account for their existing leases for the remainder of their respective lease terms following the previous accounting guidance. The Company also elected to adopt the optional transition practical expedient provided in ASU 2018-01 to not evaluate under Topic 842 for existing or expired land easements prior to the application date to determine if they meet the definition of a lease. The Company also elected to adopt the practical expedient offered in ASU 2018-11 that allows lessors to not allocate the total consideration to lease and nonlease components, such as tenant reimbursements, based on their relative standalone selling prices as the timing and pattern of revenue recognition of the combined single lease component is the same and the leases are classified as operating leases. The Company elected to adopt ASU 2018-20, which allows lessors to not evaluate whether certain sal es taxes and other similar taxes are lessor costs or lessee costs. Instead, lessors will account for those costs as if they are lessee costs. All collections from lessees of taxes within the scope of the election are excluded from the consideration of the contract and from variable payments not included in the consideration of the contract. |
Lessor Accounting Lease | Lessor accounting The Company generates revenue under leases with tenants occupying the Properties. Generally, leases with tenants are accounted for as operating leases. As of March 31, 2019, the Company does not have any leases classified as direct-financing or sales-type leases. The operating leases have various expiration dates. Lease payments on non-cancellable leases at March 31, 2019 are as follows (in thousands): Year Lease payments 2019 (nine months remaining) $ 292,215 2020 377,088 2021 354,913 2022 309,125 2023 281,437 Thereafter 1,270,928 Total $ 2,885,706 Lease payments on non-cancellable leases at December 31, 2018 are as follows (in thousands): Year Lease payments 2019 $ 392,058 2020 372,619 2021 349,160 2022 304,445 2023 277,388 Thereafter 1,265,810 Total $ 2,961,480 Fixed lease payments under tenant leases are recognized on a straight-line basis over the term of the related lease. The cumulative difference between lease revenue recognized under the straight-line method and contractual lease payments are recorded as “Accrued rent receivable” on the consolidated balance sheets. Variable lease payments are recognized as lease revenue in the period in which changes in facts and circumstances on which the variable lease payments are based occur. In November 2018, the FASB issued ASU No. 2018-19, which clarifies that operating lease receivables are not within the scope of ASC 326-20 and should instead be accounted for under the new leasing standard, ASC 842. Topic 842 requires a binary approach to evaluating leases for collectability. Lessors are required to determine if it is probable that substantially all of the lease payments will be collected from the tenant over the lease term. Should the lessor determine that it is not probable that substantially all of the lease payments will be collected, the standard requires that the lessor writes off any accrued rent receivable and begin recognizing lease payments on a cash-basis. The Company has evaluated all leases for collectability and is recognizing lease payments for certain leases on a cash-basis as collectability of substantially all of the lease payments is not probable. As a result, during the quarter ended March 31, 2019, the write off of the accrued rent receivable of $0.7 million was recorded by the Company upon adoption of Topic 842 as a cumulative effect of accounting change adjustment to equity through the “Cumulative earnings” caption on the consolidated balance sheets. The Company maintains a general reserve of $11.3 million relating to leases that existed prior to adoption of Topic 842 for which the Company has determined that collectability of substantially all of lease payments remains probable as of March 31, 2019. The Company’s lease revenue is impacted by the Company’s determination of whether improvements to the property, whether made by the Company or by the tenant, are landlord assets. The determination of whether an improvement is a landlord asset requires judgment. In making this judgment, the Company’s primary consideration is whether an improvement would be utilizable by another tenant upon move out of the improved space by the then-existing tenant. If the Company has funded an improvement that it determines not to be landlord assets, then it treats the cost of the improvement as a lease incentive. If the tenant has funded the improvement that the Company determines to be landlord assets, then the Company treats the costs of the improvement as deferred revenue and amortizes this costs into revenue over the lease term. For certain leases, the Company also makes significant assumptions and judgments in determining the lease term, including assumptions when the lease provides the tenant with an early termination option or purchase option. The lease term impacts the period over which the Company determines and records lease payments and also impacts the period of which it amortizes lease-related costs. The Company considers all relevant factors that create an economic incentive for the lessee and uses judgement to determine if those factors, considered together, signify that the lessee is reasonably certain to exercise the option. For leases where a tenant executes a lease termination, termination fees are recognized over the modified term of the lease as rental income. Additionally, any deferred rents receivable are accelerated over the modified lease term. The Company’s leases also typically provide for tenant reimbursement of a portion of common area maintenance expenses and other operating expenses to the extent that a tenant’s pro rata share of expenses exceeds a base year level set in the lease or to the extent that the tenant has a lease on a triple net basis. The Company also contracts with third-party vendors and suppliers for goods and services to fulfill certain of the Company’s obligations to tenants. Tenant reimbursement s are billed in the period in which the related expenses are incurred. The table below sets forth the allocation of lease revenue recognized between fixed contractual payments and variable lease payments (in thousands): Three Months Ended March 31, Lease Revenue 2019 Fixed lease payments $ 108,033 Variable lease payments 30,064 Total $ 138,097 Fixed lease payments include contractual rents under lease agreements with tenants recognized on a straight-line basis over the lease term, including amortization of lease incentives and above or below market rent intangibles, and parking income that is fixed under a long-term contract. Variable lease payments include reimbursements billed to tenants, termination fees, bad debt expense, and parking income that is not fixed under a long-term contract . |
Lessee Accounting Lease | Lessee Accounting The Company is the lessee under six long-term ground leases classified as operating leases. While adoption of the practical expedient allows the Company to not revisit the classification of existing leases, the Company measured the present value of the future lease payments for each ground lease agreement and recognized a right of use asset and lease liability in the aggregate amount of $22.4 million, each as of January 1, 2019 in accordance with Topic 842. The right of use assets and lease liabilities are presented in the “Right of use asset – operating leases” and “Lease liability – operating leases” captions, respectively, on the consolidated balance sheets as of March 31, 2019. The Company makes significant assumptions and judgements when determining the discount rate for the lease to calculate the present value of the lease payments. As the rate implicit in the lease is not readily determinable, the Company estimates the incremental borrowing rate (“IBR”) that it would need to pay to borrow on a collateralized basis over a similar lease term an amount equal to the lease payments in a similar economic environment. The Company utilized a market-based approach to estimate the IBR for each individual lease. The base IBR was estimated utilizing observable mortgage and corporate bond rates, which were then adjusted to account for considerations related to the Company’s credit rating and the lease term to select an incremental borrowing rate for each lease. The lease liabilities and right of use assets are amortized on a straight-line basis over the lease term with the corresponding expense classified in the “Property operating expenses” caption on the consolidated statement of operations. Certain of the Company’s ground leases contain extension options. The Company has exercised judgment in considering all economic factors to determine that it is not reasonably certain to exercise the extension options and therefore has not included the extension period in the remaining lease term. With the exception of certain ground leases that are subject to rent increases periodically based on the CPI index, all lease payments under the ground lease are fixed. Topic 842 requires use of the most recent CPI adjustment when determining the present value of the lease payments for an indexed lease. As such, the 2018 CPI index was used to determine the right of use asset and corresponding lease liability as of January 1, 2019. Additional rent payments for amounts in excess of this estimated growth rate will be expensed on a cash basis as incurred and are considered variable lease costs. The table below summarizes the Company’s operating lease cost (in thousands) recognized through the “Property operating expenses” caption on the consolidated statement of operations: Three Months Ended March 31, Lease Cost 2019 Fixed lease cost $ 525 Variable lease cost 14 Total $ 539 Weighted-average remaining lease term (years) 53.2 Weighted-average discount rate 6.3 % |
Fair Value Measurements | Marine Piers Sublease Interest Sale On March 15, 2017, the Company sold its sublease interest in the Piers at Penn’s Landing (the “Marine Piers”), which includes leasehold improvements containing 181,900 net rentable square feet, and a marina, located in Philadelphia, Pennsylvania, for an aggregate sales price of $21.4 million. On the closing date, the buyer paid $12.0 million in cash and the Company received cash proceeds of $11.2 million, after closing costs and prorations. The $9.4 million balance of the purchase is due on (a) January 31, 2020, in the event that the tenant at the Marine Piers does not exercise an option it holds to extend the term of the sublease or (b) January 15, 2024, in the event that the tenant does exercise the option to extend the term of the sublease. In accordance with ASU 2017-05, the Company determined that it is appropriate to recognize the sale of the sublease interest in the Marine Piers and to defer the amount of the pending payment due from the buyer because the Company cannot determine the collectability of the remaining $9.4 million balance due under the purchase and sale agreement. The net book value of the Marine Piers was $4.7 million, resulting in a gain on sale of $6.5 million. The remaining gain on sale of $9.4 million arising from the pending payment will be recognized at the earlier of: (i) the time that the Company determines collection of the deferred payment is probable or (ii) on the second purchase price installment date. Based on the facts and circumstances, revenue recognition under ASU 2017-05 coincides with the Company’s previous conclusion under ASC 360-20, and therefore no restatement of the consolidated financial statements is necessary as a result of implementing the guidance for the sale of nonfinancial assets. During the first quarter of 2019, the tenant at the Marine Piers exercised its option to extend the term of its sublease. Therefore, the Company expects to receive the $9.4 million balance on January 15, 2024. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2019, the FASB issued ASU No. 2019-01, an amendment to the lease ASU to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing essential information about leasing transactions. The amendments in this update reinstate the exception in Topic 842 for lessors that are not manufacturers or dealers. The amendment is effective with Topic 842. Specifically, those lessors will use their cost, reflecting any volume or trade discounts that may apply, as the fair value of the underlying asset. However, if significant time lapses between the acquisition of the underlying asset and lease commencement, those lessors will be required to apply the definition of fair value (exit price) in Topic 820. The Company has evaluated the impact of this new guidance and determined that it will not have a material impact on its consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13 that changes how entities measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The guidance replaces the current incurred loss model with an expected loss approach, resulting in more timely recognition of such losses. The guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted after December 2018. The Company is in the process of evaluating the impact of this new guidance on reserves for notes receivable. The Company has not quantified the impact that this guidance will have on its consolidated financial statements. |
Organization of the Parent Co_2
Organization of the Parent Company and The Operating Partnership (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Summary of Core Portfolio of Operating Properties and Excludes Development and Redevelopment Properties Under Construction | The Company’s core portfolio of operating properties, as of March 31, 2019, excludes one development property and three redevelopment properties under construction or committed for construction (collectively, the “Core Properties”). The Properties were comprised of the following as of March 31, 2019: Number of Properties Rentable Square Feet Office properties 88 15,719,636 Mixed-use properties 3 641,741 Retail property 1 17,884 Core Properties 92 16,379,261 Development property 1 204,108 Redevelopment properties 3 338,650 The Properties 96 16,922,019 |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule Of Lease Payments on Non-Cancellable Leases | Lease payments on non-cancellable leases at March 31, 2019 are as follows (in thousands): Year Lease payments 2019 (nine months remaining) $ 292,215 2020 377,088 2021 354,913 2022 309,125 2023 281,437 Thereafter 1,270,928 Total $ 2,885,706 Lease payments on non-cancellable leases at December 31, 2018 are as follows (in thousands): Year Lease payments 2019 $ 392,058 2020 372,619 2021 349,160 2022 304,445 2023 277,388 Thereafter 1,265,810 Total $ 2,961,480 |
Schedule Of Allocation Of Lease Revenue Recognized Between Fixed Contractual Payments And Variable Lease Payments | The table below sets forth the allocation of lease revenue recognized between fixed contractual payments and variable lease payments (in thousands): Three Months Ended March 31, Lease Revenue 2019 Fixed lease payments $ 108,033 Variable lease payments 30,064 Total $ 138,097 |
Summary of Operating Lease Cost Recognized Through Property Operating Expenses | The table below summarizes the Company’s operating lease cost (in thousands) recognized through the “Property operating expenses” caption on the consolidated statement of operations: Three Months Ended March 31, Lease Cost 2019 Fixed lease cost $ 525 Variable lease cost 14 Total $ 539 Weighted-average remaining lease term (years) 53.2 Weighted-average discount rate 6.3 % |
Real Estate Investments (Tables
Real Estate Investments (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Real Estate [Abstract] | |
Gross Carrying Value of Operating Properties | As of March 31, 2019 and December 31, 2018, the gross carrying value of the operating properties was as follows (in thousands): March 31, 2019 December 31, 2018 Land $ 509,503 $ 508,363 Building and improvements 3,068,255 3,029,427 Tenant improvements 438,121 415,529 Total $ 4,015,879 $ 3,953,319 |
Summary of Gain on Sale for Each Land Parcel | The Company sold the following land parcel and recognized a gain on a property sold in a prior year during the three-month period ended March 31, 2019 (dollars in thousands): Disposition Date Property/Portfolio Name Location Number of Parcels Acres Sales Price Net Proceeds on Sale Gain on Sale March 15, 2019 9 Presidential Boulevard Bala Cynwyd, PA 1 2.7 $ 5,325 $ 5,023 $ 751 January 8, 2015 Libertyview Cherry Hill, NJ - - - 250 250 (a) Total Dispositions 1 2.7 $ 5,325 $ 5,273 $ 1,001 (a) As of January 2019, the Company will receive an additional $1.0 million of contingent consideration. The Company will recognize this consideration on a cash basis due to uncertainty of collectability. The $1.0 million consideration is payable to the Company in twelve equal installments, of which $0.3 million has been received during the three-month period ended March 31, 2019. |
Investment in Unconsolidated _2
Investment in Unconsolidated Real Estate Ventures (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Equity Method Investments And Joint Ventures [Abstract] | |
Investment in Real Estate Ventures and Share of Real Estate Ventures' Income (Loss) | The following is a summary of the financial position of the Real Estate Ventures in which the Company held interests as of March 31, 2019 and December 31, 2018 (in thousands): March 31, 2019 December 31, 2018 Net property $ 835,827 $ 835,983 Other assets (a) 365,840 159,499 Other liabilities (a) 287,138 85,681 Debt, net (b) 490,840 365,707 Equity (c) 423,689 544,094 (a) The increase in ‘Other assets’ and ‘Other liabilities’ for the period ended March 31, 2019 compared to the period ended December 31, 2018 is due to the recording of the right of use asset and lease liability of $197.1 million and $249.3 million, respectively, for the MAP Venture ground lease upon adoption of Topic 842, which was adopted by the venture on January 1, 2019. (b) This amount increased as a result of third-party debt financing received by Herndon Innovation Center Venture, an unconsolidated real estate venture on March 29, 2019. See “Herndon Innovation Center Metro Portfolio Venture” section below for further information. (c) This amount includes the effect of the basis difference between the Company's historical cost basis and the basis recorded at the Real Estate Venture level, which is typically amortized over the life of the related assets and liabilities. Basis differentials occur from the impairment of investments, purchases of third party interests in existing Real Estate Ventures and upon the transfer of assets that were previously owned by the Company into a Real Estate Venture. In addition, certain acquisition, transaction and other costs may not be reflected in the net assets at the Real Estate Venture level. The following is a summary of results of operations of the Real Estate Ventures in which the Company held interests during the three--month periods ended March 31, 2019 and 2018, respectively (in thousands): Three-month period ended March 31, 2019 evo MAP Venture Other Total Revenue $ - $ 18,288 $ 16,771 $ 35,059 Operating expenses - (12,155 ) (6,563 ) (18,718 ) Interest expense, net - (2,536 ) (1,384 ) (3,920 ) Depreciation and amortization - (6,349 ) (7,363 ) (13,712 ) Net income (loss) $ - $ (2,752 ) $ 1,461 $ (1,291 ) Ownership interest % 50 % 50 % (b) (b) Company's share of net income (loss) $ - $ (1,376 ) $ 64 $ (1,312 ) Basis adjustments and other - (56 ) 10 (46 ) Equity in income (loss) of Real Estate Ventures $ - $ (1,432 ) $ 74 $ (1,358 ) Three-month period ended March 31, 2018 evo MAP Venture Other Total Revenue $ 995 $ 17,080 $ 24,746 $ 42,821 Operating expenses (250 ) (10,307 ) (10,211 ) (20,768 ) Interest expense, net (388 ) (3,791 ) (3,947 ) (8,126 ) Depreciation and amortization (376 ) (4,701 ) (9,307 ) (14,384 ) Loss on early extinguishment of debt (718 ) - - (718 ) Net income (loss) $ (737 ) $ (1,719 ) $ 1,281 $ (1,175 ) Ownership interest % 50 % 50 % (b) (b) Company's share of net income (loss) $ (369 ) $ (860 ) $ 523 $ (706 ) Basis adjustments and other 11 7 (137 ) (119 ) Equity in income (loss) of Real Estate Ventures $ (358 ) $ (853 ) $ 386 $ (825 ) (a) The Company sold its 50% ownership interest in evo at Cira Centre South Venture during the first quarter of 2018. (b) The Company’s unconsolidated ownership interests ranged from 15% to 70% during the three-month periods ended March 31, 2019 and 25% to 70% during the three-month periods ended March 31, 2018, subject to specified priority allocations of distributable cash in certain of the Real Estate Ventures. |
Intangible Assets and Liabili_2
Intangible Assets and Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Intangible Assets and Liabilities | As of March 31, 2019 and December 31, 2018, the Company’s intangible assets/liabilities were comprised of the following (in thousands): March 31, 2019 Total Cost Accumulated Amortization Intangible Assets, net Intangible assets, net: In-place lease value $ 179,979 $ (62,584 ) $ 117,395 Tenant relationship value 9,564 (8,715 ) 849 Above market leases acquired 4,966 (3,307 ) 1,659 Total intangible assets, net $ 194,509 $ (74,606 ) $ 119,903 Acquired lease intangibles, net: Below market leases acquired $ 49,228 $ (19,415 ) $ 29,813 December 31, 2018 Total Cost Accumulated Amortization Intangible Assets, net Intangible assets, net: In-place lease value $ 181,887 $ (53,376 ) $ 128,511 Tenant relationship value 9,564 (8,551 ) 1,013 Above market leases acquired 4,966 (3,142 ) 1,824 Total intangible assets, net $ 196,417 $ (65,069 ) $ 131,348 Acquired lease intangibles, net: Below market leases acquired $ 49,655 $ (17,872 ) $ 31,783 |
Summary of Amortization for Intangible Assets and Liabilities | As of March 31, 2019, the Company’s annual amortization for its intangible assets/liabilities, assuming no prospective early lease terminations, was as follows (dollars in thousands): Assets Liabilities 2019 (nine months remaining) $ 30,532 $ 5,433 2020 28,393 5,707 2021 20,128 4,302 2022 12,791 2,654 2023 9,756 2,094 Thereafter 18,303 9,623 Total $ 119,903 $ 29,813 |
Debt Obligations (Tables)
Debt Obligations (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Consolidated debt obligations | The following table sets forth information regarding the Company’s consolidated debt obligations outstanding at March 31, 2019 and December 31, 2018 (in thousands): March 31, 2019 December 31, 2018 Effective Interest Rate Maturity Date MORTGAGE DEBT: Two Logan Square $ 82,385 $ 82,805 3.98% May 2020 Four Tower Bridge 9,469 9,526 4.50% Feb 2021 One Commerce Square 119,292 120,183 3.64% Apr 2023 Two Commerce Square 110,014 110,518 4.51% Apr 2023 Principal balance outstanding 321,160 323,032 Plus: fair market value premium (discount), net (1,664 ) (1,759 ) Less: deferred financing costs (364 ) (404 ) Mortgage indebtedness $ 319,132 $ 320,869 UNSECURED DEBT $600 million Unsecured Credit Facility $ 160,500 $ 92,500 LIBOR + 1.10% Jul 2022 Seven-Year Term Loan - Swapped to fixed 250,000 250,000 2.87% Oct 2022 $350.0M 3.95% Guaranteed Notes due 2023 350,000 350,000 3.87% Feb 2023 $250.0M 4.10% Guaranteed Notes due 2024 250,000 250,000 4.33% Oct 2024 $450.0M 3.95% Guaranteed Notes due 2027 450,000 450,000 4.03% Nov 2027 $250.0M 4.55% Guaranteed Notes due 2029 250,000 250,000 4.60% Oct 2029 Indenture IA (Preferred Trust I) 27,062 27,062 LIBOR + 1.25% Mar 2035 Indenture IB (Preferred Trust I) - Swapped to fixed 25,774 25,774 3.30% Apr 2035 Indenture II (Preferred Trust II) - Swapped to fixed 25,774 25,774 3.09% Jul 2035 Principal balance outstanding 1,789,110 1,721,110 Plus: original issue premium (discount), net (4,015 ) (4,096 ) Less: deferred financing costs (9,430 ) (9,837 ) Total unsecured indebtedness $ 1,775,665 $ 1,707,177 Total Debt Obligations $ 2,094,797 $ 2,028,046 |
Schedule of Maturities of Long-term Debt | As of March 31, 2019, the Company’s aggregate scheduled principal payments of debt obligations, excluding amortization of discounts and premiums, are as follows (in thousands): 2019 (nine months remaining) $ 5,723 2020 87,226 2021 15,143 2022 416,832 2023 556,736 Thereafter 1,028,610 Total principal payments 2,110,270 Net unamortized premiums/(discounts) (5,679 ) Net deferred financing costs (9,794 ) Outstanding indebtedness $ 2,094,797 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Instruments With Fair Values Different From Their Carrying Amount | The following are financial instruments for which the Company’s estimates of fair value differ from the carrying amounts (in thousands): March 31, 2019 December 31, 2018 Carrying Amount (a) Fair Value Carrying Amount (a) Fair Value Unsecured notes payable $ 1,288,387 $ 1,301,735 $ 1,288,024 $ 1,262,570 Variable rate debt $ 487,278 $ 470,869 $ 419,153 $ 402,924 Mortgage notes payable $ 319,132 $ 320,187 $ 320,869 $ 318,515 Notes receivable (b) $ 47,753 $ 47,691 $ 47,771 $ 47,747 (a) The carrying amounts presented in the table above are net of deferred financing costs of $ 7.6 million and $ 7.9 million for unsecured notes payable, $ 1.8 million and $ 5.1 million for variable rate debt and $ 0.4 million for mortgage notes payable as of both March 31, 2019 and December 31, 2018 , respectively. (b) T he inputs to originate the notes receivable are unobservable and, as a result, are categorized as Level 3. The Company determined fair value by calculating the present value of the cash payments to be received through the maturity date of the loans. |
Fair Value of Derivative Fina_2
Fair Value of Derivative Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Derivative Instruments And Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The following table summarizes the terms and fair values of the Company’s derivative financial instruments as of March 31, 2019 and December 31, 2018. The notional amounts provide an indication of the extent of the Company’s involvement in these instruments at that time, but do not represent exposure to credit, interest rate or market risks (amounts presented in thousands and included in other assets and other liabilities on the Company’s consolidated balance sheets). Hedge Product Hedge Type Designation Notional Amount Strike Trade Date Maturity Date Fair value 3/31/2019 12/31/2018 3/31/2019 12/31/2018 Assets Swap Interest Rate Cash Flow (a) $ 250,000 $ 250,000 2.868 % October 8, 2015 October 8, 2022 $ 4,522 $ 7,008 Swap Interest Rate Cash Flow (a) 25,774 25,774 3.300 % December 22, 2011 January 30, 2021 185 292 Swap Interest Rate Cash Flow (a) 25,774 25,774 3.090 % January 6, 2012 October 30, 2019 151 183 $ 301,548 $ 301,548 (a) Hedging unsecured variable rate debt. |
Beneficiaries Equity of the P_2
Beneficiaries Equity of the Parent Company (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Earnings Per Share (EPS), Basic and Diluted | The following tables detail the number of shares and net income used to calculate basic and diluted earnings per share (in thousands, except share and per share amounts; results may not add due to rounding): Three-month periods ended March 31, 2019 2018 Basic Diluted Basic Diluted Numerator Net income $ 4,066 $ 4,066 $ 44,705 $ 44,705 Net income attributable to noncontrolling interests (57 ) (57 ) (376 ) (376 ) Nonforfeitable dividends allocated to unvested restricted shareholders (119 ) (119 ) (114 ) (114 ) Net income attributable to common shareholders $ 3,890 $ 3,890 $ 44,215 $ 44,215 Denominator Weighted-average shares outstanding 175,857,358 175,857,358 178,395,525 178,395,525 Contingent securities/Share based compensation - 606,860 - 1,392,786 Weighted-average shares outstanding 175,857,358 176,464,218 178,395,525 179,788,311 Earnings per Common Share: Net income attributable to common shareholders $ 0.02 $ 0.02 $ 0.25 $ 0.25 |
Partners Equity of the Operat_2
Partners Equity of the Operating Partnership (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share (EPS), Basic and Diluted | The following tables detail the number of shares and net income used to calculate basic and diluted earnings per share (in thousands, except share and per share amounts; results may not add due to rounding): Three-month periods ended March 31, 2019 2018 Basic Diluted Basic Diluted Numerator Net income $ 4,066 $ 4,066 $ 44,705 $ 44,705 Net income attributable to noncontrolling interests (57 ) (57 ) (376 ) (376 ) Nonforfeitable dividends allocated to unvested restricted shareholders (119 ) (119 ) (114 ) (114 ) Net income attributable to common shareholders $ 3,890 $ 3,890 $ 44,215 $ 44,215 Denominator Weighted-average shares outstanding 175,857,358 175,857,358 178,395,525 178,395,525 Contingent securities/Share based compensation - 606,860 - 1,392,786 Weighted-average shares outstanding 175,857,358 176,464,218 178,395,525 179,788,311 Earnings per Common Share: Net income attributable to common shareholders $ 0.02 $ 0.02 $ 0.25 $ 0.25 |
BRANDYWINE OPERATING PARTNERSHIP, L.P. | |
Earnings Per Share (EPS), Basic and Diluted | The following tables detail the number of units and net income used to calculate basic and diluted earnings per common partnership unit (in thousands, except unit and per unit amounts; results may not add due to rounding): Three-month periods ended March 31, 2019 2018 Basic Diluted Basic Diluted Numerator Net income $ 4,066 $ 4,066 $ 44,705 $ 44,705 Net income attributable to noncontrolling interests (34 ) (34 ) (5 ) (5 ) Nonforfeitable dividends allocated to unvested restricted unitholders (119 ) (119 ) (114 ) (114 ) Net income attributable to common unitholders $ 3,913 $ 3,913 $ 44,586 $ 44,586 Denominator Weighted-average units outstanding 176,840,229 176,840,229 179,875,324 179,875,324 Contingent securities/Share based compensation - 606,860 - 1,392,786 Total weighted-average units outstanding 176,840,229 177,447,089 179,875,324 181,268,110 Earnings per Common Partnership Unit: Net income attributable to common unitholders $ 0.02 $ 0.02 $ 0.25 $ 0.25 |
Share Based Compensation (Table
Share Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Company's Restricted Share Activity | The following table summarizes the Company’s Restricted Share Right activity during the three months ended March 31, 2019: Shares Weighted Average Grant Date Fair Value Aggregate Intrinsic Value Non-vested at January 1, 2019 466,439 $ 14.93 $ 70,677 Granted 196,667 15.61 3,070 Vested (33,020 ) 15.15 298 Forfeited (3,437 ) 15.34 - Non-vested at March 31, 2019 626,649 15.13 9,939 |
Schedule of Restricted Performance Share Units Plan | The table below presents certain information as to unvested RPSU awards. RPSU Grant 3/1/2017 2/28/2018 2/21/2019 Total (Amounts below in shares, unless otherwise noted) Non-vested at January 1, 2019 169,525 206,025 - 375,550 Units Granted - - 213,728 213,728 Units Vested (8,420 ) - - (8,420 ) Units Cancelled - (8,975 ) - (8,975 ) Non-vested at March 31, 2019 161,105 197,050 213,728 571,883 Measurement Period Commencement Date 1/1/2017 1/1/2018 1/1/2019 Measurement Period End Date 12/31/2019 12/31/2020 12/31/2021 Units Granted 174,854 209,193 213,728 Fair Value of Units on Grant Date (in thousands) $ 3,735 $ 4,276 $ 4,627 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Real Estate Investments, Net Operating Income and Unconsolidated Real Estate Ventures of Reportable Segments | The following tables provide selected asset information and results of operations of the Company's reportable segments (in thousands): Real estate investments, at cost: March 31, 2019 December 31, 2018 Philadelphia CBD $ 1,683,406 $ 1,670,388 Pennsylvania Suburbs 1,008,066 1,004,537 Austin, Texas 713,189 667,698 Metropolitan Washington, D.C. 524,385 524,190 Other 86,833 86,506 $ 4,015,879 $ 3,953,319 Right of use asset - operating leases (a) $ 22,175 $ - Corporate Construction-in-progress $ 112,176 $ 150,263 Land held for development (b) $ 88,047 $ 86,401 Prepaid $ 39,897 $ 39,999 (a) On January 1, 2019, as a result of the adoption of Topic 842, Leases, the Company recognized operating ground leases for which it is a lessee on its consolidated balance sheets for the period ended March 31, 2019. See Note 2, “ Basis of Presentation (b) As of March 31, 2019, the Company categorized 35.2 acres of land held for development, located in the Other segment, as held for sale in accordance with applicable accounting standards for long lived assets. As of December 31, 2018, the Company categorized 37.9 acres of land held for development, comprised of 2.7 acres and 35.2 acres, located in the Pennsylvania Suburbs segment and Other segment, respectively, as held for sale in accordance with applicable accounting standards for long lived assets. See Note 3, “Real Estate Investments ,” for further information. (c) As of March 31, 2019 and December 31, 2018, this caption comprised leasehold interests in prepaid 99-year Net operating income (in thousands): Three-month periods ended March 31, 2019 2018 Total revenue Operating expenses (a) Net operating income (loss) Total revenue Operating expenses (a) Net operating income (loss) Philadelphia CBD $ 65,798 $ (25,185 ) $ 40,613 $ 62,602 $ (24,327 ) $ 38,275 Pennsylvania Suburbs 35,627 (12,972 ) 22,655 34,882 (12,964 ) 21,918 Austin, Texas (b) 24,766 (9,076 ) 15,690 8,364 (3,523 ) 4,841 Metropolitan Washington, D.C. (c) 13,520 (6,204 ) 7,316 23,059 (8,759 ) 14,300 Other 3,182 (2,145 ) 1,037 6,141 (4,965 ) 1,176 Corporate 1,003 (1,799 ) (796 ) 1,310 (1,966 ) (656 ) Operating properties $ 143,896 $ (57,381 ) $ 86,515 $ 136,358 $ (56,504 ) $ 79,854 (a) Includes property operating expenses, real estate taxes and third party management expense. (b) On December 11, 2018, the Company acquired from DRA Advisors its 50% ownership interest in the G&I Austin Office LLC real estate venture. The DRA Austin Venture owned twelve office properties containing an aggregate 1,570,123 square feet, located in Austin, Texas. As a result of the acquisition, the Company acquired complete ownership of the Austin properties. (c) On December 20, 2018, the Company contributed a portfolio of eight properties containing an aggregate of 1,293,197 square feet, located in its Metropolitan Washington, D.C. segment, known as the Rockpoint Portfolio, to the Herndon Innovation Center Venture. The Company and its partner own 15% and 85% interests in the Herndon Innovation Center Venture, respectively. Unconsolidated real estate ventures (in thousands): Investment in real estate ventures, at equity Equity in income (loss) of real estate venture As of Three-month periods ended March 31, March 31, 2019 December 31, 2018 2019 2018 Philadelphia CBD $ 19,325 $ 19,897 $ 78 $ (236 ) Metropolitan Washington, D.C. 135,149 136,142 (175 ) (37 ) MAP Venture (b) 5,101 11,173 (1,367 ) (736 ) Other 1,993 1,888 106 104 Austin, Texas (c) - - - 80 Total $ 161,568 $ 169,100 $ (1,358 ) $ (825 ) (a) On December 20, 2018, the Company formed the Herndon Innovation Center Venture. See footnote (b) to the “Net operating income” table above for further information regarding this transaction. (b) The MAP Venture represents a joint venture formed between the Company and MAP Ground Lease Holdings LLC, an affiliate of Och-Ziff Capital Management Group, LLC, on February 4, 2016. The MAP Venture’s business operations, including properties in Richmond, Virginia; Metropolitan Washington, D.C.; New Jersey/Delaware and Pennsylvania Suburbs, are centrally managed with the results reported to management of the Company on a consolidated basis. As a result, the investment in the MAP Venture is separately presented. All other unconsolidated real estate ventures are managed consistently with the Company’s regional segments. (c) On December 11, 2018, the Company acquired from DRA Advisors its 50% ownership interest in the G&I Austin Office LLC real estate venture. The DRA Austin Venture owned twelve office properties containing an aggregate 1,570,123 square feet, located in Austin, Texas. As a result of the acquisition, the Company acquired complete ownership of the Austin properties. |
Reconciliation of Consolidated Net Income to Consolidated NOI | The following is a reconciliation of consolidated net income, as defined by GAAP, to consolidated NOI, (in thousands): Three-month periods ended March 31, 2019 2018 Net income $ 4,066 $ 44,705 Plus: Interest expense 20,357 19,533 Interest 666 627 Depreciation and amortization 51,980 43,291 General and administrative expenses 9,844 8,723 Equity in loss of Real Estate Ventures 1,358 825 Less: Interest income 525 703 Income tax provision (29 ) (138 ) Net gain on sale of undepreciated real estate 1,001 22 Net gain on real estate venture transactions 259 37,263 Consolidated net operating income $ 86,515 $ 79,854 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Lease Payments on Non-cancelable Leases | Lease payments on non-cancelable leases at March 31, 2019, which, where applicable, considered CPI index rates upon adoption of Topic 842, are as follows (in thousands): Year Lease Payments 2019 (nine months remaining) $ 905 2020 1,217 2021 1,232 2022 1,248 2023 1,263 Thereafter 111,757 Total lease payments $ 117,622 Less: Imputed interest (95,220 ) Present value of operating lease liabilities $ 22,402 Lease payments on non-cancelable leases at December 31, 2018, which were determined under ASC 840 and are therefore not adjusted for increases based on CPI, are as follows (in thousands): Year Lease Payments 2019 $ 1,222 2020 1,222 2021 1,222 2022 1,222 2023 1,222 Thereafter 55,689 Total $ 61,799 |
Organization of The Parent Co_3
Organization of The Parent Company and The Operating Partnership (Textual) (Details) | 3 Months Ended |
Mar. 31, 2019ft²apropertyParcel | |
Organization of The Parent Company and The Operating Partnership [Line Items] | |
Number of Properties | property | 96 |
Net Rentable Square Feet | 16,922,019 |
Parent Company [Member] | |
Organization of The Parent Company and The Operating Partnership [Line Items] | |
Undeveloped Parcels of Land | a | 234.7 |
Undeveloped Land Held for Sale | a | 35.2 |
Area of Additional Undeveloped Parcels of Land With Option to Purchase | a | 55.5 |
Total Potential Development Capacity | 14,200,000 |
Parent Company [Member] | Land Parcel One [Member] | |
Organization of The Parent Company and The Operating Partnership [Line Items] | |
Lease agreement term | 99 years |
Parent Company [Member] | Land Parcel Two [Member] | |
Organization of The Parent Company and The Operating Partnership [Line Items] | |
Lease agreement term | 99 years |
Parent Company [Member] | Assets Held-for-sale [Member] | |
Organization of The Parent Company and The Operating Partnership [Line Items] | |
Total Potential Development Capacity | 200,000 |
Wholly-owned Management Company Subsidiaries [Member] | |
Organization of The Parent Company and The Operating Partnership [Line Items] | |
Net Rentable Square Feet | 24,900,000 |
Wholly-owned Management Company Subsidiaries [Member] | Wholly Owned Properties [Member] | |
Organization of The Parent Company and The Operating Partnership [Line Items] | |
Net Rentable Square Feet | 16,900,000 |
Wholly-owned Management Company Subsidiaries [Member] | Partially Owned Properties [Member] | |
Organization of The Parent Company and The Operating Partnership [Line Items] | |
Net Rentable Square Feet | 8,000,000 |
Development Property [Member] | |
Organization of The Parent Company and The Operating Partnership [Line Items] | |
Number of Properties | property | 1 |
Redevelopment Properties [Member] | |
Organization of The Parent Company and The Operating Partnership [Line Items] | |
Number of Properties | property | 3 |
Leashold Interest Land [Member] | Parent Company [Member] | |
Organization of The Parent Company and The Operating Partnership [Line Items] | |
Number of Parcels | Parcel | 2 |
Undeveloped Parcels of Land Held | a | 1.8 |
Brandywine Operating Partnership LP [Member] | |
Organization of The Parent Company and The Operating Partnership [Line Items] | |
Ownership in the Operating Partnership | 99.40% |
Organization of The Parent Co_4
Organization of The Parent Company and The Operating Partnership - Summary of Core Portfolio of Operating Properties and Excludes Development and Redevelopment Properties Under Construction (Details) | Mar. 31, 2019ft²property |
Real Estate Properties [Line Items] | |
Number of Properties | property | 96 |
Rentable Square Feet | ft² | 16,922,019 |
Office Properties [Member] | |
Real Estate Properties [Line Items] | |
Number of Properties | property | 88 |
Rentable Square Feet | ft² | 15,719,636 |
Mixed-use Properties [Member] | |
Real Estate Properties [Line Items] | |
Number of Properties | property | 3 |
Rentable Square Feet | ft² | 641,741 |
Retail Properties [Member] | |
Real Estate Properties [Line Items] | |
Number of Properties | property | 1 |
Rentable Square Feet | ft² | 17,884 |
Core Properties [Member] | |
Real Estate Properties [Line Items] | |
Number of Properties | property | 92 |
Rentable Square Feet | ft² | 16,379,261 |
Development Projects [Member] | |
Real Estate Properties [Line Items] | |
Number of Properties | property | 1 |
Rentable Square Feet | ft² | 204,108 |
Redevelopment Projects [Member] | |
Real Estate Properties [Line Items] | |
Number of Properties | property | 3 |
Rentable Square Feet | ft² | 338,650 |
Basis of Presentation (Textual)
Basis of Presentation (Textual) (Details) | Mar. 15, 2017USD ($)ft² | Mar. 31, 2019USD ($)Ground | Mar. 31, 2018USD ($) | Jan. 15, 2024USD ($) | Jan. 01, 2019USD ($) | Dec. 31, 2018USD ($) | |
Basis Of Presentation [Line Items] | |||||||
Direct financing leases | $ 0 | ||||||
Operating leases expiration dates extending | The operating leases have various expiration dates. | ||||||
Cumulative effect of accounting change | $ (5,336,000) | ||||||
Amount of general reserve related to leases | $ 11,300,000 | ||||||
Number of long-term ground leases | Ground | 6 | ||||||
Right of use asset - operating leases | $ 22,175,000 | [1] | $ 22,400,000 | $ 0 | |||
Lease liability - operating leases | 22,402,000 | $ 22,400,000 | 0 | ||||
Proceeds from the sale of properties | 5,273,000 | $ 14,921,000 | |||||
Assets held for sale, net | 7,345,000 | $ 11,599,000 | |||||
Philadelphia Marine Center (Marine Piers) [Member] | |||||||
Basis Of Presentation [Line Items] | |||||||
Rentable Square Feet | ft² | 181,900 | ||||||
Sales Price | $ 21,400,000 | ||||||
Payment by cash on purchases | 12,000,000 | ||||||
Proceeds from the sale of properties | 11,200,000 | ||||||
Balance payment on purchases | $ 9,400,000 | $ 9,400,000 | |||||
Date of second installment payment | Jan. 31, 2020 | ||||||
Assets held for sale, net | $ 4,700,000 | ||||||
Gain (Loss) on Sale | 6,500,000 | ||||||
Deferred gain on sale | $ 9,400,000 | ||||||
Uncollectible Leases [Member] | |||||||
Basis Of Presentation [Line Items] | |||||||
Cumulative effect of accounting change | (700,000) | ||||||
Depreciation Out of Period Adjustment [Member] | |||||||
Basis Of Presentation [Line Items] | |||||||
Depreciation expense | $ 800,000 | ||||||
[1] | On January 1, 2019, as a result of the adoption of Topic 842, Leases, the Company recognized operating ground leases for which it is a lessee on its consolidated balance sheets for the period ended March 31, 2019. See Note 2, “ Basis of Presentation |
Basis of Presentation - Schedul
Basis of Presentation - Schedule of Lease Payments on Non-Cancellable Leases (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Real Estate [Abstract] | ||
2019 (nine months remaining) | $ 292,215 | |
2019 | $ 392,058 | |
2020 | 377,088 | 372,619 |
2021 | 354,913 | 349,160 |
2022 | 309,125 | 304,445 |
2023 | 281,437 | 277,388 |
Thereafter | 1,270,928 | 1,265,810 |
Total | $ 2,885,706 | $ 2,961,480 |
Basis of Presentation - Sched_2
Basis of Presentation - Schedule of Allocation of Lease Revenue Recognized Between Fixed Contractual Payments and Variable Lease Payments (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Lease Revenue | |
Fixed lease payments | $ 108,033 |
Variable lease payments | 30,064 |
Total | $ 138,097 |
Basis of Presentation - Summary
Basis of Presentation - Summary of Operating Lease Cost Recognized Through Property Operating Expenses (Details) - Property Operating Expenses [Member] $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Lease Cost | |
Fixed lease cost | $ 525 |
Variable lease cost | 14 |
Total | $ 539 |
Weighted-average remaining lease term (years) | 53 years 2 months 12 days |
Weighted-average discount rate | 6.30% |
Real Estate Investments - Gross
Real Estate Investments - Gross Carrying Value of Operating Properties (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment, Gross [Abstract] | ||
Land | $ 509,503 | $ 508,363 |
Tenant improvements | 438,121 | 415,529 |
Operating properties | 4,015,879 | 3,953,319 |
Total | 4,015,879 | 3,953,319 |
Building and Improvements [Member] | ||
Property, Plant and Equipment, Gross [Abstract] | ||
Operating properties | $ 3,068,255 | $ 3,029,427 |
Real Estate Investments - Summa
Real Estate Investments - Summary of Land Parcels Sold (Details) $ in Thousands | Mar. 15, 2019USD ($)aParcel | Jan. 08, 2015USD ($)aParcel | Mar. 31, 2019USD ($)aParcel | Mar. 31, 2018USD ($) |
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||||
Proceeds from the sale of properties | $ 5,273 | $ 14,921 | ||
Gain on Sale | $ 1,001 | $ 22 | ||
Land [Member] | ||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||||
Number of Parcels | Parcel | 1 | |||
Acreage of Land | a | 2.7 | |||
Sales Price | $ 5,325 | |||
Proceeds from the sale of properties | 5,273 | |||
Gain on Sale | 1,001 | |||
Land [Member] | 9 Presidential Boulevard [Member] | ||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||||
Number of Parcels | Parcel | 1 | |||
Acreage of Land | a | 2.7 | |||
Sales Price | $ 5,325 | |||
Proceeds from the sale of properties | 5,023 | |||
Gain on Sale | $ 751 | |||
Land [Member] | Libertyview [Member] | ||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||||
Number of Parcels | Parcel | 0 | |||
Acreage of Land | a | 0 | |||
Sales Price | $ 0 | |||
Proceeds from the sale of properties | 250 | $ 300 | ||
Gain on Sale | $ 250 |
Real Estate Investments - Sum_2
Real Estate Investments - Summary of Land Parcels Sold (Parenthetical) (Details) $ in Thousands | Jan. 08, 2015USD ($) | Jan. 31, 2019USD ($)Installment | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) |
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||||
Sale of undeveloped land | $ 5,273 | $ 14,921 | ||
Land [Member] | ||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||||
Sale of undeveloped land | 5,273 | |||
Libertyview [Member] | Land [Member] | ||||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||||
Contingent consideration to received | $ 1,000 | |||
Number of installments | Installment | 12 | |||
Sale of undeveloped land | $ 250 | $ 300 |
Real Estate Investments - (Text
Real Estate Investments - (Textuals) (Details) $ in Thousands | Mar. 31, 2019USD ($)aParcel | Dec. 31, 2018USD ($) |
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||
Assets held for sale, net | $ 7,345 | $ 11,599 |
Assets Held-for-sale [Member] | Land Held For Development [Member] | ||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||
Assets held for sale, net | $ 7,300 | |
Assets Held-for-sale [Member] | Other [Member] | ||
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] | ||
Number of Parcels | Parcel | 2 | |
Acreage of Land | a | 35.2 |
Investment in Unconsolidated _3
Investment in Unconsolidated Real Estate Ventures (Textual) (Details) ft² in Millions | Apr. 01, 2019USD ($) | Mar. 29, 2019USD ($)property | Mar. 31, 2019USD ($)ft²apropertyParcelReal_Estate_InvestmentApartment_unit | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($) |
Schedule Of Equity Method Investments [Line Items] | |||||
Investment in Real Estate Ventures, equity method | $ 161,568,000 | $ 169,100,000 | |||
Accounts receivable | 21,780,000 | 16,394,000 | |||
Cumulative effect of accounting change | $ (5,336,000) | ||||
Number of Properties | property | 96 | ||||
Right of Use Asset [Member] | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Cumulative effect of accounting change | $ (4,600,000) | ||||
Office Properties [Member] | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Number of Properties | property | 88 | ||||
Real Estate Venture [Member] | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Accounts receivable | $ 800,000 | $ 800,000 | |||
Real Estate Venture [Member] | Management Fees [Member] | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Service and other revenue | 1,100,000 | $ 1,300,000 | |||
Real Estate Venture [Member] | Leasing Commission Income [Member] | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Service and other revenue | $ 200,000 | $ 800,000 | |||
Unconsolidated Real Estate Ventures [Member] | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Number of unconsolidated investments in Real Estate Ventures | Real_Estate_Investment | 10 | ||||
Investment in Real Estate Ventures, equity method | $ 161,600,000 | ||||
Real estate ventures aggregate indebtedness | $ 498,200,000 | ||||
Unconsolidated Real Estate Ventures [Member] | Minimum [Member] | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Ownership percentage | 15.00% | 25.00% | |||
Unconsolidated Real Estate Ventures [Member] | Maximum [Member] | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Ownership percentage | 70.00% | 70.00% | |||
Unconsolidated Real Estate Ventures [Member] | Six Real Estate Ventures [Member] | Office Properties [Member] | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Number of unconsolidated investments in Real Estate Ventures | Real_Estate_Investment | 6 | ||||
Rentable Square Feet | ft² | 5.8 | ||||
Unconsolidated Real Estate Ventures [Member] | Two Real Estate Ventures [Member] | Land Held For Development [Member] | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Number of unconsolidated investments in Real Estate Ventures | Real_Estate_Investment | 2 | ||||
Acreage of Land | a | 1.4 | ||||
Unconsolidated Real Estate Ventures [Member] | One Real Estate Venture [Member] | Land Under Active Development [Member] | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Number of unconsolidated investments in Real Estate Ventures | Real_Estate_Investment | 1 | ||||
Acreage of Land | a | 1.3 | ||||
Unconsolidated Real Estate Ventures [Member] | One Other Real Estate Venture [Member] | Residential Tower [Member] | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Number of unconsolidated investments in Real Estate Ventures | Real_Estate_Investment | 1 | ||||
Number of Property units | Apartment_unit | 321 | ||||
MAP Venture [Member] | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Ownership percentage | 50.00% | 50.00% | |||
Number of lessee land parcels | Parcel | 58 | ||||
Cumulative effect of accounting change | $ 9,200,000 | ||||
Lessee under ground lease term | 99 years | ||||
Herndon Innovation Center Metro Portfolio Venture, LLC [Member] | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Ownership percentage | 15.00% | ||||
Herndon Innovation Center Metro Portfolio Venture, LLC [Member] | Secured Debt [Member] | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Indebtedness to third parties, refinanced amount | $ 134,100,000 | ||||
Number of Properties | property | 4 | ||||
Debt instrument, initial advance | $ 111,000 | $ 113,100 | |||
Distribution to company's stockholders | $ 16,700 | ||||
Debt instrument, basis spread on variable rate | 1.95% | ||||
Debt instrument maturity date | Mar. 29, 2024 | ||||
Herndon Innovation Center Metro Portfolio Venture, LLC [Member] | Minimum [Member] | Secured Debt [Member] | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Effective interest rate | 5.45% | ||||
Herndon Innovation Center Metro Portfolio Venture, LLC [Member] | Maximum [Member] | Secured Debt [Member] | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Effective interest rate | 6.45% | ||||
PJP VII [Member] | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Guarantees, maximum exposure amount | $ 300,000 | ||||
Construction loan, principal amount | 3,700,000 | ||||
4040 Wilson Venture [Member] | |||||
Schedule Of Equity Method Investments [Line Items] | |||||
Guarantees, maximum exposure amount | 41,300,000 | ||||
Construction loan total borrowing capacity | $ 150,000,000 |
Investment in Unconsolidated _4
Investment in Unconsolidated Real Estate Ventures - Summary of Financial Position of Real Estate Ventures (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | |
Equity Method Investments And Joint Ventures [Abstract] | |||
Net property | $ 835,827 | $ 835,983 | |
Other assets | [1] | 365,840 | 159,499 |
Other liabilities | [1] | 287,138 | 85,681 |
Debt, net | [2] | 490,840 | 365,707 |
Equity | [3] | $ 423,689 | $ 544,094 |
[1] | The increase in ‘Other assets’ and ‘Other liabilities’ for the period ended March 31, 2019 compared to the period ended December 31, 2018 is due to the recording of the right of use asset and lease liability of $197.1 million and $249.3 million, respectively, for the MAP Venture ground lease upon adoption of Topic 842, which was adopted by the venture on January 1, 2019. | ||
[2] | This amount increased as a result of third-party debt financing received by Herndon Innovation Center Venture, an unconsolidated real estate venture on March 29, 2019. See “Herndon Innovation Center Metro Portfolio Venture” section below for further information. | ||
[3] | This amount includes the effect of the basis difference between the Company's historical cost basis and the basis recorded at the Real Estate Venture level, which is typically amortized over the life of the related assets and liabilities. Basis differentials occur from the impairment of investments, purchases of third party interests in existing Real Estate Ventures and upon the transfer of assets that were previously owned by the Company into a Real Estate Venture. In addition, certain acquisition, transaction and other costs may not be reflected in the net assets at the Real Estate Venture level. |
Investment in Unconsolidated _5
Investment in Unconsolidated Real Estate Ventures - Summary of Financial Position of Real Estate Ventures (Parenthetical) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | |
Schedule Of Equity Method Investments [Line Items] | ||||
Right of use asset - operating leases | $ 22,175 | [1] | $ 22,400 | $ 0 |
Lease liability - operating leases | 22,402 | $ 22,400 | $ 0 | |
MAP Venture [Member] | ||||
Schedule Of Equity Method Investments [Line Items] | ||||
Right of use asset - operating leases | 197,100 | |||
Lease liability - operating leases | $ 249,300 | |||
[1] | On January 1, 2019, as a result of the adoption of Topic 842, Leases, the Company recognized operating ground leases for which it is a lessee on its consolidated balance sheets for the period ended March 31, 2019. See Note 2, “ Basis of Presentation |
Investment in Unconsolidated _6
Investment in Unconsolidated Real Estate Ventures - Summary of Results of Operations of Real Estate Ventures with Interests (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | ||
Schedule Of Equity Method Investments [Line Items] | |||
Equity in income (loss) of Real Estate Ventures | $ (1,358) | $ (825) | |
evo at Cira Centre South [Member] | |||
Schedule Of Equity Method Investments [Line Items] | |||
Revenue | [1] | 0 | 995 |
Operating expenses | [1] | 0 | (250) |
Interest expense, net | [1] | 0 | (388) |
Depreciation and amortization | [1] | 0 | (376) |
Loss on early extinguishment of debt | [1] | (718) | |
Net income (loss) | [1] | $ 0 | $ (737) |
Ownership interest % | [1] | 50.00% | 50.00% |
Company's share of net income (loss) | [1] | $ 0 | $ (369) |
Basis adjustments and other | [1] | 0 | 11 |
Equity in income (loss) of Real Estate Ventures | [1] | 0 | (358) |
MAP Venture [Member] | |||
Schedule Of Equity Method Investments [Line Items] | |||
Revenue | 18,288 | 17,080 | |
Operating expenses | (12,155) | (10,307) | |
Interest expense, net | (2,536) | (3,791) | |
Depreciation and amortization | (6,349) | (4,701) | |
Loss on early extinguishment of debt | 0 | ||
Net income (loss) | $ (2,752) | $ (1,719) | |
Ownership interest % | 50.00% | 50.00% | |
Company's share of net income (loss) | $ (1,376) | $ (860) | |
Basis adjustments and other | (56) | 7 | |
Equity in income (loss) of Real Estate Ventures | (1,432) | (853) | |
Other [Member] | |||
Schedule Of Equity Method Investments [Line Items] | |||
Revenue | 16,771 | 24,746 | |
Operating expenses | (6,563) | (10,211) | |
Interest expense, net | (1,384) | (3,947) | |
Depreciation and amortization | (7,363) | (9,307) | |
Loss on early extinguishment of debt | 0 | ||
Net income (loss) | 1,461 | 1,281 | |
Company's share of net income (loss) | 64 | 523 | |
Basis adjustments and other | 10 | (137) | |
Equity in income (loss) of Real Estate Ventures | 74 | 386 | |
Unconsolidated Real Estate Ventures [Member] | |||
Schedule Of Equity Method Investments [Line Items] | |||
Revenue | 35,059 | 42,821 | |
Operating expenses | (18,718) | (20,768) | |
Interest expense, net | (3,920) | (8,126) | |
Depreciation and amortization | (13,712) | (14,384) | |
Loss on early extinguishment of debt | (718) | ||
Net income (loss) | (1,291) | (1,175) | |
Company's share of net income (loss) | (1,312) | (706) | |
Basis adjustments and other | (46) | (119) | |
Equity in income (loss) of Real Estate Ventures | $ (1,358) | $ (825) | |
[1] | The Company sold its 50% ownership interest in evo at Cira Centre South Venture during the first quarter of 2018. |
Investment in Unconsolidated _7
Investment in Unconsolidated Real Estate Ventures - Summary of Results of Operations of Real Estate Ventures with Interests (Parenthetical) (Details) | Mar. 31, 2019 | Mar. 31, 2018 | |
evo at Cira Centre South [Member] | |||
Schedule Of Equity Method Investments [Line Items] | |||
Ownership percentage | [1] | 50.00% | 50.00% |
Unconsolidated Real Estate Ventures [Member] | Minimum [Member] | |||
Schedule Of Equity Method Investments [Line Items] | |||
Ownership percentage | 15.00% | 25.00% | |
Unconsolidated Real Estate Ventures [Member] | Maximum [Member] | |||
Schedule Of Equity Method Investments [Line Items] | |||
Ownership percentage | 70.00% | 70.00% | |
[1] | The Company sold its 50% ownership interest in evo at Cira Centre South Venture during the first quarter of 2018. |
Intangible Assets and Liabili_3
Intangible Assets and Liabilities - Intangible Assets and Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Intangible Assets [Line Items] | ||
Intangible Assets, Total Cost | $ 194,509 | $ 196,417 |
Intangible Assets, Accumulated Amortization | (74,606) | (65,069) |
Intangible Assets, net | 119,903 | 131,348 |
Acquired Lease Intangibles, Net | 29,813 | 31,783 |
Below market leases [Member] | ||
Intangible Assets [Line Items] | ||
Acquired Lease Intangibles, Gross | 49,228 | 49,655 |
Acquired Lease Intangibles, Accumulated Amortization | (19,415) | (17,872) |
Acquired Lease Intangibles, Net | 29,813 | 31,783 |
In-place lease value [Member] | ||
Intangible Assets [Line Items] | ||
Intangible Assets, Total Cost | 179,979 | 181,887 |
Intangible Assets, Accumulated Amortization | (62,584) | (53,376) |
Intangible Assets, net | 117,395 | 128,511 |
Tenant relationship value [Member] | ||
Intangible Assets [Line Items] | ||
Intangible Assets, Total Cost | 9,564 | 9,564 |
Intangible Assets, Accumulated Amortization | (8,715) | (8,551) |
Intangible Assets, net | 849 | 1,013 |
Above market leases acquired [Member] | ||
Intangible Assets [Line Items] | ||
Intangible Assets, Total Cost | 4,966 | 4,966 |
Intangible Assets, Accumulated Amortization | (3,307) | (3,142) |
Intangible Assets, net | $ 1,659 | $ 1,824 |
Intangible Assets and Liabili_4
Intangible Assets and Liabilities - Annual Amortization of Intangible Assets, Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Assets | ||
2019 (nine months remaining) | $ 30,532 | |
2020 | 28,393 | |
2021 | 20,128 | |
2022 | 12,791 | |
2023 | 9,756 | |
Thereafter | 18,303 | |
Intangible Assets, net | 119,903 | $ 131,348 |
Liabilities | ||
2019 (nine months remaining) | 5,433 | |
2020 | 5,707 | |
2021 | 4,302 | |
2022 | 2,654 | |
2023 | 2,094 | |
Thereafter | 9,623 | |
Acquired Lease Intangibles, Net | $ 29,813 | $ 31,783 |
Debt Obligations - Consolidated
Debt Obligations - Consolidated Debt Obligations Outstanding (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Consolidated debt obligations | ||
Plus: premiums/(discounts), net | $ (5,679) | |
Less: deferred financing costs | (9,794) | |
Total Debt Obligations | 2,094,797 | $ 2,028,046 |
Secured Debt [Member] | ||
Consolidated debt obligations | ||
Long-term Debt, Gross | 321,160 | 323,032 |
Plus: premiums/(discounts), net | (1,664) | (1,759) |
Less: deferred financing costs | (364) | (404) |
Total mortgage indebtedness | 319,132 | 320,869 |
Secured Debt [Member] | Two Logan Square [Member] | ||
Consolidated debt obligations | ||
Long-term Debt, Gross | $ 82,385 | 82,805 |
Effective interest rate | 3.98% | |
Debt instrument maturity date | May 31, 2020 | |
Secured Debt [Member] | Four Tower Bridge [Member] | ||
Consolidated debt obligations | ||
Long-term Debt, Gross | $ 9,469 | 9,526 |
Effective interest rate | 4.50% | |
Debt instrument maturity date | Feb. 28, 2021 | |
Secured Debt [Member] | One Commerce Square [Member] | ||
Consolidated debt obligations | ||
Long-term Debt, Gross | $ 119,292 | 120,183 |
Effective interest rate | 3.64% | |
Debt instrument maturity date | Apr. 30, 2023 | |
Secured Debt [Member] | Two Commerce Square [Member] | ||
Consolidated debt obligations | ||
Long-term Debt, Gross | $ 110,014 | 110,518 |
Effective interest rate | 4.51% | |
Debt instrument maturity date | Apr. 30, 2023 | |
Unsecured Debt [Member] | ||
Consolidated debt obligations | ||
Long-term Debt, Gross | $ 1,789,110 | 1,721,110 |
Plus: premiums/(discounts), net | (4,015) | (4,096) |
Less: deferred financing costs | (9,430) | (9,837) |
Total unsecured indebtedness | 1,775,665 | 1,707,177 |
Unsecured Debt [Member] | $600 million Unsecured Credit Facility [Member] | ||
Consolidated debt obligations | ||
Long-term Debt, Gross | $ 160,500 | 92,500 |
Debt instrument, description of variable rate basis | LIBOR + 1.10% | |
Spread on variable rate | 1.10% | |
Debt instrument maturity date | Jul. 31, 2022 | |
Unsecured Debt [Member] | Seven Year Term Loan - Swapped to fixed [Member] | ||
Consolidated debt obligations | ||
Long-term Debt, Gross | $ 250,000 | 250,000 |
Effective interest rate | 2.87% | |
Debt instrument maturity date | Oct. 31, 2022 | |
Unsecured Debt [Member] | $350M 3.95% Guaranteed Notes due 2023 [Member] | ||
Consolidated debt obligations | ||
Long-term Debt, Gross | $ 350,000 | 350,000 |
Effective interest rate | 3.87% | |
Debt instrument maturity date | Feb. 28, 2023 | |
Unsecured Debt [Member] | $250.0M 4.10% Guaranteed Notes due 2024 [Member] | ||
Consolidated debt obligations | ||
Long-term Debt, Gross | $ 250,000 | 250,000 |
Effective interest rate | 4.33% | |
Debt instrument maturity date | Oct. 31, 2024 | |
Unsecured Debt [Member] | $450.0M 3.95% Guaranteed Notes due 2027 [Member] | ||
Consolidated debt obligations | ||
Long-term Debt, Gross | $ 450,000 | 450,000 |
Effective interest rate | 4.03% | |
Debt instrument maturity date | Nov. 30, 2027 | |
Unsecured Debt [Member] | $250M 4.55% Guaranteed Notes due 2029 [Member] | ||
Consolidated debt obligations | ||
Long-term Debt, Gross | $ 250,000 | 250,000 |
Effective interest rate | 4.60% | |
Debt instrument maturity date | Oct. 31, 2029 | |
Unsecured Debt [Member] | Indenture IA (Preferred Trust I) [Member] | ||
Consolidated debt obligations | ||
Long-term Debt, Gross | $ 27,062 | 27,062 |
Debt instrument, description of variable rate basis | LIBOR + 1.25% | |
Spread on variable rate | 1.25% | |
Debt instrument maturity date | Mar. 31, 2035 | |
Unsecured Debt [Member] | Indenture IB (Preferred Trust I) - Swapped to fixed [Member] | ||
Consolidated debt obligations | ||
Long-term Debt, Gross | $ 25,774 | 25,774 |
Effective interest rate | 3.30% | |
Debt instrument maturity date | Apr. 30, 2035 | |
Unsecured Debt [Member] | Indenture II (Preferred Trust II) - Swapped to fixed [Member] | ||
Consolidated debt obligations | ||
Long-term Debt, Gross | $ 25,774 | $ 25,774 |
Effective interest rate | 3.09% | |
Debt instrument maturity date | Jul. 31, 2035 |
Debt Obligations - Consolidat_2
Debt Obligations - Consolidated Debt Obligations Outstanding (Parenthetical) (Details) - Unsecured Debt [Member] - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | $ 1,789,110 | $ 1,721,110 |
$600 million Unsecured Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Unsecured credit facility, maximum borrowing capacity | 600,000 | 600,000 |
Long-term Debt, Gross | 160,500 | 92,500 |
$350M 3.95% Guaranteed Notes due 2023 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | $ 350,000 | $ 350,000 |
Debt instrument interest rate | 3.95% | 3.95% |
Debt instrument maturity year | 2023 | 2023 |
$250.0M 4.10% Guaranteed Notes due 2024 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | $ 250,000 | $ 250,000 |
Debt instrument interest rate | 4.10% | 4.10% |
Debt instrument maturity year | 2024 | 2024 |
$450.0M 3.95% Guaranteed Notes due 2027 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | $ 450,000 | $ 450,000 |
Debt instrument interest rate | 3.95% | 3.95% |
Debt instrument maturity year | 2027 | 2027 |
$250M 4.55% Guaranteed Notes due 2029 [Member] | ||
Debt Instrument [Line Items] | ||
Long-term Debt, Gross | $ 250,000 | $ 250,000 |
Debt instrument interest rate | 4.55% | 4.55% |
Debt instrument maturity year | 2029 | 2029 |
Debt Obligations (Textual) (Det
Debt Obligations (Textual) (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | |
Debt Instrument [Line Items] | |||
Line of Credit | $ 160,500,000 | $ 92,500,000 | |
Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Long-term Debt, Weighted Average Interest Rate | 2.50% | ||
Line of Credit | $ 0 | ||
Interest expense, borrowings | $ 1,300,000 | ||
Effective interest rate on credit facility | 3.60% | ||
New Credit Facility [Member] | Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 600,000,000 | ||
LIBOR [Member] | Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument, basis spread on variable rate | 1.10% | ||
Secured Debt [Member] | |||
Debt Instrument [Line Items] | |||
Long-term Debt, Weighted Average Interest Rate | 4.05% | 4.05% |
Debt Obligations - Aggregate Sc
Debt Obligations - Aggregate Scheduled Principal Payments of Debt Obligation, Excluding Amortization of Discounts and Premiums (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | ||
2019 (nine months remaining) | $ 5,723 | |
2020 | 87,226 | |
2021 | 15,143 | |
2022 | 416,832 | |
2023 | 556,736 | |
Thereafter | 1,028,610 | |
Total principal payments | 2,110,270 | |
Net unamortized premiums/(discounts) | (5,679) | |
Net deferred financing costs | (9,794) | |
Total Debt Obligations | $ 2,094,797 | $ 2,028,046 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Financial Instruments for which Estimates of Fair Value Differ from Carrying Amounts (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Mortgage notes payable, net | $ 319,132 | $ 320,869 | |
Carrying Amount [Member] | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Notes receivable | [1],[2] | 47,753 | 47,771 |
Carrying Amount [Member] | Unsecured Notes Payable [Member] | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Unsecured notes payable | [1] | 1,288,387 | 1,288,024 |
Carrying Amount [Member] | Variable Rate Debt [Member] | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Variable rate debt | [1] | 487,278 | 419,153 |
Carrying Amount [Member] | Mortgages Notes Payable [Member] | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Mortgage notes payable, net | [1] | 319,132 | 320,869 |
Fair Value [Member] | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Note receivable, fair value | [2] | 47,691 | 47,747 |
Fair Value [Member] | Unsecured Notes Payable [Member] | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Debt instrument, fair value | 1,301,735 | 1,262,570 | |
Fair Value [Member] | Variable Rate Debt [Member] | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Debt instrument, fair value | 470,869 | 402,924 | |
Fair Value [Member] | Mortgages Notes Payable [Member] | |||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | |||
Debt instrument, fair value | $ 320,187 | $ 318,515 | |
[1] | The carrying amounts presented in the table above are net of deferred financing costs of $ 7.6 million and $ 7.9 million for unsecured notes payable, $ 1.8 million and $ 5.1 million for variable rate debt and $ 0.4 million for mortgage notes payable as of both March 31, 2019 and December 31, 2018 , respectively. | ||
[2] | T he inputs to originate the notes receivable are unobservable and, as a result, are categorized as Level 3. The Company determined fair value by calculating the present value of the cash payments to be received through the maturity date of the loans. |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Financial Instruments for which Estimates of Fair Value Differ from Carrying Amounts (Parenthetical) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Deferred financing costs, net | $ 9,794 | |
Unsecured Notes Payable [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Deferred financing costs, net | 9,430 | $ 9,837 |
Unsecured Notes Payable [Member] | Carrying Amount [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Deferred financing costs, net | 7,600 | 7,900 |
Variable Rate Debt [Member] | Carrying Amount [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Deferred financing costs, net | 1,800 | 5,100 |
Mortgages Notes Payable [Member] | Carrying Amount [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Deferred financing costs, net | $ 400 | $ 400 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments (Textual) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Jun. 26, 2018 | |
Third Party | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Note receivable | $ 3.4 | |
Balloon payment expected to be received at the maturity date | $ 3.1 | |
Loan maturity date | Mar. 1, 2020 | |
Third Party | Through March 2019 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Loan interest rate | 7.00% | |
Third Party | Thereafter Until March of 2020 | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Loan interest rate | 8.00% | |
Brandywine 1919 Ventures [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Mortgage loan | $ 44.4 | |
Equity method investment, ownership percentage | 50.00% | |
Brandywine 1919 Ventures [Member] | Other Assets [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Note receivable | $ 44.4 |
Limited Partners' Non-Control_2
Limited Partners' Non-Controlling Interests in the Parent Company (Textual) (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Noncontrolling Interest [Abstract] | ||
Aggregate amount related to non-controlling interests classified within equity | $ 9.9 | $ 10.1 |
Settlement value of non controlling interest in operating partnership | $ 15.6 | $ 12.6 |
Fair Value of Derivative Fina_3
Fair Value of Derivative Financial Instruments - Terms and Fair Values of Derivative Financial Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Derivatives Fair Value [Line Items] | ||
Notional Amount | $ 301,548 | $ 301,548 |
3.718% Interest Rate Swap Maturing October 8, 2022 [Member] | Cash Flow Hedging [Member] | ||
Derivatives Fair Value [Line Items] | ||
Derivative Asset, Notional Amount | $ 250,000 | 250,000 |
Derivative, Fixed Interest Rate | 2.868% | |
Derivative Asset, Fair Value, Gross Asset Including Not Subject to Master Netting Arrangement | $ 4,522 | 7,008 |
3.300% Interest Rate Swap Maturing January 30, 2021 [Member] | Cash Flow Hedging [Member] | ||
Derivatives Fair Value [Line Items] | ||
Derivative Asset, Notional Amount | $ 25,774 | 25,774 |
Derivative, Fixed Interest Rate | 3.30% | |
Derivative Asset, Fair Value, Gross Asset Including Not Subject to Master Netting Arrangement | $ 185 | 292 |
3.090% Interest Rate Swap Maturing October 30, 2019 [Member] | Cash Flow Hedging [Member] | ||
Derivatives Fair Value [Line Items] | ||
Derivative Asset, Notional Amount | $ 25,774 | 25,774 |
Derivative, Fixed Interest Rate | 3.09% | |
Derivative Asset, Fair Value, Gross Asset Including Not Subject to Master Netting Arrangement | $ 151 | $ 183 |
Beneficiaries Equity of the P_3
Beneficiaries Equity of the Parent Company - Number of Shares and Net Income Used to Calculate Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Numerator | ||
Net income | $ 4,066 | $ 44,705 |
Net income attributable to noncontrolling interests, Basic | (57) | (376) |
Nonforfeitable dividends allocated to unvested restricted shareholders, Basic | (119) | (114) |
Net income attributable to Common Shareholders of Brandywine Realty Trust | 3,890 | 44,215 |
Net income attributable to noncontrolling interests, Diluted | (57) | (376) |
Nonforfeitable dividends allocated to unvested restricted shareholders, Diluted | (119) | (114) |
Net income attributable to common shareholders, Diluted | $ 3,890 | $ 44,215 |
Denominator | ||
Basic weighted average shares outstanding (in shares) | 175,857,358 | 178,395,525 |
Basic contingent securities/Share based compensation (in shares) | 0 | 0 |
Contingent securities/Share based compensation (in shares) | 606,860 | 1,392,786 |
Diluted weighted average shares outstanding (in shares) | 176,464,218 | 179,788,311 |
Earnings per Common Share: | ||
Net income attributable to common shareholders, Basic (USD per share) | $ 0.02 | $ 0.25 |
Net income attributable to common shareholders, Diluted (USD per share) | $ 0.02 | $ 0.25 |
Beneficiaries Equity of the P_4
Beneficiaries Equity of the Parent Company (Textual) (Details) - USD ($) | Feb. 21, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | Jan. 03, 2019 |
Class of Stock [Line Items] | ||||
Dividends, Common Stock | $ 33,700,000 | |||
Dividends payable, date to be paid | Apr. 18, 2019 | |||
Dividends payable, date of record | Apr. 4, 2019 | |||
Repurchased and Retired, Shares | 1,337,169 | |||
Share Price | $ 12.92 | |||
Repurchased and Retired, Value | $ 17,281,000 | |||
Maximum [Member] | ||||
Class of Stock [Line Items] | ||||
Authorized Amount | $ 150,000,000 | |||
Dividend Declared [Member] | ||||
Class of Stock [Line Items] | ||||
Dividends Payable, Amount Per Share | $ 0.19 | |||
Redeemable Common Limited Partnership Units [Member] | ||||
Class of Stock [Line Items] | ||||
Redeemable Common Limited Partnership Units Excluded from Computation of Earnings Per Share | 982,871 | 1,479,799 |
Partners Equity of the Operat_3
Partners Equity of the Operating Partnership - Number of Units and Net Income Used to Calculate Basic and Diluted Earnings Per Common Partnership Unit (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Numerator | ||
Net income | $ 4,066 | $ 44,705 |
Nonforfeitable dividends allocated to unvested restricted shareholders, Basic | (119) | (114) |
Nonforfeitable dividends allocated to unvested restricted shareholders, Diluted | $ (119) | $ (114) |
Denominator | ||
Basic weighted average shares outstanding (in shares) | 175,857,358 | 178,395,525 |
Basic contingent securities/Share based compensation (in shares) | 0 | 0 |
Contingent securities/Share based compensation (in shares) | 606,860 | 1,392,786 |
Diluted weighted average shares outstanding (in shares) | 176,464,218 | 179,788,311 |
Earnings per Common Partnership Unit: | ||
Net income attributable to common shareholders, Basic (USD per share) | $ 0.02 | $ 0.25 |
Net income attributable to common shareholders, Diluted (USD per share) | $ 0.02 | $ 0.25 |
BRANDYWINE OPERATING PARTNERSHIP, L.P. | ||
Numerator | ||
Net income | $ 4,066 | $ 44,705 |
Net income attributable to noncontrolling interests | (34) | (5) |
Nonforfeitable dividends allocated to unvested restricted shareholders, Basic | (119) | (114) |
Net income attributable to common unitholders, Basic | 3,913 | 44,586 |
Nonforfeitable dividends allocated to unvested restricted shareholders, Diluted | (119) | (114) |
Net income attributable to common unitholders, Diluted | $ 3,913 | $ 44,586 |
Denominator | ||
Basic weighted average shares outstanding (in shares) | 176,840,229 | 179,875,324 |
Basic contingent securities/Share based compensation (in shares) | 0 | 0 |
Contingent securities/Share based compensation (in shares) | 606,860 | 1,392,786 |
Diluted weighted average shares outstanding (in shares) | 177,447,089 | 181,268,110 |
Earnings per Common Partnership Unit: | ||
Net income attributable to common shareholders, Basic (USD per share) | $ 0.02 | $ 0.25 |
Net income attributable to common shareholders, Diluted (USD per share) | $ 0.02 | $ 0.25 |
Partners Equity of the Operat_4
Partners Equity of the Operating Partnership (Textual) (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 21, 2019 | Mar. 31, 2019 |
Earnings Per Common Partnership Unit [Line Items] | ||
Dividends, Common Stock | $ 33,700 | |
Dividends payable, date to be paid | Apr. 18, 2019 | |
Dividends payable, date of record | Apr. 4, 2019 | |
Repurchased and Retired, Shares | 1,337,169 | |
Share Price | $ 12.92 | |
Repurchased and Retired, Value | $ 17,281 | |
Dividend Declared [Member] | ||
Earnings Per Common Partnership Unit [Line Items] | ||
Dividends Payable, Amount Per Share | $ 0.19 | |
BRANDYWINE OPERATING PARTNERSHIP, L.P. | ||
Earnings Per Common Partnership Unit [Line Items] | ||
Dividends, Common Stock | $ 33,700 | |
Dividends payable, date to be paid | Apr. 18, 2019 | |
Dividends payable, date of record | Apr. 4, 2019 | |
Repurchase program, number of mirror unit of operating partnership retired for each common share repurchased | 1 | |
BRANDYWINE OPERATING PARTNERSHIP, L.P. | Dividend Declared [Member] | ||
Earnings Per Common Partnership Unit [Line Items] | ||
Dividends Payable, Amount Per Share | $ 0.19 |
Share Based Compensation (Textu
Share Based Compensation (Textual) (Details) - USD ($) $ / shares in Units, $ in Millions | Feb. 21, 2019 | Feb. 01, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Jan. 22, 2019 |
Restricted Share Rights Awards [Member] | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 626,649 | 466,439 | ||||
Unrecognized compensation expenses | $ 3.4 | |||||
Weighted average period over which options will be recognized | 1 year 8 months 12 days | |||||
Stock-based compensation expense | $ 1.6 | $ 1.5 | ||||
Stock-based compensation expense, capitalized | $ 0.2 | 0.3 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | two to three years from the initial grant dates | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 196,667 | |||||
Voluntary Termination Of Employment Terms | after reaching at least age 57 and accumulating at least 15 years of service with the Company | |||||
Accumulated Service Period For Voluntary Termination | 15 years | |||||
Restricted Share Rights Awards [Member] | Executive Officer [Member] | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 196,667 | |||||
Number of restricted share right will get settled for common share | 1 | |||||
Voluntary Termination of Employment Age Limit | 57 years | |||||
Restricted Share Rights Awards [Member] | Certain Senior Executives [Member] | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Vesting period | 3 years | |||||
Period during which operating and balance sheet metrics are achieved | 3 years | |||||
Date on which operating and balance sheet metrics are achieved | Dec. 31, 2021 | |||||
Date on which first half of any additional shares earned that will vest based on continued service | Jan. 1, 2022 | |||||
Date on which second half of any additional shares earned that will vest based on continued service | Jan. 1, 2023 | |||||
Intrinsic value | $ 3.7 | |||||
Weighted average grant date fair value | $ 15.61 | |||||
Restricted Share Rights Awards [Member] | Minimum [Member] | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Vesting period | 2 years | |||||
Restricted Share Rights Awards [Member] | Minimum [Member] | Executive Officer [Member] | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Vesting period | 2 years | |||||
Restricted Share Rights Awards [Member] | Maximum [Member] | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Vesting period | 3 years | |||||
Restricted Share Rights Awards [Member] | Maximum [Member] | Executive Officer [Member] | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Vesting period | 3 years | |||||
Restricted Share Rights Awards [Member] | Maximum [Member] | Certain Senior Executives [Member] | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Percentage of additional shares to be earned subject to basic award | 200.00% | |||||
Outperformance Feature Shares [Member] | Maximum [Member] | Certain Senior Executives [Member] | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 233,890 | |||||
Restricted Performance Share Units Plan [Member] | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Vesting period | 3 years | |||||
Unrecognized compensation expenses | $ 4 | |||||
Weighted average period over which options will be recognized | 2 years 1 month 6 days | |||||
Stock-based compensation expense | $ 2.7 | 2.6 | ||||
Stock-based compensation expense, capitalized | $ 0.4 | $ 0.5 | ||||
Common shares issued for share based compensation | 147,111 | |||||
Dividends Payable, Amount Per Share | $ 0.19 | |||||
Restricted Performance Share Units Plan [Member] | Executive Officer [Member] | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 571,883 | 375,550 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 213,728 | |||||
Performance period | 3 years |
Share Based Compensation - Rest
Share Based Compensation - Restricted Share Activity (Details) - Restricted Share Rights Awards [Member] | 3 Months Ended |
Mar. 31, 2019USD ($)$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Non-vested at January 1, 2019, shares | shares | 466,439 |
Granted, shares | shares | 196,667 |
Vested, shares | shares | (33,020) |
Forfeited, shares | shares | (3,437) |
Non-vested at March 31, 2019, shares | shares | 626,649 |
Non-vested at January 1, 2019, Weighted Average Grant Date Fair Value | $ / shares | $ 14.93 |
Granted, Weighted Average Grant Date Fair Value | $ / shares | 15.61 |
Vested, Weighted Average Grant Date Fair Value | $ / shares | 15.15 |
Forfeited, Weighted Average Grant Date Fair Value | $ / shares | 15.34 |
Non-vested at March 31, 2019, Weighted Average Grant Date Fair Value | $ / shares | $ 15.13 |
Non-vested at January 1, 2019, Aggregate Intrinsic Value | $ | $ 70,677 |
Granted, Aggregate Intrinsic Value | $ | 3,070 |
Vested, Aggregate Intrinsic Value | $ | 298 |
Forfeited, Aggregate Intrinsic Value | $ | 0 |
Non-vested at March 31, 2019, Aggregate Intrinsic Value | $ | $ 9,939 |
Share Based Compensation - Re_2
Share Based Compensation - Restricted Performance Share Units (Details) - Restricted Performance Share Units Plan [Member] - Executive Officer [Member] - USD ($) $ in Thousands | Feb. 21, 2019 | Feb. 28, 2018 | Mar. 01, 2017 | Mar. 31, 2019 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Non-vested at January 1, 2019, shares | 375,550 | |||
Granted, shares | 213,728 | |||
Units Vested | (8,420) | |||
Units Cancelled | (8,975) | |||
Non-vested at March 31, 2019, shares | 571,883 | |||
Units Granted | 213,728 | 209,193 | 174,854 | |
Fair Value of Units on Grant Date (in thousands) | $ 4,627 | $ 4,276 | $ 3,735 | |
March 01, 2017 RSPU Grant [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Non-vested at January 1, 2019, shares | 169,525 | |||
Granted, shares | 0 | |||
Units Vested | (8,420) | |||
Units Cancelled | 0 | |||
Non-vested at March 31, 2019, shares | 161,105 | |||
Measurement Period Commencement Date | Jan. 1, 2017 | |||
Measurement Period End Date | Dec. 31, 2019 | |||
February 28, 2018 RSPU Grant [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Non-vested at January 1, 2019, shares | 206,025 | |||
Granted, shares | 0 | |||
Units Vested | 0 | |||
Units Cancelled | (8,975) | |||
Non-vested at March 31, 2019, shares | 197,050 | |||
Measurement Period Commencement Date | Jan. 1, 2018 | |||
Measurement Period End Date | Dec. 31, 2020 | |||
February 21, 2019 RSPU Grant [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Non-vested at January 1, 2019, shares | 0 | |||
Granted, shares | 213,728 | |||
Units Vested | 0 | |||
Units Cancelled | 0 | |||
Non-vested at March 31, 2019, shares | 213,728 | |||
Measurement Period Commencement Date | Jan. 1, 2019 | |||
Measurement Period End Date | Dec. 31, 2021 |
Segment Information (Textual) (
Segment Information (Textual) (Details) | 3 Months Ended |
Mar. 31, 2019segment | |
Segment Reporting [Abstract] | |
Number of Reportable Segments | 5 |
Segment Information - Real Esta
Segment Information - Real Estate Investments, at Cost of Company's Reportable Segments (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 | ||
Segment Reporting Information [Line Items] | |||||
Operating properties | $ 4,015,879 | $ 3,953,319 | |||
Right of use asset - operating leases | 22,175 | [1] | $ 22,400 | 0 | |
Construction-in-progress | 112,176 | 150,263 | |||
Land held for development | [2] | 88,047 | 86,401 | ||
Prepaid leasehold interests in land held for development, net | [3] | 39,897 | 39,999 | ||
Philadelphia CBD [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating properties | 1,683,406 | 1,670,388 | |||
Pennsylvania Suburbs [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating properties | 1,008,066 | 1,004,537 | |||
Austin, Texas [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating properties | 713,189 | 667,698 | |||
Metropolitan DC [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating properties | 524,385 | 524,190 | |||
Other [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Operating properties | $ 86,833 | $ 86,506 | |||
[1] | On January 1, 2019, as a result of the adoption of Topic 842, Leases, the Company recognized operating ground leases for which it is a lessee on its consolidated balance sheets for the period ended March 31, 2019. See Note 2, “ Basis of Presentation | ||||
[2] | As of March 31, 2019, the Company categorized 35.2 acres of land held for development, located in the Other segment, as held for sale in accordance with applicable accounting standards for long lived assets. As of December 31, 2018, the Company categorized 37.9 acres of land held for development, comprised of 2.7 acres and 35.2 acres, located in the Pennsylvania Suburbs segment and Other segment, respectively, as held for sale in accordance with applicable accounting standards for long lived assets. See Note 3, “Real Estate Investments ,” for further information. | ||||
[3] | As of March 31, 2019 and December 31, 2018, this caption comprised leasehold interests in prepaid 99-year |
Segment Information - Real Es_2
Segment Information - Real Estate Investments, at Cost of Company's Reportable Segments (Parenthetical) (Details) - a | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Assets Held-for-sale [Member] | Land Held For Development [Member] | ||
Segment Reporting Information [Line Items] | ||
Acreage of Land | 37.9 | |
3001-3003 and 3025 JFK Boulevard [Member] | ||
Segment Reporting Information [Line Items] | ||
Lease agreement term | 99 years | 99 years |
Other [Member] | Assets Held-for-sale [Member] | ||
Segment Reporting Information [Line Items] | ||
Acreage of Land | 35.2 | |
Other [Member] | Assets Held-for-sale [Member] | Land Held For Development [Member] | ||
Segment Reporting Information [Line Items] | ||
Acreage of Land | 35.2 | 35.2 |
Pennsylvania Suburbs [Member] | Assets Held-for-sale [Member] | Land Held For Development [Member] | ||
Segment Reporting Information [Line Items] | ||
Acreage of Land | 2.7 |
Segment Information - Net Opera
Segment Information - Net Operating Income of Company's Reportable Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | ||
Segment Reporting Information [Line Items] | |||
Total revenue | $ 143,896 | $ 136,358 | |
Operating expenses | [1] | (57,381) | (56,504) |
Net operating income (loss) | 86,515 | 79,854 | |
Operating Segments [Member] | Philadelphia CBD [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenue | 65,798 | 62,602 | |
Operating expenses | [1] | (25,185) | (24,327) |
Net operating income (loss) | 40,613 | 38,275 | |
Operating Segments [Member] | Pennsylvania Suburbs [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenue | 35,627 | 34,882 | |
Operating expenses | [1] | (12,972) | (12,964) |
Net operating income (loss) | 22,655 | 21,918 | |
Operating Segments [Member] | Austin, Texas [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenue | [2] | 24,766 | 8,364 |
Operating expenses | [1],[2] | (9,076) | (3,523) |
Net operating income (loss) | [2] | 15,690 | 4,841 |
Operating Segments [Member] | Metropolitan DC [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenue | [3] | 13,520 | 23,059 |
Operating expenses | [1],[3] | (6,204) | (8,759) |
Net operating income (loss) | [3] | 7,316 | 14,300 |
Operating Segments [Member] | Other [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenue | 3,182 | 6,141 | |
Operating expenses | [1] | (2,145) | (4,965) |
Net operating income (loss) | 1,037 | 1,176 | |
Corporate [Member] | |||
Segment Reporting Information [Line Items] | |||
Total revenue | 1,003 | 1,310 | |
Operating expenses | [1] | (1,799) | (1,966) |
Net operating income (loss) | $ (796) | $ (656) | |
[1] | Includes property operating expenses, real estate taxes and third party management expense. | ||
[2] | On December 11, 2018, the Company acquired from DRA Advisors its 50% ownership interest in the G&I Austin Office LLC real estate venture. The DRA Austin Venture owned twelve office properties containing an aggregate 1,570,123 square feet, located in Austin, Texas. As a result of the acquisition, the Company acquired complete ownership of the Austin properties. | ||
[3] | On December 20, 2018, the Company contributed a portfolio of eight properties containing an aggregate of 1,293,197 square feet, located in its Metropolitan Washington, D.C. segment, known as the Rockpoint Portfolio, to the Herndon Innovation Center Venture. The Company and its partner own 15% and 85% interests in the Herndon Innovation Center Venture, respectively. |
Segment Information - Net Ope_2
Segment Information - Net Operating Income of Company's Reportable Segments (Parenthetical) (Details) | Mar. 31, 2019ft²property | Mar. 29, 2019 | Dec. 20, 2018ft²property | Dec. 11, 2018ft²property |
Segment Reporting Information [Line Items] | ||||
Number of Properties | property | 96 | |||
Area of Real Estate Property | ft² | 16,922,019 | |||
Herndon Innovation Center Metro Portfolio Venture, LLC [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Equity method investment, ownership percentage | 15.00% | |||
Herndon Innovation Center Metro Portfolio Venture, LLC [Member] | Metropolitan Washington, D.C. - Office [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Equity method investment, ownership percentage | 15.00% | |||
Area of Real Estate Property | ft² | 1,293,197 | |||
Number of properties contributed to a joint venture | property | 8 | |||
Herndon Innovation Center Metro Portfolio Venture, LLC [Member] | Metropolitan Washington, D.C. - Office [Member] | Rockpoint [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Equity method investment, ownership percentage | 85.00% | |||
DRA Austin Venture [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Equity method investment, ownership percentage | 50.00% | |||
Number of Properties | property | 12 | |||
Area of Real Estate Property | ft² | 1,570,123 |
Segment Information - Unconsoli
Segment Information - Unconsolidated Real Estate Ventures of Company's Reportable Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | ||
Segment Reporting Information [Line Items] | ||||
Investment in real estate ventures, at equity | $ 161,568 | $ 169,100 | ||
Equity in income (loss) of real estate venture | (1,358) | $ (825) | ||
Philadelphia CBD [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Investment in real estate ventures, at equity | 19,325 | 19,897 | ||
Equity in income (loss) of real estate venture | 78 | (236) | ||
Metropolitan DC [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Investment in real estate ventures, at equity | [1] | 135,149 | 136,142 | |
Equity in income (loss) of real estate venture | [1] | (175) | (37) | |
MAP Venture [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Investment in real estate ventures, at equity | [2] | 5,101 | 11,173 | |
Equity in income (loss) of real estate venture | [2] | (1,367) | (736) | |
Other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Investment in real estate ventures, at equity | 1,993 | 1,888 | ||
Equity in income (loss) of real estate venture | 106 | 104 | ||
Austin, Texas [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Investment in real estate ventures, at equity | [3] | 0 | $ 0 | |
Equity in income (loss) of real estate venture | [3] | $ 0 | $ 80 | |
[1] | On December 20, 2018, the Company formed the Herndon Innovation Center Venture. See footnote (b) to the “Net operating income” table above for further information regarding this transaction. | |||
[2] | The MAP Venture represents a joint venture formed between the Company and MAP Ground Lease Holdings LLC, an affiliate of Och-Ziff Capital Management Group, LLC, on February 4, 2016. The MAP Venture’s business operations, including properties in Richmond, Virginia; Metropolitan Washington, D.C.; New Jersey/Delaware and Pennsylvania Suburbs, are centrally managed with the results reported to management of the Company on a consolidated basis. As a result, the investment in the MAP Venture is separately presented. All other unconsolidated real estate ventures are managed consistently with the Company’s regional segments. | |||
[3] | On December 11, 2018, the Company acquired from DRA Advisors its 50% ownership interest in the G&I Austin Office LLC real estate venture. The DRA Austin Venture owned twelve office properties containing an aggregate 1,570,123 square feet, located in Austin, Texas. As a result of the acquisition, the Company acquired complete ownership of the Austin properties. |
Segment Information - Unconso_2
Segment Information - Unconsolidated Real Estate Ventures of Company's Reportable Segments (Parenthetical) (Details) | Mar. 31, 2019ft²property | Dec. 11, 2018ft²property |
Segment Reporting Information [Line Items] | ||
Number of Properties | property | 96 | |
Area of Real Estate Property | ft² | 16,922,019 | |
DRA Austin Venture [Member] | ||
Segment Reporting Information [Line Items] | ||
Equity method investment, ownership percentage | 50.00% | |
Number of Properties | property | 12 | |
Area of Real Estate Property | ft² | 1,570,123 |
Segment Information - Reconcili
Segment Information - Reconciliation of Consolidated Net Income to Consolidated NOI (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Segment Reporting [Abstract] | ||
Net income | $ 4,066 | $ 44,705 |
Plus: | ||
Interest expense | 20,357 | 19,533 |
Interest expense - amortization of deferred financing costs | 666 | 627 |
Depreciation and amortization | 51,980 | 43,291 |
General and administrative expenses | 9,844 | 8,723 |
Equity in loss of Real Estate Ventures | 1,358 | 825 |
Less: | ||
Interest income | 525 | 703 |
Income tax provision | (29) | (138) |
Net gain on sale of undepreciated real estate | 1,001 | 22 |
Net gain on real estate venture transactions | 259 | 37,263 |
Consolidated net operating income | $ 86,515 | $ 79,854 |
Commitments and Contingencies_2
Commitments and Contingencies (Textual) (Details) - USD ($) | Apr. 02, 2015 | Mar. 31, 2019 | Dec. 31, 2018 | Oct. 13, 2017 |
Property Subject to or Available for Operating Lease [Line Items] | ||||
Loan outstanding principal balance | $ 2,094,797,000 | $ 2,028,046,000 | ||
4040 Wilson Venture [Member] | ||||
Property Subject to or Available for Operating Lease [Line Items] | ||||
Guarantees, maximum exposure amount | 41,300,000 | |||
Loan outstanding principal balance | 150,000,000 | |||
Unconsolidated Real Estate Ventures [Member] | ||||
Property Subject to or Available for Operating Lease [Line Items] | ||||
Real estate ventures aggregate indebtedness | 498,200,000 | |||
PJP VII [Member] | ||||
Property Subject to or Available for Operating Lease [Line Items] | ||||
Guarantees, maximum exposure amount | 300,000 | |||
Loan outstanding principal balance | 3,700,000 | |||
618 Market Street [Member] | ||||
Property Subject to or Available for Operating Lease [Line Items] | ||||
Contingent consideration, liability | $ 2,000,000 | 1,900,000 | ||
Fair value of contingent consideration | 1,600,000 | |||
Interest expense | $ 2,000,000 | |||
The Bulletin Building [Member] | ||||
Property Subject to or Available for Operating Lease [Line Items] | ||||
Funding requirement met for capital improvements | 1,700,000 | |||
Expected excess redevelopment funding | 37,300,000 | |||
Estimated aggregate cost | 83,100,000 | |||
Acquisition cost, inclusive in estimated aggregate cost | $ 37,800,000 | |||
Drexel Square [Member] | ||||
Property Subject to or Available for Operating Lease [Line Items] | ||||
Required spending in capital improvements to property | 2,700,000 | |||
Estimated potential additional contribution obligation | $ 600,000 | |||
Minimum [Member] | ||||
Property Subject to or Available for Operating Lease [Line Items] | ||||
Lease terms | 10 years | |||
Minimum [Member] | The Bulletin Building [Member] | ||||
Property Subject to or Available for Operating Lease [Line Items] | ||||
Required spending in capital improvements to property | $ 8,000,000 | |||
Maximum [Member] | ||||
Property Subject to or Available for Operating Lease [Line Items] | ||||
Lease terms | 66 years | |||
Mortgage Lenders [Member] | ||||
Property Subject to or Available for Operating Lease [Line Items] | ||||
Associated letter of credit | $ 0 |
Commitments and Contingencies -
Commitments and Contingencies - Lease Payments on Non-cancelable Leases (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Property Subject to or Available for Operating Lease [Line Items] | |||
Present value of operating lease liabilities | $ 22,402 | $ 22,400 | $ 0 |
2019 | 1,222 | ||
2020 | 1,222 | ||
2021 | 1,222 | ||
2022 | 1,222 | ||
2023 | 1,222 | ||
Thereafter | 55,689 | ||
Total | $ 61,799 | ||
Adoption of Topic 842 [Member] | |||
Property Subject to or Available for Operating Lease [Line Items] | |||
2019 (nine months remaining) | 905 | ||
2020 | 1,217 | ||
2021 | 1,232 | ||
2022 | 1,248 | ||
2023 | 1,263 | ||
Thereafter | 111,757 | ||
Total lease payments | 117,622 | ||
Less: Imputed interest | (95,220) | ||
Present value of operating lease liabilities | $ 22,402 |
Subsequent Events (Textual) (De
Subsequent Events (Textual) (Details) | Apr. 12, 2019USD ($) | Apr. 11, 2019USD ($)property | Apr. 01, 2019USD ($) | Mar. 29, 2019USD ($)property | Mar. 31, 2019property |
Subsequent Event [Line Items] | |||||
Number of properties used to secure debt | property | 96 | ||||
Herndon Innovation Center Metro Portfolio Venture, LLC [Member] | |||||
Subsequent Event [Line Items] | |||||
Ownership percentage | 15.00% | ||||
Herndon Innovation Center Metro Portfolio Venture, LLC [Member] | Secured Debt [Member] | |||||
Subsequent Event [Line Items] | |||||
Indebtedness to third parties, refinanced amount | $ 134,100,000 | ||||
Number of properties used to secure debt | property | 4 | ||||
Debt instrument, basis spread on variable rate | 1.95% | ||||
Cash proceeds from financing | $ 111,000 | $ 113,100 | |||
Subsequent Event [Member] | Herndon Innovation Center Metro Portfolio Venture, LLC [Member] | Secured Debt [Member] | |||||
Subsequent Event [Line Items] | |||||
Ownership percentage | 15.00% | ||||
Indebtedness to third parties, refinanced amount | $ 115,300,000 | ||||
Number of properties used to secure debt | property | 4 | ||||
Debt instrument, basis spread on variable rate | 1.80% | ||||
Debt Instrument, maturity date | Apr. 11, 2024 | ||||
Cash proceeds from financing | $ 13,800,000 | ||||
Subsequent Event [Member] | Herndon Innovation Center Metro Portfolio Venture, LLC [Member] | Secured Debt [Member] | Maximum [Member] | |||||
Subsequent Event [Line Items] | |||||
Debt Instrument, interest rate, stated percentage | 6.30% |