Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2023 | Jul. 24, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 1-9317 | |
Entity Registrant Name | EQUITY COMMONWEALTH | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 04-6558834 | |
Entity Address, Address Line One | Two North Riverside Plaza, Suite 2100 | |
Entity Address, City or Town | Chicago | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60606 | |
City Area Code | (312) | |
Local Phone Number | 646-2800 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 109,730,457 | |
Entity Central Index Key | 0000803649 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --12-31 | |
Common Shares of Beneficial Interest | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common Shares of Beneficial Interest | |
Trading Symbol | EQC | |
Security Exchange Name | NYSE | |
6.50% Series D Cumulative Convertible Preferred Shares of Beneficial Interest | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 6.50% Series D Cumulative Convertible Preferred Shares of Beneficial Interest | |
Trading Symbol | EQCpD | |
Security Exchange Name | NYSE |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Real estate properties: | ||
Land | $ 44,060 | $ 44,060 |
Buildings and improvements | 365,247 | 364,063 |
Total real estate properties, at cost, gross | 409,307 | 408,123 |
Accumulated depreciation | (174,399) | (169,530) |
Total real estate properties, at cost, net | 234,908 | 238,593 |
Cash and cash equivalents | 2,153,047 | 2,582,222 |
Rents receivable | 16,151 | 16,009 |
Other assets, net | 17,737 | 18,061 |
Total assets | 2,421,843 | 2,854,885 |
LIABILITIES AND EQUITY | ||
Accounts payable, accrued expenses and other | 20,016 | 25,935 |
Rent collected in advance | 3,132 | 2,355 |
Distributions payable | 6,868 | 2,863 |
Total liabilities | 30,016 | 31,153 |
Shareholders’ equity: | ||
Series D preferred shares; 6.50% cumulative convertible; 4,915,196 shares issued and outstanding, aggregate liquidation preference of $122,880 | 119,263 | 119,263 |
Common shares of beneficial interest, $0.01 par value: 350,000,000 shares authorized; 109,730,457 and 109,428,252 shares issued and outstanding, respectively | 1,097 | 1,094 |
Additional paid in capital | 3,984,681 | 3,979,566 |
Cumulative net income | 3,874,284 | 3,835,815 |
Cumulative common distributions | (4,865,668) | (4,393,522) |
Cumulative preferred distributions | (729,682) | (725,688) |
Total shareholders’ equity | 2,383,975 | 2,816,528 |
Noncontrolling interest | 7,852 | 7,204 |
Total equity | 2,391,827 | 2,823,732 |
Total liabilities and equity | $ 2,421,843 | $ 2,854,885 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | |
Statement of Financial Position [Abstract] | |||
Preferred shares of beneficial interest, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Preferred shares of beneficial interest, shares authorized (in shares) | 50,000,000 | 50,000,000 | 50,000,000 |
Preferred shares, dividend percentage | 6.50% | 6.50% | |
Preferred shares of beneficial interest, shares issued (in shares) | 4,915,196 | 4,915,196 | 4,915,196 |
Preferred shares, of beneficial interest, shares outstanding (in shares) | 4,915,196 | 4,915,196 | 4,915,196 |
Preferred shares, aggregate liquidation preference | $ 122,880 | $ 122,880 | $ 122,880 |
Common shares of beneficial interest, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Common shares of beneficial interest, shares authorized (in shares) | 350,000,000 | 350,000,000 | 350,000,000 |
Common shares of beneficial interest, shares issued (in shares) | 109,730,457 | 109,730,457 | 109,428,252 |
Common shares of beneficial interest, shares outstanding (in shares) | 109,730,457 | 109,730,457 | 109,428,252 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Revenues: | ||||
Rental revenue | $ 13,358 | $ 14,426 | $ 27,584 | $ 30,266 |
Other revenue | 1,232 | 1,115 | 2,582 | 1,961 |
Total revenues | 14,590 | 15,541 | 30,166 | 32,227 |
Expenses: | ||||
Operating expenses | 6,942 | 6,592 | 14,198 | 11,125 |
Depreciation and amortization | 4,514 | 4,313 | 8,824 | 8,725 |
General and administrative | 13,854 | 7,646 | 22,409 | 15,648 |
Total expenses | 25,310 | 18,551 | 45,431 | 35,498 |
Interest and other income, net | 27,352 | 5,963 | 55,728 | 7,537 |
Income before income taxes | 16,632 | 2,953 | 40,463 | 4,266 |
Income tax expense | (796) | (50) | (1,876) | (58) |
Net income | 15,836 | 2,903 | 38,587 | 4,208 |
Net income attributable to noncontrolling interest | (52) | (7) | (118) | (10) |
Net income attributable to Equity Commonwealth | 15,784 | 2,896 | 38,469 | 4,198 |
Preferred distributions | (1,997) | (1,997) | (3,994) | (3,994) |
Net income attributable to Equity Commonwealth common shareholders | $ 13,787 | $ 899 | $ 34,475 | $ 204 |
Weighted average common shares outstanding — basic (in shares) | 109,839 | 112,005 | 109,779 | 112,868 |
Weighted average common shares outstanding — diluted (in shares) | 111,237 | 113,380 | 111,269 | 113,785 |
Earnings per common share attributable to Equity Commonwealth common shareholders: | ||||
Basic (in dollars per share) | $ 0.13 | $ 0.01 | $ 0.31 | $ 0 |
Diluted (in dollars per share) | 0.12 | 0.01 | 0.31 | 0 |
Distributions declared per common share (in dollars per share) | $ 0 | $ 0 | $ 4.25 | $ 0 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Series D Preferred Shares | Common Shares | Additional Paid in Capital | Cumulative Net Income | Cumulative Common Distributions | Cumulative Preferred Distributions | Noncontrolling Interest |
Balance as of beginning of period (in shares) at Dec. 31, 2021 | 4,915,196 | 115,205,818 | ||||||
Balance as of beginning of period at Dec. 31, 2021 | $ 3,055,270 | $ 119,263 | $ 1,152 | $ 4,128,656 | $ 3,798,552 | $ (4,281,195) | $ (717,700) | $ 6,542 |
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 4,208 | 4,198 | 10 | |||||
Repurchase of shares (in shares) | (4,297,056) | |||||||
Repurchase of shares | (111,299) | $ (43) | (111,256) | |||||
Surrender of shares for tax withholding (in shares) | (160,506) | |||||||
Surrender of shares for tax withholding | (4,160) | $ (2) | (4,158) | |||||
Share-based compensation (in shares) | 493,586 | |||||||
Share-based compensation | 6,169 | $ 5 | 5,458 | 706 | ||||
Contributions | 1 | 1 | ||||||
Distributions | (4,367) | (247) | (3,994) | (126) | ||||
Adjustment for noncontrolling interest | 0 | (260) | 260 | |||||
Balance as of end of period (in shares) at Jun. 30, 2022 | 4,915,196 | 111,241,842 | ||||||
Balance as of end of period at Jun. 30, 2022 | 2,945,822 | $ 119,263 | $ 1,112 | 4,018,440 | 3,802,750 | (4,281,442) | (721,694) | 7,393 |
Balance as of beginning of period (in shares) at Mar. 31, 2022 | 4,915,196 | 112,670,401 | ||||||
Balance as of beginning of period at Mar. 31, 2022 | 2,980,267 | $ 119,263 | $ 1,127 | 4,053,256 | 3,799,854 | (4,280,826) | (719,697) | 7,290 |
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 2,903 | 2,896 | 7 | |||||
Repurchase of shares (in shares) | (1,446,026) | |||||||
Repurchase of shares | (37,555) | $ (14) | (37,541) | |||||
Surrender of shares for tax withholding (in shares) | (940) | |||||||
Surrender of shares for tax withholding | (27) | $ (1) | (26) | |||||
Share-based compensation (in shares) | 18,407 | |||||||
Share-based compensation | 2,993 | 2,611 | 382 | |||||
Distributions | (2,759) | (616) | (1,997) | (146) | ||||
Adjustment for noncontrolling interest | 0 | 140 | (140) | |||||
Balance as of end of period (in shares) at Jun. 30, 2022 | 4,915,196 | 111,241,842 | ||||||
Balance as of end of period at Jun. 30, 2022 | 2,945,822 | $ 119,263 | $ 1,112 | 4,018,440 | 3,802,750 | (4,281,442) | (721,694) | 7,393 |
Balance as of beginning of period (in shares) at Dec. 31, 2022 | 4,915,196 | 109,428,252 | ||||||
Balance as of beginning of period at Dec. 31, 2022 | 2,823,732 | $ 119,263 | $ 1,094 | 3,979,566 | 3,835,815 | (4,393,522) | (725,688) | 7,204 |
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 38,587 | 38,469 | 118 | |||||
Surrender of shares for tax withholding (in shares) | (134,193) | |||||||
Surrender of shares for tax withholding | (3,395) | $ (1) | (3,394) | |||||
Share-based compensation (in shares) | 436,398 | |||||||
Share-based compensation | 10,977 | $ 4 | 8,360 | 2,613 | ||||
Distributions | (478,074) | (472,146) | (3,994) | (1,934) | ||||
Adjustment for noncontrolling interest | 0 | 149 | (149) | |||||
Balance as of end of period (in shares) at Jun. 30, 2023 | 4,915,196 | 109,730,457 | ||||||
Balance as of end of period at Jun. 30, 2023 | 2,391,827 | $ 119,263 | $ 1,097 | 3,984,681 | 3,874,284 | (4,865,668) | (729,682) | 7,852 |
Balance as of beginning of period (in shares) at Mar. 31, 2023 | 4,915,196 | 109,701,592 | ||||||
Balance as of beginning of period at Mar. 31, 2023 | 2,369,072 | $ 119,263 | $ 1,097 | 3,976,643 | 3,858,500 | (4,866,401) | (727,685) | 7,655 |
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 15,836 | 15,784 | 52 | |||||
Share-based compensation (in shares) | 28,865 | |||||||
Share-based compensation | 7,989 | 5,706 | 2,283 | |||||
Distributions | (1,070) | 733 | (1,997) | 194 | ||||
Adjustment for noncontrolling interest | 0 | 2,332 | (2,332) | |||||
Balance as of end of period (in shares) at Jun. 30, 2023 | 4,915,196 | 109,730,457 | ||||||
Balance as of end of period at Jun. 30, 2023 | $ 2,391,827 | $ 119,263 | $ 1,097 | $ 3,984,681 | $ 3,874,284 | $ (4,865,668) | $ (729,682) | $ 7,852 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||
Net income | $ 15,836 | $ 2,903 | $ 38,587 | $ 4,208 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation | 7,543 | 7,476 | ||
Straight-line rental income | 552 | (90) | ||
Other amortization | 1,281 | 1,249 | ||
Share-based compensation | 10,977 | 6,169 | ||
Change in assets and liabilities: | ||||
Rents receivable and other assets | (1,523) | (2,336) | ||
Accounts payable, accrued expenses and other | (6,832) | (1,507) | ||
Rent collected in advance | 777 | (1,223) | ||
Net cash provided by operating activities | 51,362 | 13,946 | ||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||
Real estate improvements | (3,073) | (2,527) | ||
Cash used in investing activities | (3,073) | (2,527) | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||
Repurchase and retirement of common shares | (3,395) | (115,459) | ||
Contributions from holders of noncontrolling interest | 0 | 1 | ||
Distributions to common shareholders | (468,232) | (1,462) | ||
Distributions to preferred shareholders | (3,994) | (3,994) | ||
Distributions to holders of noncontrolling interest | (1,843) | 0 | ||
Net cash used in financing activities | (477,464) | (120,914) | ||
Decrease in cash and cash equivalents | (429,175) | (109,495) | ||
Cash and cash equivalents at beginning of period | 2,582,222 | 2,800,998 | ||
Cash and cash equivalents at end of period | 2,153,047 | 2,691,503 | 2,153,047 | 2,691,503 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||||
Taxes paid, net | 1,946 | 108 | ||
NON-CASH INVESTING ACTIVITIES: | ||||
Accrued capital expenditures | 1,697 | 315 | ||
NON-CASH FINANCING ACTIVITIES: | ||||
Distributions payable | $ 6,868 | $ 1,276 | $ 6,868 | $ 1,276 |
Business
Business | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business | Business Equity Commonwealth, or the Company, is a real estate investment trust, or REIT, formed in 1986 under the laws of the State of Maryland. Our business is primarily the ownership and operation of office properties in the United States. The Company operates in an umbrella partnership real estate investment trust, or UPREIT, and conducts substantially all of its activities through EQC Operating Trust, a Maryland real estate investment trust, or the Operating Trust. The Company beneficially owned 99.67% of the outstanding shares of beneficial interest, designated as units, in the Operating Trust, or OP Units, as of June 30, 2023, and the Company is the sole trustee of the Operating Trust. As the sole trustee, the Company generally has the power under the declaration of trust of the Operating Trust to manage and conduct the business of the Operating Trust, subject to certain limited approval and voting rights of other holders of OP Units. At June 30, 2023, our portfolio consisted of four properties (eight buildings), with a combined 1.5 million square feet, and we had $2.2 billion of cash and cash equivalents. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying condensed consolidated financial statements of EQC have been prepared without audit. Certain information and footnote disclosures required by U.S. generally accepted accounting principles, or GAAP, for complete financial statements have been condensed or omitted. We believe the disclosures made are appropriate. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes contained in our Annual Report on Form 10-K, or our Annual Report, for the year ended December 31, 2022. Capitalized terms used, but not defined in this Quarterly Report, have the same meanings as in our Annual Report. In the opinion of our management, all adjustments, which include only normal recurring adjustments considered necessary for a fair presentation, have been included. All intercompany transactions and balances with or among our subsidiaries have been eliminated. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. Certain reclassifications have been made to the prior year’s financial statements to conform to the current year’s presentation. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect reported amounts. Actual results could differ from those estimates. Significant estimates in the condensed consolidated financial statements include the assessment of the collectability of rental revenue, purchase price allocations, useful lives of fixed assets and impairment of real estate and intangible assets. Dollar amounts presented may be approximate. Share amounts are presented in whole numbers, except where noted. |
Real Estate Properties
Real Estate Properties | 6 Months Ended |
Jun. 30, 2023 | |
Real Estate [Abstract] | |
Real Estate Properties | Real Estate Properties During the six months ended June 30, 2023 and 2022, we made improvements, excluding tenant-funded improvements, to our properties totaling $3.8 million and $2.3 million, respectively. Property Dispositions: We did not sell any properties during the six months ended June 30, 2023 or 2022. Lease Payments Rental revenue consists of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Lease payments $ 8,696 $ 9,308 $ 17,763 $ 19,411 Variable lease payments 4,662 5,118 9,821 10,855 Rental revenue $ 13,358 $ 14,426 $ 27,584 $ 30,266 |
Shareholders' Equity
Shareholders' Equity | 6 Months Ended |
Jun. 30, 2023 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | Shareholders’ Equity Common Share Issuances: See Note 7 for information regarding equity issuances related to share-based compensation. Common Share Repurchases: On March 15, 2022, our Board of Trustees authorized the repurchase of up to $150.0 million of our outstanding common shares through June 30, 2023. We did not repurchase any common shares under our share repurchase program during the six months ended June 30, 2023. As of June 30, 2023, we had $120.4 million of remaining availability under our share repurchase program, which expired on June 30, 2023. On June 13, 2023, our Board of Trustees authorized the repurchase of up to $150.0 million of our outstanding common shares from July 1, 2023 through June 30, 2024. During the six months ended June 30, 2023 and 2022, certain of our employees and former employees surrendered 134,193 and 160,506 common shares owned by them, respectively, to satisfy their statutory tax withholding obligations in connection with the vesting of such common shares pursuant to our equity compensation plans. Common Share and Unit Distributions: On February 13, 2023, our Board of Trustees declared a special, one-time cash distribution of $4.25 per common share/unit to shareholders/unitholders of record on February 23, 2023. On March 9, 2023, we paid this distribution to such shareholders/unitholders in the aggregate amount of $468.3 million. In February 2023, the number of earned awards for recipients of the Company’s restricted stock units and market-based LTIP units granted in January 2020 was determined. Pursuant to the terms of such awards, we paid one-time catch-up cash distributions to these recipients in the aggregate amount of $1.8 million, for distributions to common shareholders and unitholders declared by our Board of Trustees during such awards’ performance measurement period. Series D Preferred Shares: Our series D preferred shares are convertible, at the holder’s option, into our common shares at a conversion rate of 0.8204 common shares per series D preferred share, which is equivalent to a conversion price of $30.47 per common share, or 4,032,427 additional common shares at June 30, 2023. The conversion rate changed from 0.6846 to 0.8204 common shares per series D preferred share effective February 24, 2023 as a result of the common share distribution declared by our Board of Trustees in 2023. Preferred Share Distributions: In 2023, our Board of Trustees declared distributions on our series D preferred shares to date as follows: Declaration Date Record Date Payment Date Series D Dividend Per Share January 13, 2023 January 31, 2023 February 15, 2023 $ 0.40625 April 13, 2023 April 28, 2023 May 15, 2023 $ 0.40625 July 13, 2023 July 31, 2023 August 15, 2023 $ 0.40625 |
Noncontrolling Interest
Noncontrolling Interest | 6 Months Ended |
Jun. 30, 2023 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interest | Noncontrolling Interest Noncontrolling interest represents the portion of the OP Units not beneficially owned by the Company. The ownership of an OP Unit and a common share of beneficial interest have essentially the same economic characteristics. Distributions with respect to OP Units will generally mirror distributions with respect to the Company’s common shares. Unitholders (other than the Company) generally have the right, commencing six months from the date of issuance of such OP Units, to cause the Operating Trust to redeem their OP Units in exchange for cash or, at the option of the Company, common shares of the Company on a one-for-one basis. As sole trustee, the Company has the sole discretion to elect whether the redemption right will be satisfied by the Company in cash or the Company’s common shares. As a result, the Noncontrolling interest is classified as permanent equity. As of June 30, 2023, the portion of the Operating Trust not beneficially owned by the Company is in the form of OP Units and LTIP Units (see Note 7 for a description of LTIP Units). LTIP Units may be subject to additional vesting requirements. The following table presents the changes in Equity Commonwealth’s issued and outstanding common shares and units for the six months ended June 30, 2023: Common Shares OP Units and LTIP Units Total Outstanding at January 1, 2023 109,428,252 279,892 109,708,144 Repurchase and surrender of shares (134,193) — (134,193) Share-based compensation grants and vesting, net of forfeitures 436,398 81,518 517,916 Outstanding at June 30, 2023 109,730,457 361,410 110,091,867 Noncontrolling ownership interest in the Operating Trust 0.33 % The carrying value of the Noncontrolling interest is allocated based on the number of OP Units and LTIP Units in proportion to the number of OP Units and LTIP Units plus the number of common shares. We adjust the Noncontrolling interest balance at the end of each period to reflect the noncontrolling partners’ interest in the net assets of the Operating Trust. Net income is allocated to the Noncontrolling interest in the Operating Trust based on the weighted average ownership percentage during the period. Equity Commonwealth’s weighted average ownership interest in the Operating Trust was 99.68% and 99.69% for the three and six months ended June 30, 2023, respectively. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We have elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, and are generally not subject to federal and state income taxes provided we distribute a sufficient amount of our taxable income to our shareholders and meet other requirements for qualifying as a REIT. However, we are subject to certain state and local taxes without regard to our REIT status. Our provision for income taxes consists of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Current: State and local $ (30) $ (50) $ (60) $ (58) Federal (766) — (1,816) — Income tax expense $ (796) $ (50) $ (1,876) $ (58) Federal income tax expense in the 2023 period relates to federal income taxes at our taxable REIT subsidiary. |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation At our annual meeting of shareholders on June 13, 2023, our shareholders approved an amendment to the Equity Commonwealth 2015 Omnibus Incentive Plan to increase the number of common shares of beneficial interest authorized thereunder by 1,650,000. Recipients of the Company’s restricted shares have the same voting rights as any other common shareholder. During the period of restriction, holders of unvested restricted shares are eligible to receive dividend payments on their shares at the same rate and on the same date as any other common shareholder. The restricted shares are service based awards and vest over a service period determined by the Compensation Committee of our Board of Trustees, or the Compensation Committee. Recipients of the Company’s restricted stock units, or RSUs, are entitled to receive dividends with respect to the common shares underlying the RSUs if and when the RSUs are earned, at which time the recipient will be entitled to receive an amount in cash equal to the aggregate amount of cash dividends that would have been paid in respect to the common shares underlying the recipient’s earned RSUs had such common shares been issued to the recipient on the first day of the performance period. To the extent that an award does not vest, the dividends related to unvested RSUs will be forfeited. The RSUs are market-based awards with a service condition and recipients may earn RSUs based on the Company’s total shareholder return, or TSR, relative to the TSRs of the companies that comprise the Nareit Office Index over a three-year performance period. Following the end of the three-year performance period, the number of earned awards will be determined. The earned awards vest in two tranches with 50% of the earned award vesting following the end of the performance period on the date the Compensation Committee determines the level of achievement of the performance metric and the remaining 50% of the earned award vesting approximately one year thereafter, subject to the grant recipient’s continued employment. Compensation expense for the RSUs is determined using a Monte Carlo simulation model and is recognized ratably from the grant date to the vesting date of each tranche. LTIP Units are a class of beneficial interests in the Operating Trust that may be issued to employees, officers or trustees of the Operating Trust, the Company or their subsidiaries. Time-based LTIP Units have the same general characteristics as restricted shares and market-based LTIP Units have the same general characteristics as RSUs. Each LTIP Unit will convert automatically into an OP Unit on a one-for-one basis when the LTIP Unit becomes vested and its capital account is equalized with the per-unit capital account of the OP Units. Holders of LTIP Units generally will be entitled to receive the same per-unit distributions as the other outstanding OP Units in the Operating Trust, except that market-based LTIP Units will not participate in distributions until expiration of the applicable performance period, at which time any earned market-based LTIP Units generally will become entitled to receive a catch-up distribution for the periods prior to such time. 2023 Equity Award Activity During the six months ended June 30, 2023, 274,739 RSUs vested, and, as a result, we issued 274,739 common shares, prior to certain employees surrendering their common shares to satisfy tax withholding obligations (see Note 4). On January 26, 2023, the Compensation Committee approved grants in the aggregate amount of 132,794 restricted shares and 269,609 RSUs at target (672,000 RSUs at maximum) to the Company’s officers, certain employees, and to Mr. Zell, the former Chairman of our Board of Trustees, as part of their compensation for fiscal year 2022. The restricted shares were valued at $25.61 per share, the closing price of our common shares on the New York Stock Exchange, or the NYSE, on the grant date. The assumptions and fair value for the RSUs granted during the six months ended June 30, 2023 are included in the following table on a per share basis. 2023 Fair value of market-based awards granted $ 36.51 Expected term (years) 4 Expected volatility 18.47 % Risk-free rate 3.84 % On June 13, 2023, in accordance with the Company’s compensation program for independent Trustees, the Committee awarded each of the six independent Trustees $0.1 million in restricted shares or time-based LTIP Units as part of their compensation for the 2023-2024 year of service on the Board of Trustees. These awards equated to 5,773 shares or time-based LTIP Units per Trustee, for a total of 28,865 shares and 5,773 time-based LTIP Units, valued at $20.79 per share and unit, the closing price of our common shares on the NYSE on that day. These shares and time-based LTIP Units vest one year after the date of the award, on June 13, 2024. 2022 Equity Award Activity During the six months ended June 30, 2022, 382,993 RSUs vested, and, as a result, we issued 382,993 common shares, prior to certain employees surrendering their common shares to satisfy tax withholding obligations. On January 26, 2022, the Compensation Committee approved grants in the aggregate amount of 29,071 time-based LTIP Units, 59,024 market-based LTIP Units at target (147,117 market-based LTIP Units at maximum), 92,573 restricted shares and 187,951 RSUs at target (468,468 RSUs at maximum) to the Company’s officers, certain employees, and to Mr. Zell, the former Chairman of our Board of Trustees, as part of their compensation for fiscal year 2021. The restricted shares and time-based LTIP Units were valued at $25.50 per share/unit, the closing price of our common shares on the NYSE on the grant date. The RSUs and market-based LTIP Units were valued at $35.11 per share/unit, their fair value on the grant date. On June 21, 2022, in accordance with the Company’s compensation program for independent Trustees, the Committee awarded each of the six independent Trustees $0.1 million in restricted shares or time-based LTIP Units as part of their compensation for the 2022-2023 year of service on the Board of Trustees. These awards equated to 3,604 shares or time-based LTIP Units per Trustee, for a total of 18,020 shares and 3,604 time-based LTIP Units, valued at $27.75 per share and unit, the closing price of our common shares on the NYSE on that day. These shares and time-based LTIP Units vested on June 21, 2023. Outstanding Equity Awards As of June 30, 2023, the estimated future compensation expense for all unvested restricted shares and time-based LTIP Units was $5.9 million. Compensation expense for the restricted share and time-based LTIP Unit awards is being recognized on a straight-line basis over the requisite service period for each separately vesting portion of the award. The weighted average period over which the future compensation expense will be recorded for the restricted shares and time-based LTIP Units is approximately 2.5 years. As of June 30, 2023, the estimated future compensation expense for all unvested RSUs and market-based LTIP Units was $13.1 million. The weighted average period over which the future compensation expense will be recorded for the RSUs and market-based LTIP Units is approximately 2.5 years. During the three months ended June 30, 2023 and 2022, we recorded $8.0 million and $3.0 million, respectively, and during the six months ended June 30, 2023 and 2022, we recorded $11.0 million and $6.2 million, respectively, of compensation expense, net of forfeitures, in general and administrative expense for grants to our trustees, employees and an eligible consultant related to our equity compensation plans. Compensation expense recorded during the three months ended June 30, 2023 and 2022 includes $5.2 million and $0.1 million, respectively, of accelerated vesting due to the passing of our former Chairman in 2023 and staffing reductions in 2022. Compensation expense recorded during the six months ended June 30, 2023 and 2022 includes $5.2 million and $0.4 million, respectively, of accelerated vesting due to the passing of our |
Fair Value of Assets and Liabil
Fair Value of Assets and Liabilities | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Assets and Liabilities | Fair Value of Assets and Liabilities As of June 30, 2023, we do not have any assets or liabilities measured at fair value. Financial Instruments Our financial instruments include our cash and cash equivalents. At June 30, 2023 and December 31, 2022, the fair value of these financial instruments was not different from their carrying values. |
Earnings Per Common Share
Earnings Per Common Share | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Common Share | Earnings Per Common Share The following table sets forth the computation of basic and diluted earnings per share (amounts in thousands except per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Numerator for earnings per common share - basic: Net income $ 15,836 $ 2,903 $ 38,587 $ 4,208 Net income attributable to noncontrolling interest (52) (7) (118) (10) Preferred distributions (1,997) (1,997) (3,994) (3,994) Numerator for net income per share - basic $ 13,787 $ 899 $ 34,475 $ 204 Numerator for earnings per common share - diluted: Net income $ 15,836 $ 2,903 $ 38,587 $ 4,208 Net income attributable to noncontrolling interest (52) (7) (118) (10) Preferred distributions (1,997) (1,997) (3,994) (3,994) Numerator for net income per share - diluted $ 13,787 $ 899 $ 34,475 $ 204 Denominator for earnings per common share - basic and diluted: Weighted average number of common shares outstanding - basic (1) 109,839 112,005 109,779 112,868 RSUs (2) 1,288 1,158 1,361 757 LTIP Units (3) 110 217 129 160 Weighted average number of common shares outstanding - diluted 111,237 113,380 111,269 113,785 Net income per common share attributable to Equity Commonwealth common shareholders: Basic $ 0.13 $ 0.01 $ 0.31 $ 0.00 Diluted $ 0.12 $ 0.01 $ 0.31 $ 0.00 Anti-dilutive securities (4) : Effect of Series D preferred shares; 6.50% cumulative convertible 4,032 3,237 4,032 3,237 Effect of OP Units and time-based LTIP Units (5) 357 277 341 272 (1) The three months ended June 30, 2023 and 2022, include 131 and 86 weighted-average, unvested, earned RSUs, respectively, and the six months ended June 30, 2023 and 2022, include 122 and 124 weighted-average, unvested, earned RSUs, respectively. (2) Represents the weighted-average number of common shares that would have been issued if the quarter-end was the measurement date for unvested, unearned RSUs. (3) Represents the weighted-average dilutive shares issuable from market-based LTIP Units if the quarter-end was the measurement date for the periods shown. (4) These securities are excluded from the diluted earnings per share calculation for one or more of the periods presented because including them results in anti-dilution. (5) Beneficial interests in the Operating Trust. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Our primary business is the ownership and operation of office properties, and we currently have one reportable segment. One hundred percent of our revenues for the six months ended June 30, 2023 were from office properties. |
Related Person Transactions
Related Person Transactions | 6 Months Ended |
Jun. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related Person Transactions | Related Person Transactions The following discussion includes a description of our related person transactions for the six months ended June 30, 2023 and 2022. We lease office space for our corporate headquarters from Two North Riverside Plaza Joint Venture Limited Partnership, an entity associated with Equity Group Investments (“EGI”), a private entrepreneurial investment firm founded by Sam Zell, our former Chairman who passed away on May 18, 2023. Messrs. Helfand and Weinberg continue to be advisors to EGI and certain other members of our team are expected to continue to have limited involvement in its activities. In December 2021, we entered into a second amendment to a July 20, 2015 lease with Two North Riverside Plaza Joint Venture Limited Partnership to occupy office space on the twentieth and twenty-first floors of Two North Riverside Plaza in Chicago, Illinois (20th/21st Floor Office Lease). The second amendment extended the lease term for one year, through December 31, 2022, with no renewal options. The lease payment for the second extended term was $0.4 million. In December 2022, we entered into a third amendment to the 20th/21st Floor Office Lease extending the lease term for one year, through December 31, 2023, with no renewal options. The lease payment for the third extended term is $0.4 million. During the three months ended June 30, 2023 and 2022, we recognized expense of $0.1 million and $0.1 million, respectively, and during the six months ended June 30, 2023 and 2022, we recognized expense of $0.2 million and $0.2 million, respectively, pursuant to the 20th/21st Floor Office Lease. As of December 31, 2022 and June 30, 2023, we did not have any amounts due to Two North Riverside Plaza Joint Venture Limited Partnership pursuant to the 20th/21st Floor Office Lease. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Preferred Share Distribution On July 13, 2023, our Board of Trustees declared a dividend of $0.40625 per series D preferred share, which will be paid on August 15, 2023 to shareholders of record on July 31, 2023. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) | $ 15,784 | $ 2,896 | $ 38,469 | $ 4,198 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements of EQC have been prepared without audit. Certain information and footnote disclosures required by U.S. generally accepted accounting principles, or GAAP, for complete financial statements have been condensed or omitted. We believe the disclosures made are appropriate. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes contained in our Annual Report on Form 10-K, or our Annual Report, for the year ended December 31, 2022. Capitalized terms used, but not defined in this Quarterly Report, have the same meanings as in our Annual Report. In the opinion of our management, all adjustments, which include only normal recurring adjustments considered necessary for a fair presentation, have been included. All intercompany transactions and balances with or among our subsidiaries have been eliminated. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. Certain reclassifications have been made to the prior year’s financial statements to conform to the current year’s presentation. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect reported amounts. Actual results could differ from those estimates. Significant estimates in the condensed consolidated financial statements include the assessment of the collectability of rental revenue, purchase price allocations, useful lives of fixed assets and impairment of real estate and intangible assets. Dollar amounts presented may be approximate. Share amounts are presented in whole numbers, except where noted. |
Real Estate Properties (Tables)
Real Estate Properties (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Real Estate [Abstract] | |
Schedule of Rental Revenue | Rental revenue consists of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Lease payments $ 8,696 $ 9,308 $ 17,763 $ 19,411 Variable lease payments 4,662 5,118 9,821 10,855 Rental revenue $ 13,358 $ 14,426 $ 27,584 $ 30,266 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Declared Distributions | In 2023, our Board of Trustees declared distributions on our series D preferred shares to date as follows: Declaration Date Record Date Payment Date Series D Dividend Per Share January 13, 2023 January 31, 2023 February 15, 2023 $ 0.40625 April 13, 2023 April 28, 2023 May 15, 2023 $ 0.40625 July 13, 2023 July 31, 2023 August 15, 2023 $ 0.40625 |
Noncontrolling Interest (Tables
Noncontrolling Interest (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Noncontrolling Interest [Abstract] | |
Schedule of Issued and Outstanding Common Shares | The following table presents the changes in Equity Commonwealth’s issued and outstanding common shares and units for the six months ended June 30, 2023: Common Shares OP Units and LTIP Units Total Outstanding at January 1, 2023 109,428,252 279,892 109,708,144 Repurchase and surrender of shares (134,193) — (134,193) Share-based compensation grants and vesting, net of forfeitures 436,398 81,518 517,916 Outstanding at June 30, 2023 109,730,457 361,410 110,091,867 Noncontrolling ownership interest in the Operating Trust 0.33 % |
Schedule of Issued and Outstanding Units | The following table presents the changes in Equity Commonwealth’s issued and outstanding common shares and units for the six months ended June 30, 2023: Common Shares OP Units and LTIP Units Total Outstanding at January 1, 2023 109,428,252 279,892 109,708,144 Repurchase and surrender of shares (134,193) — (134,193) Share-based compensation grants and vesting, net of forfeitures 436,398 81,518 517,916 Outstanding at June 30, 2023 109,730,457 361,410 110,091,867 Noncontrolling ownership interest in the Operating Trust 0.33 % |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision for Income Taxes | Our provision for income taxes consists of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Current: State and local $ (30) $ (50) $ (60) $ (58) Federal (766) — (1,816) — Income tax expense $ (796) $ (50) $ (1,876) $ (58) Federal income tax expense in the 2023 period relates to federal income taxes at our taxable REIT subsidiary. |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Assumptions and Fair Values for RSUs and Market-based LTIP Units Granted in the Period | The assumptions and fair value for the RSUs granted during the six months ended June 30, 2023 are included in the following table on a per share basis. 2023 Fair value of market-based awards granted $ 36.51 Expected term (years) 4 Expected volatility 18.47 % Risk-free rate 3.84 % |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share (amounts in thousands except per share amounts): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Numerator for earnings per common share - basic: Net income $ 15,836 $ 2,903 $ 38,587 $ 4,208 Net income attributable to noncontrolling interest (52) (7) (118) (10) Preferred distributions (1,997) (1,997) (3,994) (3,994) Numerator for net income per share - basic $ 13,787 $ 899 $ 34,475 $ 204 Numerator for earnings per common share - diluted: Net income $ 15,836 $ 2,903 $ 38,587 $ 4,208 Net income attributable to noncontrolling interest (52) (7) (118) (10) Preferred distributions (1,997) (1,997) (3,994) (3,994) Numerator for net income per share - diluted $ 13,787 $ 899 $ 34,475 $ 204 Denominator for earnings per common share - basic and diluted: Weighted average number of common shares outstanding - basic (1) 109,839 112,005 109,779 112,868 RSUs (2) 1,288 1,158 1,361 757 LTIP Units (3) 110 217 129 160 Weighted average number of common shares outstanding - diluted 111,237 113,380 111,269 113,785 Net income per common share attributable to Equity Commonwealth common shareholders: Basic $ 0.13 $ 0.01 $ 0.31 $ 0.00 Diluted $ 0.12 $ 0.01 $ 0.31 $ 0.00 Anti-dilutive securities (4) : Effect of Series D preferred shares; 6.50% cumulative convertible 4,032 3,237 4,032 3,237 Effect of OP Units and time-based LTIP Units (5) 357 277 341 272 (1) The three months ended June 30, 2023 and 2022, include 131 and 86 weighted-average, unvested, earned RSUs, respectively, and the six months ended June 30, 2023 and 2022, include 122 and 124 weighted-average, unvested, earned RSUs, respectively. (2) Represents the weighted-average number of common shares that would have been issued if the quarter-end was the measurement date for unvested, unearned RSUs. (3) Represents the weighted-average dilutive shares issuable from market-based LTIP Units if the quarter-end was the measurement date for the periods shown. (4) These securities are excluded from the diluted earnings per share calculation for one or more of the periods presented because including them results in anti-dilution. (5) Beneficial interests in the Operating Trust. |
Business (Details)
Business (Details) $ in Thousands, ft² in Millions | Jun. 30, 2023 USD ($) ft² building property | Dec. 31, 2022 USD ($) |
Noncontrolling Interest [Line Items] | ||
Cash and cash equivalents | $ | $ 2,153,047 | $ 2,582,222 |
Consolidated Properties | ||
Noncontrolling Interest [Line Items] | ||
Number of real estate properties | property | 4 | |
Number of buildings | building | 8 | |
Square footage (in sqft) | ft² | 1.5 | |
Operating Trust | ||
Noncontrolling Interest [Line Items] | ||
Noncontrolling interest, ownership percentage by parent | 99.67% |
Real Estate Properties - Narrat
Real Estate Properties - Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Real Estate [Abstract] | ||
Real estate improvements | $ 3.8 | $ 2.3 |
Real Estate Properties - Rental
Real Estate Properties - Rental Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Real Estate [Abstract] | ||||
Lease payments | $ 8,696 | $ 9,308 | $ 17,763 | $ 19,411 |
Variable lease payments | 4,662 | 5,118 | 9,821 | 10,855 |
Rental revenue | $ 13,358 | $ 14,426 | $ 27,584 | $ 30,266 |
Shareholders' Equity - Narrativ
Shareholders' Equity - Narrative (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||
Mar. 09, 2023 USD ($) | Feb. 13, 2023 $ / shares | Feb. 28, 2023 USD ($) | Jun. 30, 2023 USD ($) $ / shares shares | Jun. 30, 2022 $ / shares | Jun. 30, 2023 USD ($) $ / shares shares | Jun. 30, 2022 USD ($) $ / shares shares | Jun. 13, 2023 USD ($) | Feb. 24, 2023 | Sep. 29, 2022 | Mar. 15, 2022 USD ($) | |
Class of Stock [Line Items] | |||||||||||
Distributions declared per common share (in dollars per share) | $ / shares | $ 4.25 | $ 0 | $ 0 | $ 4.25 | $ 0 | ||||||
Distributions to common shareholders/unitholders | $ 468,300 | $ 1,800 | $ 468,232 | $ 1,462 | |||||||
Common Shares | |||||||||||
Class of Stock [Line Items] | |||||||||||
Stock repurchase program, authorized amount (up to) | $ 150,000 | $ 150,000 | |||||||||
Stock repurchase program, remaining authorized repurchase amount | $ 120,400 | $ 120,400 | |||||||||
Surrender of shares for tax withholding (in shares) | shares | 134,193 | 160,506 | |||||||||
Series D Preferred Stock | |||||||||||
Class of Stock [Line Items] | |||||||||||
Conversion rate | 0.8204 | 0.6846 | |||||||||
Conversion price (in dollars per share) | $ / shares | $ 30.47 | $ 30.47 | |||||||||
Additional shares (in shares) | shares | 4,032,427 | 4,032,427 |
Shareholders' Equity - Schedule
Shareholders' Equity - Schedule of Declared Distributions (Details) - $ / shares | Aug. 15, 2023 | Jul. 13, 2023 | May 15, 2023 | Apr. 13, 2023 | Feb. 15, 2023 | Jan. 13, 2023 |
Class of Stock [Line Items] | ||||||
Dividend declared (in dollars per share) | $ 0.40625 | $ 0.40625 | ||||
Dividend paid (in dollars per share) | $ 0.40625 | $ 0.40625 | ||||
Subsequent event | ||||||
Class of Stock [Line Items] | ||||||
Dividend declared (in dollars per share) | $ 0.40625 | |||||
Dividend paid (in dollars per share) | $ 0.40625 |
Noncontrolling Interest - Narra
Noncontrolling Interest - Narrative (Details) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2023 | Jun. 30, 2023 | |
Noncontrolling Interest [Line Items] | ||
Common stock, conversion term (in months) | 6 months | |
Common stock, conversion basis | 1 | |
Operating Trust | ||
Noncontrolling Interest [Line Items] | ||
Noncontrolling interest, weighted average ownership percentage by parent | 99.68% | 99.69% |
Noncontrolling Interest - Commo
Noncontrolling Interest - Common Shares and Units Activity (Details) - shares | 6 Months Ended |
Jun. 30, 2023 | |
Equity Commonwealth | |
Increase (Decrease) in Stockholders' Equity | |
Noncontrolling ownership interest in the Operating Trust | 0.33% |
Common Shares | |
Increase (Decrease) in Stockholders' Equity | |
Balance as of beginning of period (in shares) | 109,428,252 |
Repurchase and surrender of shares (in shares) | (134,193) |
Share-based compensation grants and vesting, net of forfeitures (in shares) | 436,398 |
Balance as of end of period (in shares) | 109,730,457 |
OP Units and LTIP Units | Noncontrolling Interest | |
Increase (Decrease) in Stockholders' Equity | |
Balance as of beginning of period (in shares) | 279,892 |
Repurchase and surrender of shares (in shares) | 0 |
Share-based compensation grants and vesting, net of forfeitures (in shares) | 81,518 |
Balance as of end of period (in shares) | 361,410 |
Common Stock, OP Units, and LTIP Units | |
Increase (Decrease) in Stockholders' Equity | |
Balance as of beginning of period (in shares) | 109,708,144 |
Repurchase and surrender of shares (in shares) | (134,193) |
Share-based compensation grants and vesting, net of forfeitures (in shares) | 517,916 |
Balance as of end of period (in shares) | 110,091,867 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Current: | ||||
State and local | $ (30) | $ (50) | $ (60) | $ (58) |
Federal | (766) | 0 | (1,816) | 0 |
Income tax expense | $ (796) | $ (50) | $ (1,876) | $ (58) |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | |||||||
Jun. 13, 2023 USD ($) trustee $ / shares shares | Jan. 26, 2023 $ / shares shares | Jun. 21, 2022 USD ($) trustee $ / shares shares | Jan. 26, 2022 $ / shares shares | Jun. 30, 2023 USD ($) shares | Jun. 30, 2022 USD ($) shares | Jun. 30, 2023 USD ($) tranche $ / shares shares | Jun. 30, 2022 USD ($) shares | Dec. 31, 2022 shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares authorized (in shares) | 1,650,000 | ||||||||
Common stock issued (in shares) | 109,730,457 | 109,730,457 | 109,428,252 | ||||||
Number of trustees in board of trustees | trustee | 6 | 6 | |||||||
Share based compensation amount | $ | $ 0.1 | $ 0.1 | |||||||
Compensation expense, accelerated vesting due to a staffing reduction | $ | $ 5.2 | $ 0.1 | $ 5.2 | $ 0.4 | |||||
Common shares available for issuance (in shares) | 2,073,350 | 2,073,350 | |||||||
General and Administrative Expense | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Compensation expense | $ | $ 8 | $ 3 | $ 11 | $ 6.2 | |||||
RSUs | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting period (in years) | 3 years | ||||||||
Number of tranches | tranche | 2 | ||||||||
Share-based compensation arrangement (in shares) | 274,739 | 382,993 | |||||||
Common stock issued (in shares) | 274,739 | 382,993 | 274,739 | 382,993 | |||||
Granted shares value (in dollars per share) | $ / shares | $ 36.51 | ||||||||
RSUs | Vesting in three years | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting percent | 50% | ||||||||
RSUs | Vesting in four years | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting period (in years) | 1 year | ||||||||
Vesting percent | 50% | ||||||||
RSUs at target | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of equity awards granted (in shares) | 269,609 | 187,951 | |||||||
RSUs at maximum | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of equity awards granted (in shares) | 672,000 | 468,468 | |||||||
LTIP Units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Conversion basis | 1 | 1 | |||||||
Restricted Shares | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of equity awards granted (in shares) | 28,865 | 132,794 | 18,020 | 92,573 | |||||
Granted shares value (in dollars per share) | $ / shares | $ 25.61 | ||||||||
Restricted Shares and Time-Based LTIP Units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Vesting period (in years) | 1 year | ||||||||
Granted shares value (in dollars per share) | $ / shares | $ 25.50 | ||||||||
Exercise price (in dollars per share) | $ / shares | $ 20.79 | $ 27.75 | |||||||
Estimated future compensation expense for unvested shares | $ | $ 5.9 | $ 5.9 | |||||||
Weighted average period over which compensation expense will be recorded (in years) | 2 years 6 months | ||||||||
Restricted Shares and Time-Based LTIP Units | Independent Trustee | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of equity awards granted (in shares) | 5,773 | 3,604 | |||||||
Time-based LTIP Units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of equity awards granted (in shares) | 5,773 | 3,604 | 29,071 | ||||||
Market-Based LTIP Units, Target | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of equity awards granted (in shares) | 59,024 | ||||||||
Market-Based LTIP Units At Maximum | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of equity awards granted (in shares) | 147,117 | ||||||||
RSUs and Market-Based LTIP Units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Granted shares value (in dollars per share) | $ / shares | $ 35.11 | ||||||||
Estimated future compensation expense for unvested shares | $ | $ 13.1 | $ 13.1 | |||||||
Weighted average period over which compensation expense will be recorded (in years) | 2 years 6 months |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Assumptions and Fair Values for RSUs and Market-based LTIP Units Granted in the Period (Details) - RSUs | 6 Months Ended |
Jun. 30, 2023 $ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract] | |
Fair value of market-based awards granted | $ 36.51 |
Expected term (years) | 4 years |
Expected volatility | 18.47% |
Risk-free rate | 3.84% |
Fair Value of Assets and Liab_2
Fair Value of Assets and Liabilities - Narrative (Details) | Jun. 30, 2023 USD ($) |
Fair Value Disclosures [Abstract] | |
Fair value, net asset (liability) | $ 0 |
Earnings Per Common Share (Deta
Earnings Per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Numerator for earnings per common share - basic: | ||||
Net income | $ 15,836 | $ 2,903 | $ 38,587 | $ 4,208 |
Net income attributable to noncontrolling interest | (52) | (7) | (118) | (10) |
Preferred distributions | (1,997) | (1,997) | (3,994) | (3,994) |
Net income attributable to Equity Commonwealth common shareholders | 13,787 | 899 | 34,475 | 204 |
Numerator for earnings per common share - diluted: | ||||
Net income | 15,836 | 2,903 | 38,587 | 4,208 |
Net income attributable to noncontrolling interest | (52) | (7) | (118) | (10) |
Preferred distributions | (1,997) | (1,997) | (3,994) | (3,994) |
Numerator for net income per share - diluted | $ 13,787 | $ 899 | $ 34,475 | $ 204 |
Denominator for earnings per common share - basic and diluted: | ||||
Weighted average number of common shares outstanding — basic (in shares) | 109,839 | 112,005 | 109,779 | 112,868 |
Weighted average number of common shares outstanding — diluted (in shares) | 111,237 | 113,380 | 111,269 | 113,785 |
Net income per common share attributable to Equity Commonwealth common shareholders: | ||||
Basic (in dollars per share) | $ 0.13 | $ 0.01 | $ 0.31 | $ 0 |
Diluted (in dollars per share) | $ 0.12 | $ 0.01 | $ 0.31 | $ 0 |
Anti-dilutive securities: | ||||
Preferred shares, dividend percentage | 6.50% | 6.50% | 6.50% | 6.50% |
Weighted average number of shares, restricted stock units, unvested (in shares) | 131 | 86 | 122 | 124 |
6.50% Series D Cumulative Convertible Preferred Shares of Beneficial Interest | ||||
Anti-dilutive securities: | ||||
Effect of anti-dilutive securities (in shares) | 4,032 | 3,237 | 4,032 | 3,237 |
OP Units and LTIP Units | ||||
Anti-dilutive securities: | ||||
Effect of anti-dilutive securities (in shares) | 357 | 277 | 341 | 272 |
RSUs | ||||
Denominator for earnings per common share - basic and diluted: | ||||
Weighted average number of common shares outstanding, dilutive adjustment (in shares) | 1,288 | 1,158 | 1,361 | 757 |
LTIP Units | ||||
Denominator for earnings per common share - basic and diluted: | ||||
Weighted average number of common shares outstanding, dilutive adjustment (in shares) | 110 | 217 | 129 | 160 |
Segment Information (Details)
Segment Information (Details) | 6 Months Ended |
Jun. 30, 2023 segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 1 |
Office Building | Total rents | Product Concentration Risk | |
Segment Reporting Information [Line Items] | |
Concentration risk | 100% |
Related Person Transactions (De
Related Person Transactions (Details) - Two North Riverside Plaza Joint Venture Limited Partnership - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Related Party Transaction [Line Items] | |||||
Lease payment | $ 0.4 | ||||
Operating lease, expense | $ 0.1 | $ 0.1 | $ 0.2 | $ 0.2 |
Subsequent Events (Details)
Subsequent Events (Details) - $ / shares | Aug. 15, 2023 | Jul. 13, 2023 | May 15, 2023 | Apr. 13, 2023 | Feb. 15, 2023 | Jan. 13, 2023 |
Subsequent Event [Line Items] | ||||||
Dividend declared (in dollars per share) | $ 0.40625 | $ 0.40625 | ||||
Dividend paid (in dollars per share) | $ 0.40625 | $ 0.40625 | ||||
Scenario, Forecast | ||||||
Subsequent Event [Line Items] | ||||||
Dividend paid (in dollars per share) | $ 0.40625 | |||||
Subsequent event | ||||||
Subsequent Event [Line Items] | ||||||
Dividend declared (in dollars per share) | $ 0.40625 | |||||
Dividend paid (in dollars per share) | $ 0.40625 |